PARAGRAPH 201-LUMBER. business to-day is carrying a big bonded debt. We have got to meet expenses. We have got to have money. We have got to have cash. If we do not get our price that it costs us, we have got to keep manufacturing anyhow. The CHAIRMAN. Well, Mr. Jones, your average amount of imports, as compared to the consumption in the American market, is only between 1 and 2 per cent, and when the bad times come and the things which destroyed your mills and shut them down they do not come from that 1 or 2 per cent of importation, but they come from the competition between the American mills maintaining themselves in a market that has run away from them, and it is a matter of home conflict that destroys the business and not imports from abroad? Mr. JONES. That is true, Mr. Chairman; but our contention is that if Congress is not going to put it absolutely on a free basis and have free trade, and there is bound to be any measure of protection in the business at all, then, in the very nature of the business of the manufacture of lumber, we are entitled to that protection. Mr. FORDNEY. Mr. Jones, let me ask you, am I correct in saying that the time when you need protection most is the time when prices are low, because when the prices for lumber are low, your low-grade lumber is the most difficult portion of your product to dispose of? Mr. JONES. Yes, sir. Mr. FORDNEY. It is a grade of lumber that will not stand freight to any great distance, because your low-grade lumber comes in competition with all the low-grade lumber, whether it is hemlock, or whatever it is, all over the country? Mr. JONES. Yes, sir. Mr. FORDNEY. Your high-grade lumber you export to a certain extent, and there is a certain amount used at home? You suffer more on your low grades, the grades on which you lose money, on which you do not get back the cost of production? Is it not true, then, that you need more the protection on your low-grade lumber in the period of low prices than at any other time? Mr. JONES. Why, necessarily. Mr. FORDNEY. The gentleman states, Mr. Jones, that in the period. of hard times these people are not buying lumber; they are not buying steel. I want to state that that is true of everything. In 1896 statistics show that the average citizen of the United States consumed 3 bushels of wheat per capita, whereas in 1910 they consumed an average of 61 bushels of wheat per capita. So that what is true of lumber is true of bread, is true of meat, and everything else. Your purchasing power is less, and consequently you are unable to buy at a period of low prices. Mr. JONES. Yes, sir. Mr. FORDNEY. Is that not true? Mr. JONES. Yes, sir. Mr. FORDNEY. Whether you are lumberers or agriculturists, or whatever you are engaged in? Mr. JONES. Yes, sir. Mr. Chairman, I find that the committee, in its good nature, has kindly extended my time. Mr. JAMES. I want to ask this question, Mr. Jones. Mr. JONES. Yes, sir. PARAGRAPH 201-LUMBER. Mr. JAMES. You state that you need this tariff to protect you, not because of the wages paid in Canada as against this country, but because the lumber itself is cheaper there than it is here; is that right? Mr. JONES. I don't think I said that, sir. Mr. JAMES. I think you practically do when you say that in eastern Canada the wages are the same as in the United States, and eastern Canada, you said, was your only competitor. Mr. JONES. That is right. Mr. JAMES. Therefore you could not want this tariff on account of the difference in wages, you must want it then, because of the fact that lumber is sold cheaper there than it is in the United States? Mr. JONES. Well, I did not attempt to cover that point at all, if you please, and as a matter of fact, whenever I have attempted to cover any particular point, some gentleman of the committee, seeking the information that he thought I might be able to give him, has diverted me to some other point. As a matter of fact, I will answer your question now. I say I did not go into that point at all. Mr. JAMES. All right. Mr. JONES. But the average freight rate from Canada-and transportation is the main factor in the cost of lumber, after you get by the labor-there is an average freight rate to New York City of 26 cents from our territory, and of 15 cents from Canada-from Ottawa, 15 cents, a difference of 11 cents per hundred yards, which will make a difference of $3.50 a thousand or more. Mr. JAMES. And that, you say, will enable the consumer to get lumber cheaper from Canada if the tariff is taken off? Mr. JONES. No, sir; that is a matter which this Committee on Ways and Means, in its judgment, must decide. I am not undertaking to do that. Mr. JAMES. No; you come before us in the nature of an expert familiar with the lumber business? Mr. JONES. Yes, sir. Mr. JAMES. Familiar with the tariff act. Now, you must have some reason? Mr. JONES. Yes, sir. Mr. JAMES. Then, if the reason is that it would cheapen lumber, you can say that. If it would not cheapen lumber, how would you be injured by taking the tariff off? Mr. JONES. That same question we have covered several times, and I will say that anybody can give an opinion as to the probable effect of any action on the tariff. Mr. JAMES. Yes. Mr. JONES. I think it will take a very wise man to say with certainty and knowledge what the effect will be, but I say that if it will not cheapen lumber, why take the duty off if you are looking for revenue? Mr. JAMES. Well, if it will not, why are you appearing here asking for a continuance of the duty? Mr. JONES. Because that is my opinion. We simply give our opinion that it will cheapen lumber. Mr. JAMES. That is my opinion. Now, I want to ask this question: You want our favorable action in behalf of a few manufacturers of PARAGRAPH 201-LUMBER. lumber. According to the census of 10 years ago there were 8,300,000 families that lived in homes they had rented. Don't you think that the Government might do a little encouragement along the line of home building and cheapen lumber to those millions of men and women, that they might have an opportunity to own a home? Mr. JONES. No, sir; the statement which you make that we want Congress to legislate in favor of the manufacturers of lumber I am compelled to take issue with, if you please. We do not ask you to legislate. We say this, and I say, so far as I myself am concerned, that I do not believe in legislation in favor of any product. I do not believe in the protection principle. Mr. JAMES. Well, I am very glad to hear you say that. Mr. JONES. I do not believe in the protection principle at all. Mr. JONES (interposing). Now, Mr. Chairman, if the gentleman, in all fairness, will permit me; as I say, you gentlemen are versed in public life and are able speakers; and I simply am a lumberman; and when I get an idea and try to answer a question, then the gentlemen invariably interrupt me when I get half through, and I get sidetracked; and I do not know how to talk so as to appear well in the record. Now, you gentlemen here are all experts in getting yourselves shown up properly in the record. Mr. KITCHIN. Well, we talk for the Record sometimes. We will give you the privilege of talking all you want. Mr. JONES. Here is the situation, gentlemen, and I am not speaking for the North Carolina Pine Association when I speak that way. I am not going to talk politics to this committee. I have been a business man all my life, but I have been on the Democratic State committee. The CHAIRMAN. I think we understand your position. Mr. JONES. If you will simply just let me say this: The committee has been very kind to me, and I want to stop now, but I want to say this: That I understand that the country is not ready for any freetrade bill. If you are bound to have a revenue, if you have got to impose a duty on various products in order to meet the necessary expenses of the Government, and whether you call that a protective duty or a revenue duty or whatever you call it, incidentally it is bound to afford some degree of protection. What else is the purpose back of the duty? It is bound to afford some degree of protection to various products. We simply ask that, if a duty has to be levied to raise revenue, lumber be treated simply fairly and placed on a just and equitable basis, along with other manufactured products, and we most respectfully submit that the present duty of $1.25 per thousand is about as low as it is possible to make it and do any good to anybody. I believe that it would be necessary-I do not know; I have been reading the minutes of the meeting of the Ways and Means Committee and the views of the chairman-and I am inclined to think that you would have to have a flat average duty of something near 20 per cent on all products, an average duty, to meet the necessary expenses of the Government. I do not know that this is the fact. But when you come down to the levying of duties that you have got to raise for your necessary expenses you certainly would not come down low enough to touch lumber. PARAGRAPH 201-LUMBER. Mr. FORDNEY. Mr. Jones, could I ask you one question? Mr. JONES. Certainly. Mr. FORDNEY. In asking the question I intend to answer the question put by the gentleman a few minutes ago, about the number of people living in rented homes. I will call that gentleman's attention to the fact that the census of 1910 shows that there are over 48,000 sawmills, employing, in round numbers, 800,000 men, in the country. That does not include men employed in lumber camps. Mr. JONES. Well, there are more in actual number of men engaged in the logging operations than at the sawmill. Mr. FORDNEY. Well, if there are 1,500,000 people employed in the sawmills and lumber camps, and if you have five people to the family, there are seven and one-half millions of people employed in that industry or dependent upon it, consuming agricultural products, and buying boots and shoes, and the products of all other labor in the country. That is not taken into consideration when you put the product of that labor on the free list, and put the other on the protected list. Is that not right? It is inconsistent to put one man's product on the free list and another man's product on the protected list when the two use the product of both? Mr. JONES. I am simply saying that if we are going to put a duty on any products, lumber ought to be treated fairly and equitably as compared with other products. Mr. JAMES. Mr. Jones, you have several times said in your testimony that if we are legislating for revenue we ought to put a tariff on lumber. Do you not believe that the position of the Democratic Party is this, that where it makes a tariff we do so for revenue, and not for protection; but that there are certain necessities of life, upon which we impose no tariff at all, because we believe we can get sufficient revenue to run the Government without imposing a tax upon those articles that are needed by all the people? Is that not the Democratic position? Mr. JONES. Well, for every article that you leave the duty off you have got to increase the duty on other articles, I think, do you not? Mr. JAMES. Well, that might be true, and yet we might be able to put the duty upon those things that the poorer class, the greater part of our people, would not be forced to buy in order to live. Mr. JONES. If the article was sold cheaper abroad than it was here I would take every cent of duty off. Now, I never interrupt, and I hope you will let me finish. I say that when I found an article like lumber, for instance, with such a small margin of profit, and such precarious conditions, that a man in the business so often fails, and with the large number of workingmen and their families. depending on it; and when I found that Canada was in competition with the United States in this business-now, I am stating this as a fact, that we export lumber to England and other countries. and we get from $2 to $3 a thousand, 10 per cent or 15 per cent more for it, than we do on lumber sold here-and when I came to Congress and knew all those facts, I would say, "This is a good, meritorious proposition; and I would say the lumber people are deserving people, and if this is incidental protection they ought to PARAGRAPH 201-LUMBER. have it, and this only 7.69 per cent protection is very small, and I would not disturb it." Mr. JAMES. Now, Mr. Jones Mr. LONGWORTH. Mr. Jones, if you found that they had a duty of 29 per cent on wool, would you distinguish between wool and lumber as the necessities of life? Mr. JONES. Sometimes I would feel if I had a good woolen overcoat that I could afford to stay outside, without the protection of a wooden building. Mr. HILL. I think you will admit that practically the only competitor that you have in the lumber market is Canada? Mr. JONES. At present; yes. But Mexico is standing at our door ready to come in and be a competitor in the lumber industry. Mr. HILL. I do not think we need have any fear from Mexico. We have a good deal more right to fear it from Siberia. Now, I want to call your attention, Mr. Chairman, I want to put into the record as a contribution to the economic discussion, the exportations of lumber to Canada from the United States for the last three years. You will find it on page 1907 of Foreign Commerce of the United States, under the heading of "Exports of domestic merchandise." In 1910 the exports to Canada were 189,193,000 feet. In 1911 they had grown to 403,285,000 feet. In 1912-fiscal year closing July last-they had grown to 553,021,000 feet. So that our exports seem to have increased about threefold in three years from the United States to Canada, which would seem to me to be a clear indication that the difference in the cost of production was in our favor, unless the character of the lumber was noncompetitive, and in either case it does not justify a duty on lumber in the United States. If it is noncompetitive because of its character, because of its uses, it does not justify a duty; and if the difference in the cost of production. is in our favor, that does not justify a duty; and it seems to me that the records of exports would clearly demonstrate that thing. Mr. JONES. The lumber from Canada, so far as our product is concerned Mr. FORDNEY (interposing). Mr. Jones, the lumber he refers to he well knows, and so does every other man, that there were unusual conditions in Alberta and Saskatchewan-and the immigration in those great wheat fields has brought about an unusually abnormal condition and an unusual demand for lumber in the last two years. Mr. JONES. The importation of lumber from Canada enters largely into our competition; the importations from Canada were valued at only $17.39 per thousand during the year 1912, showing that it does enter into competition with the lumber we manufacture; and so far as our product of 4,000,000,000 feet is concerned, and the pathetic feature of the poor American workman who needs lumber to build his home, that disappears and vanishes when we find that 85 per cent of our lumber of 4,000,000,000 feet is used for boxes and for crating purposes; used by those people who manufacture highly protected products, and that the largest user of our character of lumber is the Standard Oil Co. The CHAIRMAN. Gentlemen we have got three other witnesses. |