(Exhibit F hereto attached is a sample of domestic cigarette paper.)

All of which is most respectfully submitted.

THE DIAMOND MILLS PAPER COMPANY,

44 Murray street, New York City.

C. H. DEXTER & SONS,

Mr. Buck (continuing). There is a sample of this paper attached to the brief, and the committee can examine it.

Mr. UNDERWOOD. What is the volume of this business in this country-the manufacture of the paper to which you have referred?

Mr. Buck. I am unable to answer that question. The only returns are general returns and include all others in that class of extra thin metal-coated papers, and the manufacture of which is increasing to a considerable quantity.

Mr. UNDERWOOD. You do not know the quantity of this paper that is manufactured-that is, the quantity on which you want the duty changed?

Mr. BUCK. I do not.

Mr. UNDERWOOD. Do you know how much business is being done in that paper by American manufacturers?

Mr. Buck. I do not know, because it is only an experiment. The experiment has proceeded so far that we are able to say that we can produce it.

Mr. UNDERWOOD. You do not know how much of the American market the American manufacturers can supply?

Mr. Buck. No, sir; I do not.

Mr. UNDERWOOD. Then you are not giving us any information on which we can come to a conclusion.

Mr. Buck. I am unable to give you any information as to the volume of the business because the Treasury Department would not furnish it. I wrote to the Bureau of Statistics and also to the Department of Commerce and Labor, but I am unable to get the volume of business in that article.

Mr. DALZELL. This is contemplated to be a new industry?

Mr. BUCK. A new industry entirely. It has only appeared within the past three years. It is classed with this metal-coated paper and the Treasury Department referred to it in that way. I think that Mr. Austin, of the Bureau of Statistics, can find out.

In reference to the typewriter paper, I can say that the American manufacturers now make it at a cost of from 12 cents to 16 cents a pound produced in the United States. That is made in the Dexter Mills and the Diamond Mills and others. It is being produced, but they are closing their business under the present tariff. I have in my brief a table of the cost of labor.

Mr. NEEDHAM. In your paper you do not include the freight charges?

Mr. Buck. I have left out the freight charges because they are exceedingly slight and amount to nothing. In the metal-coated paper I put it in. If I can get those rates, I will put them in, and also the volume of business done.

In regard to cigarette papers, it really does not belong in this schedule. It is made by the Diamond Mills. It has a duty of 60 cents, and notwithstanding that duty the importations are increasing every year under that duty. The schedule reads as though it was a little high.

I might say further that in all of these four descriptions of paper we ask for no increase of duty whatever, and in all of the tissue papers and the metal-coated papers which we are now manufacturing we are conducting the business and competing with the foreign manufacturers. We ask no odds further than the present rate. As to these new suggestions, all we are asking is for a duty that will protect us against the foreign product, which is distinctive in character. All we ask is to enable us to conduct the business. If you will do that, we are able to go into the market and take our chances. Mr. UNDERWOOD. How many people are there in this country who are engaged in the manufacture of this tissue paper?

Mr. BUCK. That I can not say; there are a vast number of them. These are mills in Connecticut and New Jersey. The Diamond Mills have five mills engaged in this work. I do not know the capacity of the other mills.

Mr. UNDERWOOD. Is there any association or combination between the mills for the purpose of fixing prices on tissue paper?

Mr. Buck. No, sir; there never was and never will be.

Mr. UNDERWOOD. Then there is free and open competition in the market on tissue paper?

Mr. BUCK. Yes, sir; I speak for the Diamond and Dexter mills, and for nobody else. We are not in any combine. We are independent manufacturers and not importers. Some years ago one man exported 20 reams and sold it for less than it cost him in this country, and he gave up the business.

Mr. CLARK. There is no tissue paper combination?

Mr. Buck. I do not know of any.

Mr. CLARK. If there is one, you are not aware of it?

Mr. Buck. No, sir.

Mr. CLARK. Then you are not a part of the paper trust?

Mr. Buck. I do not think so.

Mr. CLARK. It has been stated before us that there is no such

thing as a paper trust.

Mr. Buck. I have heard of it.

Mr. CLARK. Have you ever come in contact with it?

Mr. Buck. I have seen a gentleman whom they said belonged to

the paper trust. I had never seen any of them before.

Mr. CLARK. Do the tissue paper men all sell at the same prices?

Mr. BUCK. I can not answer that question.

Mr. CLARK. Have you ever investigated that question?

Mr. Buck. I presume that they sell substantially at the same price.

75941-H. Doc. 1505, 60-2-Vol 6-21

Mr. CLARK. Does not the location of the mill or any favorable or accidental circumstance enable one company to produce cheaper than another company can produce?

Mr. BUCK. Possibly that might be so, but I think, with the railroad facilities, which are so complete and perfect, that it is scarcely a consideration that could enter into the question; and, moreover, if rates were to favor any particular one section or locality that matter could be corrected by the Interstate Commerce Commission.

Mr. CLARK. Is there any association, combination, or arrangement by which anybody acting under authority of such combination can sell this paper to the consumer at a fixed price?

Mr. Buck. I do not know of any.

Mr. CLARK. You never heard of such thing?

Mr. Buck. I never heard of such thing. That question has never come home to the persons I represent. I do not think the Dexter Mill would ever permit it. A gentleman who has just whispered to me says that there is no such thing.

Mr. CLARK. Who is the gentleman who just whispered to you? Mr. Buck. He is the manager of the mill of C. H. Dexter. He is a practical manufacturer.

Mr. CLARK. Are you a manufacturer?

Mr. Buck. No, sir; I am a lawyer.

Mr. CLARK. I thought you were asking these things because you were a manufacturer.

Mr. Buck. No, sir.

Mr. CLARK. Is this gentleman who was whispering to you your client?

Mr. BUCK. Well, he is not my client, but he is the superintendent of the corporation that is my client.

Mr. CLARK. Then, practically, he is your client?

Mr. Buck. Yes, sir. I know him and have known him for thirty years and I believe his word, and I also believe the word of Mr. Coffin. I have no doubt of the truth of whatever they say.

Mr. CLARK. We lawyers have never been able to get up a trust in our business.

Mr. BUCK. That is true, and I do not think that this committee, looking exactly like the Supreme Court, or a little more so, would think anything less of the truth if it came from the lips of a lawyer than if it came from other sources.

The CHAIRMAN. The paper trust which has been spoken of was the International Paper Company. You said that you had heard of the paper trust.

Mr. Buck. I have heard of that.

The CHAIRMAN. You have no personal knowledge of it?
Mr. Buck. Not the slightest.

The CHAIRMAN. I suppose that, in referring to the paper trust, you referred to the International Paper Company?

Mr. Buck. Yes, sir. We have no connection with them-no connection in any way whatever.

The CHAIRMAN. I suppose that there is a uniform price for wheat in Liverpool, is there not?

Mr. Buck. I think there must be.

The CHAIRMAN. You would not regard that as the absolute existence of a trust-the fact that the producers sell wheat in Liverpool at a certain price?

Mr. Buck. No; I do not think that is any proof. I think that the manufacturers would be weak to consider anything that would cut their own throat.

Mr. CLARK. Did you not tell me a while ago that you had run across some of the representatives of the paper trust here in Washington?

Mr. Buck. I said that I had seen one of them-that he had been pointed out to me as one of the paper trust.

Mr. CLARK. I wish you would send in the names of such gentlemen, as we would like to present them to Mr. Bonaparte, of the Department of Justice. It is claimed all the time that they are unable to find anybody who belongs to the paper trust.

Mr. Buck. I should be glad to furnish any of the names if I can. I do not know any of them, and I suppose that you have more facilities here for finding them out than I have.

Mr. CLARK. I do not run with that gang. They do not come to me, but you being in the paper business I understood you to say that you had met some gentlemen who were representatives of the paper

trust.

Mr. Buck. I think you are in error as to what I said. I said that a gentleman was pointed out to me as being a representative of that trust, but I do not know any of the names.

SURFACE-COATED PAPERS.

[Paragraph 398.]

STATEMENT OF H. B. FABER, OF NEW YORK, REPRESENTING THE MANUFACTURERS OF SURFACE-COATED PAPERS.

SATURDAY, November 21, 1908.

Mr. FABER. Mr. Chairman and gentlemen of the committee, I will not read my brief, but will simply state some of the main features connected with it.

This is an old industry, the surface-coated paper, paper familiar to you all, and paper used to cover boxes-shoe boxes and hat boxes, and various boxes of that description. This paper has been manufactured in Germany for a great number of years, but it is a relatively young industry in this country. It is a paper that is manufactured by putting onto a white paper stock a color and then polishing this color to make a glazed finished surface, which you will see in samples on the back of this brief.

Now, the main feature of the argument is to show that the imports of the foreign papers have increased from 4,000,000 pounds in 1902 to 8,000,000 pounds in 1907. The manufacturers of surface-coated papers in this country have suffered a corresponding decrease, not so much on their output as in their profits, due to this increase of approximately 100 per cent in the importations of glazed papers.

The reason that these foreign papers have come into this country in the volume that they have is due to the cost of production in Germany and the cost of production in this country.

On page 6 of this brief I have calculated the cost of producing this grade of goods in this country and in Germany, and you will notice that to manufacture a unit quantity of this grade, which we call a ream, which is 480 or 500 sheets of paper 20 inches by 24-to manufacture this unit quantity it costs us in this country $2.25, while in Germany they can manufacture the same thing for $1.19. The reason for that is that the paper stock that they use is slightly cheaper. Their color is slightly cheaper, and their labor very much so, and you will notice that the labor item in the American product is 49 cents as against 10 cents in the German.

These figures, as you will notice in making the comparison of cost, have been very carefully compiled. I have done the work myself, and they have covered over 5.000 individual orders that have been turned out and sold to the trade. They have been made up in percentages and simplified, of course, under four headings, as you will see on page 5, which will give you the component percentages which enter into the cost of production.

In taking my figures of German cost I have taken an extract from Carl Hoffmann's paper, the Papier Zietung, which is a recognized authority, where he asks the German manufacturers of these goods for their statements of cost; and he has printed that statement in detail, giving the labor of a single laborer on the machine, and that appears on page 7. That is an authentic statement, and it can be relied upon. In that statement he shows that the cost of manufacturing this product in Germany is $1.19, as against the cost in this country which we show, and which is the combined opinion of all the manufacturers in the trade in this line, of $2.25. This paper manufacured in Germany for $1.19 enters this country, all duties paid, for $1.81, and sells in the open markets for from $1.90 to $2 a ream, against our product manufactured at a cost of $2.25. That shows why the imports of that grade of paper have been on a steady increase, and why the manufacturers in this country have suffered a decrease in their profits.

The American manufacturers have been compelled in late years to throw into the market an imitation paper, and I have submitted a sample of the imitation on the second from the last sheet attached to the brief. To every appearance that imitation resembles the imported papers. It is of the same weight and of the same appearance and of the same character, but the pasting qualities of the paper are very different. It is made by an entirely different method. The burnishing is put on longitudinally instead of across the paper, and when that paper is used by the box makers they encounter difficulties which they do not encounter in the imported or domestic flints. This imitation. paper we can manufacture in this country for $1.90 a ream, and you will find on page 8 a detailed statement of our costs. That is the best we can do, $1.90 a ream, and that imitation paper at a cost of $1.90 a ream has to compete against the foreign flint paper which it is an imitation of, sold in this country at $1.90 to $2, manufactured in Germany at $1.19.

Mr. CRUMPACKER. What is the duty?

Mr. FABER. About 62 cents.