this coming in free of duty. For the handling and transportation of this wood a large amount of money has been permanently invested, so that it may be laid down at the mills at the lowest possible cost.

In 1907, 83 per cent of its output was news paper, the balance being wrapping and miscellaneous grades. The company produces a negligible proportion of the wrapping and miscellaneous grades produced in the country. The estimated production of news paper in the United States in 1907 was 1,200,000 tons. This company's proportion, therefore, was but 34 per cent. In 1900 the percentage of the news paper output of the United States produced by the company is estimated to have been 65 per cent. It is thus seen that although the company has increased its output of news paper about 12 per cent, its proportion of the total output of the country has fallen from about two-thirds to one-third, due to the policy of devoting its energies to the production of paper at the lowest possible cost rather than to reaching out for a control of the productive capacity of the country or its markets. Considering the total value of all kinds of paper and pulp produced in the United States in 1905, the company produced but 10 per cent, and operated but 19 out of about 760 paper mills in the country.

Before the Select Committee of the House of Representatives it was shown that although the rate of wages paid had increased on an average 66 per cent since the company started and the cost of wood had increased 100 per cent, and many other items beyond its control had likewise increased in cost substantially, yet the total cost of production in 1907 had increased only 14 per cent over 1900, thus demonstrating the improvement in the efficiency of the management and plants of the company.

A compilation just made by the Department of Commerce and Laber from typical pay-roll sheets of this company indicates that the average hourly rate of wages in the mills making news paper in 1907 was 24 per cent higher than in 1900 and the hours of service per day were 22.7 per cent lower per wage-earner.

The following table shows the wages paid in February, 1908, in a similar Canadian mill which makes news paper, compared with the wages paid by this company, showing an excess in our mills over the Canadian mill of about 50 per cent:

Based upon the above rates the cost of labor per ton of paper in each country is as follows:

International Paper Company

Canada

$8.00

5.46

The Canadian mill thus has an advantage of about $2.50 per ton of paper.

All the mills of this company run on the three-shift, or eight-hour day basis, whereas all Canadian mills, as we understand, are run on the two-shift-per-twenty-four-hours basis, except in the paper machine department of three mills.

Canadian mills likewise have an advantage in the cost of the raw material. The stumpage of pulp wood in Canada, in the Province of Quebec, ranges from $1.10 per cord to $1.75 and in New Brunswick from $1.25 to $2, whereas in Maine and New York stumpage ranges from $2.50 to $3.60. This is an average for Canadian wood of $1.50 and for domestic wood of $3 per cord, an advantage of $1.50 per cord in favor of Canadian stumpage.

The labor in the woods is also about 33 per cent cheaper in Canada than in the United States, as was shown before the Select Committee, pages 1041 to 1045.

To the extent to which we use Canadian wood, we, of course, share these advantages of stumpage and labor, but we are at a disadvantage again when it comes to transportation.

The cost of pulp wood delivered at Canadian mills does not exceed $6, which was the average quotation in 1907 for rough wood ready for shipment to the United States. The average cost of transportation of Canadian wood to the mills of this company in 1907 was about $3.25 per cord. As it takes approximately 1 cords of wood to make a ton of paper, this is an advantage of nearly $5 which the Canadian mill has in the item of pulp wood per ton of paper. In addition, such wood as we buy from Quebec has to pay an extra stumpage to the government of 25 cents per cord, equal to 37 cents per ton of paper. This comparison is borne out by the prevailing price of domestic pulp wood, which in 1907 was about $9 per cord in Maine and New York, as against $6 paid by Canadian mills.

In labor and wood, which are over 50 per cent of the cost of a ton of paper, the average Canadian mill has an advantage over us of $7.50, so that they are able to pay the duty of $6 and still make a profit.

The following table shows the wages in several European countries compared with those paid by this company:

tant steps in the process of making paper, and involves a large outlay of capital and the employment of a large amount of labor. We do not believe that our paper should be brought in competition with paper made from foreign pulp having free entry into this country, since the wages in foreign mills are so much less than in our own. Yet in 1907, 138,000 tons, valued at nearly $2,000,000, came in from Canada.

The duty on chemical wood pulp of one-sixth cent per pound amounts to not more than 9 per cent upon the average price of unbleached sulphite pulp, which is the only kind of chemical pulp that we use to any considerable extent. We make all the sulphite pulp that we require and have ample facilities for increasing our output as fast as conditions warrant. If the duty were taken off from sulphite, or substantially reduced, this market would be flooded not only with sulphite pulp from Canada, but from European countries, particularly Norway, Sweden, and Germany, where, as already shown, labor costs not more than 26 per cent of what we pay; as well as Finland, where wages are still lower.

We do not believe the capital and labor involved in this branch of our business should be subjected to unrestricted competition with foreign pulp, which may be, and is, sold in this market in spite of the existing duty. In 1907, 50,000 tons came from Canada and more than 40.000 tons from Europe.

We will subsequently discuss the so-called "countervailing duty" clause contained in this paragraph and paragraph No. 396.

Referring to paragraph No. 396, we are most emphatically opposed to any reduction in the duty on print paper in so far as it applies to news paper. The duty of three-tenths cent per pound on paper valued at not above 2 cents per pound is practically about 15 per cent upon the price at Canadian mills. This is a much lower duty than almost any other commodity enjoys, and is substantially the same as under the so-called "Wilson tariff." It is not adequate to prevent extensive importations of news paper from Canada, as already shown, and any reduction would mean an increase in importations and a loss of business for us. It would check the growth of our production, and the removal of the duty would close up a number of our mills. We believe that under any conditions the free admission of paper would compel us to abandon many of our plants and either drive us out of business or compel us to build mills in Canada.

We believe that great as is the stake which our stockholders have in this issue it would be as nothing compared with the disastrous effect upon our employees and the communities where our mills are located. We believe that an industrial concern of the magnitude of the International Paper Company can not be crippled or crushed out without serious detriment to the welfare of the country.

The normal capacity of the International Paper Company exceeds the present consumption of its customers, and yet 7,000 tons of print paper were imported into this country during the first half of 1908, depriving the employees of our own and other mills of employment. If the duty on paper were removed or substantially lowered, and if this resulted in reducing the price, as claimed by some publishers, this company, having no sufficient margin of profit to enable it to resist foreign competition without loss, would be forced, in an effort