dependent upon any other company or any other country for any of its requirements of pulp. It does, however, get from Canada about 35 per cent of the pulp wood required, mostly from its own lands, 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 Labor from the typical pay-roll sheets of this company indicates that the average hourly rate of wages in the mills making news paper in 1907 was 94 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 Mann investigating 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 373 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:

$2.64

264

1.70

540

1.85

380

773

Barker

68

208!

.90

Grinder man ..

Based on these rates, the cost of labor per ton of paper would be in each country as follows:

Thus some European countries have an advantage on labor solely almost equal to the whole duty of $6.

While at present no news paper comes into the United States from European countries, we believe that if the duty were removed importations would follow from Scandinavia, Finland, and Germany. In Germany prices are sustained in the home market by a combination sanctioned by the Government and the surplus is sold for export to the highest bidder, regardless of cost, special rates of freight being given by government railroads; and the German manufacturers are thus able to hold important markets in England and in South America and to compete with Canadian and United States paper in Australia and at other points.

We have no exact figures for the cost of production in Finland, but it is a matter of common knowledge that wages there are but a fractional part of what we pay and that wood is extremely cheap. The industry is growing rapidly there. Finland pays our duty upon sulphite pulp and reaches the interior of the United States, underselling western pulp mills at their very doors.

In Scandinavia labor and wood are both very much cheaper than in the United States, and their surplus pulp and paper could be profitably marketed in this country if there were no duty.

Importations of print paper from Canada amounted in 1907 to 13,248 tons, and have continued at an equal rate through 1908, and the business of this company has suffered considerable inroads from this quarter. We were obliged to curtail production, beginning the latter part of 1907, because we could not place our normal product at a price sufficiently remunerative to enable us to pay dividends and the scale of wages in vogue. Starting with the executive department, a system of rigid economy and retrenchment was inaugurated, followed by the reductions in dividends above referred to, which were equivalent to a reduction of 15 per cent on our normal pay roll.

It became apparent in July of this year that a temporary reduction would have to be made in wages. The salaries of superintendents and other mill officials were first readjusted. The reduction in wages. of some of the foremen belonging to the union which controlled the machine tenders precipitated a strike. The members of the pulp makers' union, however, and the firemen's union were desirous of continuing work and of helping the company meet a critical situation, and consented to a reduction of about 5 per cent in wages. The strike lasted three months and has finally been broken, the men of the paper makers' organization returning individually and accepting a reduction of about 5 per cent.

The average price at which the product of the company was marketed in 1900 was $43.64 per ton, delivered to the consumer, and in 1907 it was $42.83, a decrease of about 2 per cent, notwithstanding the increase in rate of wages of 66 per cent and in cost of wood of