This is a cause that almost all Americans are interested in, and should particularly interest the Ways and Means Committee of the present Congress. Yours, truly, THE RICHARDSON PAPER CO., Vice-President. MINNEAPOLIS, MINN., November 20, 1908. CASTLE, GOTTHEIL & OVERTON, 41 Park Row, New York, N. Y. GENTLEMEN: We understand that section 632 is coming up for consideration shortly. We use some 40,000 pounds of satinets a day in the manufacture of roofing paper. There has been some question in the minds of the custom-house officials as to whether this grade of stock was dutiable or not. We hope that you can have a special clause inserted to cover this grade of rags. We know it is hard to get importers to attempt to get these rags in on account of this question coming up. It certainly would be a great relief to the paper mills of this country if such a clause was inserted. These satinets contain such a small percentage of wool that they are only suitable for making paper. And it does not seem right for mills that use this grade of rags to take the chance of a 10-cent duty being assessed against the rags when the rags are worth normally from three-quarters to 1 cent per pound. We will be glad to be of any further service we can in this matter. Yours, very truly, THE NELSON PAPER CO., HON. JOHN W. WEEKS, M. C., SUBMITS LETTER OF F. W. BIRD & SON, EAST WALPOLE, MASS., RELATIVE TO PAPER STOCK. EAST WALPOLE, MASS., December 19, 1908. Hon. JOHN W. WEEKS, M. C., Washington, D. C. DEAR SIR: We respectfully call your attention to the indefiniteness of section 632 of the tariff act, which for a number of years has caused us annoyance and expense. This section reads as follows: Paper stock, crude, of every description, including all grasses, fiber rags, other than wool, waste, including jute rope and waste bagging, including old gunny cloth and old gunny bags, fit only to be converted into paper. This latter clause, "fit only to be converted into paper," is the cause of most of our troubles. We cite you the following example: We have imported from France and Belgium, to use in making paper, a grade of flax spinning waste called "cordellettes" (little cords or little strings). In 1903 and 1904 these importations were suddenly assessed a duty of 10 per cent, which was subsequently increased to $20 per ton; all this on stock worth $30 per ton, and be cause, as we understand it, some men had used small quantities, not 5 per cent of importations, for some other purpose besides paper making. We protested, and after some time the case was decided in our favor, but not until the Government had tied up many thousands of dollars belonging to us and we had been put to a legal expense of more than a thousand dollars. We also use in the making of our roofing large quantities of old satinet garments. These are old, worn-out garments and soft rags composed of cotton and wool or cotton and shoddy. They have usually been admitted free, yet in some cases have been assessed a duty of 10 cents per pound, being classed as woolen rags, although the grade is too low to be worked up into shoddy and the stock could only be used by converting it into paper. Although the board of appraisers have given cases of this kind their careful and impartial consideration, the wording of this section. has made it impossible to give uniform decision, because the law specifies that the material must be fit only to be converted into paper, and whenever the appraisers had evidence or believed the material could be used for anything else beside paper making the duty would be assessed. We strongly urge that the wording of section 632 be revised, or added to, so that flax waste, paper stocks, and old satinet garments containing a small percentage of wool be admitted free when they are to be used for the manufacture of paper and when the importer is willing to give oath that they are to be used exclusively for that purpose. This we believe to be the intent of the existing law. Yours, very truly, F. W. BIRD & SON. FRANK C. OVERTON, NEW YORK CITY, FILES SUPPLEMENTAL BRIEF RELATIVE TO PAPER STOCK. 41 PARK ROW, NEW YORK, January 6, 1909. Hon. SERENO E. PAYNE, Chairman Committee on Ways and Means, Washington, D. C. DEAR SIR: On November 21, 1908, I filed before the Committee on Ways and Means, at Washington, a brief in behalf of the New York Paper Stock Dealers' Association and others affecting Schedule M, paper stock, and recommended a form which I felt would correct the existing evils. Said form, after mentioning various grades of paper stock, stipulated that there should be inserted: Not advanced in manufacture to be used as raw material. Upon further consideration it occurred to me that there might be room for various interpretations of the phrase: "Not advanced in manufacture to be used as raw material," and I took the liberty of consulting with Judge Henderson M. Somerville, of the Board of United States General Appraisers, who said that the Board of Ap praisers had given this matter careful attention, and had recommended the following: 632. Paper stock, crude, of every description, including all grasses, fibers, rags (other than wool), waste, including jute waste, shavings, clippings, old paper, rope ends, waste rope, flax waste, flax thread waste, hemp waste, and linen thread waste, and waste bagging fit to be converted into paper; also old gunny cloth and old second-hand gunny bagging, whether fit for such purpose or not. This section would be perfectly satisfactory to the New York paper stock dealers, as the elimination of the word "only" from the expression "fit only to be converted into paper" would in our opinion eliminate most of the misunderstanding which has occurred in the past; and the section referring to old gunny cloth and second-hand gunny bagging would certainly have the effect of saving annoyance to both the Government and importer. We therefore trust that Congress can see its way to adopt the section as proposed by the Board of Appraisers, and the New York Paper Stock Dealers' Association withdraw their suggestion in favor of that of the board. We still feel, however, that the paragraph mentioned in the brief filed on November 21, as follows: "Rags or old garments composed of a mixture of cotton and wool, or cotton and shoddy, or cotton and wool, or shoddy, and suitable for and to be used for the manufacture of paper, free," is most essential, as it is a grade that can not be incorporated into the other section without a conflict, and while the goods in question have been brought in here along with other old rags for paper stock, there is an element of risk in so doing, and should be eliminated. If there will be any further public or private hearings in this matter, I would esteem it a favor if I would be advised of the time such hearings will be held. Respectfully, yours, FRANK C. OVERTON, PULP, AND PRINT PAPER. STATEMENT OF JOHN NORRIS, CHAIRMAN OF THE COMMITTEE ON PAPER, THE AMERICAN NEWSPAPER PUBLISHERS' ASSOCIATION, NEW YORK CITY. SATURDAY, November 21, 1908. Mr. NORRIS. Mr. Chairman, just as an aside, and casually and incidentally and preliminarily, I want to call your attention to the fact that Mr. Marcuse, the gentleman who appears here for a new classification and a higher rate on wrapping papers, was the gentleman whose firm plead guilty, June 19, 1908, in the United States court, as members of the Parks pool on fiber and manila, and his firm was fined $2,000. Instead of that stopping the operations of these manufacturers and paper makers in fixing prices and in regu lating output, they are at it again. I submit here a report of the Western Fiber and Manila Association, which, under date of November 5, 1908, has just advanced the price of manilas $3 per ton as the result of combination. That is merely preliminary to the other proposition. I submit also a report of the previous week of the Paper Trade Journal, giving a statement of a meeting of bookmen to discuss the unsatisfactory condition of the trade. These gentlemen come here, not on oath, and make statements. I seriously combat the accuracy of any statement they have made to the effect that there are no combinations, no agreements, no arrangements, to restrict production or to fix prices. I will speak, practically, for all of the newspapers. There has been somewhat of an understanding that I shall open, and that then the representatives of the American Paper and Pulp Association will present their side; and I hope that I may be given an opportunity, not to answer them, but where there are misstatements made, without going over the ground, to call the attention of the committee to them. The CHAIRMAN. We will cross that bridge when we come to it. I am afraid it will be a good while from now before we get there. [Laughter.] Mr. NORRIS. All right. In addition to myself, as representing the newspapers, there will be representatives of the four labor unions which are employed by newspapers, and which feel the effect of the increased price of paper. In submitting the views of the American Newspaper Publishers' Association upon the paper schedule of the tariff, I will attempt to cover the proposition for free pulp and free paper in all its phases, including the deception of your committee and of Congress by the paper makers in 1896, the failure of the paper makers to give to labor any of the benefits of the protective tariff, the organization of paper combinations in restraint of trade, the destruction of our forests by them, and their gigantic speculations in woodlands. Newspapers have been made to bear undue burdens as a result of the advance in 1907 of $12 per ton in the price of paper. Approximately 1,200,000 tons of news-print paper are used in the United States annually, costing consumers in excess of $50,000,000 per annum. As a result of the unjustifiable advance of 1907, one paper, the Baltimore American, was taxed $60.000 per annum. Another paper, the Philadelphia Inquirer, was taxed $156,000 per annum. Preliminarily I call attention to the fact that because of a labor dispute between the International Paper Company and its employees, covering a period of three months, since August 1. 1908, the output of the market was reduced about 105,000 tons. This curtailment of production has been availed of by paper makers generally to mark up the price of news-print paper this week to $55 per ton, New York, or $20 per ton in excess of the price which prevailed when the Ways and Means Committee considered this schedule twelve years ago and $15 per ton in excess of the price which would prevail under normal conditions. Mr. UNDERWOOD. Mr. Norris, if it will not bother you, will you state before you make your argument, so that we can follow it along the line of your suggestion, what suggestion you make to the committee as to our future action on this proposition? Will you state. what you desire us to do? Mr. NORRIS. Let me explain that in a summary of about twenty minutes' duration I substantially cover all of the ground, including that particular point 61318-SCHED M-09- -2 The CHAIRMAN. What Mr. Underwood wants to know is what amendment you suggest to the bill. Mr. UNDERWOOD. I want to know what suggestion you make. Mr. NORRIS. Free pulp, free paper, and reciprocity with Canada for free pulp wood, free paper, and free pulp. The CHAIRMAN. That answers the question. Mr. HILL. Do you mean to have all paper free, or just news paper. Mr. NORRIS. News-print paper is the particular matter for which I appear. Mr. HILL. And that is all for which you make any suggestion? Mr. NORRIS. That is all for which I make any suggestion; but it is coupled with wrapping paper and other kinds of paper, because these mills which make the wrapping paper, which make manila, are equipped to make news-print paper; and when they come together in pools so as to artificially stimulate their production, there is an inducement for them to keep out of the news-print paper market. I will make special reference to that later. The CHAIRMAN. I suggest that Mr. Norris go on and read his state ment. Mr. NORRIS. Please note that the publisher-not the laborer, nor the paper maker-is asked to pay this bill for industrial warfare. We will show from its annual reports that the International Paper Company, with all of its antiquated outfit and its five subsidiary companies that sap its earnings, has made an actual profit of $8.79 per ton, or 29 per cent, upon all the paper it has turned out in ten years, and that its cost of production has been $30.52 per ton, or $1.51 per 100 pounds, and that its average price during the ten years which have elapsed since the passage of the Dingley bill has been $43.91 per ton, or $2.19 per 100 pounds delivered, an increase of $11.91 per ton over the price at which paper was sold when the Dingley bill was passed July 24, 1897. Paper can be made cheaper at Millinocket, St. Croix, and Berlin than in Canada. Labor is paid less here than in Canada, and we hold that the protective principle provided for in the Republican platform does not apply to paper, because of this treatment of labor by paper makers, and because of this cheapness of cost of home production as compared with foreign production. We will show that the Dingley bill increased the duty on ground wood 45 per cent (p. 866) and on news-print paper 46 per cent (p. 1165), and that the outcome of the present policy has been to increase imports of pulp and to decrease the exports of paper. There has been a transformation in the paper situation. Instead of exporting paper, we are importing pulp. We will show that the import duty on news-print paper has not been productive of revenue and that it has furthered schemes of combination and criminal manipulation of the market. We are prepared to show that because of the import duty of $6 per ton, the price of news-print paper in the United States has for periods been raised to a figure which was $6 per ton above what it would have been under free conditions, and above what it should have been under conditions that assume respect for law. The paper-manufacturing business has been mismanaged, the burden of which mismanagement has fallen upon the publishers. We are embarrassed by the chairman's statement that the Government's figures and studies of the tariff are based on prices quoted by trade papers, which the chairman said on the floor |