of the House-referring specially to news-print paper prices are as accurate as accurate can be." We are prepared to show the utter worthlessness of such quotations, as well as the difficulty of establishing any fair standard of comparison, in determining the cost of production in the United States and abroad. The CHAIRMAN. Mr. Norris, did not the chairman give the source of that information? Mr. NORRIS. Sure The CHAIRMAN. Wait a moment. And did not Mr. North state that his source of information was from the trade journals, and did not the chairman state that at the time? Mr. NORRIS. He did; but he also gave The CHAIRMAN. Then be fair, and state the whole thing. Mr. NORRIS. But did he not also give it the authority of his position, and his office, and was it not stated on the floor of the HouseThe CHAIRMAN. What he stated was that it was taken from the trade journals. Mr. NORRIS. But Mr. Payne also said that these prices were accurate as accurate can be." Now, I do not desire to quarrel with the chairman. I simply want to say, as a matter of fact, that the figures were not accurate. The CHAIRMAN. The chairman was making a speech. The gentleman from Pennsylvania sat at the next seat, and when he commenced to speak on this subject the gentleman from Pennsylvania handed him the letter of Mr. North, which the chairman had never seen before, and the chairman presented that statement to the House; and he stands by what he said in reference to it-that that is the information that he had upon the subject. Mr. NORRIS. I do not assume The CHAIRMAN. And no one was deceived; much less yourself or Mr. Ritter. Mr. NORRIS. On the contrary. Do I understand that the chairman now says, or now assumes, or now thinks that those figures are as accurate as accurate can be? The CHAIRMAN. The statement of Mr. North was accurate for what it purported to be. If the trade journals did not get it right, that is another instance of the very small number of cases in which the newspapers of the country make mistakes about statements of fact. [Laughter.] Mr. NORRIS. But it is also an instance of the basis and character of information upon which Congress legislates without due inquiry as to the source or accuracy of information upon which it acts. The CHAIRMAN. Congress was not acting at that time. It was simply debating upon a statement; but perhaps you had better go on. Mr. NORRIS. Yes, sir. We will point out the menace that hangs over the paper business by reason of the attitude of Canada. The increasing use of water power for electrical purposes as well as the threat of prohibition of the export of wood have tended to stop the building in the United States. of new paper mills to meet the increasing consumption (p. 907). We will indicate how every material American interest may be promoted by a reciprocity arrangement with Canada and with Newfoundland, providing for free pulp wood, free pulp, and free paper. We invoke your scrutiny of State Department records which would enable you to obtain an accurate list of the dates of meetings of American and Canadian manufacturers at the Place Viger Hotel, Montreal, and the names of the participts, for purposes which are obvious; also the membership of a combination of interests that center at Three Rivers, Canada, including the International Paper Company; also calling attention to a contract of 10,000 tons of Canadian news-print paper made at $35 per ton for one year, beginning February 1, 1908, by the Belgo-Canadian Company, of Shawinigan Falls, with S. A. Cook, of Neenah, Wis., president of the Alexandria Pulp and Paper Company, of Indiana, which would have helped to relieve the shortage in the American market, but which was driven out of the country and delivered to Lloyd, of London and elsewhere, by threats of the New York paper men to destroy the trade of the Canadian mill in the event of its delivery in the United States. Summon Mr. Cook and ascertain from him how much he has paid toward a settlement of that transaction which contributed to maintain an artificial price for paper, and to tax every American publisher whose expiring contract was renewed. Also, how the Canadian government made a gift of 400 square miles to the Berlin Mills Company as an inducement for the building of a paper mill at La Tuque, Canada. We are prepared to show that in 1907, at a time when the demand was large and production was overlapping consumption, that Mr. John A. Davis bought up over 20,000 tons of news-print paper and starved the market. We will show that in 1907, when its total actual cost of making paper, including labor, had increased only 64 cents per ton, the International Paper Company, without jurisdiction, advanced prices $10 and $12 per ton. We will show that the International Paper Company is producing 300 tons per day less of news-print paper than was produced by the mills which it consolidated, and that it has either sold, leased, stopped. or diverted to other uses more than 46 of the 111 machines which it originally acquired. The paper makers lacked in appreciation of their obligations to Congress, because it is fair to assume that an industry which is an object of protection is bound to meet the wants of the consumers. The United States Steel Corporation has recognized this obligation by an expenditure of several hundred million dollars within a few years for new construction, but the International Paper Company, having decreased its daily output and restricted production, has proved itself unworthy of your consideration. We are prepared to show the methods of high finance which capi talized at excessive figures a collection of antiquated mills located on exhausted water courses tributary to denuded forests. The International Paper Company is capitalized on a basis which is three times that of the cost of the St. Regis plant. It represents $35,000.000 of watered capital which its customers must carry. On a capital of $69,000,000 it does a business of $20.000.000 per annum and requiring nearly three and one-half years to turn over its capital in manufacturing. We will show you the depletion of our spruce supply and the abso lute inability of the United States to provide for the needs of the paper industries. We will show you the impossibility of meeting thie situation by reforestization because of the time required to mature spruce forests, and because of forest fires, and because of taxes on standing timber. We will show you that the International Paper Company and other beneficiaries of the tariff on pulp and paper have involved themselves in gigantic speculations in woodlands in Canada whereby money that should have been devoted to the expansion and betterment of American mills has been diverted to Canadian woodlands which can not be made available for use by present owners during the next thirty years. We will give details of the acquirement of over 12.000 square miles of tracts in the Province of Quebec alone. The newspapers represented in the American Newspaper Publishers' Association are divided about equally between the two political parties. They represent many views on many subjects. They are substantially unanimous, however, in asking that the duty on pulp and paper be removed. The canvass made by the Mann committee shows that 715 newspapers replying to its inquiry, 651 favored the removal of tariff and 64 opposed, and that the Republican papers favoring removal outnumbered the Democratic papers which advocated removal. Unlike all other subjects of tariff taxation, users of news-print paper can not pass along the burden to the consumer. The price of a newspaper, like the price of a postage stamp, is fixed. A publisher can not raise and lower his price when the price of news-print paper advances or falls. Neither is it possible to shift the burden to advertisers because of the methods of the paper makers who make longtime contracts with some newspapers at low prices, and refuse to make the same contracts with other papers. They also make contracts that expire at varying dates. As a result of this overlapping of contracts, it would be rarely, if ever, possible to shift the burden of increased cost to advertisers. In a city where a Hearst paper was paying $37.60 per ton to the International Paper Company under a ten-year contract, do you think that another publication subjected to a $50 per ton charge by the same company, could afford to raise its price or increase its advertising rates without the Hearst cooperation? Could it expect to obtain cooperation under such conditions? The proposition that newspapers increase their price as was urged by the general manager of the International Paper Company (p. 734) would mean this: That every purchaser would pay 1 cent per day additional, or $3 per annum for approximately 20,000,000 copies per day, or $60,000,000 in all. Thus it is proposed that the readers of newspapers should pay a tax of $60,000.000 in order that a group of paper makers might take four or five million dollars from the pockets of the people through the publishers. Newspapers are entitled to consideration from you upon that score even if you ignore the extraordinary function they perform in disseminating intelliegnce, in promoting knowledge, and in facilitating the work of government. Those citizens are the best citizens who are in complete touch with the work of administration and the furtherance of the newpaper's mission is worthy of your serious effort. An increase in the consumption of paper is due to the increasing intelligence of the people. According to the best available information, it is calculated that all the paper mills have capacity to turn out about 14,885 tons per day, or 4,546,920 tons per annum, as follows: Seven concerns practically control the output of 71 mills engaged in the manufacture of news-print paper. Their daily capacity may be computed at 4,342 tons per day, as follows: International Paper Company. Berlin Mills_ W. H. Parsons & Co____ Tons per day. 1,416 H. G. Craig & Co., selling agents.. Western interests formerly associated with General Paper Company. 3 mills in Michigan and New York. Total. Pacific coast (2 concerns). Mills not primarily devoted to news.. 450 225 170 500 729 120 3,610 280 301 365 4.556 Total In any contest with Canada the publishers who pay for the paper must ultimately bear the burden of that struggle, not the paper makers who have exhausted the domestic supply of pulp wood. These paper makers have gone to Canada where there are from 200,000,000 to 550,000,000 acres of timber, largely spruce, and they have invested many millions in Canadian woodlands. The International Paper Company owns approximately four and one-half million acres, or nearly 7,000 square miles of Canadian and American tracts. The American paper makers are importing free of duty about 1,000,000 cords of pulp wood per annum. I am told that 23 important news-print paper mills in the United States get substantially all of their wood from Canada. The Ontario authorities, to block the scheme of contervailing duty which was incorporated in the Dingley bill, have prohibited the export of pulp wood cut from crown lands, and in that way they have deprived all the western mills of a cheap and ample supply of raw material. In the Province of Quebec, a tax of 65 cents per cord is imposed on all pulp wood cut from crown lands with a rebate of 40 cents if the wood is put into manufactured form in Quebec. Our courts have decided that that rebate arrangement constituted an export tax of 25 cents per cord on wood pulp, and you have therefore imposed a countervailing duty under the provisions of the Dingley law upon all paper manufactured from wood cut on crown lands in the Province of Quebec. The burden of proving that it was not cut from crown lands is thrust upon the importer. The Canadian paper makers and the Canadian authorities say they are annoyed by the attitude of the American Government. The Canadian paper makers are clamoring for the prohibition of the export of pulp wood from the Province of Quebec, as from the Province. of Ontario. They have formally submitted their request to the Dominion government, and the pressure from them upon it is very strong. Serious consequences to American paper makers are imminent. Every American paper maker who testified before the Mann committee agreed that the prohibition of pulp-wood export by Canada would bring disaster to the trade. It would close many mills, and would force the manufacturer into Canada. The president of the American Paper and Pulp Association, David S. Cowles, on September 13, 1907, sent to all editors of American newspapers a circular letter calling attention to the Canadian threats and bewailing the possibilities of what he regarded as confiscation of American investments in Canada in the event of the adoption of the prohibitory programme. That document was printed in the records of the Mann committee, although an officer of the International Paper Company asked that committee to suppress its publication. (P. 2014.) That gentleman, Chester W. Lyman, who is assistant to the president of the International Paper Company, and who is an agent of all the paper makers, took an amazing position in another letter sent on the day of his request for suppression. (P. 2013.) He said there was an adequate supply of wood left in the United States and that there were undeveloped water powers in the United States sufficient for paper making purposes. He made this declaration notwithstanding the annual importation of nearly a million cords of pulp wood from Canada by the paper makers, and the investment of more than $12,000,000 by them in Canadian woodlands. In other communications this representative argued that the paper makers were not primarily responsible for the rapid destruction of our forests; that paper makers took only 3 or 4 per cent of the total slaughter, and that the wicked lumbermen and the folks who started the forest fires were responsible for whatever damage had been done to the country's resources. Therefore, it would be inferred, it was not necessary for the American paper maker to go to Canada for his wood supply, and upon that proposition we have diametrically opposite views from the paper-mill representatives. The Canadian government is awaiting your action before deciding upon its course. If you attempt to appropriate its pulp wood without some concessions to the manufacturers of that pulp wood, then you invite a trade war. Here, now, you have a distinct menace to an important industry-a menace that would carry serious consequences to the users of paper, causing violent disturbances in paper prices, and a paper famine. You would put a premium upon the destruction of more of our forests with all the baleful climatic conditions that follow such shortsighted methods. The reciprocal relations of the two countries are so extended and complex that the interests which both possess in mutual trade and the necessity imposed upon each side for amiable intercourse should induce everyone to approach this matter in a spirit of fairness and neighborly comity. Are we to tangle our railroad interchanges, our trade of two hundred and fifty millions per annum with that neighbor, in order that we may more quickly slaughter so much of our forests as remain? Are we to start upon a retaliation and industrial warfare to insure another |