quotations who would be seated in one room while a clerk would call up someone to ascertain the status of the applicant. Almost invariably prohibitory prices were quoted under such conditions. Scores upon scores of publishers have complained that in some unaccountable way they had been apportioned to a particular mill at a given price and that all the results of a paper pool were accomplished, notwithstanding the denials of the news-print paper makers. What right has the farmer to say who shall make into bread the wheat that he sells? Yet these favored paper makers undertake to follow their paper into our press rooms and to dictate what publications shall be printed upon it. When the selling department of any corporation makes contracts in secret and makes discriminating rates to publishers and favors some and oppresses others, I say that the concern is unsound at its core and that its methods are a crime against the stockholders of that corporation. Upon our application to Congress for relief a year ago we were told that our remedy was through the executive department and the courts. We furnished to the Department of Justice the data by which the Fiber and Manila Association, the Box Board Pool, and the Sulphite Pulp Association could be reached. We furnished evidence against other groups of paper makers. We furnished the data which resulted in the dissolution of the General Paper Company and in the issue of a permanent injunction against its members, prohibiting them from acting in concert. Subsequent to the issue of that injunction many of them cooperated with the Parks Pool in Fibers and Manilas. One of their number, the Petoskey Fiber Company, of Michigan, openly associated itself with that pool. Twenty-two members pleaded guilty to violation of law. They had robbed paper users of an average of $2.000.000 per annum by arbitrarily raising prices $16 per ton, and by closing mills and by restricting production and by depriving labor of its just rewards. because the tariff kept out foreign competition. A federal judge, upon the recommendation of the United States district attorney, Tet them off with a fine of $2,000 each, or $48,000 in all. I hold that indulgence of that sort was not a punishment. It amounted to a license to break the law. If the records of the meetings of the Fiber and Manila Association are examined, I am confident it will be found that many of its members are breaking the law to-day, and that they are meeting regularly to fix prices. As a specimen of the flagrant disregard of law which the Fiber and Manila men show, I exhibit to you the first page of the Paper Trade Journal of November 12, giving the details of a uniform price list which they had adopted as of November 5, 1908, advancing prices $3 per ton. Against the Box Board Pool which invoiced goods exceeding $32,000,000 in value, at a pool profit of $1.835.652 on 853,677 tons, and against the Sulphite Pulp Association, the records of which are in possession of the authorities, not one step of which we are aware has been taken. I noticed that Mr. Sidney Mitchell was on the list to address you on the matter of box boards. It is unfortunate that Mr. Mitchell did not appear, because Mr. Mitchell was head and front of the boxboard pool and the prime factor in the wreck of the United States Box Board Company. The Petoskey company, which was guilty of contempt of court in openly disregarding the writ of prohibition of the court, has appar ently escaped all penalties. To whom shall we look for a stoppage of such lawbreaking? Do you propose to continue to show favor to these transgressors and to saddle upon the paper consumers the burdens of their misdoings? All respect for courts and for laws is destroyed when such things are possible. Carrying our complaints to the Mann committee, and telling our story to that body, we encountered perjury and lying in every aspect. We had charged that the International Paper Company was producing 63.000 tons of manilas annually in four of its mills and was selling that output through the Continental Paper Bag Company, its exclusive selling agent. We charged that the International Paper Com-. pany, through the Continental Paper Bag Company, whose stock it controlled, was participating in that pool. Mr. Waller, vice-president of the International Paper Company, appeared before the Mann committee on May 18, 1908, and unqualifiedly denied any participation or any interest in any combination or any pool of any sort. either directly or through selling agents, and this applied to " any grade of paper." Yet within thirty-two days after that testimony was given, that is, on June 19, 1908, the Continental Paper Bag Company pleaded guilty to participation in the fiber and manila pool. The Continental Paper Bag Company hid its identity in the records of the association by appearing on the minutes as John Smith. And the indictment shows that that association voted (see folio 55 of indictment, a copy of which I have here) to send its uniform price list to Mr. Sparks, of the Union Bag and Paper Company, and one to Mr. Waller, of the International Paper Company, for their guidance." Mr. G. H. P. Gould also appeared before the Mann committee on May 16, 1908, and denied all knowledge of or participation in any combination. On June 19, 1908, that is, thirty-four days thereafter, the corporation of which he was and is president pleaded guilty to participation in the fiber and manila pool. Officers operating western fiber and manila mills appeared before the Mann committee and testified that they knew of no arrangements for restricting output or fixing prices, yet they did meet. They did agree to close their mills for a period. They did close their mills, and they did so in disregard of the prohibition of the United States court dated June 18, 1906. Practically all of the mills of Wisconsin which were participants in the General Paper Company have united in the creation of a traffic bureau which concentrates the routing and handling of one and onehalf million tons of incoming and outgoing traffic for them. The same mills have common buyers who purchase all of their pulp wood. For a time all of them had auditors inspecting their books and gauging their business assumedly for Dean and Shibley. In view of the fact that these mills quote what seem to be agreed prices and accuse each other occasionally of cutting prices, I can not conceive of any machinery more complete for a combination in restraint of trade. The Fiber and Manila Association and the Sulphite Pulp Association affect the news-print paper situation. When mills which can be changed to make news-print paper with slight cost are made exces sively profitable in other directions by these pooling arrangements (see p. 226), then their equipment is kept out of news-print paper production, and a news-print paper famine is promoted. RESTRICTION OF OUTPUT. When the International Paper Company was organized, it absorbed 111 machines making news-print paper, with an assumed capacity of 1,600 tons per day. Three of the machines were sold. Fifteen were discontinued, 5 were leased, and 15 were diverted to other uses. Only 2 machines for making news print have been added to the equipment, and that was not done until after the lapse of nine and onehalf years. To-day it has 67 news-print machines with a capacity of 1,416 tons per day, but as the International Paper Company had diverted 125 tons of its product from domestic to foreign service, the supply to its American customers was 1.291 tons per day, or 309 tons per day less than its rated capacity for news-print production in 1898. If it enjoyed your tariff benefaction it should have taken care of the domestic supply, and the responsibility for a paper famine rests largely on it. We also call attention to the testimony of the manager of the Combined Locks Mill (p. 2102), who shut down his mill and discharged his help rather than solicit orders. On November 25, 1903, all the news-print mills agreed to close down for one week and to reduce the quantity of paper on hand. Notices of the shut down were circulated and printed in the trade press. As a result of that performance there was a paper famine and prices bounded to $50 per ton. Then the Publishers' Association appointed a committee which visited Washington in April, 1904, and appeared before, the Judiciary Committee of the House in an effort to compel the paper makers to keep within the law. Ordinarily a paper mill might shut down when its output exceeded the demand. But when that shutting down is part of an agreement between mills to starve the market and to extort excessive profits from buyers and to throw thousands of workingmen into idleness, then that arrangement assumes another aspect. THE SULPHITE POOL. For more than five years the members of the Sulphite Pulp Pool have been attending monthly meetings to hold up the market by its boot straps. They were continuously embarrassed by the refusal of Theodore Burgess, of the Burgess Sulphite Company, of Berlin, N. H., producing 340 tons of sulphite pulp per day, to restrict his tonnage. Finally, he was bought out by Mr. W. W. Brown, of the Berlin Mills, who cut its production to 90 tons per day, and a shout of great joy went up over the elimination of this disturber. The pool members had not reckoned that the paper makers would desert them. They had a rude awakening, however, when they discovered that the purchasers of sulphite pulp, like George A. Whiting, of Menasha. Wis., were buying sulphite pulp where they could buy it cheapest (see p. 2066). Other mill men, including John Strange (see p. 2086) said they bought foreign sulphite because it was superior to the American product. The Germans had devoted great study and energy to the promotion of the sulphite manufacture and had made many improvements while the American makers were content to run along on primitive methods. The high prices which the American producers had fixed, and to maintain which they had restricted their output, invited large importations of foreign pulp, so that in the first seven months of the year 1908 the foreign makers furnished 57 per cent of all the sulphite used in the United States. Twenty-eight thousand tons came from Europe, 11,000 tons from Canada, and 33,000 tons from American mills. In June, 1908, prices for sulphite dropped to a lower level than they had reached in eight years. The Sulphite men professedly changed their organization on December 19, 1907, to one of statistics, in an effort to evade the federal statute. They now ask that Congress tax all paper users for their benefit by raising the duties on bleached and unbleached pulp. The CHAIRMAN. It is not necessary to read that portion; just skip the part in reference to the newspapers. Mr. NORRIS. Very well. The part referred to is as follows: I submit a schedule of references to testimony of 42 newspapers, on uniform bids; of 54 newspapers, about refusal of mills to quote prices or to make contracts; of 13 newspapers, on lack of competition; of 18 newspapers, on limitation of contracts to one year; of 159 newspapers, on prophecies by paper mill representatives of coming advances in prices and of a paper famine; of 7 newspapers, on interchange of information by mills; of 8 newspapers, on simultaneous advances in prices by paper mills; of 26 newspapers, on the allotment of consumers to particular mills; of 6 newspapers, about quotations made subject to change without notice or for twenty-four hours only; of 11 newspapers, on threats or scores by paper makers; of 99 newspapers, action by mills in fixing prices, including dates of meetings. NO FEAR OF COMBINATIONS. Mr. NORRIS. We have no fear of a trade combination as such. Wher it attempts to combat natural laws of trade it invites failure. In 1897 a new production of 500 tons of news-print paper resulted from the mere discussion of the scheme to consolidate 30 mills. The actual merge of those mills in 1898 induced the building of the Great Northern mill and of similar plants. The proposition to consolidate 20 Western mills into the General Paper Company also increased the Western capacity for paper, and periods of reaction and demoralization followed the seasons of artificial stimulation. The combinations of paper mills induced combinations of supply men, and of dealers in wild lands, all of whom marked up their prices, thereby appropriating much of the additional profits which the consolidators sought to obtain. The newspapers, however, carried everybody's load. What we object to are the methods of the dark lantern and of the sandbag. The following extracts were submitted by Mr. Norris: BOOK MEN MEET. THE THEY DISCUSS THE UNSATISFACTORY CONDITIONS NOW PREVAILING-AFTER MEETING OF THE MANUFACTURERS IT IS REPORTED THAT LEADING WESTERN JOBBERS HELD A LITTLE MEETING OF THEIR OWN-A CONSOLIDATION OF WESTERN BOOK JOBBING HOUSES. [From our regular correspondent.] CHICAGO, ILL., November 2, 1908.--The majority of the western manufacturers of book and coated papers, together with a small representation of eastern manufacturers of the same grades of paper, met at the Auditorium, in Chicago, last week. No public announcement was made of the business transacted. It is reported that preceding the meeting there was a love feast, and that much of the misunderstanding and hard feeling prevailing since the summer meeting, which culminated in a cut of prices, was amicably settled. General conditions were discussed. Most of the manufacturers reported a substantial increase of orders, but that present low prices hardly covered the cost of production. Fears were expressed that the supply of pulp would be short this year. because of the drought. While it was the consensus of opinion that conditions warranted higher prices for book paper, no immediate advance was predicted. Before leaving Chicago several of the manufacturers were very active in soliciting orders at present prevailing prices, and in doing so hinted of possible future advances in price. One large Ohio manufacturer was reported not represented at the meeting. Immediately after the book-paper manufacturers had left Chicago the sales manager of the Ohio mill arrived in town, and coincidently representative paper jobbers from Minneapolis, St. Paul, Louisville, St. Louis, and Kansas City. A meeting of the jobbers was held Saturday, and the Ohio sales manager was much in evidence. Chicago jobbers were not represented at the meeting. The representative of The Paper Trade Journal was told that no report of the meeting would be given to the public. The Minneapolis and St. Paul jobbers stated that they were in Chicago to see the Minnesota boys do up the Chicago University football players, but this did not explain the presence of the jobbers from St. Louis, Kansas City, and Louisville. The Ohio sales manager hinted that it was a birthday party. At any rate, some sort of a conference was held, and in all probability it was in reference to the book-paper situation. The presence at the meeting of Judge Moore, counsel for the West Virginia Pulp and Paper Company, was also reported. It leaked out that there was a scheme of consolidation of ten of the large Western paper jobbing houses in contemplation. What advantages of consolidating were offered are not known to the public. The proposition was such a strange one that it is causing considerable talk in the trade. It seems that the gathering was not instigated by the jobbers, but by the manufacturers. It is reported that only one Chicago house was invited to attend the conference. Nothing definite was transacted, as all of the jobbers attending the conference were not in accord with the movement, whatever it was. One jobber dropped the remark that it would take more money than they had to buy them out, and that as far as his house was concerned he was not interested. Later developments are awaited with interest by the trade, but, like other schemes which look well on paper, may never be realized.-The Paper Trade Journal, November 5, 1908. WRAPPINGS ADVANCED. WESTERN M. & F. MEN ADOPT NEW UNIFORM PRICES ON MANILAS AND FIBERSFIBER PAPERS AND NO. 2 MANILAS ADVANCED ABOUT $3 PER TON, BUT NO INCREASE IS ANNOUNCED ON NO. 1 MANILAS-COST OF PRODUCTION HIGHER BECAUSE OF SHORTAGE OF PULP. The western manufacturers of manila and fiber papers have adopted a new uniform list of prices covering the various grades of manila and fiber papers. The list, which became effective on Thursday of last week, reads as follows: Screenings $2.15 2.60 2.80 2.90 3.05 3.20 3.60 3.15 3.30 3.45 385 |