duties in most instances and in a general way, an argument as to why they should be increased in some specific cases.

We understand the revision of the tariff is to be undertaken on the basis that

"Such duties as will equal the difference between the cost of production at home and abroad, together with a reasonable profit to American industries."

We believe the paper industry, as a whole, will be satisfied with such a revision and asks for itself only the same consideration as to protection as is applied to other industries.

Importations of paper and pulp during the last few years should be considered, and if there were some kinds extensively imported. that are, or might be made in this country, the corresponding duties should be increased, not only for the sake of the manufacturer, but to build up the manufacturing industries of this country.

We ask only enough protection to enable us to meet such conditions as are imposed on our industry by nature or law, as we can not overcome by capital or energy the natural conditions existing in other countries due to cheap labor and more abundant nature.

We believe that when business is normal and the demand equal to the supply the tariff has little or no direct influence on prices. During times of depression it is a protection to the home manufacturer, but with the present tariff, under any conditions, the rate is not so high but what foreign paper or pulp can be imported into this country to supply the demand without particular hardship to the

consumer.

During the past year many thousand tons of the different grades of paper and pulp were imported into the United States and at a time when the consumption of this country demanded it. Since January, 1908, at a time of general depression in all manufacturing lines, the paper business was no exception in its experience, with an apparent overproduction. Prices were very materially reduced over what they had been the previous year, due entirely to the law of supply and demand.

The duties on paper and pulp are much lower than the general average on all other lines. The duty on ground wood pulp, on an ad valorem basis, amounts to about 83 per cent, according to the market price in vogue; on chemical pulp, about the same; on newspaper, 15 per cent; on book paper, from 15 to 20 per cent, according to grade; on writing paper, 25 to 35 per cent, according to weight and quality. Some few high-grade papers and specialties take a still higher duty, but the average duty on an ad valorem basis on all imports of paper for the year ending June 30, 1907, was only about 27 per cent, whereas for all merchandise imported under other schedules it was over 40 per cent.

Manufactures of paper imported in 1898 were something like $2,840,000, which increased in 1907 to $10,728,000. During these same periods pulp increased from $600,000 to $6,348,000.

The Treasury Department is unable to give the actual amounts collected on the different grades of paper and pulp imported during any period, but there is no question that if the duty was increased upon the higher grades of chemical pulp the imports would decrease and this same quantity be manufactured in the United States; in

other words, the domestic article would displace the foreign pulps now imported.

This argument will be taken up by one of the members of our association who is thoroughly familiar with the conditions as relating to the higher grades of pulp and the probable results if the duty should be increased to a point where we could compete with the foreign article. When it is known that there are some $300,000,000 invested in the paper and pulp industry, with an annual business of over $200,000,000, showing that it takes a year and a half to turn over the capital, and in some grades nearly three years, it will readily be seen that this business, as compared with many other manufacturing lines, requires more capital for its annual business and therefore needs more profit in the way of returns on the manufactured article.

A portion of the press of the United States to the contrary, no manufacturers of paper in this country have made exorbitant profits, and as a matter of fact they have not received an adequate return on the capital invested as compared with any of the staple industries of this country. While the industry has grown enormously, it is due to the energy of the American manufacturer and to the protection afforded the industry by this Government in the shape of a tariff. Should the tariff be reduced, it would strike a blow that would be most serious to this industry and lead to the abandonment of many mills and the ceasing of operations in the way of building new mills. At the present time there is building a new mill for the production of news paper, with a capacity of 200 tons per day, which will be doubled as soon as the demand warrants. This mill is in the Middle West, with an unlimited supply of raw material, but with the tariff reduced it is very doubtful if capital could be interested in such an enterprise.

The attempt of part of the American publishers to have the duty taken off of paper and pulp during the last session of Congress was a very selfish movement on their part, when it is known that in the last twenty years the price of news paper has been reduced through competition and improved methods of manufacture over 30 per cent, and that where, in the same period of time, the quantity produced per year has increased over 75 per cent, it will readily be seen what a protective tariff has done for the consumer.

Under the present wise policy of this Government this industry can and will maintain the same rapid rate of growth and improvement in methods if protection is not withdrawn. There are abundant water powers, ample supplies of suitable wood and other material to increase the production thousands of tons annually, particularly in the South, where there are many undeveloped water powers, large supplies of suitable wood for the manufacture of paper and pulp, in addition to hundreds of thousands of tons of other materials which are now going to waste, such as cotton-plant stalks and seed delint, flax, cornstalks, and many other fibrous plants.

At the present time the Government is making in this city experiments with cornstalks and from the printed reports so far they promise results that will cheapen some grades of paper over the present method of using wood fiber. It is estimated there are 150,000,000 tons available for this purpose, or 40 times as much as the annual amount of paper of all grades turned out, so that it would seem as

though we still had raw material at our doors for several years to

come.

We beg to call your attention to the very exhaustive statement of Arthur D. Little, official chemist of the American Paper and Pulp Association, read at the annual meeting of the association in February, 1908, a copy of which we beg leave to file with the committee. You will see that the paper manufacturers are fully alive to the important question of raw material supply and are looking and working with a view of obtaining some material which might displace wood eventually through using some material which can be gotten from an annual crop.

In addition to the work which Mr. Little is doing, the Government is also fully alive to the possibilities of some other material. The insular service, through Col. Clarence R. Edwards, is much interested in the question of bamboo as a raw material, which grows luxuriantly in the Philippines and is an annual crop.

The earliest record we have of paper is from the Egyptians, who used papyrus. Since then many different materials have been used, as the necessity of the increasing population of the world needed paper as they became educated, it being truly said that "the consumption of paper is the measure of the people's culture."

After the Egyptian raw material probably came the use of old rags. As the people became more civilized they wore clothes, and these old clothes were made to do their duty in the shape of new paper. Not many years ago the supply of rags became inadequate to supply the demand for paper, then came in straw pulp, made from wheat and rye straw; then came the invention of the present raw material in the shape of mechanical wood pulp, which is so much cheaper than the straw pulp that that process was abandoned. Now there is great fear on the part of a few of the newspaper publishers particularly that the supply of wood is inadequate and that paper and pulp should be put on the free list, so that the markets of the world shall be thrown open as far as the American manufacturer is concerned.

The history of the paper business shows that the American people are well able to cope with any conditions which may confront them, and we firmly believe that before the question of raw material shall become acute other materials will be found to take the place of pulp wood. There are hundreds of thousands of tons of material going to waste to-day which may become a good paper making material as soon as a process is discovered for handling the material cheaply, and this process is sure to come, as all the others have before.

The price of paper has been steadily decreasing for years, and to-day, although the price is higher than it was two or three years ago, the actual figures show that this increase comes from an advance in wages particularly, and material used about a paper mill; not only the raw material, but everything that is used in a mechanical way to run a manufacturing plant.

To-day one of the most successful mills in the United States is equipping a department to use esparto grass, which is to be brought into this country in shiploads from Algiers and made into pulp and paper in this country. This is almost a case of history repeating itself and going back to the Egyptian times, but it only goes to show that the American manufacturer is quite alive to all conditions and possibilities.

With something like four million tons of annual product, the paper industry furnishes to the railroads in the way of freight and raw materials upward of 20,000,000 tons of freight annually. They consume 3,000,000 tons of coal, all from our domestic mines. They sustain a large number of establishments which supply them with machinery and supplies used only in paper mills. They furnish employment directly to over 75,000 men in their plants, and probably 40,000 men in getting out the raw material in the woods and mines, besides indirectly supporting an army of men engaged in supplying them with the material which they use in their manufacturing departments.

For every dollar which the consumer pays for paper it is estimated that nearly 70 cents goes to the wage fund of the country. In many sections of the country they have been the pioneers, building villages, developing power, moving in population to places that have heretofore been waste, necessitating the building of railroads for carrying material and supplies.

From Bulletin 88, issued by the Department of Commerce and Labor, Bureau of the Census, of 1905, we find total water power used in, all industries was, roughly, 1,648,000 horsepower, of which the paper and pulp manufacturers used 718,000, or something like 43 per cent of the total amount developed at that period.

The protective tariff that we have been working under has stimulated the building of paper and pulp mills to an enormous extent. Instead of increasing the price to the consumer, it has stimulated overproduction. The price has steadily gone down in twenty years under a protective tariff from 3 cents a pound down to less than $2 per hundredweight.

During the last year the cost to manufacture has increased considerably both as to labor and as to every article which goes into the manufacture of paper or into the maintenance of the plant.

The contention of the consumer that the manufacturers are reaping an undue profit was thoroughly refuted at the hearings before the select committee in Washington during the last session of Congress, when full reports were made by the paper manufacturers of their increased cost of production. It was shown by tabulating the results of the news mills reporting that the increased cost of production in the last six years was about 35 per cent.

We desire to file with this statement of facts information as to the relative wages paid employees in paper mills in foreign countries as compared with men in the American mills, filling the same positions and doing the same work, under not as good manufacturing conditions as are found in the paper mills of this country. All the mills in the United States having practically been built during a period covered by a protective tariff.

The capital invested in the plants of course is much greater from the fact that everything that has gone into these plants was protected, and it would be very unfair to put a tax upon the manufacturer for every one article which he uses, and then throw his product open to the manufacturers of the world to compete with, with their cheap labor and material.

In going over the schedule of the Dingley tariff, there is no one article in the free list which goes into the manufacture of paper or pulp, or among the articles specified in the reciprocity act of 1897

except the raw material; many of the articles are highly protected, for instance:

In addition to a heavy duty on machinery, castings, and many other articles used directly and indirectly in the manufacture of paper. In addition to Canada a menace is the older countries, who are endeavoring to keep their laborers at home by going into the manufacturing business on a scale never before attempted in those countries. Norway and Sweden are not only able to produce more cheaply on account of labor conditions, but they have ample raw material right at their doors. Russia with her pauper labor and endless forests is going into the manufacture of sulphite pulp on a large scale. How long would it be, with the American market thrown open, before she would also make and send the finished paper in here? To-day the foreign pulps have taken the place of our own to an extent that is keenly felt by our own manufacturers and has thrown many men out of steady employment.

Some of the lower grades of paper-for instance, building or saturating paper are made from the lowest grade of rags. The domestic collections do not supply the American mills and large portions are imported from the poorer foreign countries. These rags come in without duty, but should the tariff be taken off this particular grade of paper--it being now only 10 per cent ad valorem-these manufacturers would be forced to discontinue the manufacture of this grade of paper, and as their mills are not capable of making any other grade with profit it would mean their extinction, throwing out of employment thousands of men, not only those actually engaged in the paper mills, but an army of the poorer class of people in all the large cities who collect this lower grade of material, and for which this is the only use. In many cities these refuse rags are gathered by the municipality in sorting plants, and in this way it gives employment to a great many poor people who sort them, thereby giving employment to an almost helpless class of citizens to earn a small living.

There should be in force an antidumping law to protect the American manufacturer, the same as other countries have.

To-day much of the pulp, principally sulphite class, is being put in here at probably lower figures than it can be made for at home, so low that the American manufacturers can not compete.

It would be impracticable to admit print paper and wood pulp free of duty, or even wood pulp, without disturbing the whole papermaking industry.

Raw material in the shape of wood comes in free of duty. Pulp made from this is a large component part of paper. The pulp-making industry has a large capital investment and employs thousands of men and is entitled to protection in the same ratio as paper, as it is not raw material.

It must be remembered that the newspapers have to a certain extent the ear of the American people and they have emphasized un