As far as our company is concerned, I wish to say that the cost not only of labor but also of raw materials has advanced to such an extent that we are powerless to meet the foreign competition on sulphite. For instance: Two paper mills at Brownville, within 3 miles of our mill, and one paper mill at Watertown, within 7 miles of our mill, have not bought any of our sulphite for eighteen months. These two accounts used to average about $8,000 per month. We have done everything in our power to get these paper mills back to our sulphite, and they are perfectly willing to use our product in the same quantities that they have always used it providing we will meet the price on the foreign sulphite. These mills that I speak of are buying their Mitscherlich sulphite from Germany and Norway, and we wish you to fully appreciate the fact that the prices which they have had and are having their sulphite delivered at these points are below our cost at the mill.

This situation obtains with practically all of our other customers.

Our daily average production at our sulphite mill for the years 1901 to 1906, inclusive, amounted to about 9,100 tons per year. In 1907 this dropped to 6,516, and in 1908, for the ten months expired, about 5,000 tons production. This gives you some idea of what we have suffered as far as production goes. In other words, during the years 1901 to 1906 our daily production amounted to 34 tons. It has been reduced in 1908 to 20 tons.

Considering the item of pay roll, our pay roll per ton of product produced in the years 1901 to 1906, inclusive, was $5.366. In 1907 our pay roll was $7.1888; in 1908, $7.28.

1901 to 1906, per ton of pulp..

1907 1908

Cost of wood.

$13.28 18. 742 23.91

Answering your first question: The only knowledge I have in regard to the building of additional sulphite mills in Europe is what hearsay evidence I obtain.

Answering your second question: If this increased product is produced, the foreign paper market never will be able to absorb it, which means that they will continue dumping sulphite in this country at prices which will practically shut up our mills.

Answering your third question: We do not believe that the depressed business condition has had much influence on the decline in our sale of sulphite. In other words, we believe that the present ruinous condition of prices in the sulphite market is due entirelv to foreign importation.

Answering your fourth question: I received but a short while ago an offering of foreign sulphite continuing over the year 1909 at a very low price. At the present time I am not sure of the exact figures, as I sent the letter with the samples to Mr. Barratt, of the Union Bag and Paper Company, for his perusal. Answering your fifth question: I do not know what other mills in the country can do, but I do not know that our mill can not run at a profit and meet the present foreign competition.

Have already answered questions 6 and 7.
Question 8. I do not know.

Answering question 9. I certainly should differentiate between importations of quick cook and Mitscherlich sulphites. The prevailing differential in this country between these two grades of sulphite has always been about 15 per cent, and I think that the duty should be differentiated on the same basis.

You may use this letter as you see fit, either for evidence or not, and I should be very glad indeed if I could encroach upon your courtesy sufficiently to ask you to represent our mill.

I would also suggest that you have Mr. Everard at the hearing without fail, as his trip to Europe a short while since places him in position to throw considerable light on the subject.

With very kind regards. and trusting that I may hear from you, I beg to remain, JAMES E. CAMPBELL.

Yours, very truly,

61318-SCHED M -09- -9

Mr. J. E. CAMPBELL,

Dexter Sulphite Pulp and Paper Company, Dexter, N. Y.

DEAR SIR: At the recent meeting of the American Pulp and Paper Association I stated that it was the intention of our company (The Michigan Sulphite Fiber Company) to ask for an increase in duty on European high-grade sulphites, for the reason that the paper mill formerly using considerable quantities of our best grades have offers for immediate shipments or on contracts covering the year 1909 for all their requirements, at prices we could not meet at any reasonable profit, quick cook or direct-indirect being represented as Mitscherlich, when in fact we are advised there are but mighty few Mitscherlich mills in Europe, and few of these exporting to this country.

Our costs for wood, sulphur, coal, and labor have increased during the past ten years about three times as much as the increase in our selling price, and as we can figure out no way to decrease these it is our opinion that the paper mills or the trade using the paper into which our sulphite enters will find it no great hardship to pay the increase which a change of duty will bring about, i. e., one-sixth to one-third of a cent per pound ($3.33 to $6.66 per ton) on unbleached, and from one-fourth to five-twelfths of a cent per pound ($5 to $8.33 per ton) on unbleached sulphite of the higher grades.

Inasmuch as I have been asked to appear at Washington on Friday, the 20th, may I ask you to write me at the earliest date possible, addressed to Port Huron, Mich., what your views on the subject are, and if in accordance with ours, may I ask you to give us all the information you can, and especially on the following questions, giving references to authorities:

First. What knowledge have you on the building of additional sulphite mills in Europe, the product of which is intended for this market?

Second. What, in your opinion, will be the effect on mills in this country if this product is imported under the present duties?

Third. Have the European importations affected your sales, or do you attribute the present low prices entirely to the business depression?

Fourth. Do you know that European sulphite has been offered in sufficient quantities on future long-time contracts to seriously affect your prices? particulars if possible.)

(Give

Fifth. Can mills in this country run on a reasonable profit if obliged to meet this competition?

Sixth. What do you know as to the wages received by employees in European mills by day, or week, and preferably by the ton of sulphite produced?

Seventh. Have you any information as to the cost of wood per cord, or ton of manufactured product?

Eighth. Do you know of any cases where pulp has been shipped to this country as ballast, or on a nominal ocean freight?

Ninth. Would you differentiate between quick-cook, direct-indirect, and Mitscherlich sulphites; and if so, how? Or, on account of practical difficulties and as a manufacturer of Mitscherlich pulp, would you have sulphite declared as above on importing, and ask for the increase in duty on Mitscherlich only for the moral effect?

Kindly give facts and figures as fully as possible and any other information you conveniently can, so that I may have your letter by Tuesday, as data should be prepared Wednesday, following with any further suggestions you might have to make.

Would like to use your letter as evidence if necessary, but will not do so if you do not wish it, using data only for our information.

You understand that I do not presume to represent any of the Mitscherlich mills but our own, although shall be very glad to follow such suggestions as you may have to offer.

As Mr. Everard is pretty well posted on the European situation, I am in hopes he will consent to go to Washington in my place.

Yours, very truly,

November 14, 1908.

(Exhibit F is in reply to this letter.)

MICHIGAN SULPHITE FIBRE Co.,
O. L. E. WEBER, Manager.

EXHIBIT G.

EUROPEAN LABOR.

Statements by employees of the Michigan Sulphite Fibre Company.

I, Charles Helwig, have worked in a paper mill at Danzig, Germany, where I was a machine tender. The machine I ran was about 66 inches in width and ran about 200 feet per minute. I had an oiler or back tender and two reel tenders, same as I have here. In this mill there were two men in the beater room tending nine beaters, and on the whole I think that the amount of help around the mill was about the same as here.

CHAS. HELWIG.

I, Michael Kern, was a fireman in the City Electric Power Plant in Vienna, Austria, where I tended one large boiler with four furnaces. The boiler was about the same size as the No. 5 boiler in this mill, which has four furnaces and is tended by one man. The work over there was about the same as here. MICHAEL KERN.

I, John Feidler, was a bleach man in the paper mill at Gratwin, Austria, where I mixed all the bleach myself, sometimes with one helper. In this mill they had five upright quick-cook digesters, which were tended by one cook and two helpers, working twelve-hour shifts same as they do here. In my opinion there was about as much help around that mill as here.

JOHN FEIDLER.

I, Martin Zellan, worked as cook in a mill at Gratwin, Austria, where there were seven straw cookers. There was one cook and two helpers on each shift of twelve hours each.

MARTIN ZELLAN.

I, Frank Kabolnick, worked as a cook foreman in the paper mills at Gratwin, Austria, in the sulphite department. I have also worked at the Kellner-Partington mills, at Hallein, Austria. At Gratwin we have five digesters which were tended by a cook and four helpers, who filled and emptied the digesters. Here we have a cook and second cook on each shift and six helpers or digester men for emptying and filling, which is exactly the same amount of help to tend the same number of digesters. In my opinion there are about the same number of men to do the same amount of work over there as there are here.

FRANK KABOLNICK.

I, Albert Sieg, was a helper in the sugar mills at Dirschau, Germany. I found that there was not much difference in the amount of work I was required to do there than there is here. I worked from 6 o'clock in the morning till 6 at night, but had an hour for noon and a half hour in the morning and in the afternoon for lunch, which made eleven working hours in all.

ALBERT SIEG.

I, Jacob Glombowski, have worked in a paper mill in Steirmetz, Germany, where I was a beater man. There were four men on the shift tending eight beaters, which we loaded and emptied. This was about the same amount of work I have been accustomed to do here, and I have not noticed any difference in the number of men about a mill in Europe or America of the same size. JACOB GLOMBOWSKI.

STATEMENT OF GEORGE F. STEELE, OF PORT EDWARDS, WIS., RELATIVE TO QUICK-COOKED SULPHITE PULP.

SATURDAY, November 21, 1908.

. Mr. STEELE. Mr. Weber has spoken for the makers of Mitscherlich, or slow-cooked, strong sulphite pulp. The information which he has presented will also serve in large measure to inform you concerning the situation which exists in the making of quick-cooked sulphite

pulp, which constitutes by far the larger share of the sulphite produced in this country. I desire to present some further information in regard to this branch of the industry.

The total production of sulphite pulp in the United States amounts to 4,000 tons daily, or about 1,200,000 tons annually. The capital employed in the construction of mills, investments in water powers, mill sites, and working capital amounts to about $60,000,000. This does not include the value of timber lands, which would greatly increase the total investment. Excluding the investment in timber lands, the capital is turned over once in about fifteen months, but if sufficient timber land were acquired to enable the owners to practice reforestation the turnover would be considerably slower.

The industry employs from 8,000 to 10,000 men in and around the manufacturing plants, and many more in the woods getting out the timber, transporting it to the mills, and marketing the product.

The output of the industry has increased from 200 tons daily in 1890 to 4,000 tons daily in 1908. Of this amount, about 3,000 tons is made directly into paper by the mills producing it and about 1,000 tons per day are put on the market for sale to paper mills which do not produce their own sulphite.

To give an instance of the cost of establishing a sulphite plant, we will take a mill producing 60 tons of sulphite pulp per day. Such a mill would require about 40,000 cords of spruce or hemlock timber annually, and in order that the land might reproduce the timber as fast as it was used there would be needed theoretically 120,000 acres of land. This estimate is based on spruce land, well timbered and running heavily to spruce, but in practice the amount of land required would be very much greater, owing to the impossibility of obtaining bodies of timber land free from much waste and barren land and tracts covered with other kinds of timber. In the most favored locations this would entail a permanent ownership of about 150,000 acres for a 60-ton sulphite mill. I doubt if such a tract could be obtained in this country to-day at less than $20 per acre, equivalent to an investment in land of $3,000,000.

The cost of equipment of such a sulphite plant and its working capital would be about $900,000, so that we would have a total amount of $3,900,000 invested.

The annual product of such a mill at present selling prices amounts to about $700,000, which shows a turnover of the capital employed of once in five or six years. The interest charge on so large an investment at 6 per cent would be $234,000, or about $13 per ton of pulp produced. Thus anything which would affect the profits of the sulphite industry would seriously affect a large amount of capital.

Practically no sulphite pulp is exported, as costs in Canada and Europe are considerably below our costs. Owing to the rapid building of mills in this country and abroad prices have been kept below a point affording a reasonable profit. Owing to the low European labor cost the output in this country, protected by a duty amounting to only 83 per cent, has never afforded a fairly remunerative return on capital, for the price in this country is fixed by the European and Canadian offerings.

Owing to the technical nature of the industry, and the experimental character of the business from its inception, necessitating frequent

changes in equipment, the business has been lacking in fair profits. The depreciation and upkeep of a sulphite pulp mill is unusually high, owing to the use of destructive acids in the manufacture of the product.

Figures have already been sumbitted to you showing the great difference between European labor costs in this industry and those which are paid in this country. I desire to submit herewith (Exhibit A) the statement of the wages paid in the Scandinavian sulphite mills. This statement covers the wages paid in the mills belonging to the Scandinavian Sulphite Association, which includes practically all the Swedish and Norwegian sulphite mills. I have been informed that this association is recognized by the governments of Norway and Sweden, and not only fixes uniform wages for employees, but also fixes uniform selling prices and establishes trade customs.

I also beg to submit a statement (Exhibit B) showing the comparative wages paid in the mills of the Scandinavian Association and in a representative United States mill. This statement shows comparative wages of men in similar positions. The general average wage per hour in the Scandinavian mills amounts to 10 cents per hour, and in the American mill to 26.59 cents per hour. The American wages average 248 per cent higher than those paid in the Scandinavian mills. The average cost for labor in an American quick-cooked sulphite mill is about $5 per ton. The European wages, as shown by the official table of the Scandinavian mills, average 40 per cent of the American wages, or about $2 per ton, leaving a difference between the American and Scandinavian wages of $3 per ton.

The duty on foreign sulphite imported into this country is $3.32 per ton, or about equal to the difference in labor cost between that paid in Norway and Sweden and America. I understand that the wages in Germany are about the same as in the above-mentioned countries, while the wages in Finland and Russia are lower. If the low wages of operatives engaged in cutting the pulp wood were taken into account, the duty would amount to considerably less than the difference in the total labor cost. There are also other advantages which the foreigner possesses, which give him still further aid in underselling us in our own territory.

I submit a statement (Exhibit C) showing that in the year 1907 there were 110,000 tons of foreign unbleached sulphite imported into this country, while American mills were short of shipping up to their full capacity to the extent of 84,000 tons. During this period the foreign mills shipped into this market 39 per cent of the pulp sold. During the present year the situation has been much more serious for the domestic producer, for the recent tremendous increase in production abroad has resulted in a foreign market, which has been badly congested, and has caused a frenzied effort on the part of the forgein producer to market his surplus product in this country, without much regard to cost. I understand that the foreign associations which govern the selling prices have authorized the dumping of the product of their members at a price ruling much below the price abroad, and actually in some cases below the cost of production. This leads to the suggestion that an antidumping law would tend to cause greater stability of prices and to afford more adequate protection to the American manufacturer and working man.