not for the rapid increase in value of our New York State wood land, it might be that there would be a greater profit in denuding the property and keeping out of the Canadian wood market than under the present plan of operating. The present tariff schedule is satisfactory to this company, and to reduce it means to compel us to seek our source of supply of raw stock in northern New York; and, while it may mean that we shall be able for some years to compete with the Canadian mills, it plainly means that this can be done only through a sacrifice of the future forest growth in our section. The only way to prevent this effect of any substantial tariff reduction would be for the State of New York to condemn the forest land and pay its present value. In conclusion I desire to express, on behalf of our company, our approval of the conclusions expressed by Mr. Lyman on behalf of the International Paper Company. Respectfully submitted. FINCH, PRUYN &. Co. (INC.), By GEO. N. OSTRANDER, Manager Woodlands. THE ST. REGIS PAPER CO., WATERTOWN, N. Y., WRITES RELATIVE TO STATEMENT MADE OF PRICE OF PRINT PAPER. Hon. S. E. PAYNE, M. C., WATERTOWN, N. Y., November 23, 1908. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: I desire to call your attention to a statement made by John Norris in his brief presented to your committee on Saturday, November 21, which is untrue, together with evidence thereof. The following appears in the first paragraph of Mr. Norris's brief: 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. I inclose herewith a copy of a letter written by me to Mr. Norris on November 13, in which we quote him paper at the rate of $42 per ton for an annual contract of 3,000 tons or more f. o. b. mill. The rate of freight to New York from the mill is $2.60 per ton, making our quotation $44.60 per ton New York instead of $55 per ton New York. Our quotation to Mr. Norris of November 13 has not been withdrawn; indeed, the quotation was confirmed to Mr. Herman Ridder, president of the American Newspaper Publishers' Association, during the week, and as late as Saturday, November 21. I also inclose quotations published by the New York Journal of Commerce and the Commercial Bulletin in their edition printed Saturday morning, November 21, confirmatory of my own quotations, and representing, from their own investigations, current prices. Yours, very truly, ST. REGIS PAPER COMPANY, EXHIBIT A. ST. REGIS PAPER COMPANY, JOHN NORRIS, Esq., DEAR SIR: Messrs. H. G. Craig & Co., sales agents of the St. Regis Paper Company, have been authorized to establish the following prices, subject to change without notice. These prices apply to our product in the eastern territory, and are absolutely invariable, not only as to price, but to terms as well. The quantities are for annual consumption, to be shipped monthly during the year, as near as may be, viz: 3,000 tons or more. 2,000 tons to 3,000 tons. 1,000 tons to 2,000 tons. 500 tons to 1,000 tons_. 100 tons to 500 tons-‒‒‒ $2.10 2. 121 2. 15 2.171 2.20 Prices f. o. b. cars mill, cash thirty days from shipment. Paper to be charged at gross weight, including cores, cores to be credited at 1 cent per linear inch when delivered to the mill. While we have noted that prices are subject to change without notice, it is not intended that they will change excepting as conditions change. Our product is, as you know, not elastic, and we can not sell more than our unsold production, based upon normal running. At the present time we have about 60 tons a day available for 1909. When water conditions become normal again, we intend to make a public quotation for such tonnage as we have available for immediate delivery, or, say, within thirty days, but just at the moment we are not disposed to quote on any other basis than for yearly contracts. G. C. SHERMAN. Yours, very truly, EXHIBIT B. Paper. Little improvement is reported in the water-supply situation at the mills and the consequent restriction of production keeps available supplies of news print scarce. With a good demand for both sheet and roll the market is very firm. Increasing demand is noted for wrappings, and a good business is being done in book and writing papers at full prices. JOHN NORRIS, REPRESENTING THE AMERICAN NEWSPAPER PUBLISHERS' ASSOCIATION, SUBMITS SUPPLEMENTAL STATEMENT RELATIVE TO PULP, AND PRINT PAPER. COMMITTEE ON WAYS AND MEANS, NEW YORK, November 30, 1908. House of Representatives, Washington, D. C GENTLEMEN: In view of the fact that the chairman asked a representative of the International Paper Company to submit a statement of the securities given in exchange for mills merged into that company, I venture to furnish a memorandum bearing upon the condition of those mills when merged. I present the following. Yours, truly, JOHN NORRIS, Chairman Committee on Paper, American Newspaper Publishers' Association. In January, 1898, all the large paper mills of the Eastern States, with a few unimportant exceptions, were merged into the International Paper Company. This corporation was capitalized upon a basis of $55,000,000, divided as follows: Five of the paper mills (Rumford, Niagara, Fall Mountain, Turners Falls, and Montague) rented their power at a total annual cost of $196,000 per annum. Two others were run by steam, which made successful competition by them impossible, and five others had insuffiFour owned no wood lands and ten of the mills had no cient power. sulphite auxiliaries. One hundred and one paper-making machines were comprised in the plants of these mills, but only half of them were of recent construes tion or of desirable pattern. Fifty of the paper machines in the millwere almost worthless. Mr. Whitcomb, general manager, on page 1072 of his testimony before the Mann committee, submitted a table of 67 paper machines making news print paper. Referring to a list of 101 paper machines, he said: They were all making news at the time they were taken into the company. Out of this list of machines, 3 were sold, that is, the mills containing 3 machines were sold; 15 machines were discontinued; 5 machines were leased; the plants containing 5 machines are at present under lease. In further explanation of Mr. Whitcomb's testimony and to reconcile his statement that only 67 paper machines are now making news print paper, it should be stated that 15 machines have been diverted to the making of other kinds of paper. Not one of the mills in all the combination possessed all of the six essentials of the cheapest and most successful manufacture, namely, cheap wood, cheap and ample water power, cheap rates to market, modern machinery, wholesale production and concentration at one place under one supervision. One mill (Haverhill) was dismantled after purchase. One mill included in this combination (Rumford Falls) made profits of $488,000 in four months on a capital of $500,000 and entered the trust on a basis that yielded $4.50 for every dollar of original investment, so that in forty-four months the total return on an investment of $500,000 was $2,750,000. Yet that mill was in such poor shape when acquired by the trust that an enormous outlay was necessary to bring it into condition. Another mill (Ontario) averaged profits of from 32 per cent to 48 per cent per annum, and took $4 in trust securities for every $1 of its stock. One plant (Lawrence) which could not make newspaper on a number of its machines was unloaded upon the trust at a valuation of $22,000 per ton of daily output as a premium to the promotor of the International Paper Company, Mr. W. A. Russell. Another mill that had not made any money in ten years was turned in at $22,000 per ton of daily output. For a mill (Herkimer) that made not 1 cent of profit in 1897-a mill which had no water power, no sulphite attachment, and which carted its pulp 2 miles, an appraisement of $570,000 was put upon it in its merger into the trust. An allowance of nearly $8,000,000 was made for a mill (Glens Falls) one-half of which might better be located upon Boston Common or in New York City. Five years previous the stock capital of that concern had been $300,000. Another company which was merged into the trust on a basis of $3,500,000 had been started on an investment of $60,000-Glen Manufacturing Company. These details are given to show the character of security which you are now asked to protect. Respectfully submitted. JOHN NORRIS. ARTHUR C. HASTINGS, NEW YORK CITY, FILES SUPPLEMENTAL STATEMENT RELATIVE TO PRINT PAPER. Hon. SERENO E. PAYNE, NEW YORK, December 3, 1908. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: I am glad to be able to take advantage of your kind request for information from the manufacturers' standpoint as to what the effect would be on the paper manufacturers by the removal of the duty of $6 per ton on printing paper; also the answer to the request of Mr. Underwood at the proceedings on November 21, evening session; also the request of Mr. Gaines as to the increased cost of a single paper of certain size and weight. I will make each of these calculations and attach hereto. The actual cost conditions in other countries than our own make it necessary that the present duty be retained if the paper manufacturers in the news or wood papers, or so-called wood papers, are to continue in business. I believe that there has been enough testimony before your committee and the select committee of Congress to prove that there has been no adequate return on the capital invested in the paper-manufacturing business in the last twenty-five years, and that the reduction of the duty would mean in a very short time the actual extinction of the average United States paper mills making so-called wood papers. MEMORANDUM OF COMPARATIVE COST OF NEWS PAPER AS COMPARED WITH OTHER COUNTRIES. The figures which are used in this compilation are gathered from reports made by the Department of Commerce and Labor from payroll sheets of the International Paper Company, and would be more correct probably than any figures, coming from an individual mill. Based upon these figures, the rates as to the cost of labor for a ton of finished paper is, in the United States, about $8; in Canada, $5.46; Norway and Sweden, $2.22; Germany, $2.48; Austria, $2.09; so that the difference in cost of manufacture in wages alone for all the countries named, except Canada, is nearly the amount of duty, or $6 a ton. Taking the lower cost of material used in a paper mill which a United States manufacturer has to pay the difference of coming from these countries, their cost of production is more than $6 a ton less than ours. As to the Canadian duty, which is $2.54 a ton on labor alone, there should be added the saving made in manufacture in Canada over the United States mill through their cheaper supply of wood, due to the fact that the actual labor in the woods is cheaper there than in the United States and the fact that many of the mills have the wood delivered to them from the river without any freight. These two items alone, labor and wood, would praetically make up the difference in the cost amounting to the present tariff. The matter of cost has been gone into so exhaustively by your committee and the select committee of Congress that this information could be gotten in detail much more readily than I could give it to you. When the manufacturers of paper in this country do not have enough business to keep their mills fully supplied with orders, prices naturally go down. When there is more than enough business to keep them supplied the prices naturally go up, and foreign paper |