Mr. UNDERWOOD. What effect would it have on the business if we adopted the suggestion of the last witness, and made a specific enumeration of the Kraft paper?

Mr. ELLIOTT. I could not hear his statement. Does he want to raise the duty?

Mr. UNDERWOOD. I could not understand myself, from what he stated, exactly what he wanted, and I thought that possibly you could throw some light on it.

Mr. ELLIOTT. I was so far back that I could not hear it.

Mr. DALZELL. I understood that he wanted to retain the duty as it is now, but with a new classification for Kraft paper.

Mr. UNDERWOOD. What effect would that have on the business? Mr. ELLIOTT. What would be the object of making a classification if it were not to raise the duty and bring it under some other classification where there is a higher duty?

The CHAIRMAN. You say that a new classification would raise the duty, as you understand it?

Mr. ELLIOTT. You asked me if it would?

The CHAIRMAN. Yes.

Mr. ELLIOTT. I do not see any other object, when they are making the paper, as I have stated they are.

Mr. UNDERWOOD. They are making paper of that kind?

Mr. ELLIOTT. Yes. It sells in New York City in competition with the Swedish.

GREASE-PROOF PAPERS.

[Paragraph 402.]

STATEMENT OF R. S. ELLIOTT, OF PHILADELPHIA, PA., RELATIVE TO GLASSINE AND GREASE-PROOF PAPERS.

SATURDAY, November 21, 1908. Mr. ELLIOTT. Mr. Chairman, I think I can get through in five minutes.

The CHAIRMAN. Be as brief as you can.

Mr. ELLIOTT. I desire to present before this committee the following facts, showing why the present rate of duty on glassine and grease-proof papers, as covered by article 402 of the present tariff, should remain the same.

The CHAIRMAN. You can file your brief.

Mr. ELLIOTT. I just wanted to read that page.

The CHAIRMAN. All right.

Mr. ELLIOTT (reads):

The gradual increase in the consumption of these papers in the past twelve years has reached a total, at the present time, of 5,000,000 pounds of greaseproof papers and 10,000,000 pounds of glassine paper per year. Of this amount American manufacturers are producing approximately 4,000,000 pounds of greaseproof papers and 2,500,000 pounds of the glassine. This business has been established under the present rate of duty, and any increase in the rate would tend to upset the conditions which have become established among the various trades using this class of paper. The domestic manufacturers are producing nearly all the grease-proof paper consumed in America, but only a fraction of the consumption of glassine paper. It will be many years before the American

manufacturers will be able to produce the extra 8,000,000 pounds of glassine which is now imported, to say nothing of the natural increase in the consumption of these papers. An increase in the present rate of duty on these classes of paper would prevent the large manufacturers of bags and envelopes in this country from competing with the finished articles, which could be imported from abroad, where the cost of labor of manufacturing is much less.

Now, I want to give you just one point. If you change the specification of this paper and put it at $2.10, it will affect the fig manufacturers in California to the tune of about $40,000 a year. If you change the rate on that paper, it will do that. The reason for that is that glassine paper has only been produced in this country in the last two years. It is a specialty, and if you raise the tariff it would take two or three years for another mill to learn to make that paper. In the meantime concerns like the Worcester Envelope Company and the American Paper Goods Company-that employ hundreds of people-would absolutely be at the mercy of envelopes and photographic inclosures made on the other side.

I would like to read a letter from the Worcester Envelope Company, which will show the situation. [Reads:]

The Ways and Means Committee,

WORCESTER, MASS., November 19, 1908.

National House of Representatives, Washington, D. C.

GENTLEMEN: In reference to the present duty on transparent imitation parchmyn, or glassine paper, we beg to say that we as manufacturers of envelopes and other goods made from this paper find it impossible in the majority of cases to compete with the foreign manufacturer, who can procure the paper at the mill in Germany or in the same country in which he resides.

We understand that there is one factory in this country making paper of this kind, and we are informed by a firm of manufacturers in Europe that they will shortly also establish a branch factory here in this country. They state that it is possible to manufacture this paper here at a good profit with the present existing tariff. From this we submit that there should be no advance, and we strongly urge that there be some reduction, so that we can compete on large orders with the European manufacturers who are placing their goods direct here.

Very respectfully, yours,

Dictated by George D. Barber.

WORCESTER ENVELOPE Co.

Then there is another thing: The American manufacturer asks for a change in the classification of this paper to a parchment paper, but the American manufacturer is able on his grease-proof paper to compete with that vegetable parchment. That vegetable parchment is a much higher grade of paper. There are three manufacturers in this country making it, but the American manufacturer of greaseproof paper has produced such a superior article in color that he is able to influence trade away from the three vegetable parchment mills, who make a much higher grade of stock; so that you could see that to change the classification of this paper, which is a wood paper and not a cotton-stock paper like the vegetable parchment is the vegetable parchment is worth twice as much-and to ask for an increase of 100 per cent, for that is what it amounts to; you can figure out exactly what it means to the American using this paper, like box and envelope makers and factories like that.

Mr. Elliott filed the following:

Notwithstanding the fact that the domestic manufacturers, under the present rate of duty, are now supplying nearly the full consumption of grease-proof papers, they ask for an increase of over 100

per cent in the present rate of duty, and ask for as great a rate as is assessed on vegetable parchment paper, which costs over twice as much per pound. But the domestic manufacturers are also producing an imitation vegetable parchment under the 25 per cent rate of duty which successfully competes with genuine domestic parchment paper.

THE HUBBS & CORNING COMPANY, BALTIMORE, MD., SUBMITS BRIEF RELATIVE TO SWEDISH KRAFT, PARCHMYN, AND GREASE-PROOF PAPERS.

Hon. SERENO E. PAYNE,

BALTIMORE, MD., December 3, 1908.

Chairman Committee on Ways and Means,

Washington, D. C.

DEAR SIR: Having listened with much interest to the proceedings of Saturday, November 21, 1908, before your honorable committee on Schedule M, pulp, paper, and books, I wish to submit some facts for your consideration on the so-called Swedish kraft (strong) papers, also parchmyn or pergamyn, and grease-proof papers. In submitting these facts I do so in behalf of Hubbs & Corning Company (Incorporated), Baltimore, Md., and New York City, dealers or jobbers in domestic wrapping papers and importers of the above-mentioned foreign papers, and last but not least the wrapping paper consuming public generally. These papers now pay a duty of 25 per cent ad valorem under paragraph 402, and we strongly urge and recommend no raise in this rate nor change in classification. It has been fully demonstrated that kraft papers can be produced in this country, to compete with the imported, and at a profit. There are at the present time three large and progressive mills in this country manufacturing a similar article, and, we understand, from pulp manufactured by themselves. A fourth mill manufactured such a paper from pulp made in Canada, on which they pay an import duty into this country. A fifth mill, recently built, we are told, equipped themselves with machinery for manufacturing papers of the sulphite" process, or kraft papers.

I respectfully submit it is not reasonable to suppose that these mills have gone to the expense of installing new machinery and making possibly expensive alterations in their plants necessary to produce an article in which they can see no profit.

The home manufacturer has a protection over and above the 25 per cent duty now existing in the amount of expense incurred in importing and warehousing the foreign article, which on an importation of 5 tons amounts to between 25 cents to 35 cents per hundredweight. There are fixed charges, such as consular fees, wharfage, and labor charges at dock, at times high rates of foreign exchange, marine insurance, and in most Atlantic coast ports there is either a lighterage charge to docks closer and cartage to warehouse, or an extremely long and expensive cartage.

The American manufacturer, with the exception of those who have seen the growth of imported goods and have risen to meet it by pro

61318-SCHED M-09-26

ducing a competitive article, want a tariff sufficiently high to enable them to continue the short method production of poorer and weaker wrapping papers, and the further destruction of our forests. They do not want to admit, without a struggle, that the old methods are "passe," and that the public are demanding a better and stronger wrapping paper for the protection of their merchandise, and if home mills can produce such a paper, and it has been proven they can at a profit, why then should the wrapping paper consuming public be made to suffer by an increase of duty? Such an increase would discourage the manufacturer of what has become a necessary article in this country-a strong paper without unnecessary weight; inasmuch as it would entail an extra expense to equip domestic mills with the necessary machinery for making kraft papers, it is not likely, under a higher tariff, that they would go to this expense, but would be satisfied to continue along the same old lines, grinding up our pulp wood faster than is necessary, were they making a stronger, thinner, and better paper.

A higher duty will do exactly what the American manufacturers of wrapping paper are arguing for, keep out the foreign paper and keep down the standard of quality of American made goods below the point of efficiency. The whole trouble has been that home manufacturers have not studied the best interests of the consumers by making a paper sufficiently good and strong, and at the same time light enough in weight to be attractive in price. Had they done so the foreign article could never have gained a hold in this country.

I do not think the duty should be so high that it enables the American manufacturer to make money without using the necessary amount of brains, and competition is the only encouragement for superiority in one line of American goods over another. The American manufacturer has the cure for the ailment in his own brains and hands, which Providence has given him to use for his own advancement. We can not all be manufacturers; if we could I would say give us a higher tariff, but some of us have to be dealers, consumers, and even importers, and need protection as well as the manufacturers.

The gentleman who represented the wrapping-paper manufacturers before your honorable committee gave comparisons in costs and selling prices of a 60 per cent sulphite paper made in this country, against the foreign kraft paper, which is a 100 per cent chemical pulp paper, and this is in no sense a fair comparison. He should have compared the foreign kraft papers with a paper made from what is known as pure slow-cooked or Meisterlich sulphite pulp, and the difference in weight and cost per ream for the same strength would have been nearer equal. His comparison was ridiculous and misleading. Using this gentleman's figures for making and shrinkage as a basis, which is conceded to be about correct, in the first place the mill making paper to-day profitably has to have its own sulphite plant. and paper machine. At this rate sulphite would cost $30 per ton or $1.50 per hundredweight; shrinkage would be 10 per cent, which would be 15 cents per hundredweight; the manipulation and manufacturing costs 80 cents per hundredweight; in other words, pulp made and turned into paper at $2.45 per hundredweight, giving a pure sulphite paper of the ordinary quick-cooked sulphite.

The slow-cooked or Meisterlich process would cost $35 per ton at the mill, or $1.75 per hundredweight; shrinkage at 10 per cent would

be 17 cents per hundredweight; manipulation, 80 cents per hundredweight; total, $2.723 per hundredweight. Allowing the mill a profit of $10 per ton, or 50 cents per hundredweight, would make the cost of quick-cooked finished paper $2.95 per hundredweight and the slowcooked finished paper $3.224 per hundredweight. In other words, 35 pounds pure sulphite, quick cooked, would cost $1.02 per ream of 480 sheets, 24 by 36 inches, and would test and give a wearing strength better than 25 pounds to a ream of 480 sheets, 24 by 36 inches, of pure kraft imported paper. Twenty-five pounds per ream, 24 by 36 inches, paper made by the slow-cooked process in this country tests practically the same as the same weight and thickness of imported kraft paper and would cost the mill 78 cents per ream, so that it is much cheaper paper to use than the kraft paper.

The gentleman's statements are unreasonable from the fact that he is figuring $35 per ton as the cost of sulphite, whereas that is a good, long, liberal price. He has no right to figure an adulterated paper against a pure article, which he has done by figuring 40 per cent ground wood and 60 per cent sulphite. The ground wood does not add anything to the paper as far as wrapping qualities go. It only cheapens the quality, as it has no strength. He uses the freight rate of $4 per ton, or 20 cents per hundredweight, in his comparison on the domestic paper only, which is exceptionally high, as freight rates will not average over 15 cents per hundredweight. He allows no freight on the imported kraft paper, and the only place the kraft paper can be bought without freight is at seaport towns; and the consumption of kraft paper in seaport towns is a very small percentage of what is used in the country, for it is principally used in manufacturing purposes of all kinds.

In figuring on kraft paper he figures 25-pound basis, which always costs more than the heavier weight; he adds 25 per cent duty and nothing else, while to land this paper at the warehouse even in seaport towns would add 25 cents to 35 cents per hundredweight to his figures. Then again he admits the cost of the adulterated (60 per cent sulphite and 40 per cent ground wood) paper would be $2.55 per hundredweight, including the extravagant freight, and then figures the price to the consumer at 31 cents per pound, which puts on the handsome profit of 70 cents per hundredweight-almost 30 per

cent.

Now taking his cost for the foreign paper in 25-pound basis at $3.75 per hundredweight, adding extra such as interest, insurance, consular fees, brokerage fees, dockage, etc., and this would bring his cost to 4 cents per pound, but he is wrong in his figuring, for No. 1 kraft paper 25-pound basis can not be brought into this country and delivered in warehouses for anything like this price; and, furthermore, is not offered to the consumer at 4 cents per pound, but would average nearer 43 cents per pound for this weight. So you can see it is not a case of cheapness either by comparison of weights, using lighter weight in foreign than in domestic, or by actual price of the goods, but simply the fact there is not enough first-class paper made here, because the mills prefer to make tonnage product and make a cheaper article and make more pounds, whereas the consumer desires a light-weight, strong wrapper.