PARAGRAPH 201-LUMBER. Mr. HILL. Mr. Rhodes, you do not really fear any competition on lumber from Mexico? Mr. RHODES. Not for many years to come, sir. Mr. HILL. Not during the next hundred years? Mr. RHODES. Yes, sir. Mr. HILL. Why? Mr. RHODES. It is coming now, to some extent. Mexico is shipping into the States to-day. Mr. KITCHIN. Another thing about these fears of our southern friends. In 1909, before the committee, one gentleman stated that Australia had contributed largely to the lumber flood in those three years under Cleveland, and it so happened that Australia shipped in the three years of the Wilson bill under Cleveland just a fraction under 1 foot. Mr. RHODES. I would like to call your attention, gentlemen, to the fact that time is passing. Now Mr. KITCHIN. So that statistics put it down that not a single foot of lumber for which protection is asked was shipped from Australia. Mr. RHODES. Then we have the marine laws to consider. The CHAIRMAN (interposing). What marine laws? Mr. RHODES. The possibility of the Canadian manufacturer shipping into American ports, because he is not restricted in the kind of vessel in which he shall ship. That is a question which will be very much involved with the question of the Panama Canal when that arises. But the Canadian manufacturer has at present considerable advantage, which he is able to use by shipping in any kind of steamer, manned by any kind of seamen. Mr. KITCHIN. You are thinking chiefly of British Columbia? Mr. RHODES. British Columbia and also of the eastern coast. Mr. KITCHIN. Well, where and how are Quebec and Montreal-all that section-going to ship by steamers? Mr. RHODES. There is a great quantity of timber in eastern Canada that could be brought by water to our Atlantic seaboard. Mr. KITCHIN. Do you not know that in eastern Canada lumber is scarcer than it is in any State of the South? Mr. RHODES. No, indeed. Mr. KITCHIN. Is that not so? Mr. RHODES. It has quantities of spruce and pine in the eastern Provinces. Mr. KITCHIN. In connection with this labor question, you lumber protectionists also claim that it costs more here, and therefore our workmen can not come in competition with Canada. I want to say that a gentleman, a member of this committee, who has had years of practical experience, who has examined thousands and hundreds of thousands of acres of timber and the general conditions in Canada, a gentleman who and whose companies own dozens of mills in several States, North, West, and South, and who own several hundred thousand acres of timbered lands, who knows what he is talking about, has given us some information regarding the cost of manufacturing lumber here and in Canada. I refer to our friend Mr. Fordney, a member of this committee. Mr. RHODES. Yes, sir. Mr. FORDNEY. Do not exaggerate all along the line. PARAGRAPH 201-LUMBER. Mr. KITCHIN. Now, let me read you what he said in the House of Representatives on March 30, 1909. A gentleman from his city, Mr. Loveland, a big lumberman, appeared before the committee in 1897 and said: "It costs a little more in this country to manufacture lumber than it does in Canada." That being called to the attention of our friend, Mr. Fordney, he said: There is no doubt about that. Right now it costs twice as much to put a thousand feet of logs onto the market in Canada and convert it into lumber as it does in the State of Mississippi; but that is not due to the difference in the cost of labor altogether. Mr. Fordney continued: In Canada the country is very rough, and the timber on the front-near the United States is all cut off and they must go back to the head of the stream, the rough country, where it is expensive to get supplies and build roads, etc.; and those are the things that enter into the cost of getting out the timber. Mr. RHODES. That is true. Mr. KITCHIN. Do you agree with my friend Mr. Fordney that it costs twice as much to put lumber on the market in Canada than it does in Mississippi, where they get negro labor from 75 cents to $1.25 a day? Mr. RHODES. That does not answer the question that there are many thousands of acres of timber in eastern Canada. Mr. KITCHIN. But not near our line. It is far back, where it costs twice as much to produce as it does here; and I believe our friend Mr. Fordney knows more about lumber than any man in the United States. Mr. RHODES. He does. Mr. KITCHIN. You know it, too. Now, how can you expect any competition, if you had free trade with Canada, with our mills in eastern United States, and especially the mills in the South? Mr. RHODES. You pick out a case for comparison where the very greatest difference would exist, of any condition possible-negro labor in Mississippi and logging in the rough country in the eastern part of Canada. Mr. FORDNEY. In the first place, Mr. Rhodes, he knows that no man can hire negro labor to-day in Mississippi for 75 cents a day. Mr. RHODES. I should say not. Mr. KITCHIN. None of these mills that employ labor, and get it cheap, can possibly have any competition with Canada, where labor is high, even if we put this on the free list. Mr. RHODES. They do, Mr. Kitchin. Mr. KITCHIN. Well, can they if it costs, as Mr. Fordney says, twice as much to manufacture; how can they? Mr. RHODES. There are other conditions than labor that enter into it, if you will let me explain. Mr. KITCHIN. You say that it is labor that makes the difference; but Mr. Fordney says that it is not labor that makes it; he says that the timber is so far back in a rough country that it makes the cost greater than in the United States. Mr. RHODES. Labor is only one element that enters into the cost of producing lumber. PARAGRAPH 201-LUMBER. Mr. KITCHIN. But Mr. Fordney is a practical lumberman, and he knows the business in the United States and knows the total cost of supplies, building roads, cutting it down, and sawing and marketing it. Mr. RHODES. The further fact is that the amount of lumber brought from eastern Canada, as well as that from western Canada, brought into the United States, has been low-grade lumber. We are willing to admit that $1.25 is no protection on the higher grade of lumber It was not proposed to be. Neither would $2 be. Mr. JAMES. Are you willing to have that taken off Mr. RHODES. No, sir. Mr. JAMES. On the higher grades of lumber? Mr. RHODES. Yes; under restrictions. Mr. JAMES. And you want it to stay on this other grade? Mr. RHODES. Yes, sir. Mr. KITCHIN. What do you call cheap grades? You say that the only thing Canada competes with us is with the cheap grades. What price is a cheap grade? Mr. RHODES. If we must eliminate the rate of duty, we would like to have a corresponding reduction on those things which enter into our business. Mr. KITCHIN. What do you call a cheap grade? What price? I know before the Ways and Means Committee in 1909 the people from your section, the West, said from $6 to $8. Mr. RHODES. At the mill; yes. Mr. KITCHIN. At the mill. But lumber that sold in New York or an Eastern State for $17 or $18 per thousand-you would not call that a cheap grade, would you? Mr. RHODES. New York price? That would include the freight. Mr. KITCHIN. I understand. But the Pacific coast does not ship to New York. Mr. RHODES. Not cheap grades. Mr. KITCHIN. The freight is $20 to $26 per thousand, and it does not seem that they could do it. Mr. HILL. Where do you get that $20 to $26 per thousand? Mr. KITCHIN. That is from Oregon, Washington, from the Pacific coast. As I recall, Edward Hines, the largest lumber dealer in the world and a big timber holder who appeared before the committee in 1909, said the freight rates were so high that Chicago was as far east as they could reach from Oregon and the Pacific coast, even with high-grade lumber. These figures are taken from the hearings in 1909. Mr. RHODES. Mr. Dollar, who is a very large owner of seagoing vessels, is on record as saying that the advantage of being able to ship from Canadian ports to American ports in foreign registered boats is $3 and over per thousand feet as compared with shipping from an American port to an American port in an American boat. He is disinterested in the matter, because he is glad to take cargoes from either country. Mr. JAMES. How does the price of furniture in Canada compare with the price of furniture in the United States? PARAGRAPH 201-LUMBER. Mr. RHODES. So far as I am aware the business of manufacturing furniture in Canada is not very largely developed. However, I am not familiar with that business. Mr. JAMES. Well, we export furniture to Canada. Mr. RHODES. Because we make a better grade, possibly. Mr. JAMES. Is it not sold cheaper there than here? Mr. RHODES. Possibly it is. I do not know. Mr. HILL. Is it not true that the Canadian laws prohibit it? They have a duty on any article sold for less than in the country where it is produced-section 6 of the law. Mr. JAMES. The law prohibits many things that are done. Mr. HILL. A Republican would not do anything the law prohibits. Mr. RHODES. Furniture is very far removed from the lumber business. The furniture requires a high class of lumber; and it should not be compared with the case of lumber. The lumbermen feel that, because of the advantages the Canadian manufacturers undoubtedly have-I could go into it if given the time. Mr. LONGWORTH. Right there, what per cent of the total cost do you estimate labor in manufacturing lumber, generally speaking? Mr. RHODES. From 30 to 40 per cent; in a way it is all labor. Mr. LONGWORTH. Thirty to 40 per cent? Mr. RHODES. Yes; but aside from the labor cost there is the question of taxation and fire risk, and in the competition with Canada, the advantage which they have in shipping in foreign boats. Mr. HARRISON. Which grade of lumber is the competition of Canada with the southern business? Is it in spruce or white pine? Mr. RHODES. On the eastern coast in spruce and pine, and on the western coast in fir and cedar. Mr. HARRISON. Well, from what Provinces of Canada do any considerable quantities of white pine come? Mr. RHODES. From Ontario and Quebec and across the Lakes. Mr. RHODES. Yes, sir; some. Mr. HARRISON. There is no white pine, substantially, left standing in the eastern part of Quebec, New Brunswick, or Nova Scotia? Mr. RHODES. Very little, as I understand it. Mr. HARRISON. So that, in those Provinces the only competition is from spruce? Mr. RHODES. There are large quantities of white pine in northern and northeastern Canada, as I understand it. Mr. HARRISON. I think you are mistaken. You can travel there for weeks and not see any white pine to-day where it was accessible to rivers. It is only in spruce. Mr. RHODES. Spruce is the larger part of the product. With respect to the conservation of our forests, the statements which have been made by Mr. Pinchot and Chief Forester Graves and othersMr. HILL. Mr. Pinchot changed his views. Mr. KITCHIN. Before you get to that, I believe this $1.25 that is asked for is for the tens of thousands of laborers in your mills, is it not? PARAGRAPH 201-LUMBER. Mr. RHODES. Yes, sir; principally. Mr. KITCHIN. Well, you or Mr. Jones, who preceded you, said we ought not to take that off unless we give the laboring man some compensation in the reduction of duties on other articles. Well, if we give the laboring man free meats and free boots and shoes and free flour and free salt, and many other articles of necessity free, why, the laboring man would be fully compensated for this $1.25 duty, would he not? Mr. RHODES. The laboring man is directly affected by the kind of lumber that comes into competition with ours. Let Mr. KITCHIN. Well, he said it was for the benefit of the laboring man in his mills; he said if we take that off it was going to hurt the laboring man, and therefore we ought not to take the duty off from lumber; he said we were making the lumberman the "goat." me read you some other articles we placed on the free list in addition to lumber in the bill passed by the House last session: Ham, bacon, fresh and salted meats of all kinds, meal, flour, salt, boots, shoes, sewing machines, etc. Why, if we put lumber on the free list and put these articles for your laboring men on the free list, they will not be hurt by removing the tariff on lumber, will they? Mr. FORDNEY. Are you putting Mr. KITCHIN (interposing). We are going to do that. If we do that, this laboring man will be compensated, will he not? Mr. RHODES. No, sir. There comes in conservation. If the $1.25 is taken off there will be many less men employed in the sawmills, and hence they will have less buying power. Mr. JAMES. Do you agree with Mr. Pinchot that free lumber would affect the conservation question? What is your position on that? Mr. RHODES. We simply argue from this standpoint, that an article is worth saving, if it has any value. If we are obliged to burn up that part of our forest from which we can not convert into an article of value, it is wasted. With the $1.25 duty the Canadians are prevented from shipping into this country, a vast amount of low-grade lumber, which would otherwise come into direct competition with our low-grade lumber. Mr. LONGWORTH. You do not believe that a protective duty on lumber is really a protection against its destruction? Mr. RHODES. Yes, sir; I do. It seems axiomatic, but it is the fact, some people have an idea that to remove the duty would allow the American market to have access to the Canadian timber and thereby lengthen the supply available to this country. It would not follow in that way. When you cut over a portion of land you use that portion of the timber from which you can get a reasonable profit. You allow that from which you can get no profit to stay on the land and it becomes valueless. It rots and burns. Mr. LONGWORTH. Now, how do you answer this question? It is a question I put to Mr. Hines. I said, "If you have a protective duty, the forests will be destroyed, and with a lower duty the price would be lower here, and would it not be wise in the interest of conservation to put the duty so high that lumber would not be imported?" Mr. RHODES. It would, sir. The foresters go that far. Mr. JAMES. Now, would you say that the Government's first duty was to conserve the timber or the citizenship? |