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I am interested in a sawmill in North Carolina. We cut hemlock, spruce, poplar, and some other hard woods. Our mill has been shut down for the last year.

A friend of mine in Quebec has shipped 8,000,000 feet of that into New York at a lower price than our Virginia friend could ship it for.

In conversation with the various manufacturers of lumber in Canada, in discussing this tariff problem, which I did last summerI spent six weeks in Canada and saw several lumber men while I was there-as a rule they do not want this tariff changed; they would rather see it as it is. One reason is, it would cause an unsettling of the market. Another reason is, they haven't any more lumber over there than they want. It will not be very long before that portion of the country will be wanting to ship in sumber themselves. If you take off this $2 a thousand duty, they tell me that they can cut their timber closer and ship that low-grade stuff into our markets. That we all know. The moment that is done our manufacturers can not, or will not, cut the low-grade stock—the top logthat in the last few years we have been cutting, and that would be left in the woods.

In 1880, when I first went South, in Louisiana and Mississippi and those coast States, we estimated what the value of government land was. It was nearly all vacant then, and it was timber land. In 1889 it was offered at $1.25 an acre. We located several million acres for northern lumber companies. We estimated those lands would cut about 6,000 feet per acre, and they were then cutting timber. They were not going above the first limbs; the balance was left in the woods or burned up.

The CHAIRMAN. Did they make money then?
Mr. Lacey. They did not make very much then.
The CHAIRMAN. They were struggling along?

Mr. LACEY. Yes; they were struggling along. The local lumber men there were mostly cutting that government timber, and even then they could not make any money.

The price began to advance as stumpage began to advance in value. We began to increase our estimates and they began to cut more to the acre. It has grown from 6,000 until to-day in Louisiana and Mississippi they are cutting from 12,000 to 15,000 feet to the acre, or they were a year ago. At the present time they are not doing it because the general depression has prevented them from making it profitable. But with the prices that prevail they have been able to take out most of the tree and work it up so that it is profitable.

That is one of the greatest sources and will be one of the greatest sources of conservation for the present stand of timber that we can have, the proper maintenance of a price that will warrant the taking out of the entire tree and making it into some useful product, lumber and building materials of various kinds, pulp wood, and many other things that it can be worked into, when the prices of commodities will warrant it.

On the other hand, if we reduce the price of our lumber we can not afford to work out the full amount that there is in the wood, and the length of time that our timber will last will depend very largely on how we cut it.

We will cut 66 or 100 per cent, and it will depend largely on what the price is whether we can do that or not, because the lumbermen are like the rest of humanity; they work for a profit.

The CHAIRMAN. How long prior to 1907 did you cut this low-grade stuff and make it up into lumber?

Mr. LACEY. About ten years. It began in the South; in Missouri first, and then in Arkansas.

The CHAIRMAN. Did you cut that and make a profit?

Mr. LACEY. Not the low-grade stuff, but there was a price high enough so as to warrant that.

The CHAIRMAN. You say you did not make any profit?
Mr. LACEY. Very

rarely you do.
The CHAIRMAN. That gives you a loss?

Mr. Lacey. You dispose of your low-grade product so as to help out to some extent-you want to get something for it if you can.

The CHAIRMAN. And what did you sell it for?

Mr. LACEY. It depended on what section of the country you disposed of it in

The CHAIRMAN. Oh, well, what was the average price?

Mr. LACEY. It makes a great difference. For instance, the average price from 1884 to 1892 was from $10 to $12 a thousand

The CHAIRMAN. How much was the high-grade stock worth at that time?

Mr. Lacey. In Michigan white pine was up to $20 and $22 a thousand.

The CHAIRMAN. Did it cost any more to make the low-grade stock up into lumber? Mr. Lacey. Yes; because you have moreThe CHAIRMAN. How much more difference?

Mr. LACEY. I could not figure that out to a nicety. There are more logs—some logs and the tops simply knotted—it costs more to saw them; it takes more time to handle them. The price is more expensive all the way through.

The CHAIRMAN. It didn't cost much more?
Mr. LACEY. Well, it cost about $1 or $2 a thousand more, probably.

The CHAIRMAN. And you were able to make it at a profit. Of course, last year the price of lumber was low?

Mr. LACEY. Yes; it is low now.
The CHAIRMAN. There is not much demand for it?
Mr. LACEY. No.
The CHAIRMAN. Have you cut wages?
Mr. LACEY. Somewhat.
The CHAIRMAN. How much?
Mr. LACEY. Probably from 5 to 10 per cent.
The CHAIRMAN. Has there been any general cut of wages?
Mr. LACEY. I think there has been; yes, sir.
The CHAIRMAN. A general cut in wages?
Mr. LACEY. Yes, sir.
The CHAIRMAN. Where?
Mr. LACEY. In the South.
The CHAIRMAN. In the South?
Mr. LACEY. Yes, and in the West.

The CHAIRMAN. South and West. You know that is a pretty large territory.

Mr. Lacey. You might say all the way from Richmond, Va., to British Columbia.

The CHAIRMAN. How much of a cut in wages has there been?

Mr. LACEY. It would vary in different localities. In our own mills we have cut wages from 10 to 15 per cent. Probably it would not average over 10 per cent.

The CHAIRMAN. And how much did you cut your dividends?
Mr. LACEY. We have not had any dividends.
The CHAIRMAN. You mean in the last year?
Mr. Lacey. We have not had any in the last year; no, sir.
The CHAIRMAN. You never have had any?
Mr. LACEY. Not in the last year.

The CHAIRMAN. Ten years before-for ten years you have had dividends, have you not? Mr. LACEY. We had dividends for about eighteen years regularly. The CHAIRMAN. How much? Mr. LACEY. We pay the regular 6 per cent dividend, and occasionally we would have a surplus and we would put it in the timber lands.

The CHAIRMAN. Did you put your surplus in the stumpage?
Mr. LACEY. Yes; we have acquired more stumpage when we could.
The CHAIRMAN. And you took that out of your earnings?
Mr. Lacey. Earnings and outside investments.

The CHAIRMAN. You acquired the stumpage independent of your earnings?

Mr. LACEY. Yes.

The CHAIRMAN. You did not take that out of the 6 per cent, I mean?

Mr. LACEY. No, sir.

The CHAIRMAN. You took it out of your earnings, and you have as much stumpage now as you had ten years ago, have you?

Mr. LACEY. Yes; we have more stumpage now.

The CHAIRMAN. And you have cut off a good deal of what you had then?

Mr. LACEY. Yes.
The CHAIRMAX. All of it?
Mr. Lacey. No; we have some of the holdings we had then.

The CHAIRMAN. Have you cut out as much in area as you had ten years ago, an equal amount-well, about, I don't want to take too long, if you can not answer it.

Mr. LACEY. Yes; just about.

Mr. CLARK. It does not make any difference what happens, the stumpage man either holds to what he has or gets more; the stumpage always goes up?

Mr. LACEY. It will continue to go up.
Mr. CLARK. Nothing on earth makes them lose?
Mr. LACEY. No, sir.

Mr. CLARK. Everybody else may lose in the lumber business, but the stumpage man makes his profit?

Mr. LACEY. Well, so far as the manufacturer of lumber is concerned, I do not think there is a lumberman in this room that can show that he has ever made much profit on the strict manufacture of lumber; he has made his money in buying low-priced stumpage and holding that.

Mr. Clark. Are you a partner in the firm of McCormick & Co.?
Mr. LACEY. No, sir.
Mr. CLARK. Have you any dealings with them?

Mr. LACEY. No, sir. I have sold them timber lands. My business has been, strictly speaking, buying and selling timber lands.

Mr. CLARK. When did you sell your timber lands?
Mr. LACEY. In 1897 and 1898.
Mr. CLARK. How much did you get for them?
Mr. LACEY. I got from $10 to $20 an acre for them.
Mr. CLARK. How much a thousand feet?

Mr. Lacer. They run from about $1 to $2 stumpage. In the South

Mr. CLARK. Well, wait a minute; I don't care about the South.
Mr. LACEY. This was in the South-
Mr. Clark. How much do they get for that stumpage to-day?
Mr. LACEY. That is worth from $4 to $5 to-day.

Mr. CLARK. They have made a profit, then, of some 400 or 500 per cent in that length of time?

Mr. LACEY. Yes, sir.

Mr. CLARK. Then, nothing in the world, no matter what happens earthquakes, or cyclones, or what—will keep them from making a profit; they simply go on and make their profit?

Mr. Lacey. They make their profit up to a certain point, and then it will stop.

Mr. CLARK. As a matter of fact, did they not buy a million and a half acres of land at about $6 an acre?

Mr. Lacey. I didn't know what the exact figures were. At the time they were buying that at $6 an acre we were buying land on the coast at about the same price.

Mr. CLARK. Was there not a great row about that whole thing being turned over to the Weyerhæuser Company?

Mr. LACEY. I have never heard so.

Mr. CLARK. Did they not talk about investigating it, as a matter of fraud!

Mr. LACEY. About a million acres, I understand, belonging to the Northern Pacific, and they sold it to Weyerhæuser.

Mr. CLARK. They got it at $6 or $7 an acre, did they not?

Mr. LACEY. Probably somewhere in that neighborhood; yes, sir; although I do not know exactly what they paid for it.

Mr. CLARK. Well, how much is that land worth now?
Mr. Lacey. It is worth probably an average of $50 an acre.

Mr. CLARK. That is a right steep profit in that length of time, is it not?

Mr. LACEY. Yes, sir.

Mr. CLARK. Now, as a matter of fact, Mr. Lacey, when you come down to this stumpage, they got that land for about 15 cents a thousand, did they not?

Mr. LACEY. Yes, sir. Mr. CLARK. And they hold it now and charge these manufacturers of lumber about $3 a thousand ?

Mr. LACEY. I do not think they are selling it at $3 a thousand. I think it is $1.50 to $2. They may occasionally sell some for $3 a

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thousand. Of course their stumpage to-day is stumpage that is very available to transportation.

Mr. Clark. And yet they can not afford to have the tariff taken off lumber?

Mr. LACEY. It is not the holder of the stumpage so much as it is the manufacturer of lumber

Mr. CLARK. Do you think if this $2 tariff was taken off that there would be any imminent danger of Mr. Weyerhäuser and Mr. McCormick landing in the poorhouse!

Mr. Lacey. No, sir; nor any other men of means landing in the poorhouse—that is, men who have been foresighted enough to make good investments like that. So far as the duty on lumber is concerned, I do not see how any man can call it a highly protective duty or that you can call it any more than a revenue tariff

. Mr. CLARK. You do not buy any lumber for consumption, do you?

Mr. LACEY. Yes, I do, and I buy some iron, and I asked why the price was so high, and the carpenter told me

Mr. CLARK. Wait a minute. Whenever you commence that business you are precipitating a row over among those gentlemen at the other end of the table.

Mr. LACEY. I can not help that. Pig iron or coal to-day

Mr. CLARK. Does it strike your mind, you being a fair-minded, philanthropic American citizen, that it would be fair to cut these tariffs down equal to the rate on lumber?

Mr. LACEY. I say cut them down if you want to, but when you cut the tariff down you will cut down your producing power, and when you cut down your producing power you will have to cut down your wages.

Mr. CLARK. What do you mean by cutting down your producing power?

Mr. Lacey. I mean the man I am paying $2 a day to, if everything else is cut down, will have to have his wages cut down also.

Mr. Clark. You have not ingenuity enough to squeeze a part of that out of the stumpage men, instead of taking it all from labor?

Mr. LACEY. Well, they pay their proportion in taxes, and so on.

Mr. FORDNEY. You speak of the relative cost of lumbering. Where you live a large percentage of the tree is left in the woods. You say that your lumber runs from two to four logs to a tree?

Mr. LACEY. Yes, sir.

Mr. FORDNEY. It would cost you just as much to run a railroad to take off your lumber as it would if you utilized all of your tree?

Mr. LACEY. Yes.

Mr. FORDNEY. And therefore it increases the cost of taking up what you do take?

Mr. LACEY. Yes.

Mr. FORDNEY. And naturally the consumer' must pay that eventually?

Mr. LACEY. Yes.

Mr. FORDNEY. Now, then, if that is right, I want to ask you another thing. Much has been said about Mr. Weyerhäuser's investment of 1,000,000 acres, having acquired that from the Northern Pacific Railway Company. Is he to be criticised or punished because his wisdom told him that he was making a good investment when he acquired

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