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SCHEDULE M.-PULP, PAPERS, AND BOOKS.
COMMITTEE OF WAYS AND MEANS;
January 17, 1913. The committee met at 10 o'clock a. m., Hon. Oscar W. Underwood (chairman) presiding.
Present with the chairman: Messrs. Harrison, Brantley Shackle ford Kitchin Rainey Dixon Hull, Hammond, Peters, Palmer, Ansberry, Payne, Dalzeň, Hill, Needham, Fordney, and Longworth.
The CHAIRMAN. The committee will come to order. We will start in on the paper schedule. I find that there are 23 witnesses on this calendar to be heard on the paper schedule, and I want to give them a chance to be heard to-day, so I would like to limit, if it is agreeable to the committee, each of these witnesses to 10 minutes. Now, I want to say to the witnesses that if there are several of them here on the same proposition and they want to combine the time of two or three of them and give a man a chance to make a longer speech here, the committee will allow that. But if not, their witnesses will be confined to 10 minutes each.
TESTIMONY OF THOMAS 0. MARVIN, SECRETARY OF THE
HOME MARKET CLUB, OF BOSTON. The witness was duly sworn by the chairman. Mr. Marvin. Mr. Chairman and gentlemen of the committee: Under the first tariff act of the United States Government, paper was placed on the dutiable list at a rate of 74 per cent ad valorem, for the encouragement and protection of the manufacture of this commodity. At the outbreak of the Revolution there were three mills in Massachusetts and one in Rhode Island. In 1776 a mill in Connecticut manufactured paper for the use of the Hartford Press, and produced in addition much of the writing paper used in the colonies. Pennsylvania is credited with the first paper mill in the country, which was built at Roxboro about 1693. The second mill was built at Elizabeth, N. J., in 1728, and the third in Milton, Mass., during the same year. The manufacture of paper in thó colonies reached sufficient proportions to form the basis of one of the complaints of the British Board of Trade in 1731 and 1732 against the development of manufactures in America.
It seemed to the fathers of the country a wise and natural thing to do to place a duty on the imports of foreign-made paper in the first Federal tariff bill which was ever framed, a bill which was constructed, as stated by Mr. Hartley, a Representative from Pennsylvania, on the idea that the fostering hand of the General Government should extend to all those manufacturos that will tend to national utility.
Probably James Madison had the paper industry, among others, in mind when he said during the debate on the first tariff act:
The States that are the most advxaced in population and ripe for manufactures ought to have their particular interests atiended to in some degree. While those States retained the power of making regulations of trade they had the power to protect and cherish such institutions. By adopting the present Constitution they have thrown this power into other hands; they must have done this with the expectation that those interests would not be neglected.
The first Congress of the United States did not neglect the paper industry, for in its wisdom it imposed a duty of 74 per cent on imports of paper, whịcḥin those days, when the difficulties of ocean transportation amounted to a natural protection of from 20 to 30 per cent, was not-so small a degree of protection as it seems.
The framers of our early tariff laws did not proceed on the theory that the only object of a tariff act was for the purpose of raising revenue. The preamble of the act of July 4, 1789, our first tariff law, declared that the purpose of the act wasor the discharge of the debts of the United States, and the encouragement and proection of manufactures.
This act was signed by George Washington, who presided at the convention which adopted the Constitution, and he definitely approved the policy of protection when he said:
Congress have repeatedly directed their attention to the encouragement of manufactures. The object is of too much consequence not to insure a continuance of their efforts in every way which shall appear eligible.
It was approved by Jefferson, who said: Experience has taught me that manufactures are now as necessary to our independence as to our comfort, and asked,
Shall we suppress the impost and give that advantage to foreign over domestic manufactures?
It was approved by Madison, who said: It will be worthy the just and provident care of Congress to make such alterations in the tariff as will more especially protect and foster the several branches of manufacture.
It was approved by Monroe, who said:
Our manufactures require the systematic and fostering care of the Government. Equally important is it to provide at home a market for our raw materials.
It was approved by Andrew Jackson, who said: The great materials of our national defense ought to have extended to them adequate protection, that our manufacturers and laborers may be placed in fair competition with those of Europe.
Such was the policy adopted by the founders of the Government and the framers of the Constitution, and they based it upon the constitutional provisions which empowered Congressto lay and collect taxes, duties, imposts, and excises; to regulate commerce with foreign nations, and to legislate for the general welfare.
Up to the time when the Union was formed and the States surrendered to the Federal Government all control over import duties, many of the States had their own tariff laws for raising revenue and encouraging industry, and when they transferred this function to the Federal Government they transferred both the power to raise revenue and protect industries. Madison admitted that the powers which the States had had of protecting their industries had been thrown, by the adoption of the Constitution, into other hands,
with the expectation that those interests would not be neglected by Congress. While they retained that power they succeeded in developing some establishments which, he saidought not to perish from the alteration which has taken place; it would be cruel to neglect them and divert their industry to other channels.
Andrew Jackson contended that the right which the States had possessed of fostering industries had not become extinguished when he said:
The right to adjust duties with a view to the encouragement of domestic branches of industry, if not possessed by the General Government, must become extinct, and our political system would present the anomaly of a people stripped of their right to foster their own industry and to counteract the selfish and destructive policy which might be adopted by other nations.
It was under the exercise of this right to protect manufactures, which the States had possessed and which they transferred to the Federal Government, that the following duties have been levied on imports of paper:
Act of July 4, 1789: 74 per cent.
Act of May 22, 1824: Paper hangings, 40 per cent; sheathing paper, 3 cents per pound; printing paper, 10 cents per pound; other paper 15 cents to 20 cents per pound.
Act of August 30, 1842: Bank paper, 17 cents per pound; writing paper, 15 cents per pound; sheathing paper, 3 cents per pound; paper envelopes, 30 per cent.
Act of July 30, 1846: Manufactures of paper, 30 per cent.
Act of June 6, 1872: Paper manufactures excepting unsized printing paper, 314 cents.
Act of March 3, 1883: Paper sized or glued, 20 per cent; printing paper, 15 per cent; sheathing paper, 10 per cent; paper envelopes, 25 per cent; paper hangings, 25 per cent; pulp, 10 per cent.
Act of October 1, 1890: Wood pulp, mechanically ground, $2.50 per ton; chemical, unbleached, $6 per ton; bleached, $7 per ton; sheathing paper, 10 per cent; printing paper, 15 per cent; sensitized paper, 35 per cent; surface-coated, 35 per cent; paper envelopes, 25 cents per 1,000.
Act of August 27, 1894: Wood pulp, 10 per cent; sheathing paper, 10 per cent; print ing paper, 15 per cent; surface-coated paper, 30 per cent; paper envelopes, 20 per cent.
Act of July 24, 1897: Paper envelopes, 20 per cent; if embossed, 35 per cent; writing paper, 2 cents per pound and 10 per cent ad valorem, 2 to 34 cents per pound and 15 per cent ad valorem; paper hangings, 25 per cent.
Act of August 5, 1909: Wood pulp, mechanically ground, one-twelfth of 1 cent per pound; chemical, unbleached, one-sixth of 1 cent per pound; bleached, one-fourth of
cent per pound; sheathing paper, 10 per cent; printing paper, three-sixteenths of 1 cent per pound to eight-tenths of 1 cent per pound; valued above 5 cents per pound, 15 per cent ad valorem; coated surface paper, 5 cents per pound; writing paper, 3 cents per pound and 15 per cent ad valorem.
Reciprocity act, approved July 26, 1911: Pulp of wood; news print paper and other paper valued at not more than 4 cents per pound, the product of Canada, free from export prohibition or restriction, admitted free of duty.
Until the act of 1911 there was no marked change in the policy of the Government to encourage and protect the paper industry. The Walker Act of 1846 gave to this industry a duty of 30 per cent, and the Gorman-Wilson Act of 1894 levied a duty of 15 per cent on printing paper, 20 per cent on writing paper, and 30 per cent on surfacecoated paper.
The attitude of the Government evidenced a belief, to quote the words of Madison, that this industry “ought not to perish. There was no attempt to "neglect" it or divert the industry of the men engaged in it " to other channels."
Under such a policy the manufacturing of paper in the United States increased and prospered and instead of four mills as at the time of the Revolution, the Tariff Board reported in 1911 that there were 824 plants making paper of some kind, with a total productive capacity of 5,196,398 tons. Instead of three or four States, 30 States, including the District of Columbia, now produce paper in some of its forms.
The census report for 1909 shows how under favorable auspices the industry has developed:
Manufactures of paper in the United States (census of 1909). Paper and wood pulp establishments.
777 Wage earners.
75, 978 Capital..
$409, 348,000 Wages..
$40, 805, 000 Value of products.
and wood pulp industry of New England-Census of 1909 and 1899.
In behalf of this industry, which fully meets the test of national utility, in which the capital of American citizens is invested, which provides employment for over 75,000 wage earners, which utilizes the products of our soil and conserves but not destroys our forests, and particularly for the New England paper and pulp industry and the 28,000 employees in the New England paper mills, I respectfully petition the Congress to repeal section 2 of the Canadian reciprocity act and to levy reasonable duties upon imports of wood pulp and paper.
Current importations of paper and manufactures of paper do not measure the menace of the present conditions in regard to the paper industry. Under the policy in vogue for over a century, paper manufacturing steadily developed in this country. To-day, instead of increase it is threatened with decrease. Since the act of 1911 there