have been willing to part with them at such figures as they were taken in at in 1897.

Mr. UNDERWOOD. In 1897 the prices had not gone up very extensively?

Mr. LYMAN. Gone up from when?

Mr. UNDERWOOD. Had not advanced as they had up to 1907.
Mr. LYMAN. In 1897 they had not advanced from when?

Mr. UNDERWOOD. They were not nearly as high as they were in 1907, ten years later the general prices?

Mr. LYMAN. Well, our first business year was 1898, and I have given our prices for 1900. My impression is that the prices for 1898 was about the same as 1900, and that the prices in 1897 were

Mr. UNDERWOOD. I do not think you understand the question that I asked you. You say that you put this property in at a low valuation, that you considered it a low valuation, but that had it been put in a few years later it would have gone in at a much higher price. You put it in in 1897 or 1898

Mr. LYMAN. It was appraised in 1897, and the company started in 1898.

Mr. UNDERWOOD. Since that time, according to your statement here, you have not been able to pay any dividends on the common stock?

Mr. LYMAN. Only three small dividends.

Mr. UNDERWOOD. You stated that if this property had been put in a few years later it would have been put in at a very much higher figure. There is nothing here in the earning capacity of the company to warrant that statement-that you could have put it in at a higher figure?

Mr. LYMAN. There was a time during the Spanish war when paper became very scarce and independent mills asked a good deal more for their paper than the International Paper Company did, and it was in our power to ask very much higher prices than we did ask. Mr. UNDERWOOD. The Spanish war occurred at the time you organized, in 1898?

Mr. LYMAN. That was our first year, but the effect was not felt so much until the latter part of 1898 or 1899. I think you will find that generally the stimulus of the Spanish war-I do not remember when the Boer war occurred-but I know that the effect of those occurrences was not felt for a year or so commercially.

Mr. UNDERWOOD. If your statement as to the earning capacity of the company is correct, there is nothing in your earning capacity to demonstrate that the property was worth what you put it in the company for, is there? It has only paid a dividend on two occasions, on the bonds and preferred stock. In 1901 net earnings were 6 per cent on $50.000.000, or on $10,000,000 more than outstanding stock. Mr. LYMAN. The value of a property is not wholly determined by what it will earn; if it were, stock watering, of course, would be justified.

Mr. UNDERWOOD. Then, this stock really has some speculative value; that is, it is speculative value that they have put in here and not an actual value?

Mr. LYMAN. That is a thing that can not be positively said by anybody, because the matter of valuation is uncertain, and one person may say that a thing is worth so much, and another so much; and if

the man who sold that property had said that his property was worth so much in common stock and so much in preferred stock, there is nobody who could prove but that it was right.

Mr. UNDERWOOD. But really, as a matter of fact, the great percentage of the value of this company is upon a speculative estimate as to the value of your water power and your wood holdings-land holdings and not as to the buildings and plants. Is not that so? Mr. LYMAN. The plants are a large element. That is all shown in a statement to the Select Committee showing just how. we make that up.

Mr. UNDERWOOD. Now, it was stated to-day by the gentleman who preceded you on the other side that your mills were old and not up to date, and that no improvements were put into them. Is that so?

Mr. LYMAN. It is wholly misleading. It is a statement that he has harped on for ten or twelve years, ever since the hearings, in 1896, when it was stated that they were dilapidated and old then. It is perfectly absurd.

Mr. UNDERWOOD. If that statement is untrue, then to what extent have you improved your mills and developed them since that time; since your organization?

Mr. LYMAN. The extent to which we could with the outlay of the proceeds of $6,000,000 bonds and what surplus earnings we could make to keep them up.

Mr. UNDERWOOD. How much did it amount to?

Mr. LYMAN. Roughly speaking, $12,000,000 or $13,000,000, perhaps $10,000,000 I would say, because some of these earnings we appropriated in other ways; they were absorbed in working capital-that is, the working capital increased.

Mr. UNDERWOOD. Do I understand you to say that you have improved these plants to the extent of 10 millions of dollars in addition to 6 millions of bonds?

Mr. LYMAN. No; including.

Mr. UNDERWOOD. Four millions of dollars in addition to 6 millions. bonds?

Mr. LYMAN. Yes, sir.

Mr. UNDERWOOD. How much have you increased your working capital since your organization?

Mr. LYMAN. That I am unable to say offhand without working it out from our statement. It fluctuates. We have been having several bad years, and our working capital has been absorbed.

Mr. UNDERWOOD. Do you know what your working capital was when you organized your company?

Mr. LYMAN. Well, I did know, but I don't recollect it. I should say four or five millions.

Mr. UNDERWOOD. What is your working capital to-day?

Mr. LYMAN. I say, I do not know.

Mr. UNDERWOOD. Is it in excess of what it was when you started? Mr. LYMAN. I can not say just what the last balance sheet would show as free capital. I think that when we made up a statement for the Select Committee that it was somewhat less than five millions. Mr. UNDERWOOD. Then you have not increased your working capital since you started?

Mr. LYMAN. That would follow if those guesses are correct.

Mr. UNDERWOOD. But you have added four millions out of your profits to your improvements?

Mr. LYMAN. To maintenance.

Mr. UNDERWOOD. I thought you said a while ago that it was betterments. Maintenance would leave the mill in the same condition, while betterments would put it in a better condition.

Mr. LYMAN. I do not think I used the word "betterments; " I said improvements.

Mr. UNDERWOOD. You said the property was in a better condition than when you started out, and for that reason the gentleman's statement was incorrect. Do you take that back?

Mr. LYMAN. I think I stated that the statement that they were a lot of dilapidated mills, or ever had been so, was grossly misleading. Mr. UNDERWOOD. Well, in view of that, you said that you had put betterments on them probably to the extent of these earnings, $6,000,000 out of bonds and $4,000,000 out of profit. Now, you have been running for about ten years?

Mr. LYMAN. Yes, sir.

Mr. UNDERWOOD. That would represent an earning capacity in addition to what you paid on your stock of about $400,000 a year profit that you have made out of the business?

Mr. LYMAN. I have worked that all out right here $700,000.

Mr. GRIGGS. You say that the earnings of the company in excess of dividends in ten years amounted to $7,381,000, leaving the surplus earnings, together with the proceeds of sale of $6,000,000 of bonds, as having been used mostly in the improvement of plants, which is $13,381,000?

Mr. LYMAN. Yes.

Mr. GRIGGS. You only used $10,000,000 of that?

Mr. LYMAN. I say mostly. I did not substantiate that by looking it up. I know the affairs of the company generally.

Mr. GRIGGS. I am not trying to mix you up at all, but to set you right.

Mr. LYMAN. Yes; I do not want to be held down to too great exactness in making statements in answering questions of this nature. Mr. UNDERWOOD. Counting betterments and improvements, you have a pretty profitable concern?

Mr. LYMAN. Not at all, sir. I do not regard that as at all an adequate profit for the property that is represented.

Mr. UNDERWOOD. What effect do you think it would have on the price of paper if we were to repeal all duties on manufactured wood pulp and paper?

Mr. LYMAN. On the price of paper?

Mr. UNDERWOOD. I will put it in this way: I will not say to remove the duties, but if we adopted a minimum and maximum tariff bill, and the executive department of the Government should enter into a reciprocal agreement under a minimum and maximum tariff rate with Canada that would remove the duties from Canadian wood pulp and Canadian paper-leaving out the balance of the world-I will ask you what effect that would have on the price of paper?

Mr. LYMAN. That would be exactly tantamount to removing the

Mr. UNDERWOOD. That would mean free trade from Canada to this country.

Mr. LYMAN. The effect would be the same as if you took it off here, unless it gives us power to retaliate by going in and getting the Canadian market.

Mr. UNDERWOOD. What I mean is this, to make myself plain: If we had free trade on paper and wood pulp between this country and Canada, leaving out the balance of the world, leaving the duty on for the balance of the world, what effect would that have on the price of paper in the United States?

Mr. LYMAN. I think it would gradually lower the price, and in the course of ten years you would find that the paper was being made up in Canada, and the mills here would be abandoned in a very large number; but the change, as I look at it, would take place gradually. Mr. UNDERWOOD. To what extent would it immediately lower the price?

Mr. LYMAN. I do not think it would immediately lower it at all. There is great scarcity of paper at this minute. If we should have a rainy season before things freeze up, the situation would be relieved.

Mr. UNDERWOOD. At a time when you were able to produce sufficient paper both in this country and Canada, mills running under normal capacity, what effect would it have on the market?

Mr. LYMAN. If we were running to normal capacity and the consumption and production were just about balanced, it would reduce prices just as soon as Canada could increase her output, which we would do.

Mr. UNDERWOOD. Well, if you can not answer my question, all right; but I would have liked to have had from you a statement of facts, as you are in the business, but if you can not make it, say so.

Mr. LYMAN. People are very apt to ask questions from practical men and lead them to make a reply about something which they do not know anything about. Now, I know just enough about this to know that I can not tell you just what is going to happen, because so many things could occur to interfere with that.

Mr. UNDERWOOD. The amount of the tariff on a ton of Canadian paper coming into this country is how much?

Mr. LYMAN. Six dollars.

Mr. UNDERWOOD. Would it reduce the price to the extent of $6 if we took the tariff off?

Mr. LYMAN. I believe it would not at once. It might have that tendency, but before the tendency could work out, some other tendency and influence might get to work that would offset it.

Mr. UNDERWOOD. Then you do not think the reduction in price in this country would amount to as much as $6?

Mr. LYMAN. Not immmediately; no

Mr. UNDERWOOD. Do you think it would ultimately?

Mr. LYMAN. Yes, other things being equal, if no other conditions come in to change it-suppose, for instance, that all the Canadian mills were unionized, and wages were raised. Would not that have a tendency to offset it? There are a great many things like that that can happen.

The CHAIRMAN. Who is the author of this brief that you have presented?

Mr. LYMAN. I wrote it.

The CHAIRMAN. You are the author of it?

Mr. LYMAN. Yes.

The CHAIRMAN. You state that in 1898 the International Paper Company took over the property of a number of corporations by purchase, as I read it. What did they do, buy out the stockholders?

Mr. LYMAN. The old companies-for instance, the Glen Manufacturing Company, that had mills at Berlin-sold all of their property to the new company, the International Paper Company-as`a matter of fact, they sold it to trustees who received it.

The CHAIRMAN. I do not care how the transfer was brought about, but they sold it for what consideration, cash?

Mr. LYMAN. Stock and bonds of the International Paper Company. The CHAIRMAN. Do you remember the amount of stock and bonds? Mr. LYMAN. Of that particular mill, or any mill?

The CHAIRMAN. Yes.

Mr. LYMAN. No; I do not.

The CHAIRMAN. Do you remember that of any of them?
Mr. LYMAN. No; I do not.

The CHAIRMAN. You have figures to tell you of each mill?
Mr. LYMAN. Yes.

The CHAIRMAN. If it would not be too much trouble, I wish you would produce a statement showing the purchase price of each of these properties, and how paid, in cash, bonds, or otherwise.

Mr. LYMAN. We can do that, and would be glad to do it.

The CHAIRMAN. And the capacity of each mill-the number of tons they made each day-at the time of the purchase. Have you got that information here now?

Mr. LYMAN. No; I have not, but I will have my secretary make a memorandum of it and furnish it.

The CHAIRMAN. You may send it to the committee to be filed. Now, you make certain statements here about the wages paid in the mills, your mills, and the foreign mills; that is, you make a statement about one of the Canadian mills. What Canadian mill is that? Mr. LYMAN. The first statement refers to the J. R. Booth mill at Ottawa.

The CHAIRMAN. And what is the capacity of that mill?

Mr. LYMAN. It has increased lately. What is the capacity of the Ottawa mill, Mr. Chable?

Mr. CHABLE. About 100 tons.

Mr. LYMAN. What was it in February?

Mr. CHABLE. The same then.

The CHAIRMAN. And where did you get your information about the wages?

Mr. LYMAN. Mr. Whitcomb, the manager of our manufacturing department at that time, was at that mill, and talked personally with the laboring men in the mill; got it from the men themselves as to what they were being paid, and made a memorandum of it. The CHAIRMAN. When did you get that?

Mr. LYMAN. That was gotten in the spring of this year.

The CHAIRMAN. Did you get information as to the wages paid in any other Canadian mill?

Mr. LYMAN. We did; through the president of one of the labor organizations. He got a partial list of several mills, and one of those is incorporated in that statement; that is the Grand Mere, Laurentide mill.

The CHAIRMAN. You did not put that in your brief?