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we are able to afford to have.
But when we are forced out he will be left at the mercy of the Canadian manufacturer, no matter whether by their competition or not.
Now, in the Saginaw Valley alone the planing mill and box shop industry represents an industry of $3,000,000, with 2,300 men employed. In Buffalo it is greater still. In Albany it is $1,000,000. And those men will be absolutely thrown out. Now, Canada has a 25 per cent ad valorem duty on lumber.
Mr. KITCHIN. You mean on dressed lumber?
Mr. KITCHIN. It is free on rough lumber.
Mr. GREEN. It is free on rough. There is 25 per cent ad valorem for the protection of the Canadian millman, and the result is that all along the Canadian frontier are lumber mills with lumber going into there from the United States. We can not do any of the Canadian business, and yet, if the duty is lowered on this side, we will not be able to do any of our own business-they will do it all.
Now, as to the nature of the duty as it exists to-day, we believe that it is absolutely out of all reason, because it does not take into consideration the fact that lumber dressed in any one of these specified ways costs exactly the same to work it in that way. Lumber dressed on one side, or two sides and tongued and grooved, costs exactly the same as lumber dressed on four sides; and yet lumber dressed on two sides will weigh much more. The duty on the lumber dressed on three sides is $1.12.
Mr. KITCHIN. You have got that wrong; it is $2.37.
Mr. GREEN. I am speaking solely of the additional duty, in addition to that duty on rough lumber.
Mr. KITCHIN. Dressed two sides is $2.
Mr. GREEN. It is $1.25 plus 75 cents. I was speaking of the additional duty imposed. The duty dressed four sides is $1.50.
Now, another feature of the bill as it now stands is this, that all lumber, no matter what value, pays exactly the same amount of duty per thousand feet. Lumber which comes in here for the purpose of going into piano keys and other high-grade work, worth $1 a thousand, pays, if it comes in dressed, say, two sides, $2 a thousand. Lumber coming here worth $10 in Canada, for the purpose of putting it into boxes for shipping American goods in, pays $1 per thousand. The luxury pays $2 per thousand, while the absolute necessity pays 20 per cent. And for those reasons we think it is absolutely necessary to our business that the duty on dressed lumber shall be lowered not one particle. We prefer to see it increased, for the reason that these mills are building, and as soon as they can be placed in opposition we will be placed in serious competition.
Mr. HILL. You mean the differential between the rough and dressed lumber should not be lowered? I understood you to say it was immaterial whether the duty on rough was lowered or increased.
Mr. GREEN. Yes; there should certainly be more differential than there is to-day.
Mr. FORDNEY. The gentleman says he does not care anything about the duty on rough unmanufactured lumber?
Mr. GREEN. No, sir.
Mr. FORDNEY. Therefore you are not interested in the men from whom you get your raw material?
Mr. GREEN. No, sir. I am not speaking for anybody except this one association.
TESTIMONY OF J. E. RHODES, SECRETARY NATIONAL LUMBER MANUFACTURERS' ASSOCIATION.
J. E. Rhodes, having first been duly sworn by the chairman, testified as follows:
Mr. RHODES. Mr. Chairman, I represent the National Lumber Manufacturers' Association, which is a federation of 15 sawmill associations from the Pacific coast to the Atlantic. The lumber manufacturers are vitally interested in the retention of the $1.25 duty on rough lumber, with the differentials on dressed lumber. If they have apparently shown an indifference, probably, it is because they have, many of them, thought the retention of the duty was hopeless. But I would like to call your attention to three arguments which bear directly upon this from an economic standpoint. The advantage, or rather the disadvantage, which the American lumberman finds himself under, in competition with the Canadian manufacturer, is due principally to our American laws. Canadian manufacturers operate in most of the country under licenses from the Dominion or provincial governments. I presume that the majority of the committee are familiar with the terms of those licenses. The CHAIRMAN. You are talking about Crown lands? Mr. RHODES. Yes, sir.
The CHAIRMAN. That is only 5 per cent of the lands that are covered.
Mr. RHODES. Timberlands in British Columbia, Quebec, Ontario, and what timber there is in Alberta is sold or handled upon the license basis. They pay $140 a square mile west of the Cascade Mountains and $115 east of the Cascade Mountains, and 50 cents per thousand when the timber is cut. The Government thereby carries the risk of fire loss. According to the Canadian Conservation Commission, in its report made last year, this amounts to 13 cents per thousand feet, and is a decided advantage, compared with the necessity of the American manufacturer owning the land outright and paying annually increasing taxes. The Canadian manufacturer figures this advantage from $1 to $1.50 per thousand.
The CHAIRMAN. But I asked you the question if those Crown lands which you are referring to exceed 5 per cent of the timberlands that are being cut in Canada?
Mr. RHODES. That are being cut?
The CHAIRMAN. Yes.
Mr. RHODES. The Crown lands are more than 5 per cent; but there are licenses required for provincial lands. All of the Provinces handle their own lands.
The CHAIRMAN. But the Crown lands belong only to the Province. The Canadian Government has nothing to do with the lands; it is the Province which controls them.
Mr. RHODES. That is true in certain Provinces only. The fact of the matter is that the majority of the sawmills in Canada are operating under licenses. There is no question about that. Probably 90 per cent of the product of the Canadian mills is from timber held under these leases.
Mr. JAMES. How can that be possible when only 5 per cent of the timber is held under those leases?
Mr. FORDNEY. Is it not true that the 5 per cent referred to is in the ownership of the Crown lands where licenses have not been issued?
The CHAIRMan. No.
Mr. JAMES. No; of the amount cut.
Mr. ANSBERRY. The 5 per cent applies to Crown lands in eastern Canada, not western Canada.
Mr. KITCHIN. Mr. Rhodes, there is really no competition of eastern Canada with southern lumber from the Southern States in the eastern market, is there?
Mr. RHODES. Yes; there is.
Mr. KITCHIN. You know you lumbermen came down in 1909 and said, "If you reduce the tariff on rough lumber, Canada will flood the market," and a lot of Southerners came down representing associations and said, "If you reduce the tariff, it will flood our market in the South with Canadian lumber."
Mr. RHODES. Yes, sir.
Mr. KITCHIN. Well, the fact is that since the act of 1909 reducing it from $2 to $1.25
Mr. RHODES. Yes.
Mr. KITCHIN. Taking last year, less lumber was imported into eastern United States, to which the southern lumberman ships lumber, than there was in 1906 or 1907, by many million feet?
Mr. RHODES. The market conditions are entirely responsible for that, for the reason
Mr. KITCHIN (interposing). Well, that is the fact. I have the figures before me. Is it not true?
Mr. RHODES. It is.
Mr. KITCHIN. And is it not a fact that many people appeared before the committee, and it was discussed in the House, that this tariff could not affect the southern lumber in the eastern markets; and was it not predicted that all of the increase, if any, in exports of lumber to this country would be in the western portion of the United States, where British Columbia would ship, and is not that exactly what took place? There has been no increase from eastern Canada to the United States, but the increase of imports, when we did have an increase, which was in 1910, was all in western United States from western Canada. Is that not a fact?
Mr. RHODES. The statistics of the Government would show that there has been a decided increase in exportation of lumber from western Canada to western United States.
Mr. KITCHIN. And a decrease from eastern Canada to eastern United States?
Mr. RHODES. I am not so sure about the statistics showing that.
Mr. KITCHIN. That is correct. There has been a decrease of imports in the East and an increase in the West.
Mr. RHODES. I should suggest, however, that the committee is legislating for the whole United States.
Mr. KITCHIN. That is true; but the gentleman did not seem to understand.
Mr. RHODES. Yes, sir.
Mr. KITCHIN. And the fact is that Canada is really decreasing her exports to this country, and we are largely increasing our exports to Canada?
Mr. RHODES. Canada is not decreasing her exports to the United States.
Mr. KITCHIN. Except that in 1910 she shipped 1,045,000,000 and last year she shipped just 870,323,000 feet, while in 1906 and 1907 she shipped to United States from 20,000,000 to 40,000,000 more than last year?
Mr. RHODES. From one year to another, the market conditions and the conditions of the trade enter so largely into it
Mr. KITCHIN. And is it not the fact that the United States is the greatest export nation of the world in lumber?
Mr. RHODES. It is, naturally.
Mr. KITCHIN. We exported last year in lumber over $50,000,000 worth, and we exported right into Canada, and not as my friend, Mr. Fordney, would say, on account of the opening of the new country in Saskatchewan, and a large portion of this lumber went east of Winnipeg. We are shipping from the South quantities of lumber into eastern Canada each year.
Mr. FORDNEY. I think you are wrong.
Mr. RHODES. The exportation of lumber from the United States to Canada has been largely in the prairie Provinces.
Mr. FORDNEY. That is true.
Mr. KITCHIN. Brother Fordney is mistaken.
Mr. RHODES. Due possibly to the large development of that section, $65,000,000 having gone in there for railroads and for other purposes in the last five years. A further fact I want to call attention to is that the price of export lumber is higher than the price of lumber sold at home by American mills.
Mr. LONGWORTH. Has lumber, generally speaking, increased or decreased in price in the last three years?
Mr. RHODES. It has diminished.
Mr. LONGWORTH. To what extent?
Mr. RHODES. A very considerable extent. Lumber has been sold on the Pacific coast in the last year lower than ever before.
Mr. LONGWORTH. You remember, do you not, that it advanced, or did it, immediately after the passage of the Payne Act?
Mr. RHODES. It did not.
Mr. LONGWORTH. It did not?
Mr. RHODES. No, sir.
Mr. HARRISON. Did you hear the gentleman who preceded you saying that, in his opinion, in the future competition will come from Mexico?
Mr. RHODES. Yes, sir.
Mr. HARRISON. Do you fear that competition?
Mr. RHODES. Yes, sir.
Mr. HARRISON. I wish to read into the record the export of lumber from the United States into Mexico in the years of 1910, 1911, and 1912. In 1910 we exported 108,861,000 feet; in 1911 we exported 101,693,000 feet; and in 1912 we exported 106,574,000 feet. I would call attention to the fact that during the last two years Mexico has been in a state of war and trade temporarily paralyzed. Mr. RHODES. Yes, sir; but Mexico has a considerable quantity of timber.
Mr. KITCHIN. How much would you imagine Mexico has imported into this country in the last 25 years?
Mr. RHODES. The lumbering business of Mexico is yet to be developed.
Mr. KITCHIN. I understand.
Mr. HARRISON. Have you ever been to Mexico?
Mr. RHODES. Yes, sir; I have traveled there.
Mr. HARRISON. Have you not traveled there a thousand miles without seeing a single stick of timber?
Mr. RHODES. Yes; in northern and eastern parts, but on the Pacific coast there is a great quantity of pine.
Mr. KITCHIN. That Pacific coast pine or hemlock never comes to the eastern part of the country?
Mr. RHODES. From Mexico?
Mr. KITCHIN. I mean from western Mexico. It will never compete with southern lumber up in New York, will it?
Mr. RHODES. It may in 15 years from now, by water, through the canal.
Mr. KITCHIN. Well, do you know this, as a historical fact, Mexico is considered a treeless country, and that the United States supplies her largely with lumber; eastern and northern Mexico gets it from the United States, and western Mexico from British Columbia, and that they have not exported in the last 25 years a million feet a year to this country?
Mr. RHODES. There have been no mills there.
Mr. HARRISON. Is it not true, as in Guatemala and Nicaragua, that you can not get laborers to cut it there?
Mr. RHODES. When the timber is wanted it will be cut. The United States has timber enough for a hundred years to come.
Mr. KITCHIN. Well, now, I remember that a distinguished gentleman from North Carolina appeared before this committee in 1909 and made a beautiful speech, and said that during Cleveland's administration, with free trade in lumber, Mexico flooded this country, and she would do it again under free trade, and the fact was that during three years under Cleveland's administration of free trade in lumber Mexico only shipped to this country 6,000 feet, valued at $58. Now, you people are trying to scare us again with the Mexican ghosts.
Mr. RHODES. I want to say that the American lumbermen are looking for Mexican timber land to invest in.
Mr. JAMES. Why did not they do it under the Wilson bill?
Mr. RHODES. They did they were not as well fixed then to buy timber.