houser, who testified before the Senate Committee on Indian Traderships a few days ago, says that his company paid the Indians for pine $2.50 to $3 per thousand. The CHAIRMAN. That is for stumpage? Mr. STOUT. That is for stumpage. The transportation of the logs from the Indian reservation down the Chippewa to the Mississippi costs 85 cents; the cost of labor in preparing it for milling was from $3.50 to $4 per thousand; the price of all lumber was from $14 to $15. I think the price ranges from $5 to $40 per thousand. There is always 10 to 15 per cent. of loss on logs between the reservation and the place of manufacture, caused by decay. Now compare that with the stumpage in Canada. In December, 1887, 450 miles of timber limits were sold for $1,330,699, an average of $2,957 per square mile. This shows an average cost of $4.62 per acre for the privilege of cutting this timber and of paying the further stumpage duty to the government of $1 per 1,000 feet for all that may be cut, and in addition a yearly tax of $2 per square mile. If we average the cut of 10,000 feet to the acre, we find the cost of stumpage to be: License cost, $1.62 per acre, per thousand... Yearly taxes, allowing but one year 462 $1.000 .200 Total paid to government .. 1.662 Canadian limit holders know how, and have just as selfish an interest to hold stumpage at all it will bring as holders of United States timber; and the American buyers of Canadian logs to be towed to American mills do not find themselves able to buy these logs in Canada at a cost delivered in mill boom enough below what they would pay for the same grade of American logs to get very rich from the difference. But if the customs duty of $2 be removed, would not the lumber be sold that much cheaper? Yes, provided the limit-holders in Canada exhibit a trait in human nature so vastly in variance with all our experience. Mr. Oliver Hill, of Saginaw, a large manufacturer of lumber in Michigan, and also an extensive owner of timber limits in Canada, says: I am informed that Mr. Hotchkiss believes that if the Canadian export duty is abrogated, Canadian logs will naturally come in to supply Saginaw mills with stock, but I think it is a plain mathematical proposition that if the Canadian export duty on logs of $2 per thousand, and the American import duty on lumber of $2 per thousand are removed at the same time, that the Saginaw mills will stand in the relative condition as to securing logs to saw from Canada as to-day. The cost of towing and delivering of logs to the Saginaw mills from the Georgian Bay is $2 per thousand. The cost of sawing at Saginaw is about $2 per thousand, and, while Canadian labor costs less than ours, we will call the cost of sawing in Canada the same as here. The freight from Georgian Bay to Buffalo and the eastern market is, by water, substantially the same as from Saginaw. By rail it is less. If you call the freight from both points to Buffalo $2.50 per thousand, you will have these results, which please put down: These figures show that under present conditions as to duties, the Saginaw mills are at a disadvantage of $2 per thousand in handling Canadian logs, and since the imposition of $2 export duty on logs it is well known that they have ceased to come in. Now, let us suppose that both the duties are removed, as Mr. Hotchkiss proposes, and we have: Canadian sawed logs on the Saginaw River: Cost of delivering logs to mills Cost of sawing. Cost of freight to Buffalo.... Per M. $2.00 2.00 2.60 6.50 2.00 2.50 4.50 Under the new conditions the advantage of Canadian mill-owners over Saginaw mill-owners of $2 per thousand would still remain, and the logs would therefore then, as now, be manufactured into lumber in Canada. In that connection I would like to submit the petition of the Board of Trade of Saginaw to Congress in regard to the removal of the duty on lumber : To the honorable Senate and House of Representatives of the United States: Your memorialists, citizens of that State which stands first in the Union in the production of salt and lumber, respectfully but earnestly protest against the tariff legislation now pending in Congress, which threatens with disaster those industries upon which, in a great measure, the prosperity of the entire State depends. The annual surplus of $120,000,000 flowing into the national Treasury is made the pretext for abolishing the duties on salt and lumber, upon which there is annually realized less than $2,000,000, while the main schedule of customs duties is to remain comparatively unchanged. If the surplus is to be arrested by cutting down customs dues, wise statesmanship would say that those taxes should be first removed which bear most heavily upon the people. We here present a partial list of the duties paid in 1885, according to the official tables of the Treasury Department, compiled under the supervision of the late Secretary Manning: An inspection of the revenue table quickly shows whence much of the surplus comes and what taxes in fact burden the people, and it further shows that the duties which now serve to slightly protect from foreign rivalry the dealers and workers in lumber and salt should be among the last to be swept away, because they contribute appreciably neither to the surplus nor the burden. But there are other reasons why Congress should not lay its hands heavily on these industries. Salt is an article of prime necessity. It is, therefore, contrary to the spirit of national safety and independence to invite England and her dependencies to make our country a dumping ground for surplus salt, breaking down the home manufacturer and causing us to look abroad for our main supply. The men of the South, who, during the late war, dug up the dirt floors of smokehouses to extract the salt therefrom, know what it is to have depended on this same foreign supply, yet, to-day, one-third of the salt consumed in this country is of foreign manufacture. Liverpool salt is mined under a scale of wages not quite onehalf that paid in the salt works of Michigan. It is shipped to this country mainly as ballast, and distributed from the sea-board into the interior to points where the increasing freight rates compel it to yield the field to American product. While England has ceased to be a fighting nation, in a military sense, she still fights the war of commercial domination with vigor peculiarly her own. Let the 12 cents per hundred pounds now paid as duty be expended in paying additional freight, and foreign salt will flood the markets of Buffalo, Cincinnati, Chicago, Saint Louis, and Kansas City. She will press the products of Liverpool, Turk's Island, and Canada upon our markets, and will not rest until the ruin she has worked with the salt makers of Louisiana and West Virginia she brings to those of New York, Ohio, and Michigan, and they find themselves, like their brothers near the seaboard, victims of the need and greed of England. There is no better salt made in the world than in Michigan, and we challenge the world to the test. It is to-day sold in bulk in Saginaw for less than Englishmen pay for salt in Liverpool. Two hundred and eighty pounds of standard salt packed in a barrel costing 20 cents may be bought for 60 cents, or at the rate of seven pounds for a cent. On this basis the entire cost to the American people for the salt they annually consume is but 8 cents per capita, or less than one eleventh of the tariff tax alone which they pay on sugar, of 89 cents, and before the repeal of the present protective tariff on either lumber or salt we would invite your consideration to the magnitude of the interests involved, of the investments to be impaired, and the labor to be thrown out of employment, and we would respectfully ask you, charged as you are with the welfare of all the people, how these investments are to be made good, and in what new field this labor is to be employed? And it should not be overlooked that the duties on lumber and salt are not prohibitory, for one-third of the salt used in this country is imported, while onehalf of the entire lumber product of Canada comes in to compete with the home supply. The duty collected on Canadian lumber is less than 16 per cent. This percentage does not to-day equal the difference in the cost of labor in the two countries, and while great armies of men are employed in the lumber business, at least $120,000,000 worth of dutiable commodities are used annually in the production of American lumber. Yet it is proposed that the lumberman shall sell his lumber in the open market, competing with the world, and yet be compelled to buy his rails and locomotives for his logging railroad, his engines, boilers, and machinery for his saw-mills, his axes, saws, chains, and like equipments for his lumber camps, not in the world's market, but from the more favored sons of Pennsylvania, sheltered behind the tariff wall of 30 per cent. against foreign competition. But a cry which originated in Montreal, with men who sought free access to our lumber markets, has been echoing through the East that the Government should protect the forests of the country from destruction. To this we answer, that when the lumberman buys his timber from the Government or its grantee and converts it into lumber to give shelter to man, that he has not destroyed it, but rather converted it to its highest use, the one for which it was ordained. The forest resources are ample for to-day and for all time. It is the history of nations that as they grow in age and riches the use of lumber gives way to that of material more costly, but more durable, and to-day with a pinery of 235,000,000,000 feet standing in the Southern States alone awaiting the demand which is just beginning to be felt, the man who would invite Canada, with her 50,000,000,000 feet of pine, into our market, to save our forests from destruction by making it unprofitable for the owners to cut them, would, in our judgment, be wanting both in good sense and honest patriotism. We believe in the principle of protection against foreign industrial invasions in every form, but, whatever revenue system is to prevail, we ask under it an even place for the interests we represent. If there is to be free trade in lumber and salt, and we are compelled to sell our products cheaper, then the free trader should give us free sugar, free iron and steel, and free woolens; for, if the system be beneficent, we too are entitled to share its benefits. But if the theory of protection to American enterprise and American labor is still to prevail, then the protectionist should continue to give to our great industries that just measure of protection which they deserve, and we, therefore, from protectionists and free traders alike, ask simple justice, and for that your memoralists will ever pray. The CHAIRMAN. That statement you have just read is based on the cost at Buffalo? Mr. STOUT. Yes. The CHAIRMAN. Does that affect in any way the price of lumber on the Mississippi River, that is, whether the duty is removed or not? Mr. STOUT. Yes; it would in this way: Chicago has been able to take what is called the run from the mills, all the best quality, from Michigan and all along the Lakes. The Chicago dealers are then able to ship the better grades east by rail, and the poorer grades to the West. If Chicago is deprived of the Eastern markets, of course that will change the condition of the market entirely. They are able in that way to handle the lumber and dispose of all the different grades of lumber in Chicago, both east and west. Mr. COLEMAN. From Buffalo it could only go east. Mr. STOUT. The value of timber in Canada has been about $2 per thousand feet less than in Michigan since 1880, a sum equal to the tariff of $2. The conditions of the business are much more favorable to the Canadians in several particulars: First, labor in Canada has cost an average of one-third less; second, the merchandise and machinery required to produce lumber are less expensive there; and, third, streams are improved, at the expense of the government, to aid in floating logs where bought of the authorities, and such trees as are not regarded profitable are not cut or paid for, and only good logs are taken from the land by the lumbermen. In the ten years last past competition has been great between the different sections of the timber territory and sufficient to cause manufactured lumber to average lower on the Chicago market than in any distributing market in the United States or Canada. So cheaply has it been sold that shipments have been made to Boston, New York, and other Eastern markets after passing through the costly handling of Chicago docks and fully $2 per thousand feet expended. If Canada was compelled to add annually for ten years to her output of lumber an amount equal to the increased demand of the Western States alone, leaving out New England and New York's increased wants, the natural effect would be to increase wages in Canada. Considerable has been said in discussion in the House of Representatives in regard to the effect upon the forests or forest culture of clearing off all the timber. In 1883 the Ohio State Forestry Association passed a memorial and sent it to Congress asking the removal of duty on lumber. Mr. Adolph Lewe, one of those commissioners, writes as follows to the Lumbermen's Journal: I was one of the committee referred to by Dr. Warder, and voted for the adoption of the memorial, which at that time favored a measure that would advance our forestry interests. But, upon a careful study of the agitation favoring the removal of duty on Canadian timber, I found that many of the newspaper articles were inspired by interested Canadians, and that some of the memorials sent to Congress were written in Canada. This made me somewhat suspicious, and I began to study journals devoted to the lumbering interests, and from them I learn more about the resources of this country than from all other publications combined, and on more than one occasion have expressed myself in favor of the tariff, for I believe, with your friend now residing in Canada, that the working of free lumber will be $2 out to the United States and $2 in to Canada. I further believe that this duty will ultimately help forest culture in the United States, while free lumber from Canada will retard systematic forestry. I have here a clipping from the Lumbermen's Journal, showing the average price of lumber in Chicago from 1872 to 1887; also the wages in Michigan for the same time, and a comparative table of labor and lumber, showing that from 1872, while starting at 100, labor advanced to 123 and lumber declined to about 57. The CHAIRMAN. You may, if you please, hand that table to the reporter to be inserted in the record. 26 TAR In order to make the matter perfectly plain the following diagram has been prepared from the above figures, which will show at a glance the relative rate in the decline and advance in the price of lumber and labor for sixteen years: 1872 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 125 120 115 110 105 100 95 90 85 80 75 70 65 60 55 50 -Labor. Mr. STOUT. It should be more generally known in the United States that the timber tracts of Canada are owned and controlled by the provincial governments, and are only leased by the great lumbermen, not bought in fee simple, as in the United States. All government timber tracts-called limits-are leased by the square mile (640 acres). As there is always a competitive demand for these leases, they are put up at auction, and the right to lease for one year is sold to the highest bidder. At the recent sale of limits by the Ontario government, which took place at Toronto in December last, $5,500 per square mile was paid for |