Mr. UNDERWOOD. Let me ask another question. Do not most newspapers have a percentage, say, two-thirds of their paper contracted for, and do they not buy the rest of it in the open market?

Mr. WILLIAMs. No; I would not say most newspapers. In fact, nearly all newspapers have, or should have, a contract for their current requirements, and then under normal conditions, if it turns out that the mill supplying them cannot give them any more, then they can buy their additional tonnage, or spot tonnage.

Now, the situation today is such that if he has a contract for only two-thirds of the amount he wants to use, there is no place for him to go to get that other one-third.

Mr. UNDERWOOD. Let me ask another question there. Now, when I was a general manager of a paper, I think we paid about $40 a ton for newsprint, under contract. What is that selling for now? Mr. WILLIAMS. $40 is lowest contract price in modern history. Mr. UNDERWOOD. Well, I think so.

Mr. WILLIAMS. The present price is $106 a ton, delivered, New York City. Now, Lexington, Ky., is in another zone, and I should say that the price delivered in Lexington, Ky., is doubtless $109 or $110 a ton.

Mr. UNDERWOOD. Then if a man now did not have quite enough under contract to get his paper out for a year, then he has to go out into the open market and try to buy some paper?

Mr. WILLIAMS. Yes.

Mr. UNDERWOOD. About what would that cost him now?

Mr. WILLIAMS. I mentioned in my statement that it was virtually nonexistent, but that we had heard of some offered at $230 a ton. Mr. UNDERWOOD. Well, now, in your opinion, is there anything in the form, either of legislation or of inquiry, that this committee or the Congress should do that would help relieve the newsprint situation?

Mr. WILLIAMS. I cannot conceive of any legislation at the moment. I think that it is a constructive thing and I was pleased to see this committee take an inteerst in the situation, because I think going back to this committee in the Seventy-ninth Congress, it was very helpful, within my knowledge, when instances arose with respect to situations such as Mr. Ticoulat mentioned yesterday, as to sulfur, and can arise with respect to many phases of this thing. I know of instances where the committee was very helpful in understanding the situation and displaying its interest.

I say I know of no legislation that could be helpful, but I do think that the constant watchfulness of this committee can be helpful in connection with exercising its judgment in meeting some of these problems that are going to arise.

So, for the moment, I would say that this committee could continue to ask such questions as were asked Mr. Ticoulat about the sulfur situation, and keep posted, because after all, there is not enough sulfur for everybody to have all that they want. You heard a list of those different uses read yesterday. They are all, in varying degrees, essential uses.

Mr. HALE. Did you say that there was enough?

Mr. WILLIAMS. No, sir; I said that there was not enough for all essential users to get all they wanted, as I understand it, under present

conditions. I am talking about fertilizers, explosives, pulp and paper, and all, and the dangerous thing about the present sulfur situation is with respect to pulp and paper, that they are using out of inventory, and inventory is not being replaced, because they are being cut 20 percent in sulfur deliveries.

And they bring it in, by the way, as I understand most of the paper mills-I am not a paper mill operator-but my understanding is that they bring in the sulfur in the summer and stockpile it. That is why they have rather large stockpiles now.

Mr. UNDERWOOD. Has the American Newspaper Publishers Association tried, through the paper mills at Lufkin and other places, to develop any methods or as broad a base as they possibly could to help relieve the situation?

Mr. WILLIAMS. Yes. The gentleman from Maine yesterday spoke of this. Outside of the expansion of the Great Northern and St. Croix, which has been steadily increasing their capacities, the only substantial new production of newsprint in the United States was the Lufkin Mill at Lufkin, Tex., which now produces 130,000 tons, and the mill at Coosa River, Ala., which is rated at 120,000, and the distinctive thing about that is that they are making newsprint out of the pine tree. In other words, the Texas mill was the first mill in the world which was set up and operated commercially to use the pine tree, and has demonstrated that it can compete with newsprint made anywhere else.

Therefore, it has proven, from our viewpoint, economical and feasible in these two new mills. We are hoping to get an expansion of those, both of those mills, with new machinery. There are several projects in the South that are in varying stages but, of course, those projects run into trouble now under the present national defense program, when it comes to construction and material and those kinds of things.

Mr. HESELTON. Will the gentleman yield?

Mr. UNDERWOOD. I will yield.

Mr. HESELTON. Mr. Williams, perhaps I am trespassing on my colleague from Maine (Mr. Hale) and his jurisdiction over there, but last night, in view of the inquiry Mr. Dolliver made yesterday about alternative uses of material and I am somewhat interested in the use of various materials-I was interested in seeing this AP press item. It is headed: "Maine mixes spuds, wood in paper."

And it goes on to say:

Will a mixture of potatoes-of which Maine has more than it knows what to do with and wood pulp produce a better grade of paper?

And it goes on to tell about the number of bushels of potatoes produced in Maine, 61,000,000 bushels, and says: "more than half remains to be disposed of."

It further says:

Gardner estimated that 15 to 25 carloads-12,000 to 13,500 bushels of culls and inferior-grade potatoes might be used daily for paper manufacture.

It also says:

Three paper mills will make trial runs of wood-pulp-potato-pulp paper. The University of Maine paper and pulp department also will make pilot tests.

Now, he does not say anything about whether the paper could be used for newsprint, but I assume that in terms of utilizing it that

they might take the starch out if it turns out to be successful and use it, and I am wondering if you know anything about that particular thing?

Mr. WILLIAMS. We have known about the potato-it goes back to this: the chemists tell us that they can make paper out of any cellulose. I mean, that is a basic thing. The whole thing then is, can you make it economically? The word used is "economically," and, of course, "economics" is a curious word. It depends upon what kind of economics you are talking about. But the paper maker or newsprint manufacturers tell us that these other things technically can be used but they have not reached the point where they can be used competitively.

Not laboring the point, these potatoes in Maine have got to be assembled, have got to be brought together, and have got to be out of the ground in season. And they have got to be used pretty quickly, or facilities made for their storage.

Now, the answers we get in connection with bagasse in Louisiana, from the sugarcane and straw and all of those things, is that you can make paper out of them, but you cannot get together a pile big enough for a mill exclusively using that raw material to stay in business the year around.

So, competitively, the paper makers say the tree is the most compact bit of cellulose that can be gotten together to concentrate your raw material and handled in the cheapest methods possible and make a great quantity of paper at the price that it is sold at.

Now, that does not mean that the scientist cannot make paper out of it. There was a dispatch in the newspapers day before yesterday which said that pulpwood production would drop and there will be a shortage of pulp logs by fall unless the Government makes its timberlands available for cutting.

Now, on the other side, I was secretary of the committee that built the mill at Lufkin, Tex., so I know a little about that. The pine tree is available there. But, when you go into other parts of the United States, including Maine, Minnesota, Michigan, you run into privately owned lands that sell their logs off of them, or the mills own them, so that the great untapped reserves of the United States are our forest lands; that is, Government land.

That has had something to do with the economy and the plans for building more mills in this country.

Mr. HESELTON. Well, from the economic point of view, it is my understanding that the Department of Agriculture was selling these potatoes for 1 cent a hundred pounds. That is somewhat economic from one point of view and uneconomic from another.

I was interested in that statement that three paper mills will make trial runs of wood-pulp-potato-pulp paper and the University of Maine paper and pulp department also will make pilot tests, and I thought that that might be something worthy of including in the record.

With that in mind, Mr. Chairman, I would like to ask that this short newspaper story of that experiment be included in the record. The CHAIRMAN. How long is it?

Mr. HESELTON. About 6 inches.

The CHAIRMAN. Without objection, it is so ordered.

(The newspaper article referred to is as follows:)

MAINE MIXES SPUDS, WOOD IN PAPER

PRESQUE ISLE, MAINE (AP)-Will a mixture of potatoes-of which Maine has more than it knows what to do with-and wood pulp produce a better grade of paper?

The spud growers and State agriculture officials, encouraged by a preliminary test, intend to find out. Maine's big paper industry is cooperating.

IMPROVED PRODUCT

An experiment in which refuse from potato starch manufacture was used showed that the combination with wood pulp made a paper of greater strength and finer quality, State Agriculture Commissioner A. K. Gardner says.

Now a full-strength potato mixture will be tried out.

If the process is successful, and industrially feasible, what would it mean to the potato industry? The answer is, plenty.

Take this season for instance. Of the State's 61,000,000 bushel harvest, more than half remains to be disposed of. Until the Korean situation flared so that future food supplies for export and Army use had to be considered, 5,000,000 bushels of Maine surplus tubers were dumped. This means that the Federal Government, which supports the price at about $1.15 per hundredweight, was selling them back to farmers for 1 cent for use as livestock feed or fertilizer. Gardner estimated that 15 to 25 carloads-12,000 to 13,500 bushels-of culls and inferior grade potatoes might be used daily for paper manufacture. Three paper mills will make trial runs of wool-pulp-potato-pulp paper. The University of Maine paper and pulp department also will make pilot tests.

Mr. HESELTON. I would like to ask one more question, in connection. with what was just said with regard to a prospective shortage of pulpwood and the offering of the Government.

I was sent this booklet, and I imagine other members of the committee were. It is prepared by the American Newspaper Publishers' Association. That is your association?

Mr. WILLIAMS. Yes, sir.

Mr. HESELTON. And I notice a dispatch is quoted there, dated December 20. I assume, although I do not know, that that is the year 1950. This refers to the fact that the Forest Service is offering for sale about 412 million cords of pulp from Government land in Colorado. I do not know-at least I do not find anything here indicating whether that purchase has been completed.

Mr. WILLIAMS. It is my understanding that the beetle has hit the spruce tree-I think it is the spruce tree, in Colorado, on our national forests, and the beetle has not destroyed the trees immediately for use for pulp and paper making. There is a project in Colorado under which we had hoped there would be developed a pulp and paper mill, and that the paper would be newsprint. In fact, we have been trying to aid them in getting enough contract commitments to justify the investment. Unfortunately, the last information was they expected to go ahead with this mill, but that they would not make newsprint, but that they were going to use this for pulp, as I understand-in fact, the Government Forest Service has told me that the damage from these beetles, or the destruction is such that the mill can count on a minimum of 30 years' supply of wood to come from that source. That is outside of other cuttings.

Mr. HESELTON. At 200 tons per day capacity, according to this article.

Mr. WILLIAMS. Yes.

Mr. HESELTON. They will have a 30 years' supply?

Mr. WILLIAMS. Yes.

Mr. HESELTON. Does that mean all the mills or just one mill?

Mr. WILLIAMS. That is the total amount of wood that would be available and whether it was consumed by one mill, or two mills, would be a question. As I understand, they are to open bids, the Government had open bids, for the sale of this pulpwood on that project.

Of course, I should imagine that a great deal would depend on the length of the contract. You would not want to build a huge paper mill and feel like you had to bid for your supplies every year.

Mr. HESELTON. Under that particular contract, you say that they have opened bids?

Mr. WILLIAMS. My understanding is that the Government has taken the necessary steps to announce bids that it will have the damaged or beetle-blighted wood available. At least one concern I know of is interested in utilizing it, sufficiently interested to build a mill in Colorado.

Mr. HESELTON. Now, that is a probable source of pulp?

Mr. WILLIAMS. Yes.

Mr. HESELTON. Which is taken into consideration in your estimates, and the estimates furnished yesterday?

Mr. WILLIAMS. No. That is not in our estimates. Our estimates on prospective production covers only the mills in existence or mills that are under construction, like the one out in British Columbia. We do not put into our estimates these projects that are in varying stages of development, other than the one in Alabama and tthe one at Prescott, Ark.

Mr. HESELTON. There is a new mill being built, is there not, in Alberta?

Mr. WILLIAMS. There is a project in Alberta near Edmonton and we have been working with those people to get it developed. Our end of the job is, when a man or a concern says that they want to build a paper mill or want to build a newsprint mill, we say, "Fine. We will go out and try to help you get contracts to assure the use of your product," and, of course, from the financing standpoint, those contracts from a group of newspapers are good collateral for financing purposes, as most of them have to be financed in some manner.

Mr. HESELTON. I do not know whether anybody has asked you this question or not, but if they have not, I will leave it for the record. What is the situation with reference to the source of supply? Let me put it this way. I have some recollection that some of the newspapers were able to provide sources of supplies themselves, independently; that is, they bought up woodland and perhaps even mills. I do not know. Others did not have that source of supply. Of course, they went into the open market for their source of supply.

Is it not a fact that some are protected by contracts of that kind and others are not?

Mr. WILLIAMS. The daily newspapers would fall into several general groups. Of course, the larger group is the user that we speak of. The smaller newspapers, together with the medium-sized newspapers, buy their newsprint and have nothing to do with the ownership of mills, but buy that paper from a producer under contract.

Then there is another group of publishers that have bought stock in mills, like the one in Texas and the one in Alabama, because that was the only way they could be financed. In other words, nobody