(d) A producer shall report to NPA, as instructed, on the fifteenth day of each month by telegram the information required by paragraph (d) of section 6 of this order. (e) All persons subject to this order shall make such other reports as may be required subject to approval by the Bureau of the Budget in accordance with the Federal Reports Act of 1942 (5 U. S. C. 139–139 f). SEC. 8. Applications for adjustment or exception. Any person affected by any provision of this order may file with NPA a request for adjustment or exception upon the ground that such provision works an undue or exceptional hardship upon him not suffered generally by others in the same trade or industry, or that its enforcement against him would not be in the interest of the national defense or in the public interest. In examining requests for adjustment claiming that the public interest is prejudiced by the application of any provision of this order, consideration will be given to the requirements of public health and safety, civilian defense, and dislocation of labor and resulting unemployment that would impair the defense program. Each request shall be in writing, shall set forth all partinent facts and the nature of the relief sought, and shall state the justification therefor. All communications concerning this order shall be addressed to the National Production Authority, Washington 25, D. C., Ref: M-72. SEC. 9. Communications. SEC. 10. Records. Each person participating in any transaction covered by this order shall keep and preserve, for as long as this or any successor order shall remain in effect and for 2 years thereafter, accurate and complete records of receipts, deliveries, inventories, and use of chemical wood pulp of all grades, in sufficient detail to permit an audit that determines for each transaction that the provisions of this order have been met. This requirement does not specify any particular accounting method and does not require alteration of the system of records customarily maintained, provided such records supply an adequate basis for audit. Records may be retained in the form of microfilm or other photographic copies instead of the originals. SEC. 11. Audit and inspection. All records required by this order shall be made available at the usual place of business where maintained for inspection and audit by duly authorized representatives of the NPA. SEC. 12. Violations. Any person who willfully violates any provision of this order or any other order or regulation of the NPA or who willfully conceals a material fact or furnishes false information in the course of operation under this order is guilty of a crime and, upon conviction, may be punished by fine or imprisonment or both. In addition, administrative action may be taken against any such person to suspend his privilege of making or receiving further deliveries of materials or using facilities under priority or allocation control and to deprive him of further priorities assistance. NOTE: All reporting and record-keeping requirements of this order have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942. This order, except where otherwise specifically provided, shall take effect on July 1, 1951. NATIONAL PRODUCTION AUTHORITY, DEAR CONGRESSMAN BECKWORTH: We have just received final figures on newsprint consumption and supply for the first 6 months of this year, and I thought they might be of interest to you. From Canada__ From Europe. United States_ Supply First 6 months' supply (tons) 2, 383, 714 92, 420 550, 468 3,026, 602 Deputy Assistant Administrator, Chemical, Rubber and Forest Products Bureau. (Whereupon, at 12:30 p. m., the hearing was recessed until 10 a. m., Wednesday, June 20, 1951.) 80176-51-pt. 1— -16 NEWSPRINT INVESTIGATION WEDNESDAY, JUNE 20, 1951 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The special subcommittee met, pursuant to recess, at 10 a. m., in room 1334, New House Office Building, Hon. Lindley Beckworth (chairman of the special subcommittee) presiding. Present: Representatives Beckworth, Harris, Heller, Wolverton, and Dolliver. Mr. BECKWORTH. The subcommittee will come to order. The first witness we shall have this morning is Mr. Arthur Treanor. Will you identify yourself for the record, please? STATEMENT OF ARTHUR R. TREANOR, DIRECTOR, PRINTING AND PUBLISHING DIVISION, NATIONAL PRODUCTION AUTHORITY Mr. TREANOR. I am Arthur R. Treanor, Director of the Printing and Publishing Division of the National Production Authority. Mr. BECKWORTH. You may proceed, Mr. Treanor. Mr. TREANOR. I have a prepared statement as requested, relating to this subject. Until the announcement of the increase in the Canadian newsprint price obscured the issue, demand for and supply of paper were close to a balance. Conservation plans of the Division seemed likely to bring demand comfortably below supply. With little knowledge of the cross currents which may flow from the price situation we cannot forecast the future at this moment. As of May 31, the eve of the price announcement, newsprint promised approximately 6,000,000 tons as the 1951 total of production and imports, and also of probable consumption. There was also close to a balance of demand and supply for other varieties of printing paper. In the commercial printing field there were allotments but no genuine pinch. Printers had to shop for paper, but they were getting it. In books there was ample paper except for small quantities of Bible paper-solved by the Division by securing supplies of titanium-and for some book publishers who used newsprint and had not covered their requirements by contract. The larger and longer-established magazine companies were quite comfortable under their paper contracts; the only magazines which appealed for aid were those smaller and newer established units printed by printers whose newsprint sources were shrunken or lost. The extra paper demands of the mobilization for defense had thus far been met by increases in production on both sides of the border. Into this fairly stabilized picture came the bombshell of the priceincrease announcement. Much as it will harm and disorganize American newspapers, it must be considered as much more than a direct hit. In an economy even of only partial price controls, it will be difficult to justify paying more for newsprint produced in Canada than to our own mills. It flows from this that it will be difficult to grant increases to American newsprint makers and deny increases to American makers of other varieties of paper. The repercussions must reach not only every newspaper, but every magazine, every book publisher, every printer and buyer of printing in the land. We have been asked by your committee to report most directly on newsprint and newspapers; and first, as to the importance of newsprint and its price to the newspapers. Few daily newspapers on the average spend less than 15 percent of operating cost for newsprint. For those over 100,000 circulation, the percentage rises upward of 38 percent. A $10 increase amounts to about 912 percent. The increase should not in most cases be covered by printing a lesser volume of news. It should not be covered by an increase in price to the reader. The present 5-cent daily and 15-cent Sunday prices, in the judgment of most newspapers, are about as high as the public will pay without resistance. It probably must be secured by a further increase in advertising rates above recent increases brought about by rising labor scales and the still fairly recent $6 increase in newsprint. This increase in advertising rates will not be small. Since it covers all the paper used, but can only be applied to the space devoted to advertising, it will probably average about 142 percent. It then becomes for the merchant and manufacturer on whom it is assessed, an additional cost of doing business and a new contributor to the price spiral. We recognize that we have no voice or place in price decisions, but your committee has asked our opinion of their possible effects from a financial standpoint, which we have presented. You ask us further for our opinion as to the effects on supply. That comes down to possible Canadian action, and is much more difficult to forecast. We do not expect any diminution in the supply of paper produced in the United States, and we do not believe very much more paper can be produced from our existing plant. According to newspaper accounts, the Canadians promise three things if the price increase is prevented or watered down: First, that they will consider all United States contracts canceled; second, that they will sell their newsprint in the much higher world market; and, third, that they will sell their pulp in the world market at a higher price than they are asking us for newsprint. How far they can go in Nos. 2 and 3 can be more expertly appraised for you by Pulp and Paper Division of National Production Authority. Our own less-informed view is that these two markets, while presently confusing and difficult to understand, would be quieted and surfeited by relatively small additional amounts of newsprint and of pulp, and that the overwhelming percentage of Canada's pulp and paper capac |