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Mr. HARRIS. Thank you very much. I, too, want to express my gratitude for your appearance here to give us this information and the invention to visit your area at such time as we might have an opportunity. I have never been to Alaska, and I hope that I can go.

Mr. DOLLIVER. I join in that.

Mr. BECKWORTH. Without objection, the Chair will include in the record a statement by Mr. L. K. Olson.

(The statement referred to is as follows:)

STATEMENT OF L. K. OLSON, REPRESENTING PACIFIC PAPERBOARD Co., LONGVIEW, WASH.

My name is L. K. Olson, representing Pacific Paperboard Co. of Longview, Wash.

We have a small nonintegrated paperboard mill at Longview, Wash., turning out about 5,000 tons of paperboard per month. Our paperboard goes to convertors who, in turn, make general package containers for foodstuffs and clothing for both civilian and defense use. At the present time, approximately 30 percent of our output finds it way directly to the Army Quartermaster.

We are end users of sulfur. We require approximately 500 tons of sulfite per month (to line the board where it is used for food containers). We get our sulfite from a large, integrated mill. It takes that mill 50 to 75 tons of sulfur to manufacture our 500 tons of sulfite.

As a small nonintegrated mill, we have been having a desperate time getting sufficient sulfite to keep our mill going. Through regular channels we are able to get an allocation of only 90 tons per month. We finally were able to make a deal with a large integrated mill to get 500 tons of sulfite a month in return for 500 tons of board.

Last week we received the following letter from our sulfite supplier:

"On June 5 NPA issued Order M-69 which, beginning June 1, limits the useage of sulfur by any user to 100 percent of his 1950 usage. The order is apparently designed to prevent expansion of sulfur-consuming industries, but in the case of our Port Angeles sulfite mill it will have the effect of drastically curtailing production, because we did not operate that plant full in 1950, and our average monthly sulfur use was 210 tons, whereas we need about 295 tons for full operation. The order would cut our sulfite production at Port Angeles from 1,900 tons per month down to about 1,330 tons, and would force drastic cuts in the pulp we are shipping to our customers, even though we curtail our own usage very severely. As our largest customer for sulfite pulp, Pacific Paperboard would be effected very severely."

From the urgent pleas that we have been receiving from convertors manufacturing paper boxes for the defense effort, it would appear that our monthly production is quite important to the defense picture. Notwithstanding that, our apparently essential production is going to be sharply curtailed for the want of 50 to 75 tons a month of sulfur in the hands of our sulfite supplier. Furthermore, it should be significant to this committee that we, as a little, nonintegrated mill, will bear the brunt of this cut-back notwithstanding the defense interest in our output.

I have given you the facts of our case. The lifeblood of our company is at stake if we can't get sulfite. Also, we believe it means a great deal to the defense program.

We have no solution to offer, but, of course, we have our own ideas. We believe that sulfur production could be stepped up and we believe that the existing supply could be allocated without choking off small, essential mills like ours. As to the stepping up of production, if the big sufur companies cannot increase their output, we can't help but wonder why the Government, the Bureau of Mines in particular, has been so slow in giving assistance to new sulfur developments. We happen to know, for example, that it took the Bureau of Mines 5 months to grant a necessity certificate for the development of exposed sulfur deposits in Park County, Wyo. We understand that certain geologists and engineers are of the opinion that this deposit could economically produce 60,000 tons a year within 6 to 8 months. We aren't in the position to know all the facts, but if this Wyoming deposit is worth assistance, the assistance should have been given quickly, not after several months of delay. Trade journals have been predicting this shortage since early last fall.

80176-51-pt. 1-25

In summary, our little outfit, as end users, is being hard hit by the sulfur shortage and by NPA Order M-69. Our business and our contribution to defense are being seriously threatened by the impending cut-backs.

Mr. BECKWORTH. I want to say, in addition to what has been said here today, that there has been considerable interest evidenced by some of our newsprint users in the area from which I come, speaking of Texas as a whole, in a development like this. I have had some letters in the last 2 weeks that have been directed to this very subject, the development of paper making facilities in Alaska, and even an indication of manners and ways by which capital could be provided.

I think that that, in itself, is one of the good signs that has been absent in the past. There is an interest that seems to be gathering strength, and that I have not seen a great deal of prior to this time.

Mr. BARTLETT. We know that the small publishers, especially, are hard put to it to get newsprint now, and they are very interested in this.

Thank you very much.

Mr. BECKWORTH. Because the House is meeting at 11 o'clock today, the subcommittee will have to adjourn, and we will try to meet at 10 o'clock Monday, and we shall be happy to have the Forest Service with us then, if that can be arranged.

(Whereupon, at 11 a. m., a recess was taken until 10 a. m. Monday, July 30, 1951.)

NEWSPRINT INVESTIGATION

MONDAY, JULY 30, 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 and only witness we will have is Mr. Burnett Payne, of the Division of Timber Management of the Forest Service of the Department of Agriculture.

Mr. Payne, without objection, the Chair desires to include in the record a letter that was written to Mr. Celler, chairman of the Subcommittee on Monopoly Power, which I understand Mr. Celler has sent to the clerk of the subcommittee.

(The letter referred to is as follows:)

HON. EMANUEL CELLER,

WALTER S. CLUGSTON & ASSOCIATES,
Cambridge City, Ind., July 4, 1951.

Chairman, Subcommittee of Monopoly Power, etc.,

Washington, D. C.

MY DEAR MR. CELLER: In your letter of July 10, 1950, you stated: "I agree that the important thing is to develop additional newsprint production in this country." In this letter I want to show you how you fellows while talking free enterprise (both parties) are slowly choking it to death. We have been contacted by a newspaper publisher who uses 300 tons of newsprint a day asking for an assured newsprint supply. Due to inflation a standard newsprint mill cost is prohibitive. So we have proposed a de-linked setup, 80 percent old newspapers, balance semicooked woodpulp to be built on the Ohio River in southwestern Indiana, at a cost of $6,000,000.

This man has $1,500,000 in cash. I spent a very pleasant 2 hours with Mr. White, president, Indiana National Bank of Indianapolis, Ind., the largest bank in Indiana, being informed as to the interesting orders mostly from unconstitutional agencies (my opinion) and laws which would not allow said bank to help develop this proposed mill, which can and will be used as a foundation to build a newsprint industry in the Central States area. Prudential Insurance informed me they could, only under laws, etc., lend 50 percent of appraisal, etc. However, a private corporation advised they could raise the $4,500,000 needed if no further orders, etc., were issued.

From this mill with all Central States development agencies cooperating we can develop a tree planting program to give us the necessary trees to grow 60 percent of newsprint requirements for these United States. If there is any use for a newspaper in the next 20 years, without liberty we don't need newspapersjust graveyards.

Dr. Martell of Purdue University, LaFayette, Ind., will call a meeting to publicize this development as soon as we are operating.

I have talked to representatives of both parties in Indianapolis and have been assured by the Democrats they would help in any way to secure an early DO order for machinery from the Republicans I have received wind as yet.

I am expecting your support on this if this man decides to go ahead with this mill. What about it? I am sending a copy of this letter to Senator Capehart. Yours very truly, WALTER S. CLUGSTON.

Mr. BECKWORTH. Without objection, the chair further desires to include a letter from the Jayton Chronicle, a Texas weekly newspaper, that evidences the apparent plight of a good many smaller newspapers, and the Chair desires to observe that he has been in touch with many small newspapers in Texas, and it is rather astounding to find some of the difficulties that they are facing at this time. And, as has been said before, they all are apparently of the opinion, that is, the ones that have written me, that the situation is going to get worse with reference to the smaller papers, and not better.

(The letter referred to is as follows:)

Hon. LINDLEY BECKWORTH, M. C.,

House Office Building, Washington, D. C.

THE JAYTON CHRONICLE,
Jayton, Tex., July 27, 1951.

DEAR SIR: Happy to receive your note of inquiry concerning the newsprint situation. It comes at a most opportune time. I am enclosing for your information a letter received from our newsprint jobber only today. The letter is selfexplanatory.

Never, during World War II, were we denied our quota of newsprint, and we could and did manage to publish continuously all during the war years.

We have been put on an allotment, as you know. The order referred to in the enclosed letter is for our regular shipment. We do not have on hand enough paper to publish a minimum of four pages a week from now until the paper company will be able to supply us. Since we have always purchased paper from this firm, we have no allotment or quota established with any other firm. Unless I am fortunate enough to find a fellow publisher to share his own scarce stocks wtih me it looks as if we may be on the way out after 31 years of publishing continuously.

Anything you or your committee may be able to do to save us small weeklies will certainly be appreciated.

Respectfully yours,

The JAYTON CHRONICLE,

Jayton, Tex.

ELDON C. WADE.

SOUTHEASTERN PAPER Co., Fort Worth, Tex., July 26, 1951.

GENTLEMEN: We acknowledge the order given Mr. Acton, just received, for 10 reams of 30 by 44-49 Newsprint for shipment August 15.

We have just received word from the mill that our newsprint allotment has been cut to practically nothing and we hasten to advise you that it will be sometime toward the latter part of September before we can make shipment of this order or any part. This depends, of course, upon what the mill sends us and they promised to make us a shipment the latter part of September.

Yours truly,

DUER BURTON,
Sales Manager.

STATEMENT OF BURNETT PAYNE, DIVISION OF TIMBER MANAGEMENT, FOREST SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE, WASHINGTON, D. C.

Mr. PAYNE. My name is Burnett Payne, and I am assistant to Ira Mason, who is Chief of the Division of Timber Management in the Forest Service, Department of Agriculture.

My experience is in the field of logging engineering, and primarily in the Pacific Northwest.

Before proceeding with my statement, I would like to enlarge a little on a subject which Delegate Bartlett spoke of Friday.

Mr. BECKWORTH. Mr. Payne, are you the assistant to Mr. Mason who was here the other day?

Mr. PAYNE. I am one of his assistants, and deal particularly in timber sales.

Mr. BECKWORTH. For the record, how long have you been in the Forest Service?

Mr. PAYNE. I have been in the Forest Service under permanent appointment since 1935.

Mr. BECKWORTH. And you have been negotiating with reference to timber sales how long? How long have you been in that particular field in an active way?

Mr. PAYNE. In an active way, for about 12 years.

Mr. BECKWORTH. So you are cognizant of the many factors that enter into that kind of transaction?

Mr. PAYNE. That is correct.

Perhaps you have read some of the news stories about the Ketchikan pulp and timber unit. Late Thursday afternoon, July 26, the Chief of the Forest Service made final award to the Ketchikan pulp timber unit to the Ketchikan Pulp & Paper Co.

You may recall that this particular purchaser submitted a bid for the timber in August of 1948, and qualified for the preliminary award. The purchaser has now submitted satisfactory evidence of ability to proceed with the construction of the required 300-ton capacity pulp mill, and has met the qualifications for final award.

The Ketchikan Pulp & Paper Co. at present has offices in Bellingham, Wash., and is equally owned by American Viscose Corp. of Philadelphia, one of the major producers of rayon and cellophane, and by the Puget Sound Pulp & Timber Co. of Bellingham, Wash., who are pioneer pulp producers in the Pacific Northwest. They have a modern 400-ton capacity plant producing bleached sulfite pulp located at Bellingham, Wash.

It is proposed to erect at Ward's Cove about 6 miles northwest of Ketchikan, a modern pulp plant with an initial capacity of 300 tons daily, to produce high alpha pulp suitable for the manufacture of rayon and cellophane products. The major part of the production of the plant will be contracted by the American Viscose Corp., and the Puget Sound Pulp & Paper Co. will be responsible for the construction and operation of the new mill.

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