U. S. Lumber Industry Offers Tariff Trade to Canada

Proposed Reduced Duties on Species of Lumber Scorce in the

United States-No Change Produced in Surplus

Washington,.Mar. 12.-Characterized as a statesman-like proposal, the nine interested regional associations of lumber manufacturers, acting in unison through the National I-umber Manufacturers Association, today submitted to the Committee for Reciprocity Information of the State Department recommendations for a truly reciprocal deal with Canada. For the first time, it is said, in the course of the negotiation of agreements with foreign countries for the purpose of encouraging reciprocal trade under the Presiclent's prog'ram, a major American industry endorses the idea of reciprocal trade and forthrightly outlines a basis of mutual tariff concessions.

"The American lumber industry approves, and accepts as desirable," says the statement by the National Lumber Nfanufacturers Association, "the principle and the practice of mutually advantageous reciprocal trade and tariff agreements between the United States and other nations. The principle of exchange of lumber between the United States and Canada is outlined as follows:

1. Reasonable and effective protective tariffs on lumber of species which are in surplns supply in both countries, and also on Canadian lumber directly supplanting lu'mber of species which are in surplus in the United States.

2. The principle is laid down as an ultimate objective that reciprocal trade in an important sense can be attained betrveen the United States and Canada only with the reestablishment of equal access by the two countries to the competitive rvorld lumber markets. This refers particularly to the tariff preferential system within the British Empire.

3. As between the United States and Canada it is held to be sound permanent policy and in the interest of the lumber trade that duties be established as low as the larv permits on a reciprocal exchange basis on the following surl>lus species for lumber of scarce species (including in the case of Canada, Northern white arrd Norr,vay pine; and Western white spruce; and in the case of the United States. Redrvood; Western .i'r'hite. sltgar. Ponderosa and yellow pine; cypress;oak;gum;yellow popl:Lr and chestnut). Of lunrlrer of iclentical species and scarce in both countries. reciprocal exchange is aclvocatecl at rnoderate rates. permitting a reasonable range of tracle, especially in border markets.

4. Reasonable tariff protection {or surplus species of timber on the basis of tracling surpluses for scarcities arrcl of species scarce in both countries.

It is stated in the brief that access to the Unitecl States rnarkets by Canadian lnmber, determined in the specified manner at reduced import duties means access to a market fifteen times as large as the Canaclian domestic market. Such an exchange, it is asserted, is warranted only if Can-

in the Species of Lumber bv Both Countries

ada similarly admits on comparable terms to her less ex_ tensive markets the wider range of species scarce in Can_ ada and available in surplus in the United States, as each country is a large natural lumber exporter.

Definite recommendations by the U. S. lumber industry are as follows i

(a) The species relatively scarce in the United States or relatively scarce in both countries, on which American duties may be reduced to the extent to which the law per_ mits, are Northern white pine; Norway pine; Wesiern white spruce; Eastern hemlock and Basswood. The Cana_ dian duties or other taxes or charges on these species are not to be greater than those imposed by the U. S.

(b) With respect to species of lumber relatively scarce in Canada, it is proposed that duties or other charges on them rvhen imported into Canada be at reduced rates com_ parable to those imposed by the United States on the spe_ cies enumerated above. The species that are scarce or commercially non-existent in Canada are named as yellow pine ; Redwood, Western white pine ; ponderosa pine; Sugar pine and Cypress. Also these hardwoods : bak; Gum ; Yellow poplar; Chestnut.

(c) On all other species of lumber imported into the United States from Canada, including hardwood flooring, no changes are to be made in the tariff.

This exchange of concessions leaves Douglas fir, the chief lumber product of the North pacific Coast. in the same statrls as at present in the tariff schedules of both countries, as it is produced in surplus for export in both Canada and United States. The same statement applies to Eastern spruce, manufactured mainly in the northeastern part of the United States and in the eastern part of Canada.

In case the recommended reductions of tariffs on lumber imported from Canada into the United States are not con_ ceded, the position of the American lumberman is that there should be no reductions of tarifis on Canadian lumber.

A proviso is made to the effect that if importations of lumber from Canada at any time are in such volume or at such prices as substantiarly to interfere with the abilitv of American lumber manufacturers to observe the Lumber Cocle or mandatory regulations in any other form of wages, hours of employment and operation, the recommended re_ ductions may be modified or the volume of imports regu_ lated by the President.

The brief urges the government of the United States to seek the cooperation of the government of Canada in se_ curing promptly the abandonment of preferential tariffs in favor of Canadian lumber within the British Empire. Fur_ thermore, it is recommended that so long as this preferen_ tial system is continued u'ith respect to lumber wlthin the

British Empire there shall be no deviation on the part of the United States from adherence to the policy of deliberate protection of American lumber of domestic production. The lumber brief gives in great detail reasons why tariff protection should be maintained on imports of lumber from Canada. It is pointed out that the lumber industry pays 35 per cent of the value of its products to labor, against 17 per cent for all American industry. Sawmills and logging camps alone normally employ 414,000 men' and the lumber industry is the major source of industrial employment in nine states. At present unemployment in this industry is still of tragic proportions. The lumber producing capacity of the United States is grossly excessive, being more than three times as large as the 1934 production. The United States has the most extensive and most diversified commercial forest resources in the world, standing saw timber of the United States amounting to approximately l,7N biliion feet as against 500 billion feet in Canada, of which less than 30O billion feet is accessible. The United States is the largest natural lumber exporting nation, and until the depth of the depression was reached the United States led in total exports. The American lumber industry is the largest in the world, and the maintenance of American forest resources must include, in the words of the U. S. Forest Service, aggressive and persistent effort to retain, rebapture and expand markets for wood. IJnder the Lumber Code the lumber industry is now engaged in measures necessary for conservation and sustained production of forest resource's. Canada is the principal competitor of the American lumber industry in both domestic and forest markets. Canadian manufacturers have advantages over American manufacturers and distributors in respect of more favorable conditions and lower cost of timber holdings and purchases, lower transportation costs, especially in inter-coastal shipments from British Columbia and lower manufacturing costs. At present hourly minimum wages in Washington and Oregon are about 7O per cent higher than in neighboring British Columbia. The competition of imported lumber is not necessary to the assurance of reasonable prices in the United States. The average price realized by American lumber manufacturers early in 1934 were less than the cost of production in many species. The American lumber industry as a whole is still operating at heavy losses. Canada has maintained for years a tarifi and taxes generally totalling 321 or 34 per cent on finished American lumber, and has within the British Empire markets, preferential tarifis which practically exclude the competition of American lumber. At present importations of forest products from Canada now constitute 51 per cent in value of all imports from Canada to the United States. IJnder these circurirstances and others the brief objects to Canadian proposals that Canadian lumber be placed on the United States free list. With the continuation of suitable protection the lirmber and timber products industries of the United States can be maintained as a permanent supply of forest products, ample for domestic uses and export.

GEO. R. KENDRICK LOS ANGELES VISITOR

Geo. R. Kendrick, Chas. R. McCormick Lumber Co., San Francisco, was a visitor at the company's Los Angeles office on Mar'ch 23.

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