We Are Depleting Our Population and Forests Because Pulpwood Embargo Is Delayed

Canadian border cities are penalized, Canadian labor is flouted, Canadian capital is jeopardized— and foreign industries are built up at OUR expense.

J. HERBERT HODGINS February 15 1925

We Are Depleting Our Population and Forests Because Pulpwood Embargo Is Delayed

Canadian border cities are penalized, Canadian labor is flouted, Canadian capital is jeopardized— and foreign industries are built up at OUR expense.

J. HERBERT HODGINS February 15 1925

We Are Depleting Our Population and Forests Because Pulpwood Embargo Is Delayed

Canadian border cities are penalized, Canadian labor is flouted, Canadian capital is jeopardized— and foreign industries are built up at OUR expense.

J. HERBERT HODGINS

Another startling article in a series showing the menace to Canada if a pulpwood embargo is not enacted.

NOT SO long ago an Ontario town made a desperate effort to secure the branch factory of a United States industry. The Board of Trade sent emissaries to interview the executive officers of the parent institution. Free sites were offered. Finally the ratepayers passed a money by-law; the town actually went so far as to assist in financing the new venture.

The campaign cost a pile of civic money.

But the ratepayers counted it worth while, because of its results.

It just goes to show the length some towns will go to get an industry, with its attendant new population.

Take any one of Ontario’s St. Lawrence river towns. I have in mind, Prescott— lazily picturesque and with a charming hint of historic days.

I can’t help wondering how Prescott would view the prospect of getting a million dollar industry. It would probably be as startled as Rip Van Winkle when he looked upon a new era.

Y et, directly across the River St. Lawrence irom Prescott is Ogdensburg, N.Y., humming with an industry that, despite the laws of sound economics, was filched from just some such Canadian community as Prescott.

Two years ago the Algonquin Paper Corporation started in Ogdensburg to manufacture mechanical pulp and newsprint. Here is a plant capable of an annual production of 22,500 tons of newsprint and 20,000 tons of mechanical pulp. It is net located in the midst of forest areas. As far as the source of its supplies is concerned, there is no legitimate reason why it should be located in Ogdensburg: except that as a river town the pulpwood logs may be shipped direct to the mill.

The Algonquin Paper Corporation gets its raw materials from Canada. The value -of its annual newsprint production, alone, at last year’s prices, approximates $1,575,000.

One million dollars of this distributed in wages should measurably add to the community’s progress.

It would be life-blood for a town like Prescott: for any Canadian town.

Instead, Canada got probably less than $200,000 for the pulpwood which the Ogdensburg mill turned into a product worth $1,575,000.

Ottawa’s Amazing Inaction

npHE procrastinations and spinelessness of the Govern1 ment at Ottawa is directly to blame for the fact that Ogdensburg, in the state of New York, and not Prescott, in the province of Ontario, got the million dollar wage circulation.

By all the logical laws of nation-building, Prescott or some similar Canadian community should have secured . the Algonquin Paper Corporation’s mill. Dependent upon a Canadian raw product, or natural resource, the Ogdensburg industry flourishes— the corporation paid a two per cent, dividend upon its $650,000 capital stock from the very first three months’ earnings—because of the amazing inaction of our federal administration in failing to clap on a pulpwood embargo.

Canada “gets it in the neck” because Ottawa fails to stop the flow of unmanufactured wood to the mills of another country for immediate competition with Canadian mills.

The Algonquin Paper Corporation is not an isolated instance. There is the book-paper mill presently being established by the Chicago Tribune, publishers also of Liberty and the N.Y. Daily News, at North Tonawanda, six miles above the upper rapids of Niagara Falls. It was built in the United States instead of in Canada from which it draws its raw materials, because he Fordney-McCumber tariff law assesses a customs duty of one cent a pound and ten per cent, on all printing papers other than newsprint.

Then, too, the mills in the United States which operate upon Canadian wood escape many of the overhead charges in connection with their wood supply that Canadian mills must carry. They enjoy an undue advantage in the cost of their “raw.” When Canadian mills are operating upon reduced schedules, or are entirely shut down, hese overhead charges continue. But an American mill in similar circumstances is relieved.

Therefore under the existing free outlet of Canadian pulpwood it was “good business” for the Algonquin Paper Corporation to locate in Ogdensburg rather than in Prescott. Similarly, the Chicago Tribune cannot be blamed.

The Fundamental Reason

ASIDE from the newsprint companies which are having their own difficulties at present, all other branches of the industry—sulphite, mechanical and kraft pulps, fine papers, wrappings and board—are, with few exceptions, in a critical state in Canada. Yet here is the Chicago Tribune erecting its $5,000,000 plant in New York state—drawing its raw materials from Ontario and Quebec and taking competent labor from this country. The dual menace of forest and population depletion!

“It has been claimed that the high American tariff is responsible for this' situation,” said Frank W. Clarke, chairman of the mechanical pulp section of the Canadian Pulp and Paper Association at the January convention. “This may be true to some extent, but, remember, there is no tariff operating against our wood pulp.

“I think the real reason for the situation is more fundamental. So long as pulpwood can be purchased in large volume in this country and shipped across the line, just so long shall we have competition to force the price of our finished products down to a point which makes production here unprofitable and which results in driving our mills into liquidation.

“We are supplying our competitors with raw material to our undoing.”

It was recently stated in the Quebec legislature that 750,000 cords of pulpwood were exported in one year from the province of Quebec. The records show this to be about the average for the past twenty years. This represents an equivalent of 500,000 tons of newsprint. The wood may have brought the province of Quebec as much as $3,500,000. Kept in Canada and manufactured into papers, its value, at last year’s selling price, would have been $25,000,000. The difference between the two values is made up largely of conversion costs, which, in other words, mean wages for labor.

In addition to this, its manufacture here would have entailed development and utilization of an additional 170,000 h.p. of electrical energy—an increase of forty-six per cent, over present consumption.

The additional labor required would have employed eight thousand men in Canadian mills.

Every argument in favor of restricting the exportation of power is equally applicable for the restriction of pulpwood export. If we are to keep the power in Canada, we must find use for it; an important move in this direction would be the retention of our pulpwood for manufacture in Canada.

How Can We Get the Embargo?

HOW are we to set about getting this embargo?

Canada has had convincing experience of the value of an embargo. Tested both in Ontario and Quebec, as far as Crown lands are concerned, it has actually resulted in the establishment of the great Canadian pulp and paper industry as we have it to-day, second only to agriculture in financial and economic importance to the Dominion.

There was really no such industry in Canada up to the time of the placing of an embargo upon Crown lands wood in the provinces of Quebec and Ontario. If this action, affecting eighty-five per cent, of our forest wealth, has been of such inestimable value to the country, why should the Government hesitate with regard to the remaining fifteen per cent?

The fact remains, however, that the Government IS strangely hesitant.

A tragic depletion of our forest heritage goes on. A great potential Canadian industry is menaced. The Government looks on, apparently unmoved.

What are the facts of the government’s indecision?

In the early part of 1923 parliament voted the Government power to impose an embargo—by a majority surprisingly large in view of the Government’s lukewarm attitude.

On June 26, 1923, as a result, the Export Act was amended to provide for a pulpwood embargo.

“This order-in-council,” says Frank J. D. Barnjum, “was passed at the sole request and on the sole behest of the American monied interests and their Canadian associates, who profit by the exploitation of Canada’s natural resources.”

Months intervened before the Government consented to make public this order-incouncil. It reads as follows:

“Order in Council, passed August 14, 1923. “P.C. 1563, at the Government House, Ottawa, Tuesday, the 14th day of August 1923,

Continued on page 48

In the meantime “something happened.” The Govern-

ment changed its mind. On August 14, 1923. it passed the now famous “secret” orderin-council.

Will U. S. Retaliate If We Embargo Pulpwood?

DEFINITELY pleading for “conservation of raw material upon which one of Canada’s greatest industries depends,” the twelfth convention of the Canadian Pulp and Paper Association, on Jan. 30, passed a resolution “for an adeauate export tax upon logs and pulpwood exported from Canada.” The association wants this duty “imposed upon a graded basis, increasing annually.” And they urge “that proceeds be devoted as far as possible to conservation and protection of our forests.”

Immediately on hearing of this resolution the National Publishers’ Association of the U.S. protested to Washington, D.C. Their claim is that a Canadian embargo “would hurt American industry.”

In our March 1 issue we will discuss the possibilities of American “retaliation.”

We Are Depleting Population and Forests

Continued from page 11

“Present.

“His Excellency, the Governor General in Council.

“His Excellency the Governor General in Council on the recommendation of the Right Honorable W. L. Mackenzie King, the Prime Minister, and

under and in virtue of the powers conferred by The Export Act, as amended, is pleased to order and doth hereby order and declare, with reference to the provisions of an Act to amend The Export Act, chapter 46 of the statutes passed at the recent session of Parliament, that whatever regulations may be made thereunder regarding the export of pulpwood from Canada such regulations shall not be made applicable to or effect the exportation of pulpwood exported in fulfillment and in pursuance of the terms of bona fide written contracts duly executed and delivered previous to the first day of June, 1923; provided, however, that in the case of contracts calling for deliveries over a period of more than ten years from the date hereof the exemption hereby granted shall not extend beyond the period of ten years from the date hereof.

(Sgd.) “E. J. LEMAIRE, “Clerk of the Privy Council.”

In short, the order-in-council nullifies the embargo which parliament wanted.

Then, shortly, .followed the appointment of a Royal Commission on Pulpwood. As the Montreal Star describes it: “A peripatetic commission last year went gallivanting all over the country at the expense of the taxpayers to collect more evidence on the question—evidence that did not need a commission, since it was already on file at Ottawa.”

Yet $70,000 or more of public funds went to the upkeep of the Royal Commission on Pulpwood. And did we get “value received” for our seventy-odd thousands of dollars?

In a nut-shell, the Royal Commission finds as follows:

The Commission takes the view that

the actual determination of a policy

must rest with the Government.”

So Parliament resumes this month with the pulpwood problem back on the Government’s hands.

Will the Government have the courage to face this national issue with courage? The time for trifling, for side-stepping and quibbling is passed. “Definite, radical and constructive steps are of transcending importance,” as the Pulpwood Commission warns.

Prohibition of the export of unmahufactured wood would immediately save 35,000,000 trees annually to Canada. Thirty-five million trees constitute a pile of wood four feet high, four feet wide, and two thousand miles long.

Initiation of the embargo would not require the expenditure of one dollar of the taxpayers’ money. It would merely entail the passing of a simple order-incouncii, for which authority was voted by parliament two years ago.