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the number of people in the country to be taxed the present National Administration makes the Government 3.35 times as costly to th. taxpayer as did the Government of 1846 to 1853. But taking account of the wealth of the citizens or their ability to support the Government, the Administration of the United States in 1907 was only 75 or 80 per cent as burdensome as that which controlled the country at the middle of the last century.

The following table presents the actual expenditures of the Federal Government by decades, from 1850 to 1907 a period of fifty-seven years, and the amount which such expenditures represents per $1,000 of national wealth as compiled at the various census periods mentioned. The proportion per $1,000 of national wealth of the taxes levied to meet the expenditure, including schools, for government other than Federal, from 1860 to 1902, and the grand total of expenditure for government, exclusive of Federal, compiled only at the Eleventh and Twelfth Censuses, are also presented.

Total national wealth and expenditures of the Federal Government and of State, county, municipal, and all local governments, per $1,000 of wealth, 1860 to 1907.

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The expenditures of the National Government payable from taxation may be compared with the general property taxes levied for the support of State and municipal governments. The tax levies for State and municipal governments were ascertained by the Bureau of the Census for 1880, 1890, and 1902. For 1880 the per capita of such levies was $6.26, and in 1902, $9.22. In twenty-two years it increased 47.3 per cent. The per capita of national expenditures payable from taxation in 1880 was $5.28, and in 1902, $5.91, and in 1907, $6.77. The percentage of increase from 1880 to 1902 was 12, and from 1880 to 1907, only 28.2. The former was only a fourth and the latter barely 60 per cent of the corresponding percentage of increase of State and local taxation for twenty-two years. State and local taxation is increasing proportionately with national wealth and the ability of the people to meet the added costs of local government, while national expenditures-though growing rapidly -do not keep pace with the increasing national wealth; and so the burden of National Government becomes smaller and smaller with the passing of the decades-at least, that has been the general trend of affairs since the middle of the nineteenth century, in spite of the cost of the civil war with its legacy of heavy interest and pension charges.

THE WOOD PULP AND PAPER INVESTIGATION.

The following are extracts from the report of the House Committee appointed to inquire into the complaint that prices of news-print paper had been arbitrarily and unjustly advanced by a trust or combination:

The select committee of the House appointed to inquire into the elements and conditions involved in the production and supply of wood pulp and print paper in so far as the same are or may be affected by any combination or conspiracy to control, regulate, monopolize, or restrain interstate or foreign commerce and trade in the manufacture, supply, distribution, or sale of wood pulp or paper of any kind, or any of the articles entering into the same, or any of the products of paper, and how far the same may be affected by the import duties upon wood pulp or paper of any kind, and how far the same may be affected by the rapid destruction of the forests of the United States and consequent increase in the price of wood which enters into the manufacture of wood pulp, and also to inquire whether the present prices of print and other paper are controlled in whole or in part by any combination of persons or corporations engaged in commerce among the several States or with foreign nations, and

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if so, to inquire into the organization, methods, and practices of such corporations or persons, and also to inquire into certain alleged facts and to obtain all possible information in regard to the same, beg leave to submit a partial and preliminary report and to say that since its appointment the committee has been diligent in making its investigation, and the members of the committee have devoted practically their entire time since appointment to the work of the committee, neglecting their other official duties for that purpose.

The committee listened with interest, attention, and care from April 25 to May 14 to the witnesses appearing in behalf of the contentions of the American Newspaper Publishers' Association, and followed with painstaking care the statements made and evidence presented by Mr. John Norris, who appeared as the special representative of that association. Every opportunity has been given to newspaper publishers to present evidence before the committee, though not all of the publishers who offered to appear or whom the committee would like to hear have yet been examined.

In addition to the testimony presented before the committee, your committee sent out, May 6, 7,000 letters to various newspapers and other publications throughout the country.

Contention of Publishers.

It has been the contention of the newspaper publishing interestsFirst. That the price of news-print paper was advanced in September, 1907, to $50 per ton in New York and correspondingly elsewhere, a figure that was claimed to be $12 per ton in advance of the price of two years previous, and that a still further advance was threatened of $10 per ton more, thereby planning, as claimed, an advance of $22 per ton. Second. That the advance actually made and the ther advance were both the result of a combination tered into by the news-print paper manufacturers agents.

planning of a fur or conspiracy enor their selling

Third. That such advance in price and such combination to make further advance were caused, or at least in part aided, by the tariff duties imposed on wood pulp and print paper, and hence that, in justice to the newspapers and other printing and publishing interests of the country, the duties on pulp and paper should be repealed.

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Fourth.

That the decree of the United States court dissolving the General Paper Company had been willfully violated by paper manufacturers in Michigan, Wisconsin, and Minnesota, parties to that decree, who had in violation of the decree acted in concert and agreed as to prices and to the imposition of conditions upon the manufacture, sale, and distribution of the paper manufacture.

The above may not completely state the contention of the newspaper publishers, but it gives a general and fair idea of their claims.

One of the inquiries submitted to your committee was to the effect of the destruction of the forests of the United States upon the production, supply, and price of wood pulp and print paper.

It appears that the average price received by the International Paper Company for paper delivered was, in 1900, $2.06; in 1901, $2.12; in 1902, $2.07; in 1903, $2.14; in 1904, $2.12; in 1905, $2.07; in 1906, $1.99; in 1907, $2.05. and for the first three months of the current year, $2.20 per hundred pounds.

The average selling price of the St. Regis Paper Company per hundred pounds of news-print paper f. o. b. mill for January, 1903, was $1.75; January, 1904. $1.75; January, 1905, $1.74; January, 1906, $1.47; January, 1907, $1.75; January, 1908. $2.13. The evidence shows that at this mill, while the selling price f. o. b. mill had increased from $1.75 in January, 1903, to $2.13 in January, 1908, the cost of production, excluding interest and depreciation, had increased from $1.30 in January, 1903, to $1.61 in January. 1908, and that in January, 1906, while the average selling price was $1.47 the average production cost was $1.54.

Combination in Restraint of Trade.

The evidence before the committee so far fails to prove any combina. tion of print-paper manufacturers to advance prices or otherwise in restraint of trade, but considerable evidence was presented which might excite suspicion that such a combination had been made and was in existence. Evidence was presented in relation to a combination of manila and fiber manufacturers, and it seems to be admitted that that combination did exist, has since been dissolved with a fall in the price of its products, and is now under investigation through the Department of Justice in the United States court at New York.

2. Such of the paper manufacturers as have appeared before your committee during its hearings have strenuously and completely denied under oath the existence of any combination, agreement, or understanding of any nature whatever among the paper manufacturers or their selling agents to regulate, control, or advance the price of paper, the assignment of custom ers, or for any other purpose in restraint of trade.

Increased Cost of Production.

The mill owners insist that there as been a decided increase in the cost of producing paper, caused

First. By the increase in the cost of pulp wood and wood pulp.
Second. By increase in the wages of the employees.

Third. By reduction of the hours of lab r per employee per day.
Fourth. By the increase in the cost of other articles which enter in-

to the production of paper.

Increased Cost of Wood Pulp.

There seems to have been a decided increase in the cost of pulp wood. This is admitted by everyone. The average cost to the International Paper Company of pulp wood in the rough per cord, delivered at the mill, from 1898 to 1908 is stated to us as follows:

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The average cost to the Northwest Paper Company, at Cloquet, Minn., for pulp wood per cord, in the rough, 8-foot lengths:

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There seems to have been a considerable increase in the average weekly wage of the employees in the paper and pulp mills. This increase has not been greater than seems to your committee to have been necessary, owing to the increased cost of living, and the wages now paid in the paper and pulp mills would not be generally considered high as compared with other skilled labor, though this may be largely owing to the fact that the mills are generally located on streams apart from large centers of population.

Some Increase in the Price of Paper Justified.

It would appear that the increase in the value and cost of pulp wood, the increase in wages, the decrease in the hours of labor of many of the employees, and the increase in the cost of other materials used, justified some increase in the price of paper over the prices previously prevailing, notwithstanding some economies perfected in the production of pulp and paper. The International Paper Company is the largest producer of newsprint paper in the United States, and produces from 30 to 40 per cent of the entire output.

The evidence shows that the net earnings of that company for the fiscal year ending June 30, 1901, were $3,054,000; that the average net earnings of the company for the fiscal years from 1899 to 1905, inclusive, were $2,316,000; that for the fiscal year ending June 30, 1906, the net earnings fell off to $1,985,000, and for the fiscal year ending June 30, 1907, to $1,623,000 and for the first six months of the calendar year 1907, to $777,000; that about the middle of the calendar year 1907 the manufacturing department of the said company submitted reports, showing an estimated increased cost of production for the calendar year of 1908 of $1,500,000 over that for the fiscal year ending June 30, 1907, based on the same quantity of paper.

Canadian Competition,

The principal competition with the news-print paper and pulp mills of the United States comes from the Canadian mills. From Canada we import a large and rapidly increasing amount of pulp wood. We also import a considerable quantity of wood pulp and are now importing some quantity of news-print paper.

Exportations from Canada.

Some of the provincial governments in Canada now discriminate against pulp wood for exportation. It is said that most of the forests in the Provinces of Quebec and Ontario suitable for pulp wood are public, or Crown lands belonging to the provincial governments. The Province of Quebec makes a license or stumpage charge of 65 cent for each cord of pulp wood cut on its Crown lands, with a reduction or rebate of 25 cents for each cord manufactured into pulp within the Dominion of Canada.

This amounts to an export charge of 25 cents per cord, or nearly 40 per cent of the original license or stumpage charge. It is from the Province of Quebec that most of the pulp wood now imported into the United States is obtained. Wisconsin and other western paper and pulp mills could much more cheaply obtain wood pulp from the Province of Ontario than from Quebec, but the Province of Ontario absolutely prohibits the exportation from Canada of any pulp wood cut on its public lands, though permitting such cutting for manufacture at home.

The committee is firmly of the opinion that the tariff on news-print paper and on wood pulp should not be removed as to paper or pulp coming from any country or place which prohibits the exportation of pulp wood, or which levies any export duty on paper, puip, cr pulp wood, or makes any higher charge in any way upon wood pulp or pulp wood intended for exportation to the United States,

The evidence taken so far would seem to indicate that the temporary suspension or entire removal of the present tariff would not have any great immediate effect, and if the tariff is removed at any time it should be coupled with the right to free exportation of pulp wood from the Canadian forests. The removal of the tariff on print paper and wood pulp, if followed by an export duty on pulp wood coming from Canada, would probably result in a considerable increase in the price of print paper and the early destruction of the pulp wood forests in the United States.

A low or even moderate price for print paper in the future is dependent mainly upon the future supply and cost of pulp wood. About one-third of the pulp wood now consumed in the manufacture of paper by our mills is imported from Canada. If an export duty should be levied by Canada upon the exportation of pulp wood, o if the Province of Que. bec should follow the example of the Province of Ontario and entirely pro

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hibit the exportation of pulp wood cut on its Crown lands, the cost of pulp wood in the United States would be greatly enhanced and the price of paper would go up.

A mistaken policy might easily prove of inestimable damage and cause the practical destruction of the cheap daily newspaper.

It would seem that for the American publisher to be assured of low prices for his paper, it is essential to maintain paper mills in the United States. Any policy that would give the Canadian mills a preferential advantage over American mills in obtaining the raw material at a lower price must inevitably result in the dismantling of American paper machines and the ultimate dependence of American publishers on Canadian mills. Under such conditions Canada could levy export duties on print paper that would result in enhanced prices without the presence of competition from American paper manufacturers.

So far as the information yet presented to the committee discloses the facts, your committee is inclined to the opinion that if the American mills can obtain pulp wood from Canada on even terms with the Canadian mills, they can make ground wood pulp as cheaply as it can be imported from Canada free of any duty. What effect the removal of the tariff upon paper would have as to Norwegian and other European competition, your committee is at present unable to say, though it has been claimed before your committee that the wages paid in European countries are only one-third to one-half of the wages paid in the mills of the United States, and that under free trade competition the low wages in the European countries would be disastrous to the wage scale and the hour scale in the American paper mills.

Your committee proposes during the summer vacation to continue its investigation and expects to be able to present to the House at the next session of Congress definite recommendations, based upon complete information thoroughly considered, as to the various matters of inquiry submitted to the committee.

What I am anxious to emphasize is that there is a wide economic and business field in which the interests of the wealthiest capitalist and the humblest laborer are exactly the same.-Hon. Wm. H. Taft, at Cooper Union, New York City

The tariff affects trusts only as it affects all other interests. It makes all these interests, large or small, profitable; and its benefits can be taken from the large only under penalty of taking them from the small also.-President Roosevelt at Minneapolis, Minn., April 7, 1903.

It is greatly in the interest of the workingman, therefore, that corporate capital should be fairly treated. Any injustice done to it acts directly upon the wage-earners, who must look to corporate wealth for their employment. -Hon. Wm. H. Taft, at Cooper Union, New York City.

Our aim should be to preserve the policy of a protective tariff, in which the nation as a whole has acquiesced, and yet wherever and whenever necessary to change the duties in particular paragraphs or schedules as matters of legislative detail if such change is demanded by the interests of the nation as a whole.-President Roosevelt at Minneapolis, Minn., April 4, 1903.

The effect of the organization of labor, on the whole, has been highly beneficial in securing better terms of employment for the whole laboring community. I have not the slightest doubt, and no one who knows anything about the subject can doubt, that the existence of labor unions steadies wages.-Hon. Wm. H. Taft, at Cooper Union, New York City.

** Because there are men prominent la the business world who are forgetful of the privileges granted them, and of their relations to their fellows, there is no occasion for indiscriminate condemnation.-Postmaster-General Cortelyou, to Young Men's Republican Club, at Grand Rapids, Mich., Feb. 12, 1906.

The Republican party is not only rich in men, but rich in practical and beneficent principles-it is rich too in its record, in promises performed and pledges fulfilled, and SO we are for party and party principles first and will acquiesce in the choice of the majority, rallying around the standard bearer who will carry us again to victory.Hon. James S. Sherman.

All the prosperity enjoyed by the American people-absolutely all the prosperity, without any reservation whatever—from the foundation of the United States Government down to the present time, has been under the reign of protective principies; and all the hard times suffered by the American people in the same period have been preceded either by a heavy reduction of duties on imports or by insufficient protection, thus refuting all free-trade theories on the subject. As I desire my native land to be on the apex of prosperity, rather than under the heel of hard times, I am a protectionist.-David H. Mason, in the American Econ

DEPARTMENT OF STATE.

Work of the Department of State, 1897-1908.

Within the last ten years the United States has assumed far greater power and significance among the countries of the world. There has been a great increase in the number of our people who travel abroad, and an enormous increase in the number of people of other countries who are annually coming here. Our citizens are going to other countries and are investing their money there. In Latin America alone there is invested over a billion dollars of American money. The United States has today many new and significant points of contact with the world that were unknown or at least unimportant a few years ago. All these changed conditions and closer relations with other countries and peoples throw upon the Department of State an enormous amount of work. It is no exaggeration to say that the work of that Department today is at least eight times as great as it was ten years ago.

Consideration of the series of important events in the Orient, the open door policy in China, the insistence upon Chinese territorial and administrative entity during the Boxer trouble, the settlement of the Panama Canal question, the growth in the authority and recognition of the Monroe Doctrine after Mr. Hay became Secretary of State, the expansion of foreign markets for American goods, Secretary Root's efficient support and emphatic insistence upon the application of the principle of international arbitration in a practical way to disputes between nations, the great improvement brought about by him in the diplomatic and consular service, and the closer relations between the United States and Latin America, will show in what directions have been our greatest activities and achievements in the world of diplomacy, and what they are likely to be in the immediate future. No period in the history of the nation has been richer in diplomatic triumphs of an important and far-reaching character than the last ten years.

Settlement of Large Claims of American Citizens against Foreign Governments.

During the administration of Presidents McKinley and Roosevelt there were collected and settled through the Department of State and its representatives abroad claims of American citizens against foreign governments amounting in the aggregate to the enormous sum of $27,546,892.28. This record illustrates and marks one of the greatest practical achievements of our diplomacy.

Equal in importance with the practical pecuniary triumph and of the vast sum of money gained through the medium of pacific adjustment for American claimants was the great ga n in international good feeling due to the settlement of the many disputes of long standing growing out of these claims.

Many Important Treaties Made.

The record of the Department of State in the matter of treaty making during the last ten years is a noteworthy one. The treaties range in subject from the settlement of claims of private citizens to the control and construction of the Panama Canal and the settlement of the fisheries controversy with Great Britain, which has extended over nearly a century.

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Among the more important of these compacts are those providing for the extradition of fugitives from justice, the list including conventions with Belgium, Bolivia, Brazil, Chile. Denmark, Great Britain (a supplementary treaty extending the catalogue of extraditable crimes), Guatemala, Mexico (with which

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