Colonel GREELEY. 1920 until 1928. Senator MCNARY. Whom do you represent, Colonel Greeley? Colonel GREELEY. I represent, sir, the West Coast Lumbermen's Association. STATEMENT OF COL. W. B. GREELEY, REPRESENTING THE WEST COAST LUMBERMEN'S ASSOCIATION Colonel GREELEY. The West Coast Lumbermen's Association is a trade organization of some 200 loggers and manufacturers of lumber, in the Douglas fir region of western Oregon and Washington. Senator HOLMAN. May I ask-has this association any members in British Columbia? Colonel GREELEY. No, sir. Senator HOLMAN. Are any of your members interested in any British Columbia operations? Colonel GREELEY. Well, Senator, I am not familiar with the investments of my members. I do happen to know of four or five who have interests in British Columbia timber, and in British Columbia logging operations. Senator HOLMAN. That is what I thought. Colonel GREELEY. But as far as that may be a factor in this situation, let me say that anyone interested in British Columbia timber or British Columbia logging would be heartily in favor of your bill, because your bill will enhance the value of British Columbia timber and the competitive opportunity of British Columbia loggers. So far as that may be a factor in your mind, Senator, I want to assure you that any such commercial interest of that kind that may be shared by members of the West Coast Lumbermen's Association, would be an interest in favor of your bill. Senator HOLMAN. I am not so sure of that; I am not conceding that at all. Senator MCNARY. Make your statement, Colonel, please, and let's save the cross-examination until he concludes. Colonel GREELEY. I want to say very briefly, gentlemen, that this question of control of log exports runs very deeply in the forest industries of the Pacific Northwest. It is a very controversial question. It is the kind of question that immediately brings into play the diverse selfish interests of individual groups on both sides of the question. The mills which manufacture plywood and buy their logs in the open market, very naturally would like to see the supply of logs increased, and the price of those logs reduced. On the other hand, the loggers, whose business depends upon selling logs, naturally want to have as large a market available for their product as practicable, and at as high a price as they can obtain. The issue is not limited to the plywood industry. The same question has been raised over and over again by companies which manufacture lumber and which dislike to see lumber logs moving out into the export trade; and the recent trend of orders from the Orient, which are running more strongly to logs, and less strongly to lumber, has raised the identical question among the sawmill operators in that region. The same issue runs down through our pulp industry. Our pulp manufacturers have had a very large market for their pulp in the Orient, and today they are greatly alarmed by the construction of modern pulp plants in Japan, which evidently are designed to utilize pulping logs from the Pacific Northwest, and the pulp mills would like to see a control of the export of pulping logs. On the other hand, the loggers who produce these pulp logs, hemlock and other species, dislike very much to see their market for those logs restricted. They are operating today at a very low market price for their pulp logs, which in fact enforces a very serious waste of pulping woods which cannot be brought out and marketed at a profit. So it is a very deep, far-reaching question, and it necessarily involves the conflicting commercial interests of the different groups among the log sellers and the log buyers. The Pacific Northwest has been exporting logs for many years. The exportation of logs has, I think, never exceeded more than 2 or 3 percent of the total volume of logs cut. It is even less than that proportion today; from the standpoint of the volume involved the question does not assume very large proportions. At the same time, it is a very important subject because of the situation developed by Mr. Oxholm, namely the trend in many countries to purchase logs from the Pacific Northwest, from both Canada and the United States, and use those logs in building up their own domestic industries. That applies to plywood, very definitely, and I share very largely Mr. Oxholm's concern over the trend of other nations to build up their plywood industries from logs obtained from the Northwest, the Northwest Pacific Coast, utilizing their cheaper labor, which is especially evident in Japan, where, as Mr. Oxholm said, their plywoods are manufactured by labor at less than 4 cents an hour, compared with our 75 or 80 cents an hour in the United States. And along with this trend to build up home industries in Japan, in Australia, in Germany, in Italy, utilizing American raw materials, there has appeared the natural corollary, namely, an effort by tariff barriers to restrict the import of manufactured products from the Pacific Northwest which would compete with these domestic industries in the importing countries. That is very evident in the case of a number of countries as to plywood. It also applies as to the manufacture of lumber. For example, today the Japanese tariff places a lower duty upon logs by approximately $2.50 per thousand feet than upon imported lumber, and that is obviously a part of the Japanese policy to develop her industry by the use of raw materials from our side of the Pacific Ocean, and it is perfectly evident to us that Japan is now undertaking a similar policy in the case of pulp. Recently an order was placed for the cargo of a ship destined to Manchukuo, which called for approximately 75 percent of the cargo in unmanufactured Douglas fir logs, and the remainder in Douglas fir lumber. A few years ago that trade was taking entirely lumber, and this cargo is rather typical of what we must look for in the future under the very aggressive policy of Japan in developing her own controlled industries and finding a market for her own labor in Asia. So that is a very real problem, gentlemen; it is a problem that deserves your careful study. Now, in the case of Port Orford cedar, the problem is a simple one because the standing timber is all in the United States and the United States could very readily restrict or control the export of that extremely valuable soft wood, without the issue of competition with other sources of supply coming into the picture. In the case of Douglas fir logs, the issue is so beclouded by our competitive relations with Canada, that many of us believe that however important the problem is, there can be no effective or permanent solution without some form of joint or correlated action between the United States and the Dominion of Canada. Canada exports about three times the volume of Douglas fir logs that is exported from Oregon and Washington. Canada is a very large log-exporting country. Senator HOLMAN. May I ask, are any of those Canadian exported logs do they have their origin in our country, in the United States, and are they shipped over there? Colonel GREELEY. I think it is true, unquestionably, that some logs originating in the United States, going to Canada, are reexported. We lack any accurate information on that question, Senator. That is one of the things that ought to be determined, but I think it is true that that does occur to some extent. Senator SCHWELLENBACH. May I interrupt there, Colonel? I just want to get clear and get into your statement at this point, the statement that Mr. Oxholm made this morning which I understood was that 60 percent of the logs used in Canada, or exported from Canada, come from the United States. Was I correct in that? Mr. OXHOLM. Pardon me, Senator, I think I probably did not make myself clear. I said that of the 1938 exports about 55 to 60 percent of our total Douglas fir exports went to British Columbia. It was the exports from this country to British Columbia, but not from British Columbia to other countries. Senator SCHWELLENBACH. You didn't give the percentage that that occupies so far as British Columbia was concerned? Mr. OXHOLM. No; that wasn't it; it was the exports from the United States to all countries, of Douglas fir, and 60 percent went to British Columbia. Senator HOLMAN. And 40 percent to all the other countries? Senator SCHWELLENBACH. If you don't mind, Colonel, I would like to have you comment on that. It seems to me rather pertinent if they are compelled to get such a large amount-I don't know how much it is, with reference to their total amount-but if they are compelled to get such a large amount of their production from us it seems quite pertinent. Colonel GREELEY. I don't doubt for a moment, Senator, that British Columbia is importing high-quality logs from the United States, and is reexporting some portion of them. I don't know how much, but they are reexporting some portion in the form of logs. It is also reexporting a part of the remainder in the form of manufactured plywood or doors or lumber. And there is a definite trend in the situation that we should recognize for Canada to take advantage of her preferred position under the preferential tariffs of the British Empire by taking our raw ma terial and manufacturing it and selling it in England under the preferential tariff, and, therefore, debarring us from the opportunity for that trade. That is all a part of this picture. Senator SCHWELLENBACH. Carry it one step further-maybe you can't answer this question, but is it possible for them to take our logs and, because of their very much reduced labor costs, as compared with us, manufacture them and send them back into this country undersell competition in this country? Colonel GREELEY. I don't think it is possible for them to undersell our industries in the United States on logs originating in the United States and incurring that cost of double transportation back and forth; but Canada is undoubtedly competing with us, not only in the British Empire countries but in other countries, to a certain extent on logs that are originating in the United States. And Japan is doing that very clearly. Mr. Oxholm is right in stressing the menace of the Japanese Douglas fir plywood industry, which he, as an exporter, encounters in a considerable number of markets where he finds Japanese Douglas fir plywood, made in Japan from our logs, in competition. There is no question about that being a part of the trend, but it is not limited to plywood. It is one of the important underlying problems of the entire Pacific Northwest. I think it is true that industrial nations of the world generally would like to get as much of our high-quality softwood timber as they can, manufacture it with their own labor, build up their own industries, and then in many cases they protect those industries against our products by high tariffs. That is part of the situation we must recognize. Senator HOLMAN. May I make a statement? I don't want to break your line of thought, but I was told by one Oregon manufacturer that American logs, peeler logs, were exported and worked up by cheap foreign labor and reshipped as finished products into the United States and undersold him. Now that is just a statement; I have nothing to support it at all, except that oral statement. Colonel GREELEY. Well, Senator, I have heard that said several times. I don't know whether it is true or not. I have never been able to confirm an actual delivery of Japanese plywood, Douglas fir plywood, into the United States. It may be that it has happened, but whether it has happened in the United States or not, there is no question but that Japan plywood is competing with American plywood in England and in other European countries. Senator HOLMAN. I was making a point of the domestic competition, American consumption. Colonel GREELEY. Whether such shipments may have occurred, I don't know. Now, Senator Holman, we all support fully your principles of developing the maximum degree of refinement in the manufacturing industries of the United States, and of providing that much additional employment for our labor, that much additional volume for our refining industries. I don't think there can be any question as to that policy, and it runs right down through the whole range of our forest industries, but when we come to the Douglas fir situation I want you gentlemen to realize that you are dealing with a very difficult competitive situation. As I said, Canada exports about three times the entire volume of Douglas-fir logs that are exported from Oregon and Washington. Canada exports into Puget Sound, supplying the American mills of various kinds as much Douglas fir as our two States export to the entire world. Now, it is true that there are differences in quality. The Canadian timber does not have as much of the strictly high-grade peeler type of logs that the forests of Oregon and Washington contain, and if you will apply strictly the definition of the peeler log as we know it in the Pacific Northwest-a log 38 inches and upward in the small end, adapted to the manufacture of a large percentage of clear plywood-you will find a smaller proportion of that type of log in the Canadian forests than you would find in the American forests, but the Canadian forests contain a very large supply of the type of timber as defined in this bill, and those logs are exported from Canada in substantial volume along with other logs of lower quality. Now, frankly, the situation that many of us fear, if this policy of restricting log exports is undertaken too hastily-the result we fear is that we will simply give over to Canada our log exports as we have already turned over to Canada our lumber exports. In view of that competitive situation we believe that this whole subject, while the fundamental idea is sound, we think that the subject should be approached cautiously, and that before legislation is attempted that not only should a thorough investigation of all phases of the problem be made, by the Government departments which would naturally function in an inquiry of that kind, but that we should ascertain definitely whether or not the Dominion of Canada is prepared to go along with the United States on any policy of controlling the export of unmanufactured forest products. If you don't do that, gentlemen, if you pass a bill of this kind and forthwith prohibit or closely restrict the export of this type of log named in the bill from the United States, and the export of that type of log from British Columbia continues in undiminished volume to the extent they have it, you will simply enable the Canadian logger to supply this foreign market from which the American logger is excluded, and, whether or not you bring any increased volume of business to the American plywood plant, will remain, in my judgment, a very serious question. You might very easily, as a result of a measure of this kind, simply kill our export trade in fir logs of this quality, without any corresponding increase in our export trade in the manufactured products. Senator HOLMAN. May I ask about this study? You began a study on this about a year ago, didn't you, on this problem? Colonel GREELEY. Yes; we began, within the industry, to get groups of different people together and talk it over and see if we could make a common approach to it. Senator HOLMAN. But a year has gone by, hasn't it? Colonel GREELEY. Yes. Senator HOLMA,N. Will there ever be an end to this study business that would finally resolve itself in action before devastation has taken place? Colonel GREELEY. Well, I grant you that there are difficulties in an investigation between conflicting commercial interests in trying to find common ground; but what I would propose to you, sir, would be that a study be ordered on the part of the appropriate Federal departments covering these various points, with an inquiry as to the possibilities of joint action on the part of Canada, with a report to |