industry. The total consumption of paper in the United States now exceeds 7,000,000 tons annually, of which approximately 2,400,000 tons are in the form of newsprint paper. Of this total consumption, there now is imported directly over 1,000,000 tons of newsprint and enough raw wood material in the form of pulpwood and woodpulp to make an additional 1.000.000 tons. In other words, the equivalent of over 80 per cent of the raw material which makes up our newsprint production in the United States is imported from foreign countries, mostly from Canada.

Most of the mills which manufacture both pulp and paper are located in the northeastern States. New England has 76, New York 97, Pennsylvania 17, the Lake States 82, the Pacific Coast 18, and all other portions of the United States 49 establishments, all regions, except the Pacific Coast, which were cut over for lumber the earliest and in which the forests are in the most depleted condition at present. To maintain production, the dependence of these mills on outside sources for raw material is increasing yearly. Exportation of pulpwood from the Crown lands was prohibited by provincial embargoes in Ontario in 1900, in Quebec in 1910, and in New Brunswick in 1912. Present imports of Canadian pulpwood are confined to wood grown on the freehold lands. For some time American manufacturers have been apprehensive of the possibility of an embargo on all pulpwood from Canada. In June of this year the Canadian House of Commons passed a bill which gives the governor in council authority to establish a complete embargo whenever he sees fit. The American pulp and paper industry considers the situation so serious that it has called upon the Forest Service to undertake a study of the possible new sources of pulp timber in the United States. A survey has already been made indicating the pulpwood resources in Alaska and in the Western United States. The available raw material in the southern part of the United States will receive the greatest attention in the proposed study. The pulp and paper industry, as now situated in the eastern and northeastern part of the United States, has not enough raw material to supply its needs on anything like a permanent basis. The mill capacity is very greatly in excess of the remaining supplies of standing timber. In order that the national needs for paper, particularly newsprint, may be met by the American industry, other sources of pulpwood are therefore exceedingly important.

Southeastern Alaska has almost untouched resources in the two national forests amounting to at least 100,000,000 cords, consisting of western hemlock and Sitka spruce. More than half of the species suitable for pulpwood are western hemlock. At least 80 per cent of all species in southeastern Alaska are suitable for the manufacture of newsprint. As the virgin stands are cut, the percentage of spruce as shown by previous cuttings will increase so as to make the succeeding stands even more desirable for pulpwood. The Forest Service estimates that the two national forests can produce in perpetuity 2,000,000 cords annually, or enough to equal more than half the total newsprint consumption in the United States.

The water-power resources are, aside from the timber, the most essential natural resource if the pulp and paper industry in Alaska is to be developed, and one of the reasons why greater development has not taken place up to date is because of the lack of definite information with reference to Alaska's waterpower resources. Unquestionably authoritative information, such as is contained in Mr. Dort's report, will tend to stimulate and hasten this development. This report shows 400,000 horsepower available, of which 324,000 horsepower are available in power sites of 5,000 horsepower or more, which can be developed for from less than $50 per horsepower to about $110 per horsepower, a large part of it very near the lower figure. There is enough water power already in sight which can be developed very cheaply to produce 1,000,000 tons of newsprint paper, or enough to supply nearly one-half the newsprint consumption. This can be done immediately, while, unquestionably, further investigation will show enough water-power resources to develop the entire estimated output of 1,600,000 tons in terms of newsprint paper.

Add to this the additional factor of cheap wood material, which can be delivered to the mill sites for not to exceed $6 to $8 per cord, and the bearing of Alaska on the pulpwood situation in the United States is obvious.

I trust that you will use every endeavor to secure the immediate publication of Mr. Dort's report on the water powers of southeastern Alaska. The Forest Service is greatly interested in the establishment of the pulp and paper in

dustry in Alaska, because it is best suited to meet the forest management, economic and social conditions of that region. The present situation in respect to the proposed Canadian embargo creates an excellent opportunity; the immediate publication of this bulletin will materially advance the early realization of this opportunity in Alaska.

The complete report will be forwarded to you in a few days.

Very truly yours,

E. W. SHERMAN, Acting Forester.

THURSDAY, FEBRUARY 14, 1924.

SMITHSONIAN INSTITUTION.

STATEMENTS OF DR. CHARLES D. WALCOTT, SECRETARY SMITHSONIAN INSTITUTION, AND MR. W. de C. RAVENEL, ADMINISTRATIVE ASSISTANT TO THE SECRETARY IN CHARGE OF THE NATIONAL MUSEUM.

ADDITIONAL ASSISTANT SECRETARY.

The CHAIRMAN. Doctor, we have an item before us for an additional assistant secretary of the Smitsonian Institution from April 1 to June 30, 1924, at the rate of $6,000 a year. Is there any legislation authorizing this?

Doctor WALCOTT. No, sir.

The CHAIRMAN. Then we could not do it.

Doctor WALCOTT. The matter was submitted to the President, as the result of action by the board of regents. It was recommended to him, and he sent it to the Budget. It was sent back to him, and forwarded here. That is all I know about it.

The CHAIRMAN. We could not do this. You must get legislation on this before we can act on it. So that cuts that out, to begin with.

LAYING OF WATER MAIN AND ERECTION OF FIRE HYDRANTS.

The next item is:

For the laying of the necessary 8-inch water main and the erection of four fire hydrants in the Smithsonian grounds to provide additional fire protection for the Smithsonian Institution and National Museum Buildings, $8,500.

Is this something new. Doctor?

Doctor WALCOTT. Mr. Ravenel will explain that.

Mr. RAVENEL. There was one old Hayden hydrant between the Natural History Building, which is on the north side of the park, and the Smithsonian and the Art and Industries Building. It has a 4-inch pipe, and is an out-of-date hydrant. Early in August, 1922, the Smithsonian Institution asked the District Commissioners to authorize the fire department to come down and clean off the Natural History Building..

The CHAIRMAN. You mean the city fire department?

Mr. RAVENEL. The city fire department. On the north, east and west sides they could connect with the modern hydrants on B

Street; and the work progressed very favorably. But when they went to the south side, the nearest source being a Hayden hydrant about 800 feet away, with a 4-inch pipe, they failed to get a sufficient supply of water and abandoned the effort.

When the officer in charge returned to the District Building he made a report to the District Commissioners stating that the Natural History Building was without suitable fire protection on the south side, and the Smithsonian and the other buildings on the north side : that he regarded it as exceedingly dangerous, and that 4 hydrants at least should be put in, with an 8-inch pipe, for the use of the District fire department..

We then appealed to Colonel Sherrill, as the parks are under him; but he said he had no funds and no authority. The institution submitted an item last year for this purose, which was rejected by the Budget. We again submitted one this year. The Budget Bureau hesitated about it, but in October wrote and asked us to submit the item again, as they regarded it as advisable.

The CHAIRMAN. This is an item, I suppose, which should be considered in the city appropriation, should it not?

Mr. RAVENEL. I do not know, sir. The estimate, in my opinion, would ordinarily have come through Colonel Sherril, as he has charge of all parks; but the reason that we got the estimate from the District Commissioners was that they are much better equipped for the laying of mains and doing that class of work than the office of Public Buildings and Grounds. We have authority from Colonel Sherrill to approach them on the subject. He said he would prefer that they should do it.

The CHAIRMAN. Is it essential to have this done right now?

Mr. RAVENEL. We did not discover it, sir, until nearly two years ago; but the fire department regarded it as exceedingly dangerous. The CHAIRMAN. Is this for high pressure?

Mr. RAVENEL. Yes: for fairly high pressure.

The CHAIRMAN. You do not need it until after the 1st of July, do

you?

Mr. RAVENEL. Oh, no.

The CHAIRMAN. It is not a deficiency. I think it ought to go into the annual appropriation bill.

Mr. RAVENEL. We asked for it in that bill, but it was omitted. The CHAIRMAN. We can transfer it to the other bill and let them give you the hearing when they are considering the regular independent offices bill.

We

Mr. RAVENEL. That condition has existed for three years. are anxious that it should be done, so that in case of a fire water will be available; though we have some equipment in the building for fighting fires.

The CHAIRMAN. I do not like to tack this on as a deficiency. It is not a deficiency, and it ought to be in the regular annual bill. There is no emergency about it, is there?

Mr. RAVENEL. I could not say there is any more of an emergency than there has been for three years.

The CHAIRMAN. I do not like to tack this on as a deficiency. It that ought to be charged to the municipal government rather than the national Government.

Mr. RAVENEL. The last water pipe that was laid through the grounds, I believe, was put in under authority of the officer in charge of public buildings and grounds.

The CHAIRMAN. You see, it belongs partly to the Government and partly to the municipality. I think we had better let this be transferred over to the regular annual bill.

Mr. RAVENEL. I hope it will be included in the annual bill.

The CHAIRMAN. We will transfer it, and it will be considered there. Mr. RAVENEL. We do regard it as essential.

The CHAIRMAN. But it is not an emergency?

Mr. RAVENEL. No; I could not say that it is an emergency.

FRIDAY, FEBRUARY 15, 1924.

UNITED STATES HOUSING CORPORATION.

STATEMENTS OF MR. ROBERT WATSON, PRESIDENT, AND MR. L. E. REED, TREASURER.

GROUND RENT FOR GOVERNMENT HOTELS.

The CHAIRMAN. You are here to ask for $46,653 for the fiscal year 1923 and $74,315 for 1924. When did we enter into a contract to pay rent for this ground?

Mr. WATSON. We never entered into any contract. I was going to suggest, Mr. Chairman, the history of this thing is somewhat involved, and it might facilitate matters if I read this letter, which is a complete review of the whole proceedings.

The CHAIRMAN. Very well. You may read the letter.

Mr. WATSON. This is the letter which we wrote to the Bureau of the Budget.; at least, the Secretary of Labor wrote the letter. It is as follows:

The DIRECTOR, BUREAU OF THE BUDGET,

OCTOBER 29, 1923.

Treasury Department, Washington, D. C. SIR: I have the honor to transmit herewith, in duplicate, a supplemental estimate of appropriation in connection with the operating activities of the United States Housing Corporation for the fiscal years 1923 and 1924. These items cover ground rent for squares 632, 681, and part of 680, in the District of Columbia, which are owned by the Baltimore & Ohio Railroad Co., and which are occupied by certain of the buildings comprising the Government hotels.

The above-described land was acquired by the railroad company many years ago, and was formerly used for passenger and freight facilities. After the passage of the act of 1903, known as the union station act, the use of the property for these purposes was terminated; and about the time of the completion of the Union Station, the company sought to dispose of the propery by placing it on the market. By the provisions of the act approved June 25, 1910 (36 Stat. page 738), it was declared to be the intention of Congress to acquire the said squares for the purpose of enlarging the Capitol Grounds; condemnation proceedings were subsequently instituted in the Supreme Court of the District

of Columbia, holding a district court of the United States, in what has been referred to as the Plaza cases.

The condemnation commission made certain awards which, in so far as the same related to the particular land involved herein, amounted to the sum of $1,020,752, but the same was not approved by the Department of Justice or other authority; and thereafter, by joint resolution approved October 22, 1914 (38 Stat. 781), the President was authorized to appoint a commission to complete the acquisition of necessary land for the enlargement of the Capitol Grounds. The provisions of this joint resolution restricted the price to be paid for the Baltimore & Ohio Railroad Co.'s land to actual cost to the company plus 6 per cent interest from the date of purchase. Differences arose between the company and the Government in regard to the status created and the rights established under the condemnation proceedings.

By agreement of July 9, 1918, between the Government and the railroad company the land was leased to the Government for the period of the then existing war, and 12 months after the final ratification of the treaty of peace; the said lease was made subject to all existing rights of the company and the United States with reference to the condemnation proceedings above referred to, and the rental to be paid by the Government was fixed as the amount of taxes assessed against the property during the period of occupancy.

On April 26, 1922, in response to Senate Resolution 156, the Attorney General filed a report to the effect that the Government had abandoned its intention of acquiring the land from the railroad company, and the condemnation proceedings were dismissed. The Government continued to occupy the land under the terms of the agreement of July 9, 1918, and on November 14, 1922, the railroad company served notice of the expiration of the lease and requested that the buildings be removed in accordance with the terms thereof.

On November 20, 1922, the Government, through the Secretary of Labor, requested an extension of the lease for a further period under the same terms, but the request was refused, and thereafter the matter was referred to the Public Buildings and Grounds Committees of the Senate and House. The Senate committee reported favorably a joint resolution (S. J. Res. 290) authorizing the President of the United States to lease the land and pay rental therefor from revenues derived from the operation of the Government hotels, which resolution was passed by the Senate on February 28, 1923 (see Congressional Record, 67th Cong., 4th sess., vol. 64, No. 78, pp. 4877-4878). This resolution afterwards was reported favorably to the House of Representatives by the House Committee on Public Grounds, but failed to pass the House in the closing hours of the Sixty-seventh Congress.

Accordingly, a conference was held on March 6, 1923, in the office of the Secretary of Labor between representatives of the railroad company, the chairman of the Senate and House Committees on Public Buildings and Grounds, and officials of the Department of Labor, in the course of which it was agreed that, in consideration of the company's permitting the continued use of squares 632, 681, and part of 680 by such portions of the hotels as were located thereon, an estimate of appropriation for the payment of rent for the period November 14, 1922, to January 31, 1924, would be submitted to Congress.

The position which the representatives of the railroad company at first took in this conference was that a fair and reasonable rental for the further use of this land by the housing corporation would be $160,000 per annum, or 8 per cent on the sum of $2,000,000, which they declared was the market value of the property. By the exercise of every means at their command, however, the representatives of the Government finally persuaded the officers of the company to reduce this proposed rental to $74,314.91, or from the period November 14, 1922 (the date of the expiration of the aforementioned agreement), to January 31, 1924, $90,004. At no time in the course of these negotiations was any actual assurance extended to the railroad company that the sum specified would be provided, the executive officers of the Government limiting themselves merely to the pledge that an appropriate estimate would be submitted to the next Congress.

The proposed rental involves an additional monthly operating expense of $6,192,91, and the supplemental estimate submitted herewith covers ground rental at this rate for that portion of the fiscal year 1923 subsequent to the expiration of the first lease; that is, from November 15, 1922, to June 30, 1923,