Mr. WHERRY (for Mr. CAPEHART), from the Special Committee To FINAL REPORT (Pursuant to S. Res. 20) SUMMARY OF RECOMMENDATIONS AND CONCLUSIONS This committee has previously rendered two interim reports (Rept. No. 150, 80th Cong., 1st sess., reported May 1, 1947; and Rept. No. 852, 80th Cong., 2d sess., under January 30, 1948). These reports encompass the major activities of the Newsprint Subcommittee and its conclusions and recommendations. The subcommittee feels, however, that it is necessary to render this final report to high light certain portions of its activities and recommendations for future action in the newsprint question. The subcommittee hereby adopts the recommendations in those previous reports which are presently pertinent, and makes them a part of this report by reference. (1) The subcommittee feels that development of Alaska as a source of newsprint is remote. This does not mean that Alaska cannot or should not be developed as a source of pulp. It does mean that from the standpoint of sound economics the subcommittee feels that development of Alaska as a newsprint source is so contingent upon the participation of newspaper publisher end users in the financing that a resultant newsprint mill appears impractical of achievement in the foreseeable future. (2) The subcommittee feels that development of newsprint industry within the limits of continental United States and its possessions is more likely in the southern portion of the United States than any other portion of the country or Territories controlled by the United States. Because of climatic conditions, pulpwood trees in southern United States grow more rapidly and thus can assure a larger annual sustained yield than elsewhere. In addition to this, the abundant availability of low-cost fuels, as well as shorter shipping distances, all contribute to the potentialities of the South as a place for the rebirth of an economically sound United States newsprint industry. (3) The subcommittee feels that encouragement and impetus should be given to the development of de-inking pulp and paper for production of newsprint from waste paper. (4) The subcommittee recommends the completion of experimentation by Government and industry to develop newsprint and other papers from farm products such as straw, grasses, and bagasse. INTRODUCTION The Newsprint and Paper Shortages Subcommittee has worked diligently during the Eightieth Congress to alleviate distress cases of newspapers suffering from newsprint shortages, as well as investigate long-range possibilities in the newsprint industry. The subcommittee has held numerous hearings, both in the continental United States and in Alaska, on both the short- and longrange phases of the newsprint problem. In addition to this, the staff has continued to investigate individual hardship cases, as well as newer technical developments in the newsprint field. The subcommittee has helped in numerous instances of hardship relief referred by many Senators and feels that this has been an important and unique part of its work. The subcommittee does not feel that the newsprint shortage will be solved within the next year. The United States has been using approximately 62 percent of the total available world supply of newsprint. As demand for printed information media grows throughout the world, the increase in newsprint production will almost inevitably lag somewhat behind. Unless there are drastic changes in the economic picture, demand in the United States will hold fairly steady, perhaps even increasing. The subcommittee feels that the only way to eventually bring this situation into balance is to increase production and has indicated in some detail how it feels this can be done in its recommendations in this and previous reports. RECOMMENDATIONS AND CONCLUSIONS (1) ALASKA NOT LIKELY NEWSPRINT SOURCE The Department of Agriculture has accepted the offer of the Ketchikan Pulp & Paper Co., an affiliate of the Puget Sound Pulp & Timber Co. of Bellingham, Wash., for purchase of a billion and a half cubic feet of timber in the Tongass National Forest area of southeastern Alaska. The company offered 85 cents per hundred cubic feet for the timber and is expected to locate a pulp mill at Ward's Cove near Ketchikan, Alaska, which will produce 525 tons of pulp daily. However, the subcommittee has been informed that the American Viscose Corp. is a major stockholder and is intending to use the pulpwood for the production of high alpha pulp for use in making rayon and cellophane. The subcommittee feels that this contract is an indication of what will happen on other contracts for Alaskan pulpwood. Because of the high cost of transportation, housing, food, and clothing in Alaska, the subcommittee does not feel that a commercial newsprint mill is a likely development feasible in the near future. If the equity capital is supplied by newspaper end users, such development might come about, but such capital does not appear forthcoming. (2) DEVELOPMENT OF SOUTHERN NEWSPRINT INDUSTRY The subcommittee has had its staff make a study of the potentialities of newsprint development in various sections of the United States and its possessions and has come to the conclusion that the southern and southeastern section of the United States offers the best possibilities for immediate development of the newsprint industry. This is easily demonstrated in the doubling of productivity capacity of the Southland Paper Mill at Lufkin, Tex. In addition to this, a tremendous paper and newsprint mill is being built at Childersburg, Ala., by the Coosa River Newsprint Co. This company is obtaining its equity capital from various publishers as well as the public. Publishers are buying $10,000,000 in common stock and the public is being offered $8,000,000 in common stock. The mill is expected to be in production in early 1950. The publishers' contracts for stock are based on $100 in common stock for each ton of newsprint for which the publisher contracts. The total cost of plant construction will be $30,000,000 and it will manufacture at a rated capacity of 300 tons of newsprint daily, plus 200 tons of bleached sulfate pulp. Over 120 newspapers throughout the South, East, and Midwest have contracted to buy newsprint. Among these are Atlanta Journal, Birmingham News-Age-Herald, Buffalo Courier Express, Chattanooga Times and News Free-Press, Cleveland Plain Dealer, Dallas News, Fort Worth Star-Telegram, Houston Post, Indianapolis Star, Kansas City Star, Louisville Courier-Journal and Times, Miami Herald, Nashville Banner, New Orleans Times, Richmond News-Leader, St. Louis Post-Dispatch, Washington Star, and the Raleigh News. The rise of the newsprint industry in the South is due to climatic conditions which enable rapid growth of pulpwood timber, as well as lower labor costs and nearness to consuming centers. (3) DE-INKING USED NEWSPAPERS The subcommittee feels that there is real promise for the alleviation of the newsprint shortage by de-inking methods, which enable newsprint to be produced from waste paper. It notes with interest that one newspaper, the Springfield (Mass.) Union, is already using newsprint made from de-inked stock by the American Writing Paper Corp., of Holyoke, Mass. The subcommittee understands that production by the American Writing Paper Corp. is expected to soon go to 9,000 tons per annum, and that although the paper is slightly gray in color, the newsprint is reported to be usable on rotary presses without undue tearing or breaking. Currently experiments are being made to improve the color and finish and it is expected that these efforts will be successful. In this same connection the subcommittee understands that another de-inking mill is expected to be constructed in Hubbard, Ohio, by the Newsprint Corp. of America, Inc., at a cost of about $500,000. The capacity of this plant should be about 50 tons daily. The subcommittee feels that such efforts should be encouraged and stimulated. (4) NEWSPRINT FROM FARM PRODUCTS The subcommittee has noted with considerable interest the production of newsprint from various farm products. It is understood that experiments have been made with straw, bagasse, and grasses to develop a paper for newsprint purposes. Most recent of these experiments have been in the use of wheat straw in a process developed by the Kinsley Chemical Co. of Cleveland. Although unproven as to its use of high-speed newspaper presses, company officials believe that wheat-straw paper might be marketed for $65 to $72 a ton, as compared to woodpulp newsprint prices of approximately $100 a ton. Use of wheat straw has also been experimented with by the mill at Thorold, Ontario, Canada, owned by the Chicago Tribune. According to information furnished the subcommittee, nearly 50 tons of newsprint were made from straw at the Thorold mill, but contrary to the estimates of Kinsley Co. it was indicated that the use of straw fiber as a substitute for woodpulp would raise newsprint costs. The subcommittee also understood that experiments have been carried on by the Government and industry to manufacture newsprint from bagasse (sugarcane stalks) and other types of grasses. The subcommittee recommends strongly that these experimentation programs be continued to fruition. EXPRESSION OF APPRECIATION During the life of the subcommittee more than 500 cases of individual hardship by newspapers suffering from lack of newsprint have been handled by the subcommittee staff. Almost without exception some relief has been had in these cases. The subcommittee wishes to express its thanks in this report to the National Editorial Association, the American Newspaper Publishers Association, the American Pulp and Paper Association, the Canadian Pulp and Paper Association, the National Paper Trades Association, and the National Publishers Association, as well as individual newsprint mills in the United States and Canada, in assisting these hardship cases. The subcommittee also wishes to thank the Newspaper Publishers Committee, set up as a result of the subcommittee's conference in Washington on March 13, 1947. Through the cooperation and assistance of all the afore-mentioned agencies and individual concerns, the hardship of many smaller newspapers in the United States was considerably alleviated and the freedom of press maintained. The subcommittee feels that the activities of these groups and individuals should continue so long as the shortage is acute. |