Abstract: The invention relates to building materials made from paper sludge, repulped waste paper, or virgin paper pulp, mixed with clay and portland cement, or animal protein adhesives, or manufactured resins or polymers. Specifically the invention relates to a building system using this material in the form of building blocks that are glued together during assembly and are intended to be used for above grade exterior and interior walls. A block design which increases the R-value and other building products made of this material are covered in this invention. The material of this invention has unusual compression strength properties such that; when an imposed load limit is reached which begins to compress the material, the material does not break apart, but rather compresses slightly and allows considerably more load to be imposed without failure of the material to hold the superimposed load.