' C«^s:<Maaga>aiTO<::;5TOowtwxiiWit^JiWi^ 



Meeting Michigan Manufacturers 



The fall meeting of Michigan Hardwood Manufacturers' As- 

 sociation was held in the Pontchartraiu hotel, Detroit, on October 

 24 with a large proportion of the members in attendance. 



President Richardson presided. In a short and humorous speech 

 he thanked the association for electing him president in his ab- 

 sence. He said he thought he was going to like the .job. 



The report of Secretary and Treasurer J. C. Knox, follows: 



Secretary's Report 



The report of the various committees which will be made to you 

 today are so flattering and optimistic that it is hardly necessary for 

 the secretary to endeavor to make an extensive report, and we will 

 confine ourselves to the work of our office almost exclusively. 



Our treasurer's report shows a balance on hand Oct. 15, of $1,533.25, 

 and we have to report on account of the forest fire fund a net balance 

 on hand of $4,099.80, Oct. 21. 



Every member of the forest fire protection department has responded 

 to the second assessment with one exception, and we are trusting to 

 get that one. This will give us a fine start for that work next year. 



Our Pacific coast rate case has now progressed to an order issued by 

 the commission directing the railroads to check our claims and to 

 appear before that body in January. 1913, to say why they should not 

 make a refund on the basis of the eighty cent rate. 



There are a number of important suggestions to be discussed today, 

 among them present market conditions and the outlook for 1912-13; 

 thicknesses for cutting hemlock: propo.sed changes in the grading rules 

 on hardwood; employers" mutual liability insurance report; report of 

 committee on advertising, and the market conditions committee report. 

 The figures in the last report will be a surprise to many of our mem- 

 bers in that they make the best showing since 1907. 



It is customary at the fall meeting to provide for funds to carry us 

 through the coming year and this should be cared for today. 



Henry Ballon, chairman of the railroad committee, suggested 

 that manufacturers could improve the car shortage condition by 

 keeping ears moving promptly. Eeports to his committee indicated 

 that railroads were doing ever.ything possible to keep traffic mov- 

 ing promptly by making large purchases of ears and motive power. 

 He reported that they are also taking every precaution against 

 starting fires from their locomotives. 



T>. H. Day of the grading rules committee reported that the 

 members had unanimously agreed to submit to the consideration 

 of the National Hardwood Lumber Association at its next annual 

 meeting some important changes and additions to its* rules. 



Chief Fire Warden Charles F. Hickok made an elaborate re- 

 port on the successful work during the past year looking toward 

 the prevention of forest fires. 



J. A. Kennedy of Lansing, commissioner of the industrial ac- 

 cident board, made an interesting and comprehensive address on 

 the subject of industrial accidents and the Michigan state law on 

 the subject. He recommended co-operation with the state to work 

 out the big problems involved. 



J. N. Harris of Boyne City addressed the meeting on the value 

 of an industrial insurance plan. On motion a committee was ap- 

 pointed to take up the entire matter with state officials and also 

 to analyze insurance plans and methods for self protection. The 

 chair appointed as such committee S. L. Richardson, C. A. Bigelow, 

 G. von Flatten, A. W. Newark and F. L. Nicholson. 



Chairman Odell of the market conditions committee then read 

 the report of that committee as follows: 



Report of Market Conditions Committee 

 The stock report compiled by your secretary, from reports furnished 

 him by the members of his association shows a very marked decrease 

 during the year Oct. 1, 1911. to Oct. 1, 1912, in both the total stock of 

 hardwood lumber at the mills and the amount unsold; a decrease 

 amounting to a shortage in some items that may work some hard- 

 ship to consuming manufacturers and ultimate consumers; a shortage 

 for which the lumber manufacturer is in no way to blame; a shortage 

 that has been brought about by the policy of the railroads and con- 

 suming manufacturers during the past few years to purchase nothing 

 until actually required for consumption, and to make the producers of 

 not only lumber but of all raw materials carry the burden of stock, 

 with the result that when an unusual amount of raw material is 

 required, there is no reserve beyond that carried by the producer. 



You will note from the stock report that the amount of stock at 

 the mills and the amount of stock unsold is less than at any time since 



—36— 



1907, the stock at the mills being 183,000,000 feet— 55,000,000 feet less 

 than 1911, and 21,000,000 feet less than either in 1910 or 1909, while the 

 amount of unsold stock for 1912 is 41,000,000 feet, as against 71,000,000 

 feet for 1911, 71,000.000 feet for 1910, and 74,000,000 feet for 1909. 



Ash and basswood show total stocks of approximately what they 

 were a year ago. while beech, birch, elm and maple divide up the 

 55.000,000 feet decrease shown. Beech has fully verified tlie prediction 

 of your committee, there being 26,000,000 feet in stock now as against 

 35.000,000 feet a year ago and 44,000,000 feet two years ago. or approxi- 

 mating sixty per cent of the stock in 1910. Maple shows the greatest 

 decrease in stock during the past year, the total stock being 114,000,000 

 feet Oct. 1, 1912. as against 154,000,000 feet Oct. 1, 1911, and the total 

 stock of maple shows less than for either 1910 or 1909. With a decrease 

 of 40,000,000 feet in stock and an unusually large amount of maple 

 going into consumption, maple should be one of the strong items 

 during the coming year. Maple shows up in better form than anyone 

 had reason to expect. Judging from the amount of maple lumber on 

 hand Oct. 1, 1911, and the condition of the maple flooring market at 

 that time, it would have been reasonable to have expected it to 

 require at least two or three years for the stock of maple lumber to 

 work back to normal, but this and more has been accomplished In a 

 year. The stocks of both lumber and flooring are below normal and 

 tlie demand for flooring was never better. The stock of maple flooring 

 is about 5,500,000 feet less than a year ago and the manufacturers of 

 maple flooring have orders booked for more flooring than they have in 

 stock. This, with the fact that they are shipping each month more 

 than their production and that for some time new business booked 

 each month has been in excess of production, promises a bright future 

 for maple flooring, which ultimately will be shared by the lumber 

 manufacturers. 



The item of number three common hardwoods is the one showing 

 greatest shortage and it is the one item that, Vjecause of the unusual 

 shortage, may be sold at more than its real intrinsic value. The total 

 stocks show 32,000,000 feet, as against 57,000,000 feet, 71,000,000 feet. 

 70,000,000 feet and 54,000,000 feet for the respective preceding years, 

 while the amount unsold is less than one-fourth of what it was during 

 the three or four preceding years. This item of low-grade hardwoods 

 should receive just as careful consideration now as it ever did, as. like 

 tlie poor, it is always with us and always will be Just so long as we 

 manufacture lumber. We should remember the years of 1907 and 



1908. the prices at which this item sold then, and what happened to it. 

 The same condition will prevail again if the producer and the con- 

 sumer permit the price to go so high as to encourage the use of 

 substitutes. It is natural for the manufacturer to reason that because 

 he has been compelled to sell his low-grade lumber during the past 

 four years from two to five dollars per thousand less than the actual 

 manufacturing cost, he should endeavor to recoup these losses wdien 

 the opportunity offers, but results have shown that the extremely 

 high prices of 1907 may have been the direct cause of the extremely 

 low prices of the past four years. 



While higher prices are warranted for practically all of the north- 

 ern hardwoods and higher prices must of necessity prevail during the 

 present period of short supply, your committee would recommend that 

 you endeavor to hold prices down to a reasonable level and thus avoid 

 a slump that is sure to follow extremely high prices. 



Just so long as supply meets demand and demand meets supply 

 within a reasonable limit, prices will go on at a reasonable level. 



A careful study of our report during the past six years will show 

 that had the demand for northern hardwood lumber been as regular 

 as the production, there would not have been the extreme shortage 

 and large over-production with a consequent great fluctuation 'in 

 prices that we have seen during this period. Because of the nature 

 of his business and because he has built up an organization based on 

 a certain production of lumber each year, it does not seem possible to 

 the manufacturer of lumber to shut down his mill and cease opera- 

 tions because of a production of some items in excess of the tem- 

 porary demand. While possibly not so difficult, it would be just as 

 unwise for the manufacturer to try to increase his output to meet 

 the temporary demand or to deceive himself into thinking that it will 

 be possible for him to do so. If properly distributed during the past 

 six years, the supply woUId have met the demand reasonably well and 

 any atteinpt to increase the output to meet an unusual and temporary 

 demand only increased the over-production later on. 



We have been censured for the waste of our natural resources in 

 our manufacturing metiiods, but most of this censure lias come from 

 people who are not familiar either with the methods of limibering or 

 the value of forest products. They have not taken into consideration 

 that the lumberman has practiced forest conservation in so Sat as his 

 means, his knowledge and profitable returns permit him to do so, and 

 that at least a part of the lumber manufacturers have fought diligentl.v 

 for improved methods and a profitable market for what is now con- 

 sidered waste product. 



The comparatively recent demonstration that maple, beech and birch, 

 when properly treated by one of several preservative treatments, 



