October 10, 1919 



HARDWOOD RECORD 



23 



per cent of the mill value of Ivimber at the time of shipment. Among many 

 mills he makes cash advances to enable such mills to buy additional timber 

 or equipment, to meet payrolls, or to finance surplus lumber stocks, which 

 would otherwise be dumped upon the markets at times when they could 

 not be absorbed. 



Wholesaler Adjusts Market Demands to Meet Available Supply 



Through his efficient sales organization, with direct personal contact 

 with individual buyers, the wholesaler is able to give information to the 

 consuming public as to the most acceptable kind of lumber available at 

 lowest market prices suitable to each buyer's use. 



This same constant contact with the consumer together wih the whole- 

 saler's knowledge of available stock at various mills permits delivery from 

 points taking the most advantageous freight rate to the benefit of the 

 consumer, since on many classes of lumber the freight i.s from twenty- 

 five to forty per cent of the total delivered selling price and freight rates 

 are a big factor in establishing market values at points of consumption. 



In meeting the requirements of the large consuming trade, more par- 

 ticularly the industrial trade and manufacturers who require lumber In 

 large quantities for remanufacture, or in the handling of large orders of 

 all one size or quality, or orders of very difficult character or mixed 

 orders covering various kinds of lumber, the wholesaler having at his 

 disposal the product of many mills located in different sections, can meet 

 this greater variety of demand more promptly and efficiently and by 

 handling same through the one selling organization can more efficiently 

 serve the consumer at a lower cost for such service than could any one 

 individual or group of manufacturers seeking such trade in competition 

 from various sections of the country. Large contracts of all one class 

 or size of material that could not be handled by any one manufacturer 

 are distributed through the wholesaler to many mills whose timber is 

 especially suitable for such special cutting, thus giving the buyer the 

 benefit of securing production from many sources of supply at competitive 

 cost prices, but with the saving in energy and time to the consumer in 

 having to deal with one agency. 



In addition to stimulating retail sales of lumber by reason of extension 

 of credit, in turn the wholesaler, especially during present abnormal times, 

 performs a special service to the extent of stimulating production at the 

 sources of supply by financing mills in the production of small bodies of 

 timber that could not be handled by the large mills, and in that way 

 materially assist the public in conserving to their use timber that could 

 not otherwise be placed upon the tnarket. 



Through his buying organization many wholesalers supervise the manu- 

 facture, inspection and shipment of lumber at the mills, saving to the 

 consumer the cost of sending their own inspector to make mill inspection 

 and saving losses to the mills in supervising their grades to meet the 

 qualities required by the consuming public. 



The wholesale distributer has won his place and is an indispensable 

 economic necessity, due entirely to the functions and services he per- 

 forms and due to the absolutely competitive and independent factors that 

 prevail in industries in keeping with the principles of business freedom 

 a.ssured us under our democratic form of government. 



W. L. Saunders, who was to deliver a paper entitled "What the 

 Future Holds," was absent and C. E. Abbott of Cadillac, Mich., 

 delivered in his place the address scheduled for Saturday morning, 

 entitled, "Supply and Demand, Its Present Eelation." Mr. 

 Abbott's paper follows: 



Supply and Demand — Its Present Relation 



This subject is one which may be approached from a number of different 

 angles. The future cannot be predicted by the past for the simple reason 

 that there is one and only one crop of lumber, and when the harvest of 

 this crop is completed supply ceases. As we push our producing lines 

 farther into the wilderness the annual harvest diminishes. 



In Lower Michigan the cut of 1914 was 7SO.000.000 feet ; in 1915, 

 600,000.000 feet ; in 1916. 625,000,000 feet ; in 1917, 525,000,000 feet ; 

 in 191S, 400.000,000 feet. During the coming ten years the amounts 

 will rapidly grow smaller until the harvest is completed. In other words, 

 during the next five years a large percentage of the producers in Lower 

 Michigan will have finished their operation, and by the end of ten years 

 there will be practically no large sawmills operating. 



In Wisconsin and upper Michigan the annual production during the 

 past five .years has been approximately 750,000,000 feet, with a slight 

 reduction each year. However, the length of the harvest will continue 

 long after lower Michigan has ceased to be a lumber producing territory 

 on a large scale. Yet the time is not far distant when the annual cut of 

 lumber of Wisconsin and upper Michigan must gradually grow smaller and 

 eventually snuff out. 



During the past years the demand for lumber has been greater than 

 the supply, and while production is on the wane demand is on the increase. 

 During the past year the consumption of our woods has exceeded the 

 production by 50.000,000 feet. The comparison figures which I have used 

 are those of association reports, and while they do not cover all the 

 lumber produced and consumed, they actually portray the relative true 

 condition. The result of its present relation is the big question. Supply 

 and demand are the governing powers of value. The demand is in excess 

 of the supply with no possible chance of supply ever exceeding the 



demand. By this statement I do not mean that for a short period or In 

 some particular wood, or certain grade, the supply might not be in excess, 

 but I do say with the amount of lumber being produced and to be pro- 

 duced, which amount is predetermined, the supply in the aggregate of 

 the life of the lumber industry in Michigan and Wisconsin will never 

 exceed the demand. Production is decreasing and consumption is increas- 

 ing, even though all the substitution possible is being made in place of 

 our maple, birch and other woods. Yet there are none of the substitutes 

 which fully take their place. Therefore our lumber must and will steadily 

 advance in price and it is right and proper that it should. There are no 

 satisfactory substitutes for the hardwood lumbers produced by Michigan 

 and Wisconsin, and it should not be the aim of the manufacturer to sell 

 at competitive prices with woods from some other territory, which woods 

 are not actual competitors. The manufacturer should study supply and 

 demand and sell his product on its merit, taking advantage of its increas- 

 ing value, as value is its present relation. 



This concluded the program for Friday. 



The banquet and entertainment took place on Friday evening, 

 Charles A. Goodman, Marinette, being the toastmaster. 



The entertainment features were excellent. 



SATURDAY MORNING'S SESSION 



A. C. Blixberg of Bay City, Mich., opened the Saturday morn- 

 ing's session with an address on "How It Looks to the Salesman." 

 Mr. Blixberg said that it looks good with orders plentiful, kicks 

 few, collections good and prospects bright for a continuance of this 

 state of affairs. He said that in his calls on a multitude of indus- 

 tries he finds they all have and are offered more business than 

 they can take care of for several months. Everything he says 

 argues well for future prosperity. 



Getting down to the subject of the conference, Mr. Blixberg said 

 that with the increasing cost of lumber it devolves upon the sales- 

 man to sell goods more efficiently and more in line with specific pur- 

 poses. In other words, he said, the adaptability of wood is becom- 

 ing more and more an issue and this situation requires a constantly 

 closer study of the requirements of the multitude of industries that 

 use lumber. A salesman should know the adaptability of his woods, 

 conditions at the mill, car, labor and other situations that come 

 between the stump and the finished product. He stated that the 

 literal definitions of hardwood grades do not give an absolute indi- 

 cation of the lumber to be sold, as manufacturing conditions will 

 vary grades considerably. Also the locality of the timber makes 

 a great difference in the quality, and all of these differences must 

 be known to the man who is endeavoring to sell intelligently and 

 in line witli the modern thought. 



Mr. Blixberg said he believes there is a place for every wood 

 and it is up to the salesman to find that place. The mill man, the 

 retailer and the consumer have not the time nor the facilities for 

 so doing. 



Mr. Blixberg pleaded for closer co-operation between the manu- 

 facturer and the retailer who disposes of a very large percentage 

 of the millman's product. 



Mr. Blixberg then instanced a case in which the retailer could 

 have effected a considerable conservation of flooring by proper 

 co-operation in moving an accumulation of odd stock, and carried 

 out his argument that the millman and the retailer must work oat 

 a closer spirit of co-operation in order to meet these many problems. 



He then paid the wholesale fraternity a compliment and added 

 that the wholesaler owes it to himself as well as to the industry to 

 adhere strictly to specified terms of grades. 



Mr. Blixberg addressed a warning to the buyers who tries to pur- 

 chase on outlaw terms, saying that he is standing in his own light, 

 and eventually the distributor who is trying to maintain standard 

 terms will discontinue calling upon him and thereby reduce his 

 purchasing field. 



Mr. Blixberg expressed himself as believing that the average, 

 well rated buyer would not be so much concerned over terms if the 

 lumbermen themselves had a more uniform idea as to what consti- 

 tutes proper terms. The buyer knows the lumberman 's weakness in 

 this respect and rides him hard for better terms, whereas if uni- 

 versal terms were in vogue he would overlook this matter entirely. 

 Mr. Blixberg stated that standard grades for hardwood are the base 

 and foundation of the industr.v, but that they must not be placed in 



