November 10, liin; 



HARDWOOD RECORD 



19 



organization had brought ovnii up from an undesirable auil unprofit- 

 able wood to one of the finest ealnnet materials in the world, and 

 illustrated the importance of what they had accomplished by empha- 

 sizing the fact that fully fifty per cent of the hardwood st'umpage 

 in the South is gum. He reviewed briefly the very serious problems 

 confronting the members of the association when the organization 

 was perfected and for some time thereafter, but he declared that 

 everything done by the association had been done above board and 

 with no effort whatever at concealment, with the result that there 

 had been no interference whatever with the association on the part 

 of the government. He also detailed how diflScult it was to secure 

 members at first because of the fear on their part that what the 

 association hoped to accomplish would be in conflict' with the Sher- 

 man law, but he said these fears had been entirely removed and 

 that the membership of the association was rapidly increasing. 

 Continuing, he said: 



The attitude of yinir commission in rccoinnipmliDg the immediate clari- 

 fication of the law to permit co-operation among: Americans for export 

 trade is a big; step in advance and has earned the warmest praise from 

 all producers of himher and without douht every other product. 



The work .your commission is doing towards making the manufacturer 

 realize the absolute necessit.v for accurate costs to enable him to deter- 

 mine selling prices that mean a fair return on investment is a great 

 thing for all. Unfair competition heretofore seems to have been confined 

 to combinations in restraint of trade. In our business, and I judge in 

 nian.v others, there is a form of unfair competition that seems not to 

 have received the attention it should, au<l that is the unfair competition 

 of selling lumber far below its cost of production — not for the purpose of 

 throttling competitors, nor on account of a depression that temporaril.v 

 lessens the demand and causes over-production, but because its manu- 

 facturer is ignorant of its cost. There can be no fairness to a manu- 

 facturer who knows his cost through efficient methods, to force him to 

 compete with one who pursues "catch as catch can" methods. True, such 

 manufacturer pursuing slip-shod methods, will learn in time or invite 

 bankruptcy — but in the meanwhile, the unnecessary waste caused by 

 such as he, and depressing effects his- methods cause, are harmful not 

 only to his competitors, but to the pnldic welfare. He. too, as well as 

 those who combine tmreasonably t<.» reslrain trade, should be dealt with 

 by I he federal government. 



In the interest of public welfare and consei-vation of the forests, it 

 seems to me that it would be a really great and beneficial work for our 

 government, through j'our commission, to investigate the necessity of 

 legislation to control the production of our natural resources — over- 

 production means waste and depression. 



Commissioner Hurley's attitude toward trade associations is appre- 

 ciated by all business men, and I am sure that every association repre- 

 sented here will go far afield to co-operate and assist the commission 

 in its work of investigation. 



John W. McClure, president of the Southern Hardwood Traffic 

 Association, spoke on transportation, emphasizing this as one of the, 

 if not the, most important one single factor in the handling of lum- 

 ber and forest products. As giving some idea of what this meant in 

 dollars and cents he said that the average cost of transportation is 

 forty per cent of the cost of lumber delivered to the consumer. Con- 

 tinuing he said : 



The freight rate is the measure of distance from the market. Any 

 advance in the rate removes the manufacturer from that market, and 

 any reduction tends to bring the market nearer. Reduction of rates is 

 beautiful from an academic standpoint, but wc have been so far unable 

 to convince railroad traffic men that lower rates would enable us to 

 market more of our product and thereby conserve our forests. 



One of the most interesting bits of information imparted to the 

 government authorities was tiiat given in a bound volume of exhibits 

 presented by W. B. Burke, vice-president of the Lamb-Fish Lumber 

 Company and a representative of the Southern Hardwood Traffic 

 Association. He gave the commission the benefit of the extensive 

 study and investigation made by his company to ascertain cost of 

 production, percentage of marketable lumber sawn from logs and 

 information along other very specific lines. Included in the exhibits 

 filed with the commission were those presented at the harmony con- 

 ference at Memphis in April, 1915, and in the hearings in cases 

 I. & S. 520 and I. & S. 745 before the Interstate Commerce Com- 

 mission. One of these exliibits contains photographs showing how 

 the Lamb-Fish Lumber Company burns much low grade lumber for 

 fuel because it does not pay to market it. These particular photo- 

 graphs made a distinct impression on the commissioners as well as on 

 the other representatives of the government. The exhibits had not 



been brought down wholly to date by Mr. Burke, but he said that, if 

 the commissioners desired him to do this he would take pleasure in 

 complying with their request. 



Edward L. Davis of the Louisville Hardwood Club discussed insta- 

 bility of prices of lumber and gave the reasons why tliey wei-e unstable 

 and what the government could do in the direction of bringing about 

 a greater stability, as follows: 



If the government woulil aid in ileli'rniining the percentage of each 

 grade of lumber from logs in each section, according to thi^ir kind, and 

 the cost of either for each grade or the average cost per thousand anri 

 keep them before the mill men, I feel sure the latter would not so often 

 cut at a loss. 



The foregoing would help but it wouhl help more if every sawmill 

 operator and lumber dealer in the United States were required to report 

 to the government four times a year under oath the amount of lumber 

 he has on hand, or nearly as possible as to grade and thickness, the 

 information to be compiled and distributed to all who have furnished 

 report. 



Thus we could know how production and demand were keeping com- 

 pany. We could see what particular thicknesses and grades were over- 

 produced and we could stop our mills when we had over-production as 

 a whole. I feel sure that now we are frequently, through greed or ignor- 

 ance, running oveninie when, if all the facts were known, we would 

 cut less and make more money. 



There are other items such as heavy taxation on standing timber, high 

 freight rates, etc., on which the government can help the lumbermen 

 but these have been covered by other gentlemen. 



I sincerely hope this conference may lead to improved thods ami to 



better business. 



Col. S. B. Anderson tohl tlie commission that substitutes on an 

 average liave been good but that, taken as a whole, they had not 

 been good in the interest of conservation. He declared that any 

 substitute that prevented the use of the lower products of the log 

 was not in the interest of the lumber business and was also not, 

 in his opinion, in the interest of the general public. 



Doctor Parker told the lumbermen that the Board of Foreign and 

 Domestic Commerce is encouraging the lumber industry to talte 

 ail\ antage of the situation that will come with the ending of the 

 war in Europe. 



Max Sondbeimer, repre.senting the National Lumber Exporters' 

 Association, told Doctor Parker that exportation of southern hard- 

 woods at the moment is practically negligible because bottoms are 

 so scarce, ocean rates are prohibitive, and there is an embargo, 

 imposed by the allies, on all woods except ash and oak. Mr. Sond- 

 heimer said that foreigners were in real distress for want of lumber 

 but that it could not be sent across the ocean because the rate 

 is now .$2 per hundred as compared with a normal charge of 21 

 cents from New Orleans to Liverpool. Doctor Parker asked Mr. 

 Sondheimer if members of the National Lumber Exporters' Asso- 

 ciation competed with one another for foreign business, and Mr. 

 Sondheimer replied: "Competition is so strong that if we meet 

 each other in Europe we do not speak. '•" Mr. Sondheimer further 

 assured the government representatives that what the exporters 

 want is to get an American merchant marine that will make the 

 handling of lumber shipments to Europe possible. 



Commissioner Parry asked what had been done toward the estab- 

 lishment of selling agencies for export business and whether 

 efforts in this direction would be quickened if the Webb bill were 

 enacted. He was assured that the representatives of the lumber 

 industry would be pleased with the enactment of the measure and 

 that beneficial results would quickly follow. 



The hearing was prolonged to such extent that the government 

 agents were obliged to go from Hotel Gayoso to their train with- 

 out having seen any of the Memphis lumber mills, as had been 

 planned. 



Some statisticians have figured that if you add together the entire 

 population of the four states of Delaware, Arizona, Wyoming and 

 Nevada, and one-third of the population of New Hampshire, the total 

 will still be less than the number of persons engage<l in the lumber 

 industry, America's second important industry, second only to agri- 

 culture. Sixteen states have a smaller population than the total of 

 lumber workers. 



