24 



HARDWOOD RECORD 



November 10, 1916- 



to It, is that we cannot put a revision of rules through the National asso- 

 ciation if the changes are too arbitrary or too marked. I do not think 

 that we ought to pay too much attention to this phase of the question, 

 because although I am thoroughly in favor of supporting the National 

 association to the fullest extent, yet the time has come, I think, when 

 the manufacturer of the lumber should realize that it is up to him whether 

 he gets the most out of his stock or not, and if it comes to a show down, 

 I am willing to break away from the National, but I very sincerely hope 

 that this will not happen. 



If we get some changes in our hardwood grading rules during this 

 coming year, we ought to let them alone for several years, and unless we 

 go far enough to satisfy the manufacturer of the lumber for the next, I 

 might say, five years, this agitation is going to continue, and I am 

 thoroughly convinced that the rules, as they are now proposed, would 

 not satisfy the manufacturer of the lumber In a couple of years or so from 

 now. 



The final action on the grading rules provided that the vpork 

 done by the grading rules committee is approved by the asso- 

 ciation and the matter referred back to the bureau of grades for 

 joint action of the Michigan association, be followed by further 

 report of definite final recommendations in January, these recom- 

 mendations to be acted upon for final acceptance or rejection, and 

 if accepted to be put up to the National Hardwood Lumber 

 Association. 



S. N. Stamats, purchasing agent for the Willys-Overland Com- 

 pany, Toledo, 0., representing the buyers of some .500,000,000 feet 

 of lumber, expressed his views on thick stock, saying that a poor 

 back, that is, a No. 2 back, on "select" grade cannot be used 

 in automobile trades as three to four sides show finish and must 

 be clear. He said that in the automobile industry the actual cost 

 of using No. 2 common would be 10 per cent greater than using 

 first and second grades. It was suggested that the main idea on 

 the select grade with the No. 2 back was for one-inch stuff, and 

 Mr. Stamats, of course, had no objection on this material. Mr. 

 Chapman suggested there should be a special grade made for the 

 automobile trade, but that the rules covering furniture and in- 

 terior finish lumber should not be affected by the requirements of 

 the automobile industry. 



W. L. Saunders, representing the Michigan association, took 

 a prominent part in the discussion. He said that Michigan will 

 not object to any recommendations by the organization on the 

 backs for 4/4 and 5/4 select. 



Terms of Sale 



Edward Hines of Chicago led a discussion on terms of sale, 

 which subject was introduced by President Phillips as being just 

 as important as the question of price. Mr. Hines said that when 

 the present terms of sale were adopted originally, borrowing was 

 more difiicult than it is now and lumber was not shipped on as 

 long an average haul as it is at present. He maintained that 

 since 1907 the lumber manufacturers have not been in charge of 

 their own business; that there has been too much consideration for 

 the feelings of the customer. He offered some surprising figures 

 on the loss of earning power of money used by customers through 

 discounts, stating that two per cent discount in thirty days amounts 

 to 24 per cent a year, and in forty days to 29 per cent a year. 

 He said that the customer can borrow this money at five per cent 

 and thus makes about 400 per ceht a year on. this money. He 

 objected to the practice of a customer giving nothing for the 

 guarantee of delivery, which is primarily the purpose behind the 

 discount, and at the same time taking the discount. He cited 

 various examples, showing the result of foolish methods of hand- 

 ling discounts and terms of sale. He showed that the terms are 

 net on most of the material items going into the manufacture of 

 lumber, that stumpage, labor and the plant cost are about 95 per 

 cent net cash. He concluded by recommending a committee to 

 meet with other similar committees and work with the National 

 association on the question of revised terms of sale. This com- 

 mittee was later appointed by the president. 



Mr. Saunders said that lumber manufacturers are rapidly 

 coming to the thirty-day net terms. 



R. B. Goodman read a paper on "Co-Operation of the Timber 

 Owners," the main theme of which was the effort to get the co- 

 operation of all owners of timber land to the end that they should 



share the cost of work with the lumber operators as a strength- 

 ening in lumber values means just as much to the timber owner a» 

 to each timber operator. Mr. Goodman based his talk on work 

 that is already being inaugurated, in the West particularly, to this 

 end. He traced the development of the modern lumber trade asso- 

 ciation from the purely operating organization to a publicity and 

 trade extension bureau. He said that in all these efforts the tim- 

 ber owners do not contribute either time, moral support or money 

 in spite of the ease with which their obligation to so contribute 

 either time, moral support or money in spite of the ease with 

 which their obligation to so contribute could be proven. He said 

 that in the northern territory are large tracts of timber owned 

 by the United States government, railroads, large estates and in- 

 dividuals, which all should be actively interested in the special 

 campaign for hemlock and birch. He cited the formation of the 

 Forest Products Federation of the Northwest states, where 

 6,000,000,000 to 7,000,000,000 feet of cut have been paying for a 

 benefit that accrued to 1,300,000,000,000 feet of stumpage. This 

 plan is to embrace all efforts for the good of the industry under 

 one general head, which would not, however, in any way interfere 

 with the functions or identity of the individual associations. 



Mr. Goodman proposed the formation of a similar body to take 

 in the lake and eastern states, and a third body to take in the 

 southern states, and then the final organization of a powerful lum- 

 ber manufacturers' association to take in the whole. 



Following Mr. Goodman's talk, the meeting adjourned for 

 luncheon. 



Afternoon Session 

 The afternoon session was opened by the reading of a paper 

 prepared by M. P. McCullough, Schofield, Wis. In the absence 

 of Mr. McCullough, whose paper handled the question of branding 

 lumber. Secretary Swan read what he had to say. His paper re- 

 ferred particularly to a machine patented and manufactured by J. 

 G. McDonough, Eau Claire, Wis., which was suggested as being 

 the best machine for branding lumber. He referred to the suc- 

 cess with which it has met in cypress and southern pine oper- 

 ations, and recommended that a committee of three be appointed 

 for the specific purpose of investigating the matter fully. The 

 motion was carried. 



R. S. Kellogg then gave a review of the general market con- 

 ditions. He said that conditions were never more active than 

 now and building construction and bank clearances show remark- 

 ably favorable figures. Among other interesting things, Mr. Kel- 

 logg said: 



Federal census statistics show that lumber prices, based on the figure 

 received by the manufacturer, were 10 percent less in 1915 than in 1906, 

 an actual loss in the ten years which have marked the greatest advance 

 in commodity piiccs in the history of the nation in almost every other 

 line. 



When it is remembered that the cost of supplies for the camps to say 

 nothing of wages, have advanced from 30 to 50 percent in the past year, 

 it Is readily seen that the lumberman Is the sole exception to the general 

 prosperity. Here are some figures showing the Increase in prices of 

 other commodities since 1914 : Coffee, 36 per cent ; potatoes, 71 per 

 cent; beans, 75 per cent; canned goods, 100 per cent; metals (26 grades), 

 107 per cent ; gasoline, 68 per cent ; lard, 57 per cent ; wrapping paper, 

 82 per cent; iron bars, 117 per cent; copper, 115 per cent; creosote, 150 

 per cent ; pig aluminum, 205 per cent. And these are picked at random 

 from the staples. Unusual commodities run into the hundreds of per 

 cent in gain. September statistics of this year show the following increase 

 over the seven-year average : Bank clearings, 56 per cent ; Imports, 53 

 per cent ; exports, 234 per cent ; a volume bigger than any nation has ever 

 recorded in the world's history. The general level of commodities haa 

 advanced ,33 per cent over the seven-year average. 



The problem of the lumber industry today, however, is not that of 

 getting more for the lumber, but of utilization of the waste. A larger 

 market, assured by scientific merchandising, will solve this problem, by 

 making It possible to avoid the big present waste, a waste chiefly due to 

 the necessity under inactive market conditions, of merely cutting the cream 

 of the forest, to raise money quickly. 



He prophesied that lumber will be up a dollar to two dollars 

 until spring at least, and that it is a matter of guessing for any 

 further length of time; that hardwood, particularly for furniture, 

 looks good; that it would be pushed wherever possible, and that 



