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Veneer and Its Uses 



INACCUKATE ESTIMATES OF COST OF VENEER MANUFACTUKE DISASTROUS 



The followiug advertisement has bceu appearing regularly for 



several weeks in an industrial journal in the South: 



"Bankrupt Sole — Veneer I'lant — For Sale. 

 One complete venoer plant with an up-to-date drying system. The 

 plant IncludinE lot .ind b.iildinKs. cost appro.\imatoly $40,000. Tho 

 machinerv- alone cost about J20.000. The plant is situated in the suburbs 



of ^. on the Southern Railway. The capacity of the plant is about 



7.1,000 feet of 's-inch veneers per day. For further information address. 



■ ic." 



And the interesting part is that this is not the only ad of this 

 kind which can be seen by perusing the journals which make a 

 feature of their "For Sale" columns. Veneer plants are to be 

 had in a number of sections of the country, and usually the price 

 demanded is not in direct proportion to that which was expended in 

 the erection of the buildings and the installation of the machinery. 

 There is evidently something wrong somewhere. 



In many cases the reasons are not hard to find. A large number 

 of veneer plants are erected as a result of the excellent results 

 produced (on paper) by those who can take the price of logs, 

 figure the cost of manufacturing veneers, compare that with the 

 selling price and make the returns on an Arizona gold mine look 

 like the dividends from a Van Buren street peanut emporium. 

 There are some people who are so intellectual that after they have 

 demonstrated that an oak log, manufactured into veneers, is worth 

 enough to take a trip to Europe, returning by way of the Panama 

 Canal, the man to whom the demonstration is presented begins 

 to suspect, provided he is not initiated into the mysteries of the 

 business, that there must be something in the stories of the lumber 

 trust after all. 



As a matter of fact, figures, while accurate enough in themselves, 

 are usually exceedingly misleading unless considered in relation to 

 the other factors in the case. The man who figures the value of 

 veneers as compared with the cost of the log usually neglects to 

 include the cost of erecting and maintaining the plant; the labor 

 needed to manufacture the stock; the waste involved; the cost of 

 doing business, including salaries for superintendence, selling ex 

 penses and office work and a multitude of other items which would, 

 if considered, soon prove that the margin of profit on veneers, 

 under the conditions that have prevailed for several years, is 

 probably less than in many other wood-working branches. 



Unfortunately, it happens that when money is "seeking invest- 

 ment," a demonstration like that indicated above is sufficient to 

 result in the formation of a company and the erection of a plant. 

 .Vfter it has been in operation for some time and the difficulty of 



■ leelaring 100 per cent dividends every six months has been made 

 ipparent, the man who is furnishing the capital usually decides 

 liat his money had better seek investment elsewhere and eonse- 



• luently puts his proposition on the market. (Vide above.) 



In other cases the result is the same, although the immediate 

 causes may not be identical. Few of those who have not been in 

 the business rijalize th? capital required to start a veneer business 



■ >n anything like a pretentions scale. Timber is exceedingly high, 

 machinery is expensive and other features which are parts of the 

 business require large sums either for the beginning of the work 

 or for operation in connection with it. 



The necessity for having money for running expenses, after the 

 entire available capital has been absorbed in the erection of the 

 plant and the beginning of business, is frequently given as a 

 reason for the sale of thin stock at prices which do not represent 

 the cost of production by a considerable amount. It isn't a case 

 of choice; the manufacturer doesn't ask himself, "Shall I insist 

 upon a price which will earn a profit for this investment, or shall I 

 sell and get the money with which to pay oflE the hands on Satur- 

 day night?" As Mark Twain would say, "it is a ground-hog 

 case." 



The outcome of methods of this kind is of course not hard to 

 ■letermine. Such a plan, in a short time, usually shorter than the 

 people affected anticipate, is followed by disaster, and the business 



— 16— 



is halted. Then another red flag is hung out and another sale 

 is provided for. 



It would be going too far to say that all new plants are failures. 

 On the other hand, some of the best managed and most successful 

 veneer mills in the country have been started by comparatively 

 inexperienced men, who have, however, made a scientific study 

 of the business, employed the best and most practical help avail- 

 able, and sold their product at the price which it was necessary 

 to get in order to make money. The point which is to be made, 

 however, is that the business is unusually alluring, from the out 

 side, and that unless proper preparations are made and thorough 

 investigation undertaken before work is begun there are bound 

 to be disappointments. 



In the case to which reference was made at the beginning of 

 this article, investigation proved that lack of capital was the real 

 reason for the failure of the business. Those who were supplying 

 the funds had been convinced that there is money in veneers, and 

 had agreed to put up the necessary cash. The cost of building 

 and equipping a mill was much more than they had been led to 

 believe, however, and the stiff expenses of operation which they 

 were called upon to meet proved the straw that broke the already 

 weakened back of the financial camel. The angels withdrew 

 their support and the plant, by the same token, shut down. It is 

 still closed and will not be reopened except under a new man 

 agement. 



The manufacture of veneers had not been proceeding long 

 enough to enable it to be determined whether or not the venture 

 would be a paying one. Therefore it could not be asserted that those 

 who organized the company and secured the financial backing 

 (lid not make good on the proposition, for they had not been given 

 a fair chance to make a showing. It simply demonstrated, how- 

 ever, that it takes capital to run the veneer business, and that 

 the amount required is more than the average investor or capital 

 ist usually realizes. 



Owing to its peculiar attractions, and the fact that outsiders 

 regard the veneer business as a sort of legerdemain whereby the 

 intrinsic value of material is greatly increased, without realizing 

 that the laws of supply and demand govern the price as in other 

 lines, and that returns cannot be secured without manufacturing 

 conditions being right and selling methods efficient, the business 

 has been unfortunate in that many have entered it expecting to 

 make fortunes in a day, and have remained long enough to find 

 out their mistake, sell veneers at a loss and retire, more or less 

 gracefully. Those who remained have been compelled to suffer 

 because of the inexperience or over-enthusiasm of the former. 



If it were possible, it would be a good thing to issue some sort 

 of booklet on veneer manufacturing, for the guidance of those 

 intending to become .1. P. Morgans, Rockefellers and Schwabs 

 through the medium of making "thin ones out of thiclc 'onttS. 'j* 

 Many interesting facts could be compiled from the experiences 

 of some who have tried it, and the result might be that the en- 

 trance of new interests hereafter would be confined to those who 

 :ire prepared to carry on their enterprise as other businesses are 

 operated, with sufficient capital, proper methods of determining 

 cost of nianiif'acturc and thoroughly organized selling departments. 



G. D. C. 



LUMBER FOR THE NORTH POLE 



The Paris Manufacturing Company of South Paris, Maine, states 

 that it supplied the first shipment of lumber ever consigned to the 

 North Pole, of which proper deli^■ery was made. This house supplied 

 the material for the sledges that Lieutenant R. E. Peary took on his 

 ,Ari'tii| expedition. This company states that it has often sent its 

 Tfoods to South Africa, Australia, England, South America and Hono 

 Inlu, but this is the first time it ever had the distinction of shipping 

 ;iny part of its output to the North Pole. 



