HARDWOOD RECORD 



39 



hand, even the largest yards could not carry the idea to its final 

 conclusion, and specialize in too many directions, for the amount 

 of stock and the yard room, which would be required for a plan of 

 this kind, would be so great as to make the idea out of the ques- 

 tion. Besides, the capital required to handle the lumber which 

 would be needed would make the scheme impracticable. 



Nevertheless, the plan can be worked out, according to the 

 opportunities of the lumberman and the amount of stock he car- 

 ries on his yard, and it will repay investigation. One of the most 

 successful hardwood men in the country operates a small sawmiU 

 in Indiana, and though his production is bj' no means inlpressive 

 compared with that of many other hardwood operators, he always 

 manages to make, in proportion to the production of his mill, 

 more money than most of liis competitors. . 



The reason may be found to a considerable degree in the fact 

 that every board is placed, as sawed, in a space reserved for lum- 

 ber of that specific width. He cannot always fill an order for 

 25,000 feet of a given width of a certain grade and thickness of 

 oak; but if a customer is regularly in the market for that kind 

 of lumber, this mill manages to accumulate it fast enough to keep 

 the consumer constantly supplied. In other words, the lumber- 

 man is doing something for the buyer of hardwoods which the 

 average dealer is not able to do; and he is therefore getting higher 

 prices and a steadier trade than he could get in any other way. 



Getting back to the original proposition of dimension stock, 

 the usual objection to the method which has been described is that 

 it leads in the direction of a dimension business. The opponent of 

 this system insists that by "catering" to the consumer in the 

 matter of width, the hardwood man is opening the way for the 



user to call on him to deliver stock cut to the exact sizes, length, 

 width and all, that he is going to put into his furniture or mill- 

 work or specialty. It is, to his mind, a dangerous precedent to 

 establish, and will lead the lumberman to a point where, in order 

 to make a profit, he is forced to carry the stock part of the way 

 toward use in its final form. 



The answer to this is that the requirements of the consumer 

 must be considered, and always have been considered to a large 

 extent. Lumber is sold on grade, as to length and thickness; and 

 it is just as reasonable to argue that the consumer should be 

 required to take stock log-run and without regard to thickness 

 as to insist that he should not be given the privilege of getting 

 the exact widths he requires and paying the lumberman for the 

 labor of sorting it. 



Here, of course, is the meat of the cocoanut; it is feared that 

 the user of lumber will, after the sorting of stock according to 

 width becomes general, refuse to pay the premium which he is 

 now giving, and will get the service without making it profitable 

 to the handler of lumber to the extent that it should be. If that 

 happens, of course, it ■ftrill be the fault of the lumberman who 

 hasn't the backbone to ask the prices that his material and his 

 services are worth — not because his system is not economically 

 sound and practicable. 



If the plan of giving the buyer of hardwoods dimension stock 

 through a system of sorting, and without the necessity of resaw- 

 ing, is thoroughly tried, it will furnish a lot of material upon 

 which to base an opinion as to whether the manufacture of dimen- 

 sion stock can be made a satisfactory and profitable business for 

 the hardwood trade. — G. D. C, Jr. 



"\yiogg;^tagc:)5w^tfJX'ioa:*iTOC>^tf;wst^jM;)it^^ 



The affairs of the International Lumber and Development Com- 

 pany of the Drexel building, Philadelphia, Pa., of more or less 

 redolent fame, which for several years has received considerable 

 free advertising in Hardwood Record columns, are now up 

 against what promises to be the finale of this class of undertak- 

 ings. Former Chancellor John E. Nicholson, attorney in Delaware 

 for the Philadelphia stockholders of the company, has filed a bill 

 in the Chancery court at Wilmington demanding an accounting 

 of the company's affairs. 



The action follows closely the litigation instituted in the LTnited 

 States court at Philadelphia before Judge McPherson, in which 

 a number of complaining stockholders asked a receivership, alleg- 

 ing that the International Lumber and Development Company is 

 a gigantic fraud which has paid out $1,483,098 in dividends as an 

 inducement to keep the stockholders paying their money into the 

 company 's treasury. 



The Philadelphia court postponed the hearing in order to obviate 

 certain questions of technical jurisdiction. It will defer taking 

 up the matter of the appointment of a receiver until after the 

 Delaware court has acted. 



The Delaware court has designated April 29 for a hearing on 

 the petition. In the meantime the complaining stockholders have 

 until today to file affidavits in support of their charges. The de- 

 fendants are allowed until April 22 to file their answer and counter 

 affidavit. Eebuttals by the stockholders who are complainants in 

 the bill can then be filed until the date of the hearing. 



The defendants are: 



John R. Markley, contractor and promoter of the company. 



Isaiah B. Miller, contracting partner of Markley. 



William H. Armstrong, former United States railroad commissioner, 

 president of the company. 



Alfred Gratz, former member of Common Council, vice-president of the 

 company. 



Charles M. McMahon, secretary and treasurer. 



H. A. Jfcrrill, auditing director, formerly president of the City National 

 bank of Mason City, la. 



A. G. Stewart, director and commissioner of the company, former 

 attorney general of Porto Rico. 



John S. Barnes, director of the company, and a justice of the supreme 

 court of Nebraska. 



W. W. Pusny, 2d. of Wilmington, Del., resident director. 



Alfred H. Wanamaker. general counsel for the company. 



William H. Armstrong, Jr., general agent. 



The following Philadelphia concerns are named as co-defendants ; The 

 United Security Life Insurance and Trust Company of 603 Chestnut 

 street, trustee for the company's Mexican estate, and the Philadelphia 

 Real Estate and Security Company, of Drexel building, a stock trading 

 concern. 



More specific charges are contained in the Delaware bUl, which 

 states that the $6,000,000 lumber company was formed originally 

 as a $10,000,000 railway company, and that at the time of the 

 company's formation but 85 of its 20,000 shares were issued. 

 The bill recites that they were given to Markley & Miller, the 

 contractors, and to the officers and stockholders of the concern. 

 It goes on to say that from 1904 until this year no other shares 

 were issued, and that the 85 original shares remained in absolute 

 control of the corporation. 



It recites that despite the fact that subscribers paid into the 

 company's treasury the sum of $5,451,247.50 from October 3, 1904, 

 to January 20, 1912, they were never granted a vote or voice in 

 the management of the company. This one item is set forth 

 more explicitly than the Philadelphia bill as follows: 



That the method devised and practiced as above set forth for the 

 securing of subscription and of the payment of the capital stock of the 

 company was devised and contrived with the fraudulent Intent and pur- 

 pose to deprive the subscribers to the stock of the company of all voice 

 and vote in the control of the corporation and its assets for the whole 

 period of time during which their subscriptions were being paid. 



Concerning the contracts with Markley & Miller the bill declares 

 that after the first contract expired, January 1, 1912, a supplemen- 

 tary contract was entered into "wherein it was attempted to relieve 

 the said Markley & Miller of responsibility for their failure to 

 fulfill the obligations and perform the stipulations assumed and 

 entered into by them" under the first contract. 



Further, the bill claims that the company now is insolvent, that 

 its stock is of little value and that it now has no other assets; 

 that the tract of land in Mexico is said not to have been improved 

 to any great extent. All the charges brought against the lumber 

 company and its officers in the Delaware bill wUl be fortified with 

 affidavits of details and specifications within the next few days. 



