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HARDWOOD RECORD 



June 10. 1922 



The Executive's Round Table 



This Department Is Maintained for the Use of Hardwood Record's 



Subscribers and Is Open at All Times for a Frank Discussion of Any Subject Having to do 

 with the Production, Sale, Shipment, or Utilization of Hardwood Lumber 



Comments on the Proposed Hardwood Sales Code 



The question of a hardwood sales code, which will be decided at 

 the twenty-fifth annual convention of the National Hardwood 

 Lumber Association in Chicago on June 22 and 23, has provoked 

 the most earnest attention of buyers and sellers of hardwood lum- 

 ber throughout the country. During the past eleven months 

 Hardwood Record has received some very interesting comments 

 on the proposed code, these coming from both buyers and sellers. 

 Some of these observations, in the form of letters, have already 

 been published. Below are three other letters on the subject, 

 which this seems the opportune time to publish. One of these let- 

 ters is from F. E. Ackley, lumber buyer for the Heywood-Wakefield 

 Company of Chicago, one of the largest chair and furniture manu- 

 facturing organizations in the country and buyers of huge quan- 

 tities of hardwoods. There are few buyers better known in the 

 trade than Mr. Ackley. Another of the letters is from A. E. Pope, 

 lumber supervisor for the Dodge Brothers Company of Detroit. Mr. 

 Pope is one of the best informed buyers of lumber in the country 

 and knows the hardwood business from A to Z. The third letter 

 is from a leading manufacturer of hardwood lumber, who asks that 

 his name be withheld, because of his desire not to be hampered 

 should he care to enter into debate of the proposed code on the 

 floor of the National Hardwood Lumber Association convention. 

 The letters follow: 



From Mr. Ackley 

 It would be all right for the National Hardwood Lumber Association to 

 write into the rule book a sales code, if one could be agreed upon that 

 would be absolutely fair to both the buyer and the seller, with no par- 

 tiality shown to either. In other words, one that would insure both the 

 buyer and the seller a square deal. The advantage would be that, before 

 a deal is really started, a code governing how it should be bandied would 

 be thoroughly understood, but a written code is not a necessity, for there 

 are certain well-defined ethics and regulations in the buying and selling 

 of lumber that are thoroughly understood by all lumbermen through the 

 acceptance of long-established customs. A code defining these customs 

 should be acceptable. However, some of the lumbermen seem to have 

 become dissatisfied, and proposed a code at the 1921 meeting in Philadel- 

 phia with very different interpretations to the familiar terms. For 

 instance, the term F. O. B. Chicago means : "Free on Board Cars, Chi- 

 cago," and not F. O. B. the mill, with freight allowed to Chicago, and the 

 date of delivery is the date the buyer receives the stock, and a signed bill 

 of lading by a common carrier does not constitute delivery. This must 

 be so, for the buyer can only inspect the lumber as he finds it, and lumber 

 bought delivered belongs to the seller until it is accepted by the buyer. 

 Any shortage in measurement or damage in transit must be settled 

 between the seller and the railroad. Also, in the terms of payment, the 

 discount period should be dated from the receipt of the stock by the 

 buyer, as the date of the invoice makes no difference to him ; for, he is 

 only interested in the lumber after he has received it. 



We have not given this sales code idea very serious consideration, 

 knowing that a code to be effective must be accepted by both buyer and 

 seller, and neither party will accept one which he considers unfair. 



Yours very truly. 

 Diet. By Mr. F. E. Ackley. [Signed] F. E. ACKLET. 



From Mr. Pope 

 Following previous correspondence relative to the sales code. * • • 

 I wish first to repeat what I have before said, namely : "That it is very 

 difficult to discuss this subject by letter In such a way as to be clearly 

 understood. I feel that the best results can be had through open dis- 

 cussion, although I appreciate the fact that a certain amount of careful 

 publicity is quite often necessary to arouse interest, especially to those 

 who seldom attend the conventions." 



As to the code : In my opinion it should provide that a sales acknowl- 

 edgment or memorandum be given by the shipper to be his guarantee to 

 furnish a full measure, that is. 16 ounces for a pound. In other words, 

 when speaking of lumber he would guarantee to deliver as many feet of 

 each grade as the invoice covered. .\lso that be make delivery as near 



as possible and practicable at the time specified ; also that when the sale 

 is made he informs the consumer the exact mill or yard from which the 

 stock will be shipped ; also that there would be attached to each and every 

 invoice a copy of the original bill of lading, which bill of lading should 

 show consignment by the mill directly to the consumer. In other words, 

 to do away with the common practice of certain people in having stocks 

 from various mill points consigned to them at some place like, say Cairo, 

 111., or Mounds, or Buffalo, and then reconsign them to the consumer. 



Also that the shipper binds himself to complete his contract, regard- 

 less of hazard to his business, just as readily when the market goes up as 

 he would were it falling. 



On the other hand, the buyer's order to the shipper should be his guar- 

 antee to accept all the lumber purchased, and at the time specified and 

 at the price agreed upon, regardless of hazard to himself. In other words, 

 he be bound to accept all stocks on a falling market just as readily as he 

 would on a rising market. 



In other words, I believe that buyers and sellers should transact their 

 business with each other in an open manner and feel that they had just 

 the same relationship the one to the other as does one member of a 

 company to another member of the same company. In other words, they 

 should feel a partnership in each other which carries with it confidence 

 and trust, and until there is such a confidence and a trust between shipper 

 and receiver there will be very little pleasure in business. 



The address given by Mr. Hines of Chicago at the recent meeting of 

 the Yellow Pine Manufacturers' Association has revealed many reasons 

 why both shipper and receiver should conduct their business more care- 

 fully in the future than they have in the past, and I sincerely hope that 

 there will be adopted at the next annual meeting of the National Hard- 

 wood Lumber Association a code so framed as to protect both shipper and 

 receiver, and that the terms of agreement are so binding that both will 

 be compelled to stand by their agreements. Y'ours very truly. 



[Signed] A. E. Pope. 

 From a Manufacturer of Hardwood Lumber 



Replying to yours of April 13, I believe that there should be a sales 

 code, and that the National Hardwood Lumber Association is proceeding 

 along proper lines to compile and promulgate a sales code which will 

 reflect the fair practices of the trade. It is, of course, desirable that the 

 sales code be thoroughly discussed both by producers and consumers. The 

 interest of the consumers should be given first consideration. While they 

 will have no actual vote in the adoption of a sales code, they have a very 

 effective power of veto, because the buyers are under no obligation to 

 accept the sales code adopted by the National Hardwood Lumber Asso- 

 ciation unless it is fair and reasonable and satisfactory to the buyers. 



It is hardly to be expected that the buyers, due to the complexity of 

 conditions in the consuming trade, will take a very active interest in the 

 work of compiling a sales code. However, it can be expected that they 

 will watch with much interest and with the closest scrutiny the result of 

 the work which is being done along this line by the N. H. L. A. 



To be successful, the sales code should be very broad in its expressed 

 principles of honest dealings between buyer and seller. It should not go 

 too much into details, which might lead to argument and dispute. It 

 should not include the ambitious program of trying to solve in one docu- 

 ment all problems of the trade, or to put a stop to all abuses. It should 

 not attempt to hew out new paths for the trade to tread, but should only 

 attempt to express those broad principles which have been recognized by 

 custom and practice as the basis of fair dealings between buyer and seller. 



Perhaps there is more faith and confidence exercised in the marketing 

 of lumber than in any other line of business. The buyer inquires for a 

 Qertain amount of stock, the seller quotes a price, and in many cases 

 gives a very inadequate description of his stock, the buyer says in effect. 

 "I'll take it," and all of the rest is left to faith. The fact that this faith 

 is not oftener imposed upon or violated speaks highly for the average of 

 integrity and fair dealings of the lumber industry and the consuming 

 trade. During past years, however, sharp fluctuations in the market have 

 encouraged sharp practices among both buyers and sellers, and when dis 

 putes have been taken to the courts to decide the necessity for more com- 

 plete and definlDe contracts has become evident. For the sake of cc.n- 

 venience, a definitely worded sales code can be made a part of a contra (( 

 by the use of a very few words, so the necessity for a sales code has been 

 emphasized and appears to be of vital importance in future coniluct of the 

 industry. If constructed along proper lines, this sales code will greatly 

 (Continued on page 28) 



