36 



HARDWOOD RECORD 



Members, March 1, 1910 302 



New members 40 



432 



Withdrawals 30 



Members. March 1. 1011 303 



Your comniitteo has worked diliKently among 

 our several cities and has also had considerable 

 correspondence with other members of the as- 

 sociation, with a view of providing a constantly 

 increasins membership. While the results show- 

 only a small gain, it is our opinion that the 

 year's work will produce more new members 

 later. The uuusually large number of resigna- 

 tions for the year seems to be largely due to 

 firms retiring from business, failures, changes in 

 location, cutting out of timber contracts, etc., 

 and we are advised by the secretary that It was 

 also necossar.v to drop some members for non- 

 payment of dues. The committee is still working 

 with a number of prospective members, and their 

 applications may come in any day. These are 

 among concerns on which the association has 

 been working for some time. We believe that 

 all efforts should be devoted, not so much to 

 the increasing of number of members in the as- 

 sociation, but to continuing the present high 

 character and quality. The organization has 

 reached a point where the scope of its work is 

 so well known that in promulgating the various 

 problems submitted from time to time the qual- 

 ity or stability of membership is what will, in 

 the future, carry as much or more weight than 

 a mere increase in members. 



R. U. DOWNMAiN, MiW ORLEANS, LA., 



TRUSTEE 



Membership the past year has been secured 

 jn several new locations, and we believe that 

 with a little missionary work on the part of the 

 Individual members the organization will next 

 year be able to interest the hundred or more 

 wholesalers who should be interested with us 

 and who are now indirectly receiving the bene- 

 fits accruing from the associated work carried 

 on by the nearly 400 members now on the roll. 



There seems to be an annual chan.ge of mem- 

 bers amounting to more than 35 new members 

 secured during the past twelve months. To do 

 this co-operation on the part of all the members 

 is needed. 



Respectfully submitted, 



W. R. Butler, Acting Chairman. 



In the absence of G. H. Holt, chaimiau of 

 the Committee, on Fire Insurance, his paper 

 was not presented, but made a part of the 

 records. In substance his report was as fol- 

 lows: 



Report of the Fire Insurance Committee 



The report of the Fire Insurance Commit- 

 tee, as read by Chairman G. H. Holt, em- 

 phasized the fact that new legislation and new 

 system inaugurated in some of the state; 

 make it evident that the fire insurance busi- 

 ness can not be conducted upon the theories 

 and methods which have hitherto prevailed. 

 This, of course, will effect the practice and 

 cost of insurance in the case of every lumber- 



man as an insurance bu^'er, and every lumber 

 tmderwriter. 



The report then goes on to compare pres- 

 ent conditions with those of a year ago. At 

 that time the interference of state government 

 in any manner was being bitterly opposed by 

 the insurance companies. They contended 

 that rate making was a function which only 

 highly trained insurance men wholly in the 

 employ of the insurance companies were cap- 

 able of performing, and that any interference 

 \vith rate making would result in tremendous 

 flisaster. They believed at that time that 

 fliey should be immune from all inquiry and 

 investigation as to combine, etc. They con- 

 tended that rates were not inequitable, be- 

 cause the best underwriting judgment stated 

 that they were not inequitable. As to the con- 

 tention that rates were too liigb, insurance 

 companies showed by figures that they made 

 no profit in their business. These and many 

 others were the claims of the insurance com- 

 panies at that time. Since then, testimony 

 in various state courts has completely de- 

 moralized the insurance companies ' defense. 

 Conspiracies in restraint of competition have 

 been unearthed, and statutes have been passed 

 by the various states providing sufficient pun- 

 ishment for combination in restraint of in- 

 surance competition, which statutes have been 

 upheld by the Supreme Court of the United 

 States. Various state insurance investigating 

 rimimittees have condemned the old insurance 

 methods. The states which have put in opera- 

 tion state rating systems have secured reduc- 

 tions in the cost of insurance, and have had 

 no difficulty in obtaining satisfactory insur- 

 ance. As a result of the persistent resistance 

 of the insurance officials to legitimate reform 

 movements, the bills providing for regulation 

 of insurance companies along various lines in 

 the different states are anything but uniform 

 find consistent, and will, without doubt, work 

 great hardships not only on the companies 

 but on the public and on the courts. On the 

 other hand, the insurance organizations are 

 favoring legislation which will still further 

 tend to restrict or eliminate competition and 

 prevent the read.justment of premium rates 

 upon the basis of fire waste. Under their 

 system rates are not to be reduced in pro- 

 jiortion to hazard, the injustice of which is 

 self-evident. 



The effect upon lumbermen is treated from 

 two standpoints. As previously stated, many 

 of the members of the National Wholesale 

 Lumber Dealers' Association are underwriters 

 and have solicited and obtained business by 

 cut rates or promises of rebate. Under the 

 new laws a large part of this advantage over 

 the stock companies will disappear. Regula- 

 tion by the state government to prevent com- 

 bination in restraint of competition will not 

 leave the margin for scalping which enables 

 tliese underwriters to exist. The committee 

 claimed that it is no longer possible for a 

 small company to operate in competition with 

 a large stock company, or to build up a busi- 

 ness from a small beginning. Any new com- 

 pany, it is claimed, to succeed must have a 

 capital and surplus of between $500,000 and 

 $1,000,000. The salvation of the smaller com- 

 panies either lies in amalgamation or in the 

 adoption of the principle of the "under- 

 writers ' policies. ' ' 



The other point of view to be considered 

 is the effect upon lumbermen as lumbermen. 

 The result of _ the elimination of competition 

 would be to effect the loss of special rates 

 now enjoyed and the enforcement of the full 

 rate. The report then goes on to point out 

 how these things will be effected by proposed 

 legislation in the different states, and claims 

 il is better for the lumbermen to co-operate 

 with the underwriting lumbermen in build- 

 ing up an underwriting organization in com- 

 petition with the large stock companies. Un- 

 der recommendations the report says that 



lumbermen should see to it that the under- 

 writing interests are required to deal fairly 

 with the problem. Lumbermen should unite 

 actively with other property owners in behalf 

 of all worthy measures for promoting the de- 

 sired reform and to prevent waste of life and 

 reduce fire hazard. The Lumber Mutual In- 

 surance Organization should unite more 

 broadly to save expense of operation and to 

 render more efficient service. As to the pro- 

 posed legislation before various state legis- 

 latures with a view of prohibiting non-fire- 

 jiroof material in buildings above two stories 

 in height, it is pointed out that the effect 

 Mould be enormous on the lumber business, 

 and that it is a needless way of reaching the 

 desired results. 



In the absence of W. A. Crombie, acting 

 chairman of the Committee on Arbitration, 

 Charles H. Prescott read the report of the 

 Committee on Arbitration, an abstract of 

 which follows: 



Eeport of Arbitration Committee 



The Arbitration ('ommittee reported having 

 passed upon four cases during the year, ami 



F. S. UNDERBILL, PHILADELPHIA, PA., 

 TRUSTEE 



that two other eases are in preparation for 

 submission to it. During the year all mat- 

 ters presented received careful and impartial 

 consideration, and the committee states that, 

 so far as it knows, all parties interested have 

 accepted awards and are satisfied with the 

 outcome. One or two . principles were in- 

 volved, it was said, which the committee was 

 pleased to consider, and it viewed the fact 

 that but four cases were presented as an in- 

 dication that the business transactions be- 

 tween members of the association are of a 

 satisfactory nature. 



The report said: "A dispute has arisen in 

 connection with the award rendered by a pre- 

 vious committee, and as one of the members 

 has declined to carry out the award as ren- 

 dered by the committee, the case is now in 

 court, and there will probably be an oppor- 

 tunity of testing the form of agreement used 

 by the association, and as to the finality of 

 the committee's award, where the two mem- 

 bers have specifically agreed to accept the 

 committee's findings as final." 



The legal department of the association has 

 settled a number of disputes which are really 

 on an arbitration basis, but as a general rule 

 no material point is involved. It was not 

 necessary to call a meeting to consider any 

 cases presented to the committee during the 



