HARDWOOD RECORD 



Another Jolt 



An esteemed c-orrespomlciit ^vho is engaged in the veneer :ind [mI-iicI 

 industry, referring to the editorial in last issue of the Record he.-uied 

 "Something of a Jolt,"' in which was recited an analysis of M. 

 Wulpi's goose farm enterprise, TVTites a letter in supplement to that 

 article, and inquires the use of buying a goose farm when one can 

 go into the veneer business with little or no capital and make a for- 

 tune within a few months. 



He says that a statement was current a short time ago tiiat in the 

 veneer business a net profit of $85 could be made on one thousand 

 feet of logs which were cut into one-trrentieth~ inch veneer. This 

 statement was vouched for by the prospectus of a concern whicli pro- 

 posed to commence cutting veneers, and had appended to it a number 

 of the names of responsible and reputable gentlemen, among them a 

 well-known manufacturer of veneer machinery. If a cutting maciiine 

 can produce a net profit of $S5 per thousand feet of logs, and can cut 

 five thousand feet of logs into one-twentieth inch veneers per day, it 

 is conclusive that a net profit of $425 per day per machine can ])•; 

 made, and it simply means having enough macliines earning $425 per 

 day per machine to make up any amount of profit per day that one 

 might fancy. There are a number of veneer mills through the coun- 

 try that can be bought up on the installment plan — that is to say, one 

 dollar cash and one dollar per week. It is, therefore, very apparent 

 that five plants could be bought for an investment of five dollars. The 

 balance could be earned before the next installment matured. Is it 

 worth whUe to go any further with this proposition? A fortune i,s 

 staring every man in the face and only a few are taking advantage 

 of the opportunity. 



The observations of the veneer man are timely, and his letter forms 

 a very good companion piece to Mr. Wulpi's original communication. 



A Progressive Movement 



Tlie long-discussed plans for the consolidation of the Chicago 

 Hardwood Lumber Exchange, the Chicago Wholesale Lumber Dealers' 

 Association and the Lumbermen's Association of Chicago, have prac- 

 tically been consummated, and out of these three associations has 

 been formed a parent organization which will be a distinct credit to 

 those engaged in lumber manufacturing and merchandising enterprises 

 in Chicago. It is presumed the new organization will have a member- 

 ship of well towards five hundred, and as it will involve the totality of 

 all lumber, interests in Chicago, it shoidd prove a tower of strength 

 in the working out of problems of general advantage to the trade. 



The identity of the separate divisions of the trade are in no wise 

 disrupted by the consolidation, as the affairs of the hardwood inter- 

 ests will be handled by hardwood men and the building woods interests 

 by the building woods men. Undeniably the final consummation of 

 this enterprise will distinctly make for the betterment of every eo:i 

 dition surrounding the local trade, and the three associations are to 

 be congratulated nn the wise step they have taken. 



Paucity of Profits 



The commercial history of the hardwood business during the last 

 three years, both in the manufacturing and merchandising end, renders 

 much to be desired. Very few hardwood men made any considerable 

 profit during this time, and the jiresent situation is not one to war- 

 rant the belief that the business is going to show any marked 

 increase in profits unless it is possible to secure a consirlerably 

 higher i-ang-3 of lumber prices. 



It is an axiom that stumpage gradually and steadily increases iv. 

 price, and never in history has there been any decline in these values. 

 Stumpage is not liable to a quick upward trend, but it shows a 

 steady increase as the years go b.y. On the other hand, lumber values 

 fluctuate. Short supply occasionally renders it jiossible to get fancy 

 prices for various kinds and grades of lumber, and even a slight over- 

 supply or a decadence in trade cause prices to go gallivanting to lov.' 

 levels. 



During the last few ycirs the lumlicr trade has been hesitant, and 



ulnle some items of lumber have advanced in price, the larger cjuau- 

 tity produced has declined. This larger quantity represents the 

 lower end of the output, and with increasing distances between points 

 of lumber production and consumption, the situation constantly .grows 

 worse because of the increasing cost of delivering lumber by rail to 

 the points of use. 



Unquestionably stumpage and log values are ranging too high, or 

 lumber prices are too low. There is very little profit today for cither 

 Mumufacturer or jobber under existing conditions. Seventy-five per 

 cent or more of the hardwood lumber which is sold in the domestic 

 trade is marketed in a comparatively small territory comprising 

 southern Wisconsin, southern Michigan, Illinois, Indiana, Ohio, Penn- 

 sylvania and Xew York. This is the territory which contains the 

 great number of factories where things are made out of wood, such 

 as furniture, interior finish, flooring, automobile bodies, cotiins, 

 wagons and carriages, and the infinite variety of similar articles 

 which consume vast quantities of hardwoods. The source of supply 

 of hardwoods have gone further from the chief consuming centers as 

 ths years go by, which renders it imperative for remanufacturers to 

 buy lumber that will cut up without any considerable waste. A 

 furniture man at Grand Rapids, Mich., can not afford to pay the 

 freight on lumber that will onl}' show forty jier cent of cutting, 

 lie therefore seeks Xo. 1 common and firsts and seconds. 



Shippers seem to be up against a stone-wall when they att-inpt 

 to induce railroads to make a lower freight rate on lovv-grade lumber. 

 Raih-oads ar>' sticking for the last cent of rate per ton that is now 

 in force, and are constantly urging the necessity of higher cines. 

 The result on the whole hardwood situation today is that the loss on 

 the >.'o. 2 and poorer lumber absorbs almost all th-3 profit frnm the 

 manufacture of No. 1 common and firsts and seconds. 



The haidvvood manufacturers of Wisconsin, Michigan aim the 

 -Vdirondack region of New York are in a much better i)osition to 

 break even on their coarse lumber product than are the manufac- 

 turers in the remote sections of the South. The northern producers 

 are close to centers of consumption, and in a large number of 

 instances can actually market No. 2 and poorer grades and show 

 a little profit. 



The situation is worthy of the serious study of not only lumber 

 ))roduoers, but of lumber consumers as well. Either the liunber 

 consumer very soon must pay a much higher price for the desirable 

 product of hardwood logs, or he must cooperate with manufacturers 

 to kiln-dry and cut lumber out of the lower grades to dimension 

 sizes to fill his requirements. There must either be a reform iu this 

 respect or manufacturers of furniture and kindred lines will find 

 that their manufacturing institutions as a whole will of necessity 

 have to be transferred close to points of lumber production. 



The manufacture and utilization of dimension stock cut from 

 low-grade logs and lumber is perfectly feasible, and as an enterprise 

 it should be entered upon a large scale. It means the possi- 

 bility of moderate profits for lumber manufacturers, and the main- 

 tenance of comparatively low values for lumlicr material rcqiiir^'d by 

 manufacturing consumers. 



Paucity of Orders in the Furniture Trade 



Current ^alcs nf turniture at tin' chief centers nt manulacluir — 

 Chicago, Grand Rapids, Mich., Rockford. 111., and High Point, .\. ('., 

 •>re far from satisfactory. There is considerable desultory buying, 

 but the orders are for small quantities. This situation :s making the 

 furniture manufacturers very conservative in their lumber purchases, 

 and where formerly they bought in ten cars to million lot.s. thev arc 

 now placing single car orders and in some instances mixed car mders. 



There are some failures appearing in the furniture trade, anil one 

 notable one transpired in Chicago last week, which has resulted in 

 making furniture manufacturers particularly cautioH>i In ilir- ddits 

 they are extending. 



The furniture trade seems reasonably optimistic and is (jf the Ijclicf 

 that conditions will improve as the season advances, but right now 

 there is a distinct letting up in the (inaiitity of lumber usually pur- 

 chased hv factories at this time of the vear. 



