HARDWOOD XfECORD 



-nnrt feet for eneli kind nnil Rrnde. In like mnn- 

 iMT Tho value of luiutior on a wholesale yard 



• an usually be readily as(*«>i*talned, llie whole- 

 saler having as a rule linimht the lumber from 

 xiDie manufacturer at a delinlte and easily 

 l>r(ivi>d priee per thousand. 



In the ease of the maiiufaelnrer. however, 

 iliere is no definite price paid, lie is the man 

 who owns timber land, bulbls lM|;^lng railroads, 

 fells trees and saws In his own mill the loss. 

 produelng i-on^h and .sometimes dressed lumlHT 

 whleh he staeks on a yard or in sheds to dry. 

 Here there is InQnile room for dispute as to the 

 value of the lutnber. and sueh disputes fre- 

 'piently arise when assured and adjitster un- 

 dertake to determine how mueli shall be paid 

 for sueb lumber wlicn burned. It has been a 

 favorite method of procedure for adjusters to 

 ileniand that the assured establish the cost of 

 production, and in more cases than mi^ht be 

 supposed this method of arriving at the value 

 per thousand has been accepted. To the prac- 

 iloal lumberman it is not necessary to point out 

 ihe numerous points at which disagreement 

 might arise as to what enters into the cost of 

 production. It would be most dilficult to devise 

 a formula for arriving at the value applicable 

 lo all cases. Superficially it might be said that 

 Ihe cost of production can be determined by 

 adding to the cost per thousand of tho stand 

 lug timber, tlie cost per tliottsand of logging. 

 inilling and stacking on yard. Kut how can the 

 exact cost per thousand of the standing timber 

 be determined until the entire tract has been 



• ut? How about interest on the original in- 

 vestment earned in the period, often one of 

 many years, between the date of purchase of 

 the timber and the date of the burning of the 

 finished lumber? How about the time of office 

 '■mployees. and the traveling expenses and sal- 

 aries of inspectors, the advert isitig expense, 

 and the owner's time in superintending the en- 

 tire operation? All of these arc obviously legiti- 

 mate factors in producing the lumber ready for 

 a market. 



In view of all of these and many other points 

 '•i difference of opinion it is little wonder that 

 there is a growing insistance that this is get- 

 ting at the value wrong end to. It is asserted 

 by lumbermen that there is a sufficiently broad 

 and well-established market for lumber, -10 make 

 it possible to readily determine the value of a 

 manufacturer's product on the basis of the mar- 

 ket value. Between the cost of production and 

 market value lies the manufacturer's profit. The 

 adjusters have unanimously contendfed that a 

 jiollcy of insurance Is an instrument of in- 

 demnity which contemplates, J|o reimbursement 

 for profit. They are readx.'-'o pay only "cost 

 of production. " The cour"s have never sus 

 tained this contention, and in more than one 

 Instance have held the opposite. The adjusters 

 have never made It clear just what they regard 

 as "profit." Whcthe{(:thc time and effort and 

 ' energy and foresight' of the manufacturer him- 

 self shall be taken into consideration as an 

 ■ lement In the cost of production, or whether 

 the manufacturer must see all of his own per- 

 sonal contribution to the production of his lum- 

 ber sacrificed in the flames on the altar of 

 ■profit," Is a point on which the adjusters do 

 not cotnmit themselves. A lumberman who by 

 foresight and shrewdness has acquired timber- 

 land at $2 an acre and who can consequently 

 produce lumber at a cost many dollars less per 

 thousand than the man who has later bought 

 similar timlieriand at ?2<" per acre, tnust see 

 be fruits of his own sagacity wiped out In the 

 vent of the burning of his accumnlated stock 



• .f lumber followed by an aiijustment on the 

 •cost of production" basis. An adjustment on 

 the "market value" basis would on tho contrary 

 reward the $2 an acre man for his foresight 

 by paying him the same price per thousand as 

 would be awarded the VM per acre man. 



A parallel might be drawn between the set- 

 tlement of lumber lo.sse» and grain losses. 



It has never been contended that burned grain 



Hlinnid be paid for on anj- other basis thati 

 market value. Vet there Is just as much dlver- 

 slt.v In the cost of production of grain as in the 

 cost of production of lumber. Would the ad- 

 juster who Is ready I'liough to ask a lumber- 

 man to show the cost of timber, logging and 

 milling, ask a farmer to show the cost of till 

 ing. seed, harvesting and threshing, as a basis 

 of value for grain? I'l'rhaps the difference lies 

 In the fact that the poor farmer fnlght too 

 often show that it has cost tnore to produce his 

 grain than he can get for it. while the rich 

 lumbertnan as a rule has a wide and easily get- 

 at able margin of profit. Another question for 

 the adjusters to answer is what attitude would 

 they take should the market price of lumber 

 fall below the cost of production? Would they 

 then fly for cover to the "market value" basis 

 of adjustment? 



I'here is every reason to believe that with the 

 awakening of manufactnrers to the fact that the 

 cost of production method is unsound and has 

 no legal recognition, there will be a passing of 

 that manner of adjustment fraught with many 

 fallacies and uncertainties of result as It is. 

 and there will in due time be universally 

 adopted the simpler and fairer method of ad- 

 .iustnient which has as its foundation the mar- 

 ket value. Nothing seems simpler in detcrmin- 

 ifig the value of the burned lumber than to start 

 witli the market value f. o. b. cars at the place 

 of fire and deduct therefrom only the cost of 

 loading and cost of selling — the expense of 

 wliicli the assured is relieved by reason of the 

 lumber lieing destroyed. 



New Secretary Michigan Hardwood Maiiii 

 facturers' Association. 

 The Michigan Hardwood Manufacturers' Asso- 

 ciation is to be congratulated upon securing the 

 services of J. C Knox, for many years with the 

 (irand Rapids & Indi.ina railroad at Grand Rap- 

 ids, as permanent secretary. Mr. Knox's duties 

 have always brought him into close contact with 

 Ihe lumber interests of the state, so that he is 

 peculiarly fitted for the new line of work he has 

 undertaken. The secretary's office will be main- 

 tained at Cadillac, as heretofore. tip to this 

 time the work has been carried on by Bruce 

 Kdell. whose energetic and thorough way of 



,1 C. K.MiX. I'ADIIXAC, MICH., NEW .SECUK- 

 I'AliV MI'll ll.\ltliWi»>f> ^H'-fiRS. ASS'N. 



handlliiu every detail of it has done much to 

 put the association upon the flourishing basis 

 where it stands today. 



President Fred Dtgglns announces the follow- 

 ing .•..nimlitees to serve for the ensuing year, 



and will call tb.' next lueetlug at the Banciott 

 House, Saginaw, some time in November: 



Gll.lf>lM; Ut'I.KS OlMMITTKE. 



1>. H. Day, Cleti Haven. 



R. .1. i.'laike. Sault Ste. Marie. 



William H. While. Hoyne City, 



.lames Danalier. .jr.. jiollarvllle. 



.\. I". .Vnilerson, (.'adillac. 



C. L. llidl. Traverse City. 



,1. Sullivan. «;edar. 



('. A. Itlgelow, Bay Clt.v. 



W. I., Saunders, Cadillac. 



M,VflKKT CONDITfOXS COSI MITTI;E. 



liruce Odell, Cadillac. 



W, L. Marllii. Cheboj-gan. 



R. Hanson. Grayling. 



Bert Cook. I'etoskey. 



G. Von Platen, Boyiie City. 



.M. !•'. Butters, I.udington. 



R. W. Smith, Manistee. 



W. N. Kelley. Traverse City. 



A. W. Newark, Cadillac. 



FOHESTRY COSI'MITTEE. 



R. Hanson, Grayling. 



Thornton A. t^ireon, Ontonagon. 



It. (t. I'eters, Manistee. 



W. P. Porter, East .Jordan. 



Bruce Green, Cadillac. 



H. Ballon, Cadillac. 



R. E. MacLcan, Wells. 



K. G. Carey, Harbor Springs. 



Frank W. Gilchrist. Alpena. 



Resignation of Popular Manager, 



The Louisiana Red Cypress Company of New 



Orleans has reluctantly accepted the resignation 



of Franklin Greenwood, its popular secretary 



and general sales manager, to take effect January 



I, 190S. Mr. Greenwood will at that time as- 

 sume sifniiar duties with the Great Southern 

 Lumber Company of Bogalusa, La., although It 

 is probable that he will establish headquarters 

 in some large city centrally located with regard 

 to the natural consuming territory of that com- 

 pany's product. 



Mr. Greenwood took an active part In the 

 formation of the Louisiana Red C.vpress Com- 

 pany, which Involved an immense amount of 

 responsible and detailed work, and in leaving it 

 takes with him the good will and best wishes 

 of that organization. The Great Southern Lum- 

 ber Company is to be congratulated upon securing 

 his servicas. 



Makes Detroit Sales Headquarters. 



The W. 11. Wliilc Ciunpany and the Bnyne 

 City Lumber Company, both of Boyne City. 

 Mich., Iiave moved their general sales depart 

 mcnt to Detroit and opened offices in the Ma 

 jestic building, that city. L. L. King, general 

 sales agent, will remove to Detroit and assume 

 active charge of the new office. James A. White, 

 now located at Buffalo, N. Y.. will also move 

 his family to Detroit that he may be more 

 centrally located with regard to handling the 

 sales end of the company's large business. The 

 eastern offices at Buffalo and Tonawanda will 

 be retained undi'r his supervision as heretofore. 



The rapidly growing demand for •White" rock 

 maple flooring and the expansion of the cariooti 

 trade has made it desirable to locate the com- 

 pany's selling force In a more central point 

 than Boyne City, so that quicker connections 

 can be niade with buyers. The producing capac- 

 ity of the White institutions has been consider 

 ably Increased of late, and they expect to be 

 able to push carload business more vigorously 

 in future. 



The W. H. White Company and allied con- 

 cerns are among the best known in the lumber 

 business of Michigan, and Indeed of the entire 

 country. The White fnt.Tests are very compre- 

 hensive. Including as they do several modern 

 sawmills, a wood chetnlcal plant, planltiyrinlll, 

 maple flooring factory, tannery, blast ^gace. 

 cooperage factory and veneer plum. .XsltSfrom 

 mai>le flooring, veneers and by-proiluct»T Hoe 

 uniple. elm, basswood, birch and other 1 ' 

 Is manufactured. The commercial hlptoj 

 success of tills great enterprise imrdeps ■ 

 phenomenal and reflects well the fiuancla' 

 of Its astute founder and moving spirit 



II. White. 



