34 



HARDWOOD RECORD 



In iwo or three montbs we will all be on Just 

 as good ground ns four or live months njio. Now. 

 wlthnnt iissoclatlon work— each man In his home. 

 —he suspects that other men arc ji'-ltlns more, 

 and so prices will be cut. In roKiird to the 

 •lepil aspect, we merely Intend to behave toward 

 each olbi-r and the world In general In a per- 

 fectly lesillmatc manner. It Is perfectly proper 

 to talk with your neighbor about prices and 

 what vou could get. It strikes me there Is more 

 failure through cutthroat propositions than there 

 Is throu'jh any unlawful combinations among 

 n',anufact'urers,"as mentioned by the secretary. 

 I'.ut the latter are not necessary. During the 

 time I have been in associalUm work there has 

 been no combination on prices whatever. There 

 has been a general understanding among manu- 

 facturers that the word of each other could be 

 relied upon. I have always f.aind it easy to 

 figure cost and the percentage of profit that I 

 ought to have. We find that generally prices 

 have been maintained with considerable regular- 

 ity. Of cour.se. if anybody wants to cut, it is 

 all right. However, it does not pay to break the 

 law and it is not necessary. 1 believe the best 

 thing possible for business interests is for men 

 engaged in a business to get together and swap 

 Ideas, you will find you are all pretty good 

 fellows, as I said— you can all be relied upon. 

 You all want about the same profit, your cost 

 figures about the same; you know you cant 

 aSEord to sell for less than a certain percentage 

 above it. You know your competitor isn't likely 

 to have to sell immediately in order to get a 

 little money, and you may rely on the fad 

 that if you are not getting any trade it is be- 

 cause the buyer doesn't want the goods. It is 

 not because some one else is cutting prices. The 

 hardwood lumber people have associations. 

 There is no agreement on prices, but there is no 

 man in the association who hesitates to tell 

 what he asks for his white oak, red oafe; ash. 

 etc. Prices are talked over. Each knows what 

 the other is asking and what it costs them. In 

 the city of Memphis we have a lumbermeus 

 club with V2o members. We meet once in, two 

 weeks ; general matters of interest are discussed. 

 We know what stock each man has. about what 

 his trade is, about what prices he is getting. 

 This general knowledge is in the hands of about 

 12.") people, and nothing works to the injury of 

 anybody. Each man is considerate of his neigh- 

 bor's trade. We find that we are doing nothing 

 that can be criticised in the least, and it works 

 a great benefit to the trade in general and it 

 makes friends. I believe if in passing through 

 this world men in the same line can be friends 

 it is a great deal better than if they even made 

 more money. We don't have any too many 

 friends, and if we get together we are sure to 

 grow better acquainted. Gentlemen, I believe 

 that veneer manufacturers can't do anything that 

 will be of any more benefit to them than to get 

 together and make friends. 



Mr. Anderson's address was greeted with 

 much applause. He was followed by B. W. 

 Lord, who presented many valuable thoughts 

 in the following paper: 



Credits; How Can the 'Veneer Trade Through 

 the Association, Reduce Their Losses. 



Allow me to ask each one of you gentlemen 

 what you have lost in poor accounts, and you 

 will undoubtedly answer that you have lost 

 practically nothing; that you do not sell any- 

 one unless you know you are going to get the 

 money. 



Now. kindly look over your books and tell 

 me, in the last twelve months, what deductions 

 you have made on shipments and whether you" 

 have received in money the full amount of your 

 invoices less your legitimate cash discount and 

 legitimate freight. 



Oftentimes a man will take the meaning of a 

 word too literally and will not be perfectly hon- 

 est with himself, and will pass lightly over 



matters which appear to him small, liiii ii you 

 will go back carefully and figure up wlwii your 

 allowances and deductions are 1 fci-1 cnnlldenl 

 you will be surprised. 



In dlsi'ussing the question of credits it wi>nlil 

 seem to me that we should consider i( iti :t 

 broad sen.se and value a customer not only tor 

 his financial rating in Dun or Uradstreet but 

 consider also this customer's rating as regards 

 inspection and dealings. 



A short time ago we wanted to buy a launch, 

 and finally agreed with a concern to build one 

 for us according to our speeificatiims, and they 

 submitted contracts to us to sign with the terms 

 speciticMi. 'J~i i)er cent to accompany order, bal- 

 ance to be paid when launch was ready to 

 shlii. 



I asked these people why they had those terms, 

 and they explained that this was customary 

 because the work was special, and what would 

 suit us might not suit another customer. 



If you will Investigate lines of business where 

 they do special work you will liuil they require 

 a j)art payment before they commence an order, 

 and often require a large part, if not all. of the 

 balance even before the order is shipped. 



One of the greatest points the veneer manu- 

 facturers have to contend with is special stock 

 which is all right for the fcHow who wants it 



D. W. WILLIAMSON, BALTIMORE, MD.. SEC- 

 OND VICE TRESIDBNT. 



but is worth very little to anybody else on ac- 

 count of the special sizes. For instance, we re- 

 ceive an order for a carload of 1 /It; poplar 14 

 iiu_'hes long and 20 inches wide, and we have 

 three or four men inspect this stock, and one 

 of them allows to go in questionable pieces, or, 

 say, bad pieces. Our customer receives this ear 

 and he notifies us that the car is subject to our 

 order. What recourse have we? Our only hope 

 is that the customer needs the stock and has to 

 use some of it. Then we can probably secure a 

 fair settlement ; but if he refuses the entire car- 

 load, claiming it is not as he ordered it, or not 

 up to grade, let us sue him for the car. 



He brings into court a large number of these 

 defective pieces, which seem a large number 

 to the court, but which are very few in com- 

 parison to the shipment, and the court will un- 

 doubtedly justify him in refusing the shipment. 



With competition that we all have, and the 

 number of mills that are manufacturing stock, 

 it is very hard for anyone of us to handle our 

 credits and our customers alone, and it wo^lid 

 seem to me a good thing to consider a strong 

 credit bureau, backed up by all the manufac- 

 turers, and supported by all of them. I mean 

 well supported financially and by giving honest 

 information. 



Suppose we had a credit bureau, and let us 

 take first a man's financial standing. If we 

 had some uniform system recommended l»y this 

 bureau that any customer rated below a certain 

 point in the commercial agencies sliould be draft 

 on 1)111 of lading, and another customer should 

 be recpiired to pay a certain per cent before 

 the order was commenced, we could undoubtedly 

 be better protected, because If this customer 

 wrote a number of veneer mills, and all those 

 connected with the assoc-iation cpioted him llie 

 same terms, he would either pay those terms or 

 he would buy of some one outside of the asso- 

 ciation, and if tile mills outside sold this class 

 of customer it would have a strong infiueuc-e 

 to strengthen the association. 



I am guilty, and I believe there are otlicM-s 

 also, who are selling concerns and giving them 

 credit where they are not justified, because wc 

 think we know tliese people and have conlidenc-c 

 in our Judgment being bcHter than the connner- 

 cial agencies, who make a business of investi- 

 gating, and we make very little difference, if 

 any, in prices to these customers or to custom- 

 ers whom we have dealt with and who i)ay 

 promptly. 



Where we take an account that is ipiest ion- 

 able, and we take cliances knowingly, I believe 

 we should secure a pric-c \\liicli Jtistilies us in 

 taking that chance. 



Another point whicii seems to be a good way 

 of finding out about some of these customers 

 that we are uncertain about is to have them 

 make a signed statement to us of the condi- 

 tion of their business, and if you will investi- 

 gate you will find that hanks do this quite 

 largely and keep these statements on file, so 

 that if the man gets into trouble or goes into 

 bankruptcy these statements are worded in such 

 a w.iy that if he gives you knowingly a false 

 hialement he is liable to a severe penalty. 



There are a great many concerns who are do- 

 ing business on your capital and my capital, and 

 who are not Justified in receiving the ci-edit 

 that we give them, and because they give us 

 clever talk, or write us a clever letter, we grant 

 • them this credit, when, if we had a signed state- 

 ment from them, we could see exactly what they 

 were entitled to, and then, if we granted them 

 credit, we would do so with our eyes wide open. 



Mr. Roosevelt has spoken of undesirable citi- 

 zens, and I believe that if we can work together 

 and compare our experiences we will find that 

 we have some undesirable customers. 



A short time ago I met a large manufacturer 

 East, and in talking over business I mentioned 

 an experience we had with a concern who, when 

 they received shipment from us, wrote that they 

 found a large quantity defective and if we would 

 allow them a certain percentage on our invoice 

 they would remit for it ; otherwise they would 

 hold the entire shipment subject to our order. 

 This was an order that was cut in very unde- 

 sirable sizes for general trade, and the party 

 was at an inconvenient point to see, and the 

 deduction he wanted did not Justify sending to 

 see him. 



A friend whom I mentioned this incident to 

 told me of a transaction he had of the same 

 character, where the man wanted the same per- 

 centage of deduction, and by comparing notes we 

 found it was the same customer. Going a little 

 further I found a third man who had had "the 

 same experience, and we had all allowed this 

 deduction. 



The men who buy veneer today, ,vou must 

 acknowledge, are very clever business men, and 

 they have simply worked the veneer men against 

 each other, and we have granted them their 

 terms and their conditions, so that it is very 

 hard to change these to a right basis, and it^ 

 cannot be done at once, but takes time, and it 

 takes money, and it takes effort. 



You buy a carload of feed or hay and they 

 will ship and draw on you with draft attached 

 to bill of lading. Why'? Because the feed men 

 are smart enough to work together and make 

 this customary, and buyers expect it. 



