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* i'vr'ght. The Hardwood CoMrAiiy, iccr 



Published in the Interest of the American Hardwood Forests, the Products thereof, and Ljgciii?; Saw 



Mill and Woodworking Machinery, on the 10th and ZSth of each Month, by 



THE HARDWOOD COMPANY 



Edwin W. Meeker, Vice Prea. and Editor 

 H. F. Ake, Secretary-Treasurer 



Seventh Floor Ellsworth Building 

 537 So. Dearborn St., CHICAGO 

 Telephone : Harrison -8087 



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Vol. LI 



CHICAGO, MAY 10, 1921 



No. 2 



Review and Outlook 





General Market Conditions 



IT IS POSSIBLE TO REPORT a slightly advauced state of busi- 

 ness for this i.ssue with more confidence in its lasting character 

 and further expansion than for a number of months past. Even the 

 pessimist is willing to express a word of cheer, whether reluctantly 

 or otherwise. The upgrade trail is defining itself rather ponder- 

 ously, it is true, but with growing certainty as to direction. 



There are still many things to be done before a normal atmosphere 

 is again attained. Apparently the first phase of the business rehabili- 

 tation, namely, liquidation, has about been concluded. There remains 

 now the task of readjusting values and cost, which activity will em- 

 brace the readjustment of labor as well as other items in production. 

 The results accomplished to date, especially with respect to a new 

 basis of labor charge, are probably more pronounced than was an- 

 ticipated, though such efforts have caused varying reactions. Off- 

 setting determined resistance to wage reduction in some quarters 

 there are many examples of graceful yieldings and in other cases 

 voluntary downward reduction of scale, but in the aggregate the 

 average is unquestionably at a lower level than some time ago. 



The Chicago situation is one of the most serious, conflicting re- 

 solve having caused a complete lockout in the building industry. 

 The reports are inconsistent as to the tendency of the fight, but in 

 the meantime public opinion seems to be clearly behind employers, 

 as building construction has not met with any popular approval 

 under the costs now prevailing. However, it is safe to assert that 

 the tremendous propaganda for building and the extreme shortage 

 of housing facilities has had a great deal of influence and that 

 building activity is at least far above the stagnant position that it 

 was feared it would reach. 



It is also a safe statement to make that especially in the hard- 

 wood lumber business some more tangible improvement has been 

 noted during the past two or three weeks. Travelers have been 

 more successful not only as to orders, but in many cases as to prices. 

 The relation of these two factors though is one which should be 

 clearly before business men as price is essentially the product of 

 supply and demand. Supply has been so strongly tending to excess 

 and demand has been so negligible that price levels reached a point 

 not commensurate with ordinary governing balances. Therefore a 

 great deal of slack must be taken up before increasing sales will 

 have a direct reflection in current markets. In fact, it will take a 

 good deal of business to even bring about a tangible steadying in 



quotations without regard to desirability of upward tendency. 

 Hardwood Record believes that sufficient improvement has material- 

 ized to have caused a more steady market and it appears that 

 shrewd buyers are fully convinced that the bottom has been reached 

 and are taking on what stocks they are able to with the conviction 

 their investment is well made. 



General surveys of the entire lumber industry clearly show that 

 during the past month or two sales and orders have over-topped 

 production by a substantial margin. In fact, this same analysis 

 indicates that orders and shipments are from fifty to seventy per 

 cent of normal with production far below that figure. Confining 

 such investigation to the hardwood business will probably show a 

 smaller volume of orders and shipments than this general average, 

 but a far less volume of production as compared to the normal cut, 

 and this production feature is receding further with each week. 

 Shut-down orders everywhere prevail with the almost total certainty 

 that there will not be sufficient general improvement before present 

 log supplies are cleaned up to induce many mills to change this 

 policy. 



The most pronounced feature in hardwood buying circles is the 

 growing evidence of diminishing supplies of upper grades. Mills are 

 in many cases refusing to sell straight FAS, requiring that such 

 orders be sold as No. 1 common and better, a course which is 

 forced by the almost total absence of the highest grade and a grad- 

 ual diminution in the common. The result of this apparent shortage 

 has been a gradual strengthening in prices over the past few weeks 

 with here and there orders placed at slight advances, in some cases 

 up to ten dollars over the low figure. 



While one must concede that the whole fabric of business can not 

 be repaired and strengthened until certain big underlying influences 

 are cleared up, there is not the slightest doubt that a somewhat 

 better condition is prevailing and that the coming months will show 

 gradual emergence from the depths in which it has been existing for 

 so long. The readjustment phase will have to take care of such 

 outstanding factors as wages in industry and in the railroads, of 

 foreign credits, of basically sound and fair level of commodity prices. 

 The wise prognosticators do not promise a clean-cut improvement 

 until the late summer or fall months, predicating their predictions 

 upon the fact that there remain only a few large obstacles to over- 

 come and that these are gradually being worn away with the prob- 

 ability that they may be eradicated within the next two or three 

 weeks. These obstacles are tremendous in their respective influences. 



