Copyright, The Hardwoop Company. 1921 



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



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



THE HARDWOOD COMPANY 



Edwin W. Meeker, Vice Pre». and Editor 

 H. F. Ake, Secretary-Treasurer 



SeventK Floor EllswortK Building 

 537 So. Dearborn St., CHICAGO 

 Telephone : Harrison -8087 



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Vol. LI 



CHICAGO, MAY 25, 1921 



No. 3 



f 'f^-r4» i 



Review and Outlook 



t^e.w 



VOVfc- 





General Market Conditions 



TX THE LAST FEW ISSUES this column has definitely allied 

 1 itself with the conservative optimists and, predicating the opin- 

 ion strictly upon evidence of progressive accomplishments, has 

 maintained that the tendency towards betterment is developing. It 

 is wise to emphasize the unwisdom of jumping at too hopeful con- 

 clusions from what has developed in the line of improved business. 

 Hakdwood Eecobd's counsel is that these evidences be laken 

 strictly at their face value and that such measure of increased 

 orders and shipments as has so far emerged from the wreckage must 

 be taken as significant and not as an actual measuring rule. 

 Hardwood Record has not contended that business is improviuj; 

 in any groat volume, but has urged that gradual increase in orders 

 can safely be figured as a sort of a prelude to the long, steady 

 ]irogram and the gradual upward swing in the industry at large. 



This counsel has evidently met with the approval of most sub- 

 scribers, but the possibility that too great emphasis of apparent 

 improvement in orders might lead to incorrect judgment is shown 

 by comments which have come in during the past few days. Cer- 

 tain large buyers now shaping their buying policies have expressed 

 themselves as convinced of the truth supporting the underlying con- 

 tentions appearing in this column, but as having undergone con- 

 siderable change of heart because of quotations eonsi-stently re- 

 ceived on major items of stock. Buyers' records show a progres- 

 sive downward tendency, even including the past few weeks and 

 record the further illuminating fact that northern stocks, which 

 have consistently held firm, are now showing a disposition to ease 

 off considerably in the face of an apparent improvement in business. 

 These facts in the opinion of the editors of Hahdwood Recoud, 

 but prove the point repeatedly made in this market report, namely, 

 that the improvement is not so much actual as indicative, but that 

 we may expect steady advancement along these lines until the 

 impetus becomes, through increasing strength, sufficiently powerful 

 to react upon all items of hardwood stocks. 



The progress of business might be likened to that of a runaway 

 train plunging down-grade at a mile a minute. With the applica- 

 tion of the brakes the train will not immediately stop or reverse 

 itself. As soon as the passengers feel that it is under control and 

 ■; realize that the engineer is again on the job, their confideiiio will 

 ■ be restored. The momentum, though, would carry the train for a 

 lung ways on the down-grade while the brakes arc exercising tlu-ir 

 function. 



Present improvement in business might easily be considered as 

 the brakes which are gradually being applied. The downward 

 momentum will continue until their grip becomes sutficiently strong 

 to bring the downward niovenumt to a complete halt. At that point 

 it requires only the a]iplieation of a little more steam to climb back 

 up the hill. 



Thus might be easily explained the continued downward tendency 

 of prices in the face of apparent improvement in business. There 

 can be no question as to the gradually increasing number and vol- 

 ume of orders. Such records are common to all parts of the coun- 

 try. Still the slump in business has been so severe and so long 

 maintained that continued offerings of distress stock have been 

 inevitable. It is unfortunate that the major hardwood region is 

 located in the heart of the cotton country, for the excessive extent 

 of cotton financing has been largely responsible for the financial 

 difficulties which many hardwood operators have faced. In fact, 

 it is quite within the realm of possibility that hardwood prices 

 would have maintained a much greater degree of strength had 

 hardwood operators not been compelled to combat with cotton 

 financing. In the same way the continued seriousness of the cotton 

 situation is responsible for the continued offerings of distress 

 stocks. Also the easing off in quotations on northern hardwoods 

 is directly traceable to the same influence. In other words, the ter- 

 rific price comiietition with southern hardwoods has been stoically 

 met uji to the point where it has threatened the almost entire elim- 

 ination of purchases of northern hardwoods in competition with 

 southern. Thus the price concessions which in general are made 

 deliberately and with a specific purpose in mind, namely, that there 

 might be preserved for the northern woods a certain percentage of 

 the markets which they normally enjoy and the loss of which has 

 been threatened by the ruinously low prices on competitive southern 

 material. 



So while the brakes of increased orders are being apjilicd, it can 

 not be exi>ected that they will immediately check the downward 

 tendency. They are, though, taking hold: a conclusion easily de- 

 duced from the fact that firsts and seconds hardwoods are already 

 coming back. Bona fide sales in this grade have been made at 

 actual advances of from six to eight dollars. Millmen are repeat- 

 edlv coming to the resolve not to sell firsts and seconds except with 

 No. 1. The wedge has been driven with the improvement in the 

 firsts and seconds markets, an influence which is beginning to favor- 

 ably act ui"in the succeeding grades. 



