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HARDWOOD RECORD 



21 



News from the National Capital 



Trade Commission Attacks West Coast Lumbermen 



Alli'j;iiiK tl''i' ""■ l>iiiif;la.s (ir and otlicr Fai-ific ('(last liiiiilicr ami 

 loggiiiK iiitiTcsts arc organized to take coiieerted action on prifos 

 and otlu'iwise operating sul)stantially as a monopoly, the Federal 

 Trade Commission has laid before both Houses of Congress a report 

 on a special investigation it has conducted into the practices of 

 these interests. 



Secretary of Commerce Hoover, while not countenancing trust 

 methods, takes a different view of trade association activities from 

 that esjioused by the Trade Commission, and a conflict of jmliey 

 toward trade associations on the part of these two important gov- 

 ernmental bodies results. The charges of monopolistic practices 

 are summarized in the following paragraphs of the report: 



First — Hctufi-n 1V»1.5 and I'.lliO. wholesale (puttations un tiv hnnl>er 

 increased frnni ;^00 per cent to .'lOO per cent, ami most items (IuuIjIimI in 

 price after tlie annistjce. NiitwitlistninHii^ siiltstantial reiUictieiis since 

 the sprinj; r)t" lltlitt on some items, quotations still range altont as they 

 were in May and .lune, 1!11!). and on others, as the.v were in the spring of 

 1917. On snlistantial portions of the production, present quotations are 

 still more than dout)le tlie Oct<flter. 1015. price. Fir logs are quoted as of 

 Ma.v, 1921, at prices identical witli those which were fixed by the War 

 Industries Board as the war-time maximum, and which the loggers con- 

 tinued in force as the minimum until June, IttlO, These comparisons are 

 based upon the i)uldished tjuotations of the manufacturers and loggers. 



Second — The loggers and lumlier manufacturers of the Douglas fir region 

 are organizetl for the purpose of taking concerted action on the prices of 

 logs anil luinlier. supi>orting the prices so fixed by means of concerted 

 restriction of production. They have been engaged in such activities for 

 twenty years or more. As proiiuction concentrates in fewer and stronger 

 bauds, the control of these organizations over the market becomes more 

 and more effective. 



Third — The ownership of standing timber in the Dmiglas lirregion. the 

 chief source of the Nation's reserve supply of lumber, is concentrate^d in 

 the hands of a comparatively few strong <'oncerns. The organized efforts 

 of lumber producers to cimtrol prices are baseil upon their ability to con- 

 trol production : and control of timlier is the ke,v to control of production. 



P^ourth — The relation between tlie fir ami lumber markets is such that 

 ordinary manufacturing profits tend to be absorbed in the price of logs 

 and the valuation of timber, particularly on falling wholesale lumber mar- 

 kets. The frequent and present claims of tinprofitable mill prices are 

 largely explainable b.v the collusive action of loggers antl timber-owning 

 mills in enhancing the value of logs and standing timber. 



Fifth — The success of the Douglas fir loggers' and manufacturers* con- 

 certed efforts to advance prices in 1910 was threatened l>y the importation 

 of t'anadian logs, and led to efforts to prevent such importation. Failing 

 in this. The P.ritish t'olumbia loggers became affiliateil with the American 

 associations ami adopted the bitter's prices. 



Sixth — In addition to a similar exchange between fir and southern pine 

 manufacturers, prompt notice of price action is given each other by the 

 fir manufacturers and those of western pine, for the purpose and with 

 the effect of securing harmonious price action by both groups. The western 

 pine manufacturers have adopted without change the prices of the fir 

 manufacturers on certain classes of lumber and use the higher Coast 

 freight rate in (juoting delivered prices on such stock. 



Seventh — The long continued existence of artificial methods of con- 

 trolling the prices and production of Douglas fir was shown by the Bureau 

 of Corporations in 1914. 



Eighth — Despite the fact that retail prices on lumber in .Tanuary. 1921, 

 had not been reduced proportitinately to the decline in wholesale prices, 

 the manufacturers joined hands with the retailers in an advertising cam- 

 liaigii to revive bu.ving, which, if successful, will tend to prevent such a 

 reduction in retail prices, 



Robert B. Allen of Seattle, secretar,v-inaMager of the West Coast 

 Lumbernieu 's Association, has .sent to the Federal Trade Commis- 

 sion a formal statement, which in a number of particulars contra- 

 dicts statements concerning the West Coast lumber industry, con- 

 tained in the commission's rc|Hirt to Congress. In part, Mr. Allen 

 sa.vs: 



The report is radically incoi-rect in many particulars. In so far as asso- 

 ciation mills are concerned, any practice concerning which there may he 

 any question of legality will be ipiickly discarded. 



The West Coast r,.umbernien's .\ssociation is not a price-fixing or i)r<»- 

 duction-cnrtailing organization. It has not. since the war, attempted to 

 fix prices, nor has it atteiniited tti curtail output, as charged in the com- 



sion's report. During the war period It did fix prices in conjunction with 

 the War Industries Hoard at the request of the government. During that 

 perioil it endeavored to curtail non-essential production In order that 

 the essentials of war requirements might be stimulated. 



Mr. Allen h.id a conference with Houston Thompson, chairman of 

 the Federal Trade Commission, at which he recjuested that the com- 

 mission's report. During the war period It did fix prices in conjunction with 

 reopened. Chairman Thompson is understood to have refused to 

 reopen the case. 



Following the conference, Mr. Allen stated that he intended to 

 ask for a congressional investigation of the association, because he 

 stated that the commission 's report was not at all in accordance 

 with the facts in the case. 



Lumber has not been placed on the free list either actually or 

 substantially, according to a statement issued on June 21 by Rep- 

 resentative George M. Young of North Dakot.t, a member of the 

 Wa.ys and Means Committee. 



Representative Young takes exception to newspaper articles 

 which state that tariff duties on lumber have, by an amendment 

 adopted by the committee, been limited to "lumber which has been 

 placed on one or more sides and tongucd and grooved." 



' ' The article carries the idea that the amendment is a concession 

 to those who want free lumber, and that the lumber paragraph will 

 now be largely free from objection, and it is claimed by some that 

 lumber will be practically on the free list," Representative Young 

 declares. "These reports being sent out are, to sa.v the least, mis- 

 leading." Continuing, the statement says: 



The time has come for plain speaking. Lumber has not been placed on 

 the free list either actually or snl>stantially. The luuiber paragraph has 

 always lieen unsatisfactory and is still highly obji'ctionable. 



The language of the amendment is ambiguous. Only the courts can sa.v 

 what it means. If it covers all planed lumber as well as lumber tongued 

 and grooved it will cover 100 per cent of all imported dressed lumber ; 

 if it covers only lumber which is tongueil and grooved, it will cover about 

 sixty per cent of all imported dressed lumlier. Dressetl lumber, which 

 includes all siding, ceiling, flooring, sliiplap. sheathing and partition, is 

 the chief requirement for houses, barns, garages, machine sheds and store- 

 houses, now so scarce all over the country. 



An ad valorem duty on these items will mean a duty of from .$3 to $12 

 per thousand feet on the soft woods, depending on the quality: and from 

 $8 to .$20 per thousand on hardwood flooring. All of this is included dead 

 sure in the bill for duties. 



If the customs officials and customs courts say lumber planed on one 

 or more sides is included for a duty, then duties will also be collected on 

 all stutlding and joists, and it should be remembered that customs offi- 

 cials ami customs courts lean strongly towards the interpretation which 

 will bring revenue into the Treasury, 



If you want free of duty lumber such as a ranchman or mechanic would 

 consider absolutely necessar,v to meet the chills of winter or the rain and 

 heat of summer, you will be sadly disappointed if the bill Is enacted In its 

 present form. But if you are satisfied to build a house out of rough 

 lumber where the snow will drift through in the winter and flies crawl 

 through in the summer, then it is a bully good bill and yiiu <*au be par- 

 doned for supporting it. 



A Correction 



In order that the records nia.v b,. kept straight, ll.vnywooi) 

 Record advises its readers that the proposed changes in niahogan.v 

 rules were rejected at the twenty-fourth annual meeting of the 

 National Hardwood Lumber Association in Philadelphia on June 

 10. Due to an error in transmitting a telegraphic report of the 

 action of the convention on the recommendations of the Inspection 

 Rules Committee, the statement was published that all the proposed 

 changes were adopted with the exception of those applving to 

 cypress. However, both the pi'oposed cypress ;ind mahoganv 

 changes were reji'Cted when the remainder of the changes were 

 adojited. 



