January 10, 1919 



HARDWOOD RECORD 



21 



stopped at these points for yarding, grading, drying, manufacturing and 

 reshipraent. 



Secured withdrawal by the Texas &, Pacific, Gulf, Mobile & Northern 

 and other roads of the arrangements by which local rates on logs were 

 collected and refunds to the net rates were made on shipment of the 

 outbound product, thus preventing the tying up of a large part of capital 

 of members on these roads in the shape of refunds. 



Secured a decision from the interstate commerce commission preventing 

 the Rock Island system from advancing rates from points on its lines to 

 western destinations approximately 20 per cent. 



Circumvented the increased all-rail rates to Pacific coast points on 

 hardwood lumber and forest products by being able, through its export 

 department, to handle these commodities to Pacific coast destinations 

 via southern gulf ports and the Panama canal. 



Gave assistance to all members in the exportation of their commodities. 



Laid the foundations for the re-establishment of the through bill of 

 lading on export shipments of lumber in the near future. 



Perfected arrangements for the opening of its third branch office, that 

 at Alexandria. La., which will begin operations February 1, under the 

 direction of Lieutenant A. C. Bowcn. 



There are certain important matters which confront the members dur- 

 ing the year and which will make the association more essential and 

 necessary than during any year in which it has existed. Briefly, these 

 are: (1) Establishment of transit arrangements on lumber and forest 

 products at points where such an arrangement is needed; (2) proposed 

 radical advances from all points west of the Mississippi river to Central 

 Freight Association and Eastern Trunk Line territories: (3) establish- 

 ment of through rates from Arkansas. Louisiana, etc.. to Carolina points : 

 (4) reissuance of the rate book of the association ; (5) further handling 

 of export matters, and (6) establishment of a mileage scale of rates on 

 logs, bolts, billets, etc. 



Following is a record of claims during th? year: Uncollected 

 at the beginning of 1918, $32,741.83; filed during 1918, $10,843.83; 

 collected, $51,677.97; withdrawn, $5,958.47; inicollected at the end 

 of the year, $83,781.76; number of claims filed during last six 

 months compared with first six increased more than 100 per cent. 

 The receipts for the year were $40,395.95, expenditures, $39,729.65; 

 balance in bank, $660.30. 



Report of Export Booking Committee 



The report of George C. Ehemann, chairman of the committee 

 appointed to work out plans for a forwarding and booking depart- 

 ment is given below; 



The creation of this committee was recommended by President Stark 

 at our annual meeting last yea,r and was referred to the governing board 

 for such action as they deemed necessary. 



In a pamphlet issued by Secretary-manager Townshend on July 16, 

 1918, the general purpose of the export booking committee was outlined. 

 Briefly, this consists of the booking of export shipments for members, 

 either in single car loads or in making charters of vessels for the pur- 

 pose of transporting cargoes of forest products together with such other 

 cargo as it might be advantageous to handle in connection with forest 

 products. The committee is to have nothing, whatever, to do with the 

 sale of the lumber but is merely to assist in making the bookings and 

 forwarding the shipments through the instrumentality of the association. 

 The actual work is to be in charge of the secretary-manager and the 

 records are to be kept in such a manner that an individual member or a 

 committee is not to be given information that would tend to divulge the 

 trade secrets of a member. It was further proposed that charges for 

 the services should be made against the members on a per car basis. 



Later in the year at a meeting of the governing hoard, the president 

 was authorized to appoint a committee of fifteen with an executive com- 

 mittee of three to develop the plans of a department for the booking of 

 export freight through this association, and this committee was appointed 

 on September 3. 



On November 19 a general meeting of the committee was held in the 

 offices of the Southern Hardwood Traffic Association for the purpose of 

 discussing the work of the committee and the consensus of opinion of 

 those present was that this branch of the service of the association 

 could be made very useful and profitable to the members, its opportunities, 

 how-ever. being limited at the present time by the existing situation in the 

 export trade. 



Owing to the import regulations which are still in effect in the prin- 

 cipal foreign markets for American hardwoods, the volume of lumber 

 exported will be comparatively small until these restrictions are modified 

 or removed. Buyers of lumber abroad are anxious to return to the cus- 

 tom of free individual trading in effect before the war and it is hoped 

 that this condition can be brought about in the near future. 



In view of the control that is still exercised over the steamship lines 

 by the various governments and under which space for lumber shipments 

 can only be secured by special government allotment, the opportunities 

 for booking parcel shipments with the regular liners is very limited and. 

 in the opinion of those who have studied the situation, this condition 

 will exist for some time. 



It is evident, therefore, that if hardwood lumber is exported in any 

 considerable quantities, it must he done through the medium of chartering 

 vessels not under government control. To successfully handle these 

 charters, it will doubtless become necessary for the association to carry 

 cargo other than lumber in order to profitably handle the business. 

 Your committee feels that this can be done, as we have already been 

 approached by cotton shippers, who wish to include some of their ship- 

 ments with ours. Shippers of pine lumber have also expressed a desire 

 to join with us in making up the cargoes. 



In recommending the chartering of vessels as the best plan available 

 at the present time for forwarding export shipments of lumber, your 

 committee realizes that the question of fixing the financial responsibility 

 for these charters is an important one. 



One method under which these charters might be handled would be 

 for those making shipments on a chartered vessel, to be held individually 

 liable to, the extent in which they participated in the charter, but the 

 plan favored by the executive committee, is the formation of a company 

 within the association, incorporated under a separate name, for instance, 

 such as the Southern Hardwood Export Shipping Company. This could 

 be capitalized, for illustration, at $50,000, divided into one hundred 

 shares of $500 each ; no member of the association to hold over one 

 share. The amount of capital .stock could be made sufficiently large to 

 admit any member wishing to join. 



As the fund so created would merely be used for the purpose of giving 

 the shipping company a financial standing with the ship owners, it could 

 be paid in liberty bonds. With an established financial responsibility, 

 the Export Shipping Company would be in a better position to secure 

 favorable rates than otherwise. As it is proposed that the Southern 

 Hardwood Traffic Association attend to the detail work in connection 

 with the booking and forwarding on a percentage basis, practically no 

 working capital is required. A further advantage in the plan favored 

 by the executive committee is that the liability of members for losses 

 incurred could in no case exceed the stock that they held in the shipping 

 company, but members contracting for space would be expected to enter 

 into a contract under which they would guarantee to make good to the 

 company any loss sustained by reason of their failure to furnish the cargo 

 for which they had made their booking. 



Members joining the shipping company would be accorded the first 

 opportunity for making bookings in vessels chartered by the company 

 and any profit resulting from the charter could be pro-rated among the 

 members on some plan that can be adopted later. 



A question that naturally arises in connection with the chartering of 

 a vessel, is that of the ability of the members of the association to fur- 

 nish the cargo. For the purpose of determining this, as well as with a 

 view of rendering assistance to members having export business in hand, 

 we asked, in one of the association bulletins, for a statement of the 

 quantity of export lumber and other forest products that members could 

 ship on orders, provided tonnage could be secured. Replies received 

 showed the following : 



About 30 cars for Liverpool. 



20 cars for London. 



20 ears for Glasgow. 



800,000 ft. for a South African port (includes pine). 



1,000,000 ft. for a Spanish port. 



1,000,000 ft. for a Holland port. 



Our secretary-manager w^as in position to quote rates and had offers 

 from vessel owners for transporting some of the business mentioned. 

 These were submitted to the prospective shippers, but owing to the high 

 rates asked and the possibility of lower rates being obtainable later, he 

 was not instructed to accept the offers. 



This amount of Itusiness, in hand at this time, indicates the possibili- 

 ties of the future, when something like pre-war conditions exist in the 

 export trade. With a membership of about 300 shippers, there would be 

 no difficulty experienced in making up cargoes of hardwoods for shipment 

 to the important markets abroad. 



With a well organized export booking department, the membership of 

 the Southern Hardwood Traffic Association will increase, as a number of 

 prospective members will join in order to participate in its service. 



To render the most efficient service, it will ultimately become neces- 

 sary for the traffic association to maintain representatives at the prin- 

 cipal ports of export, and this can be done as the business grows to a 

 degree justifying the expense. 



It is also contemplated to operate in connection with the export book- 

 ing department, a marine insurance department. Arrangements can be 

 made with reliable American or British companies for an agency and the 

 revenue thus derived will materially assist in defraying the expenses of 

 the export booking department. 



If the suggestion made in this report, that a separate organization be 

 created within the association for the chartering of vessels, meets with 

 your approval, and you authorize us to carry out the plan outlined, we 

 will, at once, take the steps necessary to put it into active operation. 

 The matter is of such importance to the Southern Hardwood Traffic As- 

 sociation that it merits your careful consideration. We welcome any 

 suggestions or criticisms that you will offer, as It is the desire of your 

 committee to discharge its duties in a manner that will result in the 

 greatest possible benefits to the members. 



