IIMIIIIIMIIIIIMinilll 



^ RMimi RecoM 



Copyright, The Hardwood Company, 1919 



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

 Mill and Woodworking Machinery, on the 10th and 2Sth of each Month, by 



THE HARDWOOD COMPANY 



Edgar H. Defebaugh, President 

 Edwin W. Meeker, Managing Editor 

 Hu Maxwell, Technical Editor 



Seventh Floor Ellsworth Building 

 53 7 So. Dearborn St., CHICAGO 

 Telephones: Harrison 8086-8087 



Vol. XLVI. 



CHICAGO. FEBRUARY 10. 1919 



No. 8 



General Market Conditions 



THE MARKET in the past two weeks has assumed more definite- 

 ness than has existed since November. This defijiiteness is not 

 necessarily in the nature of any great increase in business trans- 

 acted, but is rather the result of countrjrivide conviction regarding 

 stocks on hand and susceptible of production in the next few 

 months. This definiteness is expressed mainly in greater firmness 

 of quotations and in the willingness on the part of the producer to 

 hold onto his lumber rather than sacrifice it. This opinion of the 

 attitude of the manufacturers need not be taken as unanimous, for 

 in the face of good resolutions, of the strongest possible stock 

 analysis, of the certainty of early growth in demand and steady 

 decrease in supply, in the face of the consistently high cost of 

 manufacture, there are many who are not only willing but seem- 

 ingly anxious to sacrifice their stocks. Anyone who conscientiously 

 maintains that lumber cannot be sold for several months in the 

 future at less than prevailing prices is honestly entitled to that 

 opinion because of the easily provable conditions that exist all over 

 the hardwood field. Hardwood Record has since the armistice 

 was signed urged against the probability of a break in the hard- 

 wood market. It has maintained this position because elements 

 bearing on the matter have consistently pointed in that direc- 

 tion, and because it has felt that it would be unfortunate for buyer, 

 as well as for seller, were purchases generally curtailed during 

 this period in anticipation of more favorable quotations. Hard- 

 wood Record is of the opinion that one of the main reasons why 

 buyers are still hesitant is that there has been a scattering of 

 manufacturers who have apparently disregarded black and white 

 evidence and have willingly and voluntarily cut prices. There has 

 been just enough of this influence to keep constantly stirred up the 

 expectation that prices would go still further. Hardwood Record 

 maintains that had it not been for this small element who have 

 apparently disregarded facts rnd figures, the hardwood buying 

 trade today would be placing orders with considerable consistency 

 and considerable volume. 



Fortunately, the large majority of the trade has taken the time 

 to analyze stock statistics and market developments. The inevit- 

 able conclusion from such anlaysis is that present prices for hard- 

 wood resulting from the steadily mounting cost of manufacture are 

 justified by the relative position of supply and demand. It would 

 not be correct to say that the volume of hardwood business trans- 

 acted is increasing rapidly, but it is a fact that the undercurrent 

 of buying during the past two weeks has shown a certain amount 

 of developing strength. Some handlers of hardwood today support 

 their pessimistic views by pointing out that buying is still carried 



on from "hand to mouth." This little phrase has always been a 

 very convenient expression for the pessimist, but at no time before 

 has it been used when the condition it described was less entitled 

 to serious consideration as a determining factor. It must be remem- 

 bered that business in all lines is necessarily from "hand to 

 mouth," that the whole country is buying all of its commodities 

 and supplies in the same way, that is, according to actual necessities. 

 But one should not stop at the size of the individual order and 

 tlraw gloomy conclusions. One should rather compute the total 

 volume of orders. 



The furniture field offers a striking illustration of the miscon- 

 ceived importance of this so-called band to mouth buying. This 

 is true for two reasons: One, because those handling hardwood 

 stocks have shown a reasonable amount of weakness in their quota- 

 tions up to now, and the other because the furniture retailer, the 

 man who buys the manufactured products, in turn buys only from 

 hand to mouth. In other words, he buys as his stocks move. But, 

 the fact remains that the retailer in buying is in almost all cases 

 immediately replacing items and suits as they are removed from 

 his stocks; he is not letting his stock run down for the reason that 

 popular buying is continuing on the increase. Suits and entire 

 home outfits are forming an increasing part of retailer sales. A 

 survey of the whole circle of hardwood merchandising through the 

 channels of furniture manufacture and distribution shows a steadily 

 climbing volume of furniture turnover in spite of the fact that it 

 comes about mostly through small transactions. 



One big outlet for lumber stocks which has been the cause of the 

 greatest amount of speculation is the building industry. No one is 

 justified in attempting a definite opinion covering the possible devel- 

 opment in the building field. However, certain outstanding features 

 give undeniable promise of considerable more activity in the build- 

 ing industry than most people have looked for. The popular idea 

 has been that high prices wovdd continue to stifle anything in the 

 nature of speculative construction. This popular analysis left out 

 of consideration the radical increases in rentals. Why, in view of 

 the fact that every large city is literally hungry for new apartments 

 and new houses and is absorbing mounting rents without a murmur, 

 is not the speculative builder justified in making the increased 

 investment ? His increased returns will show him a profit which will 

 be increased in direct proportion as the cost of operation and main- 

 tenance of his buildings decreases, for it is not likely that there 

 will be any downward movement in rents for a long time. The sup- 

 ply of buildings is too far behind the demand to make this possible. 

 So far as the home bmlding circle is concerned there is every reason 

 to anticipate a good deal of activity in the spring. Xo one will 



