18 



HARDWOOD RECORD 



February 10. 1919 



our greatest trouble — yet this is just the same kind of trouble which 

 occurred in Manchester, England, on the introduction of textile 

 machinery, and as has occurred in every great industrial center 

 upon the introduction of the labor-saving devices and improvements, 

 each temporarily injuring one trade yet benefiting society as a 

 whole. Less than 10 per cent of our labor difficulties in the building 

 line are due to contests for wages. Home building and home owning 

 is the basis of the strength of the nation. While the home is not 

 a negotiable investment, histor^^ has shown that it pays very large 

 financial returns in the increased efiieiency of the family. The 

 home-owning spirit is awakened in about 120 cities throughout the 

 United States in which agitation is now active. 



One of the greatest factors in making home owning possible is 

 building loan associations. These associations are unable to supply 

 the demand for money made on them because they are dependent 

 upon the weekly payments of their members, but they possess nearly 

 $2,000,000,000 worth of securities which they desire to pool in home 



loan banks in each federal reserve district, in order that they may 

 borrow upon these collateral assets, and with the proceeds furnish 

 home builders with the money to undertake their small projects. 

 There are 7,200 such institutions throughout the country. Loss is 

 practically unknown to them. Their directors serve without com- 

 pensation and are the reliable men of the community. Last year 

 they did a business of $1,250,000,000 at a cost of eight-tenths of one 

 per cent. 



One factor in getting ourselves out of thi.s state of liquidation 

 is settlement by the government on war contracts either verbal or 

 written. It is confidently expected that during the current week 

 Congress will give legal sanction to the moral commitments given 

 by oflicials during our war emergencies, and that thus not only a 

 large amount of capital will be immediately freed, for general 

 industry, but, also, the past having been closed, thought and initia- 

 tive may be directed to future undertakings of an active indus- 

 trial nature. 



Southern Europe Lumber Outlook 



Nelson C. Brown has returned from a business trip of two years 

 in southern Europe and northern Africa, where he studied the lum- 

 ber situation, particularly as to the prospects of selling American 

 products in that region. He was one of the four commissioners 

 sent by the government to investigate the lumber markets of 

 Europe, northern Asia, and northern Africa. He visited Spain, 

 Portugal, Italy, Greece, the Balkans, and the countries along the 

 southern coast of the Mediterranean sea. Since his return he has 

 been attending lumbermen's meetings and giving an account of 

 his work abroad. He is at present on the Pacific coast. 



It is his opinion that the opportunity to sell American lumber 

 in that region is excellent, and this is the time to make a begin- 

 ning, for the lumber from northern Europe, which would naturally 

 compete with ours, is either not in the market at all or at prices 

 much higher than ours. Russia is out of the game now, and Swedish 

 prices are very high. Little lumber may be expected to come out 

 of Austria or Hungary for a long time. 



Mr. Brown opened forty-nine lumber exhibits in the territory 

 visited by him, and placed on display thirty kinds of American 

 wood. He secured show rooms in business centers of the different 

 countries, generally with the assistance of United States consuls, 

 and arranged the lumber in a way to attract attention. 



These exhibits are necessary because many prospective buyers 

 are not acquainted with our lumber; and some who have seen 

 American lumber are prejudiced against it because of unfortunate 

 circumstances. In some instances in the past, shipments of lumber 

 not up to grade have been made to those markets, thus making a 

 bad impression. Purchasers suppose that all our wood is similar to 

 the inferior specimens they have seen, and they are naturally 

 prejudiced. It will be necessary to overcome these unfavorable 

 and unfortunate impressions, and to take constant and special care 

 that nothing like it happens again. 



It may be recalled that Mr. Simmons found a similar situation 

 in some of the markets in South America, where lumber other than 

 first class had been shipped in. One of the first steps to take, in 

 Mr. Brown's opinion, will consist in measures for inspecting the 

 exports before thej' leave America and see to it that every grade 

 is strictly what it claims to be. Otherwise, the business of the 

 honest exporter may be hurt by objectionable material shipped by 

 some one elae. 



Mr. Brown is enthusiastic in his belief that an excellent opening 

 exists in southern Europe for the output of our mills. The needs 

 are great, and much buying will be done. 'Selling methods are 

 somewhat different from what we are accustomed to in this country, 

 and it wiU be necessary to study their methods and conform to 

 them; but if that is done, the opportunities are first class. 



Mr. Brown found red gum in much favor in Spain, Italy, and else- 

 where, it having long been in use there. Workmen in those coun- 

 tries understand this wood and like it. 



Much Japanese oak is to be m?t with in the markets of southern 

 Europe, where it generally arrives in the form of square logs in 

 good condition. The notion that Japanese oak logs are always of 

 small size is erroneous. Mr. Brown saw Japanese oak logs in a 

 yard at Milan, Italy, that were full three feet square. Japanese 

 traders have been steadily pushing this oak in European markets. 



In quantity, class, and variety our woods go so much ahead of 

 all competitors that half the fight for introduction is won at the 

 beginning. 



Banks for Home Builders 



A bill is in course of preparation which will soon be introduced in 

 Congress. Its purpose is to assist home builders who may not other- 

 wise be able to command the necessary money for the construction of 

 houses. There is a house shortage now and unless active building is 

 soon taken up, the shortage will increase. The form of assistance 

 which it is expected that the proposed banks wOl be able to give, and 

 the manner in which such assistance may be furnished, are shown in 

 the tentative outline of the bill which is here given: 



It is proposed that Congress shall enact legislation permitting the organi- 

 zation of a federal co-operative bank in each of the existing federal reserve 

 districts. Every such bank shall begin business with a paid-in cash cap- 

 ital of at least $200,000, in shares of $1000 each. Only building and loan 

 association.s may purchase or hold the stock of the bank. Whenever twenty 

 or more building and loan associations in any federal reserve district, hav- 

 ing aggregate resources of $10,000,000 or more, associate themselves 

 together for that purpose they may organize the federal co-operative bank 

 of saitl district, after having obtained a certificate of the comptroller of 

 the treasury that they have complied with the provisions of this act, and 

 have adopted by-laws in harmony herewith, approved by the comptroller. 

 Every such bank shall be subject to visit and examination, at least annually, 

 of representatives of the comptroller of the treasury. 



The shareholders of any such bank shall be known as members. Any 

 member, in pursuance of the legitimate and prudent extension of Its busi- 

 ness, may obtain advances from the bank in this manner. It will deposit 

 with the bank first lien bonds and mortgages on developing properties 

 within the district (in amounts for each mortgage not exceeding $5000) 

 to an extent twenty-five per cent in excess of the loan or advance required, 

 which loan may not exceed twenty times the par value of the stock in the 

 federal co-operative bank owned by the borrowing number. 



No member may maintain borrowed money obligations, through the 

 federal co-operative bank, or otherwise, that shall at any time aggregate an 

 amount exceeding sixty per cent of all its mortgage assets. 



The idea thus put forward possesses great possibilities as an aid to 

 building. The need of homes calls for no demonstration, it being too 

 well known ; and if funds for building can be secured in adequate 

 amounts by the plans here proposed, there can be no question that much 

 will be accomplished. 



