March 25, 1919 



HARDWOOD RECORD 



30a 



{Continued from page ZZb) 

 co-operation between business and industry on one side and the 

 government on the other, and proved the wonderful results that 



may be accomplished through this condition. It is also urged that 

 business and industry -svill be impelled by their own desires for 

 rehabilitation to join heartily in these conferences. 



Broad View of Economic Trend 



Many of the points which Hardwood Eecord has argued as prob- 

 able developments in the future are already beginning to material- 

 ize. In support of many of its contentions, statistics are beginning 

 to appear and the trend of development is following very closely 

 many of our prognostications. 



H.\RDWOOD Record is gratified to see one of the leading economic 

 services of the country publishing views that coincide in many 

 jjoints with views already expressed in these pages. One of the 

 latest bulletins of the Brookmire Economic Service, Inc., New York 

 City, has the following to say regarding the general trend of build- 

 ing materials and lumber development which is strictly in accord 

 in many of the points raised with numerous prophecies made in 

 these pages heretofore. 



A much more hopeful view of the lumber sitiuitiou is reflected in the 

 various market reports coming to this office, embracing yellow pine, the 

 hardwoods, Douglas fir, white pine, hemlock and cypress. The following 

 summary of conditions are equally applicable to all kinds of lumber. 



The basis tor this improvement is found in the fact that demands are 

 crystallizing into orders ; that many sections are making plans for build- 

 ing revival on an extended scale. Even though this planning is somewhat 

 tentative it would appear as an evidence of the changing attitude of the 

 public mind regarding the expectations of much lower prices for lumber 

 products. A few facts, which warrant the conclusion that some time must 

 elapse before lumber prices would materially decline, seem pertinent in 

 this connection : 



First : During the Civil War lumber prices rose consistently through 

 the war period from 100% in 1S60 to 183% in 1864, fell'to 179% in 1865 

 and then went to 187% in 1866. In 1867 the price fell to 163% and 

 maintained that level until 1870. While not attempting to maintain an 

 exact parallel between the two periods, nevertheless, we believe that suf- 

 ficiently similar conditions obtain to warrant the conclusion that prices 

 will follow substantially the same trend, especially in view of the fact 

 that the rise of prices in the Civil War was considerably greater than dur- 

 ing the late War. 



Second : Based on a normal demand present stocks of lumber are low, 

 and production costs are so high and the margin of profit, as conceded 

 by government authorities so small, generally speaking, that manufac- 

 turers are waiting for a real demand to develop before increasing their 

 output materially. 



Third : We believe that little likelihood of much decrease in labor costs 

 exists. (See Forecaster March 17). The large number of former immi- 

 grants who have returned to their home land, and the probability of their 

 retention there, combined with the radical decline in the number of immi- 

 grants into the United States during the last few years, and the indisposi- 

 tion of native soldiers to resume their former employments, presage in 

 the near future a serious shortage of laborers for the mills and factories, 

 the forests and the mines. A higher wage rate than ever prevailed in 

 peace times, therefore, seems necessary and inevitable. This conclusion 

 is also supported by the trend of wage rates during and after the Civil 

 War period. 



Fourth : There is developing a serious shortage of houses in many sec- 

 tions, as well as a lack of buildings such as schools, office buildings and 

 other buildings of a public character, a condition which cannot much 

 longer exist without producing a grave social and economic problem. The 

 point has about been reached when considerable activity to avert this 

 problem should develop. 



Fifth : The fact of rising rents intensifies the acuteness of the housing 

 problem and constitutes a strong factor towards its solution by a speedy 

 revival of building activity. This is a matter which affects very vitally 

 a large proportion of our population. We believe that large rewards await 

 the enterprise and initiative of capital despite high costs of building ma- 

 terials in the attempt to furnish better housing at reasonable rentals. 



The result of Mr. RedfleUl's attempt to stabilize prices will, of course, 

 have some effect upon the general factors discussed above, and while we 

 do not anticipate any radical change in lumber prices as the outcome of 

 Mr. Redfield's policy, we do believe that whatever prices are arrived at 

 as a result of his conferences with lumber manufacturers will prevail for 

 a considerable time. It is very probable that in these conferences the re- 

 sult will be largely determined on the basis of the controlling and funda- 

 mental factors which we have enumerated. 



These factors standing alone seem to us to prove conclusively that the 

 basis of expectation of much lower prices in lumber is more or less un- 



sound and unwarranted. The facts of history and the economic factors 

 combined, prove it to be so. 



Range op Lujiber Prices prom 1913 to Date. Inclusive 



1019 

 Av. 3 

 1913 191-1 1915 1916 1917 1918 months 

 Yellow Pine. av. 14 



grades 20.18 18.25 18.50 22.63 27.36 33.13 35.9S 



Hardwood Composite.. .46.71 43.75 42.36 46.06 52.57 57.47 5S.26 



The general argument above in favor of steady lumber prices holds true 

 regarding building materials generally. 



Brick : There has been considerable curtailment in the output of briclc 

 in recent months but common brick is in large supply, face brick in good 

 supply, fire and paving brick stocks are more or less depleted. All have 

 been in poor demand compared with normal demands and all have shown 

 considerable rise in price through the war period, having labored under 

 high production costs so that not much recession In price is likely to be 

 seen in the immediate future. Over a period of two or three years easier 

 price conditions will develop. 



Lime : About 3,000,000 short tons of lime were produced in the United 

 States in 1918, the smallest production since 1908 and 20% below that of 

 1917, which amounted to 3,786,360 short tons, which in turn was 7% 

 below the record year 1916 when the amount produced was 4,073,400 

 .short tons. 



Cement : A very radical falling off in Portland cement production 

 characterized the year 1918. The production in the United States alone 

 amounted to about 71,000.000 barrels or 21,000,000 barrels less than 1917. 

 Similar conditions prevail in England. The present rate of production Is 

 only about 50% of normal with small reserve stocks. The recent advance 

 in price is due in large measure to the increase in the cost of cotton bags 

 from 10 cents to 25, or 40 cents to $1.00 per bbl. In view of these facts, 

 of small production and low stocks combined with increasing demand when 

 construction operations begin, it does not seem apparent that much de- 

 cline in price will he seen. 



Paints and Glass : Paint and glass manufacturers have through gov- 

 ernment orders largely, maintained a healthy business through the war 

 period but are now feeling the generally depressed state of building, but 

 should be able to meet all demands that may arise. As the subjoined table 

 will show, paint prices have increased nearly 100% and some softening 

 of this price is a reasonable expectation. The following table will illus- 

 trate the range of prices on brick, cement, lime and white lead since 1913 

 to date inclusive. 



Range of Building M.\terial Prices 



1919 

 Av. 3 

 1913 1914 1915 1916 1917 1918 months 

 Brick. Hudson R. Com. 



1000 6.83 6.77 5.82 8.16 8.85 11.45 14.83 



Cement, Portland, bbl.. 1.58 1.58 1.44 1.69 2.02 2.36 2.85 

 Lime, Rockland, lump 



bbl 91 .92 1.10 1.33 1.69 2.29 2.56 



Paint, White lead. lb.. .07% .07 .07 .0914 -11% .12% .13% 



Termination of British Lumber Control 



A cablegram has been received from Consul General Robert P. 

 Skinner, London, dated March 14, stating that the British Board 

 of Trade has canceled from March 31 all orders relating to the pur- 

 chase of imported timber abroad, and also has withdrawn the maxi- 

 mum prices for both imported and home-grown supplies other than 

 pit wood. As regards importation, no licenses will now be required 

 for the importation of hewn, sawn, planed, or dressed timber of all 

 kinds, including hardwoods and sleepers. This does not include 

 pit wood and manufactured or semi-manufactured goods, such as 

 box boards, for which licenses will still be required unless produced 

 in parts of the British Empire. Stocks of imported timber belong- 

 ing to the government will be disposed of after March 31 at the 

 prevailing market prices. These stocks, including goods yet to 

 arrive, amount to about 500,000 standards. Applications to pur- 

 chase such goods should be made to the Government Timber Buying, 

 Salisbury House. 



