INilNNATI. (I. 

 rlSHSlUKNT 



legitimate business ventures will in future reap as great, if not greater. 

 rewards than they have in the i)ast. This country with its wonderful re- 

 sources can recover quickly from a depression, and this may occur in a day. 

 The weather is a factor in our business as in other lines. The open 

 winter has afforded better logging conditions in the mountains than the 

 average, but worse ones in the North and parts of the South. 



I thinli in the production of lumber we should proceed with caution. It 

 is certainly no time to expand our operation for the purpose of increasing 

 our production. Increased production may slightly lower the manufactur- 

 ing cost, but will decrease the selling values more than is saved in the 

 manufacturing cost. While there is still room for improvement, and we 

 have spent a great deal of time, thought and money in an effort to lower 

 the cost and improve our manufacture, it occurs to me that we have not 

 made as much adv,TncemeDt in the method of marketing our lumber as we 

 have in its production. 



If our manufacturing costs were increased in the course of a month 

 S2.00 per M. feet we would immediately have every foreman on the job 

 on the carpet, fully convinced that our business was being improperly 

 managed. How much more easily do we pass a cut of $1.00 to .$2.00 per 

 M. feet in our selling price, being satistied with the statement of the sales 

 manager that it was necessary to meet competition. 



In my opinion the time has arrived when we have buying seasons in 

 lumber as there are in other commodities. For the past few years tliere 

 has been practically no business placed in July and -Vugust, yet that ap- 

 pears to be the time when we work our salesmen hardest, the result of 

 which is procuring practically no business, but which has a tendency to 

 hammer down prices. I believe the sooner we recognize this fact and keep 

 our salesmen off the road during these two months the better will be the 

 result. If they are good salesmen give them a vacation : if poor ones take 

 them to the mills in an effort to make real salesmen and not order takers 

 out of them. 



If the lumber is to hold its place in the commercial world, modern meth- 

 ods as used in other lines must be followed by ours. A few years a?o 

 we felt secure that with the diminishing supply of standing timber the 

 time would never come wlien the demand was not equal to the produc- 

 tion. When substitutes for lumber began to make themselves felt we 

 laughed at the efforts of their promoters and said the public would always 

 waHt all the lumber that we could possibly produce. We made the same 

 mistake that was made by the railroads and express companies, who did 

 not cater to public opinion. Today the mails are full of literature from 

 these companies with a view to molding an opinion favorable to them. 

 Only the other day I received (as no doubt did many of you) a pamphlet 

 issued by the American Kxpress Company marked "From the president's 

 office," setting out the growth of the express business, what they were 

 endeavoring to do and have done for the public, also how reasonable are 

 their charges as compared with the service given. 



An article in the Saturday Evening Post of December 20 entitled "Every 

 Man's Castle" shows the vigorous effort being made to sell substitutes of 

 lumber for building purposes. There is no disputing the fact that the 

 market for lumber has been seriously encroached upon by steel and con- 

 crete substitutes, and the day has arrived when we must face this com- 

 petition. A part of this substitution was absolutely necessary and cannot 

 be successfully combated. There is, however, an open field where lumber 

 has merit over substitutes, and it is this field that we must strive to 

 retain. In order to do so it will be necessary for us to increase our 

 efficiency in the marketing of our product. 



What opinion does the public hold as to the lumber industry? I I)elieve 

 that the pitblic feels that the timber of this country is so nearly exhausted 

 that it is only a question of a very short time until it will all be gone, 



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or so high in price as to make its use prohibitive. It is also the erroneous 

 belief that all lumbermen are wealthy and there is nothing but profit in 

 the lun*er business. 



The other day in the smoking compartment of a Pullman a discussion 

 was raised as to timber and lumber, and a gentleman asked me if thtre 

 were not a few white oak trees left in the country. Upon my reply that 

 there was perhaps more timber left in the country than that of which the 

 general public was aware, another one of the party mentioned that he had 

 been of the opinion that there were larger returns in lumber than from 

 any other business. I think that the lumbermen themselves are responsi- 

 ble for the views held by the public, for the reasons that they have con- 

 tinually insisted upon giving as a defense to all charges brought against 

 the industry the scarcity and high price of stumpage, there not being the 

 big profits in the business that are generally supposed. They have had to 

 enlarge upon this feature of the game in order to satisfy their creditors, 

 especially their bankers. 



This association has earnestly striven to eliminate as tar as possible 

 the losses in marketing luimier by providing what I consider a fair sales 

 code and set of grading rules. Without tear of contradiction I believe our 

 sales code stands today as the clearest, the best and the fairest term ever 

 presented tc the lumber industry. 



One of the great drawbacks to intelligently marketing hardwood lumber 

 is the grade Issue. This fact has been recognized by lumbermen and great 

 effort has been made the past few years to accomplish a single grading 

 standard as a basis upon which to transact our sales. Although repeated 

 and earnest efforts have been made along this line, we do not appear to 

 he any nearer a conclusion than we were five years ago. 



This is a question in which the consumer is as vitally interested as is 

 the producer. A man making a finished product from lumber today is com- 

 peting with substitutes, and every penn.v expended in purchasing a higher 

 grade of raw material than required for his specific purpose handicaps him 

 to that extent in meeting the competition which he must face. 



When this organization framed its grading rules they were not formu- 

 lated in an arbitrary manner, but with a view to giving the consumer the 

 grade required, as far as knowledge of the requirements were possible to at- 

 tain at that time. .\11 changes made in the rules since have had this 

 principle in view. Do you for one moment believe that an intelligent body 

 of business men. such as compose this organization, would undertake to 

 legislate a grade of lumber that was not adapted to the purpose of the 

 consumer? One of the greatest difliculties that we have had to combat on 

 this grade question is the lack of knowledge of the rules on the part of the 

 buyer. He has been prejudiced against the rules by the erroneous impres- 

 sion freely advertised that this organization had as its object the con- 

 tinual lowering of grades. I do not know but what we have to some ex- 

 tent assisted in this impression by our frequent statement that the low- 

 ering of grades was essential on account of the growing scarcity of timber. 



While it is true that the timber does not today produce as high grades as 

 in the past. I believe that with improved methods of mauufacture we can 

 still meet the demands of the consumer for a satisfactory grade, provided 

 he will lend his assistance toward utilizing the lowest grade that is profita- 

 ble tor him to use in the production of his finished commodity. 



An illustration as to the extent to which our rules have Iieen misin- 

 terpreted. I have frequently found people condemning our rules when in 

 discussing the matter I find that they had scarcely read them, having 

 taken someone else's statement as to what the rules provide. 



On the question of specific grading, which seems to have been the prin- 

 cipal point at issue, I have found some who made the statement that our 

 rules provide for the grading of lumber on the best side, regardless of 

 what the reverse side might be, and have made illustrations to me that a 



