16 



HARDWOOD RECORD 



November 25. 1921 



and as the new year advances this must be felt more and more. 

 Also, while some buyers have gone rather heavily into the market, 

 it is not likely that there has been any real overbuying. Hard- 

 wood Becoed would like to interject a little warning on that 

 score. On the other hand it certainly behooves the lumber trade 

 to keep the hardwood market under control. The goose of golden 

 egg proclivities is not the lusty bird she has been at certain times 

 in the past. Any abrupt and violent reaction upwards on the still 

 rather delicate market may easily cause a corresponding convul- 

 sion in trading. Stabilization on a basis fairly calculated by 

 new cost levels should be the goal of endeavor. In the meantime 

 it would appear unwise to too greatly expand production until 

 spring conditions are established. 



Hardwood Eecokd sees two phases in the immediate future: One 

 the mid-winter slackness, and the other the wholesale resumption 

 in early spring. Hakdwood Eecoed anticipates a certain amount 

 of easing up during the inventory period, but does not look for any 

 real softening in values. There isn 't enough lumber in the country 

 to make this probable. At the same time Hardwood Eecord is 

 firmly convinced that conditions are even now making for a splen- 

 did showing in the spring. In the meantime those who will need 

 lumber in the early new year had best look, over the markets at an 

 early date. 



A Vindication of Open Competition 



ALL ENTEEPEISING, INTELLIGENT AMEBICAN BUSINESS 

 MEN, but, of course, particularly the open competition plan 

 membership of the American Hardwood Manufacturers' Associa- 

 tion, have no doubt been greatly heartened by the dicision of Fed- 

 eral Judge Carpenter of Chicago in the "linseed oil case." In this 

 decision Judge Carpenter recognized the fact that it is neither just 

 nor necessary for the courts to insist that modern American business 

 be conducted with the same ponderous ignorance that characterized 

 medieval commercial enterprises. Seeing that the world has ad- 

 vanced, he was willing to concede that American business practice 

 had every right to advance with it. "In order to obtain efficiency 

 in business, as well as in any other human activity, it is necessary 

 to have reliable, immediate and adequate records," Judge Car- 

 penter said. "With the progress that has been made in the last 

 century it is not to be expected that business alone stood still. 



In the old days when at noon tbe business men of the community met 

 in the village blacksmith shop, or in the evening mot at the comer grocery, 

 a man was supposed to carry in his head all the facts in regard to his 

 business and never disclose them to a competitor. Adequate systems of 

 accounting had not been devised. Overhead as a cost element in operation 

 was unheard of. Business was run by the rule of thumb. Such days have 

 gone by. The commercial enterprise today which is not so managed that 

 its head can at any time know how large is his stock, the volume of his 

 sales, the cost of operation, and the amount of his profit and loss, sooner 

 or later will be. distanced by his competitors. 



It is because business is so much more complex, the volume so much 

 greater, the margin of profit on single transactions so much less, that the 

 merchant of today must have at instant command reliable and adequate 

 information, immediately to be secured and more or less permanent iu form. 

 Business is no longer a game of chance^ but a matter of scientific calcula- 

 tion. (The italics are our own.) 



The case in which this decision was rendered was one strikingly 



similar to the hardwood ease, virtually identical issues being 

 involved, and it is indeed regrettable that the same thorough com- 

 prehension of economics was not present iu the decision rendered 

 at Mempliis. 



Judge Carpenter reveals throughout his long decision a remark- 

 ably deep and firm, almost an inspired, grasp of the needs of modern 

 business, refuting completely and in convincing detail the assump- 

 tion of the Department of Justice that the exchange by business, 

 men of price and other information of their trade is a self-evident 

 proof of conspiracy to fix prices and restrain trade in violation of 

 the Sherman anti-trust law. He refused to admit, also, that a 

 co-operative endeavor of this nature of necessity eliminates com- 

 petition in a trade group. Concerning this point the Judge rea- 

 soned iu this wise: 



Every producer or merchant desires to obtain for his goods the highest 

 price he can get. The price which he charges is always the highest which 

 he believes the traffic will bear, lie can not charge ordinarily more than 

 his competitors. His competitors' price fixes the point above which he can 

 not go. When the merchant fixes the price at the level of his competitors 

 he is fixing it iu competition with his rival just as much as though he 

 named a lower price. The competition of his rival has prevented him from 

 charging a higher price. 



If, on the other hand, he finds that he can not move his goods at the- 

 price fixed by his competitors he will naturally lower the price, and this 

 will establish a new level. This is the essence of what constitutes com- 

 petition. 



Judge Carpenter also refused to regard as evidence of law-break- 

 ing the fact that the exchange 'of prices by the linseed oil producers 

 tended to stabilize prices. The statement he made on this score is 

 remarkably pertinent to the hardwood case. He said: 



But it is charged by the government that the defendants themselves 

 claim that the effect of the Bureau was to stabilize prices. That Is to- 

 say, as a result of accurate and instant knowledge on the part of pro- 

 ducers, the price of linseed oil instead of varying sharply from day to day, 

 as shown by the sales made, assume<l an average price without deviations. 

 If these deviations before had been the result of real competition, based 

 on accurate knowledge by the producers of the real market conditions, then 

 the government is far from sustaining Its contentions. The defendants, 

 however, have shown, and their evidence is uncontradicted, that the devia- 

 tions before existing were caused by the individual producers endeavoring 

 to meet prices of their competitors which had never been made ; and it is 

 common in the trade for buyers to malie false representations as to prices 

 made by other producers. Surely such a condition is not one which the 

 Sherman Act aims to foster? 



In its entirety a stronger defense of the hardwood case could 

 hardly be written than the decision which Judge Carpenter ren- 

 dered in the linseed oil case. In its bfoad effect he re-established 

 the American principle that ' ' every man is presumed to be innocent 

 until he is proved to be guilty. Logic which assumes that because- 

 there is an opportunity to fix prices, therefore, prices are fixed, is 

 contrary to the genius and theory of our law," he said. "If th& 

 Armslrong Bureau (the bureau which handled statistics for tho^ 

 linseed oil crushers) is to be dissolved merely because it affords 

 an opportunity for the members to fix prices, then this court, with 

 equal propriety, could be asked to dissolve any lunch club where 

 business men meet. This theory hardly warrants discussion, and I 

 would not mention it had I not been gravely urged in this case, that, 

 such was the underlying thought of the prosecution." 

 About this point in the decision. Judge Carpenter had also said: 

 The court should not construe the acts of the defendants to be illegal 

 when it can, with e<iual facility, ascribe them to an innocent intention. 



Table of Contents 



REVIEW AND OUTLOOK: 



General Market Contiitions lS-16 



A Vindication of Open Competition 16 



SPECIAL ARTICLES: 



Cost of Soutliern Hardwood Lumber 17 



Reiorestation Impractical in Delta 17-18 



Proposes Lumber Disarmament 18 



Grades and Inspection of Lumber 20 & 22 & 26 



The Last Word in Furniture Factories 35-36 & 44 & 48 



Plywood Makers Reject Use of "Built-Up" 38 & 46 



WHO'S WHO IN WOODWORKING: 



Ashton P. Derby 21 



J. A. Conrey 21 



YARD AND KILN 24-25 & 29-30 



NEWS FROM THE NATIONAL CAPITAL: 



Oxholm Describes Service Offered by U. S. Lumber Division 19 



LUMBER TRADE CUSTOMS 28 



CLUBS AND ASSOCIATIONS: 



Miscellaneous 30 & 33 



New Yorkers State Forest Policy Views 22 



HARDWOOD NEWS 32-51 



HARDWOOD MARKETS 51-55 



CLASSIFIED ADVERTISEMENTS 58-60 



ADVERTISERS' DIRECTORY 57 



HARDWOODS FOR SALE *. 60-62 & 64 



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