January 10, 1922 



Hardwood Record — Veneer & Panel Section 



Forecasts for 1 922 Are Chiefly Optimistic 



(Cnnthiui tl from ini;/r '^r,) 



We are in excellent shape to take care of any business which 

 might be offered, having a very good supply of fine logs, including 

 up-to-date equipment. 



As already stated, we look for an improvement in business and 

 the sooner the woodworking industry wake up to the fact that it is 

 coming, the easier it will be for them to obtain their supplies. 

 O. C, Lemke, President, Underwood Veneer Co., Wausau, Wis. 



The questionnaire you submitted in the interest of gathering 

 views of business men as to 1922 possibility may be an interesting 



compilation may serve a purpose but it will leave every man 



watching his own boat and be his own pilot. 



Water is water, but as it acquires a mysterious flavor from every 

 stratum of earth that it flows or trickles through, so all measures 

 and conditions, materialistic or otherw^ise, will have their influence 

 on and mould the new^ business level. 



This deflation has affected ^ome lines of business more than 

 others and until all commodities are nearly equalized a normal 

 basis can hardly be expected. 



Freights form a big factor in our commodity cost and must con- 

 form on a basis with business to enable business to function prop- 

 erly. Present indications do not encourage the view that an 

 equalized basis can be expected much before the end of this, or 

 even be carried into next year. 



The plant capacity has been materially increased during the last 

 four years and estimates show that about 60 per cent capacity pro- 

 duction will supply the requirements, and any excess production 

 will be a burden on the market. 



Extensive advertising will not materially influence the demand 

 or use for our commodity at this period, but v^ill assist in future 

 development. 



Logging operations in this territory have been materially cur- 

 tailed and estimated logging cost w^ill about equalize 1915. 

 F. Eggers Veneer Seating Co., Tw^o Rivers, Wis. 



We feel that you are asking a question to which it is impossible 

 to give an intelligent answ^er. While there is a general belief that 

 all business will show an improvement in 1922 over that of 1921. 

 there is no real basis on which to found such belief. We feel, with 

 all others, that there will be some improverr>ent, but to what extent 

 business will revive it is impossible to even make a guess. Buying 

 the past year has been very restricted and must, at some time in 

 the near future, show^ a revival. 



We do not believe that the advertising campaign contemplated 

 will have a material effect on the veneer industry. The use of ply- 

 wood has become so genera! that it is no longer necessary to call 

 the attention of the consumers to this line of manufacture. 



Prices, we believe, will be cut still lower than they are at present. 

 Few of the manufacturers are running at more than forty or fifty 

 per cent of their normal capacity, and there appears to be a tend- 

 ency on the part of not a few to cut prices to get orders, and we 

 think this will continue until business is again up to normal. There 

 are no grounds for believing that there is any possible chance of 

 over-production of plywoods or veneers in 1922, and until the 

 demand is up to the supply, or greater than the supply, prices will 

 remain low. 



While we can give no reason for believing so. vti'e do believe that 

 business of 1922 will rhow a decided imrovement over 1921, but 

 still be far from normal. 



An Anonymous Opinion 



A prominent Indiana manufacturer, who asked tha' his name not 

 be used, had the following to say about the 1922 outlook- 



I have made several forecasts during the past year and half and 

 missed them so badly that 1 have decided to go out of the forecast- 

 ing business entirely. 



While I do not propose to forecast, 1 do believe that January and 

 February are going to be dull \vith a slight picking up in March 

 and a fairly good demand by the latter part of April and May. 

 Briefly, and I believe to the point, this country is not going to get 

 down to that happy prosperity that we all long for until two great 

 essentials are regulated by the law of supply and demand. These 

 tw^o essentials are, first, the railroads, and, second, the coal indus- 

 try. The lumber manufacturers, the farmers and all commodities 

 that I have in mind right now from the raw product have liqui- 

 dated and are ready to do business and are striving to do business 

 on a normal basis. The railroads and coal industry have not be- 

 cause they are not under the law^ of supply and demand, but on a 

 strictly legislative value from a wage standpoint. 



Touching upon the one point that you particularly ask about. 



that is plywoods values for 1922 if there is a reasonably normal 



buying of furniture, plyw^oods should bring a price that would earn 

 a profit to the producer. Logs suitable for face stock are scarce. 

 This is especially true in white oak and walnut. 



The Mahogany Outlook 



The outlook as it applies to mahogany veneer is well covered by 

 the letter received from S. L. Frazier, manager of the mahogany 

 sales department of the Mengel Company. Mr. Frazier said: 



The w^riter is directly interested only in the mahogany veneer, 

 which is but a small sub-division of the field covered by the manu- 

 facture of veneer and plywood panels. Our answer to your ques- 

 tionnaire will therefore refer only to the merchandising of mahog- 

 any veneer. 



As to the relation of supply and demand in 1922, we can only 

 answer relatively. The demand lagged far behind the supply in 

 1921. We expect the demand to overtake supply before the end 

 of 1922, although we do not expect the demand to be many laps 

 ahead of the supply until 1923; but in 1923. and perhaps even, to 

 be optimistic, in the latter part of 1922, we will find the demand 

 exceeding the supply. 



The prospect for mahogany veneer logs, as relates to future sup- 

 plies, is unsatisfactory. There is in sight for the present — and by 

 the present we mean covering a period of six to nine months in the 

 future sufficient veneer logs to take care of the prospective de- 

 mand. As logging must anticipate the actual demand by eighteen 

 months, the very depressed state of the market during the past 

 eighteen months has automatically been drying up the sources from 

 whence veneer logs come, and the logs now on hand, or at present 

 in sight, are merely the results of the momentum given this in- 

 dustry by reason of the exorbitant prices realized during 1919- 

 1920. 



We speak with great confidence in forecasting that there will be 

 an abnormal shortage in the supply of veneer logs within a twelve- 

 month, and that this shortage will continue for a period of one 

 year to eighteen months. 



In the matter of the relation of our own production to normal, 

 we have no longer a normal standard; in fact, it has been so many 

 years since the commercial or social world has been normal that 

 we have to establish a new set of rules whereby to measure the 

 normal. 



We anticipate that our production during 1922 will be more 

 nearly the so-called normal standard than in 1921, or, to state the 

 matter more definitely, we anticipate at least 5 per cent more 

 business during 1922 than 1921. 



.As to the matter of over-production in 1922, w^e do not fear a 

 condition of this sort, due to the conservatism bred in us, as in 

 others, by reason of the baptism of fire, through v^hich we have 

 all passed. 



We cannot afford to over-produce, and therefore there will be 

 no over-production. 



Wulpi Sums Up the Forecasts 



The forecast contributed by Mr. Wulpi of Chicago, Commissioner 

 of the Plyw^ood Manufacturers' Association, wras selected to con- 

 clude the forecasts because it carefully examines the general busi- 

 ness situation as it applies to veneers and plywoods, and in effect 

 sums up the other views quoted. Mr. Wulpi said; 



I have yours of the 3 1 st ult. asking for an expression on the 

 1922 outlook in veneers and plywood panels. 



As to veneers, I have not followed these up as 1 have the panel 

 end. They are, how^ever, so closely allied that one applies to the 

 other. 



Knowing the condition the past tw^elve months in the furniture 

 end as well as the building situation, both of which are the con- 

 suming factors of plywood panels, I have constantly pointed out 

 that the latter could not see much improvement until the two first 

 mentioned w^ould regain themselves. Said industry is a sort of 

 "dessert to the meal." 



Now what is the situation in the consuming end of the plywood 

 industry? 



Rurniture sales are dependent on new^ homes and refurnishing 

 of old ones. The country has gone through a war reconstruction 

 period and as a consequence all business w^as upset. The buying 

 power w^as reduced to 52c on th e$1.00. Homes were not refur- 

 nished furniture sales stopped. 



New^ homes were not furnished because said homes could not be 

 found. Building in the country stopped. 200.000 marriages in 

 1921 had to look to "Mother and Father" for housing to a great 

 extent. All this militated against the plywood industry and as a 

 result it for months practically stood still. 



What of the outlook for 1922? We have seen the settling of 



labor contentions, a reduction of bank discounts, an easing up of 



money; the dollar worth 72 cents now^ and the average per capita 



80 per cent more than it used to be. General business is near 



{(Continued on pmjf .'>ii) 



