20 



HARDWOOD RECORD 



September lii. 1917 



surance compaiiv usually being followed. W. A. Holt of Oeouto was to the fact that the .question is now before the National Lumber 



aocordingly selected as a committee to investigate the matter of a Manufacturers' Association. The opinion was expressed, however, 



uniform lumber clause in fire insurance policies and rejiort later. that terms of sale should be uniform and rigidly adhered to liy all 



The subject of terms of sale was brought up but attention called parties interested in lumber transactions. 



,< CTOSiaigaaiTOWw>M!TOiM iro>iiMiat^^ 



^ Boyle Files Open Price Brief 



)9( I 



Gen. L. €. Boyle of Kansas City this week filed witli the Federal 

 Trade Commission a brief on the subject of the open price competi- 

 tion plan of the Hardwood Manufacturers' Association of the United 

 States, which has teen discussed at conferences between the com- 

 mission and representatives of the hardwood association. The brief 

 was filed at the request of the commission. Later there may be 

 hearings and arguments on the matter. 



The bringing forward of the open price plan, it is saidj marks 

 a revival of activity and growth on the part of the Hardwood 

 Manufacturers' Association, friends of which say that the inove 

 ment aims to place on a footing compared in soundness with that of 

 the Southern Pine Association among the .softwood interests of the 

 inilustry, the hardwood manufacturing end of the game. It is said 

 that a production of 800,000,000 feet of hardwood lumber annually 

 i.s represented in the hardwood open price competition jilan, some 

 members of the Hardwood Manufacturers' Association ])referring 

 to retain their old individual, independent, cnmjietitive status, re 

 gardless of other concerns in the industry. 



Gen. Boyle's brief is devoted in the lir.st half to a study and 

 analysis of the co-operative activities of the Hardwood Manufactur- 

 ers' A.ssociation. In the course of this he discusses the imlustrial 

 conditions, the objections of the association first, as to manufacture 

 and tlic standardization thereof; second, as to distribution, and as to 

 grading, market publicity, etc., which matters are no doubt familiar 

 grounil to members of the trade. Gen. Boyle also ijnotes the open 

 price comj>ctitioii plan in detail. 



He urges the trade commission, in the brief, to .send an expert 

 to the association's oflice in Cincinnati to examine the methods 

 employed in carrying out the purposes of the plan. ' ' We want to 

 be investigated," he say.s, "becanse it is our sincere desire to 

 do nothing that breaches the law.'' To the end that the comniis 

 sion nuiy have before it in broad outline the practical workings of 

 the plan, (!en. Boyle files with his brief a series of exhibits covering 

 in the order named the following items: production reports, stock re- 

 ports, sales reports, prii'O lists and freight rates, ius|nM-tiini reports, 

 report of shipments and market letters. 



Stabilization of prices is contemplated in the plan, by keeping 

 hardwood manufacturers thoroughly informed about stocks on hand 

 and prices realized at actual sales, with a view to obtaining fair 

 prices based on former sales. The idea is to have the hardwood 

 manufacturers place their cards on the table and do business in 

 the sunlight, so to speak, according to Gen. Boyle. 



The only possible question that can be raised against the hard 

 wood manufacturers' open price competition plan, it is said, is 

 whether or not the market rejiorts will fairly represent conditions 

 in the hardwoo<l market, owing to the fact that only one tenth 

 of the hardwood production of the country is tnrneil cnit liy members 

 of the Hardwood Manufacturers' Association. 



The reason for two classes^ of sales re|)orts under the open price 

 competition plan, says Gen. Boyle in his brief, is due to the fact that 

 some operators, although willing to disclose the names of those who 

 resell, are not willing to make sinnlar disclosure when the customer 

 is a consumer proper. He states further: 



This class of trodc comprehends large Industrial hu.vors, such as rail 

 ronds. The manufacturers consider tliat nn harm can mine to tlieni by 

 reason iif their cnuiiiotitors linowlng wliat wliolesalers and retail .yards 

 fhcy sell because tills Is a class nf tradi> iinowii to all and Imyini; a ^rnde 

 more nearly uniform than demanded liy tlio consumini; trade. 



The knowicdi,'!' of tlie existence and requirements of the Class It icon 

 Kumerl customer Ls. however, regarded in the light of n trade .secret. 

 This state of mind Is a trade inheritance more honored in the liroacli 



Ilian in tlic obseryance.' There is no mystery <ir sinister siguilicant-e in 

 the classification. There are many in the industry who feel that if the 

 names of certain customers were disclosed, some one would steal them. 

 They seem to overiooli the fact that all must Itnow that some one sells them. 

 It will take much elhnw touch to wear away this crust of trade suspicion. 

 Later on in the brief Gen. Boyle savs that " it is to be remembered 

 that at no time do the operators suggest what the jirice is or should 

 be. In other words, nothing more or less is done than if the sales, 

 when made, were published in the daily jiress. " 



It is shown in the brief that W. B. Greeley, assistant forester of 

 the United States, now in France on military forestry duty, has 

 made .statements tending to demonstrate the necessity for produc- 

 tinn and stock re])orts in the lumber industry. 



Tlie ins]iection reports of the hardwood association under the 

 open price plan is declared in the brief to be a ' ' vital and imjiortant 

 element.'' Having the facts before him, it is stated, a hardwood 

 ojierator under the open |iricc plan can understaml all the elements 

 and "the :irtificial an<l immoral course is avoided.'' He goes on to 

 say : 



I'ndcr niirmal mnditiuns. prices based vn rorreci knu\vled;;o nf market 

 facts can not be other tlian fair, correct grading rules, lionest In.spectiiin 

 reports, production and stock knowledge in c(Uuu'ction with market pub- 

 licity : these are the constructive elements that nuike for fair trade prac- 

 tices, honest prices, market staiiility ami ellicient pnblic service. 



As alread.\' indi<'ated there are a great variety tif hardwoijd grades. 

 In the naturi' iif tilings tlie public at large has no practical understanding 

 iif graiies. The fact is there is very often a lack of graile understanding 

 even among factory and yard buyers, nni' of tin- great nei'ds of the in- 

 dustry is standardisation as to grade differences, thereliy eliminating op- 

 portunity for deception and bringing the industry in closer toucli with the 

 sourci" of demand. 



In conclusion, the brief says in part as follows: 



In a woril. let it lie understnod that our plan in no wise undertakes to 

 cloak a price ll.xlng or ontimt cnrtailmeni combination. Kadi member 

 is left absolutely free to manufacture to his capacity and charge such 

 price as lie pleases. There are no penalties, obligalioiis. retiprocal under- 

 standings or scheme to act In concert. We do seek to bring onier out 

 of ronfnslon tliat we may overcome ancient Irade abuses, .\buses tiiat 

 liavf sapped our timber sujiply and all tt)o oiti'ii overreached the consumer 

 iif our products. 



Gen. Bo.vle has been talking with Federal Trade Commission peo- 

 l)le about the formal complaint some time ago instituteil by the 

 commission against a number of northwestern retail lumbermen 

 charging them and I'latt B. Walker of Minneapolis and a Twin 

 (Uties defective agency with unfair methods of competition in 

 lighting the mail order houses' lumber business. Gen. Boyle, with 

 flic Minnesota attorneys, reiirescuts the defendants in this ca.se, 

 which has been set for the taking of testimony on October !* or l(i 

 at either Minneapolis or Davenport, la. 



It is said to be possible that a motion will be made to the com- 

 mission before that time with a view to agreeing upon a statement 

 of facts in this case and so avoiding the taking of testimony, with 

 all the time, labor and expense involved in such procedure, at least 

 so far as the defendants are concerned who acted in perfect good 

 faith. It is understood that friends of the defendants and of the 

 luniber industry feel that if the activities of the defendants really 

 ronstitufed unfair competitive methods they should be stopped. It 

 is pointed out that there is no penalty attached to the law, the only 

 remedy under which is for the commission to is.sue an order for the 

 defendants in any formal complaint to cease and desist their alleged 

 unfair practices. 



As every accident is due directly or indirectly to carelessness, the 

 result would indicate that woodworkers are rather careless in their 

 habits. 



