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HARDWOOD RECORD 



November 10, 1917 



of important shipping the lumber industry lias been the easiest mark 

 for the carriers. Lumbornicn have always been the goats and lumber 

 rates occupy a plane wliifli is clearly out of proportion to the position 

 in which tlioy should stand in relation to the rates on other commod- 

 ities. The lumbermen 's iight is not against the general ))rinciple of 

 raising freight rates, but it is against tlie principle of adding fuithcr 

 to the additional weight which lumbermen are carrying over what 

 they should legitimately carry. 



To the second group nothing can be said which has not already 

 occurred to them in their councUs with themselves. There arc, and 

 proliably always will be, men in every walk of life who wish to reap 

 the benefits which somebody else is responsible for. 



The Southern Hardwood Traffic Association represents ninety per 

 cent of the trade in the South and at Ohio river crossings. This asso- 

 ciation, in fact, represents the hardwood industry of the Soutli and 

 should have the unqualified support of every hardwood shipper who 

 cares at all what his lumber rates may be. If there is any hardwood 

 shipper in this association's territory who is not convinced of the 

 vital work the association is doing, let him make a conscientious effort 

 to find out through direct communication with the association. It 

 should take but a short time to convince anyone that to support this 

 body is not only a moral obligation, but is an investment from which 

 real dividends will be realized. 



An Old Question Asked Anew 



THE ETERN.\T. QUESTION used to be, who piiys tlie t;iriff, the 

 seller on tlie other side or the buyer on this? The antiprotection- 

 ists said that the buyer paid it: but the protectionists denied this and 

 declared that the seller on the other side of the sea paid it. Politics 

 controlled the observer's viewpoint in those days, and his viewpoint 

 never changed until his politics changed. 



A very similar question is now before the American public, except 

 that it is wholly a domestic question and foreigners have no part in it. 

 Who pays the three per cent war tax on freight bills, the man who 

 sells the goods or the man who buys? At which end of the shipment 

 must this ta.\ be paid? For instance, if a shipper sells a carload of 

 lumber to a distant customer, does the shipper or the buyer pay the 

 tax? It is almost identical with the problem which was never settled 

 satisfactorily to all in the old tariff controversy. In that case, the 

 tariff was paid by the receiver of the goods. There was no doubt of 

 that; but did he charge it back to the seller and take it out when he 

 paid the bill? 



In the ease of the freight tax, neither the buyer nor the seller would 

 object to paying it, if he could charge it up to the other man and 

 make him pay it finally. But the question is, can'he do this? Will 

 the other man stand for it? 



The only point which has been decided is that the government will 

 collect the tax and that the shipment can bo, and will be, held until 

 the tax has been paid. The tax, like all other taxes since the creation 

 of the world, except poll tax, is a lien on the property, and if not paid, 

 the property can be sold to satisfy the claim. But that does not quite 

 reach the nub of the matter. Suppose the seller refuses to pay and 

 the buyer refuses to pay, and the marshal seizes the lumber and sells 

 it for the tax. The purchaser under the tax sale will then own the 

 lumlier, and he cannot be molested by either the original seller or the 

 original buyer. He will have the lumber; the marshal will have the 

 tax money; and the original buyer and original seller will have noth- 

 ing, except probably a law suit between them to determine which one 

 must stand the loss. 



One thing ought to be reasonably clear: the price of lumber may be 

 raised to include the freight tax. When that is done, the buyer pays 

 the t.ax when he pays for the lumber; and that being the case, he will 

 object to paying it twice, first when he pays for the lumber, and again 

 to the marshal who comes round with the tax bill before the lumber is 

 released. If the seller of lumber adds the freight tax to the price, he 

 will not count it a hardship if he pays the tiix at his end of the line. 



That might not solve the problem, for the seller might claim that he 

 did not add the tax to the price, but that he had quoted a net price. 

 That point would have to be settled by specific contract, to prevent 

 troubles and misunderstandings later. The government will doubtless 



uso its own pleasure and consult its own convenience in deciding 

 whether the tax will be collected at the point of shipment or at the 

 point of delivery, and buyers and sellers will not have much to say 

 ;ibout it. 



Conservation and Water Power 



THE DEMAND'for close and consistent conservation, advocated 

 by certain departments of the government, is criticised in the 

 weekly letter issued November 2 by the National City Bank of 

 New York. The-thrust seems to be aimed at the Forest Service, on 

 the ground that it is hindering the development of electrical power 

 in the uiitional forests, while power from coal is inadequate to 

 the country's needs. The pith of the criticism is in the following 

 ]i;iragra]ih: 



To Ihc cxti'iit thiit liydro-clectrlc power Is substituted, this consump- 

 tion of cnjil anil ilcniand on transportation facilities will disappear. Un- 

 fortunately, although there are 40,000,000 to 50,000,000 horse-power of 

 poRsililc but unused water power in the country, most of It is under the 

 Jurisdiction of the Federal Government, and tied up so tight that prac- 

 tically no new development is being made. Tlie running waters, which 

 wTll flow forovor are closely guarded, in the name of conservation, while 

 the coal supplies are depleted. 



This is not a new accusation, though the justness of it is open 

 to question. There is no doubt that the drain on the available 

 coal supplies would decrease in proportion to the increase in de- 

 velopment of electric power from flowing water. A few years ago, 

 during the flood of the conservation movement, fierce attacks were 

 made upon the Forest Service because it opposed throwing open the 

 water jiowcr sites to whoever would take them. The Forest Ser- 

 vice's answer to these attacks was that corporations were trying 

 to get hold of the electric power sites, to develop them for their 

 own profit, and with the purpose of fleecing the public. In that 

 controversy the Forest Service won out. The famous "Ballinger 

 incident" hinged on that question. The public decided that it 

 would be better that the power sites remain in the control of the 

 government, rather than pass to private ownership. 



The paragraph above quoted is the first intimation that the fight 

 over water power is about to be reopened. Conditions are not the 

 same now as they were ten years ago, and the advocates of giving 

 the power sites away will be able to insist that such a course is 

 expedient in the face of the coal shortage. There was no coal 

 shortage ten years ago. It may not be easy to satisfy the public 

 with a policy that withholds development (or exploitation?) of 

 water power while coal is scarce and extremely high in price. No 

 doubt the charge will again be made by the Forest Service that 

 an attempt is about to be made to get possession of power sites 

 b.y private corporations, and that charge will scarcely be disputed; 

 but the fact remains that the government is holding that great 

 resource and is making no movement toward developing the power 

 now running to waste,- and if a counter charge of a "dog in the 

 ' manger ' ' policy is made against the government, it may not be 

 easy to answer it satisfactorily. At the time of the Ballinger 

 affair, the question of developing the great water powers on na- 

 tional forests was more or less theoretical and academic; but it is 

 intensely practical now. 



Shying from Socialism 



SOME OF THE TIMBER TRADES of England aie much con- 

 cerned over the prospect that the government will stay in the 

 lumber business after the close of the war and insist on doing the 

 buying and distributing of lumber, as it is doing now. It is held that 

 such a policy will put out of business a large number of persons and 

 firms heretofore engaged in the timber trades. The unfairness of a 

 policy like that is pointed out, and it is claimed that if the business 

 is to be taken away from traders in that manner, they shoidd be re- 

 munerated for loss of capital and should also receive damages. That 

 question is not yet confronting the lumbermen of the United States; 

 yet it is easily conceivable that government control of business as a 

 ,war measure might be tried later as a peace measure. It would, of 

 course, be socialism of a radical kind. It has made no such progress 

 in this country as it has in England. Conditions here are not the 

 same as there. We do not import much of our timber; they import 

 most of theirs. 



