22 



HARDWOOD RECORD 



March 10, 1918 



whom he buys his hardwood. We set a price, say for spokes at thirteen 

 and one-hnlf cents. If a wagon manufacturer can buy spokes elsewhere 

 for that price, or below, that is all right ; it is his liuslness. If he cannot 

 do that he comes to the committee and informs them and they will tell him 

 where he can go to get them at or below that price. It Is then his business 

 to make his purchase of spokes upon his own responsibility. The commit- 

 tee has nothing to do with it. 



Mr. Tliielcns: I would say, gentlemen, that this is the third interview 

 on this subject today. 



Mr. Defebaiigh: Am I asking anything unfair? 

 Mr. Thiclens: No. you are not. 



Col. Wood: I said to Mr. Thielens last night when he told me that you 

 had asked to get the straight of this matter — I said. By all means let us 

 see Mr. Defebaugh. We want the thing placed Just as it is, the truth 

 about it, and not these rumors or statements that are going around. 



Mr. Defebaugh: In correspondence with Mr. Thielens' committee, It was 

 stated that if the prices that had been sold at, or had been quoted, were 

 not satisfactory, they would be satisfied to put it up to the trade commis- 

 sion. 



Mr. Thielens: I made the statement myself, and It is a part of our 

 record that if the prices recommended by this committee, which are the 

 prices fixed by Col. Wood as the maximum were not acceptable to the pro- 

 ducers, that the only recourse was to go before the Federal Trade Com- 

 mission, and In that connection, with the statement I read a letter from 

 this committee to Mr. Downman in which the price recommended was .?S0 

 for three-inch and $85 for four-inch oak at Chicago delivery, and Mr. 

 Downman, in his reply, stated that he approved of the general plan of the 

 committee in its operations, and if the producers had been furnishing sub- 

 stantial quantities of oak at these recommended prices during 1917 he was 

 opposed to any advance, and it would be necessary for them to exhibit their 

 costs before the Federal Trade Commission. 



Then, furthermore, the committee to make sure of the prices being prop- 

 erly quoted, wrote to every man on the committee, giving him a copy of my 

 telegram to Mr. Downman and a copy of Mr. Downman's reply. 



To show you that this committee desired your co-operation, in open 

 meeting they asked that the Southern Hardwood emergency bureau indicate 

 a man to become a member of this board, and they selected Mr. Lang, and 

 this was solely for the purpose of proving to these people that we wanted 

 to co-operate. I do not understand your co-operation. Mr. Lang sat in 

 on our meetings, etc., two or three times, and he came to me as a gentle- 

 man and said, I cannot in right continue in this work and still be true 

 to the other side. 



Mr. Defebaugh: The reason I came here was I felt there was a mis- 

 understanding. I am sure the lumber trade people felt this committee was 

 just trying to buy this stuff cheap. I know these lumber fellows well 

 enough to know that they are disorganized, and that their prices are not 

 organized prices, and with the right kind of co-operation I think this 

 thing can be worked out along the right kind of lines. At the same time, 

 with the increased cost in the lumber business, I am sure Mr. Thielens" 

 company will show at least as high a basis of prices in the last three 

 months. Oak ought to be $5 a thousand higher. Also compared with 

 other woods, oak is considerably cheaper, with the exception of railroad 

 timber and ties. 



Another thing, Colonel. I know that these men only want a fair price 

 for the stuff, but they do not want to sell it for less than it is worth. 

 The cost ought to be based on what the lumber manufacturers* figures 

 indicate, and not on what a buyer indicates or what a wholesaler indi- 

 cates. The other day at a little meeting a man said, It is a funny thing, 

 but it costs me $7.50 to get my logs into the mill. Another fellow said. 

 It costs me .f4. I will bet that .the cost committee of the trade commis- 

 sion never had any $7 logging costs in their figures. I know these 

 things to be a fact, because another man sitting there turned to his fig- 

 ures which were nearly $7, due to scarcity of labor, scarcity of cars, etc. 

 You know that in your business costs are increased probably sixty per 

 cent. 



Mr. Thielens: I understand this gentleman's position. He is like we 

 are. He is the goat. He is trying to please both sides. Now, then, this 

 Kelsey case is not the first one, but it is the last one. This Kelsey case 

 is a matter which Col. Wood has explained to you, is for adjustment be- 

 tween Kelsey and the other people. Col. Wood has stated to you that 

 he did not say to Kelsey that he would have to cancel his contract. 



Col. Wood: We are always willing to meet these people. I am pro- 

 tecting the government. That is my business. The Jeffersonville depot 

 Qnder my direction from a five million a year proposition has grown to be 

 1 250 to 300 millions a year proposition. From 145 people workifag in 

 the depot and 900 outside, it has come up to more than 4,000 inside and 

 more than 22,000 outside. I have with me ninety-two commissioned 

 officers. All branches of the Jeffersonville depot have greatly increased, 

 and as I say the wagon business in its inception started with a mere ten 

 thousand wagons, and now in ten months has come up to 240,000 wagons, 

 and we must change certain of our methods as the increasing business 

 indicates to be wise. We want to make use of the hardwood association, 

 and I say we intend to bring them in soon, and we will place the re- 

 sponsibility of getting the material upon them. We will bring their re- 

 sponsibility before the country if they fall down. And the prices have 

 got to be right when they come in. 



In connection with the question of profits, Col. Wood said: 



"The wagon people, on our figures, as approved by the Industries 

 Board, should be making a little over eleven per cent, but I question If 

 they are making ten per cent." He also said he believed that not over 

 fifty per cent of the manufacturers in any industry know how to figure 

 their costs. 



Col. Wood: I have no authority to fix sales prices of lumber. I cannot 

 fix any prices because I have no authority to fix prices, but we do this — 

 say to the manufacturers. Do not buy materials beyond certain prices. 

 To illustrate, it is like this : I go into a shoe store to buy a pair of 

 shoes and I tell the salesman I want to buy a pair of shoes to cost not 

 over $4. He says to me, "The lowest price shoe we have is $5." I say, I am 

 very sorry. I will have to go elsewhere. I do not tell him that he must 

 sell his shoes to me tor .$4, but I simply indicate that that is the highest 

 price I will pay. It is the same way in the wood stock for wagons. 



Mr. Dcfehauyh: If you can get all this stuff you want at these prices, 

 as a buyer you are foolish to do otherwise. If you want to be sure of your 

 stuff, you can use me any way you want to to bring about the necessary 

 cQ-operation. 



Mr. Thielqns: When we find out definitely how much feetage we want, 

 we will tell these people. But. I would like to impress upon this gentle- 

 man, that there has been every willingness on the part of this commit- 

 tee to meet these gentlemen and to co-operate. 



Tell these fellows among themselves to get busy too and see what they 

 can do in the way of producing dimension stock. I do not mean that 

 we are looking for it now. The government has joined with the wagon 

 men to put up additional kilns to handle other stock. Wood stock should 

 be produced in dimension sizes at the source. 



Dedicate Plants to National Service 



Members of the open competition plan of the Hardwood Manufac- 

 turers' Association, at their meeting at Memphis on March 2, dis- 

 cussed market conditions, transportation, labor and stocks of hard- 

 wood lumber, together with other subjects of paramount interest at 

 this time. 



It was agreed that, because of the large demand from government 

 and from private industry and because of the serious interruption to 

 production incident to labor and tranportation conditions, the price 

 position of the market was quite strong. It was pointed out that 

 transportation conditions are showing little improvement and that 

 labor is getting much scarcer as to supply and also much higher as to 

 price. 



The members realize that government requirements in the way of 

 lumber and timber for ship building, for airplane manufacture, for 

 the making of wagons and other vehicles, for wooden containers, and 

 for other purposes directly connected with the war program, are going 

 to be enoiTnously heavy and it was the expressed sense of the meeting 

 that those identified with the association in this territory are -willing 

 to devote their plants, their timber holdings and their other resources 

 solely to supplying the government with its needs if necessary, to the 

 exclusion of non-essentials of every character requii'ing lumber. 



It was emphasized in this connection that lumber interests every- 

 where must come to exactly the same conclusion and that the sooner 

 they do the better it will be for them and for all concerned. It was 

 made quite clear in this connection that the transportation is resolving 

 itself more and more into the question of what use is to be made of 

 the products for which transportation facilities are wanted. 



Eesolutions were adopted commending the trade acceptance as a 

 means of facilitating business, but it was pointed out in the general 

 discussion that use of this instrument is necessarOy limited because it 

 is so little understood and so little used by the hardwood trade at 

 large. 



While here F. E. Gadd, assistant to President Eobinson of the 

 Hardwood Manufacturers' Association, said that it had been decided 

 to hold a monthly meeting of the open competition plan of the asso- 

 ciation at Alexandria, La., for the convenience of those members of 

 the association identified therewith in Louisiana and Texas. He had 

 just returned from Alexandria, where the first meeting was held in 

 conjunction with the Southwestern Hardwood Manufacturers' Club. 

 The next meeting will be held March 27. 



Mr. Gadd also announced that the monthly meetings for the eastern 

 territory would be held in future at Huntington, W. Va., instead of 

 at Cincinnati, the change being made because of the serious curtail- 

 ment of passenger service on the Chesapeake & Ohio. The next meet- 

 ing at Huntington will be held March 19. The monthly meetings at 

 Memphis will be continued as usual. 



