22b 



HARDWOOD RECORD 



March 25, 1018 



Production Further Restricted 



By Shipping Difficulties. Seventy Million Feet of Logs and Ten Thousand Cars of Lumber Held Up. 



There has been little, if any, improvement in the log handling 

 situation around Mempliis so far as flat cars are concerned. A 

 delegate from the Southern Hardwood Traffic Association made 

 a trip to Atlanta recently for a conference with C. H. Markham, 

 regional director for the southeast, with a view to securing more 

 flat cars for log handling as well as increased facilities for shipping 

 lumber. J. F. Porterfield, general superintendent of transporta- 

 tion for the Illinois Central, system, has spent some time in 

 Memphis since this conference, and has promised to furnish one 

 hundred and fifty more cars for the Yazoo & Mississippi Valley 

 line of the Illinois Central system. These cars, however, have not 

 yet been placed in service, and it is doubtful if they will be so 

 placed in the immediate future. 



In the meantime the amount of lumber being produced in 

 Memphis and the valley territory is sharply below normal. It is 

 estimated there are sixty to seventy million feet of timber ready 

 for loading, but the number of ears available are very greatly 

 restricting the movement of these logs to the mills. 



J. W. Dickson, president of the Valley Log Loading Company, 

 challenges the statement that there are 540 cars in operation on 

 the Yazoo & Mississippi Valley for log loading. He believes that 

 every car in the service is available for use at least three times 

 each month, and points out that the amount being loaded each 

 month is far short of the sixteen hundred cars which would be 

 loaded under those terms. This company is having considerable 

 difficulty in keeping its three log loading machines in operation 

 because of the shortage of cars. On the other hand it has an- 

 nounced that it is perfectly vnlling to put on additional equip- 

 ment provided cars are furnished. Mr. Dickson said recently that 

 it was doubtful if the loading for March would show an excess of 

 100 cars over the short month of February. He explained that this 

 is positive proof that the situation is failing to show any improve- 

 ment of consequence. 



The movement of lumber into the Central Freight Association 

 and Eastern Trunk Line territory is even more restricted now 

 than heretofore, and vast quantities of lumber are tied up in 

 Memphis and the valley awaiting an open route for delivery. J. B. 

 Larson, who is in charge of embargoes for the Southern Hardwood 

 Association, estimates that there are fully ten thousand cars of 

 hardwood lumber tied up because of this restriction. The Louis- 

 ville & Nashville Eailroad, which has heretofore been accepting 

 shipments into Central Freight Association territory from all south- 

 ern points, will not accept shipments from Memphis unless they 

 originate at this point. It will not accept shipments from con- 

 necting lines unless these lines are north of Memphis and south of 

 the Ohio. The main open route for handling lumber shipments 

 into Central Freight Association territory heretofore has been over 

 the Louisville & Nashville. The 'Frisco, Missouri Pacific and 

 Eock Island systems have begun accepting shipments for delivery 

 as far east as the Indiana-Illinois state line," but they will not 

 accept shipments any further east. The Hlinois Central is handling 

 lumber to all points on its lines as far north as Chicago. It is 

 possible to effect deliveries to St. Louis, Cairo, Peoria and Chicago, 

 and all points in Western Trunk Line territory are open. How- 

 ever, the greater portion of the hardwood lumber is shipped from 

 Memphis and valley territory into Central Freight Association 

 and Eastern Trunk line territory which accounts for the very large 

 tie-up to which reference has already been made. 



Mills depending on the public carriers for their log supplies are 

 running in quite a restricted manner. There is full production, 

 however, on the part of those mills which control their own logging 

 and railway equipment, and which bring in their logs by water. 

 Weather conditions have been extremely favorable for the past 

 two weeks, and an abundant supply of logs has been available 



for the last two classes of mills mentioned. 



Conditions have also been quite favorable for cutting and haul- 

 ing logs and this is making good progress. Labor is becoming 

 scarcer every day, and conditions in this respect will, it is antici- 

 pated, become even more intense as work on the farms progresses. 



Will Probably Revise Chamberlain Bill 



Lumbermen have been busily fighting the bill of Senator Cham- 

 berlain of Oregon authorizing the president to commandeer timber 

 and its products. The bill was reported from the senate committee 

 on military affairs in drastic form, giving the president power also 

 to conduct logging and milling operations. Lumbermen objected 

 to this last provision in particular. They succeeded in having the 

 bill referred back to the committee. 



Then they had a hearing to voice their protest to the committee. 

 The principal speaker was Eepresentative Fordney of Michigan, 

 who has been in the lumber business almost all his life. He de- 

 nounced the bill and declared that its purpose was to enable the 

 president to establish an eight-hour day in the southern and east- 

 ern lumber industry, as he has in the west coast industry, under 

 military discipline. 



Since that hearing the senate military committee reconsidered 

 the bill and amended it so as to strike out the objectionable grant 

 of power to direct and prescribe the conduct of logging and milling 

 operations. The bill gives the president power to take standing 

 timber needed for the army, navy and shipping board, to enter any 

 lands and take timber, to erect mills, etc., that may be necessary 

 for such operations, construct logging roads and railroads for the 

 purpose; to take possession of cut logs and manufactured timber 

 and lumber, machinery, cables, etc., to designate an agent to exer- 

 cise his power; to fix a value on materials and take them by paying 

 75 per cent of the value leaving the owners to go to the court of 

 claims for the balance if they do not like the official value; to 

 issue and enforce orders prescribing the length of logs and the 

 dimensions of lumber. Penalty of $1,000 fine or one year's im- 

 prisonment is provided for violation of the law. Passage of the bill 

 is now expected. Its present form is fairly satisfactory to lumber- 



Income Tax Notes 



The Internal Eevenue bureau announces that it has been brought 

 to its attention that several trade organizations have issued to their 

 members bulletins erroneously advising them that increment or 

 appreciation in property values, as ascertained by an appraisal, 

 may be treated as earned surplus or undivided profits and included 

 in invested capital for the purpose of the excess profits tax. 



The excess profits tax law expressly places the computation of 

 invested capital upon the basis of the cash and other property 

 actually put into the business and not upon that of a present valua- 

 tion or appraisal of its assets. Eegulation 41 relative to the excess 

 profits tax point out in detail just how invested capital should be 

 computed. 

 The following statement on the subject was issued by the bureau: 

 While the bureau Is grateful for the assistance which has been rendered 

 by trade organizations in the administration of the present war taxes and 

 entertains no doubt that these particular bulletins were issued in good 

 faith, yet It cannot be too emphatically stated that they are based upon 

 a misapprehension of the express provisions of the law and of the regula- 

 tions issued thereunder, and that if not corrected they will result In great 

 inconvenience both to the government and the taxpayer. Returns in which 

 the Invested capital includes surplus or undivided profits computed upon 

 present values as determined by an appraisal cannot be accepted. It Is 

 to the interest of both the government and the taxpayer that this fact be 

 given the widest publicity In view of the misapprehension which may have 

 been caused by unofficial statements to the contrary. 



