June 10, 1915. 



WAKDWOOU RECORD 



35 



of the number of mills, important enough to be considered in the 

 United States census reports, are association mills. All that can be 

 done toward a reasonable regulation of production is to carry on a 

 campaign of education, first of all among ourselves, and in this I 

 include not only manufacturers, but the wholesale dealers who come 

 in more or less contact with many of the smaller producers outside 

 of the association. 



This problem, if it is to be solved, must be solved individually, 

 and fortunately for our industry, what is for the interests of the 

 individual, independent of the course pur.sued by his competitors, is 

 for the interest of the industry as a whole. 

 The Solution 



The extent to which each manufacturer will regulate his produc- 

 tion depends upon his mental grasp of the conditions affecting his 

 business. The first requisite is a careful study of the actual costs 

 of production. This is a difScult study, especially in mills sawing 

 mixed hard and soft woods, for the logging and manufacture of 

 hardwood costs proportionately more, and the manufacture of soft 

 wood proportionately less than the average. I would s.ay, roughly, 

 that it costs from twenty-five to forty per cent more to manufacture 

 hardwood than soft wood. 



A still more difiBcult study is to determine on the indirect or 

 overhead charges to be placed against the production of lumber, 

 including the proper amount of interest and the proper or reasonable 

 margin of profit. Every manufacturer makes some attempt at doing 

 this and fixes in his mind some figure below which he will not sell 

 his lumber. This being the case, is it not reasonable for him to fix 

 this minimum price below which he will not sell, as the point beyond 

 which he will not produce? I have printed a "query" embodying 

 that simple proposition, which I would like to have each manu- 

 facturer take home and talk over with his organization, and I would 

 like to have every wholesaler pass it on to the mills manufacturing 

 his lumber. 



If we grant that every individual producer of hardwood should. 



Comparison of Average 



UPPER MICHIGAN 

 Ten Cent Rate to Chicago 



1910 1911 1912 1913 



Basswood — 



No. 2 and better $S0.13 $25.96 $28.00 $25.39 



No. 3 11.02 8.65 11.00 18.80 



Total No. 3 and better. IS. 44 22.62 23.80 24.14 



Birch- 

 No. 2 and better 20.95 25.88 20.41 22.65 



No. ^ 9.03 7.86 9.33 12.63 



Total No. 3 and better. 16.73 20.74 17.66 19.20 



Maple (Hard) — 



No. 2 com. and better. 18.96 21.79 21.31 22.48 



No. 3 8.05 6.55 8.46 11.34 



Heart plank 14.63 12.78 10.53 15.52 



Total 15.49 15.37 15.93 18.00 



Soft Maple — 



No. 2 com. and better. IC.OO 17.00 18.93 23.SS 



No. 3 9.68 7.75 8.00 10.73 



Total 15.00 13.79 17.00 19.58 



Elm — 



No. 2 com. and better. 24.31 22.00 24.51 27.07 



No. 3 9.84 8.42 9.70 13.31 



Total 18.23 19.35 18.93 24.64 



Ash — 



No. 2 com. and better. 2G.07 27.00 27.49 32.00 



No. 3 9.21 8.20 10.19 12.67 



Total 22.45 16.07 25.09 24.19 



LOWER MICHIG.\N 



Ten Cent Rate to Chicago 



1910 1911 1912 1913 



Basswood — 



No. 2 and better .... .... ... 



No. 3 .• 



Total $14.82 $16.56 $19.69 $20.01 



Birch- 

 No. 2 and better 



No. 3 



Total 12.85 16.51 16.13 19.51 



Realization pric 



Five 

 months 

 to May 1. 

 1914 1915 



$25.80 



16.50 



25.48 $19.54 



25.09 



12.62 



20.56 



24.2T 

 10.03 

 13.12 

 17.24 



24.00 

 11.00 

 22.53 



26.51 

 12.73 

 17.36 



32.99 

 13.72 

 22.90 



18.62 



16.16 



17.06 



22.76 



Five 



months 



to May 1, 



1914 1915 



$22.65 



20.44 



$22.80 

 12.91 

 18.86 



20.94 

 10.51 

 14.51 



through the publicity given to this subject, determine to carefully 

 regulate his production in accordance with his sales, after regulat- 

 ing his sales in accordance with his cost of production, we would 

 still have, in every sense of the word, a freely competitive market, 

 because each individual producer would be in competition with every 

 other producer in determining his selling price, but it would be a 

 market in which the producer and consumer were evenly balanced; a 

 comparatively stable market in which there was little fluctuation in 

 price, thereby protecting the wholesaler and the manufacturing con- 

 sumer in contracting for future requirements; and finally, a market 

 in which every development and extension of the uses of hardwood 

 would tend to develop better values. 



The Difficulties Not Discouraging 



Let no one in this association feel that an educational campaign 

 will not produce results. Many minds are working along this line; 

 many solutions will be offered, and the influence of this association 

 wOl help the regional associations, and the regional associations will 

 concentrate on their specific kinds of wood. 



This association was born in this city in 1897, and its first meet- 

 ing was attended by less than thirty lumbermen, as I quote from your 

 former president, Mr. Barnaby. That there was great need of such 

 an organization, no honest man questioned. Prior to that time every 

 market had its own rules of inspection and both buyers and sellers 

 interpreted such rules as they saw fit. In those days the question of 

 securing fair treatment on the inspection and measurement was of 

 equal importance with the financial standing of the customer. 



The same energy; the same spirit of co-operation, and the same 

 intelligence that has accomplished order out of chaos in inspection 

 rules in this association, will, in our state associations, quickly bring 

 about a reasonable regulation of production, which, together with 

 a reasonable development and extension of hardwood consumption, 

 will cause a return of prosperity to our hardwood industry in all its 

 branches; the proper conservation of hardwood timber and a sound 

 economic foundation for future development. 



es, F. O. B. Mill for Past Five Years 



Maple (Hard) — 



No. 2 and better 16.25 



No. 3 8.46 



Total 15.01 13.02 11.56 16.86 12.59 14.96 



Elm — 



No. 2 and better 21.84 



No. 3 12.24 



Total 17.12 15.15 15.24 23.80 19.00 17.14 



.\sh — 



No. 2 and better 34.00 



No. 3 11.90 



Total 18.32 18.31 17.33 23.55 25.58 23.62 



WISCONSIN 

 * Ten Cent Rate to Chicago Four 



. months 



1912 1913 1914 1915 



Dog Run Rock Elm $22.00 $27.35 $27.00 $27.00 



No. 3 Rock Elm 11.00 13.75 13.20 12.60 



Log Run Soft Elm 23.60 27.60 26.90 26.10 



No. 3 Soft Elm 9.90 15.70 13.20 12.60 



Log Run Birch 25.00 26.20 25.66 24.90 



No. 3 Birch 9.45 13.40 13.10 10.37 



Log Run Basswood 23.75 29.40 26.80 25.40 



No. 3 Basswood 13.60 17.40 16.00 13.62 



Log Run Ash 25.15 34.25 31.00 29.00 



No. 3 Ash 8.25 14.35 12.95 None sold 



Log Run Oak 34.10 41.10 41.10 None sold 



No. 3 Common 12.50 13.65 12.50 None sold 



Log Run Hard Maple 18.85 19.10 18.00 17.80 



No. 3 Hard Maple 9.25 12.25 9.50 9.10 



Log Run Soft Maple 19.50 21.00 21.00 21.00 



No. 3 Soft Maple 9.45 13.40 13.10 10.37 



Log Run Butternut 30.75 32.75 32.75 32.75 



No. 3 Butternut 13.60 17.40 16.00 13.62 



* Some of the prices shown for 1915 perhaps appear a little high, espe- 



ciall.y on No. 3 birch, but some of the stock this compau.v is shipping is on 



old contracts and, of coarse, averaging the prices it is getting at present 



and those prices brings the average a little above the present market. 



WISCONSIN 

 Ten Cent Rate to Chicago 



1915 ■ 



January February March April 



Basswood $19.67 $16.78 $18.34 $18.86 



Birch 16.17 20.59 16.12 27.00 



