July 25, 1915. 



C. H. WORCESTER, ^^HICAGO, ILL. 



C. J. MILL.\RD, NORFOLK, V.\. 



GEORGE E. WATSON, NEW ORLEANS, LA. 



ever since the beginning of liHi, and this statu was greatly accentuated 

 immediately following the iliclaratlon of war. 



In .Tuly of last jear it seimcd that conditions were coming tjack to 

 normal so far as consumption is concerned. Immediately upon the out- 

 break of war a ri'duction of fifty-eight per cent came in the volume of sales 

 in .\ugust as (-(impari'd witli .Inly : in Septcuibi-r tln-re was a tliirty-nin*- 

 jjer cent rtxluction as compai-i-d with .\ugust. This decrease in demand 

 resulted in the price of yellnw i)int* reaching sn.s.", per tliousand feet 

 at the mills for December. 



From information which w«' are tiling with yon, gathered from a great 

 number of yellow pine mannlacturers, the cost of production of yellow 

 pine in the year 1914 is shown to be not less than S1:!.7."i |i.r tlionsnml 

 icet, while the selling price in December was S] l.s;:. 



In a three years' period, heginning .fanuary. 1!UU. thr production of 

 yellow pine lumber exceeded tlie annual eonsninption by ?,*l\"/c. This 

 has resulted in an accumulation of 9.03';; of one year's .'innuai production 

 in that poriwl. or an accumulation of stocks eciuivalent to 4.'j.2% of the 

 stocks on hand at the beginning of the period. 



The price of lumber fell from the high mark of Sl.S.4-2 per tliousand 

 feet in February. 19ir, ; .1:11.1*3 per thousand feet in Decemlier, 1914. or a 

 decline of 37 '-.j c-i-. 



'I'HK SlTlATIOX -rt) IlK l-'ACKll 



It is said that there are a number of lumber bond issues which are at 

 present in default, and the credit of the lumbernien is being (|Ucstloned 

 by reason of this condition, and because it is well known that there is 

 no longer a profit in the business as long as this state of affairs exists. 

 This situation has had its effect on the men employed in the lumber 

 industry. In many instances the wage scale has been reduced, from teti 

 to as. much as twent.v-flve per cent. In some instances the daily wage 

 Is continued, but working time is increased in order to reduce the cost 

 of production. In other cases the working hours have been decreased 

 with a consequent loss to the wage earner. In most instances the em- 

 ployees have suffered with the employer. 



The cost of labor for manufacturing yellow pine is in the neighborhood 

 of $7.00 per thousand feet, and where a ten per cent reduction is math- 

 in the wage scale, the saving is approximately seventy cents per thousand 

 feet. The average wage in all mills is the same as that in my own 

 company, $2.00 per day. The effect on the employee is that he receives 

 twenty cent per day less under present conditions than he would otherwise. 

 This, on the basis of 28.5 working days per year, means that each 

 laboring man employed in the yellow pine industry would contribute 

 :«.57.00 per year out of his rightful earnings to this condition of over- 

 production. 



The yellow pine industry, according to the census reports of 1909, pro- 

 duced 16,250,000,000 feet of lumber. On a basis of a wage cut of 

 seventy cents per thousand, the working men in yellow pine alone have 

 lost more than $11,000,000 in this competitive situation. 



In addition to the loss to the working- man, and the loss to capital 

 employed in the industry by reason of present conditions, a national loss 

 results. I refer to the waste in our forest products. 



Under present conditions it is possible to harvest only a part of the 

 tree that is cut. As the prices decline, the smaller portions of the trees 

 cannot be profitably manufactured ; it simply does not pay to haul them 

 into the mills, cut them up and ship them as lumber. The result is 

 that at the present time thirty per cent of every tree is left in the 

 woods to rot and waste. That is the case in the yellow pine industrj'. 

 In the United States in 1910, 50,000,000,000 feet of lumber was manu- 



factured. If that same volume of manufacture is being carried on today 

 15,000,000,000 feet of logs which would have been manufactured into 

 lumber, ha<l prices justified it, are now permitted to waste in the woods. 

 Kstimating that the average price of Pacific Coast timber is $3.00 per 

 thousand in the tree, there is a waste in this one direction of $45,- 

 000,000 a year. 



To remedy this condition of waste in capital and loss to employees 

 and waste of the national resources, we can suggest only one plan, 

 and that is to stop producing more lumber than the market can assimi- 

 late. If this should be done it should be under full supervision of your 

 committee. 



If we should apply this principle to the yellow pine industry, where 

 information wouhl show that two per cent of the surplus stock had been 

 accumulated in a month, and assuming that the current month's opera- 

 tions would repeat the situation, the output for the current month could 

 he rcHlueed four per cent, so as to absorb the accumulation of the 

 previous month and produce only as much lumber as would be necessary 

 to take care of the demand. 



It is believed this would not be in violation of the law, in that it 

 would not be in restraint of trade or lessen competition. The trade 

 would he able to secure all the lumber it could use, while the result 

 would be to keep the market stable aud enable the stock to forecast 

 market conditions with more certainty. 



If this condition had been applied in the operations of yellow pine 

 for the last three years, the result would have been a reduction of only 

 2..S5% less than was actually produced. Under such a condition there 

 would have been a fair profit in the business; labor would have been 

 more steadily employed, and at better pay, and the entire harvest of 

 logs would have been utilized, rather than to have left thirty per cent of 

 the log in the forest to rot. 



Should vou agree that the carrying out of such a suggestion would 

 not be in "restraint of trade, it would be wholly lawful, and it would 

 be possible to secure only a partial co-operation on the part of the manu- 

 facturers. It is barely possible that fifty per cent of the output of 

 yellow pine lumber would come under such a plan. But this fifty per 

 ient of the total manufacture of yellow pine lumber would not, in any 

 manner, approximate fifty per cent of the total number of manufacturers. 

 Many of the mills are very small, but all seek a market through some 

 avenue. Some merchandise their product direct through their own sales 

 agents. Some manufacture and sell to wholesalers, and some sell locally 

 in the vicinity of their plants. 



Mr. Keith presented brief No. 1 as submitted by L. C. Boyle, at- 

 torney for the Southern Pine Association. This is to be found else- 

 where in this issue. 



C. J. Millard Talks for North Carolina Pine Men 



Mr. Downinan introduced C. J. Millard of Xorfolk, Va., president 

 of the North Carolina Association. 



Mr. Millard's address in epitomized form was as follows: 

 There are some conditions in the forests of the East Coast that are 

 a little different than in any other section, because we are really working 

 on regrown timber. Commencing at the James River, going south, that 

 whole territory was practically a longleaf pine belt at one time. It has 

 all been destroyed by the turpentine or naval stores industry, and the 

 second growth pine that grew up. called rosemary pine,' short leaf pine 

 or North Carolina pine, took the place of the longleaf, brought about 



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