October 25, 1920 



HARDWOOD RECORD 



47 



aCFaIrs, then will it become possible to gauge tlie future witli that degree of 

 confidence which is necessary to the conduct of successful business. 



"At the present time, the consumption of hardwoods abroad has reached 

 a minimum which might almost be called nil. The supplies on hand are 

 ample to take care of present requirements, although they might be consid- 

 ered small as compared with normal conditions. In other words, present 

 stocks would be consumed within a few months under normal demand, but 

 at present rate of consumption, are ample for as many years, if present 

 conditions continue. No new commitments can be made with any cer- 

 tainty of the future. Conditions are entirely too unsettled to permit of 

 speculation. Financial conditions are compelling a liquidation of stocks 

 on hand rather than permitting an investment in supplies for the future. 

 The volume of buying is very small and restricted to absolute necessity. 



"Under such conditions prices are extremely sensitive to the slightest 

 circumstances. Merchants are inclined to hold prices firm and would dis- 

 like to experience any sudden and radical declines. Many of them are 

 holding their stocks rather than making concessiou.s in price. However, 

 the arrival of low quotations intended to force buying, or the efforts of 

 brokers to force the sale of even two or three consignment shipments 

 through reduced prices, causes much disturbance in the market and has a 

 tendency to restrict buying rather than encourage it. In a general way, 

 it may be said that buyers are very willing to pay ruling prices for what 

 they must buy. but are not inclined to buy anything not actually needed, 

 even at greatly reduced prices. 



"The great difference in exchange and the lliutuations in the exchange 

 rates are, of course, having a marked effei-t upon tin* lumlicr industry 

 abroad. What little lumber is being consumed in Dnited Kingdom markets 

 is coming from stocks mostly imported before the big slump in sterling 

 exchange. Although ruling prices compare favorably with market condi- 

 tions at home based on normal rate of exchange, there is everywhere 

 evident the peculiar condition of lumber being sold ex yard in United 

 Kingdom ports at less than present replacement values when taking the 

 present exchange rates into consideration. This situation is bringing about 

 a small movement of American hardwoods from United Kingilnm ports 

 back to America. Whether or not this movement will develop into impor- 

 tant volume will, of course, depend upon the movement of the' exchange 

 rate and the comparative values prevalent on the two sides. 



"The practice of consigning lumber abroad under present conditions is 

 lu'inging disastrous results to shippers. It is amazing to find some of our 

 best shippers still sending over consignments in the face of almost certain 

 heavy losses. The reliable brokers abroad are doing everything possible 

 to discourage consignments, but still they come, though in much smaller 

 volume than formerly. In some cases, the brokers are refusing to advance 

 against consignments and as a result, the lumber is left on tlie docks to 

 consume its value in the heavy charges now current. 



"It is impossible to make any predictions for the future with any con- 

 fidence. Old precedents have gone into the discard. The term 'normal' is 

 an unknown quantity, and must be left for the future to determine. When- 

 ever conditions come in which supply and demand are evenly balanced, a 

 new 'normal' will be established as a basis upon which the future can be 

 reckoned. In the meantime disturbances and fluctuations in the market 

 can be expected. There are many optimists over there who are looking for 

 some improvement in conditions commencing in October with good pros- 

 pects for next year. I feel inclined to accept this view. Much depends 

 upon the attitude of the American shippers. If they adopt the wiser 

 course of withholding consignments, of quoting prices only upon direct 

 inquiry and not attempting to force the market, it will help conditions 

 wonderfully. 



"Every disease creates its own toxin, and there is not wanting evidence 

 that in Europe the toxins are beginning to stop the inroads of the disease. 

 The remedy is work, and whenever Europe gets back to work, there will be 

 a great denuind for American lumber which will insure a steady market at 

 remunerative prices for a period of years. If American shippers could 

 only adopt the 'watchful waiting' attitude, watch for the development of 

 these conditions and make their plans to take care of these requirements 

 when they come, but not to anticipate by shipping in advance of rtemanS, 

 the rewards will be certain. 



"I per.sonally visited only the principal United Kingdom markets, but I 

 learned from lumbermen who had been to the Continent, that conditions 

 there were much the same as in Great Britain. Whatever difference exists 

 is in degree rather than in fundamentals." 



New Embargo Regulations 



"New regulations governing the handling of embargoes will become 

 operative at once, and these rules provide that embargoes will not be 

 authorized to prevent the acceptance of freight unless necessary and 

 unless bona fide reasons are given." 



The foregoing announcement was made today by J. II. Towusbend, 

 secretary-manager of the Southern Hardwood Traffic Association, wlio 

 added that the association "has had many complaints from shippers, who 

 claim that embargoes were improperly obtained by their customers to 

 prevent acceptance of freight." 



It will be recalled that Mr. Townshend, in a recent address before the 

 Lumbermen's Club of Memphis, pointed out that embargoes against ship- 



ments to Detroit provided that the consignee must secure the permit, and 

 that this situation left the seller of lumber to Detroit customers prac- 

 tically at the mercy of the latter. He suggested that this situation needed 

 correction, and it is apparent, from the announcement already made, 

 that it has received attention at the hands of the Interstate Commerce 

 Commission to such extent that all embargoes must be established only 

 where adequate reasons are given, and that they cannot be used to avoid 

 receipt of freight. 



East Still Buying Lightly in West 



Heavy cargo buying slightly increased the amount of new business 

 received by 121 mills reporting to the West Coast Lumbermen's Associa- 

 tion for the week ending October 9, although the new business for rail 

 shipment showed a falling off of lOS cars as compared with the week 

 previous. 



Orders for water shipment amounted to 42 per cent of the total new 

 business accepted. Purchases from railroad companies amounted to 

 approximately 32 per cent of the rail business. 



Business coming from competitive eastern territory continued light. 



Production at 1:21 mills was 70,236,673, or 17.44 per cent below normal. 



Shipments amounted to 66,026,967 teet of which the local trade took 

 3,756,759 feet ; domestic cargo, 15,706.725 feet ; export cargo, 5,853,483 

 feet. 



The unshipped iialance in the rail trade is 5,125 cars. Domestic cargo, 

 94.767,744 feet and export, 36,482,567 teet. 



Membership Growth Breaks Record 



The Executive roniniittec of the National llardwooil Lumber Associa- 

 tion lield its regular fall meeting in Chicago September 23 and made its 

 usual official review of the course and conditions of the association's 

 affairs for the first quarter of the present fiscal year besides taking up 

 and disposing of considerable occurrent business. The secretary-treasurer's 

 quarterly report to the committee was the most favorable that has ever 

 been presented for the corresponding time in the liistory of the associa- 

 tion, especially so on the score of the organization's growth. This showed 

 that since the twenty-third convention, 95 new applications for member- 

 ship had been received (all of which the committee voted to accept), as 

 against 65 voted in at the end of the same period a year ago, and with 

 a total loss from all causes of only 19 per cent, while for the first four 

 months of last year this offset reached 30 per cent. 



The finances of the association were shown to be fully keeping pace with 

 its physical growth, and as being on a very satisfactory footing throughout. 



Inspection Cannot Be Imposed 



The following is an extract from the National Hardwood Lumber Asso- 

 ciation's inspection service regulations, which are printed in full on pages 

 3S to 42 of the Official Handbook : 



"It should be thoroughly understood by each member that this associa- 

 tion possesses no authority to impose its inspection in any of the markets, 

 except through the mutual agreements of parties at interest ; therefore, 

 unless it is explicitly stated in the contract of sale or purchase, that the 

 lumber concerned in the transaction is subject to National inspection, such 

 inspection cannot be insisted upon by either buyer or seller, and can only 

 be made available by the mutual consent of both parties after a dispute 

 has arisen." 



Occasional complaints from shippers that dealers in large markets 

 ordered National inspection without consulting them prompted action 

 by the board of directors of the association to prevent sucli practices as 

 shown by the matter above quoted. It is here desired to call the attention 

 of shippers to the tact that the rule in question works both ways, and 

 that shippers oi'dering National inspection at loading points cannot insist 

 upon acceptation of shipment on that basis or enforce payment accordingly, 

 unless agreement to that effect is included in their contract. 



Evansville Lumber Club Meets 



The regular monthly meeting of the Evansville Lumbermen's Club was 

 held at the New Vendome hotel at' Evansville. Ind., on Tuesday evening. 

 October 12, and there was a good attendance. William Partington, secre- 

 tai'y and treasurer of the club, reported that all bills for the last summer 

 outing of the club, which was held in June on the steamer Crescent on 

 the Ohio river, had been paid and there is now a nice balance on hand. 

 Mr. Partington said that the entertainment committee, of which Elmer D. 

 Luhring of the Luhring Lumber Company is the chairman, will soon start 

 laying plans for the next summer outing of the club. Charles A. Wolflin 

 of the Wolflin West Side Lumber Company, chairman of the membership 

 committee, reported he had his lines out for several new members of the 

 I'lub and he will make a report at tae next meeting of the club, which will 

 he held on Tuesday evening, November 9. Secretary Partington reported 

 that the Indiana log shippers have combined to keep down the log rates 

 and the matter is now in tlie hands of the Indian Public Service Com- 

 mission. Mr. Partington, who attended a recent meeting of the commis- 

 sion, said that an increase in log rates of 10 per cent will be authorized 

 by the commission. Mr. Partington further stated that the federal gov- 

 ernment is seriously questioning the right of the various states to regulate 

 the railroads and that the state of Illinois is making a test case of this 

 matter that will be watched with keen interest by lumbermen and shippers 

 everywhere. Elmer D. Luhring bought the cigars "for the club members 

 who attended the last meeting in honor of a little daughter that arrived 

 at his home several weeks ago. It was a happy occasion for Mr. Luhring, 



