November 10. 1920 



HARDWOOD RECORD 



29 



The same conditions are reflected In the manufacturing of furniture, and 

 I do not look for much price reduction for furniture as long as dealers are 

 not placing orders with the factories. But when the latter can operate 

 on a basis of normal output costs will doubtless show the opportunity 

 for some reduction in selling values. 



To this Hardwood Record replied: 



It has lor the past couple of years been our impression that hanhvood 

 lumber values were maintained in an unstabilized condition very largely 

 because of the difficulty of getting the buyers' and sellers" minds together. 

 The history of the period when the great advances w-ere recorded would 

 probably indicate that in many cases lumbermen did not show just the 

 right spirit and now that prices are going in the opposite direction we 

 have heard of a similar tendency among the consuming factories, namely, 

 that buyers at large are deliberately and intentionally staying out of the 

 the market in order to even up the score. This tendency on both sides is 

 deplorable and really a detriment to both the industry producing and the 

 industry consuming hardwood lumlier. 



We sincerely believe that the end of the present period of qviiet business 

 will see a relatively insufficient amount of hardwood lumber, aud that if 

 all buyers stay completely tiut of the market t<j<lay. coming Itack into the 

 purchasing field simultaneously, the result will add another sweep 

 upwards to the see-saw price situation. 



We have an earnest conviction, which is not in any sense based on a 

 desire to play the lumberman's hand, that consumers would be benefited 

 and price stabilizing definitely helped, were the consuming element to 

 adopt a less severe policy regarding hardwood lumber buying. 



The present policy of refusing to purchase even that which in many 

 cases is necessary may have the effect of still further lowering prices. l)ut 

 it is bound eventually to react in the opposite direction. 



Even today many item.s of hardwood are selling below production cost, 

 and there is a widespread movement to shut down mills because of this 

 fact. The only way to reduce cost is for them to close down and start in 

 all over again on a reduced log cost and wage basis, and continuing present 

 prices w-iil undoubtedly shut off fully fifty per cent of southern produc- 

 tion in the very near future. This being the case then, the output neces- 

 sarily will be curtailed, thus adding to the apparent slight shortage, at 

 the time when business begins to look up. 



On the other hand, a fair amount of purchasing will encourage a gradual 

 stabilizing of values and cause a continuance of operations due to ability 

 to turn over the stock. This then might check the present decline, which 

 has reached a point beyond which it would not be safe for the lumberman 

 to go. but on the other hand would tend to check any extraordinary 

 tendency upwards following the present slump. 



Hardwood Record greatly appreciates your frank comments on this 

 theory, which with u.s has become an honest conviction. Would also 

 appreciate from you any information that you can give regarding the actual 

 conditions of the chair industry; as to business they are doing; cancella- 

 tions ; price tendency ; activities in the factories and stocks of raw mate 

 rial and finished articles on hand. — 'EDiTOit. 



Mr. Baker writes in a letter of later date: 



I am exceedingly interested in the comments made by you and endorse 

 the policies which you advocate. Conditions in the chair industry reflect- 

 ing those which prevails throughout the entire furniture fraternity are 

 similar to those which exist with lumber interests. No new business is 

 appearing and factories are rapidly exhausting their unfilled orders. Cer- 

 tain southern producers of furniture are making reductions on their staple 

 patterns, but as the buying public is not absorbing any of such goods. I 

 question whether any advantage will accrue to those southern manu- 

 facturers in their obvious effort to stimulate buying. Certainly their 

 margin of profit does not permit of any such reductions as they contem- 

 plate in their reduced selling values. 



Cancellations have about ceased to be a menace, largely because there 

 are no orders to be cancelled. The theory prevails with the majority of 

 the furniture manufacturers that until their distributors, the retailers, 

 have liquidated stocks on hand considerably no orders will be placed with 

 the manufacturers and values are being held intact on all lines which are 

 normally in demand by the public. 



The universal practice prevails of curtailing production so as to avoid 

 the accumulation of any stocks of finished goods, such curtailment taking 

 place through the elimination of unsatisfactory labor and the shortening 

 of working hours. 



The situation presents characteristics very similar to those of the early 

 months of 1919. and I anticipate that in the course of about ninety days 

 we will see increased buying energies and a consequent resumption of 

 operations by furniture factories, until gradually a normal basis of output 

 is reached. [Signed] Wm. B. B.iKER. 



Takes Exception to Editorial October 10 



Detroit, Mich.. October 14. — Editor II.\iu>wooD Record : I have read 

 with interest your "General Market Conditions" report on page 13 of the 

 issue of Hardwood Record of October 10. In the third paragraph you 

 state that the retailer Is now "clogging the wheels of business." You 

 further state in the fourth paragraph the following : 



The retailer who can today buy building lumber at from thirty to sixty 

 per cent off recent market price, and who may possibly have a slight 

 accumulation of high-grade stock, is frantically trying to clean up his old 

 stock at the high price, thereby not only continuing the period of inactive 



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