Copyright, The Hardwood Company, 1930 



Published in the Interest of the American Hardwood Forests, the Products thereof, and Loggingr, Saw 

 Mill and Woodworking Machinery, on the 10th and 25th of each Month, by 



THE HARDWOOD COMPANY 



Edwin W. Meeker, Vice Pres. and Editor 

 H. F. Ake, Secretary-Treasurer 



Seventh Floor Ellsworth Building 

 53 7 So. Dearborn St., CHICAGO 

 Telephone : Harrison -8087 



Vol. L 



CHICAGO, DECEMBER 25, 1920 



NEW YORL. 

 BOTANICAL 



No. 5 



Review and Outlook 



General Market Conditions 



IT IS THE OBLIGATION of the pliophet to search the past that 

 he may the more clearly see what lies ahead. That sentence should 

 not be taken literally, for have not fools and prophets long been 

 linked together in the minds of wise men Tliat man who so sets 

 liimself up reveals by the very audacity of his claim that he is not 

 sufficiently endowed mentally to speak words that are worth while. 



It is, though, possible for all of us to draw conclusions from circum- 

 stances that have gone into history and those that are now in the 

 making. Often such conclusions can be of substantial value, but never 

 before has it been so difiicult to untangle the threads leading to the 

 "\ itals of industry and commerce and rearrange them in orderly fashion 

 .so that they all point to a common conclusion. 



Few words will describe what happened during the past year. 

 Markets on all commodities were still showing an upward curve for 

 the first two or three months when a tendency to assume a horizontal 

 position manifested itself. The public mind had long been seething 

 under the irritation of excessive prices. It suddenly boiled over. Buy- 

 ing stopped abruptly, and the line of commodity values instead of 

 showing a graduated decline immediately assumed an almost perpen- 

 dicular position with the arrow pointing downward. 



In short, since May, values have fallen like a plummet. This sud- 

 den reversal has been ascribed to different causes, many people endeav- 

 oring to fix the blame on artificial action. The press has been roundly 

 scored for its propaganda against buying at exorbitant prices; the 

 Federal Beserve board has come in for equal censure for its restriction 

 of credits; the government through its agitation against high prices 

 and its counsel to buy less has been loaded with blame. 

 ' These, though, while at the time they appeared as primary causes 

 were but irritants. A vast aufl overwhelming public conviction that 

 the time had come for the bursting of the bubble was the one thing 

 responsible. Other causes have long ceased to be fundamental. In fact, 

 i'' the Federal Reserve board felt, as it probably did in the beginning, 

 that through its functions it could control the passage of industry and 

 conunerce through the liquidation peripd, it must long since have real- 

 ized that the situation had gotten entirely out of hand. No arbitrary 

 or regulatory action is now suflieiently powerful to make much im- 

 ]>ression. Liquidations must be completed along natural lines and the 

 future of business is dependent strictly upon fundamentals. 



What then does the future hold? Industrial depression came upon 

 us with a largely unfilled demand for many things. The potential 



demand for buildings, for instance, is just as great now as it was at 

 the beginning of 1920. The demand for many other things, some 

 necessities and some luxuries, is just as potentially great. The ability 

 and the inclination to buy have merely been interrupted. 



An astonishing and altogether encouraging spectacle during the 

 progress of the breaking market has been the consistency with which 

 industrial houses have stood the strain. ' Tremendous latent strength 

 has been revealed, apparently sufficient to weather the storm for some 

 months ahead. Thus the bulk of production has been able to govern 

 its activities according to the exigencies existant. Since it became 

 evident that the depression was real and lasting, a closing down policy 

 has become general. Some stocks have, it is true, been forced on the 

 market, but in lumber especially the forcing process has not been gen- 

 eral unless it might be in yellow pine. 



Just how far this curtailment of production has gone has never 

 before been clearly revealed. Hardwood Record is delighted to be able 

 to present as a special feature of this issue an accurate survey of 

 just what has happened in the curtailment of hardwood production, 

 and just what will have happened by January 1. These conclusions 

 are not drawn by inference but from actual fact. The net of the 

 whole matter is that by January 1 but thirteen per cent of the entire 

 potential hardwood production of the South, including the mountain 

 regions as well as the Mississippi section, will be in operation, and but 

 fourteen per cent of the hardwood production in the lake states region. 

 Thus taking the hardwood territory as a whole, exclusive of New Eng- 

 land, there will be in operation by January 1 but thirteen and a 

 quarter per cent of the entire potential hardwood producing capacity. 



This, of course, has no direct bearing on the present. Realization 

 of these facts must of course in time bring about a better understand- 

 ing of what may result from undue delay in placing hardwood orders, 

 and may stimulate a certain measure of buying. Their chief value, 

 though, lies in the evidence they give as to the future. 



Hardwood Record has distinctly maintained for some time that 

 hardwood lumber will be strong property the minute values are stabil- 

 ized, and values will be stabilized just as soon as the first evidence of 

 renewed interest in buying comes to the front. 



Renewal of hardwood lumber buying has alwa3's been dependent 

 upon two groups of factors, namely, those confined exclusively to 

 the industry and those general factors which are more basic in their 

 character. It being conceded, apparently by acclaim, that a turn back 

 to more favorable conditions is imminent, the one thing that interests 



