14 



HARDWOOD RECORD 



December 25, 1920 



everyone now is when will this turn come about, and how far will it 

 carry when it does come. 



The hardwood industry is therefore entirely dependent, just as is 

 every other industry, upon what the public will do within the next few 

 months. It ia unnecessary to say that the public will not show much 

 interest in purchases unless a distinctly new level of permanent values 

 is apparent. Nor must it be forgotten that the present depression 

 has seriously militated against the buying power of the public through 

 decreases or entire interruption of wages. In general, though, money 

 is still here and this loss of purchasing power can have the efEcect only 

 of making a return to normal more gradual. 



In short. Hardwood Eecord firmly believes that a new level of 

 values frankly displayed to the public would soon cause renewal of 

 buying, even though this renewal may be gradual. There is every 

 reason to believe that manufacturers can produce in general more 

 cheaply than formerly. Labor efiaciency has increased fuUy fifty per 

 cent and wages are concurrently decreasing. It is quite obvious that 

 at present prices many commodities are sold at less than cost so that 

 today the manufacturers' problem is to produce for still less. To do 

 that he must have a still lower labor cost and he is rapidly working 

 to accomplish that end. 



Hardwood Eecord believes that the present depression is too far- 

 reaching and deeply rooted to be overcome in a short time. Still we 

 are surrounded with the essentials of prosperity, with big crops, with 

 lessening production costs, with strong underlying necessity for many 

 articles of public demand, and with a gradual easing in the money 

 situation. At the same time we have greatly curtailed production in 

 all commodities. This means that the market wUl be much more elastic 

 and will rebound much more quickly when the turn begins. It will 

 not be unwieldly through over-accumulations or large stocks of any- 

 thing. 



Because when the new manufactured products come into the market 

 in the early spring months they will unquestionably mark a much lower 

 level of prices and distinctly stabilize values, Hardwood Record be- 

 lieves that their appearance will signal a very gradually awakened 

 interest on the part of the public. Hardwood Record believes that 

 this awakened interest will thus continue gradually in the beginning 

 until some inroad into stocks has been made, and that by the early 

 spring these developments will have reached a point almost of expan- 

 sion. This period then will find short stocks of raw materials with 

 resulting upward tendency of prices as scarcity develops. In hard- 

 wood lumber in the upper grades this scarcity is even now apparent 

 and with practically ninety per cent of production cut off by January 

 1, it will become more marked, especially as many of the logs going in 

 this winter have been in the woods so long as to be seriously dete- 

 riorated. 



This increase in the level of values may have the double effect 

 of stimulating production, and possibly of creating a further re- 

 action if it reflects in higher selling prices to the public. The 

 result would naturally follow that a second depression period would 

 be introduced. This, though, would be but slight as compared to 

 the present, and really would not show so much evidence of de- 

 pression as of effort to stabilize. In other words, the pendulum 

 would be checked quickly just as it might begin its upward swing. 



Following this might be anticipated the gradual return to more 

 permanent normal progress which would introduce the period of 

 four or five years healthy prosperity which has been so confidently 

 predicted by so many men in eminently important positions. 



Hardwood Eecord believes hardwood lumber is today good prop- 

 erty if it is held. That is to say, it does not increase sales, in fact 

 it still further holds up buying to endeavor to force merchandise 

 at less than cost. At the same time no one should expect to 

 realize full values on accumulations of old, high-priced stuff. People 

 in that unfortunate position may as well take their loss and figure 

 their future on the basis of greater efficiency in production and 

 less cost of operation. 



Manufacturer's Inventory 



THEEE HAS BEEN a great deal of misunderstanding as to the 

 interpretation put upon inventory regulations by the Internal 

 Eeveniie Bureau. 



As a general proposition, it is quite universally understood that 

 the regulations authorizing inventory to be taken at cost or market, 

 whichever is lower, means that if the market is lower than cost, 

 inventories may be taken at market, but this with the interpreta- 

 tion of "market" as we generally understand that word, to-wit: 

 What an article can be bought for in the open market. However, 

 the manufacturer's market, as defined by the Eevenue Bureau is 

 not the replacement cost, as generally understood, but the cost to 

 manufacture the article. In other words, mill lumber stocks to be 

 inventoried must be taken at the cost of manufacturing, rather 

 than the price at which the lumber could be sold, which would be 

 the "market" as we generally understand that phrase. 



A hearing was had Tuesday of last week before the Committee 

 of Appeals and Review to correct this situation. At this hearing 

 it was shown that the stocks in the yards of many manufacturers 

 cost from five to fifteen dollars in excess of what certain items could 

 be sold for. To make such manufacturers pay an income tax upon 

 the cost of manufacturing these items would simply mean that such 

 a taxpayer would be paying taxes upon losses rather than income. 

 An early decision by the Committee of Appeals and Eeview is 

 expected, and in the interest of equity it is to be hoped that the 

 decision will correct a manifest injustice. 



Choose Your Timberland Policy 



TT IS GENERALLY CONSIDEEED as inevitable that the Sixty- 

 1 seventh Congress will enact legislation establishing a national 

 policy of conservation and reproduction of the forest resources of 

 the country, and this being the case it is of vital necessity that the 

 owners of timberland and manufacturers of wood products, who 

 will be more directly affected than any other group of citizens, 

 should be thoroughly informed as to the provisions of the two 

 plans now before the federal legislative body. Timberland owners 

 and woodworkers must know which plan best serves their own 

 interests, in order that they may back that plan and protect them- 

 selves. It is ia this connection that Hardwood Eecord directs 

 their attention to the paper on "Proposed National Timberland 

 Policies," carried in other columns of this publication. 



Table of 



REVIEW AND OUTLOOK: 



General Market Conditions 13-14 



Manufacturers* Inventory 14 



Choose Your Timberland Policy 14 



SPECIAL ARTICLES: 



Why There May Be a Hardwood Lumber Famine 15 



Proposed National Timberland Policies 16-17 & 24 & 26-27 



Lumbermen Seek Fair Inventory Basis 18 



Engineering in Furniture Factories 19-20 



POWER LOGGING AND LUMBER HANDLING: 



"Advantages and Disadvantages of Tractor Logging 22 



NEWS FROM THE NATIONAL CAPITAL: 



Miscellaneous 28-29 



CLUBS AND ASSOCIATIONS: 



Veneer Will Be Nationally Advertised 31-32 & 36 & 44-45 



National Hardwood Lumber Association Holds Next Annual in Phila- 

 delphia 29 



Younger Element Takes Lead in Memphis Club 29 



Contents 



HARDWOOD NEWS 48-S3 



HARDWOOD MARKET 53-57 



CLASSIFIED ADVERTISEMENTS 58-60 



ADVERTISERS' DIRECTORY 63 



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