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Cofyright, The Hardwood Company, 1920 



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

 Miil 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 

 537 So. Dearborn St., CHICAGO 

 Telephone : Harrison -8087 



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Vol. L 



CHICAGO, OCTOBER 25, 1920 



No. 1 



Review and Outlook 



General Market Conditions 



So LITTLE CHANGE of definite character has occurred since 

 the last report that it was the intention of the editors of Hakd- 

 WOOD Eecord to confine their efforts this issue to a general dis- 

 cussion of probable market tendencies. At the moment the report 

 was being prepared, the Brookmire bulletin of October 18 was re- 

 ceived, which on its first page published a market policy statement so 

 patly expressing the ideas of Habdwood Record editors that it has 

 been concluded to reproduce this policy intact. It follows: 



' ' After seven consecutive months of wholesale price recessions 

 there are few who deny that liquidation is upon us with increasing 

 force. A decline of about 19 per cent from the peak has come about 

 in those seven months with most commodities exhibiting extreme 

 weakness and very few in anything but routine demand. 



' ' Since general recognition has at last been given to the fact of 

 liquidation, the questions now uppermost in the minds of business 

 men are: 



' ' 1 — The probable extent of the downward movement, and 



' ' 2 — The time when improved conditions may be expected. 



' ' The extent of the downward movement is wholly dependent on 

 the time when the attitude of the buying public will change. It was 

 this factor which was largely responsible for the radical rise in prices 

 in the past year. Heavy buying power created an unusually heavy 

 demand for goods irrespective of cost which led to the popular con- 

 ception that such an orgy would last indefinitely. Now, however, 

 there is a change in the attitude of the buying public, and cost has 

 again become the dominant factor to consumers. Falling markets 

 rarely steady themselves until after a protracted period of depression, 

 and our fundamental guides show no evidence of improved conditions 

 for six months or more. 



' ' There are very few items in our Buyers Guide which at this time 

 should be bought except for current needs, but some few items which 

 have liquidated so radically that buyers should pay careful attention 

 to their future movements. Of these, rubber, hides, coffee, sugar, jute 

 and burlap may be mentioned. Some items which develop seasonal 

 strength at this time of the year, such as dairy products and meats, 

 should be bought for a few months ahead at the least. The metals, 

 textiles, building materials, industrial chemicals, grains and oils seem 

 to us certain to reach lower levels, and forward buying in these lines 

 in heavy quantities should be avoided. 



"It was never more true than now that the only way that business 



can be done safely is to maintain as small stocks as possible of all 

 kinds of goods, whether in the raw or manufactured state, to hold the 

 largest amount of ready capital that can be accumulated; to increase 

 efficiency in production methods and selling organizations, while re- 

 ducing overhead expenses except where such reductions would wreck 

 efficient production forces. This procedure if well handled will enable 

 business to weather the storm and stress of the coming months when 

 the capacity of business men will be put to the severest strain it has 

 undergone for many years. 



' ' Some evidence exists that a measure of relief has come to the 

 banking situation in that the demands for money for crop movements 

 have not been nearly so heavy as were anticipated, largely perhaps 

 because of the small volume of such crops that have been moved so 

 far. Every week that passes now gives hope that the banking situa- 

 tion will continue to improve and that the period of greatest strain 

 has passed. The transportation situation has also shown an improve- 

 ment, both in the tonnage hauled and the increasing efficiency of rail- 

 road labor. The labor question generally is being solved by forces 

 which wiU not be denied. The fear of unemployment has tended to 

 eliminate strikes whUe increasing efficiency in production and the 

 willingness to accept somewhat lower wages on the part of industrial 

 workers is seen. These developments are . evidences of a gradually 

 returning sanity and an acceptance of the logic of hard facts, coupled 

 with the desire to meet the situation in a spirit of helpfulness and co- 

 operation which makes for mutual benefit." 



Buying policy for the present must be strictly conservative in ac- 

 cordance with the dictates of declining markets, while at the same time 

 preparation should be made to take advantage of the time when a new 

 era of prosperity will begin. 



The above statement clearly expresses the situation. We are still 

 in a period of expectancy, but there is developing certain though not 

 emphatic evidence that hardwood values will not go much lower than 

 at present. Behind the continued softening is a combination of cir- 

 cumstances including poor business among the consumers and an 

 antagonist-.e attitude among other important purchasers of hardwood 

 lumber. 



Seemingly, the country at large has accepted the theory that the 

 election will see the turning point towards stabilization leading to 

 renewed demand in the early spring. 



In its last issue Hardwood Record maintained that one of the most 

 obstinate clogs ia the readjustment movement is the retail element 



