16 



HARDWOOD RECORD 



October 25, 1920 



Soath^s Production Very Low 



Curtailment of hardwood lumber production is even more exten- 

 sive now than it was a fortnight ago. This applies not only to the 

 immediate Memphis territory but to the entire southern hardwood 

 field. Firms which announced, two weeks ago, that they would 

 run their plants normally have changed their minds and are joining 

 the procession of those who have declared in favor of curtailment. 

 It is conservatively estimated that production of southern hard- 

 woods, by the middle of November, will be something like 25 to 33 

 per cent of normal, and that, by the end of the current year, it will 

 be almost at a standstill unless there is a general revival of buying 

 such as is not now indicated. 



JJickey Brothers, Inc., have closed down their big rotary veneer 

 plant in East MemjJiis almost entirely, while they have likewise 

 laid off their entire night force at their hardwood mill here. They 

 said two weeks ago they were forced to continue operations, 

 regardless of market and other conditions, because of timber and 

 logging contracts, but they have since laid off more than 140 men. 

 The Green Eiver Lumber Company, affiliated with the Niekey inter- 

 ests, has closed down its band mill here for repairs, and it is esti- 

 mated that something like two months will be required t6 complete 

 these. George C. Brown & Company, Proctor, A.rk., and Lake Vil- 

 lage, Ark., have suspended logging operations and will close down 

 their plants as soon as logs now on hand have been converted into 

 lumber. The Lamb-Fish Lumber Company, Charleston, Miss., has 

 announced a similar policy. And so it goes. 



Lumber manufacturers are not closing down their activities in 

 the logging and producing line because they want to. They are 

 doing so because they are forced by circumstances, over which 

 they have no control, to take this course. There is almost complete 

 absence of demand, which means that the off-take is extremely 

 small. The small off-take, in turn, means that practically no money 

 is received from the sale of lumber with which to finance current 

 operations. Credit conditions are extremely tight still and, with 

 this situation, the problem of financing current operations is a 

 rather serious one. The average lumberman prefers to solve this 

 problem by shutting down his current activities and thus eliminat- 

 ing the need of raising the necessary funds. The lumberman who 

 said some days ago that ' ' there is necessarily a limit to the piling 

 up of hardwood lumber for which there is no demand ' ' spoke a lot 

 of wisdom in a very few words. This is one angle. 



Present Market Means Loss 



Another is found in the fact that, at present prices, lumber can- 

 not be jiroduced except at a loss. Labor is commanding almost as 

 high a price as at any time this year. Feed is a little cheaper, but 

 the logs on which mills are now working were purchased at higli 

 prices earlier in the summer or were cut and hauled to the right- 

 of-way of the railroads with men and teams that commanded prac- 

 tically top wages and that consumed feed that brought almost 

 record figures. Logs were brought out or purchased on the basis 

 of the high prices lumber itself commanded at the time, and the 

 whole trouble now lies in the fact that prices on hardwood lumber 

 have hit the toboggan so hard that there is little basis for com- 

 parison between prices prevailing now and those that were avail- 

 able even three or four months ago. Lumber manufacturers are, 

 in fact, from the standpoint of the cost of the unworked logs they 

 have on hand, very much in the position of the manufacturers of 

 furniture and other wood products who are carrying stocks of lum- 

 ber purchased before the decline made itself felt. Furniture manu- 

 facturers are not finding life very rosy at the moment. Neither 

 are manufacturers of hardwood lumber. 



Lumbermen have, in many instances, too, been called upon to 

 face a heavy lo.ss in another direction. The railroads have fur- 

 nished very indifferent log-car service during the past few months. 

 There are only one or two exceptions to this statement in the entire 



southern field. The Missouri Pacific officials announced in St. Louis 

 a few days ago, in a conference with representatives of the South- 

 ern Hardwood Traffic Association, that they had furnished but 11 

 per cent of the flat cars required for log loading on their lines. 

 Some of the other railroads have made equally poor showing. As 

 a result there are millions of feet of logs on the rights-of-way of 

 railroads in the southern field, including the west side lines, that 

 have suffered almost irreparable damage from insects and too-long 

 exposure to the weather. These logs were cut and hauled at heavy 

 expense and their loss, through depreciation, falls heavily on the 

 shoulders of those who were so unfortunate as to have been respon- 

 sible for their having been placed in process of removal from the 

 forests to the mills. Some firms here admit that they are not able 

 to make anything beyond relatively low-grade lumber from these 

 damaged logs, while some others admit that the timber is so badly 

 decaj'ed that it cannot be worked at all. One of the largest manu- 

 facturers of hardwood lumber in the South says he cannot make 

 anything but low-grade lumber out of their logs awaiting trans- 

 portation to its mills. 



Demand Practically Nil 



In the meantime, there is almost-no demand for hardwood lumber 

 from any source. Domestic consumers are pursuing their policy of 

 awaiting further developments and are buying only to cover their 

 more pressing requirements. They have been pursuing this course 

 with such regularity and uniformity that there are virtually no 

 exceptions. Furniture manufacturers, makers of automobiles, pro- 

 ducers of agricultural implements and manufacturers of other wood 

 products are all in the same boat. They are waiting for the market 

 to settle and they are likewise waiting, with even greater anxiety, 

 for "business as usual." They are suffering from lack of demand 

 for their products to a greater extent than for years and they are, 

 therefore, not in a frame of mind to take on normal holdings of 

 lumber from which to produce more goods for which there is such a 

 restricted market. Building operations all over the country are 

 relatively slow for this time of the year and this means that floor- 

 ing, interior trim and other finishing materials are little wanted. 

 Even rotary veneers are on the "idle" list. Furthermore, there is 

 nothing encouraging in the foreign situation for the immediate 

 future. The strike of more than 1,000,000 coal miners is actually 

 under way and the "red flag" is being waved in Downing street, 

 the seat 61 the British government. Exchange in England is declin- 

 ing again and the only favoring feature, so far as the export situa- 

 tion is concerned, is the inauguration of a rate war that means lower 

 ocean freight rates on lumber, cotton and other raw materials. But 

 this does not help now when the coal strike has plunged England 

 into financial and industrial depression of almost unprecedented 

 proportions. Exporters here admit that the existence of this strike 

 is extremely unfortunate and that it blocks the way for any consid- 

 erable movement of hardwood lumber and forest products from 

 America for the time being to the United Kingdom. Attention is 

 also called to the fact that England, which furnishes a large per- 

 centage of the coal requirements of some of the continental coun- 

 tries, has declared an embargo on coal exports. This means that 

 those countries dependent ou England for their coal supplies must 

 go without and this, in turn, means more or less idleness in continen- 

 tal {Industrial circles. Some of the Memphis exporters who recently 

 returned from England declared that prospects were bright for a 

 revival of industrial activity in the United Kingdom on the theory 

 that the coal strike would be averted. They expressed the view 

 that elimination of this disturbance would mark the turning point. 

 But the strike is on and all forecasts based on the probable settle- 

 ment of the threatened disturbance go for naught. The only hope 

 that is entertained here is that the strike will be settled before its 



