22 



HARDWOOD RECORD 



March 25, 1921 



No Relief from High Rates Promised 



There will be no immediate relief from the high freight rate on 

 hardwood lumber from southern and southwestern produtiug points 

 to consuming territory in the United States. 



This was disclosed at the conference held at the Hotel Gayoso in 

 Memphis Tuesday, March 15, between 200 members of the Southern 

 Hardwood TrafSo Association and officials representing the principal 

 lumber carrying roads in the South and Southwest. 



This conference was called by the former because of the belief that 

 present freight rates are responsible in large measure for the stagna- 

 tion in the movement of lumber. 



The lumbermen, m jjresenting their contentions, insisted that the 

 very life of the industry is at stake for the reason that the percentage 

 advance of last August Bad destroyed all rate relationships and had 

 made it impossible for southern producers to compete with manu- 

 facturers in other parts of the United States. They asked, first, that 

 rates on all grades be restored to the level prevailing prior to August 

 26, 1920, and, failing to secure any encouragement on that score, 

 proposed that the straight percentage increase be modified by an 

 advance ' ' in cents per hundred pounds. ' ' 



The railway executives listened attentively to the facts submitted 

 by the lumbermen and then countered with the statement that the 

 railroads are ' ' only a few jumps ahead of the sheriff, ' ' that they 

 are not earning fixed charges much less the 6 percent provided by 

 the Transportation Act, that the lumbermen are suffering just like 

 all business interests, that general depression rather than excessive 

 freight rates is responsible for the failure of lumber to move, and 

 that the raUway executives could not make reductions in existing 

 tariffs for the reason that the rate-making machinery is in Washington. 

 They indicated that, under no circumstances, would any rate reductions 

 be undertaken before there had been substantial decrease in the cost 

 of labor, fuel and supplies. They did not promise that there would be 

 any lowering in rates even then, though they intimated that just such 

 a development was contemplated when the transportation act was 

 passed by Congress. They did not believe that reductions in rates 

 would stimulate the movement of lumber and they pointed out that 

 such reductions would be disadvantageous to the railroads without 

 proving of assistance to the lumbermen. 



Rail Wage Cuts Urged 



The first act of the association was the adoption of resolutions 

 petitioning the President and Congress to take such action as would 

 bring about early abrogation of the National Agreements and as would 

 leave the railroads free to make individual contracts covering the pay 

 of their employes, and it pledged the support of this organization in 

 the effort to have all other hardwood lumber and woodworking 

 organizations take similar action at the earliest possible moment as 

 a means of enabling the railroads to solve the vital problem of present 

 labor costs. Railway executives characterized these resolutions as 

 ' ' striking at the very heart of the matter, high railway wages, ' ' and 

 each oiEcial bore a copy of the resolutions home with him, but appre- 

 ciation did not get beyond the "thank you" stage. 



The lumbermen presented their ease through S. M. Nickcy, president 

 of the association; James E. Stark, former president; J. H. Towns- 

 hend, secretary-manager; Walker L. Wellford, chairman of the rate 

 adjustment committee; Walter Williams, Chicago Mill and Lumber 

 Company; Kay Oleott, W. P. Brown and Sons Lumber Company; and 

 J. F. McSweyn, Memphis Band Mill Company. Their principal argu- 

 ments may be thus briefly summarized : 



That the straight percentage increase of last August had destroyed 

 all rate relationships built up over a long series of years, thus making 

 it impossible for Southern and Southwestern manufacturers to com- 

 pete with those closer to consuming territory. 



That Japanese oak and other hardwoods from that country are being 

 sent over to the Pacific coast in government-subsidized boats at rates 

 lower than from the South and Southwest. 



That Pacific coast manufacturers are shipping lumber via the 

 Panama Canal to New York, Philadelphia, Baltimore and other 

 Atlantic ports on lower rates than those enjoyed by Southern and 

 Southwestern producers. 



That large users of hardwood lumber in Northern and Western 

 consuming territory were securing their lumber from Canada, even 

 after payment of the duty thereon, and from nearby States at rates 

 nmch lower than those from the South and Southwest and that such 

 users had practically stopped buying from the latter regions. 

 Rates Will Close MiUs 



That there was such stagnation in the hardwood industry that, if 

 rates were not lowered and the movement stimulated, less than 10 

 percent of manufacturers in the South and Southwest would be in 

 operation in 90 days. 



That lower rates would result in decided stimulus to the movement 

 of lumber,' thus helping the lumbermen and providing larger revenues 

 for the railroads. 



That present excessive freight rates are causing manufacturers to 

 burn No. 3 common oak in their furnaces and that hundreds of thou- 

 sands of feet of small and defective timber are being left in the 

 woods becau.se it cannot be profitably worked under present trans- 

 portation costs. 



That large quantities of hardwood logs now lying along the rights 

 of way of the railroads are being left there to rot because it is im- 

 possible to pay freight on these to the mOls and convert them into 

 lumber that can be sold on a favorable basis. 



That fibre and corrugated containers are rapidly displacing contain- 

 ers made from low-grade Cottonwood, gum and other hardwoods, the 

 substitution in some instances reaching 100 percent and being heavy 

 in all directions. 



That hardwood lumber and pine should not be placed in the same 

 rate group for the reasons that manufacturing difficulties are greater 

 in the case of hardwoods, that the principal competition which hard- 

 woods encounter is that coming from other hardwoods moving on 

 shorter hauls, and that, whereas there is usually only one movement 

 of pine — that from milling point to retail yard at destination — hard- 

 wood lumber is converted into furniture, flooring and other products 

 and therefore furnishes two or three hauls, making it really a milling- 

 in-transit proposition. 



That the present straight percentage increase as applied to hard- 

 woods was made because the Interstate Commerce Commission did 

 not have time to do otherwise in the emergency which existed last 

 summer; that provision was made in Ex Parte 74 by the commission 

 for readjustments where it was found that distributive processes were 

 interfered with, and that the only readjustment which would enable 

 hardwoods to move normally to consuming markets was abrogation 

 of the advances made last August; and 



That the association had decided against asking for reduced rates 

 on the lower grades alone or for rates based on "released valuation" 

 for the reason that it had concluded that the hardwood industry should 

 have such rates as made marketing of the output as a whole, irre- 

 spective of grades, profitable. 



The Railroad Viewpoint 



Vice-President Bowes, of tlie Illinois Central, insisted that the lum- 

 bermen are going through the same troubles as all other business men, 

 that the position of the railroads and shippers would have been much 

 better if the general advance had been made months l?efore general 

 deflation beg.an, that seven months is too short a period in which to 

 determine whether the rate structure is too high, that a reduction of 

 25 percent in rates, as requested by the association, would not produce 

 the .'i.S per cent inci-ease in tonnage necessary to offset the lower tariffs, 

 and that his view would be to "take another look about July 1." 

 He declared that statements were made regarding timber being left in 

 (CoMinued on page 2i) 



