Fi nm iiMininiiiii 



i ni iii M i M ii i ii i i i i i iiiii ii i i iii ii i i i i iii iin i uiii iii i iii i i i ii ii iiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiiii iiiiiiiiiiiiii ii ii i i i i ii i iiiii ii i ii ii r 



Copyright, The HARnwoon CoMpA^y, ]9ji 



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

 537 So. Dearborn St., CHICAGO 

 Telephone : Harrison -8087 



iiiiiiiiiiiii iiMiiiiiiii iiiiHiiimiiiiiiiinm 



ii'iiiiiiiiiiniiiiiiiimiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiminiiiiniiiniiiiiiiiiMiiniiMUiiiinmi'illiMniMlliiili'llillilHllim 



CHICAGO, APRIL 10, 1921 No. 12 



Vol. L 



1 T W IJ -^ t C 



Review and Outlook ^--V aJ 



U/vKutSM 



General Market Conditions 



IT IS HAED TO CONVINCE A MAN whose outgo is less than his 

 income, i. e., cost of production exceeds the selling price for what 

 goods he moves, that business is showing any improvement. Indeed, 

 it probably is not well to attempt such an argument, for it can 

 hardly yet be said that what change has appeared is sufficiently con- 

 crete to be classed as an improvement. Eather it might best be 

 stated as a promise of better business, for its first effect will be 

 stability, after which a firming up in prices and a new status in 

 general will follow. An analysis of the market is especially difficult 

 today, because of the great inconsistency in the experiences of 

 individuals and firms. A man's version of the swing of affairs is 

 tempered by his financial condition. Thus, while he may actually 

 have received an increase in orders, with a decline in price conces- 

 sions to his customers, if he is up against it financially it is difficult 

 for him to glean a fair measure of optimistic thought, even from the 

 improved appearance of his order books. Similarly, a man who is 

 well entrenched financially will possibly get a disproportionate 

 amount of hope from an even less noticeable change for the better 

 for his orders. Striking an average, by thus allowing for extreme 

 cases, there is reason to believe that the discernible increase in busi- 

 ness has been sufficient to check the utter demoralization in prices, 

 which has, of course, not been cheeked completely, for distress 

 stocks have continued to come into the market. But in the main 

 buyers have evidenced a slowly developing conviction that hardwood 

 lumber can safely be bought in reasonable quantities and are recov- 

 ering in a conservative but noticeable way. 



It is not safe to arbitrarily argue that prices can not go any lower, 

 because they are now showing less than cost of production. Two 

 months ago it was believed that the low market had been reached, 

 and yet the progress downward has been consistent since then. Still 

 there is more reason to believ.e that the extreme low limits have 

 been sounded than existed prior to now. 



While quite a number of companies may have so far weathered 

 conditions, others are finding the continued strain almost unbear- 

 able, while some others were compelled to cut up logs to prevent 

 their total loss and are anxious to sell rather than to strike out for 

 new buying channels. The fact remains that almost the entire cur- 

 rent production of hardwoods is forced entirely by an accumulation 

 of logs and that the operations depending upon this source will not 

 last for more than a few weeks at the most. One fact must be given 



definite credit, that is, the extreme and growing scarcity of upper 

 grades. This was indicated first by the unreasonable spread be- 

 tween FAS and common; secondly, by actual figures of mill stocks. 

 Many lists which show well over a million feet of oak will show 

 less than a carload of dry FAS, nor is there any expectation that 

 this percentage will be increased during the current year as the 

 logs that are now being manufactured have deteriorated to a great 

 extent because of their exposure, and the percentage of upper 

 grades they will produce must without question be extremely low. 

 Any buyer who has the opportunity of accumulating FAS lumber 

 either for present of future needs can show his wisdom no better 

 than to place his orders now. Nor must the influence of this upper 

 grade situation on the succeeding grades be overlooked. 



The present condition of upper grades has an immediate potential 

 effect of great importance on common and a lesser degree, as one 

 goes down the list, on the other grades. The fact is there is a basis 

 for serious consideration as to whether or not No. 1 common at 

 present is a better buy, considering the great disparity in prices 

 and the close similarity in their utility. As supporting this thought 

 is the fact that one of the great lines of industry, which ordinarily 

 consumes large quantities of this lumber, is now showing definite 

 signs of improvement, and the pressure for further expansion is so 

 tremendous that resistance can not long hold. We refer to the 

 building business, which, according to March figures, is showing up 

 in better shape in most sections. In fact, labor now seems to be 

 the principal obstacle in the way of development, as producers of 

 building material other than lumber have evidently seen the light, 

 or have been compelled by common opinion to reduce their selling 

 price. Labor is holding out steadfastly in most important centers, 

 but it is quite likely that the man who really wants to build can 

 materially reduce his labor cost by judicious handling of that item 

 of the work. 



However, that man is in the best position whose avenue of sales 

 carries him into a varied line of industries, as at present there is 

 considerable inconsistency in conditions in the various stable lines. 

 At present a slightly better tone is noticeable in building products 

 and automobiles, and possibly to a lesser extent in furniture, 

 whereas manufactories of farm equipment are practically at a stand- 

 still. The farmer's general use of modern farming appliances is 

 of such recent beginning that he still remembers how he produced 

 successfully without many of the conveniences now widely consid- 

 ered essential. Thus he is falling back upon his former experiences 



