2a 



HARDWOOD RECORD 



March ^5, 1010 



Report of Committee on Terms of Sale and Trade Ethics 

 K. S. rmlorliill '» ri']>ort for tin- i-i>iiiiiiitt<'<' mi ti-riiiH of milo 



anil trade ethics wna retfardeil im tiiio of tlio iiioxt intoroKtiiig of 



the oonveution. It follow*, in part: 



•I'll,. I.I-.,,. ..I.,,, I.,. I 1 ....,r..l II ,..l 1.. ...ir Illlloil hllVl. 



|iri>t' ' TK, ]i8 ihi* 



Icriii- i, , 1 ' ^. iM-r cent 



(llncoiiDt tltteou ilnyii trtini Umt* o( Invoice, nr Ht&ly i1u>k' itiiti'. 



Your cuiiinilltiH' has hnU tioforr It for nuiiililrrntliiii thiK miilti>r nf 

 tcrrnn of Mtli- n nuiiibi'r of timra ilurlni: thi' iNint two .vi-iirx, anil yvt 

 11 has not ffll ralliHl upon to make any rccoiniiiruilRtloD to the niomhor- 

 slilp unir ami wc ilo rarni'!it1\ I fur ymir ronsMi-rii- 



lliiii and V ;,. iilat» II with all ii, ilili', thiil thi> TiTiiis 



' ^ ■'-■)■ . ;,,, ,,,„., of Sale, that Ik In - . . riiih of Suii' arc to lie 



' as II part nf lhi> contrart iiiiil that thi\v Nhoiilil apply with 

 . • . value ODi] luiportunri- to the tmiisaetloii, as ilo the (juestlmis 



of the prico, the count anU the quality. 



There arc iMUnc other prolilema that are probably of Interest to you as 

 wholesale lumber merchantx, and It would probably be well to discuss 

 them ot thU (rathering of the aasoclatlon. One of these problems Is the 

 terms under which you buy. and your ooinmltteo recoinnionds a dlscus- 

 nloD as to the advisability of the adoptlnn at this time of T<-rnis of Sale 

 as between the wholesale dealer and the manufacturer, for In this con- 

 nection it Is probably well to remind you at llrst of a fact that you must 

 reiHjRoUc and the man who sells you his lumber realizes, namely, that 

 when a manufacturer sells a car of lumber to you as a wholesaler, you 

 know and he realizes, that after that lumber Is put In transit. In a very 

 abort time It passes out of your actual possession — It has been loaded 

 out and consigned to you and you have received an Invoice for It, and 

 you In turn have Issued an Invoice to your customer for this same mate- 

 rial and Issueil orders to the railroad company to deliver the material 

 to another party, so that while the "Account" due you by y<iur customer 

 may be an asset for a Rrcater or less perloil. d< pending upon what you do 

 with that account, the "material" Is uo ionger one of your assets. Fur- 

 thermore, the manufacturer knows and you realize, In the majority of 

 cases, be has entered Into a transaction with you as a wholesaler, making 

 you a price on his goods with that in view and also because he expects. 

 In consideration of the price he has made, to be paid and to be paid in 

 cash with promptness. In accordance with whatever special terms may be 

 agreed upon. There are some manufacturers that have their capital tied 

 up In their timbers and mill proposition In sucli a manner that it is 

 necessary for them In making their sales to deal reall.v exclusively with 

 you as wholesalers, because you are In a sense financiers and are either 

 willing or able to do wliat few retailers are able or willing to do; namely, 

 in consideration of the low price made you by the manufacturer for his 

 product In order that he may turn It luickly Into funds, to make SO 

 per cent cash payment on receipt of the involie and B /!>. Of course, it 

 Is well known to us that there are manufacturers who are not under this 

 necessity, and who would not require it, but who for years have been 

 selling to you and will gladly continue to sell to .vou on tJbe basis of 

 2 per cent cash twenty or tblrt)- days cash on the net amount ot the 

 Invoice. 



As representing the association In the matter of trade ethics, we com- 

 mend again to the members the Code ot Ethics adopted by the Lumber 

 Trade Congress. While It does not include all matters of ethics, it does 

 embrace those most important In the matter of dealings between lum- 

 bexmcn. 



The Lumber Trades Congress was born after a period memorable in 

 the lumber trade. There has been a period of great prosperity and 

 values increased rapidly, followed by a reversol, and they declined rapidly, 

 and during those periods two evils, or rather two phases of the same 

 evil, created much concern in the minds of right thinking men ; namely, 

 that when the prices reached their summit some shippers failed to de- 

 liver goods bought before the rise, then when the reverse came many 

 dealers, when they found they could buy lumber at much lower prices, 

 either cancele<l their orders or refused to receive the goods that were 

 shipped, unless the price was reduced. Both phases were dishonorable 

 and the Lumber Trades Congress, composed ot representative manufac- 

 turers, wholesalers, and retailers, put the stamp of disapproval upon 

 such practices. The seller should stand by a bona fide sale, no matter 

 how the prices advanced, and a buyer sliould stand by a bona fide pur- 

 chase, no matter how the price declined. .\ny other view is a violation 

 ot the ethics ot the lumber trade. 



WEDNESDAY AFTERNOON SESSION 



The session opcued with a discussion of the need of reclassi- 

 fication of lumber, by Charles Hill of New York, who pointed 

 out that the freight cost on lumber is equal to at least one-third 

 the f. o. b. mill price. This forcibly demonstrates the necessity 

 for an equitable classification of freight rates so that the raw 

 material shall not be considered in the same class with regard to 

 the fixing of rates as the finished product. There is now before 

 the Interstate Conunerce Commission, Mr. Hill said, a proposi- 

 tion that we shall have a proper classification of lumber and 

 lumber products and he argued for a united front by lumber- 



men to [.roperly NiifcKunnl llie interests of whole industry in this 

 ini|iortaiit qui'stion. 



Mr. Hill inovi'd that n coiiiinittec be appointed to take up with 

 tlio members of the nasoi'iiition tlie question of eontributiD); 

 funds to lliis end n.s individuiilH and niunufacturcrs. 



On the subject of Trndo Kxtension and Utilization of Lumber, 

 K. S. Kellogg of the .Natioiml Lumber Manufacturers' Associa- 

 tion preilicted that the marketing of wood products would be 

 revoliitioni>^ed by the use of advertising. Through advertising, 

 Mr. Kellogg said, there was introitticed the advantage of bring- 

 ing the dealers' goods to the door of the juirchaser with the 

 honesty and efliciency which that method of salesmanship pro- 

 motes. 



At this point in the proceedings the consideration of com- 

 mittee reports was resumed, the first being that of the flrc 

 insurance committee, iiresciited by R. R, (iriswold, chairman. 

 In this report there was pointed out forcibly the necesHity of a 

 ilistinctive insurance company — a close family affair — catering to 

 the members of the association and meeting their requirements. 

 Mr. Griswold presented figures showing the extent of the insurance 

 business as related to the lumber industry to demonstrate the 

 vital need of a company such as he described. Of the various 

 methods under which such a company could operate Mr. Griswold 

 reiommended an inter-insurance organization, operating under a 

 Lloyd "s charter. This would require an initial expenditure of 

 .$1.5,000 to $20,000 and the organization could begin business with- 

 out delay. 



The plan of inter-insurers, Mr. Griswold reported as the result 

 of the investigations of the committee, is the ideal plan for fire 

 insurance. Through this medium the lowest cost of insurance 

 sliould he realized, the cost of conducting business should be at a 

 minimum while the fire risk is reduced to a minimum because of 

 the moral and financial standing of the subscribers. 



Mr. Griswold put into the form of a motion the recommenda- 

 tion of the committee that the incoming fire insurance committee 

 be entrusted with the task of proceeding to put such an insur- 

 ance organization into effect with power to act for the associa- 

 tion subject to the approval of the board of trustees. The motion 

 was seconded by F. R. Babcoek who made a plea for loyal support 

 of the proposed organization. The motion was carried without 

 a dissenting voti-. 



Workmen's Compensation 



The report of the workmen's compensation committee, presented 

 by B. F. Jackson, the development of the workmen's compensation 

 idea in the various states was reviewed and it was reported that 

 the laws adopted by several states are coming more and more into 

 agreement through amendments and additions. The committee 

 recommended that all lumlicrmen line uji their forces and so far 

 as possible influence legislation along broad lines which would be 

 absolutely fair to both employer and emplo.ve and so far as prac- 

 ticable have uniform laws throughout the different states. Mr. 

 .Tackson said: 



The underlying principle of workmen's compensation Is that Industry 

 should bear the burden of Its accidents, and the cost of them should be 

 added to the selling price of Its products nnd be distributed among the 

 consumers; that the loss occasioned by accidents Is as mucli a part ot the 

 cost ot the article In the production ot which the workman was engaged 

 at the time ot the accident and Injury as Is the loss occasioned by the 

 destruction of material, the breaking, the wearing out, and replacing ot 

 tools and machinery. Several ot the states have combined in the Indus- 

 trial board both the compensation and Inspection powers, thus ver.y 

 materially reducing the cost of administration as well as more cdlclently 

 putting into effect the intent of the law. It Is very evident to me that 

 the time has come when employers of labor must give this matter more 

 earnest and thoughtful consideration and If possible combat the socialistic 

 inlluences which have been so apparent In framing laws ot this char- 

 acter. 



The probability of agreement upon a single standard of hard- 

 wood inspection in the near future was reported by Hugh McLean 

 as chairman of the hardwood inspection committee, Mr, McLean 

 said there had been a steady improvement in this direction and 

 that the field was well covered by the two associations which are 

 working in harmony with each other toward the adoption of a 



