The Lumbermen s Round Table 



The Market Value of Lumber 



A hardwood man who had a lot of plain oak on his yard recently 

 said that he was holding it for a certain price, naming a figure 

 which was several dollars above the market at that time. 



"Surely you don't expect to be able to sell your lumber at a 

 premium of over ten per cent," a friend suggested. "If you are 

 going to do business, you must do it at the prevailing prices." 



"It cost me so much to make it," the manufacturer replied, 

 "that I can't afford to sell it for any less." 



"Yes," returned his friend, "but would it cost you that much 

 to replace it?" 



And the lumberman had to admit that it wouldn 't. 



This raises a rather interesting question as to market values. In 

 the first place, the distinction between market values and intrinsic 

 values should be closely drawn. Of course, the market value ought 

 to represent intrinsic value: that is, one should always be able to sell 

 his product at a price that represents cost of material and labor, 

 plus overhead, plus a profit. But it sometimes happens that this 

 can not be done. Is the attitude of the man quoted above, who 

 refused to sell unless he could get a price in line with intrinsic 

 values, logical, or was he vainly endeavoring to maintain an artificial 

 level of prices? 



Tlie cost of replacement seems to be the logical method of deter- 

 mining whether a given price is too low. If the lumberman can 

 go out and buy the stock at a figure low enough to enable him to 

 turn it over at a profit, the price would seem to be in line. In fact, 

 some lumbermen accept business of that kind, and handle it without 

 touching the higher-priced stock in their own yard, apparently 

 appeasing their business consciences without losing the trade. It 

 amounts to the same thing, however, and one would be justified in 

 shipping out lumber that cost less than the selling price, provided 

 it were possible to replace it at a sufficiently low price. 



There is an interesting analogy in the leather manufacturing 

 industry. The parallel is well drawn because there, as in lumber 

 manufacturing, it takes several months to convert the raw material 

 into the finished product. The tanner often buys high-priced hides, 

 and six months later, when he goes to sell the leather, finds that 

 the price of hides has dropped. He is forced to sell the leather 

 at a lower price, but makes up for it frequently when he puts in 

 low-priced hides and takes out leather that has become high-priced 

 by the advancing hide market. 



This happens in the ease of lumber. The market changes while 

 the stock is on sticks, and the lumberman must take the bitter 

 with the sweet, selling at the low price and taking the loss if the 

 market has gone against him, and taking advantage of the "un- 

 earned increment ' ' of higher prices if it has moved the other way. 

 There is no way to avoid this: the change is a condition and not 

 a theory, and it is up to the lumberman to make the best of it. 



The hardwood man, however, is sure to come out on top if he fol- 

 lows this plan constantly, because the general movement of values 

 is upward. 



The Value of a Veneer Stock 



Veneer manufacturers have often questioned the wisdom of carry- 

 ing big stocks, and have held that the business could be carried on to 

 the greatest advantage by cutting up the logs and flitches just as the 

 stock is needed. That may be true, as a general proposition ; yet 

 a certain large concern in the mahogany business, which has several 

 hundred thousand feet of veneers on hand, finds itself in a par- 

 ticularly enviable position at present, by reason of having a well 

 assorted stock of selected veneers, which can hardly be duplicated 

 elsewhere, in view of the prevailing shortage of mahogany logs. 

 There may be no moral in this, however; the concern may simply 

 be lucky enough to have hit the situation right. You don't have 

 a war like this every year, of course. 



Why Not Get Together? 



Lumbermen's clubs are numerous, both in the manufacturing 

 and consuming districts; and in recent years the furniture manu- 



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facturers and other users of hardwoods have been seeing the bene- 

 fits of getting together occasionally and exchanging ideas. The 

 lumber club has a solid foundation in the practical benefits growing 

 out of the trading which can naturally be indulged in, while the 

 consumer 's advantages are less direct, though they are there, just 

 the same. 



Now, while everybody realizes that it pays the members of each 

 trade to join hands, it is seldom that anybody suggests that the 

 lumbermen and the consumers meet each other. Yet there is no 

 reason to doubt that this would help to clear up a great many 

 questions that are constantly uppermost, and remove the doubts 

 and fears of consumers on a considerable number of important topics. 

 The consumer often thinks that the lumberman is a robber, and the 

 lumberman reciprocates by occasionally referring to his friend, 

 the consumer, as a thief. The terms are usually not deserved on 

 either side, and grow out of the lack of understanding. 



The lumberman needs the consumer, because he has to have orders 

 to exist; and the consumer simply couldn't run his factory without 

 the assistance of the lumberman. An occasional talking over of the 

 troubles that are experienced at each end of the transaction would 

 help to straighten them out, and would reduce the friction of carry- 

 ing on the business for everybody. 



The Value of Hardwood Flooring 



That hardwood flooring not only adds to the value of a residence 

 from the standpoint of intrinsic quality, but adds materially to its 

 salability, is a fact with which members of the flooring trade are 

 famUiar. The public, however, is likely to overlook this fact unless 

 it is brought to its attention in an effective way. Those who are 

 building houses to sell often use less hardwood flooring than they 

 should do, considering the great "talking-point" which is developed 

 in this way. 



There came to our notice recently the case of a .$7,500 residence, 

 the sale of which was almost spoiled because the builder had put 

 hardwood floors in the dining-room and living-room only, and had 

 failed to include this material in the five other rooms of the house. A 

 prospect who liked the building flatly refused to consider it unless 

 the remaining rooms were finished with hardwood floors, and this 

 was finally done. It would have been much better to have put in 

 these floors in the first place, as there is no telling how many people 

 looked at the house and said, "Oh, no hardwood floors," and 

 passed on. 



The average person probably has an exaggerated idea of the 

 cost of hardwood flooring. An average cost is probably eighteen 

 cents a square foot. The ordinary room is not more than fifteen 

 feet square, or two hundred and twenty-five square feet. That 

 would make a cost of $30.50 for the room. In a six-room house, 

 including all halls, the cost would be well under $200!; and it is 

 safe to say that a house so treated would be worth fully $500 more, 

 from a real estate point of view, than one without floors of this 

 kind. 



On the other hand, hardwood floors are desirable from the stand- 

 point of cleanliness and sanitation as well as because they add to 

 the looks of a home and are considered ' ' swell. ' ' Floors that are 

 cleaned often — constantly compared with those covered with carpets 

 — certainly do not harbor germs; and the housewife who can run 

 an oiled mop over the surface of her floors and clean them thor- 

 oughly knows that the labor of taking care of them, compared with 

 cheaper floors, is trifling. 



The hardwood floor manufacturers and contractors ought to em- 

 phasize these points, instead of merely competing for the business 

 already in the market. One result would probably be business from 

 people who are not now being solicited, and who would want to 

 improve their homes by putting in hardwood floors. 



An Indiana firm is reported to have received an order for five 

 cars of walnut and oak lumber for immediate shipment to London, 

 England. 



