Meeting of ISdichigan Lumbermen 



The regular quarterly meeting of the Michigan Hardwood Manu- 

 facturers' Association, which was lield at the Pontchartrain hotel, 

 Detroit, Mich., on Thurs<lay, October 22, was distinguished chiefly by 

 its brevity and by the excellent report of the market conditions 

 committee as read by the chairman, W. C. Hull. 



The meeting opened with the nsual roll call and reading of minutes, 

 ■following which J. C. Knox read his report, here given: 



Secretary's Keport 



It niiKlit not be out of place at tlie Ijeginning of this report to state 

 that late figures from the federal government place Michigan as twelfth 

 in the production of lumber, our state having been displaced from tenth 

 place a year ago by Virginia and West Virginia. It might also be well 

 to inform the members that the production by the members of the asso- 

 ciation this year is an increase over a year ago by a considerable extent. 

 Our report today is about as complete a set of figures on hardwoods 

 and hemlocls as is possible to compile, for on October 1, 1914, we had the 

 figures or a report from every member of our association. We are glad 

 to see so many manufacturers here today, for we know by their presence 

 that they are interested in their own success as well as in the success 

 of the association. 



In considering the stocks of hardwoods and hemlock on hand October 

 1. we wish to impress upon your mind the fact that from all indications 

 the manufacturer is holding the bag, so to speak. The retail yard and 

 the consuming manufacturer are not carrying the stock they used to. 

 but are placing their orders with the manufacturers from time to time 

 as they require them. We wish also to state that we have figures of 

 four more members reporting October 1, 19)4, than a year ago. Figuring 

 on the stocks reported a year- ago by firms not reporting and having cut 

 out and taking the stocks of the new members not reporting a year ago. 

 there is a difference of 23,000,000 feet of hardwoods and 14,000,000 feet 

 of hemlock, which should be considered when taking into account the 

 usual net stock for October 1. 



Our treasurer's report shows a balance on hand October 16, of $784.42 

 in the general fund and on October 19, of .$2,239.38 in the forest fire fund. 

 We are pleased to report that the Forest Service has taken care of 

 .$580.50 of our wardens' salaries for the month of July, August, Septem- 

 ber and October. I also desire to state that the full assessment in the 

 Fore-st Fire Protective Department fund has been collected for the entin^ 

 year. Chief Warden Hickok will make a report for his department in 

 full. 



Camp costs, especially relating to the feeding of men and horses have 



been considered by manufacturers for past years and a report has been 



prepared by Mr. Langdon on the subject, which will be submitted today. 



Treasurer Henry Ballou's report was read by the secretary and 



showed the condition of the treasury to be first-class. 



President W. W. Mitchell called on the ehauman of the respective 

 standing committees, but the first three — the railroad committee, the 

 legislative committee, and the grading rules committee — had no formal 

 reports to make. 



W. C. "Hull, chairman of the market conditions committee, read a 

 most excellent paper, as follows : 



Market Conditions Committee Report 

 Conditions now confronting our association from the standpoint of 

 stocks on band unsold are not so good as we had hoped to see them. We 

 have to go back as far as 1908 to find similar ones. At that time they 

 aggregated 100,000,000 feet as against 120,000,000 feet at the present 

 time, but a true comparison, on account of our seven new heavy produc- 

 ing members, would bring our present stocks on hand unsold to abont the 

 same figure of 100,000,000 feet as compared with 30,000,000 feet a year 

 ago and 40,000,000 tcct two years ago. 



The .situation is still further aggravated by the fact that a consid- 

 erable portion of the stock sold l)ut not shipped is quite likely to be 

 turned back on the manufacturer's hands on account of some of the "fair 

 weather" purchasers welching on tlieir contracts. 



Of this unsold stock, compared to last year, there is three times as 

 much No. 2 conimou and better and eight times as much No. 3 common 

 as one year ago. 



Against an estimate of 402.000,000 feet f6r 19i:i, we cut 440,000,000 

 feet ; the estimate for 1914 was 4."i8,000,000 feet, and judging from 

 present reports this estimate has been or will be over-cut. 



With prosperous business conditions the market might possibly have 

 absorbed this increase, but it is futile to hope the present market can 

 take care of it. 



At our spring meeting, held in Chicago, the signs of depressed business 

 conditions were very phiiu. and the remedy was suggested by your 

 committee, but was evidently not heeded. As nsual the law of supply 

 and demand governs. This heavy production, coupled TPith the present 

 weak market, has caused a decline io tht price of most of the items 

 we manufacture. 



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Your committee has carefully studied all the recent sales as reported 

 to .your secretary, and the attached price list is Its best judgment as 

 to present prices. There are rumors of quotations below this list on 

 some of the items, but we were unable to verify them. The remarkable 

 feature, however, is that prices have not broken worse than the.v have, 

 and we ha^'e no doubt whateier that these rumors will soon become 

 proven facts, lu'oviding our members continue producing at the present 

 rate. No set of men were ever able to produce more of any commodity 

 than the market could or would absorb and receive back a new dollar 

 tor an old one. and \m' do not believe the present case will prove to be 

 the exception. 



Unless we want to run our business at a loss and sacrifice our stump- 

 age, secured by the most of us by hard work, sacrifices, thrift, daring 

 and hardships, we must produce less lumber. We want you to study 

 more carefully than you ever have lieretofore the statistics as to stock 

 as prepared by your secretary and handed to you with this report. If 

 you will study them carefully, we feel sure that each and every one of 

 you will decide to curt:ul .vour productions all you possibly can and then 

 some. 



If you will do this you will discover many encouraging signs ; our 

 competitors, as well as associates, some of them, have already seen the 

 handwriting on the wall ; many yellow pine and Pacific coast mills have 

 shut down within the past thirty days ; everywhere in all lines of 

 l)uilding material there has been curtailment. Heretofore, tlie lumber 

 trade has looked upon our association as one of the ablest in the field. 

 Shall we fall in behind the yellow pine or Pacific coast associations? 

 Shall it be said of us that the only arguments that appeal to i^ in the 

 face of present conditions are that we are out of stumpage, cash or 

 , yard room ? 



The restoration to normal conditions will come much more rapidly If 

 the lumber trade generally acts unanimously along these lines. 



The war in Europe immediately threw back onto an already inactive 

 domestic market an output which at that time was more than normal, 

 which resulted in paralyzing the usual business of the lumber interests. 

 It is certainly the duty of the manufacturer and the trade generally 

 to use their l>est legitimate efforts to prevent useless sacrifice in a com- 

 modity which has at all times a basic value far above w'hat it could 

 command under prevailing conditions. The. remedy is plainly not to 

 manufacture an increased, let alone a normal, supply in the face of a 

 plainly restricted demand, and also to hold firmly to reasonable prices, 

 notwithstanding the rapid accumulation of stocks in some hands. Cut 

 prices never tended to accelerate the movement of any commodity, and 

 never will, but on the contrary have always retarded it by creating a 

 feeling of unrest, uncertainty and instability. The theory is that lower 

 prices should increase the use of the commodity, but unfortunately the 

 consuming customer does not receive tiie benefit, hut the lower price is 

 universally al>sorbed by the middleman ; eonsumptlon is not increased. 

 and the middleman smiles as ho rakes in the profits belonging to and 

 needed by the man whose effort produces the commodity. If the truth 

 were known, we venture the opinion that not two per cent of the recent 

 cuts in prices made by some of the members of our association ever 

 reached the consumer or stimulated the movement of a single carload 

 of lumber. 



The most encouraging feature in the whole situation and the one 

 that causes us to believe that the present low prices now being offered 

 b.v some of our members will be withdrawn long before our next quarterly 

 meeting, is the fact that the price of stumpage has remained absolutely 

 firm and is in no danger of being broken. In this particular the lumber 

 trade, and particularly this association, is most fortunately situate(j. 

 There does not appear to be any danger anywhere of the sale of stumpage 

 at sacrifice prices. We all know what our stumpage is worth, and we 

 will not permit it to be sacrificed. 



With the uecessar.v curtailment the domestic market will sooner or 

 later absorb present stocks, and then values of their own accord will 

 return to the prices prevailing at the beginning of the year, and these 

 low present prices, in some cases below the cost of production, will soon 

 be a thing of the past. 



An advance of rates of interest on building loans following the out- 

 break of the European war, hit the lumber trade an unusually severe 

 blow, iuasmuch as it greatly restricted building operations in large cities. 

 There is every indication that this condition will largely pass away 

 within the very near future, .\ction by government officials tending to 

 put money into circulatiou. and the general loosening of financial condi- 

 tions shown by reports from all parts of the country, are operating to 

 turn more i.-iopey into building channels, and though the usual season 

 for building is now passing, there is every promise that an unusual 

 amount of such activity will be in evidence during the winter, and a 

 very large amount very early in the spring. The general condition of 

 business over the country is much better than it has been within the last 

 few months. Enormous crops have been harvested, and will find sale at 

 unusually good prices. This fact will afford certain relief to the lumber 

 trade. It is generally admitted that the farmer has not done his usual 

 amount of building and repairing for a number of years, and necessity, 



