HARDWOOD RECORD 



May 23, 1918 



The Cost Campaign 



COMMITTEES ARE AT WORK in behalf of practically every 

 branch of lumbering seeking with the aid of auditors the best 

 system of cost accounting, and endeavoring to arrive at something 

 like a standard method of compiling costs and to get at the real 

 cost of making lumber. There are no two sections where conditions 

 are the same, and often in the same body of timber, operating on the 

 same logging road, there is a wide difference in what it costs to 

 put stuff on the log banks. Also the labor situation is very sensi- 

 tive, and almost ever.y hardwood operator is running short handed, 

 or with but two-thirds of a crew. This naturally adds materially to 

 labor charges. 



Again, there seems to be no end in the advances in price of all 

 sawmill and logging equipment and supplies. Thus, every thirty 

 days there should be a change in costs — upward — especially as, from 

 the viewpoint of most lumbermen, further advances in labor will 

 be necessary in order to maintain even the present crews. 



With these things staring us in the face, it is a fact that there 

 is no dependable knowledge as to what costs actually are, and it is 

 necessary for the well being of the whole industry that some stand- 

 ardization be worked out that will insure all costs being included, 

 so that each man will actually know his costs. 



A well known organization which had kept its cost system going 

 for eighteen years, now finds it necessary to change its methods 

 continually. In checking up the costs from sixty manufacturers 

 on various mill supplies, and the increase brought about by the 

 labor situation, it was found that an increase of forty per cent 

 had been effected in the past six months. That means, while prices 

 are higher than they have ever been in the lumber business, the 

 cost of putting lumber in piles and delivering it to the consumers 

 ' is likewise higher, possibly from 100 to 175 per cent. 



The closer accounting you make, the nearer you come to making 

 profits possible, but a business that is conducted at cost or on prac- 

 tically a five per cent basis of profit for five years, and then has 

 a good year, is not being treated fairly if it is put on a basis that 

 does not take into account all the economic changes affecting manu- 

 facturing and marketing. 



Solidifying the Lviniber Industry 



RESULTS ARE BEGIXNIXG TO TELL THE STORY in the 

 lumber industry. Differences are disappearing and common 

 interests are standing together. The lumbermen of the South, West, 

 East, and North are finding out that many things are in common 

 which were once thought to be necessarily antagonistic. This state 

 of affairs was more noticeable at the recent meeting of the Na- 

 tional Lumber Manufacturers' Association than it ever had been 

 before. Community of interests is recognized. Everybody seems 

 to feel that there is a market for all the lumber, no matter where 

 the trees grow or where the mills are located; and that the problem 

 present to all manufacturers is to produce lumber and sell it, while 

 leaving to supply and demand the prices and the distribution. 



The change in sentiment and attitude is healthful and full of 

 promise. It has resulted from better acquaintance among lumber- 

 men and futher understanding of one another's aims and purposes. 

 Petty and local matters have been found to deserve small place 

 in broad, national policies. It is recognized that regions are com- 

 ponent parts of one common country, and that the whole is greater 

 than any of its parts. 



A period of nearly four years of war has been a severe but an 

 efficient teacher, and the lessons are being learned thoroughly. 

 The greatest of these lessons teaches the value of co-operation, 

 the strength of unity, the necessity that all shall pull together, 

 and that in time of stress and danger there shall be no backfiring. 



It is the hope that when the war ends, an end will speedily come 

 to the hardships, losses, and animosities; but that the good results 

 will long continue. So may it be in the lumber industry. The 

 unity of purpose which the war has taught should continue; the 

 confidence which industrial leaders have learned to place in one 

 another ought to bear fruit during many years to come. There 



should be no return to narrow and petty sectionalism which in the 

 past so greatly cramped effort and hindered accomplishment;. 

 Policies have broadened. Let them continue to expand. 



Trade opportunities will increase and fields of endeavor will 

 widen when peace returns. Lumbermen, through their associations, 

 prepared in war for the larger problems of peace, and they will be 

 prepared to solve the problems and take advantage of opportunities 

 better than ever in the past. The tuition in the school of experience 

 has been high, but the lessons have been worth all they have cost. 



Fixing Lumber Prices to Private Consumers 



THE PROPOSAL THAT THE GOVERNMENT FIX THE 

 PRICES which manufacturers of lumber shall charge private 

 consumers, is before the country. It is expected that a meeting will 

 be held in Washington in June to settle the matter. The men who 

 make lumber are disposed to resist any attempt to fix such prices. 

 The resistance, however, shows no signs of going farther than vigor- 

 ous protests. Lumbermen take the ground that the government has 

 no constitutional right to take private property for private use, no 

 matter what the price may be, and that to compel the makers of 

 lumber to sell it to private parties at any price is without authority. 



It is understood that if the government proceeds to fix prices for 

 private sales, it will act because of complaints made by certain pri- 

 vate buyers that they are charged much higher prices for their lum- 

 ber than the government pays for what it buys. It has not yet 

 developed just where such complaint comes from, now that such 

 complaint has actually been made to the government; but it is 

 believed that the government 's proposal to fix private prices is in 

 response to such complaint made by buyers. 



The lumbermen will send a committee to Washington to present 

 their side of the case, with the hope that the government can be 

 induced to recede from its position that private sales should be at 

 fixed prices. The lumbermen are expected to contend, first, that such 

 prices cannot be regulated without violating the constitution, and, 

 therefore, it should not be done; and their second contention will be 

 that private buyers are not charged exorbitant or unreasonable 

 prices for lumber, and for that reason, there is no occasion for the 

 government to interpose its power to fix prices. The lumbermen 

 expect to be able to show by facts and figures that advance in 

 prices to private buyers has not been out of proportion to increase 

 in cost of production. The fact that the government buys its lumber 

 at prices lower than those which private consumers pay for theirs, 

 is no better argument in favor of lowering prices to the private 

 buyers, than it is an argument that the government prices should 

 be raised. The justice of the matter depends upon the cost of pro- 

 duction. The government has fixed the price that it will pay. If 

 that price is not high enough to give the sellers of lumber a fair 

 return, it can not be claimed to be justice to use that price as a 

 criterion of what private prices should be. 



It is probable that the June meeting in Washington will examine 

 very carefully into the actual cost of production, and that prices will 

 be based on that cost rather than upon an arbitrary figure. If that 

 plan shall be carried out, there seems to be no reason why a satis- 

 factory understanding can not be reached, and that if private prices 

 are to be regulated, it will be done in a way that will leave us 

 room for the charge that private property has been confiscated. 



Such an understanding would leave out of consideration the ques- 

 tion of violation of the constitution, although that question would 

 remain. Some persons believe that it ought to be waived at this 

 time, when war problems are foremost in public thought and are of 

 such tremendous importance that a purely academic question should 

 not be allowed to interfere. It is claimed that already; whether 

 right or wrong, prices to private buyers have been fixed for some 

 commodities, sugar and flour, for instance. If this view is correct, 

 tlie Rubicon has already been crossed, and regulation of sales for 

 private sellers to private buyers is an accomplished fact in which 

 the people have acquiesced because it is a war measure, and because 

 it is the disposition of the people to give the government all the rope 

 it needs for hanging autocracy, and not be too particular about the 

 niceties of constitutional questions at this time. 



