May 25, 1918 



Solving the Labor Problem 

 Nothing can take the place of adequate wages, as a method of 

 dealing with labor; but a great many things besides reasonable 

 and satisfactory wages go to make up a desirable position. The 

 lumberman who is having trouble holding his men, and who is 

 paying as good wages as anybody in his district, should look to 

 working conditions and other factors. Indeed, he might find it 

 worth while to emulate the example of those in other industries, 

 who have organized welfare departments as a means of insuring 

 proper attention to health, safety, etc. By putting work pertain- 

 ing to the human factor into the hands of those qualified to 'deal 

 with it he can take a long step in the direction of an ultimate and 

 mutually satisfactory solution of the labor problem. 



Organizing the Dimension Trade 



The discussion in this department a few weeks ago regarding the 

 situation in the dimension trade, and the unsatisfactory condition 

 which prevails there, is to have an interesting sequel in an organi- 

 zation of the dimension manufacturers at Memphis, May 25. It is 

 to be hoped that the members of this important branch of the hard- 

 wood trade get together on a permanent basis at that time, as a 

 branch of the American Hardwood Manufacturers' Association. 



In this connection it may be interesting to note that one of the 

 most successful concerns in the country, as far as dimension manu- 

 facturing is concerned, has found that correct cost keeping is the 

 basis of good results in this department. It is here, apparently, 

 that the average member of the trade has fallen down, and has 

 failed to get the prices that he is entitled to. 



Not only are time records kept of all jobs in the plant referred 

 to, but a careful study is made of the overhead costs and their 

 distribution. The dimension business is a department of the com- 

 pany, but is not carried along by it without making its proper con- 

 tribution to overhead expenses. The result is that costs in this 

 concern are probably higher than the average dimension manu- 

 facturer shows, because the latter does not always include all of 

 the costs, direct and indirect. 



If the new organization of dimension manufacturers succeeds 

 in converting a majority of the trade to the idea of organized effort 

 to improve conditions, cost discussions should and doubtless will 

 be given first place on the program. Until dimension manufac- 

 turers learn how to figure costs, competition is going to be on the 

 wrong basis. 



Lumber Buying "On the Road" 



It takes a mighty good man to go out on the road and buy lum- 

 ber under conditions that give the seller a good deal and at the same 

 time enable the buyer to rehandle the stock and make money. It 

 requires knowledge of lumber, of course, and it also demands some 

 knowledge of men. The good buyer learns how to deal with pro- 

 ducers, and how to take up the lumber without starting too many 

 arguments. 



Here, as elsewhere, the practical psychologist^who would hardly 

 call himself that, however — understands that he must work a plan 

 of give-and-take. The inspector who tries to give himself the bet- 

 ter of it on all the close ones, and who never grades up, but always 

 grades down, gets the reputation of being a hard man to deal with; 

 likewise, he irritates the sawmill man from whom he is buying, 

 and gives the impression of not wanting to give the other fellow 

 an even break. 



Just about as good results can be obtained by a more generous 

 attitude, which recognizes the rights of the seller, but at the same 

 time takes into account those of the buyer. Calling some of the 

 close ones down and the others up is a good way to impress the 

 producer with the fact that the inspector who is taking up the 

 lumber is not trying to hog everything. 



Such a policy pays in the long run, by way of making friends. 

 The lumber buyer for a hardwood company in a Kentucky market, 

 —36— 



erritory for that concern for years, and bought 

 and inspected lumber as his own judgment dictated, made money 

 for his house, and at the same time made friends for himself. That 

 sounds like a hard proposition for some, but he did it by playing 

 fair with those he was buying from, and making them see he was 

 looking for nothing better than a square deal. 



Now he is in business for himself, and the same sawmill men are 

 doing business with him, which shows that he must have left con- 

 ditions right for a come-back. Here is where the zealous inspector 

 or buyer often makes a mistake — he makes such a hard deal of it 

 that the man with tlie lumber doesn't want to trade with him 

 any more. 



Is Two Per Cent Too Much? 



Some of the Memphis lumbermen have recently been discussing 

 terms, and laying stress on the proposition that the lumber buyer 

 who gets two per cent off every bill is usually obtaining more than 

 he actually has coming to him. It was also brought out that some 

 buyers even discount gross bills, including freight charges, where 

 this is prepaid, putting the lumberman in the position of spending 

 both interest and discount for the privilege of prepaying the freight 

 for his customer. 



It is an interesting fact that the lumberman is one of the few 

 manufacturers who is unable to offset the discounts he allows his 

 customers with similar discounts taken off his own bills payable. 

 In the first place, his payroll is a cash proposition. Logs are bought 

 for cash — and it would be a worth-while performance to try tO' 

 take two per cent or anything resembling it off the amount owed 

 a canny farmer for logs. Freights of course must be paid cash 

 without discount. 



It is true that the lumberman who is operating a sawmill and is 

 buying belting, lubricants and other supplies is usually able to 

 discount his biUs for these, but the percentage of expense repre- 

 sented by these items is not large enough to be very important. 

 Consequently there are few opportunities to accumulate enough 

 credits on the discount sheet to make up for the deduction of those 

 who buy his products. 



It is a noticeable fact, also, that practically all other raw mate- 

 rials, such as iron, coal, etc., are sold without discount. It seems 

 to be the rule that finished products, on which the margin of profit 

 presumably is greater, carry discounts for cash, but that on the 

 more primary materials no discounts should be expected. For this 

 reason there is some force to the argument that discounts for prompt 

 payments might be eliminated to good advantage in the hardwood 

 business. 



The growing use of trade acceptances, which provide for pay- 

 ment at a given date following the receipt of the goods, and which 

 of course provide for no discounts, may lead to the gradual with- 

 drawal of this privilege. When this is done, the seller is able to 

 use this paper at his bank, but he pays the bank for discounting it. 

 On the other hand, the interest rate is considerably less than the 

 discount amounts to, as can be readily demonstrated. Therefore 

 the substitution of the trade acceptance for the open account sub- 

 ject to discount would be a profitable change for the average lum- 

 ber manufacturer. 



Paying Tribute to Indiana 



"If someone should start out to write the history of the hard- 

 wood business," remarked a veteran who began his lumber career 

 in the good old state of Indiana, "they would have to give my 

 state a large place in the volume." 



And that is about right, too, for not only does Indiana boast 

 toilay some of the most famous mills and millmen, but it has sent 

 to other states lumbermen who have more than made good in the 

 development of the hardwood industries of those sections. 



Kentucky, Tennessee, Arkansas and Mississippi are crowded with 

 men who hail from Indiana; and you could hardly throw a stone in 



