JCNB 10. 191S 



HAKDWOOD RECORD 



the oiik fn'oplc will be willing to speml about $30,(100 for a big 

 'furniture week.' The idea is to appropriate a certain sum for 

 preliminary newspaper advertising and then to prepare the exhibits. 

 We believe that this will put oak back where it formerly was. 



"The war will bo over one of these days and trade extension, 

 in our opinion, should be carried on vigorously in order that wood 

 may be kept properly before the public." 



The necessity of seeking intelligent data bearing on the cost of 

 producing hardwood lumber was emphasized in the address of 

 President Jurden and in the report of Secretary-Manager Pritchard, 

 but the subject was even more forcibly presented to the association 

 in the form of the following telegram from Gen. L. 0. Boyle, of 

 Kansas City and Washington, who is attorney for this organization: 



"Your industry is in grave danger unless it can demonstrate its 

 cost facts. The price-fixing program may extend to the public and 

 this would be fatal to hardwoods in the present uninformed state 

 of the industry. Big things lie before us. All depends on good 

 judgment." 



General Boylo was scheduled to address the association on 

 "Government Regulation and Price-Fixing of Materials for War 

 Purposes," but was unable to be present because of the serious 

 illness of his wife and sent the foregoing message of warning to 

 this body, saying at the same time he would be able to be with the 

 directors of the association in about ten days for a further con- 

 ference on this subject. 



In the absence of O. M. Krebs, chairman of the cost committee, 

 C. H. Sherrill of Paducah, Ky., led the discussion on the subject 

 of cost. He declared that cost of production is the heart of the 

 lumber industry as well as of all other industries and that it is 

 'utely necessary to know costs. Continuing, he said: 

 : ivc been unable to find ns many as three who could agree on the 

 "f producing hardwood lumber. No two of us have the same 

 i-h:iracter t»f operations. We are scattered over widel.v separated areas 

 and have diftorent environments which call for dlltprent methods. It is 

 almost impossible fo arrive at exact costs but it is possible to arrive at 

 average costs and this should be done without delay. Representatives 

 of the hardwood industry at Washington have been much embarrassed 

 In their conferences with governmental departments because unable to 

 give costs. Unfortunately, the industry is divided among four large hard- 

 wood organizations. I shall hail with delight the day when the Industry 

 gets under a single banner and is administered by a single body capable 

 of dealing with both ijuality and quantity, and, as far as the laws of the 

 land allow, with prices. 



We should be in position to make intelligent report of our costs at 

 Washington instead or handling this vital matter in such a haphazard 

 manner. Xo matter what expense devolves on this association or on 

 Individual members thereof, the question of finding out our costs is so 

 Important that It should be handled in the most aggressive manner pos- 

 sible. And the sooner we decide upon this course, the better it is going 

 to be for you and for me. for the government and for all concerned. 



C. L. Harrison, after stating that the Associated Cooperage 

 Industries, looking after a business closely allied with lumber, had 

 employed an engineer to make a survey of the cooperage industry 

 with a view to developing the essential facts thereof, declared that 

 the American Hardwood Manufacturers' Association should take 

 similar action and thereupon moved that the executive committee 

 employ an engineer to make a survey of the hardwood industry 

 with a similar purpose in view, the information thus gained to be 

 used as a basis for arriving at the cost of producing hardwood 

 lumber. The motion carried with it a provision that the expense 

 of such investigation or survey is to be borne by the members, 

 provided the cost is not more than 1 cent per thousand feet of the 

 cut of each, and that the engineer is to work under the direction 

 of the cost committee of the association. This motion carried by 

 unanimous vote and the association will shortly set in motion 

 machinery that will enable it to reach a definite idea of the cost of 

 producing lumber, whether that information is to be used in case 

 the government fixes the price of hardwood lumber or whether it 

 is to be used to insure more intelligent handling of the ordinary 

 commercial transaction of members of the trade. 



F. R. Gadd, assistant to the president of the Hardwood Manu- 

 facturers' Association, after briefly stating what the government 

 had done in the direction of fixing prices on yellow pine and fir, 

 told members of the American Hardwood Manufacturers' Associa- 



tion that the body with which he is connected had already employed 

 a cost accountant who would soon make a report to the cost com- 

 mittee and that the latter would whip this into shape shortly. Ho 

 said that the report of these gentlemen would soon bo ready and 

 that it would bo available to any hardwood operator. He believed 

 that co-operation between the two associations in finding out the 

 cost of producing hardwooil lumber would be an excellent idea and 

 suggested that the Hardwood Manufacturers' Association would bo 

 glad, through its cost committee, to cooperate with the cost com- 

 mittee of this organization. 



President Jurden, on behalf of the association, thanked Mr. 

 Gadd for the offer and it is clear that the two bodies intend fo 

 work closely together on this subject, which is regarded at the 

 present time as the most important confronting the hardwood 

 lumber industry. 



Col. S. B. Anderson, chairman of the committee on uniform terms 

 of sale for hardwood lumber, submitted the following majority 

 report: 



Two per cent dlscounl allowed if 80 per cent of net amount is remitted 

 on receipt of invoice, balance on receipt and Inspection ; or acceptance 

 for net amount, due fiO days from ilate of invoice. No discount allowed 

 on freight, whether or not prepaid. Prices based on existing rate of 

 freight any increase therein, and federal war taxes to be paid by purchaser. 



In speaking of uniform terms of sale. Col. Anderson snld : 



There have been no uniform terms of sale heretofore and the 2 per cent 

 discount given originally for cash has ceased to be a cash discount and 

 has become n trade discount, a discount which should be eliminated, 

 especially since it is resulting in the sale of .$50 lumber for $49. 



The trade acceptance Is very important for all lumber manufacturers, 

 but it Is far more important for those In the smaller towns, where banking 

 facilities are restrictccl. than in the larger where accommodations are 

 better. By using trade acceptances lumber manufacturers can secure all 

 the money needed to finance their business. 



We present this report as a working basis. These terms are now being 

 successfully used by us and by many other lumbermen. We should dictate 

 both our prices and our terms. A dollar saved on terms Is far better 

 than a dollar gained through Increase In price. ' 



We will submit forms for trade acceptance to the executive committee 

 and then to the members for adoption, with a view to bringing about 

 uniformity as to form and practice. 



The trade acceptance should be Inclosed with the invoice and the terms 

 should be In the body of the letter or quotation sheet Instead of being 

 merely stamped thereon. 



Mr. Anderson further reported that the only difference between 

 the majority report and the minority one lay in the amount of the 

 net invoice to be covered by the 60-day acceptance. The majority 

 one, ho said, hoUb out for 100 per cent while the minority one asks 

 only 80 per cent. 



This subject proved of such wide interest that quite a number 

 of members took part in the discussion. Mr. Anderson, as spokes- 

 man in behalf of the majority report, thought that, in view of the 

 fact that there is a very pronounced shortage of lumber, sellers 

 ought to insist on the full 100 per cent, thus putting lumber on the 

 same basis as iron, steel, cement and other materials classed as 

 construction materials. He intimated what had been done to him 

 by lumber buyers in the past when there were more sellers than 

 buyers and believed that, with more buyers than sellers, the latter 

 should give the former some of their own medicine. 



Budolph Sondheimer said that the committee, in making its 

 terms of 80 per cent on receipt of invoice and 20 per cent on receipt 

 and inspection, was trying to "evolve something that would stick." 



James E. Stark asked Mr. Sondheimer if the latter thought cus- 

 tomers would be willing to give acceptance for 80 per cent before 

 receiving the lumber covered thereby. To this Mr. Sondheimer 

 replied: y 



"I think so, if all insist on these terms, and I further think that 

 in time we will be able to obtain trade acceptances for 100 per cent 

 of the net amount if accompanied by the invoice." 



R. T. Cooper suggested that a discount of 2 per cent be allowed 

 if 80 per cent is paid on receipt of the invoice. 



Chester F. Korn said most buyers were willing to make settle- 

 ment in cash on acceptance if assured adjustments will be made 

 on inspection, but that they would like to keep back 20 per cent 

 as a reserve for their own protection. Mr. Korn also thought that 

 increases in freight should not be altogether at the expense of the 



