Jlne 10, 191J 



HARDWOOD RECORD 



37 



^a»w:«K«!'^!autmM!)a ! )M)iW^^ i ti ' je> ! W ! rw roro;7s:ii;g?ro :a6 !7 VWK ' 'u;^ 



.s.ntlng til 



coal anj lumber Interests of the 



Clubs and Associations 



Baltimore Trade to Have More Quarters 



The Lumber ExchanRe held Its s.inl aniuial ni.'i'tliiK June 3 nt the 

 Merrhants' Club perhaps for the last time, lor It appears to l)e the 

 sentiment of the organization that permanent quarters where gatherings 

 can be held at more frequent Intervals are desirable and n deHnltc selec- 

 tion Is likely to be made soon. A special committee, named at the annual 

 meeting last December, with Lewis 1)111 as chairman, has been looking 

 around for accommodations, and last Monday evi^nlng reported that very 

 favoral)le terms could be obtained from the Old Colony Club, which has 

 Id recent months made great headway In different cities. The Old Colony 

 CiBb has Its headquarters at the Southern hotel here, and has tendered 

 the use of rooms at all times for meetings, together with other privileges 

 which are calculated to make the Exchange more valuable to its members. 

 Rufus K. Ooodenow. chairman of the house committee, reported In a 

 similar sense. 



Another matter which came up was the Inadequacy of the force of 

 exchange Inspectors, which has resulted In material delays In the handling 

 of incoming cargoes of lumber and has been productive of additional 

 accumulations of charges. The inspection committee, through Kldgeway 

 Merryman, the chairman, reported that efforts were being ma<le to Increase 

 the force of Inspectors, and In this connection attention was called to the 

 change made In one of the by-laws, under which meiubcrs are requested to 

 accept no lumber talleys except those signed by licensed Inspectors of the 

 Exchange. The treasurer's report for the last six months was read and 

 made a favorable showing. After the business In hand had been disposed 

 of the members, to the number of about fifty, enjoyed an excellent luncheon. 



Firms Protest Against Freight Increase. 



.\t a conference hetwe4>n the (leiieral shippers of Louisville and the 

 state and the Kentucky Railroad Commission, held In Louisville, on Satur- 

 day, June 1, strong protests wore heard concerning the proposed twenty- 

 five per cent Increase in rates. Several prominent speakers were of the 

 opinion that such an Increase was unnecessary, and considered it as a tax 

 measure. It was stated that If any of the money derived from Increased 

 rates was used for purposes other than operating expense and extension 

 of railroads, the measure was unlawful, as It would constitute a tn.y 

 measure, whereas Congress is the only body which has the authority to 

 pass tax measures. 



J. Van Norman, representing the coal and lumber interests, in a talk, 

 which he claimed was potriotic, as the interests of the people of the 

 country were at stake, termed the increase as unwise, unnecessary and 

 unlawful, climaxing this assertion with the statement that "no blunder 

 is comparable to this since we entered the war." Mr. Norman in part 

 said : "If the railroads are operated with any degree of cfflcicncy and 

 the increase is allowed to stand, the railroad commission will be ashamed 

 to publish the railroad earnings by October. The Louisville and Nashville 

 earnings would be approximately fifty per cent on outstanding stock." 



A statement of this kind coming from Mr. Norman bears weight, as 

 he is one of the best posted traffic attorneys in the country, and for years 

 has been devoting his time to lumber and coal rate eases principally, and 

 Is well posted on ail angles of the work of the Interstate Commerce Com- 

 mission, and of .\merican railroads. 



Laurence B. Finn, chairman of the railroad commission, asked those 

 present to speak out freely, without fearing that they would be considered 

 nnpatriotlc. stating that the railroads of the country are its highways, 

 and It would be absurd to consider it the privilege of an individual, or 

 government — especially the government — to use transportation as a means 

 of taxing to defray other expenditures of the government. 



Mr. Finn also expres.sed the hope that it Is not the aim of the govern- 

 ment through the United States Uallroad Administration to make freight 

 rates the means of collecting taxes from the people to defray expenditures 

 of the government other than the natural upkeep of transportation. "It 

 would be as absurd," he said, "as to charge tolls at a tollgate for the use 

 of a road to raise funds for building a county courthouse." 



Mr. Finn stated that the estimated increase in railroad revenue under 

 the new schedule would be about $1,000,000,000. or five per cent Interest 

 on $20,000,000,000, $.3,000,000 more than the present outstanding stocks 

 and bonds of -American railroads. 



The shippers were strong in their demands for a public hearing before 

 any increases were made, and in resolutions asked that the Increase be 

 held up until October 1 at any rate. In these same resolutions it was 

 asked that instead of freight increases being figured on the existing rates, 

 that the freight bills carry a special line, upon which the twenty-five per 

 cent Increase, if made effective, be lumped In one amount, to represent 

 one-fourth of the charge under the old rate, making it much easier to 

 figure the rates. 



The coal interests were strongly opposed to the increase, claiming that 

 they had been subjected to an increase of fifteen cents a ton last summer. 

 Their plea was so strong that Chairman Finn directed a long wire to 

 Randall Clifton of Atlanta, chairman of the South Freight Traffic Asso- 

 ciation, in which he cited the case and the view of the coal men. 



Chairman Finn appointed a committee composed of Mr. Norman, rep- 



Italli'oiiil Commission 



I-.; I h;ii It la the 



i: : i should be 



no Increase 



lii- and the 

 II .' ^ 111 III.' country. 



t. R. May of the 



Louisville branch of the Southern Hardwood Traffic Association, and 

 C. B. Stafford of the Louisville Board of Trade, to flic complaint against 

 the increase before the railroad administration. 



It was also learned that the Southern Hardwood Traffic Association 

 had arranged to send a committee, composed of Mr. Norman, J. II. Town- 

 Bhcnd and Laurence Finn, to Washington to represent the lumber Interests 

 in filing complaint before the admlulsl,ratlon. 



The committee appointed by Mr. Finn drafted the following wire, which 

 was sent out June 1 : 



Mr. W. G. Mc.Vdoo, Director General, Railroad Administration, Wash- 

 ington, D. C. 



At joint convention of shippers and Kent 

 held here today following resolution adopted: i:. i.. 

 sense of this meeting that the Director Gen. r i i: 



urged to postpone effective date of general ord.r N 

 In rates until a bearing can be Imd as to th.- i. 

 reasonableness ibercof, anil the effect of same ..ii i. In. 

 J. V. Nrjii. 

 R. R. May, 

 C. B. Staffoep, 



Committee. 



At the (onl'i'ience many of the principal trade organizations and large 

 Individual shlp|)ers were represented. Several coal and lumber men were 

 In attendance, and in almost every case it was the expressed opinion that 

 there was np need for a twenty-five per cent increase, and that the matter 

 should be investigated before the increase is made effective, It being freely 

 stated that it looked as though It was a tax measure. Instead of a move- 

 ment for the general benefit of transportation. 



A log and lumber shipper present at this meeting stated that the Increase 

 would be prohibitive, figured on a $15 per car minimum on logs, as it 

 would advance rates as much us 200 per cent In some cases on logs, in 

 addition to the advance on outbound shipments of lumber. From a 

 rehandllng standpoint it was claimed that the percentage of advance would 

 put Louisville off the market, because on through business from the South 

 there would be a maximum of only five cents, whereas Louisville rehandlers 

 would have to pay #wenty-flve per cent on his inbound and also twenty- 

 five per cent on his' outbound, which would make rates two to four cents 

 higher than present difference between through rate and Louisville com- 



bina 



Memphis Strong for Trade Acceptances 



"Use of the trade acceptance is not only good business for every mem- 

 ber of this organization but it is also of the greatest possible benefit to 

 the country at this critical time because of the stoppage of waste which 

 it effects and because of the open book accounts it converts Into liquid 

 capital." declared Champ S. Andrews, textile and lumber manufacturer, 

 as well as banker, with headquarters at Chattanooga, who addressed the 

 Lumbermen's Club of Memphis at its regular semi-monthly meeting at the 

 Hotel Gayoso Saturday, June 1. at the special request of members of 

 that body and at the instance of the American Trade Acceptance Council. 



Mr. .\ndrews dealt with the subject in such an interesting and in- 

 structive manner that there were loud cries of "Go on" when he Indicated 

 that his time was up. Indeed, after he had finished speaking a vote of 

 thanks was extended to him for the excellent manner in which he had 

 explained the functions of the trade acceptance and it was the consensus 

 of opinion among all present that his talk was the most Intelligent and 

 the most timely yet heard on this subject. 



He immediately gained the attention of the lumbermen because he told 

 them that he was conducting a large lumber and box manufacturing 

 business at Chattanooga and bci-in-r Iw fnrrh.^r told them that he spoke 

 as a man who had used thr ti il i iviiir in his own business with 

 most profitable results and n..i ; -mlist. He held no brief for 



the trade acceptance but he ...imii ..| .■,.r\ m.-mber of the club that it 

 is up to him to put his house in ..nbr an.l to use the trade acceptance 

 not only as a means of financing his business but as a means of aiding 

 the nation at this most critical period in its history. 



He briefly reviewed the growth of the trade acceptance, saying that 

 it found its counterpart In the bill of exchange used before the clvii war. 

 He pointed out. however, that it did not become at all general in its use 

 until the federal reserve system conferred the right to trade in acceptances 

 in domestic as well as in foreign business and until it went a step further 

 and made of the acceptance a favored piece of paper bearing a low rate 

 of rediscount. He said : 



The federal reserve system sought a means of Increasing currency with- 

 out inflation and looked to the open hook account. Money in open book 

 accounts is tied up but the trade acceptance makes money for merchandise 

 immediatelv available. It is neither a note nor a draft but It is a nego- 

 tiable promise to pav and must be based on merchandise transferred from 

 the seller to the buyer. 



You gentlemen should mall flw' trn.lf ^r.—pfrin-- nitti v.mr Invoice. 



It is as good to you as cash, n n "i*- 'H.j nj. - . lays. The 



function of the manufacturer i i lUe is put 



under bill of lading but at pr. '1 i ;: ■; i i i .:t banker, 



he must maintain an audltin- ^ iini it large ex- 



pense and must take .itVur 71 uh i.i^ open book 



accounts, accounts wliil* •<• iiadc acceptance. 



Use of the trade a. 1 1 • soiling open book 



accounts to discount i lirge loss to the 



manufacturer or men li 1 ■ i 1 us profits for the 



discounting banks becaiise 01 m„- osiiri<.us.> ni;;ii ..,..• .Uargcd ^, . ^ 



Repudiation of the trade acceptaucc i.s bulh possible and Justifiable but 

 the manufacturer whose acceptances are repudiated a few times will have 

 his credit so impaired that It will be practically impossible for him to do 

 business. Trade acceptances must be used at the banks Immediately if 

 it is desired to convert their proceeds into cash and the banks become 



