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HARDWOOD RECORD 



try. It does not make any difference liow we 

 figure cost, provided we get results. Someone 

 said costs must be figured by results, and in no 

 other way. If some manufacturer has a cost 

 system that is giving him satisfactory results 

 upon which he can positively figure a legitimate 

 profit, which will show on his books at the end 

 of the year as he anticipated, he does not need 

 any uniform cost sj'stem that we might adopt ; 

 but it is unfortunately true, gentlemen, that 

 some of the manufacturers in the veneer and 

 panel industry have no conception of their costs. 

 One man who has been in the business a good 

 many years and has, very fortunately made 

 money, stated to me here in this hotel a few 

 months ago when I asked him if he could pro- 

 duce certain stock at the price he was selling it 

 for : "To tell you the truth, Anderson, I am 

 ashamed to say it, but I do not know, as I do 

 not know what anything I manufacture costs 

 me ; but I am going to find out." He is not 

 the only man in this situation, gentlemen. Just 

 give that condition a thought. We should put 

 into use cost systems that will bring results. 



M. W. riJKUY, .VI.(JUM.V, WIS.. DlIiECTOi;. 



Information and better knowledge to the manu- 

 facturer will right there and then get more 

 uniform selling prices and very greatly improve 

 the business. I think that the question of cost 

 and cost accounting is one that the association 

 should give very serious, careful consideration. 



One thing we si hoped (or in the association, 

 one of the points that we had in mind when the 

 assistant secretary was employed, was the pos- 

 sibility of getting a man into this work that 

 would be interested in it and become sufficiently 

 well iniormed upon the practical features of our 

 different lines to visit some of the plants and, 

 where a manufacturer is selling stock of any 

 character for less than the cost of the majority 

 of the manufacturers, find out whether it is 

 because of his peculiar situation or his much 

 greater ability that he is able to produce that 

 stock, for so much less, or whether it is because 

 he simply does not know, and then be able to 

 put him on the right track. Every man who is 

 induced to bring his price up to a profitabh' 

 basis helps every other man in the business, 

 and we can all well afford to give some time and 

 expend money and energy to get the general 

 trend of prices higher than they have been, and 

 especially to get up prices that are demoraliz- 

 ingly low. 



One of the most prominent bankers in Chi- 

 cago, in a recent discussion of the basis of 

 credits, stated that no manufacturer is entitled 

 to credit who does not use a reliable cost system 

 and figure positively his cost. I think, gentle- 

 men, that statement is too logical to admit of 

 any discussion, and I want to say once more 

 that I think the figuring of cost and a general 

 campaign of cost education and the discussion 

 of cost information is positively the one point 

 of greatest importance to this association, be- 

 cause it is only in that wav, by inducing every 

 manufacturer to figure cost and to know his 

 cost, that we can ever get the manufacturers to 

 maintain any reasonable prices. The man who 

 does not know cost has no real appreciation of 

 any price list, and really does not know whether 

 the prices are high or low ; and while to a good 

 many of our manufacturers this talk is un- 

 necessary, there are many more that need it, 

 and the men who are informed on the subject 



of cost need to educate the others for their own 

 protection. 



That is the main part of what I have to say, 

 gentlemen. The financial situation of the asso- 

 ciation is not so blooming that we felt it would 

 be possible this meeting to have a luncheon or 

 dinner. Our financial situation reminds me of 

 the story of the man whose banker called him 

 into the private office one day and said, "Where 

 do you keep your money?" "Why. I keep it in 

 your hank here ; I have an account here." "I 

 know ; but where do you keep your money ; all 

 you keep here is an overdraft." 



Secretary E. H. Defebaugh, in his address, 

 was no less earnest and pointed in tlie dis- 

 cussion of the cost system and made a plea 

 tor more individual work He wanted, he 

 said with much emphasis, to see the resolu- 

 tions committee "do things," and with 

 characteristic force the secretary asked that 

 all take a hand for a general boost all 

 along the line. 



The Secretary's Address 



Mr. President and Gentlemen : In my absence 

 yesterday our president robbed my oflice of the 

 subject I had in mind to talk on, and has put it 

 in such a way that it leaves very little for me 

 to say. I am really so interested in the success 

 of this organization, which was perfected several 

 years ago to help you work out your problems, 

 that I feel it is my duty to talk right from the 

 shoulder. Thi' troiible is there are not enough 

 tncn in it who are willing to give time to put 



II. J. BAUNARll, IXDIANAI'IILIS, DIRECTOK. 



it on its feet, to make your business a profit- 

 sharing one, and make it possible to pay divi- 

 dends instead of being run on the basis where 

 you take care of the grocery bill only and are 

 satisfied. 



A national association is formed to bring va- 

 rious trades together, men of ever.y country, 

 that the.v may exchange notes, get a clearer 

 idea of all business, so they will be able to get 

 hetter prices and work in harmony. We have 

 some eight or ten committees and in the past 

 they have done good work : have gotten together 

 and talked over various features of inspection 

 and have accomplished something. They have 

 also talked over values and have accomplished 

 something. You have compared notes on prices 

 and understand that it costs money for you to 

 live and that you have not been "putting that 

 salary in your cost account. Some of you have 

 discovered that logs were really costing more 

 money than you figured in your selling price, 

 because the logs purchased this year were not as 

 good as those bought last year. You have over- 

 looked the fact that John Smith in New Y'ork 

 has written you a letter stating that your car 

 of veneer stock sent does not suit. It is not up 

 to grade : it is split : it is defective : it is not 

 what he ordered, and you have the car throwu 

 I'ack on your hands. After peddling this stock 

 all over the East you bad to take a cut price for 

 it. You may forget that this ear, instead of 

 showing a profit, snowed a net loss. The reason 

 of this is Iiei'ause your assets are not a good 



bank credit, and unless you know actually how 

 much it costs you are liable to lose money. 



The Constitution and By-Laws Committee has 

 not been able to do much for you because they 

 v.ere not able To say you must do certain things. 

 All the officers could say was, "Gentlemen, we 

 would like to have you participate in this pro- 

 gram." You have neglected, gentlemen, to take 

 this association to heart. You should all belong 

 to the same and not allow three or tour men to 

 do the praying and paying for the entire asso- 

 ciation. I do not know as we could have a 

 better plan of organization than to bring out 

 the fact that you have good clubs, and if you 

 will Join these clubs, join them in the right 

 spirit, go to the meetings, no matter where 

 they are : go to them with open hand and heart, 

 and say : "Gentlemen, here is my business ; I 

 am willing to tell you anything about It ; willing 

 to cooperate with you fo do things." Do not 

 sit back in a corner and say, "Oh, well. So and 

 So will figure that out ; he has plenty of time." 

 Of course there must be a leader, a man who is 

 willing to make sacrifices in associations : this 

 is true in this as well as in other associations. 

 Xo association succeeds unless some man says : 

 "Gentlemen. I will give my time and let you 

 look over m.v books, and even divide my trade 

 with you," and this has been done in this asso- 

 ciation. The man who makes these sacrifices 

 does it because he believes in the industry and 

 is in it to make money and knows the only way 

 is to cooperate with his competitor. 



We have a committee on resolutions. The 

 sorry thing about the Resolutions Committee In 

 most associations is that it seldom has anything 

 to say except a few words about some fellow 

 that is dead. This committee should, when the 

 members come to these meetings, pay close at- 

 tention to what is brought out here and then 

 say what the policy of the association should be. 

 If this Rcsolutioiis Committee would In plain 

 English state to the veneer trade of the United 

 States that the prices obtained for veneer are 

 not enough to net a profit in the business, the 

 man who is really interested in his own business 

 would accept it and determine not to sell goods 

 unless he makes a profit. If the members of this 

 association will only understand they are part- 

 ners, not in crime, but in aH endeavor to do 

 something for themselves, then we will have an 

 association to be proud of. 



Here we are, forty or fifty men from every 

 part of the country, who realize the need of an 

 association, yet we are not doing what we should 

 to make it better. We are on the eve of en- 

 larged business in every line. The steel and 

 box Industries indicate a large volume of busi- 

 ness for 1910. Here there has been no effort 



CHAS BARNABY, GKEENCASTLE, l.ND., 

 MEMBER EXECl-TIVE COMMITTEE. 



made to eliminate contracts made in December 

 that may carry you next year on a basis of cost 

 irstead of being able to take advantage of aD 

 advance on account of increased volume of busi- 

 ness. It is just possible, gentlemen, that this Is 

 true in every line — lumber, cement, plaster busi- 

 ness, all the lines interested in the material 

 trade. Why ? Becaus'^ the manufacturers of 

 the United States are not in closer harmony. 

 When a man comes to this town of Chicago he 

 thinks it is more important that he should buy 

 a Christmas gift than attend the meetings and 

 not only listen to what is said but say some- 

 Ihing. 



