HARDWOOD RECORD 



43 



aJditional danger in transportation. In nian,v instances they have 

 lieen misled and in others disapiiointed, until they are beginning 

 to realize that sometliing must be done to protect their interests 

 from overwiielming claims for damage in transit. 



The Xutional Association of Box Manufacturers has been urging 

 upon the transportation companies the importance of basing all 

 their rates upon goods packed in standard packages and to make 

 wooden boxes standard. It is not my purpose at this time to dis- 

 cuss the merit of wooden boxes. But they have always been 

 standard and f predict they always will be so. They are the 

 product of tlie forest, made from that which would otherwise be 

 waste. 



Railroad companies will do well to look into the future when 

 ccinsidcriug problems of this character and act cautiously and 

 carefully before discriniiuating against an industry that represents 

 to the lumber carrying rnilriiads of the country their greatest 

 amount of tonuage. 



The members of our assoeiaticni and box manufacturers every- 

 where are not unmindful of the coiiperation of lumber manufac- 

 turers in this movement. Great and valuable assistance has been 

 given by lumbermen everywhere and it has served to emphasize 

 the bonds of friendship and the feeling of reciprocity between 

 them auil to establish a mutuality of interests. 



Prices and Grades 



The box niauufacturcrs are not actuated by selfish motives alone 

 in this matter of price and grades to which I have referred. This 

 was made very plain to the lumber manufacturers througli the 

 years past when the prices were constantly advanced. We have no 

 wish to dictate prices and are anxious to see the lumber business 

 of our country maintained on a profitable basis, but it does seem 

 that a revision might be made in prices that would worli no hard- 

 ship upon the lumber nmnufacturer and at the same time prove 

 an advantage to the box manufacturer by enabliug him better to 

 compete with substitutes. 



Personally. I am not convinced that the prices of the different 

 grades of lumber are based entirely upon the law of supply and 

 demand. It is conceded that certsin low grades of stock are sold 

 below cost. If so, the better grades must carry sufficient profit to 

 cover thf loss on the lower grades. Prevailing market prices for 

 low grades of lumber of all kinds are to some extent a matter of 

 custom and precedent and I be!ieve that lumbermen would be wise 

 if they reduced tlie prices of their low grade stock for box pur- 

 poses and increased the prices of higher grades for which there is 

 a better demand and the use of which can not be replaced by 

 substitutes. Generally sjieaking. where the better grades are 

 used in manufacture the cost of the material alone is not so great 

 a proportion of tlie entire cost of the output as it is in the box 

 business, where low grades are used. A matter of a few dollars a 

 thousand feet for low grade stock might be of the greatest im- 

 portance to the perpetuation of the box industry, whereas an equal 

 amount added to the price of higher grades would not represent 

 more than the ordinary fluctuations of the market. I understand 

 that a variation of i*-i or even .$10 does not represent more than 

 the market changes in higher grades of the better class of hard- 

 wood lumber, which demonstrates the possibility of maintaining 

 the higher standard of prices. If the prices on box grades were 

 reduced this amount it would not only be a great relief to box 

 manufacturers but it would be very helpful in perpetuating a busi- 

 ness that always has provided the greatest market for low grade 

 lumber in the country. Your association can not do this alone, 

 because the product of your mills is sold in competition with low 

 grade stock fi-om other sections, but with the cooperation of all 

 other lumber associations, representing all classes of lumber that 

 are used in the manufacture of boxes, I am persuaded that this 

 jilan could be worked out to a successful conclusion. It would 

 not only be helpful to the box manufacturing industry of our 

 country and to the lumber industry, but would also be in direct 

 accord with the most advanced ideas for the conservation of 

 forest products. With our combined efforts and cooperation we 

 can meet competition for substitutes in boxes, you can retain your 

 market for low grade stock and give a greater freedom to the 

 work of selling your higher grades of stock upon a profitable 

 basis. 



What I have said about grade and quality has reference more 

 especially to the classes of hardwood lumber manufactured by the 

 members of this association. I do not claim that you should be 

 held accountable for the sins of the entire lumber world. The 

 basis of supply is so diversified that each section depends upon 

 the source that can supply its demands most economically and 

 most advantageously. Therefore the matters of location and of 

 transportation facilities usually determine the source and basis of 

 our supplies. Xew England depends mostly upon its native second 

 growth pine. As we come west to New York our horizon broadens, 

 we get not only New England pine but the product of our pine 

 forests of Michigan, Wisconsin and Minnesota, together with the 

 importations from Canadian forests. Be.sides this they begin to 

 draw from the products of the South and Southeast, particularly 



from points accessible for water shipments. Moving farther along 

 west we come to what is termed the middle West, where our sup- 

 ply comes mostly from either the North or South, depending upon 

 our latitude and location. The Northwest depends entirely upon 

 its own output, drawing little or none of its supply from other 

 sections. This is also true of the South, whose interests are much 

 more diversified on account of her greater area, and here our 

 supply is determined by our proximity to waterwa.ys or other 

 transportation facilities. That great area of our country referred 

 to by us as the West has within its confines the greatest amount 

 of timber to be found in our country, perhaps has local supply for 

 practically all ifs industries and gives less thought to the basis of 

 supply than we do where we are more restricted. 



Perhaps the greatest freedom in choosing our supplies is enjoyed 

 by those of us who are located in the great centers of the Middle 

 West. Speaking for our cit_y, Cliicago, we draw from all districts 

 and with our facilities for transportation, both lake and rail, are 

 not dependent upon any particular section. We can handle the 

 pine, hemlock and spruce of the North as well as of Canada — or 

 the birch, beech, maple and other hardwoods of the same section. 

 We can draw from the western pine and spruce of Oregon and the 

 far West. .And are available to the product of the entire south- 

 land from Texas to the Atlantic. This gives us gum. cottonwood, 

 yellow pine, cypress and all other kinds indigenous to these sec- 

 tions. Failing in all these, we can go to the forests of Wisconsin 

 and Minnesota and find that there is still "balm of (Jilead" which 

 some of lis substitute for cottonwood. 



It may readily be seen that with these conditions existing and 

 with the diverse interests which are found in various sections, 

 with the possibilities of drawing from varied sources of supply, it 

 becomes not a matter for any organization to dispose of alone, 

 Vnit a question of national importance. 



It is a fact which, though deplored, must be admitted, that the 

 business of the box manufacturer suffers today from overproduc- 

 tion or, rather, overcapacity. Notwithstanding this fact some luni- 

 lier manufacturers seek to relieve the situation by creating a still 

 greater capacity and placing in their mills machinery for the manu- 

 facture of boxes and shooks. This only aggravates a situation al- 

 ready acute and disturbed. No action can be taken by either your 

 industry or ours to stimulate the use of boxes. They are bought 

 only when their use is required — not before — and the biggest busi- 

 ness you and I can engage in today is to see that when they 

 are demanded they are made out of that product which nature in- 

 tended and W'hich under, all laws of economics must otherwise be 

 wasted. 



With all these things to be considered, what course should we 

 pursue? We can acomplish nothing except through cooperation 

 and the cultivation and development of mutual interests — at best 

 we will have enough opposition from extraneous sources — and my 

 closing admonition is to recommend a thorough consideration of the 

 subject from every point of view that we may work in unison and 

 harmony in perpetuating these industries in the interests of all 

 concerned. 



Frank F. Fee, of the Fee-Craytou Hardwood Lumber Company, 

 of Little Rock, Ark., was then introduced and delivered the fol- 

 lowing exhaustive analysis on the "Cost of Manufacture": 



MANUFACTURING COST OF LUMBER 



While the assertion may seem, on first thought, to he t<io severe 

 self-condemnation, nevertheless I believe it to be a positive fact that 

 the manufacture of lumber has been, and is to-day, conducted with 

 less actual knowledge of costs than any other business. The maker 

 of lumber as a rule is a life member of that large association — 

 "Guessers." We guess what we pay per thousand feet; guess how 

 many feet we get out of a given amount of logs: guess what per 

 cent, of Fas and common we produce; guess what it is worth; 

 guess what is should sell for; guess how much we make or lose 

 per thousand feet; and guess whether we will fail or succeed. Pos- 

 sibly there has been a reason for all this in days gone by. 



No two trees are alike in quality. You may buy clear logs gotten 

 together fcom a great quantity, say half a dozen logs of the same 

 size, and clear exterior, each has a heart that runs the entire length; 

 there the similarity ends. Who knows how far shakes or knots radi- 

 ate from the heartof any log? The gentleman of sporting proclivities 

 should get into the sawmill game, not even Monte Carlo afi'ords such 

 an opportunity for a game of chance. Occasionally there is a winner 

 in our game. ' His name and fame reaches across the continent, but 

 the many erroneous guessers are not heard of. 



The flour mills, the steel maker, and the cloth maker buy on 

 certain measures of value. Cost of j'our life insurance is based 

 on lengthy mortality tables. Fire risks, on elaborate compilations 

 of statistics, but tables of percentages and amounts sawn from logs 

 are woefully lacking. As timber begins to vanish the commercial 

 cemeteries of sawmillers expand. 



We have awakened to the necessity of looking into costs. Values 

 have increased so greatly that knowledge must take place of guess- 

 ing. Years back if one guessed wrong but little capital was 



