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HARDWOOD RECORD 



investigation made. The cost of reliaudling 

 outs, degrailts and outs from special orders 

 amounts to 7 cents per tliousand feet ; cover- 

 ing and uncovering piles,, l'^ cent, making a 

 total expense on the amount of lumber 

 shipped of 88J/i cents per thousand. 



Now with these facts before us we know 

 wliat it costs to make lumber, and we credit 

 tlie mill with five dollars per thousand feet, 

 which allows a fair margin of profit to the 

 manufacturer. 



Going further, we have taken a record of 

 the percentage of grades sawn out of the vari- 

 ous kinds of logs, and the real object of this 

 discussion and this article is to prove that 

 there is no profit in the manufacture of quar- 

 tered red oak at the prevailing market prices. 



At this sawmill the percentage of grades 

 f.awn out of quartered red oak ruus as fol- 

 lows : 



Fas <2 9i 



No. 1 common ii'/f 



No. 2 common 1 1 9o 



No. 3 common 5 % 



Strips 2% 



Loss 3% 



Total 100% 



This was cut from what was considered a 

 liigh class of logs, and at the cost of these 

 logs in open market the lumber was delivered 

 on the yards at inventory prices, showing a 

 jirofit of only three per cent in the manufac- 

 ture. As to the inventory prices at which 

 the lumber was put on the yards, there is only 

 a yard margin of 10 per cent, out of which 

 must be paid the holding, loading, deprecia- 

 tion, discount and selling expense. 



These figures were verified by a number of 

 prominent sawmill men at the Indianapolis 

 meeting, and while the man who owns stand- 

 ing timber may figure that his quartered red 

 oak is giving him a profit, if he does so he 

 is making liis profit on the logging end of 

 the business, and not on the manufacture, 

 as his logs are staple articles, and have a 



fixed market value in the logs. It is there- 

 fore a questionable practice to give up the 

 profit of marketing the logs in order to manu- 

 facture, and the mill man who is buying his 

 logs on the market is making his lumber at 

 practically no profit. 



This is only one instance of where such 

 figures can be used in solving the knotty prob- 

 lems encountered in the manufacture of hard- 

 wood lumber, and once a person gets a taste 

 of such statistical figures it usually leads to 

 further investigation and systematic han- 

 dling of the various accounts, and enables one 

 to analyze any parts of his business with a 

 feeling of certainty. 



This article outlines only a very crude 

 system for arriving at some of the important 

 facts, and is intended merely to stimulate 

 thought on the part of tliose manufacturers 

 who are not using some similar system. Sliould 

 it prove of interest, and the reader care to go 

 further, we would advise a careful study of 

 the treatise entitled "The Exact Cost of Lum- 

 ber — A Problem Solved," by Carl Wedderin, 

 published by the Journal of Commerce Com- 

 pany, St. Louis, Mo. Mr. Wedderin 's article 

 goes into the subject from an accountant 's 

 standpoint, and with a careful perusal aud 

 the encouragement of your bookkeeper a grout 

 deal of the information can be put into prac 

 tieal use in most any sawmill business. 



[The writer of this article is seeking all 

 the information possible on this subject, and 

 should any reader of the Record have any 

 ideas that would help out or add to what 

 has already been done, the columns of this 

 journal will be open at all times for the pub- 

 lication of such information. — Editor.] 



Hardwoods in Ecuador 



In reply to an inquiry regarding the prospects 

 of developing an export business in hardwood 

 from Ecuador, Consular Agent George D. Hodian, 

 of Esmoraldas, writes as follows ; 



The hardwood trees here are widely scat- 

 tered ; there are no forests made up entirely of 

 either one or even several kinds of wood, such 



as pine, cedar or oak forests of the United 

 States. There are practically no public roads 

 aud absolutely no wagon roads in this province. 

 The districts where the hardwoods are found 

 would require roads made especially to bring 

 out the logs, and the scattered location of the 

 hardwoods would make the length of the roads 

 greater than if all the trees of the forest were 

 to be used. 



The only persons regularly engaged in getting 

 out logs are employed on the branches of the 

 Santiago river, in the north of this province, 

 and they bring out cedar, tangare and laurel, 

 chiefly for delivery to the three sawmills lo- 

 cated on that river. These logs are cut from 

 lands nearest some tributary to the river, so 

 that there is but a short land haulage, which is 

 accomplished by a "frolic," in which the neigh- 

 bors of the cutter join in dragging out the logs 

 to the water, the crudest imaginable methods 

 being employed. This has resulted in thinning 

 out the merchantable woods near the streams, 

 and logs are now brought out only during the 

 rainy season, when the small streams have plenty 

 of water to float them. In the lower part of 

 this province, along the coast, the timber has 

 not been touched, except for occasional house 

 frames, but the conditions for getting it out to 

 water transportation are the same. 



No one is at present engaged in exporting 

 hardwoods. If the market price of hardwoods 

 in Boston or New York were known here, doubt- 

 less some business man would investigate as to 

 the cost of putting the woods on the market, 

 and it it offered a good margin of profit the 

 business would establish itself, just as the ex- 

 port of ivory nuts has been developed. As the 

 business of exporting hardwoods would be new 

 in this port, it would be necessary for anyone 

 desiring a shipment to deposit a fund with the 

 firm or its New York representative to guaran- 

 tee the expenses to be incurred, or guarantee a 

 minimum price per ton for the wood to be 

 shipped. 



Another method by which a satisfactory busi- 

 ness might be built up would be to send out a 

 responsible timber expert to make an investiga- 

 tion. Public lands are cheap, title can be ob- 

 tained, and contracts can be made for timber 

 on private lands on a reasonable basis. Such 

 an expert could doubtless establish a system of 

 getting out and shipping the timber at a cost 

 that would leave a satisfactory profit. 



IilAUitAM rSlOK IN CAKKYlNc; OUT .MILL COSTS .SYSTEMS 



