RKX'IKVV OF LUMURR INDUSTRY AFFAIRS Bol 



A policy of interchange of statistical information and economic views 

 with lumber administrators of other countries and co-operation with 

 the Census Bureau, the Federal Trade Commission, the Forest Service, 

 and the War Industries Board is recommended {American Lumber- 

 man, August 3. 1918). 



For a detailed statement of the data desired and the modus operandi 

 proposed, see American Lumbennan, October 12, 191 8, page 44. 



LUMBER BUSINESS ACCOUNTING 



Federal investigation, price-fixing, and tax requirements, as well as 

 general business conditions, combine to enforce a uniform cost account- 

 ing system and practice upon a somewhat hesitant lumber industry. 

 Dr. Wilson Compton (an ex-Professor of Economics and lately with 

 the Federal Trade Commission, now Secretary Manager of the Na- 

 tional Lumber Manufacturers' Association) points out correct and 

 incorrect methods of handling depreciation and investment, showing 

 that the difference between a cost calculated upon the net-investment 

 method may show a variation of $2 to $3 per thousand feet, as com- 

 pared with a similar computation based upon the gross investment. This 

 dift'erence may often be the dilTerence between a fair profit and no 

 profit at all. 



The two forms of accounts are discussed in detail, good diagrams 

 illustrating each method. The conclusion is that the net-investment 

 method is incorrect in principle and inconsistent with uniformity in 

 cost-keeping methods and intelligent price-fixing policy based upon the 

 costs of production {American Lumberman, July 27, 1918). 



If Dr. Compton's conclusions are correct, the Forest Service may 

 have occasion to revise the instructions of its "Manual of Stumpage 

 Appraisal." 



A more or less uniform cost-accounting system was adopted in Sep- 

 tember by the California White and Sugar Pine Manufacturers' Asso- 

 ciation, and is outlined in some detail in the American Lumberman of 

 October 5, 1918. 



A cost accounting system has also been adopted by the Hardwood 

 Manufacturers' Association of the United States (lately amalgamated 

 with the American Hardwood Manufacturers' Association). Some 

 six forms are used, facsimiles and official explanations being pub- 

 lished, in part, by the American Lumberman of November 9, 1918, and 

 the Lumber Trade Journal of November 15, 1918. 



