TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



9 



pronounced than for other industries. During the last four 

 years, however, the cost of lumber purchased has almost 

 doubled, while the amounts have been reduced. Under the 

 ure.-tt tinancial burdens of readjustment and reconstruction 

 following thi> war added costs of any important material delay 

 even the most needed repairs and betterments and add to trans- 

 portation ditlicultles, which react upon all industries and con- 

 sumers, rncertainty as to securing adequate supplies of de- 

 sired materials at the time wanted has made it necessary for 

 railroad companies in general to hold comparatively large sur- 

 pluses, a tendency which serves to accentuate shortage for all 

 purchasing industries. Railroads operating in the forest re- 

 gions ordinarily carried a few years ago but from one to two 

 weeks' supplies, since slocks could be replenished quickly. 

 other roads carried stocks sufficient to last several months. 

 The limber roads are now carrying from 6 to 10 weeks' sup- 

 plies and other roads sufficient to last from G to 9 months. 



THE FURNITURE INDUSTRY. 



The furniture industry is one of a group of industries which 

 utilize mainly high-grade hardwoods and have had much the 

 same history. They began in the Northeast, where for many 

 years the local supplies were ample for their needs. The 

 waning of these supplies forced the industries westward, where 

 they rapidly expanded in the last quarter of the nineteenth 

 century, drawing mainly on the magnificent virgin hardwood 

 forests of the Middle West. Within the last 15 or 20 years 

 they have been forced to turn more and more from the depleted 

 and vanishing stands of the States along the Ohio to the timber 

 northward and southward. Their present sources of supply 

 are very largely the remoter and more Inaccessible portions 

 of the Southern Appalachians and the lower Mississippi Valley. 

 When these forests are cut out the industries will have ex- 

 hausted practically their last large resources of old-growth 

 timber. 



liesides furniture the group includes the veneer, handle, 

 vehicle, and agricultural-Implement Industries. These all com- 

 pete among themselves for raw material. 



Before the end of the summer of 1919 the demand for furni- 

 ture had assumed such proportions that the normal production 

 of the large factories during the current season had been almost 

 wholly contracted for, with many retailers uncared for. The 

 immediate result was a corresponding demand for lumber on 

 the part of the furniture-manufacturing industry, which nor- 

 mally uses about 1J billion feet, and Is the largest consumer of 

 high-grade hardwood timber In the United States. Hardwood 

 lumber stocks following the war were low and have since gone 

 to as low as half the normal ; production has fluctuated down- 

 \\ard to a minimum, in some districts of as low as 50 per cent 

 of normal, so that it has been the practically universal ex- 

 perience of furniture manufacturers that desired supplies of 

 raw material could be secured only with the greatest difficulty, 

 particularly during the past six months. 



The veneer situation has been equally bad ; orders for sawn 

 oak veneers are said to be 100 per cent greater than stocks, 

 and sliced and rotary veneer equally difficult to secure. For 

 this and other reasons production of furniture, in the face of 

 unprecedented demands, is from 15 to 25 per cent below 

 normal, and many factories face shut downs because of in- 

 ability to secure raw materials. Individual furniture manu- 

 facturers bid against each other for the inadequate supplies 

 of lumber and veneer available, while their industry competes 

 with the automobile, musical instrument, and other manufac- 

 turers similarly situated. The only factories which are not 

 having serious trouble in getting wood supplies seem to be the 

 small plants which can get local timber and which make com- 

 paratively low-grade furniture. 



Difficulties have been aggravated by lack of facilities in both 

 the lumber and the furniture industries for artificial drying of 

 186212 20 -2 



wood. In prewar practice hardwood lumber was ordinarily 

 air seasoned for six to nine months before sale. Furniture 

 dealers are now purchasing material practically green from 

 the saw, involving heavy additional freight charges. While 

 the uncertainty as to securing material and the need for a long 

 drying period justify the carrying of larger stocks at the 

 factory, it is reported that furniture manufacturers have on 

 the average only about one-half of the stocks carried before the 

 war. Supplies have been so limited and uncertain that lumber- 

 men have refused to take contracts for their output at any 

 specified price and have even refused to give buyers an option 

 on any stated amount of lumber at market prices on delivery. 

 Competition has become so keen that buyers have been ordered 

 to secure lumber almost regardless of price. 



Naturally prices have jumped under such competition. While 

 there has been an increase during the past four years in prac- 

 lically every item entering into furniture production, the larg- 

 est increase has been in the cost of lumber. Roughly, lumber 

 costs increased about 200 per cent during the year 1919, and 

 a total of 300 per cent since before the war. Something like 

 75 or 80 per cent of the raw material for furniture manufacture 

 is lumber or plywood. Average prices paid by furniture fac- 

 tories on No. 1 common 4/4 red gum were in January, 1916, 

 approximately $27.50 per thousand board feet; in April, 1919, 

 $49.50; and in April, 1920, $170. No. 1 common 4/4 sap gum 

 rose from $24 in January, 1916, to $95 in April, 1920. No. I 

 common 4/4 plain oak, another wood largely used in furniture 

 making, during the same periods increased from $37.50 to $160. 

 Quartered oak, firsts and seconds, 4/4 increased from $90 in 

 January, 1916, to $310 in April, 1920; and No. 1 common 4/4 

 basswood, from $29.50 in January, 1916, to $125 in April, 1920. 

 Wholesale veneer prices have risen in proportion; between 

 January 1, 1916, and April 1, 1920, i inch gum increased from 

 $16 to $60, &, inch and A inch gum, from $4 to $16; i inch 

 poplar, from $16 to $65; and quartered white oak on the aver- 

 age, from $17 to $52 per thousand square feet. 



Higher lumber prices are multiplied in retail prices of furni- 

 ture. This may be Illustrated by a single example. The lum- 

 ber for a medium quality plain dresser cost $2.72 in March, 

 1919, while in February, 1920, the same material cost .$7.65, an 

 increase of practically $5. Dealers are reported to add usually 

 from 75 to 100 per cent to the factory price to cover their 

 own selling costs and profit. An increase in lumber cost to the 

 furniture manufacturer of $5 adds from $9 to $10 to the re- 

 tail price, and the purchaser of the dresser actually pays for 

 the lumber which goes into it three or four times prewar prices. 



Such conditions as have existed during the past year and 

 the lumber situation has been a material factor in this have 

 injected a very large speculative element into the furniture 

 industry. In many cases the furniture maker is not sure of 

 his lumber or what it will cost until the time of its delivery. 

 He can neither plan future output nor estimate future costs. 

 He safeguards his own interest through higher prices to the 

 retail dealer, who, in turn, can be certain neither of the filling 

 of orders nor of the cost of his stock until delivered. All of 

 this uncertainty and speculative character encourages, and 

 to some extent necessitates, increased prices all along the line, 

 including finally the price to the consumer, who pays not only 

 for increased costs but for business risks. Furthermore, pur- 

 chasers, since they must pay high prices, demand high-grade 

 furniture; and this, together with the widespread disappear- 

 ance of local timber supplies, makes more and more difficult 

 the position of the small factory producing comparatively low- 

 priced furniture, and tends to centralize manufacture in the 

 larger concerns. 



THE VENEER INDUSTRY. 



Veneer manufacture is a rapidly growing industry which sup- 

 plies furniture makers, manufacturers of musical instruments, 



