10 BULLETIN 1119, U. S. DEPARTMENT OF AGBICULTXTRE. 



a situation that was revealed in tlie crowded housing and soaring 

 rents. Before the war a miUion families lacked houses. In 1918 

 the construction of houses was less than in 1919, and in 1919 only 

 70,000 houses were built when 500,000 ^ were needed. A similar 

 postponement of lumber consumption took place in the other large 

 industries using wood as a raw material. Immediately following 

 the armistice this enormous demand was freed of all restriction by 

 the Government and began to exert its influence upon an industry 

 which in the East, at least, was ill prepared to expand its produc- 

 tion. For several months following the end of the war there was 

 little activity in the lumber business. Then the wheels of business 

 began to turn, slowly at first but with increasing momentum, under 

 the stimulus of increasing orders. By August, 1919, the demand 

 for lumber was overwhelming, and prices were rising rapidly. Manu- 

 facturers were straining to increase their cut, for production was 

 still below normal, and the stocks were badly depleted. The mill 

 price of yeUow pine had advanced from $27 a thousand to the un- 

 precedented figure of $40. At this point many people thought the 

 top of the price wave had been reached. Consumers, many of whom 

 assumed that prices would fall at once after the war, were com- 

 plaining bitterly and urging investigations of alleged price fixing. 

 Domestic orders continued to increase, the price of lumber con- 

 tinued to rise throughout the winter. The demand was such that 

 purchasing agents were virtually bidding against each other for the 

 possession of any kind or grade of lumber, badly milled, half sea- 

 soned, or otherwise. The market was practically in the hands of 

 the sellers, who were in a position to ask what they chose. Prices 

 were so unstabilized that no one had an accurate idea of value. In 

 early February, 1920, southern pine went to $55. The eastern mills 

 had no stocks and cars were scarce. By that time home builders 

 were imable to pay the enormous prices asked for lumber, although 

 the building operations of many large firms continued as fast as 

 lumber and workmen could be had. The high rents received may 

 have justified building by wealthy landlords, but there was no 

 chance for the small home builder, especially as bank credits could 

 not be obtained in proportion to the vastly increased cost of con- 

 struction, which had risen nearly 200 per cent in five years. The 

 conditions were impossible for the maintenance of business on a 

 large scale. In March the demand for lumber checked decidedly. 

 Rumors of price softening became persistent, but just as persistent 

 was the lessening of retail inquiry. The whole mental attitude of 

 Americans had changed, and the period of reckless expenditure was 

 over. The public had made up its mind not to buy. 



Then came the crash. On or about March 20 the lumber market 

 went over the top of the greatest price peak ever known, with the 

 southern pine mill price at $61.60, and other woods in proportion. 

 At retail southern pine was costing the pubhc from $66 to $175 a 

 thousand, depending upon the grade and point of consumption; red 

 gum, $247.50; and quartered oak, $385. Concessions to buyers in 

 certain instances were followed by a flood of canceled orders. Prices 

 continued to slip downward, while stocks increased, and numerous 

 miUs shut down. By June the market was practically dead. North 



2 In March, 1922, a national conference of builders at Washington, D. C, declared that there is need for 

 the immediate construction of 1,500,000 new houses. 



