WD 975 CORNELL UNIVERSITY LIBRARY CORNELL UNIVERSITY LIBRARY 3 1924 092 561 038 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924092561038 34 Diagram "34 LAKE STATES HEMLOCK. 10. Conditions in production of Lake States hemlock 645 11. General outline of association work 646 12. Association price activities before March, 1906 647 13. Change in the policy of issuing association official price lists 654 14. Connection of the association with the Broughton Standard Price Lists 655 15. Extracts from lumber-trade papers relating to Lake States hemlock. . . 673 16. Comparison of list prices with prices of actual sales 679 17. Definition of grade 680 18. Prices of actual sales of Lake States hemlock 680 Tabular statement 680 Diagram 680 CHAPTER VII.— SPRUCE. Sec. 1. Production of spruce lumber 682 2. Competition met by spruce producers 683 EA8TEEN SPRUCE. 3. Conditions in production of eastern spruce 685 The interrelation of the eastern-spruce markets of Boston and New York ggg 4. Concerted price activities of eastern-spruce producers 687 Connection of spruce producers with uniform price lists and con- certed restriction of output ggy 5. Extracts from lumber-trade papers relating to eastern spruce . . . . 690 6. Definition of grade and sizes shown 694 7. Prices of actual sales of eastern spruce 694 Tabular statement Biagram ••■•»•■--■";";»;.■;»;;;;;:.■::::::: 695 WEST VIRGINIA SPRUCE. 8. Conditions in production of West Virginia spruce 698 9. Concerted price activities of West Virginia spruce producers" 700 Connection of West Virginia spruce producers with uniform price 10. Extracts from lumber-trade papers'rela'ung'to West Virginia'spr'uce ' " 704 11. Comparison of hst prices with those of actual sales P !„ 12. Definition of grade shown 13. Prices of actual sales of West Virginia spruce - 7U Tabular statement 712 Diagram 712 712 NEW YORK SPRUCE AGREEMENT. 14. Nature of the New York spruce agreement 718 CONTENTS. IX CHAPTER VIII— CYPRESS. Page. Sec. 1. Production of cypress lumber 722 2. Competition met by Louisiana red cypress 722 3. Conditions in production of Louisiana red cypress 723 4. General outline of activities of organizations among red-cypress pro- ducers 723 Southern Cypress Lumber Association 724 Southern Cypress Co. (Ltd.) and Southern Cypress Lumber Sell- ing Co. (Ltd.) : 724 Southern Cypress Manufacturers' Association 725 Cypress Selling Co. (Ltd.) and Louisiana Red Cypress Co 727 5. Connection of red-cypress producers with uniform price lists 731 6. Curtailment of red-cypress production 737 7. Extracts from lumber-trade papers relating to cypress 739 8. Grades 758 Definition of grades and sizes shown 758 9. Proportion of grades of red cypress produced by various Louisiana mills 760 10. Prices of actual sales of red cypress 761 Tabular statement 761 Diagram , 762 CHAPTER IX.— SHINGLES. Sec. 1. Production 769 2. Competition met by red-cedar shingle producers 770 Competition with shingles of other woods 770 Competition with substitute roofings _. 770 3. Conditions in production of red-cedar shingles 771 4. Organized efforts to influence prices 773 Washington Red Cedar Shingle Manufacturers' Association 773 Interstate Red Cedar Shingle Co 779 Shingle Mills Bureau .' 783 Shingle Manufacturers' Agency 797 Red Cedar Shingle Manufacturers' Association 800 5. Grades 821 6. Prices of actual sales of red-cedar products 822 Tabular statement 822 Diagram 823 7. White-cedar shingles 823 Grades 824 Tabular statement and diagram 824 8. Red-cypress shingles 824 Grades 825 Tabular statement and diagram 825 CHAPTER X.— HARDWOODS. Sec. 1. Production of hardwood lumber 832 2. Competition met by hardwood producers 833 3. Conditions in production of hardwood lumber 833 4. Organized activities of hardwood producers 833 Hardwood Manufacturers' Association of the United States 834 Minor hardwood associations 840 Michigan Hardwood Manufacturers' Association 840 Hardwood Lumber Manufacturers of Wisconsin 844 x CONTENTS. Sec. 4. Organized activities of hardwood producers— Continued. Minor hardwood associations— Continued. _ _ p as e - Northern Hemlock & Hardwood Manufacturers' Association. . 845 Wisconsin Hardwood Lumbermen's Association 845 Northwestern Hardwood Lumbermen's Association 846 Oak Flooring Manufacturers' Association 846 5. Effect of the various organized price activities 847 6. Hardwood grading rules Difficulty of securing uniform grades - - - - ° 47 Grades of the Hardwood Manufacturers' Association of the United 848 Grades of the National Hardwood Lumber Association 851 7. Prices of actual sales of oak 855 Tabular statement 855 Diagram 855 8. Prices of actual sales of minor hardwoods 868 Tabular statement 868 Diagram 868 MAPLE. 9. Conditions in production of maple 878 10. Organized price activities of maple producers 878 Maple flooring 878 Rough maple lumber 882 11. Extracts from lumber-trade papers relating to maple 887 12. Grades 892 Maple flooring 892 Rough maple lumber 892 13. Prices of actual sales of maple 892 Tabular statement 892 Diagram 892 POPLAR. 14. Competition met by poplar producers 898 15. Conditions in production of poplar 898 16. Organized price activities of poplar producers 899 Association price-list activities 899 17. Extracts from lumber-trade papers relating to poplar 908 18. Grades 9X5 Hardwood Manufacturers' Association of the United States rules. 915 National Hardwood Lumber Association rules 918 19. Prices of actual sales of poplar lumber 919 Tabular statement 919 Diagram 9 2 q Index 927 LIST OF TABLES. 1. Prices of yellow pine, Kansas City delivery, including the list prices of the Page- Yellow Pine Manufacturers' Association, of the E. J. Schuster Printing Co., and of three different producing companies, also the prices of actual sales made by several mills, 1889-1911, by months 182 1A. Actual prices of yellow pine delivered in Boston, New York, Pittsburgh, Chicago, Milwaukee, and St. Louis, and f . o. b. mill prices in Alabama, Mississippi, Texas, Arkansas, and Missouri, 1891-1910, by months 212 IB. Actual prices of North Carolina pine delivered in Boston, New York, Philadelphia, Pittsburgh, and Baltimore, and f. o. b. Norfolk basis, 1892-1910, by months -. 332 2. Actual prices of Douglas fir f. o. b. Puget Sound and Portland, Oreg., basis, 1894-1910, by months 483 3. Actual prices of white (or northern) pine f. o. b. Minneapolis, western Wisconsin, and Wausau, Wis., bases, and delivered in Pittsburgh, 1896- 1910, by months 571 3A. Actual prices of white pine (Tonawanda grading) f. o. b. Tonawanda basis, 1897-1910, by months 602 4. Actual prices of eastern-hemlock boards delivered in Boston, 1897-1909, by months 615 4A. Actual prices of Pennsylvania and West Virginia hemlock delivered in New York, Philadelphia, and Pittsburgh, 1898-1910, by months 636 4B. Actual prices of Lake States hemlock f. o. b. Wausau, Wis., basis, 1896- 1910, by months 681 5. Actual prices of eastern spruce delivered in New York and Boston, 1897- 1910, by months 696 5A. Actual prices of West Virginia spruce delivered in New York, Philadel- phia, and Pittsburgh, 1898-1910, by months 713 6. Actual prices of red cypress delivered in Boston and St. Louis, and f. o. b. New Orleans basis, 1898-1910, by months 764 7. Actual prices of red-cypress shingles f. o. b. New Orleans basis, of white- cedar shingles delivered in Boston, and of red-cedar shingles and bevel siding delivered in New York and f. o. b. Puget Sound basis, 1895-1910, by months 826 8. Actual prices of quarter-sawed and plain oak delivered in Boston, New York, Philadelphia, Buffalo, Chicago, and St. Louis, 1894-1910, by months 857 9. Actual prices of chestnut delivered in Boston, New York, Philadelphia, and Buffalo, 1897-1910, by months 869 10. Actual prices of white ash delivered in Boston, New York, Philadelphia, and St. Louis, 1896-1910, by months 872 11. Actual prices of basswood delivered in Chicago, 1894-1910, by months 875 12. Actual prices of white birch delivered in Chicago, 1901-1910, by months. . 877 13. Actual prices of maple boards and flooring delivered in Boston, New York, Philadelphia, and Buffalo, 1897-1910, by months 893 14. Actual prices of poplar delivered in Boston, New York, Philadelphia, Buffalo, and St. Louis, 1897-1910, by months 921 £1 LIST OF DIAGRAMS. Facing page. 1. Proportion of grades produced in the cut of mills sawing yellow pine and ^ white or "northern" pine ■.""; T "" i ,"^""i-" "';'). 2. Proportion of grades produced in the cut of mills sawing North Carolina pine, ^ Louisiana red cypress, and Douglas fir - - - - - • - - - - • - - - - • - y f 3 Comparative fluctuations of prices of different grades of white or northern pine, Lake States hemlock, and North Carolina pine, shown by index prices, 1896-1910 """"",'" "i " "j '" j" ' 4. Comparative fluctuations of prices of different grades of Douglas fir, red cedar, and red cypress, shown by index prices, 1895-1910 • 5. Comparison of the movement of association, Schuster, and individual com- pany list prices and of actual prices of yellow pine on a Kansas City, Mo., delivery basis, 1889-1910 126 6. Movement of actual prices of yellow-pine rift flooring delivered in Boston, New York, Pittsburgh, Chicago, and St. Louis, 1898-1910 246 7. Movement of actual prices of yellow-pine flat flooring delivered in Boston, New York, Pittsburgh, Chicago, and St. Louis, 1897-1910. 246 8. Movement of actual prices of yellow-pine flooring f. o. b. mills in Alabama, Mississippi, Texas, Arkansas, and Missouri, 1891-1910 246 9. Movement of actual prices of yellow-pine boards and dimension f. o. b. mills in Texas, Arkansas, and Missouri, 1891-1910 - 246 10. Comparison of the movement of association list prices and actual prices of North Carolina pine on an f . o. b. Norfolk basis, 1892-1910 302 11. Movement of actual prices of North Carolina pine delivered in Boston, New York, Philadelphia, and Pittsburgh, and on an f. o. b. Norfolk basis, 1896-1910 352 12. Movement of actual prices of North Carolina pine delivered in Boston, New York, Philadelphia, Pittsburgh, and Baltimore, and on an f. o. b. Nor- folk basis, 1892-1910 352 13. Movement of actual prices of fir logs, Grays Harbor and Columbia River points, and comparison of movement of association list prices with actual prices of fir logs at Puget Sound, 1896-1910 378 14. Movement of actual prices of fir lumber on an f. o. b. Puget Sound basis, 1894-1910 488 15. Movement of actual prices of fir lumber on an f. o. b. Portland, Oreg., basis, 1894-1910 488 16. Comparison of movement of association list prices and actual prices of white or "northern " pine on an f . o. b. Minneapolis basis, 1901-1910 562 17. Movement of actual prices of white or "northern " pine on the f . o b. Minne- apolis, western Wisconsin, and Wausau, Wis., basis, 1896-1910 582 18. Movement of actual prices of white or ' ' northern " pine on the f . o . b . Minne- apolis, western Wisconsin, and Wausau, Wis., basis, and delivered in Pittsburgh, 1896-1910 582 19. Movement of actual prices of white pine (Tonawanda grading) on an f. o. b. Tonawanda basis, 1897-1910 606 XII LIST OF DIAGRAMS. Xm Facing page. 20. Comparison of movement of so-called "official" liBt prices and actual prices of Pennsylvania and West Virginia hemlock delivered in New York, Philadelphia, and Pittsburgh, 1898-1910 632 21. Movement of actual prices of Pennsylvania and West Virginia hemlock delivered in New York, Philadelphia, and Pittsburgh, 1898-1910 644 22. Movement of actual prices of eastern-hemlock boards delivered in Boston, and comparison of movement of association list prices with actual prices of Lake States hemlock on an f. o. b. Wausau, Wis., basis, 1896-1910 680 23. Movement of actual prices of eastern spruce delivered in New York and Boston, 1897-1910 698 24. Comparison of movement of so-called ' ' official " list prices with actual prices of West Virginia spruce delivered in New York, Philadelphia, and Pitts- burgh, 1898-1910 712 25. Movement of actual prices of West Virginia spruce delivered in New York, Philadelphia, and Pittsburgh, 1898-1910. . , 716 26. Movement of actual prices of red cypress delivered in Boston and St. Louis, and on an f. o. b. New Orleans basis, 1898-1910 768 27. Movement of actual prices of red-cypress shingles on an f. o. b. New Orleans basis, of white-cedar shingles delivered in Boston, and of red-cedar shin- gles and bevel siding delivered in New York, and on an f. o. b. Puget Sound basis, 1895-1910 830 48. Movement of actual prices of quartered and plain oak delivered in Boston, New York, Philadelphia, Buffalo, Chicago, and St. Louis, 1894-1910 866 29. Movement of actual prices of maple boards and flooring, chestnut, white ash, basswood, and white birch delivered in Boston, New York, Philadelphia, Buffalo, Chicago, and St. Louis, 1894-1910 : 896 30. Movement of actual prices of poplar delivered in Boston, New York, Phila- delphia, Buffalo, and St. Louis, 1897-1910 924 FACSIMILE REPRODUCTIONS. A. Two pages from the August 4, 1909, basis list of the Yellow Pine Manufac- turers' Association 12 B. New York Lumber Trade Association spruce agreement price list in effect December 3, 1908 720 LETTERS OF TRANSMITTAL. Department of Commerce, Office of the Secretary, Washington, April 21, 1914. Sir: I have the honor to transmit herewith Part IV of the Report of the Commissioner of Corporations on the Lumber Industry. This part deals with conditions in the wholesale distribution of lumber, particularly prices and combinations among manufacturers and wholesalers to fix prices. Very respectfully, William C. Redfield, Secretary. The President. Department of Commerce, Bureau of Corporations, Washington, April 21, 1914- Sir: I have the honor to transmit herewith the full text of Part IV of a Report on the Lumber Industry, made to the President under your direction and in accordance with the law creating the Bureau of Corporations. This part deals with the conditions in the wholesale distribution of lumber, particularly prices and combinations among manufacturers and wholesalers to fix prices. I desire to mention as especially contributing to the preparation of this report Messrs. Thomas M. Robertson, David L. Wing, William H. England, and W. B. Wooden, of this Bureau. Very respectfully, Joseph E. Davies, Commissioner. To Hon. William C. Redfield, Secretary of Commerce. 25030°— 14 n XT LETTER OF SUBMITTAL. Department of Commerce, Bureau of Corporations, Washington, April 21, 1914- Sir: I have the honor to submit herewith Part IV of a Keport on the Lumber Industry. The preparation of this part was begun by my predecessors in office. This investigation was authorized by resolutions adopted by the Senate and by the House of Representa- tives. It deals with the wholesale distribution of lumber, prices, and combinations among manufacturers and wholesalers to fix prices. It is responsive to that part of the Senate resolution that directs an inquiry to ascertain whether or not there exists "any combination, conspiracy, trust, agreement, or contract intended to operate in restraint of lawful trade or commerce in lumber or to increase the market price of lumber in any part of the United States." A sub- sequent part of this report will deal with combinations among retail dealers. Price combinations among lumber manufacturers have usually been effected through associations. Many years ago they began organizing and to-day there is no important region of production in which they do not have an association. Furthermore, they have an association that is national in its scope and which is a federation of a number of the local associations. The prominent features of this part of the report are: 1. While some of the avowed purposes of the associations are to bring about and foster practices that are beneficial both to producer and consumer, the chief purpose apparently has been to increase profits by advancing prices. 2. The wholesale prices of lumber have been higher because of the associated activities of lumbermen. 3. In the earlier years many of the associations openly attempted to curtail the output and to fix the wholesale price of lumber; later, be- cause of fear of the law, they disavowed any such purpose, but the practices they professed to abandon were continued by subterfuge and indirection through the same groups of men who had formerly done them in the associations. 4. The National Lumber Manufacturers' Association has been active in its efforts to shape legislation. In 1909 it maintained an XVIII LETTER OF SUBMITTAL. aggressive lobby in Washington to defeat a reduction of the tariff on lumber. 5. The wholesale prices of lumber are given in elaborate tables and the course of prices is graphically shown by numerous charts ; a close correspondence is generally shown between the prices actually obtained and the list prices issued. From 1897 to 1907 there was a remarkable advance in lumber prices. This advance ranged from about 80 to 200 per cent, de- pending upon the kind of wood and the grade of lumber. While a large part of this advance was due to conditions of supply and demand and to general causes that affected the prices of all commodities, a part of it was undoubtedly due to the concerted efforts of lumber manufacturers. During this period, and since, the lumbermen through their associations and otherwise were industriously acting in concert to maintain or to raise prices. They issued uniform price lists and endeavored to maintain them and, to make it easier to secure the prices agreed upon, they often agreed to curtail the output of their mills. OPEN CURTAILMENT AND PRICE FIXING PRIOR TO 1906. Before 1906 concerted activities were openly promoted by associa- tions as part of their official work, and instances of agreements — written or oral — to maintain uniformly a certain price list, or to restrict output, were common. An example of the written price agreement is the Centralia agreement of 1905 on fir lumber for rail shipment, and an example of the written agreement for restriction of output is that for yellow pine in 1904, both of which are described in considerable detail in this report. There were found many examples of oral agreements for accomplishing both of these purposes. SUBTERFUGES LATER EMPLOYED. Since 1906 the methods of combining to fix prices have been changed. The written agreement has usually been discarded, and a variety of new methods have been adopted to carry on, in essen- tials, the practices ostensibly abandoned by the associations. In some cases the price list which was formerly the basis of the agree- ment was continued under such names as "Market report," or "Pre- vailing prices." They purported to be compiled by the secretaries of the associations from reports sent to them. In other cases they were issued nominally as a private business enterprise by some friendly printing firm, and purported to be compiled by the printer. In both cases there is evidence to show that the lists in question, by whatever name called or by whomever published, served, and were intended to serve, the same purposes as the former official associa- LETTER OF SUBMITTAL. XIX tion lists; and that the determination of the prices printed in the later lists was the work of the same group of men who had previ- ously openly determined the prices of the official lists. This holds true when the "Market reports" or "Prevailing prices" were in turn supplanted by a system of "Basis lists" showing fictitiously high prices, which were intended to be used in connection with "dis- count" or "concession" sheets. The basis lists, with the exagger- ated high prices, were officially adopted by the associations. The discount or concession sheets were sometimes compiled and issued by the secretary from what information he could gather about mar- ket conditions, while at other times they were issued by printing concerns, or trade papers closely identified with the association. Here, as in the case of the price lists, the discounts, and conse- quently the prices really intended to be observed by the members, were determined by the same group of men who previously deter- mined the official prices. REASON FOR CHANGE OF METHODS. The changes in the methods by which these price activities have been carried on since 1906 were admittedly due to fear of the enforce- ment of Federal and State antitrust laws. As a rule, in recent years, greater care has been taken to keep the associations techni- cally clear from the charge of concerted restriction of output than there has been to cover up their actions in the matter of price lists. The lumbermen active in these practices have known all along the illegal character of both these forms of activities; and the subterfuge of changing the name but not the nature of the price lists and the name but not the essential character of the committees which com- piled them appears to have been adopted, at least by some associa- tions, as a result of legal advice. SUCCESS OF EFFORTS TO INFLUENCE PRICES. The evidence clearly shows not only combinations intended to increase the market price of lumber, but there is abundant evidence to warrant the conclusion that, as a result of attempts at artificial control, prices have been higher than they would have otherwise been. Indeed, this was asserted by officers of some associations prior to 1906 and used as an inducement for their support and for increasing their membership. That the lumbermen themselves believed in the success of these efforts is shown by the fact that after the alleged abandonment of certain practices in 1906 they were continued in vir- tually the same form, by subterfuge and indirection. This was accomplished through some of the individual leaders in the industry who were willing to lend themselves to the deception of the public. XX LETTER OP SUBMITTAL. Even in the face of warnings from their attorneys as to the illegality of their actions, they persisted in these practices, with the expendi- ture of much time, energy, and money. Furthermore, a comparison of the prices actually obtained by the lumber manufacturers with the association price lists shows generally a close correspondence. EFFORTS TO INFLUENCE LEGISLATION. The National Lumber Manufacturers' Association has generally directed its efforts toward those things that affect lumber producers in common. Some of its activities, such as efforts to secure just and fair treatment from the railroads with respect to freight rates and other matters, are undoubtedly proper. Its actions in laying its views before legislative bodies in an open and straightforward way may not be objectionable, but it has not stopped there. When in 1909 Congress was revising the tariff law this association was not content to present its case in the form of proper argument. It resorted to political intrigues in its attempts to influence both political parties in Congress; it tried to pack committees; it attempted to secure the influence of Cabinet officers, Federal and State forestry officials, and others high in authority; its chief representative in Washington freely wrote letters about the services he rendered to eertain Senators and certain Representatives, and pointed out that friends of a duty on lumber traded with friends of other protected interests; and officers of the association claimed large credit for the election of two United States Senators, one of whom was subse- quently unseated by the Senate of the United States. TRADE ASSOCIATIONS AND RESTRAINT OF TRADE. The facts revealed by this investigation indicate a serious economic and business problem. Not only lumber producers but manufacturers in many other industries and also wholesale and retail dealers in many lines of business have associations similar in character to those of the lumbermen. Part of the work done by the lumber associations is of a nature which benefits the lumber industry and does not injure the public. On the other hand, their activities in fixing prices and in restricting output have profited the lumbermen at the expense of the consumer. The problem then is, how shall associations such as these be per- mitted to exercise functions that are legal and proper without per- verting them into instruments of wrong or usurping wrongful func- tions ? It may be both proper and desirable for producers in any line of business to establish standard grades, to collect and publish informa- tion as to output and current prices, and to cooperate in various proper ways for the common advantage; but it should be pointed out LETTER OF SUBMITTAL. XXI that the standardization of grades is the first step to price fixing, that the collection of information as to output facilitates the curtailment of production, and that cooperation for harmless purposes affords a convenient basis for combination in restraint of trade. These lumber associations, like similar associations in many other branches of trade, are included in the so-called "associations not for profit." It has been sometimes proposed to exempt such associa- tions from the prohibitions of the Sherman Law. While they are not organized to obtain profits for the associations as such, they are, nevertheless, frequently intended and used to promote the profits of their members by means prohibited by the Sherman Antitrust Act. The serious consequences which might result from exempting them from the operation of that act are obvious. Very respectfully, Joseph E. Da vies, Commissioner of Corporations. The President. REPORT OF THE COMMISSIONER OF CORPORATIONS ON THE LUMBER INDUSTRY. Part IV.— CONDITIONS IN PRODUCTION AND WHOLESALE DISTRIBUTION, INCLUDING WHOLESALE PRICES. CHAPTER I. INTRODUCTION. Section 1. Scope of Part IV. Parts I and II of the Report on the Lumber Industry deal with standing timber; Part III discusses concentration in the ownership of land resulting mainly from timberland grants. The present part deals primarily with the prices of lumber and its distribution into the hands of the retailer. A subsequent part will treat of the retail side of the industry. In the present part the organized activities which are discussed relate primarily to manufacturers and wholesalers. The ultimate object of all the forms of such organized activities is the obtaining of a higher price for the product. These activities may be divided into two classes — first, those which are indirectly connected with price control, such as the standardization of the product, a prerequisite condition to any effective price control, promoting the use of wood, and securing favorable freight rates or favorable legislation; second, those directly connected with price control, such as the issuing and maintenance of list prices and the organized restriction of output in order to maintain or advance prices. The entire field of such organ- ized activities has not been covered in complete detail, but enough is given to furnish the basis of an accurate judgment of the situation. The wholesale prices gathered by the Bureau are likewise suffi- ciently comprehensive to furnish an adequate view of their move- ment for the period covered. Section 2. Statistics of lumber production in the United States. The statistics on the annual lumber cut, by species, shown in the table following, are taken from Forest Service and Census sources. 25030°— 14 1 1 THE LUMBER INDUSTRY. LUMBER SAWED, BOARD MEASURE. Kind of wood. Yellow pine . . . Douglas fir ... . White pine Oak Hemlock Western pine . . Spruce Cypress Maple Poplar Red gum Chestnut Redwood Birch Beech Cedar Larch Basswood Hickory Elm Ash Cottonwood . . . White fir Sugar pine Tupelo Balsam fir Sycamore Walnut Lodgepole pine All other Total . . . . 15)09 Mfeet. 16,277,185 4,856,378 3,900,034 4,414,457 3,051,399 1,499,985 1,748,547 955,635 1,106,604 858, 500 706, 945 663, 891 521, 630 452,370 511,244 346,008 421,214 399, 151 333,929 347,456 291,209 265, 600 89,318 97, 191 96, 676 108,702 56, 511 46, 108 23, 733 62, 151 44, 509, 761 1910 Mfeet. 14,143,471 5,203,644 3,352,183 3,522,098 2,836,129 1, 562, 106 1,449,912 935, 659 1,006,637 734,926 610,208 535, 049 543,493 420, 769 437,325 415,039 382, 514 344,704 272,252 265, 107 246, 035 220,305 132,327 103, 165 92,071 74,580 45,063 36,449 26,634 68,428 40,018,232 1911 Mfeet. 12,896,706 5,054,243 3,230,584 3,098,444 2,555,308 1, 330, 700 1,261,728 981, 527 951,667 659,475 582,967 529,022 489, 768 432,571 403,881 374,925 368,216 304,621 240,217 236, 108 214,398 198,629 124,307 117,987 98,142 83,375 42,836 38,293 33,014 69,548 37,003,207 1912 14,737,052 5,175,123 3, 138, 227 3,318,952 2,426,554 1,219,444 1,238,600 997,227 1,020,864 623,289 694,260 554,230 496,796 388,272 435,250 329,000 407,064 296,717 278, 757 262, 141 234,548 227,477 122, 613 132,416 122,545 84,261 49,468 43,083 22,039 82, 145 ,158,414 The percentage distribution of the species in each annual cut, for a number of years, is shown in the following table: PERCENTAGE OP TOTAL PRODUCTION. Kind of wood. Yellow pine . . Douglas fir . . . White pine ... Hemlock Oak Spruce Western pine . Maple Cypress Poplar 5.0 22.1 9.8 12.7 4.1 2.7 1.8 1.4 3.2 33.8 8.6 15.6 9.6 8.5 3.8 3.7 1.7 2.2 2.5 1905 3 28.8 14.2 16.4 9.3 6.0 3.8 3.2 2.0 2.5 1.8 1906' 31.1 13.2 12.2 9.4 7.5 4.4 3.7 2.4 2.2 1.8 1 Forest Products, No. 2, 1909, pp. 11 » Forest Service Bull. 77, pp. 12\ 15. 1 Forest Service Bull. 74, p. 11 ,13. 32.8 11.8 10.4 8.4 9.2 4.3 3.8 2.3 1.9 2.2 19081 33.8 11.1 10.1 7.6 8.3 4.2 3.8 2.6 2.2 2.0 ' Forest Products, 6 Forest Products, • Forest Products, No No 1912, 35.3 13.0 8.4 7.1 8.8 3.6 3.9 2.5 2.3 1.8 10, 190' 2, 1910, , p. 10. 34.9 13.7 8.7 6.9 8.4 3.4 3.6 2.6 2.7 1.8 , p. 15. p. 9 37.6 13.2 8.0 6.2 8.5 3.2 3.1 2,6 2.5 1.6 PRODUCTION AND WHOLESALE DISTRIBUTION. PERCENTAGE OF TOTAL PRODUCTION— Continued. Kind of wool. 1899 1904 1905 1906 1907 1908 1909 1910 1911 1912 1.0 .8 .6 .9 .4 .7 1.5 1.5 .7 .7 .7 .7 1.3 1.0 .7 .9 .8 1.2 .7 .8 .7 .5 1.8 1.2 1.1 1.0 1.0 1.0 .7 .7 .6 .6 .4 .4 .4 .3 .3 .1 .1 1.4 1.7 1.6 .9 1.0 .6 1.1 .7 .6 .6 .5 .5 .3 .3 .4 .1 .2 .1 .1 1.2 1.8 1.6 1.0 1.2 .8 1.2 .7 .8 .7 .7 .6 .3 .4 .3 .1 .2 .2 .1 .1 1.2 1.6 1.5 .9 1.0 .8 1.1 .6 .8 .7 .6 .8 .2 .4 .2 .1 .2 .2 .1 .1 .1 .1 1.4 1.5 1.3 .9 1.1 1.0 1.1 .0 .7 .6 .6 .7 .3 .3 .3 .1 .2 .2 .1 1.3 1.6 1.4 .8 1.2 1.0 1.1 .5 .6 .6 1.0 .6 .3 Birch Cottonwood Elm 1.2 1.3 .8 .1 .3 .2 .9 .8 .5 .6 Ash .3 .4 White fir .3 .1 ..3 .2 .1 Walnut .1 .1 .1 .2 .1 .2 1.4 2.0 2.7 .4 .1 .1 Measured by value of product in 1 909, 1 lumber constituted about 94.5 per cent, shingles 4.1 per cent, and lath 1.4 per cent of the total shown in 1909 for these three sawmill products. Measured by the number of feet produced and by the value of the product, in 1909, softwoods, with 76.3 per cent of the total lumber production and 70 per cent of its value, are relatively more important than hard- woods. Lumber. — Tn 1912 2 the total production of softwoods reported was 30,526,416,000 feet, and of hardwoods 8,631,998,000 feet. The aggregate value of the 33,896,959,000 feet of softwood production reported in 1909 3 was stated as $477,345,046, and of the 10,612,- 802,000 feet of hardwoods as $207,134,813. Shingles. — According to the statistics of production for 1912 * cedar shingles formed 78.9 per cent and cypress shingles 10.9 per cent of the entire shingle production (12,037,685 thousands). The value of the total production— 14,907,371 thousand shingles — in 1909, 5 was stated as $30,262,462. This report shows prices for the red-cedar shingles of the Pacific coast, for the white cedar of the Northeastern States, and for cypress shingles. 1 Forest Products, 1909, p. 8, Table 1. * Forest Products, 1912, p. 44, Table 35. ' Forest Products, 1909, p. 56, Table 44. * Forest Products, 1912, p. 42, Table 33. » Forest Products, 1909, p. 53, Table 41. 4 THE LUMBER INDUSTRY. Lath.— The production of lath in 1012 l was reported at 2,719,163 thousands and in 1909 2 at 3,703,195 thousands, valued at $9,963,439. Lath is generally a by-product of large sawmills. Prices for lath from eastern spruce, Pennsylvania hemlock, and cypress are shown. Section 3. Scope of concerted activities among lumbermen. Development of lumbermen's organizations. — There are sev- eral stages in the process by which an industry passes from a freely competitive state into one where there is a practical absence of com- petition. The different branches of the lumber industry show various stages in such a development. Permanent organizations have been developed from loose, informal, and occasional cooperation, and have been used to eliminate some of the competition between members, partly through regular and continuous cooperation in the line of col- lecting and distributing information and by serving as a medium for promoting understandings or agreements, which have tended to be- come established as the customs of the trade. Only the concerted efforts of the manufacturers and wholesalers to reduce competition are here discussed. The discussion of the activities of the various organ- izations of retail lumbermen is reserved for a later part. Production has gradually fallen under the control of the larger timber owners and financially strong operators, who are thoroughly alive to the advantages of united action and are able to hold back their product for higher prices, and the effectiveness of these organiza- tions has been increased thereby. Many of the operators are of ap- proximately equal strength, and realize the financial advantage to themselves of restricting competition. As their methods of coopera- tion become the established custom of the trade, formal agreements become less and less essential. It is the usual custom for the manufacturers of each kind of wood or those in certain geographical sections to organize distinct associa- tions. The membership of some associations control the larger part of the output of their respective woods, and in some instances the same interests are powerful factors in several producing sections. Each manufacturers' association employs a secretary or manager, who is practically the executive head. These officers give their entire time to association work. Some are incorporated under State laws, while others are unincorporated associations. Even among associations there seems to be a tendency toward consolidation. There have been a number of association mergers in recent years, all of which have been in the direction of unifying and enlarging the organization of the various producing sections. The principal man- ufacturers' associations of the country are banded together in a ' Forest Products, 1912, p. 43, Table 34. i Forest Products, 1909, p. 55, Table 43. PBODUCTION AND WHOLESALE DISTRIBUTION. 5 federated organization known as the National L/umber Manufac- turers' Association. Serious but unsuccessful attempts have been made to merge under one legal ownership a dominating proportion of the standing timber of certain species. About 1900 an effort was made to merge the timber holdings and sawmill properties of certain North Carolina pine producers, who were estimated to control 80 per cent of the output. In 1908 active negotiations were conducted looking toward the consolidation of a large proportion of the yellow-pine timber of the central South under the ownership of one corporation with a capital of $300,000,000. The publication of the plans for this con- solidation aroused a great deal of opposition and steps were taken by the attorneys general of several States to enjoin the formation of the company, which led to the abandonment of the project. In 1911-12 efforts were made to consolidate the cargo mills of Oregon and Washington. There have also been several attempts to consoli- date the ownership of both the redwood and the sugar-pine timber of California. In the case of several species, such as Northern pine, cypress, Pennsylvania hemlock, West Virginia spruce, redwood, and Califor- nia sugar pine, a comparatively few holders already control the bulk of the raw material and the result is a relatively firmer market for the lumber produced from these woods. Referring to the rapidly proceeding concentration of timber own- ership, the Bureau stated in Part I : There are many great combinations in other industries whose formation is complete. In the lumber industry, on the other hand, the Bureau finds now in the making a combination caused, fundamentally, by a long-standing public policy. In some sections there exist large corporations which own immense quantities of standing timber, operate large sawmills, own or control fleets of lumber schooners, conduct wholesale distributing yards, and own or control numerous retail yards, thus securing the profit in every stage from the stump to the consumer. Other large concerns are engaged in every stage of lumber manufacture and distribution except that of transportation. There does not exist, at the present time, any form of unified ownership which occupies such a commanding position in the pro- duction or wholesale distribution of lumber as is occupied in their respective industries by such combinations as the International Harvester Co., or the United States Steel Corporation; however, the wholesale lumber market is not free from artificial control. Such control as has existed in the past has been largely exercised through lumber associations and the cooperative activity of lumber manufacturers. 6 THE LUMBER INDUSTRY. Standardization of product.— One of the principal objects of forming associations in an industry is the establishment of a standard of product. When this has been done, more uniform price quotations soon follow. Unless there is a standard product, centralized owner- ship is the only effective means of controlling prices. After a product is standardized prices may be manipulated or influenced through associated activity. Inspection or grading rules, roughly defining grades of lumber, were in general use for practically all woods, even before effective associations were organized among lumber manufacturers; but with the growth of associations more definite and uniform grading rules have been adopted, and in most softwoods refinement of grades has been continually going on during the last 15 years. Grading rules have been adopted by all manufacturers' associa- tions. In the early period only a few grades were defined, but as time passed changes were made in existing grades and more grades were added. As the timber supply decreases and timber of a poorer quality is cut, a great number of low grades are defined. However, there have been very few increases in the number of upper grades. Lumbermen recognize that uniform grades are a necessary means to uniform prices and that uniform prices are important chiefly as a means to higher prices. That manufacturers realize the relation of uniform grades to uniform prices is shown in the constitution adopted by the Mississippi Valley Lumbermen's Association on September 1, 1891. One of the purposes of the association is stated as "the establishment of uniform grades for the inspection of lumber as the only legitimate basis for more nearly uniform prices." The same phrase was used in the revised constitution of 1902. The following from an article in the American Lumberman, dated July 2, 1904, page 15, not only refers to the relation which uniform grades bear to uniform prices, but also to the confusion resulting from the use of different grading rules in two white-pine producing fields: UNIFORMITY OF GRADING EXTENDED TO WISCONSIN HEMLOCK. It is a far cry to the time, in July, 1900, when the lumbermen of the Mississippi Valley initiated the movement for the uniform grading of pine lumber in that producing field. The desirability of uniform grading arose from a too wide diversity in price mak- ing, each manufacturer basing his values on his individual grades. This caused great confusion and loss of profit among sellers of lumber in a common field. The evil became so virulent that at length a commission was assigned the office of visiting the mills for the purpose of ascertaining and locating divergencies in grading with the view of bringing about harmonious' practices. This commission consisted of J. S. Funk, who represented the PK0DUCTI0N AND WHOLESALE DISTRIBUTION. 7 Chippewa River district, and A. A. Fiero, from the Minneapolis or Mississippi River section of the producing field. The main friction was between these two groups of manufacturers. This commission made reports of its investigations, which became the basis of the movement which finally culminated in the bureau of grades of the Mississippi Valley Lumbermen's Association. This bureau has grown in importance, command of the situation and authority in inspection matters, until now it controls the classification and grading of the entire northern pine producing field west of the Green Bay district. After progress began in the bureau's work the Wisconsin Valley manufacturers joined their western competitors in the measure for unification, and when hemlock came to be an impor- tant branch of manufacture in the old pine districts it became desirable that the bureau's system of grading should be made to cover that kind of product. A new step in this direction recently has been taken. The Hemlock Company, of Wisconsin, on June 22 presented a request to the bureau of grades of the Mississippi Valley Lumbermen's Association that it would assume the supervision of the grading of the product controlled by the company. This proposition was agreed to, and hereafter the grading of the Hemlock Com- pany will be under the supervision of the bureau. This year the amount of lumber to be thus inspected will amount to a mini- mum of 250,000,000 feet. It was also decided by the bureau of grades to supervise inspection for manufacturers who are mem- bers of the Northwestern Hemlock Manufacturers' Association, but who are not connected with the Hemlock Company. It will thus be seen that there is a tendency among manu- facturers in northwestern territory to a uniformity of grading in respect to hemlock as well as pine. Great benefit has resulted from the work of the bureau of grades, and now that hemlock has become such an important feature of mill product it is seen that it is just as essential that there should t>e uniformity of grading hemlock lumber as was the case with pine. This has become especially requisite since the later tendency is for the product of the upper Mississippi River country and Wisconsin to mingle in competition in a common field. Uniformity of prices can be maintained only through uniformity of inspection. Lack of uniformity means confusion in trade definitions and prices, a state of things that involves cut-throat practices in selling and general loss to manufacturers. Hence it is that the Lumberman can fully indorse the movement that has been undertaken by the Hemlock Company to place its grading under the supervision of the grading bureau. It is a measure positively in the right direction and can not but be a great benefit to the hemlock business of Wisconsin, as is evidenced further by its acknowledged benefit to its parent association. A considerable refinement of grades has taken place in practically all softwoods. The great number of different grades adopted for white pine gives little room for variation in quality within a given grade, and this results in a more uniform price than can be found in the more loosely graded hardwoods. 8 THE LUMBER INDUSTRY. Considerable confusion has always existed in the grading of hard- wood lumber. There are two large and important hardwood asso- ciations, each issuing its own grading rules. Many attempts have been made to have the two associations agree on grading rules, but with little success. The rules of both associations define grades rather loosely, and permit considerable variation in quality. Hard- woods have many special uses. For one purpose an especially good quality of lumber is required and for another purpose a much poorer quality may be used, yet both may fall within the grade described by the rules. The difference in quality within a given grade may result on high-grade lumber in a difference of price amounting to several dollars. This is the principal reason for the fact that the hardwood prices presented by the Bureau are much less satisfactory than those for softwood. Even after grading rules have been adopted by an association, the variation in grades coming from association mills is considerable. The manufacturers gradually approach uniform grading, but becai se of the requirements of certain customers most manufacturers do not adhere strictly to standards. Numerous disputes arise between buyer and seller as to whether or not the grade is up to standard. These disputes soon lead to the employment of inspectors by asso- ciations or the formation of inspection bureaus, and, through these, uniformity in grading becomes more and more firmly established. Grades are not always strictly maintained, even after the inspec- tion bureaus have been inaugurated. During periods of high prices some poorer stock is often included. The purchaser is so anxious to secure his supply that he raises little or no objection to off-grade lumber. But during depressions the buyer is critical and the seller anxious to move his stock, consequently at such times a lower grade frequently has mixed with it some lumber of the next higher grade. Rules for grading have been in general use among red-cedar shingle producers for many years, but considerable differences have existed in the product. The difference between a well-sawed, well-packed, and properly kiln-dried shingle and a scant-sawed, poorly packed, and overkiln-dried shingle is very great. Only in recent years ha\e there been any decisive steps taken to bring about more uniformity in quality. Grading rules not only specify the defects allowed in a given grade, but they usually prescribe length, width, and thickness. The diffi- culty in securing the adoption and general acceptance of a uniform grade is most often due to difference of opinion as to the nature and number of defects to be allowed in a particular grade. There are some cases, however, where the thickness of the lumber prevents the adoption of uniform price lists or uniform grades. For many years tke yellow-pine manufacturers were divided on the question of the thickness of lumber. The thicknesses adopted PBODUCTION AND WHOLESALE DISTBIBUTION. 9 by the Southern Lumber Manufacturers' Association * and those by the yellow-pine manufacturers of Texas and Louisiana were differ- ent, and not until a compromise was effected were the organization and the Texas and Louisiana manufacturers able to work in close agreement on prices. The following reference to the compromise between these two groups of manufacturers appeared in the New Orleans Lumber Trade Journal dated February 15, 1899, page 13: As predicted in these columns, the annual convention of the Southern Lumber Manufacturing Association recently held at Memphis, Tenn., was one of more than usual importance. The grades were gone over thoroughly and revised and a new price Est promulgated. Plans for a closer organization were dis- cussed and a committee appointed to take the matter in charge. The most important transaction, however, was the compro- mise made between this great yellow-pine organization and the manufacturers of Texas and Louisiana, who have heretofore held aloof on account of a difference in gauges. This has now been amicably adjusted and hereafter all will be affiliated, thus adding the long-leaf territory of the Southwest to the associa- tion's field and something like 300,000,000 feet of annual capacity to the output of its membership. This is a consummation of many years' work whose tendency has ever been to unify the practice of yellow-pine manufacture. There is still much to be done, however, and this addition to the field membership of the organization will help materially in its accomplishment. The main task now before the association is the attainment of uni- form grading all over the South and the establishment of a statistical department which shall be complete and accurate. During the year 1904 an attempt was made to have the Mississippi Valley Lumbermen's Association and the Wisconsin Valley Lum- bermen's Association agree upon a common price list. At the semiannual meeting of the Mississippi Valley Lumbermen's Associa- tion, August 30, 1904, Secretary J. E. Rhodes stated in his report, according to the account published in the American Lumberman dated September 3, 1904, page 26, that — The chief trouble at first apparent is the difference in the class of stock manufactured in the two districts, that sawed in the Wisconsin Valley being the thicker. This difficulty can be overcome by the adoption of a uniform standard of sizes as suggested. According to the report of Secretary Rhodes at the semiannual meeting of the Mississippi Valley Lumbermen's Association held on August 16, 1905, no uniform standard of sizes had been adopted. As reported in the American Lumberman's issue of August 19, 1905, page 35, Secretary Rhodes said: While the bureau of grades makes grades of the same relative value, based upon surface appearance only, it has never at- 1 At that time the membership of the association was located principally in Missouri, Arkansas, and Mississippi. 10 THE LUMBER INDUSTRY. tempted to establish a standard of thickness, nor can it over- come the advantage which a predominance of white-pine timber gives a stock having a large percentage of it. The time is rapidly approaching when those of our members who saw princi- pally for eastern business will be obliged to recognize some basis of prices different from those mills which saw for other classes of trade. A difference in thickness affects the weight, hence the price of delivery as compared with thinner stocks. Nature and use of statistical information collected by the associations. — The lumbermen are well organized for the specific purpose of measuring, as far as possible, the variation in the natural factors affecting supply and demand and of basing their action upon a comprehensive knowledge of market conditions. An important part of the work of the principal manufacturers' associations relates to the collection of statistics and general informa- tion affecting conditions of supply and demand. Information is compiled which indicates the variations in supply by periodically showing the amount of lumber cut and the amount of each item and grade in stock among the producers. These figures can be compared with those of previous periods and conclusions drawn as to what prices may be possible of attainment from the standpoint of supply alone. Watch is kept upon such matters as an increase or decrease of stock on hand, railroad car shortage, and the available supply of competitive woods. Like consideration is given to the varying factors affecting demand. Many of them collect information showing the crop prospects and conditions, the extent of proposed building operations in the chief consuming markets, the amount of stock in the hands of retailers, and the state of inquiries and orders for the different grades and items of lumber. This information can be compared with similar information for previous periods, and conclusions drawn as to what prices may be possible of attainment from the standpoint of demand alone. Com- bining these conclusions with those drawn from a study of the supply, and testing them by the degree of accuracy demonstrated by previous price recommendations, a very reliable judgment can be formed of the prices which "the traffic will bear" in the future. A knowledge of all these factors may also serve as the necessary basis for occasional concerted action in artificially limiting the supply. Without the machinery to collect and consider information and to recommend certain prices it would be difficult to procure uniformity in the price policy of the individual operators. The prices thus obtained are not therefore solely the result of natural causes and conditions. Price-list activities of the associations.— Price lists used for commodities may be divided into two kinds— those which show prices which are intended to be approximately the actual sale prices of the articles and those which show prices fixed pur- PRODUCTION AND WHOLESALE DISTRIBUTION. 11 posely high above the actual sale prices and subject to discounts which will bring them down to the approximate market level. Ex- amples of the first kind are the catalogues sent out to consumers. Such prices are known as "net" prices. A notable example of the second kind is the hardware catalogue, issued for the use of hardware retailers. In such catalogues the actual sale prices are obtained by the application of various discounts, generally expressed in per- centages. Nature and use of lumber price lists. — A lumber price list is essen- tially of the same character as price lists prepared for many other commodities. The various grades of lumber are listed, together with a price for each grade. These lists the manufacturers distribute to the trade or prospective purchaser. In the earlier years for which the Bureau presents prices, all manufacturers' associations issued price lists which quoted approximately the actual selling price, or the price which in the immediate future, in the opinion of lumbermen, might be expected. About 1906 various associations began to issue "market reports," which were claimed to show about the average selling prices, as ascer- tained from reports made by manufacturers. These "market re- ports" were in the same form and served the same purpose as did the "price lists" in the earlier days. Market reports in some form have been issued by certain associations from that time down to the present, and the change in name was only brought about by a desire technically to comply with the law and at the same time get the results before obtained. During the first few years of the "market reports" the prices approximated the actual selling prices, but later some asso- ciations substituted what may be termed high "basis" lists in place of the "market reports." The prices shown in them were purposely fixed high above what was expected to be the market price for years, and when the actual sale prices rose to the level of some of the "basis" prices a new "basis" list with still higher prices was issued. Where the "basis" price list is in use, discount sheets are issued applying to it, so that the actual selling price of lumber is as well understood in the trade as it was when the old form of "net" price list was issued. Opposite page 12 there is presented a fac simile of two pages taken from the basis list of August 4, 1909, adopted by the Yellow Pine Manufacturers' Association. The pages selected show prices based on a 23-cent freight rate delivery. Manufacturers for many years have made an earnest effort to main- tain association list prices, but the associations have been careful in most cases not to put into their constitutions or by-laws any clause requiring members to adhere to such lists. Gertain manufacturers have often urged fining or penalizing members who sold at less than 12 THE LUMBER INDUSTRY. list, but this plan has seldom been pursued. In some instances asso- ciations have set forth in their constitutions or by-laws that members were not required to maintain the lists. That in at least one case the reason for adopting such a clause or section was to avoid the pen- alties of the law is indicated by the following extract from a letter which the secretary of the Oregon & Washington Association sent to O. E. Shippey, of the Lyle Lumber & Manufacturing Co., Lyle, Wash., under date of March 1, 1906: In your letter I note that you refer to the fact that some of the mills do not stand by the list, and that the by-laws do not require them to. That section was put in the by-laws on account of the Sherman antitrust law. We find, however, that there is no diffi- culty whatever holding our members up to the list when the market is as good as it is at the present time. Our difficulty is in holding members down to the list, as they have all been get- ting above our list from January 1st to February 23rd, when the new change in prices took place. Some lumbermen have claimed that price lists have had no effect on prices, because all the prices have not always been lived up to by all manufacturers This reasoning, however, is on a par with that which would claim that since the Sherman antitrust law has not always been lived up to by all corporations it has had no effect. That many of the price lists were followed closely, and that associa- tions urged their members to maintain the lists, are facts well known. The prices obtained by the Bureau show in many cases that the lists were closely followed. One of the strongest proofs that the association price lists, and the so-called "individual" priee lists which were formulated at con- ferences of lumbermen "acting as individuals," have had and do have an important effect on the actual sale prices of lumber is that the leading manufacturers in t,he industry consider it desirable, in the face of possible legal attacks, to spend so much time, money, and energy in coming together and establishing such lists. That they have done this openly in the past, and continue to do it, more or less secretly, to-day, is shown in the detailed discussion of the various species. The Bureau has not attempted to split hairs on the question of when the same man acted as an association official or member and when he acted as an "individual." It has simply regarded the result attained by his participation with others in activities designed to affect prices, whether they were or were not called "association activities". Where such activities have been conducted virtually, if not nominally, under the auspices of the association, no attempt has been made by the Bureau to respect the subterfuges adopted, often under legal advice, by the lumbermen who sought to accomplish their purposes and at the same time deceive outsiders as to the real nature of their actions. A.—Facsiinile of Two Pages from the August 4, 1909, Basis List of the Yellow Pine Manufacturers' Association. •4 LIST — BG FLOORING. Heart Face, Edge Gram B & Better Edge Grain A Edge Grain B Edge Gram C Flat Grain A . Flat Grain B Flat Grain C. , Flat Grain D No 1 Common - No. 2 Common For 3 in Edge Grain, 2J in. face. B & Better add S2 00 per M to pr'ee oi .31 A. Edee Grain. For .loin let) Flooring, add $7.00 per M. For Heart Face Flat Grain, add H*3{ ■lb** 52 75 42 75 40 25 33 25 31 25 32 75 30 25 31 75 28 25 29 75 25 75 27 25 26 75 28 25 18 75 20 76 2.5 Q'C | _- £»«*-' m O $3.00 CEILING— Beaded. §x3i- ix3i. 1x3}. Jx3i. I i 1 For S. 2 S. add J $1.00 per M. 1 21 75 25 75 28 75 31 60 B 20 75 24 75 27 75 30 50 No. 1 Com. 19 25 22 25 23 75 23 00 No. 2 Cm. who in stk 16 25 18 75 19 75 25 60 Cluster Beaded and Corrugated Ceiling For 3 in. Ceiling. 2i in face, add SI 00. add SI .00. PARTITION. A B No. 1 Com. N.i. 2 Cm. nhn in stk 32 75 31 7K 28 75 30 75 26 25 28 25 jx55i 34 75 1 33 75 BEVEL SIDING. A B No. 1 Com. No. 2 Cm. whn in 8tk 22 00 27 00 21 00 26 50 19 SO 26 50 16 50 23 00 DBOP SIDING. A B No. 1 Com. No. 2 Cm. whn in stk 32 75 31 75 27 25 23 25 On orders calling for special pattern Drop Siding, any percentage of different grade made in running same, must be accepted at proportionate price. FINISHING, S. 2 S. 1x4 inch S. 2 S. >V 1x6 inch T3 S. 2 S. 13/ I6 1x8 inch ■§« S. 2 S. >3/ 16 1x5. 10 and 12 inch. . . . .f S. 2 S. 1V 16 Ux4, 6, 8 and 10 inch... CO S S. 2 S. 1 V I6 Uxl2 inch ■* a S. 2 S. 1 V 16 Ux4, 6. 8 and 10 inch. . . «;§ S. 2 S. 1 5/,„ ljxl2 inch uc ± S. 2 S. 1 5/ )6 2x4 and 2x6 inch c«t S. 2 S. 1 3/4 2x8 and 2x10 inch * S. 2 S. 1 3/4 2x12 inch ■ S. 2 S. 1 3/4 37 75 40 25 40 25 42 25 43 75 44 75 43 75 44 75 43 75 45 25 46 25 B 35 75 38 25 38 25 40 25 41 76 42 75 41 75 42 75 41 75 43 25 44 25 31 75 34 25 34 25 36 25 37 75 38 76 37 75 38 75 37 75 39 25 40 25 Foreacli2mch.es in width over 12inches. add $2.00. Rough s ame price as S 2 S . MOULDED CASING AND BASE. A I B " From 4 and 6 inch stock, B. M 44 00 41 00 From 8 and 10 inch stock. B. M I 45 25 42 25 Moulded Casing when sold B. M. shall be computed as follows: Finished 3 j to 4} inclusive shall be counted as 5 inch. Finished 4i to 5} inclusive shall be counted as 6 inch. Mouldings. B ■& Better, per Yellow Pine Manufacturers' Association Moulding Book, under 5, ' feet. 65% discount: 5,000 feet or over 65% discount DOOR AND WINDOW JAMBS. From 1x4 and 1x6 inch stock, B. M From U. U and 2 inch stock. B. M Dressed, rabbeted and plowed as ordered. 45 25 47 25 42 25 44 25 PICKETS. Per 1000 Pieces. H, Square, 4 ft., D. & P., lVigxlVit U. Square, 4 ft., "D. & P.. IViaxlVig 1x3, Flat, 4 ft... D. & P., Jx2J For 3 foot. $1 00 less. BO- 83 AUG 4 1SQ8. SB COMMON BOAEDS, S. 1 S. 10 ft. 12 rl. 14 ft. 16 ft,. 18 ft. 20 ft. lx 8, No. 1.. 1x10. No. 1.. 1x12. No. 1.. i ForS 2S. J add 60c 1 per M. 24 75 25 25 29 50 21 75 21 75 24 00 17 75 17 75 18 50 24 75 25 25 29 60 21 75 21 75 24 00 17 75 17 75 18 50 24 25 24 75 28 00 21 75 21 75 23 00 17 75 17 75 IS 50 24 25 24 75 28 00 21 75 21 75 23 00 17 75 17 75 18 50 24 75 25 25 29 50 21 75 21 75 24 00 17 75 17 75 18 60 24 75 25 25 29 50 lx 8, No. 2.' 21 76 21 75 24 00 1x10. No. 2 1x12. No.2 lx 8, No. 3 17 75 17 75 18 50 1x10, No 3 1x12. No. 3. . For Rough, per M. Sh &apers, particularly those pertaining to market conditions, and eel that the papers should use greater care in reporting the statements made by the members relative to the outlook for business and prices. We were not talking for publication, but simply for the benefit of the members present. Note, for instance, the report in the Mississippi Lumberman, which appears in the late issue. This is read both by retailers and manufacturers alike, and I fear would not be favorably received by our customers. Further, it gives the Government information which is misleading. To which Mr. Cooper, under date of August 18, replied as follows: I have your letter of the 16th, and agree with you that the verbatim report of what is said at our meetings by the trade journals is oftentimes indiscreet and may be misleading. I think that the trade journals as a rule exercise considerable caution in this matter, but have noticed of late a tendency, particularly on the part of the Mississippi Lumberman to let things of this sort slip through. As it is often impossible for an editor to edit everything that goes into his paper, presume that the particular article to which you refer is an example of this. Some of the correspondence in this same paper headed "Spo- kane" has recently been of a rather misleading and sensational character. I am to-day taking this matter up with Mr. Walker by letter and feel sure that more caution will be used in the future. The following letters of more recent date show that secretaries are still cautious about making public all information; for if trade journals publish it, it is then available to newspapers: (letterhead of Yellow Pine Manufacturers' Association, office of secretary.] St. Louis, Mo., May 11, 1912. H. S. Childs, Secretary Lumber Exchange, Minneapolis, Minn. Dear Sir: We are handing you herewith a copy of our March comparative statement and wish to have it thoroughly under- stood that the information contained herein be used strictly for your own information, and not given out for any publication whatever, as we do not wish to place this information where it will be available to newspapers. Under these conditions, we will be glad to furnish you with our comparative statement each month regularly. Yours, very truly, Geo. K. Smith, Secretary. A similar letter under date of September 5, 1913, was sent by W. B. Roper, secretary- treasurer of the North Carolina Pine Asso- ciation, to Z. W. Whitehead, of the Southern Lumber Journal: You will notice by the call for our September meeting that this is to be an executive session. A number of the manufac- turers have expressed the desire that no one shall be admitted 26 THE LUMBER INDUSTRY. to this meeting except bona fide manufacturers. Mr. Corwin » has acquiesced in this and I am simply calling your attention to it so that you may not come to Norfolk under any misunder- standing. The idea is to have the meeting confined to mem- bers of the association without having any wholesalers, retaders, or newspaper men in attendance. You will see from this that nothing personal is intended and I am simply writing you this letter calling your attention to it to save you any possible loss of time or expense in coming here. General policy of trade journals in publishing prices.— All lumber-trade journals devote considerable attention to prices. Not only is the subject of prices discussed editorially, but considerable attention is devoted to market conditions. The news items reported by correspondents from various producing and consuming markets often refer to prices, and in many cases the selling prices of specified grades are reported, and formerly the price activities of the associa- tion were often described in detail. The lumber-trade press is largely dependent upon the lumber trade, not only for its subscriptions, but for its advertising as well. This dependence of a journal upon the trade it represents naturally results in its representing the views and wishes of the trade. Along certain lines the interests of the manufacturer, wholesaler, and retailer are identical, and along these lines it is easy for the lumber journals to represent the entire trade. There are cases, however, where the interests of the three branches of the trade are not the same, and in such cases the claim is frequently made that the majority of the trade journals will most often support the position of the manufacturers. This would seem only natural, from the fact that practically all the lumber-press advertising comes from the manu- facturers or from dealers in manufacturers' supplies. It is claimed that the manufacturers are friendly and the retailers unfriendly toward the use of odd lengths in lumber, and that most of the lumber-trade journals clearly support the manufacturers. Again, it is claimed that where differences arise between manufacturers and dealers regarding grading or inspection rules most trade journals are found supporting the manufacturers. It is also claimed that when the shingle manufacturers of the Pacific Northwest were over-drying their shingles to the point where retail- ers of lumber thought it necessary to carry patent roofing the trade journals, although recognizing the justice of the retailers' posi- tion in urging the manufacture of better shingles, only feebly sup- ported the retailers. When manufacturers curtail production the trade journals give much encouragement to the movement. Again, when associations issue price lists from time to time, and prices have reached such a high point that buying falls off and dealers complain 'Mr. Corwin was at that time president of the association. . PRODUCTION AND WHOLESALE DISTRIBUTION. 27 about manufacturers asking a price which is too high, the journals are almost always on the side of the manufacturers. Even when the poplar manufacturers (see pp. 900-904) made their sensational advance in September, 1903, some of the trade journals defended their action and only objected to the move when the manufacturers themselves found it to be a mistake. The following extract from a Kansas City news item appearing in the American Lumberman of August 10, 1907, page 72, gives the view common among retail dealers : Suggestions in the trade journals as to when dealers should place orders are often taken by the dealers as attempts to boost the demand and help the manufacturers dispose of their stock to the disadvantage of the dealers. Association price lists and market reports are defended by the lumber press, and lists or market reports disclaimed or objected to by associations of manufacturers receive little publicity from the trade papers, except in articles criticizing or condemning them. A case in point is that of the Schuster price lists. As long as Mr. Schuster and the yellow-pine manufacturers were in perfect accord the trade journals spoke very kindly of the Schuster lists, but after some misunderstanding arose between the association and Mr. Schus- ter this attitude of the trade journals changed. In March, 1906, Mr. Schuster got out two lists. The following account occurs in the news columns of the American Lumberman dated April 7, 1906, page 41: In March 28 issue of Schuster's Yellow Pine Lumber Price Current a number of changes in values are shown from those quoted in the March 5 issue. These changes are in the nature of an adjustment. [Changes are here given.] In arriving at representative prices the average of a large number of lists issued by prominent manufacturers and dealers is taken, which average is used to represent current market values. The difference be- tween the March 5 and the March 28 list prices is very small, but deemed sufficient to justify the issue of a new list. It is of interest from many standpoints to know that the copy for the March 28 list was not prepared until the morning of March 27 and advance copies of the complete list were mailed out in the afternoon of March 28. The Price Current, published at St. Louis, Mo., sells for 10 cents a copy with a minimum of five copies sent out on any order. Of the March 5 list 15,200 copies were circulated up to March 16. The list of March 5, 1906, is again referred to in the American Lumberman of September 22, 1906, page 26: "The prices given for March 5, 1906, represent about the highest price that has been reached within the last two years." Under date of October 10, 1906, Mr. Schuster got out a new list, which did not meet the approval of the manufacturers. An article 28 THE LUMBER INDUSTRY. signed "J. E. D.," in the American Lumberman of October 20, 1906, page 29, made a violent attack on this list. In the Kansas City news of the Mississippi Valley Lumberman of October 19, 1906, page 35, occurs the following statement: Anew list issued by the Schuster Printing Company, of St. Louis, dated October 10th, is repudiated by the yellow-pine people, who say that it does not represent the market, and was not authorized by the yellow-pine manufacturers. They are notifying their customers to this effect. This same Schuster list was violently attacked in the St. Louis Lumberman of October 15, 1906, and a copy of the attack was sent out by George K. Smith, secretary of the Yellow Pine Manufacturers' Association, under date of October 16. (See p. 121.) When John R. Walker established his Lumbermen's Bureau (Inc.), at Washington, D. O, and began issuing price lists on various kinds of lumber, he came into competition not only with the North Caro- lina Pine Association official lists (see pp. 299-302), but also with the Yellow Pine Manufacturers' Association official lists. (See p. 123.) The first issue of his North Carolina pine price list received a few notices in the lumber press, but no mention of his subsequent issues was found, although, as is pointed out, in the case of North Carolina pine there seems to have been a studied attempt to specify in any reference to market reports or price lists that they were those issued by the association and recognized as authoritative by the trade. The letter" of B. A. Johnson, of the Lumber World Review, to George K. Smith, written under date of December 14, 1911 (see p. 124), is specific on this point of the treatment by the trade papers of the lists of the Lumbermen's Bureau (Inc.) : It is doing to-day what, in so far as I know, the lumber press of the country believes is unethical and considers it really not countenanced by the lumber trade. Reliability of statements. — The lumber-trade journals, in the main, are fairly reliable. There are both "bulls" and "bears" in each and every large lumber-consuming market. In view of the bias, favorable to the manufacturers, of many of the leading lumber- trade journals, it is quite natural, however, to find these journals "boosting" prices. Only in exceptional cases is a "bear" corre- spondent found. In a number of cases secretaries or other employees of manufacturers' associations have acted as the local correspondents for some of the lumber papers. The prices quoted in the trade papers are usually somewhat above the average price paid for lumber, and it is not at all uncommon to find manufacturers complaining when actual selling prices are quoted in the trade journals. In a letter written by M. B. Nelson to George K. Smith, under date of March 25, 1910, the practical problem PRODUCTION" AND WHOLESALE DISTRIBUTION. 29 encountered in publishing actual selling prices is referred to as follows : I am afraid if we attempt to convey the actual selling price of lumber, some people will claim the information we are furnish- ing is detrimental to their interests, because they can sell lumber in some cases for more than we claim to be the market price. On the other hand if we report the highest price obtainable for lumber, some of the sellers may conclude that our recommenda- tions are for the purpose of deceiving them. We might try the plan for a while, and find out from those interested what objec- tions they have to it. In reply to a criticism of a published statement of market condi- tions, J. F. Hayden, associate editor of the Mississippi Valley Lum- berman, wrote F. W. Buswell, of Wausau, Wis., on March 13, 1911, as follows : Relative to your criticism of our statements regarding the hemlock market we do not care to enter into any controversy. It has always been our desire and intention to print market reports as we find them from information given us by both buyers and sellers, and if you have been a careful reader of our paper in the past, you must know that we have boosted hemlock more than any other lumber-trade paper. Our position in the field enables us to do so without prejudice to ourselves or our patrons; but we contend that we can not say that hemlock market is absolutely rigid when we have evidence to the con- trary and where we would be the laughing stock of buyers who know better. Since the Milwaukee meeting we have repeatedly said that the hemlock market is growing stronger, and we hope it will continue to move in that direction. We have said that most of the manu- facturers are holding well up to the latest list. At the same time I have seen quotations from manufacturers offering hemlock at from SI. 25 to $1.75 below that list and have the word of a Minneapolis wholesaler in good standing that he has some No. 1 dimension that he will be glad to sell at SI off the list, either to manufacturers or to the trade. You will perhaps remember that at the Milwaukee meeting, when the question was asked as to whether or not those present would make an honest effort to secure the list for the next thirty days, two prominent manu- facturers announced that they would not make that promise. Our hemlock market report in our issue of March 10 is under a large "Minneapolis" head, and that is the way we found things in this market. As to our future attitude relative to hemlock, we can say that we shall try to be absolutely fair. Since the Milwaukee meeting, we have stated that competing grades of hemlock and yellow pine have not been receiving a parity in value. That statement was made by several hemlock men at the meeting. We have also said that the manufacturers of hemlock appeared deter- mined to get better and more equal values, and that they are succeeding. You say, "It is our opinion that it will be but a short time before hemlock consumers will see prices even higher 30 THE LUMBER INDUSTRY. than those of the present list." Our statement in last week's issue was "it would seem that better prices will be possible as the building season draws on." We are not so very far apart, after all. Secretary Kellogg, of the Northern Hemlock & Hardwood Manu- facturers' Association, in a letter of March 20, 1911, reported some criticisms he had heard, as follows : I have heard some little criticism by manufacturers, of the hemlock editorial and market reports in the Mississippi Valley Lumberman, and I know that some of them feel that these reviews have not always been entirely fair. Possibly the fact that the hemlock market in Minneapolis is to such an extent dominated by jobbers and commission men from whom you must necessarily get much information, may have influenced your views without any intention whatever on your part to be unfair to the producers of hemlock lumber. I know that you would be glad to see the hemlock manufacturers more prosperous than they have been for the past three years, and I believe that conditions now make it possible for you to truthfully make statements editorially and otherwise which will assist in securing a return of some measure of the prosperity which existed a few years ago. On March 22 Mr. Hayden replied as follows: Keplying to your favor of Monday relative to our market reports on hemlock, will say that it is our desire and intention to be as nearly fair as possible. Last week I received a letter from Mr. Buswell on the same matter, and would like to have him show you my reply. Our market reports are under the general Minneapolis head and we have given the hemlock men even a little better than we have found. The day I wrote Mr. Buswell I saw a quotation from a Wisconsin manufacturer who ' makes a lot of hemlock in which he offered various items of stock at $1.50 off the list, and a responsible wholesaler here told me he had a lot of dimen- sion he would sell at $1 off. You can see the position we would put ourselves in if we told the retail readers of this journal that hemlock was holding firmly at list when they knew they could buy for less than list. We certainly want to see the hemlock men prosper and hope they are getting, and will continue to get, full hst or better. As I wrote ^Mr. Buswell, we have boosted hemlock in the past fully as much as, if not more than, any other lumber paper. Very likely we could get better hemlock "dope" if you would send us a weekly letter. If, or when, we get a little more business from the Wisconsin Valley we shall be glad to pay for more news from that section. In the meantime we will raise our former offer and will pay you at the rate of $3 per column for a news letter from Wausau, and you can boost hemlock just as hard as your conscience will let you. In a letter of December 22, 1911, written to the secretary of the Northern Hemlock & Hardwood Manufacturers' Association, in reply PRODUCTION AND WHOLESALE DISTRIBUTION. 31 to a criticism which Bruce Odell had made on the statement of mar- ket conditions which had appeared in the Hardwood Record, its editor made the following observation: You know just as well as I do that in theory and practice Hardwood Record does everything possible for the best interests of the hardwood trade, even to the extent of lying for it con- siderably when it thinks it can enthuse any optimism into the situation. While it is true that the prices quoted in lumber-trade journals are, as a rule, higher than the actual selling prices, after following the prices quoted by any given correspondent for a short time lumbermen know about the amount to allow for his "bull" tendency, and in this way the erroneous prices quoted serve the purposes of the lumbermen about as well as the correct figures. That lumber-trade journals have not in recent years given the accu- rate data regarding prices which they did 10 or 12 years ago is asserted in a letter of December 14, 1911, which B. A. Johnson, of the Lumber World Review, wrote to George K. Smith. (See p. 124.) The editorial staff connected with most of the leading lumber jour- nals compares very favorably with those of other trade papers. The general accuracy of the statements made in these journals is con- clusively «hown by comparing them with thousands of original docu- ments in the Bureau's possession. Since 1906, however, much is omitted which in earlier years would have been published, and through these omissions a less accurate picture is presented to the reader. Even a layman detects the censorship. But the newspaper man, with his instinct for news, occasionally overreaches himself, and an article appears which brings down upon the paper the wrath of sev- eral lumbermen. The following letter found in the files of the Mis- sissippi Valley Lumberman illustrates an incident of this kind. The close-down referred to is described in detail on pages 799-800. [Letterhead of The Sound Lumber Co. (Inc.), Seattle, Wash.] May 12, 1910. D. H. McMullen, Minneapolis, Minn. Dear Sir: I have been reading up the article in the Mississippi Valley Lumberman, and I am surprised at their printing a letter of this kind without confirming same. The statement is not cor- rect in any respect. The mills are closed, and it is one of the most successful close downs they have ever had, and they are just as firm to-day, and even more so, than they were when they first closed. We are enclosing you a letter written to all shingle manufac- turers in the State, by the Ballard Mills, dated May 9th. This is only one locality, but every locality is writing these circulars, and are holding out. I was obliged to pay $1.80 for the shingles in Fullerton's mixed cars. I could not buy them less. We bought them in Ballard, as they had to go on a C, M. & St. P. routing. 32 THE LUMBER INDUSTRY. Now I want to say this: If the Mississippi Valley Lumberman prints another letter like this without first confirming it, we shall feel obliged to discontinue our ad., as our ad. is no good to us if they will print a letter of this kind in the same paper, making it impossible for us to secure any business. I think you will find that every advertiser in the Northwest will take the same stand. I have had a talk with several, and have been called up several times considering this action. We want to be fair, but they must reciprocate. If they were printing the facts, and it was the truth, we would not feel the same about it. As you state, it will dis- courage every buyer for at least ten days longer. We are very much surprised at Walker allowing this to go in his paper with- out first confirming same, as we are satisfied they are. not trying to knock the market. We want you to take it up with them at once regarding this. Yours, truly, The Sound Lumber Co. (Inc.), By C. A. Dean. Notwithstanding the difficulties which the lumber-trade journals have encountered, they have been remarkably accurate in their statements. Many times they have reported association action more fully than did the secretary in his minute book, and sometimes give the only account of the most important action taken by the association at the particular meeting. Often in the case of such action the Bureau found that some association officer gave in his correspondence a full account which agreed with the trade-journal report, although no record of it was in the minutes. Many manufacturers, wholesalers, and retailers have been inter- viewed by agents of the Bureau. Men well known in the lumber trade have stated what they consider some of the principal factors influencing the prices of lumber. With the lapse of time men may have forgotten the details. Some actually did not remember the details, while others temporarily forgot during the presence of the agents. It frequently happened that the person interviewed denied in toto any knowledge of important events". It is quite natural for men to forget details of actions taken sev- eral years ago. Contemporary records are preserved in lumber- trade journals, and the extracts from such sources have been used to give what such trade journals said at the time. Those selected for presentation in this report are representative of several thousand others which were collected by the Bureau but not published. Section 6. Price statistics collected by the Bureau. General description of methods of distribution from manu- facturer to consumer. — As is customary in many industries, the processes of production and distribution of lumber to the ultimate consumer are, generally speaking, divided between three agencies — the manufacturer, the wholesaler, and the retailer; but in PEODTJCTION AND WHOLESALE DISTRIBUTION. 33 the lumber industry there are many exceptions to this general rule. In many of the softwood species the wholesaler is practically elimi- nated as a separate agency, the manufacturer dealing directly with the retailer or the large consumer. In many of the hardwoods, on the other hand, the wholesaler is often the dominant agency, buying up the annual cut of a number of small mills and selling a large propor- tion of the lumber handled directly to the large manufacturing con- sumer. The part which each of the above-mentioned three agencies plays in the distribution of any given species is determined chiefly by the peculiar conditions surrounding its production — whether it occurs mainly in forests of practically pure stands, as is the case with several of the softwoods, and is manufactured by mills of large capacity, which confine their production mainly to one species, or whether it occurs usually in forests of mixed stands of several species, as is the case with most hardwoods, and is manufactured, together with the other species, by mills of small capacity. The nature of the con- suming trade also varies. In general, the lumber needed for building and as raw material for manufacturing plants which do not consume large amounts individually is distributed to the consumer through the retailer. The lumber used by large consumers, such as railroads, car-construction companies, shipbuilders, large-scale manufacturers of furniture, wagons and carriages, and agricultural implements, and consumers of large quantities of box lumber, like window-glass fac- tories, goes direct to them from the manufacturer or wholesaler. A portion of the output of each mill goes into local consumption; the balance, shipped out by rail or boat, has to find a market outside. Of certain species a large amount is exported to foreign countries and the remainder is distributed all over the United States. There are a number of cities which are prominent in the lumber industry, because to a considerable extent they are centers of import- ant producing territory. Others are not only in themselves important consumers of lumber, but also are centers of considerable consuming areas, the conditions of which they represent. Still other cities are of great importance as being wholesale markets, or gateways, through which lumber, converging from many different points of production, passes on its way to the large centers of consumption. There are few cities of just one type; all are consuming markets in some degree. Portland, Oreg., Spokane, and the Puget Sound cities, situated in the midst of lumber-producing territory, in addition to their function in distributing the lumber in that region, are supply markets for the rest of the country. Similar in their function are Norfolk, Va., for North Carolina pine; New Orleans for cypress; Savannah, Jacksonville, Pensacola, Hattiesburg, Beaumont, and Houston for yellow pine; and Memphis and Nashville for hardwoods. 25030°— 14 3 34 THE LUMBER INDUSTRY. Examples of markets in which the forwarding of lumber is a promi- nent feature are Buffalo and Tonawanda, Cairo and Minneapolis, for western lumber, and the ports which do a large export business. The markets whose relation to consumption is probably their most im- portant feature in the lumber industry are Boston, New York, Phila- delphia, Baltimore, Pittsburgh, Cincinnati, Cleveland, Detroit, Chicago, Milwaukee, St. Louis, Kansas City, San Francisco, and Los Angeles. Necessity of securing price information from records of actual sales. — As has already been pointed out, in the Kittredge resolution special attention was directed to an investigation of the causes of "the high prices of lumber." As soon as the Bureau began its price inquiry a question of primary importance arose as to what actually were the prices of lumber. Only a brief investigation of the question was needed to prove that no published source containing even contemporary prices at that time (early in 1908) could be accepted as reliable, nor for the years previous to that period could the published prices be depended upon. Previous to 1908 the pub- lished price tables, appearing in various trade journals, were confined to wholesale prices in a few distributing markets, and, in most cases, can not be accepted as more than nominal asking prices. Since 1908 the Forest Service, and also several important manufacturers' asso- ciations, have published wholesale prices based on actual sales, which may be accepted as fairly reliable. The circulation of such price statistics, however, has been practically restricted to manufacturers only, most of them having been carefully kept out of even the lumber- trade papers. There existed a large mass of material on prices, in the shape of price lists, both the association "official" variety and those issued under the names of lumber firms ; but it was evident at the outset that such lists were not always lived up to — that the actual selling prices were often at wide variance with the listed prices. In order to determine the prices at which actual sales were made it was necessary for the Bureau to collect the data directly from the records of concerns engaged in the buying and selling of lumber. Reasons for showing wholesale prices only. — The price in- formation sought by the Bureau was limited to the normal whole- sale prices. These may be defined as the prices which at a given time would be paid by a retailer of good credit buying lumber, lath, or shingles, in the open market, in quantities of one or more carloads, under the usual terms of sale. The purchasing price of the retailer was chosen as being that point in the process of distribution nearest to the price paid by the con- sumer at which comparability of prices can be secured. There is a substantial similarity of grades and terms, as well as prices, of lumber PRODUCTION AND WHOLESALE DISTRIBUTION. 35 purchased by the retailers in a number of markets. There exists no such similarity of grades, terms, or prices in the lumber sold at retail. Even if two or more retailers in one market made the same grades and terms to their customers, comparability between different markets would be impossible. The f . o. b. mill prices shown by the Bureau are the delivered prices to retailers less the freight charge from the mill to destination. Such prices are free from the action of the peculiar local conditions of any one consuming market, but reflect instead the conditions peculiar to each mill. In those instances where the f. o. b. mill prices shown are the averages of several plants reduced to a com- mon basing point the local conditions of any one mill have little weight. Wholesale prices of lumber were obtained for every species listed in the table on page 2. For several of the species, however, the prices were too scattering and were gathered from too few sources to be considered sufficiently representative to warrant presentation. This is the usual cause for the omission of a species ; but in the case of western yellow pine and Idaho white pine, though a large number of prices were gathered from the principal manufacturers and dealers in those species, no prices are shown, because of the difficulties in distinguishing between retail sales, contract sales with subsidiary concerns, and wholesale sales. In several instances the manufac- turing company was affiliated with mining companies, or with line yards, and sold to such companies at nominal prices. Many of the companies did a retail as well as a wholesale business, but did not distinguish on their books between the two. Because of the extreme difficulty of eliminating the possible errors which might affect any compilation of prices from such data, it was judged best to present no prices for these species. The species for which the Bureau gives price statistics are yellow pine (including southern yellow pine and North Carolina pine), Douglas fir, oak, white (and "northern") pine, hemlock, spruce, maple, cypress, poplar, chestnut, birch, cedar, basswood, and elm. These species included about 88 per cent of the total lumber pro- duction in 1912. Western pine and redwood, for which no price statistics are given, formed about 4.5 per cent of the production. Adequate and representative price statistics of lumber for every important softwood, except western pine and redwood, and for the most important hardwoods, are presented in this report. No prices were gathered by the Bureau for the period subsequent to 1910. The Bureau shows prices of shingles for red cedar of the Pacific coast, for northern white cedar of Maine and New Brunswick, and for Louisiana red cypress. It also shows prices for lath from eastern spruce, Pennsylvania hemlock, and Louisiana red cypress 36 THE LUMBER INDUSTRY. Source of price information. — The information on actual whole- sale prices was obtained from the records of manufacturers, whole- salers, and retailers. The prices obtained from the manufacturers were limited to the kinds of wood which they produced and to the grades and sizes which were considered most representative of the course of prices. In each distributing market, where prices were obtained from wholesalers and from the purchasing records of re- tailers, careful inquiry was made into the nature of the local trade before determining for which woods, grades, and sizes price infor- mation should be obtained. In the search for information agents of the Bureau visited most of the large lumber-consuming markets of the country and also ex- amined the records of a large number of leading manufacturers. Information in regard to practically every kind of wood produced in the United States, and entering the lumber markets, was obtained. In each market in which the Bureau secured prices they were ob- tained from a number of concerns, including nearly always every concern of any importance which had good price records. For each species for which f. o. b. mill prices are shown, the manufacturers whose records were examined are among the most prominent producers of that species and their prices are representative of general conditions. In this work the Bureau was materially aided by many of the lumbermen, who, often at considerable inconvenience to themselves, not only granted access to their books but gave valuable advice con- cerning the typical grades and items to be selected and helpful criticisms of the price data gathered from their own books. Methods followed in collection and compilation of price data. — The statistical information was in practically every case gathered by personal examination of the records by agents of the Bureau, often assisted in this work through the permission of officers of the firm by some employee who was conversant with the books and the character of the transactions recorded. In two instances prices have been used, compiled from the records by an officer of the company, after a comparison with similar prices obtained by agents of the Bureau from other concerns in the same market showed that they were reliable. Because of the great number of sales shown in the records ex- amined for certain species, grades, and items, the immense amount of clerical work involved made it necessary to follow the practice of selecting at least three prices for the particular item, out of the great number of sales recorded for that item, in a given month. In such cases the prices copied were those representative of the sales at dif- ferent weeks in the month. When the records did not show more than three or four sales in a month for the item selected, every sale found was copied. PRODUCTION AND WHOLESALE DISTRIBUTION. 37 The first method was the one generally employed in the case of soft- woods where the records, particularly those of the large manu- facturers and wholesalers, often showed 50 or 100 sales in a month of certain items in great demand and in which nearly all the prices were identical. The second method was the one generally used in the case of hardwoods and, for some special reasons, in the case of some softwoods in certain markets. A comparative study of the original data collected by both these methods indicates that the resultant accuracy was about the same in both. The number of prices each representing a separate sale copied by the Bureau is estimated to be over a million, and in the case of the softwoods most of the prices copied represented sales many times their number. The following example of the numerically broad basis of most of the softwood price statistics relates to diagram 14. (Opposite p. 488.) In this diagram there are about 1,500 prices. Each price is the average of from 25 to 50 sales, taken from the records of about 10 concerns. But the number of sales represented is many times as great; for while the sales here included for one concern in one month may be from three to five these are representa- tive of a far larger number of similar sales made by the concern during the month, a number running often to 50 and sometimes to 100. On the other hand, in the case of hardwoods, it was so difficult to obtain a line of comparable prices, taking every sale on the selected items found in the records of many concerns in a given market, that not only was it desirable to omit any presentation of prices for several species because of scarcity of data, but even in the case of those species for which the prices are shown there are wide gaps in the tables. In the tabulation it was in some cases necessary to reduce out-of- town sales to the basis of delivery in a given market or to reduce delivered prices to an f. o. b. mill basis. The weights of lumber used in such computations were the various "official" or association weights which inquiry showed to be in general use by lumbermen for figuring freight. All the prices of a given item of size, grade, and species in a given market were then assembled and carefully studied, and an elimination made of such as showed probable errors, after all the ascertainable circumstances of the particular sale, and its relation to the other prices obtained for the same time, had been considered. Then a monthly average was computed, the average prices of each firm being given equal weight. Accuracy of price statistics shown by the Bureau. — There are a number of possible sources through which errors in the price figures might creep in. Every error of importance falls into one of the three following classes: Inaccuracies of statement in the original 38 THE LTJMBEE IWDUSTEY. records, accidental inclusion of prices not properly coming under the definition adopted of normal wholesale prices, and inclusion of prices of shipments unusually long delayed after the date of sale. The Bureau, from the outset, has used great care to safeguard the statistics against all avoidable errors. It is believed that the price tables shown are accurate statements of the actual selling prices of the lumber. On account of conditions inherent in the grading rules in force, and of the circumstances attending the production of lum- ber from the different species, it is believed that prices shown for softwoods give a more clear-cut, definite history of price movements than the prices shown for hardwoods. But all the prices published are believed to be sufficiently accurate for all practical purposes. The expert knowledge of employees or officers of a concern, in respect to the nature of its trade, was of great use in guarding against the inclusion of prices not coming' under the definition adopted by the Bureau. Not only was this knowledge available at the time of transcription, in which an employee often aided, but later it was usually possible to submit the sheets containing the prices obtained to the examination of one of the officers who was conversant with the concern's trade and general market conditions. Whenever, from his personal knowledge of the price policy of his concern, he criticized any price, it was traced back to the original records and, if then found wrong, the price was eliminated from the Bureau figures. ' Inquiry was always made of each concern into the usual time that elapsed between the date on which a sale was made and the date on which it was shipped out, and also into any periods when, because of unusual conditions, the elapsed time or "lag" was abnormal. As a general rule, the prices shown for a given month are representative of the sales actually made in the month preceding. The price material gathered for a given market was tabulated in such a manner that for each size, grade, and species all the prices for each month were brought together. In this way it was possible to discover any abnormal price not previously detected, because of the scarcity of a single concern's sales of that particular item, in the month in which such price appeared. In general, it was found that the variation between prices obtained for any given item, from different concerns in the same market, was not much, if any, greater than that found between a single concern's sales of the item to different purchasers. A further comparison was made of the prices of different sizes and grades of the same wood, between which certain well- defined differentials were known to have existed at certain periods, and this, too, aided in the elimination of errors. In a number of instances, in certain woods and markets, the prices gathered actually comprised a large proportion of the total sales in PRODUCTION AND WHOLESALE DISTRIBUTION. 39 such sizes, grades, and species during the period of time shown. In other cases, the thousands of separate sales which were taken were identical in price with at least 10 to 20 times that number of sales in the records. Most of the prominent concerns in each market whose trade was of a representative character were included. The com- parable prices obtained independently from different concerns in the same market agree within reasonable limits of price variation. Section 7. General causes of difference in prices of different species. Competition of species. — The substitution of one kind of wood for another is a natural agency acting to depress the price of the more expensive wood. The success or failure of an attempt to raise prices depends largely upon the possibility of substituting some cheaper wood. Unless a wood is very peculiarly adapted to a spe- cial use, an arbitrary advance increases the use of cheaper kinds in its place. Competition vnihin a species. — Whenever a new area of timberland of the same species is exploited under different ownership new com- petition develops — as eastern spruce with eastern spruce, Pennsyl- vania hemlock with Pennsylvania hemlock, and Louisiana cypress with Louisiana cypress — but as soon as organizations become active or the ownership becomes unified such competition becomes less and may almost cease. Where two or more fields of production exist, the two fields may compete against each other, as eastern spruce may compete with Adirondack spruce or West Virginia spruce, or eastern hemlock may compete with Pennsylvania hemlock or with Michigan or Wiscon- sin hemlock. The competition within a species is very apt to con- tinue for a long time where there is more than one field of produc- tion. 1 Ownership is not so centralized and organizations are not often so effective as where only one field exists. Changes in freight rates may enable two fields of production to compete for trade in a consuming market which was formerly confined to one of them. Local organizations of manufacturers frequently eliminate the most active competition within a given species. If a wood grows only in a certain section, its field of distribution is limited by freight rates. High-grade lumber can be marketed at more distant points than low grade. If low-grade lumber is shipped a great distance, the freight charges may form such a large part of the delivered selling price that the manufacturer will get no net return. In the case of high-grade lumber, freight charges are less important, but when it is sent to distant points they may reduce the return to the manufacturer to the point where it is unprofitable. ' An example of this kind relating to hemlock in the BuSalo-Tonawanda market is described in detail on pp. 60&-611. 40 THE LUMBER INDUSTRY. Competition of one species with another.- — Different species are often used for one and the same purpose, and quite often the ownership of the two species is different. In such cases competition may be very active. The character of a wood and the uses to which it may be put de- termines what species will compete with it. The cheaper woods crowd into a market whenever the higher priced wood is relatively high. This quite frequently compels the higher priced wood to re- main at the old price level, notwithstanding the fact that a strong organization may be back of it. A species may be hard to replace by an equally good substitute, for consumers are slow to change, but a relatively low price eventually decides the question in favor of the cheaper wood. For any particular use the quality of the wood limits the number of species which actively compete. In most industries where large quantities of lumber are needed, there are many woods which possess the required qualities, and the result is that several compete with each other. This is especially true of framing material for buildings. For certain purposes wood must withstand exposure to the weather, and this requirement limits the competition somewhat. Again, where wood is to be used underground, the competition of species is limited. Cypress, locust, cedar, and white oak are some of the woods which decay slowly underground. If a wood must be especially strong and elastic, the field is limited to a very few species. Hickory has these qualities to a high degree, and for some uses it has few effective substitutes. Wherever wide boards are required the field is largely left to fir, poplar, and redwood, and in cases where very long timbers are neces- sary fir is used extensively. In fact, very few woods can compete with fir for this trade. For some purposes the quality of the wood is of so much importance that only two or three species are much used. In the case of pattern work two or three species excel so much that other woods are scarcely considered. Greenhouse stock, tank stock, and tool handles are mainly supplied by a very few woods. Some species are preemi- nently fitted for these uses, and were the supply abundant very few substitutes would be considered. Depending upon its use, a wood must be durable, hard or soft, heavy or light, stiff or elastic, easily bent or not subject to warp- ing, fine or coarse grained, tough or easily worked, must hold paint well, etc. A large part of the lumber produced is used in the construction of buildings, and in so far as a species of wood is used in buildings it must compete with other species used for that purpose and with materials which maybe used as substitutes, such as steel, brick, stone, cement, tile, slate, and patent roofing. PRODUCTION AND WHOLESALE DISTRIBUTION. 41 Of framing material hemlock, fir, yellow pine, North Carolina pine, and spruce furnish a very considerable part. In this line these woods compete with each other where freight rates permit. Many other woods supply some framing material. There was a time in many of the northern consuming markets when white-pine dimension was common, but it has gradually given way to hemlock, spruce, North Carolina pine, yellow pine, and fir. . Many species are used for interior finish. The protection of wood from the weather permits the use of many different species. Both hardwoods and softwoods are used in flooring. Oak, maple, and yellow pine are much used, although fir, beech, ash, and other hard- woods furnish a considerable supply of lumber for flooring. Chest- nut is used for porch floors because of its weather-resisting qual- ities. Interior finish, for other than flooring purposes, does not nec- essarily require a hard texture and permits the use of a wider range of species. A great deal of wood is used in sash, door, blind, and general mill- work. Yellow pine, cypress, Douglas fir, white pine, and maple are among the more important woods for these purposes. Gum, hem- lock, spruce, yellow poplar, and birch are also quite freely used. In roofing, red cedar, white cedar, cypress, yellow pine, redwood, and white pine compete with each other for the shingle trade. Shin- gles compete with tile, slate, metal, and patent roofing. In general construction work many woods are used, and competi- tion is active. Lumber is extensively used in boxes and crating. White pine, yellow pine, and North Carolina pine rank high in the quantity of lumber used for this purpose. Other woods which actively compete for this trade are hemlock, red gum, spruce, yellow poplar, birch, basswood, and cottonwood. These species which compete with each other for the box trade must also meet the competition of other sub- stitutes for boxes. The poorer grades of relatively high-priced woods, such as white pine and poplar, and higher grades of the relatively low-priced woods are used in box factories. Much of the lumber made into boxes is obtained in the vicinity of the box factory, for cheap stock can not stand high freight charges, and for this reason competition between remote areas is impossible. In the furniture trade hardwoods predominate. White oak and red oak are the most important, but considerable hard maple, birch, red gum, and poplar are used. Walnut and cherry were at one time more important factors in this trade than now. These species not only must compete with other minor hardwoods, but they must meet several species which are imported. One species may become scarce and high in price, and others will be used. The high-priced wood may even fall in price when substitutes enter. If the first- 42 THE LUMBER INDUSTRY. used wood is scarce, it may maintain its existing price level, but if it is plentiful it will have to meet the price of the competing species or seek other uses. The competing wood may be one not formerly used. In car construction yellow pine, Douglas fir, and oak are extensively used. A considerable quantity of red oak, white pine, yellow poplar, and North Carolina pine is also used for this purpose. Steel is now very widely used in car construction, and wood feels the effect of such competition. Railroad ties are largely supplied from oak and yellow pine, although fir, cedar, chestnut, cypress, tamarack, hemlock, western pine, redwood, gum, maple, and other minor species contribute to the supply. There are other lines of manufacture besides those named above which use considerable wood; for instance, agricultural implements, vehicles, woodenware, handles, ships, musical instruments, and trunks. The various species of wood which are fitted for any of these uses compete for the trade. Causes of violent price fluctuations. — Much stress has been laid by the lumbermen, in their promotion of association price activi- ties, on the desirability of reducing the violent fluctuations of prices. The claim is made that steady prices benefit both the manufacturer and the retailer, and that all branches of the lumber trade should cooperate in holding prices on an unfluctuating and profitable level. 1 The frequent and marked fluctuations of wholesale prices are due to the interplay of two- factors — supply and demand. The supply is to a limited degree under the control of the lumber producer, while demand is wholly outside of his control. The first factor is the comparative regularity in the quantity of the annual supply. This is due to the fact that a considerable period of time must elapse between the logging operations and the marketing of the finished lumber. This period differs with the vari- ous species and with the profitableness of the use of dry kilns for different woods or for certain grades of the same wood. For exam- ple, a large proportion of the North Carolina pine lumber that comes on the market runs over "live rolls" direct from the sawmill into the dry kiln, while most of the cypress lumber as well as most hardwood lumber is air dried from nine months to a year. 1 A typical statement of this attitude is given in the following extract from an editorial entitled "A vig- orous pro testagainstindiscriminatepricequotations," published in the American Lumberman of Oct. 9, 1909: Ordinarily it is somewhat difficult to convince retail lumbermen of the advantage of a fairly stable market. The experience of the last four years, however, caused many of them to realize that they are interested in this question. Many prominent retail lumbermen claimed during 1906 and 1907 that the constantly increasing value of yellow pine made it impossible for them to derive profit from their business, asserting that the margin between the cost and the selling price was absorbed by the increase in the cost of stocks bought to replace those sold. This condition was followed by the depression of the latter part of 1907 and the early months of 1908. The retail demand was seriously affected and in a few months after the October crash many yards found themselves loaded up with stocks, some of which it was necessary to sell at cost, or in some cases less than cost. Retail buyers do not desire to have the price of lumber decrease steadily for a considerable time. They like to see sharp breaks followed quickly by reaction, which enables them to buy to better advan- tage than some of their competitors. PRODUCTION AND WHOLESALE DISTRIBUTION'. 43 Special conditions at each plant probably have as much influence in fixing the amount it will manufacture during a given year as the general conditions of market demand for the product. For example, the particular conditions of its tenure of standing timber, whether held in fee or in rights terminable after a certain date; the logging conditions, which make it desirable to cut certain tracts at once; the capacity of the sawmill, which has generally been fixed with ref- erence to continuous operation; and the facilities for storage of lum- ber in the yards at the mill all have to be considered. Thus, while it is possible in some degree for each plant to increase or decrease its output, to respond to changes in market demand, yet its financial needs, the length of time that is required to log, manufacture the lumber, season it, and transport it to the points of consumption, make it difficult to effect rapid changes in the quantity produced, moreover, to secure any prompt and concerted curtailment because of changes in demand, the promoters of the movement must put for- ward such inducement through the maintenance of profitable prices as to overbalance the losses sustained by the mill man through dis- organization of his force and the need of more capital to meet carrying charges in default of income from sales. The bulky nature of lumber, involving the need of considerable piling space, and the cost of rehandling, makes it inexpedient to maintain any considerable reserve supply at distributing points. A large proportion of the lumber manufactured goes directly into use on its arrival at destination. The heavy expense involved in car- rying charges on lumber at points of consumption makes a sudden decrease in the local demand a serious matter should the yards be overstocked. On the other hand, in case there is no sufficient local supply to meet a sudden demand, higher prices can temporarily be asked. Changes in demand may be regular, such as the seasonal changes due to the nature of the building industry, the demand for lumber on farms, etc. Such changes may be foreseen to a considerable extent, and the local supply regulated accordingly. In addition there are irregular changes in demand, which may sometimes be more impor- tant than the usual seasonal changes. There may be an increase of demand, due to special local conditions of trade, which acting cumu- latively create an urgent need for building and manufacturing purposes; or, there may be a decrease of demand in many lines of lumber-consuming industries due to strikes or other local causes. As a result of the foregoing conditions it is evident that, within comparatively short periods of time, marked fluctuations of whole- sale prices may take place, since rapid changes in the demand can not as rapidly be met by readjustments of supply because of con- ditions inherent in the industry. 44 THE LUMBER INDUSTRY. Section 8. Relative production and relative price changes of high and low grade lumber. Proportion of grades.— The Bureau has secured records for sev" eral mills of the proportion of grades produced in the output of lum- ber for a series of years. In presenting these statistics attention must be called to the fact that there are wide differences in the log- ging conditions at the various plants. Because of the topographical features, the exigencies of logging road construction, and the tenure on which the stumpage may be held, it is often necessary for a given plant to cut a greater propor-; tion of high-grade timber at one time than another. Could records of the experience of enough mills be obtained over a sufficient period, these individual variations, due to the peculiar con- ditions of each plant, would assume less importance and reliable gen- eralizations would be possible on the following questions: Is the amount of low-grade lumber in the output of the mills manufactur- ing a given kind of wood increasing; and if so, how fast? Is the increase due to closer lumbering methods which take a grade of timber hitherto left in the woods, or is it due to the cutting of second- growth timber, inferior in quality to the original stand ? The Bureau has not enough data collected to warrant a definite; general conclusion on the questions involved. It merely present^ some statistics 1 and Diagrams 1 and 2, which appear opposite this page, without making any assumption as to whether they are typical! of the general conditions. All of the mills for which the records were; obtained are operated by companies prominent in the production off the given kind of wood. In those kinds of wood which show an increase in the amount of^ low-grade lumber produced, two causes may be operating to brina about such a result. ** 1. Where the original growth of timber is being cut ("virgin^ stand") the increase is likely to be due to the taking of trees formerly considered not high grade enough to pay cutting and the hauling ou of logs formerly left in the woods because of their low grade. Ii this case the amount of high-grade lumber obtained from any giver tract of land is at least as much as formerly. The higher price o: lumber has made it profitable to take out of the woods a greatei quantity of low-grade logs, and thus lower the average grade of logs arriving at the mill. In consequence, the proportion of the low grades in the total amount of lumber sawed is increased. Under such conditions a mill which acquired its stumpage yean before, at a time when only high-grade logs were taken from th< woods, and which, under the changed conditions, obtains 8,000 feet log scale, per acre, where at the time of purchase only 4,000 feet woul< 'These statistics will be found in the discussions on the various species. Diagram l.— Proportion of Grades Produced is the Cut of Mills Sawing Yellow Pine and Whi c CD A i C (8 Plants) &' w w 1 2 3 4 ,,-,„ 1892 1894 18% 1898 1900 1902 1904 1906 1908 1893 1895 1897 1899 1901 1903 1905 1907 1909 1899 190! 1903 1905 1907 1909 1905 1907 1909 1909 1QQ 1891 1893 1895 1897 1899 1901 1903 1905 1907 1892 1894 189b 1898 1900 1902 1904. 190b 1908 1910 1900 1902 1904 190b 1908 1910 190b 1908' 1910 *E 90 80 70 ftO no 40 — 30 ?,0 10 .) — RHgXg $fa 5 6 7 6' YELLOW PINE D (3 Plants) I909 I909 I909 190I I905 I905 I907 I909 1903 I905 I907 I909 I904 I906 I908 I902 I904 I90b I908 I9I0 I9I0 1900 1902 1904 190b (90S I90Z 190% 190b 1908 1903 1905 1907 1909 1901 1903 190? 1907 1909 910 910 — — CS3 # W — ^ 1 Si <0 — SSm™ 777 — , * MH YELLOW PINE Proportion of grades in the cut of 28 plants Operated by 11 companies GRADE 3 rd Clear and belter N s 1 Common " 2 " " 3 " or Culls Common and Cull S fc r A B ■n r 1897 1899 1901 1903 1905 1907 1909 1899 1901 1903 100 18% 1898 1900 1902 1904 190b 90 1900 I90Z 104 1906 1908 NORTHERN PINE D E r G "a r ~\ r ~\ r F 1905 1907 1909 1900 1902 1904 190b 1908 1900 1902 1904 1906 1908 1901 1903 1905 1907 1909 1904 190b 1901 1903 1905 1907 1909 1699 1901 1903 1905 1907 1909 1900 1902 1904 190b 1908 1909 1903 1905 1907 190! Grades Produced in the Cut of Mills Sawing Yellow Pine and White or "Northern" Pine. YELLOW PINE D (3 Hants) E OPlante) ~> (~ 05 1907 1909 1903 1905 1907 1909 1904- 1906 1908 1902 1904 1906 1908 1904- 1906 1908 1904- 1906 1908 I90Z 190* 1906 1908 1903 1905 1907 1909 1903 1905 1907 1909 1903 1905 1905 1905 .1905 190/ IWB I7UO I9U0 I7UD I7UO < nn 1906 1903 1902 1904 1906 1908 1903 1905 1907 1909 1901 1903 190? 1907 1909 1903 1905 19071909 1903 1905 1907 1909 1901 I' '03 1905 1907 1902 1904 1906 1908 1902 1904- 1906 1 908 1902 1904- 1904 1904 1904 1904 1906, .1908 1905 1907 1905 1907 1907 1909 90" |(JU — — m, X* F ~^ r G (2 Plants) H(4Plante) J(2Ptente) K(2Plants) g 2 3 4 X 1 2 ^ 3 902 904- 906 908 11 s ? IS — s 1 — W _s_ — — — » i m ■ — w 90 80 70 60 50 40 30 20 10 NORTHERN PINE D E a r ~> r F G H I(3Platita) ~> r ~\ r 1 2 I900 I902 1904- 1906 1908 1901 1903 1905 1907 1909 1904 190b 1908 1900 1902 1904 1906 1908 1898 1900 1902 1904 i90fa 1907 1909 909 1899 1901 1903 1905 1907 1909 1900 1902 1904 1906 1908 1909 1903 1905 1907 1909 1899 1901 1903 1905 1907 1909 1897 1899 1901 190 > 1905 1906 1908 _ __ ____ ______ p 1 1L j 1 1 ! S _J &>$ IHlll lis iftt 8§fe — * ~3"-S- W7 1909 . nr . 1906 1908 t()() NORTHERN PINE Proportion of grades in the cut of 11 plants Operated by 9 companies GRADE Selects and better. W 1 Boards. » 2 » 5 " 3 " and better " 1,2 and 3 Boards __. " 4 and 5 Boards Piece Siuff PRODUCTION AND WHOLESALE DISTRIBUTION. 45 have been taken, may get higher profits at the later periods, although its proportion of low grades is increased. On the other hand, a mill which operates on stumpage bought in recent years, or, not owning stumpage, saws logs bought in the log market, may find that the decrease in the proportion of upper grades in the logs that come on the market seriously cuts into the profits. Stumpage bought in recent years reflects, in its prices, the changed conditions of cutting, and, in the log market, where logs are sorted according to quality, those logs that will produce high-grade lumber command a higher price than the others. 2. Where the timber cut is second growth, the timber standing on a given tract is usually inferior in quality to that which preceded it. In such a case there is a less quantity of high-grade lumber obtainable from the tract than formerly. It is not merely a matter of change of proportion of high grade in the total cut, but a change in absolute quantity. In general, the low grades of any kind of lumber meet with much greater competition than the upper grades. There is little differ- ence, however, between the cost of production and distribution of the higher grades and of the lower. If, as there is some evidence to show, the cost of logging, manufac- ture, and distribution, figured on the basis per thousand feet of lumber produced, has been increasing, and if, as there is also evidence to show, a considerably higher proportion of low-grade lumber is obtained from the logs reaching the mills than was formerly the case, 1 the. prices obtained for the lower grades 'have a greater effect on the industry than those of the higher grades. A change of 50 cents in the price of low-grade lumber is of much more importance to the manufacturers than several times that amount in the price of their high grades. Any- thing, therefore, which will increase the demand for the low grades, or, by shutting out competition of low grade from other sources of supply, will allow of an increase in price of low-grade lumber, is eagerly sought. It is for this reason that changes in railroad rates from pro- ducing territory to consuming centers assume so much importance to the lumber trade. A relatively small change in freight rates, since it affects all grades equally, may make little difference in the market- ing of the high grades, and yet in its effect on low grades may operate in such a manner as to cut down materially the profits of one set of producers and at the same time increase those of another. 1 At a meeting of the North Carolina Pine Association on Mar. 21, 1912, President Horton Corwin, jr., stated in his annual report: Startling as it may be, questioned as it will be, but nevertheless susceptible of proof by statistics of actual operations, the manufacturers of North Carolina pine were not receiving up to July 1st, 1911, over and above an additional increase in cost and stumpage, as much margin as they were in 1893. One of the principal causes, I fear, has been lost sight of in the depreciation of intrinsic value by reason of the drop in grades from 55 per cent of No. l's and 2's in June, 1893, to June 1911, on a product of second and third growth sappy timber, yielding only 10 to 15 per cent, which computed upon the same values as prevailed in 1893 shows a loss of $3 per M, which in some way must be provided for. 46 THE LUMBER INDUSTRY. The statistics of the proportion of grades were obtained from two classes of records. Where a yearly record of the grades cut was kept, that was taken. In many cases the only record in regard to grades was to be found in the statement of shipment of lumber by grades. That, obviously, does not give an accurate statement of the grades cut in a given year, but as usually the amount shipped in a given year is about the same as the annual production, taking one year with another, the statement of grades shipped has considerable value. In some cases it was possible to get the yearly inventory of stock in the yards and by using that in connection with the record of grades shipped to arrive at a correct statement of the yearly cut of grades. Relative price movements of high and low grades. — A direct comparison of the movement of actual prices of different grades of lumber is not practicable, since a change of equal amount does not have the same relative importance when applied to high grade as to low grade. Obviously, a change of $1 a thousand feet in the price of lumber selling at $10 corresponds proportionally to a change of $5 a thousand feet in lumber selling at $50 ; but when the two price curves are shown in the same scale on one diagram the apparent change in prices seems much greater in the high grade. The use of mora than one scale on the same diagram is not desirable, since a reader not accustomed to using diagrams would be confused. Thus, the main object in presenting statistical facts by diagrams — that of bringing out the bearing of numerical facts in a clearer form than is possible in tables — would be defeated. In the price diagrams in this part, for many of the curves presented the base line, or zero point, of the price scale is not shown. Instead, the lowest price shown on the diagram is at a much higher point than zero on the price scale. The purpose of presenting diagrams in which the normal base line of zero is not given is merely to save space, by cutting out the least significant portion of the diagram, and presenting only that portion which includes the extremes of the price fluctuations. Such diagrams, while of service in showing the fluctuations of each grade taken by itself, are of little use for purposes of comparison with other grades. To do that, by means of a diagram, prices of the differ- ent grades must be reduced to a common basis and scale. This is possible by the use of a system of index prices which permits of the comparison of the price curves of the different grades on one diagram. The usual method of construction of a system of index prices is to obtain the average of the prices extending over a sufficient time to include conditions which can be accepted as normal in the industry. Such an average price is then used as a base, and the relation of every price which is to be, used in that particular curve to that base price is obtained by dividing such base price into each price. This converts the money prices into a new set of prices called index prices, of which the base price is always represented by 100. PRODUCTION AND WHOLESALE DISTRIBUTION. 47 If in each case the base price is the average of the prices of the same period of time, it is possible to obtain a direct measure of the differ- ences between the various series of index prices. Different grades of the same kind of wood or different kinds of wood can be compared directly with each other by placing them on the same diagram. The selection of the period of time which is used in determining the base price is a matter of great importance. Usually the period chosen includes a considerable number of years, the purpose being to eliminate as far as possible the abnormal conditions which may exist in any given year. Obviously, if the base price is computed from the prices shown at a time when the market is unusually depressed, any statement of subsequent high prices is likely to give an unfair im- pression on the mind of the reader, for the price movement always will appear unduly large. On the other hand, if the base price is de- rived from prices shown at a time when the market is unusually high subsequent changes are unduly minimized. The period which has been selected by the Bureau in compiling the base prices for the price-index series here presented has been the years 1901-1903. Many of the price tables begin in 1896 or. 1897, at a time when the lumber market was unduly depressed. Then followed a time of rising prices culminating in the boom prices of 1899 and the first half of 1 900 . Then followed a sharp reaction, and a partial recovery of prices to a point below the highest point of the boom, but substantially higher than the prices for eight or more years prior to the boom. As a rule, for three or four years after 1900 there was little change in prices. In 1905 there was a pronounced rise, which in some grades and kinds of wood culminated in 1906 and in others early in 1907. These were the highest prices which had ever been reached in many of the items presented. A sharp fall in prices followed, down to a level usually somewhat above that of 1901-1903, but which was much lower than the prices of 1904-1907. After that a more or '' less gradual advance of prices took place, but by 1910, when the prices gathered by the Bureau end, this rise had not inmost cases regained the level of the prices of 1906-7. A study of the movements of prices of all the different grades and kinds of wood led to the selection of the years 1901-1903 as being those which, during the period under observation, were most free from abnormal conditions. For all except the woods produced on the Pacific coast this period is one in which prices remained fairly " constant. On the Pacific coast the prices show a more decided rise after the depression of the latter part of 1900, and a marked depres- sion in 1904, before the rise of 1905-1907. The fir prices, which are the most important prices of the Pacific coast woods, have fluctuated in short intervals of time to sucli marked degree that no period extending over several years can be selected as forming a good standard. The selection of the years 1901-1903 probably gives as 48 - THE LUMBEB INDUSTRY. fair a set of index prices as any other period that could be chosen, and it has the further advantage of making comparisons possible with the eastern woods. The importance of the proper selection of the average base price will be seen by the following examples: Of northern pine, No. 4 boards, the average price f. o. b. Minneapolis in 1897 was $5.19; in 1907 it was $17.63. Were 1897 the average chosen for, the base price, the 1907 prices would be shown by an index number of 350, an increase of 250 per cent over the 1897 prices. By the use, however, of the period 1901-1903 as a base (showing an average price of $11.08), the 1907 prices would be shown by an index number of 159, an increase of 59 per cent over the prices of what may be considered normal conditions, while the index price of 1897, a period of abnor- mal depression, would be 47. While it is true that the price of No. 4 boards increased 250 per cent in 10 years, the impression given is misleading if such a state- ment is used as typical of the general course of prices, as the com- parison made is between abnormally low and abnormally high; prices. Connection between relative production of grades and price changes. — As has been pointed out in detail in the foregoiig discussion, as a rule the high grades have fluctuated to a much less extent than low grades. || At times of abnormal depression the lower grades suffer a fallffl price proportionately much greater than the higher grades, andJH times of exceptional demand the prices of the lower grades show'l greater proportional advance. While in the main the fluctuations o' the upper and lower grades have been in the same general directio at the same time, in the last three years (1908-1910) shown} Diagrams 3 and 4 (opposite this page) in certain items — such as : flooring of southern yellow pine, North Carolina pine, and fir, an of No. 1 and No. 2 common boards in white pine — the advance price has been more marked than in the other items which, as a ru are lower in grade. It is evident that the greatest amount of fluctuation is found in 1 lower grades. It has been shown that the great bulk of the luml produced may be classed as medium and low grade, the difference! price per thousand feet being generally less between the low the medium grades than between the medium and the high gradj and that the medium and low grades have fluctuated in much cloi unison, than have the medium and high grades. The wider fluct tions, therefore, affect a large proportion of the output of the mai facturer. . It has been generally claimed by lumbermen that the prices their product were subject to violent fluctuations, and that it fl DIAGRAM 3.-Comparative Fluctuations of Prices of Different Grades of White or "Northern" Pine, Lake States Hemlock, and North Carolina Pine, Shown by Index Prices, 189^1910. ., c J NH, COMMON B0ARDS(DRESSED)rX4-\NDUP e'io^o' • ! ! i i 1 , _, ,_ 4^M M M- ^^■H'^M-^M --? 4- > VJ-J---_J— J-- ^__« a * * j N ? 1 , DIMENSION (DRESSED) 2X4 ,I2to 16 o 1 ! !■ 1 -1 1 1 >- -pT I ! *™ r "1 ' ' ■ ' I ! oo: 1 • | •(„ • | « « •.".•.I 12 S i l -1- -U III 1 U- ! _U_^_ _L_ . 11 ; i ■■ i 1 ■ : J_j _L i j_Ht iPJ I ! - i i 1 ' 1 — ^ — ^-4 — U- * L ° " "-° l j i . | i ! i ! i- ■ ■ n — i '~ri i ! i j j ! 1 : 1 i ;■ 1 — 1 -4- -j- • s > * ■ 1 1 1 : 1 . . -* -, 7 J ' 1_, ._» li.^ 4 , , *4?>»A»k» ■ J-P-'»>JjJ>-Lp 1 j .: _, ■ L OO OjO O : ; #' O 1 -1- H -+- 4+H- - r - .1 .,'.«::: ii m , 1 1 LL"te^»P*' : :,: us -H-HH i '^4 ' ^ u : i ' +t -^t^ ^tT" s-H^K^ "^~H~h ~ r ^ -k-ti — 1- -r- - -+- -tt' . k.'uy'f,. ('! 1 1 1" j ; ! ' i i : ! |*j l»h **:■! | ; M ; ! -i i : ! j i' i I ! ! 4 . • « j ' |. M •*»r«" »»!•*. , ML'»k l k ,l "p!.M , i I'.!:! M M M M I M I 1 | i ioo i 1 : , : I : ! ! ! ^ H-r~T<-^, W kb ^** j_^ i . -u^_ : ij_ i.^^-j-, i Mi— i'..' luu j ! | | , -I— - | l | «. ? ) M ^ I j. I | ! ■ I _(_[ ! ■ ! 4 M _i : 1 ■ L 4 ■ ' I : ! , ■ ' 1 ' i i °l i ~TT>« ,r r "!*»»»el ! i ! F 4 • ■"i i ! ; ■ j ! ; : ! ' ; T ! ° ?TS°i % \ 1 i 1 1 »'pp'r* ' 1 , r p il I : 1 1 j ! 1 4: i- 1 r 4 1 °l°^° L ° ! * Am',% ptr'ih ! :j ! i i .i ' i ■ 'Ml ! el 1 »i> r „b»Pi »• ' • "M.'4 ■ ' : i ' ! : Im 1 1 1 1 1 1 1 1 ! ; : ; ; j ■ 70 ° J ! ! ! ' 1 !»U - r*[»^P-^ : !-4-;4 ^ , %% M ;* !' ; j : ! m ' ■ m | ; | I . ! : i ! ; T i M | I I I; M I 1 : 1 i 1 i 1 I | 1 ^■m- t; Mf" 4~ 60 I: < "t- | | j 1 1 ■ j | | | | | 1 1 J^_^i-— J 1 — J — i_L i 1 : i 1 1 1 M 1 1 1 : ! I I 4- -Mj rr — i — r — 1 — h— 55 i 1 1 III! M i II 1 I 1 '1 ! "! 1 ; rT T"^" 1 1 i 1 1 I I 1 1 1 1 | II i II! 1 1 : i 1 i i 1/5 i i | i . '-t WAUSAU MARKET I i ! ■ 1 LAKE STATE HEMLOCK l 1 , •■[•' || 1 1 1 "h-p — h — -H~\ — 175 I6C ' DIMENSION (DRESSED) 2-"X4 - 16 • j . 1 j ; | i 4 1 -L- ^^ J- -+-i - 1 1 -1 4 1 -_ ; 1 i» _jiT- .4: i ' j I DIMENSION (DRESSED) a" XI2.*- 16' Ml: ! : 1 -|r, -rt ^^ '^t^' -^-^-v^;- 1- * ; -r 1 - | , ....11 » • 1 1 I i j i 4 >l . 1 1 1 l||£ u i r | DIMEMSIQN(ROUGH ,! 6X6 - 16 • | j , I i : 1 +- - : -+■■■ 1 1 I >L. ■ ! ! ««| i • »» ». , I | | j \ 4 _^ III I !i -;k « 'U *4«i 11 I'M ! 1 m 4 1 i i ! : I 4 ~'~ , ~ MT ■ : ijit^i"«i*i , pii!iMM 11 150 1 — i — ( I ! 1 ; | | M | | j | ' III \ ^" f 1 M * M -I' M M I 1 Mil M ^i U j ^ i4s M ~f+M T -M — hj — H-ff-t ! 1 j 1 ; ■ i u L _L i 1 r' 1 . M M M i ) w ■ m M* M* * * j i4o — Ml — MfMMMi — M M-j-j- , ■ ' i : i • < ! ■ • * M i • •' »p * :* IM iss — H M — MrM"M^-^ — p~L t--j~4-r(4M r ■■ | — l-L " f -prT t ~ ; m- -M -r: ■ i ■ i i j :j iM M^^l;"- j 4 M*| ; iiM, ijH 1 : >> '•■ : • -i« l * ' • : : • :• 1 • I 130 M ' — -+- ; r ri'^TTT:'' — n — -r | | ! ; ; i ! ' ' M M 1 M| i 1 ft:M «| |i ' j i 1 j : ; 1 1 . |> U-i-i-.J-i 1 j ; 1 i i I : 1 IS* j 1 ; l_i M -J I ' ^M 1-^- L !■ ■ L ■•■*.» i ' 1 I ; , ;«r ■ i i •i | : izs - + -+- -^TTT 4- i i i ! ; M I M MM ' S **» 1 i M M M ' ' • i i 1 120 -1 ■ +->- i j ' M f | ! -f---++- ^- ; : | ' 1 h». M: 1 . rl * . ! i ' i 1 1 : ! r.jii|iii4i^-iL ' i IIS --M 1 ■ f-| ■— ' 1 j ' ' | .!■''» ' ' ..!"■. j» !* * ' S» IB p j» J» »»»►•» j • * M i | no — -J — ^-T-t-H - l ' 1 m — ; — M ' * » ' 1 • I ! ■ - i ; ! # ' • II ! M ' ' l ' ' 1 I 1 ; 1 1 1 — 1 — i — i 1 1 i 1 1 1 100 — -i- -< — > " ]■• 1 • 30 » . ! • , 1 _i h 1 1 i | • ! • 1 » - -t T - -Mrr^^ + ii ! j : 1 05 M r-M-f-hH- 90 --Mft-r-M—M-f r- 85 ^ 1 , , i_ |» •';•».»■■•-.' ! 1 = | ! i i i ; j j 1 ' j ; ■ ; » » ■!• l * »! 80 H- -f- -t- ^4 h-- |»l> | ■ ft S * » j ^ » A .-, I ■ : : j i M M 4 j~ ; ; uo !•»•»>»» j i 1 [ 1 i 1 i M j M ■ i - M M ■ \ M I M » » ■ • » l» i 1 | ! 1 ! i m j j i m i : : ' : 4 1 1 1 1 i 1 [ . ■ i I i j i i i 1 | J j j ! M M M m I i ' M i 1 1 ; '" + -f-H — p-' — h- ' 55 ! 1 ! I ! ! 1 . 1 1 1 '1 1 1 1 i 1 Il 1 . 1 r 1 i 1 1 1 1 l 1 i 1 i ! M_ ,_ ±jj — L ^^lMl^ jJ — L. 1 r ' T NORFOLK MARKET NORTH CAROLINA PINE \tttX * ! ' — 1 h — I H~ : 1 1 1 ' —-4 — H — \-+-\-r- 175 iss H--+ Nai rift, 2^to 3^ 4 . ^_ oj..: 1.. il ilM 1 ; 1 1 1 1 1 ' 1 1 1 1 11 i 1 1 ' |Bn t NS| FLAT FLOORING j ] ! | j | j j! | M \ | | | I | j 1 1 I j i I :i ••.<:> 1 1. 1. 1 1 i | | ■ ». ' 1 | ' j j 1 III Mi , r „ T~ "^ X k i HLAI FLuuklNG • j ; i j i I i I i 1 | 1 | | 1 i | i ! * • | j I I I i 1 Mi 1 1 ISfl-H (- . Rnx BOARn.s i"x 19" RnufiH • i 1 | i ; ; | : i j ! j j \ \ M M I i 1 1 s 1 1 -'' - 1 M ! ' "i I ! •: ! 1 | »k»»P i, n Mil I I I « Mi**.- 1 ! • [ » i s » ,i tr. *1 ; iM 150 • » i » t"" " ! ! 1 1 1 j 1 1 1 I 1 ; i j 1 'ill i 1 : 1 ! 1 : ' I | ■ 1 : | ! 1 r j 1 I 140 -j LJ L 4 : j f 1 : 1 1 ! i 1 1 1 j ! 1 i 1 i ! | ! i ' 1 ■ j i 1 i 1 1 1 1 1 4 II I ! 1, •••:«. 1 V ... , I M M M 1 II I ! I •■ f f * J 1* ; ■| — .-, -^ -++4- ^- r . H _. 4 ii * — S f — ' — J — 1 f-f-pT 145 ~ i i f ! ! ! 1 ! 1 j 1 1 ; 1 I i 1 1 II 1 ! : ; 1 . |l 1 I45-: 1 — a^ + __;_. i j : 1 1 > i I 1 ; i 1 j I j ; i I j ; j ' | ! ] .' ' j || | i 1 1 j 1 I 1 1 1 1 l| 1 j, • -.4 ,J . — H -4 -H-- 1 1 i M|i | i ] i || 1 | |i' *, . • *,'"!•■ r ■• ■ p : " -fn -fci-^-H M-i • ja » ' ' s P ■ i3o -H i_j lJJ. __; ; i j ! I ; ! j | j 1 ; ( ' 1 1 S j j 1 j 1 i j 1 1 ! ; ! : ; i i j j j 1 j Ml M ! 1 •; * d , , ,%, l» l» > » *hh* .:• "vj% / I 1 1 I'M 1 ' Ml M [ 1 ii i* • '' ' "" ': i i i 1 1 ! ■ 1 i ; 1 1 i Vji a »k«M I . .• 1 't. g:j •-.-i 1 MM 4J 150 ' i «| !•:' 120 -|~j — ^j — lim im i ii ; |i ! 1 ; i i : ; |i M 1 i r*f! I 'j m jl i 1 il h 1 1 ' i i , M I M M i i i* pT j' mm __i p • * I PJ -1 — : i» 1 ««t-)- 125 1 ! • ! : 1 ; I i i 1 i 1 i 1 ; i l < i i ' 1 1 : i I 1 ■ 4 1 : !• i"'P"L ,*| 1 || 1 j 1 " > M" • 1 '• i 1 1 p P 4 I ■" -l~T :~r j r fi It ll \ \ ' | i | » 1 1 [ I | f 1 ' I ! i j : ! ! no i-M-U ti _u4- 4 1 ; ! 1 : mm 1 i M ! M 1 1 J i ; ! ! I ! ! ! i ; j 1 i i I 1 ' « : I i p ' *»p« L M 1 1 i ! * f f • • 1 : • • 1 1 I !•■ ■ I 1 ! :••! !• • i 1 . PI i 1 '"-t-X.ltpi._it l! !|l|| : j! :! :r !!"-f*F si !| ; 1! : i l ^ : "" -^ '-•**-:•">.:. ' -• • 1 i - 1 — 1 — "^ — 1 — 1 r M "° i M ; p4-4 i .%.*[.. M- 4: "»;M 1 l| ! I i i- -rHj-p- H-- H— 4- | 1 f f-t— t r< 105 « f^MM^-UMMiX^, M . U^ 4 Li v J iriMPUXiMuM'^L -1 — h — rn — i — M 100 1 i III: ! j 1 M 1 i 1 1 ' 1 ' 1 1 ! •'. F* 1 Mi: ! . " • i » » '■ I so—L-U- ii4-_M|^:j!. i. ill i 1 ; : | ! i j | L| ,;*i 1 j. | kk»L: ; * : ; •. j_ ; ^ \h I . i 1 " 1 — '" 1 1 """n 95 85 4 t ^MM-|M',!., Mi Mi I ^ \\ LI M ! 1 ! ^ifi»(i # Ml ••; '-I ij 1 • i ! : : • ! I : I | ■ ' I 1 T h 1 i | : i : "T?-+r-' 4 - i - MlL_ J J I : : i 1 : i i ! I ! | i *|*i 1 ''• 1 I 1 : M i I ' ' I----I ■- M M | | j j | j |t j M i i 1 : : M 1 1 11 ! 1 i ^^-^-M 1 ^ 1 - 1 ^^ »^' ' ' .. *|J 1 >t Ij >'r' • 1 iMM M ' ; M " 70 M »« * ,L r !»: L L *■ _. L » : [ .|.Tm 1 . fW*»* 1 M | i I 1 1 I I 1 ; ■ 1 1 Hi. ' ' r 1 ^ ' ! 1 H M M H r 75 i „ • • «• I r : 1 ■ P • ; • ; W » i-T ! i I ! 1 ' ' 1 : 11 ' ' ' 65 ^4 — ts-i — H — 4-4»+|j4' t?i« ui f> r » » J.'il ii i i ; i I I l i - 1 — h — m^m — — h 70 j ^ eo^ *i«TJ-:, ; *M v-^m h i i 1 i rn i \\ M r i mm 1 ! 1 i 1 1 1 1 1 1 I I ; i I j ! 1 1 1 Ml 1 1 1 ' 1 ' ' : ; ! _. J^ -i 1 ! _JJ_,_|__j , — ^^4 ., I 1 ! | ! ' ! I I i 1 M M M i Mm ~t i M | M 1 '■ — h— +-J-4-f-)-i4-4 i_i — 1— l— j ; j i i | | 1 M Ml ! ' | + +4- _l__|_y__| r4-H — 60 ! ! 1 1 1 1 1 i ! ! ! 1 1 | ! I Diagram 4. — Comparative Fluctuations of Prices of Different Grades of Douglas Fir, Red Cedar, and Red Cypress, Shown by Index Prices, 1895-1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 49 desirable to adopt methods which would put them on a more stable basis. It is stated that the frequent extreme fluctuations in price affect adversely the manufacturer and retailer, with no correspond- ing benefit to the ultimate consumer; that they foster speculative conditions to meet which, successfully, involves the maintenance of a capacity in excess of normal needs, the expense of the maintenance of this excess capacity falling eventually on the consumer. A discussion of the causes of violent price fluctuations has already been given on pages 42-43. It is sufficient to point out here that the actual sales prices during the period covered show, especially for the low grades, considerable fluctuation. Of the two chief ends sought by all the organized price activities of the lumbermen, one is to secure greater stability of prices and the other a higher price level for their product. 25030°— 14 1 CHAPTER II. COOPERATION AMONG MANUFACTURERS' ASSOCIATIONS. Section 1. Introduction. Lumbermen in the various sections of the country have many interests in common. It is not surprising, therefore, that early in the history of their organization there grew up a sort of comity among them. As is shown later (see p. 51), the earliest general coop- eration among lumbermen in any form upon which this Bureau has any information was in 1897. It was five years after this, namely, in December, 1902, that there was formed a federation of associations known as the National Lumber Manufacturers' Association. The most common character of cooperation, often practiced in- formally, has been the constant interchange of statistical information regarding production, prices, and curtailment of output by various associations. This information when secured was often transmitted by one association to another, and was of use in determining price and curtailment policies. In speaking of the usefulness of this inter- change of information among associations, Secretary Beckman of the Pacific Coast Lumber Manufacturers' Association, in his semiannual report for 1906, said: When lumber associations were first formed, the principal object was to obtain uniform prices. This was at that time a prime necessity, because of the lack of authentic information as to prevailing prices, demand, and competitive conditions. With the very complete organization of information bureaus every manufacturer is in position to make his own prices. For exam- ple, this association exchanges information with seventeen asso- ciations throughout the United States and Canada, and any weakness in market conditions and the cause therefor is easily ascertained. The practice among associations of interchanging information was continued in much the same way even after the national association was formed. Indeed, this has been so much the case that it is diffi- cult to draw a distinct line between what has been done in this respect strictly by the national association and that done merely as friendly cooperation among the local associations. It is clear, however, that the national organization has strengthened the amicable relations that already existed among the associations and that it has enabled them to work more effectively along certain 50 PRODUCTION AND WHOLESALE DISTRIBUTION. 51 broad lines. While statistical information can be exchanged by- individual associations, it can be done more thoroughly and more cheaply through a central agency. Furthermore, in certain large matters affecting all lumbermen alike, it was not possible to accom- plish nearly so much without a more compact organization. This is particularly true with regard to national legislation and in dealing with transportation and other problems. Section 2. Interassociation activities outside the national association organization. As already stated, cooperation among lumbermen began as early as 1897. In that year a meeting was held in Cincinnati at which rep- resentative lumbermen from various parts of the country met to devise ways and means to secure the restoration of lumber to the dutiable list. The white-pine manufacturers were prominent in this movement. At the annual meeting of the Mississippi Valley Lumbermen's Asso- ciation in 1898, the secretary of that association referred to the aid given the Southern Lumber Manufacturers' Association in organizing a system of uniform grades. At this meeting a resolution was adopted urging the extension of this system to all lumber-producing districts. At the annual meeting of the same association in 1901, the secretary reported that assistance had been rendered other lumber manufac- turers' associations, and he alluded to the cordial relations existing between their association and the Wisconsin Valley and Pacific Coast associations. According to a statement made by a large yellow-pine manufacturer there was at one time an established differential between white pine and yellow pine. In 1905 the Western Pine Shippers' Association adopted the official prices of the white-pine manufacturers for white pine and also certain differentials for western pine. The sort of cooperation above described continued after the organ- ization of the national association and, in fact, it is continued along some lines at the present time. Section 3. The National lumber Manufacturers' Association. Organization. — The National Lumber Manufacturers' Association was organized in St. Louis, Mo., in December, 1902. It was no doubt the outgrowth of the friendly intercourse that had for several years existed among a large number of local associations. John L. Roper, of the North Carolina Pine Association, in discuss- ing at the first annual meeting what was hoped to be accomplished by this new organization, said: The National Lumber Manufacturers' Association comes natu- rally as the outgrowth of an education that has been the direct 52 THE LUMBER INDUSTRY. result of our local organizations. We have witnessed the many good results growing out of an exchange of ideas, and the coop- eration received in the local associations, but we have well-nigh reached the limit of what can be accomplished in this manner, and now look to the National Lumber Manufacturers' Associa- tion to develop that wider field now before us, and the many problems that can only be solved by concerted action of all of the various local organizations in this country, put forth through this national body. Our local organizations have now expanded until almost the entire territory is covered; in some cases I believe the territory of one association overlapping that of another, with a consequent confusion of prices, grades of lumber, and manufacture, which has threatened even to rival that his- torical mix-up at Babel. More uniformity along this line can, no doubt, be brought about by this national body. What particular group of lumbermen took the initiative in the organization is not known to this Bureau, but the white-pine manu- facturers and the yellow-pine manufacturers were no doubt leaders in the movement. The following associations became members at the time of the or- ganization: Georgia Sawmill Association, North Carolina Pine Association, Southern (now Yellow Pine) Lumber Manufacturers' Association, Mississippi Valley Lumbermen's Association, Hardwood Manufacturers' Association of the United States, and Pacific Coast Lumber Manufacturers' Association. Representation in the asso- ciation is on the basis of production. In 1912 the association was composed of 10 member associations, representing an annual output of about sixteen billion feet or of 35 per cent of the total lumber production of the country. The following affiliated associations now (March, 1914) form the membership of the national association: Georgia-Florida Saw Mill Association. Hardwood Manufacturers' Association of the United States. Michigan Hardwood Manufacturers' Association. North Carolina Pine Association (Inc.). Northern Hemlock and Hardwood Manufacturers' Association. Northern Pine Manufacturers' Association. Pacific Coast Sugar and White Pine Manufacturers' Association. Southern Cypress Manufacturers' Association. West Coast Lumber Manufacturers' Association. Western Pine Manufacturers' Association. Yellow Pine Manufacturers' Association. Purposes.— The original constitution adopted by the association sets forth the following declaration of purposes: First. To promote uniformity in the methods of manufacture and sale of lumber. Second. To unify as far as possible conflicting interests and eliminate those elements of friction that have so long served PKODUCTION AND WHOLESALE DISTRIBUTION. 53 as a barrier to the elevation of the trade to that high plane of dignity and usefulness to which its importance entitles it. Third. To gather and disseminate reliable statistics showing the annual production and consumption of the various kinds of lumber manufactured in this country, cooperating with and aiding other associations along this line. Fourth. To gather, compile and distribute information as to general trade conditions in lumber and kindred interests through- out the country. Fifth. To take up for discussion and action any and all ques- tions of mutual interest that are national in their character and application, leaving to the territorial associations for final adju- dication those matters and questions peculiar to their respective localities. Sixth. To strengthen the bonds of fellowship and inculcate more friendly relations among those engaged in the same calling and occupation, whose interests are common and lie almost along parallel lines, and for the uplifting of our industry to which many of the manufacturers are giving the best efforts of their lives. Some of the speeches made at the first annual meeting indicate that the lessening of competition was probably uppermost in the minds of the men who were prominent in the organization of the association. It was apparent also that this lessening of competition was expected to result in an advance in prices and a consequent in- crease in profits. In his formal opening address, President E. C. Fos- burgh said: Can anyone assign a good reason why long leaf pine car sills have never in the past commanded a better price than $10 to $12 per thousand at the mills in Georgia, Florida, and Alabama, when it is a well-known fact that for many years past Norway pine sills have sold for from $17 to $20 per thousand at the mills in the Northwest ? J. B. White, of the Southern Lumber Manufacturers' Association, in speaking of what he thought might be accomplished by the National association at this same meeting, said: This organization can help in the matter of equalizing the prices amongst competitive woods. If hemlock was selling for $17 and yellow pine for $15 in a given territory, its influence should result in either reducing the price of hemlock to the benefit of the retailer or increasing the price of yellow pine to the benefit of the manufacturer. In the same address Mr. White called attention to the good the association might accomplish in equalizing freight rates. He stated further in regard to prices that the national association did not combine to raise prices but its mission would he to adjust differences among manufacturers and correct abuses. He also called attention to the fact that information might be available as to cost of produc- tion, the value of stumpage, and reasonable profits. 54 THE LITMBEE INDUSTRY. While the national association has not been openly active in its efforts to regulate prices, it has at least indirectly been of assistance to local associations in facilitating this class of work. The system of reporting actual sale prices as a means of leveling up values, described in connection with several of the constituent associations, owes some of its widespread adoption to the influence of the national association. This plan originated on the Pacific coast and was highly commended by Pacific coast lumbermen at the annual meeting of the national association in April, 1910. Under date of May 7, 1910, Secretary Beckman of the Pacific Coast Lumber Manufacturers' Association, in a letter to the secretaries of all associations affiliated with the national, said : Gentlemen: Pursuant to our understanding at New Orleans, I am requesting the secretaries of the different bureaus of information * to forward you a copy of one day's report as to actual selling prices. These bureaus have no connection with this association, but are accomphshing much good. Each firm turns in a daily copy of actual orders received f. o. b. mill and delivered, and the compilation is forwarded to their members daily. The secre- taries have authority to go over the books, if necessary. The broad scope outlined in the declaration of purposes above quoted left practically no field closed to the activities of the asso- ciation. The fifth declaration includes a purpose to take up for action "any and all questions of mutual interest that are national in their character and application." This declaration covers the political and semipolitical activities of the association that are dis- cussed later where it will be shown that at one time tariff legislation enlisted its most energetic efforts. Two special lines of work have received a great deal of attention from the national association. The National Lumber Manufacturers' Credit Corporation, a subsidiary of the national association, conducts a credit rating bureau. The association- also maintains a statistical department that is quite active. Credit rating bureau. — The credit rating bureau, operated by the National Lumber Manufacturers' Credit Corporation, is, as its name implies, devoted to keeping those interested in the lumber industry informed as to the financial integrity and responsibility of those engaged in the lumber trade. It issues semiannually a large volume devoted to credit matters affecting the lumber industry, similar in purpose to Dun's and Bradstreet's that relate to business in general. When new concerns enter the business or old ones disappear from it, that fact is placed before the lumber trade in supplementary sheets. These sheets are issued from time to time as occasion requires. 1 For a description of toe work of these information bureaus, see pp. 474-47/. PRODUCTION AND WHOLESALE DISTRIBUTION. 55 The credit corporation, or credit rating bureau, also issues a sum- mary of trade reports. These trade reports show the lumber-dealing firms whose transactions have been reported to the credit corpora- tion for one reason or another. It indicates those firms that have made claims for grade or shortage, number of bills that they discount, whether they pay their bills when due, and other information of this character. It also indicates those firms to whom sales should be made only for cash. The activities of this credit rating bureau will be discussed more particularly in a future part of this report dealing with retail associations. Statistical department. — The association did more or less work in collecting and distributing statistics almost from the time of its organization. It was not, however, until June, 1911, that the syste- matic collection and distribution of statistics was begun in earnest. Since that time the association has issued monthly bulletins showing the cut and shipments of a large number of mills in various producing sections and the relation of their actual cut to their normal rated capacity. The association claims that it covers about 30 per cent of the total output of all kinds of lumber in all sections of the country. These reports show statistics for hardwoods and softwoods separately. Information of this character is very useful to lumbermen in deter- mining relative conditions of the lumber trade. From these bulletins they can compare the cut and shipments, month by month, and can also determine in any month the extent to which the quantity of lumber cut exceeds or falls short of the quantities shipped. Although the official proceedings make no mention of the fact, at the time of the meeting of the National Lumber Manufacturers' Association in May, 1905, the secretaries of the various affiliated associations adopted the plan of placing each other on their mailing lists to receive all matter sent out to their respective members. Secretary George K. Smith, in his annual report to the 1906 annual meeting, had this to say of this feature of the work: Each association has been doing efficient work along statistical fines both monthly and annually, and the interchange of this information has become a feature of association work — which is the direct result of the influence of this association and the oppor- tunities offered for personal exchange of views and methods at these annual gatherings of the delegates and secretaries of the affiliated associations. Efforts to secure favorable publicity. — For many years the lumber industry has had a number of ably conducted journals devoted to its interests, particularly the interests of manufacturers. These journals carry in their columns not only very full information useful to the interests they serve, but they also, through their editors and correspondents, present much matter tending to place lumbermen in 56 THE LUMBER INDUSTRY. a favorable light before the public. But, as is the case in most trade papers, their circulation is largely confined to those directly interested. Thus, the widespread criticism of the lumbermen could not be effec- tively answered through the lumber trade journals. Under these circumstances a more popular medium was needed, and plans were devised to reach the general public through the popular press for the purpose of creating a more favorable sentiment. With this end in view there was created in the national association the office of manager. This occurred either at the close of the year 1909 or during the first week of 1910. Leonard Bronson, formerly connected with the American Lumberman, was selected to fill this office. In a letter of January 7, 1910, sent to the secretary of the Wis- consin Hardwood Lumbermen's Association, Manager Bronson stated that the purpose of his office was "in brief, by wise publicity to mold public opinion to a more favorable attitude toward the lumber in- dustry, and to serve as a medium through which the industry at large may express itself and exert its influence on all matters of common interest." In a letter of January 8, 1910, Mr. Bronson refers to the loyalty of the Chicago Inter Ocean to the lumbermen during the tariff cam- paign and suggests that the lumbermen use their influence to aid the paper. This letter was apparently sent to all manufacturers' associations. The following letter was sent by President Hines of the national association to Secretary Cooper of the Western Pine Manufacturers' Association, under date of February 28, 1910: Dear Sir: Mr. Bronson has sent you a copy of the Chicago Record-Herald of February 23. The first real results accom- plished in getting the right material into the newspapers is shown on page 13, headed, "Scouts timber trust." I do not think he could have taken any text better than Mr. Pinchot's words, as the very name would excite curiosity, attention and considera- tion. Naturally he has to handle this in a delicate way and gradually work up to the question of prices on lumber. I am writing to Mr. Kohlsaat, proprietor of the Record-Herald, thank- ing him for the consideration shown our great industry in pub- Hshing this article. Mr. Bronson will keep right after this and you will hear from him from time to time. I have also suggested that he should write a letter and send it, for instance, to the representative men in our fine of business in different parts of the country, say, Kansas City, where it would disseminate through Kansas, Oklahoma, Ne- braska and Missouri, letting such men as Capt. White or Mr. R. A. Long be sponsers for getting it into the newspapers. They could also add any suggestions to the article and no doubt they could improve upon it in many ways. Then, we will attempt to have Mr. Rhodes put an article in the St. Paul and Minneapolis papers. PRODUCTION AND WHOLESALE DISTRIBUTION. 57 We may be able, through Mr. Smith, to reach some of the St. Louis papers, like the Globe-Democrat. We will attempt then to have, through some source, our matter put in the New York papers; and gradually in different parts of the country have arti- cles come out in the representative papers. Then, no doubt, these articles will be taken up by the minor papers and further commented upon, or some of the magazines will use this article, and in some of the representative grainary [granger] and farmer papers we will have some articles. In my judgment this article will do more good in accomplish- ing the purpose of the National Manufacturers' Association than any other one agency, and it is my earnest wish that each one of the board of governors particularly will lend their support to assist in not only going over these articles and improving them, but in having them put in the right paper in their towns. Also, if it will help the situation, have the articles signed by them- selves, or such interests as they think would give the best color- ing to the article. I will also request, for instance, a man like Mr. Babcock, of Pittsburgh, who stands very high there, to get an article in one of the Pittsburgh papers, possibly have it signed by himself. We do not care who signs the articles just so the material reaches the public, and we want to handle this in a very broad way. Also have articles in some of the Philadelphia papers and Boston papers; also Cincinnati papers. So we ought to do a lot of this work in the next 60 days, and I earnestly request your cooperation in the respective territories where you can assist. Also, particularly, as to suggestions and ideas, which both Mr. Bronson and myself will be glad to receive and cooperate with you. No doubt you have business in Chicago and are passing through here from time to time. It certainly would encourage the man- agement if you would call at the office, which is most centrally located, have a talk with Mr. Bronson, and you could certainly give him some suggestions and information. Will you not please bear this in mind and try to do as much of it as you can ? Personally dictated by Mr. Hines. In the fall of 1910 the association agreed to pay a former Congress- man $5;000 to assist him in the publication of a work favoring a pro- tective tariff. It appears that the steel, woolen, and cotton interests were also contributing to the same purpose, but the lumbermen withdrew from the arrangement after making only a partial payment. On December 20, 1910, Manager Bronson sent out the following letter "to secretaries of affiliated associations": For your information I am sending you herewith copy of letter which I am sending direct to members of your association, asking that they send their check for SI. 50 in payment for a year's subscription to the National Magazine. The letter referred to as being sent to the members of the affiliated associations is as follows : Please send your check, New York exchange, or express money order for $1.50 to the Chappie Publishing Co. (Ltd.), 944 58 THE LUMBER INDUSTRY. Dorchester Avenue, Boston, Mass., for a year's subscription to the National Magazine, beginning with the number for January, 1911, and advise me that you have done so. Please state with your remittance that it is sent on my request. The January number of that magazine will have an article in the interest of the lumber industry, entitled "The high cost of living." It is very carefully prepared to present the situation of the lumber business to the public in the proper light, but not as a special plea. The only obligation we have assumed in the matter is the effort to secure 1,200 or 1,500 subscriptions. This article is to be followed by two others, one on forest conserva- tion, and the third on the "lumber trust," all directly in the interest of your business. Incidentally, I might say that the magazine is worth the price regardless of our obligation to the publishers. I would suggest that after seeing this article you may wish to place a number of extra copies where they will, in your judg- ment, do the most good. Under date of April 26, 1911, the manager sent out the following circular letter: Dear Sir : The National Magazine, of Boston, publishes in its May number an article on the alleged "lumber trust," of which I enclose a reprint. It is a clear and strong statement of the lumbermen's argument from the standpoint of an outside inves- tigator. I suggest that you might secure the reprinting of the article, or part of it, in some paper with which you are in touch, giving due credit to the magazine. Such republication ought to do good. The National Magazine receives no compensation for this article, nor for the two which preceded it. I would be glad to have you bear this friendly service in mind and return the favor, if you have the opportunity, in some substantial way. Am sure the publishers would appreciate at least an annual sub- scription, a blank for which is enclosed. Another instance of the efforts of the manager to obtain favorable publicity is found in the following letter of June 30, 1911, issued by the manager to the "members of affiliated associations": I enclose copy of a statement which perhaps might be used in local papers in connection with recent court actions taken against the retail association \ I have ma lo it brief enough to be acceptable on that score, but have covered the principal points involved in the manufacturers' interests as well as of the retailers in a way which I think should not be objectionable to any fair-minded newspaper man. I would suggest that it might be used as an interview with yourself, or that it may be made the basis of an editorial by some of your papers. The facts, I believe, tire all correctly ana fairly stated. The above was sent to various retail association secretaries with the suggestion that it be given publicity. PRODUCTION AND WHOLESALE DISTRIBUTION. 59 On August 25, 1911, Secretary E,. S. Kellogg, of the Northern Hemlock and Hardwood Association, issued the following circular to his members : The enclosed reprint of an article recently published by the Tomah, Wis., Monitor-Herald, entitled "No lumber trust found," will undoubtedly be of interest to you. Several Wis- consin papers have reproduced this statement, after their atten- tion was called to it by the local lumbermen, and I am, therefore, sending it to a number of manufacturers and dealers, in order that they may also have the opportunity to get it into their local papers. A wide dissemination of the facts stated in this article, together with the likelihood that the Government will drop the proposed criminal prosecution of the retail secretaries, as announced by the Chicago Tribune on August 13, should do much to correct current misapprehensions as to a "lumber trust." The articles referred to by Messrs. Bronson and Kellogg are identical. While the statement, as above indicated, has largely to do with con- ditions in the retail lumber trade, yet it is skilfully prepared to cover, in the words of the manager, "the principal points involved in the manufacturers' interests as well as of the retailers." At a meeting of the National Association Board of Governors, January 8, 1912, President Griggs said: In a general way we have had to follow up publicity in regard to the "lumber trust," and Mr. Bronson has done a wonderful lot of work in getting it properly, before the people throughout the country, in writing letters, which no single man can do unless he is paid for that work, and you can throw the respon- sibility on him. We have accomplished a good deal in regard to these matters. Manager Bronson made the following remarks at the same meeting: A subject that interests you especially, which will come up later, is the matter of publicity. There is a feeling among a good many that all you have to do to get publicity is to send articles to leading papers, and if they are good articles they will be printed. I do not think thrt follows. Further, there seems to be the feeling that, by the expenditure of money you can secure insertion in leading papers, magazines and so forth of articles set- ting the lumber industry in the right light before the people. But you can not buy any space in a paper whose space is worth having for that purpose. You could not buy space for such an article in the Saturday Evening Post for $100,000 more [nor] for $1,000,000. The only way you could get it would be to buy the paper and use it as an organ. The only way in which I have been able to accomplish anything is along news lines, and in that way I have succeeded in getting several articles into the papers all over the country. I have done that over my own name occasionally. Sometimes it has come out as an interview with the secretary, or with some lumberman. Sometimes it has been contributed by other people, over their names, and in that way we have 60 THE LUMBER INDUSTRY. gotten a good deal of publicity. The Associated Press has sent out from Tacoma, several times, matters which I submitted as news matter, and they were news matter, but they were colored, or stated in such a way that they presented the news in reference to the difficulties of the lumber business. In making these statistical reports, we had an opportunity to say, in connection with the comment on them, that the lumber business was demoralized, prices were extremely low, and that the only hope of an industry of so great importance to the country was the curtailment of product; the business was overdone, and all that sort of thing. That has gone out to the Associated Press two or three times within the last three or four months. Prior to the appointment of a manager to conduct the publicity work of the association, there had been more or less effort made from time to time to use the press for the purpose of influencing public sentiment with respect to particular things. This was especially true during the activities of the lumbermen's tariff lobby in 1909. At that time efforts were made to secure the publication of special articles in the press. In March, 1909, there was some division of opinion among lumbermen as to how the Ways and Means Committee stood in respect to the rate of duty that should be recommended. In order to get this matter straight, it seemed necessary to have a representative of the Associated Press see a member of the Ways and Means Com- mittee. Under date of March 9, 1909, a letter was addressed to F. E. Weyerhaeuser, by J. E. Rhodes, in which a representative of the Associated Press was spoken of as "our man." During this tariff campaign there are references to the attitude of particular newspapers, and the correspondence indicates an effort on the part of officials of the national association to control or to color news. In a letter to J. E. Rhodes, from Edward Hines, under date of March 23, 1909, the latter said: I have sent you copies of the News and Examiner which con- tain some articles that I succeeded in having published. 1 Efforts to secure favorable legislation. — The fifth paragraph of the declaration of purposes makes it a part of the work of the associa- tion "to take up for discussion and action any and all questions of mutual interest that are national in their character and application." In accord with this declaration the national association has at various times undertaken to influence Congress with respect to matters considered important to the interests of the lumber industry. The most notable effort of this kind was the maintaining of a lobby in Washington in 1909, while the Payne-Aldrich tariff bill was pending before Congress. The activities of the association in respect to this measure are discussed in some detail hereafter. (See pp. 63-70.) i This extract and some others following are taken from carbon copies of letters found in files of J E. Rhodes in the offices of the Northern Pine Manufacturers' Association. PRODUCTION AND WHOLESALE DISTRIBUTION. 61 In 1912 there was a bill before Congress that proposed to exempt labor organizations from the operation of the Sherman Law. The National Lumber Manufacturers' Association used its influence to defeat that legislation. This is indicated by the following circular of the Georgia-Florida Sawmill Association, dated May 22, 1912. This circular illustrates one of the methods employed in opposing legislation; it was as follows: To all manufacturers: The following letter from the National Lumber Manufacturers' Association is called to your attention with the request that you immediately write and wire your Congressmen and United States Senator to do everything they can to prevent the passage of this bill, which, if passed, will seriously injure every employer of labor. The Labor Committee of the House of Representatives (Wil- son of Pennsylvania, chairman) has favorably reported the Bartlett bill, and it is now on the House calendar. It not only takes away from the Federal courts the power to grant injunc- tions in labor disputes, but would exempt labor organizations and fanners' associations from the operation of the Sherman Act, and thus legalize the boycott. It is suggested that everyone concerned in this bill should wire or write his Member of Congress asking him to use every effort to defeat any anti-injunction bill whatever, or any bill that would exempt labor organizations or any other class from the operation of the Sherman Law, or that would legalize boycott. In its opposition to the adoption of the Canadian reciprocity measure in 1911, the association seems to have employed the method above illustrated, that is of getting its members to write and wire their Con- gressmen and Senators. In 1913 the officials of the association evidently were convinced that some legislation would be proposed to modify the administration of the national forests. In order to forestall any such action the secretary of the association began a campaign among the affiliated associations for the purpose of influencing Members of Congress. Under date of July 24, 1913, Mr. Rhodes, the secretary of the na- tional association, addressed the following letter to the secretaries of affiliated associations: I am enclosing you, for your information, copy of letter which has been written to the board of governors of this association. The information which it contains is vouched for. It may be desirable for you to give this information to your members in a personal way, as far as you deem it advisable. The copy of the letter referred to in the above communication was dated July 22, 1913, and was as follows: CONFIDENTIAL. Dear Sir: There is good reason to believe that an attack is to be made upon the administration of the Forest Service, with particular reference to the present methods of selling timber from the national forests. 62 THE LUMBER INDUSTRY. For your confidential information, will say that certain Mem- bers of Congress, whose antagonism to the Forest Service is well known, are said to be planning to make the charge, as soon as pending tariff and currency legislation is out of the way, that the policy of the Forest Service in disposing of Government timber is dictated, or at least influenced to a degree, by timber owners. It is contended that there is no real competition between private timber owners and the Government in the sale of timber. It is stated that an effort will be made to create a public impression that there is no real competition among lumbermen in the sale of lumber, and that the only effective way to break the control of the supposed monopoly of the timber lands and of lumber is for the Government to sell its timber for much less than it is worth, even, if necessary, at 10 cents per M. It is suggested that the Government is not in the business for making money through the Forest Service any more than it is through the Post Office, or other departments maintained for the welfare of the public; and that Government timber should not be sold on the basis of stumpage values fixed by private holders. It would be an unpardonable crime upon the American people if any such action as indicated were authorized by Congress. If a congressional investigation of the Forest Service should be ordered, it would likely result in a thorough examination of stumpage values of all classes of timber, and involve an inquiry into the lumber business as a whole. Such an investigation would be heartily welcomed by us if it will show what we well know — that there is the keenest kind of competition, not only between lumber of different species, but between manufacturers of the same woods. While this fact was proven to the Bureau of Corporations of the Department of Commerce (which has concluded its investigations into the lumber industry after five years' time, and at a cost of a half a million dollars of public money), its findings have never been made public by the Com- missioner of the Bureau and never will be. Furthermore, the Bureau has refused to give any information obtained during its work to any other department of the Government. Any vigorous effort which might be made by politicians to have the national forests sacrificed on the theory that it would reduce the price of lumber to the public, is sure to be strongly opposed by citizens who are seriously interested in forestry. Foresters, generally, are very familiar with the present condi- tions surrounding the manufacture of lumber, and know that the industry is not more profitable, if as much so, as most other manufacturing businesses. They know that prices for lumber are fixed by supply and demand and that if the Government permits its timber to be sacrificed and slaughtered, the price of lumber will . eventually be very much higher than it is now. They also know that even if the Government timber should be practically given away to be cut under scientific forestry meth- ods, the price of lumber will be very little, if any, less than it is now. Those interested in starting a movement to compel the Forest Service to sacrifice publicly owned timber will not be likely to PRODUCTION AND WHOLESALE DISTEIBUTION. 63 stop short of making unjust and dishonest charges against the lumber industry, for which reason this letter is written for your confidential information. The statement in the above letter to the effect that the findings of the Commissioner of Corporations in connection with the investiga- tion of the lumber industry will never be published is answered in part at least by the publication of this report. 1 The letter as a whole seems to be an appeal for the support of those who believe in the conservation of our national forests. But stripping the veil from the above confidential communication, it is apparent that the real objection to making any change in the policy of the Forest Service is not that it may be detrimental to forest conservation, but the fear that some change might be made which would permit the lumber made from public timber to compete with that made from private timber. The tariff lobby of 1909. — As shown by several of the speeches made at the first annual meeting of the association, one of its objects was to prevent unfavorable tariff legislation. This subject is alluded to again and again by prominent members all through the history of the organization. The first attempt to revise the tariff during the existence of the association occurred in 1909 and called forth a remarkable campaign of opposition to tariff reduction. This campaign, according to a letter written by J. E. Rhodes, was in charge of the board of governors of the National Lumber Manu- facturers' Association. A lobby, officially known as a committee, representing all lumber-producing sections, was maintained in Washington during practically all the time the tariff bill was under consideration. The active head of the committee was J. E. Rhodes, at that time secretary of the Northern Pine Manufacturers' Associa- tion and the Northwestern Hemlock Manufacturers' Association. The movement was nonpartisan. Support was obtained from Democratic as well as Republican lumbermen. The services of Z. W. Whitehead, of Wilmington, N. C, editor of the Southern Lum- ber Journal, and prominent in the lumber-producing section from Virginia to Florida, were used to bring southern influence to bear on Congress. In recognition for his services at this time, the board of governors of the National Lumber Manufacturers' Association later voted him $1,500. 2 1 The investigation of ffle lumber industry has been prosecuted continuously since it was begun by Commissioner Herbert Knox Smith. There never was any purpose or thought on the part of Mr. Smith or his successor, Commissioner Luther Conant, jr., not to publish the results of the inquiry. The present Commissioner found the investigation in progress and he is completing it along the lines already mapped out before he came into office. In justice to former Commissioners, it should be stated that the publication of this report is not due to any change in the policy of the Bureau in respect to the investigation of the lumber industry. 1 The typewritten record of the proceedings of the meeting at which this payment was authorized shows the name of "J. B," Whitehead. These initials are apparently a stenographer's error. 64 THE LUMBER INDUSTRY. The Bureau is not informed as to the exact amount of money- contributed to combat the proposed reduction of the lumber duty, but from letters written by the treasurer of the committee, it is known that approximately $40,000 had been contributed before the end of May. Prominent timber owners subscribed liberally to this fund, it being recognized that any reduction of the duty would ultimately affect stumpage values. The lobby committee employed all the tactics of shrewd politics. They worked through railroads, banks, individual lumbermen, lum- bermen members of the Republican National Committee, State and Federal forest officials, and newspapers. Tremendous efforts were exerted to influence Congress, the President, and also the public. According to a member of the lobby, Members of both the Senate and House were assisted in the preparation of speeches favorable to the lumber duty. Influence was used to secure the appointment of friendly members on the Ways and Means Committee and on the conference committee. Party lines were ignored in the seeking of favorable consideration. The lumbermen claimed that a resolution before the Wisconsin Legislature favoring the removal of the lumber tariff was defeated at their instigation. It was about this time that lumbermen claimed the credit for the election of a certain United States Senator. 1 Still another Senator they claimed owed his elec- tion in part to their influence, and according to Mr. Rhodes he was "committed to our favor in case of election." Mr. Rhodes claimed that the insurgents in the House bid for the support of the lumber interests in overthrowing the regular Repub- lican organization, promising to stand with the southern Democrats for a duty of $2 per thousand on lumber. After considering the matter carefully, it appears that the lumbermen preferred to take their chances with the regular organization. The delicate situation in the controversy over the reelection of Speaker Cannon is indicated by the following extract from a letter under date of March 13, 1909, addressed to F. E. Weyerhaeuser, by J. E. Rhodes: Mr. Hines arrived here Wednesday morning from Palm Beach and met Mr. Blodgett, and the two conferred with Mr. Hitch- cock. The conference at that time developed no particular feature, except to show that Mr. Hitchcock was much alarmed over the insurrection in the House. At this writing, however (Saturday night), the regular organization seems to nave been able to play politics strongly enough to beat the insurgents, and 1 Edward Hines was very active during this time and was in frequent communication with J. E. Rhodes, secretary of the lobby committee. That they were particularly interested in the election of a Senator of the United States, and that they believed their influence was the controlling factor in that elec- tion, is evidenced in part by a telegram sent from Chicago, 111., by Mr. Hines to Mr. Rhodes at Washington, under date of May 20, 1909. The telegram was as follows: 'J. E. Rhodes, "Arlington Hotel, Washington, D. C. "Lorimer elected. Washington work over telephone this morning succeeded. Edward Hums." PRODUCTION AND WHOLESALE DISTRIBUTION. 65 Speaker Cannon will be reelected Monday morning. We were asked to take part in this fight in behalf of the insurgents, who said they would stand with the Democratic minority in presenting a bill for $2 on lumber. Until yesterday it was not really known which side would be victorious, and as we wished to stay with the winners, the situation has been somewhat trying. * * * We have done nothing, however, that will injure us with the Repub- lican leaders, and the insurgents are going to be thoroughly squelched. As the bill passed the House it carried a duty of $1 per thousand feet on lumber, and the lumbermen claimed that this duty was secured only after a very stubborn battle and that it was the result of trading votes with those who desired duties upon other commodities. In a letter dated April 8, 1909, Mr. Rhodes wrote as follows: 1 I wired you that we had defeated the free rough lumber amend- ment by six votes in the Committee of the Whole. The final vote will be taken in the House Friday, and you can imagine that we are in the thick of the fight. After Mr. Tawney suc- ceeded in getting the rule adopted Monday for a separate vote on lumber, we confidently expected to lose out. We held a number of caucuses among the lumber Congressmen and they suggested a number of trades with the Democrats, which really saved the day. In a long letter written by Mr. Rhodes to F. E. Weyerhaeuser under date of April 19, 1909, and which was a sort of review of the whole tariff fight up to that time, was the following : Without going into all the details of the fight at this time, will say that when Mr. Tawney succeeded in getting the rule adopted by the House calling for a separate vote on lumber, we felt reasonably sure of losing the $1 which had been reported by the committee. Indeed, Mr. Fordney and our other friends in the House, mostly Democrats by the way, gave up hope, and it looked as though an amendment for free rough lumber would carry by three to one. At the suggestion of Representatives Hughes, of West Virginia, Humphreys, of Washington, and Gaines, of Virginia [West Virginia], a caucus was called late Saturday afternoon, the 2nd, and we spent nearly all night round- ing up Democrats with whom we could make trades. These covered everything from short-staple cotton and fertilizers to celluloid poker chips and leather-bound bibles, and delivered us 23 votes. We got 18 of the Ohio delegation of 20 on a trade on wool, and this was the stroke that broke Mr. Tawney's faith in humanity, as he counted Ohio as safely within his hands, and has been trying ever since to find out how he lost out. It was a square and open fight, and no tactics were used other than those generally recognized as proper in such cases. 1 The Bureau does not vouch for the accuracy of this and other similar statements made in the corre- spondence quoted in this chapter. There is no way of determining definitely whether or not the various claims made by Mr. Rhodes as to the effectiveness of the efforts of the lobby were justified by the facts. 25030°— 14 5 66 THE LUMBER INDUSTRY. In the Senate the lumber interests used their influence to secure the substitution of the corporation tax for the income tax. They claimed that they assisted the Senate organization in carrying through other schedules and secured its cooperation in return. In a letter of May 26, Mr. Khodes wrote as follows : We have succeeded in getting in very close relations with the members of the Finance Committee because of the work which we have been able to accomplish in helping them carry out their program. We were able to assist Mr. Aldrich in carrying the first vote which was taken, being that on the lead ore schedules, by having seven Democratic Senators absent during the vote. The lumbermen realized the importance of having tariff legislation considered by committees friendly to their interest. It was expected that if Mr. Cannon were reelected Speaker most, if not all, the members of the Ways and Means Committee of the Sixtieth Congress who were reelected would occupy the same positions in the Sixty-first Congress, and that there would be few changes in the personnel of the Senate Committee on Finance. Representative Bonynge, of Colorado, a member of the Ways and Means Committee in the Sixtieth Congress, was not reelected, and a letter under date of March 3 indicates that Mr. Bonynge's successor on the committee was a matter of some con- cern. This letter was addressed to Edward Hines by J. E. Ehodes and was in part as follows : I called on Gen. Grosvenor at the "Dewey" yesterday, and find him in touch with the powers. He says the House will not close amendments on the tariff bill, as there is such a strong insurgent element that the Speaker is afraid to shut them off. It is now planned that only the Ways and Means Committee shall be appointed at the next session, which is a special one for the express purpose of taking up the tariff bill, and providing for revenue, hence the other committees will have nothing to do. The General said he thought Mr. Cannon intended to appoint a far Northwest man in place of Mr. Boygne [Bonynge], which I take it would mean Mr. Cushman. Mr. Cushman was later appointed the new Kepublican member of the Ways and Means Committee just as the lumbermen desired and expected. Under date of March 18 Mr. Rhodes, in a letter to C. A. Barton, of Minneapolis, Minn., said : _ Mr. Cushman of Washington was appointed as the new Repub- lican member of the Ways and Means Committee, and every- thing has turned out as we had expected. That there was more or less general interest in the selection of the new members of the Ways and Means Committee is further indicated by a sentence in a letter from Mr. Rhodes to Victor H. Beckman, of Seattle, Wash., under date of March 18, 1909, as follows: Mr. Defebaugh wired you that Representative Cushman had been appointed as the new Republican member of the Ways and Means Committee. PBODUCTION AND WHOLESALE DISTEIBUTION. 67 The bill as it passed the House carried a rate of f 1 per thousand feet on rough lumber. This was not satisfactory to the lumbermen, but they had faith in getting more in the Senate and finally in con- ference. The attitude of the Senate Committee on Finance was apparently satisfactory, but it was important to have as many friendly members of the conference committee as possible. On March 22, Mr. Ehodes wrote H. C. Hornby, of Cloquet, Minn., a letter in which he said : The matter will really be settled by the Conference Committee, to consist of three Republicans and two Democrats from the Finance Committee of the Senate, and the same from the Ways and Means Committee of the House. As this Committee is now proposed we will have a majority in favor of at least $1.50 and probably S2.00 under some kind of a compromise. Again, on April 8, Mr. Rhodes wrote J. T. Barber, of Eau Claire, Wis.: We have had a confidential hearing with Senators Aldrich, Burrows and Penrose, who will be the three Republican mem- bers of the Conference Committee. The three House members will be Payne, Dalzell and Boutell of whom the first two are in favor of $1.00 and Mr. Boutell will stand for $2.00. A further indication of peculiar interest manifested by the lum- bermen in the selection of members of the conference committee is shown in a letter addressed to Edward Hines, of Chicago, 111., by Mr. Rhodes on May 27, 1909, in which, among other things, he said: Mr. Skinner took up with Mr. Aldrich the matter of the Con- ference Committee and the Senator stated that it would probably consist of four Republicans from each side, he said that if McCall of Massachusetts was selected it would be with the promise that he would stand for $1.50 on lumber. Under date of May 27 Mr. Rhodes wrote Edgar Dalzell, of Minne- apolis, Minn., a letter in which he said: We are now working on the membership of the Conference Committee, which will probably consist of four Republicans and three Democrats from both the Finance and the Ways and Means Committees. We have gotten in right with Senator Aldrich and have placed him under great obligations to us by assisting him in carrying out his plans. I might say incidentally that we have been instrumental in electing Lorimer United States Senator from Illinois, who will be here in time to vote on the tariff bill. In a letter under date of June 3 Mr. Rhodes stated : The Conference Committee will consist of five Republicans from each side and the House Members will be Messrs. Payne, Dalzell, Boutell and Fordney and we are using every possible pressure to have Mr. Cushman made the fifth Member and have enlisted the support of the cotton, woolen, leather and steel men to this end. 68 THE LTJMBEB INDUSTRY. Before the bill went to conference Mr. Cushman died, and since it was practically settled that he would have been a member of the conference committee, the lumbermen were concerned about a man to succeed him. On July7, 1909, Edward Knight (probably an operator's error and should be Edward Hines) sent a telegram to J. E. Rhodes, who was then in Portland, Oreg., in which he said: Account Cushman's death trying get friendly man conference. On July 10 Edward Hines sent a telegram from Chicago to J. E. Rhodes at Seattle, Wash., in which he said: Got Cannon increase House conference members to six put Fordney on Senate five Cullom fifth member he all right. The lumbermen were not content to confine their activities to influencing Members of the Congress. They tried to reach officers in the executive branch of the Government by pointing out the politi- cal aspects of the lumber schedule. In a long letter from Mr. Rhodes to F. E. Weyerhaeuser under date of March 9, 1909, the general situation was gone into quite fully. In reference to the peculiar political aspects of the situation he said: Mr. Upham went in alarm to Mr. Hitchcock, who is to run the politics of the administration, and succeeded in getting him considerably worried about the political significance of the fight over the lumber schedule. Mr. Hitchcock appealed to Mr. Blodgett, the Michigan member of the National Committee, for full information as to what the Republicans in Congress might offer the country that would satisfy the popular clamor for tariff revision, and at the same time satisfy the lumbermen. Mr. McCormick, the Washington National committeeman, has also been able to arouse Mr. Hitchcock on this matter. * * * Mr. Blodgett has been a guest of Senator Burrows, next on the Finance Committee to Senator Aldrich, and the two senators have been sufficiently interested to also take the political phase of the matter up with Secretary Hitchcock. Prior to this time, namely, on March 6, Mr. Rhodes in a letter to Edward Hines said: Secretary Ballinger, of Washington, is of course with us, although his influence will not be great in legislation. The influence of railroad officials and bankers was earnestly sought to aid the lumbermen in their fight to retain a duty on lumber. Under date of January 29, 1909, Edward Hines wrote J. E. Rhodes stating that he inclosed a copy of a letter he had written the traffic manager of the Northern Pacific. He also mentioned the inclosure of a letter written to President Harahan of the Illinois Central and stated that he had seen him personally, and he also mentioned writing PRODUCTION AND WHOLESALE DISTRIBUTION. 69 Capt. J. T. Jones of the Gulf & Ship Island. In the same letter he said: I am pleased to advise you that through one of the railroad interests in Chicago we hope to reach the Indiana representative on the Ways & Means Committee. Under date of February 3 J. E. Rhodes wrote a letter from Chicago to J. E. Defebaugh, who was then in Washington, D. C, in which he stated that a committee had been appointed to wait upon the Mil- waukee bankers and that he was to meet Mr. Hines in Chicago the next day and that they would spend two days in Chicago seeing clearing-house associations and railroad presidents. The following mimeograph letter was found in Mr. Rhodes's files: February 6th, 1909. Messrs. J. T. Harahan, J. M. Johnson, H. R. McCullough, W. B. Biddle, J. H. Hiland, G. T. Nicholson, F. B. Bowes, M. C. Markham, W. L. Ross, G. H. Ingalls. Gentlemen: I was requested by a number of the gentlemen who were present at the conference in relation to the Lumber Tariff this morning, to dictate the principal arguments which the Lumbermen have to present in favor of the reduction [reten- tion ?] of this duty, for the purpose of giving your Committee data upon which to prepare the articles which were suggested for publication by the newspapers, showing particularly the relation which the admission of free lumber from Canada would have to the revenues of the railroads. I have dictated the enclosed articles, — one being a summary of our principal arguments, which your Committee can use in any way they may see fit, and the other a straight statement which may assist them to some extent in preparing their article. It was arranged that! should send this matter to you, and I take pleasure in so doing, and would be glad to give you any further assistance which you may request. Yours very truly, J. E. Rhodes, C/o Mr. Edward Hines. Secty., Lumbermen's Association. End. The official positions of the persons appearing at the head of the above letter at that time were as follows, in the order named: Presi- dent, Illinois Central Railroad; vice president, Missouri Pacific Rail- way; vice president, Chicago & North Western Railway; vice presi- dent, Chicago, Rock Island & Pacific Railway; vice president, Chi- cago, Milwaukee & St. Paul Railway; vice president, Atchison, Topeka & Santa Fe Railway; vice president, Illinois Central Railroad; vice president, Illinois Central Railroad ; vice president, Chicago & Alton Railroad; vice president, Big Four Railway. It is doubtful if in recent years there has been in Washington a more earnest and insidious lobby than that maintained by the lumbermen 70 THE LUMBER INDUSTRY. during the consideration of the tariff bill at the special session of Congress in the spring and summer of 1909. The correspondence between the lumbermen during this time indicates an industrious endeavor to accomplish their purpose. The House and Senate, particularly the Senate, were closely canvassed and the attitude of Members and Senators toward the lumber duty was freely and fully discussed. Suggestions were freely made as to how and by whom various members might be influenced. The extent to which votes on this measure were influenced by the activities of the lumbermen, of course, is not known. Whatever the real influence of these activities may have been it is clear from the correspondence that Mr. Rhodes believed his efforts in Washington were largely responsible for the retention of a duty on lumber at that time. CHAPTER III. SOUTHERN YELLOW PINE. Section 1. Introduction. There are six varieties of yellow pine in the Southern States, in a territory which reaches from Virginia southwestward into eastern Texas. Western yellow pine is a distinct species. In the figures of production of southern yellow-pine lumber given in Forest Products for 1912, 1 no distinction is made between the different varieties. The Bureau, in its treatment of prices, has found it desirable to distinguish between what is commercially known as North Carolina pine and the rest of the southern yellow pine, and in this connection has considered the production of yellow pine reported for Virginia, North Carolina, and South Carolina to repre- sent approximately the production of "North Carolina pine." It has not been found necessary to distinguish between long leaf and short leaf pine in the matter of prices, and they have been treated as one under the head of yellow pine. YELLOW PINE. Section 2. Production. Excluding the States which produce what is commercially known as "North Carolina pine," the States which produce most' of the southern yellow pine reported cut in 1912, are as follows: M feet. Georgia 799, 370 Oklahoma 122, 685 Tennessee 94, 159 Total 11, 117, 212 M feet. Louisiana 2, 928, 632 Mississippi 2, 029, 276 Texas 1, 833, 902 Alabama 1, 214, 994 Aikansas 1, 133, 459 Florida 960, 735 Section 3. Competition met by yellow-pine producers. Competition among themselves. — The nulls which produce yel- low pine are of a great diversity of sizes. In the trade papers there is frequently a reference to the difference in price policy fol- lowed by the small mills from that of the large mills. Price-depressing effects are often attributed to the lack of capital of the small mills and their necessity for early realization on the lumber they produce. This is frequently referred to in the lumber journals. Following are a few typical extracts: A few of the small concerns have been shading prices lately, but their output and ability to handle business are not great 1 Forest Products, 1912, p. 11. 71 72 THE LTJMBEB INDXJSTBY. enough to cause any alarm, and the large operators claim to be holding as closely to the regular list as they have been. (Kan- sas City news in American Lumberman, Aug. 3, 1901, p. 41.) The solid front that the mill operators are maintaining in . their insistence on firm prices at the December advance renders the picking up of lumber at concessions in prices next to an impossibility. It is claimed that some cutting is being done on finishing lumber, but manufacturers are slow to admit such a thing. This can be said, however, there are a lot of small mills that cut timber and small dimension, and make a quantity of sides in the operation which they convert into finishing stock. Having no general yard trade to absorb such lumber in that and other forms they are inclined to dispose of it at any price they consider fair. Many of these small mills are not under the influence of the manufacturers' associations. If any finishing stock is being sold under regular prices it probably comes from these small mills. A large amount of finishing is being done, which causes a good demand for lumber adapted to that work. (Chicago news in American Lumberman, Jan. 13, 1906.) The chief trouble with the yellow pine market now is the anxiety of a great many of the small mills to place their lumber on the market even at a considerable sacrifice of values. Many of the large concerns, in fact it is safe to say the majority of them, refuse to accept orders upon a price basis which, at the present stumpage and manufacturing cost will not yield a rea- sonable margm of profit. The little mills, however, are writing urgent letters to possible buyers and offering their stock at low prices. Whether a sale is made or not this naturally has the effect of depressing the market. (Chicago news in American Lum- berman, Aug. 31, 1907, p. 98.) A large number of the southern pine mills are still shut down, while many are limiting their output by running part capacity and on short time. Many of the small mills which derive their logs by purchase from others' lands, and must pay for them as - they saw, and are thus bound by contracts, are running and placing their lumber on the market at the best prices they can obtain. It is the product of such mills that is being shipped in transit, is being sold by brokers in the large markets at a variety of prices, and is causing a large part of the prevailing demoral- ization. The large concerns are pursuing a more conservative course, many of them refusing to accept orders on standard sizes and qualities below a steadily held range of prices. They can see no object in selling lumber below cost, while at the same time they waste their stumpage. (General market news in American Lumberman, Mar. 21, 1908.) The following extracts from letters in the files of the Yellow Pine Manufacturers' Association bear on the relation of large to small mills. The first, dated May 8, 1909, was written to Secretary George K. Smith by one of the officers of a mill which bears on its letterhead the statement "Daily capacity 50,000 feet." Replying to your favor of the 6th inst would say that there is not a single member in the entire association that has done more for the advancement of the lumber industry than the King PRODUCTION AND WHOLESALE DISTRIBUTION. 73 Lumber Co., last year when the larger mills were running night and clay (and at the same time crying "Curtailment" "that is the only thing to do" etc.) we were closed down — for a period of just one year we never turned a wheel and that was just after getting in operation too — since starting up last Fall we have run only about £ time and have not shipped sufficient stock to pay our running expenses, have furnish[ed] all reports promptly and in fact have given you our cooperation in every possible way and we feel Mr. Smith the amount of service and benefit received from the association has in no way anything near justified the expense we have been put to. The Association idea is a good one and should be productive of beneficial results but one thing sure — it has not materialized in our particular case. It is not the output of the smaller mills that is cutting the ice in over- production but a most decided misrepresentation on the part of the larger mills in attempting to dictate the policy to be pur- sued and at the same time they are running, in a good many instances night and day. It is not nor has been a square deal and we naturally are quite disappointed after our conscientious efforts to further the interests of the lumber business — in our small way — for the past two or three years, to see matters terminate in the way they have. The second is a letter dated March 20, 1911, from W. M. Beebe, Manager Y. P. Sales, of the Long-Bell Lumber Co. to Secretary George K. Smith : You will remember a few days ago I stated to you at lunch that I thought it would be a good idea if the Yellow Pine Manu- facturers Association would make greater effort to thoroughly post the small mills as to what the market price of lumber really is, as they would in turn try to secure a better price for their product than they do when they are left to the mercy of the jobber or the commission man. I have put this matter up to Capt. J. B. White and Mr. R. A. Long, and they both look at it from my standpoint, and think it would be a mighty good thing to take some concerted and systematic action to give this class of mills information. I suggested] that I did not think there could be anything better than your weekly summary of prices as secured in St. Louis, Kansas City and Houston. Mr. Long and Mr. White both suggested that I write you, and state that they thought this would be a good idea. Competition with other woods. — The kinds of wood with which yellow pine principally enters into competition are North Carolina pine, hemlock, fir, "northern" pine, and cypress. In all these woods the competition is chiefly confined to certain uses common to yellow pine and its competitors. The nature of the competition between yellow pine and hemlock from the Lake States is shown in considerable detail in connection with the discussion of the latter species, and that of the competition between yellow pine and fir, in connection with the discussion of fir. The competition with "northern" pine is principally confined to the 74 THE LUMBER INDUSTRY. dimension and the lower grades of boards and is discussed in connec- tion with white and "northern" pine. A similar competition exists between yellow pine and the lower grades of cypress. Section 4. Conditions in production of yellow pine. The wide area from which yellow pine is obtained and the great diversity of conditions between the many points of production, as well as between the various consuming centers, make generalizations, which bear on the relation of such conditions to prices, of little value. Many of the mills on tidewater, or so near as to have a low rail rate to it, export to foreign countries nearly all of their product. Others ship most of their lumber, rough, by water to the North Atlan- tic ports, which are of themselves important consuming centers as well as distributing points. Still other mills, situated at a distance from the seaboard, hav e to confine themselves to an all-rail trade and ship little besides dressed lumber, which is delivered over a wide range of interior-consuming territory. The foregoing conditions have thus far prevented any such cen- tralization of control over production and prices as is evident in some other species. Attempted mergers. — There seem to have been various attempts to form large mergers of the yellow-pine producers, but these at- tempts have been uniformly unsuccessful. The following from the Kansas City correspondence in the New Orleans Lumber Trade Jour- nal of February 15, 1899, page 16, apparently refers to such an attempt: The yellow pine situation has cleared perceptibly since the first of the year, and the conditions are now all favorable for a money making season for the producers of Southern pine. The plan for consolidating the yellow pine business into one huge company has not materialized, and it is doubtful that it will, but all of the respective manufacturers have come to the conclusion that they can make and maintain a list at good prices this year. The most of them have issued the list as formulated and adopted at the Memphis meeting in January, and they are doing their best to see that it is maintained. It was at this time, also, that the first important attempt to merge the North Carolina pine producers took place. (See p. 254.) Apparently the most important attempt to form a merger took place about the middle of 1908, at a time when the yellow-pine prices hadf alien to thelowest point for several years. This attempted merger was widely commented upon in the daily press at the time as well as in the lumber- trade journals. According to the accounts published in the New York Lumber Trade Journal (May 15, 1908, p. 11, and July 15, 1908, p. 13), Nelson W. McLeod, a prominent yellow-pine manufacturer issued a call for a meeting, held in May, at St. Louis, PRODUCTION AND WHOLESALE DISTRIBUTION. 75 which was attended by a large number of the leading interests repre- sented in the Yellow Pine Manufacturers' Association and the National Lumber Manufacturers' Association. The subject of some kind of a merger was discussed. At a second meeting in St. Louis, July 8, a permanent committee with F. E. Weyerhaeuser, of St. Paul, as chair- man, was appointed to work out the final details of organizing a com- pany which it was proposed should have a capitalization of 8300,- 000,000 and include properties in Arkansas, Texas, Louisiana, Mis- sissippi, and Alabama. The proposed merger met with many violent attacks in the daily press, as having the character of a trust, and the attorneys general of several States took steps to enjoin the formation of the company. The project was dropped. Section 5. Organized activities of yellow-pine producers. Information was obtained concerning the activities of a number of associations of yellow-pine producers. The Bureau, however, gives a detailed description of the two most important ones only. Most of the members of the minor associations, such as the Alabama- West Florida Association and the Mississippi Pine Association, are also members of either the Yellow-Pine Manufacturers' Association, or the Georgia-Florida Saw Mill Association. The information ob- tained in regard to the activities of the minor associations is in many respects similar to that shown for the- two larger associations. Section 6. Power and influence of Yellow Pine Manufacturers' Asso- ciation. In 1883 the Missouri & Arkansas Lumber Association was organ- ized. This later developed into the Missouri, Arkansas & Texas Association, which was absorbed in 1890 into the Southern Lumber Manufacturers' Association when that was organized. In 1906 the name of this last association was changed to Yellow Pine Manufac- turers' Association, at which time the eligibility to full membership was confined to manufacturers of yellow pine. In the membership of the association on January 1, 1913, were 219 mills, with an estimated yearly output in that year of 4,153,323,- 133 feet. The association includes among its members most of the largest and most influential yellow-pine manufacturers. The fol- lowing extracts from addresses, delivered at some of its formal meet- ings, show the power claimed for the organization by prominent members. In the course of his address on "The marketing of yellow pine" at the annual meeting of the Southern Lumber Manufacturers' Asso- ciation, January 19, 1904, J. B. White stated: A certain large eastern jobber of yellow pine, whom we all here well know, and who has lately become a large manufacturer, 76 THE LUMBER INDUSTRY. said to me the other day, that he could name 15 men in the south who, if they could agree, could fix and maintain a uniform price for yellow pine in all the markets in the United States. I asked him who they were. He wrote down the names, and I believe he is right. There is no wood that will take the place of yellow pine at anywhere near its present value. Let us think the subject over. It is worthy of our prompt consideration. There are a great many here to-day at this meeting, but when you come to look us all up and see who the men are who have the large control of all these different interests, we may be surprised to discover how large a part of the manufacturing interests here represented are really controlled by less than 15 men and if this is true, as I believe it is, how close may we be to the final curing of the ills with which we have been afflicted. E. A. Long has for many years been one of the most prominent leaders both in the yellow-pine industry and in association work. His estimate of the effect of the association activities in relation to the restriction of output is given in detail in the address which, as president of the association, he gave at the annual meeting of the Southern Lumber Manufacturers' Association in New Orleans, Janu- ary, 1905. The following extract is from the report of this speech, published in the New Orleans Lumber Trade Journal of February 1, 1905: This condition (lack of buying by railroads) caused a break in our prices to such an extent that by June 1 (1904) we found the manufacturer sufficiently anxious to sell and the retailer and the consumer so disinclined to buy, as to bring our selling price close to, and in some cases below the cost of manufacture, and so, at our semi-annual meeting in June, a resolution was passed looking to the reduction of our output, about 33 per cent. 1 Some of the most successful men in our line of business shook their heads and made the statement that we could not "legislate prices;" that supply and demand must govern and that the supply would be governed by the "survival of the fittest." In spite of these prophecies we succeeded in securing the coopera- tion of about 80 per cent of the manufacturers of yellow pine, and so the plan was entered into and tested between July 1 and October 1. In less than 10 days from July 1 the downward tend- ency of prices had been checked, and within 30 days a substan- tial advance had been made. Before we had reached October 1 it was believed that the commencing of the operation of our mills on full time on that date would practically mean a loss of all wc had gained, and an effort was made, and accomplished, continu- ing the curtailment until January 1 of this year. On October 15 a furthernotable advance was made. Desiringtobeasnearlycorrect as possible as to the extent of the advance between July 1 and October 1 , and as to the further advance made between October 1 and January 1 , 1 addressed a letter to a number of the larger manu- facturers asking their views on this point, also as to whether or 1 For details of this action by the association, see pp. 126-127. PEODTJCTION AND WHOLESALE DISTRIBUTION. 77 not they attributed the advance to the curtailment movement or otherwise. These replies did not vary to any great extent, and the summary of the same developed an average advance between Julyl and October 1 of $1.19 per M.,andbetween October 1 and January 1 of $1.04, per M., all agreeing that the curtail movement was that which brought about this favorable condi- tion. After giving the result of his computations of the tota amount obtained by yellow-pine manufa turers, through the foregoing price advances, which he estimated amounted to $6,298,500, he stated, in regard to his own companies : Some two years ago, in figuring up and finding that the cost to my company and its allied interests to operate this asso- ciation was about $2,500 a year (and I must admit that I thought it looked large), yet in making my calculations as to the saving that this curtail movement has effected to my company, and finding that we obtained about $145,381 more for our ship- ments ibetween July 1 and January 1 than we would have obtained at prices prevailing July 1, and that our stock on hand at our mills and in our retail yards was worth about $115,000 more than it would have been worth January 1 in the absence of this movement, making a total saving to this company of $260,381, the $2,500 of course sinks into an insignificant pebble. Mr. Long's estimate of the measure of benefit his interests realized from this particular action is probably an exaggeration. However, he may have believed it to be accurate and he certainly intended that others should believe it was. In the course of his remarks in the discussion of stumpage values, at the annual meeting of the Yellow Pine Manufacturers' Association, January 19, 1909, J. A. Freeman, one of the most prominent asso- ciation members, said: We have talked a good deal about organization, we have talked a good deal about co-operation, and I undertake to say now that the only good that has ever come to us as lumber manufacturers has been the result of our incomplete efforts at co-operation with some sort of organization. We got pretty badly scared within the last two or three years, but it would seem as if now was about the time when our courage ought to be coming back to us, when we gather up a little of our second wind, as .they call it, and see whether we cannot again get together. Now, I had the pleasure, two or three years ago, of calling upon, in company with some other lumber gentlemen, one of the officials of the government, one who has to do some- what with the handling of our relations to the government; and one of the gentlemen present put it squarely out to him. He said, "We have been scared to death. We used to get together, we used to talk over what we thought the values were or ought to be, and we used to formulate a price list, and while we never had any agreement as to the maintenance of that price list, yet a consensus of opinion formulated that price 78 THE LUMBER INDUSTRY. list and we felt ourselves in some sense bound to make an effort at least to get it. " Now, he intimated also very strongly that it was the purpose of the gentlemen who composed the lumber fraternity to begin that very same sort of thing again, and he saich we want to notify the government and you officials that we purpose doing it, not with any intention of violating any law, but simply that we may get together and know each other and have some little better consensus of opinion regarding the condition of our business. Edward Hines, of Chicago, in speaking to the Yellow Pine Manu- facturers' Association at its semiannual meeting in Chicago, July 19, 1910, on the business outlook made the following statement: I feel, as far as the Yellow Pine Manufacturers' Association is concerned, you have practically got this situation in your own hands. I think it is up to you, gentlemen, to, in a measure, regulate the lumber prices from Kansas City to the Atlantic coast, absolutely. You have got nothing that you are compet- ing with in a very large business — and I speak advisedly when I say that in regard to dimension and in regard to everything except possibly finish. I feel that you could just as well get four dollars as three dollars a thousand on 75 percent of your output, if you feel confidence in your ability to do it. Of course that word confidence is quite a word. I appreciate exactly the conditions you have been laboring under, and I do not know that I can tell you just how you can get that confidence into each man's system sufficient to bring about the result, but I do feel that the disease can be cured. At the annual meeting of the association at New Orleans, January 17, 1911, in speaking on the subject of sales policy, K. A. Long said: I believe there are many manufacturers whose output is not sufficient to warrant them in employing a high class sales manager, but I think in such cases it would be to their interest, if not in the interest of the industry as a whole, to combine their product with that of their neighbors and employ sales -managers who will seek to obtain the best results that they can for you. To me these features are vitally important, because half a dozen sales managers, represented in this room, can control the price of all these untold millions, I might say, that we have talked about at this convention — and they do, in a large measure, control it. The activities of the association may be divided into two general classes, one having to do with the dissemination of information in regard to the production and shipment of lumber by the association mills, the establishment of uniform grades and of uniform terms of sale. The second general class are those activities which have had a direct bearing on the issuing of its official price lists (variously termed "price lists," "price currents," "market reports," and "basis list and concession sheets"), and its attempts to secure restriction of output in times of falling prices. PRODUCTION AND WHOLESALE DISTRIBUTION. 79 Section 7. Price-list activities. Long series of price lists have been issued at different times under various names — "price lists," "price currents," "market reports," or "concessions from basis list" — but their purpose has remained the same — that of establishing an official market price. Down to August, 1909, when the system of "basis list and concessions" was established the form in which the lists were issued remained the same, and this form also is retained in the "basis list." There were four series of lists: 1. Official "price lists" or " prices current " (June, 1883-Dec, 1905). 2. Semiofficial "prices current" of the Lumberman's Printing Co. (Mar., 1906-July, 1906). 3. Official "market reports" (Nov., 1906-May, 1909). 4. Official "basis list and concession sheets" (Aug., 1909, to date). The following statement of the nature of price lists, price currents, and market reports, appears in a footnote comment, on page 104 of the official report of the tenth annual convention of the National Lum- ber Manufacturers' Association. Charles S. Keith, in his discussion of yellow-pine lumber prices made use of the expression "current list," and this expression was explained in the footnote: The expression "price fist" is not to be understood as a list of prices at which the many hundred different items of yellow pine were actually being sold or to be sold by all or any number of manufacturers nor even by a single manufacturer. The same publication was interchangeably referred to also as a "market report" and a "price current." "Market report" is perhaps the most accurate. All meant the same publication. The com- piler placed a "price" in dollars and cents opposite each and every item of yellow pine. This "price" simply represented, in concise and intelligible form, one man's information and judg- ment as to the general range of yellow pine market values in the entire territory, without different rating as to localities in which yellow pine was sold. 1 Official "price lists" or "prices current." — The issuing of official price lists began with the first meeting in June, 1883, at Poplar Bluff, Mo., of the manufacturers of yellow pine, who at their second meeting at Little Rock formed the Missouri & Arkansas Lumber Association. An article entitled "Evolution of the yellow pine list in the great Southwest," published in the American Lumberman April 16, 1904, page 14, contains the following: At that time (May, 1883) Mr. White felt that the Arkansas and Missouri trade needed uniform grading and prices, and pur- suant to that conviction he sent out a postal card to the manu- facturers of the two states, asking them to meet at Poplar Bluff, 'The Bureau presents on pp. 80-116 detailed evidence concerning the formation and nature of this price," which differs from the foregoing explanation. 80 THE LTJMBEB INDUSTRY. Ark. [Mo.], in June. At that meeting there was adopted a more uniform list than had yet prevailed. The meeting adjourned to reconvene at Little Rock on a later date. At the next meeting there was a larger attendance and the Missouri & Arkansas Lumber Association was launched, of which J. B. White was elected president. The price-list policy so early inaugurated has been followed by the various successors of the first association. George K. Smith in the Missouri ouster suit x put in evidence a compilation of prices taken from the official lists of the Southern Lumber Manufacturers' Association and the Yellow Pine Manufacturers' Association. It begins with 1894 2 and down to December, 1905, the date of the last "official price list" there are 32 lists recorded. In regard to the method of compilation followed Mr. Smith testi- fied to the effect that down to 1906 the price lists he issued on behalf of the association were compiled for him by a price-list committee. Some of the price-list committees (sometimes known as committees on values) appear to have been limited in their action to but one meeting of the association, others to have been of a more permanent nature. At the meeting of the board of directors of the Yellow Pine Manu- facturers' Association held at New Orleans, January 24, 1906, the following resolution was adopted: i This was a suit in the supreme court of Missouri to oust 30 lumber companies from the State. In De- cember, 1913, the court upheld the contention of the State as to 25 of the companies, ousting 20 of them and revoking the license to do business in the State of Missouri of five foreign corporations. Fines imposed ranged from S1,000 to 850,000 for each company and amounted in the aggregate to $436,000. The court granted a stay of the execution of the decrees of forfaiture in respect to 11 companies upon condition that the fines assessed against them be paid within 30 days and also upon such conditions of continued good behavior as might thereafter be annexed to the decree of the court. In April, 1914, the attorneys for some of the respondents in this case determined to file a petition with the supreme court of Missouri asking the suspension or setting aside of the writ of ouster as to these particular respondents and the reduction of the fines imposed. The petition set forth that since the institution of this suit these respondents had not entered into any agreement, express or implied, for the curtailment of the output of lumber, and that they would not do so in the future. They agreed to so modify and amend the constitution and by-laws of the Yellow Pine Manufacturers' Association as to make them conform in all respects to the opinion of the court. The petitioners further agreed to submit themselves to the final udgment and further jurisdiction of the supreme court of Missouri and that they would waive their right to have the judgment reviewed by the Supreme Court of the United States on writ of error. Accordingly, a general meeting of the association was called to meet on Apr. 8, 1914, at which time the following amendment to the constitution was unanimously adopted: The object of this Association shall be, generally, to promote the Yellow Pine industry in all its branches and to that end it is proposed to adopt and maintain standard grades, sizes, and classifications for Yellow Pine Lumber; to furnish and supervise uniform inspection of same; to collect and dissemi- nate information relating to the uses, transportation rates, weights, stocks and outputs thereof; and all other information of like character which will tend to increase the demand for Yellow Pine Lumber, and to facilitate its manufacture and sale. At the same meeting the by-laws were amended by adding the following: Neither this Association, nor any officer, agent or employe thereof, shall hereafter publish or issue in the name of, or for or on behalf of this Association, either directly or indirectly, any market report, price current or price list, nor any other document or statement purporting to quote or to recite mar- ket prices or market values of yellow pine lumber; and it shall be the dutv of the officers and board of directors of this association to see that this by-law is rigidly enforced. * That there were earlier price lists adopted by the Southern Lumber Manufacturers" Association is shown by the proceedings of the semiannual convention of this association held in Kansas City, Aug. 10 and 11, 1S92, which refers to an association price list adopted Apr. 13 and readopted May 11 and a list adopted Aug 11,1892. PRODUCTION AND WHOLESALE DISTRIBUTION. 81 Resolved, That neither the Committee on Values nor any other committee or officer of this Association shall make to the Association or to any member thereof, any report other than of existing conditions applicable to the trade, and of existing prices; nor shall this association, nor any officer or committee thereof make either to the association, as a whole, or to any member thereof, any recommendation affecting prices to be charged for lumber or the amount of the product or output thereof. George K. Smith in his testimony in the Missouri ouster case said that — this resolution was passed to confine the recommendations to the existing prices at the time and not make any recommendation as to the future, I think we had been criticised on any suggesting of values in the future; and we should confine ourselves strictly to what we were doing at the time and what the situation was at the time to avoid any criticism from any source. Prior to this time the price-list committee reported direct to the association. The price-list committee then existing was abolished at a meeting of the board of directors of the association in February, 1906, and its place was taken by a committee of 30 to be appointed by the president. This action was taken on the advice of attorneys, and is similar to the action taken by other lumber associations at about this time. This new committee, known as the "market committee," was abolished * by the board of directors at a meet- ing on October 10, 1906, and Secretary Smith was ordered to issue market reports. In remarks before the North Carolina Pine Asso- ciation in October, 1906, Secretary Smith stated that a market report had been issued under date of July 18, and this is borne out by the extract from the American Lumberman of July 28, 1906, shown on page 85. Agreements to maintain the "prices current." — In the Missouri ouster suit considerable testimony was given to the effect that mem- bers were not under compulsion to follow the association lists, but that the prices thereon were those which it was merely recommended that they should follow. There is every indication that at various times and places there have besn more or less formal agreements entered into between members to maintain the official price list, but there may have been no penalty for violating the agreements. Thus, according to the New Orleans Lumber Trade Journal of February 1 and 15, 1899, on the occasion of the adoption of a new price list, five prominent lumbermen were appointed as a committee to obtain signatures of manufacturers to this list. In the same 'As will be pointed out later (pp. 88, 92), although the market committee was officially abolished there is evidence that, from time to time, similar committees existed which exercised the same functions. 25030°— 14 6 82 THE LUMBER INDUSTRY. journal are references to a meeting held in St. Louis, March 15, 1900. The account from Kansas City (Apr. 1, 1900) states: A few days ago it was decided to suspend the association list until April 5th, allowing the manufacturers in the association to dispose of surplus stock at whatever prices they might see fit to make. In the account from St. Louis in the same issue it was stated: At a meeting held in St. Louis on March 15 the list was ordered suspended until April 5, leaving everyone at liberty to make prices to suit himself. This action was not a surprise to those conversant with the situation and was the result of a request of certain wholesalers west of the river that such action be taken to allow them to reduce their stocks of certain classes of yard stuff. A new list was adopted April 5, to go into effect April 16, and according to the comments in the New Orleans Lumber Trade Journal of April 15 and May 1, it was thought the new list could be main- tained; but the general market comment in the issue of May 15 shows that there was trouble doing this, and in its Kansas City news has the following statement : At a meeting recently held at St. Louis the list of April 16th was suspended indefinitely and the manufacturers in the asso- ciation are at liberty to make any quotations they see fit. Concerning the next official list, which was issued July 2, 1900, the same paper said editorially in its issue of July 15, 1900, page 13: The new yellow pine price list formulated at therecent meet- ing in St. Louis is printed in the market tables in this issue. This list is from SI. 50 to $3 lower than the last official list issued in April. It is based as near as possible upon the actual selling value of lumber and thus will prove effective. The establishment of this list is in line with what the Journal has steadily contended for. We have not hesitated to state our opinion that the abolishment of the list was a mistake. No organization can enforce a list contrary to existing conditions, but lumber always has a value and a list based on such value is practically self enforcing. Rather than abolish a list it is better to boldly scale it to actual prices and, on the other hand, promptly advance it when conditions justify. In such a case an official list means something, for it is then a correct guide to the market, is self-enforcing and begets confidence with the entire trade. We believe that the present list fulfils the foregoing conditions and thus should be adhered to by manufacturers and trusted by buyers. Why it should have been necessary to hold meetings and formally suspend the two consecutive official lists, early in 1900, "allowing" the manufacturers in the association to make such prices on their lumber as they saw fit, unless there was a definite agreement or understanding between them that the official list prices were to be followed, it is difficult to understand. It was evidently important enough to call for formal action on the part of the association. PRODUCTION AND WHOLESALE DISTRIBUTION. 83 A similar situation seems to have arisen in the early part of 1904. The committee on values adopted a price list effective February 23, 1904, which was about $1 lower than one adopted at the annual meeting of the association in January. Information in regard to this meeting is found in the American Lumberman of February 20 and February 27 and the St. Louis Lumberman of March l. 1 On March 16 another meeting was held. The account of this meeting taken from the St. Louis news of the American Lumberman, March 19, 1904, states, in regard to what was done, that "the action taken was to reaffirm the list of that date" (Feb. 23). Other accounts, however, are more specific. The Mississippi Valley Lumberman of March 25, in its Kansas City news, had this statement: "Yellow pine price conditions are hardly as favorable as a week ago, owing to the withdrawal of the agreement to ad- here to the February list." Allusions to the result of the action at the meeting in taking off all "restrictions" are made in the Kansas City news of several trade papers at this time. The following shows the nature of the comment: Contrary to expectations of Kansas City wholesalers the St. Louis meeting of yellow pine manufacturers last week, while recommending the continuance of the February 23 list agreed to take off all restrictions. The result is that the price is not as firm as a week ago, and in some instances material conces- sions are being made to move certain items of stock. The price is bound to be unsteady for a while, as the various firms will maintain the list on items which they are not anxious to sell in large quantities, and make their concessions on surplus stock. (American Lumberman, Mar. 26, 1904, p. 56.) When the February 23rd list went into effect the majority of the manufacturers started to maintain it, and did so. Others, however, seemed to think this a good time to go after business at the expense of profits, and accordingly shaded the list, and probably got more than their share of the business. At the same time the maintenance of the list by the most of the leading manufacturers, was having the desired effect, and the dealers began to hope and believe that the market was about to be put on a steady basis. On the 16th of March, however, a meeting was held at St. Louis, and it was agreed to take off all restric- tions, with the result that the manufacturers have since been quoting according to their desire to move stock, and some have gone after business pretty hard. The yellow pine people here say that if the list had been maintained until April 1st the mar- ket would have been on a firm basis. There is now a lack of confidence on the part of the dealers and a marked disposition not 1 Following is a list, in chronological order, of the comments found, dealing with the list of Feb. 23, and the "removal of restrictions": American Lumberman, Feb. 20, p. 15, and Feb. 27, p. 37; St. Louis Lum- berman, Mar. 1, p. 28, and p. 48; American Lumberman, Mar. 5, p. 87; St. Louis Lumberman, Mar. 15, p. 30; American Lumberman, Mar. 19, p. 57; Mississippi Valley Lumberman, Mar. 25, p. 36; American Lumberman, Mar. 26, p. 56; New Orleans Lumber Trade Journal, Apr. 1; St. Louis Lumberman, Apr. 1, p. 36; American Lumberman, Apr. 2, p. 55; Mississippi Valley Lumberman, Apr. 8, p. 35; American Lumberman, Apr. 8, p. 59; St. Louis Lumberman, Apr. 15, p. 37. 84 THE LTJMBEK INDUSTRY. to buy any lumber that they can do without. (St. Louis Lum- berman, Apr. 1, 1904, p. 36.) As to prices, the situation is not any too encouraging. Up to March 16 the majority of the manufacturers were main- taining the February 22 list, and the dealers were beginning to believe that this price would soon be the market. However, all restrictions are now off and the manufacturers are making their prices according to the state of their stocks and their desire to be rid of them. (New Orleans Lumber Trade Journal, Apr. 1, 1904.) The St. Louis Lumberman of May 15 has the following statement in its Kansas City news: "The market broke very rapidly after the price agreement went off in March, and since the first of the month, at least, prices have been stationary." The official report of the proceedings of the annual meeting held at St. Louis, July 18 and 19, 1905, shows that after the price list of July 19 had been adopted the following discussion took place: Mr. White: The Committee on Values met and reported an advance in prices, on account of the pressure brought to bear by a large number here, who are not on that committee. When it came to a question of voting on the price list it looked to me as though the committee voted very enthusiastically, but not so very many " ayes " from the back of the hall. It has been custo- mary for many to inquire how many propose to issue the list; we want to see how it strikes every one, and would suggest that the chair call for a rising vote of those who are willing to issue the list, and separately of those who use the list as a basis for their prices. The chair called for a rising vote of those who proposed to issue the list, and twenty-two responded. Those who didnot pro- pose to issue a list, but would use it as a basis, responded to the number of nine. S. H. Fullerton: I think the issuing of this list should be made universal. I think the time is ripe to get the prices. We have said what the stuff is worth. Everyone should issue the list; it causes a great deal of confusion when all do not do it. I would like to see everybody issue the list. It is due to the trade. If the prices are not legitimate and equitable, let them stand up and say so now. There is no use in entering into this thing in a half-hearted way. Let us go out of the room feeling that we are all going to do the same thing. If anyone thinks the prices are too high, let him say so now; it is not yet too late to rectify them. Let them stand up and be a man. We want uniformity of prices. J. A. Freeman: I am glad to hear that we have such an urgent appeal to stand by the price list. I did not myself vote that our company would issue the list, although we would base our prices on it. S. H. Fullerton: The list should be uniform in adoption. There is coming a time when orders will be coming in very rapidly, and we need a uniform schedule. The effect will be good upon the trade. PRODUCTION AND WHOLESALE DISTRIBUTION. 85 J. A. Freeman: I believe Mr. Fullerton is right. The uniform issuing of a list would certainly be beneficial to the trade, and would not interfere with anyone who is going to ask fifty cents above the list. Since 1906, when the popular agitation against combinations in restraint of trade led to a change in the form of the price activities of so many of the lumber manufacturers' associations, no references to agreements to maintain the official prices have been found in the trade papers or the official reports of the proceedings of the yellow- pine manufacturers. - Semiofficial Lumberman's Printing Co's. "Prices Current." — Beginning in 1902 the Lumberman's Printing Co. printed the asso- ciation "Prices Current" down to the time when their issue was officially discontinued. From March, 1906, to July 18, 1906, the Lumberman's Printing Co. printed the "yellow-pine price current" under its name, instead of that of the Southern Lumber Manufac- turers' Association. The first one, under date of March 2, was com- piled from price lists of four companies; the second, of March 28, 1906, was based on the prices issued by the secretary of the associa- tion March 27, in the form of a "flat list" on a 23-cent rate, and that of July 18, 1906, on a similar official flat list, of July 18, 1906, called "market report," 1 on a 23-cent rate. These three lists were printed on the same forms from which the yellow-pine price currents, issued by the association officially, had been printed, and on which the subsequent official "market reports" were printed. These forms were the property of the association all the while. These fists were generally accepted by the yellow- pine lumbermen as being virtually association lists, and the reference to the "market committee" in the American Lumberman of July 28, 1906, page 25, shows that the connection of the association with the issue of the list was clearly recognized. 2 For some time there has been no uniform price list on yellow pine, manufacturers acting on a sort of go-as-you-please basis. Up to a short time ago it would have been difficult for anyone with the widest range of information to have given an accurate guess as to average prices; but with a curtailment of the output and a very perceptible quickening of the demand many of the wider variations in prices quoted have been eliminated, so that the market committee felt justified in making a statement as to values based both on actual transactions and on what the market warrants. 1 Mr. Smith in his testimony in the Missouri ouster suit called it a "price current," Vol. I, p. 385, while Mr. Strickland in his testimony called it a "market report," Vol. Ill, p. 1873. While in the above editorial in the American Lumberman, July 28, 1906, it is called a "price list." 2 Secretary Smith stated to the North Carolina Pine Association in October, 1906, that a market report had been issued under date ol July 18, 1906. (See also further discussion of the above lists on p. 112.) 86 THE LUMBER INDUSTRY. The status of the price compilations issued following the ostensible abandonment of price list activities in the early part of 1906 is indi- cated by a discussion which took place at a meeting of the North Carolina Pine Association in October, 1906, and was participated in by the secretary of the Yellow Fine Manufacturers' Association. The North Carolina association, as shown on pages 269-274, also sub- stituted a market report for a price list at this time. Arguing for a list which would serve as a basis for future action, J. A. Brown of the North Carolina Pine Association, made the following statements: I know members of this body quoting the price list and getting it. It is a line from which we can afford to vary a little, but when it is destroyed the Association's usefulness is sadly crippled. We must have some guide to follow. I wish to avoid making it a price list and calling it so, but I still want a price guide and if some of us don't see fit to live up to it the balance of us will. Let us publish the list, and let it stand until you change it, as the current price at which the lumber is being sold, and observe that as the price list. You can also then send out this other information about sales and then compare it. The Secretary: Your idea is exactly the one in the minds of the Committee. George K. Smith, secretary of the Yellow Pine Manufacturers' Association, was then called upon to give the experience of his association on the same question. He said: It is hardly necessary after Mr. Brown's lucid talk; he has the idea exactly and it is a plan that we have been operating on for several months. In February we abandoned our price list. We were practically up in the" air and it took us about three months to light. We then began getting the information as to prevailing prices or sales. We found that, as Mr. Brown said, when we were getting the prevailing prices or sales, we were slacking down every time. Then we started to find out what they were actually quoting lumber at. We found we were only getting reports on a few items when we asked a man what he was selling at, but he was quoting prices every day. Now, the way the change in the market commences is when a man who is oversold on lumber limbers up and begins to ask list • or higher. Now, we ask a member to give us the prices he is quoting The buyer probably comes back with about 50 cents less and he accepts it. So we ask him to say what he did accept it at, But we figure that the information to be used as a basis ot prices is the quotations and not the actual sales. Find out what the people that give to you are asking for their lumber. Ine Market Committee, when you get too far away from the list, as Mr. Godfrey seemed to think you had gotten too far away from that of June 13th, will report the changes. For example, we found that Flooring and Ceiling were selling at a deal less than the last market report. We got out a new market report lowering that side of the list accordingly. We find later that Dimension was selling at a deal more than the list. PRODUCTION AND WHOLESALE DISTRIBUTION. 87 When you are quoting higher than the list the retailer wants to try and get business at list: we, therefore, raised those items. Official "market reports." — George K. Smith stated in his testimony in the Missouri ouster suit, that after the "market com- mittee" had been abolished, the price lists (called from this time on "market reports") were based on his judgment of the results of certain compilations of price data sent him by various correspondents. The following description is taken from a memorandum of state- ments made by Secretary Smith to the Commissioner of Corporations od April 8, 1907. The memorandum was submitted to Secretary Smith and revised by him April 19, 1907: For about a year the following plan has been in operation. The Secretary has sixty correspondents (mostly members) to whom the last memorandum on prices is sent, and they note thereon the prices they are asking. These correspondents are distributed throughout eight States, and there is no opportunity for collusion. The returns are received by Mr. Smith, and no one else except his stenographer sees them. The statements are compiled and on this basis Mr. Smith ascertains the prevailing prices. These are not simply averages, as the prices of one correspondent may be given much more consideration than those of anotner, owing to the larger or more representative business done. It is made at intervals of about thirty days, but if the market is stable a longer period may elapse, and at times when prices are fluctuating the period may be shorter. For instance, one correspondent has recently written that unless the association gets out a new Market Report at once, he will get out one of his own in order to cover the recent increase in the market. There is no agreement expressed or implied that pi ices shown on the Market Report will be adopted by the individual members. The Market Report is sent to 325 members and to 1200 or 1300 manufacturers who are not members, and an extract which is compiled to show delivered prices at the various towns is sent to about 10,000 retail dealers. The "market reports," according to a statement on their covers, purported to be "compiled by Geo. K. Smith, secretary, from the most recent quotations made by manufacturers of y T ellow pine." There is considerable evidence in the possession of the Bureau that the prices shown in the official "market reports" were often sub- stantially higher than would be obtained by arithmetical processes from the data reported to the secretary. In other words, there was a perceptible bias shown in the promulgation of higher prices by the secretary, though how far the lumber trade accepted such official lists as being bona fide statements of a correct compilation of the reports received by the secretary is open to question. It seems to have been generally understood that such official figures were somewhat "above the market," and represented prices which it was desirable that manufacturers should make an effort to get, and there- fore were not misleading. £8 THE LUMBER INDUSTRY. That unreliable data were sometimes sent in to the secretary- is indicated by the following statements made by J. B. White in the semiannual meeting of the association, July 21, 1908, which indicates that often these prices were too high: Now there are here at least two representatives of a price list committee, or two representatives of firms that are pub- lishing yellow pine or lumber trade bulletins, on the floor here. I do not know how we can reconcile the prices that we are asking for lumber with the prices that we give these gentlemen when they ask us what the market is. They are making up their trade bulletins, Mr. Schuster and Mr. Smithy and perhaps one or two others, upon the information we are giving them, and yet a manufacturer goes out and finds that everybody is discrediting the very information that he gives these gentlemen! If he would live up to what he has told Mr. Smith or Mr. Schuster and -.fliers as to what he was getting for his lumber, live up to what he said was the market price, he would not be in this condition. Why don't we do it? When we tell him how much we are cutting and the price we are getting why don't we get it? It is our own fault, entirely our own fault. We are not actually honest with ourselves and our neighbors. I did not intend to say so much on this question, but I believe it is important and that we should be thoroughly honest with each other and make an actually honest report as to what we are getting for our lumber when these papers come to us, getting up these trade bulletins. There ought to be a market, a pub- lished market for lumber, that represents what lumber is being sold for. I do not know how on earth a man can get up a different or better list or more reliable one than we are now getting as long as the manufacturers are not more honest in making their statements. 1 (American Lumberman, July 25, 1908, p. 56.) That the "correspondents" have sometimes met and exercised the functions of the former "committees" is shown by the following extracts from letters. W. S. McKinney, general sales agent of the Missouri Lumber & Land Exchange Co., under date of June 22, 1909, wrote to George K. Smith, secretary, as follows : Do you contemplate getting out a new market report any time soon? If so would it be consistent to give us a line on it, within the next four or five days ? We are figuring on issuing a new list to the trade and would like to have all the information we can in order to arrive at a correct basis of values. To which Mr. Smith replied under date of June 23 : Noting yours of the 22d instant, will say that at the meeting of correspondents held here a week ago, it was almost the unanimous opinion that it would be inadvisable to get out a market report lower than the May 25th report, and as there is i Italics are Bureau's. A comparison ol this account with that given in the published "official proceed- ings" shows that the two are almost identical, word for word, except that the italicized portion above is omitted from the "official proceedings." The attitude taken by the association officials toward the Schuster lists is described on pp. 120-122. PRODUCTION AND WHOLESALE DISTRIBUTION. 89 no reason for getting out a higher one, I do not anticipate taking any action in the near future on getting out a Market Keport. The committee is figuring on a basis Yellow Pine list, which will be constructed on the theory of $10.00 stumpage and when this report is ready it will be sent to four hundred manufacturers of Yellow Pine for their consideration. The "basis list" mentioned in the foregoing letter was the first of a new series of official price lists. During the period from Novem- ber, 1906, to May, 1909, there were 21 market reports issued, the last being issued May 25, 1909. Official basis list and concession sheets. — An important reason for the adoption of the basis list and concession sheets as a substitute for the "market reports" appears to have been the con- fusion resulting from the use by members and others of "market reports" of different dates of issue. The following extract from Secretary Smith's report at the meeting of July 21, 1908, confirms this view: Some members and manufacturers are still using Market Reports issued prior to May 26th, as their basis for quotations. It is hoped the practice will soon become general of using the latest Market Report as a basis for quotations, thereby removing the liability of misunderstandings as to prices named. The official proceedings of the semiannual meeting of the associa- tion August 3 and 4, 1909, at which the basis-list policy was adopted, simply show the official report of the committee on uniform-basis list, but only a brief reference giving no details, is made to a dis- cussion that followed, before its adoption. The report in the American Lumberman of August 7, 1909, pages 40-41, however, goes into more particulars. The following extracts indicate the character of the discussion: J. B. White opposed the adoption of the list, one which would be adopted with the understanding that members could cut the prices. He quoted precedent, particularly in other fines of trade, to show the, from his viewpoint, fallacy of the proposed list, and viewed the influence of such a list as a tendency to progressive increases of concessions. C. D. Johnson spoke in favor of the proposed fist, in the con- cluding part of his argument saying: "The main object in this uniform list was a basis of prices, a recognized list as a price list based on the cost- of making the lumber, the worth of the raw material. That does not neces- sarily mean that yOu have to cut the list. You should get the prices. I am satisfied that if the uniform list is adopted and put into use the results will be satisfactory to the manufacturers, much more satisfactory than the method of quoting prices is to-day." A. J. Neimeyer criticised the value and expediency of the list and M. B. Nelson spoke strongly in its favor, and the latter was 90 THE LUMBER INDUSTRY. supported by B. F. Woodhead, O. O. Axley, and others, in- cluding Mr. Stanley. In further support of the adoption of the report Mr. Johnson stated that he was positive that every manufacturer and wholesaler in St. Louis would adopt the list and quote prices from it, "unless we except Mr. Neimeyer," and he understood that Kansas City wholesalers and manu- facturers were in favor of it with one possible exception. He regarded the list as likely to induce and maintain high prices, which a ten-dollar list would not do. After further discussion Mr. Johnson asked for an expression from Secretary Smith, who declared that he had studied the question very carefully and believed that if the list were adopted within three months it would be used over the entire country, and through it could be obtained the statistical information which the association needed; that it would largely eliminate many existing troubles. The list, he said, had been submitted to 450 manufacturers and all but two had indorsed it. Mr. Stillwell and Mr. Kaul favored the list, as did Mr. Das- comb, and Mr. White gracefully withdrew his opposition. The report was then formally adopted. * * * Debate upon this subject was considerably longer than here indicated but that which is given is generally typical of the full debate. Objection was made that the proposed list was an innovation; it is an innovation in the sense of establishing a basing price list, but as a matter of fact prices for several years have been made by cutting recommended price lists. At the present time prices are made by quoting concessions from three or four or more different price lists. The purpose of this list is to furnish relative values for the different grades, all as high as lumber is likely to sell at within the next six months or a year, and to put its claims so strongly that it will be generally adopted, in which event those who receive schedules of discount from the list from different concerns will be able to compare the prices they receive about as to their actual meaning. As Secretary Smith expressed it, " the trade will then speak a common lan- guage." It developed that letters regarding the adoption of a basic list were sent to every member of the association, asking for approval, suggestion or disapproval. Less than half a dozen disapproved of the idea, some had not given the matter sufficient attention to express an opinion, and the rest favored it heartily. Sales managers were particularly enthusiastic in support of a uniform basic list. M. B. Nelson, of the Long-Bell Lumber Company, made a strong argument on its behalf, stating that now it took practically all the time of one man to compare the different quotations sent out in order to determine what they really meant. If in his office so much difficulty was experienced in arriving at the actual prices quoted in lists sent out by various manufacturers and wholesalers he believed that the retail trade were also in the dark as to quotations they were getting. The discussion characterized the movement as one looking toward open and aboveboard business methods, and the ques- tion as to the possible effect upon the public of the announce- ment that the Yellow Pine Manufacturers' Association had. PRODUCTION AND WHOLESALE DISTRIBUTION. 91 adopted a higher price list was met by the statement that on the face of it this list was not a price list, but a basis from which each individual shipper could quote prices and to which the retailer or the buyer could refer for a comparison of prices offered him. The suggested title page previously quoted seemed thoroughly to cover this point. It will be noted from the foregoing account that when the practical effect of the basis-list policy on actual selling prices was brought into question, on the ground that it would have an influence toward low- ering them (" the influence of such a list as a tendency to progressive increase of concessions") it was defended "as likely to induce and maintain high prices," and from the support the policy received this latter view seems to have had more weight with the members. The following correspondence throws some light on the statements made when the August 4, 1909, basis list was adopted — that it was not to be considered as representing in any sense actual selling prices. A letter dated August 12, 1909, from W. J. Foye, of the McShane Lumber Co., to Secretary George K. Smith, contains the following suggestions : Do you not think it would be advisable, in sending out the price fists from your office, that you advise each and all of the manufacturers of Yellow Pine that this list is a result of Com- mittee's report based upon actual values for average during the coming year? It would seem that if the manufacturers could be made to realize that this basis price list is not a fictitious basis but a list based upon actual values for good, honest investment the efforts of the different manufacturers would be to get as near this list as possible for their product, and feel that when they cut this list they were disposing of their product at just that much below actual value. Mr. Smith under date of August 16, answered: In my circular letter of August 10th, a copy of which I am enclosing to you, you will notice that I call special attention to the fact that the' basis price list, of August 4th, was only a little higher than the actual range of values in effect August 10th, 1907, which was the highest price list ever issued in Yellow Pine. My purpose in doing this was to call their attention to the fact that where there is a demand for yellow pine, anyone might reasonably hope to secure practically as good a price as was obtained in August, 1907. The issuing of the "market reports" was discontinued by the association in 1909, the last one bearing the date of May 25, 1909. In their place was adopted, as already noted, a "basis list," issued under date of August 4, 1909, which was the same in form but which showed prices much higher than the actual selling prices at that time, and "concession sheets" showing discounts which, if subtracted from the "basis list" gave what purported to be the market prices. The secretary of the association determined the discounts placed 92 THE LUMBER INDUSTRY. on the "concession sheets" from information similar to that used for the former "market reports." There is some indication that he was assisted at times by a price-list committee in the compilation of both series. This may be inferred from the language of a circular dated December 19, 1910, sent out from the secretary's office, on the subject of the annual meeting to be held in New Orleans on January 18-20, 1911, addressed "To all members," and begins as follows: Referring to the subjects whfcffi will be discussed at our annual meeting, will say that in addition to the regular discus- sion on trade conditions, which occurs on the afternoon of the first day, the Market Committee of thirty members, provided for in Section 5 of our By-Laws, will be appointed on the after- noon of the first day, and will bring in a report on the closing day of the convention, in strict accordance with the duties assigned to it by Section 5, as follows: "To ascertain, from time to time, and in such manner as they may deem advisable, the prevailing quotations and market prices of the various classes of Yellow Pine lumber, and the existing conditions as to supply and demand for the same." This particular feature of our work is called to your attention at this time because for two years past a Market Committee has not been appointed at our annual meeting, and you might be under the impression that none would be appointed at the forth- coming meeting in January. The following extract, taken from a letter dated December 21, 1910, and marked "confidential," from J. E. Rhodes to George K. Smith, bears upon the above circular: I note your circular letter of the 19th in which you state that it is the intention of your Association to appoint a price-list committee at your annual meeting at New Orleans January 18th-20th. For your confidential information will say that there is some little improvement shown in the Yellow Pine market, possibly as a result of the recent talk in New Orleans. We have been especially pleased at the volume of business which your mem- bers have done this year. No reference to the appointment of such a committee is to be found in the official proceedings nor in the trade-journal accounts of the meeting which have been examined by the Bureau. The August 4, 1909, basis list remained in force until it was super- seded by the basis list of September 10, 1912. There were 26 official concession sheets based on it during this period. The reason for its being superseded was that actual selling prices on certain items had advanced in 1912 beyond the basis-list prices established in 1909, so that instead of discounts being applicable it was necessary to show advances, if the real market prices of such items were to be reported. The original plan in issuing concession sheets was to send them out to all members of the association and to all who were subscribers PRODUCTION AND WHOLESALE DISTRIBUTION. 93 to the market report as published up to August 4, 1909. Because of objections raised by certain members Mr. Smith, in a letter dated September 14, 1909, to the officers and directors, took up the matter of restricting the sending of future concession sheets to members only. The following paragraph gives the reason : Some of our members have expressed the opinion that these Concession Sheets should not be sold, but held strictly within our membership, as the information as to concessions may work a hardship on some manufacturers, if widely distributed, so that wholesalers and large retail buyers receive it. Correspondence with persons not members of the association, found in the files of the association, shows that the official concession- sheets "compilations" were only issued to members. The following letter from the Kaul Lumber Co., dated February 15, 1910, to George K. Smith, secretary, commends this policy: We have your letter of the 11th, and are pleased to note that there has been no change in the policy regarding the distribu- tion of the concession sheets. We are convinced that a general distribution of these would tend to demoralize prices to an extent that could hardly be overcome by our salesmen, and we even think it would be wise, if it is practicable, to send out a circular on the subject calling the attention of manufacturers to it. It is clear that this plan of a sort of secrecy as to concession sheets was adopted in the interest of higher prices. The association appar- ently acted on the theory that the less information that was available to lumber dealers the greater the probability that members of the asso- ciation could maintain the prices fixed in the price list, as modified by the concession sheets. The figures, however, in the "basis lists" were purely arbitrary, and in the absence of the concession sheets contained no real infor- mation as to prices. The following statement appears in the "basis list" of August 4, 1909: The figures given in this list are purely arbitrary. They do not purport to be the current prices at which lumber is being quoted or sold. The list is in no sense a price current or market report. In a great many lines of trade there are arbitrary tables of list prices, which do not change or fluctuate, and which do not in any sense represent actual selling prices, but are used only as a basis upon which to figure actual prices, quotations and sales being made at varying amounts below the list. It has been suggested that such a list might prove useful and convenient for Yellow Pine Lumber Manufacturers and their customers, and it is in response to such suggestion that this list has been prepared and is sent out. 94 THE LUMBER INDUSTRY. The first official concession sheet issued on the basis list of August 4, 1909, bears on its cover the following statements; Concession Sheet No. 1 of August 30th, 1909. Applying to Prices Shown on Basis Yellow Pine Price List No. 1 of August 4, 1909. Adopted by Yellow Pine Manufacturers' Association. Showing Average Prevailing Concessions as obtained by Geo. K. Smith, Secretary. Concession Sheets will be issued at frequent intervals, showing changes in values, taking the place or the Market Report, and will be sold at a uniform price of 5c. each by Geo. K. Smith, Secretary, Lumbermen' s Building, St. Louis, Mo. The subsequent sheets issued were printed on one side of a sheet of paper and bore simply at the head of each sheet the statements described below. They were termed "compilations" and began with "compilation No. 2." Each sheet bore the date of issue, the name of George K. Smith, secretary, and referred to the basis list of August 4, 1909. Compilations Nos. 2, 3, 4, and 5 purported to be based on an accompanying tabulation of detailed information as to conces- sions reported to the secretary by individual correspondents. Com- pilation No. 6, dated January 21, 1910, has this statement: "Advices from several correspondents 1 indicate that several changes should be made in concessions shown on Compilation No. 5 of January 18th. A revised compilation is submitted herewith to substitute for No. 5." Compilation No. 7, dated February 4, 1910, has the following statement: "Pending reports from Correspondents called for on February 2d, the following Compilation of Concessions is submitted as representing present market values. " Compilation No. 8, dated February 26, 1910, has the following statement: "Reports from 33 Correspondents shown on enclosed Summary of February 26th, do not indicate any material change in Concessions from Compilation No. 7 of February 4th, hence this is a reissue of that sheet without change." Compilation No. 9, dated April 9, 1910, has the following state- ment: "Reports from 27 Correspondents, shown on enclosed Sum- mary of April 9th, indicate some changes in Concessions from Compilation No. 8 of February 26th. Items changed carry light face type." Compilation No. 10, dated June 1, 1910, states: "Reports from 32 Correspondents shown on enclosed Summary of May 31st, indicate some changes in Concessions from Compilation No. 9 of April 9th." The foregoing "compilations" (Nos. 2-10) were all addressed "To members and correspondents," and as has been shown above, all but No. 6 and No. 7 purported to be based on the accompanying detailed tabulations of reports from individual correspondents. No further 1 For Secretary Smith's answer to one of these letters, see p. 105. PRODUCTION AND WHOLESALE DISTRIBUTION". 95 detailed tabulations were issued following the one accompanying No. 10. The statement on compilation No. 1 1 was addressed ' ' To Members, " and states: "Compiled from recent Market Reports." That on com- pilation No. 12 was addressed "To Members and Manufacturers," and in addition to the statement of its source, "compiled from recent Market Information" it had the heading "Present values," and also "Maximum or Largest Concessions." The same wording, except for the omission of the statement "Max- imum or Largest Concessions, " appears on compilation No. 13, dated December 12, 1910, and compilation No. 14 has the same wording as No. 13 except that the words "Present concessions" are substituted for "Present values." Compilations Nos. 15-26 follow the wording of No. 14. The significance of all the changes in the wording at the head of the table of concessions is not in every case apparent, but it seems prob- able that some of the changes were made on advice of counsel to avoid attack on the grounds of attempted price fixing. It is to be noted that while officially the sheets are called "compilations," Sec- retary Smith, in a letter dated April 6, 1912, to the Newell Construc- tion Co., refers to them as concession sheets. He states: We have your letter of the 3d instant, and wish to say that you are certainly mistaken in regard to issuance of Market Report by this office. The last Market Report issued was in May, 1909, and in August, 1909, the Basis List was issued, which is still in use. We have, however, issued several concession sheets, the last one bearing date of January 30th, 1912, and we are to-day for- warding you copies of that sheet in the hope that that is what you desire. You may return the Basis Lists which you advise you have no use for, to this office. In 1912 the association basis list and concession sheets were printed by the C. S. Severson Printing Co., St. Louis. In an interview with an agent of the Bureau Mr. Severson said: I only act as a printer for the Y. P. M. A. They own the forms for the price fists and I keep them here and get out the fists whenever they want them. I get orders from 15 or 20 lumber companies for concession sheet but as a rule these orders come through the Y. P. M. A. Sometimes the companies want their own name printed on the back of the price lists and in some cases they will want a few items changed on the concession sheet. 1 Of course we make a charge for all changes. The association owns the forms and type and we merely do the work. A second basis fist was issued under date of September 10, 1912. It is similar in form to that of August 4, 1909, which it superseded. 1 For further discussion of this point, see pp. 110-111, 116. 96 THE LUMBER INDUSTRY. The reasons for its issue are brought out in the secretary's report at the meeting of February 11-12, 1913, as follows: 1 In August, 1912, values of Yellow Pine on many items were quoted higher than the Basis List of August 4, 1909, which had been in use for three years, and on September 10, 1912, a Basis List was issued which replaced the one of August, 1909, and is now in general use among retailers and manufacturers, and the concessions report on the Pink Sheets apply to this list. Information obtained by the Bureau shows that Secretary Smith himself drew up the new basis list, generally raising the quoted price on all grades. He then called by telephone a number of lumbermen and arranged for a meeting to be held at the Mercantile Club room in St. Louis. At this meeting were present leading lumbermen from Houston, Tex., Kansas City, and St. Louis. Within the next day or two after this meeting the concession sheet applying to the September 10, 1912, basis list was published and sent to all the larger yellow-pine manufacturers. The following from the Mis- sissippi Valley Lumberman, of September 27, 1912, page 31, gives some further details. Attention may be called to the omission in this article of any reference to the concession or "compilation" sheets issued by the association, giving the discounts for use with the basis list, notwithstanding the fact that such discount sheets are an essen- tial part of the "basis-list" system. Under date of September 10, the Yellow Pine Manufacturers' as- sociation issued a basis price on yellow pine lumber making a num- ber of changes from the list issued under date of August 4, 1909. From the list of earlier date the following advances have been made : $5 .00 per M. Added to all items except lath, wagon bottoms and battens. $2.00 per M added to lath. $1.00 per set added to wagon bottoms. 20 cents per lineal ft. added to battens. 10 per cent reduction to the discount on mouldings. While the list has no particular significance in respect to the prices asked for lumber, the advances from the basis fist of three years ago probably means that the higher prices now being obtained for yellow pine do not admit of discount from some of the prices in the earner list. As is well known, the yellow pine manufacturers were recently attacked in the courts of Missouri, and one of the charges against them was that they issued price lists which the state claimed was evidence of agreement on lumber values. No one familiar with the lumber business believes that the manufacturers had any agreement or understanding that such lists should govern the actual selling price, but that there may be no misunderstanding regarding the basis lists issued two years ago, and recently, the lists bear the specific statements: "The figures given in this list are purely arbitrary. They do not purport to be the cu rrent prices at which lumber is being 1 Official proceedings, p. 4. PRODUCTION AND WHOLESALE DISTRIBUTION. 97 quoted or sold. The list is in no sense a price current or market report. It is intended to be used solely for convenience in quot- ing prices. "In a great many lines of trade there are arbitrary tables or list prices, which do not change or fluctuate, and which do not in any sense represent actual selling prices, but are used only as a basis upon which to figure actual prices, quotations and sales being made at varying amounts below the list. It has been suggested that such a list might prove useful and convenient ' for the yellow pine lumber manufacturers and their customers and it is in response to such suggestion that this list has been prepared and is sent out." In the past, the yellow pine manufacturers and other associa- tions of manufacturing lumbermen, have endeavored to keep the trade posted as to about the prices at which their lumber was being sold. This has been done in the form of market reports or price current lists compiled from information received from a large number of manufacturers, and averaged. These lists have not represented the actual market, because different manufacturers have at all times made different prices on the vari- ous items of stock. These lists have not represented the prices on which the manufacturers have agreed; but to avoid any suspi- cion of an effort to influence the market or to present price fists at which lumber is to be sold, the Yellow Pine Manufacturers ' association has now issued a "basis" fist which any lumberman will recognize at once as not being representative of the actual selling prices. The figures on the list are in all cases several dollars higher than the actual market, and the lists are mere conveniences for quoting and selling. Quotations are made by the means of discounts, and the lists make this convenient because the discounts can be offered on groups of stock rather than on each separate item. Of course such a list alone, as above described, would have no significance, but used in conjunction with a discount sheet it would become a real price fist. If there was no purpose to fix prices, it is difficult to understand why all members of the association should have identical lists and why they should also have discount or con- cession sheets that were substantially identical. Compilation No. 1, based on the September 10, 1912, list, was issued under date of September 25, 1912, and No. 2 under date of Sep- tember 25, 1913. Both compilations are similar in form to those preceding, based on the August 4, 1909, list. Other association price lists issued since 1909. — The fore- going "compilations" do not include all the price fists issued or sent out by the association since August 4, 1909. Two sheets, one for long leaf and the other for short leaf prices, f. o. b. mill, were issued July 17, 1912. The long-leaf compilation, printed on one side of a sheet of green paper, had the following legend: "Long leaf F. 0. B. List Showing Net Prices on Items if Sold at July 10th Con- cessions from Basis List of Aug. 4, 1909." The short-leaf fist, 25030°— 14 7 98 THE LUMBER INDUSTRY. printed on lavender-colored paper, had similar wording. Neither list had on it any wording to connect its issue with official sources, but they were accompanied by a circular letter from George K. Smith, secretary, dated July 17, 1912, which has the following statement: "In looking over these net prices it appears that B Flat Flooring, B Drop Siding and Finish and its products are out of proportion with common and lower than they should be." Similar f. o. b. mill sheets had been sent out by George K. Smith on March 15, 1911, showing "Net Prices on Items if Sold at March 15th Concessions from Basis List of Aug. 4, 1909;" but the accom- panying circular letter of Secretary Smith called no attention - to particular items. Effect of association price lists on market conditions. — Information in regard to how far the official prices promulgated by the association were actually followed by the various members of the association and by manufacturers and wholesalers outside of the association has been obtained by the Bureau from several sources. There is considerable testimony on this point in the Missouri ouster suit; there are numerous statements published in the official proceed- ings of the annual and semiannual meetings and in the various newspaper accounts of those meetings; also in letters, both published and unpublished, written by prominent lumbermen; and finally, there is the comparison of actual invoice prices obtained by the Bureau, with the official list prices, as well as with the company price lists. In the following discussion a statement of the general attitude assumed by the lumbermen since 1906 is first given, and this is followed by the evidence gathered from many sources, which contro- verts this statement. General attitude assumed by the lumber trade since 1906. — Of con- siderable interest is the effect upon actual prices and market conditions, attributed by various persons in a position to be well informed as well as by the trade journals, to the issuance of the association official lists (variously promulgated as price lists, price currents, market reports, or concessions from a basis list) . When on the witness stand, June 13, 1911, in connection with the Missouri ouster suit, Mr. Keith, president of the Central Coal & Coke Co., one of the leading pine producers, was asked : Q. Mr. Keith, in your judgment, has the issuance and circula- tion, or use of, the so-called "Price Current" or "Market Report" had anything to do with the condition of prices of lumber made during the period beginning 1904, 1 when the testimony shows it was rather low, and subsequent times, up to the time of the institution of this suit ? i The choice of the date 1904 was evidently made with reference to the statute of limitations, as the ques- tion was put by counsel for the defense. PRODUCTION AND WHOLESALE DISTRIBUTION. 99 A. My own judgment is it has not. The question of supply and demand, and not the question of production, practically controls the price of lumber. The following testimony of George K. Smith, at the same hearings, bears also on this point: 1 Q. Mr. Smith, I will ask you whether or not, in your judgment, the purpose of the making up and issuance and distribution of the market reports that are in evidence here, whether they are designated market reports or price currents, has had any effect in the rise of prices, the stagnation of prices or the fall or demorali- zation of prices that you have referred to in your testimony here ? A. No, sir, none whatever. Q. Now, I will ask you, so far as you know, has it been the fashion or the purpose of your association, of the market report committee or of yourselves, in collecting this information, as to the state of the market and publishing it, distributing it in the form of market report, to fix, regulate, control, maintain, raise or lower the price of yellow pine lumber? A. It is not. In the testimony given by other prominent lumbermen in the Missouri ouster suit, and in many statements made to agents of the Bureau, it has been asserted that not only were the association official prices not followed by them but that they did not always follow their own price lists. There is considerable evidence that such statements are incorrect and misleading, especially when the practice of having official prices bound in special covers and sent out as the firm's own price lists is taken into consideration. (See pp. 110-111, 116.) It is a mere quibble to assert that the prices in such lists are not the association prices. Since the beginning of 1906, when the question of the illegality of issuing association price lists was brought into prominence, the individual lumbermen have been less ready to attribute publicly any such influence on market conditions and prices to the official lists, as they did previously. An illustration of the attitude assumed since 1906 is shown by the following from the St. Louis Lumberman of August 15, 1909, page 62, in an article discussing the new basis price list of August 4, 1909: In the yellow pine business there are particularly good, as well as somewhat unusual, reasons at this time why a price basis should be introduced and permanently maintained. The so- called "price lists" or "market reports," which have always here- tofore been issued, from time to time, have been impossible and, in a sense unfortunate, make-shifts for something better. While it is true their purpose has been to serve only as a guide to market movements, and not as a valid price list binding on anybody or any number of men, in their not unfrequent reshaping in accordance with that purpose, they have been grievously misunderstood and unwarranted^/ condemned by that great part of the general public not identified with the lumber trade. ' The questions were put by counsel for the defense. 100 THE LUMBER INDUSTRY. When such lists have shown advances, and especially a series of advances, the cry has gone up from the rural districts that the lumber business was being administered by a colossal trust, and that all the saw mills were quoting the same prices. Everybody in the trade knew, of course, that there was nothing to such, charges, for it has very seldom happened at any time in history that any saw mill man has quoted list on other than very few items, and then only for a very brief space of time — much less any considerable group of mills. The general run of prices has been lower than list, as a rule, from something like fiity cents to $1 for some items to $3 per thousand feet on others. The market has never at any time ruled at list, and only occasionally, and but for very short periods of time, at that, have any respectable number of manufacturers been able to get better than list on even a few stock items. Nor yet have there ever been any uniform concessions from list established by a combination of the yellow pine manufacturing interests. Attention may be called to the last two sentences. It should be borne in mind that the various official lists of prices had always pur- ported to represent actual market conditions at the time of issue, and to be authoritative statistical information officially compiled from reliable data. It should be noted also that the official lists of prices continued to be promulgated since 1906 and that much time, effort, and money was devoted to their compilation and issue and, though in a more guarded manner, their use was still urged upon association members. Importance attached to association lists by lumbermen. — Since it is evident that in 1911, when the testimony of the Missouri ouster suit was taken, there existed a strong motive on the part of many of the prominent lumbermen to discredit and belittle the effect of the association price lists, the reliability of the opinions expressed then is open to serious question. The statements, often of these very- same men, contemporary with the price activities, are free from that motive to misrepresent the actual conditions. Furthermore, since, according to the testimony 1 of George K. Smith, the secretary of the association, many of the official records, including all those of the price-list committee previous to 1906, have been destroyed, the trade-journal accounts are to-day the most reliable sources for such information. They are second only to the documentary evidence furnished by the correspondence of the persons engaged in the activities. At the semiannual convention of the Southern Lumber Manufac- turers' Association held in July, 1899, according to the account in the New Orleans Lumber Trade Journal, August 1, 1899, page 17, the committee on values reported a new price list which should become i Missouri ouster suit, Vol. I, pp. 159-160. PRODUCTION AND WHOLESALE DISTRIBUTION. 101 effective immediately (July 20), showing some advances over the list of July 1 : After some discussion this list was adopted and the secretary, was instructed to notify all members not present by wire, of the changes made, and as to the time at which the new list was to be effective. At the semiannual convention of the Southern Lumber Manufac- turers' Association, held in July, 1900, Secretary Smith's report, as published in the New Orleans Lumber Trade Journal of August 1, 1900, page 17, contained the following statement: These two factors (decreased demand and increased produc- tion) naturally brought a lowering of values, which continued until much of the advance gained in 1899 was lost, and a halt was not called until July 2nd, when a new basis of values was adopted. This list has received the support of 140 of the prin- cipal firms in the States west of Alabama, comprising over 80 per cent of the output in five States. The interest shown by manufacturers in the work of adopting and maintaining a uni- form list, is a proof that cooperation among manufacturers of yellow pine is progressing, and the value of association work recognized. The. official report of the association meeting held January 14 and 15, 1902, contained a telegram sent by J. B. White, general manager Missouri Lumber & Mining Co., to George K. Smith (secretary of the association) as follows : Greetings to all. Hold fast to the list. We are advancing as follows. [Here follows the detailed items and amount of advances]; all above January 4th list. The following extract is from Mr. White's testimony in regard to this telegram in the Missouri ouster suit: 1 Q. What did you mean by "Hold fast to the list V A. If there was a list, then I would say — because I felt there was no need of lowering prices, that there was a growing demand and we were advancing prices, and I did not want to see them get together in St. Louis and get discouraged because I felt con- ditions were good and I knew that if they Knew I was advancing prices they would not make lower prices. Q. In other words, you wanted them to hold to the price list then being issued by your association; that is what you meant in your telegram ? A. Yes, sir; if there was a list. Q. Not to sell under the price list the association was then issuing ? A. That was my advice because I was advancing my prices and, hoped they would not lower theirs; that is right. i Questions asked by counsel lor the State. 102 THE LUMBER INDUSTRY. At the same meeting in 1902 a number of other communications to Mr. Smith were read, from which the following extracts are taken : Telegram from Flint River Lumber Co., of Bainbridge, Ga. : Congratulations on good work being done by association. Con- ditions warrant new list, and we shall certainly maintain it. Letter from W. R. Abbott, president of Fort Smith Lumber Co., of Riverside, Ala. : We will assure you that you will have the hearty support of the Ft. Smith Lumber Co., and we have issued the new list and think that the Price List Committee should be congratu- lated on what they did in making the advance. Letter from F. H. Farwell of the Lutcher & Moore Lumber Co., of Orange, Tex. : We have your circular of the 10th and beg to acknowledge with thanks the price list of Jan. 4th. Are only sorry that some of us cannot be present at the meeting, as we are with you in sympathy in all movements that tend towards the stiff- ening of prices, or getting together for our mutual benefit and the talking over the matter of grades and differences that might occur. In the American Lumberman of August 6, 1904, page 46, a report of a meeting of the committee on values contains the following statement : It was decided that the secretary especially urge all members to issue the list of August 2, as it is believed that the sending out in a general way of this list will have a beneficial effect. How this recommendation was carried out is shown in the New Orleans Lumber Trade Journal of August 15, 1904, page 17, which prints the report of this committee in the form of a letter dated St. Louis, Mo., August 2, 1904, and addressed "To all members," with the following statement printed in italics at the close of the letter: All members are urged to issue the list of August to the trade, as it is thought such action will have a very beneficial effect, but are cautioned not to send the concessions out in printed form. A copy of the 23 cent list is enclosed herewith, and full set of lists will be mailed on Friday, and price currents early next week. Kindly advise if you will issue the Aug. 2 list. The following from the St. Louis Lumberman of August 15, 1904, page 50, shows the interpretation placed on the recommendation: The Committee on Values of the Southern Lumber Manufac- turers' Association held a meeting at the Mercantile Club, in St. Louis, on August 2, with eleven of its members and fifteen mem- bers of the association present. * * * R. A. Long of Kansas City presided. [Here follows a discussion of market conditions MOfjUCTIOtf AND WHOLESALE DISTBIBTJTION. 16.3 and prices, with list of advances.] In addition to these ad- vances, it was recommended that the members of the general association should endeavor to so improye their prices that by September 1, or by the middle of that month at the furthest, list would be practically realized in mill sales of all yellow pine lumber. The following reference to this list in the St. Louis news of the American Lumberman of September 3, 1904, page 59, shows that the usual effect of a price advance in checking orders took place: "The free promulgation of the list of August 3 has tended to slow down trade to some extent, but a heavier volume of business is expected after September 15." The following account of the meeting of the committee on values, October 15, 1904, is taken from the American Lumberman of Octo- ber 22, 1904, page 17: The revised price list printed herewith shows the following advances on various items and the recommended price of all articles manufactured: * * * Notice of the action' of the committee of values has been mailed to all members of the Southern Lumber Manufacturers' Association accompanied by a revised price list and the- request that all lists issued be made to correspond thereto. The account of the meeting of the committee on values, appearing in the New Orleans Lumber Trade Journal of March 15, 1905, page 17, after recording the adoption of advances on certain prices in the January 10 list, states: "The shortage in items advanced will warrant every one in demanding the prices recommended and by using the March 1 list, it will be established at once." The report of the meeting of committee on values, sent out by them under date of November 14, 1905, and countersigned by George K. Smith, after giving the changes (all of them advances) recommended in the list, stated that "all present expressed their intentions to issue the list and use it as a basis for quotations and sales;" and also "it is hoped that every member will support the recommendations of that Committee. Kindly advise the Secretary's office of what action you will take." The report states that 12 members of the committee and 30 other members were present at the meeting. An official "market report" was issued October 12, 1908. The American Lumberman of December 26, 1908, has an editorial entitled "The selling policy of a great yellow-pine concern." It begins: One of the most progressive and yet thoughtful of the modern sales managers of the country is M. B. Nelson, of the Long-Bell Lumber Company, of Kansas City. One of his methods is to keep in touch with his sales force by frequent letters, which are not merely orders, but enter into the reasons for orders and so 104 THE LUMBER INDUSTRY. analyze the situation that the salesman will be able to act intel- ligently. The most recent of these communications has come to the attention of the American Lumberman, which is permitted to make use of it. In a letter to the salesmen of the Long-Bell Lumber Company, dated December 19, Mr. Nelson first tells about a conference held between the president of the company, the general sales manager and the manager of the retail yards, the particular subject of the conference being the policy of the company regarding stocks in its own yards. In this letter, which is quoted in the editorial at some length, are the following paragraphs: So, after a thorough discussion, Mr. Long instructed the retail yard manager to buy at least 400 cars for the retail yards, and advised that I write all our salesmen to go home and discontinue soliciting any business until further advised. So you will please comply with these instructions, and on any inquiries sent you quote straight October 12 list. This means on all inquiries of anv size or character. Please understand we do not want any more orders at prices which we have been making. If you have any quotations out which are liable to result in orders, which you would feel in duty bound to accept unless you cancel, please do so at once, and take no further business which you are not obligated to accept after thi? letter reaches you at less than October 12 list. The statements in the American Lumberman are borne out by the following letter of December 22, 1908, from R. A. Long, president of the Long-Bell Lumber Co. to George K. Smith: This to acknowledge receipt of your favor of Dec. 19th, sub- ject: Monthly Report on Conditions. I note you call my attention to question 4. I shall await with anxiety the result of the replies. I beg to say that information coming to me from various sections, led me a few days ago to conclude that lumber was going to be worth considerable more, even before the 15th, of Jan. and as the stocks of lumber at our yards are very low, I called Mr. Nelson and Mr. Foresman (the latter being manager of our retail department) to my room, expressed to them my thought, which was concurred in by them, and followed with irstructioiis to Mr. Foresman to put something like 400 cars of lumber into his yards, buying such portion of it from our wholesale department as they could supply, the rest from the outside. Mr. Nelson also in this conference was instructed and further concurred in the advisability of withdrawing his traveling men from the field immediately, and instructing them to quote strictly Oct. 12th list on all inquiries that might be made of them. This including all kinds and character of lumber. I mention this that you may know what our feelings are in the premises, and what our disposition is, regardless of what others may do. In answer to a letter dated January 21, 1910, from O. O. Axley of the Southern Lumber Co. complaining that the concessions issued PRODUCTION AND WHOLESALE DISTRIBUTION. 105 under date of January 18 ("compilation" No. 5) were too great, Mr. Smith replied, under date of January 29: Noting Mr. Axley's letter of the 21st instant, which was on my desk on my return from New Orleans, will say that on January 21st I made a re-issue of Concession Sheet, under head- ing of Compilation Sheet No. 6. I trust you will look this over and I think you will find it comes nearer your views, as expressed in your letter than the former one. The following official circular letter dated July 21, 1910, bears on the relation of "compilation No. 12" to the "values" existing at that time: Referring to enclosed compilation of concessions from August 4th Basis List, will say that in view of the strong statistical situation now held by Yellow Pine, it was the consensus of opinion brought out at the experience meeting on existing market conditions, held in Chicago on July 19th and 20th, that the enclosed compilation represents the present values of Yellow Pine. In answer to a letter of inquiry dated January 16, 1911, from the Stearns & Culver Lumber Co. as to the meaning of the "compilation" sheets headed "Present concessions," Mr. Smith wrote, January 21: Noting yours of January 16th, will say that the concessions referred to show the amount deducted from prices shown on the Basis List of August 4th in taking orders. Tha Basis List re resents relative values of Yellow Pine on a plane which, if o tarned, will net the mills about $18.00 per M on their stock F. O. B. cars at the mill. The concessions show just how much below these prices the manufacturers are accepting for the business they are placing on their books. Your Mr. Graham attended meeting in New Orleans and is no doubt familiar with the form of concession sheet. The following letter, sent to Secretary Smith, relates to the ques- tion of how far the concession sheets represent actual selling prices: Norfolk, Va., Feb. 11th, 1911. Mr. Geo. K. Smith, Sec, Yellow Pine Manufacturers' Asso., St. Louis, Mo. _ Dear Sir: Please advise us if you can furnish us with addi- tional copies of the concession sheets that you issue periodically in the same form that the basis price list is issued. We do not wish the concession report issued weekly but the little sheet which is to be pasted in the basis price list. Yours very truly, Trexler Lumber Company, By W. S. Perry. P. S. Also please advise us at the same time what you think the basis of this concession list is supposed to represent. 106 THE LUMBER INDUSTRY. Mr. Smith replied, under date of February 13, as follows: Noting yours of the 11th instant, will say that we have extra copies of the concession sheets, issued from time to time, and will be glad to send you any number you may require at the price of five cents a piece. So far as I know the concessions reported on this list fairly represent the present market price at which yard stock items are being sold. Trade-journal comment on the association lists. — The trade journals both in their editorials and news columns no doubt reflect, to a high degree, the contemporary opinion of the trade on the rela- tion of price lists to actual prices. Hundreds of extracts might be presented, forming a running commentary on this subject from several markets and in several papers from 1899 through 1910. The frequency with which the correspondents and editors of the lumber press attribute price advances directly to the influence of price lists leaves no doubt that those familiar with the trade believed in their efficacy. While some lumbermen denied that prices were affected by issuing lists, their utterances at other times and under other circumstances show conclusively that the denials were prompted by a discretion born of fear. There are numerous references in the lumber- trade journals which directly attribute to the issuing of association price lists an effect on market conditions. For convenience of discussion these may be grouped under two headings, instead of all being treated in chronolog- ical order. 1. Comments on the orders sent in by retailers in order to antici- pate an expected rise in the official price lists, and comments on the retarding of trade after the issue of the lists. Some examples of these comments follow: Note. — The italics in the following extracts are the Bureau's. 1899. In view of the fact that word has gotten out concerning several meetings which have been recently held, the retailers have been pretty generally expecting anew list, and have been sending in orders at a lively rate during the past week or so which may make dull trade for a lew weeks after the new list is generally in effect. (New Orleans Lumber Trade Journal, Mar. 1, 1899.) The demand in this territory has not been as heavy since the advance as it wai before the 15th (the dato the advance became "effective") as the dealers knew it was coming, and those who needed lumber stocked up before the advance became effective. (Kansas City news in New Orleans Lumber Trade Journal, May 1, 1899.) Yellow pine orders came in with a rush during the closing days of June before the advance took place, and the wholesalers here had all the business t'-.ey could take care of. (Kansas City News in New Orleans Lumber Trade Journal, July 15, 1899.) Yellow pine has again advanced in price, a new list having gone into effect on the 8th. This makes the third advance within forty days, and is having the effect of holding back orders. (St. Louis news. New Orleans Lumber Trade Journal, Aug. 15, 1899.) 1900. Prior to January 15th there was quite a spurt in the yellow pine business from dealers who were short on stock and wanted to fill up before the advance, but for the past two or three weeks the dealers as a rule have bought sparingly, and while there is some demand, it cannot be called heavy. * * * Prices are reported firm and by the time the spring business has fairly set in the list of January 15th will, in all probability, be folly maintained by the larger manufacturers. (Kansas City news in New Orleans Lumber Trade Journal, Feb. 15, 1900.) 1901. It was the desire to adopt a general list at the annual meeting of the association to be held January, 15 and 16 and this will be done, but wholesalers are receiving so much business evidently placed in anticipation PRODUCTION AND WHOLESALE DISTRIBUTION. 107 of that list, that they are advancing values of their own accord so as not to become overloaded at low prices. (St. Louis news in American Lumberman, Jan. 5, 1901.) Some of the local representatives of southern yellow pine mills say that there has been a slight falling off in (he demand for lumber in this immediate market since the advanced prices went into effect March 5. (Chicago news in American Lumberman, Mar. 16, 1901.) 1902. Retailers are becoming reconciled to the heavy advances that have been made. Conditions since the issuance of the new list have been exactly as the wholesalers expected and none of them have been dis- couraged at the decrease in business. (St. Louis news in American Lumberman, Jan. 25, 1902, p. 47.) The immediate effects of the issuing of the new list have worn off and retailers are again -placing orders, paying higher prices than before the list was adopted, although it is not claimed locally that the list is being main- tained on all items. (St. Louis news in American Lumberman, Apr. 19, 1902.) 1903. The deterring influence of the new list and the advance in freight rates was felt- for only a few days and no other advance m recent years has been as easily realized. (St. Louis news in American Lumberman, Sept. 5, 1903, p. 64.) 1904. The market has been unsatisfactory for some time. The new list is expected to bring it to a stable basis, but dealers are rather suspicious and want to see how it will be maintained before going in very heavily with orders. (Kansas City news in American Lumberman, Mar. 5, 1904.) During the past week there have been few actual orders placed and but light inquiries. This has not been altogether unexpected, as the list of August 3 has been mailed out pretty generally during the last two weeks and a new list almost invariably has a bad effect upon business for a few weeks following its issuance. (St. Louis news in American Lumberman, Aug. 27, 1904.) The free promulgation of the list of August 3 has tended to slow down trade to some extent, but a heavier volume of business is expected after September 15. (St. Louis news in American Lumberman, Sept. 3, 1904, p. 59.) 1905. There is some business being transacted despite the season and there are those among the wholesalers who expect a number of heavy orders to be placed by line yards and other large operators one or two days before the first of the year. The reason given for this is that many of the retailers are beginning to obtain definite knowledge regarding mill stocks and the probable advance in prices soon after the New Orleans meeting, if not at that time. Many are anxious to get in ahead of this advance and all are anxious to feel an assurance that the stock ordered will be delivered in time for the spring trade. (St. Louis news in New Orleans Lumber Trade-Journal, Jan. 1, 1905.) Retailers are expected to buy before the convention at New Orleans, which may change price conditions to some extent. (St. Louis news in American Lumberman, Jan. 7, 1905, p. 68.) There has been a stronger speculative demand for yellow nine during the past week than for months. Orders are coming in for good lots of stock for shipment within 30 or 60 days. Lumbermen say that some of this business probably is induced by the belief that prices on southern pine may be advanced at the meeting of the manufacturers this week and that dealers are placing their orders to avoid the probability of paying more a little later. (Kansas City news in American Lumberman, July 22, 1005.) By this time the dealers are all acquainted with the stiff advance that was made at the St . Louis meeting last week. Quite a few retail dealers anticipated this advance by placing liberal orders iust before it was made, but as yet the most of the dealers have not placed many orders for fall stock, and the wholesalers here look for a steadily increasing call for yellow pine from this time on. (Kansas City news in New Orleans LumberTrade Journal-, Aug. 1, 1905.) There is a stubborn rumor that the yellow pine manufacturers intend to advance their prices at an early date and many of the yards are hurrying to place the'v orders before this advance shall become effective. [A meet- ing of the price list committee had been called for Aug. 29.] (St. Louis news in American Lumberman, Aug. 26, 1905. p. 67.) A great deal of business has been placed during the last week by the retail dealers and especially by buyers for line yard companies. These latter buyers are generally better posted or, market conditions than any other class of retail buyers and for this reason perhaps they nave seen "the handwriting on the wall" during the last sixty days and have expected the advance in prices which took effect August 29. (St. Louis news in American Lumberman. Sept. 2, 1905. p. 70.) GeorgeT. Mickle, of Chicago,attendedthepricecommittee meeting. Mr. Mickle is conducting a successful business in Chicago and has had the foresight to buy considerable lumber in anticipation of the advance which came to-day. [From account of meeting of committee on values Aug. 29.1 (St. Louis Lumberman in Sept. 2^1905, p. 45.) Inquiry since the first of the month has not been so pronounced as in August. For some time prior to the advance of Aug. 29th it was rumored that this advance would be made and a rush of business came from dealers who were about ready to place orders tor fall stock, and who wished to anticipate the advance, and it is believed that for the next week or ten days the demand from the dealers will hardly be as active as it has been. (Kansas City news in American Lumberman, Sept. 9, 1905.) The brief halt in buying directly after the adoption of the list of August 29 did not last long enough to cause any apprehension, and during the greater part of the month business has been coming in very freely. (Kan- sas City news in New Orleans Lumber Trade Journal, Oct. 1, 1905.) Most of the companies here have out the November 14 list and are holding pretty closely to it. Buying on thenew list has not become active as yet, although orders are being booked on that basis right along. (Kan- sas City news in American Lumberman, Dec. 2, 1905.) 1906. The mills have all they can do to handle the urgent orders now pressing for shipment. Retailers are getting anxious to secure shipments at present prices, now that another advance is anticipated in the associate hsU (St. Louis news in New Orleans Lumber Trade Journal, Jan. 1, 1906, p. 42.) The list prices of December 27 have become better established. Last week few orders had been received by the manufacturers based, on this list, but now orders which are priced on this list are being received. The volume of business is increasing daily and soon this new list should be accepted as a basis of price for all orders. (St. Louis ne-vs in American Lumberman, Jan. 13, 1906, p. 69.) 1 This comment was written prior to the advance which took place Dec. 27, reierred to in the next extract 108 THE LUMBER INDUSTRY. A great many of the buyers are expecting some advances to be made at the New Orleans meeting. Since December er all buyers who could do so have been holding back their orders until they could feel that the list prices had become established. During the past week many of these buyers seem to have concluded that there would be no weakening in the market soon and have begun to place a fair volume of business on the basis of the new list. (St. Louis news in American Lumberman, Jan. 27, 1906, p. 72.) 1907. A list issued recently advanced the entire right-hand side of the list 50 cents and practically all items on the left-hand side SI. The advance on the right-hand side does not seem in any way to check buying which is very active. The advance on the left-hand side had a very stimulating effect on demand and prices wholesalers are able to secure. (St. Louis news in American Lumberman, Apr. 13, 1907, p. 78.) The yellow pine market is strong— stronger, in fact, than for several weeks past. This is reflected in the ad vance in prices on April 3, which amounts to fully 50 cents on most items on the lis t and $1 all around on finishing. Notwithstanding the advance the buying movement continues at a lively rate, and there is no end of inquiries for early deliveries at prices, in some cases, even better than those indicated by the late rise. (St. Louis news in American Lumberman, Apr. 15, 1907.) The demand for yellow pine continues to increase from all quarters and the increase in prices on April Srd seems to have had no effect whatever on the call for all descriptions of it— the demand seems just as far from being appeased as ever. (St. Louis news in American Lumberman, Apr. 15, 1907.) 1909. Inquiries continue to be enormous, but there is some lack of uniformity of prices among the mills, causing some hesitancy among the buyers. A general disposition is noticed to await the result of the annual meeting of the Yellow Pine Manufacturers' Association now in session at New Orleans; in fact, a great many ol the dealers are attending this meeting. (St. Louis news in American Lumberman, Jan. 23, 1909.) 1910. The dealers in many cases are probably waiting to see if the recent advances are going to hold, and figure that they have plenty of time in which to get in their orders for spring stock, as they are not looking for much business for awhile. (Kansas City news in New Orleans Lumber Trade Journal, Jan. 15, 1910, p. 42c.) Some of the yellow pine manufacturers here express the opinion that dealers who would otherwise place liberal orders for spring stock, are holding of for a while to see if the recent advance of from 60 cents to tl per thousand will slick. (Kansas City news in St. Louis Lumberman, Jan. 15, 1910.) Some wholesalers here express the opinion that the advance of a few weeks ago was too sharp on some items, at least, and that the dealers are waiting to see if the recent advance means anything and will be maintained. Thus far the manufacturers are holding their prices well in line, and there are more lists at the new price now than at the beginning of the year. (Kansas City news in St. Louis Lumberman, Feb. 1, 1910.) 2. Comments on the general effect on the market of official price lists : 1900. The whole explanation of the matter goes back to the accumulation of what was considered too heavv a 6tock by certain Arkansas and Missouri mills and the consequence [consequent] suspension of the official price list at their request. 1 This suspension of the list was designed to move the surplus stock referred to but it very natu- rally defeated the end for which it was inaugurated. With no list at all to go by, buyers were naturally afraid to buy at any price. If lumber had advanced too fast and too high, which was probably the case, the wise thing to have done would have been to get together and set the list at the point demanded by the actual conditions. Buyers then would have soon decided that prices and conditions were on a level and therefore rational and stable and would have acted accordingly. As it is, they are unquestionably at sea. The situation is a promising one at the present moment and if manufacturers would recognize the facts in the case there would be very little trouble. In the first place, every other section of the South up to the suspension of the price list was enjoying a fair trade. At the present moment, in fact, the mills of the Gulf states are finding their only trouble in the reflected eflect ol the action here referred to. Secondly, although buyers stopped buying owing to the uncertainty induced by the manufacturers themselves, still users of lumber went right along. * * * Why, in the face of all these well known facts, yellow pine manufacturers should have the least hesitancy about holding their lumber firmly at some recognized official quotation is a mystery. (New Orleans Lum- ber Trade Journal, May 15, 1900, p. 11.) The Journal advises every member to attend the meeting at St. Louis July 2. It is time that some official list be generally adopted. A list based on the actual selling price of lumber would give stability to the market at once. Delay impairs confidence and does harm without any corresponding advantage. (Edi- torial comment, New Orleans Lumber Trade Journal, June 15, 1900, p. 12 ) Your correspondent was talking with a prominent local retailer to-day who said he figures that things are as low now as they will get and that he is going to fix up his stock between now and the 10th of July. Any action at the meeting to be held in this city on July B tending toward the placing of prices on an even basis would materially benefit the situation from the point of view of the retailer. (St. Louis news in New Orleans Lumber Trade Journal, July 1, 1900.) Yellow pine has probably felt the changed conditions to a greater extent than the other woods and it has steadied down to a brisk trade at an even basis of prices. The issuing of a list on July 2 was particularly opportune and was very pleasing to both the sellers and the buyers of yellow pine. People are no longer afraid to buy for the feeling prevails that the upward tendency of values will continue and there is no doubt as to the future. The advance made at the meeting of July IS, while slight, still further convinced those who were still skeptical that the turning point had been passed and that values were undoubtedly on a permanent upward trend. (St. Louis news In New Orleans Lumber Trade Journal, Aug. 1, 1900.) The improvement in the yellow pine situation which was discerned by many immediately after the adoption of the new list at St. Louis has assumed proportions sufficient to justify the statement that this product is now on the up grade. Prices at the list are being more generally observed than some time since, while the cur- rent movement ol stock is steadily increasing. ( E ditorial comment in New Orleans Lumber Traae Journal, Sept. 1, 1900.) • For an account of the suspension of the list, see p. 82. PRODUCTION AND WHOLESALE DISTRIBUTION". 109 Prices have continued to better themselves until all quotations are now strictly on the basis of the list of July 18. At a meeting of the price list committee of the Southern Lumber Manufacturers' Association, held in this city on November 20, it was decided to recommend that all who have not already sent out lists on this basis do so at once. It was also decided not to try and further advance values before the annual meeting of the association in January, as they feel that it would be ill-advised to jump up prices at this time. (St. Louis news in New Orleans Lumber Trade Journal Bee. 1, 1900, p. 23.) 1901. The weakness in the market has been largely on No, 2 for the past few months, and it is expected that this will be remedied by the action of the manufacturers at St. Louis last week in reducing its price. The items advanced, as listed in last week's issue of the Lumberman, are all scarce and yellow pine men here say the advances were all fully warranted. (Kansas City news in American Lumberman, Nov. 9, 1901, p. 45.) 1904. A number of the local wholesalers are preparing to issue the new list and to make it the basis for all quota- tions. A list, it will be remembered, was adopted last October which was not generally observed and all prices have been based on the list of last August. If for no other reason than to get more up to date, the list adopted at New Orleans was a necessity and it is believed that it will have a good influence. (St. Louis news in New Orleans Lumber Trade Journal, Feb. 1, 1904.) During the past 10 days there has been a gradual change for the better and the adoption of the new list has aided things to some extent as it has placed the official prices exactly on the same level as the prevailing prices and practically all of the wholesalers are getting out this list. (St. Louis news in New Orleans Lum- ber Trade Journal, Mar. 15, 1904.) The general outlook has assumed a healthier tone recently, though the belief prevails here that matters would have righted themselves earlier had the committee on values left the list as it was. (Orange, Tex., news in New Orleans Lumber Trade Journal, Mar. 15, 1904.) The reduction in the price list agreed upon recently by the manufacturers of some sections has resulted, it is reported, in an increase in orders. (New Orleans news in American Lumberman, Mar. 19. 1904, p. 57.) The committee on values of the Southern Lumber Manufacturers' Association in January and February sought to arrest the tendency to a decline in prices by fixing new bases for the list, but in this case the all powerful trade law of supply and demand asserted its supremacy over the law of fiat, and prices remained persistently weak. (From article "To curtail the yellow pine output," American Lumberman, Mar. 26, 1904, p. 15.) One Alabama operator thinks that the reason prices on some classes of stock are weak and irregular is because manufacturers have lost their cohesion in the matter of prices. He thinks that the financial con- dition of the country justifies profitable prices for yellow pine, and that a regular basis could be restored and maintained if sufficient cooperation could be induced. He says mat such has been the demoralization within thej>ast three months that the retailers have been thrown into confusion about prices, and consequently hesitate about placing orders for fear that prices willgostilllower. Unity among manufacturers for the pur- pose of adjusting and establishing a basis of prices is what now is wanted. If that object could be secured retail dealers would know what to depend on and would confidently place their orders for the late sum- mer and fall trade. (From article "Peculiar and pronounced conditions in yellow pine," American Lumberman, May 28, 1904, p. 13.) Prices recently made by the committee of values of the Southern Association have put a good deal of buckram in the market and dealers here fully realize the change from the weak conditions of last summer. (Chicago news in American Lumberman, Oct. 22, 1904, p. 58.) The price list which went into effect October 15 is meeting with high favor, although some of the whole- salers report inability to secure some of the figures named. It has had the effect, however, of greatly increasing the actual selling price and the time is approaching when the car shortage will enter more directly into the situation in that the wholesalers will occupy a more independent position and will be able to name their ownprices for the small amount of business which cannot be handled promptly. (St. Louis news in Ameri- can Lumberman, Nov. 5, 1904, p. 61.) 1905. All of the items, are in poor supply at initial points and while, the new list may not be maintained at the start, it will mean anaavance in actual selling prices about egual to the advances ordered. (St. Louis news in American Lumberman, Jan. 14, 1905.) The late advance in prices of good lumber has tended to strengthen the hands of the manufacturers and has induced some friction between sellers and buyers; but in this market the dealers generally manage to dull the edge of a sharp advance so as to prevent much injury to their customers. (Chicago news in American Lumberman, Mar. 18, 1905, p. 70.) Rather a peculiar condition exists in that many of the wholesalers are swamped with business and are quoting such prices as will fail to secure orders, while others are looking for new business. This is the direct result of the adoption of the new list of March Land it is noticed that those dealers who fail to come up reasonably near the new basis immediately are the ones who booked more orders than they really wanted. Quotations are now as near the list basis as they usually get, all of which bespeaks a thoroughly satisfactory condition from a wholesale point of view. (St. Louis news in American Lumberman, Mar. 25, 1905.) Because of this situation, the committee on values of the Southern Lumber Manufacturers' Association, which met in this city on May 16, made various advances in the list, which had the immediate effect of forcing «mnfl prices to a higher basis and even those items which were being sold for less than the list of March 1 were brought up to that basis. (St. Louis news in New Orleans Lumber Trade Journal. June 1, 1905.) The issuing of a new price list meets with general approval if only for the fact that it will have a tendency to stiffen up matters. (Houston news in New Orleans Lumber Trade Journal, Aug. 1, 1905.) Since the last report from Kansas City, yellow pine prices have advanced all along the line in consequence °fiM new list adopted at St. Louis on August 29. A number of the largeconcerns put their prices onthe basis of the new list immediately it was announced. Others are working up to the new list more slowly, standing pat on the new price on some items and making concessions on others. (Kansas City News in New Orleans Lumber Trade Journal, Sept. 15, 1905.) 1906. At the late meeting of the Yellow Pine Manufacturers' Association, at New Orleans, no further advance of prices was recommended, as some have thought probable, though it was the consensus of opinion that the nulls had orders in hand for thirty to forty days' cutting, while weather conditions were unfavorable to rapid cutting of lumber. It was shown that rn\w stocks were less than normal and much HO THE LUMBER INDUSTRY. broken in assortment, and that, manufacturers were often getting more than list prices for lumber of special sorts, on time delivery. * * * For all these reasons it was considered evident that prices needed no more bolstering by associated action. Prices that are held firmly or tend upward through the natural effect of urgent demand are the strongest and most healthy of any and need no fiat from associated operators. (Editorial comment in American Lumberman, Feb. 3, 1906, p. 64.) 1907. Thereductiorts made in the list on September 28 have not stimulated demand to any great extent. (St. Louis news in New Orleans Lumber Trade Journal, Oct. 15, 1907.) 1908. They are hopeful for better things, however, now that the new list with its advance is bringing the retailers to a realization that prices will be higher and not lower from this time on through the season. The changes made in the list of February 25 are slight advances over the list of January 2d. [Changes follow.] (St. Louis news in Mississippi Valley Lumberman, Mar. 6, 1908, p. 43.) The issuance of a new yellow pine price list has created a sensation among yellow pine manufacturers and dealers and the various classes of trade are divided in their opinion as to the advisability of issuing anew list show- ing advanced quotations. Difficulty is found by local dealers and by country yards in securing a number of items in the yellow pine list even at quoted prices, and reports from the South indicate that stocks are unusually badly broken. (Chicago news in American Lumberman, Sept. 5, 1908.) Connection op the association lists with various so-called "individual" lists. — In the Missouri ouster suit it was brought out in the examination of Frank M. Strickland, who was connected with the printing of the official lists by various printing companies, that it was customary for lumber companies to have copies of the official lists bound up for them in special covers, and to send these lists out as their individual fists. At the time the E. J. Schuster Printing Co. did the printing for the association, the association only sent out a "flat list," which was the delivered prices based on a 22-cent freight rate, and the printing company got out a booklet showing these prices for deliveries based on a large number of different freight rates. About 1900 the L. S. Taylor Printing Co. printed the official list, under the name of "price current," showing freight rates from 10 to 45 cents, and afterwards it was printed by the S. T. Burnham Printing & Stationery Co. The Lumbermen's Printing Co. succeeded the latter firm in printing the "price current," in February, 1902. Mr. Strickland testified that under the arrangement between the Lumberman's Printing Co. and the Southern Lumber Manufacturers' Association, from 1902 down to the first of 1906, the printing com- pany, on orders from the members of the association who wanted yellow-pine price currents put under specified covers, paid the asso- ciation 1 cent or 2 cents over and above the price of the book, and put it under special cover and sold it to the member ordering it. He also stated that with one exception there never was any difference between the prices of the official "yellow-pine price current" and those of the issue under the special cover. Beginning with November 10, 1906, a series of "market reports" was issued by the association. These were printed from the same forms from which the yellow- pine price currents had been issued under its own name, and the three yellow-pine price currents had been issued by the Lumbermen's Printing Co., the only changes made being those in the price figures. They were the property of the association all the while. The ' ' market PRODUCTION AND WHOLESALE DISTRIBUTION. Ill reports" issued by the association were based on a flat-rate list fur- nished by the secretary to the printing company, showing changes to be made in the prices. The custom of selling to individual members lists of the official prices, bound in special covers, was continued. The orders for these came to the printing company from the office of the secretary of the association. Exhibit No. 102 in the Missouri ouster suit is a letter of February 26, 1907, from George K. Smith, secretary, giving such orders for March 4 market reports with special covers for 11 firms, stating the number of copies for each. The orders ran from 25 to 250 copies each. That copies of official prices bound in special covers were also occa- sionally printed for firms not members of the association is shown by a letter of July 27, 1908 (Exhibit No. 104), to the Lumbermen's Printing Co. from I. H. Fetty, manager of the lumber department of the Central Coal & Coke Co., which, at that time, appears not to have been an association member. We have decided to issue a new list and mail out to the trade in general, and enclose you herewith form showing how we desire same gotten out, in particularly the back. We will issue this list based on the prices which will be fur- nished you by Mr. Geo. K. Smith, as I understand he contem- plates getting out a new market report in the next few days. 1 I desire this list to bear the same date as his market report and wish same to be mailed to the trade in the following territories : [Here follows a list of 13 States.] In addition to the lists required for the above mailing, which will probably aggregate close to 8,000 fists, you will please print extra copies and send to this office as follows: 100 lists each of the following rates: 16, 17, 18, 19. 200 lists each of the following rates: 20. 50 lists each of the following rates: 21, 22. 250 lists each of the following rates: 23. 100 lists each 24 to 45 cent rates inclusive. You understand that I shall expect you to furnish the enve- lopes and deliver them to Mr. Smith for addressing, so as to enable you to mail out direct to the trade without sending them here for mailing. The extra lists, which I have requested as above, you will please express to me. According to the testimony of Charles S. Keith, its president, the Central Coal & Coke Co. became a member of the association, either in 1899 or 1900, and withdrew from it between July 15 and August 1, 1907, 2 just before the preliminary hearing in the Missouri ouster suit which was instituted by the Attorney General. An official "market report" was issued Aug. 3, 1908. •Although the Central Coal & Coke Co. does not appear in the seven official lists of members issued during 1908, both Mr. Keith and Mr. Fetty seem to have taken an active part at the association meeting of July -1, 1908 (cf. "official proceedings," p. 4). 112 THE LUMBER INDUSTRY. Attention has already been called to the fact that the Lumbermen's Printing Co. issued a "price current" under date of July 18, 1906. This was compiled from an association official flat list dated July 18, 1906, which showed prices based on a 23-cent freight rate. The following extract is taken from the official report of the pro- ceedings of the semiannual meeting held on July 17 and 18, 1906: 1 Secretary Smith — The statistical information referred to yes- terday was gone over by the committee and the various items were averaged with the following results : The committee believes that the items upon the left hand side of the list should be re- duced SI a thousand feet, except finishing lumber, and that this should be reduced $2 a thousand feet, pickets being unchanged. In the right hand side of the list all items should remain as indicated with the exception of all sizes, lengths and grades of diameter, which should be advanced 50 cents a thousand feet. These changes are referred to in connection with the market re- port of March 27. The President — What shall we do with the report of the committee ? Mr. Gardiner — Is it necessary to do anything ? The President — I don't know that it is. Mr. Gardiner — I would recommend that nothing be done with that report. The President — You recommend to just pass it as read ? Mr. Freeman — I would like to hear from the chairman of the committee on that question. The President — Mr. Johnson, do you care to reply to that ? Mr. Johnson — We thought it advisable to issue a price list, as a great many manufacturers issue a price list at this time. We went into the figures as gathered up by our secretary at the prices being paid, and these are the figures we made, based on the market as near as we could arrive at them. I think there should be a new list issued at this time and season of the year. These figures are the nearest we could arrive at what the market ought to be. Mr. Freeman — Mr. Chairman, I believe that a motion can be properly introduced here that will cover the case, and I therefore move that it be the sense of this meeting that, owing to the present condition of the market, it is an opportune time for the issuance of a new price list, and stop right there. The President — Is the motion seconded?, Mr. Gardiner — Would it not be well enough for the association to print this list as being the best judgment of this committee and leave it to every member of this association to get out a list like that or not, as he sees fit, or put his price either above or below it, but publish this as the sense of this committee and let it be issued and followed by those who wish to follow it; and i Tho accounts of this meeting in the Mississippi Valley Lumberman, of July 20, 1906, p. 30, and in the American Lumberman, of July 21, 1906, p. 42, describe Mr. Freeman's action. In its issue of July 28, 1006, p. 25, the latter paper had an article on "The latest price list on yellow-pine products" commenting upon the action and reproducing "a yellow-pino price list issued by the Yellow Pine Manufacturers' Association as of July 18." PRODUCTION AND WHOLESALE DISTRIBUTION. 113 those who wish to make a little higher price or lower price do as they choose about it ? The President — I think that is really the object of the motion. Would you incorporate that in the motion ? Mr. Freeman — That was the purpose of it. The President — Does the motion have a second ? The motion was seconded. The President — Do you wish to discuss the report of the com- mittee further ? A member — I understand Mr. Gardiner made an amendment ? The President — Not exactly an amendment. Mr. Freeman — That covers the same thoughts; it is simply an expression of opinion of its being an opportune time to issue the list. The President — Are you ready for the question? A voice — Question. The President — All those that are in favor of the motion made by Mr. Freeman will please signify it by saying aye; contrary, no. The motion was carried. In thisconnection reference may be made to the St. Louis comment in the Mississippi Valley Lumberman of August 10, 1906, page 35: "The prices are firm at the new list, and the trade generally seems to be well pleased with the outlook." The St. Louis news in the American Lumberman of September 29, page 77: "All No. 1 dimen- sion stock continues at about July 18 list. No. 1 and No. 2 boards and fencing are being offered at concessions from the July 18 list of rom 75 cents to $1.25." The following correspondence refers to a projected attempt early in 1910 to have three manufacturers prepare and circulate a con- cession sheet. Under date of March 24 Mr. Smith wrote M. B. Nelson of the Long-Bell Lumber Co., as follows: While I did not go into the meeting which was held at Mem- phis, Tenn., on Tuesday, I learned that you and Mr. C. D. Johnson were appointed a committee to prepare and circulate a concession sheet once a month or oftener, if conditions require, and that you were to choose a third man on the committee to serve with you. I imagine that Mr. Fetty has spoken to you on the matter as I understand he made the motion m the meeting to have this committee appointed. I spoke to Mr. Johnson this morning, but have not yet secured a definite answer from him as to whether he will serve on such a committee or not, but will send a copy of this letter to him and ask him to advise me and you also, whether he will accept the appointment, so that you may get in touch with each other and begin the work on any plan which may be decided on between you. I shall be glad to receive copy of any concession sheet you may promulgate and give them due consideration along with other information received from my special correspondents. Hoping you will hear favorably from Mr. Johnson within the next clay or two, I remain 25030°— 14 8 114 THE LTJMBEK INDUSTRY. To which Mr. Nelson replied as follows, under date of March 25: Answering yours of the 24th. Mr. Long has advised me of the result of the meeting at Memphis. I don't know just what good a committee would do, hut inasmuch as some of the members want information regarding market conditions, it might be Mr. Johnson can arrange for a meeting of the lumbermen in St. Louis about once a week, and we could do the same here, and place before you our ideas of the market and general conditions. You could then issue a bulletin, accompanying the same with the concession sheet, for the information of the manufacturers. I am sending a copy of this letter to Mr. Johnson. Perhaps he can think of some better plan of handling the matter. If we attempt to distribute information of this kind, we should have a correspondent in Houston to furnish us information in regard to the Texas market. There are a sufficient number of sales offices in Kansas City and St. Louis to enable us to get the proper information as to the prevailing prices in the North. I am afraid if we attempt to convey the actual selling price of lumber, some people will claim the information we are Furnishing is detrimental to their interest, because they can sell lumber in some cases for more than we claim to be the market price. On the other hand if we report the highest price obtainable for lum- ber, some of the sellers may conclude that our recommendations are for the purpose of deceiving them. We might try the plan for a while, and find out from those interested what objections they have to it. I appreciate the necessity of having some means of conveying to the seller a medium of exchange in regard to the market. If we depend upon our customers and our salesmen for the informa- tion, it will be too much of a bearish nature, and the natural trend of the market under such conditions would be downward, unless the demand was exceedingly strong. If you can offer any suggestions, would be pleased to have you do so. C. D. Johnson wrote Mr. Smith as follows under date of March 25: I beg to acknowledge carbon copy of your letter of the 24th inst. to Mr. M. B. Nelson of Kansas City, and I note the propo- sition made at Memphis to appoint Mr. Nelson and myself a committee with authority to choose a third man for the purpose of promulgating and circulating a concession sheet once a month or oftener, if, in the opinion of the committee, conditions require it. Will say that my personal opinion is that at the present time there is very little inclination on the part of the manufacturers to co-operate with the view to regulating their business in any substantial way. The concerns that Mr. Nelson and I are con- nected with have conscientiously curtailed production for nearly a year. They have also worked on a scale of prices from which there has been no great amount of deviation. A large number of other manufacturers have done likewise. On the other PEODUCTION AND WHOLESALE DISTRIBUTION. 115 hand, there have not been enough manufacturers who have thought that the policy pursued by the two companies referred to was needful or necessary, or, if they have thought so, have taken the position that they could manufacture all the lumber they were capable of manufacturing and sell it at whatever price they were of a mind to ask for it — thereby precipitating somewhat of a demoralized condition. Taking all these things into consideration, I can not conceive of any particular good that the writer can do in the matter. There has not been a sufficient number in the past who have deemed it necessary to regulate the production or make any decided attempt to secure remunerative prices. My opinion at the present time is that things will have to take their course. I am of the opinion that there is less lumber in the hands of manu- factuiers and dealers than there has been for a good many years. Nearly every stock of lumber on hand in the South is badly broken, and as far as I can learn there are no tremendously excessive stocks in the hands of the retailers. The demand for lumber is good and I am inclined to think that nearly every manufacturer in the South has about all the business he can take care of. Now, under the above conditions, if the manufacturers cannot ask a reasonable price for their lumber, I hardly think that a concession sheet promulgated by any three men will have any decided effect. If the country will take the lumber that the mills are going to make, they will sell it at a satisfactory price; on the other hand, if the country will not take it all, a committee of three or more will not be able to accomplish anything. I. H. Fetty, of the Central Coal & Coke Co., in reply to a letter sent him by Mr. Smith March 26, on the subject, wrote, under date of March 28: Your letter of the 26th at hand. My train was late in getting into St. Louis Friday and I went immediately to Mr. Johnson's office, also to see Mr. Barnes, every one seemed to be out. I talked to Mr. Nelson to-day and he is willing to do everything he can and to give all the time necessary to carrying out the ideas of this committee work. We will probably hold a little meeting here to-morrow and talk the business over, Mr. Nelson will then go over to St. Louis and go over the matter with Mr. Johnson. It was my idea that it was a general feeling among the manufac- turers who met in Memphis that these concession sheets should be kept up a good deal along the same line we had been carrying out, and I believe that it will be a great factor in holding the prices. When Mi. Nelson goes over to St. Louis he will confer with you. The Bureau has no further information in regard to this attempt. The "basis-list" system of issuing price quotations by the asso- ciation was established in August, 1909. The concession sheets issued by the association were officially labeled "compilation." Compilation No. 14 was issued under date of January 11, 1911, and received by the Bureau of Corporations January 14. Compilation 116 THE LUMBER INDUSTRY. No. 15 was issued under date of January 26 and received on January 28. Each is printed on a sheet of white paper. On January 18 the Bureau received in an envelope of the Yellow Pine Manufacturers' Association a list similar in form, printed on yellow paper, bearing only the following title: "Yellow Pine Concessions. Jan. 20, 1911. From Basis List No. 1, August 4, 1909." There was no statement to show who issued the list, and it will be noted that it was sent out before January 20. A comparison of this list with the official "compilation No. 15," dated January 26, shows that the official list was printed from the same "form," and contains the identical prices shown on the yellow- paper list dated January 20, with the exception that the prices of 20 4 50 foot No. 3 common boards appears thus in the January 20 list 4 50 4 50 4 and thus in the January 26 (official) list 4 0. All the other prices 4 (307 in number) are identical on the two lists. Furthermore, an examination of the typographical characteristics of the two lists shows that they were printed from the same "form" and with the same type. The difference of the three prices above noted appears to have been due to the accidental dropping of three types out of the "form," before the January 26 (official) list was printed. In the light of the previous practice of issuing the "official" price lists, bound in the covers of individual firms, and the claims of such firms that they issued their own price lists and did not use the association list prices (see p. 99), the connection between the anony- mous list of January 20 and the official "compilation No. 15" of January 26 can probably be explained. The following circular letter of February 4, 1910, may have some bearing on this subject. The use to which a firm ordering a large number of copies of one issue would put them is obviously that of quoting prices. Your attention is called to enclosed compilation of concessions No. 7. F We have had numerous calls for extra copies of these concession sheets and with this issue will begin to supply extra copies to members only at a charge of ten cents for one to five copies, and two cents each for any amount above five up to fifty copies. Special price will be made for more than fifty copies. This for your information. The statement of Mr. C. Or. Severson, whose firm in 1912 did the printing of basis list and concession sheets for the association, also bears on this practice. (See p. 95.) production and wholesale distribution. 117 Association price information not issued in the form of price lists.— In addition to the promulgation of the foregoing lists information in regard to prices was issued from time to time by George K. Smith, secretary, in other forms. Under date of March 29, 1909, Mr. Smith sent out a circular letter with the following statement: Information as to quotations being made, as compared with January 5th Market Report, was asked for from special corre- spondents, and the replies received are reproduced herewith in detailed form for your study and comment. No Market Report will be issued based on this information. The tabulation accompanying the letter purported to show "de- tailed statements of quotations being made on March 25th, as com- pared with January 5th Market Report, 1909." A similar tabulation was sent out giving the comparison of April 26 prices with the January 5 report. 1 These two tabulations are similar in form to those on which "com- pilations" Nos. 2, 3, 4, 5, 8, 9, and 10 were said to be based. The last tabulation (with compilation No. 10) was for June 1, 1910, prices. On June 7, 1910, Mr. Smith began the issue of a "weekly market report." The following circular letter of June 7, 1910, shows the policy adopted: Your attention is directed to enclosed report of concessions on twenty-two items, obtained from copies of orders filed by members in St. Louis and Kansas City for week ending June 4th. This plan of ascertaining the largest, smallest, and average con- cessions will be substituted for the reports from correspondents and a weekly summary will be issued regularly from now on. It is quite likely that arrangements will be made to get infor- mation from Houston, Texas, similar to the St. Louis and Kansas City reports and on the same items. It is hoped this market report, which reflects actual transac- tions and is up-to-date, will prove of great value to all our members. It will be issued on Tuesday of each week covering the business of the previous week. After looking over the enclosed report, will be glad to have your opinion of its practical value. In his official report at the semiannual meeting of the association, June 19, 1910, Mr. Smith says, under the heading of "weekly market report": _ June 1st, a system of weekly market reports was inaugurated, giving the concessions being made on actual business booked in 1 Extract from memorandum of minutes of meeting of board of directors held in Hot Springs, Ark., Apr. 28,1909: A report was made as to market conditions and the concessions which were being made from the January 5th Market Report, and it was announced that these concessions would go out in the same form as they had on March 29th, and that later on another inquiry would be made, with the idea of getting out new market report. 118 THE LUMBEE INDTJSTEY. the cities of St. Louis, Kansas City and Houston. This report has been favorably received by all our members as reflecting the actual market prices, and with the smallest, largest and average concessions before them they are able to determine the present value of each item. The question of enlarging the scope of this weekly report by securing copies of orders from Arkansas, Louisiana, Mississippi and Alabama will be discussed at this meeting, and some definite conclusion reached. And in a similar report, at the annual meeting held January 17, 1911, under the heading "market information": Early in June there was inaugurated a new plan for securing the market prices of yellow pine lumber. Copies of orders entered, showing delivered prices and freight rate, are sent in, and the concessions from August 4, 1909, Basis List, figured on 22 representative items. This report has been issued on Tuesday of each week, covering the business of the previous week. This method is considered the best of any yet tried for showing the actual selling prices. Only a small percentage of our mem- bers are furnishing copies of orders entered, but sufficient reports are received from various localities to reflect a fair average. It is hoped more will report, so as to insure a correct exhibit of market values. Compilations of concessions, in printed form, are issued at intervals, when there is any perceptible change in values. The "weekly market report" was issued until October, 1911. The following circular letter of October 24, 1911, gives the reasons for its discontinuance: At a Meeting of the Board of Directors held in St. Louis on October 20th, the Weekly Market Report was discussed. It was found that only eight members were reporting and as re- peated efforts had been made to get reports from members gen- erally without success, it was decided that the small number reporting did not furnish information sufficient to reflect average conditions and hence the Weekly Market Report will be discon- tinued. If a large number of members should desire its revival and will send in the required copies of orders, I shall be glad to present the matter to the Board for further action. In connection with the obtaining of this weekly information offices were opened during 1910 in Kansas City and Houston, Tex., in addi- tion to the St. Louis office. These offices were both discontinued in 1911 previous to the discontinuance of the work in St. Louis. When asked by an agent of the Bureau his reason for discontinuing this part of the work Mr. Smith said: "We closed these offices on the advice of counsel; not that there was anything wrong about it, but it looked bad." In December, 1911, and the first part of January, 1912, Secretary Smith sent out copies of various concession sheets received from different members whose names were not stated. PRODUCTION AND WHOLESALE DISTRIBUTION. 119 At the meeting of the association, February 6, 1912, Secretary- Smith's report contained the following statement bearing on this work: During the first half of 1911 a weekly Market Report was issued showing concessions being made on twenty-two principal items, this information being compiled from copies of orders. Since then a call has been made at frequent intervals for average concessions over a period of ten days and a summary compiled from the replies received. Under date of February 3, 1912, he began the issuing of a new form of price information. The information is in the form of tabulations showing for certain items, in detail the concessions reported by a number of correspondents, each of whom is identified by name. The tabulation bears this statement: Typical Items selected for reporting average concessions from Basis List. Concessions compiled from orders entered between Jan. 10 and 20th, 1912. Of such tabulations approximately 26 had been issued down to Feb- ruary 4, 1913. On February 26 a slightly different form of tabula- tions was issued with the heading: "Summary of Concessions from September 10th Basis List. St. Louis, Mo., Feb. 26th, 1913." This form of concession sheet was still being used during the early part of 1914. Reliability of the prices shown in the tabulations. — Correspondence found in the association files indicates that a bona fide attempt was made on the part of Mr. Smith to give out correct information on actual market prices. In a letter dated June 16, 1910, an association member attacked his policy in the following language: We are just in receipt of your weekly market report of June 14th, reporting to have been made up from the reports of nineteen mills. Now Mr. Smith I do not understand why it is that you and I are always at a variance when it comes to prices on yellow pine lumber and the mode of arriving at prices. Of course I understand that there is no way for lumbermen to establish uniform prices under the law, but you must certainly agree with me that it is business suicide to sell lumber at the concessions named in this report. You will also agree with me that in sending this out to the manufacturers of yellow pine lumber, that they will catch at it like a drowning man to a straw, the same as the old song, "Misery loves company", they will excuse themselves by saying their neighbors are selling their lumber at the same or less prices. It would seem to me that there are heads big enough at the heads of some of our lumber corpo- rations to establish some way whereby we could secure higher prices than to always be flooding the poor manufacturer with these low price circulars which certainly can do no good, and I am of the opinion that they do a great deal of harm in the way of making lower prices. 120 THE LUMBER INDUSTRY. I presume this circular is gotten up with a great deal of accu- racy and painstaking on the part of your office force and no doubt shows the weakness of the market in general at the present time, but I beg to advise that in no instance have we been com- pelled to accept these suicidal prices, and for your information would say that we are securing full May 25th, 1909 list and in no case during the last six months have we cut over 500 off of May list which is just about your August list with the first con- cession sheet sent out. For Heaven's sake let us begin to paddle up stream and not be continually floating down stream with the tide, and if we will all individually go to work and look after our sales managers closer, giving them to understand that prices should be based on the cost of our production instead of selling at any old price to get a few dollars to meet our pay roll, and trusting to luck for the next pay day, I believe now is the opportune time for changing for the better. Trusting you will take these few remarks in the spirit which they are written, I am, Mr. Smith replied, under date of June 18: Yours of the 16 th received and contents carefully noted. There has been a very urgent demand made that information which is up to date relative to prices be compiled and furnished, and the report of actual transactions seems to come nearer filling this requirement than the plan we have been operating under of showing what the different manufacturers claim to be asking for their stock. It is further claimed that we cannot improve our condition by evading or trying to' forget what is actually going on. We shall try this plan for a while and shall include the Houston market very soon and we may arrange to get reports from some Mississippi and Alabama manufacturers, so that the scope of territory covered can be somewhat widened. I fully realize that you believe thoroughly in the plan you are pursuing but it does not seem to fit the case for the large number of manufacturers engaged in selling Yellow Pine. Thanking you for your letter and assuring you it is received in the spirit in which it was written, I am, Other correspondence was found which bears out the statements made by Mr. Smith in the foregoing letter. Attitude or the association toward yellow-pine lists ISSUED BY PRINTING FIRMS WITHOUT ITS AUTHORIZATION. — In the efforts to promulgate and make effective an official list of prices the association officers have met with some difficulty because of "unau- thorized" lists, issued by printing firms in competition with the association official lists. The essence of the objection to these private lists seems to have been that they promulgated prices that were too low. Price lists of the E. J. Schuster Printing Co. — For some years before 1906 E. J. Schuster issued a pamphlet showing delivered prices figured on different freight rates, and in compiling it he used as a basis the official prices promulgated by the association. Under date of PKODTJCTION AND WHOLESALE DISTEIBUTION. 121 October 10, 1906, he published a "price current," which was attacked in the lumber press and by various prominent association members. One of these attacks, an editorial in the St. Louis Lumberman of October 15, 1906, under the heading of "Unwarranted and mislead- ing," was sent out October 16, by Secretary George K. Smith to all the association members: A considerable number of manufacturers and wholesalers of yellow pine lumber have been somewhat annoyed of late by the sending out, broadcast, of what purports to be a yellow pine price Est, or price current by a printing concern located in St. Louis. It is needless to say that this printing concern does not own a single yellow pine tree, nor carload of lumber. Just why it should undertake the issuance of what purports to be a yellow pine price list is an open question. Its issuance at this, or any other time, can only prove harmful and a detriment to the yellow pine people. It is issued as a weekly without the authority of anyone except its publishers. No manufacturer, or wholesaler, is under the slightest obligation to pay any attention whatever to the list issued or to the prices quoted. In a con- siderable number of items the prices named are not such as can, or will, be recognized by responsible manufacturers, or whole- salers. The attempt, therefore, of an outside party, one who has no interests at stake, to issue a price list on a staple com- modity like yellow pine should be treated by manufacturers, wholesalers and retailers alike, with contempt, as it does not represent the views of the lumbermen or the actual condition prevailing. Our Kansas City correspondent wires us, under date of Oct. 15, as follows: "The sending out of a price list by the Schuster Printing Company, Oct. 10, purporting to be an authoritative basis for yellow pine values, came as a surprise to Kansas City manufacturers, all of whom are very indignant. No one here was consulted by Schuster, and letters received from outside manufacturers indicate that none of the yellow pine manu- facturers were consulted. The Central Coal and Coke Com- pany is issuing a circular to the trade, which, in part, says: 'This (Schuster) list is being sold and buyers are purchasing it with the idea that it represents the prices of yellow pine lumber companies; and this list is to advise you that so far as this com- pany is concerned, we do not so regard it, and will sell only on our own quotations and on such lists as we may issue ourselves from time to time.' Other manufacturers are issuing similar letters, and all are instructing their salesmen to pay no attention to the Schuster list. R. A. Long characterizes the issuance of this list as an outrageous piece of presumption, and done for the purpose of selling these lists to the dealers, and this seems to be thegeneral sentiment of the yellow pine people here." This for your information, In the Kansas City news of the Mississippi Valley Lumberman of October 19, 1906, page 35, occurs the following statement: A new list issued by the Schuster Printing Company, of St. Louis, dated October 10th, is repudiated by the yellow pine 122 THE LUMBEB INDUSTRY. people, who say that it does not represent the market, and was not authorized by the yellow pine manufacturers. They are notifying their customers to this effect. Mr. Schuster continued to publish his lists, and a comparison of his prices on a Kansas City delivery basis with corresponding asso- ciation ' ' official ' ' figures is shown elsewhere, on Diagram 5. This com- parison shows that during this period the Schuster lists were generally below the association lists. That he continued to meet with some opposition from the association sources is indicated by the corre- spondence in the files of this Bureau. On January 3, 1910, C. D. Benedict wrote to Secretary George K. Smith the following letter marked "personal": Notwithstanding the fact that we are not subscribers to Schuster's Market Keports they have continued sending us their issues and I enclose herewith copy of letter I have written to them. It is simply a damnable outrage that such a concern as this should have any patronage at all. I presume you have read their letter to the trade on the green sheet in their report and while I am not inclined to exaggerate the actual trade condition, I feel with most everyone in the business that prices, for the last few weeks, have been better and conditions more favorable towards maintaining an even and more profitable market. I do not know if it is good policy to write such a letter as I have written to them but I cannot help to give vent to my feelings. The following is a copy of the letter referred to by Mr. Benedict: Jan. 1, 1910. E. J. Schuster Pub. Co., St. Louis, Mo. Gentlemen: We ask you to kindly discontinue sending us your market reports. Your letter in your issue of Dec. 21st, trying to portray the true market conditions, is not only foolish but absolutely untrue. We consider you an absolute menace to the interests who have their money in the Yellow Pine business and we do not want anything more to do with you. You have placed yourselves in a position where no responsible wholesale concern or manufacturer can afford to give you any support and no matter what your motives are for misrepresent- ing the actual conditions the results will not be what you antici- pated. To which Mr. Smith replied on January 4, 1910: Yours of the 3d instant received and contents carefully noted. I imagine that you have expressed the feelings of quite a number of lumbermen, but I think the general policy has been to ignore rather than to argue and it is only occasionally that we ever hear of the publication you refer to. I thank you for sending me carbon copy of your letter and trust the writing of same will relieve you of the annoyance of looking over literature which you feel is absolutely worthless. PRODUCTION AND WHOLESALE DISTRIBUTION. 123 Price lists of lumbermen's bureau — When J. R. Walker, for many years secretary of the North Carolina Pine Association, re- signed and began the publication of yellow-pine price lists by his Lumbermen's Bureau (Inc.) (see page 299), he came into conflict with the Yellow Pine Manufacturers' Association official price lists as well as with those of the North Carolina Pine Association. The following correspondence illustrates this. On May 21, 1909, the Kaul Lumber Co. wrote to George K. Smith, secretary, as follows: We hand you herewith file of correspondence, which explains itself. We desire to ask if you do not think that the work which this Bureau proposes to do is very apt to interfere with the work of our organization, and also if it is not calculated to depress values rather than to help them. We should be glad to have you treat this matter confidentially, and would say that we do not believe the work should be en- couraged; the experience we had, which is set forth in one of these letters, will show you just exactly how that is likely to work out. Will you please return the file at your early convenience, and greatly oblige, Mr. Smith wrote in answer the following letters of May 24 and 27 : Letter of May 24 : Yours of the 21st instant, enclosing correspondence relative to Lumbermen's Bureau, incorporated in Norfolk, Va., received. I am going to Kansas City tonight and will take this corre- spondence with me and discuss it with Mr. Long, Mr. White and others. No doubt the Alabama manufacturers, who market their product largely in the East, would be much more affected by this Bureau than parties farther West. As soon as I am through with the file will return it to you. Thanking you for submitting it to me, I remain Letter of May 27 : Again referring to yours of the 21st instant, subject "Lumber- men's Bureau," will say that I have had copies made of the entire correspondence and return the originals to you herewith. It occurs to me that Mr. Walker is attempting to do in the Eastern territory very much what E. J. Schuster is doing in this territory, that is — publish a rate book and price list. The question of any one other than the authorized representa- tive of a lumber association endeavoring to publish a price list is one which should have careful consideration, and we thank you for sending us the correspondence in question. I did not have an opportunity of discussing this matter with Mr. Long and Mr. White, as I had hoped to do, but as they are very little interested in the Eastern territory, do not suppose they would take more than a passing interest in the conditions set forth by the correspondence, which we are returning herewith. Hoping you will keep me advised of any further developments, I remain 124 THE LUMBER INDUSTRY. The following letter of December 14, 1911, from B. A. Johnson, President and General Manager of the Lumber World Review, to Mr. Smith bears also on the work of the Lumbermen's Bureau: The Lumber World Review, a consolidation of the Lumber Review of Kansas City and the Lumber World of Chicago, will have its first Chicago issue about January 5, 1912. It is not taking itself with desperate seriousness, but only speaking frankly, when it states to you, that it fully expects to TELL THE TRUTH ABOUT THE LUMBER MARKET, whenever it refers to the Market. This writer has been connected with the Lumber Press in this country for twenty- three years, and in that time has seen the lumber markets of the country exploited all the way down from vigorous truthfulness, to a condition most inane and purposeless. There was a time, fifteen years ago, when market quotations on lumber were as correctly placed between the column rules, and as carefully changed each time the paper went to press, as at the present time the stock market quotations are changed and corrected. This condition of constitutional prevarication which has per- vaded the lumber Press of the country for ten years, received, about two years ago, a most desperate jolt by the assumption of two or three young men that they might open a Bureau in an eastern city, and from that place prepare each month, and send to the trade, a market report about lumber conditions, which would be the absolute, unadulterated, brutal facts. The Lumber Press cried it down; many lumbermen talked against it. But the work of the Bureau went on, and the purpose of this letter to you, besides making an announcement as to what the LUMBER WORLD REVIEW expects to do in con- nection with the markets, is to call your attention to the fact that the "Lumbermens' Bureau, Ltd." of Washington, D. C. has actually succeeded beyond a doubt, and that it is today serving with a monthly report, no less than 7,000 subscribers in these United States in all branches of the lumber business, builders, retailers, wholesalers and manufacturers. It is doing to-day what, insofar as I know, the Lumber Press of the country believes is unethical, and considers it really not countenanced by the lumber trade. Before I ask you a pointed question, I want to quote from a letter, which I recently received from one of the lest known general sales agent of lumber in the United States, who wrote me frankly and personally on this subject, day before yesterday, as to the ethics of telling the truth about the lumber market, as follows : "It seems to me that your idea that a true letter from the various producing sections twice a month free from any extrava- gant expression as to the bull side of the market, would be very fine news for the lumbermen as a whole. The average lumber paper of today, and of the past several years, has never con- veyed the true condition, even when the average price was $10.00 per M. Feet f. o. b. mill. You have doubtless learned that in reading our lumber journals, when the conditions were as bad as they could possibly be, you could get an idea that lumber PKODUCTION AND WHOLESALE DISTRIBUTION. 125 was selling for extremely goodprices. What the people in this country today are demanding is the absolute truth, and, in my opinion, the sooner the newspapers and journals get down to point of telling the truth, without any exaggeration, just that much earlier we will have good times and more confidence in our fellowmen and competitors. I hope the time is not far distant when the newspapers and journals of our country will give less space to murder, scandal and muck-raking, and give more prominence to items that go to make men and women better, happier and promote more confidence in their neighbors." While I have fully made up my mind to "tell the truth and shame the devil," as the countryman might say, I have just got a great big notion that I would like to hear from you, as to what you personally think of the policy. This lumber newspaper is going to weigh all facts, and do what it believes to be right in the end, and we want to know from such men as yourself, wherein is the consistency of lumber people in all lines, demanding the truth privately, — as by the deserved patronage they have accorded the Washington institution — and refusing to have it dealt out to them publicly, through the columns of their lumber papers ? Under date of December 16, 1911, Mr. Smith replied to the fore- going letter as follows : Yours of the 14th instant received and contents carefully noted. I have never attempted to determine the market on anything but Yellow Pine, and from my experience in that I know how difficult it is to write anything or publish any figures which will definitely describe the Yellow Pine market in its entirety. Just at the present time there is a very wide dif- ference in conditions existing West of the River and in the Southeastern portion of the Yellow Pine Territory. The market is very active in Georgia and Florida and prices are firm and advancing, while the direct opposite is true in the territory West of the Mississippi River. I am unable to give you any advice as to how the market should be handled in your paper. Thanking you for your letter, I remain Comparison of association and private list prices and prices of actual sales. — The Bureau presents in Diagram 5 (opposite p. 126) a comparison, made on the freight basis of Kansas City, of the list prices issued by the Yellow Pine Manufacturers' Association and its predecessor, the Southern Lumber Manufacturers' Association ; by the E. J. Schuster Printing Co.; by three prominent manufacturers who sell most of their product in Missouri, Iowa, Nebraska, Kansas, and Oklahoma; with prices of actual sales of lumber shipped into Kansas City and vicinity, taken from the records of some of the mills whose i. o. b. mill prices appear in Diagrams 8 and 9. The items for which prices are shown are in flooring, B rift, B and No. 1 common flat; in No. 1 and No. 2 common boards, 1 by 12 inches; and in Nos, 1 and 2 dimension, 2 by 4 inches. 126 THE LUMBER INDUSTRY. In the examination of this diagram it should be borne in mind that with the exception of the prices shown by the yellow-pine triangle symbol, all the prices are list prices ; that is, asking prices, not neces- sarily those of actual sales. Except in the case of the Schuster prices, each series of list prices is believed to be complete. The Bureau was not able to obtain a complete file of the Schuster lists for the years 1909-10. Attention should be given to the relation of the prices of the official lists of the Yellow Pine Manufacturers' Association to those of the Schuster lists, for the period from 1906 on. The discus- sion on pages 120-122 bears on this point. It will be noted that a large part of this time the Schuster list prices were materially below those of the association lists. The prices presented on Diagram 5 will be found in Table 1 on pages 182-211. Section 8. Concerted attempts to restrict output. Curtailment in 1904. — The first organized attempt on a large scale to curtail output seems to have taken place in 1904. The market for yellow pine was weak, with falling prices and not much demand in prospect, so, under the auspices of the association, a concerted attempt was made to strengthen prices by curtailing production. The St. Louis Lumberman of May 1, 1904, refers to a movemen in the Southern Lumber Manufacturers' Association looking to ai agreed reduction of output. The first official action in this directio] s,eems to have been taken at the semiannual meeting of the associa tion at St. Louis June 14 and 15. The official action was taken-i executive session, and the account in the official proceedings states The- meeting then went into executive session, to deal with tl question of curtailment of output as referred to in the pres dent's address, and secretary's report. The matter receivi very careful consideration, and from the figures submitted it wi thought advisable to recommend to all manufacturers a red$ tion of 33$ per cent of all the output of all sawmills until sue time as the demand would more clearly absorb the supply. J Circular No. 589, issued by the Mississippi Valley Lumbermen Association, June 18, 1904, begins as follows: 1 At the semi-annual meeting of the Southern Lumber Mam facturers' Association held in St. Louis June 14 and 15, the qirf tion of the curtailment of output was the principal topic of dii cussion. The following resolution was adopted: I "WHEREAS, The secretary's report shows a surplus of pre uct which, with the stock being manufactured in excess of.ci mand, is the direct cause of sale values being at or below cost ' production, be it RESOLVED, Effective upon notice from the secretary th manufacturers producing 70% of the product, on the basis of 19' Diagram 5. — Comparison of the Movement of Association, Schuster, and Individual Company List Prices and of Actual Prices of Yellow Pine on a Ka % 36 M 33 32 31 30 19 2S 27 & zs 14 25 22 II 20 il m i IL 15 1689 18Q0 1891 2aaDQBSiHSS]fl2MU!raB3n0Sa22SDS232:ffiEa!QflBSH«Wii£aaiyiUUi:S2: 1141 444+44 B-RIFT, fX4 YEILOYY P/JVE MANUFA C TURERS ASS'N ft 5H1JS TER o Campany fi o B • PRICES OF ACTUAL SALES MADE BY MILLS --H 4-H-J- +44 44 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904- rrr 4-H-U- HiaaiiiiiBJmasiaBijajHBiUHaiaiDaiaaaasBiiiaHiiiKaDD^^ 1 1 I II M l II l M4-4-U-U4 4-.i-l-l.l_.-f,, 41144 m FLOORING ! l Pc -frr swr. »5> ---(-- -84 Tja ■»rp' ti- iilLL 30 If! 26 27 25 25 34 ZJ 22 2/ a- 4 ;tt'T" B-FLATJ X4 YELLOW PMC MANUFACTURERS ASSW -ft SHOOTER o Company A o PK/CeS OF ACTUAL SALES MADE BY MILLS TXrr 14 -Lj_i |_ 44+ -4-4 4-i -n-r f-h- +- ; i~ L — t-t .--t- 4 |#st ;if i-4- j-L- st*- -44-444 44 3,0,4. [of bin 4' nil. -of- Mo ttt It ft i?_ ■•*■. a 1-a.n.U-U T tot T i : . ii mil 2i f „ _U-..i-l_-J--- L-_-_-- ------- *5 —1 ,y*/ COMMON, /"X4 " <& ■ ■ | YELLOW PINE MANUFACTURERS ASS 'N $ Z-f . - 1 sruster o 22- — I .Cmipsny a • 2i Jj . 8 - 2clj-J /; a 'it- ipRICES OF ACTUAL SALES MADE BYMILLS II . _ 8 12 1/ 1. .0. D;olo; ! {.j.ii.l^.. |o- teio' -U. '-'„-hr ti-h-H-4-^-i- n-;4.---M, 4.-4--! '—.-,.-. 4^«f- .4141 J 4-4-4 4 - «-ri- TJT VJ" 4-H-: -I i°; P - h — R- •, - 5-f*-- -Tofh -%•»?>- ■^P-l"-_ 14 _L nnj -J N*/ C0MMQN,/"X/2" • — I YELLOWPINE MANUFACTURERS ASS'N V)c SHUSTER •> company a o b • - PRICES UP ACTUAL SALES MADEBYMIILS I- 44 «-. t-i i-r» .--. ,.1.1.-1 ,o ' la to 6fo* 4 !+Sp+ ( Tfi'i *wH-*<« — nr«4 *4t •" - 4 !- - F i- BOARDS L l--1 «q ; > * 4 ,..,... Li- ■ 44- 4W 1 : -4 iloV'WPPff :_L . -1*1 + ' i M ■ -i-r — t- &T--TD— ^ krf* ^ •tSs^ ts*. __ft_ r - ; + /VS2 COMMON/ XI2 YELLOW PINE MANUFACTURERS ASS'N H SHUSTER o C om puny a o PRICES OF ACTUAL SALES MADE BY MILLS TT ;if]| 4H! 1.4-44 :■--!-— r- -i. . o i t-t ^ '— -m r + H-l-4 -:il! K 44 - -l-f t 4- j- ©^j- I i : #»t 4 i !-! * r -o ;«h» - .-. ■: P 4-41 H-r « 1B-1«!~ -.--;.;4-XjP_*?. -'„. tli .** '"0!" - ©to N*t 'COMMON, 2X4 SHUSTZ.R o i] r.om /">.:<>/ y a (' ij fi « _;_| *w/-£5 of ac r ual sales MAvee V MILLS ,..4 1. :],.:. 444 -' ' 4 r-l t- pi-n i |- , ! 4 -4 4- -! -4 - H- <. ■ Mr. x_v 4r4-4--4- f4-toi - #:.i j-L ^n s i4 4+4 J**: -*» 4 :^ DIMENSIONS ■BW.M !-h fft-4-TB ;«F «' ° «Wo i 4" Zl »■ -*We- Stl-t- -U. 4.# TF -S , L «9t -S-S iWfX^-i — -4--i- U_^I_. N* 2 COMMON, 2X4- 'FLinw PUIS MANUFACTURERS A5S'N * SHUSTER '-. Cn in parly A c PRICES OF ACTUAL SALES MADE BY MILLS ...4. "4 J l_ -4 - 4-4-+H- »' V>t W f*W 4,tSSr».#. ^ *ir i|)JbuJ- --TW - -f-t 1 J- • -4-f.-bi -4-4-4- lt*? 4-4 «*t* t 4-4 w 44 SCiW w, nt- sociation, Schuster, and Individual Company List Prices and of Actual Prices of Yellow Pine on a Kansas City, Mo., Delivery Basis, 1889-1910. PKODTJCTION AND WHOLESALE DISTRIBUTION. 127 output have concurred in this resolution, the production of lum- ber in sawmills be reduced 33J%, on the basis of present pro- duction, from the date of such notice until October 1, 1904. The manner of effecting curtailment shall be optional with the manufacturer, provided that if it is desired to run a mill solid time while running during the month, and to cause the per cent of curtailment by a continuous shut down during the month, the curtailment must be made for the entire month within the first eight working days of the month." The implication is plain that a formal agreement was entered into. It will be noted that it was to be effective only upon notice that the manufacturers controlling 70 per cent of the output "have concurred in this resolution." The trade-press references to the progress of the curtailment policy generally refer also to its effect upon prices. In the New Orleans Lumber Trade Journal of July 15, 1904, both in its Kansas City and St. Louis news, attention is called to the noticeable effect on prices, although the curtailment had not long been in operation. On August 2 the "committee on values" promulgated a n -w price list with advances in prices over the former official list. Referring to this editorially, under the heading "Wise action taken by the South- ern Lumber Manufacturers' Association," the American Lumberman of August 6, 1904, page 15 says: "It is perfectly apparent that the policy of curtailment which went into effect on July 1 has been of great benefit to the market." In the next issue of the same paper, in its St. Louis news, the con- nection between the new list and the curtailment policy was discussed at length, while in the Kansas City news of the New Orleans Lumber Trade Journal of September 1 is this statement: The beneficial effect of this curtailment on prices is very ap- parent. The market is fully $1 per thousand higher than it was 30 days ago, and the leading concerns are not having to concede more than $1 from the August 2 list to get plenty of business. The original proposition was for a curtailment through the months of July, August, and September. At a meeting of the committee on values at St. Louis September 8, according to the American Lumber- man of September 24, a resolution was adopted agreeing that the production be curtailed 33£ per cent during the months of October, November, and December, provided those controlling 70 per cent of the total yellow-pine production agreed. The same paper published in its issue of October 1, a dispatch from St. Louis dated September 29, to the effect that enough signatures were secured that day to the yellow-pine curtailment proposition to make up the total number of feet required for 70 per cent of the production. In the same paper, October 8, there are two references to the effect that the 128 THE LUMBER INDUSTRY. announcement of a continuation of the curtailment policy was causing a rise in prices, and a similar view is given in the New Orleans Lumber Trade Journal of October 15. The American Lumberman of October 15 speaks of the prospective issuance of a new list, and that of October 22 records that one was issued October 14, making advances which put the new list above actual selling prices. The following is from the St. Louis news in the American Lumber- man of November 12, 1904, page 57: A feature of the week has been the sending out by a number of manufacturers to traveling salesmen of instructions to sell absolutely nothing on the left-hand side of the list at lower than full list. Some of the wholesalers have extended these instructions to a majority of the items on the right-hand side, so it seems assured that the list of October 15 will soon be the actual selling basis for all yellow pine lumber. The reasons given for this in the main are the fact that the curtailment of output and the increased demand .for uppers have caused a decreased supply at initial points, with prospect of little better- ment of stock conditions during the remainder of this year. A similar statement in regard to instructions to salesmen came out in the St. Louis news of the New Orleans Lumber Trade Journal of November 15. The situation was summed up in the Kansas City news of the St. Louis Lumberman of December 15, 1904, page 36, as follows: The yellow pine manufacturers have demonstrated to their own satisfaction that the way to maintain a stable basis of prices is to curtail the product. Whether this method of holding prices in line is satisfactory to the dealers is another question. The curtailment of the output since July has resulted in an advance averaging at least $2 per thousand, and a better main- tained market than the manufacturers have enjoyed for a long time. At the annual meeting of the Southern Lumber Manufacturers' Association held in New Orleans, January 24 and 25, 1905, the effect of the curtailment on prices was freely discussed. Lewis Thompson presented a paper on the Importance of Cooperation, in which he made the following statements concerning the action of the association in regard to prices and the curtailment of output during 1904 (Mississippi Valley Lumberman, Jan. 27, 1905, pp. 34-35). Pardon me when I refer to our meeting in New Orleans just one year ago, when we came feeling that we were on the eve of a volcanic eruption, commercially speaking. Just why we felt so no one seemed to know, but after calling the roll and casting our ballots we found that the feeling was only a hoax, and felt so buoyant that nothing would do except to raise prices. By two days of cooperation at that time we were made to feel that we had grown richer by one dollar per thousand PRODUCTION AND WHOLESALE DISTRIBUTION. 129 feet on all the lumber that we had in stock, but through a lack of co-operation, in less than ninety days we found that the volcano had erupted, and that prices were in a fair way to seek the bottomless pit. All this came through a lack of co-operation, but we had learned our lesson well years ago. We began to seek a remedy through our organization. How well we succeeded is a matter of history, and should give us untold assurances of our strength. I refer to the curtailment movement, which I understand with a few exceptions only, has been universal. That values are what they are today is the result solely of this curtailment movement, and I do not think that anyone present would argue otherwise, or that those who did not participate in the movement would deny the fact that they, together with the balance of us, have profited thereby. Co-operation makes such things possible. The views of R. A. Long, the association president, were expressed in an unequivocal manner, and an extract from his speech claiming a saving to his company of $260,381 as a result of the curtailment movement has already been given on page 77. In a speech made to the 1905 convention of the National Lumber Manufacturers' Association in connection with 'the statistical statements of cut issued by his association Mr. Long stated that — While this department is not as complete as it should be, for the simple reason that it seems most difficult to get our members to make prompt and proper reports, yet we feel that valuable information is obtained along this fine, and in this connection, through this channel we discovered last year between January and June 1st that we were cutting a great deal more lumber than the trade demanded, and this was reflected in a rapidly downward tendency in prices. The subject was earnestly dis- cussed at our semi-annual meeting in June and vigourous steps taken to relieve the situation by seeking to reduce the output, and we are pleased to say, in less than two weeks we had secured the cooperation of a sufficient number of manufacturers to control 80 per cent of the entire product of yellow pine, and a curtailment of 33$ per cent of the product was the consequence. This immediately gave confidence, and by July 1st prices were on a firmer basis and before the close of the year we were obtain- ing $2.23 per M. more than we were getting June 1st. Curtailment in 1906.— In 1906 there was a slackening of demand for lumber, and a weakening of prices. The association * does not appear to have taken as prominent a part in promoting a curtailment policy as it did in 1904. The Bureau found few references to this curtailment either in association records or the trade press. The following telegram from Secretary Beekman, of the Pacific toast Lumber Manufacturers' Association read at the meeting of the For an account of the curtailment brought about in this year by the Southern Lumber Operators' Association, see p. 153. 25030°— 14 9 130 THE LUMBER INDUSTRY. Oregon Lumber Manufacturers' Association on June 16, 1906, explains, in part, the reason for the scarcity of information. Notify meeting we have advice that Yellow Pine output will be curtailed net 25 per cent for next 30 days. This will take 60 million feet out of market and requested by Yellow Pine manufacturers not to give this to newspapers. According to George K. Smith's report, as shown in the American Lumberman of July 21, 1906, page 42B, this action was taken: When the clearing house report began to show an excess of cut over shipments and the market reports revealed a weakness in prices, some manufacturers gave careful consideration to existing conditions and decided to slacken the pace in manu- facture. July 3 we sent to members and manufacturers a copy of a letter showing that one mill had ceased operations entirely on account of unsatisfactory conditions, and asked the following questions : If you have determined on your plans for the near future, as to running or shutting down, either wholly or in part, will be glad to have you advise us, stating what your production amounted to during June and what per cent of your customary output will be made during July. These figures will be compiled to be presented to our semi- annual meeting in Chicago, July 17 and 18, 1906. At the July, 1906, meeting the vice president made the following statements : The board of directors this morning authorized the secretary of this association to employ such help as he needs to put a man in every State and get this information. If you fail to send in a reply to his inquiries there is going to be a man come right straight to your office and ask you point blank about the condi- tions that surround your business— how fast you are manufactur- ing as compared with some previous time, how you find trade, how many orders you have got on hand, how much you are cut- ting the list and a whole lot of questions. When we get this infor- mation it will go to headquarters and be disseminated from head- quarters to the manufacturers, and we can take advantage of the slack times; we can prepare ourselves for the propitious .-, times and put our lumber on the market in a great deal better " J condition than we have heretofore. The secretary of the association denied to an agent of the Bureau that this scheme had ever been put into effect, but apparently some modification of it existed in 1907. (See p. 131.) The result of this guarded action (in 1906 the antitrust agitation had begun to make lumbermen more cautious) seems to have been productive of some restriction of output. This is indicated by the following extract from the, New Orleans news in the same issue of American Lumberman: "The price tone also is healthier, the moral PKODTJCTION AND WHOLESALE DISTEIBXJTION. 131 effect of the concerted restrictive movement is given most of the credit for the improvement." The changed attitude of the association after the annual meeting in New Orleans in January, 1905, toward the policy of curtailment is clearly illustrated in the activities of 1907 to 1911. There is indi- cation that at the time of the association meetings manufacturers acting nominally as "individuals" continued to advocate curtail- ment projects, but that care was taken not to involve "officially" and "on the records" the association whose meeting had been the occasion of their coming together. Curtailment in 1907. — In the latter part of 1907 there was a general curtailment of production. A "call for general conference of "manufacturers of yellow pine, November 14, 1907," was issued by the association. It was signed by John L. Kaul, the president, and countersigned by George K. Smith, secretary. An account of the meeting, which took place in Memphis, appears in the Mississippi Valley Lumberman of November 22, 1907, page 36. The meeting was presided over by Mr. Kaul and many other prominent association members took an active part in the deliberations. It was this meet- ing to which George K. Smith referred in a letter dated March 24, 1909, to I. C. Enochs. (See p. 134.) At a mass meeting held in Memphis on November 14th, 1907, no agreements were made or suggested, and it is expected that the coming meeting in Chicago will be handled along lines simi- lar to the one held in Memphis. The American Lumberman, October 26, 1907, and the Mississippi Valley Lumberman, November 22, 1907, March 27 and April 10, 1908, refer to the curtailment and its effect on the market. According to the St. Louis Lumberman of November 15, 1907, page 79 : The actual curtailment reported below aggregates over 200,- 000,000 feet per month. Taking the entire South into consider- ation we believe it is safe to say that the production at the present time is not more than 50 per cent of normal. A feature of the association's work in connection with this curtail- ment movement is brought out in a circular of November 12, 1907: Beginning November 4th, our inspectors on mill routes were instructed to report the present running time of each saw mill visited, and to give the average daily cut from 10 hours work and the stocks on hand November 1st, and whether above or below normal. Curtailment in 1909. — In 1909 the third important organized curtailment of yellow-pine production was undertaken. Mr. Smith, under date of March 15, wrote to several members suggesting the calling of a meeting of the vice presidents and directors of the asso- 132 THE LTJMBEE INDUSTRY. ciation to consider the situation of the yellow-pine production, but this plan seems to have been changed for a "mass meeting." The following call for this "mass meeting" to be held in Chicago, March 30, 1909, was sent out by the association: Yellow Pine Manufacturers' Association, Office of Secretary, Lumbermen's Building, St. Louis, Mo., March 20th, 1909. SUBJECT: Call for Mass Meeting at Chicago, March 30th. To all Manufacturers of Yellow Pine: Conditions have assumed such an aspect, both in the produc- ing and marketing departments of our industry, that an early- conference of all manufacturers of Yellow Pine is deemed advis- able, and to this end a mass meeting is hereby called to convene at the Auditorium Annex, Chicago, 111., 10 o'clock A. M., Tues- day, March 30th. You are urged to be present whether you are a member of any association or not, as the conference is for all and should be attended by every manufacturer in the South. Hoping to be advised by return mail of your intention to be present in Chicago on March 30th, and to see you there at that time, I remain Very truly yours, H. H. Foster, President. Geo. K. Smith, Secretary. At about the same time also a mimeograph copy of a letter dated March 16 from Mr. Fullerton of the Chicago Lumber & Coal Co. to George K. Smith, advocating a united effort at curtailment on the part of the manufacturers, was reproduced on the letterhead of the Chicago Lumber & Coal Co. and sent out. After calling attention to the "critical condition" in which the lumber industry was at that time and to the dubious outlook, Mr. Fullerton says: I therefore, feel that in the interest of ourselves and that of the public we should voluntarily take some action to conserve our resources and the forest resources generally, in which the public are very much interested. Personally, I am ready and willing to use my influence to have those companies with which I am associated reduce their production at least 40%, which I think will be sufficient to pro- duce enough lumber to meet the requirements of the country, and to the end that I might have an opportunity to get the views of others, I would very much favor a general meeting of manufacturers, to which all should be invited. _ Unless some person takes the initiative there will be an ines- timable loss to the lumber industry and the public generally, which I feel it is our duty to avert. It is worthy of note in this connection that when prices show a tendency to decline some lumbermen feel inclined "to conserve the forest resources," but this feeling apparently disappears when prices are high. PRODUCTION AND WHOLESALE DISTRIBUTION. 133 The following letters indicate the part played by the association in the curtailment movement: I. C. Enochs, of Jackson, Miss., under date of March 23, 1909, wrote Mr. Smith as follows: Yours of 20th with copy of Mr. S. H. Fullerton's letter of 16th etc. duly received. I note Mr. Fullerton does not address you officially nor does his letter in any other way indicate that he wishes to connect the "General Meeting of Manufacturers" he desires called with the Yellow Pine Manufacturers Association. He seems to have left the Association severely alone and to have independently tendered his. initiative for another gathering of lumbermen so the Association could have come in for no criticism or embar- rassment whatever no matter what any number of manufacturers in their individual capacity might plan to do or might have done in Chicago on 30th instant. You call a "Mass Meeting" addressing the call "To all Man- ufacturers of Yellow Pine" instead of a meeting of the Yellow Pine Manufacturers Association, but your call bears evidence of being an Association utterance by its domicile method, service and official names. Herein seems to he trouble. Either letter so far, disjoined, is measurably free from criticism. Attached as predicate conclusion, and Conjunctively considered as one cor- respondence this is far from being the case, especiaDy if the matter Mr. Fullerton desires accomplished should come to pass under the auspices of the Association when the meeting called transpires. It seems to me no good can come to the Association by placing it in the embarrassed condition which goes with having it come to be the instrument or servant of a curtailment scheme. As an Association we were sufficiently advised and fully admon- ished by counsel and circumstances along these lines about three years ago. There has been no difficulty in getting representative gatherings of Yellow Pine Manufacturers since that time when calls emanated from individuals. We deem the Association of such value along other lines as to make it desirable to save it from relations which will be open to criticism or suspicion of acting in violation of the Anti-Trust Statutes, both State and Federal, so it appears to me you have misread Mr. Fullerton's clearly well guarded and protective letter and as well have erred in this matter to the embarrassment of the Association without adding any single element of strength to your call. If the views expressed are sound, it follows that we cannot attend the meeting called for 30th and we should be unwilling to have the Association in any appearance connected with that meeting. To which Mr. Smith replied under date of March 24, 1909: Yours of the 23d instant received and contents carefully noted. 134 THE LTJMBEK INDUSTRY. When the letter written by Mr. Fullerton was received in this office, I, personally, thought that it would be a good plan to have copy of that letter accompany call for mass meeting and have reference made in this call to the letter. I drew up call and submitted it to two of our attorneys here in the city and to President Foster, and both attorneys objected to having any- thing in the call which referred to Mr. Fullerton's letter, and they suggested that Mr. Fullerton send out copy of his letter independent of the Association, which was done. 1 The point you raise about the officers of the Association calling a mass meeting was also considered, but as it is the intention to keep strictly within the law and have no agreements made as to curtailment or any other proposition, those who were consulted did not see where the Association could become involved, but as the mass meeting will not be a meeting of the Yellow Pine Man- ufacturers Association, no doubt it will be the sense of those who attend that some one other than the President and Secretary of the Yellow Pine Manufacturers Association should act as Chair- man and Secretary of the mass meeting. I am sending your letter, together with carbon copy of my reply to President Foster, as his name was signed to the call and I feel sure that he will be interested in reading your letter. I believe that everything at the mass meeting will be done strictly within the limits of the law and I hope you will change your de- cision and come to Chicago and give your opinion of the present condition and hear the opinion of others. At a mass meeting held in Memphis on November 14th, 1907, no agreements were made or suggested and it is expected that the coming meeting in Chicago will be handled along fines, similar to the one held in Memphis. Thanking you for your letter and hoping you will decide to be in Chicago on the 30th, I remain On April 1 the Sabine River Lumber & Logging Co. wrote Secre- tary Smith as follows: We are in receipt of your recent letter, in circular form, writ- ten to you by S. H. Fullerton, and note the warning you sound in the millmen's overdoing the cut at this time, and forecasting very serious results unless the millmen will use some discretion to curtail the output of the mills. Mr. Fullerton is absolutely right about this, and the mills are making a great mistake by running full time and certainly in cases where they run overtime. We wish to go on record as having curtailed our running time 40% and wish to ask you to take this matter up with all the other mills, in circular form, asking them to do the same thing. We believe this is the only remedy for the present evil and prevention of further very serious difficulties among the mills. 1 Mr. Foster's call for a meeting and a mimeographed copy of Mr. Fullerton's letter were received, in sep- arate envelopes, by the Bureau 01 Corporations on Mar. 22, 1909. Several other correspondents besides Mr. Enochs, in letters to Mr. Smith , about the meeting, discussed both letters. The Bureau has evidence that the " Fullerton letter " was the joint work of Fullerton and Smith. The original dralt which differs some- what from the copy sent out as a circular, is in the association files. Kjoduction AirB wholesale distbibution. 135 J. E. Crawford, of the Consolidated Saw Mills Co., wrote Mr. Smith a letter dated April 8, 1909, and marked "personal:" I have been expecting to hear from you for several days in regard to the results of the meeting at Chicago. I was unable to attend but have learned through outside sources that there is a movement on foot to curtail the mills' output. Of course, we are glad to cooperate if we can be assured that this matter will be carried out in good faith by all those interested and that there will be no disposition to shift responsibility to others by those who are undertaking this movement. I shall be glad to have you advise under personal cover, stat- ing just what has been done and what will be the probable effect of this action, especially as to how far-reaching it will be. To which Mr. Smith made the following reply, also marked "per- sonal," under date of April 10, 1909: Yours of the 8th instant received and contents carefully noted. We had a meeting of the Executive Committee of our Board of Directors yesterday and I have been in conference with our attorney for the better part of two days, discussing the question of what we, as an association, will be permitted to do and the only information 1 we are able to get is that we will be permitted to ask for and reproduce any information as to amount of lum- ber produced, amount of orders accepted, amount of shipments made, and the number of hours that sawmills have been operated from week to week, but the intention of any one as to how he will operate his plant in the future will not be tabulated or distributed, as only facts which have actually taken place and are a matter of record can be reflected through the Association reports, without inviting an attack. If any mills are making less than their usual amount of lumber and are reporting to the daily and weekly information department of this Association, that fact will show up in the report and this is as far, in the judgment of our attorney, as we can safely go. These reports will be started the middle of next week and we hope the four hundred sawmills who have been asked to send in their reports, will support this department unanimously and thus make it a complete reflection of the conditions as they exist from day to day. Thanking you for your letter and trusting you will thoroughly understand the situation and will do what you can to have the four mills in which you are interested, send in direct from the mill, the amount of lumber produced, daily, and the other informa- tion which we are asking for, I remain The progress of the curtailment in May is shown by the following extract from a letter of May 10, 1909, written by Secretary Smith to President H. H. Foster: The Long Bell mills all go to four days a week running time this morning. The Central Coal & Coke Co. mills will run forty hours a week. J. B. White's mills will only make 80 per cent of the lumber they have been making. 'See letter ol Mr. Lehmann on this subject, pp. 136-138. 136 THE LTJMBEK INDUSTRY. I think Mr. Buchanan's mills are on the same basis and I am writing him a personal letter today, endeavoring to get an ex- pression from him as to whether he will report the running time of his mills or whether we shall send a representative to each one of his plants and arrange for a correspondent to give us the running time, in order that it may appear regularly on our weekly reports. I hope to be able to take up personally, with a large number of those who are not now reporting their running time, and also expect by the last of the week to have two more representatives on the road visiting those who are not now reporting. An illustration of the policy now adopted by the secretary to avoid the appearance of connecting the association officially with any advo- cacy of curtailment is shown by the following incident: J. L. Thompson wrote the secretary under date of November 2, 1909, inclosing a clipping from the Houston Chronicle of an article entitled "Need for curtailment in the yellow-pine industry," con- cerning which Mr. Thompson said : This, to my mind, is one of the strongest articles that I have seen on the subject, and I would suggest that copies of this be made in your office and sent to every manufacturer in the South. Mr. Smith's reply, dated November 5, was as follows: Yours of the 2d instant, enclosing clipping from the Houston Chronicle of October 31st, received. I shall read this clipping carefully and may issue some or all of it to members and manu- facturers, however, I may do it without placing it on association stationery. Thanking you for sending the clipping to me, I remain ' The trade news indicates that the effect of the curtailment on prices was not immediately noticeable, but by July such comments as the following from the New Orleans news of the Mississippi Valley Lumberman, July 2, 1909, page 40, appear: The curtailment already effected has had a good effect upon the market and befriended the price. The following letter from F. W. Lehmann to George K. Smith throws a good deal of light on the reasons for the adoption of the above cautious policy, and anticipates the questions raised by the Butterneld Lumber Co. in respect to the attempt at concerted cur- tailment early in 1910: [Letterhead of Lehmann & Lehmann, attorneys, St. Louis, Mo., Apr. 8, 1909.1 Mr. George K. Smith, Esq., St. Louis, Missouri. Dear Sir: I have given due consideration to the matters we talked about on Tuesday and have found no occasion to change the opinion then expressed. 'As a matter of fact, a portion 01 this article was ..cnt out by Mr. Smit. on plain stationery. PRODUCTION AND WHOLESALE DISTRIBUTION. 137 You have the undoubted right to collect and distribute the fullest information you can get of what is being done in the lum- ber field, with all details as to the amount of production from day to day, the stock on hand, prices asked and received, etc., and every man who receives this information has the right to act upon it as he thinks proper. If he thinks more is being pro- duced than can be sold, he can reduce the amount of his cutting or cease cutting altogether if he chooses, until conditions improve. Beyond this, however, you cannot go. There can be no agree- ment or understanding between two or more lumbermen to limit their production and therefore no course of conduct from which such an agreement or understanding could be inferred by a court or a jury. If some man should go from one lumberman to another getting from each a statement or a promise that he would limit his out- put in the future and what each man thus said or promised was communicated to the others and if this were followed by a limita- tion of the output, a court or jury would be very likely to infer, despite all protestations to the contrary, that the limitation of output was the result of an agreement or understanding. So too, if one lumberman after another declares that he will hereafter curtail his production and they inform each other of this purpose and then they act in accordance with their declara- tions, a court or jury would be very likely to infer that this was all in pursuance of an agreement or understanding. What is in fact being done, each and all have a right to know. This is no more than is done every day by the market reports in our daily newspapers. They show, for example, the daily receipts of grain and live stock, the prices received, information as to visible supply etc., and farmers individually govern themselves accordingly. The man not pressed for money does not ship his grain or live stock to a glutted market. The lumberman may undoubtedly get like information as to his business and may determine his conduct by it. But the action based upon this information must be individual and independent. If he concludes for himself that the market is overloaded and that he cannot produce at a profit, he may curtail or cease producing altogether and for as long a time as he pleases, but if he concludes that he will continue as he is doing, unless his competitors will also curtail or cease production, and there is a curtailment or cessation as the result of any sort of preconcert, agreement or understanding, the law is violated. The conditions of the trade, however bad; the price of lum- ber however low; the persistence of lumbermen in cutting an amount above the market demands, will not legalize an agree- ment among any number of them to limit the output of their commodity or to fix the price of it. The policy of the law is free competition and it plainly requires that each producer shall conduct his business independently of any compact with his competitors. This does not prohibit any producer from taking into account all the conditions of business in determining his own conduct, and it does not forbid cooperation for the purpose of obtaining information that is useful to each and to all. 138 THE LUMBER INDUSTRY. I repeat, however, that beyond the collection and distribu- tion of information as to what is being done, you cannot go, and cannot state too strongly that any agreement or understanding, no matter how indirect the means by which it is brought about, falls under the ban of the law. Respectfully yours, F. W. Lehmann. Curtailment in 1910. — According to the official proceedings of the association annual meeting in January, 1910, the members were fully alive to the importance of continuing the curtailment inau- gurated in 1909. While no official action appears to have been taken, a number of the members advocated the running of the mills only five days a week, and some announced their intention of so doing. Speak- ing upon this question of curtailment J. A. Freeman, of the Freeman- Smith Lumber Co., made the following statement: We can talk about legal complications, difficulties and all that sort of thing, but I undertake to say that when this body of men want to do a thing, that all of them will find a way to do it. Secretary Smith on January 29, 1910, sent out a circular "to manu- facturers of yellow pine" which contained the following: Enclosed please find copy of Daily Report for Jan. 22nd, which we ask you to study carefully. If you contemplate mak- ing any reduction in the running time of your sawmill during the next few months, we trust you will so advise, and we will send you some blanks like the enclosed for making daily reports. Also please note copy of circular to members and manufacturers who have been reporting to the Daily Information Department. That the association, through its secretary, did take action in having influence brought to bear on individual members to secure curtail- ment of their output is shown in the following extracts from corre- spondence found in the association files. Mr. Smith, in 1910, was issuing a series of reports on the " Running time of sawmills." N. H. Clapp, jr., of the Southern Lumber Co. (the same gentleman referred to in the letter of the Butterfield Lumber Co., of Feb. 12, 1910, p. 141), wrote him under date of January 31, 1910, as follows: Southern Lumber Company, Warren, Arkansas, Jan. 31, 1910. Mr. Geo. K. Smith, St. Louis, Mo. My Dear Mr. Smith : I have in this morning's mail some rather discouraging correspondence. Four of the large concerns have written advising that they wanted me to understand that they do not expect to shut down until there are at least 150 mills doing so. I also have a letter from Mr. Murray at Fordycc ab- solutely refusing to act as committeeman for Arkansas, because he says he cannot consistently shut down and will not do so. I shall ask Mr. Foster of Malvern to act in Mr. Murray's place, and I believe a little later on we will be able to make Mr. Murray change his mind. PRODUCTION AND WHOLESALE DISTRIBUTION. 139 I note your change in the Daily asking for information showing whether the mills are voluntarily or involuntarily shut down, which I think is a most excellent idea. Yours truly, N. H. Clapp, Jr. Again, on February 10, 1910, Mr. Clapp wrote him as follows: I thank you for your favor of the 8th enclosing copy of tele- gram from Mr. Sweet, also copy of your letter to him. I have today written Mr. Fullerton as per enclosed copy. It might be well to have Mr. Johnson and Mr. McLeod see Mr. Fullerton, providing you can obtain no satisfactory reason from him as to the running time of his mills. The copy of Mr. Clapp's letter to Mr. Fullerton is as follows : Feb. 10, 1910. Mr. S. H. Fullerton, Chicago Lbr. & Coal Co., Chicago, IU. Dear Sib: I am advised that you are running your Fullerton plant full time with extra quarters. As you doubtless know, Mr. Forsyth is running his mill full time, and the action of these two mills is having a tendency to make some other members who believe in the conservation movement, just a little bit restless. If consistent I would be glad to hear from you as to whether you expect to continue this policy at Fullerton and at Warren. I trust you will have a successful and enjoyable trip to Wash- ington, which will prove beneficial to the short line railroads. Mr. Smith acknowledged this letter on February 12, saying in part: I looked up the running time reported from Fullerton and do not see any extra time shown on the daily reports, but I under- stand that Mr. Sweet has been at the plant and learned that on certain days in the week they were running more than ten hours. Answering more fully on February 15, he said: As stated in my letter of the 12th instant, I called on Mr. Ful- lerton this morning and found that he had just returned from Kansas and had been away from his office so much that he was not in close touch as to what was being done at the mills. He dictated a letter to the Gulf Lumber Co. at Fullerton, asking them if they were running more than ten hours a day and stating that it was not his desire that any extra time be made at the sawmill. He did not make any definite statement about running five days per week at Fullerton. He had received information from the Bradley Lumber Co. that they have a large amount of logs on hand that must be cut up and that when they are cut they expect to shut down entirely for a time the same as they did last year. I expect to see Mr. Fullerton again at Hot Springs the latter part of this week or the first of next and he may have information at that time which will enable me to give definite advice as to what the running time at Fullerton will be and if he does make any statement I will promptly notify you. 140 THE LUMBER INDUSTRY. On February 23, 1910, Mr. Smith wrote N. H. Clapp the following letter: Please note carbon copy of letter I have just written Mr. Crossett and the list of manufacturers who are running eleven hours per day. While at Hot Spring I learned that Mr. Triesch- man had been to Davenport and secured instructions from Mr. Crossett to run their mills five, days per week. Doubtless you have received this information direct from Mr. Trieschman. The letter to E. S. Crossett, also under date of February 23, is as follows : On a report, which came to this office I see your notation about the mills that are running eleven hours a day. I instructed our daily information department to take one of our daily reports and put a cross before the names of the mills that are running eleven hours per day. You will notice that but one mill in Arkansas shows to be running eleven hours. I think there are about seventy-seven mills all told, on the sheet enclosed, that are running eleven hours. If these mills could be induced to change to a ten hour basis, it would have considerable effect on the amount of lumber produced. I will take this matter up with Mr. Clapp and doubtless he will be glad to present the question to those mills, particularly West of the Mississippi, that are running eleven hours per day. Thanking you for your interest in the matter, I remain The following taken from a letter written February 7, 1910, to a Pacific coast lumber company by its agent at Omaha, indicates that well-informed lumbermen knew that the yellow-pine manufacturers were attempting to curtail output for its effect on prices: Yours of the 2nd concerning prices. My view of the market that is ahead of us has changed a great deal recently. I wrote you not long ago that I thought the Yellow Pine mills had tried to raise themselves by their boot straps and that I expected a slump in the near future. I have an opposite opinion now, solely because of my faith in their organization for control of production. They seem to have got that under about as good control as can be. There is surely not the demand to warrant the advances that have been made in Yellow Pine, but the advances have been made and they are in the main sticking. Of course there is a wide spread in quotations, the widest I ever knew but I should say fully \ of the Yellow Pine is being held for nearly the top of the market. That some sort of understanding was reached regarding operations on the five-day basis suggested at the January, 1910, meeting is indicated by letters sent out to various prominent members by the Butterfield Lumber Co. Mr. Butterfield was present at the January meeting of the association and was one of those who advocated the five-day-a-week basis of operation. The following letter is a copy of the one received from him by the Eastman Gardiner Co., of Laurel, Miss. PRODUCTION AND WHOLESALE DISTRIBUTION. 141 [Letterhead of Butterfleld Lumber Co. I Norfield, Miss., Feb. 12, 1910. Eastman Gardiner Company, Laurel, Miss. Gentlemen, At a recent meeting of the Southern Lumber Association held in New Orleans, a large number of mills expressed a willingness to conserve the forests, or to take up the conservation of forests, individually, and not collectively, by going on a five day basis per week, beginning the first day of February. 1 There was ninety or one hundred mills represented at the meeting and it was decided to get at least one hundred and fifty mills to agree to do this. If you will be one of the members, will you not kindly write me to that effect at once, or else write to Mr. N. H. Clapp, Jr., Manager, Southern Lumber Company, Warren, Ark. Your prompt reply will be appreciated. Yours truly, (Signed) C. S. Btjtterfield. Following the receipt of the above letter, the Eastman Gardiner Co. wrote George K. Smith, secretary of the yellow-pine association two letters, one formally resigning from membership in the association, and the other giving the reasons of this action. This second letter is as follows: Laurel, Miss., Feb. 26, 1910. Mr. Geo. K. Smith, Sec, St. Louis, Mo. Dear Sir: Please note enclosed letter from the Butterfield Lumber Co., which we have submitted to our attorneys and please note our attorney's comment on same. You will recollect the conversation we had with you last December when you were in Laurel with reference to this very point. We have been afraid for some time that an act of this sort would be taken by enough of the Association members so that in case of a suit, it would appear to the Court to be an act of the Association as a whole. We understand, of course, that this particular movement is not instigated by the Association as a whole, but by the individual members of the same, but we fear that this is too fine a distinc- tion for a court to recognize, and we feel that, under the circum- stances, the best thing for us to do is to tender our resignation as a member of the Association. We do this with a great deal of regret, as we have been engaged in the Association work for so long that we have a great many warm friends and many pleasant recollections of the Association work, and we very much regret that circumstances seem to force us into this action. We assure you that this letter has not been written hastily, or without consideration, and we have come to this decision only after consultation with our Directors and Stock-holders. We 1 'Conservation of forests," referred to in the foregoing letter, is a cloak so transparent as to need no comment. 142 THE LUMBER INDUSTRY. wish to assure both you and the members of the Association of our continued pleasant regard and friendship. Yours very truly, Eastman Gardiner & Co. P. S. Gardiner, Sec. In answering this letter on February 28, Mr. Smith stated: I do not know what you said to your attorneys, when you transmitted to them Mr. Butterfield's letter of February 12th, but you are doubtless aware that Mr. Butterfield is in error when he states that the question of running five days per week was taken up at the meeting of the Yellow Pine Manufacturers' Association in New Orleans. It seems to me quite probable that if your attorneys understood that this question was not discussed by the Association in any of its sessions, that they might take a different view of the necessity for your company withdrawing from mem- bership in this Association. The attorney's letter referred to is as follows : Jackson, Miss., Feb. 22d, 1910. Eastman Gardiner & Company, In re Southern Lumber Assn. meeting. Laurel, Miss. Dear Sir: Your favor of the 21st instant to hand, enclosing letter from Mr. Butterfield, and we beg to say that we think that the proposed plan violates the Sherman Act, as well as the statutes of Mississippi, and in our opinion, it would be unwise for you to continue a member of an organization which would be thus engaged in an unlawful enterprise. We return Mr. Butterfield's letter for your file. Yours truly Green & Green. The correspondence was referred to J. B. White, who wrote Mr. Smith a letter on the subject March 1, 1910, beginning as follows: I have yours of March 28th, enclosing correspondence with Eastman Gardiner & Co. I return this correspondence, and will say that the records show that there was no meeting of the lumbermen to agree upon a five day shut-down, and there was no agreement and nothing said in the Lumbermens Convention. I think there was some outside discussion in regard to curtailing, but the records show plainly everything that was done at the meeting, and the doors were open to everyone to come in. I believe that when Mr. Gardiner is in receipt of the full minutes of the meeting that he will see there was absolutely nothing done in violation of the law. Quite likely Mr. Butterfield has been wrongly informed, and his letter to Eastman Gardiner has been handed to their attorney, and has been the basis of their leaving the organization. On March 24, 1910, Mr. Smith sent the following letter to Mr. But- terfield : Please note carbon copy of letter I have just written the East- man Gardiner Company. " PRODUCTION AND WHOLESALE DISTRIBUTION. 143 Marcellus Green suggested that I write you and advise that in his opinion it would be a good plan for you to recall all of the copies of your letter of February 12th, which were sent to manu- facturers of Yellow Pine in Mississippi and that when they are returned to you, you see that they do not again get out of "your possession. If Eastman Gardiner Company decide to withdraw their notice of resignation, I will be pleased to notify you. Mr. Butterfield replied, March 26, 1910: I am in receipt of your letter of the 24th inst., and acting on your suggestion, I am today withdrawing all my circular let- ters of February 12th, as is shown by copy attached. Of course, one of these letters will reach the Eastman-Gardiner Co., and I sincerely hope they will reconsider their decision and remain in the fold. The copy of the withdrawal letter referred to is as follows : [Letterhead of Butterfield Lumber Co.] Norfield, Miss., March 26th, 1910. Under date of February 12th I addressed a circular letter to you which contained several errors, and which also contained an incorrect statement of facts, caused by my stenographer not getting my ideas correctly, and the fact that this circular letter was mailed without having been re-read. Because of the said errors having occured in this letter I wish to withdraw the same, and will ask that you kindly return the letter to me and ignore same entirely. Yours very truly, The following extract from an address of J. Lewis Thompson, the president of the Yellow Pine Manufacturers' Association, made before the National Lumber Manufacturers' Association meeting held at New Orleans April 19 and 20, 1910, throws light on the proceedings of a meeting at Memphis, held not long before : Recently we had a little meeting over at Memphis. We had 70 billion feet in a room about the size of this room here. We all realized that there was only one evil. We took a vote on what was the cause of our troubles— "overproduction." Every solitary man agreed on that, and everybody was willing to suggest a remedy; everybody knew what the remedy was.- When we began to make the application some of them were not willing to pull part of the load. As indicated above, there was considerable difference of opinion at this time as to the advisability of curtailment. The official proceed- ings of the July, 1910, meeting of the association quote Secretary Smith as saying that "the reduction in production was practically discontinued" after March of that year. Curtailment in 1911. — The guarded reference to the subject of curtailment in the circular letter sent out January 4, 1911, by J. L Thompson, as president, urging attendance at the coming annual 144 THE LUMBER INDUSTBY. meeting, is illustrative of the later cautious attitude in the treatment of the subject. The paragraphs in question follow: Unquestionably, the difference between the supply and the demand has not been to exceed a 10 per cent margin, and it occurs to me that just a little more independence on the part of each of us, individually, would have made a much more stable market. We could have realized a much better price for our product, and could have been much better satisfied with our year's work than we are finding ourselves. You may not agree with me in the views thus expressed. My reason for stating them was this; I believe that the time has now come when we should get together and arrive at some solution, and put this great industry on a more stable basis for the next twelve months, than it has been for the past three years. I believe that could we have in attendance at the Annual Meeting in New Orleans, every member of the Association, and in addition all of the important manufacturers who are not members, that we have enough smart men in the business of manufacturing Y. P. lumber that some solution could be reached. To that end I am writing, urging the attendance of every manufacturer at our Annual Meeting. I know that to many of you it is not necessary to write such a letter, for you will be there, but to those who do not intend making any special effort to be present, it is certainly worth enough of your time to at least lend your presence on this occasion, and I hope to see the most representative gathering of lumbermen we have ever had together. Neither the official proceedings nor any of the trade-paper accounts of this meeting indicate that any official action was taken on the subject. The Bureau has considerable evidence, however, gathered from other sources, that bears upon the organized curtailment efforts of the yellow-pine operators in 1911. The following extract from a letter written December 29, 1910, from the Omaha agent to his Pacific coast company, gives a descrip- tion of the situation: 1 The Yellow Pine mills have effected a strong frame-up, a gentlemen's agreement, I take it, for there cannot have been enough buying to warrant the heavy advances in price. [Here follows a discussion of prices of dimension]. If there has been any railroad buying, I don't know it and you know what city business is for lumber, compared with what it used to be. So of course this won't hold very long, unless they can control pro- duction, and unless country buying goes on at a good lively clip. There has been a good deal of speculative buying of Yellow Pine in the last month or two everywhere, but it has not been a scramble. People have bought one car for three or four that they would have bought in old times. It may be that this improvement in price will last until April, but I don't see how, unless they can control production. 1 For the American Lumberman's explanation Ol the conditions, see p. 148. PRODUCTION AND WHOLESALE DISTRIBUTION. 145 In a circular letter of January 19, 1911, addressed to its sales representative, the Beaumont Lumber Co. of Beaumont, Tex., announced an advance to take effect January 31 and quoted certain prices. It then made the following statement: "These prices are attractive, and on the date named they will be advanced 50c, if not a dollar. The market is absolutely fixed and there is no possi- bility of its going down." Further light on the situation at this time is given in the trade journals. The St. Louis Lumberman of February 1, 1911, page 42, under its Houston news, contains the following: The lumber manufacturers are wearing that famous smile that won't come off these days. It is nearly six weeks since they started in to boost the wholesale price of yellow pine lumber, and in spite of all the adverse predictions that have been made the price has been constantly and steadily going up since that time, and there does not appear to be a thing in the world to prevent its going up to a normal altitude. The Detroit correspondent, in the American Lumberman of March 11, 1911, page 66, wrote as follows: The local trade is receiving notices from the mills in the South and Southwest of still further advances in prices. The effect has been to stimulate prices on northern woods. The impression seems to be general here that 1911 will be one of higher and firmer prices generally. A striking feature of the yellow pine market is the remarkable uniformity of the prices, which has been noted by all of the larger dealers. Some details of the curtailment movement were given publicity in the trade journals. The May, 1911, issue of the Southern Industrial and Lumber Review contains an article entitled "Great curtailment campaign in progress." It reads as follows: The greatest campaign of voluntary curtailment that the Southwest has ever known is in force at the present time. Dur- ing the week this issue of "Southwest" is going to press scores of mills are changing their curtailment plan from five days a week to four days a week or even less. In order to give some idea of the broadness of this curtailment, a list of curtailing mills in this immediate territory follows. It must be understood that this is not expected to be a complete list, even in this immediate territory, as it has been impossible on short notice to get reports from more than a part of the mills of this territory, and it is understood here that everywhere yellow pine is made they are curtailing to about the same degree. The following list is therefore only indicative of the trend of conditions in the milling territory: Kirby Lumber Company, changed from five to four days a week. Eleven mills. 25030°— 14 io 146 THE LUMBER INDUSTRY. Long-Bell Lumber Company, running five days a week, and expecting to run less. Seven mills. Frost-Johnson Lumber Company, Shreveport, seven mills ; one shut down, six running four days a week. Chicago Lumber) & Coal Company, two big Louisiana mills; running four days a week. [The article also mentions 18 other large firms by name, the majority of which were reported as running four days a week, or less.] The above list is reported to be only a few of the mills that are curtailing in the manner shown, the understanding as "South- west" goes to press being that 90 per cent of all the mills in the Southwest are doing practically the same thing. There are fully twenty large mills shut down entirely for purposes of curtailment, and there are very few mills of any size that are running full time. It is conservatively figured that the amount of curtailment is 100 per cent greater than it has ever been since the panic, and this time it is honest, sure-enough curtailment. The mills are not curtailing on paper, but are shutting down hard, because they . cannot sell the lumber they make in full time operations. The Southern Lumberman of May 20, 1911, page 47, has similar news from Houston, entitled "Restricting output." The following is an extract: Houston, Texas, May 1 7.— Curtailment is the order of the day. During the past ten days there has arisen a cry for further curtailment of the production of the yellow pine mills of this territory, and as the necessity has been most apparent the cry was responded to by a considerable number of announcements of more general curtailment and more pronounced short-running than has been known in this territory in the history of the business. For the past thirty days a large number of the mills of Texas, Louisiana, and Arkansas, have been operating only five days a week, shutting down one day in each week for pur- poses of voluntary curtailment. Those operators who found themselves with more lumber on hand than they needed to keep up their stocks and whose sales departments were unable to keep them supplied with all the orders that they needed, immediately took steps to shorten their output, knowing the inevitable results of making too much lumber. The mills generally arrange their curtailment to suit their especial conditions. So it is that a number of mills that have been fortunate enough to keep down their stocks and keep up their order files are still running full time, but they are very few indeed. About eighty per cent of the mills of this territory started running short time thirty days ago. Most of them ran five days a week. Others who had more lumber ran only four days, and still others cut down to one-half time. At the same time quite a number of large mills shut down entirely in order to enable their sales departments to reduce the stocks on their yards somewhat. Now the cry for more curtailment has arisen because the yard stock market has not improved this month in the manner that PRODUCTION AND WHOLESALE DISTRIBUTION. 147 was expected, and the volume of business being secured is fair, but no more. Today the eleven mills of the Kirby Lumber Company started on a plan of running only four days in each week. For the past month this firm has been running five days a week, and as their stocks have increased somewhat in that time they have decided to cut down a little further for the good of the market. It is reported in Houston today that several scores of mills in this part of the country are going to follow suit, and cut down to four days, or even less. The Foster Lumber Company will start its mills on a four day shift the first of June. There are no big mills in this territory running full time now. The curtailment is being practiced by at least eighty per cent of all the yellow pine manufacturing firms west of the river, and the end is not yet. There are many firms that say that they will shut down their mills entirely and keep them down as long as necessary, before they will ever again agree to cut their own prices, and help shove down the price of lumber the way they did in 1908, '09 and '10. So it appears that there is going to be much curtailment through this month at least, and probably into June. The curtailment will last until the demand for stock jus- tifies the mills in starting. At the semiannual meeting of the association on May 23, 1911, according to the official proceedings, a discussion of market condi- tions took place. A number of the members urged continued curtail- ment of production as the solution of their difficulties. Many of the remarks of members, taken in connection with the foregoing, indicate the existence of an understood policy in regard to prices and output. For example, C. S. Keith l made the following statement : What we ought to do is to hold prices firm. If we find that 32 per cent of trade is off, we ought to curtail conditions ourselves and do whatever is necessary in order to get results, without any agreement or understanding with anybody. The St. Louis Lumberman said, July 1, 1911, under a Houston date line: The curtailment is not only continuing, but it is increasing in volume. Mill owners who are in financial position to do so, are running theii plants just as little as possible, and many of these who can do so, are closing their mills for a few weeks, or for an indefinite period, to help the market from its weakened condition. In the latter part of 1911 the market got away from the manufac- turers. The same Omaha representative, already quoted, wrote on October 17, 1911, as follows: It looks as if Yellow Pine has gone to the bowwows. Stand- patters, who up to very recently were holding their dimension at $3.50 off the list, are now selling at $5.50 off. This isproof con- clusive that there was nothing under the market but an agree- Mr. Keith, the next day, at the meeting of the Southern Operators' Association, introduced as a measure Bgains', the labor unions the resolution, which was passed, placing a large number o. mills "on an operating basis not exceeding day a week." (See pp. 153-154. i 148 THE LUMBEE INDUSTRY. ment and banking power, and reduction of production, that in spite of all of these things the demand is so much too small for the price that it goes off on dimension at one jump S2 per thousand. The break in prices is discussed at length in an editorial on "The need of cooperation," in the American Lumberman of October 21, 1911, page 29. The following is the first reference to the yellow-pine situation: Early in the year the southern pine producers, as well as those of the hardwoods, resolved individually that they would not cut prices for the purpose of stimulating trade. They assumed this position because they realized that stumpage had acquired a positive value, within a well defined range, and that owing to the rapid cutting, together with the increased demand for lumber, stumpage would better remain in the forest than be converted into lumber and sold at prices lower than prevailed at the year's beginning. There seemed to have been a common consent in this matter, without any set combination in restraint of trade. After discussing at length the market conditions and the need of measures which could be taken "without fear of running foul of the prohibition of the antitrust law," it continued: Rumors have been somewhat rife within recent time that some yellow pine concerns have thrown off the restraint heretofore governing their sales departments, and have begun to sell lumber against all competition; which, of course, means lower and irregu- lar prices. Should this course be long continued the effect would be to demoralize the market for southern pine from top to bottom of the list and throughout the entire producing territory. The remainder of the editorial is devoted to an argument against such a policy. On November 13, 1911, the Omaha agent wrote to his Pacific coast company, in part, as follows: Conditions very, very, very bad. Y. P. completely demoral- ized. Object lesson in saw-mill combination. Never was so comprehensive, so difficult, so strong or so lasting a combine. For 9 months there wasn't an important leak & people had come to believe in it & suddenly the dam bursts. Generally believed cheapest Y. P. for many years is ahead of us. As cheap now about as at any time last yr. Loss in few weeks of 1.50 to 2.0d per M. It will take from fir what she gained in Neb." Further light on the break in 1911 is thrown by the following cor- respondence. On November 2, 1911, R. S. Kellogg, secretary of the Northern Hemlock & Hardwood Manufacturers' Association, wrote to J. E. Rhodes, then connected with the F. Weyerhaeuser interests, the fol- lowing letter : Mr. Landon and I will appreciate very much if you will kindly let us know the latest information you have as to the rumored PBODUCTION AND WHOLESALE DISTRIBUTION. 149 "break" in yellow pine. If conditions are not as serious as reported, some steps should be taken to put the facts before the lumber manufacturers in this territory. Mr. Ehodes's reply, under date of November 4, was in part as fol- lows: Replying to your favor of the 2nd, will say that I have been waiting for a report from our Mr. Axley, manager of the Southern Lumber Company, in regard to the conference which was held by the Yellow Pine manufacturers in New Orleans last Monday, in order that I might give you the latest information. I have not yet heard from Mr. Axley, but will probably have this informa- tion from some source very shortly, and will be glad to give you the benefit of it. The reported "break" in Yellow Pine seems to have been con- fined to Chicago and environments. We do not find that it has materially affected prices in the country. The demand for Northern Pine has been somewhat less since the report of the reduction in Yellow Pine prices, but our men advise that this is due to the wretched condition of the country roads, and they inform us that as soon as these improve there will be some trade yet this fall. It is altogether probable that the Yellow Pine men wiU not allow the situation to develop into a lively scrap, for they cannot afford to do that, and I have an idea that they will be able to patch up the differences and sustain the market very shortly. The meeting was held at New Orleans, as I understand it, so that they might secure the attendance of the manufacturers East of the Mississippi river, including the Natalbany Lumber Co., the New- man Lumber Co., Eastman-Gardiner Lumber Co., Brooks- Scanlon Lumber Co., and the Great Southern Lumber Co. As I understand it, there has been no effort to unionize the mills East of the river, and these firms have not been willing to co-operate with the firms West of the river in opposing the efforts of the labor leaders. While the Western mills have been down, more or less, the Eastern mills have been sawing right along, and this has caused Mr. R. A. Long and some others to feel that they were "holding the bag," to use a term common to the lumber indus- try. In another letter, under date of November 20, Mr. Rhodes made the following reference to the situation: It is evident now that the demoralization in Yellow Pine has not spread very generally to the country trade; at least, the country buyers are not stocking up and this may be because they wish to keep down their indebtedness, thereby helping out their year's statements. It is altogether likely that the Southern lumberman will get together at the first sign of improved demand and do what they can to save the slaughter of their standing timber at ruinous prices. Curtailment brought about through activities of the Southern Lumber Operators' Association. — Although the Southern Lumber Operators' 150 THE LUMBER INDUSTRY. Association nominally has no connection with the Yellow Pine Manu- facturers' Association, yet for reasons which will be obvious in the following discussion, the curtailment effect of its activities will now be described. That a close harmony of policies could be expected between the Yellow Pine Manufacturers' Association and the Southern Lumber Operators' Association is evident from an examination of the list of names of the officers of the latter association. At its meeting in New Orleans on March 31, 1911, the following directors were elected: John H. Kirby, Houston, Tex.; John M. Gilbert, Beaumont, Tex.; Alexander Thompson, Doucette, Tex.; S. J. Carpenter, Winnfield, La.; C. B. Sweet, C. S. Keith, and J. B. White, Kansas City, Mo.; W. W. Warren, Fisher, La. ; S. H. Fullerton, St. Louis, Mo. ; H. H. Foster, Malvern, Ark. ; W. T. Murray, Fordyce, Ark. ; John L. Kaul, Birmingham, Ala.; W. D. Harrigan, Fulton, Ala.; and W. J. Haynon, Hattiesburg, Miss. The following officers were elected for 1911: President, C. D. Johnson, St. Louis; first vice president, W. J. Haynon, Hattiesburg, Miss.; second vice president, W. A. Pickering, Kansas City, Mo.; treasurer, George K. Smith, St. Louis, Mo. The board of directors met after the meeting and selected the following executive com- mittee: C. D. Johnson, chairman ex officio, John H. Kirby, S. J. Carpenter, C. B. Sweet, and C. S. Keith. Nearly all of the foregoing men, besides being prominent officials in the most powerful companies producing yellow-pine lumber, were also among the most prominent members of the Yellow Pine Manufacturers' Association. Several were ex-presidents of that association, many of them were its active directors, and George K. Smith was its secretary. The Southern Lumber Operators' Association was organized in 1906, primarily to combat certain labor unions among employees in Louisiana. A certain amount of curtailment of production took place as an incidental result of its activities, and some description of them properly finds a place in this discussion. It is not the purpose of the Bureau, however, to dwell upon the questions raised in the disputes between the mill owners and their employees. It has made no investigation of the issues involved, and expresses no opinion as to the merits of either side in the controversy. The membership in the Southern Lumber Operators' Association, according to its constitution, was available to: "Any person, firm or corporation operating a lumber mill or mills in the territory south of the Missouri and Ohio Rivers, and east of New Mexico." This included manufacturers of yellow pine, cypress, and hardwoods. As it has worked out the membership has been practically confined to Texas, Louisiana, Arkansas, and Mississippi. On January 1, 1913, PRODUCTION AND WHOLESALE DISTRIBUTION. 151 the association members operated 111 mills. The Southern Lumber Operators' Association on January 1, 1913, embraced in its member- ship manufacturers of yellow pine, with a total rated daily cut of about 12,000,000 feet. In its organization a "board of governors" of five was provided for each of the 1 1 districts in which its mills were located. The chairman ot these boards, together with the president, two vice presidents, and treasurer of the association constituted a "board of directors," which in turn elected from its number an "executive committee", of five. The constitution provided for a "benefit trust fund," assessments for which were secured by promissory notes deposited by members with the treasurer. This measure is of great importance in enabling some of the mills to shut down without incurring too heavy a finan- cial loss. Such shutdowns were considered primarily a measure of attack against the employees, but the marked success of the "benefit trust fund" in such uses appears, through the medium of the resulting restriction of output, to have had some influence in raising market prices of lumber. The following articles in the constitution show the nature of the "benefit trust fund" and the methods of its employ- ment: ARTICLE 23. There shall be a Benefit Trust Fund, to be used only as here- inafter provided, for the purpose of assisting the members of the Association to resist any encroachment of organized labor. No payment shall be made under this Article without the recom- mendation of the Secretary and the local Board of Governors, and the approval of the Board of Directors or Executive Committee. If any plant of a member is closed down, whether through lockout or strike caused by controversy with organized labor, the owner thereof, during the continuance of such lockout or strike, shall be paid from said Benefit Trust Fund an amount equal to two dollars per thousand, log scale, on his daily average production as provided for in Section 2, Article III, hereof. The members of the association shall only close their plants when necessary to prevent the organization of labor thereat. If a strike or lockout takes place at any plant in consequence of a dispute between the operator and organized labor, the opera- tor shall use every reasonable effort to re-open it as soon as prac- ticable with non-union labor, and the association shall render any such member such assistance as the Board of Directors may authorize in the way of securing non-union labor with which to resume operations, or to pay the expense incurred by such member in so obtaining non-union labor. The Board of Direc- tors, or the Executive Committee, shall have the power, upon the recommendation of the Secretary and the local Board of Governors, to extend further aid, financial or otherwise, to such member as in their judgment they deem necessary. 152 THE LUMBER INDUSTRY. ARTICLE 24. In order to create said Benefit Trust Fund, each member shall execute and deliver to the Association the promissory note of such member, with the date of such note left blank, on forms to be furnished by the Association, in an amount equivalent to twelve cents per thousand feet, log scale, of the annual produc- tion of such member. [Here follow detailed instructions for computing the annual production.] Said notes shall be accompanied by an authority, the form to be furnished by the Association, authorizing the President or Treasurer to fill in the date in the blank space left in the note for that purpose; provided that no earlier date shall be inserted therein than the date upon which the member shall have failed on demand to pay a special assessment of the character herein- after provided for. Said notes shall only be used for the purpose of paying benefits, and shall only be negotiative when endorsed by the President and Treasurer jointly, on order of the Board of Directors or Executive Committee. All such notes shall bear interest from their date at the rate of six per cent, per annum and be payable in four months after said date. Each applica- tion for membership shall be accompanied by the note and authority aforesaid. By authority of the Board of Directors, or the Executive Committee, and whenever either of them may so order, each member shall execute and deliver a new note in exchange for the existing note and authority of such member. In case said notes shall have been used in whole or in part for the purpose of the Association in paying^ benefits, each member shall, upon the order of the Board of Directors, or Executive Committee, execute and deliver new and additional note and authority in the amount required by the Board of Directors or the Executive Committee, to keep said Benefit Trust Fund unimpaired. ARTICLE 25. In order best to keep said Benefit Trust Fund unimpaired, the Board of Directors, or Executive Committee, whenever in their opinion, the occasion may demand, shall have authority from time to time to make special assessments against the members of the Association for the amount of funds needed, in their opin- ion, for the payment of benefits, such assessments to be made ratably among said members, based on their monthly cut, log scale, and shall be due and payable on the twentieth day of the month following the date on which the assessment is declared, and shall continue until such time as the necessary funds have been raised, and the Treasurer has notified each member thereof. Should any member fail to pav bis assessment at the time the same is due and payable as aforesaid, the Board of Directors, or the Executive Committee, shall have the power to negotiate the note of such member constituting a part of such Benefit Trust Fund, for the purpose of realizing the amount or amounts due from such member for such unpaid assessment, and unless such member shall make the same good with interest at the rate of six per cent, per annum within thirty davs after such delinquency, PRODUCTION AND WHOLESALE DISTRIBUTION. 153 he shall be expelled from the Association, and there shall be paid to him, if any there be, the remainder of the proceeds of the negotiation of such member's note. Anv new member joining the Association after an assessment has been called and before the Treasurer shall have notified the members of the discon- tinuance of such assessment, shall pay the full amount of such assessment, the same as if he had been a member in good stand- ing at the time such assessment was made; provided, that such new member shall not be required to pay for a period more than sixty days antedating such member's becoming a member of the Association. Primarily the purpose of the operators' organization was to deal with labor organizations which were being formed around Lake Charles, La., in 1906. This trouble involved 9 or 10 mills. These were closed down for about 60 days. Following the settlement of this trouble the association was inactive until the spring of 1911. During this time, however, annual meetings were held and officers elected. Early in the year 1911 labor organizers, among them A. L. Emerson and Jay Smith, began to organize the mill and timber workers in southwestern Louisiana and eastern Texas. The organization, which was known as the Brotherhood of Timber Workers, held a meeting at Alexandria, La., in May. A special meeting of the operators' association was held in Chicago May 24, 1911, the day following a meeting of the Yellow Pine Manu- facturers' Association. The following is from the official minutes of this meeting: At the suggestion of the President, Mr. Chas. S. Keith sub- mitted certam evidence that had been gathered by his agents indicating that organizations had been perfected at thirty-five different points in the yellow pine district and that the organizers were busily engaged in organizing other plants. As a means, of successfully combating this encroachment of organized labor, he submitted the following resolution, which being properly seconded, was discussed at length in the meeting. It was finally put to a vote and was adopted by a vote of forty- two to three. The resolution had nine paragraphs. Nos. 1 to 4 and 9 relate solely to measures to be taken by the employers in keeping track of the previous employment records of their employees, and Nos. 5, 6, 7, and 8 were as follows : 5. The preservation of the lumber industry and maintenance of an adequate wage scale make it imperative that the proposed organization of the Brotherhood of Timber Workers be vigorously resisted. 6. That the Board of Governors and Executive Committee be and they are hereby authorized to close, in accordance with the By-Laws of this Association, any and all plants the operatives of 154 THE LUMBER INDUSTRY. which are members of Said Brotherhood or propose to become such members. 7. We further recommend that all policies proposed by the Board of Governors and approved by the Executive Committee be immediately put into effect and force by all operators. 8. Eealizing mat inasmuch as the declared purpose of the Brotherhood of Timber Workers is antagonistic to our interests as employers, and that they now claim they have 245 locals organized, and that they have 24,000 men organized in the States of Louisiana, Texas, Arkansas, Alabama, and Mississippi and that the most effective present method of protection against this organization would be to close down our properties entirely in the districts where efforts are being made or may hereafter be made to organize the employees, but the adoption of this method at this time would be impracticable because of the con- tract orders which the various mills have on their books, and in lieu of this the next most effective means of protection at present practicable would be a suspension of operations for a part of the time each week, we recommend for the present that in such dis- tricts sawmills and woods be placed on an operating basis not exceeding four days a week, and the planing mills not exceeding four days per week on an average, and that if such method be not sufficient the matter be further considered for the adoption of more strenuous action should the same become necessary for the protection of the public generally and the interests of the property and business of the employers. A strike of the unionists occurred at Carson and other points in Louisiana in June, and several mills ceased operations. It was found that the curtailment determined upon at the May 24 meeting was not sufficient to cope with the situation. A call was sent out by wire for a meeting at New Orleans on July 19. There were present at this meeting 140 members of the association and the owners of about 300 mills. The following resolution was adopted: WHEREAS: In our opinion the recommendation of the meet- ing of May 24th of running four days per week, has, in so far as it may have been acted upon, proved inadequate as a means of resistance against said combination among the operatives and ineffective for the protection of our business and property from encroachments of said organization and persons in sympathy therewith and that other and more adequate measures must be adopted if our property and business is to be protected, and that in our judgment the most efficient measures which can be adopted at present is to cease to employ operatives in the districts where this combination has manifested itself; or may hereafter mani- fest itself, and that the closing of plants in such districts is neces- sary to prevent the organization of labor therein and thereat, and to prevent the successful accomplishment of the design of said organization: THEREFORE, BE IT RESOLVED, that the Executive Committee recommends, subject to the approval of the associ- ation at this present meeting, that in addition to the prior PRODUCTION AND WHOLESALE DISTEIBTJTION. 155 recommendation of running four (4) days per week, that the following plants be closed down until such time as it shall appear that such closing is no longer necessary for the resistance of said organization and the protection of our property and business and the public generally: The sawmills of the Gulf Land & Lbr. Co. at Fullerton, La. All sawmills of the Industrial Lumber Co. The sawmills of the Long-Bell Lbr. Co. at De Ridder & Bonami. The sawmills of the Pickering Lbr. Co. at Cravens, La. The sawmill of the American Lumber Co. at Merryville, La. Such closing to be under the terms and provisions of the Con- stitution of this Association, and entitling the closed mills to all the benefits thereof. At this same meeting according to the minutes — Several manufacturers of cypress who were present indicated their sympathy with the organization and it was said that a meeting of the Southern Cypress Association would be held in the near future to discuss the question of the Cypress manufacturers joining the Southern Lumber Operators' Association practically in a body. There was continued activity of the labor unionists. The operators' association again met on August 16, in Chicago, with about 50 present. The executive committee with the Louisiana board of governors drew up the following resolution, which was unan- imously adopted: Be it Resolved by the Southern Lumber Operators' Association that certain sawmills and logging plants in Western Louisiana and Eastern Texas, some of which are already closed by strikes fomented by said Brotherhood of Timber Workers, and others, of which are threatened by them, be closed, Saturday, August 19th, 1911, and be kept closed until in the opinion of the Execu- tive Committee such mills may resume operations without the aid of any member of or any sympathizer with said Brotherhood. The milling plants embraced in this resolution are as follows. [Follows list of 23 mills in Louisiana and Texas.] Considering that a number of mills in Southwestern Louisiana will discontinue operations indefinitely after Saturday, August 19th, and will be re-imbursed in accordance with the provisions of the constitution, the Executive Committee authorized an assess- ment of twenty-five cents per thousand for the Benefit Trust Fund on the log scale production of July, and this action was unanimously ratified by all present. By this order 23 mills, having a daily cut of more than 3,000,000 feet, about 25 per cent of the total output of this district, were im- mediately shut down, throwing out of employment 8,000 men. Meetings of lumbermen were held in several States during this time for the discussion of labor problems. At the meeting of the associa- tion at Chicago, September 13 to 14, 34 mills in Louisiana, Texas, 156 THE LUMBER INDUSTRY. Arkansas, Mississippi, and Alabama were represented. The following extracts, bearing on the operations of the benefit fund, are taken from the minutes of the meeting: Mr. C. B. Sweet suggested that the Chair call upon the Treas- urer to report, whereupon Mr. Geo. K. Smith, Treasurer, stated that about $40,000 had been paid in on June and July, and that about $20,000 was still due on those months. After considerable discussion as to the proper method to pur- sue in regard to the basing of assessments and paying of bene- fits, a motion was made by R. A. Long, that assessments shall be based, as provided for in the Constitution, on the actual log scale cut, but that the benefits shall be paid on four day a week basis. The motion was seconded by Mr. J. A. Bentley and carried. Regarding the advisability of any_ mills resuming operations, Chairman M. L. Fleishel of the Louisiana Board of Governors, recommended that the Board should first make careful investi- gation of the situation, and after doing so would then be pre- pared to confer with the Executive Committee. The Executive Committee recommended for the approval of the meeting, that an assessment be made on August log scale cut, of 40$ a thousand for the Benefit Fund and 10$ a thousand for the General Fund. Mr. S. J. Carpenter moved that the above be approved, as the Finance Committee had found, after conferring with Treasurer Smith, that the expenses of the Association would be unusually heavy for the next two or three months. Mr. J. A. Bentley seconded the motion. Carried. The results of the curtailment are referred to in the following trade- journal extracts: St. Louis, Mo., June 20. — Owing largely to labor troubles in the sawmill territory of the South, a number of the large manu- facturers have found it necessary to advance the price of lumber, from 50 cents to $1 a thousand, effective July 1. (American Lumberman, June 24, 1911, p. 32.) Already effect of the shutting down of so many mills is dis- cernible in the market, and there is no doubt that if the curtail- ment of production continues long a substantial advance in { trices will come. As all the mills which have closed down have arge stocks of lumber on hand it is not unlikely that much of the loss they will incur will be made up by the higher prices received for the lumber they will ship. (Southern Lumberman, Aug. 26, 1911, p. 27.) Compilation No. 19, issued by George K. Smith on July 10, 1911, in the midst of this activity, in comparison with compilation No. 18 o'' April 26, 1911, showed on 102 items an advance in prices of 50 cents and on 7 items an advance of $1. Summary of the various activities affecting the curtailment in 1911.— The information dealing with the method of curtailment and the effect on prices in 1911, given in detail in the foregoing pages, is summarized herewith in approximate chronological order, in order that the sequence of events will clearly appear. PRODUCTION AND WHOLESALE DISTRIBUTION. 157 The market conditions of the winter of 1910-11 are described in the letter of the Omaha agent of December 29, 1910, (p. 144), the January 19, 1911, letter of the Beaumont Lumber Co. (p. 145), the extracts from the St. Louis Lumberman of February 1, 1911 (p. 145), and the American Lumberman of March 11, 1911 (p. 145), and the issue of October 21, 1911 (p. 148). This information indi- cates that by a more or less concerted effort the yellow-pine manu- facturers kept up their prices in the face of a somewhat light demand. Early in 1911, labor organizers began to work among the mill employees in Texas and southwest Louisiana (p. 153). On March 31 the Southern Lumber Operators' Association in its annual meeting chose as officers and directors the leading yellow-pine producers (p. 150). In order to sustain their prices in the face of a weakening demand, the manufacturers apparently welcomed a course of action which indirectly brought about an effective curtailment for them. To judge from the trade-paper comments, the labor situation was to them a matter of less importance than was the question of restrict- ing their output. The May issue of the Southern Industrial and Lumber Review con- tained an article on curtailment, mentioning 22 large firms as curtail- ing, the majority of which were reported as running four days or less, and stating the reason for this action "because they can not sell the lum- ber they make in full time operations" (pp. 145-146), and a similar arti- cle appearedin the Southern Lumberman of May20, 1911 (pp. 146-147). On May 23, 1911, the semiannual meeting of the Yellow Pine Manu- facturers' Association was held in Chicago, at which many members spoke, urging curtailment as a remedy for the existing market condi- tions (p. 147) . A special meeting of the Southern Lumber Operators' Association was held in Chicago the next day, May 24 (pp. 153-154). At this meeting the Keith resolution was passed. One paragraph of it recommended that mills in the districts affected by the labor organi- zation work "be placed on an operating basis not exceeding four days a week." It may be pointed out that this measure savors more of restriction of output than of discipline for employees. It is, in fact, a practice common in curtailment agreements. Had discipline for employees been the sole consideration at this time the most effective measure would have been a complete lockout. Through the opera- tion of the "benefit fund" a part of the financial burden due to cur- tailing production was shifted onto the shoulders of the mills which were permitted to run at full capacity. In June strikes occurred at Carson and other Louisiana points, and several mills closed down (p. 154) . A news item from St. Louis under date of June 20, published in the American Lumberman of June 24 (p. 156), mentioned the labor troubles in the sawmill territory of the South as a reason for a general 158 THE LUMBER INDUSTRY. advance in prices by several large manufacturers to be effective July 1. Compilation No. 19 of the Yellow Pine Manufacturers' Association price Ust series (see pp. 89-97) issued on July 10, 1911, shows an ad- vance of 50 cents to $1 on many items over the prices of the similar compilation for April 26, 1911. On July 19, at a meeting of the Southern Lumber Operators' Asso- ciation in New Orleans, several mills were ordered shut down (pp. 154-155), and at a meeting in Chicago, August 16, a resolution closing 23 mills was adopted (p. 155). Under date of August 26, 1911, the Southern Lumberman commented on the influence on market condi- tions of so many mills shutting down, and pointed out (p. 156): As all the mills which have closed down have large stocks of lumber on hand it is not unlikely that much of the loss they will incur will be made up by the higher prices received for the lum- ber they will ship. In discussing the break in prices the last quarter of 1911, described on pages 148-149, Mr. Rhodes referred (p. 149) to a conference held in New Orleans on October 30, 1911, between prominent yellow-pine manufacturers. Pressure was evidently being brought to bear on the mills east of the Mississippi to curtail. These mills had not been involved in the labor troubles: While the Western mills have been down, more or less, the Eastern mills have been sawing right along, and this has caused Mr. R. A. Long and some others to feel that they were "holding the bag, " to use a term common to the lumber industry. S. J. Carpenter, then president of the Yellow Pine Manufacturers' Association, made the following statements at a meeting of the board of governors of the National Lumber Manufacturers' Association on May 6, 1912: Yellow Pine manufacturers are having lots of trouble. The attempt to organize the labor has been a severe handicap and they are still active and busy. Today they are holding at Alex- andria, La., a grand lodge meeting and will undoubtedly order a strike or make some demands of the mills. The Yellow Pine manufacturers feel that that situation must be met. Don't know that you are all familiar with what has been done the past year by the Southern mill men affiliated with the Southern Operators' Association, but they have spent a great deal of time and money fighting the attempt to organize labor and have raised nearly $300,000. Think only 106 mills are included in the member- ship. We have that situation to face again, are not through with our trouble and our assessments during that period amounted to as much as 50 cents a thousand on our output. It is evident that strenuous efforts were made during 1911 by the manufacturers, primarily with the purpose of restricting the output PRODUCTION AND WHOLESALE DISTRIBUTION. 159 and keeping up prices. That the opportunity afforded them not onlv to attack the labor unions but at the same time to strengthen market prices by restriction of output was not neglected is a matter of record. It would be difficult to determine which was the stronger motive. It should be noted, however, that when in 1912 the labor troubles were again active and the agitation was such that special investigations into conditions around the lumber mills were carried on by both the governor of Louisiana and a New Orleans newspaper, the association took little action. Practically all of its mills kept run- ning full time. Only one mill was shut down by it, and that for about 30 days at two different times. The difference between the vigorous action taken by the association in 1911 and the measures it took in 1912 may probably be explained by the fact that during the trouble in 1912 the lumber market was strong and prices rising. The usual motive for curtailment was removed. Section 9. The Georgia-Florida Saw Mill Association. The Bureau has made no detailed examination of the records of this association. The information herewith presented is derived principally from association circulars and reports of meetings and from trade-paper sources. The Georgia Saw Mill Association was organized in 1899. It was succeeded by the, Georgia Interstate Saw Mill Association in 1903, and this in turn became the Georgia-Florida- Saw Mill Association in 1906. The latter is still in existence. President Tift, in an address made May 26, 1904, at the second annual convention of the National Lumber Manufacturers' Associa- tion, said that the association at the time of its organization in May, 1899, had about 25 members. At the time of this address the asso- ciation claimed a membership of about 150, "closely divided between Georgia and Florida," representing a cut of about 700,000,000 feet. About a year and a half later the American Lumberman, December 2, 1905, page 29, gave the membership as about 175, and July 20, 1907, on page 45, the Lumberman gave a list of 175 members. The American Lumberman, October 24, 1908, page 45, says: "The Georgia-Florida Sawmill Association met here [Jacksonville, Fla.] on the 13th, and adopted the by-law that only lumbermen manufacturing 50 per cent of their shipments would be members hereafter." Vice President William B. Stillwell, in a statement made at the eighth annual convention of the National Lumber Manufacturers' Association April 19, 1910, said that the association had a member- ship of 76, representing a cut of about 700,000,000 feet, which repre- sented about 45 or 50 per cent of the cut of their territory. 160 THE LUMBER INDUSTRY. At the annual meeting held May 16, 1911, H. H. Tift, who had been president since the organization of the association, declined reelection as president, and J. B. Conrad, of Glenwood, Fla., was elected president. E. C. Harrell has been secretary of the association for more than 10 years. The following indicates that certain important activities of the association do not get much publicity in the trade journals: The Georgia Saw Mill Association expects to hold its next meet- ing in this city August 27. * * * There was unusual interest in the proceedings of the last meeting and with the present condi- tions confronting this organization the coming meeting promises to be one of greater interest than usual. There is a great advan- tage to be had in attending these meetings as information is given that can not be printed for distribution. (From Tifton, Ga., news in American Lumberman, Aug. 17, 1901, p. 29.) Before discussing the meeting it is proper and a privilege to say right here that the Georgia Saw Mill Association is an insti- tution in the economy of associations peculiar in itself. It is an organization that has done more work and has had less said about it by the lumber press than any other association in the United States, unless possibly might be included the Cypress Association of New Orleans, which bears a close relation to the Georgia organization. The whole strength of the cypress association has been in the matter of ability to get together once a month all the members around its long table and tell each other the living truth. The members of the Georgia association get together once a month at some convenient point and tell each other the living truth. Now, that is- a part of its meeting which the American Lumberman would most like to print, but it is also a part of the meeting which no lumber newspaper will ever print because it would not be courteous to do such a thing when it would be directly in oppo- sition to the wishes of the association, and then it might destroy the very usefulness of the truth telhng which occurs; so in the account of the meeting which follows as many as thirty speeches, each of from one to five minutes' duration, will be covered in a simple paragraph showing the consensus of the opinion. The Georgia Saw Mill Association is that flat, without further explanation save to say that it is a saw mill association of saw mill owners and operators exclusively. The broker or merchant who does not actually own a saw mill has no part and parcel in the organization. (From report of meeting, in American Lumberman, Nov. 15, 1902, p. 16.) H. H. Tift, in his address before the National Lumber Manu- fecturers' Association in 1904, already referred to, stated: We hold our meetings monthly, and one cf our principal fea- tures is what we call our "conferences." At every meeting we call on every member in attendance to make a report as to now he is situated, as to the market condition, as to prices, as to.labor and as to every condition that enters into the general situation. In that way we have secured a great deal of valuable information, PRODUCTION AND WHOLESALE DISTRIBUTION. 161 That feature of our meetings has resulted in bringing about a feeling of confidence one with another. Section 10. Association price activities. In his address, delivered May 25, 1904, before the National Lumber Manufacturers' Association, H. H. Tift said, concerning conditions at the time of the organization of the Georgia Saw Mill Association: Our condition at that time was substantially this: There was no concerted action whatever between the different saw mill interests in Georgia. Every man was forhimself without any knowledge or information as to what was being done by his neigh- bor. We found after the organization of the association, when we got together and began to compare notes, the mills located within 10 miles of each other were cutting 60 foot car sills at a difference of $10 to $25 a thousand [on] orders taken at the same time from the same people. * * * Soon after our organization we went to work and established a price list. Previous to that time the prices on the different grades and sizes of lumber were practically uniform — yellow pine — and we went to work and remedied that condition and issued a price list so arranged as to fix a fair valuation on all the different sizes and grades of lumber. That price list was put out as a basis of information. The results that came from that in a short period of time were marvelous — a very large increase in the prices the lumbermen were 'getting, and, in addition they soon began to get prices for their difficult sizes that properly belonged to them. In 1900, according to trade-journal accounts, an attempt at cur- tailment of production was organized under the auspices of the Georgia Saw Mill Association. The following extracts bear on this point: At a meeting of the Georgia Saw Mill Association held at Tifton, Ga., April 6, the following resolution was adopted subject to ratification at next meeting, to be held at Valdosta, Ga., Friday, May 4 : Resolved, That, beginning May 15, every mill in the Associa- tion agree to reduce the running time to four days each week. This is an important step, as we believe in the right direction. (New York Lumber Trade Journal, Apr. 16, 1900, p. 10.) The sawmills of Georgia have also, by united action, agreed to go on two-thirds time, and, if necessary, we are reliably in- formed they will even cut down to half time. (New York Lumber Trade Journal, June 1, 1900, p. 9.) The American Lumberman of October 19, 1901, 1 refers to two concerted price advances since August. On October 26 it evidently refers to the second of these advances. The Bureau has a copy of a price list which bears the following statement on its cover: No. 1 Interior Price List, Yellow Pine Lumber, Effective Jan. 21, 1902, issued by Georgia Saw Mill Association, superseding List effective October 20th, 1901. 2fi030°-l4— U ,Seep - m - 162 THE LTJMBEB INDTJSTKY. The American Lumberman of February 8 and 15 and March 15, 1902, contain references to an advance made shortly before by the association, and the issues of New York Lumber Trade Journal of April 15 and American Lumberman of April 26 refer to another similar advance. The Bureau has a copy of a price list, entitled "Georgia Saw Mill Association Coastwise Price List," which contains four tables, the first bearing the heading "Minimum price list, rules 1883, adopted Jan. 21st, 1902" the second headed "Standard inspection random lengths only, rules 1883, adopted Jan. 21, 1902," the third headed "Minimum price list rules 1902, adopted Aug. 26, 1902," and the last "Standard inspection random lengths only, rules 1902, adopted Aug. 26, 1902." The booklet also contains two sets of grading rules. There is a reference in the New Orleans Lumber Trade Journal of June 15, 1904, to a price list which is probably the one referred to in the American Lumberman of June 23. The following refers to curtailment action taken by the association in 1904: Cordele, &a., July 14- — At the regular monthly meeting of the Georgia Interstate Sawmill Association, held here on the after- noon and evening of July 12, it was decided in view of the unsatisfactory condition of the market to reduce one-third during July and August the output of all mills affiliated with the asso- ciation. (American Lumberman, July 23, 1904, p. 22D.) A circular letter sent out August 12, 1905, by E. C. Harrell, secre- tary, was as follows: We are enclosing herewith copies of the COASTWISE and INTERIOR Price Lists effective August 15th. Prices were advanced $1.00 per M feet straight through, and in addition the Car Sill list heretofore in the Interior list were done away with, therefore quotations on all stock not Kiln-dried and Dressed are to be based on the Coastwise fist. This change really makes the advance more than would appear at a glance. From reports of those at the last meeting, and information received from a number who were not present at that time, as well as the trade with whom we have talked whenever possible, we believe that these prices and more can be obtained without any trouble whatever. In quoting on PRIME 1905, don't forget to add $2.00 to the Merchantable fist. We are prepared to furnish members as many additional copies of either hst as desired. On September 26, 1905, Secretary Harrell sent out a circular ask- ing for attendance at the meeting October 3, or for a letter regarding conditions if unable to be present, and advises that members could possibly get better prices by being in possession of the experiences of other manufacturers. PRODUCTION AND WHOLESALE DISTRIBUTION. 163 The American Lumberman of October 14, 1905, had a reference to a price list authorized at a meeting of October 3 ; the issue of March 3, 1906, had a reference to a list which was to be considered at a March 27 meeting. As shown by the minutes of a meeting of the Georgia-Florida Saw Mill Association at Atlantic Beach, Fla., July 15, 1907, the following curtailment resolution was unanimously adopted: Whereas, Valuable Pine timber is being recklessly cut up into lumber and sold at and below the cost of production in Georgia and Florida and the adjoining States, thereby destroying one of the South's most valuable assets; therefore Be it resolved, That the members of the Georgia-Florida Saw Mill Association agree to close down their mills during the month of August and call upon their fellow operators and co-workers in all the Southern Pine States to join them in this movement against the wholesale destruction of one of the South's most valuable resources, and would further recommend that the saw- nuUpeople get in communication with the Forestry Department at Washington for better posting themselves on the principles of applied forestry as enunciated in the various pamphlets printed by the department for general distribution on this subject. • (New York Lumber Trade Journal, Aug. 1, 1907, p. 13.) Trade-journal comment on the association curtailment activities in 1907 is shown in the following extracts: In the southeast prices of yellow pine are so unsatisfactory that thirty-five manufacturers in convention assembled have resolved to shut down their mills during August as a means of saving further loss and strengthening the market. In this the producers of North Carolina pine are moving to cooperate. (American Lumberman, July 20, 1907.) The act of voting to shut down the mills of those voting as a means of restricting production for the defense of present and prospective markets, is popularly presumed to be an illegal pro- ceeding; there, however, has been no final adjudication to this effect. The question at this time has attained to a degree of acuteness perhaps heretofore not fully appreciated by those most interested. The action of the Georgia-Florida Sawmill Associa- tion upon a recent occasion in which that body, and a later assem- blage of mill men at Sumter, S. C, openly voted to shut down in August all mills represented, has brought the question into promi- nence and the broad light of unveiled scrutiny. There was in this an element more conservative than the rest, but when it came to final or test vote, there was in either case no dissent. (New Orleans Lumber Trade Journal, Aug. 1, 1907, p. 12.) Following the decision of the Georgia-Florida Sawmill Associa- tion members at their meeting last month to suspend operations dunngthe month °f August, awaiting a readjustment of market and shipping conditions, reports reaching the Journal from a large part of the territory covered by the membership of that organization are to the effect that the decision is being carried out by the entire membership. (New York Lumber Trade Jour- nal, Aug. 15, 1907, p. 22.) 164 THE LUMBBK INDUSTRY. y /> At the special meeting of the Georgia-Florida Saw Mill Asso- ciation, held at Jacksonville, Fla., on August 20, it was reported that only 70 out of the 170 mills represented in the membership of that organization had shut down, thus leaving 100 in contempt of the previous agreement. Under these circumstances "^here was a dominating sentiment in favor of abrS^ting that agree- ment, thus leaving individuals free to take such future action in the premises, if any, as each might see fit. (New Orleans Lum- ber Trade Journal, Sept. 1, 1907, p. 12.) References to the effect of this curtailment upon market conditions is shown in the following extracts from New York news in the New York Lumber Trade Journal, in the following issues: August 15, 1907, page 18. — In yellow pine the recent action of the Southeastern yellow pine -mills in _ shutting down opera- tions for the month of August is already being felt in a betterment of market conditions to some degree. September 1, 1907, page 14- — In yellow pine the curtailment in operations in the Southeast is undoubtedly having a good effect on the general market. While it is true that prices nave not advanced materially, there is nevertheless a much better tone to the market, and such business as is being booked is at firm figures. October 1, 1907, page 18. — In yellow pine there is some slight improvement noted due to the strength of coastwise freights and the benefit of the southeastern curtailment. The by-laws adopted by the association on December 10, 1907, con- tains the following provision regarding price activities: Section 4. A committee of four shall be appointed by the President, to be known as the "Market Committee" whose sole duty it shall be to ascertain from time to time, and in such man- ner as they may deem advisable, the prevailing quotations and market prices of the various classes of Yellow Pme Lumber, and the existing conditions as to supply and demand for the same, and to cause the facts thus ascertained to be disseminated from time to time among the members of the Association; and it shall be the duty of the Secretary to aid said committee in the discharge of its said duty. At the regular meeting held at Atlantic Beach, Fla., June 6, 1908, according to the minutes of the association — Mr. Amorous made motion that the Secretary be instructed to issue weekly, bi-monthly or monthly, as occasion requires, a market report, to be made up by him after consulting saw mill men and lumbermen, with a view of obtaining actual market prices. Report for general distribution. Mr. Cummer amends by adding: Each member present send in to the Secretary their individual view as to market prices, by next Wednesday, the February, 1907, report to be used as a basis, adding to or taking from prices therein named. The report to also show number of mills reporting. Motion as amended adopted. PBODTJCTTON AND WHOLESALE DISTRIBUTION. 165 A report of this meeting which appeared in the American Lum- berman of June 13, 1908, page 55, is, in part, an almost verbatim extract from the minutes, but neither account contains any reference to the appointment or purposes of the committee, referred to in the New York Lumber Trade Journal of July 15, 1908, page 22, where there appears the following statement in the Jacksonville, Fla., news dated July 7: The committee appointed at Atlantic Beach to secure uni- formity in lumber prices among the Georgia-Florida sawmill men met in this city (Jacksonville) last week, and although the proceedings were private, it is understood that hereafter there will be less trouble on this score. Attention was directed to the foregoing in the following comment in the New York news on page 18 of the same issue: The price situation is still competitive on building lumber in particular, although there are some very interesting comments in our Southern news department and editorial department on the Yellow Pine situation at Southeast mill points of interest to buyers of that commodity. The Bureau has a copy of the " Coastwise prices current " of July 30, 1908, the price table bearing the heading "Report of current prices merchantable grade, interstate rules of 1905, for ordinary delivery f. o. b. cars Savannah, Brunswick, Fernandina, and Jacksonville. As ascertained from manufacturers and dealers, July 30th, 1908. E. C. Harrell, secretary." The copy also contains the grading rules. The Bureau's copy of the prices of September 28, 1908, consists of a blue card on which is printed a table of prices, bearing the heading "Prices current of yellow pine flooring, ceiling, car material, etc., as ascertained Sep. 28th, 1908, f. o. b. cars mill. E. C. Harrell, secretary." The Bureau's copy of the prices of November .17, 1908, is in a booklet, with the grading rules, similar to the issue of July 30, 1908, and with a like statement at the head of the price table. The following, taken from a circular of November 28, 1908, issued by Secretary Harrell, shows the effect attributed to the association lists at this time: To aU concerned: We copy the following for your information. Beg to advise that we have recently accepted a ya T d schedule, all 10 inches and under, largely 6 to 8 inch sawing, at a price within 45c per thousand of the last list. It would have been impossible to have closed the business at that price, had not a new hst been issued, and we have no hesitancy in saying, that we believe that within thirty days, no trouble will be encountered getting the full list price, as per the new list. 166 THE LUMBER INDUSTRY. On June 8, 1909, E. C. Harrell, the secretary of the association, - was interviewed by two agents of the Bureau of Corporations, to whom he stated that the association had practically discontinued the issuing of price lists, and that the last list issued was on September 28, 1908 of which he furnished a copy; that files of price Y U and other litera- ture of the association had not been kept; that until just what might be legally done by an association had been determined it was their policy to do very little and that the organization was being maintained, but outside of the application of the rules for classification and inspection the operations of the association had practically ceased. That the price activities have not entirely ceased is evident from the fact that official price lists ("prices current") have been issued since that time, and also from the following extracts from various circular letters sent out by Mr. Harrell. For example, in a circular letter sent out by him under date of June 19, 1909, which purports to contain extracts from communications of manufacturers, the fol- lowing comment on one of the extracts is given: We find the general statements embodied in the above about in line with our own ideas of present conditions. You will especially note the very low flooring offerings that are mentioned. It developed in the association (meeting in Savannah 14th) that several members and others were selling flooring at much lower prices then even current offers, owing probably to then- being out of touch with market changes. The writer thinks it highly important that immediate action be taken by the market committee appointed at the Savannah meeting to have circulated from your office a compendium of the committee's opinion of conditions, so as to bring members who did not attend the meet- ing into touch with the situation. The following is from a circular issued "to all concerned" by the association secretary under date of September 15, 1909: # The regular meeting of the Georgia-Florida Saw Mill Associa- tion held here yesterday, the 14th. Keports from those present, as well as information in hand, indicate that all the mills are running full time, and have 30 to 60 days, and in some instances as much as 90 days cutting on hand, at prices well up to the present market report, and on sizes 12" and up, many mills are getting above those figures. The prices issued on September 26, 1911, were printed on one side of a small sheet of brown paper. It was headed: PRICES CURRENT. Of Yellow Pine Flooring, Ceiling, Car Material, etc., as ascer- tained September 26th, 1911, F. O. B. cars mill. E. C. Harrell, Secretary. PRODUCTION AND WHOLESALE DISTRIBUTION. 167 The prices, " as ascertained Feb. 24th," were issued on a mimeo- graphed sheet which was headed: To All Concerned : For your information, beg to give you report of prevailing prices, F. 0. B. cars mill, as ascertained Febry. 24th. [Here follows the table of prices, and after the table the words :] Yours truly, E. C. Harrell, Secretary. Jacksonville, Fla., February 26th, 1912. Early in 1912 the association secretary sent out circulars which deal with prices. These circulars contained extracts from letters from manufacturers, giving their views of conditions of the market and what prices should be. Neither the names nor the addresses of the manufacturers were given. In a circular of January 26 one member, after stating his opinion as to prices, added: "With this information we hope you can arrange your price list in accordance with the present market conditions." Another said: "We are endeavoring to hold strong for the last fall prices." A circular of February 24, 1912, states that prices obtained were "well up to the figures of the September market report." This evi- dently refers to the September 26, 1911, "prices current." (See p. 166.) The circular also gives a "report of prevailing prices, F. O. B. cars mill, as ascertained Febry. 24th." A circular of March 9 contains a copy of a letter from a manufac- turer giving his quotations on certain items and asking for the pre- vailing market prices on these items. The letter closes with this sentence: "We wish to keep in line on prices, and will appreciate any information you can give us on the market." A circular of April 3 contains a copy of a letter from a Florida manufacturer stating that the list was too low on certain items and that the next market report should advance these items to the figures that this manufacturer claimed to be getting. A circular of April 4 contains copies of letters from manufacturers concerning prices. One manufacturer stated that he had all the business he needed at list prices or better. Another stated: All we have to do, we saw mill people, is to be conservative. If good business is offered, take it on, if the price is strictly up to list or better. A circular of April 17 contains a copy of a letter from a manufac- turer concerning prices, from which the following extract is taken: Looking over the whole situation we can see no possible excuse for any of the manufacturers accepting business at less than list 168 The lumber industry. figures and for special bills, 500 to $1.00 above the list can be obtained. They are not going to pay it if the manufacturers do not ask it. The manufacturers -will be told by all buyers that yard stock sawing is in poor demand and concessions are being granted from list figures, but the fact remains that if the mills simply have the nerve to ask the prices they will get plenty of sawing; we are doing it. A circular of May 21, says: We will thank you to write us promptly how the prices you are obtaining compare with the report or prices mailed you on yes- terday. Go into detail if you will, for it is only in this way that this office can give manufacturers the information that they abso- lutely require and should have. A circular of May 31 contains a copy of a letter from a manufac- turer referring to a "better arrangement of September 26th, 1911, market report," as a decided improvement over the old printed list. The following is from the American Lumberman, October 12, 1912: This is one of the reasons for the success of the Georgia-Flor- ida Association. Its members gladly disseminate any informa- tion that may be obtained and in this way every member is Eosted. Secretary Harrell sends out a weekly market bulletin, esides a world of other useful information between times. His office is a clearing house for information, a supply of which is kept continually on hand, furnished by the members. The obvious intention of these prices current and weekly market reports, together with the circulation of the manufacturers' views as to prices, demand, and production, is to render prices uniform. The following correspondence relates to a curtailment movement undertaken by the Georgia-Florida Saw Mill Association in 1913: [Letterhead of Camp Manufacturing Co.] Franklin, Va., July 29ih, WIS. Mr. W. B. Roper, Secretary-Treasurer, The North Carolina Pine Association, Norfolk, Va. Dear Sir : For your information, I am enclosing you herewith copy of the proceedings of a meeting of the Georgia-Florida Saw Mill Association held in Jacksonville, Fla., on July 22nd, 1913. This was sent me by Mr. Morgan V. Gress of the Gress Manufac- turing Company of Jacksonville, Fla., and in sending this copy of these proceedings he writes as follows: "Am also sending you, as a matter of interest, circular sent out by the Georgia Saw Mill Association. These circulars do not begin to represent the true situation, as there are a hundred mills or more in Florida who do not belong to the Association, but who are compelled to go out of business for lack of orders. These are the small mills cutting 8,000 to 15,000 feet per day. All of the Florida lumber passes through Jacksonville, and a visit to the steamship offices and docks here will show right now that the production of lumber is off, at least 33 \%." PRODUCTION AND WHOLESALE DISTRIBUTION. 169 It would seem from this report that our Florida friends are not so scarry of the "big stick at Washington as we are. They seem to take a very bold stand, and say what they will do, and what they won't do, as an Association. I am just sending this to you so that you can see what the others are doing if you have not already received this information. I am taking the liberty of sending a copy of this letter, and a copy of the report to friend Corwin. Yours very truly, R. J. Camp. Mr. Koper replied as follows, under date of July 30, 1913: Yours of 29th, enclosing copy of the proceedings of the meet- ing held in Jacksonville on Jury 22nd, has been received and I am very glad to have this. We received a call for this meeting but had not been informed of what took place. I usually get copies of the proceedings of all of their meetings and I have noted a number of times matters transacted that we would not dare to tackle. I do not know whether it is advisable for us to follow the example as I feel sure they are incurring some risk. At the same time, we might use our nerve a little stronger than we do. I hope the step they have taken will yield good results and am sure that if all of the manufacturers throughout the Yellow Pine belt would take the bull by the horns and cut down their pro- duction 40 to 50%, market conditions would improve within the next 60 days very materially. I believe the manufacturers are realizing this and more of them are making up their minds to curtail their outputs. The following is an extract from the copy of the proceedings re- ferred to in the above letter: Jacksonville, Fla., July 22, 1918. To all concerned: The following were present in response to a notice sent out on July 9th, for a meeting of manufacturers of Yellow Pine, to be held in Jacksonville on Monday July 21st. [List of names of 26 manufacturers present follows.] Mr. A. G. Cummer was elected Chairman, and Mr. E. C. Har- rell, Secretary. The Secretary read the call which was signed by E. H. Paul, A. G. Cummer, W. Frazier Jones, E. L. Marbury, F. E. Waymer, Geo. T. Betts, R. B. Young, T. S. Price and C. H. Barnes, Jr. Mr. Cummer stated that the object of the meeting was to bring before the manufacturers, the fact that there was an over- Siroduction of yellow pine, and that the continued running on ull capacity was having the effect of increasing the already sur- plus of lumber which is in excess of that being consumed. The Chairman requested that each one present express them- selves as to what they expected to do under the circumstances, which are as follows: Cummer Lumber Co., willing to curtail 20 to 33£%. Calhoun Mfg. Co., to run four days the week. Ashley-Price Lumber Co., to curtail 25%. J. S. Betts Co., to curtail 20%. 170 THE LUMBER INDUSTRY. Interstate Lumber Co., expects to shut down August 1st. Edge-Dowling Lumber Co., will shut down if the majority of Association mills will agree to do so. Kissimmee Lumber Co., have already shut down and do not expect to run again until October 1st. Dowling-Shands Lumber Co., if majority of Association mills will, will shut down August 1st. A. H. Blanding favors a shut down of thirty days. Melton Lumber Company, if majority of Association mills will agree to shut down for August, they will also. Aycock Lumber Co., will reduce 25%. Dorminey-Price Lumber Co., willing to shut down or curtail J during August. Davis-Zirkle Lumber Co., willing to shut down or curtail J during August. GuS Pine Company, if majority of Association mills shut down, they will also during August. Suwanee Pine Company favors thirty days shut down if 75% of Association mills will. Florida Land Co., and D. B. Morrison Co., will do anything majority of Association mills decide best to do. Dunlevie Lumber Co., expects to shut down August 1st for two weeks, after which will decide what is best to do. Wakulla Lumber Company would rather reduce out-put 25%. Alapaha Lumber Co., will curtail 40 to 50%, or shut down thirty days after August 8th. Union Lumber Company began a 20% reduction July 10th, to be still further reduced 50% on August 1st. East Coast Lumber Co., 25% reduction in cut since May 1st, shipments reduced 60%, will curtail as much more as possible. Fanlew Lumber Company three weeks orders on hand, which will have to be gotten out, and will then reduce 25% or more. G. S. Baxter & Co., have already reduced from 20 to 25%, and will continue to do so. A resolution was adopted, requesting the Georgia-Florida Saw Mill Association to use its Secretary and Inspectors in informing the mills throughout the territory of the curtailment of manu- facture, and request that all manufacturers notify the associa- tion office of what they expect to do until consumption equals production of lumber. E. C. Harrell, Secretary. EXTRACTS FROM LUMBER-TRADE PAPERS RELATING TO THE ASSOCIA- TION ACTIVITIES. Note. — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news items from various cities will refer to the action and for several weeks or months will comment on its effect adds to the credibility of the extracts. PRODUCTION A.ND WHOLESALE DISTRIBUTION. 171 Boston— American Lumberman, October 19, 1901, -page 43.— The effect of the recent action of the Georgia Sawmill Association, embracing the yellow pine manufacturers of Georgia, Alabama and Florida, has already been felt in the Boston market. The price was advanced $1 a thousand, this being the second movement of this kind since August. New York— American Lumberman, October 26, 1901, page 42.— Full figures are still being obtained for yellow pine, and now that the Georgia Sawmill Association has again advanced prices there is little belief that it will have little effect in curtailing orders. New York— American Lumberman, February 8, 1902, page 49.— Recent advances in prices by the Georgia Sawmill Association are being well maintained. New York— American Lumberman, February 15, 1902, page ST.— The recent advance of $1 by the Georgia mills is easily maintained, and in some instances has been advanced. Philadelphia— American Lumberman, March 16, 1902, page 51.— There has been more or less deviation from the prices recently made by the Georgia Sawmill Association. American Lumberman, March 29, 1902, page S3. — The Georgia Sawmill Association held its regular monthly meeting at Jacksonville, Fla., March 19. The members reported that the prices fixed by the association were being well maintained. There is at present a universal demand for lumber, and prices should hold good, they said. New York— New York Lumber Trade Journal, April 15, 1902, page 22.— The recent price lists of the Georgia Sawmill Association and the Southern Lumber Manufacturers' Association are being strictly adhered to and yellow pine is today one of the strongest features. New York— American Lumberman, April 16, 1902, page 51.— The S2 advance in the price of flooring made by the Georgia Sawmill Association puts heart face rift at 143 here; etc. [other prices follow] price lists are strongly adhered to. New York— American Lumberman, June 7, 1902, page 53.— That the present price list is high enough in the face of existing conditions was proven by the manufacturers at the last meeting of the Georgia Saw- mill Association, for they made no changes. New Orleans Lumber Trade Journal, June 16, 1904, page 29 (from report of meeting, June IS, 1904).— The price list committee made the following report through Chairman A. G. Cummer: "Your price list com- mittee suggests that the prices for merchantable 1904 be SI per thousand less than the present list for mer- chantable 1883, and that the grouping now in use be applied on prices for merchantable 1904; prime to be made S3 per thousand above merchantable; standard SI per thousand less than merchantable on 10-inch sizes and under. Committee respectfully submits a new grouping for price list, and asks that it be dis- tributed to all members for criticisms, which will be taken up at next meeting." American Lumberman, July 23, 1904, page 22D (from report of meeting, July 12, 1904). — Although there had been considerable talk of making some change in the price list as previously adopted nothing was done, and it went into effect with the new inspection rules July 1. Savannah— American Lumberman, October 14 r 1905, page S3 (from report of meeting, Oct. 3, 1906). — The Georgia Interstate Saw Mill Association in session at the De Soto hotel October 3 authorized the expected advance in the price of yellow pine lumber. This action was taken after the situation had been canvassed and it was shown that sales were beingmade in nearly every instance at a figure considerably higher than the list. In the absence of President H. H. Tift, Vice President William B. Stillwell was called upon to preside. The question of advancing prices came up at the forenoon session and a general expression of opinion was had from the two score members present. There was no mistaking the sentiment of the manufac- turers, all of whom were anxious to see a new price list formulated, but at the same time they wanted the matter acted upon rationally. From the statements of those who were called upon to speak it was apparent tbata new list was i ustified because of the strong demand existing and in prospect and the impaired output of the nulls through a scarcity of labor. This latter phase was shown to be serious through the refusal of negroes to work steadily and the difficulty of obtaining other laborers. Before the early session was adjourned the chair appointed a committee comprising F. E. Waymer, W. S. Fender, W. F. Jones, W. B. Cheeves and itself to consider a new list. A report was made by the committee to the convention at the afternoon session and the list submitted was approved. The advance amounts to SI a thousand straight on coastwise and $2 a thousand added to flooring, ceiling, siding, car lining, etc., on the interior list. Shingles also were advanced to S3. 25 for No. 1 and $1.50 for No. 2, with lath at 82. A revision of the list to assure its consistency will be made between now and the next regular meeting by a committee composed of President Tift, vice President Stillwell, C. W. Pike, F. E. Waymer, W. F. Jones, E. H. Hall and G. T. Betts. Jacksonville, Fla. — American Lumberman, March 3, 1906, page 49 (report of meeting). — The most important event of the week was the meeting of the Georgia Interstate Saw Mill Association. Fifty lumbermen showed up and considerable interest was manifested in the question of advancing prices and the subject of foreign labor. Mill inspection occupied some attention. Both President Tift and Secretary Harrell were on hand. While prices, were not advanced every indication is that a material advance will be made at the next meeting. A committee of ten was appointed to reviBe prices, to report at the Valdosta meeting, March 27. Car lining was put up to S22 a thousand. It developed that members were getting from $2 to 85 a thousand feet above list price. The demand is phenomenal and millmen are getting their own prices. Weather conditions and other causes have reduced the output. Section 11. Grades. Definitions. — Yellow-pine manufacturers first adopted rules for grading in 1886. The Southern Lumber Manufacturers' Association adopted complete grading rules in December, 1890. Subsequent revisions and amendments to these rules were issued August 10, 1892, February 21, 1894, February 21, 1895, January 18, 1899, January 16, 1901, January 15, 1902, July 9, 1902, January 20, 1904, January 25, 1905, January 24, 1906, January 23, 1907, January 22, 1908, January 21, 1909 and January 26, 1910. The changes for the most part have been slight. For the period covering the prices 172 THE LTJMBEE INDUSTRY. presented by the Bureau the following rules, adopted January 24, 1906, by the Yellow Pine Manufacturers' Association, represent substantially the grade definitions in use: GENERAL INSTRUCTIONS. 1. Yellow Pine Lumber shall be graded and classified according to the following rules and specifications as to quality, and dressed stock shall conform to the subjoined table of standard sizes — EXCEPT WHERE OTHERWISE EXPRESSLY STIPULATED BETWEEN BUYER AND SELLER. 2. Recognized defects in Yellow Pine are knots, knot holes, splits (either from seasoning, ring hearts or rough handling), shake, wane, red heart, pith, rot, rotten streaks, worm-holes, pitch streaks, pitch pockets, torn grain, loosened grain, seasoning or kiln checks, and sap stains. KNOTS. 3. Knots shall be classified as pin, standard and large, as to size; and round and spike as to form; and as sound, loose, encased, pith and rotten as to quality. 4. A pin knot is sound and not over J-inch in diameter. 5. A standard knot is sound and not over 1£ inches in diameter. 6. A large knot is one any size over 1£ inches in diameter. 7. A round knot is oval or circular in form. 8. A spike knot is one sawn in a lengthwise direction. The mean or average diameter of knots shall be considered in applying and construing the rules. 9. A sound knot is one solid across its face, is as hard as the wood it is in, may be either red or black, and is so fixed by growth or position that it will retain its place in the piece. 10. A loose knot is one not held firmly in place by growth or position. 11. A pith knot is a sound knot with a pith hole not more than J-inch in diameter in the center. 12. An encased knot is one surrounded wholly or in part by bark or pitch. Where the encasement is less than J of an inch in width on both sides not exceeding one-half the circumference of the knot, it shall be considered a sound knot. (See Sections 9 and 16.) 13. A rotten knot is one not as hard as the wood it is in. 14. Pitch pockets are openings between the grain of the wood containing more or less pitch or bark, and shall be classified as small, standard and large pitch pockets. 15. A small pitch pocket is one not over | of an inch wide. A standard pitch pocket is one not over f of an inch wide, or 3 inches in length. A large pitch pocket is one over f of an inch wide or over 3 inches in length. 16. A pitch pocket showing on both sides of the piece J of an inch or more in width shall be considered the same as a knot- hole. PBODTJCTTON AND WHOLESALE DISTBIBTJTION. 173 17. A pitch streak is a well defined accumulation of pitch at one point in the piece, and when not sufficient to develop a well denned streak, or where fiber between grains is not saturated with pitch, it shall not be considered a defect. 18. A small pitch streak shall be equivalent to not over one- twelfth the width and one-sixth the length of the piece it is in. A standard pitch streak shall be equivalent to not over one- sixth the width and one-third of the length of the piece it is in. WANE. 19. Wane is hark, or the lack of wood, from any cause, on edge. 20. Bright sap shall not be considered a defect in any of the grades provided for and described in these rules. The restric- tion or exclusion of bright sap constitutes a special class of ma- terial which can only be secured by special contract. 21. Sap stain shall not be considered a defect in any of the grades of Common Lumber. FLOORING. Sizes. D and better, 1x3, 1x4, and 1x6 inches shall be worked to 13/16x2|, 3$ and 5£ inches; lj-inch Flooring shall be worked to 1-3/32 inches thick. Lengths. Standard lengths are 8 to 20 feet in B and Better Flooring with not to exceed 5% of 8 ft. lengths in mixed length shipments of this grade and in addition 5% of 6 or 7 feet in C and D and 5% of 4 or 5 foot in E. The above per cent, is allowed in all shipments of mixed lengths even though the number of feet of each length in such shipments be specifically stated. Grades: A, B and C Flat, A, B and C Edge Grain, D and E. Special Section. Defects named in Flooring are based upon a piece manufactured from 1x4 — 12, and pieces larger or smaller than this will take a greater or less number of defects, propor- tioned to their size on this basis. 45. A Flat Flooring must be practically free from defects on the face side and well manufactured. 46. B Flat Flooring will admit any two of the following or their equivalent of combined defects: Sap stain or firm red heart not to exceed 15% of the face, three pin knots, one standard knot, three small pitch pockets, one standard pitch pocket, one standard pitch streak, slight torn grain, or small kiln or season- ing checks. Pieces otherwise good enough for A, but containing not over six small pin worm holes shall be admitted in B. 48. Edge Grain Flooring, A, B and C shall take the same in- spection as Flat Grain of those grades, except as to the angle of the grain. 49. Heart Face Edge Grain shall be free from sap on face side. 50. D Flooring 1 will admit the following defects or their equivalent of combined defects: Sound knots not over one-half the cross section of the piece in the rough at any one point "Previous to Jan. gfciJBBfc D flooring was called No. 1 common. 174 THE LUMBER INDUSTRY. throughout its length; three pith knots, pitch, pitch pockets, sap stain, firm red heart, seasoning checks or shake that do not go through, a limited number of pin worm holes well scattered, loosened or heavy torn grain, or other machine defects that will lay without waste : pieces otherwise as good as B can have one defect (like a knot' bole) that can be cut out by wasting 3 inches of the length of the piece. 51. E Flooring 1 admits all pieces that will not grade as good as D Flooring, that can be used for cheap floors without a waste of more than one-fourth the length of any one piece. NO. 1 COMMON BOABDS. Sizes of boards. 1-inch S. 1 S. or 2 S. to 13/16-inch. Widths. On stock width shipments of No. 1 Common, either rough or dressed one or two sides, no piece should be counted as standard width that is more than i-inch scant on 8-inch and under; 3/8-inch scant on 9 or 10-inch, or 1/2-inch scant on 11 or 12-inch or wider. Such pieces should be measured as of the next lower standard of width and not reduced in grade. 68. No. 1 Common Boards, dressed one or two sides, shall be well manufactured; will admit any number of sound knots, not over one-fourth of the cross-section of the piece if located at the edge, not over one-third of the cross section of the piece if located away from the edge; two pith knots, one straight split not to exceed in length the width of the piece, torn grain, pitch, pitch pockets, slight shake, sap stain, seasoning checks, firm red heart, wane 1/2-inch deep on edge, not exceeding l^-inches wide and one-third the length of the piece or its equivalent, and a limited number of pin worm holes well scattered. NO. 2 COMMON BOARDS. _ Size. S. 1 S. or S. 2 S. to 13/16. Widths. On stock width shipments of No. 2 common, either rough or dressed one or two sides, no piece should be counted as standard width that is more than 1/2-inch scant on 8-inch and under; 5/8 on 9 or 10-inch and 3/4-inch on 11 and 12-inch or wider. Such pieces should be measured as of the next lower standard of width and not reduced grade. 71. No. # Common Boards, dressed one or two sides, No. 2 Common Shiplap, Grooved Hoofing, D. & M. and Barn Siding, will admit knots, not necessarily sound, none of which is over one- third the cross section of the piece, if located at the edge, or one- half the cross section if located away from the edge; if sound may extend one-half the cross section if located on the edge; worm holes, splits or through rotten streaks one-fourth the length of the piece, through heart shakes, and wane two inches wide, one-half the length of the piece, or defects equivalent to the above. A knot hole three inches in diameter will be admitted, pro- vided piece is otherwise as good as No. 1 Common. 1 Previous to Jan. 24, 1906, E flooring was called No. 2 common. PRODUCTION AND WHOLESALE DISTRIBUTION. 175 DIMENSION S.1S.1E. Sizes. Dimension shall be worked to the following: 2x4 S. 1 S. and 1 E. to lfx3f inches; 2x6 S. 1 S. and 1 E. to lfx5f inches; 2x8 S. 1 S. and 1 E. to lfx7£ inches; 2x10 S. 1 S. and 1 E. to lfx9£ inches; 2x12 S. 1 S. and 1 E. to lfxll \ inches. Dimension S. 4 S. \ inch less than standard size S. 1 S. and 1 E. Grades: No. 1, No. 2 and No. 3 Common. 80. Inspection of Dimension is a question of strength and uniformity of size, and whatever reduces its strength in cross- section must be considered a defect to that extent. In com- puting the area of cross-section occupied by defects the size of the piece in the rough shall be considered. .81. No. 1 Common Dimension will admit sound knots, none of which in 2x4s should be larger than 2 inches in diameter on one or both sides of the piece, and on wider stock which do not occupy more than one-third of the cross-section at any point throughout its length if located at the edge of the piece; or more than one-half of the cross-section if located away from the edge; pith knots, or smaller or more defective knots which do not weaken the piece more than the knot aforesaid; will admit of seasoning checks, firm red heart, heart shakes that do not go through, wane £ of an inch deep on edge, { the width and J the length of the piece, pitch, sap stains, pitch pockets, splits in ends not exceeding in length the width of the piece, a limited num- ber of small worm holes well scattered, and such other defects as do not prevent its use as substantial structural material. 82. No. 2 Common Dimension may have knots, not necessa- rily sound, which do not occupy more than one-half of the cross section at any one point if located at the edge of the piece, nor more than two-thirds of the cross section if located away from the edge; smaller, loose, hollow or rotten knots that do not weaken the piece more than the knots aforesaid; will admit rotten streaks, shake, wane, worm holes, split not to exceed \ the length of the piece, and other defects which do not prevent its use without waste. Section 12. Proportion of grades of yellow pine cut by various mills. The following tables show the proportion of grades produced dur- ing the years stated at 28 plants 1 operated by 11 companies. In some instances the proportions of A, B, and C grades (grouped under third, clear, and better) were separately stated, but for the purposes of comparison all the three upper grades are shown together. Some of the mills made a separate statement of "timbers" and others included such material in their common-lumber classification. The proportion of the cut returned as timber was usually small, and it has been combined with that shown for No. 1 common, in the case of the mills which showed it separately. It will be noticed that there are some marked differences in the proportions of the grades cut at the different plants. In ad 1 In the case of one company which operated 13 mills the combined output of all tiJbse It is given as that of one plant. 176 THE LUMBER INDUSTRY. to the differences in the character of the timber, a further cause of difference lies in the fact that some of the mills were located so aa to have more favorable freight rates than the others to their consuming territory. This made possible the marketing of a greater proportion of low-grade lumber, and made it profitable for such mills to take lower grade logs from the woods than could be done by the mills on the less favorable freight rates. YELLOW PINE— PROPORTION OF GRADES.' [Figuses represent percentages.] Company A.— Sales records. Grade. 1891 1892 1893 1894 1895 1896 1897 1898 1899 11.9 49.4 38.7 7.8 51.9 40.5 11.1 41.0 38.4 9.5 13.8 47.8 32.3 6.1 11.2 41.0 37.6 10.2 8.8 38.8 44.0 8.4 11.4 41.2 40.4 7.0 15.7 46.1 32.1 6.1 14.0 45.0 Grade. 1900 1901 1902 1903 1904 1905 1906 1907 1908 12.7 47.0 32.4 7.9 12.5 43.7 33.2 10.6 9.4 40.6 40.8 9.2 13.6 45.3 31.3 9.8 12.5 43.5 32.8 11.2 13.5 35.9 34.7 15.9 22.6 32.9 32.7 11.8 20.8 28.1 36.8 14.3 14.8 8.9 Company B. — Sales records. Grade. 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 56.2 43.8 62.5 37.5 41.8 58.2 44.0 56.0 40.6 59.4 38.3 61.7 40.4 59.6 31.1 68.9 27.6 72.4 25.4 74.6 Grade. 1902 1903 1904 1905 1906 1907 1908 1909 1910 27.6 72.4 23.1 76.9 23.2 76.8 22.8 77.2 27.1 72.9 27.2 72.8 15.5 84.5 12.5 87.5 10.2 89.8 Company C. — Sales records. Grade. Plant 1. 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 Third, clear, and better 39.0 50.5 10.5 31.6 52.4 16.0 31.3 53.0 15.7 32.6 48.9 18.5 37.8 46.0 16.2 36.6 46.4 16.9 .1 37.9 45.6 16.0 .6 39.2 40.2 19.3 1.3 37.9 40.6 20.2 1.3 35.5 40.7 22.0 l.S 39.0 35.0 22.0 4.0 37.0 19.0 3.0 Grade. Plant 2. Plant 3. Plant 4. 1905 1906 1907 1908 1909 1910 1909 1910 Third, clear, and better 29.8 41.1 27.9 1.2 36.5 35.2 25.0 3.3 33.1 35.5 26.6 4.8 22.4 36.9 36.4 4.3 29.0 31.0 33.0 7.0 37.0 35.0 24.0 4.0 24.0 46.0 26.0 4.0 1,1.0 42.0 ?8.l) 3.0 > Diagram 1, opposite p. 44, shows these facts in graphic form. a Part of the time the records group No. 1 and No. 2 common and part of the time No. 2 common and culls are grouped. PRODUCTION AND WHOLESALE DISTRIBUTION. 177 YELLOW PINE— PROPORTION OF GRADES— Continued. Company C— Sales record)— Continued. Grade. Plant 5. 1909 1910 Plant 6. 1909 Plant 7. Plants 1910. Third, clear, and better Ho. 1 common. No. 2 common No. 3 common or culls. . 18.0 63.0 17.0 2.0 10.0 78.0 7.0 5.0 22.0 48. 27.0 3.0 34.0 40.0 26.0 31.0 37.0 29.0 3.0 27.0 31.0 37.0 5.0 24.0 40.0 27.0 9.0 Company D.— Salts records. Grade. Plant 1. Plant 2. 1900 1901 1902 1903 1905' 1906 1907 1908 1909 1902 1903 1904 Third, clear, and better 15.1 69.1 12.0 3.8 11.5 71.5 14.6 2.4 8.9 74.2 16.2 .7 12.2 70.4 15.4 2.0 12.3 61.1 24.6 2.0 12.5 60.5 24.0 3.0 10.4 53.1 30.3 6.2 10.4 54.8 30.1 4.7 11. S 53.9 29.1 5.2 17.9 40.9 38.6 2.6 17.2 38.2 40.8 3 8 10.0 23 8 No. 3 common or culls 14.2 Grade. Plant 2 — Continued. Plant 3. 1905 1906 1907 1908 1909 1903 1904 1905 1906 1907 1908 1909 Third, clear, and better 18.3 26.5 46. 8 8.4 16.3 25.3 51.7 6.7 16.3 21.0 51.7 11.0 18.6 25.0 48.2 8.2 18.9 24.9 46.5 9.7 10.3 62.9 26.3 .5 10.1 49.2 33.7 7.0 14.1 48.0 32.5 5.4 13.7 47.1 34.6 4.6 14.1 45.8 34.8 5.3 12.9 38.1 42.2' 6.8 14.1 44.6 No. 2 common 32.6 8.7 Company E. — Sales records. Grade. Plant 1. Plant 2. 1901 1902 1903 1904 1905 1906 1907 1908 1909 1903 1904 1905 Third, clear, and better 3.0 77.0 20.0 16.0 62.0 20.0 2.0 15.0 52.0 26.0 7.0 15.0 60.0 22.0 3.0 14.0 59.0 20.0 7.0 18.0 56.0 19.0 7.0 18.0 48.0 28.0 6.0 22.4 41.4 29.0 7.2 22.2 41.7 27.1 9.0 24.0 41.0 35.0 24.0 41.0 35.0 19.0 36.0 No. 2 common. 43.0 No. 3 common or culls 2.0 Grade. Plant 2 — Continued. Plant 3. 1906 1907 1908 1909 1903 1904 1905 1906 1907 1908 1909 Third, clear, and better No. 1 common 20.0 39.0 36.0 5.0 19.6 33.3 38.8 8.3 12.0 37.0 42.0 9.0 20.0 32.0 40.0 8.0 27.5 39.0 33.5 29.5 38.5 32.0 26.0 39.0 35.0 23.5 40.5 36.0 19.5 40.9 39.6 23.0 42.0 30.0 5.0 28.0 40.0 ^o. j caramon 24.0 8.0 Company F. — Sales records. Grade. 1901 1902 1903 1904 1905 1906 1907 1908 Third, clear, and better . . 28.7 22.3 64. 6 69. 1 6.7 8.6 17.6 67.3 15.1 14.3 64.8 17.3 3.6 19.1 52.1 25.6 3.2 17.3 47.4 " 29.4 5.9 17.5 44.3 33.1 5.1 14.8 No. 1 common 43. S ^o. 2 common 37.5 No. 3 common or coils 3.9 ■ ... . 1 25030°— 14 12 ' No figures available for Plant 1 in 1904. 178 THE LTJMBEK INDUSTRY. YELLOW PINE— PROPORTION OP GRADES— Continued. Company G. — Sales records. Grade. Plant 1. 1902 1903 1904 1905 1906 1907 1908 1909 13.1 73.7 13.2 14.0 68.0 18.0 16.9 60.9 22.2 22.0 56.0 22.0 21.8 57.7 20.5 23.6 54.4 22.0 26.7 54.7 18.6 19. 48. i 31.. Grade. Plant 2. 1902 1903 1904 1905 1906 1907 1908 1909 14.5 72.6 12.9 14.5 71.0 14.5 17.1 66.0 16.9 20.0 58.0 22.0 19.0 54.0 27.0 24.7 48.6 26.7 18.9 48.8 32.3 20.6 42.6 36.8 Company H.— Sales records. Grade. Plant 1. Plant 2. Plant 3. Plant 4, 1902 1904' 1905 1904 1905 1904 1905 1904. 24.8 72.3 22.1 46.3 28.8 2.8 30.7 44.2 22.5 2.6 23.9 53.9 20.7 1.5 24.1 46.6 26.5 2.8 29.5 37.4 27.5 5.6 28.7 35.6 28.9 6.8 22.5 44.1 29.1 2.9 4.3 Company I. — Sales records. Grade. 1904 1905 1906 1907 1908 26.3 54.9 17.8 1.0 26.3 52.5 19.4 1.8 24.9 54.9 18.6 1.6 23.0 54.3 20.3 2.4 13.4 53.5 28.9 4.2 Company J. — Sales records. Grade. Plant 1. Plant 2. 1905 1906 1907 1908 1905 1906 1907 18.5 50.1 26.6 4.8 22.0 58.5 17.9 1.6 27.8 45.7 ?3. 5 3.0 20.3 48.6 28.6 2.5 24.2 33.9 37.5 4.4 22.3 41.8 29.9 5.5 26.1 39.7 29.0 5.2 Company K— Sales records. Grade. Plant 1. Plaot 2. 1907 1908 1909 1907 1908 13.1 65.6 21.3 9.3 65.9 24.8 7.0 75.0 18.0 21.6 60.9 17.5 15.0 57.8 27.2 1 No figures obtainable for Plant 1 in 1903. PRODUCTION AND WHOLESALE DISTRIBUTION. 179 Section 13. Prices of actual sales of yellow pine. Tabular statement. — Prices of actual sales on a delivered basis in several cities and on an f. o. b. mill basis of mills located in several different States are shown in Table 1a. In the eastern markets some of the flooring for which prices were taken was pro- duced from mills which graded according to the Georgia-Florida Saw Mill Association rules. The flooring grades of this association corre- spond closely to those of the Yellow Pine Manufacturers' Association in the items selected. The rest of the flooring and all of the lumber shown for the western markets and the mills was graded under the Yellow Pine Manufacturers' Association rules. The following table shows the items and markets for which the Bureau presents prices. Prices for the following items are shown by the Bureau for the markets designated by an asterisk (*) : Description of lumber. Markets. Mills. Grade. Thick- ness and width. Length. Bos- ton. New York. Pitts- burgh. Chi- cago. Mil- wau- kee. St. Louis. Ala. Miss. Mo. Ark. Tex. Flooring: A heart rift Inches. lx 3 1x3 lx 4 lx 4 lx 4 lx 4 lx 4 lx 4 1x8 1x12 lx 8 2x 4 2x10 2x12 2x 4 Feet. 0) (•) (>) (') (') (') (') (') 12-16 12-16 12-16 14-16 12-16 12-16 14-16 (*) (*) (*) (*) (*) (*) (*) Arilt (*) (*) (*) (*) (*) (*) Do... (*) (* (* (*) (*) (*) »(*) (*) »(*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (* (* (*) (*) (*) (*) (*) (*) i*1 (*) (*) (*) Brift Aflat.... (*) (*) (*) (*) (*) (*) (*) (*) (*) Bflat No. 1 com- mon 2 ... No. 2 com- mon »... (*) (*) (*) (*) (*) (*) (*) (*) CO '<,*) 4 (*) Dressed boards: No. 1 com- mon (*) Do... No. 2 com- mon Dressed di- mension: No.l Do... (*) (*) Do... No. 2.... ] Various lengths. 'Nos. 1 and 2 common flooring were called D and E flooring after Jan. 24, 1906, by some dealers. •Includes 8 and 10 inch. - ' From Mills A and B. 6 Rough dimension. Diagrams. — Of the delivered prices shown on Table 1a, already described, some have been selected for graphic presentation on Dia- grams 6 and 7 (opposite p. 246) . Curves are shown in flooring for A heart, A and B rift, and A, B, No. 1, and No. 2 common flat. It should be borne in mind that the different markets were not all supplied from the same source, as the production of yellow pine extends over a wide extent of territory, and for any given market 180 THE LUMBER INDUSTRY. some producing points enjoy more favorable freight rates than the others. This is especially true in respect to the distribution of the lower grades, as the freight expense has much less influence on the question of upper grades. Another point that should be borne in mind is that the competition which yellow-pine flooring has to meet from flooring of other species varies considerably from market to market. In addition to the foregoing diagrams showing delivered prices, f . o. b. mill prices are shown in Diagrams 8 and 9 (opposite p. 246). In order to conceal identity, merely the States in which the mills are located are named. Curves are shown for B rift, and A, B, No. 1 com- mon, and No. 2 common flat flooring; for 1 by 8 inch and 1 by 12 inch boards 12 to 16 feet in No. 1 and No. 2 common grades, and for 2 by 4 inches, 14 to 16 feet, 2 by 10 inches, 12 to 16 feet, and 2 by 12 inches, 12 to 16 feet in No. 1 common dimension, and 2 by 4 inches, 14 to 16 feet in No. 2 common dimension. Some of the mills for which the prices are shown ware more ad- vantageously located to a consuming territory than others, and therefore were able to get a higher f. o. b. return. Also, at times there appears to have been a considerable difference in the charac- ter of the demand from the different consuming territories. Prices for high, low, and medium grades are included in the floor- ing item3 shown by the Bureau. A comparison of the fluctuations of the curves presented on the three flooring Diagrams, 6, 7, and 8, shows that the fluctuations 1 correspond in general closer in the dif- ferent markets than they did at the different sources of production. High-grade flooring, such as rift flooring, fluctuated comparatively little at the markets. The advances of 1899-1900 and of 1905-6, common in all kinds of woods, are evident, but there was no marked decline after 1907. At the mills, however, much wider fluctuations in the prices of B rift are evident, the fluctuations being more like those of the medium-grade flooring. In the medium-grade flooring curves — A and B flat — and of low grade— No. 1 and No. 2 com- mon — the fluctuations of prices in the markets were less marked than those at the mills, but the difference is not so marked as in the case of the higher grades. It will be noted that the usual rise of prices in 1899-1900 and 1905-6 are well marked. The depression in prices in 1904 which led to the vigorous curtailment methods described on pages 126-129 is less evident in the delivered prices than in the f. o. b. mill prices. There is a close correspondence between the fluctuations of the prices shown for boards and for dimension on Diagram 9. While there is a general similarity in their price movements with those of i The constant differences in actual hoight of prices of the various markets is due to differences of freight rates from producing points. PRODUCTION AND WHOLESALE DISTRIBUTION. 181 low-grade flooring, yet attention should be called to a marked dif- ference in the years 1904-1907. The rise which began after the de- pression of 1904 culminated in flooring in 1906, with the highest prices shown for the period. The prices in 1907 were in almost all cases substantially lower, the decline to the low point of 1908 having already begun. In boards and dimension, however, there was a steady rise from the depression of 1904 to the middle of 1907, when the highest prices shown for the period were reached; then followed a more rapid decline than took place in flooring. 182 THE LUMBER INDUSTRY. o UJ Hi < CO J Pi < w & K h po H < m n o w J Si i-< CO HH p-l Hi H> a w H hI w W HI W CJ O Ph -A o a M ,_; H a -«s Hi u y HO g 'C o o o a o o d Invoiced prices, mill deliveries. 3 3 1- St>> ft o o o o o o o O "3 IO »0 O lO lO 69 oo COM 13.50 13.50 13.50 13.50 (NU5 o "5 CO Yellow Pine Mfrs. Assn. 3 Invoiced prices, mill deliveries. 3 o ■c ft -4-3 3 So, ft ft ° a o s ft $17. 50 17.00 16.50 16.50 16.00 16.00 15.75 go CD CO 16.50 16.50 16.50 16.50 iO o CS O O 00 ■8<2 CO Yellow Pine Mfrs. Assn. Invoiced prices. mill deliveries. CB o ft 3 iS Pi U (3 ft o d p. 8p"- o a)-** O ft $22.50 22.00 21.50 21. 50 21.00 21.00 20.75 oo o»o 21.50 21.50 21.50 21.50 in O NO tN(N O St; ■S3 CO Yellow Pine Mfrs. Assn. o a oo 00 ^ t> c « H •5 i c 1 ^1 1 > 1- ■f- L. a X E a D C a a i c a [ 1 i e o s > Si I 1- I 1 1 > s I c cv 5 t- 0, 1 4 a s ■g !-' H a) 5 >s o a) so PRODUCTION AND WHOLESALE DISTRIBUTION. 183 8 :S CO >CO tc6 1QIOOIQ MCOCCCO eSoeSo eococqw tDtOtO £- l"- 8S S3 S3 8SS © 5 o js ft* B73P^ 184 THE LUMBER INDUSTRY. cq M P5 P o s o a « ■ £ w iso O ™ S Hi" !* W S3 M h x W HH U o 2§ 3SS « Ph V ■SS® tr h oo Ph S rt ° O J j cq n ^ _: a Ph « PJ O td W ! § -£ 05 ^ ^ I M H p-ef o a Jsgs 1-Sal Oft S .a a* o 3 I* :sa^ OS'S? E>. u 3 ■ CQ I™ o a OS ft 'Tin u « 83 CD O4iou5 u5 elS»o»o§CT 00 ss Nt-N infill ||g J I j !|||li PRODUCTION AND WHOLESALE DISTRIBUTION. 185 N<0"JiOU3 186 THE LUMBER INDUSTRY. O cd 02 ^ 2^ n ■< H--< ^* S° W w tM £o O °3 fH h4 3«i ^S h a o o u w o o?i rt p P4 U J fc H Eh wz 6* M §5 O W 5g SJ'BK B ft 3 cs°3 DEL AND S— Co |H 'g f " g oog «&a k e « S£g INE rER 889-1 d* CQ ^ ^B.-f o o 3 J « H K w K o W w H > o o m g&B M W «^o 3d "S - 8 s : S iOO>Op 0000«50 iO O MOt-O OOlOlONiO I-- IO :* : s 111 CO ** t^oot^od ooooooirit^"* ■* uj • ■* . -ji «* ^^^r-, ^,^^ rtrH T-(^Hrt •iH «rt a* :?; J J ,d "III §►> ; ; ; ; ;' 5 I III! M • OO I OOO ! ■ Om -ininin . cf P. ■*■*«> t^ oooo 00 OO 00 t-^ • mm • mm cd ■ s •». 1-1 *"• HrH I 1- " -1 ; HHH ; § s o V •c o9 ICQ Q OOO Mm 35 00»n J8 ! !o • o -o ■ -o . ■ o • m -o • 'O p. tHtJh CO I> 00 00 •00 ■ -m • yfi •■^* • >m *~* +J jH tH I-t i-Hi-I 1-t I •-* ! * H I* -1 ; 1*^ d p. '— 'V • • O • ill 3»" • m ! ' * rC 0«ra m OOO "3 in in • ooo aS|l • omm "jJ^cD l> oocooo CO* 00 1»" • m'm'm" '• • ' iS^a^ **^— tH " " • ' i«aS O O S 8 oo oo in tn to in o m 1 O J>- ' m 3 ft 1 CO •* «3 ai ss ssss r- 1 m" ■ iH rt ■ • »iO . d ' '. I S* ; ; ; s§ ; ; j tub *> a . — *— , '— -*--v ■ NNS t- MM 1- io in r-M !oo !c ■ oo •£ oo ' oo ■ M co«do6 ai QO s 8 S3 •!- r-"o6 " tHi-H ■ 1 +i" 8 ft fc •c OS no o ooo t-O «3 OOm 8 :g 1 o 'c ■ m ■ c 1 'a ' 1° B 3 O O 00 o16g s • r- • to -CC • ■!> A o 5 ^ o " '• • A 33 o+j 03 e» fc -. . , ooo ioio ! • oo • ! ' • Yello Pins Mfrs Assn $18.5 19.5 20.0 t>M ■ 8S : • oo ■ ' ■ gl S o o iO ioS mom r- o m o ' • m • • 1*11 § to M M ^s , i-I rH M* M M M M ■ • 3°- 1 • • , d a>, ' ! '• o 9 ', 1 ', .. a ! --^— i ! ' '■ • m t-MM r~ oir- IO m mm < loo !o oo '' "i* r^ r~ r^ t~ ■ ■ mm ■« mm ■ if" 8 |c5S cS mc5 8 us M ssj i • MM 'M m'm • MM ; s o 'C Q p. N"5 o oin§ s ■ o ■ o 1 o !© • m -o • -o B ft 3 8S S3 SScSel s ■M •M > M ;M 1 'eq V) ! I O • gh . . m • * • ; I '• m' ■ W ■ ,■«• Yellow Pine Mtrs. Assn. $23.50 24.50 25.50 mm ! SS3 : 'mm • ■ • MM ; ; !!! £ i \ • 00 t S a a 1 i a < a 1 a 8 03 1 o SB E a. g S5 i £ CO P O o en a Ha I PR ■s 1 ■<1dq : 6S Isl OZfl PKODTJCTTON AND WHOLESALE DISTRlBUTtOtf. 187 $ ssss :eas s SQ»OiO QO 10 o 't^tOt^ -CO » CO SO 238 clSf :8SS S :S U9CN C4CN CNtNtNCN CNCNOOO « iQU3 i> oo ■ 060606 ■ oi •odoo • in ■ . . io . lo io io • r «rj N h u t> to S5 M -if-l a« H ^ K w i*o O GO ►} J ^ o t-H M 1 M W 10 H ^^ 1-1 o a -4 H s oo c; c c oo U3 lO o :S ^ (O O0N CO o o o d • w - . _. i. CN t» . d a* ° o a p. a >, S3 o S o *o o >o o o '• O O i lo o ■ o o ri r9 a t^ CO oi d d -H CN ■ 5 53 1-1 1-1 M CN CN CN ;CN W a a o o p. , — *• — at ss - ° P uiui d 3 ' a ■ 8 o o O - o •' O '■ 3 ** IO «3 lO *o • o ■ ,p o o j**fcB3 «* 1-1 " CN CN CN (N •CN cq i J-c a.a o o S SK OQ »0 OOOO O O OO cn lomoo US io .'iO o »o o ■ CN io ' 5» vi Sir; •-• cNCNcoeo-aiTT CN CN CN CNCNCNCN CN CS • to to ;Si CN aft ^ h H « , d Bh ° fl o 3 & < P lO o o o o O O '. 'o o &a ^*« a™ t^ o o o ■o iO iO . ■ lO IQ .a o o M co r9 (M CN CN CNCNCN ■ o o O o o o I P tn' >o o o o IO IO • ,d So CN CN (N S3 S3 i o o O O O O o ! o o f7- o o CN CN o CO CN lO S3 iO »o CN (N IO IO CO CO CN CN i 5 - S o o ! 5 §s"S o IO ■ • sin 00 CN o I CO ' 3 ft 1 i d B>, 9 P o a ^ P< a >, s § 8 o o O ■o o o '• lO »o o o iO IO M 9 to (6 CO CO d d ■ CN CO ■ !-h rt o a oooiao S-^l'*T»i , ^''^ixJ>'W^l^''tf«''Ji^«^irt< , ^"'^'^''WT*'CNo • «t-io ■ io < ■COCO -CO • 'COCO -co o *o CO CO 8 CO CO l«33. 50 34.50 33.50 33.50 33.50 31.75 32.75 [O JO CN CO CO CO I— r- ■w ■♦ - eo co R CO a a tA eo eo co a a eo co ■ i OOlfl > ■ ilQ i i ■ ■ ■- >-: i - ■ ■ ■ i - , . < ■ ttcoeo '• '• 'co " • r a CO eo a CO CO a OS IO co ■ lOiO o OO '• *o ' ■ t» t- IO m IO ■ ■ IO • • nm eo coco I leo '• o IO CO eo O Q o '■ o io o «o ■ in eo co co -co o IO CO OO lOlO CN CN COCO 8R : : :R : :KRgg88 gaagRRRRRRRRRRRRRaaaaaa s a r r a a a s &, I 593 s 1 £ g o oj ^ a 5 s ss t 1 1 SSI — 190 THE LUMBER INDUSTRY. O &q 2 A «<4 H^ K H a H «i 2° «h a« p* 55 W Pig iso o "J hH ■"! H OD >H W W 55 H«l Eh Ph 8° w 2 £ <"> Hi Pi W H H55 Eh W b6 t>n o w Pi H 3 W fc fr° Jfl rS M 'A J, H ■< rot) a° £ o o o uga «*£ [H 56 PQ dg i-t BfH §8 Pi E? o o J ►J m a ^ i-; B S h5 §g Pi nO P5 55 m Pi O S N J: H a a a p oi co o» oi lO iC iiT O !--■ OI Oi Oi Oi Oi Oi r-i _H — I -H CI OI CI C3 CI ill 5§ Six Pi It ■Sacs S ft ° a p. 5§ p. It ■S3 s' a a S 3 33 8 O OO Q O OlO o 88 28 in iq io iO iQ "5 "O >o io us mcScncnmcscScSmpS in -t- -« M MN N CO ssssksrsisksss a a r s n s & 3 SR 8 W WU3 ID CO CO CO CO S : : 8 S? • ' CO 38 8 CO CO CO CO SSSS3?S?3?3SaS S3 28 8 8 88 8 8 CO COCO CO CO 2SS88888 I 8888888888 a 'I t ■ h h ^ a I & 111 03 d £* Si PRODUCTION AND WHOLESALE DISTRIBUTION. 191 c c o « c c a: 19. 25 1 19.25 20.25 i S 8 S3 i 2 8 S3 8 8 3 8 o is is S 3 a OS oo o OiO o s's s OOOQ • O O OQOO OOOOO ?5c3c3?3) irj • OOO CO CO CO CO WJIOU5 CO CO CO s CO ! ; i ! j ! u g > >S5 • d 1 I 3 1 1 1 4 I t- 4. t- e -c E 1 a: c 1 I C 1 s a p > 1 1 c 1 > •I 1 E s 1 '1 1- 1 % c Sc A a s CD P 192 THE LUMBER INDUSTRY. o •A < a u O ¥-.< < fa fa o t> m £ w < o a « w fa s fa M H t£ O o 0Q J hJ ^ H o « K-l fa a R HZ R w o K H fa R fa ID P 1-1 tJ H s W 13 h fa .9 >°-S U'prS h £ i O ■ o o « fa *••> S" 1 -i M w 5° 3 d Invoiced prices, mill deliveries, 12-16'. i a "C ft -4-3 •a Com- pany c, 16'. Com- pany 16'. ; : : : : Com- pany A, 14-16'. 03 Yellow Pine Mfrs. Assn., 16'. M a o a a o o d Invoiced prices, mill deliveries, 12-16'. 8 p, .a Com- pany 16 ; . i : i \ : ISpqs Oft : i : : : Com- pany A, 14-16'. S16. 25 15.60 15.00 15.00 15.00 14.60 14.50 15.00 15.50 16.00 15.50 16.25 16.50 ■ o • I I • o • « ■ l(> • . • ,a Sep o+J*- 1 to i i I : i Yellow Pine Mlrs. Assn., 16'. T3 9 d o I .9 M O o fa M « o a a o o d I? Invoiced prices, mill deliveries. M::i i ft .a i-S ao ri o aO o a o atq O ft MM: O ft TO Yellow Pine Mfrs. Assn. J2 c o O >-< .a E i o •A ! p ! 1 ! I ! § a C fa ■S | 1 > 1 l c 3 s l a 3 i- a 1 1 ii*- PRODUCTION AND WHOLESALE DISTRIBUTION. 193 cJc4 ssass •(M -IN is ia ss? or-t-oio t-t-cq f- -i . O (D 10 g u o^a . tut — ' .K a ?» H CO <§ ft, P rt 3 -a IS. H « 1SB JjfjB jo8 O M 1 K § a a o O O z Invoiced prices, mill deliveries, 12-16'. ry... 11.00 11.25 11.50 11.50 q U3 • ua -moioioo wow o r- ■ c5 .MOMt^io in»oK ft •a Com- pany 16'. : : : : : • i Oft Com- pany A, 14-16'. 09 / 11.50 \ 11.75 11.75 11.75 13.50 12.50 12.00 12.00 o+ji-i CO Yellow Pine Mfrs. Assn., 16'. • O O CO M a" o a a o o d 2 Invoiced prices, mill deliveries, 12-16'. coco 14.00 13.00 13.25 13.00 12.75 13.00 13.00 12.75 12.75 13.75 15.00 14.50 14.75 14.25 3 Com- pany c, 16'. Com- pany B, 16'. CO CO / 13.50 \ 13. 75 13.75 13.75 15.00 14.50 14.50 14.00 in o*^i-i CO Yellow Pine Mfrs. Assn., 16'. o io ■ ■ ■ ... tj! '. , ! . ! ! 03 3 a a o 1 .a M O o M § a a ■ o d 35 Invoiced prices, mill deliveries. O 3 9.25 9.00 9.50 9.75 a. 75 11.75 11.75 11.75 11.75 10.25 i ft •a o do do i-i 8SS3 'WO ■ do OJOOhn - D Js Ipffflk Ills §•111 H^H^HNN W -* ■■5^.8 ss mm i 196 THE LUMBER INDUSTRY. **. co co ^ co *-; ^ CO CO >j « S a t> 3 H ^ o &H 3 w fell 355 H ^ T fi o "c0 *8g ag* R rt S § eh a e co 05 ^ W co H a J Cs, ^ Ph ° Eh> §SB •=s *^ 3 2 gfsls oSO* Oft SSCQS Oft Qfl jH O ft ^ 3.9£Ss :a.£c!, Sd -** Oft Oft o ft 3 jS^a-1- a ft 3 3 fe O 03U O Pa ISffl mo ua»ri ■* iO lO 10 in -^ ^ eo co co SHR o«o !§ WO t— tDNN -32 co 10 "O »o in •«> 8(2 -4 mOJzifi :S S8S O ■© US -o s is Bfl PKODTJCTION AND WHOLESALE DISTRIBUTION. 197 :88Ki3§K :8S 'O 'loowinOioio ■ O • C5 IQ t*- I- "3 t- CM ■ CO • CD >o >o ui >o >o u^ (ddw'^'* ■* :gS : : 1 '. c oo . . . o ■ . .0 ■ , .0 ■ ■ *c , .5 ■ ■ "f . . CO ■ ■ ■ a \~~ : : ! * '~ t '. ' '• *" 3S8 :8 :tSR niotfi ■ (O ■ "fl IQ ssa ;ES8 :8 ijh 10 iri . ■» -v >d ■ o :a : :8S : : 3S :888 006 ■ 0606&0 ! CO • CO r- ■ . ■ cm .cq c5 • co . ■ 10 'Q :SS : :*:*: . . . . .0000 .0000 • ■ r-ti-H COCO 3NOIO ! C3J OS Ci CO 00 06 : : : :g 10 Tt 28 :a cCt-Ki ■ X • I- 1- '• t^CCCO iqiqiq HR11510 -in NNN ■ MCNt- ■ co" co t-^ c-^ :8 :88 8 : : :88 38 :8 : :S : : ■*CO ■ ■* CO NO IO NN rt O « ESS :B :&& 8SS3 .10 iioiow S8ssaas ■"* ■* co pi oi co co 198 THE LUMBEE INDUSTRY. w o P5 CM W o E a o o CM d Invoiced prices, mill deliveries, 12-16'. idee lO r» cC ooo OOfl io § 'Eh ft i-l a a ~- DO, Oft io cm CO «9 to W lO CM t> lO iO t- CM t-^ ci Sp j-s' u ft 3 »0 O id CO ft* o cc OOOlO "O COiuNN rn'ioo i> r- io t> t>od oooo mo o o r-^od oio CM« CO CO 8 1> 1-^ CO 0» 8 CO iO CM S3 K t- CM i-^ oi X c o P e o u o ■g'- SI . O IOC O CM C oo OOGC O CM 00 00 lOlTJ oioi m o ow oi oi ci Q <-l i-l CS CN o o CM CM i p ■a Oft O ft ^ g Oi o o oi r2 oi JO oi o o M CM rA CM CM CM u ft 3 00 C3 c If" cr OOOlOlQ OOOOQ CMMM CMeM s S lOiOO ooi-i CMCM(N oooo O ifliOiO .-i-ICMM CM CM CM CM mm S3S 3 tn"-' t) +^ •"-" o o 8 ci oi oi K CO CM lie s\- g g oi lO 1> ci i3 12 8 8 lO lO CM t*- CM CM a> .g a o -9 o o M a o a a o cj cm d ■g - & o o^ ? £GS.e t3 s c7 g 8 >d O o CD gg CO CO o o o o Si 8 to a> _o 'C ft ."3 +-1 oSO U ft o ca^q O ft o O lO o id o o CO O O o o CD CO o o o o si 8 o IN ■* ID •ft s IT lO lO U5 >0 "O r»r--t-~ cmc- ididcd r^ r-^ mooo NOOUJ i> oidiH i-H^HCMCM Si TO o o o «o id o o CD g CO o in o lO o id O o CO 8 8 so cd o O o O Si 8 3 s o OJ S3 1 o o £2 a cu £ CO n id o OJ . "I 1 1 C > 1 1 +- t- 1- a C 1 1 2 i P s en 1 s 1 PBODUCTTON AND WHOLESALE DISTRIBUTION. 199 4C3 « WW :g8 g 8 £88 iHr-ii-4 Odd 8 85 d C* « gg NNNNNN ggoooQOoooiowoooieioujiooQoo oo*oooooo©r^r*-*Qu3»«c , -t-t-i>>raooira IggSS S 8 d Tl M C4 CI C4 sss S Si S3 S3 8 S 8 S3 a as as s s SS3 8 77, S 8 as as nSn^ci OOOOOOOOOOiOUSOOOOOOOOOOO »OOOiOOOOOOOt»-^iOiOiOiO»COO'OOOiO ddddd ddddd a a 8 S 8 8' 'OO O) 33 :gg § S'S g 8 88g 8 88 8 8 d o* OOiO ©Of- '" L- —.'...- I~ dd"dd CO 00 CO CO gg : : g a u ' £ 9 2 1 a - g'§E.Sc a ft *3-- §§o"s Oft Oft SffjS o ft 3 38 S OCN CM CM CM CM t- C4 04 t- t- mm ri cm" cm cm" cm co eg com CM 04 04 CM C4 CM CM CM CM CM CM CM CM OJ CM CM CM CM ^ .a a w a c-r- 04 CM 04 CM 1Q IQIOIQIO 5^J © o ooO O ft 88 8 O A .a i-i a&j o ca-*5 U ft 8SS SSSK £ B SB ■gS t> CM © t- l> t^ t- cm co" "* eo cd co co =-a*i CM CM 04 IO >0 U3 CM 04 C^ 04 04 CM CM CM CM 04 "3 lOiQWO ■HP ■* CO* CO CO CO CO CO CO CO CO COCOMCO 8 8 tea < oa O !z;n a fe SB'S ill ■«l 3h S II O ZO PRODUCTION AND WHOLESALE DISTRIBUTION. 201 - s o t>^ r^ t~^ c~^ • s r- ci ss s c : s * -' C * r~ c° c; ex x ci ci c5 -p • cSi^w r4 N^'y; Ci Ci £^ CA tC t~ tO CJ CS I- ci ci ci CI C) C4 to l- \z l- -to to « m t»« ■ c* c* ci ci ci ci -ci ci ! »o ■ r~ • ci ci c* c* i : ^ ■ in . CJ ?i to I— c* s c-i ci ri ci CI M CJ Ci ci ci ci ciclci ? ■ ci ci t-^ ■ ci ci ci iO CI •.- L- r»- i- C4 ci e* ~" -r" -r p» cj r* c* r'j cj cm C ■** •a l~ to to > >_~ to «- f- **• t- ■ t- eS : 5 £ c £ • o • o ■ •£ 2 c - CiJCCC r^ r^ t-^ t~" ^; :s'i ;S -£c 3 • l-" . el c ■£ s ss^ ceo CO C X 3C X o a x" 6 ■ ■* * >S St > t i- -, t •< J i "c ; c e ; c ,2 ( c 3 < 2 -I P ;,■« < 1 7 1 c 2 e c 202 THE LUMBEE INDUSTRY. %% S m g H *a " Ph fi w Ph Eh & ° §3 SI w « Ph o O o co a gs ? & S H go o w >H frH W go.g ^Sl ^5 S W*i i n rj, "I* Ph _- d «: Sg2 R CO S Ph P " *«« &. w Bi iSB 5 8 8*1 jf to 8.S- S7 aP.gB« o c3 „ a.9i o St) .3 5= £ fe - £ c* a S a&s ass O cfl „ 3^- ■9 a 2 3 .SC3 wco t* ^ ^* ^* ^ CO CO p. Bi?2 3 -n 8 Sl3li Sfiofcfl PRODUCTION AND WHOLESALE DISTRIBUTION. 203 •C4USO • ooo 1QIQO e5S»»o C40C4 CCMC^CMCSKNMCOCO ■o»ow ON WW Mficiri pfc. o _ a I "Is- ^H*>«i CD fe r 2-° .81a of! O O ofcn ..Bj p Si a-g a &a §■= p g-o o » g 204 THE LUMBER INDUSTRY. o CO < CO VI ^ « nl ►J -H M w Z a Eh Ph o O CJ CO n W55 HH I ) « p Ph p H o ro Ph J Cm H W 7; W w H Pm ri M 5 Ph Ph P P R Hi W o M a !" t- -o « HI w o p ft R a \i z o o W -< n r O o W H OS o S5 O CO ■< ro B5 S < « Ph pq M ^ PS OS HI w 4 s H §8 Ch p ' ' £ o co h-1 Hi 1-1 h; a M H h] Ph o w « O CO « Pi o pa 1 HH w H fl 5 a a o 1 S 5 K cs g ! o d Invoiced prices, mill de- liveries, 14-16'. S9.00 9.25 9.25 9.50 8 oa oi o) d d d c 10.00 9.75 9.50 8.76 S3 O P. w 3 - CO Yellow Pine MIrs. Assn. 16'. o d 5» W5 d _ o g O cj 6 Invoiced prices, mill de- liveries, 12-16'. 11.25 11.50 11.50 11.25 11.25 OOU) "3U51-- O •O CO ifJOO o 'E 3 SpTS o ca ^ O 03 ^2 o o t— lOlO g CO A noo t— mo o mm 3 v Yellow Pine Mfrs. Assn., 16'. 8 I a □0 +■ : < \ E & J 1 CC E 1 1 I 1 h= I 1 1 •i c i > c |Z 1 c p CO 00 t I s ! PKODUCTION AND WHOLESALE DISTEIBUTION. 205 00 00 CO 00 CO 00 ^-^-KNOOOOO lOOOW 'O m t~ m us t»- ■ >o ^~ liOOO -.-I .-) as s Or! H cie4e 8 :g ci e4 ci n t-I pi c4 o5co co ioSoSo C* CO MM S88 8 8S8 88 do 8S -4N CO JiOlO OlO sss NWCOMMP IOIOOU3 POMPOM i Ilia ■il tier II Hiatal ins 3la«s iisi ■ s 1-s I i 206 THE LUMBER INDUSTRY. o w P 02 J M H W w S5 w Eh Ph H O r/l « ►J Ph H M w 8 W H PS rt W 5 In &h P ^ w o w z ps M !* H T3 « ta a w O H h ft p Uz w -=s | R r CO Eh OH C5Z §3 EH 3 55 ■< M Pi Ph W M w w H^ 5 gg p. is 3 CO P o CO hJ h5 H^ a W H ►j |x ■< O M W PS § .1 p m > E ■g PRODUCTION AND WHOLESALE DISTRIBUTION. 207 SSSS8 :8 8 a 8 :g 188 ;8 sa :a 88 -J*T*i as OOQ 88 tOtO is a ■OQO USUI to - 5 aa iaa to ' >o ui iji ■* •* uj 88 i>ed 88 -f m io -i- io a :8isa us nd^uj LOiOiomioiO'om io io io -r -* eo 8 : :88 •OiOO eScSr ei t-t- ld>QU3 iO -) H O w 55 ps w w S* H T3 PS fa 3 fa O a h fi a i-i 55 w < r H 1H O co B R O a B PS fa |H cq PS a> M w 55 H rn Pi p ' ' £ a CO p O CO -1 i-l p 1-i a w H P Eh O CO W w Eh fa O PS H > fa- ct! PS 55" O 1 M w H p H M a y H Invoiced prices, mill de- liveries, 14-16'. ' ss IOC 8 ic ci S c IT c KJOiq m^ "*' IT, TT -r)"-^^lilO CO COCOCO CO •» _, ^.-(^h^ rt HHH "^ * a&si ^ . ca _ ■ § s S OftQ a&S 8 8 s 10 O O 10 10 a c3 _ •CP IC »o »d 10 CO CO CO t- o&tt «• 1-1 r-( 1-1 1-1 rt a d 3 iT-' S 8 8 8 »o £ 5 J5 1h — « 5 (M CO ^ 3»aa" a&si Oaf , O Po x w 8 g i CO CC CD 1^ t-^ 06 OJ d opct M 1-1 ^ -t i-H -H 3 ■ a £ a a a a&4. O US ui O CCC «o ' -.: 6.50 6.50 6.50 7.00 7.25 3 1^ 8SS 7.75 7.75 S.50 9.25 >-< .^ J O O-if* «• H ' H . IH ,_!,_( ,_| ,_< ,_( T-lT-lrHrH 5 d 55 1 ►<■'-• 8 U3 8 J3 a. to CO cC CD t^ CO ^T-1 Co 0» Yellow Pine Mlrs. Assn., 16'. g CO S CO 8 O O O O O O t^ 00 m 00 oi M " tH rt 1-1 !-H TH i \ $&£* 00 c O if? IQ ION (N 8 inww NNN "O m-vr -n ■ cc CO CD tO t>^ t^t^ t-^ t^ mil: live: 14- w» ^ i-li-H r-1 "^ »HiHtH tH a&£ a „ ^p O Po M a&ss c 8 O „ >o u: U3 O w a O 03 „ 10 '£ CO t^ r~ 00 OC OS 'O a a u ftfQ «& 1— 1 -* a^ W3 3 !c O 'C OOOOio OOOlfJt. OiQlQ gsss Cu ,9 * *S 10 lO 6 1 x cc CD sO tC CO O cot^cd ivb^cooi w O &«< «t> 1-1 HHrtHH HHHH d 3 w c O 8 O S uT-' >o u- U3 O ^ ©CD ifi CC CO r>^ ^j oc OJ <» frffl ■ - s c O O 2 »a" H- - v IO O 10 gEa|3 us CC CO r-1 l> r^ oo 06 a> 1 O Oi Oi a 1-1 u ■5 t |i b h < ! 1 c/ J E c 1 I I 1 _ 1 i i 1 >- C I cf j C 1 i 2 E 1 a P PRODUCTION AND WHOLESALE DISTRIBUTION. 209 S 3 IS IB N £j a a OONXKOOX CO S 8 S -8 8 R sas a 8 a © U3 o ■* CO fj 88 oioo sa 00 c> a a a s a s Nu:iONWM!M(NiMOOOOO'OiOiOClC'lNfIcic5 S S 2 5 S S9 o c d 6 p d d m d ffl d a k to (d w »H.H>^WCMClClCNCIC'lCICNClClTH.--l.--li--l.--lTH.--l(NCOiOiOiOiOiOiOiOiOiOQQtOlO»Otn>OiO 4 cm cm ci ci CI CM CM i-i i-< «H 00 CO w HHHNtNNNNCNM CMCMCMCIC1CMCMCMCMCI CI CM CI CM CI cjci c to to *o in to NNC!D(D m »o r— ci a a 25030°— 14 14 3 •s Eh S •< a 1 1 j? i H -4 ■< fa PR o p 5 s« UH 5 Ch h £ o o p 1-1 Hi R H O m PS 3 fa t-> IS rt w 2 fa fa p fl hJ H c w 13 w ^ H T3 pj fa w o .9 [> fl ti ,J Z O fl -1 O o w sz U < O a Z m « 3 u< i-T ps H M r+ g H 88 P< p ' ' £ M n O C/J yA P t-> a H M p 1" d id id id "d 3 8 O 3 its Q 03 - S SSJBS s S8 8 8 88 8 g «a co to io us id co bJ O o3 „ OOffl a CO a a CO a «d 8 i »d i ■ ioS • tot-.' ■ iHi-l iqiQioujiooiniAininta wc4tNcoco»dt-l(ocDcdcd aasaaaaaaa g cd co id io >d >d >d >d id id id 1 la o r -- P3-h<« a so a a s CO t^ t^ • IO o M l t^Ca O* 8 00 CO h 53 to C/J QOOOOU50QOOO oooiooriusoinioa ididid*dtdr-^c3jaio6coco !2— -^^_*>_— ^__^_— * OOOOOOOOOO if> loioouBioioioooio r- co co oo t^ f- 1^ t^ t- r- **• h- f- ( l-( iH l-H l-< I-H iH IH rt tH •-! ^PMa|- o O Q O 4Q O IO O o lO oi cd M cT o o o d lO O O IQ O O OC t^ »0 O )>. S O *QW V f "^ io d cn oo oc jj rt rH „ rt rt rt ^ aa 8 sss§ s oo'cd cd r- cdcd co oo Pi P O 03 ^ a RRS8 ■d U) CN O) w a s iqO O O OO O O CN iQ IO IO C lQ O IO odod cd t^ odi> od o> t-Hi-l 1-4 y-i i-lrH iH i-l 1^ s id •* a OS l-H a CO a 8 88 OJffl a&^-- 5^ s as a id nco d >~t i-« t— < i-H a cd 3^- asaKasaaaaa ididididtdi-^oioiooioi od oo cd w i> i> r- 1> **■ **• * 1 a » d • ^p^a|- iQ "O IO t^ tN t- CO oi OJ i-H iH rH R O S S cd i CO § 1 Hi > 3 -* < | I CO i 1 o 1 e | 1 R 1 1 •5 i i* C 1 a r 'E P < 1 r^ > * ! PRODUCTION AND WHOLESALE DISTRIBUTION. 211 8 3S8 8 8 *2' B B gsas B SK 3U} (0003 CD C0IQ g g s CD t*» t» ■ O t"» 8 : :88 8 OOOOU3 □0 00 00 00 1> g g :g 588 S3 00 00 S8S8 U3 © 00 o> aa a Oi O) O O CO as? 8 8 83 CJ OS COX s s gas 00 CO CO O) 00 O O iQ ass 8 : :8 8o o o o CN CI CI 8888 wcbcrcs Soooo oooo sssss 888 a « "1 P. •o 1 P ..a ■w s 0!) O ►J 4 1 , • g-*3 oa fa B \a 1 ft •0 > R s-a § 1 « £ ■4 8 t-J ft f0 0> 1 p 1 I S3 1 s fa 1 a X c > 1 1 > ! 3 E c 1- « i o 1 s ! 1 E | I > Eg i CD fa a 1 Hi ■B 'Sfc l«i|J PEODUCTION AND WHOLESALE DISTKIBUTION. 213 OO© ss -d 'C lo i.o uj S3SS3 8KS CD idw lO ^ ^t* ^ ^* M"* 5 oor-ofr- corrodes od NOONNlO .OO si tell a s !«' : ■ : ggsga Sl-sJIJiUlll ~ |Na ! i j 5^a^aSS-0 coded • o ■ o • OlO ON end Si ■ o 1 o M O OOOOOOOOOIOO ©wooioio iro oomo*ooo©ioe]»o ior~Niat~t~ 00 Oi OS OS OS 00 00 00 00 00 00 00 0000030)0*0] s K 6 •II oowo OOMO w 1 ^ o om>ooiooo>oomoo imooioon O OWNONiOlONOMOO weNlOt-OCM od coco coco t>dddc--ddi>. tdr^t^cooQ .-t rH i-t i-t rH i-t rH rH iH i-H iH iH r1 i-H rH rH rH C4 C4 Is o o U3lO o to OOOUJiOO o '• '• O01OC4P4O O • • •a-s OT P< .ag. ■ • iH | 1 00 O o o o o o o Ic o ■": CO '« ' • a o w o O >ftiO oooio ONS«OON HHOicONM« *- V 5 1 a c 1 % o 1 I p 00 Oi > 1 I 1 c b 1 1 1 1 1 -<- V = ltd < I 1 a 1 1 c JZ P III II PRODUCTION AND WHOLESALE DISTRIBUTION. 215 I38KS8S 8 • 8 CtC-i 8 o 3 m S<3 ass oonu} . lo iiq >iou5 »« W O) cs sss t-t^r^ooOO>oooooooo O O IQ 'O O »Q iOONNO« ssssss o«ot-s :8 :Si «co (O «? »Q -91 ** Oinu5loOO«5>OiQiOC co ■* in iO "5 ■* -* ss NONOOO c5«01 Ol N r C4CSc5c5c5 IcScSlNcS 33 c3. III! 216 THE LUMBER INDUSTRY. ■a'g, J.& 5!" i (3 s a ..a CO O SKS8 3838888 SSgiSSiggg :88SK ssss'sss iss'ssi O0COCT>QOO0COt—00t— ceo soeSocNweNoe- COOOOOOiOOt-r-r^OOOiOiOO aooooooot^<©r-r*.i>- ss in o a :Sg :gg8888g r-I icdt^ • t-^ t-^ t^ t^ t^ oo t^ ;ss MOOONO CO -* in in -^i »« c5 N CS CN CT c5 8S3 !8 :8 inin-^ilO"tfQO>OU3Q)nLQioio 5N»oeNo0»QOOOOU <0>OONCS>OU300t •) CO CO CO CM CS CM C 88 £838833888 S£2£3S3£Swcoid(Dlodco WMwcoweowcocoeocoeo asaa liin i gf f 8--S 5 s !«S-«!mOi2;P = rt 1j Ih >lS F*i 218 THE LUMBER INDUSTRY. 1 (-1 o o 5 ffl ■* X 1 o 6 d 5 85 t-> CO < .a -3, •a.S 1 a» $26. 75 29.25 29.00 29.25 29.50 IO- mm • r-oi • oii-i • c-i co ; 8 <- 1 n ..a m o omo irar-o T-H t-IW CO CO CO 32.00 32.25 31.25 29.75 28.75 29.00 30.50 31.50 o m o CO 8 d CO .i d a <$ lf3 jo c-i -* coco S : CO • . .o . -m ! 'co • -co *1 do SI m a o LO SS ■O CN CO 1 lie • 'CN ■ \ir . .© . no . .CO o W3 m CO a o o W $35.25 35.25 36.75 38.50 39.50 39.25 38.50 39.00 37.75 36.00 35.60 35.75 36.25 36.00 36.00 37.25 36.50 35.50 36.00 35.50 36.00 36.00 35.76 < 42 6 |1 53 H CO S P. .a a a » o o oi mom CO SO CO m (N CO CO a) •a 03 > P ..a CO o U3tO CM r~ a™ 1 M O M $40.50 40.00 41.00 41.50 42.00 41.50 40.50 40.00 39.00 38.75 38.75 39.00 38.75 40.50 40.00 40.00 39.00 39.75 39.50 38.50 38.50 cb M F.o.b. Ala- bama. 8 a ■a S 1 "3 n 43.00 42.50 42.75 43.00 43.75 44.25 42.25 41.50 41.25 40.50 39.75 39.25 40.00 40.00 40.25 40.50 40.50 41.76 o • 5< '• O 8 CO o o f-i .T)H o >o N 03 CO M 8 p. 03 m io 54.50 54.50 54.50 56.25 56.75 I s i !m ■ • m • io ■ io • m >m o d lO 5 i (0 o « ■i I a CO o CJ3 •0 .X \i . c 3 s ■ 1 li 1 c '' S it S ■ O) i ! ! i S3 Us ; : i !- 11 J c 3 C • d 1 1-4 3> S ( 3 i i J r. 1- < < PBODTJCTION AND WHOLESALE DISTRIBUTION. 219 to a o o M "5 a 1 .a o" s 6* r-r- o 14.50 15.00 15.00 14.75 U3 CO gS8 eo 52« a '55 ft .a a 3 I ■ ■ > • ■ • is C3 a 3 © o & •d 3 a> +*'3 CO o hH •* •Hi.' -W 1 . , •s \ \ I R ,5 IS CO a o w o R > = ijMjji HI? 1 ! 3 1 g Oi CO rt b C C H 1 1 1 * a J -*- -it < C E 4 1 a | c s t e P si it ! > z 4= i 1 1 > ,4 1 1 5 .a s c a c •% c g C I £ 220 THE LTJMBEB INDUSTRY. .3 g O M i o as 113.50 13.25 12,75 12.75 14.00 14.00 14.50 14.25 13.25 • ooo • • • t^i-iiH • t • i-l iH iH • • 10.00 10.25 10.00 10.50 3 8 iv;, looo OOiOiOOO >u • © W © OOWMOW • C 9.50 9.00 9.25 8.50 8.50 8.75 3 M CO Eh "S'ft .2? ft i 1 : : : i : • a 1 : : : : • - 'C *-> n en o 3 P fU 3 -A d 4s ■a 1 d 1 '. ', '. '. '. lo • t > . ■ .V) • ■ • • '•'<¥> a cd en w ft .8 ft S'5i Pi > p ►3 - A 4 few" a o O H:: : :: o 3 CO CO 1 1 S ■s 5 1 1 w 3 5 s 02 o s o I 3 i?s April June July October November December 1895. January PRODUCTION AND WHOLESALE DISTRIBUTION. 221 |S^ei«i-i*Hi-i r- c5 M3 « e3 o t*- e» OSOOOOCsCOOt. C4«CN|« e5 i« eg w t- doooddo OOOiOiQIQ eo « « ca e4 e4 NONON W* PS N N c4 ^(•IQUJIQOC SOiooinoioioinin Or~ui«iONNMN fiiflill 222 THE LUMBER INDTJSTBY. o 55 H el fa O W M J, p « n i-l a a >H « o m O H na o *7i W Ol u o> M C/J H a H a fa 14 H M M <1 o ro (xfc fa s p H H S3£S3;3£ IT s joooo t-oio»o . a to 5° O r-I i-I c4 CO CO CO »0 CO t> t* t— t»Nt»WM»W i-l i-H i-H iH rH HH iH i-H i-l i-H rH rH i-H i-H i-f rH i-H rH Hjjg'ej : ^ ^* s QOOOO OOOiO iO BS8SB s m o Qio»o n»o OCN M assa §8^ ! .3™ u'o'ddH H^io'io'id to* IO ^T CMr-Il-I didd ^j^s a S8KS8 SSS CNCMciwcO CO-oJlTli M 4 en •* d Ph to pi inmooiO'O'Q'O'Oioo C~r-iOiOC3(MCNCTCNCN"3 IOOIO "OOQOOOOO OOQ NOCMt-OOiOlOOiOO OioiO OOCOaidrHrHrHDl-^io'io" »o" »o" CO CN f-I O O O rH O iH c i i i-- J rfrtrt „ rt „„ rHrtrtrt „ rtrt c3 1 IO io Sc5 S ^f ^ « jj — rt jh M -i *»•■§ 03 5 oio ION s ioir O IO o o o o 8§S 1> CD W •» 1-1 iH l- r " w 1-1 -HiHiH £ • 8 oo oo feS ■rn coco a^ «• a n3 .A p OlOiQ 10 t*cq to m g s o IO IOU3 O r-t^io o o 8 :B8 V " S CO-fl-»0 CDN as CO od rococo io O .CDt>i Og «• "" ^ rt ! HH *3 s OlOO oc »ooo»o (N OlOCN oioiooo ! Ot- NiOO i : 8 W> P CO A OMO IO" - .a ' hj W) octroi Or- c4i-I oco «* i> i> r~^ a ■ GO .■£ h CM C WNHlH rHrHiHiHr- o o SB » £ t=a Sg ^ m i(j io «? ifl uj io io o t-OJI>CNt-C-I>l^iO IOC s O in us us io io io io c ■QIC ■ 3 IM C iO CNNM--WNNC ^•^ i-Hoio-icoeoeococDt* l^OC CO N iOtP^^COCOCO*-^ ■*« • rHrHrHrHrHrHi-HrHrH 1-HiHiHi-li-liHrHr- iHr- • .a *» ri a a a . oioinooioo lONCiOiONiO 8 0"OOW3000iOO»c ONOt-IOiOlOMlON iqiao -Q as h en o i-h oi cn c IO »o t- 1^- 1* 'IT 'En P. oii CC to ■W'CC oi oi wn '•Qf CO -3 Ph » t-l M a"? ■•9 OOiO imoN s c^ sss o OO OO OIQIO ©c5r» 1-1 ra S NNM IO a" ooodt^ t-^ COCO CO CO CO rH t-l i-« OS >-3 W> tcl «S o o 9 *•? tQ io O -u bo (N Cft •c ft SI CH» •d 1 85 .3 p tNCN « g ooiodiooiooioc ioiowiosiot»oe5ir O O 0(0 OOOC oom»r :S o IO m O m ssi S^SS : s s I en CO 1 1 ft, _ 5 i.rt a 1 5 E a: t ■i C | c 1 t a P 1 1 ! >s 1 fa b 2 _ 1 1 1 r- •t- 1 1 1 1 ■i c 6 I P O ' s : t « 3 PBODTJCTION AND WHOLESALE DISTRIBUTION. 223 8IOOIOU3U9OJ0O rtSHHHHHrti-i Sgg8SSSt2S H ft r4 i-t -*■£ ' co co ^ ■* ■* 8SSSSSBSS88S ^ co oi c4 c$ i-J cS cn « co co eo SOOOOOOQO lOUjOlOOiflNO nc4««coco«C2co 8io om t-lOCN -T -f .Q '-£3 :g8S3 ■ in id -fl 3 ?88 5 eo co cococococNcocacocoeocoeN co ■coeJci I -<(Nci«co^«o rH . rH rH rH rH rt rH rH rH rH r-l 7*J S3 S ©^ O ID && i : : : 224 THE LUMBER INDUSTRY. t> o I z < a W U w 1 M ■J! & w < H & 14 J a a !* CM o ri -< i ) M o 0> M K 1= U> rn H to H4 a H fa k «s M CO «1 o ro Jxfc ^1 & M H Pi £ a h! t-aiO)0)Osc SSSSSK UJ "O "5 "O id *J< lOQujOwjOOiQiCOO NONONOiONfSiOlO ■SWM ou3io KSKKSS :g SSSS3SSS3S :S3 OOOOOininOOQiflO -Hi-cSc^(McsciMe5csiCTM 31005 •NU30 as? asss'ss's iiqoiopOQioiox •NiONOOONNt SS3?33SSSSSS lOiOiQiOOOinOOQO t*C--Nlr-Oirat^iO»fsOir3 ssssassssss oowinnjoioinin •oio(NCMCMmc5c3t^ saassssas ss Kg h'n coco S(Mc5 ?ss r.g£8 SSSS88888 cSasggRssgss ss ?SKgg8 issssa ggg 888 ass gg OU51Q ss's PRODUCTION AND WHOLESALE DISTRIBUTION. 225 sss iss SSSiSS!! 4»0 iQ "3 "OCNOC OS O* OJ 00 b- '/■'./.—■-. ~ 0> Oi Ol OS t- t— t*- 00 t— t— O I— f- 00 OO 00 CO f~ t 8 in iniomujiOOO «? Q>Q oio6t^t^tot^(dt^t^odoico SS :3S KK :S3S3 3 :S 8IOCKMOWOOQ r- iq h- t- r- r»- «o o SsSwnnncSm gO iQQ O O OO OMOfJiOiOUJ c-5 1> o COCN ci CN CN C4 S8S8Kgg8 ss S»oo 83 O >o • c^c nHSwn ■ H ■«! 7H O a i" o n n ■< o « m u W o PS O m r/> H a H Q Ph a < M PS o CO <1 S"55 £M H PS fe5 —1 O £-i of < O H m Q r/i K PS CO s J ■«! H a tt) h t; 14 0 ;t- ;(~ ;t- • -o • o> • O ■ OS • ' o 3 s a » OS 1 ■i 5 3 ft o <3 > R -1 GO O i la o If is -a 5 1 8 i i March December 1892. January March May July 1893. PRODUCTION AND WHOLESALE DISTRIBUTION. 227 : i : i^a&'ii 9 b t>~ S » == ft « B-g 9 So o 8 228 THE LUMBER INDUSTRY. .3 o o e o a o o « 1 6 r-r*o 7.25 7.00 7.75 8.25 oujoinooifloo t^oSiot-ooc5B5cfl oooooooooor-t-t-t- 6.75 7.25 7.50 7.50 o CO 69 ID oio Or- eo cd • iiO t ■ ■ id ' S : : 'oo ; ; 'ioo co • ■ .ideo s M CD 6-i 1 I : ■ • ■ '5 ft . .2 ft • ■ ■ ioo J • | ■ (O U3 • • • -I*-* . . '. '*• o3 I 5 ■ N - ■ 1 ft CD » > 23 03 o h3 III III III ill M a o e a o o d .a d o 1 $8.25 8.50 8.75 8.00 8.25 8.00 8.25 9.00 9.50 10.25 10.25 10.25 10.25 10.00 10.25 9.75 9.50 8.75 9.00 9.00 8.75 9.00 9.00 8.75 9.00 9.75 < g io in CD CO 8.00 7.75 S.25 7.25 7.25 7.00 7.00 6.75 6.50 7.50 7.75 8.00 % 9 III III la i : i ft*-* 03 a 03 3 III III 8 o *E ft u > Q +a'3 CM o o O m o ID d f~ ■ ■ n 2 :S a : ; d s III III si OiOiQ( so • 2 * : 30 ; o ; ; IS 1 : : I : i j £ c o OS 00 = 1 1 c b 5 1 ■l J 1 V i t £ C a 1 t c IZ t 1 g n 00 00 E I | ■g | 5 1 1 a C 3 i-s b3",s November 1899. February PEODUCTIOlir AND WHOLESALE DISTEIBTTTION. 229 S3 0000 -3 n m pi in S38 osoot-i--»- aoooooooioo SS" 00 0)00 0)0 00t-Xt»t0e033O tt5t^t"fNNNONt'd oooo iOiqq nm 0:iii-j..-j >ot>o iONN r^r^t-^t-^ • ododos • osodoo ■ CO' , f'^ , * r-^ to to S3 D-a_' (O C - (J fr 1 tH jitH^tflfl aaasoiasaioooor^aoao ■"a ■ • s : B s •»§,saa ?loot^o6cido6coodo6o6t> cooot^r-t i -r-r-r»r-r~r»r- do sa cocQ'^^f^f'rtmiowaiO'n'O -^TtiiOiOlO-^t^i «3 od oo 3 p J3 3 la 4-S 3 ■* OOOHHHM ujiOWfNNMOiOiONC «tf K5 Ifl 1*3 io r-r-t-to t-C*l»C~(OiOiO(0(OI— i- 00 t- 00 00 00 CO CO 00 CO t— 0000 00 CO 00 OO CO OINO CO COO) ■ rH N« tiH O >H ^H r-l rt N «(0t -t rH i-« iH iH iH i-t iH HrlP PRODUCTION AND WHOLESALE DISTRIBUTION. 231 •-- 8S at s a s 5 8 888888883 n -v ir> t- 1*. i- f» t- d *o ,-1 _H _ ^H — ^- ^- ,_, _ ,- 82 5 to «0 "5 **i o 3 »o ei oS — iH — iH ■-« o d O TO o ■o « oo torn eoco" O co* OOO mod ■ o «o 6 o o S E -< — 8 d o d i r- ■ co ■ s OK If Of u- r- c ir iq one § On- to t- s W ggS § to io s •o IO 1- agggg io cn i- t- r- as 90)090)0)000 o>oooooo>ctct> SOLOiowininciqoioo fll-NM«NONOfO 88 888883 id d d ^< co co" 888888888838 « o> Oi co t- f- t*~ 88888888888 i-oococdcoc^r^t-^dd OiqiOOKJ'flO'Oi'JOiflO tocScSior^cNOPScSociio d d d -r ■"* -01 -^ ir tt d d d ■oipeoioooo co 1 ao d co o> o> tOQO "101010 iO t-o«o ■CNt^t- HO sss is's's" is 888 d t^id "5 -©IO IO IO • O I* • © PI t» C$ ' *o 2 Ir^t^t^co 'co* sssssssssssb CN CNCS C 888888883 OOlOCN IO 888 IONCA 10 CO -/ 83 da> OiOOQOiOOiO SS8S8223 S32222Sd!2 ddddddcocoooi^i^r-* OOOOOiOOUS iOiOiOOWI>ON ddaJco'r^do^d SCJnOQlOlfl«lOOlfliQ ONOONM't'ONN dd-vco'co'oieNoloiddd 888 ddr4rtddcot^co*oddod aggasasggRa cz5o6dccoc)C^i>Ir^co*r^t^ gOtQOQOiOp'OOQiO lOMiOOOCSiOMOON d^i^icodco"deoeo*tfdd »o5S io c*oo r^r-t^r^-ioc 88 888 CtCSCN 888888888 888888888888 888888888 3888888 ■OOioniQ VlO'ditdd tOOQQO MOOflO 8gggg8888S cncncnSScnScncIcn 888 l&l^itlll iil^s^tilM lis ri-s »ea00 S-. u at < !o '< ■ o • • to . o o i X Eh • • ■ ■ . . . . . . O iO • !!!! o o 00 ■ o ■ o a Eh s 'C a iH > P d 03 1 a 5: * : b i : : i i :l al.j i : : :«1 35 S? tig *B| ! ■ ! ci • ■ . % S oo . >, ,SgB 3 3; o o v Qo L . o XI T) O w s § a a o o o» d I-H H 1 d $9.75 9.50 9.25 8.75 8.26 8.76 8.50 O a 00 8.25 8.25 7.75 7.75 7.50 7.00 s 7.60 7.00 7.00 6.76 7.2S Is Id 10 OOOiOO OlOONifl NCOIO>OIO is i |i4 ! ■IO jus ' , "a § ..sa S P. M eb So M a a d 1 O i t^CMCN 050OOO 10 tr^r-5 ujioioujo lOiaoioiao CO (D CO CO CO cotOcOcOtO© ll . 10 C« 10 10 ■'*>■:■ i K 2 >! ! ! 1 r- -> 1 f S 1 1 '1 1- 1 j < c 1- 1 i ft ! 1 PRODUCTION AND WHOLESALE DISTRIBUTION. 235 8SSS8S oo a6 «3 t-i i> t«i t^ ess oo"o' sasasassssBsa 88 :R8SSSSS8S o*oS ■ oo* od cd t^ t*^ od oo' cc* t> UJOC ujo'cl CCCNO© t- r-'i-' 8 :83 k5m5 I - I - I - t- L- OOOOlOlO) o oo o iciooxjioiflo f5S0N NNO doiddddd ills! I 111! M* . .Ipll IIIMitftJia OlO odoo* 236 THE LTJMBEK INDUSTRY. -a U OS o -Q -a r^ ss 10.75 10.75 9.75 9.50 9.25 9.25 9.25 9.25 8 S§§ co cnaJo* SI ■ Is l-i to ooo OOiO t>^ t~T r>T o m CO m r— 88 o'o" s I>* coco' o © . . m © . . o o* I ! i w 1 ^ ! I 00 . 'Sa" a 3 ft 1-1 i HI i t"- m r— CO o CO* 1 .1Q ' led 3 ■ o I ■ w ■ 5 ft ^ o m oio o m o oo coed 'O g a a o t> 6 K 1 JO d a o J a I^NiOOON«iSMNN« CN CN CN O CN m O rooOHHOHHrorimri eo ed cn cn --* d ^h oo mm do O IQOiO O WON SS8S od cd ci od o m m 8 O* oo oo cio" CO 00 CO* is S3 OO Q *«3 mo o *t« 00©) f-I -rH : ; «3 a d 'C 3 o W a O s o CNcS o m cn 83 cic* c O OiQO m or-o o HHN Is (1 to 353 OJO* o o od a K O EH m j i "C ft 1 "3 to CO § ; ! 6 bo o a I: jd 1 a O CO 1 J= a 1 1 £ 5 5 a X £ a a I C a. J C 2 1 C e r-t [s 1 JO 1 i Hi 1 Hi S 1 a E CJ CO B 8 E 1 a E S cu A 1 l-» H jog PRODUCTION AND WHOLESALE DISTRIBUTION. 237 JiHrtf^'cScScSocJescScS 30NNNH .c>»r-l*-«^H H l-l i-t t-4 i-H i-l >t-|iHiHtH HHHOOaiOOiOHHH »c*odcs»oo oJoooicooi S?5 WON NNN 00010)0 0) OOujio 100C4C4 00 00* CO 00 S8 ad OOJ iftO wo 00* eft" OUJ 'OO «OC5 >>QO OQiAOOOIQOOQ M O M in W — W ~ C © CO CO CO CO CO ^ ^ ^ ^ ^ ■** M"* eo cm CM(NCM(NCO'V ■ot*-t»e> IOWOOU310 o o" O* O* O) O) S8 OO* Ol-H—I -tH iflino c5e5io cJo'o' 383 OJ 00 00 00 00 & a ass KJiOO mcn© cinc^N:iN-wNNo 5iQt^l>©e5© p^Ntoeoeo£OcoeocO'^ , "S l ''* , cococoeoc4e>ncse*NO«eoco neon IOIOOQOIOOQQIQIO NMOOQNOOOSN iNWUS")") glOOOOOU)IQIQIQou:<()ogo to cocieN^*Nr-Ioic4coci 1-1 — ~ — 1 — r- . ,-H M — ( — 1 _| _l SE88SS 888E3 88 en ro cn on p» K8 i« rt C4 C4 04 P4 CO 04 c4cococ*i-*i--'weNc , ic«ic>i as w" in as 00 00 53 3 3 = 0*0 O JS t J? ea e» • >* 3 . 3 ' nielli!!! uf^ii ■«k5«!So2!« ^Sa-tlsSSliSoln .iSa-^s^Sozp ^a-^SS-SMOBQ b s s a 238 THE LUMBER INDUSTRY. K H if a ft J d © a a o •a 3 j,l 8 .-a a p. J .a 3 .§3 § g88SS :ag58SSg lOOOiCPQQOXJWiC N o >o t- o © © ow3eo(o«oso NNNNCOWM^tH^lOO <3eN©'i--oogoooo6 sgs gggs Sg :gg £8 :a sg ?3m t^odt> S8 aia3oC3Ccno)9'0>OQ fft-8 111! ilisl bspQ.-8fc III PRODUCTION AND WHOLESALE DISTRIBUTION. 239 S8 : s 10 o 10 10 u;oooiflOioioOio>i}io a w o t>. e5 . nooonionnonpSn OS 00 00 00 00 Oi o» OHrtOlOl oooooojaooatsc eoeocQcoeococo»0(Ocoto OO OS oo> o> OQlQOQOOQO ocoJoSwodi^oioco LQIOIQIOCIOIOIQIOIO NWCSWNINWCO^">OW31< 88 28 o©«o "ood C . - ■- lOOiQioOuJOiQiOiOiOU} 0000*0000 Nu)M>Ot»iONNNCOC-000 wejoi oicoci c^-*»or^t^c^ oo oo cd r-^ >o io irj to CNIO to«5 ss sssss ssss ass ssssa as iO"0 iO NNN ■©(DtO8B5i g~g a-g 5S sill! 9 «2 & 5 §35 &2SS sills 240 THE LUMBER INDUSTRY. i ■a a o 1 a d 1 6 to ^8 0» 5.75 5.75 5.75 6.25 7.25 6.75 6.75 Ci.75 7.00 7.00 7.00 7.00 6.25 6.50 6.25 COCO M A co i i i i i i i • | | | h3 ; ; qj t* S « ■*-= d 5 C>J 1 d si c*9 NONUJ.OW IOCS > -if t>^t»t^cocooi oJoi • «a JOOlOOiflKJQ ■ ! i oi o6 co o> oi cri d ! I 3|1 i 1 1 MS sa - ! ! 1 aid KS Sin 1 i 1 & > « o +* a I i 1 o 1 d *! CO io m 8 i i i is oo ; i : '.a i :8 iSSS is' i *C^ * Cft Ci O >0> (X 2 i i ! is : is i i : : g i . . < • • r ■ 32 H3 ::::::: II j a 6 '-5 o 8"' © 'C ft -a OJ > A CO § £ = 3 « 3 £.* II:!:!: II ..i d J3 CUD eg 1 .d d to 31 o CO OOOOO COCO 00 CO CO S SiS igg A O 0> ■ ■ CS OS gassss§ 8 i , oJcoooaocooSai » ; © o+j 3 Pa-Ccoo 1 1 1 1 1 1 1 i i H o a 1 l-a 1 1 to 1 f 1 1 s 5 t- a E | 1 i- 1 g o 1 | n IllH 1 ; \i-\ii il PRODUCTION AND WHOLESALE DISTRIBUTION. 241 8888888 t^ o> 00 00 00 t^ t- 88 B8S8S88JBBSaS COt^COt^CQCOcdcOidkQio'iO 4UJNOOU3C «5»i5L3iou)io©b.r.r.N S : :§ 888S8S odcidooJ oo oo co oo at CTi Ci Oi 00 00 C- SKS8 8853 oooinioinioio r^r^r^oooooJooi in io iq 1-- M I> t- c5 88 ;8 00 00 •!> NiOOO CO CO CO CO t-^ cO cd in cSsSiDinocSu ffloocioicioor- , iiooio6ot-« oor^o6co'cot^tx5t>r^t^cdr^ r-t-c-t-r-c-r-oocooioio OS OJ 00 00 £- t» t- OOO >0>QNiO COlO 'COCO IO -Cft IO «0 ■<*< *0 4UU sh 25030°— 14 16 to us in io to to cdio «5 io •gtlPS So l»b , sba^s 242 THE LXJMBEK INDUSTRY. 9 p o J-l e m T3 SI 1 BO m 7 M £ t> W SI •B 3 o- S s s ° P m g9 «s P* fc M „ «3 O m ^ t>t^t'Cr- .5 • 10.00 10.25 11.00 11.50 11.75 11.75 11.50 11.50 5j o M IN ! d ft 51 ■ • • > 7.50 7.25 6.50 7.00 7.50 7.50 9.00 10.00 10.25 10.00 10.25 9.25 8.75 8.50 8.75 8.00 8.25 8.25 ■<|i a : 3 ! • • JO ; ; ; • ; o m *i '< ' '. '. • 7.00 6.26 6.00 6.25 6.60 5.75 s"2 3« Ma Si o •c ft ■o =g A w 5 $10.25 10.25 9.75 10.00 9.75 9.75 9.75 10.00 11.50 11.50 11.50 11.50 11.25 11.60 11.00 11.25 11.25 a £«' 3| M C4 a' 1 ,o d «1, ■ O -co 6.60 6.50 6.75 6.50 6.25 888888 8S edt^o)o>o'o" c3o> 9.00 8.75 8.75 8.50 8.25 8.60 7.73 JO • is is i i ':"* i" 3 : i '* ■IS iss ■ t^CC 3« in Ma «a De- liv- ered price, St. Louis. ■ ■ . .10 ■ • • : : :S : : 10.50 11.00 10.75 :8 • o •d j 1896. October November December 1897. January February April May July August October November December 189S. i p 11 i i PRODUCTION AND WHOLESALE DISTRIBUTION. 243 8g88B88BSBKS t-r- 44 £8 8£Bi3B8B88 oii^C^t^f^t^co'cdt^ 00 Ol 0»0> 0> U3 HO od !od «N-00 odododaJ CO coco cor- 8S88888 oic»c3d©© ^h O'ONi SiQ IQ »0 O 88s 3 O ifl l» Q ifl o oo oo'oo ooi d 8S8 odod oi ■ oi a :8 i- ■': •- <■: z CNOScNtNir 88a 88 8B88 U3 -^lOKJ 88 ados 883888 C* tN i-i O CO 00 00 OCNU?U3 OS 00 00 0» 8 :SR © Iocs S :8 (- !od 88 :8 :88B ood Bass od od odod 88B OOOs 8888 OlCO oi cn oi co ed go" iqoioO CS'ON'O ^* ^* ^ CO 88888 : : :8S CO CO :888 38B8888 od od od oS © ©" ©" c4oic40odododododo9odai 8888 OiOOOOO 8 8 88S8S t>t-cb*odod I 1 ll 88 oieo OOt-UJ ooodt^ .■SBsSa u 3 _ 88 B888 00 0)0)01 t^S 00 >oo -00 Jl 11 .s|: cqci SB cm t— r-o OS OS 31 —■ 8B88 88 OT © cd co ed co |5|S Has- 244 THE LUMBER INDUSTRY. P o i-l B CO fi ' •R < : m H M p od todco too -cdd hS a ■as .OJODod a ;ss 00 .|^(d •d i'iq ■ifSOifl t •NtNiH I '. jOOOU) CNUSUSN O OHO 30 OOJOOOOOiN =>2 '2= OOOU3iO>5 ifloioogioinooooo iqwu: C-iraMtOOr*MMOt300 CNCNt- OO0)O) 00 0> S US iO O O N B88SS8 ■irtHC *» gg8SSS CBOOOOt^Nt* — I 888838 2 gxi g a Sp-H— ■ ■ ■ •ss-fis' -- 2 &u S 8 §•§ a oa S3 a 8-S2; t-0O000000r-COCOiOin^ 888 8 : :S ~. ', Id BSgg88 -881388 i-Ioieioieoco ■ ■* ^ ti* irj us eNot> -^ US CD ■ ooooo > » ■ NI-ONN • to io id io io O O O 'O W oo*i>o6odo6 ssseag 888888 ;8 : : :S ocioddd -o ■ • -oi idtD°cdcdcOCOCOCD Iidi>i>r^r^ r-r- rX5 tii 8SS : :8 mesco • >*o 8a8gg8BB8888 iOujiOiqiO>ou3COt>^l>t^t^ OOOOOOOOOCsC 8888 :§ HNNNMNMCCmCOM CQ^<>A>A<0>OiO • »0 U3 lO t^t^t^r- 8388 ;§ OCOOOCi iO OO >00©~ • -CJCO JNOOt»N OO h^^^ficoco'^'ws 88SSK8 t^t^t^i^ooo B8BBgg8 : :8 :8 O 00 00 OOC : :S :3 £ 'oooS ineSmS • O ■ oooo Ohhn « N N IN CO CO ■* 88 :a :8 -• -■ ■ ~ ■ o o t— f^ t— CO CO CO CO u} in iq >o lo >o in o >o co-^intdidididid"* SH8 :SB C4C4{Q ■CO'* iftiOiOiO© •HQIOOOO ■ f-rtTi; • id UO CO CO CO • qujioinNOt- -t-oooooocoooaoaiooo B8B888 ^"OU3(DcO(6 ■PQIOWJIOO 'OO • t^ oc t^ i> c-^ od icoo :ass S8sggsssa8ga wNWNe^coc^eicoco■*■* fiQincoiowococococo 88 :8g8agS8S OO • O O <-i t-h i-i CN c4 CJ coeocO'ii'Ti'-^co^! NGNCNCN i>t^oood lO CO CO CO CO CO CO ■88SB88 88888888853 :g OOOOOJOOOOO «i-I i-HCNC>»cococoeoeO'fcO'-!HCtD»0 OOs CO 00 00 t> t> O0OO0Ot-t*t>-t^Q00OeCO0QO iooiomoiraiAOmoO"3 ooJaSa6 , Qdccodo5o5aS©t-I hhOOONNHH' ncocoeococo«"v«itD(ded (diotdidio^^iHSSSS S* 1 f ill!! s Mli&silPM ~ Pllik'iiHii I DIAGRAM 6.— Movement of Actual Prices of Yellow Pine Rift Flooring Delivered in Boston, New York, Pittsburgh, Chicago, and St. Louis, 1898 1910. DIAGRAM 7.— Movement of Actual Prices of Yellow Pine Flat Flooring Delivered in Boston, New York, Pittsburgh, Chicago, and St. Louis, 1897-1910. Diagram 8. — Movement of Actual Prices of Yellow Pine Flooring F. O. B. Mills In Alabama, Mississippi, Texas, Arkansas, and Mis ^f 1891 \m \%n My* m§ \m mx r \m wd9 mo \m \9oi 190$ 100V \go§ is m feet jlF]W AMJ J J|A S OJNiD J F^l aImUJ^S D n!d d|F Ma|m|j JjAJS OlN D JJF M A|m| J J|AS N D J FMAjMXjjSs'Oi^fD jjrk AlSl rXV.I JJAlS CJN|D J F U aMj j|a|s|o!nIo J|F M AiM 4 JJAlSJO N D J FlMAM 4 4 A|S|0JN ; P .j|f|mAMJ J^JSOND ,J|FM|.^M : J JiASbJNJO j|FSMA|M|j.j|AJSONiD JJFKAJMldiJiAJSJONlD 4f Mil 1 1 . 1 1 i ii 'i'TiT h-TJ""ri rhr+-h-i ,"rrt s "~r-i — H — iTiT ai +-.-(■+ r-- j 1- — i.-u — 4-4-4 4-4 j — 1 — 1— -4 -4+4-1 — 4 444-1- 4-4-4-4-4 4.4I44 .4 1 l_i— 444- ' *4-i 4-1444 ~H" r '~t*t — h — ^ttTr^ — rrF w t-H- iHtt r 1 i Ft — ' i I 4 1 1 1 1 l i i I i - 44-4- 4 H 44 JL LL i . hi |,| i'M 4-.4.-L-44-+-.L4 F--4.4-F -+ -LL- -F44 4-44-4 llL-U-I-LU 4 444-4&ia 30 - .4. _ . ,_ ri ii it mi till 4 ^ 4 li rrt irr f [M i i \\ iifti i rmtThrifi^au 28 -4-4-4-1-4-1.-4 R P FT 1 vA" 4 4 J H-4-F -F -4-444 14 l— U .-J---U4L L . 44 4 1 ! 1 4itrrT4i i ii + t^t"i" "Hi l4 nT" "tn i l4l 144i4--^4i4l Lfj.!. pijifl !] . 1 i D n sr 1 1 xt 1 r rrl r f i 1 4 1 I Fi i i r i r t r i r 4" ~n~4~~n"T 2g -+4--L4— i F j- aiabama o F- i-J-44 14 -4 j | F - -4- r ■ -!—! -U. i j-. 4 1 4— 14 44.4 _ 4 414 T~\ r 7 T~-.\TT\Z~ t4LL4]44"44 i7"nti7tt ill 4,+ 1 I : r 44 1 147 1 ill 1 Ami 4 u il -t-i|44 4144x44-44 4 1 ■■ l 4 -til u 4-i-XL444 7 4^74h4^SMx x-747 ttri-Hl '-'44H H 1 -4 x 1 44X47 Hi 1 4 j- J 4 444- 7[|4 -ffl- tfai+fl- 1 1 ! i i 1 1 1 1 I ; 4 ,*: 1 1 1 | 4 1 * 44 27 _L J-i L.i Mississippi • 4 iii M 1 , ■;_. 4 . ijiil M ill 447 4 1 Li i 4 4 44 X i ilil •-' T || 'I ! ARKANSAS A I , fl M 'TTT'" F^t 4 "t" I r 4-f -]-<- 26 -4- -j-l- f -j -4 Missouri a -j — |— F i i | i 1 J - - — 1— L-i4~! -j— ! 4-4- .-4 4444- 4-4; 4 U 4 -Fi i- { 75 -t-4 4-4-. ■ '4,-44- 41- I 44 --J — i — (.__. |. |. 1 1 1 . ! .41- f- 4_ ' l 1 , i L 1 i 1 : ' i J 1 " ! hi : : ! ■ • : 1 I h 1 1 T XT — n i 4~L4T — r +n l4 + 1~n I 1' i Mill 1 HI L 4a|J .: ill 1 M 1 1 i^fKlol Mi 447- 4; p74-LM4^-LF r [t r | T f -h-l-i-t ■ 4- 1-4-4^77^-4- 7Mt^x+"^4i74ix4iL^ m44i <-" : i i i I ■ : — ~r 44 -1 ■ r-- - -44-44 ' "Fr'F — r 4 - 4 4- 1 44 F 4 22 Li 14-. -44 i4-4U4-.i-4.-4-- I 44 i_- -.+- 4 . u J.-J-l ; t 44 44, L-i ilLl -,- t -■ -i4--i-r'i4j|-i-i --4-4.41 r'-T4' r 4": — 14-4-14 -Kr- --^hFt't *"'" "W" Tfrf — rrnT" 1 "!^ • • 8 Ml — n rt 4. t .i|.4....i.;-. !7j44|].4--4i-. ; - t ^- -U.{-^4^- XM4^4-14-^-7-HL-t i ^44~T-HiM ■" - ' - -.;-L!.-4-L4-.--|-p--Fi444^F-L|-H--- a -IX7M4H4Xl-4-4 e i-4 S !-F|--i ;-.4--|4-4-FF i-i ■*- j 4 i-44- -*iF, 4» 4 ■■■ I 1 1 i 4 i Ll 1 u.44 4 i.|4 j i i»l !*i* ■ 44 ; jiLM 4utMi4-l-i5»l JJtleLa-i-uJ : 44LL-4-4^--Mk4-L4-4*l-i«* J «!^ 1 ' : J-U-i-U- 444- . , ; 1 1 1 , — |- p, —4 -4-j- -j p.- p.^^— 1.+- -^-+-4- + — 21 ... .4 .44.1-4-4 .. i— 4--.L- - -+4-1 4- 4 _i__i |. -F iii 1 _■ ■' L i N t 1 J [ j : i 1 -' | : . 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A i* I i ± 4&AA A A _^_X *Iit44-*-M M i;!---^+-~i---t-------H -X-4+fL xSbi^-744 474x: "i _ 4 g .... M..4 l4-4 +--L4- L-U— -UU-r-4-r-r -, ,- ^J_ ^d Al*4_^ 1 _ J.4* _l_ ^ *j*L.I i_ 1 ._l L U * 4_ If 4i»* • **!?!* ° i y I ^ ! 4 1 M llf ; i i I . - i- M- 4 "*!*- A 44.*[AA* . . KZ 4^ ^A44 4 ^fi t" * H" ! 1 ; ; , i ■ i | ; . i A a , a i » &aL & « s * 1 ■ 4. j -444- 4-4-4-^-44 -. ml 4u + 4 I : ' ! i ■ ; ' ■ 1 A A A A AA 1 s a ^ . .|. . . n it^ 1 4 1 tt ^ 4 r ,e -I.-L4J U4i4L!444-LF!+.;-;..L:-.|iLU-UUM -^ | ^ ^ ^ r[ - -p T-rp-ny -- - - r - r rrr r --| rj-]J]rr"'T"'Tr i" X flXX'T J. ._. X - 44— 1— - - -t-t-4— 44-4- -444 u T . -4 L 4 4 F I ll X + 4 1 4-74l^ l6 4-4 N9 2 common «'^' 55ippi • L44-L 4-4 4 L X LL444 +1 f^ T 4 4 -jp4 4-44^ 444 44 4l r 414474 4^ i 1 1 . | x ;+i -^ i X f r i' f '4 1 ! ' X 4 MISSOURI A | ', I i 1 ' i ; I i ! ■ 1 ; 1 i - i • ; ' j ! i | 1 i 4 , 4 i ■■ ii 4 1 i | ii i | | '" | i j , ! • ! ! i ■■ I i I • ^"»a i i I'M" 1" ' j'-T-^ ~La** "Mx^-411 !' i j ; i ; i I i j 4 i j j _i_._ .4 4_ 4 a .j . -4 ah j- - 1- I - »-— L+, -4-+4- J*i-ai*i— i-i*U 1 4-44.4 -. t-.+i 44 t l 4 4 T L jiffl Xa i X *" a ^ a 4A 4 *I4a»* ^ +I **T a^a r A,A t i 1 IF A 1 H 4^-A. - f T ■ * B iS[-44-4T •- 1 " A 4 ' Aj ' *** 1* * A A IA T "■ Tj- '!■?« "■ -TT-TT I, ». • ! - 4. jl.. l-4 A , - A 44 4- 1 4- 4 tel-ln- !«. 4l- 1444 -4- It- ■ A LO.O^.*» 4 4 ill II 9 i I ; A ! ! A j 4 k * A ' 4i ,t * 4 A i A a |a + A 47^ vv* + . j7x a h 4 474^74 j°ji^c~'S' -t;^*+-+-^-r 8 j I I I | | I A | 4 A A A '| A * *a 4 -*-t'm-777---$4--o^^L-144 a M^4 ' ! ll I A* j* A .» ,l . " ' i* 4 *A i ,A* 6 1 I l| ' ■ i A J i *fi a A Ai A fi ■ A , * p» '«,. a« # »^ 70&VIO. ; ...-X-j-P'- -- '-«i: a - " - ~t-~t-.4- J H--pr ! r',j'|" j AAA 4 4- 4 "V--t4- r .-4-|- 4+-p- -1- j- -4--U— l^_u|--.- L44-.-I.-.-. rf . 4 j. _.., h 4 p4 L|J H " _X-|4 4 I 1 i 4 1 ' A 4 I i '■ i '•■ i i l„ !, , , ' i I i I || | liiil I | i J 1 1 L 4^ J i_ 1_Lj mmmt of Actual Prices of Yellow Pine Flooring F. O. B. Mills in Alabama, Mississippi, Texas s Arksssas, and Missouri., 1891-1910, 1535 mx m$ m9 iooo mx 90i \m 4 100^. r [90S f 1906 1304 T 1905 190P "^~ 1910 ^ L f Ji5i$A]siK.rIl|E^ MfffiAiJJASONiDtitSAldJA^ l ' ' wiMUUA@0» MFEF1 —I ffirri-f- --t^ilTTT 1 ^^^- 7 ^^^^^"^^!- 11 ^- ::Z ^^4 i M . " h a+M i T+T _i«r*us_^ i -f J 4Ti4M4^a4i r r fi j"Trr-a"M"T M+VHT ; "rn+tl M4~'~M 3I i ii ba r i * a** .i*i.i i 4 a I 1 1 1 ii a i 1 1 i i a a > > ^n 1 X M Mitir X/XX fr XX 4 tX^XMXi|rf r Xri ;t4 ! T 30 ii i i i i ! a i i MM M ! | III I 1 ! 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LL___ L_„L_._-Li____„__J_i__uJ_L__i 1 MM ZM I DIAGRAM 9.— Movement of Aetna! Prices of Yellow Pine Boards and Dimension F. O. B. Mills in Texas, Arkansas, and Missouri, 1891-1910. 1821 SSiffiS? \sn w$ \%m m§ ^^^SSS^SM^S M^S ^SMi^M^^^MSS^^S^SSSSiMSiMM \%9@ \m mi 18?'? 1900 jH^BJ|oWolM|#HSiij|ft!s|o|NlD 1905 mk i$06 gMjjMlBftgJMSlifflSBilffiBSS B \m IS HAGRAM 9.— Movement of Actual Prices of Yellow Pine Boards and Dimension F. O. B. Mills in Texas, Arkansas, and Missouri, 1891-1910. m § ' \m tsg'S '"' 18W wo \ \m i we | ws 190% igog we WAMj|jiAJSlo|Nito wr jIfMaMjUaIsIoWd 190S ^aTOKsToR d 1909 j W tO oollw H^lM|jUAfelOlNSD|jFffA]ffi jjsloS 248 THE LUMBER INDUSTRY. NORTH CAROLINA PINE. Section 14. Production. North Carolina pine is a trade name applied to the lumber pro- duced from certain varieties of yellow pine in Virginia and North and South Carolina ; esp ecially to that produced from the loblolly pine, which is the dominant variety of yellow pine in those States. The following extract from John R. Walker's 1 history of the North Carolina pine industry explains the origin of the name. Speaking of the establish- ment about 1880 of a number of mills in the vicinity of Norfolk, Va., he says: 2 It was this same coterie of manufacturers who began the designation of their product as "North Carolina pine." This was suggested to them by the fact that the timber in eastern North Carolina was known to be exceptionally fine and was identical in quality with that in the Norfolk section, whereas the terms "sap pine," "Virginia pine," "Eastern Shore pine," etc., by which the product of the mills on the eastern shore of Virginia and Maryland and on the rivers along the Chesapeake bay was designated, now suggested to the buyer ungraded, stained and poorly manufactured lumber of inferior size and quality. This change of name, therefore, assisted the mills of the Norfolk section in obtaining better values for their im- proved product. Since then the term "North Carolina pine" has come to designate, both in this country and abroad, all of the shortleaf and loblolly pine lumber produced in Virginia, North Carolina, and South Carolina. The Forest Service in its statistics of annual cut gives only com- bined figures for the long leaf, short leaf, loblolly, and the other less abundant species of southern yellow pine. In discussing the different varieties it refers to "the loblolly pine (Pinus taeda), often called North Carolina pine, which grows in every Southern State from Virginia to Texas. 3 The South Carolina Lumber Association included among its membership two classes of mills, the board mills, i. e., mills which cut most of their lumber into standard sizes 1 and 2 inches in thick- ness, situated on tidewater, and manufacturing a product comparable to that of the North Carolina Pine Association (Inc.) mills, and the interior mills, which, manufacturing dimension and framing almost exclusively, had a product comparable to that of the Georgia-Florida association. When the North and South Carolina associations were consolidated it became necessary to issue price lists covering long- leaf and short-leaf pine, for the benefit of the interior mills. The ■ In 1907, John E. Walker, then secretary of the North Carolina Pine Association, published a com- prehensive history of the North Carolina pine industry in the form of a series of articles in the American Lumberman. » J. K. Walker, American Lumberman, June 1, 1907, p. 31. « Forest Products, No. 2, 1910, p. 10. PRODUCTION AND WHOLESALE DISTRIBUTION. 249 board mills in South Carolina used the same lists as those of North Carolina and Virginia. Mr. Walker gave the following reasons for the consolidation: Up to this time — 1905 — the membership of the association had been confined almost exclusively to the manufacturers in Virginia and North Carolina. During recent years, however, a large number of board mills, both saw and planing, had been established in the short-leaf and loblolly belt of South Carolina, and as the product which they manufactured was identical with that of Virginia and North Carolina many of these manu- facturers sought admittance to membership in the association. In 1903 the South Carolina Lumber Association had' been formed, with thirty-five manufacturers of longleaf and shortleaf pine as members. This association was identical in scope and purpose with the North Carolina Pine Association and even the geographical limits of the two overlapped, so the logic of a consolidation soon suggested itself to some of the members of both. 1 The annual cut of yellow pine, all kinds, in 1912, in Virginia, North Carolina, and South Carolina, was 2 — M feet. North Carolina 1,658,744 Virginia 989,622 South Carolina 751, 198 Total 3, 399, 564 Section 15. Competition met by North Carolina pine producers. Competition among themselves. — There is frequent mention in the trade journals of the competition between the larger mills, which market their lumber kiln-dried, and the smaller mills, which generally have no artificial drying facilities, but ship their product air-dried. North Carolina pine is especially susceptible to stain during the drying process. President E. C. Fosburgh called attention to the perishability of North Carolina pine in his address before the semi- annual meeting of the North Carolina Pine Association, October 11, 1906, as follows: One of the greatest sources of loss to the manufacturers of N. C. pine has in the past been caused by reason of our mills having produced at various times more lumber than the demands of the market have required. From experience and at severe cost we have been taught that our product is not like white pine, hardwoods and various other lines of lumber which can be piled up in the yards and allowed to stand for years without danger of suffering any depreciation. Our product is a perishable one, and with the growing scarcity of our stumpage, it is little less than a crime for our mills to produce lumber which they cannot market, and which must stand in their yards to stain and rot. ' J. K. Walker, American Lumberman, July 13, 1907, p. 48. • Forest Products, 1912, p. 11. 250 THE LUMBER INDUSTRY. The air-dried product is considered inferior because more stained and usually sells at considerably lower price than the kiln-dried lum- ber, with which, however, for certain purposes it enters into compe- tition. In addition to kiln-drying their lumber the larger mills usu- ally have facilities for planing it, while most smaller mills are obliged to ship their lumber rough. Remarks are often found in the lumber trade-journals attributing weakness in the market to price cutting by the small, mills, which are said to have been forced to realize on their lumber on account of finan- cial considerations at a time when prices are not strong. 1 Similar comment is usually found in all woods where, by some form of organized action on the part of manufacturers, an effort has been made to maintain or advance prices. One or two interesting excep- tions to this rule, however, occur in North Carolina pine. Attention was called, in comment from the Boston market in the American Lumberman of 1903 and 1908, to the fact that it was the large manufacturers who were cutting prices. For example: The smaller mills are well filled with orders and are asking full prices. The larger mills are shading prices extensively on many items, weakening the market. (Oct. 10, 1903, p. 51.) 2 Some mills are still cutting prices at times, while others are firmer holders. One manufacturer reports that he is about to ask a further advance and expects to get it. There are several factors at work in the market that are unsatisfactory. It is reported that several of the large mills that are obliged to sell as fast as they can, reduce the price whenever they are in need of orders and then when they are fairly well filled up they advance prices two or three dollars. (Oct. 10, 1908, p. 77. ) 3 In the spring of 1910 numerous comments in several different trade journals point out a similar situation. An effort had appar- ently been made to keep the larger mills in line with the August 17, 1909 "market report" of the association, and the details of this effort are shown in the trade-journal comments during a period of several months. In the New Orleans Lumber Trade Journal of March 15, 1910, page 31, the Norfolk correspondent pointed out: The North Carolina pine situation in some respects has taken a rather peculiar turn, in that some lines of air-dried stock are selling at higher prices than kiln-dried. This seems to have been brought about from two reasons, namely: lack of nerve on the i The following is a fair sample of this style of comment. It is taken from the New Orleans Lumber Trade Journal of Apr. 1, 1909, p. 33: While there has been some cutting of prices, in a majority of cases it is traced to a class of stock not covered by the standard rules of inspection, and in a good many instances air-dried. Tf 16 ™ w little concession being made on kilndried lumber, such as is manufactured by the old line North Carolina pine mills financially able to carry stocks and who have alwavs made it their business to do so, over just such periods as this. In other words, the better class of North Carolina pine manufacturers ana their connections have got a decidedly proper view of the situation and are holding up to business principles, taking such business as is consistent and awaiting the future for the resumption of regular values. » Similar comment occurs in the issues of Sept. 12 and 26, and Oct. 24, 1903. s Similar comment occurs in the New York Lumber Trade Journal of Oct. 15, 1908. PRODUCTION AND WHOLESALE DISTRIBUTION. 251 part of some of the kiln-dried manufacturers, and the assurance of the small air-dried operators. To aid the latter in their attitude, available air-dried stock in snipping condition is at the lowest possible stage, with a rela- tively stronger demand than has been made upon it for several months past. It seems that box makers and consumers of air- dried stock turned their attention to this class of lumber early in the season, on account of the difference in prices being from $1 to $2 cheaper than kiln-dried, and on account of the firmness of kiln-dried lumber at that particular time. In consequence, the outcome is that air-dried lumber, or at least, the lower grades are selling at better prices than kiln-dried. In conversation with a large manufacturer of kiln-dried stock, he said, that one of the causes of this remarkable condition was that some of the kiln-dried mills did not have the nerve to stick out for prices that they could get if they made the proper effort, consequently, the whole thing is reversed. It is pretty well known that the small mills having no kiln-dried facilities who manufacture board and framing sizes, etc., have passed the word from one to the other that if they ask such and such prices, they can get them. A few sales were made at greatly advanced prices the past fortnight, and these prices have been taken as a cue, and this has spread to a very large extent, all over Virginia and North Carolina amongst the smaller mill men, until it is utterly impossible for the buyer to get anything at prices that existed 30 days ago. Further on in the same article he stated : There has been some criticism made concerning methods of some of the larger manufacturers who persist, it is claimed, in selling at prices that are unnecessarily low when the situation is carefully considered. The very people who are responsible for keeping the situation unsettled at this time, or partially so, are among those that are continually protesting against low E rices, small profits, etc. There is no doubt in the minds of the forth Carolina pine trade that prices have advanced and will continue to advance. In the American Lumberman of July 23, 1910, the Norfolk corre- spondence contained the following: One matter that needs serious consideration is prices, but the consideration must come from those high up as manufacturers and shippers. Until recently the talk was that the small mill- men operating what is known as a "coffee pot" or ground mills were a thorn in the flesh, but it transpires, from very good testi- mony, that those very mills are the ones that are naming the highest prices for their product, which consists mostly of sizes and framing or piece stuff and a certain amount of air-dried boards. In the October 22, 1910, issue of the same paper the Baltimore correspondent stated, in regard to the North Carolina pine market: This wood is down in price and some manufacturers assert that they can buy lumber for less money than it costs them to 252 THE LUMBER INDUSTRY. cut stocks from their own stumpage, acquired when timber was cheaper than it is at present. This shows the folly of mill men in sawing their timber, which has not receded any in value, and sell- ing the lumber for virtually less than they could get for the stand- ing timber. The existing condition of affairs is laid chiefly to the big mills, the large bond issues, which must go on to earn fixed charges, and can not, like the small plants, shut down. The desire of manufacturers to get into this market prevents a realization of such prices as otherwise would be obtained, for the local demand has been fair, both the building sizes and box grades having been called for freely enough to prevent heavy accumulations. In the New York Lumber Trade Journal of February 1, 1911, page 48, in the Norfolk news, a report of an interview with "one of the most prominent manufacturers of North Carolina pine" quotes him as follows: At the beginning of this, a new year in North Carolina Pine trade, it is up to the manufacturers to set the pace, and it is up to the big ones to lead off in this price matter. I have heard it claimed that the small mill is a demoralizer. It is not so. The small mill cuts but very little ice in the North Carolina Pine trade with the general markets. I could cite scores of whole- salers and retailers who do not recognize anybody but a half a dozen or so of the prominent sources of supply, and it is up to these prominent sources of supply to correct the evils which they acknowledge, and have been in effect since the past year or so. In short, smce the fall of 1907. Competition with other woods. — North Carolina pine enters . into competition with several other kinds of wood, the nature of the competition varying somewhat in the different markets. In all the eastern markets for which the Bureau presents figures, North Carolina pine flooring meets the competition of yellow pine, maple, beech, and oak flooring. In Boston it also has competed with spruce flooring. North Carolina pine dimension competes in the above markets with spruce, hemlock, and yellow pine. The lower grades of North Caro- lina pine boards, particularly "roofers" and box material, compete with similar hemlock, spruce, and yellow and white pine lumber, while the upper grades, which are suitable for interior finish work, meet the competition of West Virginia spruce, yellow pine, and white pine, as well as of some hardwoods. The following extracts from letters, written by two prominent lum- bermen, throw light on the competition of North Carolina pine with spruce and with white pine. The following occurs in a letter written March 14, 1911, by an officer of the South Atlantic Lumber Co. to the secretary of the North Carolina Pine Association: The writer has had the pleasure of several conferences with Spruce shippers during the last few months and they are ready and willing to meet us in any advance in price. They are simply making their prices low enough to meet competition of the N. C. PRODUCTION AND WHOLESALE DISTRIBUTION. 253 shippers. One of the great troubles with our people is that they do not realize the value of their wood. They have an idea that they must sell it very much cheaper than Spruce and White Pine in order to get business. This is true if Spruce and White Pine manufacturers furnish the same grade of material that we fur- nish, but in their boxing lumber they put in a large amount of lumber that is far below anything that our grade allows and there is no reason why our lumber should not bring the same price per M. ft. as either White Pine or Spruce in the boxing grade. In fact, most of the consumers are w illin g to pay the same price. In a letter of October 31, 1912, written in response to a request for information on the comparative values of white pine and North Car- olina pine, Charles Hill, an official of the Northern Lumber Co. (a white-pine firm of Tonawanda) and of the A. C. Tuxbury Lumber Co. (a North Carolina pine firm), makes the following statement: Recently I inquired of one of our salesmen why we had lost the business of a certain party requiring 1 x 12 White Pine Shippers for which we were getting $31.00 per M. Our salesman replied that the business had gone to a N. C. Pine competitor for 1 x 12 No. 3 at S27.00 per M. Now a White Pine Shipper has its equiv- alent in N. C. Pme grading in a selected No. 4 grade, while No. 3 N. C. Pine has its equivalent in White Pine grading in a No. 1 Barn, and the 1 x 12 board in this grade is worth $53.50. If the man who took the order for 1 x 12 No. 3 at $27.00 had really known what his competition was, he could have sold a No. 4 for $27.00 instead of a No. 3, and given his customer good value as compared to the White Pine. This simply shows the effect of a lack of knowledge of the N. C. Pine salesmen of the competition that they have to meet in many instances. In fact, the longer I am in the business, the more clearly I understand that the competition amongst N. C. Pine dealers themselves is the thing that keeps the prices down and not the competition from other woods. It is therefore a matter of salesmanship in a very large degree. Section 16. Conditions in the production of North Carolina pine. Lumbering has been carried on in the North Carolina pine region to some extent since the early settlement of the country, but previous to about 1880 the principal demand had been for local consumption, although North Carolina pine lumber seems to have acquired some foothold in the Baltimore and Philadelphia markets. In his history of the development of the North Carolina pine industry J. R. Walker fixes 1886 as the date at which the Wood entered the New York market. At first shipments were always by water, but in 1886 rail shipments began, and to-day a large part of the product reaches its market by rail. The establishment of rail shipments led to a great increase in the planing of lumber at the point of manufacture, since it is not generally advantageous to shin dressed lumber bv sailing vessel. J. R. Walker 254 THE LTJMBEB INDUSTRY. (writing in 1907) estimated * that at least 80 per cent of all North Carolina pine lumber which was dressed before using was planed at the point of manufacture. To these various factors he attributes the growth of the industry from 1880 to 1888 : 2 The improvements which had been effected in its manufac- ture, together with the introduction of dry kilns in 1879, of plan- ing mills in 1884, and the opening of a rail outlet to the north and east in the same year, greatly enlarged the demand and the territory of distribution for North Carolina or shortleaf pine, which of course effected a corresponding increase in its produc- tion — with the result that from 1880 to 1888 the output of this lumber had grown from 60,000,000 to approximately 300,000,000 feet — an increase of 400 per cent. Attempted mergers. — From time to time there have been various attempts either to form a merger of mills on a large scale or to establish a joint selling company. None of these efforts has been successfully carried out, but each of them has given rise to considerable comment in the trade papers. The first attempt was late in 1898 and in the first few months of 1899. J. R. Walker makes a brief reference to it in his history, 3 but the trade journals at that time go into more detail. This attempt at a merger was succeeded by an unsuccessful attempt 3 early in 1899 to form a joint selling company to handle the output of the mills in the association. A similar effort to form a selling company early in 1900 met with like fate. Rumors of a proposed merger are referred to in the spring of 1900 and again at the end of that year. The New York Lumber Trade Journal and the American Lumberman devoted a great deal of space to comment, on the proposed merger, which was finally abandoned. In the New York Lumber Trade Journal of November 15, 1902, there is an editorial comment on some recent and unsuccessful efforts that had been made at a merger. In the American Lumber- man of March 3, 1906, there was comment from Baltimore on the fact that a ieported consolidation of two large producing companies was followed by rumors of another North Carolina pine combination, and reference was made to the various former attempts at mergers, attributing the cause of their failure largely to the high value placed on plants and other property by individual owners. Section 17. Association development. In the following outline of association development most of the facts have been taken from Mr. Walker's history, published in the American Lumberman. ij. R. Walker, American Lumberman, June 1, 1907, p. 31. sidem., Oct. 19, 1907, p. 45. •Idem., June 22, 1907, p. 46 et seq. PRODUCTION AND WHOLESALE DISTRIBUTION. 255 In 1888 began the first attempt to organize the manufacturers of North Carolina pine into some form of association that would insure united action on grades, prices, regulation of amount of output, and extension of markets. The name of the first organization was The Carolina Pine Lumber Association, and it seems to have had at one time 84 members enrolled. It was short lived, and was succeeded in 1889 by the North Carolina Pine Lumber Co., which embraced only the larger mills — 17 in number — representing about one-half of the industry. In 1897 this company was itself succeeded by the North Carolina Pine Association. This was reorganized in 1904, and on June 1 the charter of the North Carolina Pine Association (Inc.) was adopted, and the old North Carolina Pine Association was dissolved. On November 15, 1905, the South Carolina Lumber Association was consolidated with the North Carolina Pine Associa- tion (Inc.), forming a new association under the old name of the North Carolina Pine Association (Inc.). The annual output of the mills in the new association was estimated by Mr. Walker to have been 900,000,000 feet in 1905 and 1,200,000,000 feet in 1906. At the annual meeting of the association held March 21, 1907, the by-laws were amended specifically limiting the territory of the asso- ciation to Virginia, North Carolina, and South Carolina. 1 Down to November, 1902, the North Carolina Pine Association and its predecessor had been primarily interested in rough lumber. 2 It is true that, at the meeting of April 5, 1900, according to Mr. Walker's account 3 — The secretary was instructed to have the price fist on dressed lumber, as drawn up by the dressed lumber men in the associa- tion, printed for distribution — this being the first time that such a list had been issued by the association. But it was not until November, 1902, that the association definitely included dressed lumber in its scope of action. According to Mr. Walker — Resolutions were adopted by the association in November, 1902, that in the future it would represent both rough and dressed lumber. Previous to this time, although the dressed lum- ber interests within the organization had for several years been persistently increasing, the association officially was nevertheless a rough lumber association. This action, therefore, marked the first official recognition of the dressed lumber interests. 4 1 J. E. Walker, American Lumberman, July 13, 1907, p. 48 et seq. Previous to this time there had been a number of associations of dressed-lumber operators, all of which appear to have been short lived. Mr. Walker gives full accounts of the Carolina Dressed Lumber Associa- tion, organized May 6, 1891, the North Carolina Dressed Lumber Co., Oct. 13, 1891, the Southern Dressed Lumber Association, Feb. 1, 1895, and the Carolina Dressed Lumber Co., Feb. 20, 1896. Each of these seems to have been composed of about the same men, who furthermore were also the men who dominated lie contemporary rough-lumber organizations. •J. H. Walker, American Lumberman, June 22, 1907, p. 46 et seq. ' In his price tables, published in the American Lumberman of Aug. 1, 1908, p. 35, Mr. Walker quotes for dressed lumber North Carolina Pine Association lists of Mar. 30, May 4, Aug. I, Sept. 30, 1899, and Mar. 256 THE LUMBER INDUSTRY. Section 18. Association price-list activities. Uniform price lists before August 16, 1906. — This discussion is based upon information obtained by an examination of the records of the North Carolina Pine Association (Inc.), from interviews with prominent lumbermen who in most cases had taken a prominent part in the activities described, and from published sources. The trade-paper extracts collected by the Bureau begin in 1898. In general they are a contemporary record and a running commentary on the price-list activities which agree with the official records and correspondence. There are, however, several references to "agree- ments" between the association and its mills, or between the various mill s in the association, which indicate a state of affairs somewhat different, at that time, from what Mr. Walker describes. In his articles he implies from time to time that the price lists had no further power over manufacturers than the "moral influence." For example, he says : 1 From 1894 price lists were formulated from time to time by the company or by the association which were regarded as morally binding upon the members. During fair commercial weather, where in many instances even more than the current list prices was justified by market conditions, the members very naturally E roved loyal to their implied agreement. During contrary times, owever, many sold regardless of the list and others found a way to evade their tacit understanding without injury to their com- mercial consciences by selling f . o. b. mill, by allowing a liberal discount for cash, by raising the quality of the grading etc. And in another place, referring to conditions at the time he was writing (1907), he says: A large part of the sales of North Carolina pine are made upon these terms, but as the association lacks power to enforce them they are by no means universal in their application. They depend solely upon the individual manufacturer for enforcement and have no sanction beyond their fairness and the fact that they are recognized as "official." An explanation of the difference in the point of view between Sec- retary Walker, writing in 1907, and the trade-paper comments, contemporary with the events they described, may He in the fact that the agitation on the part of the general press and the public against the various lumber associations began in 1906, and that severe attacks had been made against their policy of issuing "official" price lists. Mr. Walker's treatment of the subject of price lists, throughout his series of articles, is more in the nature of a defense and attempted justification of the system than an impartial statement of the whole truth regarding the various methods used to make them effective in the markets. ' J. R. Walker, American Lumberman, Aug. 17, 1907, p. 45 et seq. PRODUCTION AND WHOLESALE DISTRIBUTION. 257 The founding of the Carolina Pine Lumber Association in 1888 marks the first organized attempt on the part of the manufacturers to establish "official" uniform prices. Mr. Walker describes the condi- tions as follows i 1 Previous to the establishment of the first association, in 1888, the matter of prices had been left to the free play of ignorant com- petition — not that competition in itself is ignorant but that these operators previous to the time stated had no source of informa- tion from which to ascertain the prices that competitors were obtaining and so were proceeding ignorantly. In that year the Carolina Pine Lumber Association was organized, but as it was impossible suddenly to reverse the practice of years and to estab- lish uniform standards of grading or manufacturing, so it was likewise impossible to formulate a uniform basis of prices, as the products of the various manufacturers differed so greatly one from the other as to quality, grade, etc. The only action looking to a regulation of prices, therefore, which that association could take was to instruct a committee to disseminate each week among its members a report of the prevailing market prices. The first organization was short lived, and Mr. Walker says in re- gard to the policy of its successor, the North Carolina Pine Lumber Co.:' In the following year the principal members of the Carolina Pine Lumber Company formed the North Carolina Pine Lum- ber Company, which succeeded the old association. This was a closer and more coherent organization, the object of which was to enable its members not only to establish but to obtain uniform prices for their lumber. To this end uniform standards and grades of manufacture were established and it was planned that the surplus stock of outside miUs which offered their lumber to the trade at less than the company's fist prices should be bought up. It was also intended that this company should handle the surplus stocks of the manufacturers who composed it, but as these were large concerns with good facilities for marketing their lum- ber, and as it was rather a point of honor among them to be able to market their own lumber at list prices, very little stock was pur- chased from the members. This company, with good manage- ment, prospered as long as the market maintained a firm or upward trend, but with a change of management and coincident decline in the market its operations proved unsuccessful, and the v members, being unwilling to sustain further loss in a futile effort to buoy up a declining market, brought the activities of the company along this line to a close in the fall of 1894. A loose organization, however, was maintained until 1897, when the North Carolina Pine Association was formed. Each of the short-lived dressed-lumber associations of the period 1891 to 1897 appear to have issued at least one " official" price list. 2 1 J. E. Walker, American Lumberman. Aug. 17, 1907, p. 45 et seq. ■Idem.. Aug. 10, 1907, p. 48 et seq., and Aug. 1, 1908, p. 35. 25030°— 14 17 258 THE LUMBER INDUSTRY. In the first half of 1899 an attempt seems to have been made to rely on something more than "moral influence" in price activities. About the time of the failure of the first attempt at a general merger of mills (see p. 254) a Norfolk comment in the New Orleans Lumber Trade Journal of May 15, 1899 (p. 16), speaking of a recent advance in the price list, adds the following: "This is in addition to the in- crease of 50 cents per thousand ordered to-day after the association closed its agreements with the mills." The same paper, in its issue of November 15, 1899, under its Nor- folk news, refers to the date of the agreement as January and quotes "a prominent lumberman" as follows: "I do not mean, " said he, "that the agreement between the mills has been violated in any particular. It has not, but on the contrary, prices instead of being cut, have been raised above the list by individual mills." In the account of a meeting of dressed-lumber manufacturers, described at length in the New York Lumber Trade Journal of August 15, 1899, under its Baltimore news, after an advance in the price list had been made, it was said : The price list having been disposed of, the expediency of form- ing an organization was also discussed. Hitherto there has been no attempt to regulate prices except by periodical agree- ments, but the opinion is gaining ground that an association of some kind should De called mto being. The preliminary steps to this end were taken. In another account of the same meeting, appearing in the New Orleans Lumber Trade Journal, of August 15, 1899, under the Nor- folk news, it is stated : The five big concerns represented, practically control the dressed lumber trade of North Carolina and Virginia. There is no regular organization of these dealers to control the prices of dressed lumber, as there is of the rough lumber dealers, but steps were taken to form an organization. There is no doubt but that such a combine will materalize. These dealers have been con- trolling the prices for some time by merely agreeing among them- selves as on yesterday, but as the lumber business is growing to larger proportions every year, the big dealers desire an organiza- tion. During the next few years there are no allusions to "agreements," but often the trade journals comment on the uniformity which ex- isted in the prices of the different mills and on their conformity to the "official" lists. As the Boston correspondent of the American Lumberman, in the issue of November 16, 1901 (p. 42), commenting on price advances, describes it: North Carolina pine producers have again received telepathic messages and display a pronounced unanimity in the newer price lists which are appearing in th9 market. The fact that the PRODUCTION AND WHOLESALE DISTRIBUTION. 259 North Carolina Pine Association had rscently issued an "official price list," effective October 17, 1901, making several advances on its previous "official price list" of June 28, 1900, over a year before, may have some bearing on the situation. After a long period, during which it was generally reported in the trade papers that the mills were getting "official list" prices or better, rumors of price cutting began to appear, in the last part of 1902, principally in the reports from the Boston market. The situation was discussed at the October 2, 1902, meeting of the North Carolina Pine Association. In the Norfolk news of the New York Lumber Trade Journal of November 1, 1902, page 30a, occurs the following picturesque summary of the resulting situation: Operators who have been "tilting" with buyers throughout the summer months on the question of prices, find now a ready sale and a free market for almost anything they have to offer, at firm, full list prices. The matter of accumulation has gone entirely out of date, and manufacturers are disposing of their stocks at full values. There are buyers and buyers who waited until the last meeting of the North Carolina Pine Association, held on October 2, before placing orders, hoping for a "slump," and now that the prevailing figures have been "nailed" more firmly to the list and there will be no "slump," there has been an influx of orders into this market that is giving somebody something to do. On June 15, 1904, Secretary John R. Walker called attention to replies he had received in response to a circular sent out which had asked if there was any price cutting. Mr. Walker summarized these replies as follows : In regard to the cutting of prices three replied "don't know of any"; one, "no complaint to make"; one, "don't observe much" ; six reported that they had observed cutting, one of whom reported that it was on No. 1 and No. 2 4/4 Edge and No. 1 Stocks, particularly; there was a good demand for No. 2 4/4 and 5/4 Stocks; No. 3 and Box Stocks and Edge were good sellers; two, "everything on the list from 50 cents to $2.50, mostly dressed lumber and Box Boards " ; one "thin ceiling and No. 3 Flooring"; one, "some on No. 3 and No. 4 Flooring"; summary of which shows five favorable and six unfavorable. At this meeting of June 15, 1904, Secretary Walker reported that — we have recently sent out 300 postals to non-members asking for a statement of their output and the character of the lumber which they manufacture, promising in return that they will be placed upon our mailing list for changes in Price Lists, Grading Rules, etc., as we deem it essential that the entire industry whether within or without the Association should be advised of Association Prices that all may make an effort to obtain the same. 260 THE LUMBER INDUSTRY. Attention may be called to the comment from Norfolk in the Amer- ican Lumberman of September 10, 1904, soon after the reorganization and incorporation of the association, reading as follows: It is easy to see what has been the real cause of the activity which has prevailed throughout this summer season. Prices have been generally well maintained and manufacturers have shown more confidence in each other. At a meeting of the North Carolina Pine Association (Inc.), on October 13, 1904, President John L. Roper gave a verbal report, in which, according to the association minutes — He urged a strong policy of co-operation among the members toward obtaining better prices for their lumber in order that they might redeem the ground which had been lost through unnecessary price cutting during the last few months. There was considerable discussion of prices at this meeting. K. J. Camp, chairman of the price-list committee, stated — that excepting a few items none of the members have been obtaining list prices for their lumber, but as conditions were so favorable and were improving all the while that it only required time and co-operation for full list prices to be obtained. He recommended that no changes be made in the Price List but that certain concessions be agreed on by the members which might be made on certain items on the list, this list of concessions to be kept secret from the trade. The minutes of the meeting report E. C. Fosburgh as urging "that the mambers agree to stand by the present list for at least 30 days." R. S. Cohn, of the Roanoke Railroad & Lumber Co., on the other hand, is said to have advocated "that no changes be made on the present list, but stated that it was impossible to agree to sell no lum- ber below list prices as recommended by Mr. Fosburgh." L. S. Blades, apparently as a compromise, suggested "that they take the list item by item and vote on each one as to whether or not they would maintain full list on the same." John L. Roper, president of the association, stated "that with a very few exceptions full list could be maintained throughout, and urged strongly the feasibility of maintaining the Price List." The minutes do not show that the suggestions of Messrs. Camp, Fosburgh, Blades, or Roper in respect to establishing an agreement were carried out. After this discussion the price-list committee was instructed to meet November 15 and devote an entire day if neces- sary to agreeing upon a definite report to be made to the association at their next meeting to be held November 16, 1904. The association met on November 16, 1904, and adopted the recommendations of the price-list committee which had recommended an advance of 50 cents per M on No. 1 and No. 2 13/16 flooring, and PRODUCTION AND WHOLESALE DISTRIBUTION. 261 hat concessions of 50 cents and |1 be allowed on several grades of ough and dressed lumber. These prices were "to become effective mmediately, and remain in effect until 'officially changed.'" At a meeting of the association on February 9, 1905, a new price istwas "unanimously adopted by the association." At a meeting if the association on March 16, 1905, Chairman E. J. Camp, of the irice-list committee, reported that the committee had carefully can- rassed the situation and thought that it was not advisable to change ,he list. Mr. Camp reported that "certain changes had been favored >ut owing to the fact that the present list was thoroughly established ;his action was deemed inadvisable." Secretary Walker called attention in his report to the issuance of a 'reight-rate book. In calling attention to its value to the association le stated that the benefit of this book to the association membership 'can not be overestimated." The following correspondence illustrates how this freight-rate book !?as used in an attempt to keep members from price cutting, and it ilso throws light on the attitude taken by certain members at that period as to the binding force to be attached to the association's rules. The following letter, dated April 20, 1905, written by R. J. Damp, vice president of the Wiley, Harker & Camp Co., and chair- man of the price committee of the association, to the Blades Lumber Co., of Elizabeth City, N. C, bears on this point: We are advised by one of our salesmen that he has been informed by certain buyers of North Carolina Pine in the Pitts- burgh territory that you are selling North Carolina Pine based on a rate of 130 from Norfolk to points where the official rate book gives a rate of 16$. Of course, we do not believe all we hear in regard to these matters, but we would like to know from you direct whether you are using the rates named in the official rate book, or whether you are using your through rate to points where the through rate is less than the sum of the locals, and we thought the proper course to pursue was to take this matter up with you direct, rather than regard any hear-say. L. S. Blades, secretary of the Blades Lumber Co., replied under date of April 21, 1905, as follows: In reply to your favor of the 20th, beg to advise, that we |¥ have tried to be explicit both to individual members of the Association, and in the meetings of the Association, that we are selling our stock on a through rate where a difference between that and the rate from Norfolk is as much as 30. We believe that this is for the interest of all manufacturers of North Carolina pine, as it is in this territory that we meet the south-western competition so seriously. I am aware, that at this time, we could obtain the price based on the Norfolk rate without difficulty, but the same would apply to other points, 262 THE LUMBER INDUSTRY. that is, that we could get proportionate advances to the other points, but under ordinary circumstances, when all sections are producing, and the demand is not more than equal to the sup- ply, it is all that we can do, using our through rate to compete in the Pittsburg market with the south-western stock. If on the contrary, we hold to the Norfolk rate we would be put out of that territory, and compelled to furnish more stock in the particular territory where the through rate and the local rate are identical or nearly so. To some of these particular points, the through rate gives us an advantage of 1 but we base all of our sales on the Norfolk rate, as stated above, we base our sales on the Norfolk rate, unless there is a difference of 30 and we believe that if we did not have this favorable rate to the Pittsburg market, that we would be shut out entirely under normal conditions, by the southwestern stock. We trust that you will agree with us that this is the proper course to pursue under the circumstances. The following significant answer was written by R. J. Camp to The Blades Lumber Co. on April 26, 1905: I am in receipt of your valued favor of the 21st, and note what you say relative to handling lumber in Pittsburg territory and taking advantage of the special rate which you have. We can- not agree with you in this matter for the reason that it does not place all of the members of the North Carolina Pine Association on the same basis, and it is, in our opinion, in violation of the rules adopted by the North Carolina Pine Association. 1 I am taking the matter up with Captain Roper and have taken the liberty of sending him a copy of your letter, which I trust will meet with your approval. If you quote on a 130 basis then ■ of course all members of the North Carolina Pine Association should be allowed to use the same rate. I will doubtless advise you further in regard to this after I have heard from Captain Roper. The question was taken up with John L. Roper, president of the North Carolisa Pine Association (Inc.), and President Roper wrote the following letter, dated April 27, 1905, to the Wiley, Harker & Camp Co. at Franklin, Va. : I am in receipt of yours with copy of letter to the Blades Lum- ber Company and their reply to same. Unquestionably thy have no more right to sell in Pittsburg territory on a 18$ rate basis than any other member of the Association has to sell at 34 off list to any point. 1 Our Pittsburg price list is based on a Norfolk rate of 160 and any deduction from that price is a cut in price to that extent. The members have no right to use any local rate that may be to their advantage and it seems to me that that was thoroughly discussed at our last meeting, and the Blades people were present. It certainly is unfair to other members of the association, who do not have that rate, for them to avail themselves of it fir tfo ■Italics by Bureau. PRODUCTION AND WHOLESALE DISTEIBTJTION. 263 sake of securing orders, and I notice by their letter 1 that they admit they could obtain the price based upon Norfolk rate without difficulty, — then why cut the price ? I regret exceedingly that they are disposed to avail themselves of their more favorable freight rate and cut prices. On April 29, 1905, L. S. Blades, of the Blades Lumber Co., wrote lie Wiley, Harker & Camp Co. : Yours of the 26th received, and note that you do not agree with our idea, regarding the advisability of the different mills in the Association using their through rates when there is as great a difference as three cents or more, between that, and the local and Norfolk rate combined. We regret this, simply because we dislike differences of opin- ions and disagreements. We have given good and substantial reason for our position, namely; The widening of the general North Carolina Pine market, which is paramount to everything else in the Association work. Your main argument to the contrary, is that "It is not placing all the members of the North Carolina Pine Association on the same basis" and your second objection, is that " You believe it to be in violation of the rules of the North Carolina Pine Associa- tion." l Answering the first objection, will say, that we believe it to be practically impossible to place all the mills in the Association on the same basis: Example, The New York market is controlled by the Norfolk Harbor mills, so far as the North Carolina Pine industry is concerned. We, located away from deep water, cannot realize as much for our product there, as they. We do not express objection to this, but take consolation in the fact, that while their lumber goes there to a better advantage, we are busy supplying another market. Each location has its advan- tageous field of distribution, and the operator naturally seeks to market most of his product in that zone. So is Baltimore, Nor- folk, Wilmington and Charleston have advantages on the Sea Board, why should we not permit our interior mills to compete on the Western borders of our territory for a trade, that if they cannot take advantage of their through rate, go unquestionably to another source to supply. Answering your second objection, will say, on this I cannot verify your belief, but whatever the rule is, it is to be presumed that it is not so hard and fast, that it cannot be changed, if change is found desirable. 1 In this connection, I would like to suggest (if I may be permitted) that as there is a variation in the through and combined rates, of from one to four cents per hundred pounds, that where there is a difference of three cents or more, the through rate should be applied. This we feel would be a good, fair "give and take" rule for an Association, whose object it is to keep all its members in good working humor. You say something about all the members of the Association (meaning the Norfolk mills) being permitted to quote on the basis of the through rate. We do not beheve this is meant altogether in good faith, as we have no idea they would do so,. any more than the 'Italics by Bureau. 264 THE LTJMBEB INDUSTRY. interior mills would try to control 1 the New York, Providence and Boston markets. I shall not ask pardon for so lengthy a reply, for if we are truly interested in the welfare of the Association, and through it the general North Carolina Pine Industry, we must confess the importance of the subject. Since you thought best to send Capt. Roper a copy of my letter, I shall take the liberty of sending him a copy of your reply with one of this, so that he may have both sides of the argument before him, with the hope, that he will consider the subject, not from what might be called a personal standpoint, or to the particular advantage of the Norfolk mills, but to the gen- eral good of the Association at large. After considering the entire correspondence in the case President Roper wrote the Blades Lumber Co., under date of May 1, 1905, as follows : I am in receipt of yours of the 29th ult. enclosing copy of let- ter from Wiley, Harker & Camp Co. and your reply to the same. I received a letter a few days since from the Wiley, Harker & Camp Co. enclosing copy of their correspondence with you on the subject of Pittsburg rates, to which I replied. After going over your letter carefully I can see no reason to change my opinion as given to them and which they have probably forwarded to you. Unquestionably the Association price list for Pittsburg is based on f . o. b. price at Norfolk with the freight rate added, which I believe is 160. Applying your rate, which I understand is 130, in making sales is equivalent to a cut of about 750 per M ft. It is understood of course that local rates do not apply, but all prices are based on Norfolk f. o. b. price with the freight added, and I should say you have no more right to use a 13$ rate against a 16$ rate than any other member would have to make a direct cut of 75$ per M ft. It means the same thing. I think the matter was fully explained at our last meeting and note by your letter that you admit there would be no difficulty in obtaining the full price, — then why the necessity of your making the concession? l From the information I have our regular list price is lower than the Southwestern price list; in other words, to secure business in Pittsburg, it is not necessary to cut prices. I trust you may look at the matter in this light and co-operate with us in obtaining list prices. At a meeting of the association May 16, 1905, a report of the price-list committee recommending advances in the list prices was amended by the association and unanimously adopted. "The secretary was instructed to send a copy of our lists on rough and dressed lumber together with a strong letter setting forth the conditions which made this advance imperative and requesting the earnest cooperation of every manufacturer of pine lumber in the States of Virginia, and the two Carolinas in obtaining these prices. 1 Italics by Bureau. PRODUCTION AND WHOLESALE DISTRIBUTION. 265 At a meeting held June 29, 1905, a report of the price-list committee recommending advances in the list prices was adopted. Similar action was taken at a meeting held August 3. At the meeting of the association held August 29, 1905, the basis which had been agreed upon for the consolidation of the South Carolina Lumber Association with the North Carolina Pine Associa- tion (Inc.) was reported. The following is one of the terms which had been agreed upon by the committees from the two associations as a basis for consolidation: It is further proposed that as there are in the South Carolina Association a number of mills who manufacture scantling and dimension, such mills be permitted to agree upon a schedule of prices for that class of lumber, which shall be referred to our Price-List Committee and adopted and issued by them on a separate sheet from our price list, as the official list on that class of lumber. 1 A resolution was adopted by the association stating that it was the sense of the North Carolina Pine Association that the proposed consolidation be consummated on the basis outlined by the com- mittee. At a meeting of the association September 19, 1905, the report of price-list committee recommending advances in the list prices was unanimously adopted. While it is customary for the trade journals to comment on advances in the "official price lists" as being "fully justified by the market conditions," the following justification, taken from an article entitled "The remarkable strength shown by North Carolina pine," in the American Lumberman of September 30, 1905, is certainly unusual. After stating the particulars of a sharp advance in the "official" price list at the recent meeting of the North Carolina Pine Association, the article continues: This advance in prices over the values which North Carolina pine has easily commanded for some time was practically a necessary measure of self-defense upon the part of the manu- facturers in order to prevent undue raids on their stocks by anxious purchasers, whose onslaughts seems to have been influ- enced very slightly by previous price advances. Where several prospective purchasers are contending for a board the owner of that board naturally is anxious that it serve its highest purpose and answer the greatest need, which of course is that of the one who is willing to pay most for it. At a joint convention of the North Carolina Pine Association (Inc.) and the South Carolina Lumber Association, held in Columbia, The '. uties of the price-list committee as set forth in the by-laws were: " The Price List Committea shaU •Met upon the call of its chairman or of the President of the Association, to determine upon a schedule of Prices on kiln-dried lumber, framing, and bill stuff whic" . in its judgment reflect the conditions tf the market, to be recommended to the Association, and which if approved may be used by the members as a basis for determining prices. ': 266 THE LXJMBEE INDUSTRY. S. C, on November 15, 1905, the consolidation of the two associations under the name of the North Carolina Pine Association (Inc.) was ratified. E. C. Fosburgh was elected president of the consolidated association. While discussing the great prosperity of the country Mr. Fosburgh stated that it presented an opportunity — to advance the prices of our product to a point more in harmony with its value as compared with other competing woods. Right here, gentlemen, let me say that hut for the Keen sagacity, coupled with the energetic action of our price-list committee, and followed up by the hearty co-operation of every member of the North Carolina Pine Association, we would never have been able to have taken advantage of the golden opportunity, and advanced our prices to the figures which we are now realizing for our product. 1 We are now reaping the reward for all the time and money spent on our association work, and unless I am vastly mistaken, the measure of our reward will continue to increase as the days come and go. . A committee was appointed and recommended prices for dimen- sion lumber manufactured by the South Carolina members. The report of the committee was adopted and the price list became effect- ive November 15, 1905. The consolidation of the North Carolina Pine Association (Inc.) with the South Carolina Lumber Association, to form the new North Carolina Pine Association (Inc.), was the subject of much comment. Secretary Walker in his account of the consolidation does not go into particulars on the subject of the advantages expected or derived from this union. He states, referring to the South Carolina Lumber Association: 2 This association was identical in scope and purpose with the North Carolina Pine Association and even the geographical limits of the two overlapped, so the logic of a consolidation soon suggested itself to some of the members of both. The trade-journal items at this time are much more specific in regard to the results expected from the combination. Thus, when the preliminary arrangements were taking place the New Orleans Lumber Trade Journal of November 1, 1905, page 35, commented as follows: The North Carolina pine situation is understood to be of an ideal sort, reinforced by the recent affiliation of the entire pro- ducing contingent of that wood. The merger of the North Caro- lina Pine Association and the manufacturers of South Carolina, lately closed, will tend to unitize the interests involved and to sustain uniform manufacture and prices accordingly. i Italics by Bureau. « J. B. Walker, American Lumberman, July 13, 1907, p. 48 et seq. PRODUCTION AND WHOLESALE DISTEIBUTION. 267 In the Philadelphia news of the same journal in its issue of Novem- ber 15 appeared the following: The meetings taking place in the North Carolina pine territory show us conclusively that the manufacturing interests under- stand each other and that there will be no fluctuations unless in an upward direction. The Baltimore news in the American Lumberman of November 25, 1905, states that "the consolidation of the two Carolina associations has a tendency to stiffen values still more." The Baltimore correspondent, in the New York Lumber Trade Journal of December 1, 1905, page 31, is still more outspoken: Values are either stationary or tend upward, as in the case of North Carolina pine, which was advanced at the consolidation of the Carolina Pine lumber associations not less than $5 per 1,000 feet; an action that caused not a little embarrassment to dealers who were unprepared for such a sharp rise. Change in the form op association price lists in 1906. — At a meeting of the association held August 16, 1906, a change was made in the method heretofore followed in the price work of the association. Secretary Walker presented a plan for a market bureau which should obtain reports from the mills containing a weekly report of their sales, tabulate this information, and distribute it weekly to the mills that had reported. The minutes state that this plan aroused a great deal of interest and it was believed that it would be a valuable feature of the association " and would have .a great effect upon the regulation of prices, but still be strictly within the provisions of the law. This plan was unanimously adopted by the Dimension mills, to become operative at once." In the discussion of the new method in the Norfolk news of the American Lumberman of September 8, 1906, it is pointed out: One of the most pleasing features of the new system is that it will abolish the cry that the "other fellow is selling secretly under list." Another agreeable incident is that the false tradi- tion of the prejudiced, that the association is a trust whose sole aim is to maintain a fixed price list in restraint of trade, also is abolished. At the meeting of the association held on October 11 and 12, 1906, Secretary Walker said, in his semiannual report while discussing this new method of handling the price question: During the last few months we have ceased the issuance of the Weekly Exchange Report showing items that the members wish to sell or buy. On August 16th the Dimension Branch of the Association adopted a policy which in the estimate of the lumber press, of prominent manufacturers in other sections, and of many of our own manufacturers, is one of the most important moves 268 THE LUMBER INDUSTRY. ever undertaken by the Association. I refer to the Weekly- Report of Dimensions Sales sent by the Dimension Manufac- turers to the Secretary's office and compiled by us. The price list as formerly understood has been found inadequate to meet modern conditions and modern laws. The Federal Anti-Trust law forbids that any group of men adopt any rule or regulation which tends to restrict trade, and the other associations have construed this to apply to the issuance of price lists. As owners of property and loyal citizens we are, of course, respecters of law. The question is what method will meet the requirements of the law and at the same time provide our members with the benefits of cooperation. The answer is clearly some method that will not bind or compel but will none the less enable our manufacturers to act intelligently. The law does not seek to prevent the dis- semination of facts for all business depends upon information of trade conditions. The law does not contemplate the injury of legitimate business nor the limitations of the nation's prosperity, but even were this its intention such a law would fail for all law depends upon public opinion for its enforcement and public opinion would brand such a law ridiculous. What the law seeks to overcome is a combination or conspiracy, written, verbal, or understood, to influence future trade. The feasible method for us to pursue, therefore, would seem to have a market committee who would ascertain from time to time the actual quotations that various mills were making and report the average of these as the prevailing market quotations. This would be supple- mented by a weekly report from each member showing the actual sales that he had made. These would be tabulated weeldy and distributed to those reporting. I am firmly of the opinion that this would be the most important action ever taken by the Association, and would lend an element of coherency to the market that it has never before possessed. Under the old system, if members disregarded the list, as was frequently and sometimes universally done, and responded to the market they gave rise to a feeling of uncertainty and ill will among the others, whereas if they adhered to a list that did not represent the mar- ket they merely postponed the inevitable or lost their trade to competitors. The proposed system would avoid both evils. It would respond to the market automatically and would forestall sudden depressions and flurries by responding to the first sugges- tions of them, and would not create a feeling of distrust and antipathy among the members for each would report frankly just what he was doing without apology. We can not legislate against natural conditions; all that we can do is to ascertain correctly what they are and meet them intelligently and unitedly. Is there any manufacturer to-day in ignorance of the lowest sales that are being made ? No. For every wholesaler and retailer is an information bureau regarding them. But there are many who are in ignorance of the good prices being obtained, for who is there to tell them ? Certainly not the buyer — and unfortu- nately not the manufacturer, for each is keeping information as to prices secret and at present the Association has no system for obtaining and disseminating such information. I have innum- erable inquiries from members for light on the situation, yet all I PRODUCTION AND WHOLESALE DISTRIBUTION. 269 can give them is an opinion. No one knows what the prevailing prices are and is this the best that a body of intelligent men can do ? Let us establish this system where every intelligent manu- facturer will always know exactly the real conditions, for his present lack of information is very expensive to him and others. It stands to reason that every manufacturer will aim at the high- est prices shown, for if others can obtain them, why not he ? At the second day's session the following resolution was read by Secretary Walker: We recommend that the name of our Price List Committee be changed to the Market Committee and that from time to time they ascertain from the members the actual quotations which they are making upon the different classes of lumber manufac- tured by them. These reports to be tabulated and the average figures shown to be published as the prevailing quotations on our lumber. We further recommend that a Weekly Sales Report on North Carolina Pine, similar to that on Shortleaf and Longleaf Pine now issued by the Association, be compiled by the Secretary and distributed among the members replying. Thus indicating week by week the actual market conditions. In presenting the resolution the secretary made the following statement: It simply means that the Price List Committee will have printed blank price list forms on which no prices are inserted, and send them to the members asking them to report the prices they are quoting. The discussion of the above resolution, as reported in the minutes, is of particular interest because it shows exactly what was intended to be accomplished. J. A. Brown — I do not want to do away with that valuable feature of our work which gives us what the market is doing. It makes no difference what you may call it if it gives us a guide to go by. If flooring is $28.00, say that it is and we will take it for our guide. I thought your idea was to say that the following are the current prices for lumber and that we would observe this as the price list of the Association. J. T. Deal — How often do you intend to get these reports out, annually, semiannually or quarterly ? The Secretary — This matter is to be determined by the Market Committee just as the Price List Committee has determined it in the past. No stated time can be named, as conditions determine that. It will be issued at the same intervals as our price list has been in the past. J. T. Deal — The Market Committee will solicit this informa- tion from the members. Wm. Godfrey — This takes the place of the price list. If you have seen our Longleaf reports you will see that they report our actual sales and prices. This is then issued from the Secretary's office and shows the average — whether fifty cents under or over the list, etc. 270 THE LUMBER INDUSTRY. J. T. Deal — And then we may sell according to that if we can ? Wm. Godfrey — This just tells you what we sold for last week; if you can sell higher all right. J. T. Deal — The reason I ask this question is that our firm has always taken the position that we would get the price list if we could. We have never obligated ourselves to maintain the list because we always have to meet the competition of the market. If we found kiln dried product being sold on the market in suffi- cient quantities to satisfy the demand we would not propose to let the trade go by us. We have several times stated our position before the Association. My reason for doing so is, that on more than one occasion I have had gentlemen approach me and say they could not understand why members of the Association could not live up to their agreement to maintain prices. We have never maintained the list except when we could get it; when we could not be sold under. We want our position along this line to be understood. Last spring or in the early summer I was approached with just such a suggestion. I said frankly then and there that we sold under the lists we have always sold under the lists when we could not get the list and I believe we have gotten on the whole the average price and come as near to maintaining the list as any one else. We have not felt that we were under any obligations. When we go on the market and find quotations being made and trade gets passed us, and being bought from other concerns in the North Carolina Pine Asso- ciation, there was no reason for our holding to the list. I want our position to be clearly understood. No one can say that we were under an agreement to maintain a price when we don't think so. And we do not expect others to do it. A Member — A thought that occurred to me was that the price list committee has been the suggester of prices to those others who have not had the time nor the information to find out what the conditions of the market were. This seems to me the best way to overcome the difficulty of the man not ac- quainted with" the market. I take the last week's price list and quote on that and continue to quote on it week after week. The change in conditions that will justify us in raising prices is not known, perhaps, as it would be if suggested to us by this committee. While this committee was getting up these quo- tations another feature might be added and suggestions made as to whether the market would bear higher or lower prices. Giving the information as to what we should quote it. Wm. Godfrey — I would like to say in answer to Mr. Deal, when it was proposed to us to consolidate with you the most trouble was with the price list. A great many of our members had always heard that it was an agreement that we should get the list or not sell at all. When we had the conferences at Ham- ' let and at Wilmington leading towards this consolidation, the first question naked by us was about that price list — whether it it was something that had to be lived up to. There were a lot of us that could not sit by and hold our lumber. It was ex- pressly stated in the by laws that this price list may be used by the members as a basis for determining prices. The price list is really a reflection of the market in which those prices were PRODUCTION AND WHOLESALE DISTRIBUTION. 271 obtainable when the price list was issued. It is simply a state- ment of market conditions. This new method will have a net list for each week showing what the lumber is really sold at and the price wi'l change each week as with grain, cotton, etc. You can look at it and see what the market is on it just as you can see the price of stocks. I think it will be a good thing to keep us posted on prices. There are some of us running little mills who sometimes do not sell any N. C. pine for six weeks. We look at the present price list and don't know whether the prices are within a mile of it or not. In this proposed way we can see what it was last week and can demand a little more for it week by week with actual market prices for our guide. J. A. Brown — I am quite satisfied that if that rule is fol- lowed the changes of the market will be downward. We have to have a guide to follow; if we don't follow it we have to stand the consequences. Each week each man will shave the list and we will finally reach the bottom. We have to have a standard by which we are expected to quote our prices. If you can't live up to it live as near as possible, but don't change it. Wm. Godfrey — What does the June 13th list mean to us to-day? The Secretary — I was just arising to remove a misunder- standing which seems to exist from the fact that we are con- sidering two recommendations at the same time. We are trying to solve a problem which has been confronting us for some time; we want to be able to give to the members an accurate line on market conditions and to make this as complete as pos- sible; to keep within the law, but at the same time to secure the benefits of co-operation. The first thing proposed is for the Market Committee to ascertain the quotations you are making and to use these figures in issuing a list showing the prevailing quotations. J. A. Brown — You show the current prices of lumber — is that the idea? The Secretary — Yes, the Market Committee will have actual facts before them in determining this. J. A. Brown — That will be the list price which I and every member of the Association is expected to hold ? The Secretary — If these are the prevailing prices it is to be expected that every intelligent manufacturer will obtain them. We will be in no more of a position to enforce them, however, than we are at present. J- A. Brown — But the point I want to impress is this. A member of this Association said to me "I want some flooring — at list." He paid me list price for a carload of 5/4 Flooring. What was the price list worth to me ? I know members of this body quoting the price list and getting it. It is a line from which we can afford to vary a little, but when it is destroyed the Association's usefulness is sadly crippled. t We must have some guide to follow. I wish to avoid making it a price list and call- ing it so, but I still want a price guide and if some of us don't see fit to five up to it the balance of us will. Let us publish the list, and let it stand until you change it, as the current price at which the lumber is being sold, and observe that a3 the price 272 THE LUMBER INDUSTRY. list. You can also then send out this other information about sales and then compare it. The Secretary — Your idea is exactly the one in the minds of the Committee. I would like to call on Mr. Smith from the Yellow Pine Manufacturers' Association to give the experience of his Association in this same line. He is in a position to give us something valuable. George K. Smith — It is hardly necessary after Mr. Brown's lucid talk; he has the idea exactly and it is a plan that we have been operating on for several months. In February we aban- doned our price list. We were practically up in the air and it took us about three months to light. We then began getting the information as to prevailing prices or sales. We found that, as Mr. Brown said, when we were getting the prevailing prices or sales, we were slacking down every time. Then we started to find out what they were actually quoting lumber at. We found we were only getting reports on a few items when we asked a man what he was selling at, but he was quoting prices every day. Now, the way the change in the market commences is when a man who is oversold on lumber Umbers up and begins to ask list or higher. Now, we ask a member to give us the prices he is quoting. The buyer probably comes back with about 50 cents less and he accepts it. So we ask him to say what he did accept it at. ' But we figure that the information to be used as a basis of prices is the quotations and not the actual sales. Find out what the people that give to you are asking for their lumber. The Market Committee, when you get too far away from the list, as Mr. Godfrey seemed to think you had gotten too far away from that of June 13th, will report the changes. For ex- ample, we found that Flooring and Ceiling were selling at a deal less than the last market report. We got out a new market report lowering that side of the list accordingly. We find later that Dimension was selling at a deal more than the list. When you are quoting higher than the list the retailer wants to try and get business it list: we, therefore, raised those items. J. A. Brown — You suggest changing current prices ? George K. Smith -Not until the market has changed. J. A. Brown — The idea is to keep that as a main line. The mill man is to shoot in that direction. You issue this as the line that we go by. We do not call it the determined price list. Just as the New York papers quote the cotton exchange, making the cotton market all over the South. Why should not lumber do likewise? When a farmer makes too much cotton the low prices will force him to reduce. Geo. W. Brill. — You touch the real meat in the argument. It is the production. The production regulates the price. If you run your mill and make more lumber than the market can take you have to sell it cheap. J. A. Brown — Let us have a line to go by. I teU you the major- ity of the Association is going to pay some attention to that line. J. T. Deal— If the report is adopted will it be carried out along the lines as suggested by Mr. Brown ? If so, I think it will be satisfactory to us; it conforms with our ideas. I merely wanted to make my position clear. There is no member of the Associa- PRODUCTION AND WHOLESALE DISTRIBUTION. 273 tion who sells by the list of the Association. But all the mem- bers and non-members use it as a guide. There are people who are not members of the Association, I believe, because of this question of accusing one another of cutting the list. They are outside of the Association, but co-operating with it. We don't want to get outside. If the time came when we felt obliged to sell our stock under the list, we don't want a member of the Association to tell us that we have not lived up to our agreement. H. C. Scarborough — I would like to ask Mr. Smith how often they issue their reports. George K. Smith — We issued a report on July 18. The Market Committee has not been called together since then. I have sent around every thirty days to get reports. Just before I came away I sent out a report from 64 members, which showed Flooring being sold at $1.25 under the July 18th report. Now the ques- tion will be left to the Market Committee to decide whether they wish to issue a new market report. We have no stated period. A Member — I want all the information — not only as to what the members are selling or quoting at, but as to conditions — what we ought to be selling and quoting at. If lumber is going to be worth more than that next time, I don't want to know what the member is getting for his lumber. We can send Price Lists among our members as information showing them what they should get for their lumber. When you come to an iron clad agreement to which we are bound down, then there is some fear of a trust. Why not send out a price list based upon the broadest information of every kind. I am in favor of sending out a list just as heretofore. R. J. Alderman — I moved to modify this resolution by dis- seminating the price list as heretofore and submitting these weekly sales reports to the price list committee, and have the Secretary issue them after they have passed through the hands of the Price List Committee. Seeing small sales at low figures is apt to make a member lose lots of money when he is ready to sell. I make this as an amendment. Amendment seconded. J. A. Brown — 1 must think that it is not understood what the in- tention of this committee is. They are going to do exactly what Mr. Alderman asks for. The current price list which will be sent out is to be similarly observed as the Association price list. The other information will be sent out in order to give the mem- bers an idea of market conditions. R- J. Alderman — I wish to include in my amendment the pres- ent report on Dimension. I think that ought to go through the hands of the Price List Committee, and also leave it to their judg- ment as to how frequently it would be disseminated. The Secretary — I think it would simplify matters, as we are dis- cussing two questions — one about issuing periodically market quo- tations as a price guide, and the other a weekly report of actual sales made. If we vote first on the issuance of a price list — then take up the sales report. R. J. Alderman — Instead of the resolution of the committee, I offer the following: "I move that the Secretary procure from all the members weekly statements of their quotations and sales 25030°— 14 18 274 THE LUMBER INDUSTRY. of all kinds of pine lumber manufactured by them; said reports to be submitted to the Price List Committee, which committee will issue not more frequently than monthly through the office of the Secretary, a condensed compilation of such reports reflect- ing the actual trade conditions, as reported by the members." The President — Gentlemen, you have heard the amendment as offered by Mr. Alderman. If there [are] no further remarks to be made we will vote on the amendment. ******* This substitute was voted upon and lost. W. B. Roper — I move that we now take a vote on the original motion. The original motion was carried. The "weekly sales reports" established at the foregoing meeting were of but short duration. In regard to their discontinuance J. R. Walker merely states: 1 "At a directors' meeting November 22, 1906, these reports were ordered discontinued." The following, however, from the Norfolk news of the American Lumberman of December 1, 1906, page 41, gives more details: A meeting of the directors of the North Carolina Pine Associa- tion was held in the assembly room of the Monticello Hotel in Nor- folk last Thursday, November 22. The meeting was in session much of that day but few details of the proceedings have leaked out. Some significance may be attached to the fact that the directors decided to discontinue market reports on North Caro- lina pine. It was only a few weeks ago that this system of mar- ket reports on North Carolina pine was put in operation by the association and was intended to ultimately replace the fixed price list. The directors voted also that the weekly market reports on shortleaf, framing and longleaf dimension be discontinued and biweekly reports issued instead. Association "market reports" and their real nature — Although the association had "officially" discontinued its "price list" and had substituted the "market report," purporting to be com- piled from reports of quotations submitted by the members of the North Carolina Pine Association (Inc.), there was no real change in the price work of the association. That the "market report" was in- tended to be used as an association price fist and was so used, is amply shown by the correspondence which the Bureau publishes as well as by the comments in the lumber press, which clearly present the situation as understood by the trade. The last official North Carolina pine "price list," that issued June 13, 1906, bears the title "Price List effective June 13th, 1906, The North Carolina Pine Association, Incorporated" ; the first official "market report," that issued December 6, 1906, has the title "Dec. 6th, 1906, Market Report on (kiln-dried rough or kiln-dried dressed) ' J. R. Walker, American Lumberman, July 13, 1907, p. 48. PEODUCTION AND WHOLESALE DISTRIBUTION. 275 North Carolina Pine as compiled from reports of quotations sub- mitted by the members of the North Carolina Pine Association (Inc.)-" That the change was one of na*me only is evident from a compari- son of the prices in the following lists on long-leaf pine dimension: Price list. [August 16th, 1906, to the wholesale trade only, on rough long leaf yellow pine dimension sizes. The North Carolina Pine Association, Incorporated. For merchantable grade, Inter-State Eules of 1905, f. o. b. cars at Norfolk and the Virginia gateways.] Sizes. Weights. 16 feet. 17 to 20 ' feet. ' 21 to 25 feet. 26 to 30 feet. 31 to 35 feet. 36 to 40 feet. 2x3,2x4,3x4,4x4... do — CD Si ■ «n ■ 23.50 22.50 24.50 . 25.00 25.50 27.00 29.00 30.00 31.00 32.00 33.00 24.00 23.00 25.50 20. 00 26.50 28.00 30.00 31.00 32.00 33.00 34.00 25.00 24.00 26.00 26.50 27.50 29.50 31.50 32.50 34.00 35.50 38.00 27.50 26.50 28.50 29.50 30.50 31.50 34.50 36.50 38.50 40.50 45.00 32.00 29.00 31.50 32.50 33.50 35.00 38.50 40.50 43.00 46.00 53.00 35.00 31.50 8} X 10 to 11 x 12 34.50 11} x 12 to 12 x 12 1 x 14 to 8 x 14 35.50 8J x 14 to 11 x 14 111x14 to8xl6 8}xl6 to 10x16 10} x 16 to 12 x 16 12} x 16 to 14 x 16 141 x 16 to 16 x 16 48.00 52.00 58.00 For "standard grade" deduct $2 per M feet from above prices. For "prime grade" add S3 per M feet to above prices. For car material add S3 per M feet to above prices. For dressing add $2 per M feet to above prices. Market report. (December 6th, 1906, on rough long leaf yellow pine dimension sizes, as compiled from reports of quotations submitted by the members of The North Carolina Pine Association, Inc., f. o. b. cars at Norfolk and the Virginia gateways.] Sizes. Weights. 16 'eet. 17 to 20 feet. 21 to 25 feet. 26 to 30 feet. 31 to 35 feet. 36 to 40 feet. 2x3,2x4,3x4,4x4... 2x5to8xl0 do u5o l?e o u «p 23.50 22.50 24.50 25.00 25.50 27.00 29.00 30.00 31.00 32.00 33.00 24.00 23.00 25.50 20.00 26.50 28.00 30.00 31.00- 32.00 33.00 34.00 25.00 24.00 26.00 26.50 27.50 29.50 31.50 32.50 34.00 35.50 38.00 27.50 26.50 28.50 29.50 30.50 31.50 34.50 36.50 38.50 40.50 45.00 32.00 29.00 31.50 32.50 33.50 35.00 38.50 40.50 43.00 40. 00 53.00 35.00 8}xl0 to 11x12 34.50 35.50 37.50 111x12 to 12x12 Ixl4t08xl4 8}xl4 to 11x14 H}xl4to8xl6 42.50 44.50 48.00 52r00 58.00 8}xl6 to 10x16 10} x 16 to 12 x 16 12}xl6 to 14x16 14}xl6 to 16x10 For standard grade" deduct $2 per M feet from above prices. For "prime grade" add S3 per M feet to above prices. For car material add S3 per M feet to above prices. For dressing add S2 per M feet to above prices. It will be noted that the prices of each size are identical in both I lists, although one is a "price list" of August 16, 1906, and the other a "market report" of December 6, 1906, "compiled from reports of quotations." In the case of a few of the "market reports" the word "effective" preceded the date. For instance, the association's "market report" on short-leaf pine was "effective March 21, 1907," although its ;, : "market report" on North Carolina pine, for the same date, did not have this word. In the light of various attempts made by asso- ciation officials generally to explain away the significance of such 276 THE LUMBER INDUSTRY. words as "effective" on a certain date, or "superseding all other editions," when applied to this form of price list, 1 the following tele- grams are of interest, as showing the situation in regard to the North Carolina Pine Association's " market reports " : [On Western Union Telegraph Co.'s form.] MS. New York, Dec 21-08. R. H. Morrisset, [Morris, Secy.] North Carolina Pine Assn., Norfolk, Va. When does December twenty first market report take effect. Wire Wiley Harker Lbr. Co. Inc. The following reply was sent to this telegram: December 21, 1908. Wiley-Harker Lumber Company, Flat Iron Building, New York City, N. Y. December twenty-first market report effective to-day. E. H. Morris, Secretary. Charge N. C. Pine Association. The subtle distinctions of title and method of issue between the former official "price fists" and the official "market reports" which succeeded them, seem to have been lost on most of the contemporary trade journal correspondents, since they continued to refer to "the list" or the "price fist" just as they had previously referred to the former lists put out by the association. The news letters from Nor- folk show a somewhat more careful phraseology, but even in them occasional slips occur and a reference is made to the "official list." It should be noted, however, that apart from this difference in phraseology the Norfolk comments on the effect of "market reports," or "official market reports," are in the same vein as those from other markets, and that no trade-journal correspondent at least if, indeed, anybody else in the trade, was misled by the subterfuge of change of name. The following comments refer to the first "market report" issued, that of December 6, 1906: The price list is firmly maintained, however, and a decline in any division of the trade is not expected. (Baltimore news in American Lumberman, Dec. 29, 1906, p. 76.) Dealers in North Carolina pine say that the market is stronger and a general understanding has been reached by which Decem- ber prices are likely to be maintained, with box, low-grade flooring and roofers a little'higher . (Buffalo news in New Orleans Lumber Trade Journal, Jan. 1, 1907.) About the only wood which has eased off lately is yellow pine, the manufacturers of North Carolina pine having made an informal cut before the holidays which still holds good. 1 For example, in the Missouri ouster suit hearings, similar explanations were attempted by the yellow- pine lumbermen. PRODUCTION AND WHOLESALE DISTRIBUTION. JJYV (Baltimore news in New York Lumber Trade Journal, Feb. 1, 1907, p. 38b.) At the annual meeting of the association held March 21, 1907, Secretary Walker stated in his annual report that the market reports were not distributed generally to wholesalers and manufacturers, as was formerly the case, but to members only. The "market report" issued on March 21, 1907, is referred to under the Norfolk news of the New York Lumber Trade Journal of April 15, 1907, as follows: "Prices are firm and the new list which has just gone into effect is being easily maintained in all negotiations." A market report was issued under date of September 10, 1908. The following letter of October 17, 1908, from E. M. Wiley, of the Wiley-Harker Lumber Co. (Inc.), to Secretary Morris shows that the so-called "market report" was considered a price list: I have your favor of the 15th and it would afford me very great pleasure to attend the meeting of the market report com- mittee next Wednesday evening but as I stated to you the other day when I called on you at your office, I will be in South Carolina which will prevent my attending the meeting. I have no doubt but that the Committee will report that the list as adopted on the 10th ultimo is becoming an established fact. I do not think it well, however, to change the prices at this time. At the semiannual meeting of the association held October 22, 1908, President Fosburgh discussed prices and profits as follows: Do not, I beg of you, for one moment lose sight of the fact that our stumpage is rapidly disappearing, and if you do not, in view of the experience of the past, use good judgment and sound common sense in the future you will be guilty of little less than criminal negligence in the management of your business. Will it not be infinitely more profitable for the owner of 100 million feet of stumpage to cut it off at the rate of 20 million feet per year, at a profit of say $4.00 per M. ft. and keep within the demands of the trade at all times, than to cut 40 million per year, help to overstock the market and sell at a profit of $1.00 per M. ft. ? Now, I want to say a few words to you in regard to the matter of prices. This Association, as you know, does not attempt to either regulate or establish the prices at which the product of the mills represented in the Association shall be sold. With the splendid facilities which the Association now has for collecting information regarding the output of our mills, stocks on hand, conditions prevailing in the market centres, etc., it will be able through its Market Report Committee from time to time to accurately and reliably determine the prevailing prices on North Carolina Pine. Market reports showing these prices and various other information will be furnished you from time to time as the market fluctuates. These prices, and other information, can be definitely relied upon, and no time should be wasted on, or 278 THE LUMBER INDUSTRY. confidence attached to any so-called Market Reports emanating from any source outside of this Association. 1 With such information before you, it must be apparent to you all that there are no laws in this country, and are not likely to be, which will prevent any man from exercising good judgment and good sound common sense in determining at what prices his product shall be sold, just the same as he would do in the management of any other department of his business. The minutes for the afternoon session of this same meeting contain the following: A R Turnbull: Mr. President, I move that the Market Report Committee's report be accepted and published with as little publicity as possible. Mr Geo W Roper: I move that the secretary be authorized to distribute the reports as found by the market report com- mittee to the members of the association. AR Turnbull: I second the motion. Mr Geo W Roper : I move that the secretary be authorized to send out the market report to the various members gotten from the best information he can secure. W P Jackson: I second the motion. Motion is carried. The influence of the association is to be noted also in the following extract from the American Lumberman of October 31, 1908, in its general comment on North Carolina pine: In the North Carolina district the optimism of manufacturers has become irresistible. A few manufacturers who, up to the time the North Carolina Pine Association met in semiannual session, were willing to cut prices in order to get business have been converted to the army of standpatters, and the situation is by that measure firmer than it was two weeks ago. A comparison of the "market reports" of September 10 and October 22, 1908, appears in the following from the Norfolk news of the New York Lumber Trade Journal of November 1, 1908, page 32: The Market Reports used as a basis by the North Carolina Pine Association, dated October 22, which is the last authentic report covering, shows advances, and it is said that these advances are the prices obtaining and have obtained in a general way for the past thirty days; that the previous Market Report, that of September 10, which reflected conditions at that time, took a healthy advance within ten days after being issued and that it was necessary, in order to put a proper Market Report before the trade, to make an advance. It is interesting to note in this connection that R. H. Morris, the new secretary of the North Carolina Pine Association, was the Norfolk correspondent to the New York Lumber Trade Journal and other trade papers, as shown by the following statement in a letter i This is evidently a reference to the "market reports" of the Lumbermen's Bureau. (See pp. 299- 302.) PRODUCTION AND WHOLESALE DISTBIBUTION. 279 written by Secretary Morris to Charles M. Betts & Co., of Philadel- phia, under date of November 24, 1908: Now, I want to tell you confidentially, that I am Correspondent for the American Lumberman, N. Y. Lumber Trade Journal, The Southern Lumberman, and the New Orleans Lumber Trade Journal. I wouldn't like this known, generally — being in posi- tion to work for N. C. Pine interests, you can readily see the point. In this connection I would be glad to hear from yon whenever you feel disposed or have the time to write me. Some of the larger manufacturers issued price lists under their own firm name. Most of such lists, however, were based upon the asso- ciation market reports. The following letter of October 3 1 , 1 908, from Paul E. Hanburg, of the Branning Manufacturing Co., to Secretary Morris bears on this point: In having our price-list printed we were governed, or thought we were, by the copy which you sent out. In any event, we have just discovered in our rough list 5/4 x 10" No. 1 should read $35.00 instead of $45.00 and in the dressed list No. 2 5/4" wide edge should read $38.00 instead of $28.00. We are taking the liberty of writing to inquire whether the mistake 1 was ours or yours, as we have mislaid the copy which you sent us. The following correspondence indicates the use to which the "market reports" at this time were put by the manufacturers. On December 21, 1908, W. G. Underwood, vice president and secre- tary of the Albemarle Lumber Co., Hertford, N. C, addressed a letter to the association in which he said: We are in receipt of the new market report and will put it into effect at once, as we believe it is conservative and the manufac- turers will have no trouble in estabhshing it. In his reply dated December 22, 1908, Secretary Morris stated: I have yours 21st and I believe as you do; that there will be no trouble, or at least very little, in estabhshing the new price basis. In a letter dated December 29, 1908, from the Southern Pine Lumber Co. to R. H. Morris the wisdom of making the advances made in the December 21 market report was questioned. I learned while in Philadelphia that you had advanced the price of North Carolina Pine on the 21st inst. If you have, will you kindly favor me with a price list, but, R. H. do you not think that you are making a mistake by making such sharp advances at this time. I am afraid that the market will not stand it and that the advance will have a tendency to retard the building business that is under consideration. 1 The letter of Not. 24, 1908, to Charles M. Betts & Co., states: Ithauk you very much for your kind expressions contained therein concerning our Market Report of October 22nd. I regret, however, that a few errors crept in, in spite of all our care, but the writer has gotten after the matter personally and by tomorrow, we will have corrected copies for our people, which I think are absolutely correct. 280 THE lumber iNdustby. Secretary Morris replied on January 4, 1909, in which he defended this advance as follows: I have yours of the 29th of December and same noted, par- ticularly that part which refers to price matters. Now, Frank, this advance was not made without careful and exhaustive weighing of the situation, and judging from appearances and information in hand since this advance, known as Market Report December 21st, was put into effect, there has been no mistake made. It reflects not only present conditions, when the ex- tremely limited supply of North Carolina pine against demand now on and in prospect is considered. Reliable sources of sup- ply are so loaded up with orders that many of them are deliber- ately holding off taking any more business, feeling that present price basis will certainly be met when they are ready to accept orders. In a letter dated January 26, 1909, written to E. C. Harrell, of Tifton, Ga., secretary of the Georgia-Florida Saw Mill Association (Inc.), Secretary Morris uses the term "market report" as synony- mous with "price list" and says: I am sending you herewith a copy of Dec. 21st, market report, and you will find the F. 0. B. Norfolk prices on roofers on page #7. I note you say there seems to be considerable inquiry in your territory for this class of stock, and it would be well for you to impress upon your manufacturers the importance of adhering strictly to market reports, or price lists, as under present condi- tions, and judging from signs for future business, we can get these figures just as easily as we can get business at 50$, or more or less per thousand. It looks as though there are buyers who have an idea they can go south and buy roofers cheaper. They should be disillusioned and met by prices that are in keeping with the cost of production, to say nothing of profit. On February 22, 1909, the Albemarle Lumber Co., of Hertford, N. C», sent out the following letter, addressed "to our customers": We have your letter of Feb. 18th in reply to ours of the 16th and have read same with much interest. Smce Jan. 1st we have accepted no orders at less than the list price, 1 and now have a fair amount of business on our books. While business has been quiet we are pleased to be able to say there has been some im- provement within the last week or ten days. Under these cn- cumstances, and in view of your suggestions and those of a few of our other friends, we do not think it would improve matters to reduce prices, and also that to do so would be an injustice to the trade, who took the word of the manufacturers and whole- salers that there would be no decline in prices, and bought freely during Nov. and Dec. on this representation. We have therefore decided to make no change in our price list and to continue our policy of accepting orders only on that list. We believe most or the large manufacturers are taking practically the same position i In this connection see extract from the Albemarle Lumber Co. 'si etter of Dec. 21, 1908, on p. 279. PRODUCTION AND WHOLESALE DISTRIBUTION. 281 as ourselves, and hope you will do what you can to cooperate with us, and that you will be able to favor us with some business on the list of Dec. 21st. On August 17, Secretary Morris sent the following night letter to Victor H. Beckman, secretary of the Pacific Coast Lumber Manufac- turers' Association : Our Directors met to-day. Business and prices gaining un- mistakably. Our prices averaging one fifty better than thirty [to] sixty days ago. Under these circumstances we have made new basis of prices. The New York correspondent of the American Lumberman, August 28, 1909, said: Reports of the advance by the association are well received, although some wholesalers are of the opinion that it would have been better to allow trade to get more firmly established. The Boston correspondent of the same paper, September 18, 1909, stated: The association's new price list has done much to steady the market, but there are manufacturers who are not living up to the list in all cases. In a letter dated November 8, 1909, written to the Owen M. Bruner Co., of Philadelphia, Secretary Morris described the action of the asso- ciation at its October 28 meeting regarding the "market report" and market conditions as follows : I am pleased to state that at the Semi-Annual Meeting of the North Carolina Pine Association, held Thursday, Oct. 28th, the Market Report of August 17th, was re-affirmed, after careful consideration, and it is very likely that it will not be altered or changed during the balance of the present year. The following correspondence relates to efforts early in 1910 to adopt a revised "market report" on long and short leaf dimension lumber for use of the interior mills of South Carolina. H. J. Mc- Laurin, jr., of Sumter, S. C, wrote R. H. Morris, on February 28, 1910, a letter which began as follows : Your esteemed favor of the 25th received; and, replying, I have iust returned to the office this morning after an absence on a trip forth. I have been unable to get any of the parties you men- tioned in this territory together to take up the price list matter; and, in fact, do not think it good policy to do so, as it will be practically impossible to prepare an Association List that would meet the requirements of the case fully at this time. The thing for you to do is to call in immediately the old list and state that a new one will be issued in the near future. He further stated that trade is very good and that his firm had just issued a higher price list. 282 THE LTJMBEE INDUSTEY. Under date of March 1, 1910, Secretary Morris answered the above letter as follows: I have yours of the 28th and in view of the fact that you can not get any of our people together to prepare an Association list covering shortleaf stuff, we will at once issue a circular revoking and recalling the short leaf Market Report of October 28th, pend- ing a new issue. I do not see what we could not frame up some- thing that would be acceptable and agreeable that would fill the bill until the Annual Meeting of March 24th, at which time all of us could get together and put what you might call an author- ized list in circulation. Chances are that there will be two or three changes between now and the first of March, and judging from your remarks, it is highly probable that this will be the case. I believe the framing and dimension mill crowd has suddenly become wise to the situation. I mean, a large number who have heretofore been apathetic and careless about market conditions. It seems as though they have suddenly awakened to the fact that they are paying big prices for food stuffs and supplies on one hand and have not been getting proper returns for their lumber, on the other. In other words, they have caught the fever, they have become inoculated with the spirit of the times, so to speak, and figure to get just as much out of their lumber as other people are getting out of their product and I am glad to see it. I hope our lumber people, great and small, will ask the greatest prices they can think of. I hope they get chesty and exercise their bluffing propensities to a greater extent than ever before. The bluff has always been on the other side, according to my way of thinking and I think we are really in the best shape of the two situations to be the "big noise." You will get notice of the withdrawal of the October 28th list by next mail. The dimension manufacturers of South Carolina were not repre- sented at this meeting and no action was taken on the dimension list, as is shown by the following extract from a letter dated March 26, 1910, by Secretary Morris to William Godfrey of Cheraw, S. C: I am sending to you for your consideration and the consider- ation of one other good member of ±he Association, Market Reports on rough short leaf sizes. These prices, or the basis of these prices, was furnished by Mr. McLaunn a week or two ago, and in view of _ the close proximity of the Meeting, they were gotten up in this form for consideration and were to have been passed _ upon at the Meeting. The absence, however, of our dimension representatives precluded this as the board mill people did not think it right to pass upon dimension business. I might explain for your information that Mr. McLaurin's first list was based on a 13$$ rate to Norfolk. I took the liberty of adding freight, in order to make this fist in harmony with our regular Market Report, ie : F O B cars Norfolk and Virginia Gateways. I trust you will give this matter your very prompt attention so that we can have authority for publishing short leaf sizes PRODUCTION AND WHOLESALE DISTRIBUTION. 283 and timber list with the new issue of the Market Report which we are now working on, and will be ready in a few days. On the cover of the association market report for March 24, 1910, is the following statement: March 24, 1910, superseding all other editions, market report on North Carolina pine, compiled by R. H. Morris, secretary, The North Carolina Pine Association (Inc.). From most recent quotations made by manufacturers of North Carolina pine and is the Only Official List. The following letter shows some details of the method by which the secretary "compiled" this "market report:" [Letterhead of Camp Manufacturing Co.] Franklin, Va., March 28th, 1910. Mr. R. H. Morris, Secretary, The North Carolina Pine Association, Norfolk, Va. Dear Sir: Yours of the 26th received with enclosures as stated. I am returning herewith the rough and dressed lists, all of which I find to be in accordance with my recollection of the changes made at the meeting on last Wednesday evening. In regard to 4/4 #1 Edge, I think both Mr, Clark and Mr. Gibbs are mistaken, in that any change was agreed upon. There was considerable talk relative to advancing the price of #1, #2, #3 Edge and stocks, but it was decided best not to do it. Then the question of advancing 4/4 #1 Edge was taken up and discussed separate and apart from anything else, and my recol- lection is that we decided it would be unwise for us to advance the price of 4/4 #1 Edge, for the reason that we could not consistently advance the items on the corresponding lists which would be effected by an advance in 4/4 #1 Edge rough. In my opinion no advance was decided on, and I think the lists should be issued without making any advance in 4/4 #1 Edge. In regard to the market report on rough short leaf sizes and timbers, I would say that I regret exceedingly that the South Carolina representatives were not there to pass upon this matter. The list which you sent me, and which I am returning, is, in my opinion, entirely too low, and it seems to me it would have a very bad effect to issue this list at. this time. Take for instance 8/4 x 10" and under 20 ft. (and by the way I think this should be 20 ft. and under) @ $16.00 delivered at Norfolk. We are listing 4/4 x 10" Box at $16.50 kiln-dried, and I am advised that air-dried is bringing that price, that is, in lengths of 12, 14 and 16 ft., as well. I would like for you to take this matter up with Messrs. Roper and Fosburgh, and ask them what they think of the advisability of issuing this list along with the other lists. My own idea would be that this matter should be taken up again with Mr. McLaurin, or some one prepared to pass upon it and see if they want these prices put on the lists to be issued; if so, it could be done later by separate report to be pasted in the regular reports which you are sending out on Mln-dried rough and dressed. Yours very truly. J R. J. Camp. 284 THE LUMBEK INDUSTBY. There was some trouble encountered in getting out the dimension "market report." In a letter of April 4 from H. J. McLaurin, jr., attention was called to the following fact: With regard to the Short Leaf list which we sent you, I have taken this matter up with the lumbermen here and they do not wish any change made in this list. Secretary Morris, on April 7, replied : With reference to your of the 4th, subject: Long leaf list. You will find this hst in shape of a detached sheet accomp any- ing the August 17th Market Report, but the late issue of the Mar- ket Report of March 24th, has it in it's proper place, Page 27. Your copy of the March 24th hst should have reached you to-day. I am endeavoring to get others of the Market Report Committee to pass upon the short leaf list in order to make it absolutely within regulations, after which this part of the Market Report will be sent to members -promptly. Mr. McLaurin on the same date wrote Mr. Morris, saying: We have today received copy of the Market Report under date of March 24th and regret to note that the price list which we sent you sometime ago as having been agreed upon by all the lumbermen at this place, representing prices on Short Leaf and Rosemary Pine, does not appear in this report. Secretary Morris further explained his lack of authority to issue a "market report" in the following extract from his reply, dated April 9, 1910: Of course, you understand my position in this matter, it would not be possible for me to take data from any but regular sources and issue a Market Report, this must be handled in the regular way, through the Market Report Committee, or under their 0. K. The part that the board of directors of the association played in issuing the price lists and the control of the association organized by a small group of "the leading operators" is shown in the circum- stances surrounding the August 3, 1910, meeting of the board of directors. The market was rather dull during the summer of 1910. On July 15, 1910, E. C. Fosburgh, president of the association, wrote a letter to Secretary Morris, in which he said: I am planning to return to Norfolk about the latter part of the month and it occurs to me that it would be a good idea for you to call a meeting of the Board of Directors for about August 2 or 3rd. If I understand the situation correctly it will hardly be possible to make any changes in prices at the present time and if such is the case it appears to me that if any publicity is given to the meeting the effect among the trade generally would be detrimental rather than beneficial. If so I am inclined to believe that it would be better policy to have the call for the meeting made in a quiet way and let it be kept out of the lumber journals and press generally. I would like to have you talk this matter PRODUCTION AND WHOLESALE DISTRIBUTION. 285 over with Mr. R. J. Camp at once and if his views co-incide with mine you can act accordingly. I would suggest that you call the meeting to be held at 11 a. m., at the Virginia Club and have the call sent out as promptly as possible. I believe a meeting of this kind would be helpful as it would enable the leading operators to discuss the situation and if they felt it well to do so a general meeting could be called a little later on. In sending out your call, if you decide to act on the line above suggested, I think it would be well to advise each director in your notice that the meeting will be a quiet one and that it is not desired to have any publicity given to it. A meeting of the directors was held on August 3, 1910, at which President Fosburgh reported that he had talked with R. J. Camp and that Mr. Camp has expressed the opinion that he did not think it advisable or wise for the "price-list committee" to attempt to revise the price list at this time, but that Mr. Camp was of the opinion that the meeting should consider the market situation, and if it seemed to be the opinion that something should be done in the way of advancing prices later on, the committee would then take up the question of revising the list. A discussion of market conditions followed at an "experience meeting," which indicated that prices were being taken at from 50 cents to $1.50 off of the March 24, 1910, "market report." This interesting statement appears in the minutes of this meeting: The drop in prices seemed to be with the larger mills ' and it was stated that no relief could be obtained unless they main- tained the present price list. Secretary Morris emphasized this point in the following para- graph from a letter dated August 9, 1910, addressed to W. P. Jackson, of Jackson Brothers Co., of Salisbury, Md., at Loon Lake, N. Y. : I am enclosing herewith a circular outlining briefly what was done in part at the Director's meeting last Wednesday. Of course, you understand there were some interesting discussions that was not deemed wise to print. These discussions con- cerned prices and a method of getting same where they belong. It was the opinion of those present of our Directors who repre- sented the larger operations that the fault, if any, for present and past price conditions could be laid up against our largest and best mills, the representative ones, irrespective of Associ- ation membership. You know the facts just as well or better than I, along these lines, and most of those who are directly in- terested know what we have been up against in the years past and how apparently difficult it is to even make a start in the right direction for a concerted move, for the purpose of estab- lishing conservative conditions and better prices. It looks like lost motion and lost time to say that "if" we could do thus and so, the game would be ours. In plain terms, that "if" means by honest adherence to a given list by eight or ten of the mills recognized as factors in the North Carohna Pine trade — the rest would be easy. 1 The comments in the lumber press on the situation at this time has already been shown on pp. 250-253. 286 THE LUMBER INDUSTRY. For several years previous to 1910 the association had at times received in trade papers and elsewhere considerable publicity in re- gard to the price activities of its market-reports committee and board of directors, which was unwelcome to it. Caution was advocated from time to time to avoid such publicity. For example, at the meeting of October 22, 1908, it was moved "that the market-report committee's report be accepted and published with as little pub- licity as possible." (See p. 278.) On January 1, 1909, Secretary Morris wrote the following letter to Z. W. Whitehead, editor of the Southern Lumber Journal, at Wil- mington, N. C: Acknowledging yours of the 31st., I enclose herewith a copy of our Market Report December 21st. We just received from the printer and yours is the amongst the first to go out, in conversation with Mr. Fosburgh a few days ago, expressed a desire that no undue publicity be given these Market Reports, in other words no great big noise made when putting them out so if you will kindly refrain from making more than a formal notice you would be conferring a favor and at the same time be in line with our sentiments. I think there is no question about prices quoted being main- tained in general way. I enclose also one of my circulars for your perusal and for you to draw your inferences from without Sublishing same as it now reads, wishing you a vory Happy 'ew Year and a various share of success in prosperity. President Fosburgh's letter of July 15, 1910, proposing a meeting of the board of directors, laid stress on the avoidance of publicity. During the fall of 1910 the association became more careful and appointed a committee to censor circulars and other matter sent out by the secretary. The following reference is from a letter written October 27 by Secretary Morris to R. J. Camp, of Franklin, Va.: Association affairs in general are in good shape. Our finances are O. K. and it seems to me that there is a more marked recog- nition of the Association in evidence. I see it is necessary to fight shy of everything that savors or reflects prices as some of our members are scared at the very thought of it. I do not propose to send out any more circulars or any kind of information bearing the word price unless O. K.'d by the Advisory Board. List of grades and values. — In 1911 the price activities of the association were given another change of name. Shortly before the association meeting Mr. J. D. Rounds, in a letter written to the editor of the Southern Lumber Journal (the official exponent of the asso- ciation), and published in that paper, March 15, 1911, page 32, said, in part: If the- North Carolina Pine saw mill association, who repre- sent a large per cent of the manufacturers of this state, would at their meeting on the 23rd of March at Norfolk, after carefully considering the conditions of the market, and the cost of manu- PRODUCTION" AND WHOLESALE DISTRIBUTION. 287 facture, irrespective of the present prices asked for lumber, get out a list of prices to place before the buyers that will give a fair margin of profit to the manufacturer, over and above cost, and then tell the retailer that this will be the prices that will hold good for six months all would be well. Then every man who enters into this agreement stand by his colors, and not begin to cut prices before he gets home from the meeting, as has been the custom during the past year. At the end of six months have another meeting, and if changes are warranted, make them, but make them good for six months longer. These are the methods of the White Pine Association in Tonawanda, and the Hemlock Association in Pennsylvania. 1 The plan advocated by Mr. Rounds was not adopted at the asso- ciation meeting, which took place March 23, 1911. According to the report in the New York Lumber Trade Journal, April 1, 1911, the following action was taken: On motion the constitution and by-laws were changed to exclude all relation to establishment of prices and matters of that character, and to substitute therefore other plans for coopera- tion to meet all possible requirements of law or trade conduct. The report of the president's address, in the same paper, contained the following statement in regard to cooperation in association work: The foremost idea is cooperation in the exchange of informa- tion, as to ways and means, costs, methods of collection, labor, methods of selling and credits, etc. We can do all these things without touching on the great bugaboo of prices, which of course, we do not undertake to regulate, and without attempting to restrict the output of lumber, well knowing that any efforts of ours along these lines might bring us into conflict with the authorities under the various antitrust laws. The following is from a statement made by W. B. Roper, the new secretary of the association, in a letter of April 27, 1911, to Ellington & Guy (Inc.), of Richmond, Va.: Your favor of the 26th has been received and in reply beg to state there has been no concerted action taken by the operators so far as I am aware towards getting better prices, other than by comparing prices with each other. Under existing conditions, it is out of the question for the Association to undertake or control prices. All we can do is to disseminate all the information we possibly can regarding prices and the cost of production, etc., leaving it to the indi- vidual initiative of each member to use the information to the best advantage. The minutes of a meeting of the directors held May 11, 1911, con- tain the following : Mr. Millard, Chairman, brought out in his conversation this morning the disadvantage the N. C. Pine Association, not only 'The white pine situation at Tonawanda is discussed on pp. 583-599 and the Pennsylvania hemlock situation on pp. 617-621. 288 THE LTJMBEK INDUSTBY. the N. C. Pine Association but other lumber Associations, have been put to by publishing a price list that falls into everybody's hands. I believe the Southwestern people in 1909 adopted a basis of prices very much higher than they are really securing but they hope to get there some day, and they simply have an understanding from time to time to give a certain percentage or so much a thousand off those lists, and the Costs & Values Committee thought well of it. Of course, it is going to take some work to get it up but it is a step in the right direction. The Chairman was instructed to appoint a committee to work with him on this proposition and report to the next meeting of the Costs & Values Committee. A meeting of the association was held on August 17, 1911, at which the following motion made by C. I. Millard was adopted by a vote of 16 to 7: I move that the practice of publishing an Association Market Report be discontinued and that a basis Schedule of Relative Values of North Carolina Pine lumber be adopted by this Association, and that the circular or information sent out, which may best express the intent and purpose of this, be left to the discretion of the officers as guided by the best legal advice that they can obtain; it being expressly understood that this is not a price list but is simply a guide for members with respect to values and they are at liberty and are expected to sell their lumber as they may deem proper and for their best interests. The account of the August 17, 1911, meeting in the Southern Lum- ber Journal of September 1 discussing the proposed "basis schedule of relative values" has this significant statement: Another thing — a Basis Schedule of Relative Values in no way violates either the letter or spirit of the Sherman Anti-Trust law, which so many cheap John attorneys generally all over the country are trying to frame up for a suit against lumber people; at the same time it serves the same purpose as a price list. While the report of the American Lumberman, October 7, 1911, page 50, referring to the new list as " the new list of grades of North Carolina pine, which takes the place of the old market reports which have been issued in the past," quotes the "notice to the trade," which begins as follows: "The figures given in this list are not intended to represent the prices at which lumber is being quoted or sold, and the list is not a 'price list' or ' market report. ' " Itfurther states that this list is to "go into effect" October 1. The correspondence files of the association show that there was some doubt on the part of several members as to the legality of the new list under the Sherman antitrust law. Secretary Roper stated the case in a letter to a prominent attorney as follows : At the request of Mr. Corwin, who did not have time to write you today, lam sending you herewith copy of a circular that we contemplate issuing to the members of this Association regarding the meeting held yesterday. PRODUCTION AND WHOLESALE DISTRIBUTION. 289 Mr. Corwin wants to call your particular attention to the para- graph headed "Schedule of Values" and ask that you read it carefully and advise us whether in sending out this circular and schedule of values we will be making ourselves liable to censure or criticism under the Federal Anti-Trust Laws. It may be well to explain that the Schedule of Values referred to is made upon the basis of about five to eight dollars in advance of the present market values of lumber. Our idea is to have this somewhat on the basis of the price list used by manufacturers of pipe, belting, and other products. These products, as you un- derstand, are sold on a list basis, subject to certain discounts. In making up the Schedule of Values or list on N. C. Pine lumber we endeavored to get the relative values properly adjusted and have all of them vary enough above present market values to allow for any possible increase in market prices and leave it in the hands of the individual manufacturer to sell at such discount or concession from these prices as he may see fit. This method has been in use by the manufacturers in the South- west, who are marketing a competing wood, for four or five years and they find it very satisfactory. Before issuing this circular to members, we thought it wise to get an opinion as to whether we would be transgressing any law by doing so. Mr. Corwin and I agreed in thinking that we would not render ourselves in any way liable. Will you kindly look the matter over and advise me promptly, mailing Mr. Corwin at Edenton a carbon copy of your reply ? On the basis of these facts the attorney offered his comment as follows: 1. The Sherman Law or Anti-Trust Law, seeks to prohibit two evils, (a). Eestraint of trade, which broadly expressed means interference with competitors, and restraining trade and com- merce, (b) . Establishing or attempting to establish a monopoly in any line of industry, or in the production of any one line of articles. 2. The law is intended to promote the growth of industry and not to contract the same. It is not intended to restrict the operation of the law of supply and demand. To give effect to this natural law, producers in any line wish to know the volume and cost of production and the demand, the consumption and the prices paid by the consumer. 3. I see no reason why producers may not combine to give effect to this natural law of supply and demand. You have attempted in your circular to make estimates of the_ cost of pro- ducing marketable lumber, based upon information received from the producers. I do not understand that there has been or will be any agreement between the producers to maintain these prices, or to penalize any one who fails to maintain them. If any member wishes to sell below the cost of production he has the privilege of doing so. If any member can produce for a less cost, either by reason of decreased cost of logs, or by economies effected in manufacturing, it is his privilege to do so, 25030°— 14 19 290 THE LUMBER INDUSTRY. 4. To make the action of the Association perfectly clear, you might add to your "Schedule of Values" an expression substan- tially as follows : "There is no intention expressed or implied to constrain any member of the Association to adhere to these prices in making sales of his products, or to adhere to any arbitrary discount therefrom. The Association has no desire to interfere with any competitor in or out of the Association. We recognize the law of supply and demand, and this law applies both to the producer and consumer. The only purpose of the Association is to keep its members informed and leave to them the privilege of quoting such prices as their judgment may dictate and as may best con- serve their own interest." The attorney's views are reflected in the following statement on the published "list of grades and values of North Carolina pine": There is no intent, express or implied, to restrain any manu- facturer by such rules or prices, list or schedules, or to adhere to, or agree upon, any fixed trade discounts therefrom. Every manufacturer must fix and quote such prices for his products as his judgment may dictate, and as may best conserve his indi- vidual interest. The only purpose of this issue by the Association is a response to a suggestion that there be published, for the information of the industry and the public, the relative worth of the grades of lumber, which would meet the cost of reproduction of standing timber. The question of title for the new fist was a matter of some concern. In a letter of September 22, 1911, Secretary Roper wrote C. I. Millard, chairman of the costs and values committee, and gave his views as follows : Another matter that we ought to decide on is the title of this book. The Yellow Pine Association call theirs a Basis Price List and with the statement which we propose to insert in the book, I can see no possible reason why we should not plainly designate ours a "Price List" and not have to resort to any subterfuge. Almost every other industry has its standard price list and there appears to be no reason why lumber should be on any different basis. Will you also kindly take this matter up with Col. Rodman ? In a letter of September 25 to President Corwin, Secretary Roper said: I am submitting also sketch for the cover. This also concurs with Mr. Millard's view. Both he and Col. Rodman seem to think it would be better not to call this a "price list" notwith- standing the Yellow Pine people do so. Less guarded but probably more accurate statements of what was expected from the new list are to be found in Secretary Roper's cor- respondence with some of his members om October 2, 1911. In a letter to Woodson & Graves, of Lynchburg, Va., he said: PRODUCTION AND WHOLESALE DISTRIBUTION. 291 We now have in the press the new Value List, which will be ready for distribution about the first of next week. While this new list will not represent the market prices of lumber, it will enable you to accomplish what the market report has prevented recently, i. e. — the obtaining of higher prices on the lower grades. The new Value List is on a basis of about $5.00 to $8.00 above the market prices, giving therefore plenty of latitude for advances without being criticized by the trade. A more detailed statement occurs in a letter which Secretary Roper wrote on October 25, 1911, to W. P. Jackson, of Salisbury, Md.: Referring to your recent inquiry, regarding the List of Grades and Values, a copy of which was recently sent you, beg to state that at one of our meetings two or three months ago it was deter- mined to discontinue the publication of the Market Report and in place thereof to issue a List showing as nearly as possible the value of each different item of North Carolina Pine based on a stumpage value of $10.00 per M with proper allowance for cost of manufacture, overhead charges, depreciation, etc. The list sent you shows the result of this effort with the exception that an error was made in the list of surfaced boards. These were entirely out of harmony with the rough and it is on that account that the lists were recalled and we are now having new ones printed. The intention is in connection with these fists for the Secretary to issue occasionally a concession sheet to the members of the Association, showing what in his opinion represent the differences between the List Values and the market values of the different items. The two taken together would therefore give the members of the Association a pretty intelligent idea of cur- rent market conditions. These concession sheets would probably not be issued oftener than two or three times per year unless conditions were changing rapidly either for better or for worse but the Weekly Sales Reports that we have been issuing for the past three or four months would be continued as at present fiving current market information every week. I am reminded, y the way, in writing this letter that we have not received any of these weekly sales reports from your company. We would be very glad indeed if you would join the others in furnishing this valuable information. We now have 22 members, who are con- tributing regularly, and these 22 members embrace all of the larger and more important plants in the Association with the exception of yours. We are largely indebted to the Yellow Pine Manufacturers' Association for the plan of the List of Values and the concession sheet. They have been issuing for more than two years what they call a basic price list. Some of our members were a little timid and were afraid to call ours a price list at all; hence, it is called a List of Grades and Values. We have been carefully advised by the best legal talent all along and feel sure that what we are doing now is strictly within the law and that neither the Association nor its members can be unfavorably criticised. In fact, I happen to know that the Department of Justice has been giving Mr. Geo. K. Smith's office a thorough investigation for a month or more past and they found no cause for undertaking 292 THE LUMBER INDUSTRY. any action against his Association. We are proceeding even more carefully than Mr. Smith and we believe the plan we have hit upon, keeping our members informed as to market conditions and current market prices, is about the best that can be arranged. Manufacturers in making their quotations on lumber can, of course, either use the List of Values as a basis and quote dis- counts therefrom or may issue their own price list on a net basis. Both plans will probably be pursued. One great advantage of the Value List, which runs from $5.00 to $8.00 above the present market conditions, is that it allows perfect freedom in advancing E rices when conditions justify it without having to issue a new st. It would simply be necessary either in the case of an ad- vance or a decline of prices to send out a new concession sheet. I believe upon careful consideration of this plan you will approve of it. Should an opportunity not offer before to talk with you fur- ther, I trust you will make it a point to be at our next meeting so that we may go into the matter more fully. At the October 26, 1911, meeting of the association President Corwin, in his semiannual report, stated: The Sherman or Anti-Trust Law and the recent activity of the Federal Department of Justice in its enforcement has per- haps served to deter some from joining our Association, while possibly a few among the membership may have felt a little apprehensive that we might unintentionally transgress the laws. He then proceeded to lay stress on the purpose of the association to keep within the law in the conduct of its business. The secretary's report, in reference to the new "value list" and the "weekly report of sales," said: As has been well stated in our President's address these several new features have not been added to our Association work without careful investigation from a legal standpoint, and if any of our members have refrained from contributing information from fear of legal complications we feel that we can assure them that their fears are groundless. The list of grades and values became effective November 1, 1911, and has been used as a basis list since that date. Concession sheets were used in connection with this list. The following letter of Novem- ber 6, 1911, written by Secretary Roper to President Corwin, throws light on the method of compilation of an association concession sheet: Yours of the 4th, enclosing letter from Mr. Millard received. I agree with you perfectly in the necessity of having all forms in connection with the Cost & Value List, Weekly Sales Reports, and Concession Sheets, approved or recommended by the Costs & Values Committee and have been acting along that line. The form of Concession Sheet, which I gave you a few days ago, has been approved by Mr. Millard and it was not my purpose to issue a concession sheet to our members until the concessions PRODUCTION" AND WHOLESALE DISTRIBUTION. 293 named in it had also been approved by him and yourself. I think in getting out the first of these Concession Sheets we ought to be very careful and consider it from every possible standpoint. I have been making up a sheet with my ideas of the proper concessions and have about half finished it. I compared this today with the proposed concessions of the Roper Lumber Co. and found that as a rule my concessions were less than theirs. They will probably have this sheet ready to issue by the time we get our new lists from the press and it has occurred to me that possibly it will be better for the Association not to under- take to issue a Concession Sheet at once but let the Roper Lum- ber Co. issue be circulated amongst our members. This per- haps would bring forth concession sheets from others of the manufacturers and later on the Association could issue a sheet made up from these. No doubt you will be passing through Norfolk again in the near future and we can talk this matter over more fully at that time. The issuing of an association concession sheet was still advocated as late as the November 23, 1911, meeting, according to the report in the American Lumberman of December 2, 1911, page 43. C. I. Mil- lard, chairman of the costs and values committee reported that the secretary was to issue such a concession sheet from time to time. At the meeting also the report shows that — President Corwin stated most emphatically to those present that the present workings of the association were strictly within the confines of the interpretations of the Sherman law and there should be no need of fear of prosecution by federal authorities. The Bureau, however, has no evidence that any association con- cession sheet was issued at this time. In a letter dated February 23, 1912, written to Hallowell & Souder, of Philadelphia, Secretary W. B. Roper says: In regard to price lists, beg to advise the Association issues no price list but we can furnish you with as many copies as you desire of our Lists of Grades & Values at 10$ per copy. These as you will doubtless understand are used in connection with concession sheet or discount schedule, which is issued by the manufacturer and not by the Association. On March 16, 1912, Secretary W. B. Roper wrote R. S. Kellogg, of Wausau, Wis., secretary of the Northern Hemlock & Hardwood Manufacturers' Association, in which he explained the use of the list of grades and values and concession sheets as follows: These lists were issued November 1st and I am sending you several copies under separate cover. Should you have use for any more, will be glad to supply them. The Association, of course, does not publish any concession sheets or undertake to dictate to its members what concessions shall be made. This matter is left to the voluntary action of each individual manu- facturer. You will find enclosed herewith copies of concession 294 THE LTJMBEB INDTJSTKY. sheets recently issued by two of our members in printed form, also a blank form that the association furnishes its members which may be filled out either with pen or typewriter. About three or four times a year, I will individually compile a conces- sion sheet made up from the sheets furnished by the various members of the association and representing my individual opinion as to the current concessions. This will be done simply as a guide and of course the concessions named on this list will not be binding upon anybody. If there is any further information you desire, shall be very glad to supply it. A letter of April 8, 1912, from Secretary Roper to Secretary Doster of the Hardwood Manufacturers' Association, also states: "The asso- ciation does not issue the concession sheets. These are left for the individual manufacturers to make up as they see fit." The reason for the temporary abandonment of the proposed asso- ciation concession sheets was probably a fear of involving the associa- tion in legal difficulties. When Secretary Roper endeavored to cany out the project referred to in the latter part of the foregoing extract from his letter to Secretary Kellogg, he sent out, on July 13, 1912, letters to several important manufacturers similar to the following to the Albemarle Lumber Co., of Hertford, N. C: In reply to our recent request for copies of concession sheets or price lists, we have received quite a number from our members among them being one from you. It has occurred to me that it would be very useful and inter- esting to our membership to have a tabulated statement show- ing the concessions allowed by the different members who have sent us their lists putting them in parallel columns for ready comparison and on a separate sheet giving the names of the par- ties so that they can be identified with the different columns. A statement of this sort is sent out every two or three weeks by Mr. Geo. K. Smith of the Yellow Pine Mfrs. Assn. and some of the other associations are publishing the names of their mem- bers with the prices being quoted. One or two of our members with whom I nave talked have thought the idea a good one and say they would be very glad to contribute their prices for that Purpose and would urge no objection to having then names given, his, of course, would not be circulated outside of the member- ship of the association. Before getting up a statement of this sort, I wish to submit it to those who have contributed their price lists and obtain then- consent. I will be glad to have your views as to the desirability of doing this and also whether you would have any objection to the plan. Kindly let me hear from you promptly as I am desir- ous of getting the statement out next week. Horton Corwin, jr., president of the association, wrote to Secretary W. B. Roper on July 17, 1912, in which he referred to Secretary Roper's suggestion as follows : Now with respect to your letter about having a tabulated statement prepared showing the concessions allowed by the dif- PRODUCTION' AND WHOLESALE DISTRIBUTION. 295 ferent members who have sent in their lists. I want to com- mend your zeal, and as far as the matter is to be considered from a standpoint of a manufacturer or operator, believe it would be a good thing. Looking at it, however, from an Association standpoint think I can detect how it might be construed as an effort in Association work in restraint of trade, or as a violation of the spirit and intent of the Sherman Act, besides which, think it will nave the effect upon some of the members of restraining that freedom of action in submitting to the members their indi- vidual lists. You know our plans contemplate that the Asso- ciation's action in matters of this kind end in the report of the weekly sales and the tabulating of the same to the membership. Each operator should, unsolicited upon the part of the Associa- tion, ask for and receive in exchange of courtesies in the way of concession sheets from others, and altogether I know you will upon further consideration of this matter arrive at the same con- clusion with me, that it will be better not to prepare any tabu- lated statement that shows the concession sheets of the different members. Confidentially I am rather disappointed in Mr. Millard's con- cession sheet as far as it relates to Box and the low grades. Am satisfied that it was intended to be prohibitory and that he does not want to sell any of the low grade lumber, but to utilize the same for Planing Mill purposes. Secretary Roper, in his reply of July 18, took issue with President Corwin's position. In his letter Secretary Roper stated his disbelief that the proposed concession sheet could be construed as an effort in restraint of trade; that the proposed action was "simply logically following out our plans and making them more effective," and he cited, as example, the issuance of similar sheets by Secretary Smith of the Yellow Pine Manufacturers' Association. In the light of pos- sible opposition on the part of members, however, Secretary Roper decided that the best plan for the present would be simply to publish the weekly price sales, and added: "In addition to this, I will get up as I have done heretofore a full concession sheet giving my own idea from the prices that are sent in to me of present market conditions." The Bureau has little definite information regarding the use made of such concession sheets compiled by Secretary Roper. The following letters, however, indicate that they were sent out to association mem- bers. On August 8, 1912, Woodson & Graves, of Lynchburg, Va., wrote Secretary Roper as follows: We are obliged to you for the concession sheet #3 applying on the prices as shown in your issue of November 1st, 1911 "List of grades and values." We wish you would mail Mr. H. P. Woodson, Burgaw, N. C. a copy of the issue of November 1st referred to above together with a copy of the concession sheet as sent us — #3. Please let us know what the charge is and we will send stamps to cover. 296 THE LUMBER INDUSTRY. The following reply, dated August 9, signed, "The N. C. Pine Association:" Yours of the 8th acknowledging receipt of Concession Sheet No. 3 has been received. In compliance with your request we are sending to Mr. H. P. Woodson, Burgaw, N. C, today a copy of our List of Grades & Values of Nov. 1st, 1911 and also a copy of our Concession Sheet No. 3, which we trust will be received by him O. K. The cost of our List to members is 10$ per copy. There is no charge for the concession sheet. The following letter was written by Secretary Roper on February 20, 1913, to two prominent manufacturers: We are desirous of obtaining copies of the most recent con- cession sheets in order that we may compile an average con- cession sheet to be sent out from this office to our members. The last sheet we have from you is under date of December 10th. If you have published any later than this, will you not kindly send us several copies, and oblige. In Bulletin No. 12, of the North Carolina Pine Association, June, 1913, appeared a tabular list of concessions, at the head of which was the following statement: CONCESSIONS. The Concessions named below are from the List of Grades and Values of North Carolina Pine dated November 1st, 1911, and have been compiled by W. B. Roper, Sec'y- These figures represent the compiler's opinion of present market quotations as gathered from price lists and concession sheets sent in to bis office, together with reports of actual sales, and are issued as current information. Association price information not issued in the form of price lists. — In 1906, as has already been shown, Secretary Walker secured the adoption of a system of "weekly sales reports," which, however, was soon discontinued. In 1911 Secretary Roper began the issuing of a new series. In his letter of April 27, 1911, to Ellington & Guy (Inc.), a part of which has already been cited (see p. 287), he said: We are working now on a plan to disseminate information once a week or perhaps once every two weeks to our membership, showing prices that are being obtained. This I think will Be quite valuable as it will show some people who are selling at low prices that others are doing much better and will inspire them to ask better figures. The following correspondence indicates the use which the associa- tion members made of the weekly sales reports: PRODUCTION AND WHOLESALE DISTRIBUTION. 297 Letterhead of the Camp Manufacturing Co. Franklin, Va., August 18, 1911. Mr. W. B. Roper, Sec, North Carolina Pine Asso., Norfolk, Va. Dear Sir: We haven't been able to move our 2\ and 2>\" #1 Flooring without cutting the price anywhere from $3.50 to $4.00. Is this in line with the price that the others are getting ? I wish you would let me know if this is about in line with the others. I feel like it is too much. It looks like we ought to be able to get a better price for it. On #1 Rough lumber we are cutting the price anywhere from $2.25 to $2.50. I would like to know if this is about in line with the reports that you are getting. Yours truly, Camp Manufacturing Co., By J. L. Camp, VP. & GM. On August 22, 1911, the following reply from the office of the asso- ciation was made to Mr. Camp's letter: Replying further to your letter of the 18th instant, regarding f rices of #1 Flooring and #1 rough lumber, I have to advise that have received a reply from Mr. Roper and he wishes me to state to you that he thinks you are selling your #1 Flooring somewhat lower than the other prominent manufacturers. For your infor- mation, I am sending you Weekly Sales Reports Nos. 9, 10 and 11, which gives the actual sales of this stock. He also states that he thinks on the rough lumber you are nearer the mark and about in line with other manufacturers. The Southern Lumber Journal, October 15, 1911, page 25, in an article entitled "A Word to the N. C. Pine Manufacturers," contains this paragraph: In the absence of a regular price list for N. C. pine, such as was at one time issued by the association, it becomes doubly impor- tant now to the manufacturers as well as dealers to be more prompt in reporting every week their sales to the Secretary of the N. C. Pine Association, Norfolk, Va., for use in the compilation of the Association's Weekly Sales Report, which Secretary Roper issues every Saturday morning. The list of Cost and Values for each and every grade of N. C. pine is published in each and every issue of the Journal for the guidance and direction of all manu- facturers as well as purchasers and the Weekly Sales report will show the variation from these figures. There is no great industry extant today, but what has a cost and values list which governs all sales in that line of industry. In the secretary's report at the October 26, 1911, association meet- ing occurs the following statement: So much dissatisfaction having been expressed with the old Market Reports (the last one being under date of March 24, 1910), and many members being in the dark as to the exact state of the market, it was decided at our meeting in May to issue weekly reports of sales, gathering the data for these reports direct from the actual sales made by members. These 298 THE LUMBER INDUSTRY. reports, therefore, represent the actual condition of the market and the prices that are being obtained, and for that reason the members of the Association seem to be more appreciative of their usefulness as time demonstrates their value. The number of contributors to this weekly report has now grown to 22, and we are trusting that within a short time we shall have reports regu- larly from at least 35 members. The best results can not be obtained without larger cooperation than we have heretofore received. With the institution of our new Value List the weekly report of sales will be even more essential than heretofore, and will be used as a basis for the Concession Sheets which it is proposed to issue in conjunction with the Value List. On November 8, 1911, Secretary Roper again wrote to President Corwin in which he explained his method of tabulating the weekly sales reports as follows: I have never felt that it was right since instituting these weekly sales reports to undertake to edit them as it were. I have fre- Juently, of course, thrown out reports or individual prices when felt sure they were erroneous, but when every indicationpointed to the fact that they were correct, I have not considered that it would be proper to omit them simply because they were low. The idea in the reports is to reflect actual market conditions and get the men who are quoting low prices to move up. It is hardly to be suspected that those who are getting higher prices will be tempted to quote any lower by the fact that some foolhardy manufacturer is selling his lumber several dollars less than he should. Perhaps when you are here Saturday, I shall be able to tell you the result of the letter which I wrote these people. With the partial abandonment of the plan for issuing association concession sheets (see p. 294) the importance of the part played by the weekly sales report in the association price activities increased. The following estimate of its value is from a statement made by Sec- retary Roper at the annual meeting of the association on March 20, 1913: It has been found impossible to get the co-operation of all of our members in furnishing statistics covering the output, stocks, etc. Only 25 to 30 contribute to the weekly sales report and about the same number to the other statistical reports. The members who do report comprise practically all the large opera- tors, as well as many of the smaller, and represent, I believe, fully two-thirds of the output of the association. As these statistics are published monthly in our Bulletin, it is needless to refer to them here except to say that they deserve your study and will be found of much use. Is it not worth something to know whether stocks are increasing or decreasing at the mills? Whether we are making more or less lumber than we are ship- ping ? These are vital facts and have a great deal to do with the state of the market. Referring especially to the weekly sales report, while this has grown steadily in value and has become much more appreciated PRODUCTION AND WHOLESALE DISTRIBUTION. 299 than it was a year ago, the number of contributors has increased but little but there are still many of our members who pay little if any attention to this weekly tabulation and put it to no practical use. This fact is evidenced by letters received from members occasionally asking what prices are being paid for cer- tain items of lumber. A reference to the weekly report would have quickly shown them just what prices are being oDtained by other members of the association. On the other hand, some of our members realize the value of this information and consider it the greatest feature of our association work. One member says he would pay $1,000.00 per year for this information if neces- sary. The figures given in these sales reports are reliable, fresh, and accurate and in my opinion they comprise the best available data as to market conditions. It enables you to compare your prices with your fellow member or manufacturer and puts you in position to obtain full value for your product while at the same time there is an entire absence of agreement and each individual is free to quote such prices as his judgment dictates. Attitude of the association toward price lists issued by the Lumbermen's Bureau. — After John R. Walker, for many years secretary of the North Carolina Pine Association, had left the asso- ciation he established a company under the title of "The Lumber- men's Bureau (Inc.)," with headquarters at Washington, D. C. This concern has published a series of lumber price lists under the title of "Monthly market report" purporting to be actual selling prices. Among the species covered is North Carolina pine. There is some evidence of opposition to these lists, as being irregular or unauthorized prices, on the part of various prominent association members. The following are the first and practically the only mention of the North Carolina pine reports issued by the Lumbermen's Bureau (Inc.) which were found during an examination of the trade papers. In the Norfolk news of the St. Louis Lumberman, of October 15, 1908, was the following: "The October 1st market report of the Lumbermen's Bureau showed that air dried edge box was bringing $11.50 at Norfolk." While in the New Orleans Lumber Trade Journal of the same date it was stated: "The Market Report of the Lumbermen's Bureau for October 1 puts air dried edge box at $11.50 at Norfolk and kiln dried edge box at $12.50." As has already been shown, on page 279, R. H. Morris, secretary of the North Carolina Pine Association, was the Norfolk correspondent for the New Orleans Lumber Trade Journal at this time. President Fosburgh's address, at the semiannual meeting of the association October 22, 1908, contained this statement in reference to the association price work: Market reports showing these prices and various other infor- mation will be furnished you from time to time as the market 300 THE LUMBER INDUSTRY. fluctuates. These prices, and other information, can be defi- nitely relied upon, and no time should be wasted on, or confidence attached to any so-called Market Reports emanating from any source outside of this Association. Mr. Morris was also the Norfolk correspondent of the American Lumberman. In the October 31, 1908, issue of this paper, under the Norfolk news, was the following statement: The market report of October 22, formulated as a basis of prices, which is recognized by the North Carolina Pine Associa- tion and the trade generally, quotes 4/4 kiln dried box edge at $13.50; 6-inch, $14; 8-inch, $14.50; 10-inch, $15.50; 12-inch, $17. [Further prices follow.] An examination of the Norfolk market news, in the papers for which Morris was correspondent, shows his care when referring to the "mar- ket reports" of the association to add some such statement as "used as a basis by the North Carolina Pine Association, and the North Car- olina Pine trade at large," or "which is the recognized authority by the trade at large," or "the recognized basis." Such statements do not occur in the North Carolina pine-market news from other cities. It is probable that the addition of the words "and is the only official fist" on the cover of the August 17, 1909, "market report," to the statement which appeared in the previous association "market re- port" of December 21, 1908, was due to a desire to distinguish the association's price lists from those of the Lumbermen's Bureau. Succeeding market reports have also been designated as "the only official fist." The Bureau has made no comparison of the prices shown in the various "market reports" issued by the Lumbermen's Bureau (Inc.), either with the prices as shown in the association "market reports" nor with the prices obtained from records of actual sales. There is evidence at hand, however, that the prices published were considered by many lumbermen to represent actual market conditions with con- siderable accuracy. In a letter written December 14, 1911, by B. A. Johnson of the Lumber World Review to George K. Smith, secretary of the Yellow Pine Manufacturers' Association, the following state- ment is made to the work of the Lumbermen's Bureau (Inc.). Re- ferring to market quotations on lumber as published in the lumber press he said: This condition of constitutional prevarication which has per- vaded the lumber Press of the country for ten years, received, about two years ago, a most desperate jolt by the assumption of two or three young men that they might open a Bureau in an eastern city, and from that place prepare each month, and send to the trade, a market report about lumber conditions, which would be the absolute, unadulterated, brutal facts. The Lumber Press cried it down; many lumbermen talked against it, but the work of the. Riirsau went, on. and the purpose PRODUCTION AND WHOLESALE DISTRIBUTION. 301 of this letter to you, besides making an announcement as to what the lumber world review expects to do in connection with the markets, is to call your attention to the fact that the "Lumber- mens' Bureau, Ltd." of Washington, D. C. has actually succeeded beyond a doubt, and that it is to-day serving with a monthly report, no less than 7,000 subscribers in these United States in all branches of the lumber business, builders, retailers, whole- salers and manufacturers. It is doing to-day what, insofar as I know, the Lumber Press of the country believes is unethical, and considers it really not countenanced by the lumber trade. The following correspondence clearly shows the attitude taken by the chief officers of the association toward the Lumbermen's Bureau. [Letterhead of the North Carolina Pine Association (Inc.).] At Edenton, N. C, November 8, 1911. Mr. W. B. Roper, Secretary, N. 0. Pine Association, Norfolk, Va. Dear Mr. Roper: Please note the within communication from The Lumberman's Bureau. This is sent for your own information. It looks as if the Educational Plans of the N. C. Pine Association is giving Mr. Walker some uneasiness. It is needless to say that he will not get any encouragement from me. Kindly return, and I would like to have your comments for I have not yet answered this letter. Very truly yours, Horton Corwin, Jr., President. Secretary W. B. Roper replied under date of November 9, 1911, in which he indicated the cause of the hostility as follows: Yours of the 8th, enclosing letter from the Lumbermen's Bureau, has been received and I am returning it herewith. This appears to me to be a shrewd move on the part of the Lumbermen's Bureau to get $1,500,000 or $2,000,000' extra income per year and at the same time save themselves from losses which appear impending. I trust none of our manu- facturers will allow themselves to be pulled into the trap. If the Lumbermen's Bureau would really do as this letter suggests and unite their best efforts with those of the prominent manu- facturers in the direction of keeping up prices of North Carolina Pine, it might be worth while to encourage them but I do not feel any confidence in the plan. Herewith enclosed I am also sending you copy of letter written Mr. Major to-day referring further to the matter of low prices on our last week's report. The Bureau has no copy of the letter from the Lumbermen's Bureau. It has, however, a copy of one written to Horton Corwin, jr., in his capacity as president of the Branning Manufacturing Co. 'These figures appear in the original letter. This is no doubt an error in writing. The amounts meant were more likely $15,000 or 120,000 or even $1,500 or $2,000. 302 THE LUMBER INDUSTRY. by Robert McBlair, secretary of the Lumbermen's Bureau, under date of December 15, 1911, from which the following is taken: With further reference to the matter of your placing an advertisement in our North' Carolina Pine Market Report, we beg to advise that we are especially anxious to have you insert this advertisement, as whether or not you do so will have an influence upon our plans in which we are attempting to rase the level of N. C. Pine prices. If we can get a certain number of N. C. Pine people to advertise with us we shall show in our Market Reports the top of the market always instead of the middle of the market which we have heretofore been showing. As the reports are used ||| . several hundred mills we think that this will have a benefits!! effect on prices ; and as the report is used by approximately 1,000 retailers it will also make better prices easier to secure. After naming some manufacturers who had agreed to advertise, ' and stating that another would give his advertisement, provided ; Mr. Corwin's was also obtained, the letter continued: You, of course, recognize that we are not engineering anything '_ in the nature of a combination in restraint of trade as no one- agrees to sell by the prices we publish, they are issued simply 1 as information, and your advertisement would simply assist T us in publishing them in the interests of the larger manuf actiif^f That is, if we commence and continue this plan of showing the r top of the market in these reports we will lose the suppojffloff many Wholesalers and your advertisement and those of *the f other concerns that enter upon this plan will simply compenliffifj- us to an extent for this loss. ^| The foregoing correspondence indicates that at least up to Decent-" ber 15, 191 1, an effort had been made to present reliable price informlfe tion by the Lumbermen's Bureau. The Bureau has no informal bearing on the subject since that date. Comparison of association list prices with those of actual ] sales. — The f. o. b. Norfolk prices, obtained from records of actual i sales, have been compared on Diagram 10 (opposite this page) with the ! Norfolk basis list, issued by the successive North Carolina pine associations. It may be noted that during 1899 and 1900, in some items, the rise in actual prices took place before that in the list prices, also that since that time actual prices appear to have been occasionally, for short intervals, higher than list prices. A com- parison of list and actual prices, when the period of 19 years is con- sidered, does not reveal the close correspondence between the two which might be inferred from the claims of association officers and the Norfolk items in the trade journals. Section 19. Restriction of output. Curtailment in 1900. — Various organized attempts to limit prod^ tion and thus affect prices have been made by the manufacture!^ of | North Carolina pine. In the spring of 1900 there was a generaffall Diagram lO.-Comparison of the Movement of Assertion List Prices and Actual Prices of North Carolina Pine on an F. O. B. Norfolk Basis, 1892-1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 303 in lumber prices. A general curtailment, organized by tbe associa- tion, is described by Mr. Walker as follows : * Market conditions had again become very unfavorable and on May 3, 1900, it was unanimously resolved that a curtailment to the extent of 33 percent of the output of the mills be made for thirty days, this to be accomplished by shutting down two days in each week, Friday and Saturday if possible. The president was empowered to employ one or two good men to interview outside manufacturers with a view to obtaining their cooperation. D. J. Turner was employed for this purpose and was successful in securing the promise of a number of mills to cooperate. The mill owners in the vicinity of Petersburg, in response to a call issued by Mr. McKenny, held at Petersburg a meeting on June 2 at which they agreed to cooperate in the curtailment in- augurated by the North Carolina Pine Association, and appointed a committee to see that the resolution became effective. It was estimated that mills representing 80 percent of the output of North Carolina pine were affected by the curtailment. The North Carolina Pine Association continued the curtailment of 33 percent during May, June and July, and during August shut down two full weeks. By fall the situation had become greatly relieved. The situation as described in the trade-journal comments indicates that at first no effort was made to meet the f ailing demand by lowering prices; at least "official" prices. The strengthening of the market was to be brought about directly through curtailment of production. This is indicated by the following trade-journal comment: The association, at their meeting held here on the 3d, re- affirmed the March price list, which action seems to have given general satisfaction, as it was felt that any change in prices would be likely to disturb the market. (Norfolk news in New York Lumber Trade Journal, May 15, 1900, p. 27.) Taking it upon the whole it was not deemed necessary to reduce prices, but out of caution and to make the situation still stronger, it was decided =to reduce the output for next month 33 per cent. This will be done by closing down the mills of Eastern North Carolina and Virginia two days out of each week. (Norfolk news in New Orleans Lumber Trade Journal, May 15, 1900, p. 23.) The action of the North Carolina Pine Association, at the meet- ing on the 4th inst., resolving to shut down the mills during two days out of six, has been productive of good results. (Balti- more news in New York Lumber Trade Journal, June 1, 1900, p. 20.) To further strengthen the situation the North Carolina Pine Association has decided to reduce the output 33 per cent for one month, shutting down the mills for two days each week, and they have appealed to all manufacturers outside of the >J. R. Walker, American Lumberman, June 22, 1907, p. 46 et seq. 304 THE LUMBER INDUSTRY. Association to join in this curtailment. (Editorial comment in New York Lumber Trade Journal, June 1, 1900, p. 9.) The Association mills are all rigidly living up to the agreement not to run over four days per week this month, and a majority of those outside the Association are cooperating with them and are curtailing their output correspondingly. The curtail will, I understand, be continued as long as seems expedient, though the present agreement is for this month only. (Norfolk news in New York Lumber Trade Journal, June 1, 1900, p. 26.) At the meeting of May 31, 1900, it was found desirable to lower the "official" prices, and this was done in issuing the "price list" effective May 31, 1900. This is shown in the following: The action of the North Carolina Pine Association at Norfolk last week indicates not so much that matters have become dis- quieting, but that the increases in the price list made at the beginning of the year followed each other too rapidly and that the safety mark had been passed. The reduction ordered is in- significant compared with the various increases, and admits of business being done on a profitable basis. (Baltimore news in New York Lumber Trade Journal, June 15, 1900, p. 19.) The Association, at its meeting held here on May 31, decided to continue the curtailment of 33 per cent in the output through June and longer should it seem necessary; this and a small reduction in the price of some half a dozen grades comprise about all that was done of interest. (Norfolk news in New York Lumber Trade Journal, June 15, 1900, p. 23.) The success of the curtailment movement is indicated by the fol- lowing: As all the Association mills and at least two-thirds of the out- siders are only running four days a week, there is no large accu- mulation of stocks on hand, and as long as they run that way there is not likely to be any, and I understand that it is the pur- pose of the Association to continue the curtailment as long as there seems to be any necessity for it. (Norfolk news in New York Lumber Trade Journal, July 1, 1900, p. 25.) The Association held a meeting here on June 28, and agreed to continue the curtail of one-third of the output for the month of July, and to close down altogether for two weeks in August, which it is thought will be sufficient to meet the exigencies of the situation. Some adjustments of prices were made, and an adjournment was taken until September, the present price list to be rigidly adhered to until that time. (Norfolk news in New York Lumber Trade Journal, July 16, 1900, p. 21.) The mills are rigidly living up to the agreement to run only half of this month, and will do the same thing again next month, rather than see the market break and prices fall as they did a few years ago. (Norfolk news in New York Lumber Trade Journal, Sept. 1, 1900, p. 24.) Curtailment in 1 906 . — The marked decline in prices which occurred about the middle of 1906 led to another general movement to curtail PRODUCTION AND WHOLESALE DISTRIBUTION. 305 production. Secretary Walker in his history refers to this movement as follows: Prices at that time had reached the highest point ever known, but a very rapid decline soon set in. This was due to the very large increase in the production which the stimulation of the high prices had effected, and to a similar check put upon construc- tion work. By June this decline amounted to at least $2 a thousand feet and many of the mills began a curtailment of production. During July and August this amounted to about 25 per cent, many small mills closing down entirely, and many of the larger mills did not get back to a normal basis before the end of the year- He does not refer to any association action on the subject, but that such action took place is evident from the following from the minutes of the meeting of the directors of the association, held June 13, 1906, in which it was stated that the question of curtailment was discussed : and the fact developed that practically all of the mills favored such a move to improve market conditions; and a large number signified their intention of reducing their output 25 per cent during July and August on the basis of the output of their mills during the corresponding period of last year. The following news items in trade papers throw some light on this movement.: The movement for a curtailment of the output of lumber in the North Carolina Pine belt, inaugurated by members of the North Carolina Pine Association at a directors' meeting held at the Virginia Club in Norfolk, June 13, is spreading to manufacturers not members of the association. Norfolk wholesalers encourage the curtailment and W. W.. Robertson & Co., one of the largest wholesale firms in the city, has written personal letters to more than 100 firms with whom it does business, urging the necessity of a curtailment in emphatic terms. (Norfolk news in American Lumberman, June 30, 1906, p. 47.) The lumber trade situation, though no pronounced changes have taken place, is characterized by an easing off in some of the quotations, especially in the lower grades of North Carolina Pine and in flooring.. The reduction in commons is due to the action of the North Carolina Pine Association which, at a recent meeting in Norfolk, decided to cut the list 10 per cent because of the quiet feeling in the trade and the fact that the movement had been rather slow of late with a heavy production. It was also resolved to curtail the output 20 per cent, which, it is thought, will be sufficient to arrest any weakness that might otherwise develop. (Baltimore news in New York Lumber Trade Journal, July 1, 1906, p. 26.) Secretary Walker, in a circular letter dated July 5, 1906, said: We beg to advise that we have received advice from a very large number of manufacturers, both members and non-members 26030°— 14 20 306 THE LUMBER INDUSTRY. of the Association, stating that owing to the present unfavorable market conditions, they had determined to reduce their normal output 25% or more during July and August, or until the present conditions improve. From these replies we have made the following tabulations: Members who will curtail. Annual output. 25% curtail during July* August. 298,068,000 308,688,000 140,424,000 12,419,000 12,862,000 5,851,000 Total 747,180,000 31,132,000 These members represent about 77% of tbe output of the Association. Non-members who will curtail. Annual output. 25% curtail during Julys August. Virginia North Carolina South Carolina Total.... 118,425,000 162,110,000 130,508,000 411,043,000 4,934,000 6,754,000 5,438,000 17,126,000 Making a total curtailment during July and August of 48,962,- 000, or approximately 50 million feet. Many of these mills will curtail more than 25%. The above figures represent over 80% of the board mills. We have not heard from as many Dimension mills as we desire, so request any who have not replied to write us immediately as to their plans. We are receiving additional communications every day both from members and non-members, and we expect before July 15th to have advice for 90% of the membership that they are curtailing. At the end of the month we will ask each mill for a statement of the curtailment effected by them and the manner in which it was done. This information will be tabulated and forwarded the members. In addition to this curtailment movement, carried on inside the North Carolina pine territory, the association took part in a movement to secure the cooperation of the Georgia-Florida Saw Mill Association and the Alabama Lumber Manufacturers' Association, in a combined curtailment. A meeting was held in. Atlanta on June 28. The references found to it in the lumber press at the time are somewhat guarded. In the PRODUCTION AND WHOLESALE DISTRIBUTION. 307 American Lumberman of July 7, 1906, page 59, under an Atlanta date line of July 3, it was stated: Representatives of the most prominent lumber concerns in eight southern States held a conference at the Piedmont Hotel in this city Thursday, June 28. There were two sessions, both of which were executive. No information was furnished to the press. As far as could be learned the object of the conference was the dis- cussion of subjects of vital importance to southern lumber dealers, chief among which were those relating to prices, wages, labor and shipping. It is understood that while no definite agreements were entered into by the conferees much benefit is expected to result from the mutual interchange of ideas and plans. It is said that the various representatives present at the meeting will urge upon their State sawmill associations the adoption of certain regulations that will result in better prices, a more uniform wage scale, fewer labor troubles, and better shipping arrangements with the railroads. The States represented at the conference were Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Louisiana, and Texas. And under a Montgomery date fine of July 2, in the same issue, page 7, in reference to the curtailment movement, it was said : From every section of the lumber territory comes the report that the millmen are either actually cutting down the output or preparing to do so. It also is heard in a general way that they are determined to win the price fight which now is on with the 2-edged sword of less lumber and adherence to an adequate level of prices. Several Alabama manufacturers were at the meeting of southern millmen in Atlanta Friday last and they say that in a quiet way the mill owners have decided to keep up the price and cut down the supply. After speaking of curtailment movements in other sections, it was observed : However, the mill owners do not propose to get into any trouble with the anti-trust laws of either the United States or the States, and there will be nothing in the nature of a combination to control prices either in the buying of timber or the selling of the output. One of the largest producers in the yellow pine section does not hesitate to say that so far as he is concerned, and several others with him, there will be no agreement in violation of the law. The lumbermen can not afford to antagonize the statutes and still find ways other than that to keep themselves in a way to earn profits on the output. The following reference to a conference at Atlanta occurs in the New York Lumber Trade Journal of September 1, 1906, page 15, in its report of the meeting of the North Carolina Pine Association, at Hamlet, N. C, on August 16, 1906: R. J. Alderman reported the results of the conference held in Atlanta in July between representatives of this association, the Georgia-Florida Saw Mill Association, and the Alabama Lumber 308 THE LUMBER INDUSTRY. Manufacturers' Association to take some action looking toward relief for the depressed condition of the Pine lumber market. The principal result of this meeting was the adoption of a resolu- tion forwarded to each association outlining the conditions as ascertained at the meeting and suggesting that the issuance of stock lists be discontinued and that the various associations take such action for the relief of the situation as to them seemed expedient. At this same North Carolina Pine Association meeting the question of curtailment was discussed. The account in the New York Lumber Trade Journal of September 1, 1906, pages 15-16, is somewhat more full than the official minutes, particularly in relation to official action taken by the association in regard to curtailment. Secretary Walker reported that a reduction in the cut of 35 per cent had been made for the year. After considerable discussion the following resolution was unanimously adopted: Resolved : That this Association endorse the steps being taken [by] its Executive Committee to effect a general curtailment that is not illegal. To further that end it is recommended that a commit- tee of three — one each from Virginia, North and South Carolina — be appointed, each member by his respective state; said committee to meet with representatives from the other Southern Pine Associations, and to formulate some tangible working plan to be recommended to all manufacturers of pine lumber in the South. According to the trade paper account — The secretary was instructed to get in touch promptly with secretaries of the other associations, asking to participate in the joint conference, immediately suggesting Atlanta as the meeting place, and September 1, as the date for the meeting. It was also resolved that the expenses of the committeemen be paid by the Association. J. W. Wallen was selected as the delegate from South Carolina, the Virginia delegate to be appointed by President Fosburgh. The Bureau was not able to find any account of the meeting pro- posed for September 1, either in trade papers or in the association minutes. It may be that the questions beginning to be seriously considered as to the legality of such activities on the part of the association had already begun to influence the character of the records as well as the attitude of the members toward concerted curtailment. This attitude is clearly brought out in connection with the action taken in regard to curtailment in 1907. Curtailment in 1907. — There seems to have been some curtailment in 1907, but apparently it did not have the official sanction of the association. At a meeting of the association on August 6, 1907, the proposition that the North Carolina Pine Association decree a shut- down of the mills for 30 days was defeated, according to the Norfolk correspondent in the American Lu mberm an of August 3, 1907. PRODUCTION AND WHOLESALE DISTRIBUTION. 309 At the request of the South Carolina members, President E. C. Fosburgh, of the North Carolina Pine Association, has author- ized Secretary Walker to issue call for a special meeting of the membership of the association, to be held at the Jamestown Exposition grounds, Tuesday, August 6. In the call it is stated that the meeting will be held for the purpose of considering market conditions, and it is probable that the closing of mills in Virginia and North Carolina will be considered. While condi- tions hardly warrant this action among the board mills it is pos- sible that they may agree to close down through spirit of coop- eration. One great objection which the manufacturers have to closing mills is that it disorganizes their working forces, and when they get ready to renew operations they have no crew. The North Carolina Pine Association (Inc.) circular No. 418, dated August 8, 1907, said that a number of manufacturers stated that they had closed their mills down or intended to do so "but a number of large operators opposed such action and especially any official action on the part of the association." At a meeting of the association held September 4, 1907, market con- ditions were considered and a report was made by Z. W. Whitehead, editor of the Southern Lumber Journal, regarding the curtailment among Georgia and Florida operators, as brought out at a recent meet- ing of the Georgia-Florida Saw Mill Association. (See pp. 163-164.) It was voted that a committee of five be appointed by the president to draft a letter to the Attorney General of the United States "inquir- ing whether or not the action regarding curtailment, which had been proposed that this Association take, comes within the scope of the law; the reply of the Attorney-General to be sent out to all members of the Association when received.'" President Fosburgh stated the attitude of the association in his annual report presented at the annual meeting held March 26, 1908. After describing the unfavorable business conditions in 1907, he continued : It became apparent to many of our members that unless prompt measures could be taken to secure a general curtailment of output the value of our product must continue to decline and further disastrous losses be sustained by hundreds of mills throughout the North Carolina Pine territory, who, being unable to market their stock would be compelled to stand idly by and see it deteriorate and perhaps even rot and decay on their hands. In view of our past efforts to educate our operators regarding the necessity of conserving in every possible way our rapidly dimin- ishing and soon to be exhausted timber supply, and securing their co-operation with the Forestry Department of the United States along the lines laid down by it for carrying out this great work it can be easily and readily understood how eagerly our mem- bers look to this Association to devise for them some source of relief, some protection from the impending storm. 310 THE LUMBER INDUSTRY. At our mid-summer meeting in Wilmington, N. C, the situation was exhaustively discussed and canvassed from every possible standpoint. It was the almost unanimous opinion that the only source from which relief could be had would be through the joint co-operation of every mill represented in the Association to curtail its output to such an extent, and for such period of time as would be necessary to exhaust the surplus, and keep the stock at the mills within the requirements of the trade. We were then con- fronted with the question as to whether such action on our part would not render us liable to prosecution by the authorities at Washington for violation of the Sherman Anti Trust Law. To meet this question, if raised, our Executive Offices had obtained the written opinions of several eminent legal authorities on the subject. Some maintained that any such action on our part would be a violation of the Sherman act. Others claimed that we had a perfect right to take such action at any time we saw fit to do so. It was then agreed that the only safe and sensible plan of action would be to address a communication to Attorney General Bona- parte setting forth the existing conditions, assuring him of our earnest desire to strictly respect and obey the laws of our country, and asking if he would not kindly give us his opinion, or interpreta- tion of this Sherman law as it applied to our case. Attorney General Bonaparte replied to our communication by referring us to the Sherman law, advising us to consult with our legal advisers, and also stating that it was his duty to furnish such information as asked for to the President only. Of two things we are now reasonably certain, first — that we have not violated the Sherman law, second — that in not doing so it has been at a cost that has been wellnigh incalculable. Later in his report he said : So long as this business could be conducted along the lines laid down by this and kindred Associations, all was well, and it was the exception and not the rule, when the manufacturers as well as the dealers, were not making money and giving ready employ- ment to labor at good prices. A strict construction, however, of the drag net features of the Sherman Anti Trust law made it hazardous for the Association or its members to longer adopt the rules and methods in vogue for so many years and by which order and prosperity were wrought out of chaos and confusion. Against the further practice of- these methods and policies of the past, and by which we prospered so uniformly, there was never a complaint raised by the great majority of the people,- for they shared in a greater or less degree with the manufacturers and members of these associations in the beneficent results thereby obtained and made possible by and through their co-operation. Intelligently conducted Associations promulgated such rules and regulations touching the question of grading and classification, inspection and measurement, prices and so forth as created a market for standing timber that had for years and years before been practically a dead asset to its owners. Curtailment in 1908. — While no reference to any discussion of cur- tailment occurs in the minutes of the March 26, 1908, meeting, there PRODUCTION AND WHOLESALE DISTRIBUTION. 311 is reason to believe that, in spite of the foregoing remarks of President Fosburgh, some kind of action was taken by the association. The following is from the Boston Commercial Bulletin of April 4, 1908, page 5: At a meeting of the North Carolina Pine Association, held in Norfolk, Va., a few days ago, a report submitted showed that one-half of the mills of the association were closed down and that the normal output of lumber was cut in two. As the association claims to control all the leading mills in eastern Virginia, Mary- land, North and South Carolina its recommendation to continue the curtailment throughout the summer is well worthy of note. Curtailment in 1909. — The following guarded reference to cur- tailment is from the minutes of a directors' meeting held May 13, 1909: The matter of supply and demand was discussed; also the advisability of curtailment was given careful consideration. It seemed to be the opinion of those present that it would be highly beneficial and very proper, to exercise discretion along these lines, and, if need be, curtail output during the Summer as the means of conserving timber, and keep within bounds stocks on hand. On September 16, 1909, Secretary E. H. Morris wrote a letter to the Hotchkiss Bros. Co., of Torrington, Conn., in which he said: I presume it would be interesting information to say while writing you that stocks of North Carolina Pine are very much depleted, especially desirable lines of kiln-dried lumber, and that up to the present time mills are not increasing output and there seems to be a tendency, and a very strong one, in fact on the part of manufacturers, to keep up this idea of curtailment. There is a very nice line of business being offered, not heavy but healthy, and prices are without question very much firmer than they were 30 days ago, many of the mills having sufficient orders on old prices to warrant them in asking and receiving prices on the basis of August 17th List, this being based on kiln- dried stock in accordance with North Carolina Pine inspection, etc. Curtailment in 1911. — The attitude of the association toward cur- tailment in 1911 is expressed as follows in a letter written by Secretary W. B. Roper to W. T. Christine, of Chicago, editor of the American Lumberman, the letter being dated November 23, 1911 : In looking over your issue of November 18th, I find under the heading of "Review of Current Lumber Trade" an item regarding North Carolina Pine, which appears to be a littb mis- leading. What you say regarding the market situation, prices, etc., is quite correct but what I have reference to is your remarks concerning an alleged curtailment of cut amongst the North 312 THE LUMBER INDUSTRY. Carolina Pine manufacturers. 1 The way thi3 is written would lead a casual reader to infer that there had been a voluntary curtailment. This is far from correct. I think I am safe in saying that there is not a mill in this section that has not made all the lumber it could possibly make during the past year. The only curtailment that has been in effect in North Carolina Pine has been involuntary and occasioned by labor shortage, weather conditions, etc. Our Association has been very careful to avoil any action that could be construed as in violation of the Anti- Trust act. We have reason to know thnt our friends, the enemy, at Washington consider curtailment just as much a restraint of trade (if it is by agreement or understanding) as the raising of prices or the elimination of competition. It is for this reason among others that there has been no talk whatever among our manufacturers as to a general curtailment and so far as I am aware there has been no individual curtailment except from necessity. I simply mention this so that you may understand the situa- tion and avoid hereafter putting our manufacturers in a wrong light before the reading public. Curtailment in 1913. — An extensive curtailment of production took place in 1913 among the North Carolina and yellow pine man- ufacturers. The conditions which caused this curtailment were described to an agent of the Bureau by Secretary Roper, in substance, as follows: During the first six months of 1913 there was a very large cut of lumber. The year 1912 was an exceptionally good year, and during the first six months of 1913 the members of the asso- ciation cut from 25 to 30 million feet more lumber than had been cut for the same period of 1912. This larger production was due to two reasons: First, the open winter; second, operation of night shifts by some of the manufacturers. The large production of the first six months of 1913, together with a slackened demand, resulted in an overproduction of lumber. A curtailment of out- put began in June, which lasted through September. I think the Surry Lumber Co. was the first mill to shut down in June, " and soon after that a considerable number of the mills closed their plants. In July and August a considerable per cent of the association mills were closed down part of the time. Mills out- side of the association followed the lead of the more prominent association manufacturers, and the curtailment was general throughout the North Carolina Pine territory. The curtailment movement also spread to other territory, and reports from the yellow-pine States show that in some sections there was a con- siderable curtailment. I do not believe the yellow-pine people , curtailed to nearly as large an extent as the manufacturers in the North Carolina Pine territory. There was no agreement between the manufacturers to lessen the output of lumber. The association did not attempt to influence the manufacturers, i The reference of which Secretary Roper complained reads as follows: The curtailment of cut considerably practiced by North Carolina pine manufacturers since activity in the lumber trade declined allowed a clearing away of the surplus, resulting in reaction for the better in both demand and prices. (American Lnrnhnrrgan. Nnv 18 1011 p. 29.) PRODUCTION AND WHOLESALE DISTRIBUTION. 313 but simply showed them what the conditions of the lumber mar- ket were, and different manufacturers stated that they consid- ered that any mill that continued operating on full time was simply throwing its stumpage away and that if the mills con- tinued to operate at full capacity the result would be that lum- ber would be sold at less than the cost of production. In the following letter Horton Corwin, jr., president of the associa- tion, refers to a proposed circular which the secretary had prepared for his consideration and opinion as to the advisability of sending it out to the association membership: The North Carolina Pine Association, Norfolk, Virginia, At Edenton, N. C, May 19, 1913. President's Office. Mr. W. B. Roper, N. C. Pine Association, Norfolk, Va. Dear Mr. Roper: Your letter of the 17th received enclosing a draft of a circular that you have prepared and asking for my opinion as to the advisability of sending it out. First, I ap- prove of the circular as to its phraseology except the last feature, which is the inference toward curtailing. Second, I am as doubtful in my mind as to the advisability of sending it under the present conditions. I believe if I could talk to you a little I could make myself clearer than by writing, and as I do not see any necessity for any great hurry, will be in Norfolk on Thursday and will talk the matter over with you. In the meantime you will probably have a letter from Mr. Camp. The letter as you have written it would be all right in every particular to people like Mr. Camp and others of that stamp, but among the smaller operators, who were not present at the meeting, it may create in their minds a greater feeling of uncertainty. However, using one of your faminar phrases, "let's talk it over?" Very truly yours, Horton Corwin, Jr., President. This draft of the proposed circular was submitted to R. J. Camp, who indorsed it, as shown in the following letter: [Letterhead of Camp Manufacturing Co.] Franklin, Va., May 19th, 1913. Mr. W. B. Roper, Secretary-Treasurer, The North Carolina Pine Association, Norfolk, Va. Dear Sir: I am in receipt of yours of the 17th inst., enclosing carbon copy of letter to Mr. Corwin, also copy of the suggested letter to be sent out to the trade relative to market conditions. I have read your suggested letter very carefully, and can find nothing in it to criticise, and nothing in it to object to, and I can see no earthly reason why it should not be sent out. You have out-lined the situation very clearly and very fully, and it seems to me that this letter ought to be productive of a great deal of good, and so far as violating the law is concerned, 314 THE LUMBEE INDUSTRY. if we are not permitted to send out such letter as these for fear of the law, then I do not believe we would be justified in holding the meetings which we do hold. You have made no suggestion that would even indicate a violation of the law, as I see it. It is true that you refer to curtailment, but this is a reference and not a recommendation, and every one has a right to act in this matter as he sees fit. I hope the letter will be approved by Mr. Corwin, and that you will send it out to all of the members. I am also of opinion that letters of this kind, sent out once in a while, especially during a period of depression like we are passing through now, from your office, will be of great help to the trade, and will not, in my opinion, be any violation to the Anti-Sherman Law. I fully approve of the suggested letter, and hope this one will be followed by others. Yours very truly, R. J. Camp, Jr. Secretary W. B. Roper refers to his connection with this move- ment as follows in a letter dated June 12, 1913, to Charles Hill, of the A. C. Tuxbury Lumber Co., of New York: I think practically all the manufacturers realize the desira- bility of curtailing the output of lumber at this time and while I could hardly under existing conditions urge this matter too forcibly upon the attention of our membership, I have en- deavored to impress upon such manufacturers as I come in con- tact with the fact that one of the troubles with the market is an over-production. I think you are correct in what you say regarding the different conditions surrounding the small mill and the large mill, and the greater difficulty encountered in cur- tailing the output or shutting down entirely the large plant. At the same time it occurs to me that it might be better for some of the larger manufacturers to consider the idea of shutting down entirely at a heavy expense for a short time rather than keep running and suffer from a resultant longer period of low prices, during which time possibly the average selling prices might not exceed the cost of production. Sometimes the bitter medicine is more beneficial than the sugar-coated pill. I under- stand the Surry Lumber Co. have decided on taking the bitter dose. The following letter shows that the mills were curtailing during the latter part of May and first half of June : [Letterhead ol A. C. Tuxbury Lumber Co.] New Yoke City, June 18, MS. Mr. W. B. Ropee, S. & T. N. 0. Pine Ass., Norfolk, Va. My Dear Mr. Roper: I shall not be able to be at the Meeting to-morrow, which I very much regret, but I have just telephoned to Mr. Jones of the Camp Mfg. Co., and requested him to inform the members that owing to unsatisfactory market conditions we have decided not to run our saw mill nights as we have been doing for the last eight months. This will mean a lessening of production of one million fe et per month. PRODUCTION AND WHOLESALE DISTRIBUTION. 315 I did not suppose that we could do this advantageously, but, as always, we nave a choice of two evils and it now seems clear to us that the greater of the two evils would be to continue run- ning nights. I know several small saw mills that have shut down during the last thirty days. I hope that the other members will con- sider this matter and if they are able to in any way reduce their *, production they will do it for the results may be rather serious if we continue to force our lumber on the present market. Yours truly, Chas. Hill. The following telegram is interesting in this connection: [On Western Union Telegraph Co.'s form.] MS. New York June 19, 1913. W. R. Roper, Secy., North Carolina Pine Assn., Monticello Hotel, Norfolk, Va. Our production of edge box is sold to Sept. first and we shall offer none until then This for your information. Chas. Hill, 1020AM. On June 21, 1913, Secretary W. B. Roper replied to the above letter and telegram as follows : Your favor of 18th and your telegram of 19th were received. I was very sorry you were unable to attend our meeting on the 19th. We did not have much business to transact but there was a good deal to talk about. I find that a good many of the manufacturers feel as you do and that they have made their plans for curtailing their outputs in various ways. Some have already taken actions, others contemplate doing so between now and July 1st. I am glad to know that you have sold your output of Edge Box and that you will not be in the market dur- ing the summer. I believe this will help matters. During the latter part of July Z. W. Whitehead, editor of the Southern Lumber Journal (which claims to be " the acknowledged exponent and champion of Southern lumber and timber interests "), took an active part in this curtailment movement. Mr. Whitehead used the columns of the Southern Lumber Journal to further this movement. His report of the Wrightsville meeting of the association was submitted to Secretary Roper for approval prior to publication. On July 29, 1913, Secretary W. B. Roper wrote Z. W. Whitehead the following: I note the rough copy of your report of the meeting. I fully appreciate the idea you have in mind in writing this and believe if the article came to the notice only of manufacturers it would be eminently proper. I realize your paper is read principally by manufacturers but it does get into the hands of a great many wholesalers and retailers of lumber and they would quickly seize upon your article and use it as a club with which to beat down 316 THE LUMBER INDUSTRY. E rices in trading with our manufacturers. Personally I would e willing to take the chance on a little of this with a view to impressing upon our manufacturers the necessity of cutting down their output but I know so well the attitude of a number of our leading members that I feel sure the publication of this ar- ticle would call forth very severe criticism for the reasons I have outlined above. I think it would be well, therefore, to omit most of this matter. I have indicated the point to which the article appears to me to be satisfactory. Regretting. I am unable to O. K. the article in its entirety and hoping you will appreciate my attitude in the matter. The following letter shows that the report of the meeting was changed by Z. W. Whitehead to conform to the suggestions of Presi- dent Corwin and Secretary Roper : [Letterhead of the Southern Lumber Journal.] Wilmington, N. C, Aug. 2, WIS. Mr. W. B. Roper, Norfolk, Va. My Dear Mr. Roper: After a conference with Mr. Corwin here yesterday I changed the phraseology of my report of the meeting to practically comport with your suggestions which I submitted to him and he approved. In its revised shape Mr. Corwin thought that the wholesome influence of the information contained from various sources and different states showing the general curtailment and reduction in lumber output would do a great deal of good and exercise a more or less wholesome influence upon the wholesalers and after discussing the matter from differ- ent angles we agreed that it would be best to let the edition go ahead to our subscribers in the Northern, Eastern and Western states where the dealers would see the evidence of the heavy reduction among the mills in the South Eastern States. I also submitted to him the editorial on page 26 referring to this matter which he approved as printed. It will, therefore, be unnecessary to write any of the tender footed tribe with reference to limiting the circulation of this issue to the South Atlantic and Gulf States. You will observe that I followed your suggestions closely with reference to the report of the meeting, which Mr. Corwin read over himself and approved. With regards and best wishes, I am, very truly yours, Z. W. Whitehead, Managing Editor. P. S. Will give you a recapitulation of the replies received dur- ing the next week from the letter sent out regarding the matter of closing down and curtailing output which Mr. Corwin approved here yesterday. The president and secretary of the North Carolina Pine Association (Inc.) hesitated to make the curtailment an association movement, yet they advised, consulted with, and were furnished the replies re- ceived by Z. W. Whitehead. The following letter gives President Corwin's opinion of this method: PRODUCTION AND WHOLESALE DISTRIBUTION. 317 [Letterhead of the North Carolina Pine Association (Inc.)-] At Edenton, N. C, July 29, 1913. Mr. W. B. Roper, Secretary, The N. C. Pine Association, Norfolk, Va. Dear Mr. Roper: I am enclosing you herewith the letter that Mr. Whitehead proposes to send out, and I confess to feeling con- siderable doubt as to the wisdom of setting forth that which will be accepted as simply a subterfuge from the Association. I would like to have your views about it, and in fact what I would like would be for you to condense this letter in a new one of your own getting up, because the letter is entirely too long. Please write me fully and frankly just how you feel about it, and I will defer my answer to Mr. Whitehead until I receive your letter, very truly yours, Horton Corwin, Jr., President. Secretary W. B. Roper replied to the above letter under date of July 30, 1913, as follows: Yours of 29th, enclosing copy of Mr. Whitehead's proposed letter, has been received. He sent me a copy of this and while I did not feel free to rewrite the letter or tell him that it would not do, I did make certain sug- gestions writing them on a Hank sheet of paper without heading or signature so that if it fell into alien hands there would be nothing in the writing to indicate from whence it came. I did not keep a carbon copy of my comments but will have a copy made for your notice from the stenographic notes and enclosed herewith. 1 have also made the same corrections in the carbon of Mr. Whitehead's letter that I made in the other. 1 I agree with you that in addition to the other points of criticism, Mr. Whitehead's letter is a little too long. I believe it should be made shorter and that all signs of an agreement and of mention of the association should be omitted. I had not previously thought out a letter that would be proper but following the suggestion in your letter, I will dictate and enclose herewith a sketch indicating about what I would write if in Mr. Whitehead's place. You may do as you please with this. The following undated draft addressed to Capt. N. O'Berry, of Goldsboro, N. C, was prepared by Secretary W. B. Roper and sent to President Corwin: In the course of my investigation as Editor of this Journal, it appears to me that the condition of the lumber market and the situation among the mills renders it imperative that something should be done to prevent the continuent overproduction of lum- ber, which to my mind is accountable for the unsatisfactory mar- ket conditions at present. This is not confined to any one section but will be found to obtain through the entire Yellow Pine belt, both short leaf and long leaf. I learn that in the Southwest many ; of the mills are shutting down and others are curtailing their output with a view to correcting the unfortunate conditions that 1 Italics by Bureau. 318 THE LUMBER INDUSTRY. now exist. Some in our own section are taking similar steps. It is useless, however, for just a few to attempt to help matters in this way. All manufacturers should be moved by a common impulse. "Self preservation is the first law of nature." It is stated and I know of no better way to preserve the lumber indus- try than for each manufacturer to make a little sacrifice at this time and either shut down his plant for half or all of the month of August or curtail his output by shutting down three days each week for the next sixty days. Statistics show that there has been an enormous overproduction of lumber this year and it will require a normal demand for some time to come up with the sur- plus. I am writing an identical letter to several hundred manu- facturers in the Southeastern states with a view to ascertaining how many are alive to the situation and are curtailing their out- puts or planning to do so. Will you kindly advise me by early mail as to this status. The wording of the first sentence is significant. The officers of the association wanted it to appear that the association was not connected with the movement. An identical letter, except for errors in typing, addressed to Horton Corwin, jr., at Edenton, N. C, was identified by Z. W. Whitehead as the circular letter sent out by him to manufacturers throughout Virginia, North and South Carolina, Georgia, Florida, and Alabama. (See p. 321.) It should be remem- bered that this circular was written by Secretary W. B. Roper, sub- mitted to President Horton Corwin, jr., and sent out by Z. W. White- head " as editor." The following letter acknowledges receipt of Secretary Roper's suggestions and emphasizes the intimate relations between the associa- tion officers and Mr. Whitehead: [Letterhead of the Southern Lumber Journal.] Wilmington, N. C, July 31, 1918. W. B. Roper, Norfolk, Va. Dear Sir : This is to acknowledge receipt of your suggestions relative to changes in the phraseology of letter to be written lumber manufacturers with a view to securing a reduction in the output of mills during August, all of which I have adopted. In fine thirty wherein reference is made to improved prices to a profitable basis to the manufacturers, I have added the words 'and at the same time conserve our forest resources." I added this much for the reason that I am told the Government at Washington is willing to give the lumber people some latitude provided it can be shown that in their operations that considera- tion is at the same time given to the conservation of forest resources. 1 _ Now with reference to the report of the meeting at Wrights- ville, instead of giving specific figures as shown by your report l Similar "conservation " phrases were found introduced into the curtailment propaganda in the casu of other woods, apparently for a similar purpose. (See pp. 132, 141, 163. ) PRODUCTION AND WHOLESALE DISTRIBUTION. 319 which might be traced to official sources, should any one see fit to go to that extent, I have referred to that feature in a general way by saying that reports show production to be ahead of ship- ments and consumption and in consequence thereof stocks are piling up at the mills at a rather unhealthy rate. I note also what you say with reference to the report of the Wrightsville Beach meeting and in this connection would say that in con- versation with Capt. Nathan O'Berry and Mr. Wright they both urged me to emphasize the fact that stocks were piling up at an alarming rate, and stated that nothing short of language to this effect would move some people to cutting down their pro- duction or closing down their mills. Now confidentially some of the largest N. C. pine manufac- turers in North Carolina came to me since the meeting and stated that the only thing to be done was close down the mills and unless the Association could find some way by which this much could be accomplished, either directly or indirectly; that they did not expect to attend but one more meeting of the organization. They went on to say that when times were good they were all able to take care of themselves, but when times were bad and they needed an Association to help them out that the Associa- tion found its hands tied or itself crippled to such an extent that it was of no substantial benefit to them and under such conditions they could not see where it would justify them in paying out their monthly dues and other expenses to Norfolk and elsewhere without getting anything in return. I reasoned with these gentlemen for some little time and told them that they would De making a serious mistake to adopt any such a policy; that the organization had done a great deal in the past and was capable of doing a great deal in the future and that before they decided upon taking any such course as they had indicated, they should take the matter up personally with you and Mr. Corwin and discuss it from every angle. They stated that there were others who were thinking very much as they were and I also told them that this fact within itself should admonish them to go very slow in the adoption of any such a policy. I recounted briefly something as to what the association had accomplished in the past and told them that the present situation was a very awkward one, but that they need not be uneasy but what new conditions would sooner or later arise which would call for the best efforts of the Association. I finally told these gentlemen that I had decided to write up my report of the Wrightsville meeting and likewise editorialize another feature solely for the benefit of the manufacturers and limit the circulation of this number absolutely to the states of Virginia, North and South Carolina, Georgia, Florida, Alabama, Mississippi and Louisiana, not permitting a single copy to go beyond the Virginia fine as I did not want the wholesalers and yard men North, East and West to have the benefit of such information as this report ought to carry to the manufacturers. At the same time the wholesalers are fully aware of the fact that lumber is piling up at the mills and I don't know that the report I wrote up of the Wrightsville meeting would tell them anything but what they already knew. At the same time I do 320 THE LTJMBEB INDUSTRY. not want to be the means of giving them this information to the extent that it ought to be put up to the manufacturers if we expected the latter, as the result of this information, to close down their mills. You will thus observe that my position has been a rather rocky road to travel, and I appreciate fully the contents of your letter with reference to certain tender footed manufacturers who might complain of the Wrightsville report, or rather the feature wherein we refer to lumber piling up at the mills at an unhealthy rate. I regard, however, the work of closing down for fifteen or thirty days as the salvation of the industry, and the reports at Wrightsville justify this view of the situation. But we nave reports from other sources fully as urgent along this line as those we had at Wrightsville. I have, therefore, decided that I had best write a letter to those members of the Association whom you think would most likely kick on that report of the Wrightsville meeting telling them that this issue of the Journal was limited absolutely to the Southern states, that not a single copy to go North of Virginia. I would like to have your views on this, and will ask you to send me a list of those people whom you think would most likely kick on the Wrightsville report. I will then write them a letter to this effect explaining why we made our report of the Wrightsville meeting so drastic. Of course we will have calls from our subscribers saying they received no paper on the first of August, but I propose to see that every copy of this issue is sent only within the states above enumerated so that when these calls come in for absent copies they will all have been sent out and I can write them saying we had no copies left over, which will be the truth. Mr. Corwin will be here tomorrow morning and I will have a brief talk with him before he enters into a conference with the railroad officials, whom he comes hither to see. I will appreciate it if you will let me hear from you promptly and if possible mail your answer before two o'clock so that it will come through here, reaching Wilmington at one o'clock tomorrow night. I will then get it first thing Saturday morning. With regards and best wishes, I am, Very truly yours, Z. W. Whitehead, Managing Editor. The plan, as outlined in the above letter, was indorsed by Secretary W. B. Roper in his reply to Z. W. Whitehead, dated August 2, 1913. Your special delivery letter of 31st was duly delivered yes- terday but I was out of the City all day and did not have the opportunity to read it until this morning. Knowing that Mr. Corwin would see you yesterday and talk these matters over fully, I did not deem it necessary to wire you. Mr. Corwin has been in the office this morning and has given me an account of his interview with you. I think you are on the right track in regard to the overproduc- tion of lumber and I feel more or less in sympathy with the members of the association who have spoken to you regarding the inability of the association to take hold of this matter in an PRODUCTION AND WHOLESALE DISTRIBUTION. 321 energetic way. I believe it is a good idea for you in your indi- vidual capacity to go ahead and impress upon the manufactur- ers the fact that too much lumber is being produced and urge them to curtail. My chief concern in writing you before was that you should not write or publish anything in the nature of an agreement among the manufacturers. I beheve Mr. Corwin also took this point up with you. I thank you for the informa- tion given about the dissatisfied members of the association and I hope we shall be able between now and the September meeting to show them that the association is of some account at least under present conditions. Secretary W. B. Roper wrote Z. W. Whitehead on August 11, 1913, in which he indorsed the manner in which Mr. Whitehead was handling this movement. Upon my return to the city this morning after a week's absence, I find yours of the 2nd. I have also read the August 1st issue of your Journal and have noted the report of our asso- ciation meeting and the editorial on Page 26. Both of these articles strike me as being along proper lines and I believe the method in which you have handled the matter will redound to the benefit of all concerned. I shall be glad to learn the result of the letters which you have been sending out to the mills through our territory. The following letter shows the territory circularized by Mr. Whitehead : [Letterhead of the Southern Lumber Journal.] Wilmington, N. C, Aug. 18, 1913. Mr. W. B. Roper, Norfolk, Va. Dear Sir : I am back in this office this morning and have your letter of recent date with reference to rephes to the letter I sent out several days ago, and I am glad to say that from these letters and other information the curtailment has been more general and heavier than I expected. Capt. Nathan O'Berry was in the city on Thursday of last week and I showed him the rephes, many of which he read and he too expressed most agree- able surprise at the number of mills closing down as well as the extent of the curtailment. Of the 632 letters sent out I have received about one hundred and forty eight replies from the states of Virginia, North and South Carolina, Georgia, Florida, Alabama, Mississippi, and Louisiana. At first I thought of limiting my letter to the South Atlantic states, but after I got into it decided that if we could do any good in the South Atlantic states we ought to do some good in the Gulf states as well, hence I fired the letter into Alabama, Mississippi, and Louisiana quite extensively. I am mailing you under separate cover about one half of those I have thus far received, and by the way we are receiving replies every day, for your personal examination and I should be glad to have Mr. Corwin look over them also. As soon as you are through with these letters please hold them in your office for me until I 25030°— 14 21 322 THE LUMBER INDUSTRY. come over. The other half I will mail you in the course of a day or so, as soon as I can finish replying to them. Some of them of course need no reply, but in many cases I am writing these people asking them to take it upon themselves to write their neighbors a letter pointing to their own reduction of output as a means and justification for reducing their output. The leading editorial in this issue incidentally refers to this reduction in out- Eut I also submitted to Capt. O'Berry, every word of which e heartily approved. By the way there is no letter in these from Capt. O'Berry as he had previously written me what he was going to do in the matter of closing down and this much he has done. But as for that matter there are a great many others who have closed down and whose letters I will not be able to send you before day after tomorrow. With regards and best wishes, I am, Very truly yours, Z. W. Whitehead, Managing Editor. The relation of the president and secretary of the association to this curtailment campaign is further shown in the following letter written by Secretary W. B. Roper to R. J. Camp, of Franklin, Va., under date of August 20, 1913: Herewith inclosed find a letter received from Mr. Whitehead regarding the matter of curtailment, which I feel will be of inter- est to you. The letter Mr. Whitehead sent out was sketched off by me at Air. Corwin's suggestion and was sent out by Mr. White- head as of his own volition. We desired to ascertain to what extent the mills were curtailing and to impress them with the necessity of so doing, and thought it would be better to have Mr. Whitehead write and send out the letter than for the Asso- ciation to do so. I believe it has had good effect. The following correspondence shows the extent of the curtailment as estimated by Secretary W. B. Roper: [Letterhead of St. Louis Lumberman.] Mr. W. B. Roper, St " LoUIS ' Aug - 19 ' im Sec'y., North Carolina Pine Assn., Norfolk, Va. Deak Sm: Will you not kindly advise us as to whether cur- tailment is making any headway in your association's territory and, if so, how it is being accomplished flimrSS? y ° n A Can give us on this subject will be greatly James E. Gatewood, On August 21, 1913, Secretary W. B. Roper replied as follows: Your favor of the 19th inst. has been received In reply beg 'I Julv fi st ThT?VY Ur ^ Trit0r y W beln curSiffg ■ d*5 July first. The reduction in output during July in estimate, PRODUCTION AND WHOLESALE DISTRIBUTION. 323 was about 25% or 30% and from reports received, I believe the reduction this month will be between 40 and 50%. As the nor- mal output of our mills is about 70,000,000 per month, you can easily calculate the amount of lumber has been taken off the market. This curtailment has been effected through individual effort and each manufacturer has used the method of curtailing that appealed to his judgment. Some have shut down entirely, others are running a shorter number of hours per day, and still others are shutting down two days in the week. A few of our plants which we run night and day have discontinued the night shift. I think the manufacturers realize that it is absolutely necessary to reduce the production of lumber and they have made up their minds to continue the reduction until market conditions justify a resumption of their full output. You may feel free to use any of the information contained in this letter without giving the source of the information. The following letters indicate that Secretary W. B. Roper took further part in the curtailment movement than merely to advise Z. W. Whitehead regarding it. [Letterhead of the Dennis Simmons Lumber Co.] August 19, 1913. Mr. W. B. Roper, North Carolina Pine Association, Norfolk, Va. Dear Sir: We have yours of the 18th enclosing letter in refer- ence to Market conditions. The two letters that you have selected to our mind are to the point. We closed down our Astoria mill August 1st and will likely remain so until possibly September 15th. We have been shut down at our Middlesex mill for the past 10 days for repairs. We are compelled to run the Kenly mill on account of not being able to secure some extensions on short life timber; but for that we would have shut it down. We hope this curtailment by the members of the Association individually, but not by a concerted action, will be the means of the manufacturers getting a net price for their product this Fall. You will note our sales are running very light at this time. Yours very truly, The Dennis Simmons Lumber Co., Asa T. Crawford, Sec'y. Secretary W. B. Roper replied under date of August 22, 1913, as follows: Yours of the 19th inst. was duly received. I am glad the recent circular appeals to you as being to the point. I note that you have your Astoria mill closed down until probably September fifthteenth, and that the Middlesex Plant is closed for repairs. I presume you will not hurry the repair work, for I am convinced that the only remedy for the depressed market conditions is a radical reduction of output. This has 324 THE LUMBER INDUSTRY. come to the realization of many of the manufacturers of lumber throughout the country and I believe from reports that curtail- ment is being very generally effected. Each manufacturer, of course, is deciding this question for himself and determining the method of curtailment, as well as its duration. Personally, I believe it should continue through the entire month of September, thereby giving the market a chance to recuperate. I note your reference to your light sales; if you will notice our weekly Sales Report for the past two weeks, you will see that the sales of other manufacturers are also very light. Lumber is selling very slowly, but there are indications of improvement in demand, providing the manufacturers do not try to force the market. A second circular letter was sent out by Z. W. Whitehead on or about August 14, 1913, relative to curtailing. No carbon of this let- ter or originals or carbons of many other significant letters were found in Z. W. Whitehead's files. The following letter shows that the replies received by Z. W. Whitehead were sent to Secretary W. B. Roper: [Letterhead of the Southern Lumber Journal.] Wilmington, N. C, Aug. 23, 1913. Mr. W. B. Roper, N. C. Pine Association, Norfolk, Va. My Dear Sir : I thank you for your kind letter of August 22nd. Under separate cover I am mailing you today 82 additional let- ters which if anything I think are even more assuring for a cur- tailed output of lumber in the South Atlantic and Gulf states than the first batch sent you several days ago. Many replies are coming in to my second letter, and I believe the mills are realizing at last that there is a curtailment on in fact and that the manufacturers generally are co-operating in this move. I am rather inclined to the opinion that the buyers are realiz- ing themselves that there is a big curtailment in the output of lumber all over the South and that in consequence thereof they are giving more consideration to purchases and deliveries than at any time within the past six weeks or two months. If we have gotten them to understand that the manufacturers are determined to use the surplus stock worked off before they pile up any more that we have done a good service. You can keep all these letters together until I come over. With regards and best wishes I am, Very truly yours, Z. W. Whitehead, Managing Editor. If there is any case in which the editor of a public journal has gone farther, or even so far, in doing for lumbermen what they were afraid to do for themselves, it has not come to the knowledge of the Bureau. He was willing and proposed to confine the circulation of a regular edi- tion of his paper within certain territorial limits in order to keep it PRODUCTION AND WHOLESALE DISTRIBUTION. 325 from certain subscribers. He went still farther and volunteered to be the medium through which the officials of this association could accomplish a thing they did not dare undertake openly and over their own names. Although the minutes of the association for this period do not show that the question of curtailment was considered at association meet- ings, the following letter written by R. J. Camp, one of the most influential members of the association, indicates that curtailment was discussed: [Letterhead of Camp Manufacturing Co.] Franklin, Va., August 27ih 1913. Mr. W. B. Roper, Secretary-Treasurer, The North Carolina Pine Association, Norfolk, Va. Dear Sir: I beg to acknowledge receipt of yours of the 26th enclosing letter from Mr. Chas. Hill, Treasurer, A. C. Tuxbury Lumber Company, which I have read and herewith return. I im inclined to the opinion that it would be well to hold the September meeting early in the month, say on Thursday, 11th, instead of 18th. I believe now is the time that we should get together, and discuss the various matters pertaining to the mar- ket, and also as to curtailment. I would, therefore, advise hav- ing the meeting on the 11th of September, if there is no special reason why it should not be held so early. Yours very truly, R. J. Camp. The extent of the curtailment is shown in the following letter of September 9, written by Secretary W. B. Roper to Nathan O'Berry, president of the Enterprise Lumber Co., of Goldsboro, N. C: I have been trying to ascertain as accurately as possible how general the curtail of product was during July and August. I lelt somewhat as you do before I began to make inquiries and have beer surprised to find that the mills pretty generally have reduced their outputs and are continuing to do so. Mr. Morris has been for the last two or three weeks on a trip among the mills and I asked him to report on this feature particularly. He has found practically all of the association mills curtailing in one way or another. Of course, there are exceptions. The mills outside of the association have been taking the same course and letters that I have received during the past week in reply to inquiries made indicate that most of the mills have made up their minds to continue curtailing their operations until market conditions justify a resumption. As long as stock continues to pile up at the mills, there is certainly no incentive to increase the output. The market unfortunately does not show any better indica- tions than a month ago and it begins to look as if we will simply drag along all the Fall. I was talking with Mr. Corwin yester- day in regard to the curtailment that the mills had effected and he appeared to be highly gratified at the result. 326 THE LUMBER INDUSTRY. I simply write you the above feeling that possibly you have not made the same investigation and that perhaps your feeling in the matter is influenced by the fact that some of your near neighbors have been running without doing their part to help market conditions. I think you will find that the larger oper- ators have done what they could to reduce the available supply of lumber. Section 20. Grades. Definition of grades. — According to J. R. Walker, the first rules formulated by any concert of action on the part of the manufac- turers * were adopted May 20, 1888, by the Carolina Pine Lumber Association. These covered rough lumber only. There were some modifications from time to time, but the rules were not satisfactory and on December 21, 1897, a new set of grading rules for rough lumber was adopted, which have continued substantially unchanged to the present time. The first grading rules for dressed lumber were adopted January 8, 1903, and these, too, have remained practically unchanged. The following definitions of grades are taken from the official grading rules, being the rules issued April 1, 1906, and amended April 18, 1907 : 2 ROUGH LUMBER. No. 1 — No. 1 grade, under 12 inches wide, shall have one side clear of all defects except 5 per cent pitch streaks, the other side to grade No. 2 or better. Lumber 12 inches and. over wide, in addition to the pitch streaks, may have one small pitch pocket or sound pin knot for every additional three inches of width. No. 2 — No. 2 grade shall consist of boards with small tight knots on the best side and will permit 15 per cent of pitch streaks, the other side to grade No. 3 or better; no knot in a board up to six inches wide to exceed one inch in diameter, and in boards above that width no knot to exceed one and one-half inches in diameter. The aggregate diameters of knots not to exceed one and one- quarter inches for every three inches in width of the board. Standard pitch pockets to be treated the same as knots. No. 3 — No. 3 grade shall consist of tight knotted boards below the grade of No. 2 with clear edges on theface side. Stock boards ten inches and over wide shall have one edge clear one-fourth the width of the board on the face side. No knot in a board up to four inches wide to exceed one and a half inches in diameter, up to six inches wide one and three-fourths inches, and above that width two inches; admitting black pin knots; pinney boards that would otherwise grade No. 1 or No. 2; No. 1 boards showing 50 per cent pitch; No. 2 boards showing 25 per cent pitch; the reverse side to grade equal to box. Box — Box grade shall consist of coarse knotted boards and pin- ney and pitchy boards that would otherwise grade No. 2 or No. 3. 'The American Lumberman, July 27, 1907, p. 48. > J. R. Walker, Amerioan Lumberman, Aug. 3, 1907, p. 580. PRODUCTION AND WHOLESALE DISTRIBUTION. 327 Mill culls— Mill culls shall be all boards, excepting red heart, below the grade of box, and shall be unsound, loose or rotten knotted, and otherwise defective boards, which can be used without a waste exceeding 25 per cent. Red heart — This grade of lumber can be 75 per cent firm wood, so that it may be cut up with a waste of not exceeding 25 per cent. 1 DRESSED LUMBER. No. 1 — This grade, up to 6-inch strip, shall have the face side practically clear of all defects, admitting 5 per cent of pitch streaks; strips over six inches wide may have one sound pin knot or smalt pitch pocket for each two inches of width over six inches. No. 2 — This grade shall admit small sound knots on the face side and 15 per cent pitch streaks; the reverse side to grade No. 4 or better; no knot in a strip up to six inches wide to exceed one inch in diameter; wider strips may have knots one and one-half inches diameter. The aggregate diameter of knots or defects not to exceed one and one-half inches for every three, inches of width of strip. Standard pitch pockets to be treated the same as knots. No. 3 — This grade shall consist of knotty boards below the grade of No. 2; no knot to exceed in diameter one-half the width of the strip and no knot over two inches diameter allowable in strips six inches and under; wider strips may have knots two and one-quarter inches diameter; admitting small encased knots and small spike or horn knots and 30 to 40 per cent of pitchy streaks, also pinney boards that would be otherwise classed as No. 1 or 2, and No. 1 and 2 boards showing 50 per cent pitch. No limit as to quantity of knots in this grade. No. 4 — This grade to consist of all lumber below the grade of No. 3 and that can be laid without wasting over 25 per cent of any one piece. Factory flooring and roofers shall grade the same as box lum- ber. Unless otherwise specified, roofers shall be worked, tongued and grooved. Definition of "edge" widths: Narrow edge — also called edge — contains all widths under 12 inches except stock widths — 6-inch, 8-inch, 10-inch and 12-inch. Nos. 1 and 2, 4^4 edge, to be 3 inches wide and up. Nos. 3 and 4, 4-4 edge, to be 4 inches wide and up. Wide edge contains all widths over 12 inches. Definition of defects referred to in grading rules : Knots — Referred to as sound, rotten, loose, encased and tight, as to quality. A loose knot is one that will come out. An encased knot is one surrounded by bark or pitch. A tight knot is one that will not come out. A pin knot is a knot one-half inch and under in diameter. 'Before 1907 the percentages were 66} and 33J. 328 *HE LUMBER INDTJSTEY. The diameter of an oblong knot is the mean between its greater and lesser diameters. A spike or horn knot is a knot sawed nearly or altogether length- wise. Pitch — Pitch pockets are openings between the grain of the wood, and may contain pitch, or bark, or both. A standard pitch pocket is not over £ inch wide nor over 3 inches long (measured over all). A small pitch pocket is not over f inch wide nor over 2 inches long (measured over all). A pitch pocket shall not be deeper than one-half the thickness of the piece. A pitch pocket which shows on both sides the piece shall be considered the same as a knot hole. Pitch streaks are simply accumulations of pitch at different portions of the board. Section 21. Proportion of grades of North Carolina pine cut by various mills. The following tables show the proportion of grades produced dur- ing the years stated at 15 plants, operated by 3 companies. No. 1 and No. 2 are generally classed as upper grades, No. 3 as medium, and No. 4 or box, and red heart and mill culls as low grade. Most of the mills were on substantially the same freight rate to their con- suming territory, so that the policy of taking low-grade logs would be about the same for all. There were, however, marked differences in the quality of the logs, several of the companies having a much larger proportion of second growth in their timber holdings than the others. NORTH CAROLINA PINE— PROPORTION OF GRADES." [Figures represent percentages.) Company A .—Sales records. Grade. Plant 1. 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 No. 1 17.3 11.9 17.7 31.7 21.4 22.9 12.6 19.9 38.0 6.6 16.6 12.2 17.0 45.6 8.6 15.9 9.1 11.8 52.5 10.7 11.1 10.5 13.1 46.8 18.5 13.8 10. S 15.2 42.8 17.4 11.4 6.5 13.6 39.1 29.4 11.3 7.1 15.1 47.1 19.4 10.0 6.6 14.4 48.9 20.1 11.1 7.1 15.0 53.2 13.6 8.1 5.1 9.7 63.5 15.6 7.7 No. 2 5.7 No.3 8 5 62.6 Red heart and mill culls 15.5 Grade. Plant 1— Continued. Plant 2. 1907 1908 1909 1910 1897 1898 1899 1900 1901 1902 1903 1904 No. 1 6.6 3.6 9.0 67.2 13.6 4.8 3.1 4.1 68.4 19.6 9.1 6.9 6.2 61.3 16.5 8.6 7.2 5.3 66.4 12.5 24.1 24.0 17.4 31.4 3.1 15.3 24.2 13.1 27.8- 19.6 7.4 16.8 14.9 35.8 25.1 7.4 9.9 10.5 57.2 15.0 7.0 14.4 19.5 31.5 27.6 10.0 11.5 20.3 36.5 21.7 5.4 8.9 7.5 63.7 14.5 3.2 No. 2 3.4 No.3 4.4 79.4 Red heart and mill culls 9.6 i Diagram 2, opposite p. 44, shows these facts in graphic form. PRODUCTION" AND WHOLESALE DISTRIBUTION. 329 NORTH CAROLINA PINE— PROPORTION OF GRADES— Continued. Company A. — Sales records — Continued. Grade. Plant 2— Continued. Plant 3. 1905 1906 1907 1908 1909 1910 1905 1906 1907 1908 1909 1910 No.l No. 2 7.0 6.4 7.1 69.4 10.1 7.0 6.6 7.1 70.5 8.8 5.5 3.9 6.2 77.7 6.7 3.5 4.2 4.9 79.6 7.8 3.4 4.7 5.2 78.0 8.7 4.8 5.0 4.3 75.1 10.8 7.5 6.6 8.2 75.1 2.6 3.2 5.9 6.5 83.1 1.3 3.9 4.8 11.3 74.9 5.1 3.2 3.4 4.1 85.5 3.8 3.6 4.0 3.4 81.1 7.9 3.9 No.3 Red heart and mill culls 24.7 Company B— Sales records. Grade. 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 No.l 23.9 22.7 9.2 38.7 5.5 29.3 19.8 7.5 40.2 3.2 20.4 17.6 8.4 50.6 3.0. 16.6 14.5 4.7 57.5 6.7 20.2 11.3 6.5 56.0 6.0 14.7 12.0 6.1 58.9 8.3 6.3 6.9 5.0 73.7 8.1 6.1 8.9 4.4 77.4 3.2 5.5 5.9 3.4 82.9 2.3 7.1 4.8 6.3 73.9 7.9 12.2 10.0 9.3 60.7 7.8 13 6 No. 2 10 2 No.3 53.3 Red heart andmillculls 9.6 Company C— Cut of mill records. Plant 1. Plant 2. Plant 3. 1906 1907 1908 1909 1910 1906 1907 1908 1909 1910 1906 1907 No.l 8.9 10.0 31.4 31.4 18.3 9.8 10.3 30.8 31.5 17.6 9.5 9.7 32.0 28.6 20.2 9.6 10.0 28.0 30.0 22.4 8.6 8.7 31.6 30.1 21.0 7.4 7.4 12.2 50.4 22.6 9.3 9.5 10.8 37.0 33.4 9.1 9.1 13.4 36.2 32.2 8.5 8.7 14.7 46.0 22.1 6.2 6.6 10.3 42.3 34.6 10.3 10.9 18.6 41.9 18.3 13.0 No. 2 13.2 No.3 19.5 Box or No. 4 38.7 Red heart and mill culls 15.6 Grade. Plant 3— ( tinued ?on- Plant 4. Plant 5. 1908 1909 1910 1906 1907 1908 1909 1910 1907 1908 1909 1910 No.l No.2 No.3 13.4 13.0 23.3 35.3 15.0 12.4 12.4 25.3 36.6 13.3 11.6 11.5 27.6 38.5 10.8 9.1 8.0 16.0 59.6 7.3 4.0 3.5 24.8 56.0 11.7 3.6 3.5 21.8 55.8 15.3 2.6 2.6 22.7 57.6 14.5 4.6 3.1 26.2 52.4 13.7 7.4 8.4 10.8 62.8 10.6 15.5 15.6 15.3 39.9 13.7 16.5 16.5 11.8 38.8 16.4 18.6 18.8 9.6 Box or No. 4 47.7 Red heart and null culls 5.3 Grade. Plant 6. Plant 7. Plant 8. Plant 9. Plant 10. Plant 11. 1907. 1906 1907 1908 1909 1906 1907 1906 1907 1906 1907 1906 1907 *o.l..„ No.2... No.3.. 6.3 15.6 18.9 44.7 14.5 10.1 17.2 17.7 40.6 14.4 16.6 16.0 18.9 35.4 13.1 9.6 16.3 19.3 37.8 17.0 1.8 23.9 22.7 42.2 9.4 9.4 14.0 23.0 41.0 12.6 5.6 21.7 11.2 50.3 11.2 6.0 7.5 21.8 52.0 12.7 7.4 8.5 24.1 44.9 15.1 8.1 10.9 .23.1 44.1 13.8 11.1 11.6 21.3 47.3 8.7 6.7 7.5 15.6 59.2 11.0 6.4 11.5 21.6 Box or No. 4 . Red heart and mill culls.. 45.3 15.2 - . , 330 THE LUMBEE INDUSTRY. Section 22. Prices of actual sales of North Carolina pine. Tabulae statement. — Table IB shows prices for North Caro- lina pine, on a delivered basis, in the following markets: Boston New York, Philadelphia, Pittsburgh, and Baltimore, and on an f. o. b! basis for Norfolk, Va., the principal distributing point. With the exception of Pittsburgh all of the above points are accessible both to rail or water shipments. It was found that almost invariably there was a marked difference in the delivered prices, depending on whether the shipment was by rail or water. In order to secure com- parability in the delivered prices in the different cities a careful dis- tinction was kept by the Bureau when gathering prices from the record of sales. The delivered prices presented by the Bureau are all for the same form of delivery, being based on the rail shipments. The water-shipment prices, collected but not published, follow the same general fluctuations of price changeSi on a somewhat lower price level. Prices are shown for flooring for the period 1896-1910, and for boards 1892-1910, for Norfolk market, and for shorter periods for the other markets. Prices for the following items are shown by the Bureau for the markets designated by an asterisk (*). Grades. Description of lumber. Thick- ness and width. Length. Markets. Boston. New York. Phila- delphia. Pitts- burgh. Balti- more. Norfolk. Flooring: Rift No. 1,2J-3J'" Rift No. 2, 25-3}". Flat No. 1, 2J-3J". Flat No. 2 2J-3J". Flat No. 3, 2J-3J". Flat No. 4, 2J-3J". Boards: No. 1 (rough). No. 2 (rough). Box (rough) Roofers (dressed)... Red heart and mill culls (rough) Ir.rhett. n 1 'lx 8 '1x12 81 '1x10 '1x12 lx 8 1x10 H 'lx 8 '1x10 '1x12 Feet. m ( ! ) ( ! ) ( ! ) 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 8-16 (*) (*) (*) (*) (*) 8 (*) (*) (*) (*) <*) *) (*) (*> (*> (*) (*> (*) m ' Before 1908 no distinction was generally made in price for the different widths of rift flooring. Since that time a marked difference has been made between 2 j", 3", and 3 J"; and the prices shown in 1908-1910 are for 2J". i Various lengths. • "Edge" widths. 'Stock widths. PRODUCTION AND WHOLESALE DISTRIBUTION. 331 Diagrams. — For the prices shown in Table lB, already described, 11 items are shown on Diagrams 11 and 12 (opposite p. 352). Attention should be called to the difference in scale between the two diagrams. Diagram 11, showing prices of high-grade lumber, is on a scale of $2 to a space, while diagram 12, showing prices of low-grade lumber, is on a scale of $1 to a space. In diagram 11 the fluctuations of the same items, for different markets, show a fairly close correspondence, as do also the price movements of flat flooring and boards. The rift flooring appears to have been less affected by the depression of 1907-8, and prices in 1910 were as high or higher than those of 1906, which in the other items were the highest prices reached in the 15-year period. All the items on the diagram show the usual rise and fall of prices in 1899-1900, the rise in 1901-2 to the high level of 1900, and prices remaining at about that level, with some depression in 1904, until the rise of 1905-6. The highest prices shown for the period were in 1906. In all the items except rift flooring a steady decline took place from the high prices of 1906 to the low prices of 1908. In the latter part of that year there was an advance, and in 1909 and 1910 prices fluctuated but little. In diagram 12 the items show similar price movements to those just described. Although the difference in scale, to which attention has already been called, accounts in part for some of the apparently greater fluctuations of items on diagram 12 from those on 11, a refer- ence to the price under comparison of grades for North Carolina pine, shown on diagram 3, will show that the actual fluctuations of prices were considerably greater for the low-grade than the high-grade lum- ber. In times of depression low-grade lumber is sold at relatively cheaper, and in times of prosperity at relatively higher prices, than the high-grade lumber. 332 THE LUMBER INDUSTRY. 6°a T-'AS. a T3 3 3* II H 3t K a £2 £2 CM o *£ 8I38888888SK dododooddooi OlOiOOOlOTOJOOlCIC s :s OQiOOOiQiOOO «M«(NCOM«««PINN o in o c5 «5 lO SSKKg tDEOtdcOS sg £■08 Ah NNMNNN 83 a3 £ ° ° t ~ os O^ OS r*. 5SSS moo Sc3 w SSKg «NN« ■§^•2-3 55 e-c >.§>.! , J&'SoSS PBODUCTION AND WHOLESALE DISTRIBUTION. 333 NOiONMOCioCt-OO aoo^H w -v r» cotoujionwNN^r ■n a ss oc lOiOOOOOOC t-NO»raoooc oc >o c s = ass t- oooo to oo>o ?:mw^ • M w c* 00 t-t-NeD 55ot>r-t- c5 d5 QO© us © CI ;•* CI — -- — CI O 'NOC* N NCQ ■* tot- oooo o » ©lOO'*'*^' ' 5 5 iO o S3 a o o JO ooo o oo =- C? iO COCO OO 8 n IO Tf -r -* 38888 Jo ass 8 8 o U3 s "^ P" C" C f — c* 1— "tf ir 00 35 ?j CD ■a OS a MNe*c4««e*e*c*e>»csiw lQQOOO>n>QQiCOQO fr-oooiot--r-ot-ooo cirtcoididtdedt^t^ojOQ j « «w ffiWh-NtOiOiOm UJUJO r-eSio s ©f- 17.50 19.00 19.25 20.00 21.50 22.25 22.50 22.50 O »o o o 8 a : O O 'O lC o -,:- — ,-. u5 cScSm ■0 OMt- a a pi CJ • OiO ■ or- o • § s o O a CSl tn>Oif> CSCKM US t- X *oS CftOS a ON iO O r- O C5 OS ooo wow s tf: c c IS a e tDtC as Of 5 a C iO CM Oifl lOiAioieioiagoiooo »ONi>e5NNOONiOiO f -J" tJ"^> u5 o "J* SS3 •3 .9 -Is- W M £ •9s s si* a.gs 1.1.9 M £ ffl o o o o" ci iCifloiOirj t«t»iOt»N sss SOIQOO *o»o •.- ?i i- i- -j r i -,2 >»slG"£ iSogp ^fis ^i ^mOZfl 334 THE LUMBER INDUSTRY. « o a w o 55 <1 W O M M E-l Pn J w p < 4> 3 .a 1-1 w a Ph m Y « m o H >* fc o a fc [w „ n y, o H o d. m iz w M > j o fa K w fc £ PQ Ph o «! fc fa ►J Q O S5 « Eh O 1 P5 -1 6< ■zs ll * -3 = •9 .= .& Ph ra »o »o o o o o tjI ! ■* -& *<$ ■«£ ■<* ec ■# »o »o id SIOIQ §&5 1*« ujioioio ©r- ■ o a i f-u: . Olf3 >oc5 a ! ior- t» ■ t^t-r-oooooooooot- ifliO!£cCnO-0<0!0 0(0 jojooiopinwooiooia t- oo oi a> oi o»-oo ei oo oo oi oo W(M(N(NCqS«wSNN 8S8 ooooodoaoi .8 :S 88a ■^ Cfl IN C-3 M ot^ot- 2*T|000 88S8gS88iS8aS cocxSodcoooaoGoodt^cocood hhhhhnwn: 16.75 17.00 16.25 16.25 15.75 16.25 s CC i-H c c cC IOC J--C CO CC o o OlOO c tr c 16.50 16.25 16.50 16.50 16.75 16.50 16.25 16.25 16.75 16.50 16.75 17.00 16.60 loomwoooo »o WiONr-o'O'O'n t*- CO CO CO CO CO-^O CO CO cO ION lOCNi? t-^co cocoa c CM o o S3 H 'rtH --Hi- s 1- IT O © o c c a e»oe "3>0 t-CN IT a o ooaoxaoaoGQaof-QOooooao HrtrlHHHrti-lrlHHH lOOQOinpOOOOOiO t»oo«5«ooownwN t^ oe> o6 co ao oo co co t-^ t^ i> t^ -*n oooc^ f-MOOiOOOMiontOcci KSaSSRg888S8 WCMCMCNNMWeNMeNC 8888 NCTCNtN tN»n cn iou5ift MMCSWNNN ooSm ss r- o oJoi KSwoScdooio ss KtS c SoS 8SS ss IO O SSgJ QySQOiooowomo© >nMOONOu)NONO>0 S9S SQooiciiooioioi ooowoSwSionSS o SOSOiOlOiOiOSCJi iO iO -n.&§>p,S£K 5 03 o3 cLea 5-73 3 fcro o « 336 THE LUMBER INDUSTRY. w A O a H < m p z B CO Eh H Ph Hi w n < 3 w m o M o 1 GO a Z O z :» H m Z o H o O til M t-H ra" OS W w M > J ►3 o o w z Z (0 Ph 0 § E 81S88!SgS888iSiS 88! !8R8 8 :g? 88 NOWOONNNN M^iNOO? :88 Oinoiooooooioom IflNONOOOOOr-ON Sio3§*o CR ■ ■ i • .conn •¥* • • 2SS888!S8g8g8 sss 88!: g88888S5 CO CO CO CO CO CO CO 88 S8 8 :8 88 8S8S88S 88 8888881588888 :88 s :Sfe S if! HtH,a-JsseHt-<:i»oZft 8Kg :8 883 8885 ,»S lllf. HtSa^^s^o^fl PRODUCTION AND WHOLESALE DISTRIBUTION. 337 hNM^CQIOIQiniONCO oqcftaoooocoooooooooo HHHrtrtHHHrtrtHH SSSgRRgSgagS ooooo6o6c6odcoco'o6o6c6o6 88RgRg8gggR8 gggSSSgSRSRR CM CN CNCN CM C 883i3gi3gR8RR8 CBCRCfiCBOOOOQOOCOOOCOi— ( SSSSS2SSS8SS 888E 20.25 "26' 25" 20.00 19.50 19.25 19.00 18.75 18.50 18.50 19.75 20.00 21.50 21.50 20.25 19.50 19.50 19.50 19.50 20.00 20.00 20.50 21.25 21.00 21.00 21.00 21.50 21.00 21.50 21.00. 8 :S 00m OiQO 8S3 20.60 20.75 21.26 21.75 21.75 .0 O O 'O -o gg US O 22.00 22.00 22.00 22.00 22.00 22.00 ~4 iO « -CI CNMCNCNT-fO nnnnnn CM. CM S S3 CN sssssssssasgi S88SSiS3S3S3S3S3S3S sssssassss^gj g88g88S88R8g a»g»cor-t~(ocoeoco»qt^-l"~ c*cncncncscncncncncncmcn 000 tOU3 >C omomommm ooioomoop aiodooooooo CM CM CM CN CN CN CM m » 1 570 o to 338 THE LUMBER INDUSTRY. w ps o a H iJ << n n w cs PS p « CO Eh M to iJ d § w 3 Ah g E g £ o O o~ £s O J, HO 00 S5 ". o a Sm &3 ►J o fi Pi fiS Sr 1 P3 p< m Deliv- ered prices, Pitts- burgh. M 8 CO to OQO O 1>I oo lOiA o lO o OOO •O ■ lO Deliv- ered prices, Pitts- burgh. d bO CD o lO » 14.50 15.50 15.50 15.50 15.50 ooo lOOO lOCC) CO 15.75 15.75 16.00 16.00 16.50 16.25 16.00 16.00 DO 6(6 -d n ■•a 'a & a tt-8 -d © 1 g I o -d oj I 'g ? d CO u g 1 l OS ft a OS 1 •5 1 1 1 -5 1 1 1 V 5 t E »! a cc 1 c c t- a | c iz 1 i i P S I i I ■5 > 1 II !i i<50 PRODUCTION AND WHOLESALE DISTRIBUTION. 339 NNNNNNCSlHMNrt MMcoMcocoeoeocoeo *b l-g= : slSSa ]£?Sfo.SfcS -'■a« Jzii&l 11.11 (-• 2 - . 3 SB'S !>>S t»a-SSSS assess !»£<&■££" 340 THE LUMBER INDUSTRY. CD CUD s o wT c3 o .Q CM d o o 8 88 3 -3 8 ©o ©o © -to© o io -t-ioirj ft A -S3 * 5? ^5 o s M 00 fa 8 CO ft* © m cm IO © e4cq © «o c4 o© COCO too COCO l"s I'M tin r-NOiooNOCNNSioifl i>-ioi>'>o»ot--t-t»t--i--ioo 1-5 CN (N ,-5 CM i4 0(N©CN»n©iOiO'00 roco^eoeoeocoMco"* "3 ft ft l! to iqOO CNNOoio cocococo CO©CDCOCO IO -IO -'■ >tO DiO ON ocd o A TJ -*a! ft A 2 C» s i i •lO J3 d s So § a as s t c s 1-3 la E ,0 X O 13 a r3 > 1 Q. § 2 P <5 a a a p 0) o o a> a > o 2; £ o> R CO 2 p. c 5 a < > 3 i-s > a 3 E <1 a) S 53 PRODUCTION AND WHOLESALE DISTRIBUTION. 341 8 JS :8 • to 17.50 17.50 17.50 17.75 18.25 19.50 g S c CN 19.75 19.25 19.25 18.50 C\ a 18.50 19.75 19.50 19.00 19.00 19.00 oi © oi rH is CO 8 CO CN S88gSS cQ co co co co r~^ CNCN CNCN CNCN r CO '• mooio 10 COCOiO ■AOOOO C-tOOOO 00 00 CR Oi Oi lOOiCOtO NONOCS ooaot^r^r^ © m©o t»oo r^odoo 00 8 06 8 12.60 12.60 13.26 14.00 15.00 15.00 15.75 15.75 15.75 16.00 16.75 18.25 18.25 17.75 17.75 17.75 888 fi COCO HrtH K*" oo 'oo ■ HOW • ©© ' ii>t^ 'cod ■ -X 8 CN 06 06 N !■■ O". Ol Ol Ol O O H ©CN e5cNCN(NCN| CN 10 m CN t— i-Hoi CNrH ©CN CNCN © »o CN d© CN CN 8 d CN Si3 CNCN O • 00 '• D <>0 O -CN H ;CN joj2 CNCN CNCN ES3 OOOiQ OU3U3 CN SSiSSJ 8 S3 O OOiOOOOO O Ouat-OOOO trt -r -r T 10 uj 10 'O CN CNNCNCNCNCNCN © S3 CO rH CO O to CO S3 CN CO • OQiqiqiqiOO "OiOClNNI-O ' CO 00 d d d d cfc . rt rH r-i r* ,_< rH CN 10 CN O O CN CM 010 OS HO (NCS OQiO O© OiONOUJ dddrHp* CNCN CNCN CN 00 ©0 CNCN •o I— CN ss •V'* ■ OlOOOQOlOOlQ iO 'O >0 iO O iO O io lq 1.-3 lo 10 OOOOlOOOOlOUSOO ■ tocDf-r^ooooddd offl od oo cot^i> to «o«o eor^t^o6t^t^i>lr^i>r^i>o6 1 1? 3 I s • ■ o5 oi • d : is- 1 : s s ci CN 8 CN © •o c CN 8§§g88888g us cnncScncn 8 S38iSS3S3 O S3 CO i-i r-5 CN rH 1^ CN CM CN CN CN CN CO CNCNCNCN CN CN CN CN CN CN CN CN CN ©a o»o SSS5 88 3 is i d ci >Qin oomoooio • CNCN oor^ooof- co ■* tp tj< co co co cn'o rHi-H i-i rH rH rH rH rH rH 'QiOm O ilfllOOQlOQ >OU}tQ o5r~r-. 10 .r-i-*©5r-o -oi>ti ©0600 06 'CO100010 <6oio> » 1— Irl rH >rH • • ■ ■ • • ; • 3 ! ■6 I CO g co OO «o»o CD CO C^t^r^OCNCNCNCNcNcNua oi ci cn m co oi'oo CO » CO CO • ■ O • A ■ O ^5 8 10 8 S3 © IO rH 8 rHCN ■ .0 8 g 00 ©to ©CN -

r > ■*- a £ a 6 1 f 1 ! d e ■1 P | r > r > I a S | 1 ai 1 © a > g > 3 1 3 ^ p > 1 a £ a a u CU ■i a E E C sOZfl 342 THE LUMBEK INDUSTRY. to o f-. m -o (73 O fit CN 6 s CO CM « OH r °KS g 5e c C c S5 c5c5p 8S3 S5S o IO • CN •CN :S8g : a) . a) ft w43 += 00 CN OtNCNWS O «* 8S SS3 S38 ■nSSSSoSSo I ! JO s CN is i j i CM • • i M o o 00 M s JO (fit SSS3 oooooo ooioom o QQci OQO «CN HW CN CM CN OiOiOCS oooiaict O no • O iCN • oi >e» ■ g8SS3 8S8S8S8 00 00 00 CO 00 CO 00 CN CS CN CN (N tN CN OiO CNCN oooooo !o oooooo .o 00 00 00 CO GOOD •00 CNMClcNCNoS -S bfl -a 4> OiO oooo OC5 U3t»00 CO 00 00 00 00 00 Qwioo ooiooooionoioo • Ot-l^-O OOMOOOC-NOMO ■ r^ r-^ t^ • HHrtH »H ^H i-H i-H i-H i-l rH i-< i-H i-H rH ■ 13 00 <0 >Q IO CNNCNCNCNeN O -iO > to ■(>• • id •■* ■ M -CN ' 8 CN i-O 88 (Nc4 CO 00 a 8 CN CN CO CO CN CO 8 CN CO OO • ■ o*o • < CNr-l '• ' COCO • ■ CD faO ■o CD O iO O "O "O w? IO >0 o o ©»o ift US iO OOOOlO OiO QO otr-oc>l- nnnoooomono«3 3SS88S£3£SSS 822888823S22 ■d o »o s O IO CN o IO K a s S3K :S PSlH lCN CNCN -CN 8gSS CNCN CNCN si S38R8 CMCN CNCN a* S3 S3 NOU9 CN 3SH S3 «S "OfliOiOOOOO t^ ■oi-cst^O'O'Oco SI Ic5wc3cNe3cNcNe5 1 1 J. a o o ■a CD 3 s "3 1 d OOHHHHHHHHtqH i-li-H w N « CN CN CM CN CN CN M i-l i-H .-H i-H >H i-H .-H rH i-H .-( >-l -H .-1 i-t i-H t-I .-1 i-H tH .H i-H i-H rH i-H ■& 4) p ssgsgg&ssgsssgg gssKaaKssisge co ■■* Tfi tj! -d ira o i-H iH o o CO m i ■ id ■ • 1 O a O s > cS e rt > SS c a P 1 1 ! < E o OS CD o 8 o CJ E o 8 E o CD Si 6 (1 s s a S3 a > 1 ! i-a > 1 *- V 5 bi a ■4 c ! III OiziR PRODUCTION AND WHOLESALE DISTKIBUTION. 343 8IQO "-- "OOO ss 888 :8S 88 SS SOOOWOiOO OOOOiOt-O 553 §8 888 88 s ss 88 888 30000U3 8SS OQOOiqOOOOOiQ>0 IQNOIOMO«0>OONN :8S SB88 8888 •QOO ■OOOQO . — — ..- -OOOOu) :S32 iSSSSg OOiq -OQO OON *IQ oo 888 OOiOOO o-^e4oioi iniouao C4 04C40 88! .-io*.- KS88 8 88 33 8giSgS8S88g8g 888888g88K8i2 SS 04 04004 04 2S88S8 888 rr -^ -r OiQiqdOO i-e$c 88g8g88888i?8 8SS88SK8S8S8 CjC40)C4O1oi0JOJ0ic4'H04 c«oaoooocomw*'*»©"**o 8K8S8SR8BSg8 "3 « N K X N C ifl i(! '(i -t « ■QlQiOtQCOkQiQtQtQiQiQia BSgSK88Bg88S sssssssssas s •* o JO 17.00 18.00 17.76 18.00 20.00 o o 17.60 16.76 16.76 16.25 S CO oo o»o 8 oi 0« e C > c c „ ! c £ - J 1 S s> > s *- _ r E a X E X E o i 1 * = — F e X E -- a I s X E 344 THE LUMBEB INDUSTEY. « o a H < m a z ■< w a « P tq 03 H H fM l-l w p ^ QOoor^t-r» tc^ioiacocoIi>t>!tdcded - O CN CN CN O CN CM 5i>ivt>iit^iv S3J3H22! us ' 0lOlO ' ,,, " ^ usiowsioio O O 10 »Q 10 in W O Q iq io o 10 'O id -* ■<* ~v llaf ■^■•SraOfcQ 111! 346 THE LUMBER INDUSTRY. ! ! •dob ai P3 1x12" stock, I.o.b., Nor- folk. 1x10" stock, f.o.b., Nor- folk. 1x8" stock, f.o.b., Nor- folk. 1" edge, f.o.b., Nor- folk. : : : to 2 6 •a U o M o « 13 ■& ■a M o o O Deliv- ered prices, New York, * So M -d £ oi a a aj p, P i i •8* o a O o o +^> $10. 00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 8 i 6 '• u 'a > a m a ; ; fM o ft % o 03 O M ' >o • . .10 ■ !!!*!! ' !oi '■ • ■«> ■ 9. SO 9.50 9.50 9.50 '9. 50 9.50 73 a; . u (a ^ s a, p, B C< a ft j j ** ££ oJ cm $7.50 7.50 8.00 8.00 :::::: is j h '.,.]'.', I 00 • o • E5 . . •m 8888 :88 :g : 88 :::::: :g CO CO co oo ■IQO • 'C»6 ■ :gg : • oo '• • : 8saass : :sss ■ o aJ o-J ci oi — J • loooooo O) 0) A O) Oi 03 wiaoow ■ 'Oooo r» !>■ lO IO CN • 'IQIQIQIQ g ctj Ci oi oi • >o6ododcx} 88 :g cood -oo :88 : lilies H © a art a-g p goo ft 2£ OOO© oodo « C-5 N.t- ^ oJcioiadod S3 ^•2 OU50 00 CO 00 x y. ". C- ~ ■a «1 m a ■a •s-9 ;.og 4> 4J 3 (5 CM a p. ft •a s a I s OOOOpHOOOOO ^h . .MONN O0O^00O>O3O0K>Q0CCC^O> gRSSSS8§8S .(or-r-r^t^r»r»r-^ r^ooaoco05coi^t-"t*i^r-oo si ISa-SisS, gf&lfrg PRODUCTION AND WHOLESALE DISTRIBUTION. 349 I 1 : • • i : - oiniooooo ONMOOOO cd o co t^ C- os o OOO OOO o m OO i-Hi-H o OS oood 8.00 8.00 7.75 7.50 7.50 7.00 7.75 7.25 7.25 7.50 mi/Mo g : :S pi !3 CO S3 >o o • lO « O -O — ' ■ — " s o m to 8 lO s ; CO i ggss Iks QOWS OOt- CO CO CO irt (N f- io CO oo OO 11.50 11.00 11.25 o U3 11.50 11.25 11.75 11.75 11.00 11.00 10.75 iH >lH ■O • o 15.00 15.25 16.00 16.00 16.00 16.50 17.00 O o o W3 O O 2J WO «o COCO o CO oo OO COM rHrH cnc4 • o rH lO 15.50 15.00 15.25 15.25 15.25 14.75 15.00 15.00 15.00 14.75 15.00 15.25 15.00 ■cici isss !phc4c4 iHHH 12.00 12.00 12.50 12.50 13.50 13.50 14.00 O us 12.25 12.00 11.75 12.00 11.75 O U3 11.00 11.00 11.25 11.50 11.00 S'OOiOOOiOOOOO • cor-ooeioooo r co co co eo N i- HHHHHNNNN : N i » ij2 ; c5cm id'ir 8S" U3IO as N O rH 16.75 17.00 16.75 16.25 15.50 15.25 14.50 3 14.75 14.50 14.50 13.75 14.00 13.50 14.00 14.25 14.75 O to CO oo ■OlO C4 01 o '• »o . CO ■ 9.00 9.00 9.50 10.50 11.00 11.25 11.00 11.00 11.00 11.50 11.50 12.50 12.75 13.50 13.50 13.50 13.00 12.50 12.50 12.25 11.25 10.50 10.50 11.00 11.00 OOOOOOWiOiO ddddddddd ■OlQ ■ • piei ! o o in rH o in o 8 US o o 14.00 13.00 13.00 12.75 !- CO o o rH 11.25 14.00 14.25 OO OO o o m OO mm coo o OO oo »oco o o CO 1-1 «50 COCO 8 CO rH oo >0»0 n'c4 o • o • -& 1 ffljoiowoooin !ooo owwwo wNnenoooeS .lototo ioocScho t- 1- 1^ aa o5 d cs o 'dod *-ir*cicir* HHrt ■ — i — i —> i-l rH i-H i-l rH 9.75 9.00 8.25 7.75 8.50 8.50 oo mo GOOD OOiO OOCM 00 CO CO o I ooGoaOHOooHriHH HHHOOO>OOtN o,2 " . „ P CD fl>5 _l~l >-■ <-"r*»r1r*>OL-.j_, r* CJ 3 CDrg (p H 350 THE LUMBER INDUSTRY. K|o>z;S 3 4 t3 vj «3 °z,3 HJbzo 8S oioi OOQ QO"? BiOOOON HH t-i i-i 01 o o o 01 t-.a 3 S P CO CO CN CO CO ■OiOiqiOiO ■v co co eo 03 co co saaaass ■n co co lo its co co eowcDcoco -t^t^ ssia ^ i isa ga COCOCO 'COCO 13 1 ^OO iQiQOC tH *3* -rf -3« -31 -wi m -31 ■* •* ■* U3 W CO <£> 10 «3 W 10 U3 »0 sasg gas gggg :a :segs ggga lOOKJiQOOOOloOlOO NOCNMiOOOiONiOt-uj THCNCNtNNcOCOCN oi eicN ei t^Of-iOtNPClUSCNCNt-OO CNCO^COCOCOMCOCOCNCOCO as p P-( (fl ft - 10 >o c~ o < o to CO iQ 1010 U3W co c-r» oooioiddortdoddo N«.H.-ti-ICNiHiH,-l,H^ m a ^aaagasaga gKasgggggggg OOIOhhhhhhohh MhC^hNCINhOHhN pi :SKKK ■ CNtN tN OJ 8 |S CO !« gooio 00c- ^lOlO'3<^f«<''J O^ O OOO1O10QOO v) in to iO «5 f* N O ifl IQ t> CN oiaiaaaiooH nm 88 [O O 10 \ ! »o CO 10 10 ' CN cor-. ■« OO '• 10 . OO 10 to lo ■ lO I CD (NO ooo U)lQO OOinioOiOQOiQOO OO lOONCNiONOKJNlouj OO t>- 060606 06 06 ai oioJoo «-h * CO tH ■ iH iH i-l i-l i-l OK5 ^£ CO lO CN loinioiouatoiocot"- lO «3 00 10 lO CN CN 10 to c3 c3 e3 Oi ^ CO CO CO CO a is 5Ci 5S 3« 3 g >CI s 5 ci OiQiOOOiOiQOQC t-t-NNNNMOsao c c c SK CNCv idnioif ■ ©cni— C CN -CNCNi-If- (0o to o cnO r '?■'"■ 1" '~ '.';■■ "— '— 1 ~- gOQOOOOOO OOOOIOIQIQO O5o6t*«ocococdcot-i ill Hilfh 352 THE LUMBEE INDUSTRY. 3. B'i Mo o^jfi O • Q «5 O 10 m © 10 • iri xo »n in 10 ** »n win S Ik ssssssaggg --<©© 3g ;C ■oeSSS ■©OOiH Oi ■00)0)01 ■£.2 Sg essssssgEssg CO CO X- '/, I ~ r- i- ■/> f-1 oi oi oi fHi-H^-(rHi-(i-lrtiHiHfHiHW ■° '-'id ©iQif3iOlO©©"0'OiOOiO W U3 uj .2 ^ ft A Ph o3-ft ^ggssgggsssg gg cried r-i>t-t-c cdt^i>dcDi>aDcdco ^•2 •upOifMO>0 cricri ■coeriededed -cd taioinm>n>n>niniooo>o Ca6at) ^ ^ "*f* ^i ^1 ^* CO CO CO CO iQOOiOiQlOiOOOQiQQ MOWeNt^OKNiOWONiB cdcd«Nr-iN«Ncgcocdm cq a ©(NOOOiO© •* CO CO CO CO CO CO ©©io ededej © © © © CO 8£8 8 id-* cd ■* © © © © © © 8KS!28SSSSS8S as 'Bg :Ssfl0 ^ o ® V DIAGRAM 11.— Movement of Actual Prices of North Carolina Pine Delivered in Boston, New York, Philadelphia, and Pittsburgh, and on an F. O. B. Norfb PER MFEET 44 42 40 38 36 34 32 30 26 26 24 22 20 \&93 FM ,J|A \%9t MAM N2i RIFT BOSTON — NORFOLK- m MJ 1899 FMA 1900 FM AM JJ AS ND MAM 901 ON 1902 MJ AS 1903 Aid FT FLOOR ON \90k AM J J 1905 NG 2V-3V (g'fe* ONLY SHOWN IN 1908- 1910 MA MJ ON DJ X9Q6 MAMJJ 1902 MA JJ SjO ND 38 36 34 32 30 28 26 24 22 20 18 N2 2 RiFT BOSTON ... NORFOLK ! I ' MM ;-4-LU Tii i i -14 XXXX--U 1 J 4~- l- -' - _i_ 4-4-1 i 1 I. 1 1 1 1 |. 1 1 1-L-U -i-UJ-J_U 1 1 U-U-IXXJ-L- .. . ------- rw - L ---------- - r | - 3d mi j r ; 1 11X111 [ • i 1 in i mi ii mi ~^ .- «, ■■ . ^ i . ii . A T^ r [vjo l, . r A ■ r f wsj fc f« -j •/-> __ < /a 32K+T FLAT h-l-A H — v^ v^ mi v^ ^*- . 5 t a aA . 4 i 1 ! 4 i LI ;' M ;ii|j ; t A 4 *_ °i4 _„ »aa 1v •*} :_ x X.x A A X AAA i A A a.X "— t" - -H- f— * F--t- 22 4+4- !.l ; ■ -;-;---|!- |-|- ^ ° ^ ## x „ »n » • ••..7. ... • • a "* i 20 - t ~+ 18 — 16 -t+sj 14 +j- , i i i i A ' 1 ; | A o! AA A3 # » • •• . • •• • # *• •«• ••!••••• : -•+ - i . • • » : ! 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O* » OOOO _ 26 -H-- (FOLK • X A O • • • o 24 -1 ~^TT-| 1 1 1 1 1-"-- ' A**-****' XX t A AAA* _ a* V A A -*4.^ *- A .«-J_* - . I ,__«.! 22 -1 ; " P 4 *" LL L ^1 x^4XI a|^ a -B- T* ^ * aa a **- => ° » o ° ° 20 4-|— X u 4-m 4 ** «" "* L ^ o j *••••( -»■-. j. ♦♦♦ w m ■••«- -4-. • • -j 18 -1 16 — +-- X~ ■■ 1*A, A 'AUljAi AIaiAaUa^jAAAa* 4 * & ° „«i -1- • 7 Ta X * # *• •. • * ••*.»• -- * • • - • P • 14 -fX f-t-J-- f— ^4- X---H -— - -H — rT-H^^H H— "I : _^_)_^ . ■ - - ! ! _, J I «»t- l - - 12 J*»< 1 .i T Tl ! I _L - I U U 1 LJ L , | I j_ ^ 1 — i 1 i _ ±_ "Til IT of Actual Prices of North Carolina Pine Delivered in Boston, New York, Philadelphia, and Pittsburgh, and on an F. O. B. Norfolk Basis, 1896-1910. Diagram 12.— Movement of Actual Prices of No' tD Carolina Pi ne Delivered in Boston, New York, Philadelphia, Pittsburgh, and Baltimore, and on an F. O. B. N al Prices of No*th Carolina Pine Delivered in Boston, New York, Philadelphia, Pittsburgh, and Baltimore, and on an F. O. B. Norfolk Basis, 1892-1910. eN8FWVED*ND PRINTED BY THE -S.GEOl.OSlCA!_ SUI PRODUCTION AND WHOLESALE DISTRIBUTION. 353 "•rid -in-* ass 888 s 8. c5tOM 88 edco w o »o »o a p 2 p y? js 8 8 ' O O Ov S ■.' * )O©00 ss o oi as oo l^'/<-l''-Z ' '■■". >~ '-"- — — ■ (CNNt-(OS oo o m o rjt^r^eO CD OHOOONN^t-NNOOOO NOJ.Mi-0-lT-li-lTMi-li-i.-ti-l iQOOiQiOOlQOOiO coooodoocoosoooooooo -CTONOc5o 8iO*0'0>OQ'0 1 OiOO>0 t^c~?5t-ot-f-00!0<0(0!0 g : :8888 :g t^OOC- ss OSOSOSC0O000OSOSOSOS inCiONOt-OOuJO os as os oso os os oi co co" iqoio 'Qooo 'Omo fr-WCS 'IQIOOO 'lONO oi OS OS '00 00 00 CO iOOOOOS §888888 OS OS CO OS OS CO CO iniflQOlQlOOOCQOO oc NNOiONNiOOWOOO OC iO(D(oio^ , ^''^''o»otoy COiOiOiOiOiOiOlO as8S8sas88a ososooo6i>r^t^t>o6coco OC40U3C cdcococoosodcoc6i>t^ <00)A>A>OiCiQO>QOiniQ NiONNNNWONiONt- o6odr^ivt^t^i>t>lt^t^t^r^ C-t^O0GO t-t- 83 »Of-OiOoSSOCOtCCOiOiOiOOiO IE-S ■p§5 Sg 25030°— 14 23 CHAPTER IV. DOUGLAS FIR. THE LOG MARKETS. Section 1. Logging conditions in the fir region. In the early period of lumbering in Oregon and Washington, before the advent of the transcontinental railroads, the fir mills were located on navigable water. In this early period many mills owned and logged their own timber, while others bought logs. As the timber near the water's edge was cut away, making logging more difficult and expensive, most of the mills found it more profitable to buy logs delivered at tidewater than to log their own timber, and a number of new mills were established which neither owned not cut timber but bought all their logs. The logging end of the industry was developed by men who specialized in cutting the timber and delivering the logs to the mill. At the time this system developed the supply appeared inexhaustible and the price of stumpage was comparatively low. The difficulties of logging called for men of wide experience in that particular branch as well as a considerable investment of capital. For these reasons many of the mill men on navigable waters con- fined their efforts to sawing the logs and marketing the product. As the supply of timber available at low logging cost diminished, the various logging firms began to cooperate in the matter of fixing the log prices to the mills. Not only did they work in harmony in this respect in a given region but the loggers of various centers of pro- duction at times cooperated. Closely allied as they were to the tim- ber owners, the results were often to the disadvantage of the millman who owned no timber. The desire of the timber owner to get a higher price for his timber and of the logger to get a higher return for his work, both can be realized by higher prices for logs, while the object of the millman who buys his logs and owns no timber is to secure the logs as cheaply as possible. Any increase in log prices cuts down his profits, unless he can secure a correspondingly higher price for his lumber. This is not, however, always possible, in view of competition which he must meet from fir lumber of other localities, from other woods, and from substitutes for wood. 354 PRODUCTION AND WHOLESALE DISTRIBUTION. 355 The millman who owns bis own timber, whether it is logged by himself or by others, is in a different position. An illustration of the position taken by a millman who also owns stumpage is fur- nished in the following remarks of Mr. Ives of the Stimson Mill Co., which appeared in the Mississippi Valley Lumberman for April 8, 1910 : "Lumber prices are up pretty well, and the demand is much ■ better for lumber than it was a few months ago, but the high price of logs gives those mill owners who do not mill their own timber a comparatively narrow margin," said Mr. Ives. "Of course we have our own timber so any advance means real money in our pockets. Mills on the Puget Sound are becoming more and more mere clearing houses for logs." In their endeavor to secure a high price for their logs the logging associations have been able to count on the cooperation of this class of mill men, in efforts to raise prices by curtailing the log supply, par- ticularly of those mill owners whose principal investment is in their timber lands. Section 2. Associations of loggers on Puget Sound. Since 1899 the loggers of Puget Sound have had an organization which has maintained a fairly continuous existence, under one name or another, although its influence has varied greatly, due to changes in personnel, variations in market conditions, or other circumstances. Their organization has been known successively as the Puget Sound Timbermen's Association (1899), the Washington Logging & Broker- age Co. (1904), and the Washington Log Brokerage Co. (1907), which is the name of the present organization. The Puget Sound Log Scaling and Grading Bureau is an association of the loggers of Ever- ett, Wash., some of whom withdrew from the Washington Log Broker- age Co. at different times in the last five years and, together with hitherto independent loggers, formed the Puget Sound Loggers' Asso- ciation in December, 1912. The name was changed in February, 1913, to the Puget Sound Log Scaling and Grading Bureau. Puget Sound Timbermen's Association. — Late in the year 1899 representative loggers and lumbermen met in Seattle, Wash., and organized the Puget Sound Timbermen's Association. According to accounts of the meeting appearing in lumber-trade journals, 90 per cent of the Puget Sound log output was represented at this meet- ing. 1 A log price list was adopted at this meeting and the association voted to maintain it. From time to time this association adopted log price lists, and ordered log camps to suspend operations. It even specified the day when the camps should be closed down and when they should com- mence operations again. For a few years the association was quite i Pacific Lumber Trade Journal, Jan. 1, 1900, p. 21. 356 THE LUMBER INDUSTRY. successful in maintaining the prices agreed upon, but toward the close of 1903 the control exercised by the association seemed less effective. Washington Logging & Brokerage Co. — Early in February, 1904, an organization known as the Washington Logging & Broker- age Co. was incorporated in the State of Washington. According to a news item from Bellingham, dated February 6, appearing in the Mississippi Valley Lumberman, issued February 12, 1904, page 37 — Mr. Bloedel (one of the directors) says that while it is similar to the shingle selling company it is simpler for the reason that there are fewer members and fewer customers to deal with. "Forty or fifty members have joined the new association," said he, "which is known as the Washington Logging and Brokerage Company. This membership represents about 85 per cent of the salt water production, totaling 800,000,000 feet, and practically controls it. Each member will sell his logs to the company, which acts as a selling agency and disposes of them to the mills. The prices fixed for this year are, $4.50, $7.00 and $9.00 per thousand." The American Lumberman editorially discusses the new organiza- tion under the head of "The selling agency plan." The following is an extract from an editorial appearing in that paper, dated February 13, 1904, page 17: The latest organization of this character is the newly formed pool among the loggers of Puget Sound, announcement of which is made in the news department, the Pacific Northwest. This organization certainly should give strength to the lumber situa- tion on the coast. A scale of prices has been agreed to, and if the plans of the company shall work out as contemplated the lumber-industry will have a solid basis on which to build. The pool is said to embrace 85 per cent of the loggers in the district m question, and should be strong enough to control the market. All lumber manufacturers will be placed on a footing of equality and no discrimination shown with respect to prices charged individual concerns. Prices of logs have been somewhat demoralized of late and in consequence lumber values have been affected, as the stability of the latter depends upon uniformity in the figure at which the raw material can be secured. The prices established by the selling agency are $1 below last year's values but $1 more than late ruling prices. It is thought by the originators of the scheme that whatever tendency toward unsettled values there may have been will dis- appear when the organization shall have been perfected and reached a working stage. The following extract is taken from a Tacoma news item, dated May 7, appearing in the Mississippi Valley Lumberman, issued on May 13, 1904, page 29: Fir logs are holding pretty stiff prices because the loggers are pretty generally bound by the rigid rules of the association and their regulation of fli ° ennnlv is well handled. i PRODUCTION AND WHOLESALE DISTRIBUTION'. 357 In 1904 the price of lumber in all producing sections fell below its previous level. The indifference of the logging company to this fact is indicated by the following from the Pacific Lumber Trade Journal for July, 1904: "The loggers of the Pacific Northwest are pretty strongly organized. While the price of lumber had decreased 25 per cent the last year the price of logs, especially on salt water, has remained reasonably firm." The following month the same publication stated that "The Asso- ciation prices for logs, $4.50, $7, and $9, have been maintained all summer by the association without difficulty." The following letter of July 15, 1904, from F. M. Duggan, manager of the Washington Logging & Brokerage Co., was written in reply to a request from Secretary Beckman as to the future policy of the company on log prices: Regarding your inquiry as to prices on logs, should lumber advance in prices, we beg to state the prices of Togs will remain as at present, S4.50, $7.00 and $9.00 for an indefinite period of time, as it is the desire of this association for the mills to recover the loss they have sustained, through the low prices of lumber, for the past six months. You have our permission to make this statement to all. During the summer of 1904 the Washington Logging & Brokerage Co. was active in curtailing the log output. The lumber-trade jour- nals repeatedly refer to the curtailment inaugurated by the logging company. The following is an extract from a news item from Ta- coma, dated May 2, appearing in the Mississippi Valley Lumberman of May 6, 1904, page 29: At a largely attended meeting of the Washington Logging & Brokerage Association held in Seattle Saturday it was decided to reduce the output of the logging camps 50 per cent during May and June, unless the demand from the mills should show marked improvement, the logging camps will be closed entirely during the month of July. Eighty-five per cent of the membership of the association was represented at the meeting and the action was unanimous. The following reference to the Washington Log Brokerage Co. from the American Lumberman, dated June 18, 1904, page 38, is of inter- est, in connection with the efforts of the Pacific Coast Lumber Manu- facturers' Association to enforce a signed curtailment agreement of the fir mills (see pp. 444-445) : The company has determined to keep down the surplus. Many letters have been received by it from prominent mill owners in this district applauding its action in striving to maintain the price of logs, which the mill managements say will prove the salvation of lumber prices. A member of this company states that the closedown will continue as long as the association prices of $4.50, 358 THE LUMBER INDUSTRY. S7 and 19 are not paid, and that it makes absolutely no difference to the company for what prices the mills dispose of lumber. The following extract from the American Lumberman of September 24, 1904, page 36, refers to the reopening of the camps: More than 50 per cent of the logging camps which have been closed under agreement since June 15 reopened on September 15. A few camps outside the association were opened earlier than that. In speaking of the success of the efforts of the company to main- tain nrices during this period, President J. E. Gowan, on December 2, 1904; said (American Lumberman, Dec. 10, 1904, p. 50): We have succeeded in maintaining prices to the cent for eleven months, and we intend making the association doubly advantageous to both members and mOlmen next year. In 1906 several advances were made in the price of logs and several manufacturers voiced their objections to the action taken by the logging company. An Everett news item in the American Lum- berman of January 20, 1906, page 61, has the following: The Washington Logging and Brokerage Co., composed of fully 90 per cent of the producers in this State, has assurance that the demand during 1906 will equal if not surpass its supply. James E. Gowan of this city heads the powerful organization. A few mill men caught short are somewhat worried over a prospect of not being able to secure logs, though it is generally believed that lumbermen will not be called upon to face any such emer- gency. On May 14, 1906, the Washington Logging & Brokerage Co. advanced the price of logs $1 per thousand feet. The Seattle cor- respondence in the American Lumberman of May 26, 1906, page 54, refers to the action of the logging company as follows: A great surprise was the announcement this week from the Washington Logging & Brokerage Company, controlling more than 60 per cent of the log output of the state, that the log list has been advanced $1 all around, making the new prices: Hem- lock and No. 2, $7; dimension, $9.50; flooring, $12. This is the top notch for the raw material in the history of the lumbering industry on the coast. The effect will be far-reaching. As one result several mills, which have heretofore received their supply of logs from the association, will now go into their own private timber for their stock. They claim they are not able to pay the advance and come out clear on lumber. The following from Everett, appearing in the American Lumber- man of June 2, 1906, page 49, is the view expressed by a prominent manufacturer regarding the action of the logging company: Requested to talk from the standpoint of a manufacturer buy- ing logs in the open market, ex-Governor D. M. Clough, manager of the Clark-Nickerson Lumber Company, said this week touching PRODUCTION AND WHOLESALE DISTRIBUTION. 359 several points concerning the action of the Washington Logging & Brokerage Company injurious to the lumber trade: "Lumber conditions are the same as they have been for the last two months, the mills having all the orders, even more, than they can fill, but the price of logs and the manner of raising has reached a point where there is little money in the lumber busi- ness. Our mill is not accepting any orders; in fact we notified _ customers three weeks ago that the price of logs was being raised ' so frequently that we dared not contract lumber. The idea of the loggers raising their prices every little while is idiotic and eminently unfair to the manufacturer. I do not offer objection to the raises in themselves but the manner in which these raises are made. The logger should come to an under- standing of what he wants for his output, what he believes he should have for the logs and set his price once a year, allowing such prices to stand so the manufacturer would know just how he could do business, and not issue a new scale of prices at irre- gular and unexpected intervals during the twelve months. Sixty days ago the loggers raised their prices and we supposed the advance was at an end, so we contract lumber for ninety days. After a short time we were called upon to stand another $1 raise. We do not dare to take orders on a contracted price, because long before the contract time expires we may be forced to stand another raise. The logger should allow the manufac- turer to five as well as himself. Understand me that it is not the price of logs which I object to, but the uncertainty of how long that price will be in force." Notwithstanding such complaints, another advance was made sev- eral months later. On October 1, 1906, nearly every item on the list was increased $1.50, the loggers claiming that the extraordinary demand for timber, due to the increase in the mining facilities along the Sound, justified this course. By this time the mill men were thoroughly aroused over the increases. A typical expression of the mill sentiment at the begin- ning of 1907 is an article published in the Lumber Trade Journal for January of that year. Victor H. Beckman, secretary of the Pacific Coast Lumber Manufacturers' Association, vouched for its accuracy in his testimony in the Portland Gateway case, which was quoted in the railway brief in the lumber rate case brought by the Oregon & Washington Lumber Manufacturers against the railroad companies, and argued before the Interstate Commerce Commission. The following extracts are from the article : LOGS ADVANCE ON PUGET SOUND. The New Year's gift of the loggers to the Puget Sound mill men was an advance in prices of from $1.00 to $3.00 — the idea of course being that the loggers wished the manufacturers a prosperous New Year and many happy turns of the buzz saw— for it will take both and plenty of each to realize a scant margin of profit between the new cost of logs and a saw bill. 360 THE LUMBER INDUSTRY. The advance was not unanticipated for premiums were being offered the loggers by the mills two weeks or more before the list was formally adopted and rafts were being bought up just as fast as the thirty-two firms selling through the Washington Log- ging & Brokerage Company could get logs into the water. However, the fact remains that the present log quotations are out of all proportions to stumpage values: The advance in logs during the past year has been from $3 to $6 per thousand while stumpage increased from 25 to 50 cents. Lumber has not advanced in proportion to the advance in logs nor can the mill men now raise prices to meet the latest demand of loggers for the good and sufficient reason that the market east and coastwise will not s^said another new list at this time. * * $ * * # * A year ago when mill men on the Sound were paying from $7.50 to $17.00, according to grade, for merchantable logs with 27-inch diameter tops and under, they considered the proposi- tion rather strenuous. On February 1, the 27-inch top list was advanced 50 cents, while 28-inch top and over advanced $1 right through, with the exception of merchantable under 40 feet in length. The second advance of the year was made in March 26 and again all lengths up to 100 feet with 27-inch tops and under, were advanced a half dollar while the same lengths in 28-inch tops went up another dollar. Both grades of flooring also ad- vanced a dollar, while hemlock, white firj clear spruce, merchant- able spruce and No. 2 spruce were listed for the first time at $6.00, $11.00, $8.50 and $6.00 respectively. May 14 saw the third advance of the year and incidentally the biggest raise up to that time. All items right through the list in all grades were advanced $1 over the March 26 list. This list held throughout the summer without being officially changed but toward the latter part of August and during the month of September the mills were bidding over the published prices in order to secure a supply. This vulgar display of wealth on the part of the mill men and the shortage of logs brought about the big advance of the year on October 1 when all items on the merchantable list were run up $1.50 with the market continuing to show as strong as at any time in the year. On January 14, the fifth advance in twelve months took effect, the regular merchantable lengths being raised $1, hemlock and white fir, $2; clear spruce, $3; merchantable spruce, $2.50; and No. 2 merchantable spruce, $2. Much of the brief is devoted to showing that there was no justifi- cation for the tremendous advance in log prices. The situation remained practically unchanged for the first four months of 1907. According to the lumber press, several of the saw- mills were forced out of business by the high prices of logs. Washington Log Brokerage Co. — In the spring of 1907 the members of the Washington Logging & Brokerage Co., fearing that PRODUCTION AND WHOLESALE DISTRIBUTION. 361 their methods of operation were questionable from a legal standpoint, reorganized under the name of the Washington Log Brokerage Co. (the present organization), and somewhat modified their activities. According to Edward P. Blake, the president and manager of the company to-day, upon the reorganization in 1907 the members of the old company placed themselves in the hands of their attorneys and asked to be put on the safe side. Until recently each member, in order to become a stockholder, signed a lengthy contract with the company relating to the terms of sale of the logs belonging to him. The use of this written contract has now been abandoned, but according to President E. P. Blake the business of the company is carried on tacitly under its terms. Inasmuch as this contract still represents the relations and obliga- tions of the parties, the broad powers which were conferred upon the company by its terms will be noted. The first important clause gave the company — called the "broker" in the agreement — exclusive control over the output of the logger: The logger hereby employs the broker as his sole and exclu- sive agent for the selling of his entire output of fir, spruce, hem- lock and larch logs of every grade, that shall be cut and manu- factured in the State of Washington by the logger or by any logging company or outfit, or any machinery now leased, con- trolled, or operated by the logger directly or indirectly, or which may hereafter during the life of this contract be acquired, owned, leased, controlled or operated by the logger directly or indirectly, or in which the logger may have a controlling interest. The contract also provided that — The logger distinctly and specifically agrees not to sell or contract, directly or indirectly, any portion of said fir, spruce, hemlock and larch output to any other party than the broker, without the written consent of the broker being first obtained. In case the logger shall violate this clause, the broker shall be deemed damaged to the extent of one dollar per thousand feet, board measure, for all of said kinds of logs so sold or con- tracted by the logger, which sum shall be deemed the broker's liquidated damages per thousand, and may be retained by the broker out of any money then or thereafter in its possession belonging to the logger. The broker may also institute suit at any time without notice and without demand on the logger, and may recover therein its liquidated damages above provided. The broker on its part agrees that it will, for such compen- sation, act as the selling agent of the logger during the hie of this contract, and agrees, as far as possible, to procure orders for the output of the logger at such schedule prices as may be by the Board of Trustees from time to time fixed, as the market price reasonably obtainable; provided, that such price shall be a uniform price for all customers of the broker. 362 THE LUMBER INDUSTRY. The company agreed to use its best efforts to obtain the schedule price, but was given the option to sell at not exceeding 50 cents per thousand less than this price upon the consent of the logger. Even in case the logger himself secured a purchaser, the company- was nevertheless entitled to its commission by the terms of the contract. The company in addition was given the right to purchase any or all of the logger's output on its own account in preference to any other purchaser, and to deduct its commission for such a sale. The log brokerage company is nothing less than a medium through which the members dispose of their product to the mill men at such uniform prices as the trustees may see fit to charge. One of the first actions of the new company was the promotion of a curtailment in the production of logs. In this movement they re- ceived considerable outside assistance, from independent loggers, and timber-owning mill men. At a meeting of the Washington Log Brokerage Co. on May 4, 1907, the Port Blakely Mill Co., one of the most prominent timber- owning companies, requested that the company handle its logs for the same commission as was charged members, and in return for this agreed to cooperate in the curtailment activities of the company. The offer was accepted, for the minutes state — On motion of Mr. Draham, it was ordered that the Manager be instructed to handle all logs purchased from the Association by the Port Blakely Mill Company, now on hand at Port Blakely, and all logs put in the water by the Snohomish Logging Com- pany, for their account. The Port Blakely Mill Company to pay the regular fees for such services as prescribed in the contracts with the members of the Association; and it also being under- stood that in case a shut-down of the Association camps should be ordered, that the Mill Company is to agree to close its camps on the Port Blakely Railroad in Mason County for the same period and during the same time as the Association camps are closed. The following is from the minutes of a meeting of the board of directors of the Washington Log Brokerage Co., on May 18, 1907: The Manager presented a report covering the amount of logs now in the waters of Puget Sound, both in the hands of the loggers and at the mills, and after full discussion of this report and the further report as to conditions on Columbia River and Gray's Harbor, it was on motion Resolved, that it be recommended to the members and stock- holders of the Association that their output be curtailed, during the month of June to as great an extent as possible. And further that it be recommended when the camps close on the 29th of June, that it be for an indefinite period to be governed by the market conditions in this and adjoining territory. The proposed curtailment was explained in a telegram dated May 20, 1907, from E. E. Brehm J^iJl JLJ3kinner, of the Port Blakely ,dAM PRODUCTION AND WHOLESALE DISTRIBUTION. 363 Mill Co.: "One third output shuts down June first One third June fifteenth All balance June twenty-ninth." Attempts were also made to interest independent loggers at this time. A letter dated May 20, 1907, from M. E. Reed, of the Simpson Logging Co., Shelton, Wash., to the manager of the Washington Log Brokerage Co., shows the manner in which the independent loggers were approached. This letter, in part, was as follows: On my way home I met two loggers not members of the Asso- ciation — Mr. M. J. Rogers and James Mitchell, and they signified their willingness to close down with the Association, if requested so to do. From their conversation it is very evident that they appreciate the good work of our Company and would like to follow in its wake to some extent, but they want to be recognized to the extent of an official communication requesting them to close. I think it would be a good idea for you to write to all of the outside loggers and set forth the benefits to be received through concerted action and request them to join with us in the closed period. This letter coming in connection with the fact that a representative of the association has just visited their camp will moist assuredly have its effect and I really believe will induce a considerable number of the camps to close. It is not so much reduction in the output of these small camps that will help, as it is the moral effect of the Association being able to influence them to close. Manager Brehm replied on May 21, in part, as follows: I beg to acknowledge receipt of and thank you for yours of May 20th, and assure you that I heartily coincide with your suggestions contained therein. I shall write to all the outside loggers whose addresses I have, and request them to cooperate with us in the shut-down movement. While canvassing the camps to obtain the log supply on hand, I had Mr. Leake, Mr. Hawthorne, and Mr. Densmore talk with every logger they came in contact with regarding the shut-down, and had these gentlemen request the loggers to cooperate with us in the movement. Many of them have already stated that they will shut down, and I shall certainly spare no effort to induce them to do so. So far as I have talked with the sawmill men they seem to be immensely pleased with our action and promise us hearty support, which I hope will be forthcoming at the right time. The manager called a special meeting of the board of directors for June 1, and urged concerted action to lessen the output. The minutes of this meeting contain the following: After a full discussion of the situation, it was on motion ordered that it be recommended to the stockholders and mem- bers of this Company, that all camps operated by them be closed to-night, June 1st, 1907, until market conditions improve and further recommendations be had from this Board. 364 THE LUMBEE INDUSTRY. The severity with which the curtailment program was enforced by the company is shown by the fact that a member could not con- tinue to operate without securing the consent of the company. Illustrations of this are found in the minutes of the Washington Log Brokerage Co. When the June curtailment was authorized at the directors' meeting of May 18, 1907, Thomas Bordeaux requested the company to allow his concern, the Mason County Logging Co., to make slightly different arrangements. The permission was granted in this case. The minutes contain the following: The Mason County Logging Company, through Thos. Bor- deaux, its President, reported that it would be necessary for him to close one of his camps at once, and in that event he sug- gested that he operate, one camp during the month of August which would not violate the spirit of the recommendation of the Board, in order that he haul sufficient cedar logs to supply his shingle mill during that period. On motion it was ordered that this request be considered in the spirit of the recommendation aforesaid. The action of the directors at the meeting of June 1, on the request of a member who wished to continue operating, is stated as follows in the minutes : The Manager reported that Mr. Izett had made application to him to be allowed to operate his camp and dispose of the logs at $1.00 off the Association list. On motion it was ordered that the request be denied. At the same meeting the company took action to interest the timber-owning mills in the curtailment: On motion it was ordered that a committee of three, of which the Manager shall be a member and chairman, be appointed to confer with the several mill companies on Puget Sound who are doing their own logging in whole or any part, for the purpose of urging them to co-operate with this Company in the curtail- ment of the output of logs. The Vice President appointed Messrs. John Bagley, and M. E. Keed, as a committee to associate with the Manager in conferring with the several mills with respect to curtailment of their output. Substantial assistance was rendered by the St. Paul & Tacoma Lumber Co. which released logging companies with which it had contracts for logs in view of the curtailment then in progress, by the Washington Log Brokerage Co. A typical letter setting forth the company's attitude in this is as follows: [Letterhead of St. Paul & Tacoma Lumber Co., Tacoma, Wash.] June 3, 1907. Northern Coast Timber Company, Tacoma, Washington. Dear Sirs :. Referring to your contract for logs from the Kangley camp, under date of Nov. 23, 1906, as we are in receipt PRODUCTION AND WHOLESALE DISTRIBUTION. 365 of advice that the Washington Logging & Brokerage Co., have ordered a complete shut-down of their camps for 90 days, we hereby release you from furnishing logs to us for this period of 90 days, on said contract. Yours truly E. G. Griggs, 2nd Vice President. At the same time he notified the Washington Log Brokerage Co. of his company's action, inclosing a copy of the above letter. John Bagley, manager of the Northern Coast Timber Co., objected to being released from his contract, and on June 14, 1907, wrote C. W. Griggs, president of the St. Paul & Tacoma Lumber Co., to that effect. He received from him the following reply dated June 17, 1907 : Your favor of the 14th inst. is received. I was somewhat sur- prised at the contents thereof. As I understand, the Loggers' Association have closed down for the period of three months, and all of the members are to be guided by their action. I presume their intention is to reduce the output, so that the manufacturers will be able to hold their prices on the product, and thereby hold the prices of logs from dropping without detriment to the manu- facturers. Unless this is carried out, we can readily understand the price of logs must drop; but if the Association strictly hold to their order (and as I understand, the loggers on Grays Harbor and Columbia River are acting in concert with you) in that way the Association will be able to hold their prices. Under the present market, logs are from $2.00 to $3.00 too high, and undoubtedly would go much lower unless this action was taken. We are willing to take the logs contracted of you at a later date, but will have to be governed by the prices at the time they are taken, in accordance with our contract. Our business relations with yourself and also with your com- pany have always been very pleasant, and we hope it will con- tinue so we will be able to buy logs of you right along in the future ; but it must be fair to both parties, and certainly you would not expect us to do anything else except to abide by our agreements, and as you are to be governed by Association rules, we believe you will act upon them The price of logs has been raised by the Association on Mer- chantable from $7.50 to $12.00; flooring from $9.00 to $15.00, and No. 2 from $5.00 to $9.00 since closing contract with you in December. You can see the injustice of taking the highest price for the balance of our logs, unless the Association is justified by the supply and demand to keep the prices at the highest notch. The manager of the Washington Log Brokerage Co., in the course of a letter written July 1, 1907, to D. E. Skinner said: We are advised from Gray's Harbor that log prices are firm and will be maintained, and while the Columbia River has been our weakest sister, if you will get a copy of the Portland Oregonian of Wednesday, June 26th, you will see an authentic, and I am well advised, absolutely reliable account of the meeting of the Columbia River Loggers Association, which was presided over by Mr. Clair, the Weyerhaeuser representative, and manager of 366 THE LTJMBEB INDUSTET. their logging business on the Columbia. The Weyerhaeusers are the heaviest loggers on the river and heretofore have opposed courtailment as they have had a fairly steady sale for their out- put, but now they have come into line and as you will see by the article referred to, agreed, along with about twenty-five of the heaviest loggers on the River, to shut down until the surplus is used up, which insures a general close down over there as most of the other camps not represented at the meeting were willing to stop if the Weyerhaeuser's would. The news that the Weyerhaeusers were in favor of curtailment was tremendously important in its effects on loggers who had thus far been undecided, but now hurried to get in line. On August 31, the company authorized a 50 per cent resumption as follows : On motion of Mr. Reed, it was ordered that the several mem- bers of the Association be recommended to start their logging camps, having in view the unsatisfactory lumber market, that so far as consistent with their interest, they confine their output to approximately 50 per cent of their normal capacity. In a letter of September 10, 1907, Manager Brehm made the fol- lowing statement: It was decided on the first of September to start up our camps at once at one-third to one-half capacity for the time being, but to make no change in the prices. The list of September 16, 1907, shows a reduction of $2 on practi- cally every item on the previous list. Throughout the summer and fall the St. Paul & Tacoma Lumber Co. continued to assist the Washington Log Brokerage Co. in curtail- ment. On November 25, 1907, E. G. Griggs wrote E. P. Blake urging a complete shutdown of the camps of the Washington Log Brokerage Co. On November 30 he sent the following telegram: Tacoma, Wash., Nov. 800,-07. Edw. P. Blake, Mgr. Wash. Log Brokerage Co., Oriental Building, Seattle. General consensus of opinion cargo shippers meeting to-day best interests of all to shut down log company immediately and curtail output. E. G. Griggs, Pres. Pacific Coast Lumber Mfr. Assn. There was no need, due to car shortage, of a concerted curtailment movement on the part of the mill men at this time (see pp. 446-447), but, as shown by the foregoing telegram, they urged the loggers to take steps which would result in some lumber curtailment. In January, 1908, an attempt was made by the Washington Log Brokerage Co. to strengthen its position with the timber owners and timber-owning mills. The following is taken from a detailed report dated January 11, 1908, dealing with this subject: .A A., PBODUCTION AND WHOLESALE DISTRIBUTION. 367 We could hardly expect the Stimson Mill Co., the St. Paul people, 1 or in fact any mill that cuts its own forest product, to contribute as heavily to the support of this institution, as do the members whose logs are sold through this office. Any logs that were sold for their account, however, would be entitled to pay the full commission, and it would be paid without hesitation, but none of the concerns to which reference is here made, expect to sell any logs on the open market; they believe in the institution, and signify their willingness to contribute their moral support, and also some financial support based upon their relative interest in the entire working of the Brokerage Company. This matter is a feature that I would like to have the directors consider at their next meeting, and fix upon a contribution that would be mutually satisfactory. In discussing this particular feature with Mr. Griggs, I assured him that the Brokerage Company would be quite waling to leave that matter entirely with him, but he preferred that a fixed con- tribution be decided upon, and I don't know but what he is right. I discussed with him quite fully the need of protecting his business as well as other large concerns here from the assaults being made by the numerous sma.ll concerns now operating, who were patronizing and encouraging the opposition to this company. He thoroughly appreciates that feature, as does Mr. Ives and Mr. Bolcom, and I think that if some members of this Association would follow up the work already done, while these several gen- tlemen appear to be in an amiable mood, that they can be tied up in a manner that will prove to be a formidable barrier to those who now seem to be seeking the disruption of this Associa- tion. I have made small effort lately to induce any loggers to join, and I believe the most effective course for us to follow will be to tie up the consumers of logs in the most thorough manner possi- ble, and if success can be met, I anticipate very little disturbance from outside sources. No one that I have approached, and I have seen nearly all the principal consumers of logs from Bellingham to Tacoma, desire to see the price of logs reduced, with the exception of the Tacoma Mill Company, and they are so very uncertain of their future course as to make their position decidedly weak. Mr. Hill states that all business they now have on hand will be completed by the 20th of this month. According to the lumber press the Washington Log Brokerage Co. experienced little difficulty during 1908 in maintaining its prices. This is borne out by a statement made by the manager in a letter of September 22, 1908, to William Bishop, of Chimacum, Wash., asking him to affiliate with the "association," i. e., the Washington Log Brokerage Co.: You certainly must realize the fact, although you have not been in operation of late, that this Association has had a very marked effect upon the market. It has not only sustained the price during the depressed conditions during the last year, but it i This refers to the St. Paul & Tacoma Lumber Co. 368 THE LUMBER INDUSTRY. has established a base price for stumpage, and it has only been able to do so because of the character of the members. All during these depressed times, we have received our schedule rates for logs, which is more than anybody has done who was not affiliated here. The mills on Puget Sound have come to understand now that there can be no stampede in prices, which is a big step in the right direction for the owners of timber land, and whde of course everybody who owns timber land has been benefited by this condition, I know you to be too fair minded a man to be satisfied with benefits to which you have not contributed to obtain. An advance was made in the price of fir logs on November 1, 1908. In the spring of 1909 the fir manufacturers on Puget Sound took part in a concerted restriction of output. (See pp. 447-449.) The Wash- ington Log Brokerage Co. gave them its assistance. On April 15, 1909, the manager wrote to the Danaher Mill Co. about a conference of mill men he had attended in regard to the demoralization of the lumber market, which was threatened by a break in prices in the Grays Har- bor region. (See p. 447.) In this letter he pointed out the connection between log and lumber prices, in the following language : I realize that there is not sufficient margin for profitable oper- ations between the present prices of logs and the present selling t)rice of lumber, but were the prices of logs to go off, the price for umber would instantly follow, and the mills would then be in no better position so far as the manufacturing margin is con- cerned, and would be facing a low price for lumber that would take a long time to recover from. There are indications of a curtailment during the summer of 1909. In May the manager reported a growing surplus of logs, and he was instructed by the directors to urge all loggers to reduce operations as rapidly as conditions would permit. On August 28 he reported a growing scarcity and urged a limited increase in the output to provide for a winter supply to the mills. This growing scarcity could not have been due to increased consumption because the mills during this time had consumed less than the normal quantity of logs. (See p. 449.) ■ In June, 1909, the company reduced prices, but later in the summer put the price back to the old scale. The following letter of September 4, 1909, from E. P. Blake to E. B. Day, bears on this point: We beg to advise you that owing to the settlement of the dis- turbances as to prices on Gray's Harbor, and a sharp advance in log values at that point, it is thought the market on Puget Sound will permit of a restoration of the prices obtained last spring, namely: $6, $9, and $12, respectively. Therefore, all deliveries from camps affiliated with this company will be at that figure from and after September 1st. Another advance in the price of logs was made by the Washington Logging & Brokerage Co. on February 1, 1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 369 In June, 1910, the brokerage company endeavored to secure the cooperation of several of the independent loggers in shutting down logging operations for a part of July. Correspondence in the files of the company indicates that it was successful in this attempt. To a mill owner who did his own logging, and who wrote on July 6 that he desired to reopen his camp immediately in spite of the curtail- ment, the manager wrote, on July 8 : While it is true that you are not selling logs on the market, it is equally true that your mill at Everett, would be a material help to the situation just now, were it to look to the open market for logs for the next two or three weeks. Some of the other mills, as for instance the Stimpson Mill and the Pt Blakeley Mill, both of which mills have been supplied from their own camps, have ceased operations in sympathy with the movement of the other loggers, and so far as the writer knows, they may be up against the same conditions that you are. You will understand that we are not attempting to dictate, but in our judgment, based upOn a very careful investigation of the situation, it is our opinion that general conditions in the logging line on Puget Sound, would be materially advanced if all the camps would close down, during the present month, and I therefore trust that you can see your way clear to join in the movement. For a description of the curtailment of lumber production by the mill men themselves during 1910, see pages 450-453. The general attitude of the mills of Puget Sound toward the Wash- ington Log Brokerage Co. during 1911 is explained in a letter of May 5 from Manager Blake to The Timberman. The following extract follows a reference to the forced reductions made by the Columbia River Loggers' Association: Log conditions on Puget Sound are in a similar fix, except that this company which provides the mills with approximately 50 % of their purchases, have acted on the suggestion of the mills themselves, and are endeavoring to sustain the lumber market, by accepting that portion of the business that the mills can afford to give them at the price. We have been urged by nearly all of the mills to stand "pat," altho by so doing we have been compelled to lessen production, and are still lessening. The mills themselves realize that if word should go forth that this company had decided to join in the present demoralization, there is no telling where prices would go to. There is no money in the logging business, at least on Puget Sound, and none of the loggers feel that they are making anything, but they are not dis- posed to play a cut throat game, and we trust that wise coun- sels will prevail on the Columbia River, so that the impression will not get abroad in the buying centers, that anything serious has happened. The following letter of May 19, 1911, from the manager of the log brokerage company to W. R. Hawthorne, shows a method for main- taining list prices and at the same time to help the mills: It has been decided to aid the mills a little during the present stringency, that is, the various operators thought it would be 250302— " aj 370 THE LTJMBEE INDUSTRY. well for the manager to exercise some discretion in the matter, and it was left in his hands. The price of logs will not be lowered, but the loggers will con- tribute something to help tide over the present serious condi- tion in business. Your portion of the contribution for the present, will be equivalent to a half dollar per M on the Merch. logs, and $1.00 on Clear logs. This is all for the present. Please consider this communication as personal and strictly confidential. Manager Blake was instrumental in bringing about a meeting on June 15, 1911, of the loggers from the various districts to promote a concerted curtailment movement. (See pp . 377-3 78 . ) The following letter, dated June 16, 1911, was in the files of the Washington Log Brokerage Co. It was sent out to several loggers for the committee appointed at the meeting. At a general meeting of the loggers held yesterday, it was estimated that about 45% of the logging capacity of Puget Sound was represented. It was decided that in the interest of business that all logging camps on Puget Sound shut down during the entire month of July, with the exception of three small operations, that gave substantial reasons for not (?) run- ning, and which said reasons were acceptable to the meeting. All the operators present signified their willingness to join in the movement and shut their camps down as above. The Chair appointed a committee of which you were on, whose duty it should be to secure the co-operation of all loggers in their immediate vicinity. Enclosed herewith you will find a blank form, which kindly ■ circulate and secure if possible the signature of every logger you can reach. It is very desirable that this petition be circu- lated immediately, so that a general co-operation may occur. When you have secured the signatures of all in your vicinity, kindly forward the same to 503 Oriental Blk., this city, ad- dressed to the undersigned. Your earnest co-operation is con- fidently relied on, and thanking you in advance for the courtesy of prompt action, I remain, During 1911 there was an important concerted attempt by the fir mill men to restrict output by means of a curtailment, beginning May 27, and continuing through the balance of the year. (See pp. 453-467.) With the improvement in the lumber market, which reached the Pacific coast in 1912, the loggers again began to advance prices. On June 1, 1912, the Pioneer Western Lumberman stated: Just as soon as local or general lumber prices commence to improve it is certain that log prices or freights become liable to advance and absorb the lumber manufacturers' better prices. To-day, June 1st, existing Sound quotations on fir and cedar logs advanced $1, because of the wise plans of some of the largest logging concerns. The rise in price was announced by the Washington Log Brokerage Company, which aids in marketing more than 65 per cent of the entire logging output on Puget Sound. J « PRODUCTION AND WHOLESALE DISTRIBUTION. 371 The minutes of the directors' meeting of August 27, 1912, contain the following: The Manager reported a marked stiffening of values, and the further information that some of the Mills has expressed a willingness to pay more for logs, if such action would result in an increased supply. The opinion appeared to prevail among those present that an increased price for the product would stimulate production, and the Manager announced his intention of asking an advance of $1.00 per M. on all grades as a stimulus, and he was thereupon instructed to notify all interested parties, and to urge renewed activity in the camps for the balance of the year. Trade journals show that the advance was made on September 1. Puget Sound Loggers' Association.— While the proportion of the output controlled by the Washington Log Brokerage Co. was con- siderably lessened about 1910, as the result of the action of Everett loggers in withdrawing from the organization and forming the Puget Sound Loggers' Club, which in 1912 was succeeded by the Puget Sound Loggers' Association, yet the evidence indicates that the prices of the Washington Log Brokerage Co. continued to be followed by the Everett loggers. President Irving of the new association stated to a representative of the Bureau that they had nothing whatever to do with fixing the price of logs, frankly admitted that they were afraid to issue a price list, because it might be held illegal. Section 3. Associations of loggers on Columbia River. A large part of the logs sawed on the Columbia Kiver are cut in the State of Washington. A natural advantage which logging operators of this district have over those who must store their logs in salt water is that their product will keep indefinitely in the fresh water of the river, without being subject to the attacks of teredoes, a salt-water worm which causes great destruction to logs in Puget Sound, Willapa Bay, and Grays Harbor. The natural effect of this is to increase the ability of the river loggers to hold their logs off the market. The Bureau has little information concerning the organized activi- ties of the Columbia River loggers prior to 1907, further than that in 1901 there was an association which promoted an important curtail- ment movement. Columbia River Loggers' Association. — In the early part of 1907 an organization of loggers was formed. The Timberman of March, 1907, page 67, states that — A meeting of the loggers of the Columbia River district was held in Portland, March 13, to consider the advisability of clos- ing the camps in order to curtail the output. A resolution to close the camps was adopted and a permanent organization was formed under the name of Columbia River Loggers' 372 THE LTJMBEE INDUSTRY. Association. The American Lumberman of March 30, 1907, page 132, states that — The newly organized Columbia River Loggers' Association at its second meeting, held Wednesday of this week, concluded to allow its camp to remain idle at least until the first of April. The article continued: About 90 per cent of the logging camps that find a market for their logs in this city (Portland) are now members of the associa- tion. The camps still in operation are either owned by mills or are working on burned timber that must be gotten out without delay in order to save it. All logs, however, have been with- drawn from the market pending the settlement of the strike in the mills. The price of logs will be maintained at S12. There will be no difficulty in doing this through the curtailment of the cut and the prevention of an accumulation of logs while the mills are closed down. Apparently the new association found difficulty in holding its members together on prices at this time. As indicated by the Ameri- can Lumberman of April 6, 1907, page 78, this was due to the ina- bility of the smaller camps to endure a long-continued shutdown. The article gives such a complete picture of the conditions that it is quoted entire, as follows: Now that the millmen have won their fight with the striking employees they are whetting their hatchets for the loggers, claim- ing that they are and have been paying at least $2 a thousand too much for logs. While it might seem that the loggers in such a contest would have the best of the situation, being the pro- ducers of the raw material upon which the mills depend, it is not at all unlikely that the millmen will come out on top in this con- test too, from the fact that the loggers do not hang together. There is no question but that present log prices could be main- tained if the loggers would act together. If they do not— and the result of the meeting of the Columbia River Loggers' Asso- ciation held this afternoon indicates that they cannot and will not — there must be an inevitable slump in the log market. The failure of the loggers to stand together is due to the fact that many of the smaller operators are not strong enough financially to weather an indefinite shutdown of their camps. They have been under heavy expense getting ready for the season's work and now that they are prepared for active operations they do not feel able to rest in idleness. At a meeting of the Portland mill owners held the early part of this week it was decided that about $2 a thousand too much was being paid for logs, the ruling prices being $12 and $13 a thousand. It was further decided to pay S2 less a thousand hereafter and to require the logging companies to scale the logs at the mills buying them instead of at the logging camps, as has been the custom heretofore. When the loggers heard ofthis action there was considerable consternation. At the meeting of the loggers' association to-day the demands of the millmen were characterized as highhanded and unreasonable, and when PRODUCTION AND WHOLESALE DISTRIBUTION. 373 a motion was put to continue the shutdown of the camps for another month a large majority of the members present voted in the affirmative. This vote, however, did not bind those who voted in the negative, and after the whole matter was discussed for about two hours it was evident that not over 50 per cent of the loggers operating along the Columbia Eiver would stand by the majority vote. As a consequence of the failure of the loggers to agree upon another month's shutdown most of the camps will resume operations Monday morning. How the loggers can maintain prices with the Portland muls working but day shifts, which means practically a 50 per cent curtailment in the demand, remains to be seen. All of the logging camps are now fully equipped for continued operations and a large accumulation of logs is inevitable. This must result in a demoralization of prices, unless the larger log- ging companies are disposed to buy the output of the smaller camps and hold for ruling prices. The demand of the millmen that the scaling of logs in future be done at the mills instead of at the logging camps was unanimously turned down. The demand of the millmen for cheaper logs has aroused some feeling among the loggers in view of the fact that one of the reasons for the closing down of the logging camps was to aid the millmen in winning the strike. It is also known by the loggers that the millmen only recently issued a new price list, showing an advance in the selling price of fir in the eastern and middle states markets. The result of the inability of the loggers to agree at this time resulted in the disbanding of the association. Nevertheless, the loggers continued to meet informally and agree upon the policy to be followed. Such an informal meeting on June 25, 1907, was described at length in the American Lumberman of July 6, which stated that on July 1, 90 per cent of the larger logging camps on the Columbia River and its tributaries would close down tight for a month, as the result of an agreement entered into at the meeting. This is the meeting referred to in the letter of July 1, 1907, quoted on page 365. At the June 25 meeting, according to the American Lumberman, a second meeting was called for July 27, and it was stated: At the meeting on July 27 the questions of increasing the board to $5 a week and reducing wages 10 percent will be discussed. A number of the camps owners are of the opinion that they have been paying too big wages during the year past. In the neigh- borhood of 3,000 men will be thrown out of employment as a result of the temporary shutdown. The following, however, taken from a letter dated July 30, 1907, written by George M. Cornwall, editor of The Timberman, to the manager of the Washington Log Brokerage Co., does not mention any concerted action regarding labor: At a meeting of the Loggers of the Columbia river held on Saturday, it was decided to maintain the close-down until August 374 THE LUMBEE INDUSTRY. 15th at least. It is estimated that there is in the hands of the loggers both in fresh and tidewaters, about 75,000,000 feet of logs at this date. Of this amount, probably 60,000,000 feet are in the fresh water streams, leaving only about 15,000,000 in the hands of tidewater loggers. I am not quite certain as to the amount of logs in the hands, of the mills, but it is not large; hence you will readily understand that the close-down until August 15th will put the market in splendid condition. Fir logs are selling readily from $8 to $10, with prospects of this price being maintained, and I should not be surprised but an advance might appear towards fall. A new association, the Columbia River Loggers' Association, was organized in May, 1909. In the articles of association, preceding the by-laws, the following appears: We, the undersigned, hereby form an association, to be known as the Columbia River Loggers' Association, and we bind our- selves to abide by and perform, both in letter and spirit, all of the provisions, or by-laws, or agreements which by our signatures we hereby adopt, and we bind ourselves to keep and perform such other agreements, promises or requests hereafter made or entered into by this association under and by virtue of the said annexed agreements or by-laws. The following appears in the minutes of the organization meeting: A full discussion as to the present market condition of logs was then had, and it was the unanimous opinion of all those speaking on the subject that as the price of labor and all other prices which in any way affected the logging business were extremely high, that the individual members of the association would not be justified in dropping the market price of logs. Considerable discussion occurred in the meetings in regard to cur- tailment of the log output, but apparently the association, as such, did not officially assist the movement further than giving it pub- licity. There is evidence to indicate that certain topics, such as prices and concerted curtailment, were discussed and reference to them excluded from the minutes. The manufacturers assert that while no formal price lists are issued, the expression "association price" is a common one among the loggers. The following state- ment by H. C. Clair, president of the association, to an agent of the Bureau, is interesting in this connection: The Association has been very careful not to do anything which we considered would be in restraint of trade. There are two reasons for this. Our operations here on the Columbia River are interstate. A very large part of the logs which are sold to the mills in Portland are logged in Washington, and we are very careful not to do anything which we consider would be in violation of the laws of the United States or the States of Washington or Oregon or the ordinances of the City of Portland. PRODUCTION AND WHOLESALE DISTRIBUTION. 375 A letter of May 2, 1911, from The Timberman to the manager of the Washington Log Brokerage Co. contained the following state- ment: At the special meeting of the Columbia [River] Loggers Asso- ciation held last Saturday afternoon, it was decided that each individual logger should, m fact, be his own salesman. In other words, prices may go to whatever is offered. Some of the loggers who have tried hardest to maintain prices, feel a little revengeful at the folks who have stood against them. On February 24, 1913, the Puget Sound Loggers' Association wired President Clair of the Columbia River association for information as to conditions in his territory. The following reply, signed "Columbia River Loggers Ass'n." was dated February 24 : Mr. Clair is away have notified our customers that price will be eight eleven and fourteen first of March some have been getting that already think logs will average little better than number two price. At last meeting of loggers they agreed to co-operate with you in advertising for men. The lumber manufacturers that depend principally upon the log market for their raw material aie practically unanimous in their statements to agent3 of the Bureau, alleging that loggers of the Col- umbia River district have a strong combination which fixes and maintains the market price of fir logs. The following statement, made by a prominent, manufacturer, agrees in substance with the statements of many other manufacturers : Whenever the price of lumber advances the price of logs is immediately increased and when the log market becomes a little weak the loggers curtail the output and hold their logs off the market. Large and financially strong loggers, like the Clarke County Timber Company, hold their logs off the market and thus aid in maintaining the agreed prices. The condition is almost unbearable for the lumber manufacturers. Columbia River Log Scaling and Grading Bureau. — In March, 1910, the Columbia River Log Scaling and Giading Bureau was organized. This was leally a subsidiary of the association, its formation having been agitated at several of the association meet- ings, and its officers being piominent in the association. Prior to the organization of the bureau there was no uniformity in the scaling or grading of logs on the Columbia. It was claimed by the secietary in an interview with an agent of the Bureau of Corporations that the present grading bureau is the only loggers' association that has ever been organized on Colum- bia River that has not attempted to determine the selling price of logs. S76 SHE LtTMBEB inBusteY. Section 4. Cooperation between loggers of different districts. The lumber produced on Puget Sound, Willapa Bay, and Grays Harbor, and on the Columbia River is of similar quality and is largely- sold in the same markets. The lumbermen of a given district, there- fore, must meet the price set by those of any one of the other districts. This is difficult when mills of one district must pay more for logs than the mills of another, and it has naturally led to more or less suc- cessful efforts to eliminate differences in the log prices of the several producing sections. Joint action on price maintaining and curtailment appears to have been of comparatively recent growth, however, not antedating the organization of the Washington Log Brokerage Co. in 1907, and indications are that early relations among the loggers of the different districts amounted to little more than the exchange of information on market conditions. In a letter of June 5, 1909, written by the manager of the Wash- ington Log Brokerage Co. to George S. Long, the general manager of the Weyerhaeuser companies, the following occurs: We would appreciate it very much, if you will convey to your Mr. Claire at Portland, our congratulations on the strength that has been developed on the Columbia River in the matter of sustaining prices, and also assure him that we will work in har- mony with the Columbia River loggers to the fullest possible extent. We are just as much opposed to present conditions as they can possibly be down there, and jointly, I think something can be done towards Puget Sound; possibly united efforts of interested parties on the Columbia River and Puget Sound, might change the complexion of things on the Harbor, as the loggers down there who have been so desirous in selling logs ought to be very docile at this time. 1 The cut in prices at Grays Harbor in April, 1909, called forth a good deal of concerted effort among Puget Sound and Columbia River loggers to keep their own log prices steady. Its effect on the Puget Sound logging situation has been noted on page 368. In a letter of August 14, 1909, the manager of the Wash- ington Log Brokerage Co. said: Mr. Coony seems to think that Gray's Harbor is ripe for an improvement in conditions, which of course means prices, but under the strict interpretation of the antitrust laws of this glorious country, we can refer only to conditions, and not to prices or the material welfare of the operators. In a letter of September 4, 1 909, he said : We beg to advise you that owing to the settlement of the dis- turbances as to prices on Gray's Harbor, and a sharp advance in log values at that point, it is thought the market on Puget Sound i H. C. Clair, the Weyerhaeuser representative at Portland, was president of the Columbia Kiver Log- gdrs' Association. PRODUCTION AND WHOLESALE DISTRIBUTION. 377 will permit of a restoration of the prices obtained last spring, namely $6, $9, and $12.00 respectively. Therefore, all deliv- eries from camps affiliated with this Company will be at that figure from and after September 1st. Whether or not it is true that the Columbia Eiver Log Scaling and Grading Bureau has not attempted to determine the selling price of logs per thousand (see p. 375) , it is true that the manager of that bureau apparently acting for the loggers in the Columbia River region, did take an active interest in such matters. On April 18, 1910, D. L. Wiggins, who was at this time manager of the grading bureau, wrote the following letter to E. P. Blake, manager of the Washington Log Brokerage Co. : Will you kindly on receipt of this let me know if the prices on the published card issuecf by your company for logs 44; 46' and longer are maintained on the Sound, or is there a variation from those published. Our loggers here want to maintain exactly the prices at which you are selling and in order to do this want definite information along this line. In June, 1910, there was another break in lumber prices at Grays Harbor. The manager of the Washington Log Brokerage Co. feared that the loggers would be involved in the fight and that log prices on Puget Sound and Columbia River would be affected. His letter of June 22 on the subject, written to A. P. Stockwell, of Aberdeen, con- tains the following statement: I assume that the Grays Harbor loggers are in the business for the money that is in it, and if the Puget Sound methods were worthy of following, by the Columbia River operators, why would it not be well for the loggers of Grays Harbor to look into the matter a little. Mill men will always scrap, but I can con- ceive of no reason why they should scrap on the loggers money, as has been the custom more or less in the past. It has been the history of the lumber business that lumber prices have al- most invariably fluctuated with the prices of raw material, and I do not recall an instance where the mills have initiated an ad- vance in the prices of lumber, or recent history shows that fol- lowing an advance in the price of logs, a corresponding advance has occurred in the price of lumber, and if the mill men desire to have it that way, and propose to have it that way, why the loggers might as well assume their responsibility at once, and lend, the necessary stability to the market. We shall use every endeavor here to sustain the present values of logs and unless the opera- tors use the same unwisdom, that I feel the mills sometimes use, there will be little or no fluctuation in prices on Puget Sound. In 1911 the efforts to bring all of the fir loggers into closer coopera- tion began to take a definite form, and preliminary steps were taken looking to a joint organization of the Puget Sound, Columbia River, and Grays Harbor associations. 1 E. P, Blake took an. active part in 1 There have been from time to time various logging associations in the Grays Harbor region. No inves- tigation of them has been mado by the Bureau of Corporations. 378 THE LUMBEE INDUSTRY. bringing about a meeting of the different interests. His purpose is outlined in his letter of June 1, 1911, to H. C. Clair, from which the following extract is taken: It has been suggested that it would be well to get the various logging interests, both those of the independent logger and of the self-supplying mill, and discuss the situation. There seems to be a considerable movement in the direction of a curtailment of the lumber product, which will make necessary, of course, a cur- tailment of the log end of the game, and it was thought, if all of the various interests could get together, that a more equitable and intelligent lessening of the production of logs might be arrived at: The meeting was held on June 15, 1911. A general curtailment took place, but whether or not as a result of this meeting can not be stated, but as already shown (see p. 370) an agreed curtailment was effected on Puget Sound. On April 13, 1912, the Pacific Coast Loggers' Association was organized. Its membership includes loggers from the Puget Sound, Columbia River, and Willapa Bay sections. In an interview with an agent of the Bureau in April, 1913, the secretary stated that the membership was composed of individual loggers and that the association was not a federation of the district associations. Meetings are supposed to be held monthly, but several have been omitted. The secretary said that the purpose of the organization was to keep the members in touch with the conditions of supply and demand in the log market by means of statistics, to discuss such matters as wages and the demands of the labor unions, and to keep watch upon legislative matters. He denied that the association had ever taken action on such questions as prices and curtailment. In one or two cases the association's minutes showed that prices were touched upon in general discussion, but no action was shown. There are indications that the association is a medium which has the effect of unifying the policy of the various logging districts in regard to prices and curtailment. There seems to have been some understanding reached in 1912 that log prices were to be advanced on September 1 both on Puget Sound and Columbia River. On October 9, 1912, Manager Blake wrote to George M. Cornwall, editor of The Timberman, as follows: We note that your price on the Col River is firm at $7, $10 and $13.00. We had been informed heretofore that the loggers on Col River had notified their customers that logs would be ad- vanced to this price on the first of Sept. but we learned somewhat to our surprise that the advance did not take place until quite late in Sept. and we would greatly like to hear from you as to whether the advance 13 actually on, and whether it is general. We have been very frank with the loggers in advising them of Diagram 13.— Movement of Actual Prices of Fir Logs, Grays Harbor and Columbia River Points, and Comparison of Movement of Association List Prices with Actual Prices of Fir Logs at Pwget Sound, 1896-1910 doll«: PER M fE ET 15 it 13 1"? l| f 18% 1897 169S 1899 1900 1?01 1902 1903 1904 1905 1906 1907 1908 190? 1910 D0 p L E r m.a M|J(J:A!5 0;N : D J FjM AjM J JiA S NIP j|f M A M[J J A 5 N D J F M A M J J A S ON D J FJM A M J J A_jS N D J F M AIM J J A 5 N D J F N A M J j!A S OjN D J F M A M J J A 5 0|N D J|F M A M J J A 5 OIN D J!F M A MJJ J A S N D JiP M A MJJ J AlS 0|kID jIf M AjMJJ J A 5 N j|F M AJM J J A S ON D jlF M A MiJ J|AI5 oIn D 1~ I I j L| | i I I I i | i I U— j-J-l 1 i I i I i-i l_H L | | I i_|_|_.. i ! i i : ; T" I ■ ' — ] — p- ' ! ; i 1 i ! , 1 iji : : i | M , i 1 | | | | i | j i i | | ...yi yj^^ojj,.,! , , 1 I I I j : kJ f-i —j U h : . , | j i i i ^ l | | I : I ( : jf : | i V I | l-j |_J 1 IO . | I || MM ; ' i i i , i i ( if* t ^| | | ^ i | J — h 1 — 'rV — l4 1j_,.i puget sound ^^ ' ~n~ H u r ■ 1 ' "7 ' f'TT iM ' i : ! ■ I ! : I I ' i I ! ! m!i fy* \ . | i | ; | t-f-p 1 r^ 1 I3 -- 4 — U-; — |M Length ZO to 40 ft A ^n' List - I , [ M L h ^_ f _J4_..jX I i _j_J_J_i— L-i-:— i- Li- M i I ! 1 ■ ' < : i i | . i ■ ! ! 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' 1 ~i~'p~H — M — r ~^ — '^ — M — p-^-»j^ *\9\m4-^ U ,V|»»4«4«-«-* *-H — M — — H — 9 I a 7 i ■ | • ! ■ , M : M - i | ! ' i : 1 ' i 1 ! 1 , / I ■ j V^MJ-s-HeJ*!®! , 1 | ' M | M M 4*+»4«4»i»vU|^| 1 i M I ! 1 ; ^- — \ — ■ — l-j-- — ^^ — 1 — ^ — ^— 1 — f«i«-l«— -i^-Uffli-i— J — L-^ptt-^^H*-*^ J — i - I-l ' i ' : 1 I ! 1 I 1 ; — J-t-M — H — M 1 - 8 7 r- 1 /In i ■ 1 ' 1 i ; i 1 ; 1 1 \ y»4*! 1 | . ! 1 ' 1 | ; M ' II I M i ; 1 i_'._l. ,- _|_i. _L 4 L^ i : I ■ Vf • t ; I 1 • : 1 : 1 ^J ; 1 I | ! : | | i -S-l i | i | h i: 1 M M ' ' | I ■ M | M M M M : i | | 1 M i ' h 5 PRODUCTION AND WHOLESALE DISTRIBUTION. 379 contemplated advances, and in response to our declarations of intentions, we actually advanced the logs on Sept. 1st to $7, $10 and $13.00, at which price they are selling today. A letter in reply under date of October 10 from David Davis, of The Timberman, contained the following: I am frank, myself, to confess that I believe loggers as a rule did not advance the price of fir here on September 1st to $7, $10 and $13. However, there was a great bluff made at this. But the truth of the matter is, I think it was nearer the middle of September before these prices, became generally effective. Section 5. Fir log prices. Opposite page 378 will be found Diagram 13, which shows for Puget Sound the movement of association list prices for fir logs, 40 feet and under, in flooring, merchantable, and No. 2 grades, compared with the actual prices paid for such logs, shown on the* books of a prominent mill which bought on the market practically its whole supply of logs, during the period shown. Curves of prices taken from mill records, but showing no distinction in regard to lengths and grades, are also shown for Columbia River and Grays Harbor. DOUGLAS FIR LUMBER. Section 6. Production. Fir constitutes 27.6 per cent of the total amount of standing .tim- ber in the United States. This is double that of yellow pine, which ranks second. 1 The annual production of fir lumber and the per cent for each year which this output bears to the total annual production of the United States are shown below: Year. Fir lumber. Per cent of total lumber production. Year. Fir lumber. Per cent of total lumber production. 1912 5,175,123,000 5,054,243,000 5,203,644,000 4,856,378,000 3,675,114,000 13.2 13.7 13.0 10.9 11.1 1907 4,748,872,000 4,969,843,000 4,319,479,000 2,928,409,000 1,736,507,000 11.8 1911 1906 13.2 1910 1905 14.2 1909 1904 8.6 1908 1899 5.0 These figures, especially since 1906, are considerably less than the annual capacity of the fir mills. The eastern markets now open for timbers to the fir manufacturers will probably, on the completion of the Panama Canal, be available to other fir products. These facts indicate that in the future fir will be the leading wood in our lumber supply. Washington and Oregon are by far the most important fir producing States. The cut reported in 1912 for Washington and i Part I of the report of the Commissioner of Corporations on the Lumber Industry, pp. 65-70. 380 THE LTJMBEK INDUSTRY. Oregon was, respectively, 65.3 per cent and 30.7 per cent of the total production; in other words, these two States reported 96 per cent of the total production. Moreover, the fir supply and production is largely centered in that portion of these two States which lies west of the Cascade Mountains. In view of these facts, the importance of any price activities or control in this field will be readily appreciated. The following statement shows the output of the fir-producing States in 1912: ' Washington 3,381,395,000 Oregon 1,589,670,000 California 105,625,000 Idaho 51, 845, 000 Montana 39,325,000 Section 7. Competition met by fir producers. In the earlier years for which the Bureau shows prices, only high- grade fir and long timbers reached the eastern markets. The long timbers came to the Atlantic coast in vessels. Even to-day only high-grade fir is sent by rail into the large eastern cities. In 1899, according to the lumber- trade papers, vertical-grain fir flooring was being substituted for maple and hard-faced yellow pine flooring in the Boston market; and again in 1900 they claim that fir was brought to the New England markets in vessels, and in some cases sold for white pine. In 1902 Minneapolis lumbermen frequently stated that fir was actively competing with white pine in Minnesota and neighboring States. In this region fir not only competed with some of the better grades of white pine, but it also affected the sale of the medium and lower grades. During this year the trade papers commented on the substitution of fir for yellow pine by car builders. During the next few years fir extended its field of distribution, coming in competition with practically all species. Its competitors varied according to localities and the quality of wood required for specific uses. In 1904 there were many new mills operating in fir, and in practically all eastern markets lumbermen discussed the "encroachment" of fir lumber on the market. Heavy timbers appeared in nearly all eastern markets competing with yellow pine. In the Kansas City territory fir especially affected cypress prices. During the year 1904 it was not uncommon to hear dealers in oak plank and timbers complaining about fir "encroaching" upon their trade. That the white pine manu- facturers in 1904 considered fir acompetitor is shownin the trade-paper comment. 1 Forest Products, 1912, p. 12. PRODUCTION AND WHOLESALE DISTRIBUTION. 381 In 1904 the prices of fir lumber had fallen considerably and the red- wood manufacturers found fir actively competing in their local trade. In Chicago territory sash and door factories increased their use of fir at the expense of white pine; fir tank stock was "encroaching" on cypress; and interior finish made of fir competed actively with yellow pine and quarter-sawed oak. At the regular monthly meeting of the rail branch of the Pacific Coast Lumber Manufacturers' Association held in Seattle, May 26, 1905, Secretary Beckman made a special report in which he described con- ditions in Minneapolis as follows: In Minneapolis, it was stated, ten carloads of yellow pine uppers were sold to one carload of fir. In long dimension and tim- bers fir had the call, but in the other grades yellow pine seemed to be preferred. This notwithstanding the fact that fir prices were from $2 to $12 less than yellow pine prices. In casting about for reason for this discrepancy it was found that the yellow pine manufacturers had entered into an agreement whereby the retailers were to sell all large contractors, such as railroads, warehouses, etc., in return for pushing yellow pine. The coast representatives May 13 threatened the retailers with putting in a yard in Minneapolis where nothing but coast prod- ucts would be sold to consumers and in conversation with several retailers I told them the members of our association would undoubtedly back their representatives upon this proposi- tion. This resulted in calling a joint meeting, which was to nave been held last week, and it is probable an understanding will be arrived at whereby coast products will be given a fair show. In 1905 the fir trade was reported to be moving eastward, extending its markets and affecting the sale of yellow pine, white pine, and cypress. During this year the trade papers frequently stated that the structural wood of the country was at one time white pine, then came yellow pine, and lastly fir. They attributed the entrance of fir into Buffalo to the high price of yellow pine. Several cargoes of fir were said to have arrived in New York and were being used in place of the yellow-pine sizes which were hard to get. In 1906 the Chicago correspondents of trade journals commented on the substitution of fir for yellow and northern pine; Buffalo corre- spondents spoke of the competition of fir with Norway and southern pine. In Minneapolis the lumbermen claimed that the failure of fir to arrive helped the sale of white pine and hemlock. The embargo of 1907 (see p. 446) for a time kept fir out of the eastern markets. This caused many to turn to other woods, and caused an unusually heavy demand for northern pine, hemlock, yellow pine, and cypress to take the place of fir. The car builders largely aban- doned the use of fir during the year and returned to the use of yellow pine. 382 THE LUMBER INDUSTRY. During 1908 and 1909 fir was taking the place of ash; sash and door mills increased their orders for fir at the expense of white pine; and fir tank stock made inroads on cypress. Fir, however, has suffered from the sale of yellow pine. This occurs in railroad timbers and car-building material. Fir during this period succeeded in entering the yard trade in considerable new territory in spite of low prices of yellow pine and hemlock. Section 8. Conditions in production of fir. In the early years when the water front and the river banks were lined with timber, logging was comparatively inexpensive, but when logging railroads became necessary, and when logs had to be carried over chasms and ravines by means of cables, logging became difficult and expensive. A large part of the fir timber is located on rough ground. The size of fir timber requires the use of heavy and expen- sive machinery not only in logging and transportation but also in the sawmill. " There are many comparatively small mills in Washington and Oregon, but there are also a considerable number of large mills having an annual cut of from 50 to 100 million feet. The average annual cut of lumber per mill is high for fir as compared with other species. The consuming territory for the eastern rail trade is far removed, and to push a wood into a distant competitive territory is a work for large and well-equipped plants. Salesmen are necessary, and the mill must be able to furnish all grades and descriptions needed in the yard trade. The small manufacturer with neither planing mill nor dry- kiln is unable to meet the requirements of the yard trade, and as a result brokers have been active in handling the output of such mills and some of them dispose of their product through selling agencies. The difficulties under which the small manufacturers dispose of their product direct to the trade are claimed to make a lower price neces- sary than is secured by the larger operator; but notwithstanding this handicap of the small operator the association and information bureaus have tried to induce all to live up to a uniform price. With a uniform price the large operator naturally gets the business. The trade on the coast is divided into the rail trade and the cargo trade. When foreign or California trade is dull, the cargo mills seek an outlet by rail, and compete with the rail mills. Again, when the rail trade is dull, the mills on the water front, engaged both in rail and water shipments, divert more lumber to the cargo trade. The interior mills, however, have little opportunity to divert their trade into other channels. The small interior mills are frequently at a dis- advantage. In the first place they have not the variety of stock required for the yard trade, and in order to compete with the large mill must sacrifice in price; and in the second place they can not PRODUCTION AND WHOLESALE DISTRIBUTION. 383 easily enter the cargo trade. They can not become active competitors with cargo mills when the cargo trade is more profitable than the rail trade; but when rail trade is the more profitable they frequently have active competitors from among the cargo mills. Most of the small operators recognize that they are at a disadvantage and must sacrifice in price in order to compete with the larger mills. Notwithstanding this disadvantage, the associations, controlled to a considerable extent by large operators, have tried to instill the idea into the mind of the small operator that practically all their efforts are in his behalf, and that information regarding the prices which others receive for their lumber is furnished him so that he may secure the same for himself. At the semiannual meeting of the Yellow Pine Manufacturers' Association on May 23, 1911, President Griggs, of the Pacific Coast Lumber Manuacturers' Association, made the following statements: We have a market in California that takes nearly a billion and a half feet of lumber. That market always has been the dumping ground for some. The export market takes about 320,000,000 feet. That market in the twenty years that I have been in the business has not changed materially. Section 9. General outline of association work. 1 Southwestern Washington Lumber Manufacturers' Asso- ciation. — The Southwestern Washington Lumber Manufacturers' Association was organized on January 11, 1900, and continued in existence as a separate organization until the formation of the West Coast Lumber Manufacturers' Association in 1911. The objects of the association, as stated in the constitution, were — to secure a full understanding of the conditions surrounding the lumber market; the establishment of uniform rules for grading and manufacturing; the establishing of uniform rates and prices; and for the purpose of carrying out such other measures as may be deemed for the welfare and in the interests of the manufacturers of lumber. The reason for organizing the association was given by C. A. Doty, the first secretary, in substance as follows : A broker would come to my mill to buy lumber. Upon giving him my price, he would claim that he could buy it cheaper from one of the neighboring mills , and not knowing the market price I would sell at his figure. Upon being fooled so often along this line, we decided to protect ourselves by organizing an associa- tion in order to become better acquainted with conditions. We did not agree on a fixed price at which lumber was to be sold, but arrived at a standard on which to base our prices, and gave what discounts we thought best. We were at liberty to sell at 1 The discussion in sees. 9 to 16, inclusive, is based on information gathered by the Bureau, partly from an examination of records, partly from interviews with lumbermen who vera weU informed and who had often taken part in the activities described, and partly from published sources. 384 THE LUMBER INDUSTRY. any price we chose, but knew the market prices. There was no penalty of any kind for cutting prices. While the matter of prices was the principal reason for organizing the Association, we also had in view the bettering of conditions among our laborers, and the advertising of our lumber throughout the country. The members were chiefly manufacturers in inland territory be- tween Tacoma and Portland. This association was active from the beginning in promulgating price lists, and in more recent years joined with the other Pacific coast associations in agreeing upon joint price lists. Price activity was the most important feature of the asso- ciation's work. Pacific Coast Lumber Manufacturers' Association. — On January 10, 1901, lumbermen, chiefly from the Puget Sound region, held a meeting in Seattle, Wash., and organized the Pacific Coast Lumber Manufacturers' Association. 1 This association became one of the most powerful organizations of lumbermen west of the Mississippi River and continued a prominent factor until the formation of the West Coast Lumber Manufacturers' Association. In 1904 Secretary Victor H. Beckman estimated that the association members shipped 80 per cent of the rail and 85 per cent of the cargo shipments from Washington, Oregon, and British Columbia. The membership of this association in the earlier years included lumbermen in Washing- ton, Oregon, Idaho, and British Columbia. Later, associations in Oregon, eastern Washington, Idaho, and Montana were organized and the membership of Pacific Coast Lumber Manufacturers' Association was confined to the fir manufacturers in British Columbia and Washington west of the Cascade Mountains. The association was divided into two branches, the "cargo branch" and the "rail branch." The cargo branch was composed of stock- holders engaged in shipment by water, and the rail branch of those engaged in shipment by rail. Some manufacturers were members of both branches. The activities of the Pacific Coast Lumber Manu- facturers' Association covered a wide range of subjects. The two chief purposes of the organizers were, according to James E. Bell, first president of the association — first, to obtain higher prices for their products, and second, to establish uniform grades. In addi- tion to the price activities a large part of the work of the asso- ciation had to do with freight rates and transportation matters; tariff revision; extension of markets; the dissemination of lumber, crop, market, and labor statistics; activity in connection with State legislatures, especially in regard to employers' liability and lien laws; the adoption of uniform terms of sale; and the carrying on of an i The association was incorporated in the spring of 1906. PRODUCTION AND WHOLESALE DISTRIBUTION. 385 enthusiastic odd-length campaign, the purpose of which was to reduce the waste at the mill by inducing retail dealers to handle odd-length lumber. Oregon & Washington Lumber Manufacturers' Association. — Shortly after the Pacific Coast Lumber Manufacturers' Association was formed, the Oregon Lumber Manufacturers' Association was organized by lumbermen from western Oregon, and adopted a price list. This association soon became more or less inactive and not until May 6, 1905, did the Oregon lumbermen form an organization, which became an active force in the lumber world. On August 18, 1906, the name of this organization was changed to the Oregon & Washington Lumber Manufacturers' Association, and it remained a prominent factor on the coast until its activities were taken over by the West Coast Lumber Manufacturers' Association in 1911. Included in its membership were manufacturers in western Oregon and also several along the Columbia Kiver in Washington. The principal activity of the Oregon associations was in connection with prices and price lists. The miscellaneous activities of these associations covered the adoption of uniform terms of sale; the dis- semination of statistical information relating to the supply and demand of lumber; legislative activity in both State and nation, especially that concerning employers' liability, Hen laws, and the tariff on lumber; an advertising campaign which included the odd- length propaganda; and active cooperation with other lumber organi- zations on freight rate and transportation problems. West Coast Lumber Manufacturers' Association. — Prior to 1911 various attempts had been made to consolidate the three Pacific coast associations, but all overtures to this end had been rejected by one or the other of the associations. At the last semiannual meeting of the Pacific Coast Lumber Manufacturers' Association, held July 14, 1911, the following motion was carried by a unanimous vote: We favor the plan of consolidation as submitted, the details of which are to be left to the Presidents of the three Associations, they to call in such assistance as they may see fit and they to have full power to act. The last monthly meeting of the Pacific Coast Lumber Manufac- turers' Association was held at Raymond, Wash., on August 25, 1911. The West Coast Lumber Manufacturers' Association formally organized and elected officers on August 31. For all practical purposes the latter association absorbed the three organizations already existing in Washington and Oregon, viz., the Pacific Coast Lumber Manufac- turers' Association, the Southwest Washington Lumber Manufacturers' Association, and the Oregon & Washington Lumber Manufacturers' Association. The corporate identity of the Pacific Coast Lumber 25030°— 14 25 386 THE LUMBER INDUSTRY. Manufacturers' Association and the Oregon & Washington Lumber Manufacturers' Associations has been continued, although they are entirely inactive. Members of the old associations had to sign an agreement to abide by the by-laws of the new association and make application for one share of stock at $1 per share in order to become members of the West Coast association. So far as the activities of the associations are concerned there was no break in their continuity. The following announcement was sent out on a printed card: announcement. October 1st, 1911. From this date the West Coast Lumber Manufacturers' Asso- ciation will carry on the business formerly done by the Pacific Coast Lumber Manufacturers' Association, Oregon and Washing- ton Lumber Mfg. Ass'n, Southwestern Washington Lumber Mfg. Ass'n. E. G. Griggs, W. C. Miles, and Thorpe Babcock, president, manager, and secretary, respectively, of the Pacific Coast association, were elected to act in the same capacities for the West Coast association. Price and curtailment activities continued to be carried on as they had been since 1906, in part through committees, information bu- reaus, selling agencies, and in part by concerted action of individual members and by groups of the leading manufacturers. Section 10. Association price-list activities prior to June 30, 1906. For many years previous to the organization of the West Coast Lumber Manufacturers' Association the three groups of lumbermen constituting the Southwestern Washington, the Pacific Coast, and the Oregon & Washington associations tried to get into closer agree- ment regarding their policies of price activities. At the organization meeting on January 10, 1901, the Pacific Coast Lumber Manufacturers' Association adopted "last year's list." * At a meeting of the board of directors held January 21, 1901, "on motion of Mr. Warren, it was resolved that the price list adopted January 10th be reconsidered, and that the large shippers agree on a list and live up to it;" and on January 22, "on motion of Mr. Warren, those present pledged themselves to adhere to the list." The new list was adopted. i That there had been cooperation on prices among the fir manufacturers preceding the formation ol the association is indicated by the following article from the Mississippi Valley Lumberman of Apr. 24, 1891, p. 9: Seattle, April 17.— A lumber combine has at last been effected. At a meeting held April 10 nineteen nulls were represented and a scale of prices was agreed to, which went into effect last Monday. The penalty for departing from the schedule is J1,000. The following schedule, which is an advance of »1 per thousand, was adopted: [List follows showing the kind and grade of lumber, by sizes, together with the price.] Again, in 1895 the lumber press contains accounts of meetings of manufacturers at whloh prices wore agreed upon. PRODUCTION AND WHOLESALE DISTRIBUTION . 387 The activity of the Pacific Coast Lumber Manufacturers' Associa- tion in furthering a uniform price list, and joint action of the three groups of lumbermen, is illustrated in the following extracts from the minutes of a meeting of the board of directors held on February 26, 1901: It was moved, seconded, and carried, "that a committee be appointed to meet with a similar committee from the South- western Washington Lumber Manufacturers' Association for the purpose of adopting a timber list; also to adopt a plan of con- solidating the two associations. The committee to report at the next meeting." Also — "that a committee be appointed, in conjunction with a similar committee from the Southwestern association, to visit Portland lumbermen with the view of arriving at an understanding in regard to prices and other matters pertaining to the welfare of the trade." The object of the joint meeting is stated in the Seattle news in the American Lumberman of March 16, 1901, page 19, as follows: A strong committee from the Pacific Coast Lumber Manu- facturers' Association and the Southwestern Lumber Manu- facturers' Association will probably leave for Portland during the coming week for the purpose of conferring with the leading mills of Oregon in an effort to have the latter agree on uniform E rices in rail and cargo shipments. No combination of the kind as ever been attempted before, but the underselling by the Oregon lumbermen in the California market and the East has been felt by the Washington mills, and much therefore depends on the conference. The following description of the result of the conference is taken from the minutes of a meeting of the board of directors held March 29,1901: The Oregon lumbermen did not see their way clear to reduce their own prices, and the sentiment among them seemed to be that inasmuch as their market was so different from the market of the Washington lumbermen they could not see that their interests would be served by joining our association. They were, however, in favor of a cargo agreement, 1 and if they could be convinced at a meeting to be held on the Sound that it would be profitable to agree on a rail trade agreement they would do so. On April 5, 1901, the Southwestern Washington Lumber Manu- facturers' Association met and advanced their list of January 18 from 50 cents to $4, or practically the figures adopted by the board of directors of the Pacific Coast Lumber Manufacturers' Association 1 For a description in regard to the cargo agreement entered into in 1901, see pp. 389-393; no rail-trade agreement seems to have been made until the Centralia agreements of 1905, see pp. 393-409. 388 THE LUMBER INDUSTRY. at their meeting of March 29. The efforts at this time thus brought a parity in price between the two Washington associations. In his annual report at the Pacific Coast Lumber Manufacturers' Association meeting on January 14, 1902, Secretary Beckman dis- cussed the association work of 1901 as follows: The association during the year accomplished much good for the lumber trade of the Pacific Northwest. Prior to its forma- tion there had been spasmodic attempts to establish uniform grades and prices; but in reality little had been accomplished. After the first official list of the association had been issued, efforts were made to induce theSouthwesternWashingtonLumber Manu- facturers' Association and the lumber manufacturers of Oregon to agree on uniform prices. The Oregon manufacturers, as a result of the formation of the Pacific Coast Lumber Manufacturers' Asso- ciation, organized the Oregon Lumber Manufacturers' Association, and at a joint meeting held in Portland, at which members of this association and the Southwestern Washington Association were E resent, the Oregon association announced the adoption of a igher fist than the one issued by our association. Then the Southwestern Washington, at a joint meeting held in Tacoma on March 29th, agreed to maintain our list on upper grades, and 50 cents per 1 ,000 feet less on common and timbers. This proposi- tion was made on the ground advanced that if all prices were equal, the larger mills would receive the bulk of the business. This agreement has been kept, and was renewed at the December 20th price fist meeting at Tacoma. Later in the same report Secretary Beckman said: "Eleven cases of alleged price list cutting were investigated during the year. 1 The majority of the cases were found to be the fault of jobbers. The list was well maintained until the latter part of the year." At the same meeting it was voted " that 50 cents be made the limit, of rebate to fine yards, and that the dealers' commission passed March 29th be reaffirmed, and that the secretary be instructed to notify the mills accordingly." The minutes of the board of directors of the Pacific Coast Lumber Manufacturers' Association show the following action taken on Feb- ruary 26, 1902: The new list of the Southwestern Washington Lumber Manu- facturers' Association was brought up by the price Est committee. It was found that the list did not conform to the agreement made by members of that association at the December 20th meeting, . and on motion the president was instructed to appoint a com- mittee to meet with the Southwestern Association within ten days for the purpose of having the list conform with the one originally agreed upon. Secretary Beckman on March 28, 1902, reported that the com- mittee held a meeting at Centralia on March 7, and "after discussing the price list issued by the Southwestern Association a motion was PRODUCTION AND WHOLESALE DISTRIBUTION. 389 put to adopt the Pacific Coast association list of March 1, with a re- bate of 50 cents on the common grades, and was adopted by a unani- mous vote." At this meeting it was voted to allow the Southwestern Washington Association to become a member of the Pacific Coast association on the payment of a lump sum of $100 per year, and that it be entitled to three votes. At the August 28, 1902, meeting of the rail branch of the Pacific Coast Lumber Manufacturers' Association it was voted to give the Southwestern Washington Lumber Manufacturers' Association a place on the price-list committee. At the semiannual meeting of the Pacific Coast Lumber Manu- facturers' Association, on August 22, 1903, in the course of his address President Griggs stated: About two and a half years ago the conditions surrounding the lumber business on this coast were so appalling that a few of us decided to band ourselves together to better them. For six months our committee labored on a proposition, overcoming every obstacle, and in the face of previous and numerous failures, launched a scheme for the cargo branch that has saved to the lumber interests of this coast a vast sum of money. We have made the foreign buyer pay what our lumber is worth. Speaking of the work of the price-list committee he remarked : "Last year I served on the price-list committee. No meeting was con- sidered a success unless an advance was made." Export agreement or 1902. — The scheme to which Mr. Griggs referred was a pooling arrangement usually termed the "export agreement." The agreement was confined to manufacturers engaged in or capable of engaging in the export trade. Export trade was denned as that to all the ports of the world reached by water, except the ports of California, Alaska, and the Hawaiian Islands. The agreement was important for the domestic trade: First, on ac- count of the claim made' by its promoters that it materially raised fir prices in the coastwise trade, and second, because the success at- tributed to it in raising prices led to efforts to adopt a similar agree- ment in the rail trade, and prepared the way for the adoption in 1905 of the various Centralia agreements covering the rail trade. (See p. 392.) The export agreement was adopted November 27, 1901, became effective January 1, 1902, and lapsed January 1, 1904. It arranged for the division of the manufacturing interests into four districts — Puget Sound, Columbia River, Oregon and Washington coast, and British Columbia. The capacity of each mill capable of doing export business was determined by a committee, and to each mill was al- lotted an export percentage of the total export trade. On all export shipments an assessment of $3 per thousand feet was collected by the trustees who managed the pool; and any mill shipping over its 390 THE LUMBER INDUSTRY. allotted percentage was assessed an extra 13 per thousand feet on such excess. A mill shipping less than its allotment was required to pay $3 per thousand feet on its entire allotted percentage; however, any mill which did not ship its full percentage could sell its right to another mill. In such cases no extra assessment was paid on the percentage transferred. The seller surrendered to the buyer his claim to dividends on the percentage sold. Dividends were declared monthly and semiannually. Fifty per cent of the receipts from shipments were divided among the shippers monthly. Semiannually, after deducting expenses, the undivided receipts were divided among all members. In a memorandum explaining the agreement, attention was called to the advantages of the scheme as a means of regulating "unwise com- petition" and checking "the indiscriminate cutting of prices" and of making possible "a considerable increase in price." In the latter part of 1903 prices had fallen off somewhat, and on Sep- tember 30, and again on October 29, at meetings of the rail branch of the Pacific Coast Lumber Manufacturers' Association, it was decided to allow discounts of $2. The minutes of the second meeting show that it was voted " that the present price list of the association stand, and that discounts of not greater than $2 throughout the list be made, and these prices be maintained until the December meeting of the association." At the annual meeting of the association on December 8, 1903, President Griggs, discussing general market conditions, said: We can of course never agree on the percentage of business we are each individually entitled to in the eastern trade, but I be- lieve 75 per cent of the shipping mills can set a price that they can get and never be affected by the quotations of the remaining 25 per cent. Our price list today is a very satisfactory piece of yellow paper only ! Further on in speaking of the cargo trade he stated: _ The results of the year's work of the cargo branch of this asso- ciation have proved the necessity of strong agreements strictly adhered to. If we will but recall the conditions surrounding our export trade two years ago, we will fully appreciate the results accomplished and the necessities which bound us together at that time. At the monthly meeting of the rail branch, held in Seattle on Janu- ary 6, 1904, he stated: _ The most satisfactory assurance I think of the benefit of asso- ciation work is the result which was attained by the cargo branch of the Pacific Coast Lumber Manufacturers' Association in the accomplishment of a raise in price of lumber from $7 to $14 per M in two years. (Pacific Lumber Trade Journal, Janu- ary, 1904, p. 23.) PE0DUCTI0N AND WHOLESALE DISTRIBUTION. 391 Mr. Griggs was a member of the committee which prepared the scheme lor the export pool, and possibly was carried away by his enthusiasm into making the above extreme statement. Secretary Beckman, however, at about this time, in a signed article on "Organ- ization in the Far West" appearing in the Mississippi Valley Lum- berman, dated January 22, 1904, page 74, said: The associations of which I have the honor of being secretary have made for the lumbe'r and shingle manufacturers of the Pacific coast upward of $10,000,000 during the past four years, over and above what they could have made in a disorganized state, even under the most favorable conditions. Yet we have been told at times when, on account of over-production, floods, crop failures, or other unforeseen causes, prices were weak, that the associations were of no earthly account and that their price lists were a farce. That this view is so decidedly wrong, I will illustrate briefly in the case of two of our associations : The Washington Red Cedar Shingle Manufacturers' Associa- tion was organized in 1899. The first year, by issuing a uniform list, it succeeded in putting into the pockets of the shingle man- ufacturers at a conservative estimate $650,000 more than they could otherwise obtain. In the year 1900, owing to over- production, the amount was not as much, the estimate being $480,000. In 1901 the amount exceeded $1,000,000, and in- cluded $250,000 saved by an adjustment in freight rates, brought about by the efforts of the association. In 1902 it is safe to state that the shingle manufacturers gained $1,500,000. In 1903, while prices have been uniformly low, it is certain that the mill men are ahead by nearly $600,000 over any similar year prior to 1899. AH this has been accomplished at an expense of not more than $2,000 per annum. The same holds good with the Pacific Coast Lumber Manu- facturers' Association. The annual output of this association is . 1,500,000,000 feet, and the advances made on common lumber since 1901 will average $4.50, and on the upper grades $6.50. Assuming that of the production 75 per cent is common and 25 per cent uppers the net gain for the three years is as follows: Common, $5,062,500; uppers, $2,437,500. This has been accom- plished at a cost of about $15,000. Prior to the formation of the association, notwithstanding the steady increase in demand, there were no uniform prices and at the best seasons about 50 cents represented the actual advance in five years. The present year, owing to various causes, the prices have declined some- what, but are still very much higher than they were during the favorable conditions existing prior to the formation of the asso- ciation. The cargo branch of the association alone made for the thirty odd mills engaged in the export trade $1,500,000 per year over and above what they were obtaining for the same amount of lumber prior to the formation of the association. These are facts and can not be controverted. 1 If these are facts which can not be controverted, and if it is true that the price of lumber was raised from $7 to $14 in two years i For similar claims in 1905, see pp. 412-413. 392 THE LTJMBEE INDUSTRY. through the efforts of the cargo branch of the Pacific Coast Lumber Manufacturers' Association, as stated by E. G. Griggs, it is not strange that the general public thought there was a combine among lumber- men. And even if their statements are highly colored or exaggerated, it is not surprising that the rank and file of the lumber trade should give some credence to such statements, especially when coming from high officials in the association. At the meeting of the rail branch of the Pacific Coast association on March 18, 1904, the chairman of the committee on grades and values "stated that a conference with a similar committee from the Southwestern Washington Lumber Manufacturers' Association had resulted in the recommendation that the February 5th list be re- affirmed by the two associations and that the fist be cut uniformly, only when necessity occurred." The discounts recommended vary from 50 cents to $2.50 for different grades. The committee's report was adopted after further explanation that "the recommendations were to be effective only in cases of necessity and not to be given circulation." In his published report on the work of the cargo branch, at the semi- annual meeting of the Pacific Coast Lumber Manufacturers' Associa- tion August 26, 1904, Secretary Beckman said: A suggestion has been made to have three agreements — one covering the domestic, one the rail and the third the export business — all on the same lines as the old export agreement. The contention is that all three are interdependent, and if one falls by the wayside the others are affected and vice versa. He closed his report as follows : In closing this report it is well to call attention to the benefits derived by the operation of the export agreement. During the two years of its existence, the shipments made by the members aggregated 506,544,236 feet, valued at $6,435,226.96. Of this amount the members paid $l5J t .,26I l ..98 in penalties, which was divided among members not penalized, 1 $61,624.06 to the com- mission fund and $8,628.00 in dues. The enhancement in values due to the agreement ranged from $3.00 to $6.00 per 1,000 feet, and the net profit, after deducting the expenses indicated, through the operation of the agreement over and above the prevailing prices prior to the agreement amounted to $2,253,641.05. This was participated in by 31 firms. Added to this, the enhancement in values of the coastwise business, due to the export agreement and in sympathy therewith, footed up $5.00 per 1,000 feet, or $6,376,014.00 on 1,275,202,954 feet shipped in 1902 and 1903. Thus it will be seen that the agreement was responsible for $8,629,655.05 in net profits to the Pacific Northwest in two years. 2 1 Italics by Bureau. ' In the account published in the American Lumberman of Sept. 3, 1904, p. 22, the foregoing paragraph, except for the italicized portions, is reproduced almost word for word. The reason for the editing is obvious. PRODUCTION AND WHOLESALE DISTRIBUTION. 393 There was considerable discussion during the fall of 1904 of reviving the export pooling agreement and establishing a similar agreement among the mills engaged in the coastwise trade. The following letter of September 27, 1904, to Secretary Beckman gives the views of President Griggs : We have your circular #86 and note the communication from San Francisco. While we do not believe we can in this way definitely maintain a price, yet we think the work is to be commended, and certainly will bring about better results if we can succeed in getting the different manufacturers together. We would be pleased to receive copy of agreement after full report has been rendered to the committee, covering the vote on both domestic and foreign list. We do not think, by reason of the fact that these mills have signed this agreement, that it assures us of the maintenance of this price, as we have never yet seen an agreement which was made effective until the penalty clause was attached thereto. At the annual meeting of the Pacific Coast Lumber Manufacturers' Association on December 13, 1904, President Griggs said in his annual report : We must all sooner or later appreciate that the mills of the Pacific Coast Lumber Manufacturers' Association are allied to further the interests of a common product, and by allaying the competition among ourselves unite to push our Pacific Coast woods into the ever-widening territory. Later, in discussing price lists, he said: Probably the most efficient work of an association is reflected in the benefits accruing to its members in the adoption of a price list. During 1905 occurred several events of great importance in the development of the association activities in Washington and Oregon. The most important were the adoption of the Centralia agreements, and the organization of the second Oregon Lumber Manufacturers' Association. To secure clearness in presentation each of these subjects will be discussed separately. It must be borne in mind, however, that the events described in both occurred contemporaneously, and that the success of one influenced the other. Centralia price agreements of 1905. — The Centralia price agreements will first be described in considerable detail. It should be noted that in 1905 the antitrust agitation had not yet attracted much attention from the lumbermen, and the correspondence quoted shows that not very much question was raised as to the legality of the methods employed, except that it was desired to keep the Pacific Coast Lumber Manufacturers' Association in such a legal status that it could not be held responsible for any loss in trade by persons who were not signers to the agreement. (See letter quoted in full on 394 THE LTJMBEB INDUSTRY. pp. 398-399.) The publicity given to the agreements by the lumber press at this time also indicates that no great precautions were being taken to guard against an attack under the antitrust laws. It is possible that the wide publicity given to the events to be described contributed in no small measure to stimulate the antitrust agitation in the great fir-consuming territory. 1 On February 2, 1905, a meeting of lumber manufacturers from the Sound region was held in Seattle, at which an agreement was signed to maintain the price list which had been adopted by the Pacific Coast Lumber Manufacturers' Association on January 27, 1905. Everett G. Griggs, president of the Pacific Coast Lumber Manu- facturers' Association was present and was one of the signers. On February 3 President Griggs wrote a letter to W. B. Ayer, of the Eastern & Western Lumber Co., Portland, Oreg., in which he stated: Yesterday I attended a meeting of lumber manufacturers in Seattle, and we signed up a regular agreement to stand for the amended price list adopted by the association on January 27, and list the country on this basis, this action to be binding until the next meeting of the association, which will be held the latter part of February. From the conditions prevailing with the majority of the mills reporting at that time, it is clearly evident that they can "stand pat" on this agreement, and I believe it will mean a considerable advance in values aU along the line, if concurred in by those mills that were not present. You will probably receive full report from the secretary, and I have suggested to him the pos- sibility of your calling a meeting of those manufacturers directly interested in your immediate vicinity and endeavoring to pass the same agreement. Surely we can never get any more for our stock unless we ask for it, and it is up to the manufacturers to determine what these prices shaU be. The same remarks apply to the coast business, and undoubtedly from the activity in lower California, it would be a wise time to take similar action. Victor H. Beckman, secretary of the Pacific Coast association, wrote on February 18, 1905, the manager of the Lumber Manufac- turers' Agency, which then sold the output of the mills of 11 of the more important members of the Southwestern Washington Lumber Manufacturers' Association the following letter: Members of our association are endeavoring to stiffen prices, and to this end we have been holding weekly meetings. The re- sult is that we have a signed agreement from 43 of thelargest firms in the state as well as a number of wholesalers to maintain our January 27th list, which I enclose. This agreement terminates at our meeting at Tacoma on Friday, Feb. 24th, when a new agreement will be entered into provided we can secure your support. i In this connection note the association's aotion taken In reference to the North Dakota antitrust law. (See pp. 411-412.) PRODUCTION AND WHOLESALE DISTEIBUTION. 395 Conditions warrant a stiffening in prices ; and if all will co-operate at this time there should be no difficulty in getting something for our lumber this year. To this end I am requested to ask you to take the matter up with your members and have them and your- self attend our Tacoma meeting in order that an understanding may be arrived at. I trust you will see the importance of this and endeavor to have your agency represented. The rail branch of the Pacific Coast Lumber Manufacturers' Asso- ciation met on February 24 at Tacoma. Minor changes were made in the list of January 27, and it was voted to maintain the amended list, provided the wholesalers, the members of the Lumber Manu- facturers' Agency, and of the Southwestern association signed. It was also agreed that a reduction in price would be allowed on certain grades in 50-cent territory. 1 Large jobbers were present by invita- tion and agreed to support the mill men. 2 This movement was taken up vigorously by the Pacific Coast Lum- ber Manufacturers' Association after its meeting of February 24. A committee was appointed to obtain signatures from the manufac- turers and wholesalers to an agreement to maintain the February 24 price list. This agreement was to remain in force until March 31, 1905. On February 27, 1905, President Griggs wrote a letter to George E. Birge, manager of the Lumber Manufacturers' Agency, in which he said: From the condition of the order books of the majority of the members of our Association, I feel confident that the agreement entered into based upon the signatures of your association being obtained, will have the most salutary effect. They are all pretty well loaded up with business and considerable is being offered, and if there is any opportunity at all this year to take a firm stand, it would be at this time. You will readily appreciate that when mills are hungry for business, they are quick to snap at any proposition offered, and representatives who lose orders continually accuse competition of cutting prices. I think the information disseminated by our secretary, with the results of the last meeting, will have a good effect, and I will again suggest to him a further confirmation of your letter relative to prices at which this business was accepted. As some of these men who have quoted such low prices have no financial interest in the mills themselves, nor do they control the output, I think they are liable to stand a forfeit before some of the business is filled. My own idea is to get all mills in both Associations to stand for the present list, which is considerably higher than stock has been sold at during the past six months, and with this agreement perfected, and all mills taken care of satisfactorily on such busi- ness as they want, we can readily act concertedly for an addi- tional advance if conditions warrant it. You realize as well as the writer the good results of concerted action taken simultane- 'ln the 60-cent territory fir met keen competition irom yellow pine. American Lumberman, Mar. 4, 1905, p. 38. 396 THE LUMBEK INDUSTEY. ously when it comes to advancing prices on lumber, and we think the broad-minded way to look at this matter. is to get all our Association mills in line to receive the benefits of any advance which may materialize in the lumber industry. I am confident that the big buyers throughout the East are holding off placing business, trusting to a break in the agreement which was entered into 30 days ago, and will be reentered into on receipt of decision on the part of the mills which are represented in your agency and in the Association. On March 3 and 4 the Southwestern Washington Lumbermen's Association met at South Bend. 1 Secretary Beckman of the Pacific Coast Lumber Manufacturers' Association reported the price action taken by his association on February 24, and asked for the support of the mills of southwestern Washington. 1 It was decided, however, to defer action until the meeting to be held at Centralia on March 8. 1 The following letter of March 6, 1905, was written soon after the South Bend meeting by President Griggs to Mr. Birge: Yours of the 4th inst., is received. I am pleased that you decided to call a meeting for Wednesday, and m discussing this matter with other members of the association and some of the wholesalers, it was unanimously determined to send a committee to confer with you at your regular meeting. We think you realize as well as the writer the objections and difficulties which waylay association work, and appreciate that if it was confined to individuals, we could soon bring the matter to a definite and determined head. I would suggest that your association do not insist upon any terms which it is impossible for our association to comply with. If you are talking to individual mills and can get up an agreement that all will sign, we ar«. with you to put up any forfeit proportionally with the balance. The great results which we want to obtain are better prices for our product, and we can well afford to stand together on a proposition of this kind. I think I voice the sentiments of the entire associa- tion when I express to you the earnest effort that has been made by all connected with the association to improve the lumber conditions. As long as there are some four or five hundred manufacturers in this state, I do not think we can ever eliminate the price cutter absolutely; but with a large percentage stand- ing m fine and asking the same prices, we will all get about the same proportionate amount of business which we would get otherwise, and at a price which will mean a good deal of money to each one of us individually. Mr. Beckman will also attend the meeting in Centralia, and the signatures of manufacturers and brokers will be presented at that time. H. B. Waite advised his representative that it would be out of the question for him to sign an agreement unless the Southwestern Lumber Manufacturers' Association signed, and of course he simply expresses the general opinion of all, as was fully discussed and determined at the meeting which you attended. 'American Lumberman, Mar. 11, 1905, p. 42. PRODUCTION AND WHOLESALE DISTRIBUTION. 397 On March 8, 1905, there was a meeting at Centralia of the Pacific Coast Lumber Manufacturers' Association and the Southwestern Washington Lumbermen's Association at which a compromise list was adopted. 1 Both manufacturers and wholesalers united on the list. 2 The new list was a compromise between the February 24 list of the Pacific Coast Lumber Manufacturers' Association and the last Southwestern list. 3 After the Centralia meeting of March 8 a new "joint agreement" called the Centralia agreement was circulated by the secretary. This agreement was to become void unless signed by 80 per cent of the manufacturers, wholesalers, and jobbers. It reads as follows: JOINT AGREEMENT. We, the undersigned, hereby agree to maintain the official list adopted at a joint meeting of the Southwestern Washington Lumber Manufacturers' Association and a committee of the Pacific Coast Lumber Manufacturers' Association, held at Cen- tralia, Washington, March 8th, 1905, same to be maintained in all territory, with the exception of 50 cents per thousand feet discount to fine yards. The above agreement to remain in force until changed by mutual agreement of a joint price list committee. The above to become void unless signed by 80 per cent of the manufacturers and wholesale jobbers. Name of firm Address Date: March , 1905. The following letter of March 13, 1905, from Secretary Beckman to the Lumber Manufacturers' Agency shows the method of procedure in bringing about concerted action and a uniform price : Replying to vour favor of the 11th instant, will state that we have forwarded the joint list, effective March 8th, to every rail shipping mill and wholesaler in Western Washington and West- ern Oregon. The first day's mail brought in signatures from 32 mills, having an aggregate daily capacity of 2,890,000 feet, or about 40% of the total rail capacity, and from 13 whole- salers. Today's and tomorrow's mail should bring in as many more, and on Tuesday I will forward another circular to those who have not signed. In about a week over 80% of the manu- facturers and wholesalers will have signed. As soon as the required percentage has signed names will be forwarded to all signers, and I would advise that the mills in your section give preference to wholesalers who are staying by us. Among today's signatures is the Grays Harbor Commercial Co.'s. ' American Lumberman, Mar. 11, 1905, p. 45, and Mar. 18, 1905, p. 47. "Idem., Mar. 11, 1905, p. 45. • Pacific Lumber Trade Journal, May, 1905, p. 14. 398 THE LTJMBEK INDUSTRY. I am mailing you 12 copies of our F. 0. B. list at your request. On April 25, 1905, Secretary Beckman stated in a letter to the Lumber Manufacturers' Agency, of Centralia, Wash.: "We secured over 80 per cent" and "there are 160 other signers besides yourself to the agreement against whom there has not been the slightest accusation of price cutting." The rail branch of the Pacific Coast Lumber Manufacturers' Asso- ciation met at Seattle on March 31 and affirmed the price list agreed upon March 8 at Centralia. 1 Some changes were made in spruce prices. On April 28 the rail branch met at Tacoma and reaffirmed the Centralia agreement. It was stated at this meeting that 160 names were attached to the agreement. 3 During the first half of the year, 1905, the president and secretary of the Pacific Coast Lumber Manufacturers' Association were very- active in attempting to force manufacturers and wholesalers to maintain the agreed prices. The success of the export agreement had been so satisfactory that large pecuniary gains were anticipated from the enforcement of a rail-price agreement. The correspond- ence files of the association show the activity of its officers. The following letter, sent out by President Griggs under date of April 19 to the members of his association, bears on the method by which instances of the violation of the agreement were reported to association officers: The matter of maintaining the joint price list agreement with the Southwestern Lumber Manufacturers' Association is being tested to the limit. The outlook for business is such that I firmly believe that no signer of the agreement is justified in mak- ing any cut to secure business. The work which has already been accomplished is clearly evident in the betterment of con- ditions, and if there is any efficacy in Association work, I believe we are about due to receive some of the benefits if we stand together. In case of any deviation from the agreement coming to your attention, please use the wire at once, and bring the matter to the attention of your Association officers, and it will be investigated. A letter of May 18, 1905, from President Griggs to A. F. Specht, assistant secretary of the association, indicates the care taken not to involve the association in legal difficulties: Eeplying to yours of the 18th.: I am glad to note that Mr. Beckman will be back on Friday and, if possible, will attend meeting in Seattle of the Lumber Manufacturers. I doubt whether I can be there. As to maintaining a fist it is necessary, of course, that the Association keep free from any direct accusations so that we 1 American Lumberman, Apr. 8, 1905, p. 31. a Pacific Lumber Trade Journal, May, 1905, p. 14. PRODUCTION AND WHOLESALE DISTRIBUTION. 399 would be held responsible for any loss in trade by members who are not signers of our agreement or otherwise. We trust your office appreciates the importance of the legal status in this matter. We do not wish to make any accusations whatever as an organ- ization, and Mr. Beckman, we believe, fully appreciates the importance of this attitude. The following correspondence shows the way in which some of the complaints were handled. Several complaints were dealt with during this time. First will be given two instances where complaints were made against manufacturers who had signed the agreement. Complaint against Atlas Lumber & Shingle Co. — Affidavits dated April 22, 1905, were signed by Harrison G. Foster, and C. M. Stafford of Minneapolis, to the effect that the Atlas Lumber & Shingle Co. had made quotations $1 lower than their February 1 fist. Mr. Griggs, on April 24, 1905, wrote the following letter to the Atlas Lumber & Shingle Co.: We are in receipt of a telegram from the east to-day, making accusation and stating that affidavit can be furnished to the effect that the Atlas Lumber & Shingle Co. quoted direct $1 off their February 1st list to single yards. We therefore wired you this morning as follows: "Are advised you quoted direct dollar off your February 1st list, single yards. Investigate and correct if possible. Im- portant account tendency signers agreement magnify deviation." and hereby confirm. Inasmuch as we are making particularly strong efforts to maintain this list and believe that same can be maintained provided all stand firm, despite the various accusa- tions we believe you are as heavily interested in the matter as any of us and will follow up this accusation promptly and advise. A letter from President Griggs to Charles E. Patten, of the Atlas Lumber & Shingle Co., dated May 27, 1905, shows that this complaint was considered at a meeting of the Pacific Coast Lumber Manufac- turers' Association held May 26. President Griggs, asked for further information ' 'pursuant to resolution passed at the meeting yesterday, ' ' and stated that he "desired "to present full report at the next meeting of the association to be held in Tacoma on the last Friday of June." A letter from the Atlas Lumber & Shingle Co., dated May 29, 1905, stated that the writer could not find any record of the quotations that the affidavit stated had been made and that he believed that he could "fully convince you that the Centralia agreement was not broken." An affidavit by S. K. Whiting stated that the records of the Atlas Lumber & Shingle Co. for the month of April had been examined and that there was no record of quotations being made at $1 off the com- pany's February 1 list. Complaint against Lumber Manufacturers' Agency. — On April 7, 1905, George E. Birge, manager of the Lumber Manufacturers' Agency, of Centralia, wrote Victor Beckman as follows: "We are maintaining the list in every respect as we agreed to do." 400 THE LUMBER INDUSTRY. Again, on April 17, 1905, George E. Birge wrote Mr. Beckman: It seems useless for us to try to maintain prices when we are not securing sufficient business for our capacity, and we know others have under-bid us and have secured the business and are furnishing the goods, and another thing we desire to impress on you at this time again is the necessity of a forfeit being placed in escrow to this agreement, as we believe that is the only solution to make this proposition successful. We have had the matter up with the H. J. Miller Lumber Co., and they advise us that they have not, or will not, sign any agreement to maintain a price unless there is a forfeit connected with it. Mr. Beckman on April 20, 1905, wrote Mr. Birge as follows: [Paoiflc Coast Lumber Manufacturers' Association rail-trade branch letterhead.] Seattle, Wash., April 20, 1905. Lumber Manufacturers' Agency, Centralia, Washington. Gentlemen: I am in receipt of the following correspondence, which is self-explanatory: Seattle, Washington, April 18, 1905. Mr. Victor H. Beckman, Secty. Pacific Coast Lor. Mfrs. Ass'n. Dear Sir: We are just in receipt of the enclosed copy of bids opened at Milwaukee on the 10th of April, covering fir lumber proposals to the United States Engineer's office. You will observe that the prices quoted by the H. B. Waite Lumber Co., Minneapolis, the Chicago Lumber & Coal Co., St. Louis, and our prices are identical. These bids were figured on exact Associa- tion prices. Other bids submitted are a trifle higher, with the exception of quotations made by the Lumber Manufacturers' Agency, Centralia, Wn., and the Stimson Mill Co., of Ballard. It is very possible that the Stimson Mill Co.'s price, as shown, is a typographical error. However, it is hardly the case with the Lumber Manufacturers' Agency, their bid being $120.00 below list prices. Will you kindly take this matter up immediately with the Agency and ascertain whether it was their intention to cut prices ? If not, their bid should be withdrawn at once. Should the Lumber Manufacturers' Agency be awarded contract on the basis of this cut bid, we shall be obliged to reserve the right to meet any competition we see fit in the future. Awaiting your report, we are, Yours very respectfully, Lewis & Hughes. Minneapolis, Minn., April 14, 1905. V. H. Beckman, Secy. Wash. Lumbermen's Ass'n., Seattle, Washington. Dear Sir: On April 10th bids were opened at the U. S. Engineer Office, Milwaukee, for three proposals of lumber, one PRODUCTION AND WHOLESALE DISTRIBUTION. 401 going to Menominee, one to Sturgeon Bay and one to Kacine. Below we give you an abstract of the bids : Menominee. Sturgeon Bay. Racine. Day Lumber Co., Seattle, Wash $2,662.56 '$2,049.96 $2,185.68 H. B. Waite Lbr. Co., Mnpls '2, 587. 44 '2,049.96 '2,146.62 Carstens & Earles, Seattle 2,760.04 2,186.62 2,219.33 Stimson Mill Co., Ballard '2,587.44 '2,049.96 2,116.62 Seattle Lumber Co., Seattle 3,277.42 2,596.62 2,597.05 Lumber Manufacturers' Agencv, Centralis. . . ' 2, 587. 44 ' 2, 049. 96 2, 026. 62 Chicago Lumber & Coal Co., St. Louis '2,587.44 '2,049.96 '2,146.62 J. G. Newbegin, Tacoma - 2.697.99 2,139.94 2,143.79 Lewis & Hughes, Chicago '2,587.44 '2,049.96 '2,146.62 You will see that while the Mfg's Agency maintained the prices on two bills they cut the price on the third, giving them the e'ntire business. This is a fair sample of the way this business has been going in times past. You might as well give up trying to control absolutely the price. You will never succeed until you get a condition where the demand equals the supply. Your members will go into an agreement and will not live up to it. Why then should you ask us to enter into it 1 Yours truly, H. B. Waite Lumber Co. Kindly forward explanation as soon as possible, as this is a very serious matter and may jeopardize the agreement and undo the work already accomplished. You should withdraw your quotations. Sincerely yours, (Fac-simile stamp) Victor H. Beckman, Secretary. The following letter was written by the president of the Pacific Coast Lumber Manufacturers' Association : |St. Paul & Tacoma Lumber Co. letterhead.] Tacoma, Wash., April 24, 1905. Mr. George E. Birge, Manager, Lumber Manufacturers' Agency, Centralia, Wash. Dear Sir : In checking over the Government bids submitted at Milwaukee on April 10, we find that the $120.00 discrepancy referred to in the wires which have passed between us, occurs on the following items : 1,200 pieces 2x12-26, 62,400 ft., 1,200 " " -24, 57,600 " 120,000 " at $7.00 per M $840.00 while it Bhould be at $8.00 per M or 960. 00 120. 00 being a cut of $1.00 per M on 120,000 ft. You can of course appreciate that there is a good deal of objec- tion raised on the part of the signers of the agreement to this quotation, and we trust that a satisfactory solution of same can be reached. I do not hesitate to say that in case the Agency feel 'The association list price on the Menominee proposal was 12,587.44; that on the Sturgeon Bay, $2 049.96; and that on the Racine, $2,146.62 25030°— 14 5>R 402 THE LUMBER INDUSTRY. that action has been taken by other signers of the agreement which would warrant their cutting prices, it will simply mean the disintegration of the price list and general war for the business. We have a meeting of our association on the 28th, and I sin- cerely trust that a representative of your Assn. can be present at that time. Yours truly, E. G. Griggs, President, P. 0. L. M. Assn. Under date of April 25, 1905, Victor H. Beckman wrote to the Lumber Manufacturers' Agency of Centralia as follows : Your signature to the agreement was conditional on securing 80 pe r cent of the capacity; we secured over 80 per cent. What makes your case aggravating is the fact that several weeks prior to the opening of the government bids you wrote this office to the effect that you intended quoting list, and that in the event others quoted lower you would immediately withdraw from the agreement. It seems that all signers except yourself, kept faith. Further on in the same letter he said: We do not think that you are entirely alone in holding the "sack." There are 160 other signers besides yourself to the agreement against whom there has not been the slightest accusa- tion of price cutting. Again, on April 27, 1905, Victor H. Beckman wrote to the Lumber Manufacturers' Agency as follows : We beg to acknowledge receipt of your favor of the 26th instant, relative to the Milwaukee government bid. It certainly looks strange that you were the only one of the nine bidders who made the mistake you referred to ; our information from Chicago is to the effect that your representative knew what he was doing. It is also a coincident that three weeks ago you wrote this office to the effect that you expected a break on this particular business, that you proposed quoting the list and if any of the signers shaded their figures you would wire in your resignation from the agreement. It seems that you were the only signers who did not live up to the agreement. Further on he said: We can state this fact that of the numerous cases of violation of the agreement, when sifted down to actual facts, only three have been sustained, and you are one of them. What makes it aggravating is the fact that all were suspicious of you from the start, and of the many complaints against you we brought to your attention only the most likely to be substantiated. Wholesale dealers secured their supplies largely from the smaller manufacturers, many of whom were not members of either of the fir associations. Hence, the only way for the associations to control this supply of lumber was by securing the cooperation of the whole- sale dealers in the maintenaiU2B_oiAhe_I^ntralia agreement. PRODUCTION AND WHOLESALE DISTRIBUTION. 403 The following complaints are directed against wholesalers, who signed the agreement and failed to live up to it. The importance of keeping the wholesalers in line is well brought out in President Griggs's letter of April 14, in reference to the practice of some brokers quoting single yards 50 cents off list: "We certainly cannot speak too strongly on this subject, as we believe if these brokers insist upon this action it will nullify all agreements and simply mean that prices will tumble." Complaints against H. B. Waite & Co., W. I. Carpenter Co., H. C. Bolcom Lumber Co., and C. H. Nichols Lumber Co. — The following letter of March 20, 1905, from President Griggs to Secretary Beck- man shows that H. B. Waite & Co. were under suspicion of cutting prices in March: I am today in receipt of advice from our Mr. Foster, as fol- lows, under date of the 16th inst. : "With reference to H. B. Waite & Co. getting out a cut price list, would state that this is a mistake. I have asked several people to get prices from them, and they have been making full list prices." It would strike me that the Menz Lumber Co. can well afford to get in line in view of the strong stand taken by the major portion of the shippers. President Griggs on April 14 wrote Secretary Beckman a letter showing that this firm was again charged with violating the agree- ment: I wired you this evening as follows : "Am advised Carpenter, Waite, Bolcom quoted single yards fifty cents off list. If wholesalers persist in this action agree- ment will be annulled." and will forward further data pertaining to this report shortly. We certainly cannot speak too strongly on this subject, as we believe if these brokers insist upon this action it will nullify all agreements and simply mean that prices will tumble. Our com- pany will not stand by an agreement of this nature and will not be a party to an agreement which is one-sided. On April 17, 1905, President Griggs wired Secretary Beckman at Portland, inquiring whether W. I. Carpenter had signed the agree- ment. Secretary Beckman replied "Carpenter Lumber Co. did not sign agreement." Mr. Griggs's letter of April 18, 1905, to Secretary Beckman is given in full: Inasmuch as I am prepared to make affidavit, having seen cor- respondence with discounts allowed by H. B. Waite Lumber Co., and H. C. Bolcom Lumber Co., of Minneapolis, and C. H. Nichols Lumber Co., LaCrosse, Wis., I wired them yesterday as follows: "Please advise if you have withdrawn from price agreement. Recent quotations from your company will nullify good work already accomplished if continued." 404 THE LUMBER INDUSTRY. and this morning received their replies as follows: _ "No. Please specify when and where complaint originated and who quoted to. "H. B. Waite Lumber Co." "Still adhering to price agreement and losing business every- day. You have been misinformed. Please advise fully. "H. C. Bolcom Lumber Co." "We are adhering strictly to agreement. Have no other dis- position. If prices made lower, clerical error. "C. H. Nichols Lumber Co." and have written them to cover. I hope the effort will bring W. I. Carpenter Co. into line, as certainly it will be difficult to keep the wholesalers in line if any one of them maintains tie present attitude. Complaint against Carstens & Earles, Inc. — The Centralia agreement allowed a discount of 50 cents per thousand to line yard owners, and there was some confusion among the signers in determining parties that were granted this discount of 50 cents. The following letter bears on this point: [Carstcn & Earles, Inc., letterhead. | Seattle, Washington, April 29, 1906. V. H. Beokman, Sec'y, P. G. L. M. A., City. Dear Sir: We understand that we have been hauled under the coals for quoting the government discount off the list on bills of timbers along with most of other offenders. When first spoken to on the subject we did not think we had quoted the government anything off the list, although we believe that they should be entitled to the same price as line yard concerns, but on looking up the matter we find that on one bill we did quote them 50 cents off the list on most items. On three other bills our prices were about 50 cents over the list. We enclose herewith copies of our quotations, and if the govern- ment is not entitled to 50 cents off the list, then we must admit that we are subject to criticism on our quotations of March, 24th. Possibly, however, our quotations of March 29th will soften the hearts of the mill-men towards us. We would like to have a specific rule on this matter, and if the government is not entitled to line yard prices, we think that circulars should be issued to all signers of the agreement notifying them to that effect. We also think that specific instructions should be issued with regard to the quotations with Railroads. In talking the matter over with mill-men who are signers of the agreement the most of them admit that they would quote Railroads 50 cents off the list, whereas others claim that they would not be entitled to it. If the Railroads are entitled to 50 cents off list then surely the government would also. PRODUCTION' AND WHOLESALE DISTRIBUTION. 405 The quotations of March 24th to the government, however, are not in line with our usual quotations to the government, 1 as we do not like their business and usually quote prices high enough so that we wont get it, and if we do get it then we can afford to give them good material. We do not believe that we would be guilty again of quoting them less than list as it is contrary to our regular rules. We have had two experiences in filling government orders that have satisfied us, and we do not care particularly for their orders. Before looking the matter up we supposed that the quota- tions had been made by our Minneapolis office, but when we came to looking up our quotations, we found that the writer was the guilty party. At the same time we would call your attention to the fact that it would be practically impossible for signers of the agreement to get any government business on common timbers at list, as there are so many mills out side of the agreement who can easily furnish timbers, but who could not so easily furnish upper grades, and it will mean that the bulk of the government and the railroad business will go to them and the faithful ones will suffer. Personally we think that the railroad and government business should be left open, although this is a matter for the association to decide. Please return the copies of our quotations as they are the only record we have. Yours truly, Carstens & Earles, Inc. Traill. Complaint against Newbegin Lumber Co.— The following is from another firm censured at the April 28 meeting of the Pacific Coast Lumber Manufacturers' Association: [Newbegin Lumber Co. letterhead.] Tacoma, Wash., April 29th, 1905. Mr. V. H. Beckman, Seattle, Wash. Dear Sir: We understand that at the meeting held at the Tacoma Hotel yesterday by The Pac. Mfgrs. Assn. that the- New- begin Lumber Co. among some other firms were censured for cutting the list price in making quotations to the Government on some proposal received at St. Paul. On March 31st. we quoted on one bill which was opened Apr. 5th. our quotations were from the list price to 50 cents above. On the 19th. of this month we quoted on a bill which was to be opened on the 24th. this calling for material clear of sap, we quoted from the list price on sized 6x12; and on rough, 50 cents above fist, and fist; on the flooring we quoted 21.00 which is 1.00 above number 2 pc. and should cover the sap proposition. We think that 'no sap' is worth full list to 1.00 more than fist and figured this way on this bill. We have not heard who was suc- cessful on this iatter bill. On the first bill we are informed that the Contract was awarded to Swager & Nettleton at from 60 cents to 2.10 below the list. We have not heard any official 1 For this firm's bids on the proposals at Milwaukee opened Apr. 10, 1905, see p. 401. 406 THE LUMBER INDUSTRY. notice taken of this. We are informed that our name was severely criticised in this connection, we do not appreciate being misrepresented, and do not care particularly for this kind of advertising with our friends. You will please remove our name from your list of wholesalers who are supporting the list, we will continue to quote the list price or above the list just so long as we think the market justifies it. Yours sincerely, Newbegin Lumber Co., J. G. Newbegin, Secy. Complaint against Menz Lumber Co. — On March 17, 1905, President Griggs wired Secretary Beckman as follows: Am advised Menz Lumber Co. instructed their salesmen, cir- culars one thirty-four, one thirty-six and one thirty-seven, making cuts on joint price list. Not in accordance with agree- ment. Wire them recall circulars or signature to agreement. Advise notifying Southwestern. In a letter dated March 17, 1905, confirming the above telegram, President Griggs said : If this is the spirit of their agreements, we certainly predict that we cannot maintain joint price list and this matter must be vigorously pushed and the association fully advised of their action. I am under the impression they signed the new agree- ment to maintain the joint list; and having received a copy of Carstens and Earles' Circular letter under date of March 8 (Their #39) I am certainly convinced that other brokers are staying in line. Later President Griggs wrote further concerning the Menz Lumber Co. as follows: It would strike me that the Menz Lumber Co. can well afford to get in line in view of the strong stand taken by the major por- tion of the shippers. 1 Complaint against Hill Lumber Co. — The foregoing discussion has dealt, except in the case of the W. I. Carpenter Co., with firms who were signers to the agreement. The following correspondence, relat- ing to the Hill Lumber Co., shows an attempt to bring a nonsigning firm into line with the association policy. [St. Paul & Tacoma Lumber Co. letterhead.] Tacoma, Wash., May IB, 1905. Mr. Victor H. Beckman, Sec'y, 6O4. Lumber Exchange, Seattle, Wash. Dear Sir: I wired you this morning as follows: "Notify Hill Lumber Co., Tacoma, complaints entered con- cerning cut list. Suggest they withdraw circular." which I hereby confirm. We understand today from members of the Association that the Hill Lumber Co., of this city, have a Un letter quoted in full on p. 403. PRODUCTION AND WHOLESALE DISTRIBUTION. 407 cut list out all the way from 500 to $3.00 per M on various items on the Association list. If these people are not signers of the agreement, think it would be well to take the matter up with them and if we can bring any influence to bear to protect our E rices, we certainly want to do so. It is a question of our ecoming involved in any legal fight if we notify the members of the Association; but think the information can be given out in case the Hill Lumber Co. refuse to withdraw the list. Yours truly, E. G. Griggs, President, P. 0. L. M. Assn. [St. Paul & Taeoma Lumber Co. letterhead.] Tacoma, Washington, May 16, 1905. Mr. Victor H. Beckman, Sec'y, 604 Lumber Exchange, Seattle. Dear Sir: I am in receipt of the attached communication from The Hill Lumber Co., Tacoma, and would suggest that this matter be taken up at the next meeting of our Association. The Hill Lumber Co. are not signers to the agreement, but we presume they are making purchases from a good many of the Association mills. Yours very truly, E. G. Griggs, President, P. G. L. M. Assn. (The Hill Lumber Co. letterhead.) Tacoma, Wash., May 15, 1905. E. G. Griggs, President, P. 0. L. M. Assn., City. Dear Sir: Your favor of the 12th at hand. It is true that we sent out a list on Fir Lumber under date of May 1st, copy of which we enclose herewith showing prices delivered on a 400 rate. We also sent along a circular with this list, making a special offer on some items on which we were long. We have been adhering to list prices, with the result that we were getting practically no business, and yet reports were coming to us from all sides that signers of the agreement were cutting list and getting the business away from us. In fact, we had been told by some whose names appear as signers to the agreement that they were not getting list in all cases. Under the circum- stances we felt that we were too much handicapped and decided to go ahead and quote such prices as we thought necessary to meet competition, as we cannot consent to have our business taken away by parties who will not keep faith when they enter into an agreement. We have never signed up, and yet we have been trying to maintain the prices and will still except in special cases. There is no desire on our part to make a general cut and we think our prices will average about as good as the majority of the shippers. Yours truly, The Hill Lumber Co., Per C. E. Hill, President. 408 THE LUMBER INDUSTRY. Notwithstanding Mr. Griggs's suggestion that the matter be taken up in the next association meeting, no reference to the subject was found in the official minutes of the regular monthly meeting held in Seattle on May 26. The veiled threat in the last sentence of Mr. Griggs's letter of May 16 suggests a possible resort to boycott methods, as does the one in a letter which he had written to Mr. Beckman May 1: I am in receipt of advice that Robert Wilson is cutting prices indiscriminately, and I believe we should get out information to the mills promptly as to what wholesalers are standing with them so we can do the needful. On May 26, 1905, the rail branch of the Pacific Coast Lumber Manufacturers' Association met at Seattle. An extract from the speech of Victor H. Beckman at this meeting is as follows: The Minneapolis representatives commend the action of this association and the Southwestern Washington Association in maintaining prices, it being the first time on record in several years. Buyers generally are accepting the new prices, it having been demonstrated that they are heing maintained. The action » of the association in eliminating from the list of signers certain people who did not maintain their obligations had a salutary- effect in the eastern dealers and with the exception of a few accusations of price cutting the agreement is being well main- tained, cast and west. The official minutes of the monthly meetings of March 31 and April 28 contain no record of such action. The only statement bear- ing on the Centralia agreement in the record of the March 31 meet- ing is : After considerable discussion as to the Centralia agreement the meeting adjourned. The only direct references found in the record of the April 28 meeting were: Mr. Griggs brought up the question of maintenance of the price list. Mr. McCormick stated the Southwestern Washington Lumber Manufacturers' Association favored the existing list. The associations apparently were very successful in maintaining the Centralia agreement after the first of July, 1905. In fact, few com- plaints were reported after the first of June. In July, 1905, the joint agreement was amended slightly to read, as follows : JOINT AGREEMENT. We, the undersigned, hereby agree to maintain the official list adopted at a joint meeting of the Southwestern Washington Lumber Manufacturers' Association and a committee of the Pacific Coast Lumber Manufacturers' Association, held at PBODUCTION AND WHOLESALE DISTRIBUTION. 409 Centralia, Washington, March 8th, 1905, same to be maintained in all territory, with the exception of 50-cents per 1,000 feet discount to line yards ; a line yard dealer to be construed as one owning not less than five yards. This agreement to include all such changes heretofore made at a joint meeting of the_ two Associations and to be made here- after, and is to remain in force until annulled by mutual consent of the Joint Committee on Values. Name Address July ,1905. Circular No. 283, sent out by Secretary Beckman under date of September 25, 1905, gave the names of 139 manufacturers who had signed the above agreement. Also, he gave the names of 32 whole- salers, listed under the following caption: Those wholesalers who Tiave signed the agreement and are endeavoring to obtain living prices for your lumber, and who deserve your consideration are as follows: It will be observed that the Centralia agreement placed the author- ity of making changes in the price list in the joint committee on values. The joint committee was originally made up of representa- tives of the Pacific Coast Lumber Manufacturers' Association and the Southwestern Washington Lumber Manufacturers' Association. Later the Oregon Lumber Manufacturers' Association's representa- tives took part in the meetings of the joint committee on values. This agreement was to remain in force until annulled by mutual con- sent of the joint committee on values. There was nothing in the records of the associations or in the minutes of the meetings of the joint committee on values which indicates that the Centralia agree- ment was annulled prior to June 30, 1906. The records show that at least one firm signed the agreement as late as March 1, 1906. A prominent wholesaler of Puget Sound told an agent of the Bureau, after discussing the Centralia agreement, that in his opinion the agree- ments of the association as to prices were never very effective. He believes that they did result in obtaining more stable prices, and that probably the manufacturers benefited by them, but he states that some of the larger manufacturers who have been prominent in asso- ciation work have always been the ones who benefited most and that he marvels at the fact that the smaller manufacturers will cooperate with them and enter into agreements, because in every instance the large manufacturer is the one who cuts the price just enough to get the business. During the life of the Centralia agreement the association price lists were changed from time to time. It will be noted that such changes were provided for specifically in the last paragraph of the agreement shown above. 410 THE LUMBER INDUSTRY. Relations between the different associations. — A number of Oregon manufacturers signed the Centralia agreements of March and July, 1905, but the Oregon association does not appear to have formally adopted it. On April 18, 1905, Victor H. Beckman met with the Oregon manufacturers at Portland. The purpose of the meeting was to organize an association among the Oregon mill men. At this meeting it was decided to meet again on May 6, and on that date the Oregon Lumber Manufacturers' Association was organized. On May 27 the new association held another meeting in Portland, completing some details of the organization. The domestic fir com- mittee appointed at this meeting met, after the association adjourned, and arranged for a meeting to take up the issuance of a price list and grading rules. That the Oregon manufacturers were not working in entire harmony on price policies with the two other associations at this time is indi- cated by the following letter of June 3, 1905, from President Griggs to Secretary Beckman : I am in receipt of advice from St. Louis territory that Portland mills are quoting exceptionally low prices, possibly $2.00 to $2.50 off our list on Flooring, $4.00 on Partition and $2.00 off on Step- J)ing. While we have no definite territorial agreement of price ist understanding with them it would be well to keep this matter in mind when we come to price agreements. Efforts were early made to get the new association to adopt price policies in common with the two older associations. The Southwestern Washington association at its June 6, 1905, meeting decided to abolish the 50-cent concession to line yards, or to grant the same concessions to large buyers for single yards, provided the other associations would concur. The secretary of the Oregon association at its June 24 meeting was instructed to notify the South- western association that the Oregon association was opposed to grant- ing any concessions to line yards. 1 The Southwestern and the Pacific Coast associations appear to have been working in close touch with each other, at this time, in the mat- ter of prices. For example, the South western association met at Cen- tralia July 27, 1905, and recommended the price on stringers be increased 50 cents. This action was to be communicated to the Pacific Coast association, and if it agreed to the raise, the new price was to be adopted. Among the items changed in the price list, at the meeting of the Pacific Coast association at Seattle on July 28, was bridge stringers, which were advanced 50 cents. i Apparently there was some opposition to this measure at this time on the part of the Pacific Lumber Manufacturers' Association. No action on the proposition was taken until the Feb. 23 meeting, when the following resolution was passed: "Resolved, That no concession to line yards or others be allowed on the list, and that a commission of 50 cents per 1,000 feet be allowed legitimate commission men and brokers." PRODUCTION AND WHOLESALE DISTRIBUTION. 411 On August 25, at the semiannual meeting of the Pacific Coast Lum- ber Manufacturers' Association, Secretary Beckman after referring to the Southwestern Washington association and the Oregon association stated: Both associations are working in harmony with the Pacific Coast Lumber Manufacturers' Association and their influence has been strengthening, especially in the matter of prices and railroad questions. President Griggs wrote on August 29, 1905, a letter to Secretary Beckman, on the subject of merging the fir associations, in the course of which he said in reference to the other associations: There is a good deal of feeling on the part of these fir men on the fine that their interests are not absolutely identical with some of the others in the Association and better results are often obtained by local organizations and these co-operating with the larger central one. In fact, I am in favor of having a meeting of both price list committees, which after all is the main feature in Association work with the majority of the mills. Our price list committee should be particularly alert on this matter and try and keep them in line with us, and by mutual concessions get together at all times. A meeting of the joint committees on values of the Pacific Coast Lumber Manufacturers' Association and the Southwestern Washing- ton Lumber Manufacturers' Association was held in Centralia, Wash., on September 15, 1905, at which substantial advances were made in the list of July 28. At this same meeting "on motion it was decided that this list does not [apply] to sales made within the borders of the State of North Dakota." The significance of this action and the motive of the lum- bermen will be clearly seen from the following from the American Lumberman of September 30, 1905, page 40: Washington lumber and shingle manufacturers have with- drawn all price lists from North Dakota and, until the legality of the new antitrust law of that state can be determined, sales from this territory will be on a cash basis. The Southwestern Washington Lumber Association, controlling price lists of the mills in that part of the state, by resolution has agreed that shipments into North Dakota shall not be affected by associa- tion rulings and notice has been served on the Pacific Coast Lumber Manufacturers' Association by many of the big oper- ators in this section that they have withdrawn the North Dakota list. The new North Dakota statute provides that no goods pro- duced by members of any trust or association of two or more persons organized to regulate prices or traffic shall be received in that state or, if so, the transaction is to be deemed illegal. The only exception to the rule is made to combinations con- trolling live stock or agricultural products. The law provides that a Dakota purchaser, upon a snowing that his bill of goods 412 THE LUMBER INDUSTRY. is received from a trust or person connected with a trust or association, may refuse payment for the same and be awarded the goods on his showing. A heavy penalty is attached for fail- ure to file a certificate showing that the shipper is not connected with any trust or association organized for the purpose of con- trolling prices. While the lumber business is hit hard the law can be applied to almost every commodity. While the lists are withdrawn it is not expected there will be any trouble in maintaining prices in that state. The demand for all kinds of lumber is very heavy and with the coast mills still choked with orders and a car shortage on the association prices will be very liable to prevail. That the efforts to bring the three associations together in their price-list activities finally succeeded is shown by the following sum- mary of the year's work given by Secretary Beckman at the annual meeting of the Pacific Coast association on December 12, 1905: In April of the present year the secretary of this association called a meeting of the Oregon lumber manufacturers, and as a result the first 1 lumber association ever formed in that State became a reality. The Southwestern Washington Lumber Man- ufacturers' Association, composed of a number of active workers in Lewis, Thurston, Pacific and Cowlitz counties, has been in active operation for over five years, and two years ago formed a selling agency which has done more real good for the lumber industry in Southwestern Washington than all other causes com- bined. As a result of association work the three associations are working in harmony in all matters affecting the fir, spruce, and cedar trade, representing an annual output of nearly 3,000,000,000 feet, or nearly 90 per cent of the fir, spruce and cedar production of the entire Pacific Northwest. This intelli- gent cooperation has been worth to the lumbermen of the Pacific Northwest no less than $5,000,000 during the year now drawing to a close. In reference to the importance, of this cooperation, the Pacific Coast Lumber Trade Journal, of which V. H. Beckman was also editor, stated in the issue of November, 1905, page 11: These statistics give some conception of the power behind the new triple alliance on the fir price list, and there appears to be absolutely no question as to the maintenance of the list changes that have been made and which will be made under this new compact. In the report, at the same meeting, of W. A. Whitman, chairman of the committee on fir values, it is stated: Conditions in all markets in which fir is marketed commenced to become better at the opening of the year 1905 and have continued steadily getting better as is obvious by the issuance of new price lists each time showing advances on the different dates mentioned, namely: January 27th, February 24th, March 8th, March 31st, June 30th, July 28th, Sept. 15th, and Oct. 27th, 1905, making in all eight lists for the year. 'Mr. Beckman "- """ PRODUCTION AND WHOLESALE DISTRIBUTION. 413 He also submitted a table showing in detail the list prices pro- mulgated on each date, and remarked, in reference to the interasso- ciation price activities: During this year the price list committees of the three asso- ciations, namely: Pacific Coast Lumber Manufacturers' Asso- ciation, Southwestern Washington Lumber Manufacturers' Association and the Oregon Lumber Manufacturers' Association, arranged for joint meetings at which were adopted uniform price lists and values. This should have the effect of establish- ing uniform values on all classes of material in Washington and Oregon west of the mountains. Basing his computations on the table in the Whitman report, Secretary Beckman figured out an average advance for the year of $2.80 per thousand feet. He issued a circular under date of Feb- ruary 21, 1906, showing in detail, for each of the 109 members in the rail and 54 in the cargo branches of the association, the total estimated gain, and the dues paid by each, claiming: "On this basis this association enabled our members to make the following amounts over and above the prices prevailing in 1904." The recapitulation of the detailed advances shown and dues paid is as follows: Gain, 1905. Dues paid. Rail branch $3, 133, 210. 00 $8, 414. 89 Cargo branch 2,131,040.00 2,459.20 $5, 264, 250. 00 $10, 874. 09 This circular illustrates the extravagance of the claims put forward at various times by other association officials before 1906. Secre- tary Beckman's assumption that all of the advance in price was due to association activity is open to serious question.. His method in compiling these particular figures was faulty, in that he used a simple average of the advances on all items, regardless of the proportion of each sold. On February 22, a joint meeting of representatives of the Oregon Lumber Manufacturers' Association, the Pacific Coast Lumber Manufacturers' Association, the Southwestern Washington Lumber Manufacturers' Association and the Western Pine Manufacturers' Association was held in Tacoma at which 1 "the fir list of January 1 was advanced $2 on all items, except ties $1 and lath 25c." Section 11. Change in the price-list policy in 1906. In common with many other associations the fir manufacturers found it desirable to change the policy of openly promulgating asso- ciation price lists. The Oregon association appears to have taken the initiative in this matter. The last reference in its minutes to an Pacific Lumber Trade Journal, March, 1906, and West Coast Lumberman, February, 1906, p. 24a. 414 THE LUMBER INDUSTRY. official price list is in connection with its June 16, 1906, meeting when it was voted — that the Domestic Fir Committee be authorized to confer with the price list committees of the other two associations and request them to issue a new price list, with the understanding that our committee be requested to request an advance in prices. In a letter written by Edmund P. Sheldon, secretary of the Oregon Lumber Manufacturers' Association, to members of the association, under date of June 27, 1906, he said: In the future the Association will not distribute lists to be sent to the trade with the imprint of "The Oregon Lumber Manufacturers' Association" upon them. This is because of recent action taken against some of the associations by several district attorneys of the United States in their respective districts. At a meeting of the rail branch of the Pacific Coast Lumber Manu- facturers' Association held June 30, 1906, the following action was taken: Mr. Chas. E. Patten moved that the committee on values of this association be abolished, that all action taken by any com- mittee of this association having reference to values and prices be hereby rescinded, and that all price lists issued by this asso- ciation are hereby rescinded; the motion being seconded and unanimously adopted. The Southwestern Washington association also abandoned the issue of official price lists about this time. Section 12. Uniform price lists since June, 1906. Although for several years following 1906 the fir associations adopted no official price list, price activities, similar to those ostensibly abandoned, were carried on by officials and members of the associa- tion in a manner which, for all practical purposes, made the lists issued association lists. The so-called "prevailing prices'' Usts were generally accepted as taking the place of the former Pacific Coast association lists, and price lists issued by Anderson & Duniway Co., a printing firm of Portland, filled the place of the former Oregon and Washington association lists, while the Southwestern Washington association sometimes officially adopted one or the other of the fore- going lists. During this period also repeated attempts were made by the associations to establish a uniform price list which could be used by all three. For clearness of description each of the foregoing lists will be discussed separately. It must be remembered, however, that the events described occurred contemporaneously. "Prevailing prices" rail-shipment lists. — In the case of the Pacific Coast association the new lists took the form of "prevailing prices" lists, which were first ostensibly compiled and issued by PRODUCTION AND WHOLESALE DISTRIBUTION. 415 Victor H. Beckman and later by the Pacific Lumber Trade Journal. The first of this series was issued on August 1, 1906, and the last on August 2, 1909. Following the action of the association at the meeting of June 30, 1906, abolishing the committee on values and rescinding all price lists issued by the association, prices of lumber were furnished the trade in printed form very much resembling the old price lists. The following appears on the face of this publication: 1 Prevailing Prices of Fir, Spruce, Cedar Lumber for Kail Shipment as Ascertained August 1, 1906. Victor H. Beckman, Secretary. An example of the press comments on the new fist appears in the Seattle news of the American Lumberman of August 18,1 906, page 60 : The advance in lumber prices has been confirmed. The first list issued under authority of the association since February 23 is being distributed to-day. It is in the form of advices from the association to members that the new prices shown now prevail at the Washington mills. The figures were given to Secretary Beck- man by the manufacturers in response to inquiries sent out by him. While the prices have been generally adopted by mem- bers of the association that organization had nothing to do with ordering the advance, it simply acting as an agent of information. These "prevailing" prices were regarded and used as a price list, as is shown by the following from a letter dated December 22, 1906, from George E. Birge, manager of the Lumber Manufacturers' Agency, of Centralia, Wash., to Victor H. Beckman: We are returning the blank list with notation on the same that we have sold nothing for less than the August list for the last four months, and, in some cases, we have received a premium. We shall attend the meeting in Tacoma on the 29th inst., and some of our committee will confer with yours relative to such changes as we would recommend in the August list. As a result of this Tacoma meeting a fist under date of January 1, 1907, was issued. In the news from Seattle, dated January 16, published in the American Lumberman of January 26, 1907, page 74, is the following: The Pacific Coast Lumber Manufacturers' Association advis- ing the trade of market conditions has issued a new price list dated January 1, 1907, showing an advance of from SI to $2 in almost every item. The Southwestern Washington Lumber Manufacturers' Associa- tion, which also had stopped issuing "official" price lists in 1906, decided to follow the prices " ascertained" by the Pacific Coast Lum- > On the cover of the booklet which contained the prices shown on freight rates ranging from 15 to 72 cents, the title was given as "Prices current" and the following statement made: "As ascertained August 1st, 1906, from actual quotations at the mills, to which is added freight charges as per rates indicated." 416 THE LUMBER INDUSTRY. ber Manufacturers' Association. The following from the minutes of the meeting held at Centralia January 5, 1907, bears on this point: Moved by Mr. Yeomans that inasmuch as this Ass'n did not issue a price list, all members be governed by the prices as ascertained by the Pac. Coast L. M. A. at their last meeting. Motion carried. A circular letter of January 15, 1907, sent out by the secretary of the Southwestern association to the members begins: The following is the increase in prices of lumber as ascer- tained at the last meeting of the Pac. Coast Lbr Mfrs Assn and the Southwestern Wash. L. M. A. since Aug. 1st 1906 and should be added to your lists of that date: [A list of 13 items, with their respective price advances, follows.] By 1908 the association evidently had arrived at a decision that it was unwise for the name of their secretary or that of the association to appear on these lists. The list of January 1, 1908, did not bear the name of "Victor H. Beckman, secretary," but instead had "Pacific Lumber Trade Journal." It should.be noted that Victor H. Beckman, in addition to being secretary of the association, was also at this time editor of the Pacific Lumber Trade Journal, and continued to be until August, 1909. The following comparison of the f . o. b. mill prices of various grades of lumber, as shown in the association list of February 23, 1906, the two sets of prices "ascertained" by Victor H. Beckman dated August 1, 1906, and January 1, 1907, and the prices "as ascertained" by the Pacific Lumber Trade Journal for January 1, 1908, shows a striking uniformity: V. G. flooring. No. 1. No. 2. No. 3. Ceiling J. No. 1. No. 2. No. 3. Drop siding. No. 1. No. 2. No. 3. February 23, 1906. August 1,1906... January 1, 1907... January 1, 1908 . . $27. 00 27.00 ■27.00 27.00 S24.00 24.00 24.00 24.00 519. 00 19.00 19.00 19.00 120.50 20.50 20.50 20.50 $18. 50 18.50 18.50 18.50 $13.50 13.50 13.50 13.50 $22.00 22.00 23.00 23.00 $20.50 21.50 22.50 22.50 $18.00 18.00 18.00 18.00 Not a single change from the -February 23, 1906, list is shown in either flooring or ceiling. There were changes in some other items. While it is true that the manufacturers sold their lumber practically at list for much of the time, it is also true that neither on January 1, 1908, nor during the two months preceding did they get the "ascer- tained prices." The Bureau determined this by examining the invoices of many large companies, which together sell several hundred million feet of lumber. The January 1, 1908, "ascertained" price was the flimsiest sort of a subterfuge. The "ascertained" price's published for the trade were no more than a price list, and served the PRODUCTION AND WHOLESALE DISTRIBUTION. 417 same purpose, even though the association did not vote on their final adoption as had been done in earlier years. The Pacific Lumber Trade Journal issued lists of "prevailing" prices, dated August 10, 1908, December 18, 1908, and March 31, 1909. While these were all labeled "prevailing prices" as "ascer- tained" on date of the fist, the Pacific Lumber Trade Journal printed discount sheets to accompany them. The status of the "prevailing prices" issued by the Journal under date of December 18 is shown by the following letter from the Atlas Lumber & Shingle Co. to an eastern sales agent. Under date of December 24, 1908, C. E. Patten wrote: We are enclosing new list issued on Dec. 18th by the Pacific Trade Lumber Journal, which supersedes their last list of Jan. 1st, 1908, which has been the list in universal use since that time. We also enclose discount sheet which fifteen or twenty of the best manufacturers have agreed to use. Instead of sending out our list at the same price as herein, we are deducting the dis- counts and publishing the new list, which really amounts to the same thing. Most of the other manufacturers are going to get out a duphcate of the enclosed list, and mail it to the dealers with the discount sheet enclosed. We would be pleased to have you keep us advised as to how many of these you run across. Mr. Patten wrote to the same sales agent the following letters : To-day we received one of the St. Paul and Tacoma new list which we find is almost an exact copy of our January 1st list. There are two or three unimportant items that vary. Yesterday I saw Mr. Hansen of the White Paver and Mr. Whitman of the Tacoma Mill Company. They stated that their lists were in the hands of the printers, and that five or six other firms are getting out new lists and they are all based the same as our January list. We hope this will have a good effect on the market. (Letter of Jan. 7, 1909.) We herewith inclose a new revised list dated January 1, 1909, issued by the Lumber Mfg. Agency at CentraUa. We understand that they and all of the mills in the South- western Association have agreed to use this list. If you will compare it with our January 1st list, you will find that they are practically the same. On a few items, we are 500 or $1.00 higher than their prices and on other items, they are 500 or $1.00 higher than .our prices. We will send you the other lists as soon as they are received, and it would be well for you to carry them and show them to your customers as it may brace them up. (Letter of Jan. 8, 1909.) We are in receipt of your letter of the 10th, stating that you presume our wire of the 10th was intended for a discount of $5.00 on January fist 1907 which is the latest list you have. Now, we desire to say that we have always sent you all of the so-called Association "lists as soon as they have been issued. The last one was issued under date of December 18, 1908. On this was based our list of January 1909. The above list is published by the 25030°— 14 27 418 THE LUMBER INDUSTBY. Pacific Lumber Trade Journal as the Association never publishes any lists, or has not for some two years, so whenever we refer to the Association list, we always mean the latest list issued by the Pacific Lumber Trade Journal. We are sending you another copy of this list, so that there may be no mistake as to our mean- We also inclose their discount sheet #1 under the same date. Our list of January 1st was based on the Association list less the regular discount, i. e., we sent out a new list. It is our intention for you to sell common lumber at $5.00 off their December 18th list when necessary. (Letter of Feb. 16, 1909.) On April 28, 1909, Mr. Hogg, of the Atlas Lumber & Shingle Co., wrote one of their eastern sales agents as follows: I have not had time to get that list of manufacturers about which we spoke, but will do it just as soon as possible. The situation is very bad from the manufacturer's standpoint and at a meeting held this morning in the office of the Secretary of the Association, at which there was in attendance a number of the Inland Empire and Portland manufacturers these manufac- turers claimed they are making a concerted effort to keep prices up and they are urging Coast manufacturers to get in lme. It seems as though it is almost impossible to have any concerted action among the Coast manufacturers, still a Committee was appointed with a view of having a talk with the larger manu- facturers, and we are going to ask them to not only cut out the jobber but to stand firm for prices at $4.00 off list. All pre- dicted that they saw a better demand from 30 to 60 days in the future and many were optimistic enough to predict that in 60 days conditions would right themselves. We hope so. The meeting above referred to was no doubt the one at which plans for curtailment were formulated. (See pp. 447-448). Under date of May 25, 1909, the Anson Lumber & Shingle Co., of Kansas City, Mo., wrote the Journal as follows: A price list issued by your Company for the Nelson Lumber Co. of your city has been brought to our attention. We would like to know if this is considered the Association list on western lumber. If so, what is your price per dozen, hundred and five hundred lots, how often are they issued. Also please give us any other information pertaining to lists in ques- tion. The Journal replied as follows on June 4, 1909: Answering yours of recent date, will say that the price list concerning which you inquire is the official list for Western Washington. Copies are being forwarded you under separate cover. There is evidence to show that in 1909 the work of the committee on values, which was abolished June 30, 1906, was being performed by another committee. The following correspondence which took PRODUCTION AND WHOLESALE DISTRIBUTION. 419 place immediately before the publication of the Pacific Lumber Trade Journal "prevailing prices" list of August 2, 1909, together with discount sheet, No. 1 of the same date, throws light on the method by which the discounts were determined. The following letter bears upon one of the functions of the "statistics and labor committee": [Letterhead of National Lumber & Box Co., Hoqulam, Wash.] Hoquiam, Wash., July 28, 1909. Statistics and Labor Committee. — J. H. Bloedel, Bellingham, Wn.; S. L. Johnson, Seattle, Wn.; H. W. Stuchell, Everett, Wn.; J. G. Dickson, Tacoma, Wn.; J. D. Butler, Seattle, Wn.; W. H. Oliver, Seattle, Wn. Gentlemen: The writer is of the opinion that an f. o. b. schedule of prices as enclosed, can be maintained commencing August 1st. Will be. glad to have you give this matter consid- eration and if basing values proposed meets with the approval of the majority of the Committee, would suggest that they be reflected to the members of the Association as the prevailing prices. Yours respectfully, National Lumber & Box Company, (Facsimile) A. F. Peterson, Ass't Mgr. On July 29, 1909, the Tacoma Mill Co. wrote to the Lumber Manu- facturers' Agency, at Centralia, as follows : We believe the present market prices are on the basis of the following discounts from our list of March 4th, 1909 (which is the same as the last list issued by the Pacific Lumber Trade Journal) : [The discounts appear in the table on p. 420.] We are about to issue a new discount sheet as above and would like to inquire if you are selling on this basis. According to the minutes of the meeting of the Pacific Coast Lum- ber Manufacturers' Association, on July 31, 1909, "Discussion as to market conditions showed that the following discounts were being made." (The discounts appear in the table on p. 420.) The following letter under date of August 2, 1909, was written by the Tacoma Mill Co. to the Lumber Manufacturers' Agency: Gentlemen: Your favor of the 30th ult, at hand, and we wish to say that it is the belief of the Larson Lumber Co., St. Paul & Tacoma Lumber Co., Dempsey Lumber Co., Clear Lake Lumber Co., South Bend Mills & Lumber Co., Grays Harbor Commercial Co., and ourselves that present market conditions justify discounts as follows: [The discounts appear in the table on p. 420.] It is our intention to issue a discount sheet accordingly. The demand for lumber is getting better every day and as the fall trade is close at hand, it is up to the manufacturers to get busy at once if they expect to get prices which the demand for fall requirements will justify. We hope that you can act in harmony with the above dis- count sheet. 420 THE LUMBER INDUSTRY. On August 2, 1909, the Pacific Lumber Trade Journal published "prevailing" prices, which were the same as those shown in the list of March 31, 1909, together with a discount sheet entitled: "Dis- count sheet No. 1 — Pacific Lumber Trade Journal F. 0. B. List, August 2, 1909 — Discount from prevailing prices." The following tabular statement affords a comparison of the four sets of discounts on fir lumber: Items Tacoma Mill Co. letter of July 29, 1909. Association meeting of July 31, 1909. Tacoma Mill Co. letter of Aug. 2, 1909. Pacific Lum- ber Trade Journal dis- count sheet of Aug. 2, 1909. Flooring, V.G Flooring, F. G 1x4 1x6 Ceiling Partition Porch decking Drop siding Common boards and shiplap Car siding and roofing Common dimension: 2x3-2x12 Other sizes Timbers Other items SI. 00 4.00 Not sepa- rately shown. 4.00 4.00 4.00 4.00 4.50 Not shown. 4.50 4.00 4.00 All straight list. si. oo $1.00 $1.00 f 4.00 L 3.00 3.00 3.00 3.00 Not shown. 4.50 3.00 > 4. 50 4.00 7 items at list. 4.00 3.00 3.00 3.00 Not shown. 3.00 4.50 Not shown. 4.50 4.00 4.00 All other items, list. 4.00 3.00 3.00 3.00 3.00 3.00 4.50 3.00 4.50 4.00 All other items, list. A comparison of the two Tacoma Mill Co. letters shows that the discount on drop siding was changed from $4 in the first to $3 in the second. The only difference between the prices of similar items in the association list, the second Tacoma Mill Co. list, and the Pacific Lumber Trade Journal list, is that in the Tacoma Mill Co. list the dis- count on 2 by 3 to 2 by 12 inches dimension was S4.50 and on other sizes $4, while in the other two lists all sizes of dimension were sub- ject to a $4.50 discount. In an official . circular of August 17, 1909, Secretary Beckman called attention to the similarity of prices in the following language: ' ' Beports from our members as to ' asking prices ' show a remarkable unanimity in quotations — and you will note same in a subsequent circular." Anderson & Duniway Co. lists. — About the time of the discon- tinuance of the official fists of the Oregon association a printing firm by the name of Anderson & Duniway Co., of Portland, Oreg., began to issue lumber price lists which were used by the Oregon manu- facturers. It has been the claim of some lumbermen that the lists issued by this firm were in no way authorized by the Oregon association, and that there was no connection whatever between the association and the printing company. The following letter of July 6, 1906, from the association's secretary to Shaw & Kivett, of Boise, Idaho, refutes that claim as far as this earlv period is concerned: PRODUCTION AND WHOLESALE DISTRIBUTION. 421 Your letter of June 30th written to the Anderson & Duniway Co. of this city has been referred to me for reply. The Associa- tion does not issue pricelists to any one but to members, and Anderson & Duniway as our printers have no authority to print lists except by orders through the Association. If, however, you are agents for the D. L. Kelly Lumber Co., by order from that company we will have printed for you price lists bearing the name of the D. L. Kelly Lumber Co. with your name at the bottom as agents of the above company. The following letter, dated September 11, 1906, from Secretary Sheldon to the Calapooia Lumber Co., shows the active interest which the association officials took in holding mills up to the price list: I have received your two letters of Sept. 8th. In regard to the Columbia River Lumber Co. and their purchase of No. 2 V. G. Flooring 4-inch at $24 per M. I will say that I will en- deavor to find out where they have made this purchase. Mr. Botzford, the manager, is out of the city to-day and will not return for 3 or 4 days. As soon as I see him I will take pains to ask him where he has bought lumber at this price. It may be that he bought it for Eastern shipment as $24 is the present price of that grade, whereas for California it should be $26. Of course it is not possible for all the mills in the Association to hold out to list prices, but it is a good thing to find out which mills are not living up to the list and keep them informed of exact market conditions. In regard to the matter of discount I will say that most of the mills are using the new terms of Sale, but on account of so much lumber being tied up between here and San Francisco there is arising a good deal of discussion in regard to the matter and I find that mills are ready to do anything if they can get an order through to California points. A large amount of the lumber produced in Oregon goes into the California cargo trade. The rebuilding of San Francisco in 1906 after the earthquake and fire called for a good deal of lumber. It will be noted that in the foregoing letter the price of No. 2 V. G. flooring for eastern shipment was $24, while $26 was expected to be asked for California. A high discount list was published by the Anderson & Duniway Co. under date of May 1, 1908. This list was generally used by the Oregon fir manufacturers. The following informal report made on behalf of the domestic fir committee at a meeting of the Oregon & Washington Lumber Manufacturers' Association, held in Portland August 15, 1908, indicates that this list was satisfactory: Chairman F. C. Knapp stated that he had no special report to make except as he would suggest that the members get in touch with Anderson & Duniway Co., publishers of the Standard Oregon Pricehst "A," and order supplies for their use. He had been advised from a number of sources that this discount list was working very well in practice. 422 THE LTJMBEB INDUSTRY. In a letter dated September 24, 1908, George E. Birge, of the Lum- ber Manufacturers' Agency, writes as follows to F. C. Knapp, of Portland : There was a meeting of the South- Western Association here yesterday at which time a new price-list was adopted. Your Mr. Wastell was here and seemed very much pleased with the course we were pursuing and the prices we have adopted. On the same date Mr. Wastell, the secretary of the Oregon & Washington Manufacturers' Association, wrote to the Pittock & Leadbetter Co. as follows: In accord with 'phone conversation this date, we enclose here- with discount sheet showing quotations for the month of Sep- tember, 1908. The ink markings indicate probable prices that will be quoted during the month of October. In regard to the current price list, the standard Oregon list "A" is now generally used, and copies can be secured from Anderson & Duniway Co., 208 Alder St., Portland, Oregon, at a rate of 4£0 each in lots of any number you wish, from 100 up. The following letters show the cooperation of association officers and the Pacific Lumber Trade Journal in the matter of price lists. Secretary A. B. Wastell wrote as follows to Robert B. Allen, man- ager of the Pacific Lumber Trade Journal, under date of November 11, 1908: I am pleased to acknowledge receipt of your favor of the 9th inst. and to enclose you herewith discount sheets which have just come off the press and which apply to Oregon List A. The tabu- lations as made* by Anderson & Duniway Co. were checked over by a number of mill men and we anticipate that these discounts will prevail from the responsible mills in Oregon in quotations on future business. I also hand you the old discount sheets cover- ing October 1st schedules as requested, so that you will be in a position to note changes. We hope that your missionary work on E rices will result to the mutual advantage of all Northwest lum- ermen, and certainly our people should appreciate- the interest you have taken in this matter. I will suggest prior to the next meeting of the Pacific Coast Lumber Manufacturers' Association to two or three of our people to run up to the meeting and report on trade conditions in Oregon, in accord with your suggestion. And on December 23, 1908, as follows: I beg to acknowledge the receipt of your letter of the 18th inst. and copy of prevailing prices as ascertained December 18, 1908. Although your statement that the prevailing prices are subject, to discount is an " Irish Bull" we consider it entirely pardonable, as we have been guilty of perpetrating the same practice our- selves. I do, however, want to call your attention to an apparent over- sight. In checking over the list I note there is a difference of S3 on 1 x 4 and 1x6 Flat Grain fir flooring whereas in the list of August the difference was $1.00 which agrees with the differential PRODUCTION AND WHOLESALE DISTRIBUTION. 423 in our list. Uniform discount of $3.00 off on these two items brings 1x4 flat grain flooring entirely too low in comparison with Oregon current prices. Of course, 1x6 slash grain moves freer than 1x4 slash grain and yet this differential, it seems to me, is beyond reason. Would appreciate your experience in this regard if the figures printed are correct. It looks to me as though you had raised the list on 1 x 6 and omitted to do so on 1 x 4. I meant to drop you a note on last Saturday when I noticed it on opening up the list but on account of our meeting occurring Saturday afternoon, I overlooked doing so. We are glad to acknowledge your efficiency in bringing about a better realization in the minds of the sales managers of the Wash- ington concerns that they were selling too cheap and your activ- ity has, without question, stimulated values for which you deserve the thanks of all the Northwest manufacturers. At the third annual meeting of the Oregon & Washington Lumber Manufacturers' Association, held in Portland February 20, 1909, Sec- retary A. B. Wastell described the use of the Oregon standard list and discount sheet as follows : The issuance of a discount pricelist for use in both eastern and California territory was undertaken by the Anderson & Duniway Co. of Portland and covers fir, spruce, cedar and shingles. The publishers have issued about 11,000 copies of this list and monthly communicate with all subscribers to the list comprising both manufacturers and wholesalers and issue on the first of each month discount sheets applicable to the list, representing aver- ages established by the consensus of statements from the several subscribers. This method tends to establish a stable market on our products for at least an interval of one month, so that eastern buyers, particularly car manufacturers, can safely figure on using fir in making bids on a lot of cars with the understanding that values will be constant for at least thirty days and that they will receive notice from the lumber manufacturers, by medium of the discount sheets indicating the state of the market. A new Oregon standard list was published May 1, 1909. This was a high discount list. A meeting of the stockholders of the Oregon & Washington Lum- ber Manufacturers' Association was held on September 18, 1909. The secretary of the association issued Circular No. 48, covering the proceedings at this meeting. At the close of this circular the following occurs : Note. — Just after adjournment telephone message was received from Centralia that the mills in Southwestern Wash- ington had decided at afternoon meeting to adopt the use of Oregon Discount List "B." A. B. W. Attempts to secure a uniform standard price list foe the three associations. — An early attempt to secure a uniform price list for the three associations of fir producers occurred in 1905. (See P. 411.) Throughout 1907, 1908, and 1909 rep eated attempts were 424 THE LUMBER INDUSTRY. made, reaching a success finally in the adoption by all three asso- ciations of the "standard list" of February 1, 1910. The corre- spondence files, minutes of association meetings, and contemporary comment in the trade journals furnish a good record of the difficul- ties encountered by the promoters of this interassociation list, and of the clashing interests which had to be reconciled. Repeated conferences were had at which delegates from the three associations were present, and after a conference had come into agreement the list was rejected by one or more of the associations. Finally, in the latter part of 1909, after repeated conferences, a list was pre- pared which was adopted by all three associations. The 1910 Standard Price List of Pacific Coast Forest Products. — The following extract from the report of the secretary of the Oregon & Washington Lumber Manufacturers' Association, dated December 20 1909, shows that the new "standard list of forest products" was to be used by several associations, and firms outside the associations: DOMESTIC FIR COMMITTEE AND BUREAU OF GRADES. F. C. Knapp reported that finally the new universal basis price-list was being printed. Decision satisfactory to the com- mittee had been reached, so that the much-talked-about high base list subject to discount to suit each manufacturer's ideas would soon be in circulation covering not only fir but also spruce and cedar. The list is named "Standard list of forest products" and will be used by manufacturers of Pacific Coast, Southwest- ern Washington, Oregon- and Washington, and Spruce associa- tions, as well as many firms outside of the associations, taking the place of the many lists now in use, which in itself will ob- viate much confusion, as reference to Standard List will be un- derstood on all quotations. The following from the report of the secretary of the Oregon & Washington Lumber Manufacturers' Association, dated February 19, 1910, indicates the plan of using the lists: STANDARD BASIS PRICE LIST. Harmonizing relative values between different grades and between different sizes and lengths has been accomplished by the compilation and issuance, on a high basis of a standard price list of Pacific coast forest product. There will be applied to this list by each manufacturer discounts to suit himself, on the products that he manufactures, but the relative values or the spread between items will be preserved and make for rela- tive stable value. This standard list is being rapidly adopted by fir manufacturers and is meeting with practically universal approval as to high basis and style. This new list is the fulfilment of years of effort on the part of active members of each association and will eliminate from the PRODUCTION AND WHOLESALE DISTRIBUTION. 425 buyer's desk a large number of lists, and will enable bim to understand wben quotations are received wbat Hst is referred to, thus obviating the confusion that has existed in the past through a multiplicity of lists. Further evidence that this hst was officially adopted by all Pacific coast associations is shown by the following letter, dated March 14, 1910, written by R. B. Allen, editor of the Pacific Lumber Trade Journal, to the E. K. Wood Lumber Co., of Bellingham, Wash. : Replying to your letter of March 11th, we beg to advise you that the August 2nd hst is out of print, but we herewith enclose you two copies of the February 1st, 1910 hst, which is now the official hst of all Pacific Coast associations. We can furnish you these lists in any quantity, on any rate, and with your own cover design, at a very reasonable price. This hst has been out only about a month and yet there are probably thirty-thousand of them in use. We also beg to advise that there is an agreement that this hst shall not be changed within a period of five years, and fur- ther that the grading Rules of the three associations will be altered to conform to it. The standard price list was constructed with an idea of expressing relative values between different grades. The prices were also made so high that it could be used as a basis list for years, and that a dis- count sheet would be necessary at least in the beginning. The infor- mation bureau showed its members what prices other members were obtaining and what discounts were allowed. The old price hsts, which were adopted by associations and which members were expected to maintain, were feared by most lumbermen to be illegal. The use of the standard price lists with discount sheets was an attempt to secure the results of the old price lists, and technically avoid violat- ing the law. The manufacturers considered that the standard price list was a basis hst such as is used in the hardware, glass, and other trades, and held that if such lists were legal, their new basis lists were legal. The associations apparently sought to avoid involving them- selves in legal difficulties, by adopting officially a basis hst showing prices so high as to be impossible of attainment, and by not adopting officially the discount sheets, which were absolutely necessary for any use of the basis hst. That the official basis list and the unofficial discount sheets were designed to accomplish the same purposes as the net price hsts is shown later. (Sec pp. 443-444.) On March 26, 1910, a meeting of -the board of trustees of the Pacific Coast Lumber Manufacturers' Association was held in Seattle, at which "the secretary was instructed to eliminate reports as to 'asking prices,' 'stock on hand,' and to revise the other monthly inquiry blanks." The minutes for this period show that the association was endeavoring to disclaim responsibility for the price hst that was being % 426 THE LUMBEE INDUSTRY. generally used. The minutes of a meeting on April 30 contain the following : A discussion as to trade conditions was then had. Every member present testified to the fact that trade conditions were satisfactory. Several stated that values were stiffening in many items, and that conditions had never been better in the past three years. It developed that the Universal List of Eelative Values, published by the Pacific Lumber Trade Journal is being used with but a few exceptions. The "standard list" is what is known as a "discount list." The significance of the price activities is shown in the changes which have taken place in the discount sheets issued from time to time, applying to it. During the more recent years, especially since January, 1910, the price activity of the fir manufacturers has been centered largely in the work of compiling and adopting uniform discount sheets, to be used in connection with the standard price list. These discount sheets have been published by the Pacific Lumber Trade Journal. From February 1, 1910, to March 1, 1913, 17 discount sheets applying to the standard list have been published. Nearly all of these lists have been adopted at "informal" meetings of manufacturers which have been held at intervals of about a month; the representatives of manufac- turers and selling agencies have frequently agreed to maintain the discounts adopted. (See pp. 428-441.) Many of these meetings were called by means of circular letters sent out to the mills by L. G. Horton, secretary and treasurer of the Northwest Lumber Co., and C. E. Patten, vice president and secretary of the Atlas Lumber & Shingle Co., who apparently were" members of an unofficial price committee. The discount sheets were printed by the Pacific Lumber Trade Journal. Discount sheet No. 1 was issued February 1, 1910, with the standard price list. On April 30, 1910, the Pacific Coast Lumber Manufacturers' Associ- ation held a meeting in Tacoma at which discount sheet No. 2, as pub- lished by the Pacific Lumber Trade Journal under date of May 1, 1910, was considered the "current market price." Discount sheet No. 3 was issued under date of July 1, 1910. On October 11, 1910, R. B. Allen, editor of the Pacific Lumber Trade Journal, wrote to E. R. Hogg, of the Atlas Lumber & Shingle Co., inclosing a copy of discount sheet No. 3. Mr. Allen said: These discounts apparently need some revision at this time, and we trust that you may find it convenient to give us your idea, by marking in such changes as may occur to you. This will be strictly confidential. It is for our own information, and we ask it with a -view to getting absolute accurate net values, and for the further purpose of attempting to produce a concession sheet that will help ptoarhr tb ° mor-i^f PRODUCTION AND WHOLESALE DISTRIBUTION. 427 On October 20, 1910, discount sheet No. 4 was issued. On January 11, 1911, S. L. Johnson, at that time with the Grays Harbor Commercial Co., sent a copy of discount sheet No. 4 to Mr. Allen "with pencil changes which you can modify to suit conditions." Mr. Johnson suggested that Mr. Allen consult J. G. Startup and E. R. Hogg. Discount sheet No. 5 was issued February 1, 1911. On April 6, 1911, R. B. Allen wrote a letter to the St. Paul & Tacoma Lumber Co. in which he stated: We have your letter of April 5th, asking for a few of the latest di?r junt sheets, and we take pleasure in enclosing you discount sheet No. 5, which you will probably not find in line with the pifcsent market. The writer is gathering data now for discount sheet No. 6, which will be published on April 15th and copies mailed you. The following letter of April 7, 1911, from Robert B. Allen to the Lumber Manufacturers ' Agency indicates the method used at this time for securing information as to discounts: Enclosed herewith please find discount sheet No. 5 Standard Price List. Would greatly appreciate your making marginal notations indicating any change of values — the idea being that this discount sheet should actually represent the market as it is. Then in red ink we would like to have you indicate such items as are ripe for an advance and to what extent, in your opinion, such advance should be. All information is strictly confidential, and no record, except an average record is maintained in this office. At the April 28, 1911, meeting of the Pacific Coast Lumber Manu- facturers' Association, according to Secretary Beckman's letter of May 1, 1911, to W. B. Mack, the following resolution was passed: Resolved that President Griggs be authorized to appoint a committee of twelve representing this Association, to meet with similar committees from the Southwestern Washington Lumber Manufacturers ' Association and the Oregon & Washington Lum- ber Manufacturers' Association at the Elks Club, Centralia, on Satuiday, May 6th at two o'clock P. M., for the purpose of going over the different problems of curtailment, prices, how much of the product is sold direct, etc., as well as a closer working arrangement between the different associations. Mr. Mack was named as chairman: Messrs. McGauflin, Bloedel, Patten, Boner, Bronsen, Whitman, Doud, Burnside, Stuchell, Horton, and Griggs were the other members. In the above letter Secretary Beckman referred to the above com- mittee as "appointed at our meeting on April 28th." In the minute book of the board of trustees, under the heading "Committees ap- pointed April 28, 1911," the above names appear, with the following note: 428 THE LUMBER INDUSTRY. Committee to meet with Southwestern Washington Lumber Mfrs'. Assn., and Oregon & Washington Lumber Mfrs'. Assn. and take up questions of curtailment, prices, etc. 1 Secretary Beckman in circular No. 1304 of April 29, 1911, describ- ing the association meeting said, concerning this committee: After a general discussion the President was authorized to ap- point a committee of 12 representing this Association, to meet with similar committees from the Southwestern Washington Lbr. Mfrs. Assn. and the Oregon & Washington Lbr. Mfrs' Assn. to meet at the Elks Club, Centralia, on Saturday, May 6th at 2:00 P M, for the purpose of going over the different problems confront- ing the lumber trade. It will be noted that the description of the purpose of the committee is less detailed in the circular than in the letter to Mr. Mack. Under date of May 2, 1911, President Griggs sent out a strong circu- lar letter to members of the Pacific Coast Lumber Manufacturers' Association urging them to support the recommendations to be made by the committee in which he said : 2 The way to raise prices is to raise them. An automatic cur- tailment will result if we demand a fair return on our lumber and logs, or we will secure an advance which will protect the logger, the stumpage owner, the manufacturer and his em- ployees. Orders have been placed to capacity and large volume is moving. All we lack is determination to ask our price. Support the recommendations of your committee which meets Saturday, May 6th. On May 8, 1911, R. B. Allen wrote letters to E. G. Griggs, T. H. McLafferty, C. E. Patten, and A. F. Peterson, in which he stated: Herewith enclosed, you will find the writer's understanding of what is wanted in discount sheet No. 7. If I am in error in any way, please call me up by 'phone in the morning as it is the inten- tion to send the new discounts out to all mills by tomorrow noon. In describing the work of the committee, E. R. Hogg, of the Atlas Lumber & Shingle Co., stated in a letter, 3 dated May 9, 1911, to one of their sales representatives : They furthermore, changed the prices, and all agreed to get out a list and a discount sheet immediately, and to instruct their various salesmen to confine themselves to the quotations agreed upon at this meeting. We believe so firmly in the efficacy of this move that we are arranging now to issue a new list based on those prices, which, you will note, are not very far off from the prices on our last list. It is the intention of the manufacturers to try to hold these prices i According to the minutes of the same meeting: "On motion the discounts listed by the Pacific Lum- ber Agency was adopted." a The circular is given in full on p. 454. 'For further statements in this letter, see p. 454. PRODUCTION AND WHOLESALE DISTRIBUTION. 429 to the trade until it is demonstrated that they will stick, then to advance them probably 50c. more. In other words they are going to move very slowly in the matter of advancing until prices are up to a basis of about 9.00. They think conditions will then take care of themselves. We are enclosing herewith discounts from the Standard Lists which were agreed upon. Just as soon as the writer can fix up one of our own lists snowing these changes we will mail it to you. However, you have some lists at hand, and can do that just as well as I can. I had very little time yesterday to talk to Mr. Patten about the details of this matter, and to-day he has gone to Hanford until the latter part of the week. However, he said that all of the manufacturers present agreed that they would go out with a night letter to their salesmen immediately, quoting these dis- counts and instructing them to hold to them. We will accord- ingly send you a night letter informing you of these changes in price. We feel that on the part of the trade there may be some temporary objection to this action, but with the curtailment absolutely decided upon and a number of manufacturers holding firmly to the changed prices, we think there will be no trouble in eventually getting the new prices. At least we will make a desperate effort in that direction. Of course, in discussing this advance with vour trade, you will be careful not to say anything that would indicate to them that it is the result of a conference, in any sense of the word. However, your good judgment will dictate what jou shall say to them. Discount sheet No. 7 was issued under date of May 10, 1911. The following appears on its facing sheet: These Standard List Discounts positively represent actual and prevailing selling values for Fir, Spruce, Western Hemlock and Red Cedar Lumber. Discount Sheet No. 7 is the market. 1 As Ascertained and Compiled by the Pacific Lumber Trade Journal, Seattle, Washington, May 10, 1911'. On May 18, 1911, the Atlas Lumber & Shingle Co. wrote the following to J. D. Hayford: Regarding the new lists which have been forwarded, as stated in a previous letter, we have agreed to make these prices the minimum that we will accept. Many other manufacturers have also agreed to do this, although many of them have not been advised of the action of the members present at the meeting. At the meeting held Tuesday steps Were taken which we hope will result in getting practically all of the manufacturers in line on this basis. We wish you would keep in as close touch as possible with what others are doing, and notify us if any are making lower prices, giving us the details so we can report them. 1 Note that these are the discounts agreed upon at the Centralia meeting of May 6, at which were present official committees 0/ the three associations. 430 THE LUMBER INDUSTRY. On May 19, 1911, the same company sent out the following circula letter: We herewith inclose copy of our discount sheet # 7. We ar now mailing about 5000 of these lists which we believe repre sents what we should be able to secure for our lumber. Thes prices are about 500. higher than what we have been gettinj for the past 60 days but conditions have improved materially and as lumber is now being sold at less than the actual cost o manufacture, we believe that at this time the lumber manu f acturers should make a special effort to endeavor to get some where near the actual cost of manufacture. We have been advised that more than fifty manufacturers oi the coast have issued lists on the basis of the inclosed discoun sheet, including such mills as the St. Paul & Tacoma Lbr. Co. Larson Lumber Co., Day Lumber Co., Northwest Lumber Co. Pacific Lumber Agency, representing all the mills on Gray Harbor, the Lumber Manufacturers' Agency of Centralia, repre senting most of the mills in that vicinity, together with a largi number of the Portland mills. We, and I understood others also, have instructed all salesmei not to take an order at less than the prices represented by thi inclosed discount sheet and we hope you and other manufac turers in your district will take the same action. We are sending this letter to every manufacturer in Washing ton and Oregon in order that those who have not kept in toucl with the market conditions may know just what is transpirinj and therefore have no excuse for not falling in line and asking i better price for their product. Hoping to receive your assistance in bettering the lumber con ditions, we are, Respectfully, Atlas Lumber & Shingle Company ceb p inc. — LIST. P. S. — If you will kindly send us a copy of any list or discouni sheet you are issuing this month, we would consider it a specia favor and we will compile a list of all lists issued and would b< pleased to notify you as to just who have issued May lists and al what prices. On May 30, 1911, Mr. C. E. Patten, of the Atlas Lumber & Shingle Co., of Seattle, wrote the following letter to A. F. Peterson, managei of the Pacific Lumber Agency, of Aberdeen, Wash.: At a meeting in Centralia, you, Mr. Hazen and myself were appointed a Committee to check up the price lists, with the un- derstanding that we were to meet from time to time and furnish the mills with what we thought was a fair price to be quoted to the trade. On June 5, 1911, R. B. Allen wrote a letter to W. R. Macfarlane at Manila, P. L, in which he said: Conditions here are even worse than when you left last winter, but the bottom, as far as prices are concerned, seems to have PRODUCTION AND WHOLESALE DISTKIBTJTION. 431 been reached. I enclose you Discount Sheet No. 7, Standard List, which some 58 mills have agreed to maintain, but which the wholesalers seem determined to break. On June 23, 1911, Mr. E. R. Hogg again wrote a letter to J. D. Hay- ford in which he commented on quotations of the United States Lum- ber Co., which were alleged to be "ridiculously low" and added: A few of the "stand pat" manufacturers are up in the air as to what to do. From the very best information we can get, such mills as Larson, Day, Northwest, and the Pacific Agency at Aberdeen, and the Lumber Agency at Centralia, Weyerhaeuser, and several of the other larger mills, including our own, are holding for prices as per our May list. Of course, there are some mills that are making lower prices than we are making, and the wholesalers are also out at prices that are securing all the business, and we are the "goats." Yesterday the writer had luncheon with probably ten of the Seattle manufacturers. We discussed the situation and all of us agreed to hold for present prices, at least until the first of July. On August 1, 1911, discount sheet No. 8 was issued. This was the last discount sheet issued before the West Coast Lumber Manufac- turers' Association took up activities of the three Pacific coast asso- ciations. This discount sheet continued to be used until No. 9 was issued. After October 1, 1911, the West Coast Lumber Manufacturers' Association carried on the business formerly done by the Oregon & Washington Lumber Manufacturers' Association, the Pacific Coast Lumber Manufacturers' Association, and the Southwestern Wash- ington Lumber Manufacturers' Association. This association has not dealt directly with prices and curtailment while acting in its cor- porate capacity. 1 The' price and curtailment activities have been carried on through committees, an information bureau, various selling agencies, and "informal" meetings of manufacturers. The com- mittees are not official committees of the associations. The informa- tion bureaus, and the selling agencies are each separate organizations. The "informal" meetings of manufacturers are carefully kept distinct from the regular formal meetings of the association. So far as con- cerns the form the activities of these different bodies seem to be separate and distinct. But brushing aside forms and fictions this one central fact stands out clearly: The majority of the members of these committees, bureaus, selling agencies, and manufacturers' meetings represent members of the West Coast Lumber Manufacturers' Asso- ciation. Therefore, as individuals they are responsible for the activi- ties carried on through these various organizations. For example, ■As shown later, pp. 441-442. the association did adopt standard price list B, but this was a "basis" "sti i- e. subject to discount, and did not represent current price quotations. 432 THE LUMBER INDUSTRY. the same lumber firms may and in many cases do belong to the West Coast Lumber Manufacturers' Association, the Lumbermen's Infor- mation Bureau, one of the various selling agencies, and have repre- sentatives at the informal meetings of manufacturers. So that from the practical standpoint of actual results it is immaterial whether the lumber manufacturers carry on their various activities through one general association or through several separate organizations a majority of whose members or stockholders are the same firms. While the association has not dealt directly with prices, "as it has been felt that this was not the purpose of the organization," the secre- tary did refer requests for price lists and discount sheets to the Pacific Lumber Trade Journal, which continued the practice of issuing dis- count sheets based on the officially adopted "standard list" of Feb- ruary, 1910. A meeting of the sales managers of the Douglas Fir Sales Co., of Portland, the Lumber Manufacturers' Agency, of Centralia, and the Pacific Lumber Agency, of Aberdeen, and others, was held at Cen- tralia December 30, 1911, at which new discounts were agreed upon. These three agencies represented about 35 manufacturers. Discount sheet No. 9 was issued January 1, 1912. E. R. Hogg, of the Atlas Lumber & Shingle Co., was also present at this meeting. On January 17, 1912, he stated in a letter to the John Hansen Lumber Co.: In order to put you in touch with quotations being made on the coast, for car material, we are enclosing herewith Discount Sheet # 9, issued by the Pacific Coast Lumber Trade Journal; this gives the prices which the three big agencies are asking for car material. A letter dated January 17, 1912, from G. M. Duncan, manager of the Douglas Fir Sales Co. to their Chicago office, contains the fol- lowing: Eeferring to the second paragraph of your letter, we thor- oughly appreciate that the matter of advance in prices is uphill work. However, for your information beg to advise that we have every assurance from the more responsible manufacturers and sales agencies that the prices as outlined in our Discount Sheet No. 5 are being adhered to strictly by them; in fact, I have been as- sured by Mr. Peterson and Mr. Jenelle, as well as Mr. Hogg of the Atlas Lumber & Shingle Company and several of the other more responsible concerns out here that it was there intention to adhere strictly to these prices. Discount sheet No. 10, adopted at a meeting held in Tacoma, Feb- , ruary 13, was dated February 15, 1912. On March 6, E. R. Hogg wrote S. H. Chatten, of Kansas City, stating that — We had a meeting at Tacoma a week ago yesterday, at which there were about 35 manufacturers present, a number from South of Tacoma and as far north as Bellingham. At that meeting it was agrptaH that ™)n ra tions were no t quite as promis- PRODUCTION AND WHOLESALE DISTRIBUTION. 433 ing as they were at the meeting we had held 2 weeks prior to that date, but it was thought wise for all of us to stand for Discount Sheet #10, copy of which we are inclosing herewith, and above all to maintain differentials. The results of this meeting have been good in that prices are a little better and the differentials in price on lengths are being maintained much better than for the last 1£ years, but we are on the ragged edge and the least break on anybody's part I am afraid will start the price downward a little. On March 18, 1912, a circular letter was sent out by L. G. Hor- ton and C. E. Patten "to lumber manufacturers" announcing a meeting to be held in Tacoma on March 22. At this meeting of lumbermen it was decided that "discounts should be reduced 50 cents." Discount sheet No. 11 was issued under date of March 22, 1912. Aletterfrom the Tacoma and Eastern Lumber Co., dated March 27, 1912, to P. G. Conover, of Denver, Colo., contains the following: Your favor of the 24th at hand. I am aware of the fact that we gave you leeway to cut prices on the 22d and then jumped you on the 23d. The reason was that on the afternoon of the 22d there was a meeting held here of practically all the lum- bermen on the coast and after comparing notes, found that with the business being offered and the conditions that we are working under, prices should be stiffened. I found by compar- ing and seeing orders that they are going $6.50 off and full spread without any trouble, also found that the Douglas Fir people were out with their raise at $6.00 off so thought it ad- visable to wire you to stiffen up. We of course will protect our business quoted on at a lower basis and will allow you to cut a little on the 26 to 32' lengths but do not believe that a cut should be required for after comparing and seeing orders booked by these different people at $6.50 off and full spread, I cannot for the life of me see why we should even be asked to quote lower. Besides we have had wholesalers come here in the last ten days and place numerous cars at $6.50 off full spread. We have turned down probably 20 cars where they were offered at $6.50 off and half the spread where we had no commissions at all so I think by the time this letter reaches you, there will be no trouble to securing business with full spread. Discount sheet No. 12 was adopted at a meeting of manufacturers held at Tacoma, April 25, 1912, and was dated May 1. On May 2 F. J. Shields, manager of the Northwest Lumber Agency, Tacoma, wrote a letter to J. A. Knudson, of Minneapolis, in which he made the following reference to discount sheet No. 12: "There is a new price list out here, based on prices agreed upon a week ago to-day, of 50# per M higher than List #11." On May 9 E. A. Poyneer of the Ferry-Baker Lumber Co., of Everett, Wash., wrote C. E. Patten, making the following inquiry: Can you inform us as to just what manufacturers, who were represented at the meeting in Tacoma on April 27th, have to date 25030°— 14 28 434 THE LUMBER INDUSTRY. issued new price lists or discount cards on the basis agreed upon in Tacoma. We know of only a few who have done so, and in order to make our plans effective it seems to us essential that all of the manufacturers should put out the advanced prices at the very earliest possible date, following their agreement to do so. We would appreciate any information that you can give us. C. E. Patten replied on May 10 as follows: Replying to your letter of the 9th inst., will say that immedi- ately after the Tacoma meeting we issued lists on the basis of Discount Sheet #12 dated May 12th, and I immediately sent my Discount Sheet to everyone attending the meeting at Tacoma, requesting them to exchange Discount Sheets or price lists with me, so I could keep posted as to just mills were sending out lists. Up to date, the following have notified me that they have issued lists or discount sheets on the basis of Discount sheet #12: The Atlas Lumber Company, St. Paul & Tacoma Lbr. Co., Port Blakely Mill Co., Salsich Lumber Co., Pacific Lbr. Agency, Doug- las Fir Sales Agency, Grays Harbor Comm. Co., Grays Harbor Lbr. Co., Ferry-Baker Lbr. Co., Clear Lake Lbr. Co., North Bend Lbr. Co., Wash. Cedar Products Co., Union Mill Company. This is about one-third of the firms which were represented at the Tacoma meeting. Now, whether the others have sent out their Discount Sheets or price lists is hard for me to say, as they have failed to answer my letters. There is no question but what in order to get the proper results, the manufacturers must issue new discount sheets or price lists whenever prices are advanced and must work in harmony, and these lists should be sent out immediately. A good many of the manufacturers after agreeing to send out same, fail to do so, and others wait 3 or 4 weeks before getting out their lists or just before another advance, and this way they keep trailing along, which of course, results in our efforts not meeting with the reward they should. I am going to write all of the mills I have not heard from, again to-day and see if I can get any more replies. If you can do any- thing to assist me by writing the various mills urging them to send out lists, I would greatly appreciate it. If you have not already done so, you should read W. E. Barns' report on the yellow pine conditions. This was published, I thmk, in the last number of the St. Louis Lumberman. I am going to endeavor to have the West Coast Assn. send a copy of this letter to each of the mills, as I believe it would have a bene- ficial effect on them and perhaps stiffen up their backbone so they will ask better prices. On April 30, 1912, F. E. Campbell, of the Pacific Lumber Co., of Centralia, Wash., wrote R. B. Allen, of the- Pacific Lumber Trade Journal: Received the price list discount sheets, for which we are obliged to you. However, Bob — use your influence in getting a sane condition once more; The mills have figured for three years, that if they could once more get the business a-coming, they would be reasonable and not boost the prices too fast. Now, you issue a PRODUCTION AND WHOLESALE DISTRIBUTION. 435 discount sheet on the first of the month, and before it is even established and the orders coming in on that basis, out pops an- other list. There is one result of this ' ' rapid fire " work, and that is the buyers crawl in their holes and pull the holes in after them — then what — we hunt and hunt for a long period, trying to find one of the buyers, who will give us an order at any price — then pop — comes a few cuts in the price and the bottom has fallen out again. Urge reason, my boy. Mr. Allen said in his reply of May 2 : Answering your letter of April 30th we will say that Discount Sheet No. 12 will probably not be changed in the next six months, and wish I could say as much for actual fir sales. Notwithstanding the fact that Mr. Allen stated in the above letter of May 2, and also in subsequent correspondence, that there would be no change for six months, C. E. Patten and L. G. Horton sent out a circular letter under date of June 4, 1912, in which they said: We have been requested to call a meeting of the lumber manu- facturers to be held in Tacoma, Friday, June 7th, at 1 :30 p. m., at the Hotel Tacoma, to consider the lumber situation and the prospects for future business. Discount sheet No. 13 was decided upon at the Tacoma meeting of June 7. This meeting "had a very large representation." This dis- count sheet was issued under date of June 10 and was to be "in effect on and after June 20, 1912." The lumbermen seem to have felt that business conditions would enable them to maintain these discounts. On June 14, 1912, E. R. Hogg wrote a letter to J. D. Hayford, in which he said: We have a letter today from the Weyerhaeuser Lumber Com- pany [enclosing] one of the new discount sheets, and say they expect to stand for these prices or not sell at all. A number of the other manufacturers are going to do the same. E. W. Demarest, manager of the Tacoma & Eastern Lumber Co., stated in his instructions, dated June 19, 1912, to the eastern repre- sentatives of the company: I think that you will have plenty of business, say within two weeks after the advance goes into effect, but the first two weeks will probably be a little slow with you, as there might be some trailers who wish to take on some business before making the advance, but 90% of the mills on this Coast will maintain this advance right from tomorrow without any doubt. In a letter to J. D. Hayford, dated July 11, 1912, E. R. Hogg says: • We have just talked with Demarest of the Tacoma & Eastern Lbr. Co., at Tacoma, Peterson of the Pacific Lumber Agency at Aberdeen, and Jenelle of the Lumber Manufacturers' Agency at Centralia. These three managers control the output of prob- 436 THE LUMBER INDUSTRY. ably thirty mills. Each, one says he is now going to hold for Discount Sheet No. 13. We have just issued a call to the manufacturers for a meeting to discuss conditions, which meeting will be held in Tacoma tomorrow afternoon. We do not anticipate that there will be any advances in prices, but we are getting up some statistics in our office to show "What fools we mortals De" in the way of prices, and we are inclined to think that as a result of this meet- ing there will be a decided stiffening of prices. This meeting, held in Tacoma July 12, is well described in the following letter to the Atlas Lumber Co.'s sales agents: [Letterhead of Atlas Lumber & Shingle Co., Seattle, Wash.] July 15, 1912. Mr. J. D. Hayford, Detroit, Minn.; Mr. John A. Uhler, Burling- ton, Iowa; L. L. Woods Lbr. Co., Wichita, Kans.; J. H. Yund, Grand Island, Neb. Dear Sir: Saturday afternoon we sent you the following night letter which we presume was like a thunderbolt from a clear sky to you: "Big meeting of manufacturers yesterday brought out inter- esting facts about broken stocks at the mills here and in the south coupled with present and prospective demand resulting in advance effective July twentieth fifty cents on boards one dollar all other items over June prices notify your customers to get under cover." We may add that this meeting was very largely attended by manufacturers representing perhaps 75% of the coast, and was held in Tacoma Friday afternoon. It was the most opti- mistic meeting the writer ever attended. There was not a dis- senting note in the outline of conditions with reference to broken stocks at the mills, good demand now with better demand coming. The result of the meeting was that practically every manufac- turer there thought the market justified an advance of 1.00 per M on all items over our June list, or Discount No. 13, on all items except 1x4 to 1x12 Boards and Shiplap, these being advanced only 50^ per M. We are getting out a new list based on these advances; in the meantime if you take on any business on our June list it will be satisfactory. The new list will be effective July 20th. Very truly yours, The Atlas Lumber Company. Bulletin No. 399, sent out by the Pacific Lumber Agency under date of August 1, 1912, shows the policy of the fir manufacturers at this time: To District Representatives: Under separate cover you have been furnished with our-dis- count sheet #14. This discount sheet has been issued to stimu- late buying on #13 and at the same time to establish a mark for the fall trade. Until further notice we will be agreeable to accepting any business that we can handle for prompt shipment PRODUCTION AND WHOLESALE DISTRIBUTION. 437 that can be secured strictly within the limits of discount #13 where it will be impossible to secure the #14 basis. The importance of high quotations is emphasized in the following letter: [Letterhead of Weyerhaeuser Lumber Co., Everett branch, Everett, Wash.] August 5th, 1912. Douglas Fir Sales Co., Portland, Oregon. Gentlemen: I am just in receipt of a copy of your Discount Sheet No. 10, issued under date oi August 1st, 1912, and I note that it does not seem to conform to the Discounts issued by the mill s in the North. We are working at the present time on a basis of Standard Discount No. 14. We issued this on the 13th of July, to take effect the 20th, and while there were some straggling orders coming in at Discount No. 13, we are absolutely holding at the present time, and have been for the past ten days, to Discount 14. And while we are not receiving a very large volume of business, we are getting in all the business we want. Practically all the concerns in this part of the country have sent out, and are trying to get, Discount 14, although I will say the majority have possibly not succeeded in securing it as yet, but by concerted effort they will in two weeks. At our manufacturers' meetings at Tacoma I have been trying to impress the manufacturers and salesmen with this; That under conditions as they exist today we do not care how cheap a manu- facturer may sell, but we do care a great deal how cheap he quotes. For instance, the larger part of the business that is coming in today is coming in from the retail yards direct, without any price attached. We are filling in prices in accordance with Standard Discount No. 14, and they, in comparing our acknowl- edgment of this order with your list, probably feel that we are taking their money unjustly; while we firmly believe that con- ditions warrant prices that are being charged. And we know from a canvass of the situation in this part of the country that it is an absolute fact. The sending out of a discount sheet brings very little business in direct, but assists greatly in establishing a market price; and when traveling salesmen meet lower discounts from representa- tive concerns, they either lower their price to meet it or make no sales; if the latter neither get any business, one spends a 20. stamp, and the other several dollars. We feel that for the general good of the lumber industry that you should issue a new discount sheet, conforming to Standard Discount 14, and if you want business, let your traveling men take on whatever you want at any price you want. We shall be very glad to hear that you will cooperate with us in this manner, and believe you will when you know what we are trying to do. Yours very truly, W. H. Boner. A meeting of lumbermen was held August 29, 1912, at which a discount sheet, No. 15, was adopted to become effective September 2. 438 THE LUMBER INDUSTRY. The Department of Justice was holding hearings in the Federal Building at Seattle from August 27 to September 5, 1912, in the case of United States v. W. G. Hollis, Northwestern Lumbermen's Asso- ciation et al. These hearings gave cause for objections on the part of some lumbermen to holding a price meeting at this time, as is shown in the following letter, dated September 5, 1912, from the Tacdma & Eastern Lumber Co. to S. L. Johnson: Your circular of the 4th in reference to list 15. I have had some criticisms made, but have not paid much attention to them. I would suggest, however, that a meeting be called of all the manufacturers and a new list 15 put out. It would be well to have the list before them, and let them go over it and then if they want to adopt this as list 15 or if they want to make any changes it can be threshed out at this meeting. I explained to one or two that mentioned this matter to me that personally I felt that it was a wrong time to call a meeting last week because of the investigation at Seattle. I thought these meetings should be handled very carefully, but I think now that the investigation has ended that a meeting could be called and this list put before the meeting asking for suggestions as to whether this should be adopted or the necessary changes could be made that the majority seem inclined to want. I have held off printing our list, thinking that this would come about. I think Mr. Hogg of the Atlas Lumber & Shingle Co. would be very glad to call this meeting in the absence of Mr. Patten who formerly called them. The changes at the meeting held August 29 made no general advances in fir prices. While the price of a few fir items was increased, at least 23 items were decreased, as compared with dis- count No. 14. These changes were not satisfactory to all of the lumbermen, as shown by the following letter, dated September 4, 1912, from S. L. Johnson, manager of the Washington Cedar & Fir Products Co., addressed to the Northwest Lumber Agency, the Pacific Lumber Agency, and the Tacoma & Eastern Lumber Co.: In accordance with the request the undersigned had printed a new discount sheet in accordance with the values decided upon as representing market values at the conference on August 29th, and since this list was published by Mr. Allen of the Lumber Trade Journal, it has been circulated here among a number of the manufacturers who seem to resent the publication. Mr. Horton, therefore, thinks it advisable for me to write you asking whether or not in your opinion it is advisable to send this list out until a meeting of the manufacturers who have been interested in this movement heretofore and attend such meetings, can be called, and Discount Sheet No. 15 be approved. Kindly look over the enclosed and see if it agrees with your understanding and advise us by return mail what your attitude is in regard to the above. Some of the men who have been instrumental in accomplishing a great deal of good during the past six or eight months do not feel that we should have Mr. Allen publish this list without eiving them consideration. They PRODUCTION AND WHOLESALE DISTRIBUTION. 439 do not feel that they have any right to criticise f or publishing our list but they look upon the list issued by the Lumber Trade Journal as official and with which we as individuals have nothing to do. Pursuant to a call sent out by L. G. Horton and C. E. Patten under date of September 7 a meeting was held in Tacoma on September 11, 1912, at which a new discount sheet, No. 15, was adopted. F. J. Shields, manager Northwest Lumber Agency, wrote a letter to J. A. Knudson, of Minneapolis, on September 12, 1912, in which he described this meeting as follows: I wired you last night immediately after returning from a meeting of the manufacturers representing 150 mills. Every- body was of the unanimous opinion that there is no necessity for cutting prices. Mr. Bloedel of the Larson Lbr. Co. was there and admitted he had been selling some stock last week at 500 off #14 List. Mr. Blagen of the Grays Harbor Lumber Company, who furnished Pinkham nine cars of stuff, said he let Mr. Pink- ham have it at 500 off #14 and said he presumed Mr. Pinkham wanted it in order to get in good with the wholesalers. He allowed him to have these nine cars, feeling under some obliga- tions to him, on account of some sdo stock he wanted moved before the rainy season set in. He said, however, this would end it. The best information I was able to get was general that here- after there will be no more cutting of prices. Of course, we cannot tell what the other fellow will do, even though he promises to "be good." We certainly don't want to cut #14 List unless it is absolutely necessary. All the mills want to move a little stock from time to time, but they all feel that the trade for spring will open up early and that we won't have the stock to fill orders with and that prices will go still higher. As a matter of fact, it is well understood here now that we are right up against a severe car shortage. We are not able to get cars as fast as we want them at some of our mills, and other concerns are worse than we are. The Railroads tell us that in 60 to 90 days there will be as severe a car shortage as has ever occurred. Taking these things into consideration, it seems to me that it will not be necessary for us to cut the price. Discount sheet No. 15, as adopted September 11, showed material advances over No. 14, as is shown in the following telegram dated September 11, 1912, from the Northwest Lumber Agency to J. L. Todd, at Sioux City: Do not think it necessary to sell under fourteen List. Fifteen authorized today, which will be issued at once, increasing prices very materially; for instance, number one flooring, one dollar; number two, two dollars; two and better dropsiding, one fifty; ceiling, one dollar; dimension, one dollar. Will mail lists soon as possible. A meeting of lumbermen was held in Tacoma on October 18, 1912; no changes were made in the discounts. E. R. Hogg, in a letter to 440 THE LUMBER INDUSTRY. J. D. Hayford, at Detroit, Minn., on October 19, 1912, gave an account of this meeting: Yesterday over in Tacoma we had a meeting of about the same crowd that attended the meeting which was held while you were here. The object of this meeting was to discuss conditions and decide what we may expect in the way of future business. We have been having these meetings about once a month for the last year, and at not a single meeting has there been shown such an optimistic spirit as was shown at yesterday's meeting. Expressions were made by every manufacturer, and they were practically the same in substance, being to the effect that there is plenty of railroad bills and plenty of cutting bills, that there are no yard orders; that they were holding for prices on Discount #14 or better; that if we would lower the price 1.00, 2.00 or three dollars per M, that we would get no more yard business than we are getting now, probably not as much because the buyers would expect the market to go still lower. Nobody in the meeting reported stocks above normal, nearly every one stating that his stocks were below normal, or very much less than they [were] Jan. 1st of this year. Pursuant to a call sent out December 2 by C. E. Patten and L. G. Horton, a meeting of lumbermen was held in Tacoma on December 6, 1912. L. G. Horton wrote G. M. Duncan, of the Douglas Fir Sales Co., on December 12, 1912, in which he made the following reference to the meeting held December 6 : Up until about ten days ago our Agency had taken a small amount of business on basis of $10.50 off on dimension and adhered pretty close to discount #14 on uppers. However, since the Tacoma meeting, we are holding for full discount #14 and we believe within the next thirty days, at the outside, we will be able to get all the business that we can handle on that basis, or even better. It was suggested by R. E. Forbes, secretary of the Clear Lake Lumber Co., in a letter to C. E. Patten dated January 9, 1913, that a meeting of sales managers be held in connection with the regular annual meeting of the West Coast Lumber Manufacturers' Association to be held in Tacoma January 31, as it was thought "that an oppor- tune time is approaching in which to get together on prices." This suggestion was not acted upon; instead a call was sent out on January 20 by L. G. Horton and C. E. Patten for a meeting of sales managers to be held in Tacoma on January 24, 1913. C. E. Patten referred to this meeting in a letter dated January 28, 1913, written to J. H. Yund, of Grand Island, Nebr., in which he said: Friday we held a meeting in Tacoma, attended by 50 or 60 of ' the largest manufacturers in Oregon and Washington and it was the unanimous report that stocks were lighter than they had been in years, lengths were badly broken and that never since 1906 had there been as many orders booked or as many inquiries received for lumber as there has been in the past 10 or 15 days, PRODUCTION AND WHOLESALE DISTRIBUTION. 441 and it was the understanding that all the manufacturers were going to hold strictly to Discount Sheet #16, some copies of which we are seading you today under separate cover. This is about the same as our January 15th list, copies of which we are also sending you, so you can use either this Discount Sheet or our list. Discount sheet No. 16 was issued January 25, 1913. The Tacoma & Eastern Lumber Co. stated in their letter of instructions "To all salesmen," dated January 31, 1913: We are getting a nice line of business in here at 4 off, or in other words our straight December price-list, and if it comes in as fast in the next few days as it has in the past few days we will be forced to advance our prices for self-protection, as we now have so much business and the weather has been so bad that we are getting behind in our shipments. Please bear these conditions in mind and endeavor to raise your prices whenever the opportunity affords. In other words, do not bid straight off your December 20th prices. Aim to get something above these prices. I enclose herewith a list discount sheet which some fifty or sixty mills agreed to stand on. I was tempted to withdraw our prices of the 20th and put the enclosed list in effect, but thought it best to let you boys have a few days on your other prices. I want to impress upon you the fact that we want better prices than the December 20th hst. We will leave the list with you temporarily, merely to assist you when necessity demands. Under date of January 31, 1913, Mr. Patten wrote one of his sales agents to the following effect: We herewith inclose our January price hst which is an exact copy of the one issued by Weyerhaeuser and a number of others. We want you to hold all stocks strictly to this hst. We would prefer that you send us half the number of orders and get better prices. Pursuant to a call sent out by C. E. Patten and L. G. Horton, on February 17, a meeting was held in Tacoma, February 21, 1913. Discount sheet No. 17, which apphed to the new standard hst B (see p. 442), was issued under date of March 1, 1913. On March 3, 1913, W. H. Boner, of the Weyerhaeuser Lumber Co., wrote E. B. Allen, of the Pacific Lumber Trade Journal, stating that the discount on timbers should be $7 per thousand instead of $8. On March 4, 1913, R. B. Allen replied as follows: Acknowledging your letter of March 3d., relative to discount on fir timbers in No. 17, will say that correction has been made. Would also say that copy received by us covering ideas of the Tacoma meeting, called for $8.00 off on this item. The 1913 Standard Price List B. of Pacific Coast Forest Products. — In the fall of 1912 a movement had been started for a revision of the stand- ardlist of February 1, 1910. The object desired seems to have been the adoption of a standard hst that would be used by all fir manufacturers. 442 THE LUMBBB INDUSXBY. The following extract from a letter dated November 4, 1912, written by W. H. Boner, of the Weyerhaeuser Lumber Co., " to the 63 rnillq favoring the Price List Committee's report, " gives a general discussion of the situation: About five years ago Mr. McLaughlin, who, I presume, was chairman of the statistical committee, got up a new list based on ten dollars above the market, which was acceptable to the Portland manufacturers, and was accepted at a monthly meeting of our old Pacific Coast association. This list was put in use by the Portland manufacturers, but was never used by the manu- facturers in the north. The only one I know of was myself, who tried to use it, and later found out that nobody else was using it, and we later printed our own list, which we have been using ever since. About two years ago, after it was demonstrated that we were not together on a list, another effort was made, and this effort culminated in the issuance of the present standard list, which was again adopted at another monthly meeting of the old Pacific Coast Association. This list has been used very large- ly by the Manufacturers south of Tacoma. Consequently the Portland people especially, and other users of the standard list, feel that they have done their part in trying to establish a uni- form list, and decline to accept any other compromise. And I think possibly there is some merit in the argument from a sen- timental standpoint. But there is absolutely no merit in the present basing of the standard list. The above history goes to show that the making of the price list has been done at all times by the minority of our association, and that has been the reason why we have never been able to get together on a price list. And it was my idea to put this price list matter up to a vote of the association in order to get a full expression, figuring that the majority would rule and the minority would be governed by it. However, this does not seem to be the case, and it is a question as to what the majority should do. But the feeling of the standard list people is so strong on account of being fooled twice by a supposed expression of the wishes of the manufacturers of lumber in the north, which was absolutely no expression at all. At the same time they accepted it as such, and coming from our association in the manner in which it did, they had possibly reason to believe that it was a true expression, and undoubtedly they acted on it with good faith. I am convinced that it is very important to the manufacturers and for our association to get together on a price list and if we start in now and issue a list of our own we will only get further apart and widen the gap that now seems to exist. And the question in my mind is had we not better put our shoulders to the wheel and take the present standard list with a view later on if possible, of revising it to a lower and more uniform discount. A new list was agreed upon in December, 1912, and issued as an official basis price list on March 1, 1913. The revision of this list was under the supervision of the statistical committee of the West Coast Lumber Manufacturers' Association. PB0DT7CTI0X AXD WHOLESALE DISTEIBLTIOX. 443 Section 13. Connection between official basis lists and unofficial dis- count sheets. Although all of these discount sheets were issued under the name of the Pacific Lumber Trade Journal they were regarded and used by lumbermen as official discount sheets. S. L. Johnson, manager of the Washington Cedar & Fir Products Co., stated in his letter of September 4, 1912: 1 Some of the men who have been instrumental in accomplishing a great deal of good during the past six or eight months do not feel that we should have Mr. Allen publish this list without giving them consideration. They do not feel that they have any right to criticise for publishing our list but they look upon the list issued by the Lumber Trade Journal as official and with which we as individuals have nothing to do. Mr. Johnson was thoroughly familiar with the method of adoption and use of the discount sheets and was very active in the "informal" meetings of lumbermen. As shown by the letters already quoted in this discussion the changes in the discount sheets and their date of issue was determined by the manufacturers at the "informal" meetings. These meetings were, as a. rule, well attended. (See pp. 428—441.) The men who were most active in calling and arranging for these meetings were also active in association work. The Pacific Coast Lumber Manufacturers' Association, and later the West Coast Lum- ber Manufacturers' Association openly adopted the basis list. How- ever, on account of legal considerations, the associations rarely went on record as adopting discounts to be applied to the standard lists; instead these discounts were "agreed upon" or adopted at "infor- mal" or "get-together" meetings. The subterfuge employed of hav- ing the name of the Pacific Lumber Trade Journal on these lists see p. 426) instead of that of the real authors indicates that the men who met from time to time at these meetings felt that their acts were of questionable legality. This state of mind is further empha- sized by the correspondence concerning the meeting held in Tacoma on August 29, 1912, at the time the Department of Justice was hold- ing a hearing in Seattle. (See p. 438.) Some manufacturers had discount sheets printed by the Pacific Lumber Trade Journal with their company name appearing on the facing sheet. A comparison of some of these sheets showed that they were identical with those published at the same time by the Pacific Lumber Trade Journal. Other lists were found to be practi- cally identical. Occasionally items on which a particular firm was "short" would show much lower discounts than the Pacific Lumber Trade Journal sheet. ' Tot full letter, see pp. 438-439. 444 THE LUMBER INDUSTRY. The regularity of these so-called informal meetings and the signifi- cant fact that month after month the notices were sent out by C. E. Patten and L. G. Horton (see pp. 428-441) indicates that the lumber- men had developed an efficient price regulating organization. The advantage of this method from their viewpoint was due to the fact that no authorized records were kept of the actions taken at these meetings. The discount sheets determined upon at these gather- ings were ostensibly put out by the Pacific Lumber Trade Journal, but in reality this journal merely acted in the capacity of printer and published the discount sheets as decided upon by the lumber- men. The mere fact that these meetings were not called by the West Coast Lumber Manufacturers' Association has no practical significance. The men that actually directed these price meetings and engineered these gentlemen's agreements were all practical manu- facturers or sales managers who knew exactly what they wanted. It is not claimed that the prices at which the manufacturers actually sold their lumber were always on the basis of the last discount sheet issued. New discount sheets were occasionally put out to "stimu- late buying" on the previous sheet. Section 14. Curtailment of fir production. During periods of prosperity new mills are built and the existing mills increase their capacity, but in a time of falling market curtail- ment of production is much discussed and frequently practiced. The curtailment of output reduces the supply, whether the curtail- ment be involuntary, as a result of strikes, storms, fires, or the exhaus- tion of the timber supply, or whether it be voluntary through indi- vidual or association close-downs. Under the favorable market conditions experienced by the coast manufacturers from 1899 to 1903 efforts were directed toward in- creasing the production and satisfying the existing demand. At a meeting of the Pacific Coast Lumber Manufacturers' Association on August 22, 1903, President E. G. Griggs said: The conditions which have prevailed throughout the country have caused an unprecedented increase in capacity of mills, more than one hundred and fifty new mills being built in the State of Washington in 1902, without regard to the increased capacities of those in existence. Concerted curtailment in 1904. — At the meeting of the Pacific Coast Lumber Manufacturers' Association held April 22, 1904, it was voted "that a curtailment of one day in the week be recom- mended, the secretary to send out a circular letter to ascertain the wishes of the mills." Secretary Beckman sent out several circular letters relative to curtailment immediately after this meeting. The Tacoma corre- PRODUCTION AND WHOLESALE DISTRIBUTION. 445 spondent reported in the American Lumberman of April 30, 1904: "It is estimated that 150 mills of the State are shut down." The result of Secretary Beckman's action is described in the Ameri- can Lumberman of May 21, 1904, page 60, as follows: The association sent out a circular asking for an expression of opinion on the matter of closing one day a week, with the result that enough mills were willing to warrant an association order to that effect. This order is effective May 16 and will have the effect of curtailing the cut more than 50,000,000 feet a month. The following from the San Francisco news, in the same issue, page 39, indicates that a signed agreement was undertaken: The work of obtaining signatures to the agreement is progress- ing with fair rapidity, and it is believed that the majority of manufacturers in the sound country, Grays harbor and Columbia river sections have signed. As soon as a fair majority of the manufacturers representing the greater part of the output shall have signed the new system will be inaugurated. This is ex- pected to be about June 1, so that the output for seven months of the coming year will be restricted to a marketable amount. At the meeting of the rail branch of the Pacific Coast Lumber Man- ufacturers' Association held on May 27, 1904, it was unanimously voted "that the secretary's office be instructed to arrange for a special meeting of all 1 imber manufacturers in the Pacific Northwest, to be held in Seattle, in the near future, for the purpose of arranging a curtailment of the lumber output." At the meeting of the rail branch on June 24, 1904, it was voted "that this association recommend a curtailment of one-third during the month of July." And another motion carried "that the secretary secure a list of the mills that did not curtail." The following appears in the Pacific Lumber Trade Journal of August, 1904, page 18: Everett, Wash., Aug. 8. — "I contend that the curtailment that has recently been made by the mills in the output of lumber brought about the improvement in prices. The one followed the other immediately." So spoke Gov. Clough of the Clark- Nickerson Limber Company, the other day, while discussing the lumber situation with the correspondent of the Pacific Coast Lumber Trade Journal. Concerted curtailment in 1905-6. — During the year 1905 there was a steady advance in the price of fir lumber. Demand was so good there was no effort during the first three-fourths of the year to curtail production. Secretary Victor H. Beckman sent out a circular letter dated November 13 " to the lumber and shingle trade" in which he stated: As it is customary for the majority of the mills in the Pacific Northwest to make repairs during the winter months, it has been suggested that advantage may be taken of the opportunity to 446 THE LUMBBE INDUSTRY. have all the mills contemplating repairs to close down during the month of December — in other words, to make a concerted close- down for the same purpose. There are several good reasons why repairs should be made by- all the mills at the same time. December is usually the quietest month in the year, climatic conditions in the East and on the Coast being such that but little building is done, and stocking up for the spring demand does not begin until after the first of the year; laborers in the camps and mill naturally expect to observe the holidays, and labor as a consequence is more or less disturbed during the entire month. Therefore, from these points of view there is no better time to make needed repairs than during the month of December. Furthermore, a concerted close-down will have the effect of stiffening values and to clean up the stocks on hand, so that you may be enabled to start the coming year right. The railroad companies, too, will be enabled to catch up on their orders, and the car shortage will be a thing of the past if the mills close down. An attached form for signatures reads as follows: CURTAILMENT OF PRODUCTION. We the undersigned manufacturers of lumber products are in favor of closing down our mill for repairs, for the benefit of the trade, during the following period : From December to Daily capacity Lumber Shingles Name of firm Address.. -- Date By November 15 seventy-four signatures had been obtained, repre- senting 45 lumber manufacturers and 29 straight shingle mills. This curtailment took place largely in December, 1905, and January, 1906. The only united effort to curtail production during 1906 occurred during January as a result of the "concerted close-down for repairs" which began in November, 1905. The advance in prices during 1906 was so great and the demand for lumber so strong that the manu- facturers increased their production. Nonconcerted ourtailments in 1907 and 1908. — The high prices of logs and the rail embargo caused a close-down of many of the Pugefc Sound mills in January and February of 1907. A car shortage had existed since August, 1906, and, in the latter part of January, 1907, claiming that it was impossible to furnish any cars, both the Great Northern and Northern Pacific railways issued an order known as the "embargo," refusing to take shipments of lumber for eastern points. The "embargo" remained in force about seven weeks, the Great PRODUCTION AND WHOLESALE DISTRIBUTION. 447 Northern rescinding its order about the middle of March and the Northern Pacific on March 28, 1907. The scarcity of cars, however, continued somewhat longer. In consequence of a weakening market the logging camps closed down in June of this year for a period of 90 days. At the meeting of the cargo branch of the association on Au- gust 31, "It was stated that the California demand offered so little encouragement, that several mills were closed, others contemplated closing, while a number were operating on short time." A Tacoma report to the American Lumberman, published Sep- tember 28, 1907, says that "mills are closing down, more than twenty in and tributary to Tacoma being idle as a result of inability to get cars and the uncertain outlook." According to the lumbermen the freight-rate question continued to tie up business in the early part of 1908. Mills were frequently reported as curtailing their production during the early months of the year, and at the meeting of the cargo branch on March 28, 1908, it was said that "Quite a number of mills were reported closed down." Records of the Pacific Lumber Inspection Bureau show that in 1908 on the average about 40 per cent of the cargo mills were closed or operating on reduced time prior to October 1, while through the remainder of the year this average was from one-third to one- fourth. The usual close-down for the December holidays and repairs occurred in December and extended into January. Concerted curtailment in 1909. — On April 14, 1909, an informal gathering of the mill men was held at Tacoma for the purpose of discussing a break in prices at Grays Harbor, and to decide what would be the best procedure for the mills in Puget Sound to adopt. On April 28 thirty prominent lumbermen held a conference at Seattle and discussed plans for curtailing production. The plan finally suggested was that of reducing the time to a 48-hour run per week or its equivalent, to be inaugurated for 30 days. A committee was appointed for each of the nine districts. These men, through district meetings or otherwise, were to ascertain the sentiment of the manu- facturers toward the proposed plan of curtailment. A telegram from Seattle, April 28, 1909, to the Mississippi Valley Lumberman at Minneapolis, read in part: "Informal meeting lumber manufacturers Oregon, Washn, Idaho, today decided reduce lumber output approximately forty percent account market conditions. Outlook discouraging. Bloedel presides." On April 29, 1909, R. B. Allen of the Pacific Lumber Trade Journal, wrote to E. G. Griggs as follows: "In accordance with the plan out- lined by you yesterday, notices calling for district mill meetings were mailed to the several members of the committee last night, and doubtless are in their hands today." 448 THE LXJMBEE INDUSTRY. The following notice was sent out by Mr. Allen: (Letterhead of the Pacific Lumber Trade Journal.) Seattle, Washington, April 29, 1909. Willamette Valley District, A. C. Dixon and Geo. Gerlinger; Grays Harbor District, S. L. Johnson and E. O. McGlaufiin; Everett District, W. H. Boner and Fred K. Baker; Tacoma District, Chas. E. Hill and J. W. Dempsey; Bellingham Dis- trict, J. H. Bloedel and Geo. A. Cooper; Seattle District, L. G. Horton and W. M. Bolcom; S & I District, C. C. Bran- son and F. H. Jackson; Centralia District^W. C. Yeomans; Portland District, L. J. Wentworth and W. B. Mackay. Gentlemen: With a view to improving general conditions on the Paeific Coast it is deemed absolutely necessary that prompt action be taken in calling together all manufacturers m your district, regardless of association afniation. For this purpose the above committee has been appointed, to call such meeting in the several districts above assigned, and to ascertain the sentiment of the manufacturers of these districts. Mr. Everett G. Griggs, of Tacoma, Chairman of the Committee will be pleased to receive reports of these meetings within the next five days. It is understood that a curtailment based on a 48-hour run per week, or its equivalent, be inaugurated during the next thirty days. Upon reports from the above committee, this action wUl be authorized. Very truly yours, Robert B. Allen. The following letters, both written on April 30, show the nature of the movement. The first from E. R. Hogg, of the Atlas Lumber & Shingle Co., to J. D. Hayford says in part: Referring to the meeting of the manufacturers of the Portland and Inland Empire, this meeting was held and conditions gone over very thoroughly. Every manufacturer reported conditions about as unfavorable as they have ever been, prices being badly cut and orders being scarce. At this meeting it was decided to curtail the cut was the only solution of the problem and it was suggested that the curtailment be at the rate of 48 hours run per week or its equivalent for the next 30 days. The Portland and Inland Empire delegation claimed they would do this, but there was some difference of opinion among the Coast manufacturers. The writer's personal opinion is that tnere will be no curtailment because each fellow is situated about like we are and has to keep running. However, there was a rift in the clouds as every body believed that within from 30 to 60 days, the demand would be sufficient to bring conditions back to their normal state. Of course, when it comes down to the last analysis, the supply and demand regulate these things anyway. The second letter, as follows, is from E. G. Griggs td Robert B. Allen: Referring to yours of the 29th instant, the Tacoma crowd will all get together on Saturday and discuss the recent action which PRODUCTION AND WHOLESALE DISTRIBUTION. 449 I trust will result in stirring up the other districts as much as possible on the importance of recommendations by lumbermen. On May 3 Mr. Allen wrote to Mr. Griggs : Herewith hand you a letter from Mr. Yeomans, indicating the disposition of Southwestern Washington association mills in the curtailment proposition. If I can be of any further service to you in this matter do not hesitate to call upon me. Under date of May 25, 1909, Secretary Beckman, of the Pacific Coast Lumber Manufacturers' Association, issued a circular repro- ducing a circular of the Oregon & Washington Lumber Manufac- turers' Association, dated May 22. In this circular appears the fol- lowing paragraph : The news that from twenty to twenty-five per cent curtail- ment of output has been put into effect by the fir mills of the Northwest, as published throughout the country, has resulted already in the receipt during the present week, of a large volume of inquiries, by the mills, than for some time. Orders also are coming in quite freely and are invariably marked Rush indicating very clearly the fact that buyers are delaying ordering until lumber stocks get so low as to require prompt replenishing. Although not all mills followed the 48-hour plan, production was considerably curtailed in one way or another. In a letter dated May 27, 1909, A. B. Wastell wrote to Kobert B. Allen, manager of the Pacific Lumber Trade Journal : In regard to the curtailment movement, you should know the secretary of a lumber association is not expected to have any- thing to do with the matter and I wonder at your asking me any questions. All I can do is to guess. If I guess aright, curtail- ment is in full swing in Oregon. From the mutterings and whis- perings that I have heard I feel satisfied that 25 % of the capacity of the Oregon mills is being curtailed. One mill that did not want to curtail had an engine blow up and knocked them out of enough running time to bring them up in the procession; so you see we have Providence with us, as well as suggested control. Kead what your friend, Wallie Everett, says on curtailment in his last issue, which practically parallels my ideas. Certainly it is the only course to pursue under existing conditions and I believe conditions will be very much bettered through this joint action. At the meeting of the Pacific Coast Lumber Manufacturers' Association at Tacoma, May 29, 1909 — Mr. R. B. Allen, of the Pacific Lumber Trade Journal, stated that 306 sawmills in this State had curtailed production 25 per cent, and that reports at hand from independent sources showed a similar curtailment. An increase in demand began in July and, according to the Tacoma news, published in the American Lumberman of September 18, 1909, 25030°— 14 5>fl 450 THE LUMBER INDUSTRY. page 81, "reliable estimates are that 90 to 95 per cent of the mills of this State are now running at capacity." At the January 29, 1910, meeting of the Pacific Coast Lumber Manufacturers' Association, President Griggs, in reviewing 1909, said: In March the effort of all association members from Portland, Spokane and western Washington was directed to stem the tide of over-production and disastrous prices. Horatius "holding the bridge" was not more mighty. Concerted curtailment in 1910. — At a meeting of the Pacific Coast Lumber Manufacturers' Association in Hoquiam, Wash., on August 27, 1910, a committee on curtailment of output was appointed. This committee took up the matter of curtailment of output with many mills in Idaho, Washington, and Oregon. A blank was sent to various miils requesting information regarding the present curtail- ment of output and the possible future curtailment. The committee secured reports from many mills in Oregon, Washington, and Idaho. A copy of the committee's report, signed by Mr. Patten, chairman, showed that in all sections of the three States named the output was being curtailed. In a letter dated September 9, 1910, written to J. D. Hayford at Detroit, E. K. Hogg stated in discussing the condition of the lumber market : The situation has caused the manufacturers to sit up and take notice, and at the last meeting Mr. Patten was appointed Chair- man of a Committee formed for the purpose of getting in com- munication with the various mills on the coast, both in Oregon and Washington, with a view of urging an individual close-down. The replies he is getting are very satisfactory, and indicate that many of the mills are already closed, and many more will close. Of course, this is not the result of any work done by the Com- mittee, but of necessity. On Sept. 3rd we closed the Alder Mill, and it will remain closed until conditions are decidedly improved. As a member of that company I am very glad they closed; we were just about breaking even up there when prices were a dollar better than they are now. To continue running would mean a decided loss not only in operation but in our timber. I do not know that there is any thought at the present time of closing the Eatonville Mill; that may come later, however The following from the American Lumberman, dated September 17, 1910, refers to a meeting of the Southwestern Washington Lumber Manufacturers' Association at Centralia, Wash., on September 12: After a general discussion regarding conditions of business it was unanimously voted to curtail the output of all mills in the association, and a request was mailed to other associations to join this movement. For the present the reduction will be 25 per cent, but if it shall be necessary, it was agreed that the reduction be made 50 per cent. It "will be optional with the A PRODUCTION AND WHOLESALE DISTRIBUTION. 451 mills either to shut down certain days of the week, or to reduce the daily schedule. C. E. Patten, chairman of the committee on curtailment of output, in the following letter of September 16, 1910, to the secretary of the Southwestern Washington association, leaves no room for doubt regarding the common understanding existing between the two associations, although the writer mentions the unwisdom of any association doing that class of work officially: Replying to your letter of the 12th will say that we are getting very favorable replies from all over the country. A great many of the mills have closed down entirely; every mill in Washington that we know of but one has shut off their night run and we only know of one in Oregon that is running nights; a great many others are running only 7$ hours per day while some have closed down one side so at the present time there is a very large curtail- ment and fully 90% of those who have replied to our communica- tions are in favor of further curtailment. The way things now look every mill in this country will be absolutely compelled to close or go into, the hands of receivers, for as you well know, there is absolutely no business coming in and there will not be before the first of January and for the mills to continue to run and pile up lumber in their yards and borrow additional money from the banks means bankruptcy. For this reason, it is up to your members as well as all the manufacturers to voluntarily close their plants and curtail their output. You state that if the members of the Pacific Coast Lbr. Mnfrs. Assn. will curtail you will do likewise. We desire to say that our Association has nothing to do with this curtailment whatever. It is entirely an individual matter. It would be very unwise for any Association to do this class of work as an Association. We hope you will use your influence to see that the mills in your section of the territory close down regardless of what their neighbors may or may not do. There will never be a time but what here and there some man will run either on account of his finances not being such that he can close his mill and pay his labor or run out of pure cussedness, so we must all take a hand in this and do our part regardless of what others do. I hope you and your neighbors will assist in this work and that you and the representatives from your district will be present at the meeting to be held at 2 p. m. Monday, Sept. 19th at the Commercial Club Rooms in Tacoma, as we need your advice and assistance. A full report of conditions will be made at that time. Chairman Patten explained the plan of curtailment further in his letter of September 20, 1910, to the North Bend Lumber Co., of Tacoma: We note what you say about the larger mills running night and day, and in reply will say that there is no way of remedying this state of affairs. If a mill is built to run night and day then that is its capacity; if 100 M per day then that is its capacity; simply because your mill and our mill may have a capacity of 452 THE LUMBER INDUSTRY. only 40 M per day is no reason why we should compel others to cut only that amount. Replies are coming in very satisfactorily and we know of only one mill on the Puget Sound, one on Grays Harbor and one on the river that are running nights, and we hope to be able to induce these to discontinue. Outside of these, a very large number of mills have closed entirely, others are running three-quarters or half time. The only thing to do is for each mill to cut as little lumber as possible. We hope you will do your share of curtailing as it is to your own interest to do so. At the September 24, 1910, meeting of the Pacific Coast Lumber Manufacturers' Association the minutes show: Mr. Patten, chairman of a committee to ascertain the effect of the present deplorable conditions in the lumber trade, stated that over 50 per cent of the mills in Washington, Oregon, Idaho and Montana had or would curtail production until orders jus- tified operating to full capacity. He will prepare a letter on the subject, which will be forwarded you in a few days. This investigation is not limited to our own association but the vast number of mills not members of any association. This is the same meeting described in the Mississippi Valley Lum- berman of October 14, 1910, pages 28-29, from which the following extract is taken regarding the curtailment: The manufacturers of lumber have decided that curtailment alone will give strength to the lumber market. To what extent this idea has taken hold can be determined by the circular recently issued by the Curtailment Committee of the Pacific Coast Lumber Manufacturers' Association. At the recent meeting of that organization at Bellingham the committee re- ported that out of 98 mills in the state of Washington having a daily capacity of 9,153,000 feet, they found the present curtail- ment was 1,778,000 feet, and that the movement would soon result in a further reduction of 1,930,500 feet, a total daily cur- tailment of 3,708,500 feet, or more than forty per cent. Forty- eight Oregon mills with a daily capacity of 3,853,000 feet re- ported a present curtailment of 1,560,000 feet, and an additional 1,446,000 feet in prospect; a total of 3,006,000 feet, or seventy- five per cent. Twenty-one Idaho mills with a daily capacity of 1,380,000 feet, reported a present curtailment of 438,000 feet, to which would be added 520,000 feet; a total of 958,000, or about seventy per cent. Eighteen Montana mills with a daily output of 732,000 feet expected to be shut down entirely before the end of September. The combination of these reports showed that mills having a daily capacity of 15,118,000 feet planned a cur- tailment of 9,085,500 feet, or sixty-one per cent. On September 29, 1910, in a letter to Chairman Patten, after acknowledging the receipt of instructions relative to mimeograph copies of the curtailment, Secretary Beckman discussed the official A PRODUCTION AND WHOLESALE DISTRIBUTION. 453 attitude of the association toward the curtailment movement as follows: Inasmuch as this curtailment proposition is entirely outside of our association (and for the benefit of all) my personal opinion is that your committee should stand the expenses of the circulars, postage and work — on the theory that the work is benefiting all. To this end I shall have our Mr. Marshall render you an itemized expense account. On October 8, 1910, Secretary Beckman wrote Secretary George K. Smith, of the Yellow Pine Manufacturers' Association, the following letter: What efforts are being made to curtail lumber production in the South? In the Pacific Northwest there will be a curtail- ment of 60 per cent, and possibly if a yellow pine curtailment of like character is made there will be less mills placed in the hands of receivers. There is no agreement as to a curtailment on the Coast, and same is purely voluntary. On October 14, 1910, E. R. Hogg wrote a letter to H. I. Isbell, of Elkhart, Ind., in which he said: I have before me the report of the chairman of the curtailment committee, showing that in the states of Oregon and Washington there is now a curtailment of 5,664,500 ft., with a prospective further curtailment which means that within the next fifteen days this amount will be increased to 6,180,000 per day. This covers reports up to Oct. 8th. We understand that since that date a number of other mills have notified the chairman of their intention to curtail. This volume includes a great deal of cedar, not only siding but shingles, also. Concerted curtailment in 1911. — In this year there were two movements on the part of the fir manufacturers for restriction of output. One was promoted by association action and was in charge of W. C. Miles, manager of the Pacific Coast Lumber Manufacturers' Association, and after October 1, 1911, of the new West Coast Lumber Manufacturers' Association. This agreement covered a curtailment of production from May 27, 1911, to January 1, 1912, 1 by which the signatory mills agreed to operate not more than 10 hours a day, and to remain closed each Saturday and Sunday. The second movement was a close-down, beginning in December, 1911, and continued into 1912 under the management of C. E. Patten, of the Atlas Lumber & Shingle Co. Curtailment agreement of May 27, 1911. — The Pacific Coast Lumber Manufacturers' Association on April 28, 1911, appointed a committee to meet with similar committees from the other two fir associations. 1 Prior to June 22, 1911, the curtailment was "voluntary," since the agreement was not "in effect" antil the necessary capacity had been signed. (See pp. 455-456.) 454 THE LTJMBER INDUSTRY. At the meeting of the committees various subjects, including curtail- ment, were discussed. (See pp. 427-429.) On May 3, 1911, President Griggs sent the following circular to Secretary Beckman, with the request that it be sent out at once: Mat 2, 1911. To the members : - As a result of our meeting Friday, a Committee of Twelve millmen will confer on Saturday, May 6th, at Centralia, with like committee from the Southwest and Portland. Despite the fact that a large amount of lumber is being manufactured and shipped today, it is evident our mills never faced lower prices. Credits are extended to the limit, and it is apparent we must get more for our lumber if we are to avoid financial rocks. We owe a duty, not only to ourselves as manu- facturers, but to the state and nation. That duty is the success- ful marketing at profitable returns of the timber we control. The heritage of centuries should not be wasted by senseless competition and effort to avoid assessments and taxation. Prosperity and boosters only come to our State when logs and lumber can be handled at a profit. Boosting and upbuilding require money. THE WAY TO RAISE PRICES IS TO RAISE THEM. An automatic curtailment will result if we demand a fair return on our lumber and logs, or we will secure an advance which will protect the logger, the stumpage owner, the manufacturer and his employees. Orders have been placed to capacity and large volume is moving. All we lack is determi- nation to ask our price. Support the recommendation of your committee which meets Saturday May 6th. Yours very truly, Pacific Coast Lumber Manufacturers' Association, E. G. Griggs, President. The action taken by the committee on May 6 is described by E. K. Hogg, of the Atlas Lumber & Shingle Co., in a letter ' of May 9, 1911, to one of their sales representatives as follows: For your information, at the last monthly meeting of the manufacturers held in Tacoma about two weeks ago, a committee of twelve was appointed from our Association to meet a com- mittee of six from the Oregon & Washington, and six from the Portland Associations, for the purpose of going over conditions to see if some way cannot be devised to improve prices, etc. Fortunately, Mr. Patten was a member of that committee. They met last Saturday at Centralia. After a very careful canvass of the situation, they finally agreed to curtail their cut one day of ten hours each week from now until Jan. 1st, 1912, and as an evidence of good faith the manufacturers present, who com- prised the cream of the saw mill men out here, signed that agree- ment with the understanding that it was to be handed to others with a view of getting a large percent of the mills to agree to it. The conditions surrounding this agreement are such that if they go into it they will have to keep it. ' For further statements in this letter, seo pp. 428-429. PRODUCTION AND WHOLESALE DISTRIBUTION. 455 The meeting above referred to resulted also in the issue of discount sheet No. 7, which 58 mills agreed to maintain. (See pp. 430-431.) W. C. Miles, manager of the Pacific Coast Lumber Manufacturers' Association, was in charge of the campaign to obtain signatures to the following curtailment agreement, which was drawn up by J. N. Teal, attorney of the Pacific Coast Manufacturers' Association: Whereas, under present conditions the manufacture of lumber is largely in excess of market requirements, and such excessive manufacture and consequent demoralization is causing great waste of the raw product and loss to all concerned; Now, therefore, in consideration of the foregoing arid of the mutual benefits to be derived thereby, we, the undersigned, do severally agree one with the other to operate our respective mills from and including the 27th day of May, 1911, to the 1st day of January, 1912, in the following manner, to-wit: First: Ten hours shall constitute a day's run and no mills shall be operated for more than ten hours in any one day, except as provided in paragraph numbered third. Second: Commencing on Saturday, May 27, 1911, all sawmills shall close down and not operate on said day and on each suc- ceeding Sunday and Saturday until the 1st day of January, 1912, except as provided in paragraph numbered third. Third: Cargo sawmills during the first ninety days of said period may operate not to exceed sixty-six shifts of ten hours each. Closing time to be selected to suit convenience of operators, but after said period of ninety days said cargo mills shall close and not operate on Saturday and Sunday of each and every week as provided in paragraphs numbered first and second, except as nerein otherwise provided. Fourth: Voluntary or involuntary closedowns from any cause whatsoever, except as provided herein, shall not be considered as a closedown in compliance with this agreement, but said mills shall close and not operate on the days specifically mentioned, except as herein provided. Fifth: W. C. Miles, of Globe, Washington, is appointed agent for the parties to this agreement jointly and severally, and authorized and empowered to see that the same is faithfully complied with; to settle and finally adjust all questions as to its meaning and interpretation and any differences that may arise thereunder, and to allow, for good and sufficient reasons, a vari- ation from the closing days named herein, provided the running time shall not exceed two hundred and twenty hours in any one month, and for such purpose shall have access to all necessary records of the parties hereto. He is also authorized to secure and employ such assistance or help as he may deem necessary. Sixth : To provide funds to pay the necessary expenses arising under this agreement, each of the parties hereto agrees to pay the said manager, on demand, their prorata share of such expense based upon the average mill cut as set opposite the name of each party hereto. Seventh: The office of the agent shall be maintained at Cen- tralia, Washington. 456 THE LUMBER INDUSTRY. Eighth: This agreement may be abrogated at any time by vote of or on the written request of a majority of the signers hereof, and when requested so to do by five of the signers hereof the agent shall call a meeting to be held at Centralia, Washington to act upon matters submitted at said meeting as stated in the call thereof. Ninth : This agreement shall become effective on being agreed to and signed by operators representing a daily output of not less than ten million feet on a ten hour basis. In witness whereof, the undersigned have executed these presents with the average daily cut of their respective mills set opposite their respective names, this day of May, 1911. E. R. Hogg, of the Atlas Lumber & Shingle Co., described this movement in a letter dated May 26, 1911, to J. D. Hayford, as follows : For your own information there is now a movement on foot to effect the curtailment of the output by closing one day a week, commencing next Saturday and lasting until the first of January 1912. We have a big meeting of the manufacturers tomorrow in Seattle, and have no doubt but we will get a great many more pledges to this curtailment movement. Mr. Miles, the new manager of the Association, is working on this matter now, and we were informed yesterday that he had pledges from mills with a combined capacity of six millions of feet per day; as soon as he secures ten million feet the curtailment will go into effect. We are confident he will have this amount by Saturday. This means a curtailment of more than forty million feet per week, because three or four of the cargo mills, who have been running night and day, have agreed to close their night shift, and also to close every Saturday. St. Paul & Tacoma, who have been run- ning twenty hours per day all winter, have signed up the agree- ment, and have quit running nights, and we understand two or three mills down in the harbor have agreed to do likewise. We figure that this will make quite a little difference in the visible, supply, and if there is any demand at all, it should strengthen values very soon. It seems to me that it might be a good idea for us to have the mill run steadily five days in the week on regular stock, pile it up in the yard and have it good and dry when trade begins. _ Of course, we would like to have order right along to keep things going. We would be glad to know your views on the matter. On May 29, 1911, C. E. Patten wrote the following to W. C. Miles: While in Tacoma today, I had a talk at the Club with Messrs. Doud, Dickson, Whitman and a number of lumbermen who were very anxious to know how you were getting on. They thought you should send a letter to the mills as soon as possible, giving an outline of the success you are meeting with, and it was also their opinion that you should hire some assistants to help you in getting the signatures. I stated that practically all the mills north of Seattle had closed last Saturday and in the southwest the mills had been PBODTJCTION AND WHOLESALE DISTRIBUTION. 457 closed for the past two Saturdays, and we thought all mills should begin immediately to close down even though you did not have the full ten million feet curtailment signed for. I believe it would be well for you to keep the mills fairly well posted as to what you are doing as they are all anxious to have a closedown but a great many of them are afraid to close before the other man closes, but I think a letter from you advising all to close down regardless of the full amount of ten million feet having been curtailed, would meet with a response and they would afl be willing to take the chances on your giving the full amount. They thought you should hire somebody to assist you in getting these signatures so as to hurry matters as much as possible. I expect to leave Seattle Thursday and will not see you again before September, but I wish you all manner of success. The following from a letter dated May 30, 1911, from the Atlas Lumber & Shingle Co. to J. D. Hayford, throws light on the real object of the curtailment: Quite a bunch of the manufacturers attended the meeting last Saturday with Mr. Miles, the new manager of the Association, and every one of them signed the curtailment movement; we began, as did most of the mills on our line and most of the signers, to curtail last Saturday, closing our mills on that day. It might be well for you to spread the gospel pretty freely to the effect that we are endeavoring to bring about a curtailment movement to become effective when we succeeded in securing signatures representing a daily capacity among the manufac- turers of ten million feet. At Saturday's meeting it was de- veloped that there was a fraction over eight million feet signed up, with many more to see, and they were signing as fast as they could get hold of the petition. This curtailment means, in addi- tion to the mills which are already down, a further curtailment of one day each week, beginning on the 27th of May and lasting until the first of January, 1912. Now, if we succeed in getting signers representing ten million feet, this will mean forty mil- lion per month, and the seven months would make a minimum curtailment of 180 million. Of course, a few months have five Saturdays, and this would mean a slight increase. We feel that this amount of lumber taken out of the market, together with the prospect of a good demand for the fall, ought to make firmer values, and while we and many of the manufacturers on the coast do not want to see prices go beyond a fair return, we do, of course, want to get them on a basis where we will not lose money on every piece of lumber that goes out of the mill. In talking with Mr. Patten about this matter, he said he thought it would be advisible to give the buyers some idea of what this movement means. We recognize the fact that in trying to hold prices to our list, we are going to lose a great deal of trade, but with the mill running only five days a week, we are in hopes we will be able to keep it going to advantage. We will have to ask you to redouble your efforts, if it is possible, and secure all the business you can on our list. 458 THE LUMBER INDUSTRY. The following circular letter of May 31, 1911, from W. C. Miles, manager of the Pacific Coast Lumber Manufacturers' Association, shows the status of the curtailment campaign at the end of May: Up to date I have secured signatures to the curtailment agree- ment, aggregating eight (8) million feet. This includes both the States of Washington and Oregon. The mills in Southwestern Washington, and in Everett, as well as several in other portions of the district closed down last Saturday, May 27th., in conformity with this agreement. I believe this is a good idea as it will help the market. I would advise that all mills close down Saturday next, whether the ten million has been secured or not by that date. I will notify you whenever the ten million has been secured. On June 13, 1911, W. C. Miles sent out a circular letter in which he stated: We have at this time 8,115,000 feet signed up on the curtail- ment movement. The signing is moving rather slowly now as the mills to be reached are outlying, and the headquarters of many of them are in San Francisco, and hard to reach. The campaign is being pushed with all vigor, and we hope to soon have the 10,000,000 feet signed up, which will make the agreement effective. On June 16, 1911, W. C. Miles reported in his circular letter: We have at this time very close to 9 million feet daily capacity signed and assured, and the movement looks brighter at this writing than it has at any time since its inception. Rail mills are very generally closing on Saturdays; cargo mills on Puget Sound alone are curtailing to the extent of about 1,800,000 feet daily capacity by closing Saturdays. About one- third of this curtailment is by cargo mills that have not signed owing to their principals being out of the State. I want to congratulate the manufacturers on their unity in this move — it means a great deal to the State in the way of main- taining the value of timber assets. Some mills doing their own logging have raised the objection that they will have to shut their camps and may lose their men. I want to make it plain that this movement has been taken up strongly by the loggers and can assure the mills that with the exception of a few cases, where contracts forbid, every logging operation in this section will close for the entire month of July, and longer if necessary. This was definitely decided at a strong well represented meeting held yesterday in Seattle. In a circular letter dated June 22, 1911, W. C. Miles stated: We now have signed and assured sufficient capacity to make the curtailment agreement effective. As this is the first time that the mills have so generally gotten together on any move for the betterment of the business I would ask that no one stand on technicalities, and that all put the cur- tailment into effect by closing next Saturday, and help the good cause. PRODUCTION AND WHOLESALE DISTRIBUTION. 459 A large number of the mills are curtailing now and it is for the interest that all do so. On July 3, 1911, Mr. Miles sent out a letter of instructions regarding the form in which reports of the amount curtailed should be filled out. In this letter he says: The curtailment is now in effect. It is to the interest of all alike that present conditions be remedied. While a diminution of the excessive output will be of some help, every one engaged in the lumber industry should strive in all other legitimate ways to place it on a sound footing. In my opinion this can only be done through united action. It is my hope that each one will do all he can to help in this work. By so doing, you will conserve your assets and tend to better methods and fair profits. E. G. Griggs, as president of the Pacific Coast Lumber Manu- facturers' Association, on July 11 wrote to Mr. T. Babcock, who had succeeded V. H. Beckman as secretary of the association, as follows: Please let me know if the Seiffert Lumber Company, United States Lumber Company, Parker-Bell Lumber Company, Puget Sound Lumber Agency and the Sound Lumber Company have been represented any time in the Centralia conferences, or if they are members of the Association. Secretary Babcock replied on July 12: Referring to yours of the 11th inst., in regard to the Seiffert Lumber Co., United States Lumber Co., Parker-Bell Lumber Co., Puget Sound -Lumber Agency, and the Sound Lumber Co., and their representation at recent Centralia conferences, beg to state that from my own personal knowledge the above companies were not represented at any conference, with the exception of the Defiance Lumber Co., which belongs to the Puget Sound Lumber Agency. The Seiffert Lumber Co. controls the Sultan Lumber Co. and the Stocker Mill Co., and of these two the Sultan Lumber Co. has signed the agreement and we are of the impression that the Stocker Mill Co. is not running. The United States Lumber Co. have not signed, nor have the Parker-Bell. The Puget Sound Lbr. Agency comprises the Otympia Door Co., Defiance Lumber Co., Fidalgo Mill Co., and Vance Lumber Co. Of these the Defiance has signed and the Fidalgo is not running. The Sound Lumber Co. controls the Canyon Lumber Co., and the latter has signed. All mills named above are members of the Association. The following letter written by C. E. Patten to W. C. Miles under date of September 19, 1911, indicates that some manufacturers were beginning to weaken and that the curtailment was not as general as during the earlier months : I am in receipt of your curtailment report of Sept. 18th and am very much disappointed at the showing made as it is not what it should be. About 50% of the mills seem to be honestly and conscientiously living up to their agreement and making their 460 THE LUMBER INDUSTRY. full curtailment regardless of the other days that they may be forced to close, whereas nearly 50% of mills seem to be trying to evade their obligation and unfortunately some of largest mills such as the St. Paul & Tacoma, Defiance, Pacific National Crown Lbr. Co., McCormick, Clark-Wilson and others too numerous to mention, have apparently made very little effort to fulfill their part of the contract, evidently waiting until they have had a breakdown or some other natural cause for closing and then claiming this as part of their curtailment. Others undoubtedly expect to close some time during the winter on account of the bad weather and are putting off their curtail- ment until that time. Now, it seems to me that it is your duty to get after these mills in such a way that they will either make their curtailment or come out and be men enough to say that they do not intend to live up to the agreement, and in that way, you can notify the mills that are living up to their agreement and they can then use their own judgment as to whether they want to continue or not. I, for one, am thoroughly disgusted with the manufacturers of lumber as well as shingles, for I have never gone into an agreement but what a lot of them would deliberately break their word, allowing some of us to make the sacrifice and they trailing along and reaping the benefit. I, for one, want to know just what to expect in the future and I want you to write a strong letter to the manufacturers and if you desire you may use this letter as I want them to know just how I feel in the matter. Acting under the fifth article of the agreement, W. C. Miles granted permission on September 25, 1911, to the Atlas Lumber & Shingle Co. to run their mill "9 hours a day, 5 days, and 5 hours on Saturday" instead of the regular shutdown on Saturdays. W. C. Miles wrote a letter, dated October 7, 1911, which he signed as manager, West Coast Lumber Manufacturers' Association, to C. E. Patten, in which he discussed the status of the curtailment movement as follows : You speak of renewing the contract: The agreement stood from the time it was signed until January 1st and is still in effect. I can not off hand at this time say just how well the agreement has been lived up to but I can say this; that had all the mills signing lived up strictly to the letter of the agreement and closed but one day in the week and operated all the other days the cur- tailment would not have been so great in the aggregate as it is under present conditions. Several mills have burned since this agreement was made and quite a number have shut down entirely; others have reduced their capacity so that the curtail- ment is larger than we anticipated. This however does not excuse the mills who have not made their curtailment but I have had correspondence or conversation with most of the mills that have not made their curtailment and have had assurance from them that they would do so. Of course there are several mills who signed the agreement that absolutely ignored it from the day PRODUCTION AND WHOLESALE DISTRIBUTION. 461 they signed and will not answer correspondence or anything of that kind. * * * # # * I find that the curtailment is doing a great deal of good in reducing the stock in the country as stock seems to be extremely low. There does not seem to be any #1 Flooring in the country. ## is very scarce and from what I can learn all classes of stock is very short, with the possible exception of 4-inch F. G. clear. Mr. Patten replied on October 9, as follows : Replying to your letter of the 7th, will say that I am very well pleased with the curtailment as far as it has gone, but of course, the mere fact that some of our mills have broken down or others have voluntarily closed their mills entirely, is no reason why the signers of our agreement should not keep faith with us and close their mills one day each week. This, in addition to the present curtailment, would make a very material difference in the market conditions. I am satisfied that stocks are comparatively light and this condition has been brought about entirely by this curtailment movement, and I feel certain that if all of our mem- bers and manufacturers had lived up to their agreement and we had secured other signers as I think we should have done, to-day, we would be getting from $1.00 to S2.00 per M more for the lum- ber than we are getting and this is the result which we all eventually look forward to, so I believe this movement deserves our very best effort and every effort should be made to induce every mill to live up to their agreement. I hope you will also act upon my suggestion and get up a detailed report giving the exact standing or curtailment of each one of the 95 manufacturers. In this way we will know then who are delinquent and some of us may be able to render you some assistance in inducing the delinquents to fall in line and close down. I believe this is the most important work you have in hand and you can afford to drop all other work rather than have this a failure. In a letter dated October 9, 1911, to W. C. Miles, C. E. Patten stated that 95 manufacturers had signed the agreement. Under date of November 18, 1911, W. C. Miles sent out a detailed report of the amount curtailed for October which showed 43 mills curtailing and 23 closed down. This report was summarized in a circular letter sent out by W. C. Miles under date of November 20, 1911, as follows: The enclosed curtailment report for the month of October is exceptionally gratifying. The curtailment by voluntary closing down amounts to 73,671,000 feet. Add to this curtailment close downs for causes not specified, 3,379,500 feet and we have a total of 77,050,000 for the month. In addition to the above I have a list of 43 mills that have either burned, failed or closed down, whose combined capacity 462 THE LUMBER INDUSTRY. amounts to 58,630,000 feet per month. Adding this to the above curtailment give a total reduction of output for the month of 135,680,000, or fully 40% of the capacity. A statement that the amount of curtailment up to the first of De- cember was over 300,000,000 feet appears in a letter written Decem- ber 22 by Mr. Patten to S. H. Chatten, of Kansas City. (See p. 465.) The manufacturers, who curtailed in harmony with the terms of the agreement considered that the names of those that did not line up to its provisions should be made known to the manufacturing fraternity. The following extract from a letter dated February 6, 1912, written by W. H. Boner, manager of the Weyerhaeuser Lumber Co. to W. C. Miles, bears on this method of bringing pressure to bear, through association methods, on the mills who did not live up to their agreement: I also think it would be interesting, and possibly you have in mind to get out a statement of the mills signing up under the curtailment agreement; and possibly classify them giving the names of : those that fulfilled their agreements, and put them on the roll of honor; the near-do-wells; and the Pigs; and the Hogs: don't know that I would use these headings literally, but what I had in mind is that we all should know the names of those who filled their agreement, and those that did not; and the matter should be put before every member of the Association, so we could see who has played fair, and who hasn't. I think that it would have a good moral affect. Also I think that we ought to have a report of the mills that closed down voluntarily on the volunteer curtailment idea, and I think in doing this that the whole fist of mills should be published; and show the volun- teer curtailment of each mill. I figure that the moral affect of these things will help very much, as some of these mills break their agreements, and don't do the fair thing, figuring that no one outside of their immediate neighbors, are any wiser. Mr. Miles answered the suggestion in the Boner letter as follows, in the following paragraph from his letter of February 8 : Your suggestion on the curtailment agreement is alright and I will give it due consideration. The last circular I sent out on curtailment, you will note, gave just the number of hours that each mill reported curtailment, also showed the mills that had not reported and showed the mills that had not made full cur- tailment. The close-down begun in December, 1911. — The results of the cur- tailment agreement of May 27, evidently not entirely satisfactory, a meeting was held in Everett, Wash., on November 24, 1911, at which the question of an absolute close-down was considered. A committee consisting of C. E. Patten, of Seattle, chairman, William B. Mack, of Aberdeen, and F. C. Knapp, of Portland, was appointed to take up the matter of a close-down. Manager Miles on December 1 wrote to Mr. Knapp a letter which called attention to the fact that PRODUCTION AND WHOLESALE DISTRIBUTION. 463 the association was not officially connected with the movement, as follows : I am returning, herewith, Mr. N. B. Nettleton's communica- tion and will give you an explanation of why we have a new Secretary. After the West Coast Lumber Manufacturers' Association meeting in Everett there was a meeting of the Lumber Manu- facturers of which Mr. N. B. Nettleton was made Chairman. As this meeting had nothing whatever to do with the Association and as the Manager and Secretary had no part whatever in the meeting, the information in regard to the action of the meeting had to be given out by their Chairman. It seems that there was a movement on foot to close the mills for 30 days commencing December 15th and the question was discussed and a motion was made, as I understand it, that the Chairman appoint a committee of three to canvass the situation and see if it were possible to bring about this close down, believing that it was for the best interests of the business under the present market con- ditions. I presume from this communication that Mr. Nettleton appointed you on this committee, of which as you know Mr. Patten is Chairman and Mr. W. B. Mack of Aberdeen is the other member of the committee. I am not surprised that you did not understand the letter as Mr. Nettleton should have gone further into detail, you not being present at that meeting. It was a meeting of the Manu- facturers but was not a meeting of the West Coast Lumber Manufacturers Association. You understand that our Associa- tion will take no action in these matters. You will no doubt receive further communication from Mr. Patten in regard to the matter. C. E. Patten sent out a circular letter soon after the meeting "to the manufacturers in Oregon and Washington who are members of our Association, also to as many of the manufacturers in Washington who are not members, as I could learn the addresses of." The circular reads as follows: To the Lumber Manufacturers of Oregon & Washington: At a meeting of the lumber manufacturers held in Everett on Friday last, at which there were present, representatives of more than fifty mills, the lumber situation was thoroughly discussed and it was the unanimous opinion of the lumbermen present that in order to clear up the surplus of lumber on hand and permit the demand to catch up with the supply that it was absolutely necessary that there should be less lumber manu- factured. We found a very large curtailment had taken place since last June, since which time some 70 or 80 mills have been running on an average of 5 days a week, and a great many of the mills were closed entirely. This curtailment has reduced the amount of lumber to almost normal, but as the demand in the next 60 days will be very light, if the mills continue to run, there will be a very large accumulation on hand when the spring 464 THE LUMBER INDUSTRY. trade opens. As this should be avoided, the manufacturers present were of the unanimous opinion that the mills should close for 30 to 60 days, and with the exception of two, every manufacturer present stated it was his intention to close the mill from 30 days to 3 months. A number of the manufac- turers stated they would close their mills before the holidays and would not resume operation until the market had improved. F. C. Knapp of the Peninsula Lbr. Co., Portland, Wm. B. Mack of the S. E. Slade Lbr. Co., Aberdeen and the writer, were appointed a Committee to notify the manufacturers of Oregon & Washington of the situation and request them to curtail their output as much as possible for the next 90 days. It is the hope that every mill in the States of Oregon and Wash- ington will see their way clear to close down for a period of 30 or 60 days as there is no question but what it will be beneficial to the lumber industry. In order that we may know just how much of a curtailment is taking place and just what mills are closed and for how long, we would request you to fill out the inclosed blank and return it to the undersigned who will compile the information and keep you advised as to the amount of curtailment. Thanking you in advance, I remain,' Respectfully, Chas. E. Patten, Chairman. Chas. E. Patten, 911 Alaska Bldg., Seattle. Dear Sir: It is our intention to close our mill between , 1911, and . , 1912, or for a period of days, which will mean a reduction in our normal cut of million feet. Yours, truly, Firm Location E. G. Griggs, president of the West Coast Lumber Manufacturers' Association, indorsed this new movement in a letter to C. E. Patten, dated December 15, 1911, as follows: Replying to yours of the 14th inst., I am fully alive to the curtailment situation and appreciate the beneficient effect it has already played in the prices of lumber. I am more than ever appreciative of the good efforts you are putting into the further curtailment as outlined in your communication. Our own Company has had one of its mills closed down com- pletely, as per previous advice, has co-operated in every way with the additional curtailment, eliminating a large amount of production from the market as you know. We not only cur- tailed our mills, but we shut down our logging camps. During the month of January we will have three steamers which will have to be taken care of, and as you know what an export contract is, I need not dwell on this matter as to the necessity of our operating to take care of these commitments. We have no lumber orders booked for the export market after this delivery and therefore I think we would be safe in advising PRODUCTION AND WHOLESALE DISTRIBUTION. 465 that a considerable curtailment will be effected in the months of February and March. In order that you may protect your figures, from the present outlook you can count our Company in for a 20% curtailment during those two months. We trust you will be successful in your efforts, and are pleased to note the copy of communication which you forwarded. E. R. Hogg, of the Atlas Lumber & Shingle Co., on December 15 wrote Hooker Elmore, an operator of retail lumber yards with head- quarters at Excelsior Springs, Mo., in which he said: We have made very low prices in order to secure the business. We must have immediate reply because we anticipate that prices are now lower than they ever will be again. Our Mr. C. E. Patten, who is Chairman of the Manufacturers' Curtailment Committee, has reports from 100 mills out of 250 in Oregon and Washington, who have stated that they will close all the way from three weeks to three months, making a total curtailment by these mills of about 450 million feet. He has sent out another letter to the balance of the mills who have not reported, and we confidently look for a curtailment during the next three months of at least 600 million feet. We are giving these facts merely as a matter of information. On December 19, 1911, Mr. Hogg wrote the Fish & Hunter Co., at Lead, S. Dak., regarding quotations stating: These quotations are for immediate acceptance, and it might not be out of place for us to say that our Mr. Fatten, who is Chairman of the Curtailment Committee of the Manufacturers, has letters from 141 manufacturers who say they will curtail between the first of December and the first of March, the total amount of curtailment amounting to 477 million feet. This curtailment is now going on, and there are still other mills to be heard from. This is why we must have immediate acceptance of this order because we anticipate prices will advance somewhat between now and the first of the year. C. E. Patten wrote to S. H. Chatten on December 22, in part as follows : In regard to conditions on the Coast will say that some 95 of our leading mills in Oregon and Washington, last May inaugu- rated a curtailment movement and up to the first of December, practically all of these mills only operated 5 days in the week or 8 hours per day, and a great many of them were closed en- tirely, as prices did not warrant operating. All of our mills with the exception of our smallest one, have been closed down during that time. This, the Secretary of our Association advises us, produced a curtailment of more than 300 million feet. The first of last month, the Secretary of our Association made a very careful canvass of stocks on hand, and taking the total for Ore- gon and Washington, it showed that every single item was below normal; some of the mills were long on certain items but as a whole, we had less than a normal stock. 25030°— 14 30 466 THE LUMBER INDUSTRY. In addition to this, as the Association refused to do anything in regard to a curtailment of our output, in November, I per- sonally took up this matter and sent out circular letters to the mills, copies of which I herewith enclose, and in response to these I have to date heard from 171 mills which have agreed to close their mill either all or part of the time during the months of December, January and February, and as you will see by the inclosed circular, more than 90 of them will not turn a wheel or saw a board for a period of 3 months. This will reduce the cut 537,250,000 ft. or a total curtailment since June 1st of over 800 million feet. I believe this is going to have a very beneficial effect on the market and that if our mills remain closed as they have agreed, our stocks by the 1st of March will be all shot to pieces, then with a very little demand either from the car manu- facturers or from the retail yards, we will be able to secure a better price. The trouble has been for the past year and a half that we in the West, as well as you in the South, have been manu- facturing more lumber than was really needed, and in order to move it, -we have been cutting and slashing prices. If we can create a shortage of stock with a little increased demand, there is no question but what prices will take care of themselves. I have been considering seriously of writing to some of you yellow pine men and see if you would not personally take up a curtail- ment movement in the South and endeavor to get the mills to close down during the next two months. I think no other work that you could do would bring as great results as this, for there is no question but what the supply and demand regulate the price and if you can once get a demand greater than the supply, prices will take care of themselves. And he added the following postscript: P. S. — By the way, among the few mills that have not reported, is the Union Mill at Tacoma, in which you are interested. I do not know whether they intend to close down or are running. I think it would be well for you to advise them to close and remain closed and do their share towards assisting the rest of the Pacific Coast mills in creating better lumber conditions. C. E. P. The difficulty in holding the mills in line in the latter part of the curtailment is indicated by the following paragraph from a letter dated March 6, 1912, from E. R. Hogg to S. H. Chatten, of Kansas City, Mo.: Our Mr. Patten has been faithfully at work on his own re- sponsibility, trying to get the mills to continue the curtailment movement, but not with the success his efforts should warrant. The local papers throughout the State, who of course are interested in getting the mills to start, are publishing accounts of large orders being placed and mills filled with business and all that sort of thing which is having its effect, and many mills are starting up which had rather been inclined to remain closed. In circu- larizing the mills last year, Mr. Patten had assurance from 171 out of about 250 that they would curtail and this year he has not had to exceed 75 replies on his second letter, and not over 50% of them are favorable, so while the stocks are very badly PRODUCTION AND WHOLESALE DISTRIBUTION. 467 broken on the Coast, it would seem as though there is not going to be business enough to keep the mills going if they all start up. The result of this curtailment is shown by the following extract from a letter of March 6, 1912, from C. E. Patten to W. E. Barns, editor of the St. Louis Lumberman: Our closedown during December, January and February was a very satisfactory one, fully 50% of the mills being closed from 30 to 90 days. In addition to this, there were a great many others that ran a short time. At the present time there are probably not over 3 or 4 mills running nights, where ordinarily there are 20 or 30. In addition to this, a large number of our mills are either running only 8 hours per day or 5 days per week. I am endeavoring to get as much of a curtailment as possible but it is pretty hard to hold some of them in line as we have a good many mills that through pure cussedness will not curtail, in fact, one or two of them sawed more lumber in 1911 than they did in 1907. Then, of course, we have a good many who are in such financial condition that they are unable to curtail, but even with all this, at the present time we are having a very large curtail- ment, which I hope will continue until the 1st of July or until conditions improve. In an article referring to a proposed curtailment movement in 1912 the American Lumberman, of November 9, 1912, page 11, summed up the results of the Patten curtailment as follows: Last year C. E. Patten, of Seattle, spent a great deal of time and trouble in convincing manufacturers of the necessity of cur- tailing their output. The curtailment at that time was the sal- vation of the lumber market last summer. By that means a total of 571,000,000 feet of lumber was eliminated from the market. This approaches a little over one-eighth, or about 13 !)er cent, of the entire output of the State of Washington — more umber than all of the mills on Grays Harbor, the largest single lumber manufacturing section in that State, would cut in an entue year. The large influence that this has had on the price of lumber during the last six or seven months is easy to see. Elimination by the mills of one-half as much lumber from the market this winter would insure the strongest market in the early part of 1913 that the Coast producers have experienced for more than five years. Section 15. Selling agencies. The cooperation of the selling agencies, in the price activities which have been carried on with the official and unofficial assistance of the various fir associations, makes a treatment of certain aspects of these agencies desirable. On August 14, 1909, George E. Birge wrote to Secretary Beckman of the Pacific Coast Manufacturers' Association in regard to the advantages of selling agencies : The Agency was organized in December, 1903, with a capital of $3,000 — fully subscribed, but at the present time we are 468 THE LUMBER INDUSTRY. operating on a capital of only $2,000 — this being 1200 each from our ten mills. It has cost us from 1\ to 4$ % to handle the business through this Agency, and we are satisfied that by being organized we have been able to maintain better prices in southwestern Washington than could otherwise have been accomplished. We have not only been able at times to take care of the capacity of our ten mills, but have had as high as forty accounts with different outside mills — who were furnishing material on our orders. We have found that by being in position to take care of any kind of an order — irrespective of its quan- tity — we have been able to secure from 500 to $1.00 more — especially on Timbers — than could have been Procured by any individual mill. Our members have all found that a great many benefits have been derived from the agency — more particularly, the competition is not in evidence which would otherwise have existed were our ten mills to attempt to protect orders individu- ally. Therefore, we believe it to be to the best interests of the manufacturers, were agencies established throughout the entire western country. There is a movement on foot in Portland at the present time, which we trust will materialize, whereby the majority of the larger mills in that territory will form a selling agency for their entire capacity. If you desire any further information relative to operating the Agency — as to taking up with the manufacturers regarding the organization of similar agencies — kindly let us hear from you accordingly, and we will endeavor to assist you. The above information is given to you as strictly confidential, and is of course not to be published in any way. The West Coast Lumber Manufacturers' Association, recognizing the advantages of selling agencies, actively fostered their organiza- tion. At the October 27, 1911, meeting of the association the min- utes state: Then followed a discussion of the advisability of establishing district selling agencies which resulted in the passing of the following motion : "The President shall appoint committees of three from each district for the purpose of formulating a plan for district Selling Agencies. Each Committee shall feel out the sentiment in its district after which the committees shall meet as one Committee to further plans and report results at the next meeting of the Association." Some delay was encountered because of the interest of the mills in a proposed merger which was being advocated by Henry J. Pierce at that time. This proposed merger was not effected, and in the few months following the Northwest Lumber Agency and the Tacoma & Eastern Lumber Co. were organized. The Pioneer Western Lumber- man, of December 1, 1911, in speaking of this movement among the manufacturers, said: PRODUCTION AND WHOLESALE DISTRIBUTION. 469 They feel that the present competitive system is ruinous to prices and to business and that by handling their lumber through a common channel they will be able to turn a loss into a profit. Selling agencies have from the first owed their existence to advan- tages which they furnish each mill in selling lumber. To eliminate the need of an expensive selling force, and make possible the handling of large orders which single mills can not take, each agency contracted with its members to market their output, distributing the orders equitably among the members. The members often excepted the local trade, their own yards, and other territory in which they had individually built up a trade. In return for its work the agency was given a commission of 5 or 10 per cent on the sales. From this com- mission the expenses of the agency were paid, and any balance was paid as a dividend to the stockholders. At least six agencies handling fir lumber have been organized and are active to-day, all conducted along practically the same lines. The Lumber Manufacturers' Agency, of Centralia, Wash., was organ- ized December 7, 1903. The membership from the first has been largely from among the members of the Southwestern Washington Lumber Manufacturers' Association. The Pacific Lumber Agency, of Aberdeen, Wash., was organized August 6, 1910. Its membership has varied from 20 to 8 mills. The Douglas Fir Sales Co., of Portland, Oreg., was organized in May, 1911, and began business in September, 1911. It handles the output of 15 mills. The Northwest Lumber Agency, of Tacoma, Wash., was incorporated in February, 1912. In October, 1913, it handled the product of 14 mills. The Tacoma & Eastern Lumber Co., of Tacoma, Wash., was incorporated in March, 1912. It handles the output of 6 mills. The Washington Cedar & Fir Products Co., of Seattle, Wash., successor to the Washington Cedar Products Co., was incorporated May 24, 1912. It sells the output of 6 sawmills. In the earlier years of the Lumber Manufacturers' Agency action was taken mainly at meetings of directors. In recent years added responsibilities have been given the managers of the different agencies, thus concentrating power and making cooperation easier and action quicker. Each agency within itself may be considered a small "pool." In each one the selling price of a large output is fixed by one or a few men, competition between the mills represented being entirely eliminated. It is, however, in the cooperation of all these agencies together that the effects become of greatest significance. This cooperation has been carried on partly by means of correspond- ence, and more effectively, in "informal" meetings (see pp. 470-473) of the managers and members. The principal cooperation has been along the line of agreeing on prices and in apportioning the orders among themselves. 470 THE LUMBER INDUSTRY. The Lumber Manufacturers' Agency cooperated closely with both the Washington fir lumber associations. At a meeting of the board of trustees of the agency on March 17, 1904, it was — moved and carried that the manager attend the meeting of price list committee appointed from S. W. Lumber Mfgs. Assoc, to meet with committee of Pacific Coast Lbr. Mfgs. Assoc, in Seattle on Mar. 18th and help secure uniform prices in the two associations by having price lists the same and to conform to prevailing market prices on lumber. On April 15, 1904, the board of trustees voted — that the management of this Agency notify N. W. Hamilton, chairman of Price List Committee of Pacific Coast Lumber Mfrs. Assoc, that we are compelled to suspend the price list as agreed upon by the two associations Mar. 18th in order to meet compe- tition as we find market prices at the present time. Members of the agency were signers of the price agreements of the associations during 1905 and 1906. (See pp. 393-409.) George E. Birge, manager, was active as a member of the joint price committee. At a meeting of the directors of this agency, December 16, 1908, "Motion carried that representatives of our mills call upon Pres. Miles of the S. W. L. M. A. 22d inst. and urge the adoption of a price list to take effect Jany. 1, 1909." The managers of the different selling agencies sometimes meet with members and nonmembers and agree on selling prices. A descrip- tion of one of these meetings occurs in a letter which E. R. Hogg, of the Atlas Lumber & Shingle Co., wrote to S. H. Chatten, Kansas City, Januaiy 3, 1912, as follows: For your information, Peterson of the Pacific Lumber Agency called a meeting at Centralia Saturday last, and the writer was the only one present north of Tenino, which fact is to be re- gretted. At that meeting there were present the managers of the three agencies, and a majority of the members. Reports were to the effect that business conditions look very much bet- ter; that the curtailment now going on, the condition of stocks in the retailers' hands, and the fact that the railroads are begin- ning to buy, all tend to strengthen the market, and special stress was laid on the absolute necessity of our maintaining the spread as to lengths. With this in view, the discounts as shown in pencil on the enclosed discount sheet were thought to repre- sent fair market conditions, and Duncan of Portland, Peterson of Aberdeen, and Jennelle of Centralia, as managers of their respective agencies, said they were going out about the first on these discounts. The elimination of competition between the different agencies in bids for large orders is illustrated by the following examples: On December 23, 1910, A. F. Peterson, manager of the Pacific Lumber Agency, wrote to Mr. Wonderly, of the Lumber Manufac- turers' Agency, as follows PRODUCTION AND WHOLESALE DISTRIBUTION. 4*7l Are delaying in (quoting on the government inquiry for Man- istique, Mich., delivery, pending advices from you as to the market prices on this class of material. No answer to this letter was found, but the copy in the files of the Lumber Manufacturers' Agency bears the following pencil notation "Phoned 12/27." In the summer of 1912 there was some controversy among various selling agencies over a contract to supply lumber to the Pullman Co. which had a contract to build a large number of cars for the Harri- man Lines. G. M. Duncan, manager of the Douglas Fir Sales Co., wrote a letter to their Chicago representative, April 17, 1912, in which, after referring "to our wire of the 15th regarding the Harri- man equipment," stated: Further in this connection, it is our intention (in fact, we have the work started) to line up the other interests on the Coast that can possibly be considered as competitors on this business and have them name under no circumstances a less price than our figures, and, if possible, a higher one. I believe that we can handle this entire proposition between your office and ours, we making distribution amongst outside interests on a reasonable proportion of the business. By doing this, we can give absolute assurance of perfect service in the matter of shipments and can also satisfy our outside friends. A slight misunderstanding in this deal is explained in a letter of F. C. Schoemaker, a director of the Pacific Lumber Agency, written to L. J. Wentworth, president of the Douglas Fir Sales Co., June 10, 1912. He wrote: As I told you over the phone Saturday, I had written you a long letter in regard to the car material mixup, over which the various agencies have been feeling "sore" at the Douglas Fir Sales Company. After writing the letter I decided not to send it, hence am writing this as a substitute, hoping to be able to confine myself strictly to the text. In the first place, I would refer you to the file of correspond- ence enclosed, which is by no means complete, insofar as the transactions between Peterson and Duncan are concerned, but it covers the situation pretty well, so far as subsequent develop- ments are concerned, but should you desire to have the complete files, Mr. Duncan or Mr. Peterson of course, can furnish them. The Position of the other agencies in this proposition is, briefly stated, as follows: The various interests had a meeting in Cen- tralia at some time previous to April 26th, at which meeting were present Messrs. Startup, 1 Horton, 2 Shields, 3 Peterson, 4 Won- derly, 6 and possibly another. As I understand it, various prices 1 Probably J. G. Startup, manager, Washington Cedar Products Co. *L. G. Horton, chairman executive committee, Washington Cedar Products Co. • F. J. Shields, manager, Northwest Lumber Agency. 'A. F Peterson, manager, Pacific Lumber Agency. •J. D. Wonderly, acting manager, Lumber Manufacturers' Agency 472 THE LUMBER INDUSTRY. were talked over and the car material situation was one of the principal matters under discussion. All of the men excepting Duncan claim that they discussed the Santa Fe and Harnman business, etc., while I believe that Duncan says that the Harri- man business was not considered. All of the other men had original memoranda which they presented at the meeting in Portland, showing the Harriman business together with sug- gested prices and terms of division, etc. Peterson and Duncan virtually agreed on the prices, but the other price figures varied materially. All of the other parties excepting Peterson and Duncan had made notations that the business was to be divided on the basis of 3% commission to whoever might secure the business. Peterson understood that there was to be no commis- sion whatever, and Duncan understood that there was to be no division whatever, but that they were simply to hold together for prices and let the business fall where it would, etc., etc. Mr. Knapp heard this entire discussion and I think he will tell you that there was certainly room for conclusion that there was no very definite understanding amongst any of the men. Under date of April 26th, you will note that Peterson wrote Duncan on the Harriman business, giving him the prices he had quoted since and asking if there was anything further that he had to suggest. According to Duncan's statement, Hutchins secured this order from the Pullman purchasing agent on April 27th, but for two weeks following, Mr. Duncan did not tell Mr. Peterson that he had already secured the business despite the fact that they had repeated telephone conversations about it, and even so late as May 5th and 6th, I understand, Duncan positively stated to Mr. Peterson that he knew nothing about the business having been placed; the information having come to us through our representative who tried to secure the order from the Pullman people. Duncan's excuse for having taken this position, as stated to the writer, was that the order was in such condition that he did not feel at liberty to tell any one that he had it. The criticism the rest of us make of his attitude is that he should have told us frankly that he did not care to furnish any further information in the matter, just as Mr. Hutchins did in Chicago, so that we would have known we were in competition with one another instead of cooperating with one another. Farther on the letter states: After Mr. Duncan admitted to us that you had secured the entire order, the question of distribution was brought up and Dun- can offered to turn over to the Pacific Lumber Agency, a goodly number of cars on your various orders, low priced as well as high priced, en the basis of 3% commission. On the statement of one of the Directors of the Pacific Lumber Agency, who had no authority to act for the Board, your Agency took the posi- tion that we had turned down your offer and said that you would not renew it again. Mr. Peterson and myself came down to Portland, not knowing that you had changed your attitude but assuming that you had simply left the matter in abeyance until we could talk the rjroposition over. We were frankly PRODUCTION AND WHOLESALE DISTRIBUTION. 473 refused any business excepting on the basis which under the cir- cumstances, we considered unacceptable and on which offer we refused to act, because it was entirely foreign to the understand- ing which we thought we had amongst us, in regard to the dis- tribution of the business. We thereupon considered that prob- ably the matter was definitely closed and that in the future there would be no cooperation between the Douglas Fir Sales Agency and the rest of the agencies who had participated in this supposed agreement. And again: Mr. Mack, who was one of the "fire eaters" at the start, has recommended that the whole matter be dropped and that you be permitted to keep the business which you have secured whether you were entitled to it or not, and that we attempt to clean up the slate for future cooperation in the handling of such orders. Practically all of the Directors of the Pacific Lumber Agency are of this opinion, but I do not know how the other agencies feel about it. While this would be satisfactory so far as we are con- cerned, nevertheless I feel that a matter is never settled until it is settled right, and if there is any way to adjust the matter by offering the rest of these agencies some of the business which you have secured, I think it would turn away all of the feeling which has existed in this matter, since this controversy came up. How- ever, you can do as you like about it and the rest of us will try to forget our feeling that the arrangement was not carried out in the spirit which the majority of us intended should control it. The following letter of Mr. Schoemaker calls attention to a meeting held to discuss similar arrangements : [Letterhead of Willapa Lumber Co., Raymond, Wash.] July 17, 1912. The Douglas Fir Sales Company, Pacific Lumber Agency, Northwestern Sales Agency, Tacoma-Eastern Lumber Com- Sany, Washington Cedar Products Company, Lumber tanufacturers' Agency. Dear Sirs: Please do not forget our meeting on the evening of July 26th after the association meeting at Tacoma. Please try to line up some feasible and equitable scheme^ of distributing orders, in case of large quantities of railroad material, etc. At this meeting we will try to define some plan which will be satisfactory to all and which will work to the mutual advantage of all concerned. Yours truly, F. C. SCHOEMAKEE. On December 16, 1912, the Northwest Lumber Agency telegraphed R. A. Joy, its Chicago representative, as follows: Your wires and letters covering Montreal deal received and your action approved by this office. Peterson 1 read me a wire i Manager of the Pacific Lumber Agency. 474 THE LUMBER INDUSTRY. on Saturday signed by Sine 1 and Davis 2 jointly commenting on Montreal matters stating among other things Joy unmanageable. I told him you would do what was right and they must do the same. We must all act in harmony and on the square or the main object of the agencies would not be accomplished but no double crossing will be permitted, Petersons scheme is to ask twenty eight as long as possible and then come down to twenty seven or twenty six if necessary. We dont want the business but will send another wire later for you to show the boys you understand. It is reported that Pullman will cancel order with Douglas Fir material for Northern Pacific cars and replace. See what information you can get at that end. On January 8, 1913, the Northwest Lumber Agency telegraphed Mr. Joy as follows: See copy of Petersons letter to Sine which we sent you in regard to Brigham business and follow those prices. Jenelle' will be in Chicago Friday morning. Get in touch with him, Davis and Sine and frame up best deal that can be made. We can handle material for three hundred cars in connection with Seattle. Material to be shipped via all lines. If must ship via Harriman Lines only, then we should have enough better prices to pay local charges which will be on basis of three to five cents per hundred. Keep us posted by wire. Section 16. Information bureaus. The subject of information bureaus will be treated in connection' with the association price activities, for although the bureaus have been represented as not being connected with the associations, yet while they are distinct organizations, they have been used to aid in carrying out the association purposes. For instance, in his speech before the National Lumber Manufacturers' Association at their April 19-20, 1910, meeting Victor H. Beckman took care to state "The bureaus are operated independent of any association." Thorpe Babcock, secretary of the West Coast Lumber Manufac- turers' Association, and former secretary of the Lumbermen's Infor- mation Bureau, of Seattle, in a letter to the Carlton Consolidated Lumber Co., July 24, 1912, said: Answering yours of the 23d in regard to Information Bureau reports beg to advise that the Information Bureau is not con- nected with the Association for the reason that the officers of the Association have not deemed it wise to bring into Association work this dealing too much with prices of lumber. On the other hand, a comparison of the membership list of the various information bureaus with the membership list of the manu- facturers' associations in Washington shows that practically every i A. J. Sine, Chicago agent of the Pacific Lumber Agency. S D. H. Davis, Chicago agent of the Tacoma & Eastern Lumber Co 8 Manager of the Lumber Manufacturers' Agency PRODUCTION AND WHOLESALE DISTRIBUTION. 475 member of the information bureaus was a member of the manufac- turers' association.- Practically all the members of the Lumbermen's Information Bureau formed by the consolidation of the foregoing bureaus, are members of the association, with the exception of three selling agencies whose members are nearly all association members. The associations have actively supported the bureaus by urging association members to take up the information bureau work. For example, in Mr. Babcock's letter, part of which has just been cited, occurs the following: The Information Bureau sent out the reports that you have been receiving to the members of our Association with a view to interesting our members in the work that the Bureau was carry- ing on. They have now advised that they do not feel that they are warranted in continuing further reports. Of course, they would be glad to have you join the Bureau on the same terms as other members in which case you will not only receive those reports but daily detailed reports of sales. We would suggest that you take the matter up with the Informa- tion Bureau direct as we are urging all members of the Associa- tion to take up the Information Bureau work as we believe it is of the greatest value. The cost of the same is very nominal, something like twenty cents per car, we believe. However, the Secretary of the Bureau will inform you as to details. The standard price list (see p. 424) was issued under date of Febru- ary 1, 1910. Several information bureaus sprang into existence at about the same time. The membership of the different bureaus was composed of lumber manufacturers. The most active were those having headquarters at Tacoma, Seattle, Centralia, and Everett. At each of these points an office was established and a secretary employed. The members of the various bureaus operated mills either in the town where the head- quarters were located or in the immediate vicinity. All of these information bureaus were consolidated about Jan- uary 1, 1912, into one, called the Lumbermen's Information Bureau. This bureau has its headquarters at Tacoma, in charge of G. A. Brewer. The work of the information bureaus and the results claimed for them by their advocates is best shown by the following extracts from speeches at the meeting of the National Lumber Manufacturers' Association April 19-20, 1910. Victor H. Beckman, in reviewing recent work of the Pacific Coast Lumber Manufacturers' Association, said: Another matter we took up was the establishment of informa- tion bureaus. The information we had secured before that time was, in many cases, misleading; in other cases incomplete and was of utterly no value. So members of our association and other people outside established about twelve informa- tion bureaus in different localities, and took in twenty-five or 476 THE LUMBER INDUSTRY. thirty mills each. A secretary and a stenographer were put in and members of each bureau paid the expenses of the bureau out of their own pockets. A duplicate invoice of every order is sent to the bureau secretary every day, with the f . o. b. price and the delivery price. It was found at the start that there was from |2 to $8 a thousand difference in the quotations, and to-day there is a difference of only fifty cents or a dollar. It is the finest thing that ever happened to the lumber business on the Pacific Coast. It is the business of the bureau secretary to visit the mills frequently, and he has access to their books. The bureaus are operated independent of any association. In regard to general conditions on the Coast, our export trade is very good and prices are about $2 firmer than they were about two months ago. There has been quite a demand for railroad material, and the yard trade is opening up very well. There has been an increase of possibly 50 cents to $1, which I ascribe almost wholly to the information bureau system. At the same meeting J. H. Bloedel, of Bellingham, made a speech on "Insurance and price problems." In his description of the work of the information bureau, he said: The object is to inform each other of the actual selling condi- tions of that day. The secretary bulletins these, and the result is that next morning we have a copy of the business taken by our immediate competitors in our immediate district, under the same conditions that we are selling, handling the same class of lumber and operating under practically the same conditions of cost. Each one knows what the other is doing. If one is getting one dollar per thousand more for No. 1 flooring than others are, they ask their sales agents, why can't they do it ? If there is a weak sister in the bunch, he gets his backbone stiffened and tries to get a better price. Our object is to get in all the manufac- turers; and the more of the little ones the better, because as a rule they are the ones who are the weak sisters, who have never tried to get a price and have done that largely from the fact that they have not had the information before them. The same thing is put into effect in the cargo bureau. Where heretofore we were largely subjected to price quotations and manipulations of the brokers in San Francisco, our cargo friends have found that they are able to hold them absolutely in line; and not only that, but to be the dictators of the price situation instead of having the brokers, the commission men and the wholesalers dictate to them, as has been the case. Mr. Bloedel's reference to the small manufacturers is similar to Mr. Beckman's statement to an agent of the Bureau of Corporations that the movement was chiefly in the interest of the small operators, who are uninformed as to market conditions. 1 It may be pointed out that if the large manufacturers can persuade the small operators to ask the same price for lumber that they them- i This attitude may be compared to the conditions described in yellow pine, pp. 71-73, and Nortn Carolina pine, p. 250, where the helplessness of the small mills was given as a motive tor various con- certed price activities. PRODUCTION AND WHOLESALE DISTRIBUTION. 477 selves can secure, the business will more readily go to the large manu- facturers, who can supply the prospective purchaser more promptly with any and all grades required, than the small operator can. Mr. Bloedel after urging his hearers to establish information bureaus of their own called attention to a newspaper clipping which showed a difference of over $2 per thousand feet in some bids on a Government contract for Manila, and contiauing said: Every one knows that the Government specifications are standard; they cannot vary a great deal and there was no justifi- cation for a difference of two dollars per thousand feet. There might have been a difference, according to a man's valuation of his lumber; it might have been fifty or seventy-five cents between two bids, or half a dozen bids, but it never should have been two dollars per thousand. The object of the bureau I have mentioned is to avoid such a thing as that. One man knows the price quotations another man is making; prices may go up with the market or go down, and will vary, but at the same time we get much better prices for lumber all around. The information collected and disseminated by some of the informa- tion bureaus was of such a nature as to be very useful in bringing about more uniformity in prices. That this has been the result is practically admitted. But what is of more importance is that this was evidently the purpose of their organization. For instance, the Tacoma Lumber Information Bureau on December 31, 1909, advised the Atlas Lumber & Shingle Co. (.and apparently other manu- facturers) that the price of common lumber would advance $1 per thousand on January 1, 1910. Section 17. Grades. Definitions. — The Pacific Coast Lumber Manufacturers' Associa- tion adopted grading rules on the following dates: March 29, 1901; August 22, 1903; January 27, 1905; March 30, 1906; July 28, 1906; March 28, 1908; and May 1, 1909. Changes in grade are often slight and for the present purpose only the grading rules of March 30, 1906, for rail shipments are presented. These rules were adopted not only by this association but also by the Southwestern Washington associa- tion and the Oregon & Washington Lumber Manufacturers' Associa- tion. DEFECTS. Kecognized defects are knots, knot holes,, splits, checks, wane, rot, rot streaks, worm holes, pitch seams, pitch pockets, torn or chipped grain, discoloration and imperfect manufacture. Knots. — Shall be classed as sound or loose as to quality and large or small as to size. # Splits and Ghecks. — Shall be considered as to length and direc- tion. 478 THE LUMBER INDUSTRY. Wane. — Is bark or lack of wood from any cause on edges of lumber. Pitch Seams. — Are clearly defined openings between the grains of the wood, are generally rilled with granulated pitch, and a serious defect and not admissible in any grade above No. 2 Common. Pitch Pockets. — Are openings between the grains of the wood containing more or less pitch, and are surrounded by sound grain wood. Torn or Chipped Grain. — Is usually caused by dressing against the grain and is more or less of a defect according to its depth or extent. Discoloration. — May be the result of various causes and will only be considered a defect when it will damage the piece for use intended. FLOORING. No. 1 Clear. — Edge Grain, 3, 4 and 6 inch. Shall be well manufactured, and free from all defects. Angle of grain not less than 45 degrees. No. 2 Clear.— Edge Grain, 3, 4 and 6 inch. Shall be well manufactured. Angle of grain not less than 45 degrees. Will admit of slight roughness in dressing, and from one to three small close pitch pockets, or equivalent defects. No. S Clear. — Edge Grain, 3, 4 and 6 inch. Angle of grain not less than 45 degrees. Will admit of roughness in dressing; two or three small knots not over J inch in diameter or eight small pitch pockets, any three of which may be open. It is generally understood that this grade will admit such defects or combina- tion of defects as will not impair its utility for cheap floors. CEILING. No. 1 Clear. — 4 or 6-inch. Shall be strictly clear, well manu- factured. Both Edge and Flat Grafr i admissible. No. 2 Clear. — 4 or 6-inch. ShMb weH manufactured. ■Will admit of slight roughness in dres]p|v Either of the following also permitted with the above: 'mreeVlose pitch pockets, not to exceed 2 inches in length, thr^e smJiU, tight, smooth knots } inch in diameter, or their equivalent of combined defects. Both Edge and Flat Grain admissple. No. S Clear. — 4 or 6-inch-, Allows any three of the following defects: 25 per cent of tJfe face may be rough from dressing. 4 inch stock admits of r*t to exceed six tight knots f inch m diameter or two knots lfcich in diameter, or three open pitch pockets not to exceec? 4 .itches in length, or an equivalent number of tight pitch pockets. *6 inch is correspondingly graded, with proportionately greater i..f e cts. Both Edge and Flat Gram admissible. DROP SIDING AND RUSTIC. No. 1 Clear— 6 or' 8 inch. Shall be well manufactured and free from all defects. Both Edge and Flat Grain stock admis- sible. PRODUCTION AND WHOLESALE DISTRIBUTION. 479 No. 2 Clear. — 4, 6 or 8 inch. Shall be well manufactured. Slight roughness in dressing admissible; will allow three small, tight knots not more than £ inch in diameter or four pitch pockets, or their equivalent of combined defects. No. 3 Clear. — 4, 6 or 8 inch. Will admit of roughness in dressing; four or five knots not larger than 1 inch diameter, or eight small pitch pockets, any three of which may be open, or their equivalent of combined defects. COMMON BOARDS AND SHIPLAP. Common Boards, SIS, ajid Common Shiplap, shall be manu- factured from sound stock. Will admit of any two of the fol- lowing defects: Wane \ inch deep on edge and one-sixth of the length of any piece, tight sound knots, none of which shall be larger than 3 inches in diameter, or equivalent spike knots, one spht not more than 16 inches long. These boards should be firm and sound, suitable for use in ordinary construction, and service- able without waste. Roughness in dressing admissible. JOIST AND SCANTLING. Common Fir Joist and Scantling must be of good character. Will admit of coarser knots than 1 inch common. Some wane edge admissible. Generally speaking, there should be no imper- fections that seriously impair the strength of the piece. ROUGH TIMBERS. Rough timbers, 4x4 and larger, shall not be more than \ inch scant when green, and be evenly manufactured from sound stock, and must be free from knots that will materially weaken the piece. Timbers 10 x 10 in size may have a 2 inch wane on one corner, or its equivalent on two or more corners, one-fourth the length of the piece. Other sizes may have proportionate defects. Season checks and checks extending not over one-eighth the length of the piece admissible. Section 18. Proportion of grades of Douglas fir cut by various mills. The following tables show the proportion of grades produced dur- ing the years stated at 10 plants operated by 10 companies. In 6 plants the only division of grades possible to obtain were third clear and better, and common. In 4 plants the grade of culls was also given. It is believed that the classification returned as common in the first 6 plants included, in most cases, some lumber of the grade returned as culls in the last 4. Some of the mills were located so as to be able to ship by both rail and water; others were interior mills. It is not known how far differences existed in the character of the timber holdings. 480 THE LUMBER INDUSTRY. DOUGLAS FIR— PROPORTION OK GRADESji |Figures represent percentages ] Company A. — Sales records. Grade. 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 Third clear and bet- 23.3 76.7 37.4 62.6 23.4 76.6 21.7 78.3 20.5 79.5 18.4 81.6 24.8 75.2 21.7 78.3 14.7 85.3 19.1 80.9 14.7 85.3 12.4 87.6 Common 83.4 Grade. 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 18.8 81.2 13.7 86.3 12.3 87.7 16.5 83.5 15.2 84.8 11.9 88.1 10.7 89.3 27.0 73.0 21.9 78.1 21.0 79.0 22.5 77.5 31.0 69.0 Company B.— Sales records. Grade. 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 Third clear and bette 12.1 87.9 20.6 79.4 10.1 89,9 11.1 88.9 11.2 88.8 15.7 84.3 16.1 83.9 14.6 85.4 17.2 82.8 8.0 92.0 Grade. 1901 1902 1903 1904 1905 1906 1907 1908 1909 Third clear and bette 12.4 87.6 17.3 82.7 20.6 79.4 14.7 85.3 16.6 83.4 24.9 75.1 26.4 73.6 30.4 69.6 25.8 74.2 Company C. — Sales records. Grade. 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 Third clear and better 38.9 61.1 40.6 69.4 29.4 70.6 48.4 51.6 57.6 42.4 29.1 70.9 37.1 62.9 42.6 57.4 39.8 60.2 40.6 59.4 42.4 57.6 52.6 47.4 Company D. — Salts records. Grade. 1903 1904 1905 1906 1907 1908 1909 Third clear and bette 25.7 74.3 35.7 64.3 33.9 66.1 28.5 71.5 32.1 67.9 47.0 63.0 34.9 65.1 Company E.—Cvtt of mill records. Grade. 1902 | 1903 1904 1905 1906 Third clear and bette 1 45.2 ; 36.0 54.8 64.0 31.9 68.1 29.2 70.8 33.1 66.9 1 Diagram 2, opposite p. 44, shows these facts in graphic form. PRODUCTION AND WHOLESALE DISTRIBUTION. DOUGLAS FIR— PROPORTION OF GRADES— Continued. Company F.— Sales records. 481 Grade. 1909 43.6 56.4 Company Q. — Sales records. Grade. 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 Third clear and better... Common Culls 20.7 76. S 2.5 23.3 74.5 2.2 25.2 72.0 2.8 22.3 74.4 3.3 23.9 70.8 5.3 26.8 68.0 5.2 19.8 75.9 4.3 14.7 79.7 5.6 17.3 76.5 6.2 18.8 75.1 6.1 19.5 73.5 7.0 21.4 68.0 10.6 16.1 72.6 11.3 17.7 66.1 16.2 Company B. — Sales records. Grade. 1906 1907 1908 1909 23.6 59.1 17.3 24.6 55.4 20.0 19.7 56.7 23.6 18.6 68.8 Culls 12.6 Company I. — Cut of mill records. Grade. 1906 1907 1908 1909 23.0 72.0 5.0 24.9 69.8 5.3 23.3 69.3 7.4 23.1 69.2 Culls 7.7 Company J. — Cut of mill records. Grade. 1909 Third clear and better 23.1 Common. . 64.5 Culls 12.4 Section 19. Prices of actual sales of Douglas fir lumber. Tabular statement. — Prices of actual sales of fir in two markets, Puget Sound and Portland, are shown in Table 2 (pp. 483-489.) The prices are for rail shipments, and practically all sales used in getting the average monthly prices were delivered to points east of the Rocky Mountains. The vast majority of the shipments were made on a 40 to 50 cent freight rate. The weights used in reducing the delivered prices to an f. o. b. Puget Sound or Portland basis are those recom- mended by the Pacific Coast Lumber Manufacturers' Association. All prices presented for dimension are for dressed stock. It is less expensive to dress dimension than it is to pay freight on the heavier weight of the rough stock. Prices are presented for the period of 25030°— 14 31 482 THE LUMBER INDUSTRY. 1896-1910 on the Puget Sound basis, and 1894-1910 on that of the Portland, Oreg. The following table shows the items for which prices are presented, the markets in which the items appear being designated by an asterisk (*) : No. 1 clear vertical grain flooring No. 2 clear vertical grain flooring No. 3 clear vertical grain flooring No. 1 clear ceiling No. 2 clear ceiling No. 3 clear ceiling No. 2 clear drop siding No. 3 clear drop siding Common boards or shiplap Common boards and shiplap Common dimension Common dimension Common dimension Common dimension Timbers Thickness and width. Inches. 1 x 4 or 6 1 x 4 or 6 1 x 4 or 6 8x4 1x4 1x4 1x6 1x6 1x8 1x12 2x4 2x6 and 2x8 2x12 4 x 4 to 4 x 6 10x10 to 12x12 Length. Feet. 10 to 16 10 to 16 10 to 16 10 to 16 10 to 16 10 to 16 10 to 16 10 to 16 10 to 16 10 to 16 8 to 16 8 to 16 8 to 16 8 to 16 I and under Puget Sound. * (*) (*) (*) (*) (*) Port- land. (*) (*) Diagrams. — Of the items in Table 2, already described, 11, on the Puget Sound basis, are shown on Diagram 14; and 9, on the Portland, Oreg., basis, on Diagram 15. There is a general corre- spondence in the price fluctuations of the same items in the two markets. Attention may be called to the difference in the course of flooring prices since 1907 from that of the other items. In 1910 the prices of flooring were as high or higher than they were in 1907, while in the other items they were considerably below the 1907 high prices. Considering the general price movements of all the items presented, it should be noted the rise and decline in 1899-1900 were not as marked, and the rise and fall in 1902-1904, particularly in the Portland prices, were much more marked than was the case with many of the eastern woods. The rise in fir, beginning in 1905 and cul- minating in 1907, and the decline to the low point of 1908, following by a gradual rise which was in progress most of 1910, are similar to the prices of other species. PRODUCTION AND WHOLESALE DISTRIBUTION. 483 fflSn •pnerjioa; 7.00 7.00 7.00 6.50 5.75 5.75 5.75 5.75 6.00 6.00 ■pu.g joanj '.'.'.'.'. ::::::'. '. \ \ \ i «9 O •w 00 S 1 1 . R •punog ^aSnj 'noui -uioo',,9 x j- 0^ ,,\ x ^ L as ■puBBJOj ■ o ■ ■ .10 ■ - .to . . 7.00 7.00 7.00 7.00 6.25 6.25 5.75 5.75 7.00 7.00 7.00 7.00 •pu,g 4380,1 "°5oS «5 •pOTnioj OOQ OO ■ ■ O^Onu] ■ ■ «» • • 3iD 'in ■ ■ O ■ ' -OOO 'O ■ Q sz [^ ■ m ■ • © ■ ■ nmor- 'O •© O t^ Io6 ■ '00 ■ ■ ■l^C-^Xi > t- 't— pu,g }93ryc a o . CI -pusnioj io ■ o • O ' • . 10 i . 1 t^ ! 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(^s-, = 5 3 ^^ K G ¥ ^IS -•} 3 jJH I ~~Z — i 1 i v: j 1 1 ..L... _4 - 1 ■ ■' ; " V 1 1 \ \ -4- M \ ; | | .., .., ... ^ a .; . ....... --U -- - L ; : ~ j — r— t — ' I ..1....4- — ? L 1 .1.. I'~"? 3 — - -- """]" _i_j~ 3UGH TIMBER? ?ESSED,C0MM( ^ — — ~. 3D m Co Co m o o z o io — -^--ro i"''oi2 ^r^ZoO OOmO C^c5q£3iCO 3) z C/> > c» CO a: "D l - > ■— -4- - --- __.,. . ■ i i ■ c _... D m 0) en m rrg a>cnO - _ Z > > O m z Co o z "1 "" 1 7? — — j 1 d ■ i ' 1 I __ — ■ - ... 2 1 T :iz _ — .... r _. ■ ,. "* n 1 H - — , — 1. — L.„ — — '■ iO to ' c r c 5^ yd s< z 3 — - ... <-j y - - z Z ro — ' c "2. c o . D» - — __ _l — = ■; - c Z T o - • > m :: : k L ■ ^ ► i e ^bS — SO^O s — 4 ... ... m 1 t> ! c ♦ • ► c ... O '" =Z. Co - Zn. - ■s § - — i ^ g g - Co r oo — ( o °1 o S - — M 1 c k> t> ! k- A ■ 1 j — , c c ► M I O O _ J r - ♦ -- - c n — * ... -,: - -- ► ... ,._ ~_| < =» "*v ► "1 < 1 > ...... c ?. Oo * !• 1 ► t> n « NJ _..j - -— - h * E .... c 5 i • *> ■ ¥ ► t c D n ■a " Oo ► * — • ► _]■ ► > 4_ 1 »• ► $ ► ► .._> ► • ► k- i • ► 1 t *• ♦. I ' < 1 1 ♦ ► 1 * ► 1 ." ► > • -V ► t> ♦ • ...._.... 1 ♦... ^ • 1 ♦ h 1 c k> ► f — ! I — 1 __ j > * « 1 ► J »• - ■ ■ 1 — — - » !> ♦ ► ' \ 1 fr > { l> ». * i 1 ♦ i >► * • 1 1 n » » 1 , ► t c ^O ► & .... 9 ► 1 c . . ► - •j 1 k < c n 3 ' : . . >. • 1- t i ► V k- > ► >>• ■ 1 3 ► |i 9 1 t ► !»• 9 k O 1 — ft- 1 k »• ► t> * 1 > I I »*= ■ • *• C ■ J* __ KC= 1 1 P -- i »■ > ■ < 1 > ► > '■ fl ► 1 r D ■ *> w> ■ • 1 ► ■ I i* ■ • ► > ■ ► K ■ • o I Cr> i i > l> 3 o I H* i • ► £> ■ ; ► B» t • 1 : c < ♦ ► 1- ♦ e -1 ► c . ,, 1 ► > ■ 9 !" > o ♦ I > ■ • 1 r> "0 c Fl H 0> O CZ z: a c _ c < I {> J 1 < 1 IF k- > K » ►■ rJ o > _4 » ► o > > i ■ ► c c c .... „ 1 o i ► {•* ♦ i 1 o E >t> t* ■ • 1 o >> i «* ■ • ► I i ► > 1 'o t» t> < I ■ t> > i- ♦ > y '"1 — & > *■ ■ 9 — ( ? J ► £> > ► ■ C <>_* i i>f t ■ ► > ! O' W> i* "^ 1 I ( > > : > *■ k> £_ - ■ c ♦ > > e: 9 > > a- • • j >1 . ..|.. j :\Q o ■ j 1 * > I » _, , 9 "9 1 o # k> > >- ■ 1 's:_ — o o .♦ — *■ > a- il — ► 1 ... * ._..4 ► t> !■> j .< e < ... k- 1^ -< ►I > & ► 4; k r> i o f : ■h > - ... ij ■- 1 1 .._ __..:;_ 1 a c 3 I* D> i > Aj ■ "3 V : t i O oi ► -> c» 4 • ■ ► ^ c _,± I • I 1 ♦ • k- t> 4- c o « ■ ► > 1 • ► ♦ r~ 1 k- i> 1 > ! ->• ♦ • ► t> c " ■ — • I b- - -■ ♦ 1 ► > - c 5 » "St. ■ ► l> "& < • k- ■■ 4- ) : I - > > ♦ » ► l> t • \ -- "I'll k > o 4 • < 1 1 > 3 a I_ ► ?> > ■ ]~ • fc --■j ■;■ ■ ... . .^ o ♦ ► > ♦ ■ ■ 3 ■ o • ^. > • 1 P\ i [ ' ._j._j c c » , • k- t> ► > > ♦ • ► t> ; ! - r^ 3 1 , k- _bv > " ♦ e ► r> ! : : c c H ► t> >i • • 1 ►■ ;> ; i ! 1 1 ► k i> > • 1 ► r f; 7 1 ♦ _ J rZ] t> 1 i — •_^ O -;- k- "i >_ - ~s c, -O 4 tr 1 ► J i ■ • O <* ► » i 4 a O £> »■ > ~n "• ■ ..... -j- — .... • .... k- C> ~ c ■ k> > »\ k ' 1 k- E> ■- _ <* fc- > tej ♦ r~ • *- > a> k- > [> ■- j ^i- -- ... - ; -. — • t d" e» > _4 — f. ~ — • » l> 5> 1 ► ^ H • -*1 _J? i_j ► > i> c ""zj "X) o * = 4-t- I > • I > ^ ..„_ i- > »■ ^ - . j. 1 • 9 k- > i> j— c 3 o o V. '""""" - . .. » t i~l ►I > i s ♦ ..... — i — j 9 < 9 ► k- 3 "^ _;l: h— .. .. 4.—.. O o ft > i >*- • ^ 4— .... • 9 O .._!_ k , k ife v c z — ^ j — o o 1- — ■- ► > J^ ^- :tr ..: ...... 9 9 i k- i> ^ -v »> r> t*i ■ < . ..._ *9 ! h > t: — — ... c f-l o '- . ~, > i — . __j < 1 * __. "" 9 9 6 _l_ ...&: ... -- = 11 3 -4 o ■ o ♦ J _+._ ► o • i > t> - -■ 9 9 9 C 4, > 1* ~ c c 5vtS 3 o N » , > > > • -- i ► L * ' 9 9 9 < > M ..... > < o Vf- ■ — _jH * > * i .Efc ♦ I, f- 9 9 9 » k M O c Tl 5 - o r" ." t> ► A ■ 4 - O t - -T — — i >■: ' ♦ 9 ► f^ K " o ~i » - « o ' 9 CJ r* 1 L " i r - -- 3 > ► ♦ ► o V ► > > .- — ^ 9 u — -1 — k -■V -- --- — r> *■ ' 9 _ — ^ — _ 1 k> I> ^ « S» ► "1 9 - _t? _ f • ik- t ! ^_ . „ _ 1 — > k- - I> f U F> > ► t • 1 - t S \T\ o r — H ► ► > * i- — .;* 9 9 k b 3 HJ 3 • > > ► s ♦, 9 ... k k 1- ♦ • j—- _6 ■ > 1 ► > ' ! k- > ♦ 9 k _ it *■ > > \ e ..„ ...... k- — - -H — i ► ♦ 9 1- - - t> 3 ► t> 6 e • t ► 1" < • 9 th s -J oo vo f-N =: f^ J7, Oi +■ Oi ^ -J CD *D ^5-- ?3 L" — _ _ _ _ — _ _ — ro^ w o- -j co *£> Q— ro o> f= Qia> -^ cd vo r^— ^ CO k£> ^^ — ro 0, -^ Ol CT" ~i CB -O Q — i%s t*» -P> ^ CT- -J Co S S > Diagram 15. — Movement of Actual Prices of Fir Lumber on an F. O. B. Portland, Oreg., Basis, 1894-1910. PER 29 25 V Zb 25 | n 20 1- 15 in 1894 1895 /£9b / f^/ /^£7^ /905 1904^ 1905 190b /9^r /9^- /9^9 /9/^ l°°™ 3 A Mil JlAl5 0|Nl5 JIF1M AIMU JIAiS NiP J f 1M AIM . .1 A 5 MID JiFIM A MU JIAI5 HIP " raLT i I phpti flwn nRFRON i '■ I i : ; ; ;j : i ' L^ Ia|a| a aU| a | J 1 i 1 i 1 -H- 1 ■ , i ._!_!_ I. I'll: j i I ' | | I \Jf\ l_HINL», Ur\t.OvylH|l j \\ \ ! ' '■ ! - l A i i ! ! ' ; i i ; !_. A OA l__i__ 1 i A AJA A 1 I 1 Z"? - q Hp 1 j V.&FLOOF 1x4"- 10 TO N°| A » 2 * 'INR h i ! | ! i l \ """j T r I I A a! a: j . ' __ .jjhl.U "TT_." i A ' ! ' ; 1 ■ : 1 jl ; 1 f-M---t- ; -1+hhAt-tM-Hl ™ 44 — i- l ; ! 1 j-f—M Mia ; A i fl i a 1 | ! : i | ' ■ ' j_! 1 : j i ■ : ■■ ~~ 4 " ; •" +4-i — H~* ! i : ' ; • ; i : Ai'l 1 ! f 1 I* ' , 1 ' aI'] 1 '^' ! : 4i ; | |! 1 i ! ' !4 '«-r«'' - , ' -" .. 'AiAji! 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A AJA!AA | | \ >*** A; 1 u ' j- 1 ■ 4Ti \j : ■ iii i i i ; 1 i_[ : j_i : ' ; J_ -Mi -4-j— --H-i — m — H i3 i- ^t* if "1 .!. aaL .! i i 1 j I : i ' ■ ! ' ! : ' ! ' ! 1 1 Iii: 1 11 1 I ! | - : i iii ■'.-HJ»- i~ti iAi*i i y*j?,: i A ; i 1 1 I 1 1 1 1 ! 1 1 1 1 ' ■ 1 1 I 1 ' ' ' : 1 1 1 1 ' ' i i I — i-4 — 1 — i — ! : --H-fH--H- " 1 ■ + ;■•■ r iJi i*f- -pi-j=m — r-t*- * «*-i«*iii^-rf fi- rp-yT - ' t - "'*" I — rr - ^ 1 | j : ! i i : : • ' i i r : , i ! : i I i li M i : : io ! 1 ] | ! ■ ; | , ■ ! - 1 +++—- h— j4+ ! j: I ' I i ] : i ' I i i il 1 i : I ■ ! I 1 ! : : || ? 20 19 '6 il 16 15 \l il 10 8 ii i i ■ ' 1 1 i i ! I I ' ! I I ! 1 ! ! I i I I ' 1 I I I I M I l : 1 i-l I 1 1 I I I I J_Ll i I Li. J, ! f ' 1 I 1 i i i ! 1 111:11 1 | j I ' ; : I ■ ' '1':!! 1 1 1 1 j 1 1 ' , 1 i l ; : 1 I i i 1 .^.'lai-LULLO- ?! ■ ' ! 1 l N$2 CEIL1NC ! i ! i ! i l ■ ' ' ' ■ ; i : ! i i '•Nii . j i \\ i i I , i ill 1 ?0 ~^r %x4"-iOT016' t DRESSED, COMMON BO . -- H 1^ rH pi ^ \-\ T++-I i|_L j , 14 . i , : .,», L_:.L ^_ 19 ARDS AND SHIPLAP — ^ '^rt,!: 4 f"! '"^V — |— <— 1— (-t- i- \-^+ It — k- ■ —("i- ; - 1.: 4 4--**| ! i i : i i - U— i-i- J-)— - 4-T44-4- 18 i ■ ! ~n 1 x 6" - IZ TO 16' a ' : tj ' ' i ■ : ■ i 1 ! ! ! ! i , l^i :* t H a : ' ! ..•* 1 ** 1 ^ ll»L*l«^si*.«-*U^ — — 14- l7 - : -f+f- 4-f n !;!.!:' ! i ! ! ' ' :••! ; j i | 1 ■' | !•: ! : ; | j ill ' 1 ■ i j ! ; Ia ' Ia 4 ^' i- 1 !*! j ! 1 ..*,• 16 1 : "Tf^rri"! ^--^♦•i^U ' t ^r J r^ri- jji-ti -rj^-r -:-!""'"" f;" e l"" : "t"; "'""!": T 1 ' 't^ ! ' ! ' ■!.»•! . . *! : i l-*i : •; : ! 1 i , i 1 : : \F> 1 ' 1 1 i 1 1 — rr+ _ t _j_l. 1 ': ■ '■ I i M 14 +--| --!---,•:- 1 1 ! ! ! .•!* * 1 ' r- - »*« * "* -I 1 ! l ! > ! I i l ! ,.! : i : " : """ ! " "tT""^ 'ill 'it: r i 1 ! ! ; 1 i * M •!••; i - i - — -i-MM-JA^K-M— 4- 1— is _r i - " • *! i- •! 1 I i! !!'»! ,!,,; >.l.i.*' , :r' ■■ I ' ^^M''lT[;: n **iJTiT n "j.i.i :. !i ' ' 1_ ! 1 *i*l ; ' T Ml 1 ;: ill ! <■ A Ai I A iii! *l 17 ... ;1|+..; t f-t j-: - L -i-hi. ;.,^J. ! *!* • i ! : ■ 1 I 1 : 1 ■*. i i : \ . . .. T+'i 4-l-r ' |A|A,A|AJ* S AJ A^^..^^4Va a 4TUiAU. II ■H-H- ---■<- 1 : 1 1 ! i : j 1 '| ! i ; | I j i j | | iAAA^IA^I • 1 | A i ; i 1 1 ' | i II) , i j ' 1 j — K • ■ ! 1..1.1 1 1.^ ,. •!■: .! ! "i ! ! ! ! ' ! 1 ! i : ' !"'• ! ' ! a!a' .i**l*!*Ai*!A.i.i .I , .1 j. : i I.J Iii* il l^ : ! 1*^4, 1 _ _i_L _LL.iJ-o_.-i. A A *l i i i M i 1 ! i i r | -U . i ■ . ! 1 M>*- '■- [ ttn^-K^ J '1 1 " ' ^ » ■ ^ai ' " 1 ; : | 1 * ! ' i*! 'Ia^aj^*!*; : ■ '• \ : i . i , : i : . j : | ■ A i v ;» : : : ■ i i. ±__ , , , , ,..±,i.i. lj.^. ^T T^f ^At ^^- + 1 j : . I i 6 ; 1 ; -f^*t— ^ ~i — h-f -■ —K|V|*h^tf-i i | . ; . . 1 a : *!*' : !' , ■ ! 1 ' . j jt : ■ 1 . i 1 i 1 ' I'|| j 1 ' ■ M MiT — i— — t— i-i i i U-hl 7 A, - : i ! iaa! 1A |a' j 1 : A; : ' 1 ; * • ; ill | : ; ! : ; i i : j 7 I i i : ; i j in | 1 : - I 1 | 1 : M i Tu'T J^-*f »h4''.: r t -)*->!-t*ijt J •-!-- +— 1 — r — -i — i — f — | — p-~- + H ; " 1 i ' 1 1 1 I i i ' 1 1 1 1 1 : ' i t ' i 1 ! i ' i i ! ! i 1 ! i 1 i 1 1 1 I 1 M 1 5 15 14 10 9 8 b 1 1111 ii ; i ' 1 1 1 1 ! ! 1 1 \ 1 ! 1 j ' I , 1 i 1 : ■ I : ': ! ! ! ! ; i j 1 i ll|' i 1 : I i ■ | I 1 1 '1 i 1 III 1 i i 1 i 1 i ' : 11!;! i [ i ! .*a*M : ,! 1 1 i Mil i ! U..-..L j . !l 1 -\ ii is "D RESS ED. COMMON 2x4"- 8 TO DIMENSION ' , ' ' 1 Al. 4IAAA AAAiAiA ;i II *l 1 AiAAi ' 1 I i| | 4 1 1 1 14 i— pi iii iii 1 1 i ! i i : ! i i i ! i | i ■ 'fc 1l|. 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T 4- 7 Gt^» *p •p" O O d i •! i 1 H ! -j— — k4-j*j~- H&fej* r i_t : ^ ,. + .. r .,_^?i_, .o|oj.._.o )e | er .i4J.- L4- r . f 4--t-j--i-i-t4-U— i-j-ij-i M-M- . i-fl: -I-l-.-'-- i !+t|r — f- 1 - i:-H 'i r + f l-^y: jflf ■ I ■ M ' 1 1 i i iii 5 1 1 ! 1 1 1 "Mi Ll-LLj ' ' ! ' ■' i ' j • ! ■ i iii! i 1 : i i ! l i ; ! ! ■■ i l i i : j 111,1 '''' — i 1 i i i-LJ-iJ-uU — L^l L.,_i J..i._L_ Ll._L^ — L„.,,i 1 PKODUCTION AND WHOLESALE DISTRIBUTION. 489 OOOHHHHHr Scooo 0)01010 iniaiQiooioiQcuoiQiA OioSt-l— OC3l-xraL-NnN>ncio>oc0>Oi030)OJ WCONCONNNNCJi-HrH OOONOO ©OOO^- H N .-I ~H .-I t-l l-l .- sssgsgg ©OOSOOO© io mi- «xwao)0)0>a NN©t*N©<0<0©CiO -r -ti -r -i o m i". N«NW«N(NC4cSc^c5 »0 ©©©•=>© m ^lOOOOO t~ N W (3 <3 c3 o3 cS 5 fee=2 (>.§>>&' god CHAPTER V. WHITE AND "NORTHERN" PINE. Section 1. Production. The Forest Service 1 groups at least four species in its statistics of white pine production, namely, the common white pine of New England and the Lake States (Pinus strdbus), the western white pine of Idaho (Pinus monticola), the Norway pine (Pinus resinosa), and the jack pine (Pinus divaricata) . The total production reported for 1912 under the name white pine was 3,138,227,000 feet. The white-pine lumber of New England is largely a second-growth product of a comparatively low-grade character. Most of it comes from trees which have grown since the original white-pine forests were cut, and which, although belonging to the same species, yield little lumber that is comparable in quality to that of their predecessors. The reported cut in 1912 was as follows: Maine, 280,145,000 feet; New Hampshire, 240,215,000 feet; Massachusetts, 143,119,000 feet; Connecticut, 16,422,000 feet; Vermont, 16,664,000 feet. The Bureau obtained some prices on eastern white-pine lumber, in the New York market, but they were for cargo shipments, and the prices of the different cargoes were known to vary so widely from each other, according to the dimensions shown in the ship's tally, 2 that they could not be considered comparable. Besides the New England production, which was about 22 per cent of the total in the United States, there was a production of 278,531,000 feet, forming about 9 per cent of the total, in the Appalachian region of the States extending from New York south to North Carolina. The Bureau obtained some prices for Virginia and West Virginia white pine but from too few firms to be representative. Much of the white pine produced in the Lake States is sold under the name of "northern pine." The upper grades are generally restricted to white and Norway pine, while the lower grades are a mixture of white, Norway, jack pine, tamarack, spruce, and a few other minor kinds of wood. The amount produced in 1912 was as 'follows: 3 Minnesota, 1,225,674,000 feet; Wisconsin, 397,549,000 feet; Michigan, 141,003,000 feet; and Iowa was credited with 22,324,000 feet, sawed from logs floated down the Mississippi River from Minne- i Forest Products, 1912, p. 14. s Compare with discussion ol cargo spruce, pp. 694-695. 8 Forest Products, 1912, p. 16. 4Q0 PRODUCTION AND WHOLESALE DISTRIBUTION. 491 sota and Wisconsin. The production of these States was 1,786,550,- 000 feet, being about 57 per cent of the total. Prices of white-pine lumber from these sources are shown by the Bureau in its statistics for Minneapolis, Wausau, and eastern Wisconsin, Pittsburgh and Buffalo and Tonawanda markets. The western white pine, reported in 1912, came from the following States: 1 Idaho, 309,564,000 feet, and Washington, 41,762,000 feet, making a production of 351,326,000 feet, or about 11 per cent of the total white-pine production. The Bureau secured prices covering this class of white pine in considerable detail, but it has not published them because of the difficulty of insuring comparability, since usually no distinction was found in the records examined between wholesale, retail, and contract prices, and nominal prices to allied companies. Section 2. Competition met by white and "northern" pine producers. Until a comparatively recent period in the history of the lumber industry white pine occupied a commanding position. It was the best known and most desired softwood, and it was so plentiful and so cheap that it went into most general use. It was employed largely to the exclusion of less valuable kinds of wood, even for purposes for which they could as well have been used. With the exhaustion of the original pine forests of the North Atlantic States the forests of Michigan, Wisconsin, and Minnesota were drawn upon. The lessen- ing of the ultimate supply of white pine and the increased cost of transportation to the great centers of consumption forced the use of substitutes. These began to be demanded first for the uses to which they were as well, or almost as well, adapted as white pine, and gradually the use of substitute woods has been extended until white pine to-day encounters, to a greater or less extent, the competition of such substitutes in every use to which it is put. White pine, however, remains the standard because of its strength, lightness, softness, slow decay, and special adaptability for interior, finish. No other softwood possesses such a combination of desirable/ qualities, though some may surpass it in some one of them. As it was a pioneer wood in the lumber trade the custom of using it has played an important part in deterring the use of substitutes. The difficulties met with by dealers in trying to substitute other woods for the more familiar white pine are often the subject of comment in the trade papers. For instance, notwithstanding the fact that pop- lar and red cedar siding, in every way as good for the purpose, could be bought in Buffalo in 1902 at many dollars less a thousand, white pine siding was demanded. In 1907, in Chicago, certain consumers demanded Norway-pine dimension at $23.50 a thousand when hem- lock was available at $20 and yellow pine at $21. For pattern work i Forest Products, 1912, p. 15. 492 THE LUMBER INDUSTRY. substitutes have repeatedly been tried, but the consumers have not found them satisfactory and demand the higher-priced white pine. Because of the lack of odor the lower grades are in great demand for boxes for such food products as macaroni, crackers, etc. White pine meets competition from different kinds of wood, according to the different uses to which it is put. Its upper grades of boards compete principally with clear wide stock in fir, cypress, spruce, and poplar, and to a less extent with southern yellow pine and North Carolina pine; its lower grades with all these, hemlock, and western pine. For a few uses other hardwoods, in addition to poplar, are used as substitutes — basswood, for example. Little white pine goes into dimension stock, Norway pine being the princi- pal constituent of "northern pine." The dimension stock meets considerable competition from hemlock, southern yellow pine, fir, and spruce. Generally the substitution of another wood for white pine has been forced by the growing scarcity of the latter, and has not come because the substitute has equal or superior qualities for the purpose. NORTHERN PINE. Section 3. Conditions in production of "northern" pine. The history of white-pine lumbering goes back to days of the first settlements on the North Atlantic coast. The vast white-pine forests originally existing in these States have practically disappeared. The descendants of the old trees still furnish over a quarter of the annual cut of white pine in the United States, but in quality they little resemble the original forests. Most of the present product is low-grade lumber, used principally for boxes. The same process of extinction of the original white-pine forests has gone on in the Lake States. In 1900 the cut of lumber from these States (including that of Iowa, which sawed Minnesota and Wisconsin logs) was 6,266,341,000 feet; 1 in 1909, 2,259,426,000 feet; and in 1912 it had fallen to 1,786,550,000 feet. The strong financial position of most of the owners of the remain- ing white and Norway pine, comprising, as they do, the most powerful and wealthy group of lumbermen in the country, and with the ever intensifying demand for the species because of its unrivaled combi- nation of desirable qualities, has placed the northern pine manufac- turers in a peculiarly strong position. The cypress manufacturers of the lower Mississippi have a number of similar advantages, but the natural demand, due to the uses to which the wood can be put, has been less for cypress than for white pine. Keferences to the strong strategical position of the northern-pine manufacturers and its relation to their price policy are frequent in i These figures are compiled from the Twelfth Census of the United States, part 3, pp. 870-877. M PKODTJCTIOIT AND WHOLESALE DISTEIBTJTION. 493 association meetings * and in trade papers. It is a situation so well recognized generally that only a few extracts need be quoted in illustration : TEiough the customary market for Norway dimension is being more and more invaded by yellow pine from the South, owing to the declination of the supply of Norway and the strong hands that hold it, there should be no reason why prices should not be fairly well maintained against any competition. (Chicago news, American Lumberman, Apr. 30, 1904, p. 53.) The northern-pine trade is patiently and doggedly waiting for the canals to open and the Lake vessels to begin running. Stocks are being held as firmly as possible, because they are in muscular hands, financially speaking, as the holders know that there will be a demand for their dry lumber before many weeks. (General market comment, American Lumberman, Feb. 29, 1908.) Production is in such strong hands that there is no fear of white-pine prices suffering under any possible conditions that may arise, except on low-grade stuff. This character of stock has been dragging from the very opening of the season, and is still doing so, partly because there has been so much material competitive with it from the cypress, hardwood, and yellow pine lines. (St. Louis news, St. Louis Lumberman, June 1, 1910, p. 96.) The best example in recent years of the strong price position of the northern pine manufacturers (due to their being financially able to hold their lumber on their yards and not being forced to meet the low prices of rival woods) is afforded by their course during the latter part of 1907, when prices of nearly all kinds and grades of lumber were going down rapidly. Notwithstanding the low prices of yellow pine, hemlock, cypress, and fir, the principal competitors of their northern pine, the manufacturers maintained for several weeks the prices established earlier in the year and made few concessions to move their lumber. Late in December, 1907, the manufacturers put out a new list 2 which was reported to represent actual selling prices and which showed a price reduction only about one-third as great as that in the princi- pal competing woods. The Minneapolis news letter to the American Lumberman of January 4, 1908, page 55, in commenting on the list, said: "The manufacturers say that higher prices could have been maintained, but they deemed it advisable to adjust things, and to show the public that lumbermen are not always sticking prices up." 1 In his annual report at the meeting held Feb. 14, 1905, Secretary Rhodes made use of the following language: White pine occupies an absolutely independent and impregnable position. During the coining year we need have no fear of dangerous competition from any other kind of timbers, much less from ourselves. (Official proceedings, pp. 18-19.) a A further discussion of the list issued at this time will be found on pp. 529-531, 494 THE LUMBER INDUSTRY. Editorial comment on this news in the same issue, on page 21/, con- tains this statement: Until the last few weeks the prices of northern pine have been very little affected, although some operators have made conces- sions of $1 from the August list. It was decided, hcWever, by those who took the lead in this matter that owing t,o the low prices at which fir and yellow pine were being offered in the North, and the lower wages at which workmen could be secured, a readjustment of values should be made. The northern pine manufacturers assert that the old list could have been maintained but they deemed it advisable to rearrange selling values in accordance with market conditions, if for no other reason than to demonstrate to the public that the cost of manufacturing lumber is the controlling factor which fixes the selling price. Section 4. General outline of association work. The organized price activities of the northern pine producers were carried on principally through the Mississippi Valluy Lumbermen's Association and the Wisconsin Valley Lumbermen's Association to the beginning of 1906, when the two consolidated under the name of the Northern Pine Manufacturers' Association. Mississippi Valley and Wisconsin Valley associations. — The Mississippi Valley association was organized in 1891 , and the Wisconsin Valley association in 1893. They were consolidated January, 1906, under the name of Northern Pine Manufacturers' Association. The two associations made the same kind of lumber, they controlled con- tiguous territories, they were formed about the same time, they worked closely together, and they ended in union. The membership of the Wisconsin Valley association was reported as 22 in January, 1898; it was about 15 at the time of the consolidation. That of the Mississippi Valley association was 69 in 1895 and increased until in 1901 it was 91, its greatest number. By 1905, the year before the two associations were consolidated, the number of members had fallen to 60. The cause of the decline in number in both cases was the cutting out of the pine. Northern Pine Manufacturers' Association. — At the August 11, 1905, meeting of the Wisconsin Valley association and at the Au- gust 16, 1905, meeting of the Mississippi Valley association committees were appointed, with power to act — to agree upon a consolidation of the two associations. The committees agreed upon a consolidation under the name of the Northern Pine Manufacturers' Association. The two associations met and ratified this action on the morning of January 23, 1906, and on the afternoon of that day the Northern Pine Manufacturers' Association held its first meeting. The secretary of this organization stated in 1912 that the association's membership PRODUCTION AND WHOLESALE DISTRIBUTION. 495 controlled probably 90 per cent of the total pine production in their territory. The constitution and by-laws adopted — according to the account in the American Lumberman of January 27, 1906, page 40 — con- tained the following articles in the by-laws, on the formation and functions of the price-list committee. Article VII. Price List Committee : How Elected. — There shall be elected at each annual meeting of the association a standing committee of twelve members to constitute what shall be known as the price list committee. The price list committee shall be nominated and appointed in the same manner as is the bureau of grades, except that there shall be two representatives from each district, as described in Article VI of the constitution. When the price list committee is regularly appointed it shall meet and select a chairman from its own members. Article VIII. Functions of the Price List Committee. — The price list committee shall meet at such times as it deems best and recommend such a basis of price for lumber as in its judgment the conditions of supply and demand warrant. It shall be understood that no member of this association is obligated to observe or be governed in any way in the sale of his lumber by the prices which may be recommended by the price list committee. The foregoing articles do not appear in a pamphlet edition, entitled the "Constitution and by-laws of the Northern Pine Manufacturers' Association, January 23, 1906." In this pamphlet only 8 articles are shown in the by-laws, instead of 10 shown in the trade journal. Except for the omission of the two articles and a conse- quent change in the numbering of the articles, the two sets of by- laws are alike. The explanation of the omission of Articles VII and VIII of the by-laws from the pamphlet issued by the association is found in the events discussed later. (See pp. 517-523.) The accounts of the meeting published in the American Lumber- man of January 27, 1906, page 39, Mississippi Valley Lumberman of January 26, 1906, and St. Louis Lumberman of February 1, 1906, page 88, all give in the same, words the report of the conference com- mittee on consolidation of the associations, from which the following extract is taken: We propose that there shall be one director from each of the six districts, one member from each district on the bureau of grades and two on the price list committee. The account in the American Lumberman says : The constitution as prepared by the committee was adopted in toto with the addition of upper Michigan to the Wisconsin Valley district, as the new association has some members in that district. The new constitution is here given. 496 THE LUMBER INDUSTRY. Section 5. Association official price activities. In addition to the information derived from interviews with lum- bermen by agents of the Bureau, and from the trade journals, many of the records of the Mississippi Valley Lumbermen's Association and the Northern Pine Manufacturers' Association have been examined. While the records of the Wisconsin Valley association were destroyed about 1909, considerable documentary information in relation to their price activities was found in the files of other associations and of indi- vidual companies. Price activities of Mississippi Valley and Wisconsin Valley associations. — In the discussion of the price activities it has been found desirable to treat together the work of the Mississippi Valley and the Wisconsin Valley associations because of the closeness of the relation between them. Even before the organization of the association, the white-pine manufacturers of the upper Mississippi Valley attempted to secure better prices through concerted action. The Mississippi Valley Lumberman of May 30 and of July 11, 1890, contain reports of two meetings of the white-pine producers at which steps were taken to establish uniform grades and terms of sale. Motions were adopted at both meetings advancing prices and at the first meeting it was voted to appoint a committee to secure the signatures of the manu- facturers to an agreement to withdraw their traveling men for 60 days. The price list adopted at the July meeting was officially designated as the Northwestern Universal List. No doubt it was of this preassociation period that the president of the Mississippi Valley Lumbermen's Association spoke at the 1898 annual meeting: We are assembled to-day in the seventh annual convention of this association, which really had its origin three years previous in the informal organization which for that period was maintained. A prerequisite to effective price work was the establishment of uniform grades, it being obvious that until grades were standard- ized and generally followed there could be neither uniformity nor organized control of prices. The first constitution of the Missis- sippi Valley Lumbermen's Association, adopted in 1891, and the revised one adopted in 1902, both contain as among the purposes of the association: "The establishment of uniform grades for the inspection of lumber as the only legitimate basis for more nearly uniform prices." It is evident, however, that the securing of uniformity in prices was desired chiefly as a step to obtaining higher prices through organized efforts. The two associations finally agreed upon uniform rules for the grading of their product and put them into effect on April 1, 1895. PRODUCTION AND WHOLESALE DISTRIBUTION. 497 At the same meeting which, adopted the grading rules of April 1, 1895, a member of the Mississippi Valley association said: Last year the market was an open one, there were no fixed prices, but the whole market was an auction. On January 10, last, Minneapolis dealers got together and agreed upon a list, so as to have some basis as a starting point to work upon, which it is realized is much lower than should be obtained and than is profitable. After giving some details of prices, he further said : We all know that we can not make and sell lumber at the aver- age of these prices and come out whole, and that we may have more reasonable prices, moderately following up the line of advance, and excepting Sioux City, Omaha, St. Joseph, Atchison, Kansas City, and Chicago as free free-for-all markets, I move that the Minneapolis prices of January 10, 1895, be advanced 50 cents per 1,000 all around, and adopted by this association, and be used as a basis of prices at all other points, taking effect March 9, giv- ing time for all to get out their lists. The convention referred the subject to a committee, which recom- mended: That as soon as the uniform grades adopted and approved at this meeting can be put in force * *. * the board of directors in this association be requested to formulate a new list including these new terms as applied to the newly established grades, and communicate the same to the members of this association as a basis list for the establishment of advanced prices. The report of the committee was adopted, with amendments pro- viding "that the bureau of uniform grades have charge of the matter of prices," and also "that the bureau hold meetings as often as once a month, and whenever necessary revise the list as circumstances would warrant." In the foregoing paragraph reference was made to the action of the Mississippi Valley Lumbermen's Association in placing the work of establishing price lists under the bureau of uniform grades. The Wisconsin Valley association held a meeting September 11, 1895, at which the president stated that the object of the meeting was "to devise some plan whereby prices might be advanced and the same maintained." At this meeting a price-list committee was appointed and a price list was adopted, and "it was agreed to maintain the prices that had been adopted to-day for a period of 60 days from September 15, and that the present list be adhered to until the new one goes into effect, and that a committee be appointed to secure signatures to this agreement." By a separate resolution "it was agreed that members of this asso- ciation be permitted to sell to one another at whatever price they may see fit." 25030°— 14 32 498 THE LUMBER INDUSTRY. From this time the price-list committee was a regular organ of the Wisconsin Valley association. In the early years of the Mississippi Valley Lumbermen's Associa- tion prices appear to have been fixed at association meetings rather than by a standing committee. The constitution adopted in 1896, however, provided for a price-list committee of seven members, chosen by districts. According to the constitution, the duties of the com- mittee were : ' ' Such committee shall meet at such times as they deem best and make and recommend to the members of the association a schedule of prices which in their judgment the market conditions may seem to warrant." Because of the limited supply of white-pine timber and the concen- tration of its ownership in the hands of a few financially strong in- terests, organized attempts to sustain prices on a falling market by limiting the output of the mills have played little part in northern- pine conditions. There is evidence indicating that, in early years, some agreements were entered into by the various manufacturers, and concerted restriction of output resulted. At least as early as 1896 the Mississippi Valley Lumbermen's Asso- ciation was restricting the output of its members in order to sustain the price. At the annual meeting of March 9, 1897, the president of the asso- ciation said that the movement for curtailment ''was successful to a degree scarcely thought possible when the project was first discussed previous to the commencement of the sawing season." Notwith- standing there was a diminution of output, the president pointed out, the total of the stocks on hand was not greatly diminished. He urged that measures be taken to hold down the cut of 1897 to an amount not exceeding that of 1896. Accordingly, the association unanimously adopted the following resolution : Resolved, That it is the sense of this association that the condi- tion of trade demands a continuance of the policy inaugurated a -year ago, curtailing the cut of lumber in the mills of the members of this association, and to this end that a committee be appointed to secure an agreement that the cut of 1897 shall not exceed that of 1896, or a reduction of 25 per cent from the cut of 1895. At the seventh annual meeting of the Mississippi Valley association, held in March, 1898, resolutions were adopted instructing "the proper committee" to prepare as often as their judgment dictated "a basis list of prices for recommendation to the members of this association, and that the membership of this association is requested as far as possible to conform to the recommendations of this committee." The New Orleans Lumber Trade Journal mentions some lists issued in 1899. Under its Philadelphia news in the issue of July 1, 1899, page 23, it stated: "The white pine business is good. Prices have been advanced in sympathy with the advance decreed the other day PRODUCTION AND WHOLESALE DISTRIBUTION. 499 at St. Paul." Editorial comment in its issues of August 15 and November 15 call attention to further advances. The following from the Buffalo news of the New York Lumber Trade Journal of June 15, 1900, page 20, throws some light on price activities in 1900: The Mississippi Valley Lumbermen's Association held a meet- ing, when it was agreed that, as the situation has never been worse in the history of the lumber business in the Northwest, the list of April 16 should be strictly maintained, and that the secretary be instructed to issue a possible advance in price if conditions do not improve. The situation referred to in the above was the abnormal shortage of lumber on January 1, 1900, in the hands of the members of the association and the manufacturers affiliating with them. 1 In the summer and fall of 1900 the complete maintenance of list prices was found impossible. The situation at that time and the bearing it had on the work of the price-list committee was dwelt upon by Secretary J. E. Rhodes in his report to the annual meeting of the Mississippi Valley association on February 19, 1901, from which the following extract is taken: The heavy demand of 1899 continued well into January and February of last year, when all speculative buying ceased, and when the wide advertisement of high prices of all kmds of build- ing material created a fear that the building operations of the spring would be greatly curtailed, and when a strike of the building trades in Chicago shut off all demand from that immense lumber market. The prices of yellow pine had stimulated pro- duction to the danger point, and when the demand slackened the prices of that commodity came down so rapidly that the Southern Lumber Manufacturers' Association found it necessary to entirely suspend their official list. This immediately affected our prices to a certain extent, the principal weakness being in dimensions, which was being rapidly substituted by yellow pine and hemlock. The members of this association were then asked to take their traveling representatives off the road in the terri- tory west of the Mississippi river, in an effort to sustain the market and with the hopes that conditions would soon improve. The salesmen were held in for two months, during which time prices remained from $1 to $2 per M higher than they probably would, had the usual efforts been made to sell. Further on he said: At its meeting in September the price-list committee care- fully reviewed the conditions, and thought it expedient to offi- cially acknowledge that the maintenance of an absolutely uni- form price by all of the many interests represented by this asso- ciation was impossible. It was thought better to make this acknowledgment, and to ask every manufacturer to use his best endeavors to get the highest possible prices for his product, than 1 The resolutions adopted at this meeting are given in detail in the New Orleans Lumber Trade Journal of May 1,1900, pp. 11,12. 500 THE LUMBER INDUSTRY. to suspend the official list entirely, as the yellow-pine manufac- turers had done earlier in the year. The northern Minnesota manufacturers, whose natural market in the grain-raising dis- tricts had been cut off by the drought, were obliged to seek other and more distant markets. It was plainly evident that these manufacturers could not compete on an even basis with the mills south of them, which were located much nearer to the only trade then to be sought. There were also manufacturers who claimed that they could not get the same price for their product that could be obtained by manufacturers whose stocks contained a larger percentage of white pine. The policy of the price-list committee, since its meeting in September, has been simply this: The absolute maintenance of the official list, if possible, is by all means to be desired, but if it can not be accomplished with absolute fairness and honesty to all parties interested, it is better to have it understood and then rely upon the interest which every manufacturer takes in the profits of his business to get as near official list prices as the conditions of stock, location of mill and class of trade sought will permit. It therefore rests with every member to fully realize his own personal responsibility in the matter, and to do the best he can at all times. This policy will result in a higher average selling price than could be maintained should no official list exist, and certainly conduces to more harmony than unsuc- cessful efforts to maintain a strictly uniform price. When conditions are entirely favorable so that a uniform list can be obtained with reasonable unanimity, the policy of the committee can be changed to suit the emergency and a request . made that every manufacturer maintain absolutely the official list prices for his stock. It is believed by many that such conditions now face us. One thing is certain: Present conditions, and prospects for the immediate future are much more favorable than they have been at any time during the past twelve months. Whether they are such as to warrant the absolute maintenance of the official prices by all of the many interests represented in this association remains for the manufacturers here assembled to decide. The trade-journal information obtained for the period beginning with 1901 is much more complete than that of previous years, and the extracts will be found on pages 554-561. At the 1902 annual meeting the president made the following statement: "Your price-list committee has kept in close touch with the varying market conditions of the year, and results have proven the wisdom of its recommendations in every instance." The secretary said : " The committee's work has enabled manufacturers to take advantage of the improving conditions of the year much more quickly than they otherwise could have done." According to the report in the Mississippi Valley Lumberman of February 21, 1902, page 26, the price-list committee reported: That after due deliberation it had been decided to make no official advances over the list of December 3. Advances had PEODUCTION AND WHOLESALE DISTEIBXJTION. 501 been made bythe different manufacturers, but it was thought best that nothing further be done officially. The price of com- mon lumber was as high as it should be officially, and though some of the better grades were worth more money, there was not enough of that class of lumber on the market to render formal action necessary. The report was accepted, and the Mississippi Valley Lumberman commented upon the action as follows : " The acceptance of the report gives the manufacturers the right to make their own prices. The list has been virtually suspended." At the next annual meeting, February 17, 1903, Secretary Rhodes, in his report on market conditions, stated : There has never been a time when the association price list has so completely represented the selling market as it has done the past year. When it has not done so it has been because the market was higher than the official list. Our committee has been extremely conservative, recommending that manufactur- ers make such individual lists as they believed would represent the value of their lumber. Under date of August 25, 1903, a circular was issued by the price- list committee, containing recommendations for an increase in the price of certain items and a reduction in the price of others. The circular contained the closing statement : We respectfully recommend that each member of this asso- ciation reissue the official list under the date of August 25th, in conformity with the association list which will be mailed you at once, and that the same be mailed to the trade as soon as pos- sible. We further recommend that these prices will be absolutely maintained for they represent the value of all lumber in pile at this time. In a circular dated October 26, 1903, the secretary urged curtail- ment, saying: For the purpose of sustaining a profitable market for north- ern pine during the coming year, in view of the increased pro- duction in other sections of the country, and the possibility of a slightly lessened demand, it has already been proposed by cer- tain timber holders to curtail this winter's input of logs. This is certainly in line with the policy of conservatism, and if gen- erally adopted, would exercise a strong influence toward perpet- uating the favorable conditions which have governed our indus- try for the past few years. There is no proof that an agreed plan of curtailment resulted from the above suggestion, but in a circular of January 22, 1904, the sec- retary, in speaking of the consumption, stated that "it is being demonstrated by this winter's logging operations that the production can be regulated accordingly." In a circular of June 8, 1904, he 502 THE LUMBER INDUSTRY. said " there will be, on the whole, a considerable reduction in north- ern pine cut this season." In a circular of March 9, 190*1, the members were informed of the advances made by the price-list committee and it was stated that: "The committee recommended that the manufacturers issue the above advances at once in a new price list to be mailed to the trade under date of March 8." In a circular of March 12, 1904, the secretary stated that: "We are advised by many firms that they are going ahead with the issuance of the official list of March 8. As soon as the question of terms is settled a list of the firms issuing the new list will be sent you." In a circular of June 16, 1904, the price-list committee said: "The manufacturers who will saw more lumber this season than last wish it distinctly understood that no efforts will be made by them to move lumber to the detriment of other members, agreeing to take salesmen off the road whenever the committee deems it necessary." In this same circular, the secretary states that: "The committee urgently recommends that all members at once issue delivered lists to their customers in conformity with the enclosed Basis List of June 15. A full set of official lists will follow at once. Will you kindly advise us of your intentions and oblige." At the end of the circular was the following acknowledgment, addressed to J. E. Rhodes, secretary. "We have circular No. 587, and beg to advise that we will at once issue delivered price lists to our trade in conformity with the recommendations made therein." In circulars issued later in 1904 by the secretary of the Mississippi Valley association, considerable stress was laid on the desirability of a curtailment of output by the northern pine mills, but no evidence has been found that there was a definite agreement on this point. It is a fact that there was a marked curtailment in 1904, not only of white pine, but of yellow pine and fir. The curtailment of the two latter woods, as shown elsewhere, was the result of the efforts of their respective associations. This widespread reduction in output was due to the fact that prices of all lumber at that time had fallen below their previous level. On June 15, 1904, the price-list committee of the Mississippi Valley Lumbermen's Association sent a telegram to the yellow-pine manufacturers' meeting at St. Louis, stating that the white-pine listhad been "practically reaffirmed," and adding: "Stable market conditions can be maintained by further substantial curtail- ment of production." The relations that existed between the Mississippi Valley and the Wisconsin Valley associations with respect to price lists were a subject of frequent comment in the trade journals. In the earlier years the two associations appeal to have had largely separate selling terri- tories, but by 1904 there seems to have been considerable clashing PRODUCTION AND WHOLESALE DISTRIBUTION. 503 through the use of the two different lists in common selling terri- tory. Accounts of joint meetings of the price committees of both associations are given in the American Lumberman issues of May 11 and July 6, 1901. In 1902 and 1903 no accounts were found of joint price-list committee meetings but there are references to action taken by the price-list committee of the Wisconsin Valley association which brought its list to a parity with that of the Mississippi Valley associa- tion. These comments appeared in the American Lumberman issues of August 10, 1901, and May 24, 1902. Action taken by the Missis- sippi Valley association price-list committee and by individual mem- bers of the Wisconsin Valley association brought about a similar result, according to comments in the American Lumberman issues of August 9 and October 4, 1902. In 1904 an attempt was made to bring about the use of a universal price list to be adopted by both associations. The price-list com- mittee of the Mississippi Valley association adopted the following resolution on June 15, 1904: Resolved, That we believe that on account of the increasing amount of lumber which our members are selling east of the Mississippi River, the conditions make advisable and will soon necessitate the establishment of a universal list covering the prices of northern-pine lumber sold in the territory tributary to the mills of the members of this and the Wisconsin Valley Lumber- men's Association. Resolved, That we encourage the movement already begun to bring about this result, and that we seek an early conference with the committee appointed by the Wisconsin Valley Association to consider this subject, to the end that the present confused condi- tions resulting from manufacturers of both producing districts selling into the States both east and west of the Mississippi River upon the two different official lists may be entirely overcome. The following extract from the remarks on the price committee in the report of Secretary J. E. Rhodes at the semiannual meeting of the Mississippi Valley association August 30, 1904, appears in the account of the meeting in the American Lumberman of September 3, 1904, page 26: Pursuant to instructions from the committee the secretary attended a meeting of the price-list committee of the Wisconsin Valley Lumbermen's Association held at Wausau April 22, when the matter of the adoption of a universal list by both associations to apply to territory both east and west of the Mississippi River was presented, the object being to do away with the two separate lists as issued by the two associations at present, having one basis list recognized in both territories. At present the Wis- consin Valley association and many of the members of our association mail the Wisconsin Valley official list into Illinois and Wisconsin while others of our members are selling on the basis of the Mississippi Valley list east of the Mississippi River. Dur- ing the year a number of Wisconsin Valley firms have solicited 504 THE LUMBER INDUSTRY. trade west of the river on their official list and the result has been confusing. Because many of our members are obliged to market increasing quantities of their stock east of the river, being driven out of the Missouri River territory by western lumber, it would seem entirely feasible for both associations to adopt a universal list. The Wisconsin Valley manufacturers favor the plan but recognize certain obstacles that will have to be removed before such a list can be made practicable. The chief trouble at first apparent is the difference in the class of stock manufactured in the two districts, that sawed in the Wisconsin Valley being the thicker. This difficulty can be overcome by the adoption of a uniform standard of sizes as suggested. The delivered prices upon a universal list would have to be based upon an absolutely arbitrary classification of the towns in both territories, as it would be impossible to base the list upon the freight rates from any one particular shipping point. This would revolutionize our present system of arriving at delivered prices, but it can be done and would be an entirely practical thing. The Wisconsin Valley association appointed a committee consisting of W. H. Bissell, E. O. Brown and C. C. Yawkey to confer with a committee of three from our own association to discuss this matter, but as the conditions have not seemed propitious during the summer the conference has not yet been held. The work of the price committee at this meeting is thus described in the same issue : The price-list committee reported, recommending that the manufacturers reissue the official list of June 15 and mail it to the trade under date of September 1. The committee held a meeting this morning and canvassed market conditions carefully. It was found that stocks in the hands of manufacturers August 1 were practically the same as last year. Crop reports and general business conditions reported to the meeting indicated a bright outlook for the coming season's trade. A number of members outside the committee were present and others were heard from by letter. Being governed by their wishes the committee decided to make no change in the list. The committee decided to hold a conference with the committee of the Wisconsin Valley Lumber- men's Association relative to the proposed universal list. The conference referred to was held on November 4, and the following account is taken from the American Lumberman of November 12, 1904, page 26: Committees representing the Mississippi Valley and the Wisconsin Valley lumbermen's associations met Friday, Novem- ber 4, in the office of Secretary J. E. Rhodes, of the former association, to discuss the question of uniform prices east of the Mississippi River and some method of maintaining them. This question has for a long time been mooted. It was decided at the meeting that a uniform price list for the two associations was not practicable at this time. Instead an endeavor will be made to make an agreement as to territory, so that the Mississippi Valley list will not demoralize prices in PRODUCTION AND WHOLESALE DISTRIBUTION. 505 towns where the bulk of the stock is sold by the Wisconsin Valley mills. As it stands prices on some items in the Mississippi Valley list are lower in these towns, and the market is thus broken down. Thomas Wilkinson, chairman of the Mississippi Valley price- list committee, and W. H. Bissell, chairman of the Wisconsin Valley committee, were present. They agreed to call a joint meeting of their committees in this city for November 21 and 22. The first day's session will be taken up with this question of competitive territory, and the Wisconsin Valley people will submit a list of towns where they are selling the bulk of the stock. It was agreed to recommend that in these towns the figures of the Wisconsin Valley price list should be respected. In other towns in Wisconsin and Illinois, where freight rates favor Minneapolis and the down-river mills, the Mississippi Valley price list will be allowed to rule and also all through the terri- tory west of the river. At the second day's session each committee will work out separately a new price list to come more in accord with present market conditions. Some items on the list will have to be raised and others lowered. This conference appears to have been held by special committees, not by the regular price-list committees. According to the American Lumberman account the special committee made the following recommendation to the price-list committees with the suggestion that the same be considered in a joint meeting of the two committees to be held at an early date: That the Wisconsin Valley Lumbermen's Association prepare a list of the towns in the States of Wisconsin and Illinois as outlined by us on the maps, including the towns in Indiana and southern Michigan as classified by the Wisconsin Valley associa- tion, in which the members of the Mississippi Valley Lumber- men's Association are to agree to maintain the official Wisconsin Valley delivered prices, with the understanding that the members of the Wisconsin Valley Lumbermen's Association are to agree to maintain the official delivered prices of the Mississippi Valley association in the States west of the Mississippi River as classified by the latter association. The secretary of the Mississippi Valley association, in his report to the annual meeting February 14, 1905, said: On November 22d the committee met in conference with the price-list committee of the Wisconsin Valley Lumbermen's Association, for the purpose of recommending some plan by which universal prices between the members of both associations might be maintained in that part of the territory east of the Mississippi river which for many years past has been supplied with lumber almost exclusively from the Wisconsin Valley mills. It was felt that some such action was necessary as members of this association have been shipping an increasing quantity of lumber into that section, and much confusion resulted from the maintenance of two different sets of prices. 506 THE LUMBER INDTJSTBY. Taken in connection with the foregoing accounts, the following extracts from the Minneapolis news of the American Lumberman during this period are of considerable interest in their bearing on the effect on market conditions, which is attributed to the foregoing activities : Minneapolis, Minn., Nov. 2. — A conference will be held Friday in this city between three representatives of the Wis- consin Valley Lumbermen's Association and a like committee from the price-list committee of the Mississippi Valley Lumber- men's Association. The purpose of the meeting is to discuss the question of prices in competitive territory. The Mississippi Valley list results in a lower price than the Wisconsin Valley list on some items and the Wisconsin Valley manufacturers want the other association to respect its prices in territory east of the river. The question has been a vexed one for some time and it is hoped to arrive at some understanding before the next meeting of the price-list committee of the Mississippi Valley Lumbermen's Association, which will be held for the purpose of Jetting up a new list about the middle of the month. (American lumberman, Nov. 5, 1904, p. 29.) The proposed revision of the price list November 22 will put the market on a better basis. (Minneapolis news in American Lumberman, Nov. 12, 1904, p. 55.) Interest centers in the joint meeting of the price-list committees of the Mississippi Valley Lumbermen's Association and the Wisconsin Valley Lumbermen's Association, which is to be held in this city next Monday and Tuesday for the purpose of making a price agreement for competitive territory and of getting out new lists based on the market and the condition of the trade. (Minneapolis news in American Lumberman, Nov. 19, 1904, The new list issued by the Mississippi Valley Lumbermen's Association has had the effect of strengthening prices. While the new list prices are not being adhered to in every case the market has secured an advance and the generally received report of trade conditions fully warrants it. * * * Higher prices have temporarily checked buying among the heavier retail dealers, but there is a fair trade going on and some large orders are being taken from big consumers. (Minneapolis news in American Lumberman, Dec. 3, 1904.) Prices are being well maintained under the new list. (Min- neapolis news in American Lumberman, Dec. 24, 1904, p. 59.) In 1905 there were further attempts to bring about a parity in the official prices of the two associations. The first is described as follows : The price-list committees of the Mississippi Valley Lumber- men's Association and the Wisconsin Valley Lumbermen's Asso- ciation will meet in Milwaukee Monday, May 8, at the request of the latter association. The market situation will be gone over and some revision of the list possibly may be made, more for the sake of bringing the lists of the two associations into harmony than for anything else. AT " ™ Q + ™<,1 alt.nmt.inn in nresent nricesis PRODUCTION AND WHOLESALE DISTRIBUTION. 507 expected. (Minneapolis news in American Lumberman, May 6, 1905, p. 44.) An important meeting of northern lumbermen was held in Milwaukee, Wis., at the Hotel Pfister, on Monday of this week. It was in the nature of a conference between committees of the Mississippi Valley Lumbermen's Association, whose head- quarters are at Minneapolis, Minn., the Wisconsin Valley Lum- bermen's Association, which has its headquarters at Wausau, Wis., and the Northwestern Hemlock Manufacturers' Associa- tion, composed of a considerable number of producers of that class of stock in Wisconsin and northern Michigan. These men met in conference to make changes in their price lists in response to a general sentiment that a rise all along the line was necessary. The hemlock people were convinced that a raise should be made, but were waiting to see what action the pine association would take. As a result of the meetings a general advance of 50 cents a thousand on all hemlock was announced and an advance of $1 on 3-inch plank and 2x8, 10, 12, and 14-foot lumber. On lath an advance of 25 cents is made. The two pine associations raised the prices as follows: All No. 1 boards and strips, $1 ; all No. 2 boards and strips, 50 cents; 4-inch and 13 inches and wider, No. 3, $1; 6, 8, 10,' 12 ft. No. 3, 50 cents; mixed widths, No. 4 and 5 boards, 50 cents to $1; all piece stuff, No. 3 planks and timber, 50 cents; pine lath, 25 cents. Each association held individual meetings, but the three bodies consulted each other on the general proposition as to the necessary advances. (American Lumberman, May 13, 1905, p. 26.) Local manufacturers are not unanimous in their opinion as to the advisability of the advanced prices in the new list, but all agree that the conditions of the market and the probable supply of stock will warrant the raise. * * * The $5 advance on finish and A select has startled the jobbers, who were looking for nothing more than a lining up of the list. (Minneapolis news in American Lumberman, May 13, 1905, p. 70.) The advanced prices noted in the list of May 8 are the rule of the market. Lists have been mailed to customers and all new business taken is practically on the basis of the new list. (Min- neapolis news in American Lumberman, May 20, 1905, p. 45.) Two months later, according to the following account, the Missis- sippi Valley Lumbermen's Association again raised its price list : The trade was taken somewhat by surprise at the action of the price-list committee of the Mississippi Valley Lumbermen's Association, which met in this city July 13 and issued a new price list of that date. The committee was expected to advance dimension and did so, but did not stop there; it decided in favor of a general advance on all boards better than No. 4, on nearly all fencing and on both inch and thick finish. The changes in the list of May 8 are fully given in the following analysis. [Changes follow.] (Minneapolis news in American Lumberman, July 22, 1905, p. 33.) 508 THE LUMBER INDUSTRY. Secretary Rhodes referred to the above advances as being "radi- cal," but said that "they seem to have met with pretty general approval, and if the crop matures, are certainly warranted." The second attempt to unify the official prices is described in the following extracts: Conditions in the Northwest justify a strong price situation and there is no surprise over the probable advance at the coming meeting of the price-list committees in this city Friday. Dimen- sion prices are sure to go up and no one knows where the raises will stop. (Minneapolis news in American Lumberman, Sept. 16, 1905, p. 65.) White-pine prices for the Mississippi Valley mills have ad- vanced practically to the same level as the list heretofore main- tained by the Wisconsin Valley Association mills. This result is the fruit of a conference held in this city last Friday, after which a new-basis price list was issued. The conference was attended by about twenty-five manufacturers, including all the members of the price-list committee of the Mississippi Valley Lumber- men's Association and four members of the price-list committee of the Wisconsin Valley Lumbermen's Association. * * * The two price-list committees worked together to harmonize their lists and as a result the Mississippi Valley list, where it stood lower, was raised to correspond with the list in effect in the Wisconsin Valley. In addition a general advance mas made on all dimension, with the understanding that the Wisconsin Valley committee would follow this move and make similar advances in its dimension list. Individual manufacturers had already advanced their dimension on account of the relative scarcity of that stock and the new list will bring the various items in better accord. The strong market situation — good crops, heavy demand and comparatively light stocks — led some to advocate a sweeping price advance, but this was not agreed to by the more conservative. (Minneapolis news, dated Sept. 20, in American Lumberman, Sept. 23, 1905, p. 25.) The new list is in effect and there is little doubt about the ability of manufacturers to secure list prices. While the list was adopted primarily in order to line up the two associations in common territory it will be the basis for all white pine trans- actions. (Minneapolis news in American Lumberman, Sept. 23, 1905, p. 61.) A circular of the secretary contained the following statement regarding the above advances : Our list of Sept. 15th, while considered radical by some at the time it was recommended has been fully established, and is now being very generally maintained on all items. A considera- ble number of our mills have issued advances since that time and the sentiment is increasing in favor of a further advance. Later in the year another attempt to put prices "in harmony" took place when the Wisconsin association list of September 16, issued in PRODUCTION AND WHOLESALE DISTRIBUTION. 509 accordance with the foregoing action, was reaffirmed by it and reissued under date of October 4 : A meeting of the price-list committee of the Wisconsin Valley Lumbermen's Association was held here to-day. After a review of the situation it was decided to reaffirm the list of September 16, notice of which was sent out recently on postal cards. Members probably will issue a new list in conformity with this recom- mendation and on the basis of the September 16 prices. The attendance at this meeting was large and interest maintained throughout. The list to which reference is made was the result of the deliber- ations of the price-list committees of the two white-pine associa- tions. The list adopted by the Mississippi Valley Lumberman's Association was printed on page 25 of the September 23 issue of the American Lumberman. By reaffirming what is termed the postal-card prices the Wisconsin Valley Lumbermen's Asso- ciation has placed its prices in harmony with those of the manu- facturers of the Mississippi Valley Association. (Wausau, Wis., news (dated Oct. 4) in American Lumberman, Oct. 7, 1905, p. 27.) . In November, 1905, the Mississippi Valley association seems to have made a further advance, which the other association did not wholly follow: Some surprise is expressed because the Wisconsin Valley asso- ciation did not advance its recent list to correspond with the November 8 list of the Mississippi Valley association. The di- mension prices, after their dollar advance, are still $1.50 lower than the list of this association and boards are 50 cents to $1 lower. However, the Mississippi Valley manufacturers do not seem at all inclined to meet the prices of the other association. The light stocks of the Wisconsin Valley mills are not expected to be a great factor in the market and the Mississippi Valley mills have no doubt of their ability to get full list prices from all stocks. (Minneapolis news in American Lumberman, Dec. 2, 1905, p. 41.) The reason for the moderation of the Wisconsin Valley association is given in a circular which the Mississippi Valley association sent out on November 24, 1905. This showed the increases of from 50 cents to $2 which had been made November' 23 in the "Wisconsin Valley official list," and said: While the Mississippi Valley list is yet considerably higher than the Wisconsin Valley list on piece stuff, the Wisconsin Valley committee feared to recommend any greater advance than $1 on account of hemlock competition. We are informed that the price-list committee of the Northwestern Hemlock Manufacturers' Association will meet at an early date, and will undoubtedly advance its list. At the last meeting of the Mississippi Valley Lumbermen's Asso- ciation, held in January, 1906, the secretary stated that it had been 510 THE LUMBER INDUSTRY. difficult for the price-list committee "to keep the so-called official list up to the actual market, for no sooner has it been issued than many of our members have quoted higher prices." Price activities of Northern Pine Manufacturers' Associa- tion. — On January 23, 1906, as stated above, the Mississippi Valley and the Wisconsin Valley associations were consolidated under the name of the Northern Pine Manufacturers' Association. The price-list committee of the new association held its first meet- ing directly after the adjournment of the first association meeting. The following account is taken from the American Lumberman of January 27, 1906, page 42: The meeting was' adjourned from executive session at 4:45 ' p. m. and was followed by a meeting of the board of directors m the same room at the West Hotel, and by the price-list com- mittee at Secretary Khodes' office in the Lumber Exchange Building. auxiliary meeting. At the price-list committee meeting Thomas Wilkinson, of Burlington, Iowa, who headed the old Mississippi Valley com- mittee, was elected chairman and the committee proceeded to revise the list. The following is a brief statement of the changes embodied in the list of January 23, all of which are advances. Two association price lists were promulgated, one effective January 23, 1906, for the Mississippi Valley district, and one effective January 25, 1906, for the Wisconsin Valley district. The Northern Pine Manufacturers' Association issued circular No. 11, under date of March 5, 1906, which begins: At a meeting of the price-list committee of the Wisconsin Valley district, held March 3, 1906, at Wausau, Wis., the fol- lowing advances in the January 23 list were made for the' pur- pose of leveling up that list to correspond as nearly as possible with the Minneapolis list. (A list of price advances follows.) On March 15 the northern pine association price-list committee held a meeting in Minneapolis and made some advances in the price list, According to the Pacific Lumber Trade Journal of April, 1906, page 19, the new list was the first one of the new association intended to apply to all its members: 1 It is a universal list on northern pine, taking the place of the old lists of the Mississippi Valley and Wisconsin Valley associa- tions, and in its form is a compromise between the two. It will be used by Mississippi Valley and northern mills on the basis of rates from Minneapolis, and the Wisconsin Valley mills will base rates under it from Wausau. i Accounts of the action of this price-list committee are also given in the Mississippi Valley Lumberman of Mar. 16, 1906, and the American Lumberman of Mar. 24, 1906. PRODUCTION AND WHOLESALE DISTRIBUTION. 511 This list of March. 15 seems to have been the last "official associa- tion list" issued and openly acknowledged by the association. Sub- sequent price lists, ■ which for all practical purposes were official, nominally were compiled and issued by a printer (A. L. Broughton & Co.), and the pretense was made that the association had no con- nection with their preparation or promulgation. That this was a mere subterfuge and that association officials and members were actively engaged in the preparation of the lists and that such lists were recognized as virtually being association lists, is amply proved by information obtained from various sources. Effectiveness of price lists during the period that they were officially issued by the associations. — How far the early agreements and how far the price-list activities generally have had an effect on actual sale prices is a matter which can not be definitely determined. Since 1906, a constant attempt has been made to give the public the impression that the association has no longer engaged in price activities, and instead of publicity being courted, such activi- ties have been carried on secretly and often under the form of a sub- terfuge, the true significance of which was intended to be known only to members. The association officials and the lumber press have, from time to time, made statements claiming that the price-list activities affected the actual sale prices. There is some indication that in the early years of association activities in the northern pine territory there were express agreements among the manufacturers to maintain the price list. Mr. R. L. McCormick, of the Mississippi Valley Lumbermen's Asso- ciation, in an address delivered before a meeting of the National Lumber Manufacturers' Association in 1903, made the following statement: I remember one meeting that we attended, as an illustration, in the "Ryan Hotel," St. Paul, and the question of advance — I think the second one we made, some time ago this was — the talk was as much against the advance as it was for it. We thought we ought to have more for lumber, but we knew we would never get any more for it — there was no use talking. Certain men said: "Don't try it, for you will make trouble for yourselves." We put it to vote and it carried by a close vote. There was an advance of one dollar, and I think some of us went out of that meeting feeling as though we would have to play double; that we could not maintain that list and do busi- ness. The fact, however, was that we found that the people were expecting it and they would have been disappointed if we hadn't made it, and, as soon as made, the orders came in, prices were maintained, and from that day to this we have made advances. This may be peculiarly the province of our local association, but I mention it to you as the strength of association work. 512 THE LUMBER INDUSTRY. Mr. McCormick did not state the exact date of the meeting of which he gave the detailed account. According to the account in the Mississippi Valley Lumberman of January 7, 1898, page 14, at a meeting of the Wisconsin Valley asso- ciation the secretary "saw no excuse for going below the October advanced list." He "moved that the October list be taken as a basis for selling, and that the traveling representatives be instructed to strictly adhere to it." This motion "was adopted by a rising vote unanimously." The committee on resolutions of the Mississippi Valley association, at the annual meeting in February, 1899, recommended "the main- tenance of the present basis list, and that we make such advances in the future as shall be warranted by the demand." The recom- mendation was approved by vote of the association. The basis list referred to was the list showing prices at a common point. The other lists issued by the association gave prices of lumber delivered at different rates of freight. They were derived from the basis list by simple addition of the estimated freight, and "maintenance of the basis list" meant maintenance of the agreed prices throughout. At the annual meeting of the Mississippi Valley association, held February 27, 1900, Secretary Rhodes' report contained the following statement: "by acting as a unit on the recommendations of the com- mittee manufacturers have been able to take advantage of improving conditions much earlier than they would without concerted action." A year later, at the annual meeting held February 19, 1901, he reported: "The very existence of the committee's organization and of the 'official list' has had the effect of keeping the market from 50 cents to $1 per M higher than it would have been during a large part of the year without these influences." Referring to a Mississippi Valley association list, effective Janu- ary 1, 1901, in the Minneapolis news of the American Lumberman of January 5, 1901, page 55, it was stated: "It is believed that the recent action of the price-list committee of the Mississippi Valley Lumber- men's Association in advancing the list prices of some of the white- pine products will be of material aid to the manufacturers of the Northwest." A week later, in Chicago news of the same journal, is this observa- tion: "Whether there had been concerted action on the part of the manufacturers or not the advance would no doubt have taken place just the same, although possibly not as early as it now has." Referring to a Wisconsin Valley association's list, made effective March 5, 1901, the Chicago news of the American Lumberman, of March 16, 1901, said that that action, in addition to the strength shown at primary markets along Lake Superior and in the Menominee district (the other principal points of supply for Chicago), "will do PRODUCTION AND WHOLESALE DISTRIBUTION. 513 as much to offset the disposition frequently shown at this season of the year to sacrifice lumber in order to make a sale as anything else." Referring to a Wisconsin Valley association fist adopted August 3, 1901, the Minneapolis news in the American Lumberman of August 10, 1901, has the following comment: "The price situation continues very strong in this market, and increased strength was given to it this week by the action of the price-list committee of the Wisconsin Valley Lumbermen's Association." According to the trade journals there was a good deal of pressure brought to bear at this time to secure "official" higher prices than the price-list committee were willing to issue. Eemarks about the domination of the association by the conservative element are frequent, and the upshot, as described in the Minneapolis news of the American Lumberman of November 30, 1901, page 37, was: 1 Sentiment in favor of an advance in the list price of July 5 is rapidly increasing and pressure is becoming so great that it is anticipated that a meetmg of the committee will be held within a comparatively short time. Since September 1 the trade has been agitating the question of an advance in the list, the early suggestions to this effect coming chiefly from points below Minneapolis. The members of the committee, however, instead of puttmg into effect lists which would apply to all manufac- turers suggested to the down-river manufacturers that they issue independent lists, inasmuch as they were heavy buyers due to the shortages that had developed, and that they could make these lists cover such goods in individual cases as they were purchasing. This was done and it is stated that twenty- one firms now have independent lists. In the revision of the constitution and by-laws of the Mississippi Valley Lumbermen's Association, adopted in 1902, the following was added to the by-law relating to the function of the price-list com- mittee: "It shall be understood that no member of this association is obligated to observe or be governed in any way by the prices recommended by the price-list committee of this association in the sale of his product." At the annual meeting of the Mississippi Valley association Febru- ary 18, 1902, the secretary said in his report, under the subject of the price committee: "The committee's work has enabled manufacturers to take advantage of the improving conditions of the year much more quickly than they otherwise could have done." Commenting on the action of the Wisconsin Valley association, in adopting its fist, effective May 15, 1902, the Minneapolis news of the American Lumberman of May 24, 1902, said that it "strengthens the market all through the white-pine belt and makes the manu- facturers who were inclined to take a somewhat weak view of the situation stronger in their views of the market." 1 See also extracts on pp. 554-555 from American Lumberman of May 11, July 6, 1901, and Jan. 25 and Feb, 1,1902. 25030°— 14 33 514 THE LUMBER INDUSTRY. Referring to the Wisconsin Valley list of January 8, 1903, the Minneapolis news in the American Lumberman of January 24, 1903, page 72, stated: "There is renewed agitation over dimension prices since the action of the Wisconsin Valley association in adding 50 cents to its list, and three or four firms formerly against the advance have swung over to the other side." An official price list was made effective August 25, 1903, at a meeting of the Mississippi Valley association. The following from the Minneapolis news in the American Lumberman of September 19, 1903, page 55, appears to refer to a meeting held not long after: "Prices have weakened slightly, but the downward trend was checked by a meeting of the Minneapolis manufacturers who decided not to sell at any greater discount off the list than now obtains." Apparently the by-law of 1902 (see page 513) was not intended for strict observance, for, with the circular advising members of the price list of June 15, 1904, the following form of acknowledgment and agreement was sent out for signature: "J. E. Rhodes, Sec'y., Minneapolis, Minn. We have circular No. 587, and beg to advise that we will at once issue delivered price lists to our trade in con- formity with the recommendations made therein." The trade-journal comments on the price conferences held late in 1904 and early in 1905 between joint committees of the Mississippi Valley and Wisconsin Valley associations clearly show that the price-list activities were considered so effective by the lumbermen that they went to considerable trouble and expense to control and unify their action. In the American Lumberman of November 12, 1904, page 26, the following statement occurs in the account of the meeting of November 4: It was decided at the meeting that a uniform price list for the two associations was not practicable at this time. Instead an endeavor will be made to make an agreement as to territory, so that the Mississippi Valley list will not demoralize prices in towns where the bulk of the stock is sold bv the Wisconsin Valley mills. As it stands prices on some items in the Mississippi Valley list are lower in these towns, and the market is thus broken down. After the Mississippi Valley association list of November 22, 1904, had been issued, as a result of the conferences, the Minneapolis news of the American Lumberman of December 3, 1904, stated: The new list issued by the Mississippi Valley Lumbermen's Association has had the effect of strengthening prices. While the new list prices are not being adhered to in every case the market has secured an advance and the generally received report of trade conditions fully warrants it. * * * Higher prices have temporarily checked buying among the heavier retail dealers, but there is a fair trade gomg on and some large orders are being taken from bie consumers. PRODUCTION AND WHOLESALE DISTRIBUTION. 515 Referring to the Mississippi Valley list of February 14, 1905, the Minneapolis news in the American Lumberman of February 18, 1905, page 75, contained the following: "While it contains few changes it has a marked strengthening effect on the market, as it comes in anticipation of an active spring trade, and with white-pine stocks somewhat lower than a year ago." At the Mississippi Valley association meeting held on August 16, 1905, Edward Hines, of Chicago, called attention to the disposi- tion of some manufacturers to use Chicago as a dumping ground for surplus stock, and he outlined a plan for agreement on minimum prices. According to the account in the American Lumberman of August 19, 1905, page 36, he said: The price-list committee spends considerable time in arriving at a proper value for lumber. Now after going to all that trouble the work is to an extent nullified by making certain cities open markets. A house may have two to ten cars of cer- tain kinds of lumber which may be scarce, very scarce, with other manufacturers. It is possible for the holders of this stock to imagine that their assortments are general. It is not unusual for a surplus stock to be offered anywhere from $2 to $5 a thousand less than the price-list committee says it is worth. Mr. Hines went on to speak of the price-depressing effect of such conditions, illustrating it by examples. The account then continues: The suggestion was again made that some limitation be placed upon an open market so that lumber would not be offered at prices ranging $1 to $6 below the recommended list. Mr. Hines outlined briefly the result of a meeting had at Chicago August 8, at which prices were advanced 50 cents to $2 a thousand on some items, and at another meeting at Tonawanda where in- creases of $1 to $3 a thousand were made. He stated also that in Canada the demand was as strong as it is in this country; that lumber is selling for just as much in the Dominion as it is here; that his concern had sold a block of Norway to parties on Owen Sound at $15 a thousand. "You have nothing to be afraid of, gentlemen. You control the situation and you ought to agree upon some means of protection along this line." Thomas Wilkinson. What remedy do you suggest ? Mr. Hines. I would offer this suggestion: We ought to get the matter settled so that when it became necessary for an individual to move a certain kind of stock the list would not be cut more than a certain amount on common and not to exceed a certain amount on the upper grades. In the past Chicago bought largely from Saginaw, Manistee and Lake Superior ports. To-day Chicago must buy her lumber from the interior and I think this change in itself is of such significance that it should not be ignored. There is no record that Mr. Hines's suggestion was adopted by the association. It was a distinct violation of the association by-law just referred to, which specifically states that no member shall be "obligated to observe or be governed in any way by the prices 516 THE LUMBER INDUSTRY. recommended by the price-list committee of this association in the sale of his product." Mr. Hines's remarks, however, throw a signifi- cant light on the price-list situation at that time. He was not only the most powerful lumberman in Chicago, both in wholesale and in retail lines, but also was affiliated with the most powerful group of manufac- turing interests. He was urging the members of the association to advance and maintain higher prices, citing meetings at Tonawanda and Chicago which had recently done that, and his statement regarding the future source of northern pine for Chicago was addressed to the men who controlled the "interior" supply. As has already been pointed out (see p. 510), on the formation of the Northern Pine Manufacturers' Association two price lists were issued, one effective January 23, 1906, for the Mississippi Valley dis- trict and one effective January 25, 1906, for the Wisconsin Valley district. Illustrations of the use of the Mississippi Valley price list by lum- bermen are given in the following letters from the files of A. L. Broughton & Co., who published the offical lists: [Letterhead of Canton Saw Mill Co., Canton, Mo.] 1/22-06. Mr. A. L. Broughton, Minneapolis, Minn. Dear Sir: We are informed that the price-list committee will meet to-morrow and will likely get out a new list. If they make changes to justify a new list, enter our order for the usual num- ber you have been sending and three pocket lists. Would like the pocket lists just as soon as you can send them. Respectfully, Canton Saw Mill Co. [Letterhead of C. A. Smith Lumber Co., Minneapolis, Minn.] Jan. 27, 1906. Mr. A. L. Broughton, Minneapolis, Minn. Dear Sir: We return herewith the proof which you sent us for price list and wish that you would print us 500 130 lists and 300 of the 150 to apply on this. Illinois territory. These lists of course are to be sent to our Camden "Place office and not to Mr. Rhodes' office and they should be dated the same as the regular list which was adopted Jan. 23rd. Yours, truly, C. A. Smith Lumber Co. The following two extracts from the Minneapolis news of the Amer- ican Lumberman bear on the situation at this time: Some large orders for March delivery had been placed even before New Year's, but a rush to buy came during the first two weeks of the month, as a tip had gone out that prices were to be raised before the retailers' convention. The raise did not come until a week later, allowing time for many orders to go in. The PRODUCTION AND WHOLESALE DISTRIBUTION. 5l7 new list prices rule strictly and the trade is not buying much. The Wisconsin Valley manufacturers advanced their list January 25 to correspond with the raise agreed on by the association . committee here. (American Lumberman, Feb. 3, 1906, p. 65.) Northern pine is not active in retail buying since the advance in price, as dealers who did not anticipate the advance and load up with stock are now in no hurry and expect to buy when they need the lumber. (American Lumberman, Feb. 17, 1906, p. 61.) The Northern Pine Manufacturers' Association issued a list on March 15, 1906. (See p. 510.) A number of postals similar to the following one, sent out at this time by different companies producing northern pine, indicate that the price list had at least some effect on quotations, and probably also on actual prices at which sales were made: Cloquet, Minn., March 14, 1906. To the Trade : Our price list of January 23rd, 1906, is hereby witMravm and all quotations canceled. Any orders accepted after this date will be invoiced on revised list now printing, copy of which we will be pleased to mail you as soon as possible. Soliciting a continuance of your valued business, we remain, Yours, truly, Northern Lumber Company. The following letter refers to the association list of March 15, 1906: [Letterhead of Canton Saw Mill Co., Canton, Mo.] March 19, '06. A. L. Broughton & Co., Minneapolis, Minn. Gentlemen : Please send us the following lists * as adopted by price-list committee Mch. 15, 1906: F 5 A. A. 10-AB-15 AC. 15-A D. 10-A. E. 10-A. F. 10-A. G. 25-A. H. 100. A. I. 25-B. J. 15-B. A. 15-B. B. 10 and two (2) Pocket price lists of same date. Please send forward by mail promptly and oblige. Yours, truly, Canton Saw Mill Co. Section 6. Change in the policy of issuing association official price lists. The change of price-list policy was brought about by the anti- trust agitation directed against lumber associations. This had, early in 1906, begun to assume considerable importance, and the associa- tion sought advice on the legality of their price activities. The following extracts are from the opinion, rendered to Secretary Rhodes under date of March 13, 1906, by a Minneapolis lawyer. The opinion covered the general field of association activities. Only 1 The capital letters refer to the freight rate at which the list shows delivered prices. Thus, A A means an 11-cent rate; A B, a 12*!ent rate, etc. 518 THE LUMBER INDUSTRY. that portion which directly refers to the price-list activities is quoted below: The main purpose of this investigation, you informed me, was to determine the true status of the so-called price list which has been prepared by your so-called price-list committee and distributed to the members of your association. I find that this list is prepared by a standing committee pro- vided for by your by-laws and that its functions are specifically enumerated in your by-laws and are as follows: "The price-list committee shall meet at such times as it deems best, and recom- mend such a basis of price for lumber as in its judgment the condition of demand and supply warrant." After describing in detail the method of work of the committee, he continued: I can not find that any attempt has ever been arbitrarily made to change, or influence prevailing market prices, by this committee, by your office, or by the association, and that your members have not changed their prices, except where actual prevailing conditions were such as would naturally affect or influence the market conditions and consequently the market values of the articles upon which prices were changed. There is no evidence of an arbitrary or unwarranted advance in prices and none of any agreement or understanding, tacit or otherwise, to fix or maintain prices contrary to the provision of law. There is another provision of your by-laws relating to the conduct of your members which should be considered in this connection. I refer to that part of Article VIII which reads: "It shall be understood that no member of this association is obliged to observe or to be governed in any way in the sale of his lumber by the prices which may be recommended by the price-list committee.' This provision of itself is a sufficient safeguard so far as the association, as a body, is concerned, but if, in fact, the members had some agreement or understanding among themselves to adopt and maintain prices recommended by the price-list com- mittee, there would be little or no protection to them as indi- vidual concerns, independent of the association. I find that there is no agreement or understanding of any kind among the members as to how the so-called recommended price list should be used. I therefore, made careful inquiry as to the use to which the same was put by the members, giving particular at- tention to the methods employed by the several members. This inquiry was made to ascertain whether Or not there was anything to be found in the conduct of the members from which a tacit agreement or mutual understanding might reasonably be implied. The inquiry disclosed certain main features of uniformity in the price lists of the members, but no more than might reason- ably be expected in a business of this kind where the conditions affecting each individual member are substantially the same as that of every other. It also discloses numerous and material differences. The most significant fact disclosed by this inquiry is that in making qua^B^^^^^^^^^^^^^^g^^onjiractice PRODUCTION AND WHOLESALE DISTRIBUTION. 519 for members to deviate from the recommended list prices; that the price lists published to the trade by the individual concerns are continuously disregarded. It is the exception, not the rule, to find a sale or a quotation of prices in which either the recom- mended prices or individual price lists have been strictly fol- lowed in every item. It is, therefore, my conclusion that there is nothing in the conduct of your members from which a tacit agreement or an implied understanding to fix or maintain prices can reasonably be implied. From what has been said above relating to the methods em- ployed by your price-list committee it is obvious that in my opinion they do not in fact /u; or recommend prices. What they actually do is to estimate the amounts and kinds of stocks held, ascertain the actual or probable demand for them and report their market values. It follows, therefore, that the name "price-list committee" is, in my opinion, an unfortunate misnomer, one that may create a prejudice difficult to overcome. Courts are supposed to look at the substance of things rather than to the shadow and to be governed in their deliberations by the actual substance rather than by the name by which it is known; but juries, .investigating committees, and the like, I regret to say, often lose sight of these important distinctions. They are too apt to say that a price-list committee is what its name implies and that its busi- ness is to fix prices. They are more apt to be influenced by popular prejudice than by the - provisions of your by-laws limiting the authority of the committee. They are apt to be slow in considering methods of procedure in the face of almost steadily advancing prices even though market conditions fully warrant the advance. In these days, when the atmosphere is surcharged with the spirit of investigation, it seems the part of wisdom to take every precaution to avoid the possibility of unfortunate prejudice where that is possible. Notwithstanding my conclusion as to the legality of the work of your association as shown by this investigation, I recom- mend as a precautionary measure that Articles VII and VIII of your by-laws, relating to the price-list committee, be stricken out for the reasons given above, and that new articles be adopted in accordance with these suggestions. I submit herewith a draft of articles for your consideration in that connection. The articles recommended as substitutes were: ARTICLES VII. COMMITTEE ON STOCKS AND MARKETS. There shall be elected at each annual meeting of the associa- tion a standing committee of twelve members to constitute what shall be known as the committee on stocks and markets. This committee shall be appointed in the same manner as is the bureau of grades except that there shall be two representa- tives from each district as described in Article VI of the con- stitution. When the committee on stocks and markets has been regu- larly appointed it shall select a chairman from its own members. 520 THE LUMBER INDUSTRY. ARTICLE VIII. FUNCTIONS OF THE COMMITTEE ON STOCKS AND MARKETS. The committee on stocks and markets shall meet at such times as it deems best and ascertain as near as may be the amount of stock, on hand or in sight, of any and all kinds, quality and grades of lumber and timber products, which are manufactured or offered for sale by members of the association. They shall also estimate the market values of such stock as they shall find at the various points where the same may be offered for sale taking into consideration the value of stump- age, the fixed rates of transportation, the conditions as affected by supply and demand and all other elements which in their judgment may affect the market values at any point. The committee shall report the results thus ascertained to the secretary for distribution to the members of the association. It is hereby specially provided that no agreement, arrange- ment, or understanding shall be entered into or observed by the members of this association or any of them to fix or maintain any price or price list or to adopt or maintain the estimated market values as reported by this committee as the sale prices of their stock or any part thereof and that members are expected to exercise their individual wills in fixing the sale prices of their respective stocks and products. According to the account of the meeting of the price-list com- mittee on March 15, described in the American Lumberman of May 24, 1906, page 35, in addition to making changes in the price list: The price-list committee voted to recommend that its name be changed in the constitution to "committee on stocks and mar- kets", which more nearly covers the actual functions of the committee. 1 This was done at a meeting of the board of directors, held April 17. The official minutes of this meeting show that it was desired to get further advice on the legality of the price work of the association, and the question was submitted to a firm of lawyers of St. Paul. The following extract is taken from their opinion, dated May 15, 1906. After stating the Minnesota antitrust law the opinion goes on to say: The first question then is : Does this law cover your associa- tion? Your association neither buys or sells any commodity, has no agreement to fix prices, limit production or competition, no penalty attached to any act of any member, every member can sell without reference to the price list (and actually does so) both higher and lower. It would seem from this statement that your association is not covered by our antitrust law, or any other. Your articles and by-laws are all right, but the courts will not decide the case on the articles and by-laws, even if they are legal; it will look further and determine just what the organization actually -does, and decide the case from that. Assuming the evidence would show that the secretary mailed circular letters to all its members asking for general information i For similar action ot the ^"'" "■"•»-"- TT., J i M i.ir 1n| , t i„ f1 ,„^ i A tmnnlnt iim see pp. 654-655. PRODUCTION AND WHOLESALE DISTRIBUTION. 521 in regard to stock, market conditions and prices; that on the return of such answers the price-list committee met and after considering such information recommended a list of prices for all stock and caused to be issued an official price list showing the prices at Minneapolis and Wausau as a basis, and the price at all points having a freight rate of from 5$ to 31$, also issue under its name an official classification list, which two books together show the price of lumber products at every station in the territory covered by your association, and such prices are the ones recommended "by the price-list committee; then show that nearly every recommendation of this committee was adopted by all the members and that in fact this list was tbe governing price and that nearly all dealers would say that they usually bought on such list, and that mills with a 50 rate charged the same price at such station as did mills with a 15$ rate, what would the court say? In our opinion the court would answer that this was a com- bination which at least tended in some degree to fix, maintain and regulate the price of all lumber products in your territory. That to be sure, these prices are only recommended, but in fact these recommendations governed as to the actual prices, and that in fact it was only a scheme which in fact fixed the price of lumber. In arriving at this conclusion we are influenced by the trend of the decisions of late on these questions in the State and Fed- eral courts. It is not essential that the result of your efforts should effect a complete monopoly; it is sufficient that it tends to deprive the public of the advantage which flows from free competition. Neither does it make any difference that the list price as fixed, is reasonable, the point being that you can not combine to fix a reasonable price, nor that purchasers buy freely at ad- vanced prices. The next question is, is the law valid and does it apply to your association? That the law is valid as applied to certain combinations we do not think there is much doubt. The Su- preme Court of the United States has had occasion to pass upon and sustain laws of Kansas and Texas which were equally drastic. But in those cases the combinations which were at- tacked were very clearly combinations in restraint of trade under absolute agreements binding the parties to abide by the prices fixed. We have not much doubt that the supreme court of Min- nesota would not only uphold the law but hold that it applies to your association in its manner of doing business. Whether the Supreme Court of the United States would hold that the law is intended to apply to such a case as would be made against your association, is not certain. If you are willing to take the chances you have a good case to go to the Supreme Court of the United States on, but in our judgment you ought not to take the chances. The price-list committee should De eliminated from your association at once. The balance of your association is clearly legal and is not covered, in our opinion, by the Minnesota law or the Sherman Act. The Wisconsin law is similar to the Minnesota law, and if you are liable under the one you would be under the other. 522 THE LUMBER INDUSTRY. In the case of United States vs. Nelson et al. decided by Judge Nelson under the Sherman Act, really nothing was decided except that the indictment found at that time was defective in form, and the judge having decided in favor of the defendant the United States could not appeal, and therefore the matter went no further. We can furnish you with a list of the authorities which compel us to this opinion at any time if you desire them. At a meeting of the board of directors, held in St. Paul May 15, 1906, the following resolution was passed: Whereas this association has been advised that certain actions of its committee on stocks and markets may possibly be con- trary to the antitrust law of the State of Minnesota; now, there- fore, be it Resolved, That said committee on stocks and markets are hereby discharged, and Articles VII and VIII of the by-laws of this association covering the duties of said committee be, and the same are, hereby repealed. The following letter was thereupon issued. (The letter-press copy of this letter was marked, "copy of letter sent to every member.") Minneapolis, Minn., May 21, 1906. Northland Pine Co., City. Gentlemen : Article 9 of the constitution specifying the pow- ers of the board of directors reads: "The board of directors shall have the power to enact by-laws and provide for the standing committees and define their duties." Article 7 of the by-laws provides for the election of the mem- bers of the price-list committee, since amended to the committee on stocks and markets, by the appointment by the president at each annual meeting of two representatives , of each district nominated by the delegates from each district. Article 8 of the by-laws, as amended April 17, provides that the committee on stocks and markets may ascertam the market value of lumber and report the same to the members of the association. At the meeting of the board of directors held April 17 the name of the price-list committee was changed to the "committee on stocks and markets" in order that the name might more clearly designate the real functions of the committee, it being feared that the name price-list committee might convey the idea to those not familiar with the work, that its duties were to fix a Erice for lumber regardless of the market value as determined y the conditions of supply and demand. Your directors have competent legal advice to the effect that the work performed by the committee on stocks and markets has not been in any manner a violation of the laws of the state in which our members are located, nor of the United States. How- ever, in view of the prejudice in the public mind against any- thing that pertains to the ascertainment of the real market value of any commodity, by natural laws or otherwise, we deem it expedient at this time to cancel articles 7 and 8 of the by-laws, thus eliminating the c """""^" ^-^ ofrmW n .nd markets from our PRODUCTION- AND WHOLESALE DISTRIBUTION. 523 organization and entirely removing any cause for question or unjust criticism of the methods employed by this association. There is, of course, absolutely no question as to the legality of the other branches of the work being conducted by the organi- zation, which will be continued as heretofore in every respect. This will include the gathering of information by the secretary regarding the production, shipments and consumption of north- ern pine lumber, the stocks on hand, and other statistics for the benefit of our members. We have been requested by the Forest Service of the Dept. of Agriculture to furnish them cer- tain of this information. While our committee on stocks and markets is wholly within the letter of the law, yet inasmuch as it is not necessary to the welfare of the business, nor to the existence of the association, it is deemed best, because of the spirit of investigation prevalent, and the possibility of unjust criticism, a criticism which recog- nizes no difference between complete monopolies of raw prod- ucts and purely trade organizations of every class, that the price list feature of our association be eliminated in every respect. Yours, truly, J. E. Rhodes, Secretary. From 1906 on, as has frequently been pointed out in this report, change of attitude toward official price-list activities, due to the antitrust agitation, took place generally in lumber association and trade-paper circles. This change is manifest from expressions of Secretary Rhodes. The American Lumberman of August 11, 1906, page 59, published an account of an interview with him, in part as follows : Mr. Rhodes entered into something of a discussion of the methods of his association. It has no price-list committee and issues no official list. This position, of course, is made practi- cable by a demand larger than the remaining supply of northern pine. The result is a constant tendency to advance prices. The officers and leading members of his association believe that prices are high enough and their effort is to restrain the more enthusiastic and try to maintain a conservative price policy. Differences in quotations are not standard prices and cuts there- from, but standard prices and advances thereto. That is to say, there are well-defined prices for the principal items in northern pine but some people are inclined to ask higher prices for some of them, and have no difficulty in securing them. This policy is not thoroughly approved of by the more conservative members of the trade. This attitude is further reflected in the testimony of Secretary Rhodes before a Minnesota legislative committee. (See pp. 527-528.) In his report on market conditions at the meeting of the Northern Pine Manufacturers' Association, August 11, 1908, from which the following extract is taken, as reported in the Mississippi Valley Lum- berman of August 14, 1908, page 37: In view of this state of affairs, with which everyone interested in the business is familiar, it is amusing to continue to read of 524 THE LUMBER INDUSTRY. the machinations of the "lumber trust," which many newspaper and magazine writers would have the public believe is in control of practically the entire lumber output of the country, fixing and dictating prices, corralling timber lands, and saying who [shall] and. who shall not engage in the business. We know, and everybody who gives the matter the slightest investigation knows, that the price of lumber is regulated now as it always has been, and as it probably always will be, by the demand and the supply. Section 7. Connection of the association with the Broughton Standard Price lists. The real significance to the Northern Pine Manufacturers' Asso- ciation of the Broughton Standard Price Lists will be fully discussed in the following pages. A representative statement of what the lum- bermen wanted the public to believe is the following, taken from an editorial in the Mississippi Valley Lumberman of March 5, 1909, page 24: Only a few years ago, before the wave of opposition to uni" formity in selling lists became too pronounced, the manufac" turers' associations had price-list committees that recommended what the selling values ought to be, and uniform lists were issued in accordance with those recommendations. Actual selling prices were no more uniform than they are now, but the official list served as a basis and the lists sent out by one manufacturer were the same as the lists sent out by another. The usual method now is for some publishing concern not identified with the lumber business, to get information from as many sources as possible and then print a list giving as nearly as possible the average market. Each manufacturing concern then issues its own fists, conforming to the general list or differing from it according to the condition of the stock of that particular concern. The connection of A. L. Broughton & Co., a printing firm of Minne- apolis, with the issuance of northern-pine price lists dates from a period long before the association went through the form of officially separating itself from price-list activities. During the period when the different northern-pine associations issued official basis price lists, f. o. b. Minneapolis and Wausau, Broughton issued pamphlet lists showing prices at the different delivery rates. The lists were termed " Broughton's official price list." The Mississippi Valley books contained the official f. o. b. Minneapolis list and delivered lists; the Wisconsin Valley books contained the f. o. b. Wausau list and delivered lists. In an interview with an agent of the Bureau Mr. Broughton stated that the basis lists were furnished him at that time by the secretaries of the associations, that the date on which each list was to be made effective was determined by the instructions that came with the copy, and that the associations paid him direct for printing the lists they ordered. Broughton issued the list of January 23, 1906, under the title "Mississippi Valley pine, effective January 23, lnnc p t-+~-'~ -«- yj fl l nrirA list.-" the list of PRODUCTION AND WHOLESALE DISTRIBUTION. 525 January 25, for the Wisconsin Valley district, under the title "Wis- consin Valley pine, effective January 25, 1906, Broughton's official price list;" and the Northern Pine Manufacturers' Association price list of March 15, 1906, under the title "Northern Pine Manufac- turers' Association, effective March 15th, 1906, Broughton's official price list." In reference to this last fist Broughton issued the fol- lowing notice: Enclosed please find copies of the Northern Pine Mf'rs. Assn. March 15 List, which supersedes the Wisconsin Valley Pine List of March 5. In future there will probably be only the one pine list and this is sent you on your standing order for Wis. Val. Lists. Please notify us if you wish any change made in your standing order. We have completed the new Hemlock List and are now finishing the Hardwood and Cedar Lists. After the association officially abandoned its price-list activities the name of Broughton's fists was changed from "Official price list" to "Standard price list." The list he issued in August was probably the first of this new series. It bore the title "Northern pine lumber, effective August 8th, 1906, Broughton's standard price list." The next one, of December 8, 1906, had a similar title, except that the word "effective" was omitted from before the date, while in this and subse- quent lists of this series the word "revised" appears before the date. When questioned by an agent of the Bureau in regard to the compi- lation of his "standard" lists, Mr. Broughton stated that he printed lists for various companies. A company would furnish him a basis selling price, and he would make up delivered lists from that, according to the order. He further stated, concerning the "standard " list, that he made that come as near the average of such company lists as he could. When asked how he arrived at the average he replied that his judgment told him what was the average list; then if the manufac- turers wanted to use it they could; if they didn't, they didn't have to. Although the association had "officially" abandoned its price-list policy, it is clearly evident, from information gathered from several sources, that the Broughton Standard Price Lists were regarded, not only by nonmembers but by association members, as being to all intents and purposes the regular or association list, and there is ample evidence to the effect that Mr. Broughton's statements are not en- tirely accurate. The following letter in reference to this list is in point: A. L. Broughton & Co., Minneapolis, Minn. Gents: We notice the association has decided to issue new lists. Please send us same number of Aug. 8th lists that you sent of March 15th, '06. Be sure to send three pocket lists. If Eou have the pocket lists ready send them at once, and the sheet sts send when ready. Yours, etc., ' Canton Saw Mill Co. 526 THE LUMBER INDUSTRY. At the semiannual meeting of the Northern Pine Manufacturers' Association, held August 21, 1906, there was a discussion by various prominent members on market conditions. When speaking of prices reference was made to their being on list or above list. For example, according to the account in the Mississippi Valley Lumberman, of August 24, 1906, page 31— M. J. Scanlon, of Minneapolis, stated that the mills in which he is interested are manufacturing for the cargo trade, and that market is taking all they produce. The price in that market is from two to three dollars above the Minneapolis list. Their trade from the country consists of odds and ends and these are selling at full list, so that this in itself is a good indication of the strength of the situation. The Bureau secured little information from the files of either the association or of A. L. Broughton & Co. bearing directly on the con- nection which association members and officers had "unofficially" with the Broughton standard price lists for the years 1906, 1907, 1908, and 1909. The general correspondence files of the association to which the Bureau had access did not go back of 1910, those preceding that year having been destroyed. It has been the custom to destroy correspondence two or three years old. However, information from other reliable sources is not lacking. The following from the Ameri- can Lumberman of December 1, 1906, page 36, indicates some con- certed action, which doubtless found expression in the prices of "Broughton's standard price list" of December 8, 1906: Minneapolis, Minn., Nov. 28. — News has leaked out of an impending advance in northern-pine prices. From authentic sources it is understood that all the manufacturers in this terri- tory are getting ready new basis lists which will be mailed to the trade the last of this week. These lists will show an advance from those now in the hands of retailers on practically every item of rough lumber, dimension, timbers and boards. The advance will not be radical, but will run from 50 cents to $1 on most descriptions. The new lists will not be any more binding than the old ones, of course, and there will be some concessions made where the manufacturer has a long line of something which he wants to dispose of. That is being done right along at the pres- ent time, but on the bulk of the stock the mills are holding for the full list or even higher. It is also becoming apparent that prices must advance by next spring, and the retail trade is begin- ning to wake up and send in orders, not only to forestall an advance in prices but to make sure of getting the stock when it is wanted. The following, under a Minneapolis date line, in the West Coast Lumberman for December, 1906, page 184, is of interest, as apparently it reflects a desire to minimize the importance of the association work, something rarely found in the columns of a lumber-trade paper: The Northern Pine Manufacturers' Association will have its annual meeting also i T ~ — ml "'~ — Hingis PRODUCTION AND WHOLESALE DISTRIBUTION. 527 never very largely attended or very significant. The market sit- uation is usually discussed, but sales managers do not need much light on that proposition nowadays. As for price lists, they are never issued any more as association lists, for fear of running afoul of the State law. The "market-report" scheme of the southern lumbermen, it is feared, is on the border line of suspi- cion when it comes to Minnesota. Under present conditions, however, there is no trouble at all about raising prices by indi- vidual action, and there is an upward movement in the market right now. The emphasis put on the alleged absence of concerted effort on the part of the manufacturers and dealers, in raising prices, appears again in the following from the general market comment of the American Lumberman of March 30, 1907: The advance of $1 a thousand in northern lumber that recently occurred was without any concerted effort on the part of manu- facturers or dealers, there having been no recommendation by any committee and no meeting of wholesalers of any kind. Sev- eral firms desiring to shut off further orders advanced their prices. This forced the business to other concerns, which were soon del- uged with orders and raised their prices. These advances were followed by practically all the manufacturers in the Minneapolis district. The development which the antitrust agitation had attained by this time has probably considerable significance in this connection. In March, 1907, a legislative committee of the Minnesota State Leg- islature, appointed for the purpose of investigating the lumber and coal business of the State, with a view to discovering whether or not they were practicing methods that constitute a violation of the State antitrust laws, took evidence in St. Paul. According to the account in the Mississippi Valley Lumberman of March 15, 1907, page 33, Mr. Rhodes, at that time secretary of the Northern Pine Manufacturers' Association, gave the following testimony relating to list prices: Q. Do you not supervise the supervision and publication of price lists ? — A. I do not. Q. Don't you know how price lists are prepared ? Are they submitted to you ? — A. No, sir. Q. Do you know if the lists of manufactured lumber in this State as sent out by your members are all the same? — A. No, sir; they are not the same. There is a wide difference in many of them. Q. Is it not a fact that members of your association quote the same prices for their lumber ?— A. No, sir; it is not a fact. If you were to request quotations on bills of lumber you would be almost sure to get different figures. Q. But is it not a fact that it is the object of your association to maintain uniform prices ? — A. The maintenance of a uniform price by as many manufacturers as are represented by this asso- ciation is utterly impossible from what might be called physical reasons. Some firms manufacture a class of timber much superior in quality to that owned by others. There are some 528 THE LUMBER INDUSTRY. who have almost exclusively fine, large white pine, while others are manufacturing small timber, running 50 per cent to other woods. The value of the stocks is widely different, and a firm having good lumber is able to sell it for a much higher price than a firm whose timber does not produce such stock. Then, again, some firms are located at points where shipping facilities are much better than those of a firm situated, for instance, on one line of railroad, where the car supply is not as good as at a terminal point and where shipments can not be made so expeditiously. The selling abihty of men must also be taken into consideration. Some lumbermen are able to obtain a much higher price for the same class of lumber than are others, owing to a better acquaintance with the trade and their different methods of merchandising. These and many other similar reasons preclude a possibility of an absolutely uniform price, as well as the fact that wholesale lumber stocks have a way of becoming what is known as "broken," and without a complete assortment a salesman is frequently required to sacrifice on price. Q. Is it not a fact, asked one of the members of the com- mittee, that your association fixes, controls, and regulates the price for lumber? — A. I wish this committee to distinctly understand, replied Mr. Rhodes, that the Northern Pine Manu- facturers' Association does not fix, control, or regulate the price of lumber. The following, from the Mississippi Valley Lumberman of March 22, 1907, page 33, is particularly significant in showing the claims made for the Broughton fists: A. L. Broughton & Company, of Minnneapolis, are publish- ers for standard price fists for lumber products of this section of the country. These include current market values of north- ern pine, hemlock, hardwood and white cedar. These lists take the place of the lists formerly issued by the manufacturers and producers of these products of the northern forests. They are revised frequently, and the quotations therein are at all times kept as near the current market as it is possible to make them. The latest northern-pine list bears date of March 5, and under date of March 16, Mr. Broughton has just issued a revised hemlock list. These lists are conveniently arranged with quotations on delivered stock and a three to a thirty cent rate of freight. In January, 1908, the board of directors took a further step to avoid legal difficulties through the operation of the antitrust laws. The minutes of the 10.30 a. m. meeting of January 28, 1908, con- tain the following: Upon the advice of Mr. Macartney 1 it was resolved to per- mit no discussion of market conditions at the annual meeting, and it was the sentiment of the directors that no action be taken by any of the officers or members which might in any way be construed as pertaining to price or market conditions. 1 ■-"- -- — --■"- -■-"— PRODUCTION AND WHOLESALE DISTRIBUTION. 529 At their later meeting on the same day, called to order upon the adjournment of the annual meeting, about 5 p. m., the following motion was passed: _ Moved, in line with the well established policy of this asso- ciation, Be it resolved, That the president, secretary and all the officers of this association are hereby instructed to take no action on behalf of this association which shall in any way tend to fix, establish or regulate the prices at which our product or any portion of the same shall be sold. Early in January, 1908, a number of new lists made their appear- ance at about the same time. Apparently, though issued by differ- ent manufacturers under different dates, the prices were substan- tially similar and, while it is not directly stated that these lists were the result of a price conference or agreement between the manu- facturers, similar to those described on pages 534-550, there are indi- cations that some such action must have taken place. The following from the American Lumberman of January 4, 1908, page 55, supports this conclusion: Minneapolis, Minn., Dec. SI. — Northern-pine prices have been reduced by the manufacturers from $1 to $3 a thousand. Defi- nite action to that effect has been taken by important mills, and the rest have quickly followed suit. Until now northern- pine prices have not been much affected, and only on some items were concessions of $1 allowed from the lists issued in August. It was decided, however, that owing to the low prices made on yellow pine and on fir in this territory there should be a readjustment of northern pine, and the cut made affects ev- ery item except inch D and thick select and shop. The lower wages paid in the woods this year are also a factor in deciding the manufacturers to the reduction. Eeductions made from the August lists are as follows : Dimensions and timbers $2. 00 No. 1, 2, 3, 4, and 5 boards 1. 00 Six-inch. No. 1 and 2 fencing 1. 00 Six-inch No. 3 fencing 2. 00 Pour-inch No. 1 and 2 fencing 2. 00 Four-inch No. 3 fencing 3. 00 C and better, 8-inch and wider 2. 00 Siding, C and better 2. 00 Siding, D and E J 00 Siding, C and better Norway 1. 00 Bath 50 Thirty-two inch lath to be quoted f . o. b. at 1. 50 The manufacturers say that higher prices could have been maintained, but they deemed it advisable to adjust things, and to show the public that lumbermen are not always stick- ing prices up. They believe the reduction takes full account of conditions and represents a low point, from which the market ■will build up again. The cut now made puts_ the pric9 list . about where it was a year and a half ago. Since that time three more or less general advances have been made, which are practically wiped out by the reduction. 25030°— 14 34 530 THE LUMBER INDUSTRY. In its issue of a week later the same journal has the following state- ment in its general-market comment : Considerable comment has been caused by the marking down of the figures in the price list at Minneapolis. But investiga- tion will reveal the fact that the apparent cuts were only to make the list conform to prices that have prevailed for months, and that they are on the sorts that are mostly used in the country yard trade. The prior list represented boom prices; the revised one is scaled to conform with conditions with the "boom" . eradicated from demand. As the list now stands prices are high enough to afford a good profit on the present stumpage- value basis, when the cheaper rates of labor and other reduced expenses of production are considered. The comments in the Mississippi Valley Lumberman at this time indicate that the various individual lists were practically the same. In its Minneapolis news, in its issue of January 10, 1908, page 35, it is stated: The new list now being sent out seems to be accepted as final by the retailers and the lowest that will be issued in 1908, and they are acting accordingly. * * * Evenly distributed buy- ing will tend to secure the most favorable prices for the buyer, in case for any reason any deviation is made from the list. Geographic location has some bearing also, as some mills in the north make the same price at the mill as at Minneapolis. All lists are not the same. In its issue of a week later it states : "The city demand is likely to be stimulated by the issuance of the new list, being more sensitive and responsive to influences of this nature. * * * Prices may be considered as governed substantially by the new list." And in the issue of January 24, 1908, it says: "Since the issuance of the new list, the manufacturers seem to be taking the position of holders of stock." But two "individual" price lists issued at this time were obtained by the Bureau. They have been compared with the Broughton Stand- ard Price List, revised January 18, 1908, with the following result: Company issuing list. Date of list. Items in common with Broughton list. Corresponding items on which the prices are identical with the Broughton list. Corresponding items on which the prices are diflerentfrom the Broughton list. 1908. Jan. 10 Jan. 4 324 324 303 286 21 38 The following letter was written, under date of July 10, 1908, by Secretary Ehodes, to a correspondent who asked for a white-pine price list: Eeplying to your request for a white-pine price list, as made in your notation on p ostal card report. PRODUCTION AND WHOLESALE DISTRIBUTION. 531 This association does not issue any price lists but you can obtain a copy of the book of prices showing delivered rates from A. L. Broughton & Co., Minneapolis. The book is sold for 50£ per copy, and the latest issue is dated Jan. 18, and the market is represented by concessions from the same of from one to two and half dollars. If we can give you any further information in regard to this matter, we shall be happy to do so. The various rules adopted by the board of directors after the abo- lition of the official price lists in 1906 apparently were not held to apply to members of the association when, "acting as individuals," they agreed on the issuance, under their own names, of substantially similar price lists. Under date of July 23, 1908, the Itasca Lumber Co. wrote A. L. Broughton & Co. as follows : We enclose you herewith one of C. A. Smith Lbr. Co. price lists and we want you to get us up a set of these promptly, using the same back and form as heretofore and begin the series number with #3,000. As others have not ordered this list we must insist upon ours being furnished at once. If you can not do so advise us. We want about the following of each rate. [Here follows a statement of the number of lists wanted, at each freight rate.] A comparison has been made by the Bureau of this C. A. Smith Lumber Co. list of July 30, 1908, with the "individual" lists of six other companies. The results are as follows: Company issuing list. Date of list. Items in common with Smith list. Corresponding items on which the prices are identical with the Smith list. Corresponding items on which the prices are different from the Smith list. Atwood Lumber Co. 1 T. M. Partridge Lumber Co.' J. Neils Lumber Co Douglas Lumber Co Red Kiver Lumber Co. 2 Eddy Lumber C0.2 1908. Sept. 8 Sept. 3 Aug. 20 ..do... Aup. 1 ..do... 372 372 372 372 348 370 362 362 356 347 310 334 10 10 16 25 36 1 The lists of Atwood Lumber Co. and T. M. Partridge Lumber Co. had identical items and prices. ' In the list of Red River Lumber Co. and the Eddy Lumber Co. the prices for the corresponding items were identical. A "Broughton's standard price list, revised August 6, 1908" was issued 1 but the Bureau did not secure a copy of it. The following taken from the Minneapolis news of the Mississippi Valley Lumberman at this period indicates how a correspondent, presumably in close touch with the situation, recognizes the essential price unity of the various "individual" lists: The new lists are now pretty well scattered throughout the trade. Some orders have been filled at straight list throughout. 'Mississippi Valley Lumberman, Aug. 21, 1908, p. 40. 532 THE LUMBER INDUSTRY. and dealers have their hearts set on getting this list for all they sell. Some retailers, however, can not get it out of their heads that concessions ought to be granted on any list no matter how low it is and some wholesalers are of the opinion that this con- dition of affairs has deadlocked some business. For these reasons some firms of very substantial standing declare it as their opinion that bringing out the new lists at this time was a mistake. (Issue of Aug. 21, 1908.) The eastern market is giving practically list price for white- pine lumber and the upper grades are strong at that. Many dealers are claiming list prices for northern pine in this territory, but it is quite apparent in most quarters that conces- sions on the August list are still the rule on everything but the higher grades. (Issue of Sept. 4, 1908, p. 39.) Trices are holding their own at the advance gained since July, but advances recently are not general and concessions on the new list on most items are still the rule. (Issue of Sept. 11, 1908, p. 39.) Prices are certainly stronger on all the higher grades from number one up and there is no doubt that the August list is low on number two and better white pine and not far from that state of affairs on timbers. Low-grade stock sells at the level of several weeks past. (Issue of Nov. 13, 1908, p. 39.) A comparison has been made between the prices shown in the "Broughton standard price list, revised January 9, 1909," and those in a number of "individual" lists issued at about the same time. The results are shown in the following table : Company issuing list. Date of list. Items in common with Broughton list. Corresponding items on which the prices are identical with the Broughton list. Corresponding items on which the prices are different from the Broughton list. 1909. Jan. 5 Jan. 9 ...do ... 338 346 346 346 346 346 301 346 346 338 346 346 346 346 346 301 337 336 Jan. 12 Feb. 25 Jan. 9 Jan. 11 Jan. 9 Jan. 2 Wild Rice Lumber Co. 2 ' 9 10 ' Comparison was made between the Broughton "basis list" and this company's list "f. o. b. Virginia, Minn." . „ 2 Comparison was made between the Broughton " basis list" and this company's list " f. o. b. Ada, Minn. The comments in the lumber press at this time show that they were well informed as to what was taking place, and in the Minneapolis news of both the American Lumberman and the Mississippi Valley Lumberman there are comments in several issues in December indi- cating that there would be a general issuance of lists by the manu- facturers early in January. The following is from the American Lumberman of December 26, 1908: Prices are steadily growing firmer and on some of the upper grades most of the rr- i; -+ New lists PRODUCTION AND WHOLESALE DISTRIBUTION. 533 of January 1 will take up this advance and probably mark im- provement on other items, and some active buying may be looked for during the last week of the year, anticipating this move. The new lists may check trade for a while after they are issued, but manufacturers are expecting to move stock in large quantities by March. The following from the Mississippi Valley Lumberman of January 8, 1909, page 38, shows clearly how completely the fact is recognized that practically the same prices were issued by the different manu- facturers under the guise of "individual" lists: Although the new price lists have not been circulated among the trade as yet, nevertheless, they are the cause of a good deal of discussion. The opinion is expressed in some quarters that the list has, as usual, caused a temporary unsettled condition in the market and put both buyers and sellers in a position where they will need a few days to get their bearings. Never- theless, the changes of the new list do no more than adjust the printed figures to the quotations that have been offered through- out the market for some time. The advance of a dollar on the upper grades puts the list at figures which correspond very closely with the quotations offered by many concerns on these items for several weeks. Some concerns who had been offering their uppers in mixed cars at the old list have now raised to the new list and have gone so far as to cancel quotations at the lower figures sent out very recently. In its general comment on the white-pine situation, the American Lumberman said, in its issue of January 9, 1909, in reference to this issue of lists : It is general^ believed that the advance in prices may retard trade for a few days, but the period of quiet will not be long and when it is over values are expected to firm up still more. In its issue of January 16, 1909, page 35, it further states: From the Minnesota field the movement of lumber is about normal. The new list fairly represents present asking prices and it seems that the advances have acted as a slight curb upon the placing of orders for stock which was not absolutely required. It is possible, however, that there will be no recession of white- pine prices. At the annual meeting of the association, January 26, 1909, Secre- tary Rhodes read a paper on "Lumber prices and the law." In view of his connection a month later with the events next to be described, the following is of interest : Under the present state of unjust hostility toward the lumber- men it would be unwise for the manufacturers to make any effort whatever to secure a revision of the present drastic antitrust laws now in effect in Minnesota, Wisconsin and Michigan, so as to permit them to prepare anything like a market report on lumber prices, as was once done, and is still done in some sec- 534 THE LUMBER INDUSTRY. tions of the country. The laws referred to are susceptible of a very wide interpretation, and in view of the prejudice against any man who cuts a tree it would be unwise for us to do many things which are done with impunity by trade organizations representing other lines of business. There is some reason to believe that association officials were actively connected with the preparation of the "Broughton standard price list, revised January 9, 1909." Mr. J. E. Rhodes at this time was secretary both of the Northern Pine Manufacturers' Associa- tion and of the Northwestern Hemlock Manufacturers' Association. He came to Washington, D. C, early in the year in connection with certain tariff legislation. Mr. H. S. Childs was acting secretary during his absence. As shown in the discussion on hemlock, pages 659-667, a difficulty arose over the adoption and issue of a hemlock price list. In the correspondence over this subject, quoted in con- siderable detail elsewhere (see pp. 662-665), some references were made to the difference between the policy that had been pursued by Mr. Rhodes in handling price-list matters, as secretary for the hem- lock association, and his policy as secretary of the pine association. Acting Secretary Childs, writing under date of February 6, 1909, to Mr. Rhodes, said, in relation to notifying the members of the hemlock association of the price-list situation: Another thing, from what I have heard and learned by obser- vation here in the office it is a question with me whether it is policy or customary to issue letters of that kind in relation to lists from this office. I wish that you would let me know about how far we can go in matters of this kind. Mr. Dalzell seems to think that you have been taking more latitude with the hemlock people than you have with the pine and that it would be all right to issue a circular letter informing the hemlock people that the recommended list has been held up. In a letter to Mr. Dalzell, of the C. A. Smith Lumber Co., under date of February 11, 1909, Mr. Rhodes said: I have carefully written the draft of the circular and sent it to Mr. Childs, which will explain the situation to our hemlock mem- bers, as I have deemed it safe to explain such matters a little more plainly to them than to our pine members. In a letter to Mr. Childs, under the same date, Mr. Rhodes said: "In relation to the hemlock-price matters will say that I have taken somewhat more liberty than with the pine list." What liberty, if any, was taken by him with the pine list may be conjectured from the more definite information regarding price-list activities some months later. On August 13, 1909, just preceding the semiannual meeting of the association, a'conference of the principal members was held and a new list prepared. The following extracts are taken from stenographic notes of letters found in the office of the association and apparently dictated by Secretary Rhodes: PRODUCTION AND WHOLESALE DISTRIBUTION. 535 A letter, under date of August 9, 1909, addressed to A. L. Osborne, states: I have jour letter of the 6th, having just returned from Wash- ington this morning. I find that Mr. Childs has called the annual meeting of the pine association for Tuesday, August 17. It will be best for me to attend your meeting on Friday, August 20, or even on the 19th, if you desire to call it Thursday instead. I will say, confidentially, that a number of pine members are figuring on a new price list and I may have some information to convey to you when I see you. In a letter written on receipt of Mr. Osborne's communication of the 10th, he said : I will be able to bring to the meeting a new list on northern pine, and think we shall have a free and open discussion of market conditions. I do not think it necessary to invite the representa- tives of the daily and trade journals. A letter, evidently written for the president's signature, reads: Mr. J. M. Eichards, Bemidji, Minn. I have called a conference of a number of the principal inter- ests to be held here this week, Friday, 13th, to convene at 411 Andrews Bldg., 10 a. m. This is for the consideration of the new list, which I think you will agree with me is badly needed. Will you kindly arrange to come down, and wire me upon receipt of this letter if you will do so. Please keep this matter quiet, as we wish nothing said about it. The following letter, under date of August 13, addressed to Edward Hines, of Chicago, gives an account of the meeting : 8/13/09. Mr. Edw. Hines, Chicago. We had a conference here to-day, attended by Mr. Dalzell, representing Minneapolis; L. K. Baker, Bis. 1 representing Wis- consin Valley; Mr. Chisolm, representing Shev. 2 interests; Mr. Rich., 3 representing northern Minnesota; Mr. McCarthy, representing lower river firms; and I was pleased to represent your interests and the Wey. 4 peoples. 5 The entire day was spent in discussing the situation, and I was exceedingly surprised at the remarkable strength of the market, as indicated by- association men. I was obliged to handle the matter with extreme caution because I did not want them to infer that we 1 Evidently abbreviation for Bissell. 2 Evidently abbreviation for Shevlin. 1 Evidently abbreviation for J. M. Richards. 1 Evidently abbreviation for Weyerhaeuser. s At the Aug. 17, 1909, meeting of the association, Secretary Rhodes severed his official connection with the organization, being succeeded by H. S . Childs, who had been chief inspector for many years, and acting secretary for a number of months during Secretary Rhodes' absence in Washington in connection with tariff legislation. Mr. Rhodes then entered the employ of the Weyerhaeuser interests at St. Paul. It will be noted that in the above letter, written before his resignation as secretary, Mr. Rhodes stated that he had attended the price conference of Aug. 13 as the representative of the Weyerhaeuser and Hines interests. In a letter of June 29, 1909, Mr. Hines wrote Mr. Rhodes in regard to the tatter's prospective affiliation with the Weyerhaeuser interests, stating that F. E. Weyerhaeuser " is anxious of course to have you give your ■ttata attention to the very same questions that you would give attention to if you were with the association." 536 THE LUMBER INDUSTRY. intended to take any independent action at our regular meeting in St. Paul and to ignore their interests. I further thought they should express themselves before I showed my hand, and the result was that I was obliged to make some concessions and, on the other hand, prevented them from making the radical ad- vances that were proposed. They simply would not stand for any revision on piece stuff because it represents such a large proportion of the northern stocks, and when I had shown what we hoped to get for good lumber the suggestion was made that we were going to reduce piece stuff in order to take the stand for the advances made on selects. We went over the list very care- fully, and as I did not wish to give them an idea that we would issue any list which the meeting might agree upon, I called up Mr. F. E. W. 1 and explained the situation, and he said that he felt willing to leave the matter to me, and I enclose you the result of the conference. It was the understanding that the firms may make any minor additions to this which they chose in order that the lists may not be entirely alike. I believe that the failure to reduce piece stuff will be satisfactory to you because of the stock at Vir. 2 The argument that this reduction would pre- vent the yellow-pine mills from piling up surplus was not accepted by my confreres, because they claim that yellow pine is rapidly- advancing and we should hold up their hands and not attempt to discourage them and that they will run their mills to full capacity on the strength of the bright prospects for trade. I will not attempt to go into all the arguments presented but hope you will find the enclosed statement of changes in the list of January 9 satisfactory. I know that you will make some further advances in your new list. The northern mills selling into Dakota are having a splendid trade and claim to be getting full fist on piece stuff in that territory. They feel that because of this fact and the large proportion of piece stuff in their stocks, you should not injure their interests by insisting upon a reduction. Under date of August 14 he wrote to Messrs. Drew Musser and IT. C. Hornby, describing the meeting. Extracts from this letter follow: We had our price conference here yesterday, attended by members representing all of the districts of the association, and I was unable to write you last night of results. I find myself in rather a delicate position because I do not know just exactly what they will do and I find that the whole crowd are absolutely opposed to any reduction in piece stuff. I was obliged to report to them the results of our recent meeting in St. P. very cau- tiously and carefully because they are inclined to get the idea that we are disposed to force a reduction in piece stuff in order to * * * 3 of the advance in cut lumber of which a majority of stocks have but very little. The Minneapolis and northern Minnesota delegates feel that a reduction in piece stuff would seriously injure them because it constitutes so large a part of i Evidently abbreviation for F. E. Weyerhaeuser. 2 Evidently abbreviation for Virginia, Minn. « At this point some stenographic! characters could not be deciphered. PRODUCTION AND WHOLESALE DISTRIBUTION. 537 their output, and, although they are not getting less at present, it will be a serious mistake to give the trade an idea that they will cheapen any or weaken. Furthermore, my argument to the effect that a reduction would have some effect in preventing the yellow-pine mills from piling up surpluses did not appeal, because they were able to show that the yellow-pine mills have already gotten an advance of nearly $2 and are having a good trade and would not likely be in favor of any reduction in our printed list in the north. The lower river people claim that yellow-pine piece stuff was selling for as much or more than northern pine in some parts of the territory, and after listening to all the arguments I was obliged to insist that an advance in piece stuff at this time would not be wise. * * * 1 Consider- able improvement in trade is reported, and it is felt that it will be best to give the dealers to understand that prices are strength- ening rather than to give them to understand that there is to be any advance in common lumber. This will naturally have the effect of increasing the demand somewhat. The gentlemen present were not disposed to consider the sentimental or political effects to any extent, but proposed a number of advances in common lumber which I was able to have them withdraw upon the theory that we will have covered losses within 60 or 90 days, depending upon the state of trade. I desired to prevent recom- mendations which would look like a radical advance, but must confess that the enclosed list seems rather strong, but upon examination you will find that it covers satisfactorily #1 and bet- ter. The advance on #2 boards was that proposed at St. P. and the meeting was unanimous in favoring an advance in #1 finish. They met our views in regard to reduction in the list of 4 and 5 Bds., * * *.* From all the conditions as I am able to gather them I think this list is as fair a compromise as we could get. I have given a story to the newspapers 2 showing that it is simply a leveling up and that low-grade lumber has been reduced while selects, which are in short supply, are advanced. Some results of this price-list conference of the northern pine manufacturers are shown in the following letters, sent to A. L. Broughton & Co. Under date of August 16, 1909, the Itasca Lumber Co., of Minne- apolis, wrote: Confirming our telephone order. Hurry forward our lists. Dat9 same Aug. 10. Use our series #3200 advancing numbers as heretofore. In the matter of prices, be governed by the C. A. Smith list of Aug. 14th, except on the item of #5 boards, which please amend to $8.50. Under date of August 23, 1909, the Stolle-Barndt Lumber Co., of Tripoli, Wis., wrote: "We understand that there is a new hemlock 1 At this point some stenographic characters could not be deciphered. ! Thisstatem ent is borne out by comments on the price lists issued at this time, appearing in the America Lumberman of Aug. 21, 1909, pp. 32, 73, and 80, and the Mississippi Valley Lumberman of Aug. 20, 1909, besides a reference on p. 39, had on p. 21 an editorial vigorously attacking a Minneapolis daily paper for stating, in comment on the new lists, that prices had been raised. 538 THE LTJMBEE INDTJSTKY. and pine list out. Please send us by return mail two of the hemlock lists, Aug. 20, 1909, and one of the latest pine lists, which was adopted later." Under date of September 7, 1909, Miller & Miller, of Detroit, Mich., wrote: Will you kindly mail us an association list under date of August 20th, 1909, on white pine f. o. b. Detroit rate of freight. We understand that the prices that cover this territory are contained in "B-J" list. We understand that there is a new list out on white pine and we would like very much to have same. Also let us know what the cost is and we will forward you settlement to cover. Under date of September 14, 1909, the Edward Hines Lumber Co. wrote: "Kindly mail us promptly two copies of the National Pine Association Standard Price Lists dated 8/20/09. We find we have use for two extra copies." Three "individual" price lists issued at this time have been com- pared with the "Broughton standard price list, revised August 20, 1909," with the following results: Company issuing list. Date of list. Items in common with Broughton list. Corresponding items on which the prices are identical with the Broughton list. Corresponding items on which the prices are different from the Broughton list. C. A. Smith Lumber Co J. Neils Lumber Co Nichols-Chisholm Lumber Co 1909. Aug. 14 Aug. 16 Aug. 20 346 346 346 346 346 341 A comparison of the prices of the C. A. Smith list of October 14, 1909, with the Broughton's standard price list, revised October 21, 1909, shows that for each of the 346 items common to the two lists the prices are identical. Attention may be called at this point to the frequent mention of association or official lists in letters to A. L. Broughton & Co. When questioned on this point by an agent of the Bureau Mr. Broughton explained his filling orders for association lists by saying that his lists were all that he could send and that such expressions were survivals of the time when there was an association list. It should be noted, however, that the association ostensibly abandoned its price-list policy in 1906, and yet such presumably well-informed firms as the Edward Hines Lumber Co. (letter of Sept. 14, 1909), and Willson Bros. Lumber Co., of Pittsburgh, refer to them as association lists. The obvious explanation is that the Broughton standard price lists were meant to be, and were, regarded by the lumbermen as, to all intents and purposes, official association lists. The letter below apparently refers to the "Broughton standard price list, revised December 21, 1909." PBODUCTION AND WHOLESALE DISTRIBUTION. [Letterhead of Willson Bros. Lumber Co., Pittsburgh, Pa.] 539 1909. December 31, Messrs. A. L. Broughton & Co., Minneapolis, Minn. Gentlemen: Will you be kind enough -to send us four copies of the late association pine price lists, also would like to ask if you would be kind enough to enter a standing order from us and send us four copies of these lists whenever there are new lists issued. Please send us your bill for same, and we will promptly remit. Very truly, yours, Willson Bros. Lumber Co. A. Willson, Vice President. The request to send four copies "whenever there are new lists issued" clearly indicates that the Willson Bros. Lumber Co. was de- pending upon Broughton & Co. to supply them with price lists. A conference of manufacturers was held in Minneapolis on Decem- ber 7, 1909. It is not known exactly what was done at this meeting, but there are indications that it had to do with prices. It will be noted that it shortly preceded the issue of the Broughton list of December 21. A comparison has been made of the prices of the Broughton's Standard Price List, revised December 21, 1909, with three "indi-. vidual" lists issued at about that time. The results are shown below: Company issuinglist. Date of list. Items in common with Broughton list. Corresponding items on which the prices are identical with the Broughton list. Corresponding items on which the prices are different from the Broughton list. 1909. Dec. 15 Jan. 10 Deo. 20 346 342 346 346 342 344 2 A conference of manufacturers was held in Chicago, February 19, 1910. In a letter under date of February 21, 1910, to Mr. L. K. Baker, then president of the association, Mr. Childs, who had suc- ceeded Mr. Rhodes as secretary, wrote in part: Am sorry I did not meet you as I expected to, in Chicago, Saturday. We had a very good representation and I think the meeting will result in considerable good. There was some quite plain talk back and forth between some of the manufacturers that have considered each other as close rivals, and still think so, but I believe that it was a very good thing because it served to clear away the effects of rumors and reports that were not alto- gether well founded but which irritated the parties interested as they had taken these reports for gospel truth. The con- ference had a .tendency to dispel the errors of these rumors and clear the atmosphere and I think that everybody went away feeling much more charitable to each other than when they met. 540 THE LUMBER INDUSTRY. Mr. Dalzell, of the C. A. Smith Lumber Co., wrote Mr. Childs on February 21, 1910, the following letter in regard to getting out a new list: I am in receipt of your favor of the 19th enclosing copy of the changes in the list and have written Broughton as per enclosed copy and as soon as you arc ready to mail this list let me know and I will send you clown enough 20 envelopes to take care of them and if I am not here take the matter up with either Mr. Irwin or Mr. Tweed. The copy referred to was as follows: Mr. A. L. Broughton, City. Dear Sir: I wish you would get out a basis list at once and make changes as per enclosed memorandum. When the list is out please take proof to Mr. Childs and have him check it over and see if it is correct. The reason I do this is that I am going out of town to-night and will probably not be back until Thursday. As soon as he O. K.'s it you can then go ahead and get out the basis list and then I wisn you would make the same changes in our list of Dec. 15th and send me copy of thef. o. b. list so that I can have it checked over on my return. Apparently there was some error in the getting out of the list, as is shown by the following: Please compare the items of 13" and wider No. 2, 10 to 20 ft. mixed lengths, 4 and 6" flooring, C, D, and C and better Norway on enclosed list, with same items on our list of Febru- ary 21. Our February 25 list is correct. C. A. Smith Lbr. Co. Minneapolis, Feby. 25, 1910. The Standard Lumber Co. of Dubuque, Iowa, wrote under date of March 5 to the C. A. Smith Lumber Co. complaining that they had not received the list of February 21, referred to in the list of February 25 which they had received, and stating: "We understood that we were on your regular mailing list, and would be furnished with a copy of each issue promptly when mailed to. others." The complaint was referred to Secretary Childs, the Smith com- pany stating that " as this was handled through Mr. Childs office we have referred the matter to him and asked bim to write you regarding it.'* The secretary explained that "the name of the Standard Lbr. Co. is on our mailing list in correct form," and suggested the prob- ability of a miscarriage in the mails. It is customary with many firms to have their price lists sent out from the secretary's office, with the use of the association's mailing list and addressing machine. Some of the members have given the secretary instructions to send their price lists to all the other members of the association. PRODUCTION AND WHOLESALE DISTRIBUTION. 541 The following letter, it will be noted, recommends the C. A. Smith Lumber Co. list. Apparently the reason that Mr. Childs recom- mended the list of this firm was that the Broughton list, which had prices identical with the Smith list, was not issued until March 8. [Letterpress copy.] 2/25/10. W. H. Gantz, Auditor, Prices and Material, Deft, of Finance, City of Chicago, Chicago, IU. Dear Sir: Your letter of the 21st instant asking for price list of pine lumber delivered in Chicago, received and noted. Our association does not issue any price lists but I have referred your letter to the C. A. Smith Lbr. Co. of Minneapolis, and requested them to mail you a list which will be a fair representation of market prices of white-pine lumber. They are about getting out a new list and it may be two or three days before you will receive a copy. Yours, truly, H. S. Childs, Secretary. A comparison of the "Broughton standard price list, revised March 8, 1910" with the "individual" lists of eight companies shows the following results : Company issuing list. Date of list. Items in common with Broughton list. Corresponding items on which the prices are identical with the Broughton list. Corresponding items on which the prices are different from the Broughton list. 1910. Feb. 25 Feb. 28 ..do 346 346 346 346 346 346 346 346 346 346 346 346 346 346 346 345 Mar. 5 Mar. 8 Mar. 18 Mar. 8 Mar. 4 Burkholder Lumber Co WildKice Lumber Co Leech Lake Lumber Co. 1 ... . Carpenter-Lamb Co 1 1 Comparison was made between the Broughton "basis list" and this company's list i. o. b. Walker, Minn. As showing the common acceptance of the Broughton list as the association list in lumber circles, the following letter is in point: [Letterhead of Western Pine Manufacturer's Association, Spokane, Wash.] Mch. 10, 1910. A. L. Broughton & Co., Minneapolis, Minn. Gentlemen: Understand that the Northern Pine Manufac- turers' Association have recently adopted a new price list. If you have issued same, should be pleased to have you for- ward two copies together with your bill. Very truly, yours, A. W. Cooper, Secretary. 542 THE LUMBER INDUSTRY. It was in reference to the list -issued March 8, 1910, that the fol- lowing comment appeared in the general market report of the Mis- sissippi Valley Lumberman of March 25, 1910, page 39: The demand continues fairly active both for pine and hemlock, with greater call for the former. The new price list issued about two weeks ago has taken hold well and concessions from it are very few. Upper grades are practically commanding all the list calls for and lower grades are fast approaching it. Shortly after the issue of the Broughton list of March 8, 1910, a number of Wisconsin Valley firms complained that the Broughton list was lower on some items than the lists gotten out by companies in that territory, and suggested changes in the method of its compila- tion. These letters followed a conference held at Milwaukee on March 21. The following letter shows the plan proposed: [Letterhead of Yawkey-Bissell Lumber Co., Arbor Vitae, Wis.] March 23, 1910. H. S. Childs, Secy., Minneapolis, Minn. Dear Sir: Several of the Wisconsin members of the N. P. Manfrs. Ass'n. in comparing the Broughton March 8th standard list with their respective current lists note that the Broughton list quotes prices on many items at less than they are obtaining for such stock. Very few items are quoted at the same or higher prices than our list and we as members of the association object to future issues of the Broughton standard list (compiled from price information such as heretofore furnished them) as recog- nized market prices of lumber manufactured by members of the N. P. Mnfrs. Assn. While we realize the desirable features of the Broughton pub- lication, we find that same does not represent actual values of pine lumber, but can readily be corrected to cover same by you submitting to A. L. Broughton & Co., from information obtained from current price lists of various members of the association, a list carrying maximum prices on every item. The Broughton standard list is used by manufacturers (not members of the association), by wholesalers and large buyers, and in fact by all parties engaged in all branches of the northern-pine lumber trade and is considered by them to represent current prices of pine lumber. This list, therefore, as now published creates a direct and unnecessary competition which should be eliminated. In talking this matter over with Mr. Rhodes he agrees with us that this matter should be adjusted and stating that he would see you and others interested -regarding same in a few days. He appeared to think that none of the Minnesota members oi the as- sociation would object to the correction of the Broughton stand- ard list as suggested. Should this matter meet with the approval of other members of the association we would suggest that you would consider as representative Wisconsin lists those published by Goodman Lumber Co., Goodman; J. S. Stearns Lbr. Co., Odanah; Brooks & Ross Lbr. Co., Schofield; Chippewa Lbr. & PRODUCTION AND WHOLESALE DISTRIBUTION. 543 Boom Co., Chippewa Falls; North Wisconsin Lbr. Co., Hayward; Iron River Lumber Co., Iron River. If necessary the writer will come to Minneapolis and go over this matter more fully with you and others and we hope that this suggestion will meet with the hearty approval of all members of the association. Yours respectfully, Yawket-Bissell Lumber Co. Rea. The statements in the foregoing letter dated March 23, and obviously not for publication, may be contrasted with those in the following letter, dated March 24, from the same firm, to George K. Smith, sec- retary of the Yellow Pine Manufacturers' Association. A copy of the letter was sent out by him as an association circular. Attention may be especially called to the statement which deals with the company's price list practices. [Yawkey-Bissell Lumber Co. letterhead.] Arbor Vitae, Wis., March 24., 1910. Mr. Geo. K. Smith, Sec, St. Louis, Me. We enclose herewith copy of our March 16th list just issued and memo, showing advances over our February 1 6th list. This is not a Northern Pine Mfrs. Assn. matter at all, although we belong to same, but we find that yellow-pine piece stuff and timbers are selling in territory we cover at higher prices, also stocks in retail- ers' hands are light and practically all anticipate an exceedingly large spring trade. We make these advances irrespective of what others are doing and have done, but since issuing this list have been advised by several pine manufacturers that they will issue a new list at once carrying practically the same advances. We apprehend no difficulty in obtaining these present prices espe- cially on piece stuff and timbers providing the yellow-pine mills maintain their present prices and they really could obtain more if they would only ask them. We, of course, run up against the ever-present transit car evil but that only affects us in the larger cities such as Milwaukee, Chicago, Joliet, Rockford, and other large manufacturing and consuming centers. Yours, truly, (Typewritten) Yawkey Bissell Lumber Co. Mr. Childs, answering the letter of March 23, wrote a letter to C. F. Rea, of the Yawkey-Bissell Lumber Co., on March 26, from which the following extract is taken: Replying to yours of the 23rd will state that a conference of some of the white-pine manufacturing interests will be held on Wednesday morning at 10 o'clock, March 30, to consider the proposition that you have made in relation to the Broughton list. It will be held in the office of the C. A. Smith Timber Co., Andrus Building, corner of Nicollet Avenue and Fifth Street. I hope that you will be there and represent your people and the Wisconsin Valley for I am inclined to think that some one who is thoroughly familiar with the situation in your territory will be 544 THE LUMBER INDUSTRY. needed to explain the conditions. Some of our people here are complaining that they are unable to obtain prices at the present list and I would not be surprised if some objection was made to a further raise. Try and be here. Letters to Mr. Childs complaining of the Broughton lists were also received from the J. S. Stearns Lumber Co., Brooks & Ross Lumber Co., and Goodman Lumber Co. Mr. Childs, in reply, sent them notice of the conference and asked their attendance. The attitude of these prominent members toward the price-list activities of association offi- cials is clearly shown by the following from the Brooks & Ross Lumber Co. letter of March 26: Our idea of how the Broughton list should be gotten out is that you, or some one in your office, should take representative lists from all districts and furnish Broughton with the highest prices on any of them, or at least have it a high average instead of the way it is done at present. As you know, the prices quoted by the present Broughton list are the lowest of any in effect and we do not think it is for the benefit of the manufacturers in general. The following is from the Goodman Lumber Co. letter of March 26: Now, it does not seem to us that this is fair to those members of our association who are getting prices so far in advance of the Broughton list or that we should encourage quotations of this kind in the future. Also, we recently sold a car of 8/4 #2 shop at $42 per M f. o. b. Goodman, while the Broughton list referred to above quotes this item at $37. Now this is all wrong, in our estimation, and hope that you will take this matter up with the Minneapolis members of our association and agree upon some plan whereby the Broughton lists in the future will more nearly represent the highest market values that individual members of our association are getting for their product. A second letter from them dated March 29, acknowledging the receipt of notice of the conference contained the following: Am very sorry to advise that the writer will not be able to be present at this meeting but we do hope that your committee can see it to their advantage to get out future lists based on the maximum prices shown in price lists of the members of our asso- ciation. In other words, we do not approve of the Broughton lists being issued in future showing in nearly all cases themini- mum values of lumber listed by members of our association. Believe that we made our position quite clear in our previous letter and as the Broughton lists generally are acknowledged to represent actual market prices for northern white pine and Nor- way and as a great many members of our association have and are still issuing lists that are higher than the Broughton lists on a great many items, it seems to us only fair and reasonable that the Broughton lists should be advanced and show the maximum prices for white pine and Norway quoted in the individual lists of the members of our association. PRODUCTION AND WHOLESALE DISTRIBUTION. 545 At the conference of all the districts of the association, which was held in Minneapolis on March 30 to discuss the matter, apparently the Minnesota members objected to any plan which would increase the prices in the Broughton list, claiming they had difficulty in securing even those prices. It seems that no decision was reached at the Minneapolis confer- ence, and a general conference was called to meet in Chicago on April 16. Mr. Rhodes took a prominent part in calling these con- ferences. 1 The Flambeau Lumber Co., a nonmember, was specially invited. The feeling of the members that membership in the asso- ciation bound them to observe certain prices is shown in a Yawkey- Bissell letter of April 8 to Mr. Rhodes. Speaking of inviting the Flambeau Lumber Co. to the Chicago conference, the writer says: As you no doubt know, they have never belonged to the asso- ciation and have been more or less below the market for years and have caused all of us over here considerable trouble at times, as their prices were erratic and we could never tell where to find them. In fact they have been to the Wisconsin Valley what the Red River Lumber Co. 3 has been to the Minnesota Mills. To Mr. Rhodes's suggestion that the list of the Yawkey-Bissell Lumber Co. be taken as a basis for the Broughton list, Mr. Rea, of the Yawkey-Bissell Lumber Co., objected in the following letter, dated April 8, 1910, which clearly shows the general use made of the Broughton list: We will be pleased to attend the conference in Chicago on Saturday the 16th, and have written to several of our Wisconsin Valley friends asking them to be there if possible. I think it would not be a good idea to publish the Broughton pocket list in accordance with our list as such a publication would make the Broughton published list absolutely worthless and none of us would then claim that it was market prices for northern-pine lumber. If we arrange to publish the Broughton list carrying the maximum prices shown by individual lists published by various members of the association or showing average maxi- mum prices, we then could all claim that the Broughton pocket list was the market prices of northern-pine lumber and such a list would no doubt be accepted by the handlers of lumber whom we are trying to reach, i. e., the commission salesmen, whole- salers, who seldom have money invested in lumber stocks, small pine manufacturers, hardwood and hemlock manufacturers who usually have some pine to sell and mills not members of the •Mr. Childs writing to Mr. Rea on Apr. 9, said: I was not aware that Mr. Rhodes had been sending out notices of the conference to be held on the 16th as he asked me to do that and if I had known that he was doing the same of course, it would have been unnecessary for me to repeat it. However, no harm has been done and you will be twice notified. 1 A comparison of the prices taken by the Bureau agents from the invoice books of this company has been made with those of the other northern-pine mills from which prices were obtained. While there Is usually a marked uniformity between the prices of the other mills, the prices of the Red River Lumber Co. are often much below the general level. 25030°— 14 35 546 THE LUMBER INDUSTRY. association but who use the Broughton pocket list as their sell- ing basis. I wish you would consider these points and if possible decry any suggestion as to using any particular firm's individual list as the basis prices to be quoted in the Broughton pocket list. The Bureau did not secure direct information on the details of these conferences. In answer to questions of an agent of the Bureau, Mr. Childs stated that the complaint about the Broughton list arose from the fact that the Wisconsin mills could get a better price than the Minnesota mills because they were nearer Chicago and had a better freight rate. He further stated that the matter was never settled so far as he knew; that he did not attend or know of the Minne- apolis conference (though he sent out notices of same) ; that he did not know whether any change was made in the method of getting out the Broughton list; that he never had anything to do with furnishing copy to Broughton; that he did not know of the Yawkey- Bissell list ever being taken as the basis for the Broughton list; and that he did not know the results of the Chicago conference. Mr. Broughton claimed that he did not remember the circumstances connected with the criticism of his list in March, 1910, and that he made no change in the method of getting out his lists as a result of such complaints, even claiming that his method has always been the same since the price-list committee was abolished. The apparent casuistry of the attitude of Messrs. Childs and Brough- ton is explainable on the ground that all this price-list work was not to be considered " officially " an association matter, notwithstanding the real activities of Mr. Childs, and the arguments used in the letters of the Wisconsin manufacturers. This is also indicated in the follow- ing extract from a letter, dated April 9, written by Mr. Childs to Mr. Rea: There can certainly be no objection that I can see to inviting the Flambeau Lbr. Co. or any other pine manufacturer to that conference. It is well understood that it is not an associa- tion affair and should not be considered in that light. I have written the Flambeau Lbr. Co. to be there and sincerely hope that they will send a representative. Note your remarks in relation to market quotations and think they are all right. One of the objects of this meeting, I presume, will be to discuss and straighten out that question. That the Chicago conference of April 16 had some effect on the price-list situation is indicated by the fact that a number of companies got out new lists about this time, and there was a Broughton Standard Price List issued for May 2, 1910. The Bureau has no copy of this Broughton list, and the following table shows a comparison made PRODUCTION AND WHOLESALE DISTRIBUTION. 547 between the C. A. Smith Lumber Co. list, of April 25, 1910, seven other "individual" lists: with Company issuing list. Date of list. Items in common with Smith list. Corresponding items on which the prices are identical with the Smith list. Corresponding items on which the prices are different from the Smith list. Crookston Lumber Co Nichols-Chisholm Lumber Co . Park Rapids Lumber Co Bovey-De Laittre Lumber Co. Carpenter-Lamb Co Bhevlin-Mathieu Lumber Co. . Red River Lumber Co.i 1910. Apr. 27 ..do May 2 May 10 May 4 Apr. 27 May 12 353 353 375 331 364 353 365 353 353 374 330 362 342 338 1 1 2 11 27 ' Comparison was made with the blue-ink list prices of this company, and not with the red-ink discount prices. (See p. 553.) The following letter from the Itasca Lumber Co. shows that the company list, dated March 1, was the same as the Broughton list of March 8, that the company was in a great hurry to get the new lists out (this was three days after the Chicago conference), and that Broughton was asked to "see that these prices are in line; call us up, if not so." [Letterhead of Itasca Lumber Co.-Deer Eiver Lumber Co.] Minneapolis, Minn., 4/19 — 1910. A. L. Broughton & Co., City. Gentlemen : Please get out for us at once a new price list with advances and reductions, per enclosed memorandum, over our list of March 1st, 1910, series 3500, your list dated March 8th, 1910. We wish our new series to begin with # 3600 for the f . o. b. and then 3512 for the "E" or 5(S 1st, 3514 for the "F" or 60 list and so on. In addition we have been getting more lists than we need of late and you make [may] reduce the number that you last printed as follows: #3512 3514 3516 3518 3520 3522 3626 3630 3638 3648 3650 3652 5$ 6* 7* 8* 9* 10* 12* 14* 18* 23* 24* 25* 100 Less.1 75 ( 50 t 50 t 50 i 75 i 50 t 75 i 125 1 75 1 125 i 150 t New series #3600.— Date same April 14, 1910. Kindly hurry this work out and call us by 'phone if you do not fully understand foregoing. Yours, truly, Itasca Lbr. Co. W. Engel. (Handwritten) See that these prices are in line; call us up, if not so. 548 THE LUMBER INDUSTRY. The following appeared in the Minneapolis news of three different trade papers at this time and show the grounds on which the lumber- men justified the advance: The market at this time presents a sufficiently healthy con- dition to warrant wholesalers preparing and issuing new price lists, which when compared, show about the following revi- sions. [List of price revisions followed.] (Mississippi Valley Lumberman, May 6, 1910, p. 38.) For the second time within two months, new white-pine lists have gone out from the mills here and elsewhere in Minnesota, and Wisconsin. Again the list is only a partial advance and revision, but it shows the tendency of the market, as in nearly everything the trade is now getting the full measure of the new list. (The Timberman,_May, 1910, p. 49.) Finding that dimension is getting very scarce in their dry stocks, and can not be replaced with new lumber in shipping condition for about sixty days, the white-pine manufacturers of this territory have issued lists under date of April 26, putting up the prices all the way from 50 cents to $2 a thousand. This follows pretty closely on the advanced list of February, but lumbermen here are sure that the advance will be maintained and is fully-justified by conditions. (West Coast Lumberman, May, 1910, p. 621.) The Bureau has a large quantity of information which shows that the conditions in regard to price-list activities, already described in considerable detail, have continued down to the present time. Nu- merous letters show the efforts of Secretary Childs to convey the impression that no association list was issued. He usually suggested the use of the Broughton list, as representing the actual market con- ditions, but on some occasions, when there was not a late Broughton list, he sent to his correspondents the Northland Pine Co.'s list. In fact, there is some evidence to indicate that this company's lists became the model for other lists, in the same manner as the C. A. Smith Lumber Co.'s lists had previously served, and that it was, at least in 1911, recognized as the standard to be followed by the other members; and that it formed the basis of some of the Broughton ■standard price lists. Under date of January 23, 1911, the Virginia & Rainy Lake Co. wrote to Secretary Childs as follows: I note your notice to the members of the association on changes of prices. I call your attention to the item of 2" lath. My copy reads $15.50 basis. I think it is very important that this be rectified so that the different members will know what we are driving at. In reply the secretary wrote on January 25, as follows: I do not know what you refer to in your above-quoted letter. I have not sent out any notice to the members of the associa.ion on changes of priees. Neither do I expect to as the association PRODUCTION AND WHOLESALE DISTRIBUTION. 549 has not for some time made any quotation whatever on prices. It may be that you refer to the enclosed price list of the North- land Pine Co. that we mailed for them by our addressograph. Can see nothing in that, however, referring to $15.50 lath. Kindly explain. Writing to another member on January 28, 1911, the secretary said: In relation to prices will say that as an association we have not had anything to do with prices for several years. I under- stand that a slight advance has been made by some of the pine manufacturers and that the Northland Pine Co. has sent out new lists that fairly represent the asking prices that now prevail. I think that this hst has been generally adopted although I do not know about that for certain. Do not think that there will be any change from that hst immediately although conditions point to still further advances in the near future. A comparison has been made of the prices shown in "Broughton's standard price hst, revised February 1, 1911," with ten "individual" lists issued at about that date. The results are shown in the follow- ing table: Company issuing list. Date of list. Items in common with Broughton's list. Corresponding items on which the prices are identical with the Broughton list. Corresponding items on which the prices are different from the Broughton list. 1911. Jan. 18 Jan. 25 ..do 346 346 346 346 346 346 346 346 346 309 346 346 346 346 346 346 346 342 335 289 Feb. 1 }..do.i... Feb. 15 Feb. 20 Feb. 1 ...do Thief Eiver Falls Lumber Co Burkholder Lumber Co Grand Forks Lumber Co J. Neils Lumber Co 4 C. A. Smith Lumber Co 11 Bovey-De Laittre Lumber Co ...do 20 1 Joint list. These two companies are controlled by one interest . If the association through its secretary had nothing to do with prices, it is a little peculiar that prominent members sought price information from him. As shown by the statement above, there was a remarkable uniformity in the price lists of a number of prominent concerns. It is not reasonable to suppose that this was a mere coin- cidence. There is evidence that at this time the lists were the result of price conferences, similar to those already described. For example, correspondence between Secretary Childs and Mr. Rhodes, February 21, 1911, indicates that the latter was instrumental in bringing about such a conference. On March 7, 1911, Secretary Childs sent out a call for a conference to be held in Chicago on March 16 "to discuss market conditions and subjects that may be of interest to the trade." 550 THE LUMBER INDUSTRY. A copy of this letter was sent to 26 of the most prominent northern- pine manufacturers. The following letters show clearly that the association officials, the members, and Broughton were still engaged in the uniform-price list activities, and that the remark of Mr. Childs, "I suppose you are aware that the association issues no price list," is put in as a caution- ary measure. The first letter is from Mr. Bissell to Secretary Childs. [Letterhead of Yawkey-BisseU Lumber Co., Arbor Vitae, Wis.] Mar. 29, 1911. Mr. H. S. Childs, Sec'y., Minneapolis, Minn. Dear Slr: I understand that on or about Mar. 18th a new list was issued covering the advances and changes recommended at the Chicago conference and thought you had handed me a copy of such list when I was there, but find that the one I brought home is North Land Pine Co.'s Feb. 1st list. At least prices are the same as in the Broughton Feb. 1st. Will you kindly advise if such new list has been issued and send us copies of same. Also if Broughton got out a new list covering these advances will you kindly ask him to send us a copy of same and oblige, Yours respectfully, Yawkey-Bissell Lumber Co. W. H. Bissell, Secy. Secretary Childs replied as follows: March 30, 1911. Yawkey-Bissell Lbr. Co., Arbor Vitae, Wis. Gentlemen : Your letter of the 29th instant in which you say that you took home from here a Northland Pine Co.'s basis price list of February 1 and would like their later list, received and noted. I do not know where you got the Northland Pine Co.'s Feb- ruary 1 list, as the only lists we have issued by that company are dated January 18 and March 20. I suppose you are aware that the association issues no price list and that whenever any is called for we send them a list of some of the manufacturers that we have on hand. On March 20 we mailed you a copy of the Northland Pine Co.'s f. o. b. Minneapolis list under date of March 20. That is the latest list that I know anything about and according to my understanding covers the recommendations you speak of in your letter of the 29th. I have just called up Mr. Broughton who informs me that his f. o. b. list is the only one that he is making separate from his regular book and that neither his f . o. b. list or the book will be in shape for distribution until some time next week. He tells me that his f. o. b. list is an exact copy so far as items and prices are concerned, of the Northland Pine Co.'s f. o. b. list of March 20, two copies of which I am enclosing. As I do not exactly understand by your letter whether you wish to have Broughton's book of delivered lists or whether you only wanted his f . o ^- - .... \,: m jQ T you. PRODUCTION AND WHOLESALE DISTRIBUTION. 551 Broughton says he will send you whichever list you want if you will write him. Yours, truly, H. S. Childs, Secretary. Mr. Bissell further wrote : [Letterhead of Yawkey-Bissell Lumber Co., Arbor Vitae, Wis.] * Mar. 31, 1911. H. S. Childs, Sec'y., Minneapolis, Minn. Dear Sir: We have yours of the 30th inst. enclosing Mar. 20th lists and thank you for same. The list we had of North Land Pine Co. was not dated, but as their prices were the same as the Feb. 1st Broughton list we referred to it under such date. In- asmuch as the Broughton delivered price books are not ready you need not place order for us as we will order our supply direct. Thanking you for the accommodation, Yours respectfully, Yawkey-Bissell Lumber Co. W. H. Bissell, Secy. The following letter of the Itasca Lumber Co. has a further bearing on the use of the Northland Pine Co.'s list: [Letterhead of Itasca Lumber Co.-Deer River Lbr. Co., Minneapolis, Minn.] Apr. 3, 1911. A. L. Broughton & Co., City. Gentlemen: Please get us up a set of lists along the basis of Northland Pine Co. list. Our series will be 3800. Asking your earliest attention, we are, Yours, truly, Itasca Lbr. Co., By Wengel. A comparison has been made between the prices shown in '' Brough- ton's standard price list, revised April 8, 1911," and three "independ^ ent" lists. The results are shown in the following table: Company issuing list. Date of list. Items in common with B rough- ton's list. Corresponding items on which the prices are identical with Broughton list. Corresponding items on which the prices are different from the Broughton list. Northland Pine Co 1911. Mar. 20 Mar. 25 Apr. 4 366 366 363 366 366 355 Crookston Lumber Co C. A. Smith Lumber Co 11 The following two letters between the secretary and a prominent member will illustrate Mr. Childs's caution in dealing with the price- list subject "officially": [Letterhead of Yawkey-Bissell Lumber Co., Arbor Vitae, Wis.] Dec. 29, 1911. H. S. Childs, Sec'y., Minneapolis, Minn. Dear Mr. Childs: We understand many, if not all, of the mills in your vicinity have recently issued a new list making 552 THE LUMBER INDUSTRY. some slight reductions from the old list price. We have received copies of some of these lists and are pretty well informed as to the changes or reductions that were made, but for fear that we may have overlooked some particular item or items would like to have you_ send us a list of just what these concessions or changes consisted of and greatly oblige. Also would be pleased to learn if all of the mills, or at least those that are members of the association propose to issue new lists based on prices as shown on the few lists we have received from mills in Minnesota. Yours, truly, Yawkey-Bissell Lumber Co. Schulz. Jan. 2, 1912. Yawkey-Bissell Lbr. Co., Arbor Vitae, Wis. Gentlemen : Your letter of the 29th ult. received and noted. I can not give you any authentic information on the subject that you inquire about. You are well aware that the associa- tion issues no price list and that so far as I am concerned I know nothing official, in fact there is nothing official in relation to these matters. I know that a good many of our members are getting out new lists but I have not received enough of them to obtain comparisons showing whether they are all on about the same lines or not. I do not suppose that there was any definite understanding as to just what items have been changed but presume that there is not very much difference. I have heard nothing about other parties getting out lists and do not know how many will do so. Yours, truly, H. S. Chjxds, Secretary. A comparison of the prices in "Broughton's standard price list, revised December 30, 1911," has been made with those of eleven "individual" lists. The results are shown in the following table: Company issuing list. Date of list. Items in common with Broughton list. Corresponding items on which the prices are identical with Broughton list. Corresponding it ems oo which the prices are different from Broughton list. 1911. Dec. 26 ...do 366 366 366 366 366 366 366 366 374 348 354 366 366 366 366 349 349 349 346 345 348 354 Dec. 30 |iDec.30 Dec. 20 .do 17 17 .do... 17 Deo. 28 Dec. 26 1912. Jan. 5 V Jan. 15 20 29 . i Joint list. These two companies are controlled by one interest. 2 These three companies are controlled by one interest but issue separate lists. PRODUCTION AND WHOLESALE DISTRIBUTION. 553 Notwithstanding Secretary Childs's cautious attitude toward the subject of the connection of the association with price-list activities, many prominent members of his association, in letters to him or to Broughton, continually persisted in referring to the result of these price activities as "association lists." This plainly shows how they disregarded the subterfuge and regarded the practical situation, when they wrote for the sake of clearness, in matters of business, and not with publicity in view. Numerous letters from nonmembers show that they considered the Broughton standard price list as being a regular association list. It is, however, not necessary to reproduce these letters or give fur- ther details of the manner in which this price-list work has been carried on. They all support the conclusion that the practices, of which a few instances have been described in detail, have been con- tinued by substantially similar methods down to the present day, and a very technical distinction is made between the actions and knowledge of the same persons, when acting as officers and members of the association and when acting as "individuals." The "individual" price lists issued by the northern-pine manufac- turers, under the conditions described in the foregoing pages, are what are known as "net" lists; that is, the prices shown are intended to be practically the prices at which sales are actually made. They differ in this important way from the "basis lists" used by manu- facturers of some other species, where the list prices are purposely too high, and discount -sheets are regularly issued, either through asso- ciation channels or by firms "acting as individuals," such discount sheets purporting to show the actual market prices. As far as the Bureau has been able to ascertain, the Red Eiver Lumber Co. 1 is the only firm engaged in the northern-pine manufacture that makes a practice of issuing, from time to time, discount sheets applicable to their booklet price lists and of circulating them among the lumber trade. Attention may also be called to the statements frequently made by association officials and members, who point out, in an endeavor to mislead the public as to the real conditions, that few "individual" lists are exactly alike in every price shown. The Bureau has found by examination that many of these "individual" lists have every price exactly alike, and most of the others examined have but a few out of 300 or more prices shown which are not identical for corresponding items. Such differences are made, partly because the company issuing the list may have an unbalanced stock of those particular items, and partly in order to mislead the public in regard to the 1 When questioned by an agent of the Bureau Mr. Childs stated that, as far as he knew, the Hed River Lumber Co. was the only firm that sent out such discounts. 554 THE LUMBER INDUSTRY. uniform price-list activities. This is shown in a letter which gave an account of a price conference (see p. 536), as follows: "It was the understanding that the firms may make any minor additions to this which they chose in order that the lists may not be entirely alike." It is also shown in a letter to the printer, ordering the list adopted at this conference, page 537: "In the matter of prices, be governed by the C. A. Smith list of Aug. 14th except on the item of #5 boards which please amend to $8.50." Section 8. Extracts from lumber-trade papers relating to white and "northern" pine. Note. — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber-trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news items from various cities will refer to the act and for several weeks or months will comment on its effect, adds to the credibility of the extracts. 1901. Mississippi Valley Lumbermen's Association price list, effective January 1, 1901. ' Chicago — American Lumberman, January 12, 1901, page 86. — The advance made last week by manufac- turers in trie upper Mississippi district was only a reflection of the conditions actually existing in that section; and whether there had been concerted action on the part of the manufacturers or not the advance would no doubt have taken place just the same, although possibly not as early as it now has. Minneapolis — American Lumberman, February 88, 1901, page 48— The most important feature in the white-pine market at this point during the past week has been the readoption of the old price list by the Mississippi Valley Lumbermen's Association. * * * Concessions and discounts which were given under the list during the latter part of last year are now a thing of the past. Prices obtained to-day are practically those printed in the list. Wisconsin Valley Lumbermen's Association list, effective March 5, 1901. Chicago — American Lumberman, March 16, 1901, page 74. — The recent action of the Wisconsin Valley association in pushing up prices on piece stun 25 cents and on boards 50 cents, in addition to the strength that is being shown at primary markets along Lake Superior and in the Menominee district, as evidenced by recent sales, will do as much to offset the disposition frequently shown at this season of the year to sacrifice lumber in order to make a sale as anything else. Minneapolis — American Lumberman, April 6, 1901, page 89. — An advance in white pine of 50 cents a thousand on some descriptions is not out of the question. In fact, it is understood the price-list committee of the joint associations has such an advance in contemplation, to be put into effect sometime this month, il conditions continue as strong as at present and seem to warrant it. Mississippi Valley Lumbermen's Association list, effective May 8, 1901. Minneapolis — Amer'can Lumberman, May 11,1901, page 40. — The joint price-list committee of the Missis- sippi and Wisconsin Valley Manufacturers' Associations held its meeting in this city to-day (May 8) and as a consequence of this meeting there is likely to be some dissatisfaction among a certain element in the two associations. * * * The conservative element controlled the action of the committee and it was decided to make only a few minor changes. These changes apply to finishing lumber, inch and thicker, and to lath. Fencing and siding, both of which have been very strong in this market of late, were left at former figures. Minneapolis — American Lumberman, June 89, 1901 r page 86. — Manufacturers at Minneapolis, however, are firm in predictions of an advance as soon as the price-list committee of the Mississippi Valley Lumber- men's Association shall meet. They point to the advance made by the Wisconsin Valley association, nd declare that the conditions in the territory controlled by the Mississippi Valley association are of such a decided nature that an advance can not but be anticipated. a Mississippi Valley Lumbermen's Association and Wisconsin Valley Lumbermen's Association Joint list, effective July 5, 1901. Minneapolis— American Lumberman, July 6, 1901, page 28. — The joint price-list committee of the Missis- sippi and Wisconsin Valley associations held a meeting Tuesday afternoon of this week in the Lumper Exchange, Minneapolis, and decided upon a number of advances to be recommended to go into effect 1 The various price lists are given their chronological place in these extracts. PRODUCTION" AND WHOLESALE DISTRIBUTION". 555 July 5. Preparatory to this meeting a number of the leading manufacturer held a conference in this city last Thursday. As a result of the conference it was decided to send out a notice to the trade stating that all piece stuff and timbers had been advanced 50 cents a thousand, this advance to go into immediate effect, all previous price lists on these descriptions to be withdrawn. This action on the part of individual manu- iacrnrers paved the way for positive action on the part of the price list committee. After a meeting which lasted two hours that committee decided to recommend a number of advances to go into effect July 5. The advances which they recommended are as follows: Ten and 12-inch Nos. 1 and 2 boards, advanced 50 cents a thousand. Advance in dimension and timbers made by manufacturers previously authorized and recommended to others. Finishing lumber advanced $1 a thousand, and prices of flooring leveled up. Minneapolis— American Lumberman, July 6, 1901, page 39. — The action of the price-list committee this week in advancing prices on dimension and timbers is certainly warranted and will not be the cause of any serious complaint from consumers of lumber, while on the new basis the grades advanced are now repre- sented on the price list by their aotual value. In some quarters it is felt that dimension should have been advanced to a still greater extent but the conservative element among the manufacturers controlled the meeting and prevented any radical change. Wisconsin Valley Lumbermen's Association list, effective August 3, 1901. Wausau— American Lumberman, August 10, 1901, page £0. — A meeting of the Wisconsin Valley Lumber- men's Association was held at the Bellis House in this city on Saturday (Aug. 3) last for the purpose of discussing trade topics in general and making a slight increase in the price of certain items. Minneapolis — American Lumberman, August. 10 7 1901, page 38. — The price situation continues very strong in this market and increased strength was given to it this week by the action of the price-list com- mittee of the Wisconsin Valley Lumbermen's Association. The Wisconsin list is now on a parity with the Mississippi Valley list, and with uniform prices in effect in the principal white-pine manufacturing districts, list quotations will be more closely observed in the future and manufacturers are less likely to make con- cessions. Minneapolis— American Lumberman, August 24, 1901, page 37. — Probably the greatest interest centers in the recent meeting of the price-list committee of the Mississippi Valley Lumbermen's Association. This committee, after going over the ground thoroughly, decided not to make any further changes in prices at this time. * Minneapolis— American Lumberman, November 2, 1901, page 57. — It is understood that some local handlers and manufacturers are already inclined to believe that the higher prices put in effect in lower Mississippi River territory ought to be extended to the entire district. The conservative element, however, dominates the association and will make no move to advance prices until all manufacturers shall feel that it is a necessity and that such advances when put into effect will be firmly maintained. Minneapolis— American Lumberman, November 16, 1901, page 40. — It is reported that manufacturers in the Wisconsin district are in some instances anticipating the work to be done soon by their price-list com- mittee and are naming higher than list prices on descriptions of which they are short. This has also been true on the Mississippi south of Minneapolis for some time. Mississippi Valley Lumbermen's Association list, effective December 8, 1901. Minneapolis— A merican Lumberman, December 7, 1901 , page 40. — With the advance in prices which went into effect this week it is anticipated that buying inquiry will be comparatively quiet for a few days, although these conditions will not continue long, owing to the condition of stocks with retailers and the continued free movement to the consumer. * * * Generally it is believed that the new list will be fully sustained by manufacturers in this territory. There has been a sentiment for some time among local manufacturers in favor of an advance, and more southerly manufacturers have maintained the advance (or two months. Wisconsin Valley Lumbermen's Association list, effective December 18, 1901. Minneapolis— A merican Lumberman, January 4, 1902, page 43- — Three advances in the list price have occurred and the new list adopted December 3 is being observed in nearly every section of the Mississippi Valley, with manufacturers and wholesale dealers in some quarters putting out lists 50 cents higher than the association prices, owing to the fact that they desire to curtail demand on certain specifications of lumber as much as possible. 1902, Minneapolis— American Lumberman, January 25, 1902, page 44-— Present conditions can not last long and it is only a question of days until further changes will be made in the list prices. At the latest these changes will probably occur at the time of the annual meeting of the Mississippi Valley Lumbermen's Association, February 18, but some of the least conservative of manufacturers would like to have them go into effect next week. If action were taken as soon as this there is no question that prices would remain as firm as they are to-day on the new basis. Minneapolis— American Lumberman, February 1, 1902, page 52.— Manufacturers who recently withdrew list prices nave sent out or are preparing to send out individual lists which will be higher than association prices. In most instances these mdividual lists are 50 cents higher on piece stuff and $1 higher on No. 1 boards and better. Among the members of the price-list committee this move of the manufacturers is being watched with interest and with their full approval. It is appreciated that the situation warrants higher prices than those given in the list, but the association has always followed a conservative course and is conservatively inclined now. It is felt that if the manufacturers place higher prices on their products and get the trade educated up to the point of paying these higher figures, there will be no difficulty a little later in making an advance and fully sustaining it. Minneapolis— American Lumberman, February 8, 1902, page 40.— During the past week a number of additional firms have adopted individual price lists raising the uniform prices from 50 cents to $1 a thousand on grades in which there is the greatest shortage. It is believed that by the first of March there will not be many firms left in the upper Mississippi Valley who will be selling on the present basis of uniform prices. Lumber is worth more than the association list calls for, and while it is a question whether the list will be advanced it is the common impression that action will be taken throwing the market open with the un- • derstanding that manufacturers shall charge as much more for their lumber than list prices as they may individually believe it is worth. Following the opening of the sawing season uniform prices will probably prevail again but until that time manufacturers are likely to make prices to suit themselves. Minneapolis— American Lumberman, February 22, 1902, pages 48-49— -The annual meeting of the Missis- sippi Valley Lumbermen's Association at Minneapolis this week failed to take any price action, notwith- standing that almost every member of the association has out a list higher in at least some items than the official list. The condition of stocks is such that it is practically impossible to make a price list which 556 THE LUMBER INDUSTRY. .will fit all of them; consequently each man with lumber to sell is putting his own price on it according to how his stock is assorted. The official figures are the minimum, but it is practically impossible to make a general list which under such abnormal conditions will do justice to the situation. Furthermore, when the new cut is ready some of the special prices will naturally come down to their proper level in comparison with others. Therefore it was thought best to leave the official list unchanged. * * * The recommen- dations made by the price-list committee at the annual meeting of the Mississippi Valley Lumbermen's Association are entirely in accord with the views of local white-pine manufacturers and jobbers. * * * Present conditions admit of no misconstruction being placed upon the action of the price-list committee. It was only after the question of an advance had been discussed at some length and all statistics relative to the stocks on hand nad been reviewed that the decision was reached. The fact was cited that many of the manufacturers are at present asking and securing prices in advance of the list on certain items. Wisconsin Valley Lumbermen's Association list, effective February 24, 1902. Minneapolis— American Lumberman, March 1. 190B, page 44.— Most of the firms in the Mississippi Valley have put into effect individual lists advancing the prices of certain descriptions of white pine 50 cents to $2 a thousand. * * * Owing to the fact that the price situation is very uniform here there is already con- siderable sentiment in favor of a universal list and it would not be surprising If the price-list committee of the association should hold a meeting inside of the next fortnight at which the advisability of adopting a uniform list shall be considered and at which it is possible that further advances may be made. Mississippi Valley Lumbermen's Association list, effective May 7, 1902. Wisconsin Valley Lumbermen's Association list, effective May 15, 1902. Minneapolis — American Lumberman, May 17, 1902, page 46. — The new list is being well maintained by all of the manufacturers in this section and values are on a firm basis. Minneapolis— A merican Lumberman, May 24, 1902, page 70. — The action of the Wisconsin Valley associa- tion at its meeting on May 15 in practically making the samo advances as had previously been put in effect here strengthens the market all through the white-pine belt and makes the manufacturers who were in- clined to take a somewhat weak view of the situation stronger in their views of the market. Mississippi Valley Lumbermen's Association list, effective August 6, 1902. Minneapolis— American Lumberman, August 9, 1902, page 45. — The action of the Mississippi lumber- men's association this week in revising the official list and bringing it down to date wilt meet with the approval of manufacturers in both the Mississippi and Wisconsin Valleys. Many in the trade were securing higher prices than the official list of May 7, because they had the lumber to supply the trade with and would not sell it below their views of the situation. It is probable that the issuing of a new list will therefore bring all the manufacturers closer together and will result in a uniform list throughout the two valleys. That the new list will be sustained goes without saying. Minneapolis— American Lumberman, October 4, 1902,page6S.— -Prices are firm in all lines and the individual action of Wisconsin Valley manufacturers in raising prices on dimension is encouraging to local men. This puts the two producing fields practically on even terms once more. Minneapolis— American Lumberman, December 20, 1902, page 49. — There seems to be little doubt that 50 cents will be added to the list price of white pine dimensions, 14 foot and over, before the annual meeting of the Northwestern Lumbermen's Association. Present market conditions are such that wholesalers who have to fill up their yards on this stock now have to pay in advance over the list price, and if they have to sell to the trade at list they will come out at the little end of the horn. 1903. Mississippi Valley Lumbermen's Association list, effective January 1, 1903. Wisconsin Valley Lumbermen's Association list, effective January 8, 1903. Minneapolis— A merican Lumberman, January 10, 190S, page 49.— Manufacturers are sending out the list adopted by the price-list committee and dated January 1, which, as told last week, is almost identical with the list of August 6. Minneapolis— American Lumberman, January 17, 1903, page 67. — Prices are firm and close to list on everything, while dimension sells at exactly list figures. Minneapolis— American Lumberman, March 21, 1903, page 51.— Prices are being maintained all along the line except on lath, which are selling a little under list. Wisconsin Valley Lumbermen's Association list, effective May 7, 1903. Minneapolis— American Lumberman, May 23, 1903. page 59.— The white-pine list of January 1 made by the Mississippi Valley Lumbermen's Association will be reaffirmed and issued June 1, by order of the price-list committee. Mississippi Valley Lumbermen's Association list, effective June 1, 1908. Mississippi Valley Lumbermen's Association list, effective August 25, 1903. Minneapolis— American Lumberman, August 29, 1903, page 61.— Bullish feeling predominated at the meeting of the Mississippi Valley Lumbermen's Association this week. The price-list committee prepared a new list, which was adopted. The net result of it does not amount to an mcrease, but it brings the list nearer to market prices. Dimension over 18 feet is advanced 50 cents, and piece stuff of 10-foot lengths is made the same price as 12, 14, and 16 foot. The other changes were reductions. Lath of all grades was dropped 50 cents; 6-inch No. 3 fencing in but 16-foot lengths was reduced 50 cents; D siding was brought down $1 and E siding 50 cents. Wisconsin Valley Lumbermen's Association list, effective September 16, 1908. Minneapolis— American Lumberman, November 7 190S,page 56.— Stocks are plentiful, with the exception , of low-grade boards which are now so scarce that almost list prices are being asked for them. Wisconsin Valley Lumbermen's Association list, effective December 19, 1903. PRODUCTION AND WHOLESALE DISTRIBUTION. 557 1904. Mississippi Valley Lumbermen's Association list, effective January 6, 1901. Wisconsin Valley Lumbermen's Association list, effective January 16, 1904. Mississippi Valley Lumbermen's Association list, effective March 8, 1904. Wisconsin Valley Lumbermen's Association list, effective April 22, 1904. Mississippi Valley Lumbermen's Association list, effective June 15, 1904. Minneapolis — American Lumberman, June 18, 190/ f , page 41. — The price list committee of the Mississippi Valley Lumbermen's Association held an all-day session here to-day (June 15) and decided on a number ol minor changes in the official price list. The following members of the committee were present: Chair- man Thomas Wilkinson, Burlington, Iowa; F. Wenzel, Minneapolis; J. D. Bronson, Stillwater, Minn.; W. Hayes Laird, Winona; George H. Chapman, Eau Claire, wis.; F. W. Mueller, Davenport, Iowa; H. C. Hornby, Cloquet, Minn.; C. L. Case, Chippewa Falls, Wis.; I. R. Goodridge, Minneapolis. Minneapolis — St. Louis Lumberman, July 15, 1904, Page S5. — White-pine men are keeping pretty well up to their list for June 15, as there is little dry stock, and it does not pay to cut prices in order to move green lumber, paying the overweights. Minneapolis— American Lumberman, August 27, 1904, page J7.-;PriCes are not very strong and little change in the present list is expected from the meeting of the price-list committee next week. Mississippi Valley Lumbermen's Association list, effective September 1, 1904. Minneapolis— St. Louis Lumberman, September 1, 1904, page S6.— The list is being scaled at least tl a thousand on most items. Wisconsin Valley Lumbermen's Association list, effective September 2, 1904. Minneapolis— American Lumberman, September 3, 1904, page 57.— A good brace was given the market this week by the gathering of the manufacturers at the meeting of the Mississippi Valley Lumbermen's Association. The conference developed that the stocks on hand are no larger than those of last year, while there is a prospect for good business this fall and next spring. The price-list committee followed the generalfeeling when it decided not to make any change in the present list. The old list will be reprinted under date of September 1 and mailed to the trade. Mississippi Valley Lumbermen's Association list, effective November 22, 1904. Minneapolis — St. Louis Lumberman, December 1, 1904, page SO. — New white-pine prices were fixed at a joint meeting in this city (Nov. 21 and 22) between the price-list committees of the Mississippi and the Wisconsin Valley Lumbermen's Associations. * * * No. 4 boards, which have been well cleaned out by the demand for box lumber, are raised to S13 straight, and a list price of SS.50 is fixed on No. 5 boards. Advances of 50 cents to $1.50 are made on certain items in the dimension list. No. 1 and No. 2 boards are raised 50 cents to tl, and No. 3 shop is advanced $2. The increased prices took effect November 22. 1905. Wisconsin Valley Lumbermen's Association list, effective February 7, 1905. Mississippi Valley Lumbermen's Association list, effective February 14, 1905. Minneapolis— American Lumberman, February 18, 1905, page 75. — The new list adopted at the meeting of the Mississippi Valley Lumbermen's Association February 14 is being mailed. While it contains few changes it has a marked strengthening effect on the market, as it comes in anticipation of an active spring trade, and with white-pine stocks somewhat lower than a year ago. The present tendency is to quote full list on practically everything. Wisconsin Valley Lumbermen's Association list, effective May 8, 1905. Mississippi Valley Lumbermen's Association list, effective May 8, 1905. Minneapolis— American Lumberman, May B7, 1905, page 70. — The market is strong and the list of May 8 rules in practically all sales made. Manufacturers are satisfied that they can secure their price and so are not disposed to make concessions except in the case of surplus items. Minneapolis — American Lumberman, July 1, 1905, page 66. — A meeting of the price-list committee of the Mississippi Valley Lumbermen's Association will be held soon after July 4 to revise the official list of white pine of May 8 so that it may conform with the suggestions of the manufacturers who favor advance in prices of dimension lumber. A necessity for this is found in the large difference between the price of 1-inch and 2-inch lumber, making the selling of the latter unprofitable. Mississippi Valley Lumbermen's Association list, effective July 13, 1905. Minneapolis— American Lumberman, July 22, 1905, page 65.— The new list of July 13 is being sent out to the trade, and is being generally adhered to. Wisconsin Valley Lumbermen's Association list, effective August 11, 1905. Mississippi Valley Lumbermen's Association list, effective September 15, 1905. Wisconsin Valley Lumbermen's Association list, effective September 16, 1905. Chicago— American Lumberman, September 2S, 1905, page 61. — At a meeting held on Friday of last week Wisconsin manufacturers recommended an advance of 50 cents on 4-inch and wider No. 2 and No. 3 boards and strips and their products; 50 cents on 4 and 6 inch D siding and tl on all piece stuff and timbers. It is understood that local values are being revised in consonance with the northern advance. Minneapolis— American Lumberman, September SO, 1905, page 65.— Prices are holding up firmly to the new list and as stocks are not piling up about the mills it becomes evident that a light supply will be carried over the winter. 558 THE LUMBER INDUSTRY. Wisconsin Valley Lumbermen's Association list, effective October 4, 1905. Minneapolis — American Lumberman, October SI, 1905. — Prices continue strong and on big lots that are badly wanted the buyers are bidding up above list in many cases. Mississippi Valley Lumbermen's Association list, effective November 8, 1905. Minneapolis, Minn., November 15.— A new white-pine price list has gone out to the trade under date of November 8; it shows a general advance on dimension, boards, and fencing. The raise is merely in con- formity with market conditions. Manufacturers at outs'de points had been putting out independent lists at prices higher than the association basis list and a short time ago prices were raised by some of the Minne- apolis manufacturers. Stocks at this time, when they are usually the most complete of any season of the year, are comparatively light and broken and manufacturers are realizing that their lumber is worth more money than they have been getting. This fact has been forced on them by the action of large buyers who have come in with bids running prices up above the list or are sending in orders without specified price showing that the principal consideration with everybody is to get the lumber. The new list merely brings prices on the official card up to those being secured by the manufacturers. (American Lumberman Nov 18, 1905, p. 47.) Wisconsin Valley Lumbermen's Association list, effective November 23, 1905. Minneapolis— American Lumberman, December 16, 1905. — "White-pine manufacturers are not in the least alarmed over the situation and are maintaining prices strictly. Their stocks are so broken and light for the time of year that they are not in any hurry to dispose of their lumber. A rumor is abroad to the effect that white pine will go up another dollar in January. 1906. Northern Pine Manufacturers' Association list: Mississippi Valley district, effective January 28, 1906; Wisconsin Valley district, effective January 25, 1906. Minneapolis— American Lumberman, January 27, 1906, page 70,— Absolute confidence in values is shown by the action of the price-list committee of the new Northern Pine Manufacturers' Association, which at its meeting this week advanced the Mississippi Valley list on nearly all items. Piece stuff and fencing went up 31.50 a thousand and boards 11. Minneapolis— West Coast Lumberman, February, 1906.— Northern-pine manufacturers have taken the lead again in raising prices. Their latest effort was pulled off January 23, and was a general advance. Dimension of every kind was raised SI. 50 a thousand, and fencing the same figure. Boards of all grades were raised $1, except 8-inch No. 2, 18 and 20 foot, which were raised $2. B and better select, all sizes, was raised $3, and No. 3 thick shop $2 a thousand. This advance was made by the price-list committee of the new northern pine association at its first meeting, and was followed by the Wisconsin Valley members with a similar advance January 25. Minneapolis— American Lumberman, February 17, 1906.— Manufacturers all over the northern-pine territory are experiencing a continuance of the brisk buying movement of January, though it has been somewhat lighter since the advanced list went out. In some quarters price seems to make no difference. The volume of trade is the best vindication of prices, which are holding firm on all lines. Northern Pine Manufacturers' Association list, Wisconsin Valley District, effective March 5, 1906. Northern Pine Manufacturers' Association list, universal for Mississippi and Wisconsin Valley dis- tricts, effective March 15, 1906. Minneapolis— Mississippi Valley Lumberman, March 16, 1906.— There will probably be an advance in white pine this week and the price-list committee of the Northern Pine Manufacturers' Association is in session at the present writing. The deliberations will undoubtedly be carried beyond the hour when this publication will go to press. Minneapolis — Mississippi Valley Lumberman, March 16, 1906. — :Tbe price-fist committee of the North- ern Pine Manufacturers' Association held a meeting in Minneapolis Thursday afternoon. After hearing reports from the different members the committee found the market $1 above the list of January 23 on dimension, boards and fencing. Two dollars on inch and thick finish and flooring. One dollar on siding except " e" siding. Twenty-five cents on white-pine lath, 50 cents on number 2 and mixed lath and 25 cents on 32-inch lath. These advances were accordingly recommended. The committee also revised the table of weights as found necessary by the work of the association in weighing lumber. A subcommittee was appointed and directed to take up the work of harmonizing the phraseology of the price list heretofore published by the Mississippi Valley Lumbermen's Association with that of the Wiscon- sin Valley Lumbermen's Association. Minneapolis— Mississippi Valley Lumberman, March SO, 1906. — Everything is commanding the new list price. In fact, the conditions were such before this list received recognition by the association and it was but a reflection of actual conditions. The present-price basis of white pine was established by the buying faction of the market. For weeks buyers had thrown away all bargaining for prices and freely ofiered any- thing which would bring the stock. Above the list was common at that time and the present list is con- ceded to be only a fair representation of the real strength of the market. Minneapolis— Pacific Lumber Trade Journal, April, 1906, page 19,— New lists have been adopted within the montn on northern pine and hemlock. Each is a general advance over former values. The price-list committee of the Northern Pine Manufacturers' Association met for the first time March 15, and after an all day session recommended an entirely new list. It is a universal list on northern pine, taking the place of the old fists of the Mississippi Valley and Wisconsin Valley associations, and in its form is a com- promise between the two. It will De used by the Mississippi Valley and northern mills on the basis of rates from Minneapolis, and the Wisconsin Valley mills will base rates under it from Wausau. * * * Compared with the Mississippi Valley list of January 23, which was also a general advance, the list of Mn rob 15 raises the different items of the list as follows. * * * The new list was not in any sense raising prices, as prices were already raised. Minneapolis— Mississippi Valley Lumberman, April 20, 1906, page 35. — The list is the basis, but nearly every transaction has a price of its own which is invariably considerably above the list. PKODTJCTION AND WHOLESALE DISTRIBUTION. 559 Minneapolis— West Coast Lumberman, May, 1906, page 599.— There are some signs of weakness in the northern-pine market that are rather surprising. * * * There is a feeling that the present list is too high and that the advances made in M#rch were not justified. It is known that a good many buildings planned for this season have been abandoned for the present because of the cost running higher than ex- pected. Minneapolis— West Coast Lumberman, June, 1906, page 67,2.— Some of the northern-pine mills have been sending out independent lists increasing the association list prices, which is a pretty effective answer to the talk of an impending drop in prices. Minneapolis — Mississippi Valley Lumberman, June 15, 1906, page 37. — There is a strong spurt of trade in white pine this week. The encouraging feature about it is that the orders are upon the list basis in price and all show a good, healthy condition of business throughout the country. Minneapolis— West Coast Lumberman, August, 1906, page 822B. — It looks as though there would be another advance after the semi-annual meeting of the Northern Pine Manufacturers' Association this month. Prices are already above the association list on some items, and dimension is not considered high enough as it stands. B rough ton's standard price list, effective August 8, 1906. Minneapolis— Mississippi Valley Lumberman, August 10, 1906, page 3^.— The price situation in white pine is very stronj?. Lists are coming out from the different manufacturers which show a tendency to advance on many items. This is evidently warranted by the low stocks and the persistent demand. At the present writing these lists show number 3 boards at an advance of about 50 cents. There is a reduction noted on number 5 boards of $1, but that is not surprising, as this material has generally sold about where this reduction would place it. Six-foot fencing is generally quoted from 50 cents to 81.50 off the old list but on most other lengths above this an advance of from 25 cents is regular. The fact can not be disputed that the tendency of prices is upward, and while some reductions are found in the new lists, it is nothing more than an evening off on items which have generally been selling below the list quotations. Minneapolis— Mississippi Valley Lumberman, August $4, 1906, page S5. — The reports from the head of the lakes show that the lumber shipments from those ports have been the heaviest this season ever recorded. The price in the market to which these mills cater is now from $2 to S3 above the Minneapolis list and this stock is practically sold for the balance of the season. Broughton's standard price list, dated December 8, 1906. Minneapolis— American Lumberman, December 22, 1906, page 77.— A steady inquiry from buyers, unusua at this season, furnishes ample proof of market conditions to justify the recent advances in northern-pine prices. Minneapolis— Mississippi Valley Lumberman, December $8, 1906 ? pages 88-84* — The price situation is fully as strong as expected. The recent advances made by the different manufacturers are being fully realized. Manufacturers who were conservative in their last list are now understood to be considering the issuing of new ones in which they will come up to the highest figures found in other lists. The price situation/nowever, is largely determined by the conditions of the stock at the mill from which the list is issued. 1907. Minneapolis— Mississippi Valley lumberman, February 22, 1907, page Jfi. — An advance of SI will be the reading on the new lists which will emanate from the northern-pine mills next week. Not that the advance has not already taken place, but in order to make the list quotations mailed out by the different mills harmonize more closely with what the manufacturers are now receiving for their product. Demand has been centralizing steadily from week to week upon the northern mills until it has reached a point where the stocks aommand values from a dollar to a dollar and a half above the old lists issued by the mills in January. Minneapolis— Mississippi Valley Lumberman, March 22, 1907, page 85.— As was predicted in last week's report, many of the larger manufacturers of pine have advanced the price of piece stuff 50 cents within the last few days and are finding no difficulty in securing orders at the new quotations. Minneapolis— American Lumberman, March 28, 1 907.— Dimension promises to be scarce and most of the mills have advanced it 50 cents over the prices sent out March 1, which means $1 advance over the former prices. Minneapolis— Mississippi Valley Lumberman, May 81, 1907, page 85. — Prices are firm to the limit, as conditions should warrant. Many items on the list are selling at a premium and there is not an item that cannot command a full list price. Minneapolis— American lumberman, June 29, 1907. — Little effort is being made by the sales managers of the local mills to pick up new business. They have small stocks of dry lumber, and wet weather has held back the new cut somewhat. They are willing to sell at full list, with premium on some items, but rather than make concessions will hold their lumber for the business that they know is coming. Minneapolis— American Lumberman, July 13, 1907. — Several manufacturers have issued new lists lately to protect themselves, and a stiffening of prices on the upper grades is likely to bring about a general revision of the list before long. On account of broken stocks it has been necessary to ship considerable lumber green. The manufacturers hate to do it on account of destroying the balance of their new stock v* ■ 7 in the season ; and have demanded prices that would at least cover the extra freight. The full ir " eman< 5ed on -nearly everything, and a number of items are at a premium. . Minneapolis— Mississippi Valley Lumberman, July 19, 1907 . page 35.— Quite a number of concerns have Bs ued new lists advancing prices on a number of items. Minneapolis— Mississippi Valley Lumberman, July 26, 1907, page 39.— The manufacturers of white-pine lumber are now getting out new lists, which show considerable advances on certain items. * * * The recent advances on pine were principally confined to the following items. The figures of the increase here given can be taken as the average advance. Lists have been issued showing higher or lower quota- tions, but these will show the average general increase: 4-inch and wider, 10 feet and longer No. 1 $1.00 8 and 10 inch. No. 3 boards, 10 feet and longer 50 M. W. No. 3 boards, all lengths 50 4 and b inch D flooring and C Norway flooring 1. 50 8-inch and wider D select and C and better Norway 1. 00 D siding 1. 00 E siding 2.00 Battens, per 100 L. F 05 There is no doubt that these prices will be held firm. Minneapolis— American Lumberman, July 27, 1907 .—There is some adjustment of prices going on, and all the mills are getting above the list for several items, especially in the upper grades. The entire list is firm. 560 THE LUMBER INDUSTRY. Broaghton's standard price list, revised August 12, 1007. Minneapolis — West Coast Lumberman, August, 1907. — There is no general list now, but all the manu- facturers have put out new lists raising prices on a number of items. All the better grades have advanced 50 cents to $2 a thousand, and even No. 3 boards have developed strength. Finish, siding, and flooring are all up. While not shown on lists, low-grade stuff is also advancing, and a shortage developed in dry No. 4 boards has sent the price up to 518 and beyond. ' Minneapolis— American Lumberman, October 1$, 1907. — Prices are unchanged and as far as any open quotations are concerned they are still firm at list. Minneapolis— American Lumberman, October 19, 1907. — A number of items are better than list and the outlook is good for placing all the lumber manufactured. 1908. Minneapolis— Mississippi Valley Lumberman, January 10, 1908, page 35.— The new list now being sent out seems to be accepted as final by the retailers and the lowest that will be issued in 1908, and they are acting accordingly. * * * Curtailment is still effective, and the supply of new logs promises to be about half of that of last year. As to lists, it now looks as though this is a list which will be effective for some time to come. The fact that other woods going to the same customers have strengthened since this list was issued would seem to indicate the timeliness of the move. As to the general effect of such a move, which is now well-known it would seem that a concession of from 7 to 10 per cent might not only be expected to create better feeling, but also make possible some building projects which have been hung up on account of the high prices of materials. As to prices, the trend of prices may. depend to a certain extent upon the demand. Evenly distributed buying will tend to secure the most favorable prices for the buyer, in case for any reason any deviation is made from the list. Geographic location has some bearing also, as some mills in the north make the same price at the mill as at Minneapolis. All lists are not the same. Minneapolis—- American Lumberman, January 11, 1908. — Dealers report very quiet trade, but it has picked up somewhat as a result of the new lists, which a good many retailers have been waiting for. Some of them were ready for stock and put in orders when they received the new lists, knowing there would not likely be any further reduction at this time. Most retailers are holding back, however, and January promises to be more quiet than usual. The new reduced lists are generally adhered to, and so far as known there is no cutting under them. B rough ton's standard price list, revised January 18, 1908. Minneapolis— American Lumberman, February IS, 1908, page flff.— With hemlock and yellow pine still being offered at low prices, white pine's territory is restricted and there is little doing among retail yards. Prices are maintained at the January list with a few exceptions. Minneapolis— American Lumberman, February £9, 1908, page 83. — The January lists are not being stiffly maintained, as several companies are offering concessions on a part of the list to'move their stocks, hut the competition from other woods is not as sharp as it was, and as soon as spring buying starts, the market is expected to take a better turn. Minneapolis — Mississippi Valley Lumberman, March IS, 1908, page 41. — Demand here seems slow, ac- counted for by some by saying that the consumer expects to get the full benefit of the recent drop in lumber, and is much disappointed at the figures quoted him, and very frequently leaves without buying. Minneapolis — West Coast Lumberman, April, 1908, page 488— There is good evidence that the retailers are holding off as part of a concerted effort to pull down prices. The general public has been informed by the newspapers that lumber is down, and customers expect substantial reductions in their bills. Yards that were stocked up before the price began to drop, and that includes most of them, have been caught for heavy reductions in profits, and now they are trying to get it back by forcing the lowest possible prices on thenew stock. Minneapolis— West Co%st Lumberman, June, 1908, page 6S1. — The trouble is that the country trade has become sore on high-lumber prices because of the advances of the last four or five years, and consumers still think prices are too higb, so they are disposed to hold off in the hope of a further drop. The fact is that in many country districts the retail dealers have not reduced their prices as much as the wholesale price has fallen off, which is from S3 to $5 on pine and $6 to $6.50 on hemlock, compared with a year ago. K rough ton's standard price list, revised August 6, 1908. Minneapolis— Mississippi Valley Lumberman x August 7, 1908, page 39. — Practically all the northern-pine concerns sent out new price lists this week which correspond more closely to the prices that lumber has been selling for of late than do the lists issued last January. In accordance with the strength shown in the higher grades of inch lumber this list shows a substantial advance over that of January 18, 1908. Minneapolis— Mississippi Valley Lumberman, September 25, 1908, page 39. — Practically everything in grades of number two boards and better is selling at the August list and in many cases much better than that and there is a disposition in some places to get out new lists showing a further advance. Minneapolis— Mississippi Valley Lumberman, October 16, 1908,pageS9. — Prices vary considerably among dealers here. Some concerns are holding firmly to prices to which they advanced two months ago. That means straight list for number two and better and from 50 cents to $1 off on dimension. Some others, however, are granting concessions on these prices which cut into the market seriously. Minneapolis— Mississippi Valley Lumberman, December 4 } 1908 } page 39.— Prices are showing actual ad- vances on all items from number three boards up. The list price is steadily extending to items which previously have been selling off the list. From 50 cents to $1 off the list are about the limit of concessions on anything above the very lowest grades. . Large concessions amounting to what may be called price cutting are disappearing very rapidly and the bargains of a few weeks ago have about disappeared. Minneapolis— American Lumberman, December IB, 1908.— All the upper grades are selling firmly at the list and concessions on low-grade stock are fast disappearing. An active buying movement is expected to begin right after the retail inventories have been taken and some of the local companies have decided to put out new lists in advance of this demand, raising prices all along the line 50 cents to $1. Minneapolis— Mississippi Valley Lumberman, December 18, 1908, page 40.— New lists which usually appear in January will probably follow closely the trend the market has taken during the last few months. The strength of all the higher grades which have advanced to prices higher than the August list will very likely be advanced in the printed lists. Minneapolis — American Lumberman, December 19, 1908. — New lists with advanced prices on everything better than No. 3 boards will be issued by most of the manufacturers to take effect about January 1. Minneapolis— Mississippi Valley Lumberman, December 25, 1908, page 39.— Prices are becoming more firm and more uniform. Concessions are so rare that buyers are beginning to order without first getting prices from every dealer in the business. On the othor hand the sellers are not making great effort to move their lumber. *.iil- PRODUCTION AND WHOLESALE DISTRIBUTION. 561 With the stiffening up of the higher grades the lower grades are beginning to show a little more strength. It is quite clear that the new January lists will show advances of $1 a thousand on practically everything included in No. 1 and better inch stuff, as well as on small timbers. The price of 12 and 14 foot dimension will very likely be advanced to the present price of the 16-foot lengths. Lath are not very plentiful. White-pine lath are selling practically at list, while No. 1 mixed lath are bringing prices from 25 to 50 cents off the August list . 1909. Minneapolis— Mississippi Valley Lumberman, January 1, 1909.— New lists have begun to appear in this market to take the place of the list issued in August. Several advances are made on the new fist and one or two slight reductions. Practically all of the upper grades, including No. 1, and better, have been ad- vanced on an average of about $1. Small timbers nave been advanced 50 cents over the August list. The price of 12 and 14 feet dimension has been advanced to the price of the 16 feet length, making the list price of all lengths from 12 to 16 feet $18 a thousand. * * * It is believed by the manufacturers that this list represents current values very closely and is thoroughly warranted by the present condition of stocks in the manufacturers' hands and the indications which point to a better demand later in the season. It is quite evident that current quotations are working up very close to this list and each week seems to give the market a stronger tone. Minneapolis — American Lumberman, January 2, 1909. — All of the manufacturers in this territory have been making advances in price, bringing most of their items fully up to the August lists or above, and it is commonly understood that new lists will be out for January 1 showing a number of advances. Broughton's standard price list, revised January 9, 1909. Minneapolis— American Lumberman, January 16, 1909. — The new lists have been generally sent out to the trade and old lists recalled. The actual market is close to the new list. Minneapolis — Mississippi Valley Lumberman, April 23, 1909, page 89. — Prices on some items of number two and number three have weakened a trifle recently and there are some quotations out offering liberal discounts from the last list on many of these items, uppers of all kinds continue to hold firmly up to list and there is little prospect of any concessions appearing on those items on account of the very limited supplies in stock. Minneapolis— Mississippi Valley Lumberman, May 14, 1909, page 40. — It seems to be the growing opinion that cutting prices does not increase the business to much extent, and those concerns which are holding up strong claim to be getting their share of the business. Minneapolis — Mississippi Valley Lumberman, May 28, 1909, page 39. — Prices remain about stationary, with some concerns doing a good business at some concessions from the prevailing quotations, while others are holding up firmly with prices at the list or close to it on all the better grades. Minneapolis— Mississippi Valley Lumberman, June 25, 1909, page SS.— There are some items in low grade boards which are selling in places at more than $2 off the list. Broughton's standard price list, revised August 20, 1909. Minneapolis— American Lumberman, August 21, 1909, page 80. — An upward movement in high-grade lumber is chronicled this week in new lists which have been issued by most of the manufacturers. The lists are the first sent out since last January, and are a timely readjustment of printed lists to suit present market conditions. Low-grade boards, are reduced to correspond with the situation, Nos. 3 and 4 being cut II a thousand and No. 5 from 811 to 88. No change is made in dimension, but everything in the upper grades is advanced from 81 to S2 a thousand, including No. 1 boards, 8, 10, and 12 inches wide. The list on 8-inch No. 1 hoards, 16 foot, is now $30. While the new list is a little high on some low-grade items the market is stiffening and the list prices will probably represent actual conditions soon. Business continues coming in from railroads and other large concerns and the situation is easy. Minneapolis— American Lumberman, September 4, 1909, page 78.— City trade continues active and the price situation is lining up closer to the new lists right along. Minneapolis— Mississippi Valley Lumberman, September 24, 1909, page 40.— Practically everything in No. 2 and better is being held for list prices by the biggest manufacturers. On No. 3 and lower-grade boards some concessions are still being given even from the lower prices which the last list placed on these items. Minneapolis— Mississippi Valley Lumberman, October 15, 1909, page 89"— Actual advances recently, however, are not so characteristic of the market as the gradual disappearance of concessions among a few from the ruling prices of the majority of the manufacturers. New lists will be issued by some of the north- ern-pine manufacturers soon, readjusting some of the quotations on the August list in accordance with stocks on hand with possibly some advances on a few items of uppers. Broughton's standard price list, revised October 21, 1909. Broughton's standard price list, revised December 21, 1909. 1910. Broughton's standard price list, revised March 8, 1910. Minneapolis— Mississippi Valley Lumberman, March 18, 1910, page 39.— Prices are being held close to list and more or less inquiry coming in for lower grades and such class of stock as is now being carried by northern-pine dealers. . Minneapolis— Mississippi Valley Lumberman, April 15, 1910.— Prices quoted on northern pine at this time are strong and well up to the list. Broughton's standard price list, revised May 2, 1910. Minneapolis— Mississippi Valley Lumberman, May 20, 1910, page 40. — Prices are being held up to the last list and all. grades are snowing some movement. Minneapolis— West Coast Lumberman, June, 1910, page 707.— -Prices have held up well and while no revision is expected in the lists for some time, there is a stronger feeling and the items that have been weak are being held closer to list. Minneapolis— West Coast Lumberman, October, 1910, page 1035.— No change has been recorded in prices and none is likely for some time. The list is observed on some things, but not on the pine market as a whole. 25030°— 14 36 562 THE LUMBER INDUSTRY. Section 9. Comparison of list prices with prices of actual sales. The f . o. b. Minneapolis prices, obtained from records of actual sales, have been compared on Diagram 16, opposite this page, for a number of items, with the list prices based on Minneapolis. Prior to 1906 the list prices used were those officially issued by the Mississippi Valley Lumbermen's Association, and which also appeared in the "Brough- ton official price list" series. For a discussion of these lists, see pages 496-510. The list prices of March, 1906, are those promulgated by the Northern Pine Manufacturers' Association. (See pages 510-511.) The list prices from August, 1906, on appeared in the "Broughton standard price list" series. The discussion of the connection of these lists with the price activities of the Northern Pine Manufactur- ers' Association will be found on pages 524 -554, and as the evidence gathered by the Bureau shows that such Broughton lists were used, for all intents and purposes, in the same manner as the lists formerly "officially" promulgated by the association, no distinction has been observed in presenting them on the diagram. Attention may be called to the close correspondence between the list prices and those derived from the records of actual sales. In northern pine there is a closer correspondence between list and actual sale prices, for a long period, than for any other species investigated, excepting West Virginia spruce. Section 10. Proportion of different species included under the name of " northern pine." , The proportion of white pine which enters into the output of 1 "northern pine" varies with the different grades and the particular j condition of the mill. Generally speaking, inch finishing lumber and; C selects are all white pine; boards contain white pine, Norway, jack- pine, tamarack, balsam, and poplar, in varying proportions, and piece ; stuff is largely Norway pine, with a mixture of tamarack. The Bureau obtained definite information in regard to conditions at the mills of several of the principal producers. In order to con- ceal identity, the different mills will be referred to by letters. MILLS HANDLING "NORTHERN" PINE. MillA. Grade. Item. White pine. Norway pine. • Other ; woods. "1 Inches. Iby 10 Iby 12 Iby 12 Iby 12 4 and up 4 and up 2 by 4 2 by 12 6 by 6 Per cent. 100 40 30 30 26 20 Per cent. Per cent. 55 60 60 60 60 90 90 90 5 10 10 15 * J 10, Do Do iol • Diagram 16.— Comparison of Movement of Association List Prices and Actual Prices of White or "Northern" Pine on an F. O. B. Minneapolis Basis, 1901-1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 563 MILLS HANDLING "NORTHERN" PINE.— Continued. MillB. Grade. Item. White pine. Norway pine. Other woods. Inches. 1 by 10 and 12 Iby 12 Iby 12 1 by 12 Iby 12 4 and up 4 and up 2 by 4 6 by 6 Per cent. 100 100 90 60 70 SO 70 Per cent. Per cent. 10 40 30 10 20 8.5 SS 10 15 Do 15 Mill C. Grade. Kind of wood. Grade. Kind of wood. C selects Nos. land 2 boards White pine only. Not running over 50 per cent white pine; balance Norway pine. Dimension: 2 by 4 and 2 by 12. 6by6 Largely tamarack, mixed with Norway pine. Largely Norway with no white pine. Mill D. White pipe only. White pine, 85 per cent; way, 15 per cent. Nor- Norway, 75 to 80 per cent; other woods, 20 to 25 per cent. Mill E. White pine only. Boards and dimen- sion. 30 per cent Norway; re- mainder tamarack, cedar, spruce, etc. MillF. Finishing and se- lect. No. 2 boards and better. All white pine. Do. Lower grades White pine, Norway pine, and tamarack. Mill G. Finishing All white pine. with white pine. Notwithstanding the differences in the proportions of white pine and the other woods that enter into the grades below finish" and select and are sold as "northern pine," there does not appear to be any difference in the prices asked. Only when "straight white pine" is specified for one of such gradas is an extra price charged. The actual price received by companies which put the smaller proportions of Norway and other woods into their "northern-pine" grades agrees closely with those of companies which put in larger proportions of such woods. 564 THE LUMBER INDUSTRY. Section 11. Grading rules for northern pine. The following rules were adopted by the bureau of grades of the Mississippi Valley Lumbermen's Association and the Wisconsin Valley Lumbermen's Association in the fall of 1894, and have since been in force. Five editions have been issued. Only slight changes have been made, and these have been suggested by the experience of the inter- vening period, during which the work of unifying the grading of white pine and Norway lumber has been carried on under the auspices of the organizations mentioned. The rules express, as nearly as it is possible to define them, the grades of lumber being made under the supervision of the bureau of grades with its corps of inspectors. Ninety-five per cent of all the white pine and Norway lumber made in the region west of and including the Wisconsin Valley in Wisconsin and in the Mississippi Valley between Minnesota and Missouri, is graded in accordance with these rules, and is subjected to the super- visory inspection of the employes of- the bureau of grades. The grading rules given below are taken from the rules of 1894, as slightly modified in the fifth edition, issued April 15, 1906: RULES FOR GRADING PINE LUMBER. GENERAL INSTRUCTIONS. The aim of the uniform grading inspection is to harmonize the natural differences which exist in the characteristics of the different stocks cooperating in this bureau, making lumber of the same grades, at the different manufacturing points, of prac- tically equal value, whether the logs from which the lumber is cut are large or small, coarse knotted, fine knotted, black knotted, red knotted, sound, or shaky. 1. No arbitrary rules for the inspection of lumber can be maintained with satisfaction. The variations from -any given rule are numerous and suggested by practical common sense, so nothing more definite than the general feature of different grades should be attempted by rules of inspection. The follow- ing, therefore, are submitted as the general characteristics of the different grades. 2. In the grading of finishing lumber in common practice, there is a recognized difference in classifying inch lumber, and lumber thicker than inch. 3. A very large percentage of the one and one-fourth, one and one-half, and two-inch lumber used for finishing purposes • goes into work requiring each face to be shown, as in doors, sash, etc. With inch lumber, except shop common and partition, the uses are quite different, the almost invariable practice being that one face of the board is shown and that face the better one. 4. The face side of the lumber is the side showing the best quality or appearance. 5. Defects in lumber should be distributed in proportion to the size of the piece. Long or wide pieces of the same grade may PRODUCTION AND WHOLESALE DISTRIBUTION. 565 contain more and greater defects than shorter or narrower pieces. The same percentage should be observed in both long and short, wide and narrow. 6. Wane in lumber is a defect which can not be described by rule with satisfaction, and therefore must be left to the judg- ment of the grader. "C" SELECT. 1. "C" select must be eight inches and over in width. 2. This grade will admit of quite serious defects if the piece retains at the same time a fair appearance. 3. The defects admissible are the same as those in "B" select, 1 but exist to a greater degree. See General Instructions. "d" select. 1. "D" select should be eight inches and over in width. 2. This grade admits any piece of lumber that has the appear- ance of finishing or a percentage of cutting in which the defects are too numerous or too serious to admit of its being graded into "C" select. 3. Blue sap covering two-thirds of the face will be admitted. This description embraces one inch, one and one-fourth inch, one and one-half inch, and two inch stock and is graded strictly from the face without regard to the back and can not be recom- mended for quality. See General Instructions. COMMON LUMBEK. Common lumber may consist of white or Norway pine, or a mixture of both. The characteristics of common lumber, as distinguished from finishing, consists of a general coarseness of appearance, caused by various defects and combinations of defects, in a greater or less degree according to the grade. NO. 1. COMMON BOARDS AND STRIPS. 1. No. 1 common boards and strips includes all sound, tight- knotted stock, whether red or black knots, free from very large, coarse knots, or any imperfections that will weaken the piece. 2. This grade should be of a character fitting it for ordinary use, except finishing purposes. 3. Knots, medium-colored blue sap, or a small amount of shake are admissible if they do not affect the general utility of the piece. 4. Norway boards and strips, except clear and select, should not be put higher than No. 1 common. The class of Norway admissible in this grade can contain either black or red knots, provided they are small and firmly set, or medium-colored blue sap covering the entire face of the piece if not in combination with other marked defects. See General Instructions. ' In this grade white sap is not considered a defect unless too many other imperfections appear. Knots, shake, and a small amount of stained sap are admissible. An 8-inch or lO-.nch piece should have but very little shake. Wider pieces can have more shake, but it should be local and not scattered over the face of the piece. Slightly stained sap is admissible whn other defects are not of a serious nature, the amount of stained sap depending upon width of piece. 566 THE LUMBEE INDUSTRY. NO. 2 COMMON BOARDS AND STRIPS. 1. No. 2 boards and strips are subject to the same general inspection as No. 1, except that coarser and larger knots, not necessarily sound, more stained sap and shake are allowed. "V" and coarse limb knots, heart shake or slight trace of rot, when firm; or occasional worm holes, are defects admissible in this grade. 2. Norway, with stained sap covering the entire face of the piece is admissible if not in combination with other marked defects. See General Instructions. NO. 3 COMMON BOARDS AND STRIPS. 1. The general appearance of this grade of lumber is coarse, admitting: 2. Large, loose or unsound knots. 3. An occasional knot hole. 4. A great deal of shake. 5. Some red rot. 6. Large worm holes. 7. Any amount of blue sap. 8. Not a serious combination of these defects in any one piece is admissible. See General Instructions. NO. 4 BOARDS AND STRIPS. 1 . The predominating defect characterizing this grade is red rot. 2. Other types are pieces showing numerous large worm holes, or several knot holes, or pieces that are extremely coarse knotted, waney, shaky, or badly split. 3. Norway, when extremely cross checked, is admissible in this grade. See General Instructions. NO. 5 BOARDS. No. 5 boards is the lowest recognized grade and admits of all defects known in lumber, provided the piece is strong enough to hold together when carefully handled. NO. 1 JOISTS, SCANTLING, AND TIMBER. 1. No. 1 joists and scantling must be of a good, sound char- acter, but will admit of defects that do not impair the strength of the piece. 2. On basis of 2 by 4, wane on edge is admissible, one-half inch deep, for half the length, or a proportionate amount for a shorter distance or on both edges. In any case, one side and two edges should allow a good nailing surface. It being under- stood, however, that the wane shall in no case extend over one- half the side of the piece. 3. A few worm holes admissible. 4. Stained sap is not considered a defect. 5. Timbers and 3-inch plank admit proportionately greater defects. 6. Two-inch dimension of this grade may contain 20 per cent of No. 1 tamarack, and 3-inch and thicker and timbers may con- tain any amount of No. 1 tamarack. PRODUCTION AND WHOLESALE DISTRIBUTION. 567 Section 12. Proportion of grades of northern pine produced at various mills. The following tables show the proportion of grades produced dur- ing the years stated at 11 plants, operated by 9 companies. In some instances the original records were in much greater detail, but for the purposes of comparison all the upper grades are shown as selects and better, and, where separately stated, the grade of box has been grouped with No. 5 boards and shown in the total under No. 5 boards. For some mills the original records were in such shape that the grouping "No. 3 boards and better" had to be used. It will be noticed that there is a higher percentage shown for select and better, in the case of Company C than for the other com- panies. This is believed by the Bureau to be explained by the char- acter of the timber which that particular company cut, the propor- tion of white pine in the logs sawe Ki- S - :- - c o a e o 6 i-t *r 'HD 1 — *-• to H U- ^^ ~ N C' ~3 -f ■ to o o — io c: >o >c «: zd- *d io ;o >o :c >-r} < .5 5 r x 1 ( . p 2 c. r ft *-• ,- CO SI 4. 75 15.00 14.75 13.75 14 00 13.50 14.no 14.00 14.25 lO ■ £°e*^EJ ti B V- o o - A D,, I HO — ■*& « — in iq n oq c5 t^ is e ooio r- e* -|5 -* -" -^ IOC— a o a > E h- Is 'e 1 ft 1 i s I i. iS 5 a. i- '1 2. E c i a c j: - i| 1 _ 1 2 1 - i- ,E t E e c a. a c t C a. i % c % $ 1 ft 572 fHE LtTMBfiK INDUSTEY. S3- Sg'S. 5 § a st •■"A to CN O N N C$ -i t-I i-l i-H i-H i-f rt (A SSSSSSSSSSSS £88888888888 cs cq co o> a US O USUS US© cn otNr~cN its CO US US US US cq .Eg&2g'a O K ° LJ I ."£2 tH • fig&SS'S assess OS 00 X2S & sasss 8888888138 r~c0cot>cocoh-coo» ili^itllfi tiJJijIiWIl PRODUCTION AND WHOLESALE DISTRIBUTION. 573 cm ■ §3 c3 ?S c*S £3 S3 oiei lOiOOOOOOOO NNUJOiOiOOOiO 88 iCMCMCMCMCMCMCMCM U}<0<0<0(00»ninin^ , ' , l'^ t '* Somooooooinno ICNOSOOOONCSIO inmincOC0cC)s0-l <-l CM CM CM CM CM CM CO Ml CO CM CM CM CM CM CM CM CM CM CM CM CM CM (N CM CM CM CM SS3 S3 S3 S3 S3 c$ £3 S3 S3 ooioiniooxioooo CONNNiONuJOiOO WQOOOOOinO MommoooMO t- O CO CO 10 m 00 coco OOCQOQOiOHHOO CMCMCMCMCOCOCOCO'CO CM CO OOQQOmOQQOOO mooooNoooooo W§NCSCM.-lCMcqeM 1 CMCMC'J 8S CAOCACAOC 5 CM CMCMCN 4 W lO lO W lO lO HOi-l CMCMCMCMCM S3 SS5S S3 S3 S3 S3 S3 S3 S3 S3 S3 S3 SS S3 S3 SS S5 S3 S3 OS OS OS OS OS OS OS OS OS OS OS OS OS OS OS OS OS OS OS CM CM CM C cm co co_ in in in in in in >n ■>* co co -^ ■* co co CM CMCM CM CM CM CM CM CM CM CM CM CM CM CM CM CM OS OS OS OS OS -'-'-.' -■' -■■> os as os os o> o o i-l i-H i-H i-H ^H CM CM ■U3NNU3IOC 3 CO CO CO CO CO co eo co co co co q CM CM CM CM CM CMCMCMCMCMCM eo-^cOTtiinininin IN CM CM CM CM CM CM £5 in in up in >n in in CNCMN WCMCMCM t-r*i^r-t-t^t^i--t»-tDco«3 co:or— t— r- 1-- r- 00 00 1— r— r- OS OS OS OS OS assasss ssgsssass ^TjiTffTT-^i'9'in'winininin ' in in in 10 us ^ra ioks t^ I s ■•2 u&% e^Bb i*§I&8.S?S>£s°8 lag's *3 aso s § • «l(aO!ZiO as. 574 THE LUMBEE INDUSTRY. 4--r 3 ^* IOO'OOOWWWO>OU}0 t-OTlOiOC-SfMl^Wt-lNO o '3 ^i 'ii -^ -^ io ir; >o in tD co wioiomc qoooqqoiqoqoo josoiciososcsoioioo Oi OS cs o O iO iO m cn tN □c 06 CO NOON(NOiON(NCTNN t-^ CO CO 00 CO 00 00 00 00 CO 00 CO OOOWNINONMM CO CO CO CO CO ^ CO C^ CO CO CO *^ cSmwncSncncsicnincncni OiOiOMiONifliOiOiOC CO co co CO co co co co co co c^ CNIMMCNCN(NMC5CNC5c5 i cm CM CM CM CM c nnnpSnc tNc3S o CN*ncs o cNm cmu mt-mCNCNir o mi-- CN CN c isionooo oiQioc ooooommo too oo o«n o no omo woom ioujooco^no soiooosowinoMn t^mor- ooooo o oh o moo oeotdr^t^t^ taaiddodddopcid Oi^i^cncs — cn-i — * CN N CM CM CM CM CNeNCNcoeococoeococNcNco COCOCOCOCOCOCOCOCOCOCOCO co co co co CM CN CO CM CO CO CO CO CO CO CO CO »o»o»oinQO »n m o" r-b-i>CNoin ^ cm in ujoifjooo oooomin CSONIOIOUJ OOOOCNCN OlQO o oo om in in in in cn oo ooooo oo oooo m cmcmcmcncmcm cmcoco cocococococo eocococococo ■*coco CO CO CO CO COCOCOCO CO COCOCOCO CO CO ■* ^ ■* t* ■* CO CO CO CO CO CO CO NNNWNC CNCNCMCNCNCNCNCNCNCNCN inmiotocpoo ootsc CM CN CM CM CM CN CM CN C ^CNOOCNmCNOCNOCMW sssssas mmoinoooin in aoco ooo>ou (NCNmcNommcN cncnocno cNomr- t OOCOQClijCOCOOQC'OQ 31 C CN CN CM CN CN CN CM CM CN OiflNt» 5t3(D itQ 1CNCN .CN SS noooinooowmu JOOONOOONNt "Sjnpoinc t^CMOmCM u inminminmc^mminc incNOinininmoommc "£ S ® fl c l4!£fi E, c3 • « Sl» o ft 5-° t n 5 3 '3 576 THE LUMBER INDUSTRY. §3 OQOOCOOQaOCOQOOQOC 383313 SSqRcNc^wc^cq&aM&Seq ^cncScSS- COCO CO 3uo c 10 m '^ io h- O (M (N cm r-j 3^ n 3 eg] 2 03 eoeocoeoeococoeocoeoeoeo t^ n « w »o o5 5 CO CO CO CO CO S38SS co co co cc co c cn£ ft •1 coco coco coco in icioioNC S88 IOWWWOOOOOO gsa» CSWC0«c5lN(NWWN M IC O O C iQ (D IQ IQ ;S m Snnwonoo *) CO oiaiaia>cooioocRaicBOi NWNNlOh Doisacnooo d i ; c :o '-c to loioiouj'n'n^^iotoiou) O O O u i-l*— '_n sll OS Oj O) 00 00 ;oci-accqio 3. oc so r - ad a? a? od lOiOiOOiOiQiOOOCO ci i.' s' CO y$ y\ y$ CO CO* 00 00* 25030°— 14 37 - u, p ^3 . to k. ?„.£; o £ ® ; -. - h ^r* n m^; x3 > o >&2<2££a OJ OS Ol © OS OS os as oi o o" OJOiOS©©0 ©©o©©c- d o a 53 ifiUJWinOOiQOOOOO CMCMC5ciOOOOU}>OloQ>nQ OOUJNIONNNOCTO cso'cioJoso'i-JwcNcococo E o oioiddddoiddd ^ tg-9 OOiOUJOinujOOwiOiO Otf5r~eqoe5c5«5i5f-ot» ooodt^GoododoioJoJoioaJ © © o © ©° OhOOOhhH(CCCCi3M ododoiododododosoJa! -© © « 5SKS as-s^ S«H t-s §2 si PRODUCTION AND WHOLESALE DISTRIBUTION. 579 tNNCNCNCMCMe>J~Hi-li-l IOU3 tOmOOlOO iflOlQ CO CO ^ ^ ^ CO ^ ^# ^ ^* gOOiOOOOiOOWOlO eoedcococacsNC«cic^iN NNNciojc>i^cocococoeo •^■^ui-^uiteitouiuiiauiio loioioioidioirjio^ ^iOSt-NU3"JC CO CO CO ^ "^ ^ "^ ■* f -I" ** "O S8S88SSSRS8§ NONNOOC t*.r-.f»t^t~r-t-f»t- 888888888888 m ci ci ci ci c*i cn* ~h ** *A tA .4 WO'O'Oio'OiOOQOOQ CMCMCOCOCOCOCOCOCOCOC' ^ ^i ^ ^1 MH ^i ^ ^ CO omujoooowoiopio iflNNlOiOifliONOlNON ■"CJiNINWW aaa ■^COCO^ti^t"*-^'*TH nneOWMCONNWINNN WM«(NfjNMn««c OiOOOOOOQOOOO or-oooooooooo OQOQOQiOOiO OOOOOOt-Of- '"' iC O i-t' t* I--' -f iO -^ • -QiOO • >ONiO I '• CS O) 30 S U3 4.00 4.25 4.25 4.25 4.25 4.25 5.00 4.75 6.00 lOO o CM IO IO »o cd CO WOW© lOQiOOOOOOO nono cm o cm o minus mm CO CO CD CO CD CD CO CO CO CO CO CO CO 7.50 8.00 o c lO t— IO IT f^cO tpcc C 88 eStZ OOuj I OOM • o m o o 5.50 5.50 5.25 5.00 5.25 5.75 6.75 6.00 6.50 wo r-ia COED HNNNrHr 8U3 US CM t— do'o' 000010)0)0)0) OhhO -ooooooo CM CM O HO »0 CM C 5333 gOiQWOOiOiOiOiOOO i-JwcicJeNtN'-HT-J 5 cm "3»o r— cm c ,_l ^ -. — --H --.-iO©0.-tO© i-ii- H^H^-IOOOi-ll-HO Ot— CMiOiOCMiOCMCM O iO CM ^H (M (M 21.50 22.50 CM I ! piCOCOOOOOOOO »OiOtniOCOCOCDCOCOCDCOCO COCOCOCOCDCOCOCOCD CO TfCO CO CO CO CO CO CO CM CM CM fCO-f-*'*''*-*''* "f^(iO'n>OtO0«Oi(3 inomiowjoiooo *ocoiricDuotdidec5ic3 !5S!C 200iowcioia NOcSWOOiflNMCMPq t^»Ot— CM CO ^ ^ *n ^ ^* ^ ^ ^J* ^* ^ w ■it-irawsioict-r— >o U3lOiOtOCMI>-NCMC COCOcOCOCOCDCO'eOCO IQOOIOOOOU3IQ 1-. KJ 1(3 N iO U3 IO N N sills SaSh&S.&SrS.St-l i>r°&3& a o 5 £'"55 0J 3X3 ' E l sa liip gifel&Si'S'S.s ft o« e-,2 3 ^ 3 o o o ® =e °£ & £ B d ^ qT.£;>2~ 580 THE LUMBER INDUSTRY. CO-*-* i *-*-* , *to>o 8 CI I>(N IN o o O lO s NNNN S NMN §3 (NJ CM T* N oc c IT lomooooooooou- OC OC OC CM OC OC c c o ■3(OOtO(QCOCOO(OsOCO(0 i— cor-r-r^oocoaooo lO oo t»-0«3 >ri (d»o mcoioioiniocfficocotoin ■jT — ■ E ~ '-£ I- £3 -3 2. OOiO oor- ed cdr-o eo^dcdidoidocdidididtd CD«0«OCDtO(Ot*t , -I^ OOOOOWiOON idid»d»did>d ioco«o 3aff J .8 .8 ■S§B OZQ £•?& PRODUCTION AND WHOLESALE DISTRIBUTION. 581 lOOCN r^odoi NCSWNN 3csn£ ooioiomiQioioiooioo NNnoncqoc pgoioioooiooioo^oo NNNHHH 8S : :s c3S • !c« ssss Kggaasaaaaag i-H d CO ^ ^ ^* ^f 1 ^ "^ ^ ^ ^ MMc3Sp5c3e5Sc5^c MCOHHHOHHHHH 83Kgg dS S £88 JWinininoiniooo 5«NC5«0«NOO S8 WNNCIMNN iQ O nc3 oo IO IO O'O ON t^ o - S lO cn 20 O 10 O lOiOOiQOiOWOOinOiQ t-cSioc5iocqoSoocSoOtOtSO r ^">w)q.5 > 8 L 3 « : 3 53= Ilia 3 « * Pi* 5"£ 3 Ero o « g5£-c<>.g!>i&s.B>8 S « °s &(fl St; p sr^ o a> a 3fl 582 THE LUMBER INDUSTRY. > P w a p S3 . t> r~ t- r- r^ ■5 10 io t~ «o t~ s'i s! S' /! /! S'1 Si lO »0 "5 IQ >0 O *0 mcomwMWN WCO^CQ'J'tMT ss; SKKggKSS N(NC 1 -H — 1 (N Hf ---S.SSg SS^caOfcP s .=>•?,-.• ^8 » * ft™ S H 01 03 drt E3 *2 3 DiAGfern W isconsin, »£" 1906 M)S wo9 mo "JJT afect jFUMJJASONDJFMAKji J4S0NDJ JAMJJASONDJFHANJJ430N5J.FEET « ±1 ( B £---- SELEG !!!?-- — 45 " " FO.B. min- " ;,. n ll 40 d. rxa -■--"-- *' n 39 38 •in « J™ a 31 «i"t » f, '.:. :;;;«;-- .. An 29 97 ^2 27 ., ™ B 24 nn " £3 Ol „_ nn ID 1C ■ * IB e o e 17 j a.— -llllllllllill::::::: ,_._..,».,, 3S 35 i =:E'_!i!_S, 35 ** N2| COMK -"' , , ••* it ,. it i i •'• ™ IX8-I2to16 prai »»■ - r* ooooo"" ~ 18 „c 9A ■ ?a 41 ?n ? » m j 17 17 16 • i __ 16 lo 14 .X so-— mi ii ::::::: — -JT—T — (#,- — 30 28 . _ _ 4?. I-V- -* 23 »---- N22 COMh:;=ai=' £».„5tM" 1 n Sc 9A ;, U .... IfO.E ?? 2i Z\ 20 i« i" ■» is * * ii ■ ii « " ■■•"■" IZ X • " ■ *»•" »— -llllllllllill ::=:::: :::::::::::::::::::::::» J"— 5--5 -------- M l9 Ix6-I2toI6 fob ';----• IB 6 is ---- v Ai \:::::: X 15 IB _ 14 i? ii jj „ 1 . 83 ers ets ct, 3re >ut he , is lot ere ,lo- er. iay igh lat to ich 'he the ro- of on, T J- the ne- uct ing an, i of rho •ee- the led ion i in nee ime ing by Diagram 17.— Movement of Actual Prices of White or "Northern" Pine on the F. O. B. Minneapolis, Western Wisconsin, and Wausau, Wis., Basis, 1896-1910. Diagram 18.— Movement of Aetna! Prices of White or "Northern" Pine on the F. O. B. Minneapolis, Western Wisconsin, and Wausau, Wis., Basis, and Delivered in Pittsburgh, 1896-1910. PEODUCTION AND WHOLESALE DISTEIBUTION. 583 WHITE PINE (TONA WANDA GRADING). Section 14. Association and other organized activities of wholesalers in the Buffalo-Tonawanda market. In the discussion of white pine the Bureau has treated the markets of Buffalo and Tonawanda as being one market. As a matter of fact, the greater part of the white pine is handled at Tonawanda, where the largest wholesale white-pine yards in the country are located, but since the two markets are so closely connected that even in the lumber trade mention is often made of the Buffalo market when it is evident that the reference covers the two markets, the Bureau, not withstanding the fact that its white-pine prices in this region were gathered only from Tonawanda records, has used the title Buffalo- Tonawanda market, as being more significant to the general reader. For all practical purposes, at least in the case of white pine, they may be regarded as one. The Buffalo-Tonawanda market is the principal gateway through which the supply of white pine from the Lake States and from that part of Canada lying north of the Great Lakes passes on its way to the consuming territory of the North Atlantic States, including such great markets as New York, Philadelphia, and Boston. While the quantity handled is not as large as it was some years ago, when the white pine forests of Michigan, Wisconsin, and Minnesota were pro- ducing their maximum, still it remains, because of the quantity of lumber handled, and of its importance in the work of distribution, the largest and most influential white-pine market in the country. The bulk of the white pine is received in cargo shipments from the Lake ports in the producing region of Michigan, Wisconsin, Minne- sota, and Canada, from mills which ship almost all of their product by water, and grade their lumber for the eastern trade. This grading is variously known under the names of Buffalo, Tonawanda, Michigan, and eastern grading, and differs from that used by the producers of the interior mills of the Mississippi and Wisconsin River Valleys, who follow the Northern Pine Manufacturers' Association grading rules. Previous to 1903 there are references to an understanding or agree- ment in regard to prices between the various Lake ports and the Saginaw Valley producing market. An agent of the Bureau obtained from the records of the Saginaw Valley Lumber Dealers' Association copies of some of these agreements and of the official action taken in regard to them. Some of the trade-journal comment with reference to these agreements is also shown in the following discussion. The initiative in making the price agreements seems to have come from the producers. Their records show that an important meeting was held in Saginaw on February 15, 1899, which was attended by 584 THE LUMBER INDUSTRY. delegates of the Cleveland, Sandusky, Toledo, Bay City, and Saginaw wholesale lumber dealers. It was moved and supported and carried that in getting the prices for the different markets that the Saginaw Valley price be adopted as a basis for rough lumber, and $1 per thousand be added for Toledo, Cleveland, and Sandusky. The price list adopted by this meeting bears the title: "Price list adopted by the Cleveland, Toledo, Sandusky, and Saginaw Valley lumber dealers, February 15, 1899." At a joint meeting held in Toledo, a Pittsburgh list was adopted subject to the ratification of each association. This list was made effective August 1, 1899. The following from the New York Lumber Trade Journal describes the conditions at this time: As will be noted by Prices Current, published elsewhere in this issue, the white-pine markets of the Saginaw Valley, Toledo, Sandusky, Cleveland, Tonawanda, and Buffalo are now practi- cally on the same basis. That is, sellers in those markets are making practically the same delivered prices to New York, Phila- delphia, Baltimore, Boston and other eastern points, as noted. Of course, it would be impossible for them to be on the same basis except on a delivered-price list, and the fact that they are now, and that practically the same list is effective in all those markets, is a distinct step forward so far as convenience for both buyer and seller is concerned. * * * While this is not what might be called the official list, it is, undoubtedly, a recognized list. It is so because the prices given are in accordance with current conditions of demand and supply. Under these circumstances there will be no difficulty in main- taining the list. Indeed, we have heard that in Buffalo and Tona- wanda the lists are already pronounced too low on a few items. (Editorial comment in New York Lumber Trade Journal, Aug. 15, 1899, p. 9.) The following from the New York Lumber Trade Journal relates to the joint conference on prices held in Cleveland, August 25: The market prices which are being quoted now are the result of a conference held in Cleveland the latter part of August which was attended by representatives from Buffalo, Toledo, Saginaw Valley, Tonawanda, and Cleveland lumber exchanges. (North Tonawanda news in New York Lumber Trade Journal, Sept. 15,- 1899, p. 19.) The prices as agreed upon at the conference held in Cleveland are very firm, and on many items have been advanced from fifty cents to $1 and in some cases $1.50 per thousand, especially on the common grades of lumber. (North Tonawanda news in New York Lumber Trade Journal, Oct. 2, 1899, p. 20.) At the meeting of the Saginaw Valley association on September 11, 1899, it was moved and carried "That an f. o. b. Saginaw price for Michigan business be arrived at by deducting $4.50 per M from the price agreed upon at the Cleveland conference August 25." PRODUCTION AND WHOLESALE DISTRIBUTION. 585 At this meeting the secretary was authorized to issue a call to the different wholesale associations for a joint meeting to be held in Detroit at an early date. This joint meeting was held October 17, and was productive of a price list, as indicated by the minutes of the Saginaw Lumber Deal- ers' Association's meeting on October 26, and by the following trade- paper comments : On October 17 delegates representing white-pine interests of Saginaw, Bay City, Cleveland, Toledo, Tonawanda and Buffalo, met at Detroit and adopted a new scale of prices. (Buffalo news in New York Lumber Trade Journal, Nov. 1, 1899, p. 19.) There are offers of white pine $2 to $3 below association list. This list is but two or three days old, and is up to date. (Phila- delphia news in New York Lumber Trade Journal, Nov. 1, 1899, p. 17.) At the meeting of November 13, 1900, steps were taken to secure a joint conference on prices with the other associations. At the meeting of November 30 the secretary was instructed to send out the following letter : To the secretaries of the associations, Toledo, Cleveland, Buffalo, and Tonawanda: The Saginaw Valley Lumber Dealers' Association at a special association meeting held November 30th instructed its secretary to write as follows to the secretaries of the lumber dealers' associa- tions named at the head of the new communication : "The Saginaw Valley Lumber Dealers' Association are now practically together on white-pine prices and ready and anxious to cooperate with the other distributing markets with the view to establishing closer uniform prices in the markets with which we compete. "The replies received to the letter sent you after our meeting of November 13th indicate that Cleveland is in the same con- dition as Saginaw Valley. On the other hand, Tonawanda and Buffalo and Toledo reply that they hope to be able to report a like condition soon. "Now, gentlemen, 'it is up to you' to get your home tangles straightened and select the time and notify Cleveland and Saginaw and the deed will be done. We would choose Detroit as a convenient and a central point of meeting. If the Buffalo association takes the matter in hand there will be no unnecessary delay." The joint conference was held at Detroit, January 10, 1901. The following trade-paper extracts refer to this meeting: The annual meeting of Saginaw, Cleveland and Toledo dealers took place at Detroit on Thursday, where a social time was had, the experiences of 1899 discussed and stocks on hand were compared. Of course, values present and prospective were discussed, but it was not a price-list meeting and none was adopted, the joint opinion being that present stock would take care of itself and that present selling prices were about right. — (Toledo news in American Lumberman, Jan. 19, 1901, p. 25.) 586 THE LUMBER INDUSTEY. Representatives of twenty wholesale dealers in pine lumber held a meeting at Detroit last week for the purpose of checking up lists and conferring as to matters of mutual concern. Dealers were present from the Saginaw Valley, Buffalo, Tonawanda, Cleveland and Toledo. (Bay City and Saginaw news in Ameri- can Lumberman, Jan. 26, 1901, p. 33.) In the minutes of the January 18, 1901, meeting of the Saginaw association occurs this statement: "The matter of prices made at the joint conference at Detroit on January 10th was taken up and discussed." The following extracts indicate that in addition 'to the agreement as to prices existing between the different markets, referred to by the Philadelphia correspondent of the American Lumberman of December 14, 1901, as the "association," there seem to have been some local agreements between the wholesalers in Buffalo and Tonawanda, to which the extracts of June to December, 1901, refer: Prices are reported to have fallen off as much as $2 below the list in instances. (North Tonawanda news in American Lumber- man, Mar. 16, 1901, p. 75.) The recent advance in prices on some of the poorer grades is being maintained and from present indications is likely to prevail for a long period. (North Tonawanda news in American Lumber- man, June 15, 1901, p. 35.) Prices are decidedly firm on most grades, including those on which an advance was recently recorded, and dealers are figuring on getting together shortly and adopting a new price list, which many deem advisable. (North Tonawanda news in American Lumberman, June 22, 1901, p. 44.) New price lists have been issued by the firms interested to their local representatives which show an advance of from fifty cents to $2.50 on barn grades according to width, and an advance of from fifty cents to $3.50 on the better grades. Of the latter dressed and 8/4 fine common show the biggest advance, having been increased $3.50 per thousand. These advances were made at a meeting of the dealers held recently, and while there is nothing ironclad concerning the maintenance of these prices, at the same time the interest manifested at the meeting indicated a marked tendency to adhere absolutely to the new list as issued. (Editorial com- ment on Buffalo-Tonawanda market, New York Lumber Trade Journal, July 1, 1901, p. 9.) There is still no concerted action -in the putting up of the price, but everybody is asking and getting more than was possible a month ago. (Buffalo news in American Lumberman, July 27, 1901, p. 44.) With one exception there has been no disposition to cut prices since the advance was agreed to over a month ago. It is reported that some dealers who have a large stock of box lumber have offered to sell to consumers at New York and other eastern points at $1.50 less than the price set heretofore. (North Tonawanda news in American Lumberman, Aug. 3, 1901, p. 39.) With the exception of a cut on box lumber prices are firm, no deviation from the last price list having been made in any other PBODUCTIOX AXD WHOLESALE DISXBIBUTION. 587 items. (North Tonawanda news in American Lumberman, Aug. 10, 1901, p. 38.) Prices nave been advanced all along the line within the last week on some of the better grades as much as 32, which is attributed to the constantly growing expense to which dealers are subjected in handling the stock. (Xorth Tonawanda news in American Lumberman, Aug. 31, 1901, p. 42.) It is easily a case of take it or leave it with this class of lumber and there is no disposition shown to force the sale of any of the grades by weakening of the price list. (Boston news in American Lumberman, Aug. 31, 1901, p. 42.) Members of the trade are still asking for concerted action as to prices, but most of them are against anything of the sort. One of them states that he has been asked to join in an effort to establish a uniform price but he refused. He is selling his lumber at a good advance and that is enough. (Buffalo news in Ameri- can Lumberman, Sept. 14, 1901, p. 45.) White pine conditions continue practically unchanged. The latest price list from Tonawanda is certainly a stunner. (Phila- delphia news in American Lumberman, Oct. 12, 1901, p. 40.) At a recent gathering in Buffalo prices on some of the lower grades were advanced yet another dollar and news of the advance did not take long to reach this market . (Boston news in Ameri- can Lumberman, Nov. 30, 1901, p. 37.* The lower grades hold firm at the recent advances and the ultimate price to which the lumber will go is a problem the solution of which no man attempts. (Boston news in American Lumberman, Dec. 14. 1901, p. 43.) Prices hold firm, with a belief that there will be an advance agreed upon at the next meeting of the association. (Phila- delphia news in American Lumberman, Dec. 14. 1901, p. 43.) We are advised that prices on white pine in the wholesale markets of Toledo, Sandusky. Cleveland, Saginaw, Buffalo and Tonawanda have been advanced according to the amounts given below, becoming operative on December 5, by concerted action of the interests involved: Fine common has been advanced S2; all shop lumber, 32: selects and uppers, except 10-^ and 12-4, $2; Nos. 1 and 2 dressing, 50c. to SI ; C and better strips, 32; all manufactured goods, such as moldings, window frames, sash, door and blinds, 5 per cent net; Nos. 1, 2 and 3 common, and box lumber, no particular change. This advance was made necessary partly on account of broken stocks and the scarcity of some grades of lumber, together with the very heavy demand which has prevailed for all grades of white pine throughout the entire country during the past few months, which in the face of existing conditions made necessary such an advance on the part of the manufacturers. (New York' Lumber Trade Journal, Dec. 15, 1901, p. 9.) An advance of 31 in some grades and 31.50 in others has not had any appreciable effect on the demand for good white pine. Uppers, No. 1 cuts, advanced 32 a thousand. Probably the only reason for the higher prices quoted is the scarcity in those grades. (Philadelphia news in American Lumberman, Dec. 21, 1901, p. 39.) 588 THE LUMBER INDUSTKY. Prices on the poorer grades have begun to advance with astonishing rapidity, some of which were marked up several dollars last week. (Tonawanda news in American Lumberman, Dec. 28, 1901, p. 39.) After 1901 more attention seems to have been paid to local attempts to control prices than to the agreements with other markets. The following trade-journal extracts for 1902 probably relate to local Buffalo-Tonawanda conditions. As has already been pointed out, New York, Philadelphia, and Boston get nearly all of their supply of white pine from the Buffalo-Tonawanda market. There is little or no variance from the list prices. (Philadel- phia news in American Lumberman, Jan. 18, 1902, p. 57.) A meeting of wholesalers is reported to have taken place lately for the purpose of advancing prices and discussing other important matters concerning the trade, but those who would likely attend such a meeting appear to know nothing about it. (North Tonawanda news in American Lumberman, Feb. 22, 1902, p. 49.) There is a lively enough demand for white pine here to take readily anything that the stock list offers at the list prices. (Boston news in American Lumberman, Mar. 8, 1902, p. 57.) Continued change in the direction of advancing figures here and there in the list marks the progress of the white pine market. (Boston news in American Lumberman, Mar. 15, 1902, p. 48.) In 1903 a formal organization was developed in the Buffalo- Tonawanda market among the wholesalers of white pine, and this undertook the conduct, in a systematic manner, of the price activi- ties which had been rather spasmodically followed in previous years. The lumber-trade papers throw considerable light on the organiza- tion of the White Pine Association of Buffalo and Tonawanda and on its purposes. It is found that not only did it engage in promul- gating price lists, but that the agreements made in regard to follow- ing list prices seem to have been carried out to the extent of affecting the prices of actual sales. As illustrations of this point may be men- tioned the comments of November 21, December 15 (Tonawanda news), 19, and 26, 1903; March 1, April 9, August 1, and September 3, 1904. The exact nature of the price agreement or understanding which was the basic factor in the price activities of the association does not appear. The comment of November 28, 1903, states: At the late meeting of the carriers of white pine they found the conditions so imperatively in favor of a firm price that the old charge that agreements at such meetings are made merely to be broken will hardly apply this time. That of December 19 says: There is some understanding as to uniform prices, but where a common price list exists it is used more as an expression of PRODUCTION AND WHOLESALE DISTRIBUTION. 589 opinion than as an agreement. The fear that certain dealers are likely to continue the old practice of cutting the prices is laid aside. That the association early showed a desire to avoid publicity of the transactions at its meetings is indicated by the following in the New York Lumber Trade Journal of May 15, 1904, under a Tona- wanda date line: The White Pine Association held a meeting on the 3d and went over the price list thoroughly, making an occasional change, but as a rule the former prices were continued. The associa- tion is not disposed to make its proceedings public but its influ- ence is pronounced very salutary by all of its members. It should also be noted that while the account of the monthly meeting held on July 19, as published in the Tonawanda news in the issue of August 1, 1904, is noncommittal as to action taken at that meeting; the comment from, the same place in the issue of August 15 shows that a price committee was appointed to take important action to stop a decline in prices, and the editorial comment in the issue of September 1 shows the nature of that action. In order to cooperate with the white-pine interests of Tona- wanda in the matter of white-pine prices, as noted in the Tona- wanda letter this issue, the Buffalo white-pine wholesalers met on the 9th instant with George B. Montgomery, of the Mont- gomery Door and Box Company, as chairman, and prepared a pre- liminary price list and agreed to make up a detailed stock list at once. Another meeting will be held as soon as the list can be made ready. The feeling was that business is improving fast and that there is a shortage of lumber, all of which is in line with recent advices in the Journal. The movement, we believe, is right in line with the best inter- ests of all concerned, and will result in continuance of firm values. (Buffalo news in New York Lumber Trade Journal, Nov. 15, 1903, p. 24b.) It has been felt for a considerable time that a lack of common understanding existed among the dealers in this market, and to make this apparent to all and to prevent selling at cut prices, a meeting of all the lumber interests was held on the 4th, at which a general comparison of notes was made. It was found, as was expected, that a better all-round assortment was in yard here than the condition of sales had given reason for supposing. It was found that when one yard was long on a certain grade or length another was short on it, and so an increase of exchange from one dealer to another has already set in. (Tonawanda news in New York Lumber Trade Journal, Nov. 15, 1903, p. 24b.) Prices are firm and recent steps taken by dealers relative to quotations assure a continuation of this condition. (North Ton- awanda news in American Lumberman, Nov. 21, 1903, p. 60.) At the late meeting of the carriers of white pine they found the conditions so imperatively in favor of a firm price that the old charge that agreements at such meetings are made merely 590 THE LUMBER INDTJSTKY. to be broken will hardly apply this time. (Buffalo news in American Lumberman, Nov. 28, 1903, p. 59.) There is a continuation of the better feeling in lumber here, especially white pine, and there is a corresponding effort to make the most of the situation. Had it been known earlier in the sea- son there would have been a decided stiffening up months ago, but it happened that the dealers were bashful and failed to learn that where one was a trifle long on a certain grade some one else was sure to be short. So the overstock was sold at a cut and the trade was in a measure turned over to the buyer, as there would be something like $5 difference in certain prices. (Tonawanda news (dated Nov. 29) in New York Lumber Trade Journal, Dec. 1, 1903, p. 26.) Of course the movement of the white-pine interests is the chief matter of interest. It started here, the first meeting being held in the office of the W. H. Sawyer Lumber Company. The new association has not been fully organized, but it has gone far enough to need little more than final details. No election has been held, but an agreement to make George S. Daily manager has been reached. * * * He will be placed on a salary, with instructions to gather statistics of the white-pine trade constantly and distribute them among the members. The plan is to incor- porate and to expend $5,000 a year on the work. (Tonawanda news in New York Lumber Trade Journal, Dec. 15, 1903, p. 28.) The new understanding in white pine and the great increase in confidence shown of late will make a decided difference in the handling of business. It has been too much go-as-you-please without regard to anyone else for a long time, but this practice has been stopped and it will not go on again. * * * Prices are no higher than they were except that the cutting has been stopped and it will not be resumed. High-grade pine has re- sumed its proper level and will go on much after the fashion of low grade, which will remain scarce. (Tonawanda news in New York Lumber Trade Journal, Dec. 15, 1903, p. 32.) There is much interest taken in the new white-pine movement, especially as it is the first general effort to unite the interests of Buffalo and the Tonawandas. The final work of organization is not done, but with the joint meeting of the white-pine men at Tonawanda on the 4th, matters were carried far enough to make organization a certainty. The reason for expecting this is the practical necessity of it. For a long time the dealers were grow- ing more uneasy over the situation. They felt that there was something wrong in the business, and they were not long in learning what it was as soon as they began to exchange notes on the way the stocks were being handled. Without a common knowledge of them, one dealer was slaughtering one thing and another something else. (Buffalo news in New York Lumber Trade Journal, Dec. 15, 1903, p. 28.) There is some understanding as to uniform prices, but where a common price list exists it is used more as an expression of opinion than as an agreement. The fear that certain dealers are likely to continue the old practice of cutting the prices is laid aside. (Buffalo news in American Lumberman, Dec. 19, 1903, p. 65.) PRODUCTION AND WHOLESALE DISTRIBUTION. 591 The understanding reached between the members of the pine trade here and in Tonawanda has had "a good effect that is bound to continue. (Buffalo news in American Lumberman, Dec. 26, 1903, p. 65.) The new White Pine Association has now been put into opera- tion by the election of Pendennis White, president; George B. Montgomery, vice-president; George S. Daily, treasurer and manager. Air. Daily, who is the really active member of the management, has opened an office in the Post Office building in North Tonawanda tor the present, in connection with that of Harrison M. Tyler. He will give his entire time to the work of keeping the members posted on the condition of stocks. While it is to be noted that one or two white pine concerns have not yet joined the association, the movement is practically unani- mous throughout the white pine market of both the Tonawandas and Buffalo. (Tonawanda news in New York Lumber Trade Journal, Jan. 1, 1904, p. 27.) The monthly meeting of the new White Pine Association of Buffalo and Tonawanda was held at the Buffalo Club this month with good attendance. The members express themselves as well pleased with the workings of the plan, but they do not feel anxious for publicity, saying that the proceedings were general discussions of the situation without much direct action. There were attendants from some of the other lumber cities east and west, but opinions differ as to the likelihood of their becoming members of the association. (Buffalo news in New York Lumber Trade Journal, Feb. 1, 1904, p. 27.) The White Pine Association has issued a price list during the last half of the month, independent of the stock list that came out during the first half, and it is noted that all prices are very stiff, some of the outsiders claiming that an advance has been made. (Tonawanda news in New York Lumber Trade Journal, Mar. 1, 1904, p. 31.) There is not much revival of demand, but the trade is in good shape and dealers say that prices are holding firm, though they do admit that but for the new White Pine Association there would probably have been a lot of cutting that has not developed now. All that has been done is to spread the knowledge of the amount on hand and the prospect of getting more when that shall be gone. (Buffalo news in American Lumberman, April 9, 1904, p ,7.) The White Pine Association is solidly against any change in ! >rices at present, and this tends to hold the members of the ocal trade together. (Buffalo news in American Lumberman, April 16, 1904, p. 63.) The White Pine Association held its monthly meeting on the 19th in its commodious new rooms, but the report discloses noth- ing more done than to discuss the state of the market about as usual. There appears to be all of the former faith in the good offices of the association as a price steadier. (Tonawanda news in New York Lumber Trade Journal, Aug. 1, 1904, p. 23.) It seems to be agreed among the white-pine jobbers that there is to be no further reduction of the price of high-grade stock. (Buffalo news in American Lumberman, Aug. 6, 1904, p. 59.) 592 THE LUMBER INDUSTRY. The White Pine Association at its last meeting took the view that it was wise to look closely to prices and to that end appointed a price committee, which will make an effort to show that there is not high-grade white pine enough coming in now to warrant any further decline in the prices. Low grades are taking care of themselves and it is felt that when the condition of high grades is understood there will be about the same care in the handling of good lumber. (Tonawanda news in New York Lumber Trade Journal, Aug. 15, 1904, p. 29.) At the last meeting of the price-list committee of the Buffalo and Tonawanda Lumber Exchange, held last week, the last price list adopted some months ago was reaffirmed, owing to the fact that prices at producing points were very stiff, and it was felt that it would be impossible as well as impracticable to reduce prices on pine lumber at this time. (Editorial comment in New York Lumber Trade Journal, Sept. 1, 1904, p. 9.) Prices are weak on some items but the association is using its best efforts to maintain them at the schedule adopted. (North Tonawanda news in American Lumberman, Sept. 3, 1904.) During 1905 the price activities of the association come in for con- siderable comment in the trade journals. The extracts for April 15, May 1, and June 15 bear on the general efforts the association was making to keep prices up. The comments on the Olcott Beach meet- ing in August, 1 beginning with the one of August 5 and ending with that of September 16, are from two papers, as well as from the two points of Buffalo and Tonawanda. The price action of the meeting of September 19 is clearly outlined in the extracts of September 30, October 1, 7, and 14; that in refer- ence to the adoption of a list on November 1 is shown in the extracts of October 28, November 1 , and 4. That these price lists were held by the trade to have a real effect on actual selling prices is indicated by the comments of November 4 on the rush orders sent in to take advantage of the prices in effect before the official advance on Novem- ber 1. Some of the extracts, those of September 16 and October 1 and 28, comment on prices of dealers outside of the association. It is not clear why, unless there were an agreement that members of the associa- tion should maintain uniform prices, and it was generally lived up to, the adoption of a higher price list should be a matter of such great importance in order that members could secure the prices which their competitors, outside of the association, were able to obtain. Prices of all lumber are strong, and the White Pine Association is holding the dealers together on prices that are up to the proper level, yet there is still considerable report of price discrepancies. (North Tonawanda news in New York Lumber Trade Journal, Apr. 15, 1905, p. 23.) i This is the meeting mentioned in Edward Hines's speech at the Aug. 16, 1905, meeting of the Mississippi Valley Lumberman's Association. (See pp. 515, 516.) PRODUCTION AND WHOLESALE DISTKIBUTION. 593 The White Pine Association is making an effort to advance prices of low grades, beginning with No. 1 barn, and there seems to be no reason for delaying the step any longer. (North Tona- wanda news in New York Lumber Trade Journal, May 1, 1905, p. 26.) The White Pine Association is urgent in its advice to hold up strong, but it is much easier to do this in theory than in fact. (North Tonawanda news in New York Lumber Trade Journal, June 15, 1905, p. 31.) The eastern consumer and retailer are convinced that white pine is no longer as active as it used to be, they also know that it is decidedly higher accordingly at the saw mills than it is here. Our dealers are not a little disturbed at this, as nobody claims that new lumber can be put in at prices corresponding to the asking prices here, so it is expected that the White Pine Asso- tion at its Olcott meeting next week will order an advance. (Buffalo news in American Lumberman, Aug. 5, 1905, p. 105.) t The meeting of the White Pine Association at Olcott ought to five us better selling prices, even if the amount sold is reduced a ttle by it. (North Tonawanda news in New York Lumber Trade Journal, Aug. 15, 1905, p. 22.) The association did nothing radical, though it did order an advance of from $1 to $5. The advance of the barn grades, for instance, was about |1. (Buffalo news in American Lumber- man, Aug. 19, 1905, p. 66.) In order to realize a fair profit on the labor and capital involved the members of the White Pine Association found it necessary to advance quotations on some of the common grades Thursday of last week. (North Tonawanda news in American Lumber- man, Aug. 19, 1905, p. 66.) The effort to advance the price here has been taken up in earnest, though it is too early to say how it is to come out. (Buffalo news in American Lumberman, Aug. 26, 1905, p. 65.) Some of the dealers are still saying that the recent advances made by the White Pine Association are not enough to meet the prices at the sawmills and that more must be asked if a fair profit is to be made. (Buffalo news in American Lumberman, Sept. 2, 1905.) The White Pine Association has not met to act on the price list since the outing at Olcott Beach last month, but dealers outside the association say prices on nearly every item are being advanced. (North Tonawanda news in American Lumber- man, Sept. 16, 1905. \ Few dealers are willing to take orders for other than imme- diate delivery, owing to advancing prices. Another price list will be put in force by the association October 1, showing a sharp advance on the common grades. (North Tonawanda news in American Lumberman, Sept. 30, 1905.) The White Pine Association met on the 19th and went over the situation thoroughly, making an advance in most of the grades of common lumber to the extent of some S2 in such grades as appeared to be too low in the schedule. So long as 25030°— 14 38 594 THE LUMBER INDUSTRY. outsiders are still boasting that they are getting considerably more for lumber than the association prices, it is certainly proper to look carefully to the matter, especially as the sawmill prices are so much higher than they were. (North Tonawanda news in New York Lumber Trade Journal, Oct. 1, 1905, p. 27.) Advanced prices adopted by the association at its last meeting went into effect at the Deginning of this month. (Buffalo news in American Lumberman, Oct. 7, 1905, p. 63.) The new price list is being maintained without difficulty. (North Tonawanda news in American Lumberman, Oct. 14, 1905.) A strong demand continues without any signs of abatement. In fact, the call for stock from the lowest to the highest grade has shown such strength during the last week that an advance in quotations has been made by dealers outside of the association and the association will adopt another schedule of prices Novem- ber 1, which will show an increase on those items in demand and growing scarce. (North Tonawanda news in American Lumberman, Oct. 28, 1905, p. 64.) There is all of the former good demand for white pine at prices that are steadily advancing, though more particularly in the lower trades, a slight advance in box and the two lower barn grades eing ordered at the last meeting of the White Pine Association. (North Tonawanda news in New York Lumber Trade Journal, Nov. 1, 1905, p. 38.) Notwithstanding the car shortage consumers continue to send in rush orders. New business has been coming in decidedly too fast to suit some dealers and in a number of instances salesmen have been taken off the road. The announcement that a new price list is to be adopted by the association on November 1 is considered an incentive for the extra rush. (North Tonawanda news in American Lumberman, Nov. 4, 1905.) It looks as though an effort would be made to put prices up again this month, especialty on the low grades, which are so generally in the hands of the box makers that the amount for sale is distressingly small. (Buffalo news in American Lumberman, Dec. 9, 1905, p. 67.) The White Pine Association continued its price activities in 1906, but apparently did not change its price list as often as during the previous year. The list, with the advanced prices referred to in the North Tonawanda and New York news of January 15 apparently was not lived up to at first, to judge by the North Tonawanda com- ment in the New York Lumber Trade Journal of February 1. The New York comment in the American Lumberman of March 17, however, states: "While the demand appeared to have fallen off slightly following the last advance it is the general opinion that there .was no corresponding weakening in prices during the inter- vening period." The clippings indicate that another advance in the list took place in August or September, and an interesting side light on the effect PRODUCTION AND WHOLESALE DISTRIBUTION. 595 of the price list advances on mill prices to the wholesalers appears on November 24. The White Pine Association at its last meeting advanced prices from $2 to $4, the $2 raise being the rule, and yet the prices are paid right along. (North Tonawanda news in New York Lumber Trade Journal, Jan. 15, 1906, p. 29.) There has been but little change in the local lumber market during the past fortnight with the exception of an advance of from SI to $2 in West Virginia spruce, coupled with an advance of from SI to S7 in the Buffalo and Tonawanda white-pine prices for delivery in this market. (New York news in New York Lum- ber Trade Journal, Jan. 15, 1906, p. 15.) There is indication of lack of cooperation in the white-pine trade, for some yards aie observed to be doing very much more business than others. It is said that a salesman who is able to say to customers that he will sell at a dollar off the list price is sure to do a big business on the road, while his competitor, who insists on full prices, does next to nothing. The state of things is not pleasant, and ought to be made impossible by sticking to prices. This is especially true in view of the fact that the quite liberal Eurchases of white pine made of late are at prices decidedly igher than were paid last season. It is also found that the sawmills will not make any prices for future, and are in doubt whether to offer any at all or not. (North Tonawanda news in New York Lumber Trade Journal, Feb. 1, 1906, p. 38.) Demand is better than two weeks ago and some desirable business is placed on the new base of price made effective the middle of January. (New York news in American Lumberman,' Feb. 10, 1906, p. 76.) A meeting of the association will be held this week and some increases in the price list are expected. (North Tona- wanda news in American Lumberman, Feb. 24, 1906.) The White Pine Association met last week in regular monthly session and discussed conditions of the trade. Several members were unable to be present and no important matters were transacted, no change in the price list being made. (North Tonawanda news in American Lumberman, Mar. 3, 1906.) Prices are strong in all instances, and while the demand appeared to have fallen off slightly following the last advance it is the general opinion that there was no corresponding weaken- ing in prices during the intervening period. (New York news in American Lumberman, Mar. 17, 1906, p. 76.) At this week's meeting of the association the condition of trade was summarized as good and the prospects for the season as exceedingly rosy. The anticipated change in the price list did not materialize. (North Tonawanda news in American Lumberman, Apr. 21, 1906.) Prices are strong but no change from the price list adopted during the winter has been announced. (North Tonawanda news in American Lumberman, May 26, 1906, p. 66.) In the better grades white pine has been slow. Considerable stock is being sold for this time of the year. The Tonawanda 596 THE LUMBEE INDUSTRY. list remains firm. (Philadelphia news in American Lumberman, July 7, 1906, p. 65.) The White Pine Association met as usual this month, but attendants say that nothing radical was done. The price list was brought up and approved, no changes being recommended. (North Tonawanda news in New York Lumber Trade Journal, Aug. 1, 1906, p. 22.) The White Pine Association of Buffalo and the Tonawandas made a picnic of its August meeting and did double duty on the day, as a good business session was held during the day. * * * Though the occasion was mainly treated as an outing there was a report of the price committee, favoring an advance in prices, especially of low grades, to be taken up and a session was held to discuss it. It is felt that low-grade pine is being sold too low and at the same time there are members of the trade who do , not see how the consumer is going to pay much more for his lumber. No detailed report of the changes made in prices was given out, but it is stated that some of the lower grades were advanced moderately, as it was thought that the trade would stand it. The problem of higher sawmill prices was hardly solved by the action taken, but the association will watch the matter closely and a further advance may be necessary. (New York Lumber Trade Journal, Sept. 1, 1906, p. 16.) The recent advances in prices are being maintained. (North Tonawanda news in American Lumberman, Sept. 15, 1906, p. 73.) Box lumber is difficult to get and inquiries from numerous sources indicate a willingless to buy heavy on the prevailing fist with a hope of forestalling an expected advance. (New York news in American Lumberman, Oct. 6, 1906, p. 67.) Box material is scarce and some dealers report if they could make prompt shipments, it would not be difficult to get a dollar above the list. (New York news in American Lumberman, Oct. 20, 1906, p. 67.) The White P ne Associat'on meets this week, but it is said that it is not likely to take up the price question again, as it is not easy to do anything in that line without exciting the saw- mil 1 interests and giving them the cue for another advance. (Buffalo news in American Lumberman, Nov. 24, 1906, p. 53.) During the first part of 1907 two lists advancing prices appear to have been adopted by the association — one of January 2, and the other of April 25. The last direct mention found of the price activities of the asso- ciation is the comment from Buffalo, in the American Lumberman of June 1, 1907. The few clippings shown, principally for the New York market, for 1909 and 1910, if taken in connection with those of former years, raise a strong presumption that the association price activities were ac- tually continued, even if more secretly than before. Attention must be called to the fact that the antitrust agitation against the lumbermen had attained great strength by 1907, and that the early reluctance to publicity of the proceedings of the association, pointed out in the dis- PRODUCTION AND WHOLESALE DISTRIBUTION. 597 cussion on the events of 1904, may have increased to such an extent as to keep out effectively mention of the affairs of the White Pine Association in the trade journals. Whether the association con- tinued, 1 in secrecy and by subterfuge, its former price activities — as has been shown to be the case with a number of other lumber asso- ciations — or whether the work was really abandoned, has not been definitely determined by field investigation. There is an advance of $1 to S2 on white-pine lumber here, taking place the first of the year, and the report is that it is paid without demur. (North Tonawanda news in New York Lum- ber Trade Journal, Jan. 15, 1907, p. 36.) The demand has been much better all through the market the last week and the recent advances in prices do not seem to deter the buying outlook in any way. (New York news in American Lumberman, Jan. 26, 1907, p. 87.) White pine continues to show great strength and the market is steadily tending upward. The advance of January 2 is holding firm and there are rumors, as noted elsewhere in these columns, of a sharp advance in white pine at manufacturing points within a few weeks, which will mean still another advance in the eastern wholesale markets. (New York news in New York Lumber Trade Journal, Feb. 15, 1907, p. 20.) There is not much to talk about in this market beyond the fact that the White Pine Association has been trying to boost prices again, voting to add $2 to the box grades and $1 to the barn grades at its last meeting. (North Tonawanda news in New York Lumber Trade Journal, May 1, 1907, p. 32.) An important feature of the current market is the advance in white pine, scheduled for this date in the Buffalo and Tona- wanda markets of from $1 to $2. (New York news (dated Apr. 25,) in New York Lumber Trade Journal, May 1, 1907, p. 18.) At the meeting of the White Pine Association last week all prices were firm and could be maintained, but it was not thought best to make any effort to get more. (Buffalo news in American Lumberman, June 1, 1907.) As noted elsewhere there will shortly be quite a sharp advance in white pine. The production is less than last year and stocks in some cases are going to be scarce at wholesale centers and practically all of the stock at the mills is already contracted for. (New York news in New York Lumber Trade Journal, Dec. 1, 1909, p. 27.) Probable immediate advance in white fine. — There are rumors to the effect that prices on white pine lumber for eastern delivery will very shortly be advanced, more particularly on good lum- ber. It would appear that this advance will be as much as from one to two dollars, and even more on special items. (Editorial comment in New York Lumber Trade Journal, Dec. 1, 1909, Following the announcement in our last issue of the Journal to the effect that a sharp advance in white pine was imminent, ' In this connection see the extract from T. D. Round's letter on pp. 286-287. 598 THE LUMBER INDUSTRY. there occurred almost concurrently with the publication of our December 1 issue, such an advance, and based on the previous list the new list shows about the following readjustments, f. o. b. New York: [Readjustments follow.] (Editorial comment in New York Lumber Trade Journal, Dec. 15, 1909, p. 19.) The recent advance in white pine is equally well maintained and stocks broken at wholesale centers with a shortage in some grades and very limited supplies in the hands of the buying trade, all of which reveals a situation which speaks for itself in the matter of the position of white pine in the next three months. (New York news in New York Lumber Trade Journal, Feb. 1, 1910, p. 37.) White-pine prices are ruling firm as per list published in our prices current supplement in this issue, with the possible excep- tion of a few items, but as a whole the April increase in prices is being well maintained. Indeed, present firm prices are neces- sitated by reason of the strong prices being asked at mill points for the season's cut. (New York news in New York Lumber Trade Journal, June 15, 1910.) Wholesalers find new orders extremely scarce, but say the aggregate of business is not poor. Prices are fairly well held, and as the situation seems well controlled, higher prices will quickly follow any increase in demand. (New York news in American Lumberman, July 2, 1910.) White pine has not attracted much attention, prices have been maintained as per the April increase and are held firmly at mill points. (New York news in New Orleans Lumber Trade Jour- nal, July 15, 1910.) One dealer complains that the local jobbers are not pulling together and to prove it he says that he can buy stock of cer- tain sorts right here at home and sell it at a profit of $2 to $6, which is too much variation, he thinks. (Buffalo news in New Orleans Lumber Trade Journal, Sept. 1, 1910, p. 34.) The demand for white pine still continues largely of the hand- to-mouth order, and prices on the lower grades show some com- ?etition, but the better grades are very firm at the list. (New "ork news in New York Lumber Trade Journal, Nov. 1, 1910, p. 23.) The following letter, obtained by agents of the Bureau in the course of an examination of the records of the North Carolina Pine Association, throws fight on some measures at present used among the wholesalers of the Buffalo-Tonawanda market to prevent "price cutting and demoralization" of the market. Mr. Charles Hill, the writer of the letter, is well qualified to speak on conditions in that market, through his connection as treasurer with the Northern Lumber Co., an important white-pine concern of Tonawanda. It is to be borne in mind that the price list to which Mr. Hill refers is a fist of agreed prices for transfer of stock between wholesalers, and not a list of prices to be asked from their customers, like the price agreements hitherto referred to. It should be noted, however, that the use of the price list described by Mr. Hill is to prevent price cut- PRODUCTION AND WHOLESALE DISTRIBUTION. 599 ting in sales to the wholesalers' customers. In other words, it is to be used to maintain prices from falling below certain levels. [Letterhead of A. C. Tuxbury Lumber Co.] New York City, 28 August, 1913. Mr. W. B. Roper, Sec. & Treas., N. C. Pine Association, Norfolk, Va. Dear Sir: I do not want to weary you with my letter writ- ing, but am greatly interested in the proper solution of the problems, now before us. A scheme that is in force between the white-pine dealers at North Tonawanda, that has worked out very well, suggest that we might do something of the same sort, through our association. 1 At North Tonawanda the different dealers have a price list and a general stock list. If one of the dealers gets an order for some item in a carload, that he does not have in stock, he trades some other stock that he has with one of his neighbors, who has the particular stock that he wants, and both prices are based on this general price list. This works advantageously in two ways. The dealer does not have to buy a large stock of items, that he does not need, in the Northwest in order to get certain items that he does need, and if he is overstocked on a certain item, his neighbor helps him dispose of it, and thus prevents price cutting and demoralization of the market. It is this last feature that I think may be of value to the members of the N. C. Pine Asso- ciation, and I want to ask if it could not be arranged so that each member, say once in two weeks, could submit to you a list of items that he wants to move. You could compile these lists from the various mills and distribute them amongst the members of the association, and if one of the members had an opportunity to sell a certain lot, that he did not have in stock and could get it from another member, it would prevent price cutting and work to the advantage of all concerned. I wish you would think this over and if it appeals to you, you can probably work out the scheme in a manner that will accom- plish the result. Yours truly, Chas. Hill. Section 15. Buffalo-Tonawanda grading. As far as the Bureau has been able to ascertain, no association or official grading rules have been established in the Buffalo-Tonawanda market. It was found on inquiry that all of the firms in this market use substantially similar grading rules, which have been established by custom and not by formal concerted action. The definitions presented by the Bureau were drawn up for it by a member of one of the most prominent white-pine firms and are believed to be reliable and representative of the grading in this market. 414 uppers. — Should be 8 inches and up in width ; 8 inches and 9 inches to be free from all defects; 10 inches and up will admit 1 Mr. Hill is an officer of the A. C Tuxbury Lumber Co., which is a member of the North Carolina Pine Association. 600 THE LUMBER INDUSTRY. of two small defects. One or two small knots or bright sap on back and edge, but not on face. Thicker stocks will take more defects. Fine common.- — Eight inches and up in width; 8 inches to 11 inches will admit of bright sap to meet on back for one-half the length of the piece; 12 inches and up will admit of the same amount of sap with two or three small knots on face. No. 1 cuts. — 4/4 pieces that will cut 2/3 good with a per- centage of 44 inches cuts for panels free from all defects, bright sap no defect; 5/4 and thicker the same as 4/4 with one or more door styles in a piece. No. 2 cuts. — Pieces that will cut 50 per cent good lumber in shorter sections than No. 1, bright sap no defect. No. 1 shelving. — Twelve inches and up. Can contain small tight-scattered knots; must have two good edges and no stained sap on face. No. 2 shelving. — Twelve inches and up. Will admit of a larger knot than the No. 1. Should be sound with one good edge. Bright sap no defect. Dressing is distinguished by the so-called "dressing knot," which is a small knot as distinguished from the long, branch knots. Dressing and shelving, or No. 1 dressing, is somewhat better than a No. 1 barn. The shelving stock is selected for clear edges; where two edges are clear it becomes No. 1 shelving, and where one edge is clear, No. 2 shelving. No. 1 barn. — Four inches and up in width. Will admit of sound knots about the size of a silver dollar, one good edge, little or no heart defect. No shake. Bright sap no defect. No. 2 barn. — Four inches and up in width. Will admit of a larger knot than the No. 1. Branch and horn knots admitted when sound. No. S barn. — Four inches and up wide. Will admit of a coarser knot than the No. 2, such as case knots. Black sap and small amount of shake no defect. Box. — Shake; large loose knots and knot holes no defect. Coarse sound stock taken in this grade. No. 2 box or mill culls. — Wormy, rotten, and otherwise un- sound stock. Defects in combination. Section 16. Prices of actual sales of white pine. Tabular statement. — Prices based on records of actual sales of a number of prominent wholesale firms are shown in Table 3A on an f. o. b. Tonawanda basis. The period covered is 1897-1910. The items for which prices are presented are shown in the following table: Grade. Thickness and width.' Grade. Thick- ness and width.' Grade. Thickness and width. 1 Grade. Thick- ness and width.' li and IJ by 8 and wider. do li by 7 and wider. No. lbarn. ...do No. 2 barn. lbylO. Ibyl2. lbylO. No. 2 cuts No. 1 dressing. . Do li by 7 and wider, lby 10 lbyl2 lby 10 lby 12 No. 2 barn. No. 3 barn. ...do No. 1 box . ...do lby 12. lby 10. lby 12. No. 1 cuts No. 2 dressing. . Do lby 10. lby 12. 1 All pri/.oo orfl fnr 1 (i Ky Tfl fqat I flnpt.ha _ PRODUCTION AND WHOLESALE DISTRIBUTION. 601 Graphic diagram. — All of the prices shown in the foregoing table are given in Diagram 19 (opposite p. 606). The prices of the'grades covered lie between $10 and $47 in 1897, and $24 and $95 in 1910. The upper, middle, and lower grades show about the same relative course of prices as appeared for similar grades in northern pine (Diagrams 17 and 18, opposite p. 582). There seems, however, to have been a somewhat more marked depression in 1900 in the medium grades in the Buffalo market than in the producing centers. The effects of the panic of 1907-08 are less evident in the Buffalo market than at the mills. Attention should be called to the marked difference in the prices shown between 1 by 10-inch and 1 by 12-inch boards of the same grade. The difference of 2 inches in the boards made a difference of prices in 1910 of about $13 a thousand feet in No. 1 and $10 in No. 2 dressing, $12 in No. 1 barn, $5 in No. 2 barn, $3 in No. 3 barn, and $1 in No. 1 box. The reason for the marked price differences in dressing and No. 1 barn is said to be due to the character of the export market, which demands boards at least 12 inches wide. 602 THE LUMBER INDUSTRY. •O O "3 OO saa aass 88 gg !gS38 -Tf.-t-p^-^-f.-t.^.^-t.^H^ saaaaaaaaaaa assssas SP":QiooQpu5pg 4t.i!5MOOONOO 8gggKSK8:3KS3K ^^^•Vyi^-^-^^liO OOi0O"3O"3OOOOO «oor~ot— »ar-»o»Qoo© »o «o «o OOPQ>'!'OOlOO r-r*.f-ia»oiScNC*©ea© nnNnnnnnnncSn OOiQQOpOpuje COiQOOOO OQiOOOOlO ggg S8SR8 :gg CD 00103 O >OC C4 • ?l T-l CI CI ~ 0U3O00000O0 "ONmooowono CMC* W Wi- NNWWN 8Ki38Kgg ©Ol*-C- 3Q>00>OiQO - 15 c f- iq :ggs o 3 w g-d oo © wS J88S SU3 OOIQU] MOWNN S inoooo ogooiooiQgooQO uo i-O r- O CO CO CO CO CO CO CO CO CO CO cm 'c^cocoeo■* CO • CO CO CO CO CO §ag'i«''T3s SKSSKSSS8RS p.a x gg ssssssssssss §s«$s«**i;s*ss 8888 coado iltN &s PRODUCTION AND WHOLESALE DISTBIBUTION. 603 IQlOO r-M»o **dt» g g 8 00 8S COt> dec 18.00 18.00 18.00 17.50 17.76 Moio»ot- uju:r'Oioii5«t»c5Nh.N ShSShwSh odooxddddddddd 83 8 d i-H 8SS r- r- d 8 d 17.00 17.00 17.00 17.00 ooo OlOO oor^od 17.75 17.25 17.25 17.50 17.50 17.75 18.50 OIQU3 00 00 00 .-I »H iH ©0©««© U3000QOOU31QOQO ©©OiOO<0©«50©©iO CJs Cft 03 03 OS 03 O O O ■"" ' ^H o c^ddodooddooodooodod SiOOUSOOOOOiOiOQ C$w5m»0»0^©u3©©iQ§ S*dpddd'-5«-J»H ( -5rHrH MMMMMMCNMMMM •OOiONONNWNiS coDoo>oo)0)0)cno)OiO)0> = ©ow« 30>or-t- B8SS8SS8SB8S »©r- 8'CPOOOU30iO>OOiO iH .HHNHOOOOlcid M ■MMMMMMMi-'MM iooooiQOiAOOo r-©©iOM©MO»Ot"»OM 88 s ; d S 0©lQlQU3©Q©iOG oONOIl-OO^f-C ©OiOQ©QQOiO©»fl>u3 OO ooN>oiQioo>nt'ion^ ©w nNNMnnnMNNNcq Sic) 30.00 30.00 30.25 30.25 30.50 30.50 31.25 31.25 31.50 22.50 23.00 23.25 24.00 23.50 23.50 24.00 23.25 23.60 23.75 23.25 22.50 22.00 21.75 22.25 gg COM c5w 23.00 24.00 23.50 24.00 24.25 24.25 24.00 24.00 24.50 26.26 25.50 25.25 26.00 26.00 26.75 26.25 27.25 26.75 26.75 27.00 24.00 25.50 27.25 28.75 28.76 28.50 29.50 29.00 27.75 27.00 27.00 26.50 26.50 26.00 26.75 26.75 27.00 26.75 26.25 26.00 25.50 26.25 26.50 26.25 26.75 27.00 27.00 27.25 27.75 28.25 28.00 28.75 28.25 28.75 28.75 28.75 29.00 28.50 22.00 22.50 22.50 24.00 24.00 24.00 23.50 23.00 23.60 22.00 22.00 22.50 22.60 22.50 22.26 22.75 22.75 22.50 22.75 23.00 23.00 23.00 23.75 24.75 26.00 25.75 26.00 25.50 26.00 25.50 26.25 oitHN 34.00 33.00 33.50 33.00 33.00 33.00 32.00 32.50 31.75 32.25 32.50 31.25 31.50 30.75 31.50 32.50 31.25 31.50 32.00 32.75 32.75 32.50 32.50 33.25 33.25 34.75 36.50 36.00 35.75 35.75 35.50 35.75 35.50 36.00 IQO '■£>!> CM CM 28.00 28.00 28.75 29.00 29.00 27.75 g CO © Ui 1ft C-l 24.50 24.50 26.25 26.00 27.00 26.50 '2.8.' 50 28.25 28.50 29.26 30.50 31.00 31.00 31.75 31.50 32.00 31.00 31.00 31.00 ■1OM6ON0S gMiOOOOOOOO CM©o©too©ota CO CO CO CO CO CO CO CO CO CO M -r -r -r t ■OlOOQQOQiOiQiO MM»0©©iQ©Mt-t*- ■o>oooo>oou;ieo>QO r-t^iOOOMOMOOM© CO CO CO CO CO ^f "^ ^ ^ ^P ^ ^ 88 88SS? MJlogiOiOWOiQiOQiflO r-c-©Mr-t~wMM©f->o S3 33 399 3 S3 3 3 3 3 88B8gSKSSB<38 3^$!$33^$!$%$g HC4>n0 lq 10 10 'O O LO \Z' iO u"3 ciSSS 88 SSu SOQOOUJOO t*. OO 8S88S &Z fill il!lii#ll Ifliiilllll iilf a IS » a« g-g g osS 604 THE LUMBER INDUSTRY. OQOlOQlQQQQOiQO SSSS83S3888S8 s«s lOiOOOiOiOfliOQOQO o6o6qdo6o6o6d6o£o6o>coo> CI CO Ol Ol OJ g : :8 SSSSSSSS OOOIONN Oi CE> Ol Oj O"- or-t-t*r^i>c-" ssssssssssisssisss assasjfssssgsssssa 8888!3g888giSg Oc38ioe3irae3c3ioe3e5c3 leiooooo NnSN^( SOlOiOUSlOlOlOOpOO Mwc5we5c5c5cScscsc*cs iQiOQOiQQiqOOOiOO «NOONOCSO"3>Ot»0 SS3 gioooioooooicu: $ or~r-r»t-oo sssassssssssssssgssi 888883 2; sessssg :owni5nonon«c ssssg encQaoaoopooopCQ 5cn iof)u w w r-tow >n c ssssssss sss? 583? «NWS3«OT 8™ OHO eoeoco ggsgsgggg e"3COCOC"3CBCOC?OtOC3 CO CO C*5 tt ■S I O 3 M a-a gggSSg 3 ? K as OiqooooujujOOion - O O" QlQOOOO W^iOiOiOK MOOuJUSOWOnSSc- QOO>OuMqiQOiqoo CNOioeNc-t-t-ioNioo SScScSSsoioioKSSSS ■*U5oQiaioooo Mjoompo ^j* tj< ^ ^ ^ -rf* 8S3K8 88 iC OU1QQO r-owoo>o S8 8S 8S8SSS 888 SS :333333 88S 88S88 555 88 SSSgSg 8Kggg8SS888Sg S 8888 888888 I^OOCOOOt^QO 10 IQIO iq IO iO '§8 SgS!S8g88K!3Kg SK8888 88! lit* oS) 00 ■HIM llw&ailPl . „ E o Co ^j i ! i|| j|| 3 3-S ■Sozo 606 THE LUMBER INDUSTRY. gg 3 W lO S38 gsss iSowSs ISSS A 9 0> OpOQAOOOCO NK« CO CO CO CO CO CO CO CO CO CO o 2KS8S8KS8 OQ iiQlOOOO -O'OO U3U5 •«t**u50"9 -ust-o Sow ooc iSnu f ^^^5^5^5i^!5^^ ^j ^j ^j i§ Sgj Sjj ^j ^i ^1 ^j § gSK8KS88S88g 88 IO >0 IQ W3 1* "O «i up iO io iq >o yatd CO CO CO CO CO CO CO CO CO CO CO CO coco el ■a ■c SR as o a x aw is"*""! SeJeS gRg g88g :8R o 3 m g'o g Iggggsggggg SSRSS IiP*ll 8QOOOOIQO 3g g :g : : :g Sg Diagram 19. — Movement of Actual Prices of White Pine (Tonawanda Grading) on an F. O. B. Tonawanda Basis 1897-1910. CHAPTER VI. HEMLOCK. Section 1. Production. The cut of hemlock lumber in the United States in 1912 is re- ported l to have been 2,426,554,000 feet, board measure. It came principally from three regions, the Appalachian region producing about 41.5 per cent, the Lake State region with about 47.3 percent, and the North Pacific region with about 7.9 per cent. The Bureau gives prices for hemlock coming from the Appa- lachian and the Lake State region. "Eastern" hemlock has been taken as typical of the hemlock lumber produced in New Eng- land; Pennsylvania and West Virginia hemlock for the hemlock pro- duced in Pennsylvania and West Virginia and the neighboring States ; and, for the Lake States region, Wisconsin hemlock. Outside of Boston, not enough of the "eastern" hemlock lumber was found entering into the markets to give a good line on prices, and even in Boston of late years the trade has been small. Apparently most of the eastern hemlock cut is consumed near its source of production. Pennsylvania hemlock, on the other hand, is an important factor in the lumber trade of several of the eastern markets, especially in Pittsburgh, Philadelphia, and New York, all of which it reaches by rail. It formerly was marketed to a considerable extent in Buffalo, but of late years its place there has been taken by hemlock from Michigan, which comes by water. The hemlock of Michigan and Wisconsin finds its principal markets in the cities situated on Lakes Michigan and Erie, and reaches them both by water and by rail. The following table 1 gives an idea of the relative production of hemlock lumber in the Appalachian and Lake States regions: Appalachian region: Eastern hemlock — Maine M feet b. m. 89, 142 51, 289 36, 784 New York 123,924 New Hampshire. Vermont Total 301,139 Pennsylvania hemlock — Pennsylvania 386, 188 West Virginia 215, 893 Virginia 39,185 Appalachian region — Contd. Pennsylvania hemlock- Continued. North Carolina Tennessee M feet b. m. 35, 539 30, 486 Total 707,291 Lake States region: Michigan 535,446 Wisconsin 610,421 Total 1,145,867 ' Forest Products, 1912, p. 16. 607 608 THE LUMBER INDUSTRY. Section 2. Competition met by hemlock producers. Competition among different regions of production. — As is the case with some other species, hemlock from one locality competes sharply with that from another, in markets which both can reach. In Boston there has been a constant competition between the hem- lock boards from Maine and New Hampshire and those from Penn- sylvania. The comment in the lumber-trade journals indicates that there was a considerable trade in No. 1 and No. 2 Pennsylvania hem- lock boards in Boston from 1901 to the middle of 1905, when the rapid rise in Pennsylvania hemlock prices kept it out of this market, as dealers turned to' eastern hemlock and spruce. With the fall of prices in 1908 No. 2 Pennsylvania hemlock boards again came back, but apparently No. 1 Pennsylvania boards have not been as much in demand. The competition is keenest between No. 2 Pennsylvania hemlock boards and eastern hemlock boards, as they both sell at about the same price level, while No. 1 Pennsylvania hemlock boards are usually about $3 higher. One of the principal dealers in the Boston market attributed the scarcity of sales of eastern hemlock boards in 1909 and 1910 to the approaching exhaustion of the supply and to the competition of Pennsylvania hemlock. In the New York market there is some competition between eastern hemlock and that from Pennsylvania and West Virginia. It ap- parently has been of an intermittent nature, although occasionally attention is called to its severity. The principal hemlock competi- tion in the New York and Philadelphia markets, and to a less extent in Pittsburgh, seems to be between Pennsylvania and West Virginia, the West Virginia hemlock occasionally being less strongly held to price lists than the Pennsylvania. The most striking example of the competition between hemlock from different regions is to be found in Buffalo and Tonawanda, where Michigan hemlock invaded a market in which Pennsylvania hemlock was firmly intrenched, and after a fight of several years virtually drove it from its position and made serious inroads into the territory east of Buffalo, along the line of the Erie Canal. The Michi- gan hemlock, coming in cargo lots, usually sold at a somewhat lower price than the Pennsylvania, which reached the market by rail, but the price of the Pennsylvania product was not disproportionately high when the differences in delivery and the regularity of supply are considered. For Michigan hemlock is only delivered in large quanti- ties during the season when navigation on the Lakes 'is possible, and then only in large lots, while Pennsylvania hemlock can be had at all seasons in car lots. The details of this competition are told in the trade-journal comment from Buffalo and Tonawanda. In 1903 there wae a scarcity of Michigan hemlock coming to the Buffalo market. The American Lumberman commenting on the PRODUCTION AND WHOLESALE DISTRIBUTION. 609 situation in Buffalo at this time stated in its issue of April 4, 1903, page 53: There is a demand for hemlock that still surprises dealers who are troubled over the supply. They say that it is practically out of the question to buyit m Michigan, for the asking price there is $12, or close to it. With not less than $2 freight it would be impossible to sell it here at the Pennsylvania base price of $15.50 and make any profit, especially as it is not so valuable. In its issue of May 9, 1903, page 107, it stated: The situation is peculiar on account of the sudden dropping out of Michigan hemlock. If it has been found that the Pennsyl- vania producer can shut this western competitor out by holding the base at $15.50, where it has been since March, possibly the price will be held where it is. By the last of the year, however, the competition of Michigan hemlock had revived to such an extent that the base price of Pennsyl- vania hemlock at Tonawanda was reduced to meet it, as noted in the following from the North Tonawanda news of the American Lumber- man, October 24, 1903, page 57: Competition of Michigan and Pennsylvania hemlock as regards sales has been very brisk lately, resulting in a reduction of 50 cents in the base price of stock from the latter State. This reduction places the price of Pennsylvania stock the same as at Buffalo. An explanation from the Buffalo market appears in the issue of that journal, November 28, 1903, page 61: But for a misunderstanding in the western sale of Michigan hemlock, which threw a lot of it by lake into the eastern trade about midsummer, the price would be higher than it is, but with this competition in sight the Pennsylvania prices have remained unchanged all summer. In its issue of July 1, 1905, page 67, the American Lumberman stated the situation as follows: Bather more than the usual amount of hemlock is coming in from Michigan, though that trade is not very satisfactory. Western demand for it is good, so prices are held up, while this market always prefers Pennsylvania hemlock. The advances in price of Pennsylvania hemlock were counter- balanced by similar advances of Michigan hemlock, as was pointed out by the American Lumberman in the Buffalo news in its issue of September 9, 1905, page 61: Pennsylvania producers have concluded to. make another advance of prices and the circulars are out for 50 cents addi- tional in the base price, with special advances in long lengths pushing them up $1 to $1.50. This means that the trade is entirely independent of the former competition from yellow pine 25030°— 14 39 610 THE LUMBER INDUSTRY. and that the Michigan dealers are holding their lumber so high that it will not interfere with the advance. The move seems to have been agreed on rather hurriedly, for the new price went into effect on the first of the month, with the circulars not generally out. From that time until the general decline of prices in 1908 the market comment in the trade journals indicates such a strong demand in Buffalo that both Michigan and Pennsylvania hemlock sold readily, Michigan stock often bringing as high prices as Pennsylvania. In the beginning of 1908, however, at the time of the widespread commercial depression, the competition again started. In February a new list was issued, making a material reduction in the price of Pennsylvania hemlock, and by August the competition between the Pennsylvania and the Michigan hemlock had become active. By the last of the year the competition seems to have diminished, probably because of the close of navigation on the Lakes, and the consequent shutting off of cargoes from Michigan. In the first part of 1909 competition was not active, but in September a rise in price of Pennsylvania hemlock led to a greater trade in the Michigan product. A decided change in the base of supply for the hemlock market can be seen here this season. A year or so past, hardly a yard in the city used much western hemlock. This year scarcely a yard can be found that has not had in at least one block of stock from the West, and many are using it entirely. (Buffalo news, New York Lumber Trade Journal, Sept. 15, 1909, p. 31.) By the end of the year Michigan hemlock seems to have the advan- tage in sales. A little later there seems to have been an effort on the part of the Michigan hemlock dealers to push their sales east of Buffalo. The following extracts from trade journals present many of the de- tails of the contest between the two kinds of hemlock in 1908-1910. 1908. Buffalo — St. Louis Lumberman, August 16, 1908. — There is a big demand for hemlock, on account of the liberal amount of building in the city, but the stock from the East and from the West is still at odds over prices, so that the city is getting the benefit of the cut made by lake shippers and is not buying much of the Pennsylvania mills, which refused to meet the reduction. A good many lake districts are offering hemlock and it is finding its way some distance east by canal, though rail rates are too high to be paid very much. Buffalo — 81. Louis Lumberman, October 1, 1908. — The Pennsylvania hemlock trade is now creeping back sl6wly, so the reduced prices on an $18 base are held. The Michigan stock had been sold so low that it had the market pretty well to itself, but when the jobbers began to ship it to all points East by canal it was seen that something must be done by the Pennsylvania mills to hold their trade. Buffalo — St. Louis Lumberman, October IS, 1908. — Some of the dealers in hemlock call prices pretty weak, even with the large demand for it that exists. This is because the hemlock from Pennsylvania and the hemlock from Michigan got out of line, and cutting is not yet at an end. The jobbers in the lake trade are bringing it down in good quantity and are quite willing to take all of the city trade, but Penn- sylvania mills, once driven out by them, are trying to get back again. Hence the strife, which may last all the season. Buffalo— St. Louis Lumberman, November 1, 1908, page 81. — Hemlock dealers generally express them- selves as satisfied with the trade, though they would nave done a good deal better had the Pennsylvania and Michigan branches of it been willing to divide up on it in some way. After they had disagreed and cut the price down a few dollars they concluded that it was best to let each other live. Buffalo— New York Lumber Trade Journal, November 1, 1908, page 18.— While more hemlock is used than any other wood the price still remains low, for the reason that the hemlock coming in from the West has made the Pennsylvania dealers reduce their base about SI. 50 to meet the competition. PRODUCTION AND WHOLESALE DISTRIBUTION. 611 Buffalo— American Lumberman, November 14, 1908.— Dealers agree that there is enough business for both the lake and the Pennsylvania sides oi it if they do not fall out again. The war that took place be- tween them some months ago, and which ended, for the present, in the reduction of the Pennsylvania base price to $18, was not needed, and now that the southern pine prices are out of the way, the hemlock prices may advance, although they do not show much disposition to do so. Buffalo— St Louis Lumberman. November IS, 1908, page 81.— Hemlock is very active in this market, but it is too bad from the lumberman's standpoint that it is not bringing as much as it did in the spring, all because two sets of sellers wanted all the trade, each to the exclusion of the other. So it appears that competition is the life of trade in this case, also, but it is death to good profits. Buffalo— St. Louis Lumberman, December 15, 1908.— Trie leading producers and jobbers in hemlock feel pretty sure now that there will be an advance in this wood after the first of the year, something that can easily be done unless the Pennsylvania and Michigan branches of the trade get to fighting among themselves again. Buffalo— American Lumberman, December 19, 1908.— It appears that there is still a little haggling going on between the Pennsylvania and Michigan interests, and it is said by an outsider they both want an advance in price but can not agree to compromise on a figure. 1909. Buffalo— St. Louis Lumberman, January IB, 1909.— It is generally believed here that, notwithstanding much talk to the contrary, the Pennsylvania and lake hemlock interests will get together before long and agree not to cut one another's throats. Buffalo— St. Louis Lumberman, February IS, 1909, page 107. — Last year the Michigan and Pennsylvania dealers pulled apart and failed to agree upon a price so that it was cut down considerable, but the feeling Is better now and the base price is maintained at $18.50 by the Pennsylvania dealers, though Michigan hemlock is reported as selling at 50 cents less, which is perhaps a fair differential. Buffalo— American Lumberman, September 2$, 1909, page SO. — The Pennsylvania hemlock mills this week advanced the price 50 cents, bringing the base price up to $19.50. Pennsylvania hemlock prices are thus a little higher than they ever were before. A very strong demand in the eastern territory of the Pennsylvania mills is given as the reason of the advance, and this opens up some territory east of Buffalo for invasion by the northern hemlock people. General market comment— St. Louis Lumberman, December 1, 1 909.— Competition between the hemlock dealers with Pennsylvania mills and those who get their stock by Lake has been very sharp this season, and now the former complain that they have about been driven out of this market by cut prices. Awhile ago the Pennsylvania prices were put up from 50 cents to $2 a thousand but the others did not advance prices. 1910. Buffalo— St. Louis Lumberman, February 1, 1910, page 129.— -The hemlock jobbers differ from the other city lumbermen by reporting that there is plenty of stock. The city yards usually put in such as can be shipped in by Lake and it so undersells the Pennsylvania hemlock that the latter has to seek a market eastward. Buffalo— St. Louis Lumberman, June 1, 1910, page 96.— The dealers in hemlock from the lakes claim to control the trade and they have about shut the Pennsylvania hemlock out of this market Buffalo— St. Louis Lumberman, August 1, 1910; page 96. — There is a large amount of hemlock coming in by lake from Michigan and it sells readily here, though it is not shipped eastward very much, as it has to compete with Pennsylvania hemlock in a way that it does not have to here, so it is well to divide up the territory in that way. Buffalo— St. Louis Lumberman, October IS. 1910, page 88.— Some hemlock is being shipped as far east as Syracuse, finding a good market east to that point. Buffalo— St. Louis Lumberman, December 15, 1910, page 96. — The hemlock trade is good as regards quan- tity, but prices are low and have been weak for a long time. Since the time when the lake dealers cut under the Pennsylvania dealers and took the trade away from them they have felt obliged to keep prices low, while the Pennsylvania dealers have shipped their cut East at prices that are quite as satisfactory. They would come back if they could, but while they are now selling some lumber here, they agree that they do not need Buffalo as a market. Competition from other woods.— Hemlock is chiefly used for framing) and there are several other woods with which it competes for this use. Its strongest competitors are southern yellow pine, spruce, and North Carolina pine, and many instances are noted in the trade journals of the effects of such competition on hemlock prices. In Boston, New York, Philadelphia, Pittsburgh, and Buffalo, it meets the different kinds of spruce, and also North Carolina and southern yellow pine. In most of the region west of the Alleghenies and north of the Ohio River it meets competition from "northern" (white) pine and southern yellow pine. The comparatively small amount of hemlock sold west of the Mississippi meets competition from "northern" (white) pine, southern yellow pine, western yellow pine, and Douglas fir. In normal times hemlock and Douglas fir have not been in close com- petition, not much fir dimension coming east of the Mississippi nor hemlock going west of that river. In 1907, however, on account of 612 THE LUMBER INDUSTRY. a scarcity of cars in the fir and yellow-pine producing regions, con- siderable territory west of the Mississippi was opened to hemlock. The competition of yellow pine has had some influence on hemlock sales in the markets east of the Alleghenies, but by far its most important effect has been shown in the marketing region of the Lake States hemlock. The hemlock manufacturers of Michigan and Wis- consin have not been in as advantageous a position as those of Penn- sylvania and West Virginia. The latter have been more able gener- ally to restrict production at times when prices were unsatisfactory or to divert their output from markets where they encountered severe competition to those where they met less. On the other hand, the necessities of the Lake States producers have often compelled them to meet severe competition by cutting their own prices; and where they met yellow pine, it was a case of two weakly held woods crowd- ing into the same marketing territory. The difference between the course of hemlock dimension prices and those of "northern" (white) pine dimension, in the face of the southern yellow pine competition in 1906, is a good illustration of the effect on prices of the power of a strongly held timber supply. "Northern" pine has the same gen- eral marketing territory as hemlock, but it is largely controlled, like Pennsylvania hemlock, by a few large owners. In the following article, published in the Mississippi Valley Lum- berman, August 30, 1907, page 22, under the title of "A neglected field for the sale of Wisconsin hemlock," this difference in market control between hemlock and northern pine is well brought out: For a number of years the principal field of endeavor for the manufacturers of hemlock lumber in the State of Wisconsin, in the sale of their output, has been embraced in the southern part of their own State, northern Illinois, Indiana, and Ohio, and a part of the State of Iowa. Surplus stocks which they could not sell to the dealers of these States have been persistently offered in Chicago, which has been notoriously a market where adequate values could not be realized, and where competition from other woods has always been of the most vigorous character. In the other markets above mentioned practically every sale has been made in competition with the manufacturers of yellow pine. It is a well-known fact that the yellow-pine market has been decidedly unstable even at times when the demand for lumber has been the greatest, and as a result, the published hemlock price lists have been little more than bases for concessions. During the past summer selling prices for hemlock lumber in Wisconsin, Illinois, Indiana, and, m fact, most sections where it has been sold, have ranged from 50 cents to $2 and more a thousand below the latest price lists issued by the manufacturers. Meanwhile, with the exception of the hemlock manufacturers located in the western part of Wisconsin and the wholesalers located in Minneapolis, few hemlock producers have made more than spasmodic efforts to cultivate the trade of the States west PKODUCTION AND WHOLESALE DISTHIBTJTION. 613 of the Mississippi Eiver. Possibly, in the past, when the volume of northern pine output was much greater than at the present time, and when west coast lumber was lower in price, southern Minnesota, Iowa, South Dakota, and northeastern Nebraska did not offer an alluring field for the sale of hemlock. But times have changed. Northern pine is not pushing for customers, and the re- duced supply makes it .unnecessary for the manufacturers to expend the effort formerly required. Advancing cost of production and increases in timber values have forced the prices of western woods to a higher point. Hemlock lumber has always been sold at a lower price than northern pine because of a certain prejudice against it. During recent years actual use of the lumber has dissipated this preju- dice to a marked degree, but the manufacturers have continued to underestimate the value of their product. It can be said, however, that conditions that prevad in the manufacture of hemlock have contributed largely to this. As is the case with southern pine, its production is very largely in the hands of those who are either financially unable to hold their lumber for its true value, or who seem incapable of appreciating what it is worth. The small manufacturer sets the pace which must be followed to a certain extent. While the competition of southern pine with Lake States hemlock has been active for a long series of years, there have been several times when its severity has been especially marked. In 1904 the American Lumberman, in its market reports from Chicago, called attention to the competition hemlock was meeting there from yellow pine. One extract will be sufficient to show the situation. In its issue of September 17, 1904, page 59, it was stated: During the summer hemlock encountered much competition from sacrificial yellow-pine piece stuff and common inch; but now that the rural demand in the natural territory for distri- bution is affording an ample outlet for southern pine in all grades the effort to unload cheap stuff in the farther north has been relaxed. This relieves hemlock from such southern competi- tion, and dealers can go out for orders without the handicap of cheap yellow pine offered at slaughter prices. The result is a healthier tone m the hemlock trade. In 1905 conditions appear to have been somewhat reversed. The demand for hemlock piece stuff is visibly more active, mainly because of the higher prices recently established for Norway and because of the extreme difficulty of securing yellow pine. Manufacturers and wholesalers of hemlock say that they are shipping much of their product into what has been hereto- fore regarded as exclusive yellow-pine territory, and that the demand is getting brisk in many localities. (American Lum- berman, Aug. 26, 1905, p. 66, Chicago.) Through the first part of 1906 hemlock appears to have been little affected by yellow-pine competition, but toward the middle of the 614 THE LUMBER INDUSTRY. year prices were affected for a short time, as is shown by the following quotation : The recent drop in the yellow-pine market caused a wavering in hemlock prices, but the still more recent stiffening in yellow pine has permitted hemlock to get back to the list. (Mississippi Valley Lumberman, July 20, 1906, p. 34.) About the middle of 1907 the competition of yellow pine again caused considerable comment. The following is an extract from the Mississippi Valley Lumberman of August 23, 1907, page 21: As was stated at the meeting of the Northwestern Hemlock Manufacturers' Association, held this week in Milwaukee, the key to the whole situation has been yellow pine. A very large proportion of the hemlock lumber cut in Wisconsin and Michigan comes into direct competition with yellow pine in Ohio, Indiana, Illinois, southern Wisconsin, and Iowa. Yellow pine has been notably weak during the past few weeks, and hemlock has been sympathetically in accord with it. The competition which hemlock met from yellow pine in the early part of 1908 appears to have been the most severe in recent years. The following extract from the American Lumberman of January 25, 1908, states the condition clearly: Among the northern woods hemlock is attracting some atten- tion. Its course follows very closely that of yellow pine, of which it is a direct competitor, in some uses either wood being a substitute for the other. Hemlock, however, being the cheaper, and, on the whole, the inferior wood, can not expect to sell in considerable quantities on even terms with yellow pine. Yet its cost of production, including stumpage, is nearly that of the southern wood. Under such circumstances, the hemlock people do not expect to do much, and are not disappointed. A few are losing money in attempting to sell below the cost of production, but the majority are holding, in full confidence that within sixty days yellow pine will have so advanced as to let hemlock in to its usual markets. In some cases it is still selling at better prices than the lowest heard of for yellow pine, for the reason that many retail dealers that get hemlock as a regular commodity do not care to educate their customers into using yellow pine for the purposes for which hemlock has been used. After the middle of the year the competition slackened. The trade papers mention competition between the two woods in 1909 and 1910. The following from the Mississippi Valley Lumberman of May 20, 1910, indicates that the manufacturers preferred low prices to allowing a competing wood to get a foothold in their territory: The territory naturally belonging to yellow pine has shown considerable activity in building this spring and has up to this time consumed a large portion of the output, and any invasion at this time into hemlock territory is regarded as only tempo- rary and the result of an effort to secure some business during a seasonable lull. If such a campaign, however, proves to be of more lasting qualities some manufacturers believe it advisable PRODUCTION AND WHOLESALE DISTRIBUTION. 615 and better policy for the hemlock dealers to meet the compe- tition rather than to allow their competitors to get a foothold in the territory and in the end be forced to meet the competition after the trade is pretty well stocked up and the demand com- mencing to fall off. Section 3. Eastern hemlock. As has already been pointed out most of the eastern hemlock cut is consumed near its source of production, and it is not an important wood in any of the large consuming markets. The Bureau presents prices only for Boston. Definition of gkade. — But one grade is shown, that of merchant- able. The Bureau did not get an authoritative definition of this grade, as applied to hemlock boards, the only kind of eastern hemlock lum- ber for which prices were obtainable. It is believed, however, that the definition of "merchantable" boards, stated under "Rules for the inspection of spruce and hemlock (eastern) " in the Massachusetts State law for the inspection of lumber, 1904, applies substantially: Merchantable boards shall not be less than 8 ft. long, and 4 in. wide, of sound character and free from knots, wane, splits and rot, or other defects that will impair its strength, or prevent its use for ordinary purposes without waste. Prices of actual sales of eastern hemlock. — The Bureau shows in Table 4 actual prices of eastern hemlock boards, planed one side, 1 by 5 inches and wider, mixed lengths, delivered in the Boston market. The prices given in Table No. 4 are shown in graphic form on Diagram 22 (opposite p. 680). Table 4.- -ACTUAL PRICES OF EASTERN HEMLOCK BOARDS DELIVERED IN BOSTON, 1897-1909, BY MONTHS. [Comprising dressed boards, mixed lengths , 1 by 5 inches and up.] Month. 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 $10.50 10.50 11.25 10.50 $10.25 $10. 75 $14. 50 $15.00 $15. 00 $14. 75 $19. 50 20. CO 19.50 19.00 18.25 18.25 18.50 17.50 19.00 February $21. 25 22.00 21.50 21.25 21.00 21.00 20.75 20.75 20,75 20.50 March 10.50 10.25 10.00 10.25 10.00 10.00 10.00 10.00 10.50 11.00 12.00 14.50 14.25 14.25 14.00 13.50 13.50 14.75 15.25 14.75 14.50 15.00 14.50 15.00 15.00 16.25 16.00 15.66 15.75 16.25 16.25 16.50 17.00 17.25 17.50 18.25 19.00 $22.00 22.00 20.75 19.75 20.75 21.00 "20." 50 119.00 $14.00 14.50 14.75 15.00 14.75 14.50 14.75 14.00 15.00 14.75 14.25 14.50 14.50 14.50 14.50 20.00 Miy ; 11.75 13.00 13.00 14.00 15.00 15.25 15.75 sie. 50 14.50 14.00 14.50 14.25 14.00 14.00 16.25 10.25 10.00 10.50 10.00 10.25 10.50 19.00 July 19.00 August 19.00 September 19.00 October. .. 19.00 November. 19.00 December 19.00 PENNSYLVANIA AND WEST VIRGINIA HEMLOCK. Section 4. Conditions in production of Pennsylvania and West Virginia hemlock. Hemlock lumber came into importance in Pennsylvania with the exhaustion of the white-pine forests. In the early days hemlock was cut for the bark (for tanning) and the peeled trunks were not valu- 616 THE LXJMBEE INDTJSTKY. able enough to convert into lumber. Gradually, as more valuable species became scarce, hemlock was used in increasing quantities for framing and rough construction until at last it had a secure place in the lumber supply. In West Virginia the manufacture of hemlock lumber for the general market did not begin until a comparatively recent period. As is pointed out in the case of West Virginia spruce (see p. 698), the railroad development of the State was first necessary before the forests of West Virginia were accessible to the lumber markets. Because of the economic importance of hemlock bark the condi- tions of the tanning industry have had a most important effect on the lumbering of hemlock. In a way hemlock lumber has had the posi- tion of a by-product of the tanning industry, large tracts of hemlock stumpage being controlled by tanning companies so that they can be sure of their supply of bark; and even where the owner of hemlock stumpage has no direct connection with the tanning industry it is generally to his financial interest to regulate the amount of his cut- ting by market requirements for hemlock bark, and the time of his cutting by the bark-peeling season. 1 The bulk of the hemlock of Pennsylvania has fallen into a very few hands. Keferring to conditions at the present time one informant said to an agent of the Bureau: "The entire supply sold in the New York market is owned by two companies, the Goodyears and the Central Pennsylvania Lumber Co. 2 They set their price and you either pay it or let it alone." In addition to the demand for hemlock logs for lumber some hem- lock is also consumed in paper making. According to Forest Products No. 1 for 1911, page 8, this amounted in 1911 to 33,181 cords in Penn- sylvania and 7,000 in West Virginia. The effect of the demand for pulp wood is to lessen the supply of logs to be converted into lumber, and thus reduce the production of lumber and strengthen prices. Section 5. Concerted price activities of producers. No detailed investigation has been made by the Bureau into the various organized attempts of the Pennsylvania and West Virginia i This is illustrated by the following trade paper comments: At least four-fifths of the remaining hemlock stumpage in Pennsylvania is controlled by the tanning companies. These companies permit cutting hemlock timber only as fast as they require the bark for tanning purposes, and therefore the hemlock output of the S tate is gradually dim inishing until it hardly keeps up with the demands of the trade. (American Lumberman, July 13, 1901, p. 12.) From authoritative sources it is learned that the demand for bark will fall short of last year's by 200,000 cords, which means a curtailment of about 300,000,000 feet of manufactured lumber. (New York news in American Lumberman, June 11, 1904, p. 63.) The United States Leather Company, now a leading producer of Pennsylvania hemlock, cuts its hemlock as it needs bark, making the lumber a side issue, and it has an excess of bark now; hence the prospective lumber shortage. (Buffalo news in American Lumberman, Dec. 31, 1904, p. 71.) Hemlock remains a puzzle owing to the increasing scarcity of the wood and the fact that so much of it is held by a few hands. Pennsylvania hemlock is held largely by tanners, who cut it on the basis of their requirements for bark and not on the market demand for the timber. (Pittsburgh news in Ameri- can Lumberman, Sept. 23, 1905, p. 43.) s The Central Leather Co. owns entire capital stock, except qualifying shares, of the Central Pennsyl- vania Lumber Co. (Moody's Manual, 1912, p. 3841.) PRODUCTION AND WHOLESALE DISTRIBUTION. 617 hemlock lumber manufacturers to establish and maintain uniform prices. Extracts from trade journals presented in this chapter de- scribe such attempts, and show what they were generally understood to mean in the lumber trade. Men prominent in the lumber trade in New York, Philadelphia, Pittsburgh, and Buffalo have made state- ments to agents of the Bureau that confirm many of the trade-journal statements. Connection of hemlock producers with uniform price lists. — The control of the supply is in so few hands that there could be little need for a formal organization. There are, however, some organiza- tions mentioned from time to time. For example, the New York Lumber Trade Journal, October 2, 1899, refers to price activities of the Western Pennsylvania Planing Mill and Lumbermen's Associa- tion. In the early part of 1899 the "Wholesale Lumber Dealers' Association of Pittsburg" was organized. An important part of its activities seems to be the issuing of ' ' official ' ' prices on hemlock. This is indicated by the extracts from the American Lumberman of March 11 and 18, the latter stating: "The object of the association is for mutual protection, to regulate prices, to pass on credits, and to pro- mote a social feeling among the dealers." At the first organization meeting an advance of prices was pro- mulgated, and further references are to be found in news items from the American Lumberman of April 1, 1899, June 1 and July 13, 1901, which show aggressive and what was claimed to be effective price action. In the American Lumberman of November 2, 1901, Fred E. Bab- cock, president of this association, is quoted as attributing a good deal of credit for price control to the activities of the association. The Pittsburgh wholesale association on October 4, 1904, suspended its hemlock list, but a week later reaffirmed it. 1 In the American Lumberman of January 7, 1905, and of December 9, 1905, and in the New York Lumber Trade Journal of February 15, 1906, changes in the official list are attributed to action of the association. Of interest is the announcement in the American Lumberman of January 12, 1907, that an advance would have to come soon, and that a committee was working on the subject at that time and would report to the Pitts- burgh association at an early day; while in the next issue, January 19, 1907, this statement occurs: "On Tuesday of last week there were some slight "advances made in hemlock." A detailed historical account of the Pittsburgh Wholesale Lumber Dealers' Association appears in the American Lumberman of Janu- ary 21, 1911, page 42. No direct reference can be found in it to these price activities. It contains an extract from the charter of incorpo- i American Lumberman, Oct. 8, 1904, p. 30, and Oct. lo. 1904, p. 42. 618 THE LUMBER INDUSTRY. ration obtained in 1908, which sets forth the purposes and objects of the association in the following words: Said corporation is formed for the purpose of protecting, fos- tering, and encouraging the wholesale lumber business and com- merce in the county of Allegheny, Pennsylvania, by combining the intelligence and influence of its members against imposition and fraud by providing for, collecting, preserving, and dissemi- nating statistical and other information concerning said business, and generally to use all lawful means to bring about a greater certainty and uniformity in the trade, by establishing closer ties of business association among its members, thereby promoting mutual harmony and good will. It will be noted that in the above statement of purposes there is no direct reference to establishing or maintaining price lists, but it is apparent that "mutual harmony and good will" would not be pro- moted by cutting prices. In March, 1908, and for some months following, there is much comment from Pittsburgh on the efforts made by the hemlock men to maintain the list in the face of a declining demand. 1 The Pittsburgh association list is often quoted as the standard of desired prices, and frequent references to it in the succeeding years are to be found in the market comment from Pittsburgh. The New York Lumber Trade Journal in its issue of November 15, 1909, refers to appeals that had been mad« to the Pittsburgh Wholesale Lumber Dealers' Association to raise its base price of hemlock to correspond with Philadelphia lists. An agent of the Bureau, in 1913, was told by the secretary of the Pittsburgh Wholesale Lumber Dealers' Association that the association has absolutely nothing to do with prices, except as incidental to dis- cussions of the market, and does not issue a price list of any kind. Other informants in the Pittsburgh market, in a position to be well informed, stated that at the meetings of the association the whole- salers discuss prices in a general way and "jump" on the wholesalers who cut prices, but that no concerted effort is made by the associa- tion, or any of the individuals, to dictate what price the wholesalers of Pittsburgh should ask for their lumber. The "hemlock list" re- ferred to in the lumber trade generally and in the trade journals as the "association list" is a list which a leading firm dealing in hemlock issues and distributes to the other members of the association and to the trade generally. Of late years the list issued by the Babcock Lumber Co. has been the one which is known in the market as "the hemlock list." The Bureau has copies of two recent lists issued by this firm. The first is an f. o. b. Pittsburgh fist, bearing no firm name ■ On this point see extracts from the following journals, on pp. 629-631: American Lumberman— Feb. 8; Mar. 7, 14, 21, 28; Apr. 11; June 6; July 25; Aug. 1; Sept. 5; Oct. 24, 31; Deo. 5, 26, 1908, and Jan. 16, 1909. New York Lumber Trade Journal— Mar. 15; May 15, 1908. New Orleans Lumber Trade Journal— Feb. 15; Mar. 15; July 15; Sept. 15; Deo. 1, 1908. St. Louis Lumberman— Aug. 15; Oct. 1; Not. 15; Dec. 1, 15, 1908, and Jan. 1, 1909. PRODUCTION AND WHOLESALE DISTKIBUTION. 619 or other marks of identification to show by whom it was issued. It is entitled "Hemlock market quotations effective March 4, 1913." The absence of a firm name is doubtless to facilitate its use by the Pittsburgh dealers as a common price list, and copies of this list were found being used by several other firms. The prices are stated out- right, as is common with the price lists of most other woods, and not with reference to a base. The second fist issued by the Babcock Lumber Co. bears the firm's name and address, is "effective March 5, 1913," and is in the form of a base list. (See pp. 621-622.) This list is especially adapted for quoting prices on lumber sold on a delivered rate. The informants stated that the prices shown were net prices and were not supposed to be subject to any important discount in the making of actual sales. Mr. F. K. Babcock, in reference to the issuance of the first fist, stated that the list was distributed to the trade generally, but claimed it was absolutely necessary to have some kind of a fist in order to keep the market from becoming demoralized. In addition to the activities in Pittsburgh there are some comments indicating that the leading hemlock producers met occasionally and agreed on prices, though how far they had a formal organization does not appear. The most definite comments are those in the American Lumberman of May 27, 1899, which specifically attributes recent price advances to such meetings, and of July 28, 1900, giving a cir- cumstantial account of the price action of "the western Pennsylvania hemlock manufacturers" at a meeting in New York on July 20, as described by "a wholesaler who is in position to speak authorita- tively;" and in the New York Lumber Trade Journal of August 1, which describes a meeting of " all the large hemlock manufacturers," held at Scranton, Pa., at which important price action was taken. In the extracts from the trade journals are found various comments indicating that similar meetings to fix prices were held from time to time. For example, in the American Lumberman of November 4, 1905, it was announced that " a general meeting will be held at Will- iamsport, Pa., this week" for the purpose of making a price advance in certain lengths, and the New York Lumber Trade Journal of De- cember 15, 1910, mentions important price action taken at a luncheon recently held by the Pennsylvania manufacturing interests. The general situation was described by a lumberman prominent in the hemlock trade in an interview with an agent of the Bureau. The following extract is from the agent's report : The manufacturers of hemlock lumber issue price lists which are practically identical. Several years ago, about 1903-4, the manufacturers of hemlock lumber had price agreements. When the market was strong these agreements would be kept for a time/but whenever a break occurred in the market any manu facturer would cut the price in order to secure a large order. At the present time each manufacturer issues his own price fist, 620 THE LUMBEE INDUSTRY. but they get together and talk over prices and these price lists are practically identical. He stated that his company was just issu- ing a new price list, and that one would find that the price lists issued by the other companies at the present time are practically the same as that issued by the Goodyear Lumber Co. ; that if they are not the same now within two weeks they would all have the same base price. During the late fall of 1910 and early winter of 1911 there was considerable demand for lumber and most of the yards stocked up. The retail trade was not as good as they antici- pated, and it left most of the yards with a large stock of lumber. The price began to break and a great many of the retailers asked the manufacturers to prevent a further break in prices. During the spring they got together and talked over prices and agreed to maintain the base price for New York delivery ($2.60 freight) at $21. This base price has been the same since that time. While it was practically impossible to maintain an agreement, yet the gen- eral effect of the agreement is to steady prices and keep them from f ailing as much as they otherwise would. Those retaildealers who stocked up quite heavily last fall appreciate the fact that the wholesalers have maintained the base at the same figure. How- ever, at most any time when a large order can be secured, any manufacturer will cut the price slightly, in order to secure the trade. The Bureau has a more detailed history gathered from other in- formants, all of whom were in position to be exceptionally well informed as to the meeting probably referred to in the above interview as taking place during the spring of 1911. A meeting was reported to have taken place in Buffalo, on or about March 6, 1911, which was attended by representatives of the Goodyear Lumber Co., Central Pennsylvania Lumber Co., Pennsylvania Lumber Co., Wheeler & Dusenbury, Kaul & Hall Lumber Co., and Hall, Gardner & Co. As a result of this meeting a new price list was issued, which showed some changes in price. One informant stated that he did not think the price list had been changed since 1909, as there had been no reason for making a change. He also said that the smaller mills and some of the jobbers used the price lists furnished by the com- panies represented at the meetings for the purpose of printing similar lists and that this made the prices fixed at the meetings practically standard prices. Several informants stated that there was no regu- lar organization, that there were no stated times at which meetings were held, and no stated times at which changes or revisions of the price lists were made. One informant stated that there was no pen- alty if one of the mills represented at a meeting cut the prices printed in the lists, and that it was sometimes done by a concern which found a grade piling up in the yards faster than it should, but an agreement was made — a gentlemen's agreement — to maintain the prices on the list, unless some particular reason could be assigned for not doing so. He further stated that the meetings were called for the purpose of PRODUCTION AND WHOLESALE DISTRIBUTION. 621 making a uniform price, and that is what they always expected to do when they met. The foregoing statement that there was a price agreement in effect about 1903 is borne out by another informant who said that in 1903 his firm was buying a large quantity of hemlock lumber. When all the bids were received it was found that all the prices were exactly the same except that of one New York concern. The price of this concern was 25 cents off the list, while all the other concerns had quoted the price of the hemlock association. The New' York concern got the order. The next time the informant's firm was in the market for hemlock it tried to get the same New York concern to give it a price 25 cents off of the list price, but it was informed that the New York concern had had all kinds of trouble because the hemlock asso- ciation had learned of its cutting the association price. After this the informant's firm was unable to buy hemlock under the list. Character of the hemlock "base" price list. — Most of the hemlock producers and wholesalers use price lists which state prices for the various items in the form of differentials to be added to or subtracted from a given "base." Certain items are usually at " base " and the differentials of the other items are changed from time, to time. Thus, the Goodyear Lumber Co. circular No. 13, effective February 12, 1906, quotes for No. 1 boards, rough, 1 by 8 inches, 12 and 14 feet, "add $1.50 to base price," and for 16 feet "add S2.50 to base price," while circular No. 14, effective February 15, 1908, quotes for 12 and 14 feet "add $0.50 to the base price," and for 16 feet "add $1.50 to base price." The one item which appears to have been always "base" since 1899 is 2 by 4 inches, 12 and 14 feet. Before September 1, 1902, the "base" included 12, 14, and 16 feet, but in the list of that date 16 feet was placed at $1 above "base." References to this change may be seen in the market comments at that time from Philadelphia, Buffalo, and Tonawanda. The use of a "base" in the price lists facilitates the use of the same price list for different points of delivery, and also facilitates raising or lowering prices uniformly. All that is necessary for the manufac- turer or the wholesaler to do is to change one price — the "base" price — and the prices of all the items on the list move accordingly. Whenever it is desirable to change the differentials between the differ- ent items, a new price list is issued. In some instances when a new price list was issued the base price in force at that time was not changed, but only the differentials on certain items. This system of base prices was of considerable use in establishing different price levels in different localities, according to the local competition met by Pennsylvania hemlock in them, the difference between the bases of the different markets being determined partly by the differences 622 THE LUMBER INDUSTRY. in freight from the mills to the market, and partly by the local con- ditions in regard to competition. For example, Buffalo and Tona- wanda have often been given bases proportionately lower than Pitts- burgh, Philadelphia, and New York, considering freight rates, because of the competition of the Michigan hemlock coming by water along Lake Erie. Usually the base at Tonawanda has been 50 cents higher than that at Buffalo; but in the October 24, 1903, issue of the American Lumberman it is stated that as a result of the very brisk competition between Michigan and Pennsylvania hemlock, the base price on Pennsylvania stock in the Tonawanda market was reduced 50 cents to the Buffalo level. Later, the customary 50 cents differ- ence was restored. In the issue of the American Lumberman of February 22, 1908, mention is made of the issuing of a new circular which cut down the base price for Buffalo, but left it as it was for other points. The difference in official price-list levels in November, 1909, between Pittsburgh and Philadelphia, which led to appeals being made to the Pittsburgh Wholesale Lumber Dealers' Association to raise its official base price, has already been referred to. Section 6. Extracts from lumber-trade papers relating to Pennsylvania and West Virginia hemlock. Note.- — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber-trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news items from various cities will refer to the action and for several weeks or months will comment on its effect adds to the credi- bility of the extracts. 1899. Price list Issued, effective February 1, 1899.' New York— American Lumberman, February IS, 1S99, page SI.— It was only a month or so ago that it was suggested in this letter by a dealer that the hemlock men could do much by getting together and stick- ing out lor a price. They have evidently done so. The advanced figures are proving almost prohibitory, while in some cases dealers are refusing to sell at all. Pittsburgh, Pa., March 7. — The wholesale dealers of Pittsburgh have about come to the conclusion that an alliance among themselves will foster a more fraternal feeling, and at the same time materially benefit the standard of prices. A decisive movement was made in this direction on Saturday, February 25. In response to a calf issued by Frank F. Nicola and indorsed by other leading lumbermen, a meeting was held on that day at the Hotel Lincoln. (American Lumberman, Mar. 11, 1899, p. 37.) Price list issued, effective March 15, 1899. Pittsburgh, Pa., March IS. — A meeting of the hemlock dealers and manufacturers was held here on March 7 in the office of Nicola Bros., and it was decided that the organization should be known as the Wholesale Lumber Dealers' Association of Pittsburgh. The object of the association is for mutual protection, to regulate prices, to pass on credits, and to promote a social feeling among the dealers. The general idea is to nave a common place of meeting during the noon hour, when in the intervals of dining the trade situation may be freely discussed, as only members of the trade will be present. At the meeting on Tuesday an advance of 75 cents a thousand was decided upon. It is the intention to advance prices on different grades of lumber as the meetings progress. (American Lumberman, Mar. 18, 1899, p. 32.) Pittsburgh, Pa., March 19.— The wholesalers again met in session on Saturday at the Hotel Lincoln, when hemlock prices again took an upward climb. * * * The advance in hemlock, as given in the market report, was the main work accomplished. (American Lumberman, Apr. 1, 1899, p. 21.) i The price lists noted here are those referred to in the lumber-trade papers as " the hemlock list," or the "officiaf" list. d j; PRODUCTION AND WHOLESALE DISTRIBUTION. 623 Price list Issued, effective April 11, 1899. Philadelphia— A merican Lumberman, April 29, 1899, page 26.— Last week the hemlock manufacturers con- cluded that existing prices were not just as high as they should be, so an all round advance of 50 cents a thousand was agreed upon and sizes are now firmer at $11.50 for 12, 14, and la inch and $12.50 for 18 and 20 inch, with boards at $13. Price list Issued, effective May 15, 1899. Price list Issued, effective May 22, 1899. American Lumberman, May 17, 1899, page IS.— Within the last two or three months a number of the lead- ing hemlock manufacturers of Pennsylvania have been getting together at times for conference, and as a result of these meetings there have been at least two advances m hemlock prices, the latest resulting from a meeting held at Philadelphia on May 18. [Prices of the new list follow.] New York— New York Lumber Trade Journal, June 1, 1899, page SI.— Hemlock has advanced 75 cents, and is now on a $13.25 basis, which Is the highest price that it has ever reached in the history of the wood. Price list Issued, effective June 20, 1899. WOliamtport, Pa.— New Orleans Lumber Trade Journal, July 1, 1899, page 19.— On last Monday morning the price of lumber took another jump. The Goody ear Lumber Company ordered an advance of 75 cents per thousand on all green stock and the Williamsport lumbermen ordered an advance of 50 cents per thou- sand, beginning Monday morning. The lumbermen up country and all lumbermen outside of Williams- port to the Jersey line will advance prices 75 cents per thousand. Buffalo— New York Lumber Trade Journal, July 1, 1899, page SS.—Juxus 21 a further rise in the wholesale price of hemlock was announced, the rate now quoted f. o. b. Buffalo by the Pennsylvania mills being $11.50 per thousand base, an increase of 50 cents per thousand over last quotation. New York— American Lumberman, July SB, 1899, page 41.— -It has been remarked that on almost every Monday nearest to the 15th of the month, since March last, there has come an announcement from the manufacturers that the price of hemlock has taken another jump upwards. That announcement did not come at the beginning of this week. Philadelphia — New Orleans Lumber Trade Journal, August 16, 1899. — The demand for hemlock keeps apace with white pine. It sells readily at the latest advance. The new list price established by the organi- zation holds. Price list Issued, effective August 16, 1899. Price list Issued, effective September 22, 1899. Price list Issued In October, 1899. New York Lumber Trade Journal, October S, 1899, page 10.— Hemlock advanced again September 22, and the base price is now $16. The list of dry stocks at the Pennsylvania mills, we are reliably informed by people in a position to know, are virtually exhausted. New York Lumber Trade Journal, October £.1899, page 10. — At a largely attended meeting September 19, at Pittsburgh, of the Western Pennsylvania Planing Mill and Lumbermen's Association, it was decided to advance the price of hemlock lumber from $18 to $19 per thousand. Philadelphia — New York Lumber Trade Journal, November 1, 1899, page 17. — Hemlock boards have been advanced $1 per thousand. Now $17. Price list Issued In December, 1899. New York — New York Lumber Trade Journal, December 16, 1899, page IS.— From official sources we are advised that hemlock has been advanced $1 per thousand, making the base price for New York delivery $17. 1900. Price list Issued, effective January 20, 1900. New York — American Lumberman, January S7, 1900 ; page 81. — As was expected the advance of a dollar in the price of hemlock was made sooner than the arrival of the new month. On Saturady, January 20, the edict went forth that hemlock would not hereafter be sold under an $18 base. Buffalo— New York Lumber Trade Journal, February 1, 1900, page 27. — Hemlock manufacturers have recently advanced their price $1 per thousand, and now ask $16 base delivered at this point. Philadelphia, Pa., April 24. — The leading exponents of the hemlock trade met in the office of E. B. Nettleton, John E. Dubois' representative, 615 Harrison Building, this morning and gave the situation a rather rapid survey. Mr. Nettleton presided and briefly sketched the purpose of the gathering. An informal discussion followed. Some of the gentlemen wanted the price cut down to $16, and others wanted it left where it was. Among the latter were W. M. McCormick and R. C. Lippincott. Itwas admitted by everybody that the January raise was a mistake, and there were some who questioned if a reduction in the price now would not also prove a mistake. There were wholesale charges of undercutting made and few but acknowledged the corn. Finally a motion to reduce the price $1 was put and received nine votes, the remaining five gentlemen present declining to vote. Afterward these said the action was satisfactory to them. Those present were * * *. (American Lumberman, Apr. 28, 1900, p. 24.) Price list Issued in May, 1900. Philadelphia— New Orleans Lumber Trade Journal, May 15, 1900, page 18.— Hemlock has been reduced il per thousand in price, because of the dull trade. Price list issued In June, 1900. Philadelphia— New Orleans Lumber Trade Journal, June 1, 1900.— Hemlock is strong. The omcial Uat is still adhered to but a drop is looked for despite that. Philadelphia— New York Lumber Trade Journal, June 15, 1900, page 18.— Hemlock can be had when 'anted at less than list prices, which are really set aside when quotations are asked by responsible parties. 624 THE LUMBER INDUSTRY. Price 1 1st issued, effecl.lv e July 20, 1900. New York, July 25. — The most important news feature of the week just ended was the meeting of the western Pennsylvania hemlock manufacturers in this city on Friday last, when the base price of hemlock was placed at 515 and it was mutually agreed that that figure would be lived up to. Particulars of the meeting and the names of those present are being carefully withheld from the ardent newsgatherer, but the importance of the action was thus discussed by a wholesaler who is in position to speak authoritatively: "This action was taken because it was just about time that the hemlock men should step in and pro- tect themselves. It is really a cut of $2 from the last list price, which was made last winter. "The figure 515 was made with a view to sticking to it. What is the use of making it $16 and having the stock offered at 515.75 and $15.50? At $15 hemlock is a bargain, and dealers ought to be glad to get it at that figure. And $15 will be the price. Don't forget itl When we say that we don't mean $14.50. We've put it at bottom figures. I don't believe it has ever been selling so low, and at that figure it is pro- portionately as cheap as other woods. There will be no excuse now for builders not to buy. and if there was any doubt before as to building reviving it ought to be dissipated. Other sections oi the country have been in better shape than New York on hemlock because dealers here were well stocked up with the lumber. " Have the hemlock men noticed any results? "Yes, indeed. The orders are coming in right along, and the action was both wise and timely." (Amer- ican Lumberman, July 28, 1900, p. 20.) New York Lumber Trade Journal, August 1, 1900, page IS.— At a meeting of all the large hemlock manu- facturers, held at Scranton, Pa., last week, it was unanimously voted to put the base price of hemlock at $15, and to maintain this price without any variation whatsoever. This was done after a careful consider- ation of everything pertaining to the condition of the consuming markets, and it was the concensus of opinion that this price should De maintained in future absolutely. Messrs. W. R. Creed & Co., the large hemlock wholesalers of this city, in speaking of the hemlock situ- ation, stated to the Journal that they were one of the attendants at the above meeting, and that they were f>ositive that there will be no further cut in the price of hemlock^ and that the price as now set will be as ow as hemlock will be bought for some time to come, and in a circular letter under date of July 26, have so notified the trade. It is very evident, from all that can be learned concerning the doings at the meeting that the manufacturers are harmonious in every way as to maintaining this base price, and it is, therefore, reasonable to believe that there will be no further reduction in the price of this commodity. 1901. Price list lssned in January, 1901. New York—American Lumberman, January 6, 1901, page 66.— The scarcity of rough hemlock boards continues and all kinds of boards are held stiff at the 50-cent advance noted. There is good demand for ordinary hemlock at the $15 base and prospects are bright for a good spring call with a possibility of prices stiffening. Pittsburgh — American Lumberman, January 19, 1901, page 57. — Hemlock is in active demand at close list prices. The list remains unchanged. Philadelphia— American Lumberman, March 16, 1901, page 76.— A trade publication announced in a recent issue that hemlock prices were being cut m this market, but if this is the case none of the big handlers of the lumber are aware of it. New York— American Lumberman, April IS, 1901, page 41b.— The $15 base is very strongly held to and there may be a few cases where better figures are obtained, although no official sanction is given. Price list Issued In June, 1901. Pittsburgh — American Lumberman, June 1, 1901, page 26. — Hemlock remains the leader in this market and strong steps are being taken by the association to maintain prices at a good firm basis. The travelers representing local houses have been advised under no condition to lower list prices. Pittsburgh— American Lumberman, June IS, 1901, page 36.— The demand continues steady with a well- maintained price fist. A concerted effort on the part of the wholesalers has kept the price on a firm basis, but there is little likelihood of any advance in the near future. New York— American Lumberman, July IS, 1901, page S6 — The base price is well held to, no talk or hint of cutting prices being heard. Philadelphia— American Lumberman, July IS, 1901, page SS.— There is a good movement and the market continues firm at unaltered prices. * * * The action of the Pittsburgh men in reaffirming their list has had a very good effect on this market. Philadelphia — American Lumberman, August 17, 1901, page 42. — One leading wholesaler who is also a manufacturer of Pennsylvania hemlock advanced his price to $14.50 on Saturday. The Williamsport mills have all the orders they can take care of, and the most recent information from there is the expression of an opinion that the price would be advanced to $14.50 by September 1. New York — American Lumberman, August 17, 1901, page 41. — The report tliat the Williamsport people have advanced New Jersey and Philadelphia figures 25 cents over tie old rates has had a tendency to make dealers hold firmly to the $14.50 base. American Lumberman, August 24, 1901, page 26. — At a recent meeting the manufacturers of hemlock in Pennsylvania adopted a new price list, in effect August 15, making an advance of 50 cents a thousand. [The new list f. 0. b. Philadelphia is given.] New York— American Lumberman, AugustSl, 1901, page4S — There is no definite action by manufacturers to advance figures as far as the metropolitan district is concerned, although the talk of advancing prices in contiguous districts will probably be followed by a rise here. Prices lor Philadelphia delivery have been raised 50 cents. , New York— New York Lumber Trade Journal, September 1, 1901, page 12.— The hemlock manufacturers association have not as yet taken any steps officially to advance prices for local delivery, but it is being agitated quite freely. New York — American Lumberman, September 14, 1901, page 46. — No official notice has been promulgated that figures shall go up but individual mills are notifying their city agents to stick firmly to the $15 base and to make no concessions even on stock that might not be classed always as strictly desirable. Pittsburgh— American Lumberman, November t, 1901, page 16. — Fred R. Babcock, president of the Pitts- burg wholesale association, and therefore an indubitable authority upon the lumber business in this territory, spoke emphatically on the situation, as follows: "It is very gratifying to observe that the people who have been so anxious to sell hemlock in the past to the extent of sacrificing to obtain orders at prices below the Pittsburg association list,- which has been religiously maintained by its members for the betterment of the retailer as well as the wholesaler, are now overstocked with orders. These orders they are unable to ship, by reason of the extreme car shortage and they are therefore not in position to enjoy the benefit of the present unusual demand at good, firm prices. PRODUCTION AND WHOLESALE DISTRIBUTION. ' 625 This should be a lesson to those who have profited by the workings of the association, that, in the future they should maintain prices instead of going about the country boasting of offering stock 25 cents below the list. This rigid maintenance of the list would add much to the comfort of wholesaler and retailer." Philadelphia— American Lumberman, November 16, 1901, page 4/.— Hemlock is running from $16 to $18 with continued activity. Nothing has been done so far in the much talked of raise in prices, but it may come later on if the dealers can reach any agreement. Price list Issued, effective December 1, 1901. New York— American Lumberman, December 7, 1901, page 42.— The advance had to come, and here it is. On December 1 prices went up 50 cents, so that $15 is now the basis on sizes, with $15.50 quoted for boards, as per the old schedule. Market comment— New York Lumber Trade Journal, December 15, 1901, page 21.— Hemlock is now on a $15 base, that is, generally speaking; and while there has not possibly been any official action taken, the large manufacturers, who for the most part control a large percentage of the output of hemlock, have put their prices up on a $15 base, and all orders will be figured on this basis in future. 1902. Buffalo— New York Lumber Trade Journal, January 1, 1902, page 27— The report of a hemlock trust which can control the supply and put the price at $18 to $20 has been very generally read, and while its consum- mation is impossible there is enough truth to cause retailers to place orders for future shipment and to bring many inquiries as to the probability of an advance. North Tonawanda — New York Lumber Trade Journal, January 1, 1902, page 27. — Hemlock has taken a mysterious jump during the past few weeks from $14 a thousand to $17. The increase is mysterious because the reason lor it can not be exactly determined. Some of the dealers say that it is due to a prospective corner in the hemlock market which may be expected at any time. Buffalo — American Lumberman, January 4, 1902, page 45. — A decidedly uneasy feeling prevails among consumers and rival branches of the lumber trade over the repeated stories of a further advance in the price of hemlock. It is claimed that the present base of $13.50 is high enough and that if it shall go much higher there is pretty sure to be a repetition of the experience when the price went high two years ago. It shut off the building of frame houses and hurt pretty much all classes of building. 80 the attitude of hemlock producers, especially in Pennsylvania, will be watched closely. Really there seems to be no exact combine, but there is a very close understanding apparent among the producers. Philadelphia — American Lumberman, January L, 1902, page 46. — The talk of a corner had no effect on the demand for hemlock Buffalo— American Lumberman, January 11, 1902, page 17.— Producers are still watching the condition of the market with an idea of advancing the price still further if it may look as though it would be paid. Outsiders are also watching them, and the speculation over the reported combine of the Pennsylvania producers continues. So far nothing has been done openly. Philadelphia— American Lumberman, January 18, 1902, page 58. — It does not take any combination in the hemlock interests to hold prices firm. The dealers know that only a comparatively small quantity is going to be cut and consequently no large stock will be piled up. Hemlock is selling easily on the old basis. Batten— American Lumberman, January 18, 1902, page 58.— Hemlock is just holding its own at $16 to $16.50 for Pennsylvania and $14 to $14.50 for eastern. An increasingly large amount is being used for rough lumber work on dwelling houses in the place of spruce. Pennsylvania lumber is strongly held by a few long-headed individuals who practically control tha market and apparently do not intend to see any break until natural causes may make it wise. Philadelphia— American Lumbermanjanmxry 25, 1902, page 46.— Dealers are adhering strictly to the list. Pittsburgh— American Lumberman, February 1, 1902, page 54. —Absolute adherence to the list is being maintained. New York— American Lumberman, February 1, 1902, page 51.— There is talk of still further advances in hemlock, but despite the action of the manufacturers, the retailers are slow to send up figures, and so while the strong feeling will continue it is possible that no list advances will be made for at least a short period. Price list Issued in March, 1902. New York— American Lumberman, March 8, 1902, page 58.— This stock continues to rule strong, on a $15 base. While nothing of an official nature has been announced, it is believed that an advance of 50 cents will be made within a short time. Buffalo— American Lumberman, March 15, 1902, page 49.— The Pennsylvania hemlock producers have added a dollar to the price, making the base $14.50 at Buffalo. New York— American Lumberman, March 15, 1902, page 19— At last an advance has practically been forced on the manufacturers. So heavy has been the demand and so choked up some of the mills on old orders that $1 has been added to the base price, which is now $16. Even at this rise the market is still decidedly firm. New York— American Lumberman, March 22, 1902, page 17— That the action of the manufacturers la advancing the price $1 — to a $16 base — was a sensible one has been proven daily ever since the rise occurred, for the advance is being well maintained without effort on a strong market. Boston— American Lumberman, March 29, 1902, page 18.— Pennsylvania hemlock is very strong and now sells at $18.50 for No. 1 and $15 for No. 2. This establishes a new record for the lumber in this market. Pittsburgh— American Lumberman, March 29, 1902, page 18.— This commodity has been advanced 50 cents on all lines since March 19 and the advance will be maintained for some time. Philadelphia— American Lumberman, April 5, 1902, page IS.— The feature of the week was the advance to the $15.50 basis, though good lumber has practically been sold on that basis for several weeks. Boards in some instances have brought as much as $17.50. . New York— American Lumberman, April 19, 1902, page 68.— There is a big falling off noted in the call for hemlock, due, it is felt, to the recent advance to a $16 base. Price list issued In May, 1902. New York— American Lumberman, May 24, 1902, page 72.— Although local trade is rather quiet the recent advance of 50 cents to $1 on hemlock is being well maintained. New York— New York Lumber Trade Journal, June 1, 190S, page 21— In hemlock the demand locally has dropped off considerably on account of the advanced prices. . . Philadelphia— American Lumberman, July 5, 1902, page 50— There is considerable shavmg bemg done on the lists and it is no secret that a $15 price is the highest that is being gotten in some quarters. New York— American Lumberman, July 12, 1902, page 61— The basic price is strongly held to, despite the fact that the demand has slackened since the first of the month. 25030°— 14 40 626 * THE LUMBER INDUSTRY. Price list Issued in August, 1902. North Tonawanda— American Lumberman, August 23, 1902, page $.— Another advance on Pennsyl- vania hemlock, the first in about two months, took place last week on all lengths over 16 feet, the increase being SI. The base price of $15 on 16-foot and under is still maintained. New York— American Lumberman, August 23, 1902, page 48.— The expected advance has come. It is not on the base price, which remains $16, but special sizes have taken a big jump. A list just to hand adding $1.50 to 10, 18, and 20 foot lengths ana tne advance ranging irom tnat up to $7 lor such scarce lengtns as 38 and 40 feet. « " North Tonawanda— American Lumberman, August SO, 1902, page 53.— Local handlers of Pennsylvania hemlock have been notified that the base price is scheduled for an advance of 50 cents the first of next month which will bring the figures up to $15.50. Price list issued, effective September 1, 1902. Philadelphia— American Lumberman, September 6, 1902, page 49.— A new hemlock price list went into effect on September 2, which involves not only an advance 01 from 50 cents to $1.50 a thousand, but a change in the base, which is now 12, 13, and 14 foot lengths excluding from the base 16-foot, which is given a price $1 higher. [The new list is given in this item.] North Tonawanda — American Lumberman, September 6 { 190%, page 48. — The anticipated advance of 50 cents in the base price of Pennsylvania hemlock came with the first of the month. With this advance came the removal of 16-foot lengths from the base price list, which is limited to 14-foot. In advancing the base price another increase of from 50 cents to $2 in the longer lengths is announced. Philadelphia — American Lumberman, September 27, 1902, page 52. — Dealers say there has been some recov- ery from the first shock following the advance on hemlock. They assert that the new list is being lived up to strictly to the letter and that there is no reason for cutting prices. New York— American Lumberman, October 4, 1902, page 55.— There is something like a boom in hemlock. Recent advances seem to have stimulated instead of curtailed the demand, and though supplies are short the cry is still for more with dealers kept busy supplying the call. North Tonawanda — New York Lumber Trade Journal, October 15, 1902, page 28. — Hemlock has gone up 50 cents on the base price since October 1, making the selling price at present $15.50- North Tonawanda — American Lumberman, November 1, 1902, page 78.— The recently increased prices are being maintained and dealers are of the opinion that there will not be another advance this year. Price list issued, effective December 8, 1902. New York— American Lumberman, December IS, 1902, page 56.— The base price, $16.50, is lived up to religiously as would be expected considering the conditions. Buffalo— New York Lumber Trade Journal, December 15, 1902, page 27. — The long-expected advance in No. 1 hemlock boards, 16 feet long, went into effect yesterday. This applies to all sizes and on all rates of freight, and brings 16-foot boards nearer their correct relation to 2-inch and thicker of the same length. New York — American Lumberman, December 20, 1902, page £2— The expected advance in hemlock was made last week when 50 cents was added to the price of 10 and 16-foot lengths, No. 1 hoards 8, 10 and 12 inches either rough single surfaced or tongued and grooved, which makes a difference now of $1 between the stock in question and 12 and 14 foot lengths. The base figure is still $16.50 and the demand is excellent. 1903. North Tonawanda— American Lumberman, February 7, 1903, page 55, — The base price advanced 50 cents on Saturday, bringing the figures up to $16.50. Price list issued, effective February 21, 1903. New York — American Lumberman, March 7, 1903, page 53.— The expected has happened for the advance arrived on schedule time. It was of 50 cents all around, which makes the base figure $17. Philadelphia— American Lumberman, March 7, 190S, page 19. — The recent advance in hemlock is being maintained, and the dealers aver they are having no trouble in getting the full list prices. New York — American Lumberman, April 4 t 1903, page 53. — There is an excellent and steady demand at the new base figure of $17 and no complaint has yet been heard of any weakness in price. Philadelphia — American Lumberman, April 4, 190S, page £3. — Full list prices are easily being gotten by the wholesalers for it is absolutely certain that there is no surplus in any one of the items. New York — American Lumberman, June 6, 1903, page C2. — The price of this stock has been advanced 50 cents over in New Jersey, so that the base figure in that State is the same as in New York— $17. Buffalo — American Lumberman, June IS, 1903, page 58. — There is now a report of an expected advance from the regular $15.50 base price, but it is not yet official. New York — New York Lumber Trade Journal, June 15, 1903, page S3.— There is no change in hemlock locally, but in the New Jersey district it has been advanced 50 cents, and is now on a $17 basis in that territory. Buffalo — American Lumberman, June 27, 1903. page 58e.— The price of hemlock has been advanced 50 cents making the Buffalo base $16, this on account of the rushing demand. Buffalo—American Lumberman, July 4, 1903, page 55.— Hemlock continues to be the most active lumber. All reports agreeing that the supply is short of tne demand. On the advance to $16 base, some of the larger producers failed to respond, but they have now fallen into line with a readiness that shows the increased scarcity of the supply. Boston — American Lumberman, July 18, 1903.— An effort is being made to raise the price of Pennsylvania boards with the result that native stock is taking its place. Philadelphia— American Lumberman, July 18, 1903, page 56— The advance in the list of 50 cents has not - restricted the movement to any appreciable extent. Boston — American Lumberman, July 25, 1903, page 66. — The recent rise in Pennsylvania hoards is not fully maintained and there are many sales at the former figures. Philadelphia— American Lumberman, August 15, 1903, page 58.— The new basis of hemlock is still holding its own and the dealers say_ they will be able to get the list prices right through. 1904. New York— New York Lumber Trade Journal, January 1, 1904 t page 9. — Half a dozen operators control practically all the hemlock that comes to this market, and from all the information I can gain the present price is being maintained, with no prospect of a break. The present basis of $17 will not be lower this season, in the opinion of those most interested. In fact, holders of hemlock state with confidence that they have the situation fully in hand. PRODUCTION AND WHOLESALE DISTRIBUTION. 627 Price list Issued, effective February 10, 1904. New York— New York Lumber Trade Journal, March 1, 1904, Page 29.— During the past fortnight there has been an advance in hemlock, 2x4, 18s and 20s, have been advanced 50 cents, making the price on this item now $2 above the $17 base as against $1.50 heretofore. The scarcity of 18 and 20 foot logs, together with the fact that the major portion of the orders are running unusually to 2 x 4 is given as the cause of the advance. Philadelphia— American Lumberman, April 16, 1904, Page 65.— Pennsylvania stock is being held firm, but deviations from.the list on both boards and sizes is reported in West Virginia stock. Some of the latter stock has been sold here on a $16.50 basis. Philadelphia— American Lumberman, June 25, 1904, page 67.— Pennsylvania manufacturers have been successful m holding their stocks up to the basis of the season and it is only in odd stocks that any cutting is being done. Pittsburgh— American Lumberman, July 2, 1904, page 128.— Large operators are holding firm to the list and are making absolutely no concessions. North Tonawanda— American Lumberman. July 23, 1904—The disposition to cut prices in hemlock is more noticeable among the smaller manufacturers. The larger manufacturers are reported to be exerting themselves to maintain the figures at which stock has been quoted for several months, and it is thought that the shaving being done by others will be only temporary. Buffalo— American Lumberman, August 6, 1904.— There is a good demand for all cuts of hemlock and while producers do not deny that the circular price has been cut they say that the tendency is all toward a stronger situation. Philadelphia— American Lumberman, August 20, 1904, page 65.— Any effort to put back the price of hem- lock to the old basis would be useless, say the dealers, at present. The demand is too light and competi- tion is too keen. Buffalo— American Lumberman, August 27, 1904. — Hemlock is held to be growing stronger by leading producers who say that the supply is not large enough to admit of price cutting and that hereafter they shall insist on the full circular price for everything. Price list Issued, effective September 6, 1904. Buffalo — American Lumberman, September 10, 1904, page 61. — Side dealers say that there is a good deal of cutting of the circular prices with a prospect of more of it, though they do not think there is any need of it from any standpoint. They of course lay the blame on the sawmill owners who set the pace and could hold prices up if they chose. New York — American Lumberman, September 17, 1904, page 69. — September 6 was the date set for adher- ing strictly to the $17 base and some business has been taken at that price. The increase, however, has had the effect of holding back some orders, yardmen claiming that conditions do not warrant the increase but that at S16.50 they would be in a position to place some orders. Buffalo — American Lumberman, September 17, 1904, page 60. — It is claimed that an effort is to be made to stop the price cutting and hold everybody up to circular. With the present outlook all that the large pro- ducers need to do is to maintain their own prices and there willbe no difficulty, for hemlock is not especially high. Philadelphia— American Lumberman, September 24,. 1904, page 61.— It is too early yet to see the effect of the recent action of the hemlock manufacturers in fixing a $16.50 basis for this market and south Jersey and a $17 basis for the northern counties, New York State and north Jersey. There is a difference of opinion as to how it is going to work out. North Tonawanda— American Lumberman, September 24, 1904. — Dealers report that Pennsylvania pro- ducers have advanced the base price of hemlock to S16.60, an increase of $1 during the past week. Buffalo— American Lumberman, October 1, 1904, page 68. — All hemlock shippers are trying to unite in holding close to circular prices and say that the conditions of supply and demand fully warrants them. New York — American Lumberman, October 1, 1904, page 58. — The movement is fair and orders are appar- ently held back by reason of the recent advance. Dealers claim to hold firm to $17, and state that wnile orders are somewhat slow mills are behind on previous shipments. Philadelphia — New York Lumber Trade Journal, October 1, 1904, P°^ e s ^- — Hemlock is moving slowly at the new base price as fixed by the manufacturers, but there is a doubt as to whether the agreement is being lived up to all the way through. Philadelphia— American Lumberman, October 1, 1904, page 68.— There is still some uncertainty as to whether the new list is being adhered to altogether. The bigger concerns are in a position to stick it out for the advance but there are some short stocks to be moved by the smaller dealers that can hardly get the extra 50 cents of the new list. A better demand is apparent. Pittsburgh— American Lumberman, October 8, 1904, page SO.— The Pittsburg Wholesale Lumber Dealers' Association held its regular meeting on Tuesday at the Union Club. The main business was the decision to lay the present hemlock list on the shelf until such time as it may be deemed necessary that it be lifted, dusted and revised. This means that there will be no arbitrary list on this Pennsylvania wood for an indefinite period. The strength of the market still prevails and it is the unanimous opinion that prices are bound to be still higher. Buffalo — American Lumberman, October 15, 1904, page 55. — Leading producers report that they are getting the advance— that is, the full circular price— for everything and that nobody is cutting it now but such as are always found in the practice and would cut a $10 price a quarter in order to keep up their acquaintance with themselves. New York— American Lumberman, October 15, 1904, page.55. — There is some speculation here as to the final result of making the basic price $17 and the outcome is awaited with interest. It is claimed that quotations are made in accordance with the advance, while on the contrary some business, especially large orders, is reported taken at the old figures. Pittsburgh— American Lumberman, October 15, 1904, page 42.— The hemlock list suspended one week ago bas been reaffirmed, with the base $15.50. The market is strong at this price, with increasing demand, inquiries and orders increasing and every prospect of good business for the remainder of the year. . Philadelphia— American Lumberman, October 29, 1904, page 56.— Now that the new list has been pretty well instilled into the minds of the trade business is moving along evenly. Demand is seasonable in every way and some little buying is being done by the yards. There is hardly any doubt but what the list is being generally lived up to and few reports of cutting are heard by the trade, as it is not regarded as necessary to make low prices on Pennsylvania stock to insure its movement. Pittsburgh— St. Louis Lumberman, November 1, 1904,page40.— Hemlock is showing a more decided strength and the call for boards at the new list is greater than before it went into effect. 28 THE LUMBER INDUSTRY. New York— American Lumberman, November 5, 190^, page 60.— The number of orders taken- during le week has been moderate and it is stated the new list has been held to strictly. The manufacturers aim there is absolutely no necessity for price cutting, because the condition of the hemlock market is ich that departure from the list is unnecessary to move stock. 1905. Pittsburgh— American Lumberman. January 7, 1905, page 61. — The regular meeting of the Pittsburg Tiolesale Lumber Dealers' Association, held Tuesday afternoon, formally announced the new price lists r hemlock in this district, as arranged and approved on December 27. Buffalo — American Lumberman, March 4, 1905, page 68. — Manufacturers refuse to accept orders under the rcular. Reductions have been made in some instances, especially to certain $2 rate points, which seem ' have been overcharged. A manufacturer predicts that by the opening of spring the circular will be Lvanced 50 cents and 10, 13, and 20 foot lengths will be reclassed so that the advance on them will be $1. Price list Issued, effective March 25, 1905. New York— American Lumberman, Ajpril 8, 1905, page 66.— Trade holds up well but the demand this eek is reported to have fallen off a trifle, probably due to the advance in prices put in effect March 25. Buffalo — American Lumberman, April 15, 1905 t page 6$. — Pennsylvania producers have issued circulars mouncing prices advanced 50 cents for this section, which will make the base $16 here. Philadelphia — American Lumberman, April 22, 1905, page 62. — An advance of 50 cents is reported for , 18, and 20 foot lengths. Inquiries and orders continue plentiful. The trade is taking every thing it n get in the way of hemlock. List prices are maintained easily. New York — New York Lumber Trade Journal, May 1, 1905, page 10. — The Peimsylvania hemlock manu- cturershave advanced prices 50 cents,' and that commodity is now on a $17.50 base in this district. Philadelphia — New York Lumber Trade Journal, Mag 1, 1905, page #?.— Hemlock is much in demand id is selling freely at the late advance in price. New York — American Lumberman, May 20, 1905, page 66. — Stocks on hand are gradually being consumed id dealers find that wholesalers hold strongly to the new list. Price list Issued, effective July 5, 1905. Buffalo — American Lumberman, July 15, 1905, page 66.— The new hemlock circular is out putting the ■ice of the Pennsylvania cut 50 cents for base, making the base price $16.50 for Buffalo and adding another i cents for low grades— No. 2 and shiplap. North Tonawanda — American Lumberman, July 15, 1905. — To the continued brisk demand and growing arcity of stock at the mills is attributed an advance of 50 cents in the base price of Pennsylvania hem- c k * * *. The advance on Pennsylvania went into effect July 5. New York — New York Lumber Trade Journal, August 1, 1905, page 10.— Hemlock is very active and 3 recent upward movement to an $18 base has not only not curtailed buying but if anything has had ie opposite effect. Pittsburgh— N ew York Lumber Trade Journal, August 1, 1905, page 25. — There is every likelihood that Le advance of 50 cents a thousand which went mto effect July 15 will hold good for at least two months. Price list Issued, effective September, 1905. Philadelphia — New York Lumber Trade Journal, September 1, 1905, page 26. — Hemlock is holding the cent advance so well that there is considerable talk of putting it up another dollar, but conservative .embers of the trade are counseling against it. New York — American Lumbermari, September -2, 1905, page 70. — Rumor has it that September 1 will e another general advance in the Pennsylvania hemlock list. Quotations are now made on the basis $19, three of the larger manufacturers having adopted this price. Buffalo — American Lumberman, September 9, 1905. — Pennsylvania producers have concluded to make lother advance of prices and the circulars are out for 50 cents additional in the base price, with special Ivances in long lengths, pushing them up $1 to $1.50. * * * The move seems to have been agreed on ,ther hurriedly, for the new price went into effect on the first of the month with the circulars not generally it. New York— New York Lumber Trade Journal, September 15, 1906, page 9.— Effective September 1, the asic price of hemlock f. o. b. New York was advanced one dollar .ana now rules $19. Pittsburgh— American Lumberman, October 14, 1905, page 41. — Hemlock conditions have remained un- langed and many orders are awaiting the ability of the dealers to fill them at full list prices, with some more rgent ones offering a bonus for quick delivery. New York — American Lumberman, October 28, 1905, page 66. — Demand is good and inquiries are coming l steadily, indicating a good trade for November, with no change in the price situation as far as base is mcerned. Orders are taken at from $1 to $3 above the list. Price list Issued, effective November 1, 1905. Buffalo— American Lumberman, November 4, 1 905.— Producers find that they are as far behind their ■ders as ever and are preparing to make an' advance on certain lengths, includmg 10, 18, and 20 feet and pward, without changing the base price, and a general meeting will be held at Williamsport, Pa., this eek for that purpose. Philadelphia — American Lumberman, November 4, 1905.— The market here is strong and has been selling > much over base that the new scale going into effect November 1 is not unexpected. This new schedule takes the base price here $19. This increase will have no effect upon the demand as not 50 per cent of ie orders for hemlock can be accepted at any price. Buffalo — American Lumberman, November 11, 1905. — The new circular does not advance the base price > far as Buffalo is concerned but certain lengths are put up. New York— New York Lumber Trade Journal, November 15, 1905, page 18.— In regard to prices, the ictober 25 advance of $2 in West Virginia spruce and the November 1 advance of $1 in the base price of emlock have not only had no deteriorating effect upon demand but, on the contrary, the car shortage nd general outlook of short stocks for spring supplies have led dealers to place a great many orders where ossible at the advanced prices, believing that even at the latter the stock was a "good buy." Pittsburglir- American Lumberman, December 9, 1905, page ^.—During last week the official list on hem- >ck was advanced by the association $1 even. Buffalo — New York Lumber Trade Journal, December 15, 1905, page 28.— The hemlock producers are mdmg out notices of advance again, the base price for Buffalo being now $17.50. PBODUCTION AND WHOLESALE DISTEIBUHON. 629 1906. Price list Issued, effective January 8, 1906. New York— American Lumberman, January IS, 1906, page SS.— Hemlock dealers report another advance in the New York list, which puts the base at $21, an increase of $1 over the list issued about a month ago. Pittsburgh— American Lumberman, January IS, 1908.— Increasing demand for hemlock and its scarcity in spite of the higher prices have caused a general expectation among the Pittsburgh lumbermen of an advance in the present rates, which were on a $19 base. The announcement that central Pennsylvania manufacturers have already put hemlock on a $20 base caused no surprise, though it is still claimed by many that the advancing of the list is questionable in wisdom and in this many of the larger manufac- turers coincide. The only explanation for the advance is that the demand is such that the supply is inade- quate and it will be impossible to meet the orders even at the higher rate. Boston— New York Lumber Trade Journal, January IB, 1906, page 86.— Pennsylvania hemlock has been advanced a dollar making the base price $21.50. There is no question but that the higher prices have checked business. One wholesaler in this market states that at one time he had a large business n Penn- sylvania hemlock, but that since the advance to $20.50, which was established some months ago, he has sold but few cars. Pittsburgh— American Lumberman, January SO, 1906.— The influence of the central Pennsylvania hem- lock men in putting hemlock on a $20 base has not reached the general trade and it is not known as yet when it will show itself. New York— American Lumberman, February 10, 1906, page 77.— The base of $21 is strictly adhered to and, while no official increase has been made, a large number of orders are taken at an advance where deliv- eries are made promptly. Price list Issned, effective February 14, 1906. Pittsburgh— New York Lumber Trade Journal, February IS, 1906, page SSa.— Hemlock is on a $20 base authorized by the Pittsburgh Wholesale Lumber Dealers' Association, which controls the price of that wood in this section. Buffalo — American Lumberman, February 17, 1906. — Pennsylvania producers are out this week with a new circular putting the base price up SI, making it $19.50 for Buffalo and adding an extra 50 cents for 2 x 4, 10. 18, and 20, and for all 3x4. New York— American Lumberman, February ti, 1906, page 72.— The only feature in the hemlock market is another advance, making the base price $22, $1 higher than the latest list. It is believed that compara- tively few orders have been taken at this price, but millmen are hopeful that it will cause a relief at con- gested manufacturing points, where mills have heretofore been sold for a long period ahead with no imme- diate relief in sight. Even at the old $21 base orders were very plentiful and in many instances were taken at $1 or S2 above the list. New York— American Lumberman, April it, 1906, page 116.— The base of $22 is firmly held and even on a large order for 800,000 feet placed this week the full list price was obtained. Pittsburgh — New York Lumber Trade Journal, July 16. 1906, page 27. — Offerings of hemlock are larger than a month ago and some evidences of weakness are noted in the shading of quotations on lots of second- class stock which had to be moved quickly. No change has been made in the official list of $21 base. New York — American Lumberman, November 10, 1906, page 72. — Large quantities of the latter [eastern hemlock] have been arriving and are disposed of at good prices in strong competition with Pennsylvania manufacturers. Conditions among the latter are such that there is no shading from the base price of $22 and dealers say there is no question but what they will be able to handle their output at a profit in many cases, orders being placed from 50 cents to $1 over the market price in order to obtain prompt shipments. 1907. Pittsburgh— American Lumberman, January Is, 1907, page 71.— The hemlock situation has not changed much. The announcement is to the effect that an advance will have to come soon, however. A com- mittee is working on the subject at this time and will report to the Pittsburgh association at an early day. Pittsburgh — American Lumberman, January 19, 1907, page 78. — On Tuesday of last week there were some slight advances made in hemlock. It is understood that a more pronounced advance is likely before many weeks have passed. Pittsburgh— New York Lumber Trade Journal, April IS, 1907, page 29.— Hemlock has stood up well under the advance of 50 cents per thousand, which went into effect a few weeks ago. New York— American Lumberman, July 6, 1907.— There is no change in the base price of $22, although the demand does not continue as strong as last month. Pennsylvania manufacturers claim to have the situation in their line well controlled but here and there comes a report of a slight shading, particularly on large orders. Pittsburgh— American Lumberman, October 26, 1907.— The hemlock trade has been stiffened much and the sales reported show that prices are being maintained without much difficulty at the agreed prices. Pittsburgh— New York Lumber Trade Journal, November IS, 1907, page 26.— The cutting of quotations on hemlock comes chiefly from the mill owners along the branch roads of West Virginia and Pennsyl- vania. Quotations range from $2 to $3 under list in many instances and stocks are larger than the imme- diate demand warrants. 1908. Buffalo— American Lumberman, January 4, 1908. — Some sizes are off in price, but there is no change of the circular that has held a year or more, and it may be maintained till the demand is better. New York — American Lumberman, January i, 1908, page SS.— Up to within about two weeks ago large buyers could practically control prices, but notwithstanding a decreased demand manufacturers prepared for it and there is now very little more stock offered than needed. Buffalo— American Lumberman, February 8, 1908.— One mill owner here lately sent out queries to half a dozen hemlock dealers for prices, but found only a single concession from the list prices, and that a small one. Pittsburgh— American Lumberman, February 8, 1908, page 91.— A number of hemlock mills are running short time and some decline to sell anything on the present offerings unless they are well up to the Pitts- burgh list. * * * Some of the larger dealers report competitive sales at from $1 to $1.75 off list but that is about the limit of the shading being done. 630 THE LUMBER INDUSTRY. Price list issued, effective February 15, 1908. Pittsburgh— New Orleans Lumber Trade Journal, February 16, 1908, page 35.— Hemlock is held at the regular list and is slightly stronger. Buffalo—American Lumberman, February 22, 1908, page 91.— The hemlock producers who control the market to a certain extent have issued a new circular making radical changes, cutting down the base price lor Buffalo from S19.50 to $19, but leaving it as it was for other points. New York— American Lumberman, February 29, 1908, page 86.— The severest competition conies from dealers in eastern hemlock who, while not putting as much stock on the market as usual for this time of the year, are still unloading enough to prevent prices from going any higher. Price list issued In March, 1908. Pittsburgh— American Lumberman, March 7, 1908, page 119. — During the past week there has been a return to an established list in the hemlock trade of Pittsburgh territory. The base price established is 819, a dollar off from last fall and winter. Pittsburgh— American Lumberman, March 14, 1908, page 113.— Most producers report a general quieting down of trade since the establishment of the new base and price list. The market, however, is firm, ana the disposition of the trade is to hold to the list. Pittsburgh — New Orleans Lumber Trade Journal, March 15, 1908.— Hemlock and spruce are now under strong support and the lists established are being maintained. Pittsburgh— New York Lumber Trade Journal, March 15, 1908, page 55.— A hard break was made in the price of hemlock on Pittsburgh quotations this month. Some varieties are down $2 from lastmonth'slist, and lath is marked off $1. There is still a sliding margin of 50 cents from these prices, so that the hemlock base price is away below what it was a year ago. Pittsburgh— American Lumberman, March 21, 1908, page 128.— Since the establishment of the new list on hemlock there has been a quiet state of trade. In fact, many buyers seem to doubt the seriousness of the effort of the hemlock men to establish a reliable list again and reports are that numerous efforts to break this list have been made, with practically no success thus far. The firmness is general and the hemlock men are confident they will be able to hold it. Pittsburgh— American Lumberman, March 28, 1908, page 87.— The second and third week of the life of this list, however, has shown a tendency on the part of the buyers to show more confidence in the determination of the dealers to keep their word and hold firmly to the market as established. New York—American Lumberman, April 11, 1908, page S5.— There is no snap to the hemlock market A few good orders are received, but prices are unsteady and the nominal base price cuts no figure. Pittsburgh— American Lumberman, April 11, 1908, page 95.— Sales are small and the interest is slow in growth since the establishment of the list and -the strong stand taken by the manufacturers to hold to this list. Confidence in the final outcome of this attitude by the mills is unshaken and many of the mills are cutting standard sizes and piling at the mills for the spring demand. Buffalo— New York Lumber Trade Journal, April 15, 1908, page 82. — The hemlock market has advanced. The base price which has been off for the last few weeks jumped back again this week to J19.50. Pittsburgh— American Lumberman, April 25, 1908,pagelOS. — Sales increased over a week ago. They have been gaining in all directions and the determination of dealers to hold to the existing list is slowly being accepted by consumers.. Price list issued in Hay, 1908 Pittsburgh— American Lumberman, May 9, 1908, page 88.— It is admitted, however, that there is some shading in prices that comes in competition with the Pittsburgh trade, but dealers here are firm in main- taining list prices. Pittsburgh— New York Lumber Trade Journal, May 15, 1908, page 27.— Prices have been sustained at about the levels which prevailed April 1. Hemlock is decidedly weaker. The efforts of wholesalers to maintain list price early in the spring have practically failed, and the man who wants hemlock lumber to-day and has money to pay for it has the price situation in his own hands. Pittsburgh— American Lumberman, June 6, 1908, page 89.— The established base of 519 is being held here. New York— New York Lumber Trade Journal, June 15, 1908, page Sl.—hi hemlock, the base price con- tinues at $21, and on carload lots and small orders in the suburban trade this price is being well maintained, but it must be admitted that on larger and more desirable business there is keen competition, which is naturally reflected to some extent in the price. So far as the metropolitan district proper is concerned the movement of hemlock is very slow, and another factor is the competition from which Pennsylvania stock is suffering through small shipments of down east hemlock, which is being offered at from S2 to $3 below Pennsylvania list. The larger Pennsylvania producers, however, are for the most part holding up firmly to the base believing that the constant decrease in stumpage not only makes such action necessary, but likewise in the firm belief that cutting of prices will not stimulate business in any particular. Pittsburgh — St. Louis Lumberman, July 15, 1908, page 88. — The lowering of prices on hemlock by practically abandoning the existinglists, has injected life into this grade of lumber and sales made during the past fifteen days have run into several million feet more than was expected. Pittsburgh— New Orleans Lumber Trade Journal, July 15, 1908, page 84.— Hemlock mills are operating steadily, and the Pittsburg list is being upheld remarkably well, considering everything. Pittsburgh— New York Lumber Trade Journal, July 16, 1908, page 28.— The reduction of the price of hem- lock has resulted in larger sales at a minimum of §17, but has not worked the advantage to the market in general that was anticipated. Pittsburgh— American Lumberman, July 25. 1908, page 92.— Sales have been larger during the last week and small orders are not being taken at any shading of the list: besides, manufacturers have booked some unusually large orders. In fact some of the larger dealers say that if the present rate continues in sales for the next fifteen days there will be a determined effort to restore the last list complete. Many important interests are already refusing to dispose of available stocks below list prices. Price list issued In August, 190S Pittsburgh— American Lumberman, August 1, 1908, page 86,— Owing to the steady increase in orders for hemlock in the Pittsburgh and eastern markets, prices have recovered a notch or two and are now averaging closer to the last list of the Pittsburgh association. Pittsburgh— St. Louis Lumberman, August 15. 1908, page 81.— The smaller orders are now held strictly to the Pittsburgh list, while larger orders are still secured with a shade of from 50 cents to $1.50 off this list. Mills are running fairly regular, with the exception of the Central Pennsylvania Lumber Company, which has a large stock on hand and will not sell a foot under the list. Pittsburgh— American Lumberman, September 5, 1908, page 85. -~- The reduction below the last adopted Pittsburgh list is still about the same, $1.50 off the base. PRODUCTION AND WHOLESALE DISTRIBUTION. 631 Pittsburgh— St. Louis Lumberman, October 1, 1908, page 82.— Prices are about 11.50 under the Pittsburgh list, but in small lots the list is being asked and no long time contracts are taken. New York— American Lumberman, October 11, 1908, page 79.— Trade is picking up slightly and there is a firmer price situation all through the list. The improvement, however, is hardly noticeable in the few large orders placed because competition among manufacturers of Pennsylvania with those from West Virginia and the east is very keen and while the general tone is better in some respects the market can still be termed a buyers' market. Furthermore, the low price obtained for spruce is not conducive to an improvemen); in hemlock. Pittsburgh— American Lumberman, October 24, 1908, page 80.— There were efforts, for a time, to get greater concessions than $1.50 off the Pittsburgh list in the Pittsburgh territory but this has been given up "and orders are taken after being rejected for lower prices at the shading mentioned. Pittsburgh — American Lumberman, October 81, 1908, page 84. — Eastern consumption has increased and prices are stronger than for some time, though still below the last adopted Pittsburgh list. New business is not taken at the lower rates of a month ago, and it would be a difficult matter to get any amount of stock at $1.50 off this last list. In some special sizes full list is obtained. Pittsburgh— St. Louis Lumberman, November 16, 1908.— Increasing orders for hemlock has so stiffened the price in Pittsburgh that it would be hard to get a greater concession from the past established list of $1. It has been sold up to within ten days at $1.50 oft list. Pittsburgh — American Lumberman, November SI, 1908. — Reports from Pittsburgh state that many lists have been recalled and supplanted by others showing advances ranging from 50 cents to SI. Pittsburgh— New Orleans Lumber Trade Journal, December 1, 1908, page 87.— Hemlock is better because yellow pine has gone up. It is selling nearer the Pittsburgh list than at any time this year; concessions are small and few. Pittsburgh— SI. Louis Lumberman, December 1, 1908.— There is little disposition on the part of buyers to force any considerable concessions from the Pittsburgh list at this time and small orders are held rigidly to this list while special interest attracts slight concessions for large contracts. Pittsburgh— American Lumberman, December 5, 1908, page 8$.— More sales have been made during the last week at list than for a year. Demand continues strong, particularly in the east, and stocks are not large. In some instances certain sizes are unusually scarce. The average price now asked is less than $1 off the last Pittsburgh list, and this is for large and attractive orders. The confidence is strong that full list will rule before February. Pittsburgh— American Lumberman, December 12, 1908, page 89.— Eastern demand has been so steady and persistent that prices in the east have risen for hemlock to full list with the opening of this week, and there appears to be a shortage for much of the material called for. The market seems barren of much surplus stock with the exception of one instance and this is not for sale at any time under the list. A few local dealers report a shading of from 50 cents to 75 cents on small orders, but under exceptional conditions. Pittsburgh— St. Louis Lumberman, December 15, 1908, page 107.— Prices for hemlock have been returned to full list for the first time during the last nine months. The demand has been so active and the mills are so much behind on orders that the advance of the price to the last Pittsburgh list was not objected to. Short stocks are the rule and the only surplus known is in such strong hands that there is no likelihood of it moving under the list in force. Pittsburgh— American Lumberman, December 26, 1908, page 87.— Eastern buying of hemlock continues to be the feature of this market. It has been strong throughout the week and only in rare instances is there any shading of the Pittsburgh list reported. 1909. Price list Issued In January, 1909. Pittsburgh— St. Louis Lumberman, January 1, 1909.— Prices are more firm in the hemlock trade. The larger dealers and manufacturers are asking full list in all sales. Some rare instances are reported of slight shading by small dealers who have material in transit. There is talk of anew Pittsburgh list soon with some advances in it, but for the present the old list is being kept in force for the first time in months. Eastern buying has been a feature of the past week. Pittsburgh— American Lumberman, January 18, 1909. — Exceptional orders of large size seem to get the best of the old Pittsburgh list but this is only a slight concession. Generally the full list is secured, and buyers are becoming accustomed to meeting it. New York— A merican Lumberman, February 27, 1909. — The control of the situation by strong hands keeps prices in line, but those retailers who need small replenishing stocks have no difficulty in getting what they want quickly. Several cargoes arrived from the east last week and it was necessary to make some concession in price. Pittsburgh— American Lumberman, March 20, 1909. — Stocks are small and special sizes are getting full list prices. "Where there is a call for stock on hand, little shading, possibly 50 cents to 75 cents, is made on attractive business. Relatively the hemlock situation is much firmer than other lines of lumber. Pittsburgh — American Lumberman, April 10, 1909. — Orders for future delivery are also accepted only at list price. The best at present offered to the buyer is $1, and the average 75 cents off list. Pittsburgh— American Lumberman, May 8, 1909. — List prices are being asked in Pittsburgh and prices are steady in the east. Pittsburgh— St. Louis Lumberman, May IS, 1909, page 97.— At this time $1 off Pittsburgh list isbeingheld to, except where stocks are absent from mills and demand special cutting. Then full list is held firmly. Pittsburgh— American Lumberman, July 24, 1909. — Hemlock is scarce. It is holding firmly at list except where there are stocks available for quick delivery and these are allowed to go at about 50 cents off. Pittsburgh — American Lumberman, August 7, 1909, page 82. — Notices have become general among the leading hemlock manufacturers of an advance of $1 on the base price for all sizes above eighteen feet. This notice of advance took effect this week and is due to the general shortage of the market and the increasing demand. The low conditions of hemlock stocks is continuing because of the activity in buying and list Is being well maintained. Pittsburgh— St. Louis Lumberman. August IS, 1909.— Dry stock is scarce and the advance which leading manufacturers have made of $1 on the base during the past 10 days is being firmly maintained. Pittsburgh— St. Louis Lumberman, September 15. 1909, page 97.— There is an influx of the new cut in hemlock in the Pittsburgh market which has unsettled prices slightly in some quarters, but leading manu- facturers promptly turn down orders for under the full list. Pittsburgh— American Lumberman, September II, 1909. — The larger dealers are refusing to touch new business of any importance at less than Pittsburg list. Price list Issued In October, 1909. Pittsburgh— St Louis Lumberman, October 1, 1909.— The better grade of hemlock is holding closely to list. Eastern prices have advanced from 50 cents to $1 for points east of Buffalo and Philadelphia and the new rate is being held firmly. 6 3 '2 THE LUMBER INDUSTRY. Pittsburgh— St. Louis Lumberman, October IS, 1909, page 90— The best that buyers report at this time Is from 50 to 75 cents off the Pittsburg list and this is by no means general. . . Pittsburgh— American Lumberman, October 18, 1909, page 78.— The Pittsburgh list is not in force alto- gether, but it is considered steady at 50 cents off this with good prospects that it will advance to the full list in the immediate future. Pittsburgh— American Lumberman, October 2S, 1909, page 110.— There are a few hemlock men who say they can not get within 50 cents of the established list, but the majority claim that the full list is being held firmly. Pittsburgh— American Lumberman, October SO, 1909, page 82.— Prices are being sustained by general consent among the leading manufacturers. Pittsburgh— St. Louis Lumberman, November 1, 1909, page 97.— List, and in some instances, better than Pittsburg list, is being asked in hemlock circles. Pittsburgh— New York Lumber Trade Journal, November IS, 1909, page 40.— Still another feature that caused considerable dissatisfaction in this city in October was the difference in base prices of lumber here and in the eastern market. This difference on hemlock and many grades of pine average nearly $1 .50 per M after considering 60 cents difference in freight rate. Resulting from this naturally the big firms of Pitts- burg have been shipping their lumber East almost without exception. The local market has not been strong enough to force any uplift in quotations although frequent appeals have been made to the Pittsburg Wholesale Lumber Dealers' Association to raise their base price of hemlock to correspond with Philadelphia lists. Pittsburgh— American Lumberman, November 27, 1909, page SO.— There has not been any change in prices and none are looked for. The maintenance of the established list is a source of much satisfaction. 1910. Pittsburgh— New York Lumber Trade Journal, January IB, 1910.— Prices ranged away below eastern line of quotations for three months at least prior to January 1. Pittsburg list was from SI to $1.50 lower than eastern list. On this account some big Pittsburg concerns withdrew their stock practically from this market and shipped all their stocks east. New York — New York Lumber Trade Journal, February l t 1910, page S7. — In hemlock, Pennsylvania stock continued at the present base price of $21, but there are slight concessions here and there on the larger and more desirable business by reason of a weak attitude on the part of some sellers who seem to fail to take recognition of the season of the year. The outlook for a big spring trade is good. In West Virginia hemlock the base price rules about $20.50, and taking the relation between the two products there seems to be about the same percentage of West Virginia shippers cutting to a $20 base as there are Pennsylvania shippers selling at $20.50. Taking the conditions of the market as well as the prospective outlook, there does not seem to be anything which warrants the concessions. Pittsburgh— New York Lumber Trade Journal, May IB, 1910, page 39— The hemlock list was put up officially in Pittsburg last week, the advances ranging from 50 cents to $1 per thousand on different items. New York — New York Lumber Trade Journal, June IB, 1910. — Hemlock, while continuing on a $21 base, shows considerable cutting on that price, especially on ordinary sizes and large orders. Pittsburgh— American Lumberman, August B0, 1910, page 82— The eastern demand has picked up materially, and the absence of any considerable surplus stock has stiffened prices to practically a well maintained list. Pittsburgh— American Lumberman, October 1, 1910.— As a rule, the established list appears to be the rale in important transactions. New York— New York Lumber Trade Journal, November 1, 1910, page 28.— There has been no change in the official price of hemlock, the base of which continues at $21, but actual orders being booked show con- cessions from the list, particularly on the larger and more desirable business. Long lengths are firm. New York — New York Lumber Trade Journal, December IB, 1910, page 27 .—The Pennsylvania manu- facturing interests recently held a luncheon and consultation at which after a full consideration of the business situation it was decided unanimously that they would adhere strictly to the list price in the different territories till further advised. This puts the base price of hemlock at $21 to the points taking a thirteen-cent rate; $3.50 less for No. 2. Pittsburgh — American Lumberman, December $4, 1910. — Surplus stocks and those on hand at the mills are moving at concessions ranging as high as $3. In the matter of special sizes and stocks to be cut the prices hold very close to the list. Section 7. Comparison of list prices with those of actual sales. On Diagram 20 (opposite this page) is shown a comparison of prices obtained by the Bureau from actual sales with the prices shown on the so-called official lists referred to in the foregoing discussion and newspaper extracts. Comparisons are made for dimension lumber, merchantable grade, 2 by 6 inches to 2 by 12 inches, 12 and 14 feet, in the New York, Philadelphia, and Pittsburgh markets, and 2 by 4 inches, 16 feet dimension, and 1 by 12 inches, 16 feet boards, in Philadelphia and Pittsburgh. The list prices presented were obtained in most cases from so-called official-list prices published in the trade journals. However, several of the list prices shown for the last few years were obtained from the lists issued by manufacturers. Such lists showed a close similarity in the Diagram 20.— Comparison of Movement of So-called "Official" List Prices and Actual Prices of Pennsylvania and West Virginia Hemlock Delivered in New York, Philadelphia, and Pittsburgh, 1898-1910. DOLLARS PER M FEET ~ i$9$ 20 - IS - 14 - \i>99 WOO ROUGH DIMENSION 2'x6"-2"xi2",I2toI4' invoiced prices • *L 1901 it \90l A 1902 \90H- SIj i90§ NEW YORK \9Q6 \90X \90& \909 \9\0 BLABS PFR )MFEET -ris.2 21 -20 19 18 1 6 IS 14 23 22 2! 20- 19 R0U6H DIMENSION 2"X4"-I6' INVOICED PRICES • UST PRICES H PHILADELPHIA •*a -21 20 - 19 21 20 - 19 16 - 15 - 14 - ROUGH DIMENSION 2"X6"-2"XI2", I2'toI4-' INVOICED PRICES • LIST PRICES -.r~ ■ 18 17 2S 24 23 - 22 21 20- 16 - 15- 14 - 13 - 12 - N a l BOARDS ROUGH I" X 12- 16' INVOICED PRICES • LIST PRICES & -25 -24 - 23 - 22 15 J4 22 - 21 - 20- 16 - 15 - ROUGH DIMENSION 2"X4"-I6' INVOICED PRICES X LIST PRICES PITTSBURGH t* 20 19 12 II 10 21 20- 19 R0U8H DIMENSION 2"X6"-2"XI2".I2'toI4' J 22 - 21 -20 19 18 17 23 22 21 20- 13 — 12 II 10 - N s l BOARDS ROUGH |"XI2"-I6' INVOICED PRICES X LIST PRICES & 22 21 20 19 18 17 16 15 14 PRODUCTION AND WHOLESALE DISTRIBUTION. 633 prices quoted at any given time for the same locality. The Bureau was not able to get a full line of list prices for each of the localities presented, as since 1906 they have not often been published in sufficient detail in the trade journals. For instance, it seems probable that later in the spring of 1906 a list was issued for Philadelphia which contained sub- stantially higher prices than that of March, 1906. Section 8. Definition of grade. There are no "official" or association grading rules. The following definitions were obtained from two firms, prominent in the hemlock trade : "Merchantable," as applied to dimension lumber, is denned: (a) Merchantable hemlock is generally sound and solid and does not contain defects that weaken or impair the strength of the piece as used for ordinary building purposes. It will admit of knots of any size but no rotten knot holes. A small amount of bark or wane on one side, not greater in extent than half the thick- ness of the piece or 35 or 40% of the length of the piece. Slight heart check and slight shake are admitted, but through shake or broom shake must be eliminated. It must be practically free from rot. The important rule always to be recognized is that it will admit of no defect which materially impairs its strength. Season splits not greater in extent than the width of the piece will be admitted. (6) Merchantable and better, supposed to be all kinds of piece stuff suitable for building purposes. Each firm used its definition given above for dimension to apply also to No. 1 boards. In the Massachusetts State law for the inspection of lumber, 1904, the following definition is used for grading Pennsyl- vania hemlock : No. 1 shall be 12, 14, and 16 ft. long, 6 in., 8 in., 10 in., and 12 in. wide, free from rot, loose knots and knot holes; will admit sound knots that do not impair the strength, one straight split not exceeding one foot in length, or a slight shake that does not pass through the piece. The first two following definitions for No. 2 boards are from the two prominent firms and the last from the Massachusetts law: (a) Number two hemlock is generally sound in its character and the 2" and thicker should be sound enough for general planking purposes, and the boards should be suitable for good sheathing. It will admit of large black knots, horn knots, considerable shake, heart checks, occasional small knot holes, and a small amount of dote or hard redwood. It will admit of grub holes if scattered. The stock must not be so badly shaken as to be broomy. It will admit of season checks or splits equal to not more than 30 to 35% the lengths of the piece. It will admit of wane or bark not greater in extent than half of the thickness nor 25% of the length on the face, nor greater than 20% of the entire piece on the back. 634 THE LUMBER INDUSTRY. (b) No. 2 boards are sufficiently good for sheathing but con- tain too many knot holes, or shake, or dote to enable them to pass as merchantable and better. (c) No. 2 shall be 12, 14, 16 ft. long, 6 in., 8 in., 10 in., and 12 in. wide, and will admit loose and rotten knots, knot holes, one straight split not exceeding two feet in length, and small dark colored and rotten streaks, but boards in this grade should work the full size for coarse purposes, without serious waste. Section 9. Prices of actual sales of Pennsylvania and West Virginia hemlock. Tabular statement. — It was not found practicable to distinguish hemlock from Pennsylvania sources from that from West Virginia, since this distinction was not kept in the records examined. It is not one of importance. Prices of actual sales are shown in Table 4A for the New York, Philadelphia, and Pittsburgh markets. The prices of most of the items are for the period 1898 to 1910. The following table shows the items for which prices are presented, the markets in which the items appear being designated by an asterisk (*}. Description of lumber. Markets. Grade. Thickness and width. Length. New York. Philadel- phia. Pittsburgh. Inches. 1 2 by 4 2by4 2 by 4 2 by 6-2 by 12 2 by 6-2 by 12 2 by 6-2 by 12 3 by 4-12 by 12 3 by 4-12 by 12 Iby 6 Iby 6 Iby 8 Iby 8 Iby 10 Iby 10 Iby 12 Iby 12 1, with random widtlis. Feet. 12-14 16 18-20 12-14 16 18-20 12-14 16 12-14 16 12-14 16 12-14 16 12-14 16 Random. 4 (*) (*) (*) 8 * (*) (*) *) (*) h (*) (*) (*) ('*) (*) (*) (*) (*) 8 8 (*) (*) Lath Diagram. — Of the prices appearing in Table 4A, already described, curves are shown on Diagram 21 (opposite p. 644) for 2 by 4 inches, 16 feet, 2 by 6 inches to 2 by 12 inches, 12 to 14 feet, No. 1 boards 1 by 12 inches, 16 feet, No. 2 boards, and 4-foot lath. The grouping of dimension stock sold in Philadelphia and New York is somewhat different from that in Pittsburgh. In Pittsburgh the grouping is 3 by 4 inches to 12 by 12 inches, whereas in Philadel- phia and New York it runs 2 by 6 inches to 12 by 12 inches. Thus, the 2-inch stock is admitted in the latter but not in the former grouping. It was pointed out by an official of a company prominent PB0DUCTI0N AND WHOLESALE DISTRIBUTION. 635 in the hemlock trade that this difference would make prices of such dimension noncomp arable. The Bureau, therefore, has based its prices wholly on sales where the exact dimensions were specified, and does not present any prices for the grouping 2 by 6 inches to 12 by 12 inches. An examination of the price lists of the Goodyear Lumber Co. shows that, with the exception of 2 by 8 inches, 18 and 20 feet, in the September 1, 1905, list, up to the issuance of their circular No. 11, effective November 6, 1905, they placed all the sizes 2 by 6 inches to 12 by 12 inches in one group and quoted prices based on the different lengths. Beginning with circular No. 11 there is a detailed listing of many of the sizes formerly included in the group. The fluctuations shown by the various curves for dimension are in close correspondence. In 1898 the prices of the items shown were about $10; in 1910 they were about $20. In common with many other species, there was a marked advance of prices in 1899 and the first part of 1900, followed by a sharp decline beginning about May. Prices rose rather gradually through 1901-1903 back to the high level of 1900. In 1905 and 1906 the second sharp advance carried prices to the highest mark shown for the period. The decline which oc- curred at the end of 1907 and in 1908 was not as marked in the Penn- sylvania and West Virginia hemlock dimension as it was in many other kinds of wood, and this is true, too, of the subsequent rise in prices. Attention may be called to the absence of marked price fluctua- tions in the hemlock dimension, especially since 1907, when com- parison is made with the prices of species which compete for the same uses in the eastern markets. This is probably partly due to the fact that hemlock stumpage is cut primarily in response to the demand for bark in tanning and not to the demand for lumber, and also partly due to the control over the market exercised by a few "dominating firms. The fluctuations in the curves shown for hemlock boards are similar to those for the dimension items. The causes which would affect the one class of lumber materially influences the other. There is not as close connection, however, between the price of lath and that of the lumber of the same species. For instance, the rise of lath prices in 1905 was much more rapid than that of lumber, and the lath prices increased about two-thirds while the lumber prices increased less than one-third. Attention, however, should be called to the effect of the difference in scale between the lumber and the lath prices, which makes a direct visual comparison difficult. There is really a less close correspondence in the fluctuations than appears to the eye from inspection of the diagram. This is evident from a consideration of the proportional advance or decline, based on the prices previous to the change. 636 THE LtTMBEE INDUSTRY. 2Bi oo oog too 6.75 7.00 5.50 5.25 4.75 4.00 3.25 iOiO ;OtO OOOi o OOHHMMMCO'* iO(0 I '. 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S5 1 inifflioinir.oowioin mra«nri«w«com CO CO TO 5ooo S CO CO CO CO CO goo O u? lOiOO coco'coco'co'co'coco 88 lOUS bxi fl c: •d •S OS S21 co£j 50WNiOU3 SOQOOOl30U}mOO 31 OOiOOiO ©O M moS oo oo OIOU30 s tO lO O 1/5 lO Xi-CifjO CO o OO OiO U3 CD tO OCOCSON £•2 «5U50 •« iQO iO t-t^O tNCSWN eococo'cococococDcdco'ecco gfj U]iOOO>OiOiOCiiOiO«|iO 060606060606060606060606 ■S3 3S 1 P4 aj 888 glOOOOiOiOOQiOOiO O6t^o6o6o6o6o6o6c6o6o6o6 3 CN lOiQOC P ~ ff- ?.' ff. c o o o O O O i- tN(N(NC OiOOOlCJlOSCTiOOOOOOOOOO OO O ciciciadod co co co co co co co cor~t-~«Dto»ototO(0 i> r*. oo r» i- co'cococoeocococoeo^eoco* asas8SBSSsss 88 88 JS8 io in in 3S8 ONNNK3U3C 00NNNtOJH(Ne>ii-ioirHc4 88 33 888 ass OWWINWWC ss ssss mininoiAiniAo m© MMMCQMmMM COCO 3 S3 S3 SioS S333 nc5mc5 CO CO CO CO CO CO c$ c*5 e$ csi cs o5 KS3S5 0OO IOOO 88 S3S3 c3e5c jiQOOOOiniooouj 3Ninu3tf)iONNOON ci a cm a cs c ggoioiooioo o »o (N CM io r~ lO 8888 WMc5e3 S3 S3E5 S3 oooog sssiasjss 644 THE LUMBER INDUSTRY. W o PS i= m 03 e En S p 2; -< w Ph M PS o i* t£ B I— I P w PS . wg pS Oto OB PH WO i— < ~ o° pjS >3 W is p iZ P w 55 SZ5 w p^ f» O W o PS Ph P o H O *! I lr,d lb 01 OS S£ IO 8 £ 8 CO CO CO CO CO "^ CO ^ ►J > 03 •33 3,& 'OQIOmPQIOO OlOlObOOOiOlOJ eocoeoeo-*eococo §1 $16. 50 16.50 16.75 17.25 17.00 17.00 16.75 16.50 i 6 .23 nogwcooino 4 3 35- wig o £* Pi i .d OOQiOloOiQiO 3 Jf> lOUJiONNiONN P-I.Q cocoeNciwc^Nci dlMNCilNiMiMN '" t3 uj§So8«no8 CN aft M sl J> s ooooo>ra>oioo TP 33 2fl s 0>CMN o 0.-H ^* CMrqoi«c>i NNNNNNNM „ 43 -£» O c o OS a fc-. 5 >. i-T Q c C i J 5 1. 1 a 2 & /I Diagram 21.— Movement of Actual Prices of Pennsylvania and West Virginia Hemlock Delivered in New York, Philadelphia, and Pittsburgh, 1898-1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 645 LAKE STATES HEMLOCK. Section 10. Conditions in production of lake States hemlock. In the Lake States hemlock was not considered valuable for lumber till the supply of pine was nearly exhausted. Then it began to find a local market, chiefly for framing, and gradually it came to be used for other purposes and to be shipped to greater distances. The hemlock grows mixed with hardwoods ; both hemlock and hardwoods are usually cut by the same mills; and a considerable number of companies, each having a moderate holding, contribute' to the supply. Ownership of hemlock stumpage is by no means so con- centrated in Michigan and Wisconsin as in Pennsylvania. There is a demand in the Lake States for hemlock bark for tanning, but it has far less relative importance here than in Pennsylvania. In the Lake States hemlock bark is a by-product of the lumber industry; in Pennsylvania the lumber may almost be said to be a by-product of the tanning industry. The contrast between the two regions in respect to concentration of hemlock ownership may be connected with the contrast in respect to the importance of the demand for bark. Curiously contradictory opinions are expressed on the relation between bark prices and hemlock cutting. The following is from an article on "Hemlock logging and tan-bark peeling in Michigan and Wisconsin," in the American Lumberman of June 29, 1907, page 33: This season operations in hemlock logs and hemlock bark are attracting extraordinary attention. This is because of the high prices being paid by the tanners for bark. It is a peculiar feature of the hemlock lumber situation that present demand for hemlock lumber and the prices being paid therefor can not be counted upon as special incentives for the season's activity in cutting and peeling hemlock logs ; for the demand for lumber is a little quiet while prices, especially in Wisconsin, are subjected to some shading. * * * It can be seen that the high price of bark is a stimulus to cutting hemlock logs, with the natural result of increasing the log supply, and eventually the quantity of lumber to be turned out during the season. It is probable that the effect of this in a market sense will not appear for some time, but at length it will be a market factor to be reckoned with. But an editorial in the American Lumberman of July 13, 1907, pages 32 and 33, said: In the opinion of competent judges among lumbermen any revival of the bark industry, based on higher prices a cord, will have the effect to check a tendency to an oversupply of logs. Owners of hemlock stumpage who are operators of saw- mills begin to realize that their hemlock lumber is worth econo- mizing and conserving with reference to future value. The 646 THE LUMBER INDUSTRY. manifest anxiety of tanners to secure annual stocks of bark at prices so much higher than several years ago is an assur- ance that the value of this tanning material is hereafter to be taken into account in estimating the value of hemlock stumpage. Consequently owners will be more conservative in their cuttings and will be inclined to fell no more timber than they can get peeled. It should seem that it would be an inexcusable waste to do otherwise. Instead of peeling a part of their logs when prices suited them, or often neglecting to peel any, as heretofore has been much the practice, they will peel all the timber they cut. * * * It seems probable that the bark feature of hemlock production in Wisconsin and the upper Eeninsula of Michigan hereafter will be a greater factor than eretofore, and will assume an importance approaching that characteristic of the hemlock industry which has prevailed in Pennsylvania for many years. Another influence, besides the needs of the tanning industry for hemlock bark, affecting the production of hemlock lumber, is the demand for hemlock logs by the pulp mills. 1 In 1907 and 1908, when hemlock lumber prices were unusually low, the trade journals commented frequently on the effect of the pulp-mill demand as a factor in strengthening prices by curtailing the supply of logs available for lumber. The following extract illustrates this: The manufacturers of hemlock lumber in Wisconsin are "up against" a queer state of things. The pulp manufacturers are paying $14 to $15 a thousand for hemlock logs, a price that the sawmill operators can not compete with at present prices of lumber. It looks as if this were a good argument for a sub- stantial advance in the value of hemlock mill output. (Ameri- can Lumberman, Sept. 7, 1907.) Section 11. General outline of association work. There have been several associations of hemlock manufacturers in the Lake States which have issued price lists and have made organ- ized efforts to raise and maintain prices. The most important have been the Northwestern Hemlock Manufacturers' Association (suc- ceeded in 1910 by the Northern Hemlock & Hardwood Manu- facturers' Association) and the Michigan Hardwood Manufacturers' Association. The members of the latter are chiefly in lower Michi- gan; those of the former in Wisconsin and upper Michigan. The Bureau has made no examination of the records of the Michigan association. Those of the Northern Hemlock and Hardwood Manu- facturers' Association it has examined with considerable care. The establishment of the Northwestern Hemlock Manufacturers' Association is thus referred to in TheTimberman, 2 May 1, 1897,page21: ■ According to Forest Products, 1911, p. 8, the amount of hemlock pulp wood consumed in 1911 in Wis- consin was 311,470 cords, and in Michigan, 56,518 cords. • The Timberman and the Northwestern Lumberman were consolidated to form the American Lum- berman. PRODUCTION AND WHOLESALE DISTRIBUTION. 64? About three years ago there was organized in the Wisconsin Valley the Northwestern Hemlock Manufacturers' Association. The meetings of the organization were held at Marshfield, Mr. B. F. McMillan, of B. F. McMillan & Bro., being one of the leading figures. But, owing to the depression in the hemlock trade and to the reluctance of some of the manufacturers to work in har- mony with others interested in the association, it died out, and it has been in a state of desuetude for two years past. * * * Some of the La Crosse and Eau Claire people, there- fore, interested others in reviving the old organization or starting a new one. It was thought that the former idea was the preferable one, and so letters were sent to all known lumber producers in Wisconsin, and personal visits were made to some of the principal manufacturers, with an invitation to attend a meeting at La Crosse on April 27. The Northwestern Lumberman, of Chicago, gave an account of the meeting in its issue of May 8, 1897, page 2, and said: "The principal object of the meeting was to take measures to establish uniformity of grading." The organization appears to have become inactive again, and to have been revived only in September, 1898. Then it did some- thing, in establishing a price list and making a serious effort to raise prices. (See pp. 648-649.) From that time the Northwestern Hem- lock Manufacturers' Association maintained an active existence until January, 1910, when it was merged in the Northern Hemlock & Hard- wood Manufacturers' Association. The latter association was formed by a union of the Northwestern Hemlock Manufacturers' Association and the Hardwood Lumber Manufacturers of Wisconsin. Hemlock and hardwood are manufactured largely by the same mills, and many companies were members of both the old associations. This condi- tion was very favorable to a consolidation. Some of the members of the present association are no doubt members also of the Northern Pine Manufacturers' Association, but the overlapping of interests in this case is much less. The selling territory of the association is principally in southern Wisconsin, northern Illinois, and the East. Ten to 20 per cent is shipped west of the Mississippi River; practically all to Minnesota, Iowa, and South Dakota. Wisconsin hemlock goes east as far as Pennsylvania and New York. Section 12. Association price activities before March, 1906. The concerted price work of the Wisconsin hemlock manufacturers divides itself into two periods, distinguished by the greater and the less publicity with which they agreed upon their price lists. Up to 1906 the work was carried on openly, and the association's rela- tion to it and responsibility for it were unconcealed. The association had a price-list committee from 1898; and the association letterheads carried the title of the committee and the 648 THE LUMBER INDUSTRY. names of its members. The business of the committee was to consider the conditions of supply and demand and to recommend prices to the members. The price-list committee sometimes held meetings in connection with association meetings and sometimes independently. In the first case the recommendations were sub- mitted to the association for approval and were formally adopted. In the latter case the recommendations were sent out by the sec- retary on the committee's authority. Upon the receipt of recom- mendations from the price-list committee it was usual for the mem- bers of the association to issue the new list under their own names also. Thus, the secretary sent a circular to members, dated Novem- ber 15, 1904, inclosing a new "official price list under date of and effec- tive November 14, 1904," and saying: "The committee believes that each member should issue a new list at once, for its good effect on the market, and religiously maintain same." It was in September, 1898, that the Northwestern Hemlock Manu- facturers' Association first made a definite effort to raise prices; and indeed it seems to have been this action which first gave the associa- tion cohesion enough to live. The Northwestern Lumberman of Sep- tember 17, 1898 (pp. 8 and 9), contains the following: Marshfield, Wis., September 14- — The manufacturers and wholesalers of hemlock in Wisconsin and Michigan are following in the footsteps of their white-pine brethren m the matter of obtaining better prices for the product they handle. They have long been aware that hemlock lumber was selling too low and that there was too small a margin in the business for them to conduct it with any degree of profit at prevailing prices. The recent advance in pine prices gave them the idea that they could do better, and following the suggestion made editorially in the Northwestern Lumberman last week a meeting was called to be held to-day in this city, for the purpose of considering the price situation, the matter of grades, and of generally bettering the hemlock situation by closer and better organization. Several years ago the Northwestern Hemlock Manufacturers' Association was organized, primarily for the purpose of formu- lating some standard rules for grading hemlock. This was accomplished, the rules were approved by the Mississippi Val- ley Lumbermen's Association, and arrangement made with the latter organization to supervise the grading. Further than this the association did nothing, although for a time an effort was made to keep members posted on the stock situation. To-day's meeting was a success from start to finish. There were represented at the meeting concerns making this year over 100,000,000 feet of hemlock, while letters approving of the object of the meeting were received from a score of other pro- ducers and handlers of hemlock. The primary object of the meeting — the adoption of a list making an average advance in prices of 50 cents — was also brought about with practically no opposition. PRODUCTION AND WHOLESALE DISTRIBUTION. 649 The old hemlock association was revived, and in a couple of weeks the association will call a general meeting of hemlock men to legislate still further in behalf of the hemlock trade. To those whose efforts made to-day's meeting possible, a great deal of credit is due. From September 26, when the new prices are effective, hem- lock lumber will be firm, for there has been evinced a disposition on the part of the trade to fall in line in any movement looking toward better values. * * * In taking the chair, Mr. Shepard, who, by the way, proved himself to be a model presiding officer, stated that . all present undoubtedly were aware of the object of the meeting— to endeavor to bring about a condition of affairs whereby better prices could be obtained for the output of northern hemlock mills. The price list adopted was made "effective September 26." The association met at Menominee, Mich., on October 19, 1898. According to the Northwestern Lumberman, October 22, 1898, page 18 — ■ Secretary Shepard requested that whenever a manufacturer of hemlock heard of a cut price being made the matter be fully reported to him and he would run it down and report the result to every hemlock lumberman in the Northwest. He believed that when such hemlock men as are in the habit of cutting prices knew they were being watched, they would desist from doing so. At this meeting the list of the previous month was reaffirmed — with the understanding that it is a minimum list, and that anyone can issue a list as much higher as desired. At a meeting at Milwaukee, November 16, 1898, a permanent com- mittee was appointed "to attend to and recommend prices from time to time." Some years later at the association meeting which adopted the August 5, 1901, list, three members of the Mississippi Valley Lumber- men's Association (white pine) appeared and "reported an advance of 50 cents to $1 upon the white-pine price list, and urged the hemlock people to take similar action." This doubtless had its influence. One member of the hemlock association, indicating his doubt of the wisdom of an advance, said: I have gotten up in a convention and roasted people who were voting for a rise in prices for no other reason than to go out on the street and get out lists cutting the prices; and you all know I came pretty near hitting the nail upon the head when I did it. . (American Lumberman, Aug. 10, 1901, p. 22.) Price lists continued to be issued from time to time. The North- western Hemlock Manufacturers' Association met on February 5, 1902, and adopted a price list $1 higher than that of the preceding 650 THE LUMBER INDUSTRY. December on a number of items. The following note was appended to the price list : These prices to govern in all markets except Chicago, which has been declared open market. (American Lumberman, Feb. 8, 1902, p. 25.) At this annual meeting of February 5, 1902, the association took another action which had an important bearing on actual prices. As is pointed out elsewhere (pp. 9-10), the first step toward uniformity of price is to secure uniformity of grade; for if No. 2 boards from one mill contain a considerable sprinkling of stock which another mill would call No. 1, identity of price for No. 2 boards does not mean a real identity. Up to 1902 the Northwestern Hemlock Manu- facturers' Association had no effective means of insuring uniformity of grades. The Mississippi Valley Lumbermen's Association and the Wisconsin Valley Lumbermen's Association had for some years cooperated in maintaining an official grading bureau for white pine, with inspectors traveling among the mills and bringing the grades to uniform standards. At the meeting of the Northwestern Hemlock Manufacturers' Association on February 5, 1902, a committee was appointed to — confer with the bureau of grades of the Mississippi Valley Lumbermen's Association for the purpose of allowing the North- western Hemlock Manufacturers' Association to join that move- ment. (American Lumberman, Feb. 8, 1902, p. 24.) It appears, however, that the arrangement was not completed till 1904. The following appeared in the American Lumberman of February 8, 1902, page 11: The Michigan Hemlock Association at its meeting in Detroit on Wednesday did not advance its list, but it was able to an- nounce that list prices are being obtained and maintained. This is equivalent to a substantial advance within a short time, for the list was suspended the greater part of last year. That association did not follow the market with its list, but waited for the market to come to it, which it has done, and Michigan prices are now substantially in accord with those this week proclaimed by the Northwestern Hemlock Association. According to the American Lumberman of February 14, 1903, page 24, a member of the price-list committee said, at the 1903 annual meeting of the Northwestern Hemlock Association: The price-list committee met twice last year, but in addition to this we corresponded with each other. The first time we met we left the price list as it was, as we thought it was not best to raise it, but the next time we raised it 50 cents for some items. This was in August last, and the increase recommended by the price-list committee received no consideration at the hands of the members of the association. Instead of raising the list a PRODUCTION AND WHOLESALE DISTRIBUTION. 651 half dollar, as recommended, most of the members reduced the old list 50 cents. Under date of June 6, 1903, the secretary of the Northwestern Hemlock Manufacturers' Association issued a circular in which he said: "Owing to the success the association has met with so far this year in its work for the good of the business, we continue to gain in membership, and this alone is assurance that we have been well guided in the market through Our price-list committee." Early in 1904 a number of the principal producers of Wisconsin hemlock established a common selling agency, in the form of a cor- poration called The Hemlock Co. This company was incorporated about the end of January, 1904, and ceased to be active near the close of 1906. According to the American Lumberman of May 28, 1904, it was said to represent "90 per cent of the total output of hemlock in Wisconsin and the contiguous territory." The American Lumberman of December 22, 1906, in announcing the decision to wind up the enterprise, said: "It will be remembered that when the company was organized it did not undertake to transact business until it had secured support representing about 75 per cent of the output of hemlock." A. L. Osborn, of Oshkosh, Wis., afterwards president of the North- western Hemlock Manufacturers' Association, was manager of The Hemlock Co. throughout its active existence. In an interview with an agent of the Bureau, on May 4, 1912, Mr. Osborn made statements to the following effect : The authorized capital of the company was $100,000, of which about $65,000 was subscribed and about $27,000 paid in. The company was not to begin business until it had secured con- tracts for a certain proportion of the hemlock output. I am not sure what the proportion was, but the amount was some- where around 250 or 300 million feet, while the total hemlock output of Wisconsin during the operation of the company was about 700 million feet. The statements in lumber journals to the effect that the company controlled 75 to 90 per cent of the hemlock output are inaccurate. The output of the mem- bers of the hemlock association was about 400 or 500 million feet. Practically all the mills represented in the Hemlock Company were also members of the hemlock association, and the company maintained a joint office with the hemlock associa- tion. It also used the price lists of the association as a basis for its quotations. During practically all of the company's existence the hemlock market was a constantly rising one, and the Hemlock Company was almost always able to secure asso- ciation list prices or better. The price secured by the company was very generally followed by outsiders within about 50c per M feet. I think that the largest number of mills ever represented in the company was 32. There were only four mills in the com- pany which had an output of over 10 million feet each. In 652 THE LTJMBEB INDUSTRY. addition to the mills or individuals representing them, there were a few individual stockholders who neld stock in the com- pany merely as an investment. I had $1,000 of my own money mvested in the company. The company paid dividends to its stockholders varying from 12 to 15 per cent. The method of operation was as follows: The company had an exclusive contract for the output of the mills which directly or indirectly held stock in it. Each stockholder was a director in the company, and there were some 35 or 40 directors. The directors elected an executive committee of 7 which decided upon prices at which the output controlled by the company should be sold, these prices being based largely upon my recom- mendation. The contract with the stockholders provided that the company should buy from the contracting mills their entire output at the market price fixed upon by the executive com- mittee less 50c per M, which the Hemlock Company should re- ceive to cover the cost of doing business. The contract pro- vided that the mills could buy back from the Hemlock Com- pany their respective outputs at the net price they had received from the company plus 25c per thousand feet. This allowed each mill to handle its own business, and most of the business was handled independently by the various mills. I am not sure whether the contract prohibited the mills selling their product below the market price as fixed by the executive committee, but the effect was to prevent them from doing so. The com- pany sold on its own account from 40 to 50 million feet per year, distributing the orders among the various mills. This distribution was left entirely to the manager, there being no understanding as to the distribution of these orders. One of the useful features of the company was that it was in a position to buy up stock offered by mdependent concerns at less than the market price as fixed by the company. Prom 20 to 25 per cent of the com- pany's sales was bought from outside mills. During the summer of 1904 hemlock had to meet considerable competition from yellow pine (see p. 613), but by fall conditions were more normal. The American Lumberman of October 15, 1904, page 54, said: "Prices are held firmly by the controlling influences in the Wisconsin supply as well as at Lake points." The secretary of the Northwestern Hemlock Manufacturers' Asso- ciation said in his circular of November 15, 1904: "I am safe in saying that for the past year 75 per cent of our members, represent- ing 70 per cent of all the hemlock manufactured in Wisconsin, have religiously maintained all prices." J. E. Khodes, secretary of the Mississippi Valley Lumbermen's Association, said in his annual report of February, 1905: "The Hemlock Company has proven a strong factor toward the stability of hemlock values, and demoralizing competition from that source need not be feared this year." The following extract from the speech of A. L. Osborn, a delegate from the Northwestern Hemlock Manufacturers' Association to the J:4 PKODUCTION AND WHOLESALE DISTEIBUTION. 653 annual meeting of the Southern Lumber Manufacturers' Association at New Orleans, January 24, 1905, is taken from the official pro- ceedings of that association. It is a good illustration of the price policy at that time. At the meeting just held (of the hemlock manufacturers in Milwaukee, Jan. 17) there was a great deal of discussion as to whether they would advance the list the whole length or only a few items, and I am frank to admit that I did afl I could to oppose the advance the whole length of the list for the reason that they were not getting at the day the meeting was held — no one I know of — the full list on all items, and it seemed to me time when they were getting the full list to make the advance, and I can tell you that certain items in the last week have com- pletely demonstrated that we will be getting the full list, and the full present list right away, and better than that in thirty days. The association was working in close harmony with the pine asso- ciations in the same region — the Mississippi Valley and the Wisconsin Valley associations. In 1905 there are frequent references to a close connection between the three associations in their price activities. In a circular of May 9, 1905, announcing that the price-list com- mittee had met the day before and raised some items 50 cents and others $1 a thousand, the secretary said: "Both the Mississippi Valley and Wisconsin Valley price-list committees met on the same day, and advanced pine prices from 500 to $1 on boards, piece stuff, and timbers, and as high as $5 per M on some items in selects and uppers." 1 Again, on August 12, 1905, announcing a meeting of the price-list committee on August 11:' 'At the same time, the Wisconsin Valley association met and adopted general advances all along the line from 50# to $1 per M on everything in 1-inch com- mon, piece stuff, plank, and timbers, in pine and Norway effective to-day." The following passage from the Chicago report in the American Lumberman of August 26, 1905, page 66, shows how the hemlock people profited by the action of these pine associations, especially in raising the price of Norway pine, and also by the diminished com- petition of southern yellow pine : The demand for hemlock piece stuff is visibly more active, mainly because of the higher prices recently established for Nor- way, and because of the extreme difficulty of securing yellow pine. Manufacturers and wholesalers of hemlock say that they are shipping much of their product into what has been heretofore regarded as exclusive yellow pine territory, and that the demand is getting brisk in many localities. i Bee also the trade-paper extract cited on p. 675. 654 THE LUMBEE INDUSTRY. And, on September 29, 1905, announcing a meeting of the asso- ciation to be held October 4, the secretary said: The price-list committee of the Wisconsin Valley association meet at the same time and it is deemed advisable to issue the new lists of both associations under the same date. At the annual meeting on January 30, 1906, the secretary said in his report: Since our annual meeting January 17, 1905, there have been six meetings of the price-list committee, * * * and at every meeting of the committee an advance was made in accordance with their judgment, and the advances have been loyally sup- ported by practically all of our association members. The committee now recommended a further advance of $1 a thou- sand all along the line. One man said in the course of the discussion that in his opinion the shortage of the log supply would be in some cases as high as 40 per cent, and that under these circumstances he thought the association could put prices to any point it wished. Another said: "It is not a question of price of lumber, but of furnishing the stock." The recommendation of the committee for an advance of $1 on all hemlock lumber was adopted unanimously. Section 13. Change in the policy of issuing association official price lists. Up to this point the lumber journals give very detailed reports of the association's activity in price matters. The printed proceedings of conventions show the items advanced and the action of the com- mittee and the convention, and. there is a close correspondence between the lumber-journal reports and official statements. About this time, however, the growing trust agitation caused an increase of caution. J. E. Rhodes, already secretary of the Northern Pine Manufac- turers' Association, became secretary also of the hemlock associa- tion in March, 1906, and in March an attorney's opinion was secured on the legality of the price activities of both associations. 1 He pro- nounced the methods adopted legal, but advised changing the com- mittee's name to "Committee on stocks and markets." On April 10, 1906, the president wrote the secretary: I have seen several of the directors and they were in favor of changing the name of the "Price-list committee" to the "Com- mittee on stocks and markets" so I will take the responsibility of ordering the name changed and you can govern yourself accord- ingly and we can have the action ratified at the first meeting. Later the matter was submitted to another firm of attorneys. They advised that these activities were in violation of the State anti- trust laws, and that the price-list committee should be eliminated. ' For the account of what took place in the Northern Pine association, see pp. 517-623. PBODTJCTION AND WHOLESALE DISTRIBUTION. 655 On June 1, 1906, the board of directors of the Northwestern Hem- lock Manufacturers' Association held a meeting, the minutes of which contain the following: The secretary presented the opinion of Clapp & Macartney as obtained by the Northern Pine Manufacturers' Association, re- garding the legal status of the committee on stocks and markets and its work. As a result the following resolution was adopted: "WHEREAS; This association has been advised that certain actions of its committee on stocks and markets may possibly be contrary to the antitrust law of the States of Wisconsin and Minnesota, "BE IT THEREFORE RESOLVED; That the said commit- tee on stocks and markets is hereby discharged, and Articles 1, 2, and 3 of the by-laws of this association, covering the duties of said committee, and the same are hereby repealed." Section 14. Connection of the association with the Bronghton Standard Price List. The official price list had for years been published by A. L. Brough- ton & Co. as well as by the association itself. The earliest Brough- ton's official price list in the possession of the Bureau states on its cover, "prices adopted by the N. W. Hemlock Manf'r's Assn. effective Aug. 5th, 1901." Earlier official lists are found in the lumber papers, and were doubtless published in pamphlet form, though the Bureau has no pamphlet copies. The last such list openly issued by the asso- ciation, so far as the Bureau knows, bears the following on its cover: "Effective March 16, 1906. Hemlock price current. Issued by Northwestern Hemlock Manufacturers' Association." The last-named "price current" bears the imprint of Castle-Pierce Printing Co., Oshkosh, Wis., and was apparently printed by that company for the association. Substantially the same matter was published by A. L. Broughton & Co., Minneapolis, under the follow- ing cover page : "Hemlock. Effective March 16, 1906. Broughton's Official Price List and Reference Book. Price 50 cents. Sent post- paid on receipt of price. Published by A. L. Broughton & Co., Min- neapolis. Copyrighted by Amos L. Broughton." The association itself published no price lists, so far as the Bureau knows, after March 16, 1906, but A. L. Broughton & Co. continued to publish them. They were, however, no longer "Broughton's Offi- cial Price List," but "Broughton's Standard Price List"; instead of being "effective" on a certain date they were "revised" on a certain date. Price lists were also published by Castle-Pierce Printing Co. of Oshkosh, Wis. The disappearance of price determination from official minutes and published reports does not mean that it disappeared from the activi- ties of the association. On August 25, 1906, the Westboro Lumber Co., long a prominent member of the association, wrote as follows to A. L. Broughton & Co. 656 THE LUMBER INDTJSTBY. Replying to yours of the 23rd. inst. you may enter our order for 500 hemlock price lists to be made for us after each change in price by the association. * * * Make us up an order of lists after the meeting of the 28th. inst., whether prices are changed or not, and then an order after each change until further notice. The significance attached to the Broughton lists issued under the new plan is illustrated by the following clippings. A Broughton list "effective Dec. 20" shows advanced prices over the preceding one. The American Lumberman of January 12, 1907, page 88, said: The hemlock list was advanced December 20 $1 a thousand, but prices here have not varied perceptibly, except that manu- facturers and wholesalers are a little firmer in their ideas regard- ing prices. The going figures are about 75 cents off the old list. A week later on page 78, the same paper said: It is a little difficult to say just what the price of hemlock is in this market. A new list was made effective December 20 which advanced prices on all items $1 a thousand feet, but the advance has had no perceptible effect on the going price of lum- ber. Right now it appears to be a question of how badly the buyer wants the stock, as prices range from $1 to $2 off the new list. This does not mean there has been a slump in hemlock values from those obtained last month, but rather an increase, as the going prices in December were about 75 cents off the old list, which would be $1.75 below the schedule now in force. Toward the close of 1906, the active existence of The Hemlock Co. terminated. A. L. Osborn, its manager, said in May, 1912, to an agent of the Bureau: The company dissolved largely because it had accomplished the purposes for which it was formed. It had succeeded in establishing hemlock on the market, and in introducing it into the East. The fact that I no longer wished to remain with the company also had something to do with its dissolution. The American Lumberman said, December 22, 1906: "The reasons given for the dissolution of the company are that the changed con- ditions of trade make its further existence unnecessary." This is very similar to Mr. Osborn's statement, and may probably have been inspired by him in his capacity as manager. The real reason for the dissolution, however, was undoubtedly fear of the antitrust laws. This was clearly stated to the agent of the Bureau by other informants. No mention of prices appeared either in the official minutes of the annual meeting, January, 1907, or in the Mississippi Valley Lumber- man report. This indicates the great caution with which the asso- ciation was then handling the price question. The secretary referred in his report to the resolution of Senator Kittredge, directing the Secretary of Commerce and Labor to investigate the lumber industry, and continued: PRODUCTION AND WHOLESALE DISTRIBUTION. 657 It is ODly necessary here to say that so far as the Northwestern Hemlock Manufacturers' Association is concerned it has not violated any laws of the states or of the Nation. It is well known to the members of this association that they have never felt under any obligation to this organization to maintain any par- ticular price for their product, and that as a matter of fact, the prices which they have been able to obtain have been dictated solely by the supply and demand. In reply to a circular letter which A. L. Broughton & Co., pub- lishers of the "Standard price list," sent to the manufacturers, Barker & Stewart Lumber Co., Wausau, Wis., wrote on March 14, 1907, as follows: We have your circular request as regards any changes that we have made in the Dec. 20th list. We have issued a postal notice of an advance of $1.00 per M. over this list, but have not as yet ordered new ones. Foster-Latimer Lumber Co., Mellen, Wis., wrote on March 15, 1907: Replying to your circular, we beg to advise that we have issued a list under date of the 15th, making prices in everything in hemlock lumber $1.00 per M more than the Dec. 20th list. Same have been distributed to our customers. E. E. Bolles & Co., Coleman, Wis., wrote on March 15, 1907: Your circular letter received. We are in favor of advancing the December 20th hemlock list $1.00 per M on all items, and think it will stand this advance, and trust you will receive enough favorable replies from parties of the same opinion to warrant you in issuing such a list. Mason-Donaldson Lumber Co., Rhinelander, Wis., wrote on March 15, 1907: Replying to your circular letter beg to advise that we are getting a new price list and have advanced all items of hemlock lumber $1.00 per M and hem. lath 250 per M per your Decem- ber 20th list. We believe that this is being done by all of the large hemlock manufacturers in Wisconsin. The unanimity of the advance of $1 on all items of hemlock lumber is noticeable; and so is the understanding that "this is being done by all the large hemlock manufacturers in Wisconsin." A price list was issued under date of January 15, 1907, and another under date of March 16, 1907. The following comments appeared in the American Lumberman of February 16, 1907, page 88: Prices are about the same as they have been since the first of the year, though if anything they are a little firmer. The bulk of the orders now being taken are upon the basis of about a dollar below the list of January 15. This would bring them to the prior list and shows an increase of about 75 cents since the new list went into effect. 25030°— 14 43 658 THE LUMBER INDUSTRY. The American Lumberman of March 30, 1907, said: "The March 16 list, which advanced the price on all hemlock items $1 a thousand, is being fairly well lived up to, the basic price being about 50 cents off." The market tended downward from about June, 1907, and the movement was emphasized by the panic which came in the fall. In November a meeting was called, to be held at Minneapolis, December 3, for the purpose of arranging to curtail production. The mimeo- graph report of this meeting, sent out by the association secretary, said that about 125 manufacturers from Wisconsin and Michigan were present, and that the president of the association, in calling the meeting to order, "stated that the meeting was not a meeting of the hemlock association membership but that all of the hemlock manu- facturers had been invited and were asked to take part in a full and free discussion of all the conditions affecting their business at this time." A new list was issued under date of January 28, 1908. The Ameri- can Lumberman said in its issue of February 8, 1908, page 90: "Hemlock is steadier, a new list issued last week bringing prices down 11.50 to $2.50 a thousand below the former list and about even with current quotations, which are pretty solid on the new list." The official minutes of the annual meeting, February 4, 1908, make no mention of prices, and the report in the Mississippi Valley Lumber- man contains nothing directly on this point beyond the following line: ''A discussion of market conditions followed." On March 21, 1908, the secretary issued a circular discussing the log input and stating that "wisdom dictates reduced production of lumber during the coming sawing season." Market conditions were not good, and the Mississippi Valley Lum- berman of April 24, 1908, page 41, said: Concessions are frequently made at figures somewhat in excess of $6 from the list, and there are but few takers at that. It is not expected that hemlock will evidence an upward tendency until such a time as the yellow pine market begins to show signs of firmer values. Under date of August 8, 1908, A. L. Broughton & Co. published a new list, with prices from 50 cents to $3 lower, on several items ) than that of January. The Mississippi Valley Lumberman said on August 21, 1908: "Prices have not reached the new list by any means." Again, on September 4, page 40, the same paper said: A slightly firmer tone has been noted in the hemlock market, largely because of a steady betterment of the situation in yellow pine, but thus far prices have not strengthened to any great extent, and concessions are still made from the list as low as $5 to $6. PRODUCTION AND WHOLESALE DISTRIBUTION. 659 And the Mississippi Valley Lumberman of October 2, 1908, page 38, said: The hemlock manufacturers appear very much encouraged by reason of the fact that the yellow pine market has advanced from one to four dollars per thousand and they are thus able to get higher prices for hemlock. A good many of them are still giving concessions from the August list, but there seems to be little reason for continuing this. At the semiannual meeting, September 29, 1908, the association instructed the secretary "to prepare and send out to the members an official table of weights, showing the cost of delivery on every item quoted and sold from the product of hemlock logs." The official minutes of this meeting make no reference to any action on prices. However, according to the American Lumberman report, the presi- dent "warned the members against using the 1907 list, but urged the use of the later list, from which it would be possible to make an advance." F. W. Buswell, a member of the association, "was in favor of the hemlock people asking an immediate advance of at least $1 a thousand, except perhaps on timbers and plank, and believed that they could get it." At this meeting, also, George H. Chapman, president of the asso- ciation "strongly urged that logging should be light during the com- ing winter." He also said : Our policy, especially in regard to logging, should be carefully considered at this meeting. While the law forbids us to enter into agreements in regard to those matters, there is no reason why we should not and every reason why we should frankly face the situation and determine, each for himself, what is the proper policy to be pursued. On December 24, 1908, the secretary issued a circular calling atten- tion to the fact that overproduction was one of the factors threatening to prevent a decided improvement in the lumber market. While the demand for lumber will unquestionably be better the coming year than it has the past year, it will be a very easy matter for the lumber manufacturers of the country to supply it; and the danger is that in preparing themselves to do so they may early find themselves overstocked to such an extent as to make it necessary to sacrifice in values. The official minutes do not show that any action was taken on prices at the annual meeting on February 2, 1909. The American Lumberman report says that under instructions from the board of directors the president had appointed a committee on market conditions, and that J. J. Lingle, chairman of the committee, in presenting its report, said that "prices prevailing seemed to show an advance of about 50 cents a thousand." 660 THE LUMBER INDUSTRY. In the discussion which followed "it became apparent that the advance which most of the manufacturers proposed to put into effect would amount to 50 cents on piece stuff and $1 on 6-inch and wider No. 1, with an advance of $1 on No. 1 hemlock lath." Official notes which were found in the office of the Northern Pine Manufacturers' Association show that the chairman of the committee offered a resolution for the appointment of a committee on "P. L.", evidently meaning price list. Further details of what took place at the meeting are revealed in correspondence found in the association files, extracts from which are given in the following paragraphs. Secretary Rhodes started for Washington on the night after the meeting, February 2, 1909, to work against reduction of the lumber tariff. The next day he wrote from Chicago to H. S. Childs, the acting secretary in charge of his office at Minneapolis : I telegraphed Mr. Broughton that he might issue a new book of hemlock prices, advancing all items on the list 50 cents straight with the exception of No. 2 hemlock plank and 32-inch lath, effective February 2 . This for your information in case he makes any inquiry. It is proposed that this list shall be issued by all hemlock manufacturers at once, although it will not be necessary for us to make any official announcement of it from our offices. It will be remembered that Mr. Broughton was the Minneapolis printer who had for years got out official association price lists. (See p. 655.) On the same day, February 3, 1909, W. C. Landon, of Barker- Stewart Lumber Co., Wausau, Wis., wrote to Mr. Rhodes: Since the meeting of yesterday I have been looking over the price list of Aug. 8th and comparing it with what I consider to be the present selling prices, and while it was suggested at yester- day's meeting by several of the manufacturers that there would be a fist issued advancing all items 50$, I think this would be a mistake and am of the opinion that there should not be a list of that kind issued at this time without a little more thought upon the subject. If you will refer to the list that the committee recommended, I would suggest a few changes which seems to me will probably come nearer to the market conditions as a whole than a straight raise of 50* would. [Here follows a detailed list of changes which Mr. Landon recommends to be substituted for the list recommended by the committee; then the letter continues :] I am sorry there was not a larger number of us got together and talked this matter over before any sug- gestion was made as to price in the general meeting. If after you have gone over this matter you think it advisable to take this matter up with some of the regular manufacturers before any lists are printed I would be pleased to have you do so. I will send Mr. Osborn a copy of this letter, and he will un- doubtedly write you his views regarding it. PRODUCTION AND WHOLESALE DISTRIBUTION. 661 A. L. Osborn, of Oshkosh, Wis., was president of the association. On receiving the copy of Mr. Landon's letter, which Mr. Landon sent him in accordance with the last paragraph, he telegraphed to Mr. Rhodes at Minneapolis, under date of February 4: "Stop move to issue new list. Letter tonight." Mr. Rhodes being at Washington, Mr. Childs, the assistant secretary, telegraphed Mr. Osborn to send his letter there. On February 5, Mr. Osborn wrote to Mr. Rhodes accordingly: On my return home I received a letter from Landon protesting against the 50$ flat advance and showing how absurd it is. He asked delay on issuing new list. I called up Goodman to con- sult him and found he had a new list out based on the report as first drawn by committee of 5 night of the 1st, and said that was what he understood the crowd were to use, and the Bay Shore people all understood that the typewritten list changes passed round on the floor was the "new list." I wired to you at Minneapolis to stop issue of new list, and Childs wired me to go to you. What I wanted was to head off Broughton. I wrote a letter that I hope will get a result. You may not appreciate it, but Lingle's report was not very authori- tative. There was a lot of noise in the room. I stopped Castle-Pierce on the list and hope Broughton is headed off. Anyway I shall call a meeting soon to confer and get up a fist that will be acceptable to all. "Castle-Pierce" means Castle-Pierce Printing Co., Oshkosh, Wis., which had printed many official price lists for the association. On February 6, George H. Chapman, who had just retired from the presidency of the association, wrote to Mr. Rhodes : Mr. Osborn seems to be having some difficulty with the report of the market conditions committee, which pans out to be quite unsatisfactory to a good many of our good friends. I understand that he has decided to call a halt and to have another conference before going ahead. On February 6, 1909, the same day on which Mr. Chapman wrote the letter just quoted, Acting Secretary Childs wrote to Secretary Rhodes: There has been considerable flurry over the price list business. When I received Mr. Osborn's telegram about which I wrote you yesterday, I called up Broughton and found that you had wired him already to stop the printing of the lists. In addition to the letter I maded you yesterday I received another one to-day from Mr. Osborn, in which he expressed some anxiety about the lists and hoped that Broughton had been headed off. Of course, he understands before this time by my telegram and letter yesterday afternoon that Broughton is held up, but he asks in today's letter, "Please let me know what you did in way of advising members of the situation." Now, the facts of the case are, until I received your letter of the 3rd from Chicago in the last mail 662 THE LVMBER INDUSTEY. yesterday afternoon, I knew practically nothing about the hem- lock list business. I might have sent out a circular to the hemlock people advising them that the recommended list of the 1st instant had been held up but there were two reasons why I did not do so: I had an idea that the "blank form of circular" which in your letter you say is to be issued to the hemlock mem- bership and those on the "shipment" chain, and which you say in your postscript later on, "Will send copy for circular to- morrow, was in relation to this list business; and if it was that I would get my information as to how to act from that. Another thing, from what I have heard and learned by observation here in the office it is a question with me whether it is policy or cus- tomary to issue letters of that kind in relation to lists from this office. I wish that you would let me know about how far we can go in matters of this kind. Mr. Dalzell seems to think that you have been taking more latitude with the hemlock people than you have with the pine and that it would be all right to issue a circular letter informing the hemlock people that the recom- mended list has been held up. I have wired Mr. Osborn that I have done nothing in the premises and have also written him explaining the situation and informing him that we can issue a circular on very short notice if he will indicate his preference either by wire or mail. On February 11 Secretary Rhodes wrote from Washington to President Osborn : Upon receiving your wire at Chicago to head off the new hemlock list, I telephoned Broughton, as I assumed of course you would also take the matter up with Castle-Pierce Printing Company, as I find you did. It was very unfortunate that this list matter was handled in the hasty and unsatisfactory manner that it was. Perhaps we were just a little afraid of the courts, and needlessly so. I was surprised to learn during the afternoon that a number of our people did not understand that the report of Mr. Lingle's committee had been repudiated, and I feared that some misunderstanding would result. The hasty decision to reissue the old list, advancing 50$ straight was undoubtedly ill-advised, for such a list would not meet the conditions. I have assumed that you have arranged for another conference, and that copy for a new and satisfactory list will be prepared and furnished the printers. I have written Mr. Childs as per the enclosed copy, and if he will issue the enclosed circular letter I think it will explain the situation to our members. If we had done bold and made the whole department of the association work, as I had expected we could do, we would" have straightened this matter out before we left Milwaukee, but all we can do now is to make the best of it. I hope that Mr. Goodman and the Green Bay Eeople did not go very far with their own individual lists. If you ave not already done so, would suggest that you call ten or fifteen members together at Oshkosh to prepare a new list, and furnish explicit copy to Mr. Broughton and Castle-Pierce. # If this is your plan the enclosed draft of circular which I am sending to Mr Childs will cover the case. If you have made other arrangements it will be necessary to change this circular. PRODUCTION AND WHOLESALE DISTRIBUTION. 663 Secretary Rhodes's letter to Acting Secretary Childs, dated Febru- ary 11, 1909, and referred to in the above letter to President Osborn, was as follows : Replying to yours of the 4th in relation to the hemlock list, this matter has given me some worry, and is an extremely un- satisfactory condition. It arises from the order in which this matter was arranged at the hemlock meeting. Had the day been devoted to the association meeting instead of crowding everything into the morning session, and turn the afternoon over to "slashing" bill, we would not have been in this condition. About fifteen members met in Milwaukee Monday, and the market conditions were thoroughly discussed and an entire new list was prepared by my committee, of which Mr. J. J. Lingle was chairman. This list recommended a difference between number one and No. two of $3, and when the committee's recommenda- tions were distributed among those who arrived early Tuesday morning, there was general complaint over the work. A number said they would not issue any such a list, and the board of directors attempted to get together and compromise the matter before the meeting was called to order. They talked of making advances of $1 per M on inch and .50 per M on two-inch. As there was considerable doubt about the advisability of presenting this matter in the open meeting, I was instructed Tuesday noon to arrange for Broughton and Castle-Pierce Printing Company to reissue the old list, making an advance of 500 per M straight on all items except No. 2 lath and 32-inch lath. I accordingly telegraphed Mr. Broughton and as I omitted the lath in my first telegram I wired him again Tuesday night advising him again not to make the advances on lath excepting No. 1 lath. I was surprised during the afternoon to find that Mr.' Landon and one or two others had not understood that recommendations made by Mr. Lingle's committee had been repudiated, and I thought it was explained to him that the committee's report was to be ignored and the old list advanced straight 50$ as indicated. It would seem from Mr. Landon's letter of the 3rd, which I returned, that he did not understand this, and assumed that the new list was to be issued according to the committee's report. Mr. Osborn understood that the list was to be advanced 50$ only and that the committee's report was ignored. This little misunderstanding might have been avoided if there had been more time for discussion, and I feel that an advance of 50$ on the old list will not meet the regulations nor the issues of the majority. It will be necessary for the hemlock people to get together, or at least a committee of them, and prepare a new list and see that it is reprinted correctly. Possibly you may now have this up with Mr. Osborn. I am writing this letter in carbon, and send Mr. Osborn a copy of it so that he will understand what I am writing you. I received his message asking me to see that the new list was made up, and have had no letter from him since. I would have written him earlier had not Mr. Hines kept me on the jump in Chicago, and this is the first opportunity since I arrived m Washington that I have had to dictate a letter. The only way this matter can be handled is for Mr. Osborn to arrange 664 THE LUMBEB INDUSTRY. for the meeting of ten or fifteen of the principal interests, and sufficient time taken to prepare a copy for a new list, to be given to Broughton and Castle-Pierce Printing Company, and they can get out their price books accordingly. I note in a letter you say that Mr. Osborn thinks I should dic- tate a circular letter to our members on this subject. If you have not already issued something to cover the case, enclosed draft of the circular might be all that is required, provided it is arranged that Mr. Osborn is to call together a number for the purpose of preparing a new list. The following is the draft of the circular which Mr. Rhodes refers to; At the annual meeting of this association, held at Milwaukee February 2, there was not sufficient time for the proper con- sideration of market conditions. Various suggestions were made by different individuals in regard to their ideas of the values of hemlock lumber, and it was announced that certain firms were about to issue a new list. In view of the information in regard to the immediate demand for hemlock and the future of market, it has been thought best to postpone the issuance of a new list by several who had proposed to do so, and I am now informed that a new list is soon to be issued, which will be no doubt a more satisfactory and definite indication of the values of hemlock lumber than the list which we proposed at the Mil- waukee meeting. If you are expecting to issue a new list soon it might be well to await the receipt of the new list when you can see whether or not it meets your views. It is, of course, desirable that there should be as little variation among the lists on the same class of stock as possible. In another letter to Acting Secretary Childs on the same day Secretary Rhodes said: In relation to the hemlock price matters, will say that I have taken somewhat more liberty than with the pine list. Although you will note from the copy of the circular which I am sending you, I have handled it in a rather guarded manner. I am sorry the hemlock people did not seem willing to take this work off of us at this time, but as the notice was very short, and they were unable to make any arrangements for transferring it immedi- ately, we are not in a very good position to criticize them, and when this price list work and membership business incident to the beginning of the new year is out of the way, it need not involve much labor. On February 11, 1909, Mr. Rhodes wrote to Edgar Dalzell, of the C. A. Smith Lumber Co., Minneapolis, a prominent member of the Northern Pine Manufacturers' Association: A committee of fifteen of the largest manufacturers labored Monday afternoon, February 1st in preparing a new list, and when their report was circulated among the members Tuesday morning strong objections were raised to it and it was entirely repudiated. As a result it was at first arranged to reissue the new list making an advance of 50$ straight, but it seems that some did not understand that, and were under the impression a PRODUCTION AND WHOLESALE DISTRIBUTION. 665 that the list as recommended by the committee was to be gen- erally issued. Upon receiving Mr. Osborn's telegram to hold up the new list, I wired Broughton, and the matter has been in the air until the present time, and I have written Mr. Osborn that he must call a committee together at once for the purpose of getting together a new list in a proper manner, because a 50£ advance over the old list will be no more satisfactory than was the report presented by the committee. I have carefully written the draft of the circular and sent to Mr. Childs, which will explain the situation to our hemlock members, as I have deemed it safe to explain such matters a little more plainly to them than to our pine members. The phrase "I have deemed it safe to explain such matters a little more plainly to them [our hemlock members] than to our pine members" appears to have been the subject of comment in other letters passing between Acting Secretary Childs and Secretary Rhodes. The following is from the former's letter of February 6 (p. 662): From what I have heard and learned by observation here in the office it is a question with me whether it is policy or customary to issue letters of that kind in relation to lists from this office. I wish that you would let me know about how far we can go in matters of this kind. Mr. Dalzell seems to think that you have been taking more latitude with the hemlock people than you have with the pine and that it would be all right to issue a circular letter informing the hemlock people that the recommended list has been held up. To this Mr. Rhodes replied on February 11 (see extract cited on p. 664): In relation to the hemlock price matters, will say that I have taken somewhat more liberty than with the pine list. Although you will note, from the copy of the circular which I am sending you, I have handled it in a rather guarded manner. On February 16, Mr. Childs wrote Mr. Rhodes as follows: Your letters of the 11th instant and one of earlier date, together with copy of your letter to Mr. Osborn and draft of letter to be sent to nemlock members in relation to price lists, received and noted. In the same mail with your letters I received one from A. L. Osborn with a draft for his letter in relation to the price-list business. You will find enclosed a copy of Osborn's circular ', letter which has been sent out, so that I presume the matter of the hemlock price list will rest easier on your mind. Mr. Osborn says that a list will probably be issued soon. The following is a copy of the circular: Northwestern Hemlock Manufacturers' Association, Office of the Secretary, Minneapolis, Minn., February 15, 1909. Gentlemen: At the recent meeting of this association at Milwaukee there was not sufficient time for the proper considera- tion of market conditions. A good deal of difference of opinion 666 THE LXTMBEK INDUSTRY. No lists have been issued up to this time, but it is understood that a good many firms are about to issue lists representing on the better grades an increased value that the market seems to justify and a slight reduction or no change on the lower grades. Copies of this list will probably come to your hand and it is urged that you at once adopt the list and issue same. Yours, truly, H. S. Childs, Acting Secretary. The date of "Broughton's standard price list" was February 20, 1909, while Castle-Pierce Printing 'Co., of Oshkosh, put out their edition, entitled "Hemlock price current," under date of February 15, 1909. A letter of Mr. Childs to Mr. Osborn, dated February 22, shows that the basis or f. o. b. list was to be mailed to all members of the association. 1 The Bureau has copies of several lists issued by different manufacturers, under dates ranging from February 20 to March 1 , and all agreeing with the list which was issued by Castle- Pierce Printing Co. under date February 15 and by A. L. Broughton & Co. under date of February 20. Under date of February 22, Mr. Osborn wrote to Mr. Khodes: "Broughton & C. P. both are having a good call for the new list & I am sure it will be promptly adopted." In a letter of March 3 to Mr. Rhodes, he said: "It seems from the information I have that the new list is being rapidly adopted. And that too in face of a market that shows no improvement." 2 A letter from A. L. Broughton & Co., dated March 12, 1909, speaks of "sheet price lists that we have made for about twenty firms on the Feb., 1909, fists." The following extract taken from an editorial entitled "Putting it up to the manufacturers" and alluding to the price-list situation appeared in the Mississippi Valley Lumberman of March 5, 1909, page 24: Only a few years ago, before the wave of opposition to uniform- ity in selling fists became too pronounced, the manufacturers' associations had price fist committees that recommended what the selling values ought to be, and uniform fists were issued in accordance witfi those recommendations. Actual selling prices were no more uniform than they are now, but the official fist served as a basis and the fists sent out by one manufacturer were tfie same as the fists sent out by another. The usual method now is for some publishing concern not identified with ' The paragraph referred to is as follows: "In the same mail with your letter one came from Secretary Rhodes relating to matter to be mailed to members. He stated that he had expressed a sufficient number of printed resolutions and suggestions on tariff matters to mail a copy to each member of both associations. They will probably arrive tomorrow, and then we will mail them with the notices of officers of hemlock association; tamarack lath and Broughton's basis list; all under the same cover." " The American Lumberman, March IS, 1909, in its Chicago news, made the following statement: A firming of prices is noticed, probably in response to the higher list issued some time ago, although concessions are being offered on that list, and quotations vary according to the stocks held by the 56116rSi PRODUCTION AND WHOLESALE DISTRIBUTION. 667 the lumber business to get information from as many sources as possible and then print a list giving as nearly as possible the average market. Each manufacturing concern then issues its own lists, conforming to the general list or differing from it ac- cording to the condition of the stocks of that particular concern. If all of the manufacturers of a certain wood should follow the suggestion of the Wisconsin dealers, and issue uniform lists at the same date, they would lay themselves liable to prosecution under the antitrust laws. In advance of the next semiannual meeting letters to the following effect were sent to some of the manufacturers : The semiannual meeting of this association is called for Fri- day, August 20, at the Hotel Pfister, Milwaukee, Wis., at which time a large number of subjects will be discussed. On the day previous, however, or Thursday, August 19, a meeting will be held of a number of the leadmg hemlock manufacturers con- vening at Hotel Pfister, 4 p. m., for the purpose of discussing market conditions. You are respectfully requested to attend both the meeting on Thursday afternoon and the regular meet- ing on Friday. There is considerable improvement in general business condi- tions and an increased demand for lumber is reported. With the settling of the tariff agitation and the harvesting of the crops the prospects seem favorable for a much improved trade and the policy to be pursued by the hemlock manufacturers should be discussed at once. Will you kindly arrange to attend this meeting and oblige. A. L. Osborn, President. The official minutes of the semiannual meeting, held August 20, 1909, show that a resolution was adopted for the appointment of — a committtee of three for the purpose of recommending a list of prices, which after full investigation of all conditions they believe will represent the value of hemlock lumber at this time; and that this recommendation be circulated among the manufacturers to be used by them as a basis for quotations, superseding the several different fists of various dates which are now being used as the basis for prices on hemlock. This committee was appointed, but the only official report of its recommendations is the following: "It was moved by Mr. Charles A. Goodman, chairman of the committee on market conditions that the spread between #1 and #2 hemlock, inch and two-inch lumber, be $2.50 per M feet. Carried." It appears from other evidence, however, that the whole matter of the price list was considered, and that the prices agreed on were fur- nished to A. L. Broughton & Co. for publication. The changes, to- gether with the date "August 20, 1909," were noted in pencil in a printed copy of the preceding Broughton list, and this copy was after- wards delivered to the Bureau by H. S. Childs, who in August, 1909, was acting secretary of the association. A memorandum of the 668 THE LUMBER INDUSTRY. changes was also found by an agent of the Bureau in the office of A. L. Broughton & Co. This memorandum is headed "Hemlock. Changes from list of February 20th, 1909. Effective August 20, 1909." The list was published by Broughton with the changes indicated, under date of August 25. Its cover bears the legend, in the form used since 1906, "Revised August 25, 1909." It is worthy of note, however, not only that the written memorandum was dated August 20, the day of the association meeting, but that the date was accompanied with the word "effective," which implies issue from an authoritative source. Furthermore, on August 27, a member wrote Broughton for copies of ' ' the new price list decided on at the hemlock meeting at Milwau- kee, August 20th." The manufacturers continued to give attention to restricting the supply, for the purpose of raising prices. At the meeting of August, 1909, the president, in his formal address, said: Let us remember the parable of the foolish virgins and not be out of oil when our lamps should be shining bright and strong. That means, put in less logs next winter and the next, if condi- tions do not materially change. Again, at the annual meeting in January, 1910, the president said in his opening address: "We need to go slow at the producing end." At the same meeting the secretary said in his report: The competition incident to overproduction is not confined to a fight for the markets between different species of lumber, but members of the same family of manufacturers are striving with each other for business that 'does not demand the supply and are destroying the profits of all. There is no doubt that this phase of the contest is carried often beyond the selling necessi- ties and by judicious management could be remedied. To dis- cover and prescribe these remedies is the province of the asso- ciation. At this meeting, January 21, 1910, the Northwestern Hemlock Manufacturers' Association was consolidated with the Hardwood Lumber Manufacturers of Wisconsin to form the Northern Hemlock & Hardwood Manufacturers' Association. At the organizing meeting, a special market-conditions committee was appointed, which sub- mitted a price list on hardwood, and recommended "the use of the hemlock list issued August 25, 1909." In submitting its report on hemlock the committee stated that it expected "people to nearly hold up this list." There is no mention of the report of this committee in the Mississippi Valley Lumberman report of the meeting. A permanent "committee on grades and information" was estab- lished, and the president of the association wrote as follows to the chairman of this committee on January 29, 1910: There seems to be a considerable increase in the demand for hemlock since our meeting in Milwaukee and with prospects of a PRODUCTION AND WHOLESALE DISTRIBUTION. 669 little better price, in fact on many things the prices are already a little better than they were two or three weeks ago. I am look- ing for a good spring trade and believe that by the time we will be able to get the information which the committee should have in deciding upon just what kind of a list should be put out, it will be time to issue that list. I have written Mr. Chapman today asking him to send you a copy of his ideas as to what the list should be and also send me a copy of his letter to you. I did not do that with the idea of in- terfering with your committee work, but as I was writing him about some other matters, I wanted his views as to what kind of a list should be put out, I requested him to send you that infor- mation. I believe the time is ripe for a steady and gradual ad- vance in the price of hemlock, but we must be careful and not try to go too fast, especially at this time, as the season has not ad- vanced far enougn so that people have decided definitely upon certain buildings that are being contemplated being built, so that we would not want to do anything that would tend to discourage people from building this spring, yet at the same time we want to get all the money for our stock that the market will reasonably stand and as soon as your committee can get this information together which they would like, as to what the price should be, a new list should be gotten out. On February 1, 1910, A. K. Owen, chairman of the committee on grades and information, wrote a letter to the assistant secretary requesting him to obtain information from the association members regarding "supply and values of hemlock lumber," and added: "I then figure that as soon as we get enough replies to get the informa- tion wanted, that I would call a meeting of the committee." A meeting was held later at which changes in the price list were decided upon. An association circular dated February 28, addressed "To Members," was sent to A. L. Broughton & Co. This circular con- tained a list of items which "undoubtedly would stand an advance of 500 per M." A. L. Broughton & Co. got out a list containing these advances under date of March 16, 1910. The following letter was written March 19, 1910, by C. A. Goodman, a member of the committee on grades and information, to the secre- tary of the Michigan Hardwood Manufacturers' Association: Your letter of the 16th inst received. Mr. Lusk spoke about your wanting some hemlock lists but sending these has been delayed because at the time you wrote him we had a call out for a meeting which meeting was held later in the month and changes made in the list. We enclose herewith March 16th list received to-day and also copy of Aug. 25th, 1909 list referred to in your letter. Upon reading your letter again I get the impression that you think our association or secretary gets out a hemlock list but this is not the case. A few of the leading manufacturers get out lists and from these lists are made up the Broughton books which are used as a standard price list. We would say that we are now getting this list or very close to it on all items. 670 THE LUMBER INDUSTRY. This letter is a curious combination of frankness and caution. The first paragraph states the facts; the second sets up a theory of the facts which the writer evidently considers safer in view of possible conflict with the laws. In the first paragraph "we had a call out for a meeting which meeting was held later in the month and changes made in the list"; and a copy of the list established at the meeting is enclosed. In the second paragraph there is no meeting: "A few of the leading manufacturers get out lists and from these lists are made up the Broughton books." The committee on grades and information met April 28, 1910. Under date of April 30 the secretary issued a circular in which he said: At a meeting of the board of directors and standing committees of the association, held yesterday it- was the unanimous, feeling that hemlock is worth the March list on all items and that this list should be used to the entire exclusion of the August list. About this time the secretary began to obtain reports of the sales made by members, and to issue "Sales reports," giving the highest, lowest, and average prices reported as received for the principal grades during given periods, with the number of reported sales of each grade. On May 18, 1910, the secretary wrote to the Goodman Lumber Co., suggesting that a concession of $1 per thousand from list, which they had reported on a certain item, had hardly been needed. They replied: We acknowledge receipt your favor May 18th calling our at- tention to your sales report which we received a day or two ago giving information as to selling prices of hemlock. Also note you say that you are under the impression that a study of this report will convince us that a concession of $1.00 per M. on 12' & 14' piece stuff is a little more than is necessary under present conditions. We have had occasion to inquire of about a dozen different manufacturers of hemlock within the last few days for prices on 8 or 10 cars 2x4 to 2x10 10-20' #1 & merchantable hemlock and find that these quotations range all the way from a conces- sion of $1.00 to a concession of $1.50 per M. from the list on 12' & 14' lengths, while we have a few oners where concessions are $1.25 per M. on 10' & 16' lengths from the same list and 50£ to 750 per M. off on 18' & 20' lengths. This does not look to us as though manufacturers generally were able to get present prices for hemlock beyond those referred to in our letter to you. After discussing market conditions in detail the writer continued: In our estimation the hemlock list does not mean anything; but if we could get together and establish a basis price and agree among us to hold or quote hemlock on any basis that might be agreed upon, am sure that we could maintain an advance at the present time. We hope to see the time in the near future PBODUOTION AND WHOLESALE DISTRIBUTION. 671 when we can get up a hemlock list and sell our product in ac- cordance with that list. This will do more good to strengthen the market and to enable the manufacturers to get more money for their hemlock than anything that can be done in my esti- mation. At the semiannual meeting, September 14, 1910, action was taken looking toward a more effective method of reporting prices, patterned after the plan already in use on the Pacific coast. This consists in reporting sales to the secretary, and the publication by him of cir- culars to members giving not merely totals and averages, but each sale by itself, with name of seller, prices, freight rate, State of des- tination, and character of buyer as retailer, wholesaler, or factory, though not the buyer's name. Secretary Kellogg explained the plan at the semiannual meeting in September, 1910, and said that it "had a very wholesome influence on prices." The chairman of the com- mittee on grades and information, in a letter of January 7, 1911, remarked that it "does away with the idea of making lists, which is so obnoxious, I believe, to the public at large." A new price list was, however, recommended at the annual meeting of January 31, 1911, and was issued under the supervision of the president and the secretary of the association. This was the list issued by Broughton, February 8, 1911, and by Castle Pierce, February 15, 1911. In reply to F. W. Buswell of Wausau, Wis., who had written in criticism of statements made about the hemlock market, in the Mississippi Valley Lumberman, J. F. Hayden, an associate editor, defended the. market report in his letter of March 13, 1911, which appears on pages 29-30. The following statement is of interest in showing one feature of the meetings which obtained little publicity: You will perhaps remember that at the Milwaukee meeting, when the question was asked as to whether or not those present would make, an honest effort to secure the list for the next thirty days, two prominent manufacturers announced that they would not make that promise. On March 21, 1911, the secretary issued a circular encouraging the manufacturers to hold out for higher prices. "The manufacturers," he said, "now have the situation in their own hands." While ad- mitting that concessions from list were still made, he quoted a manu- facturer as writing, "We have had an excellent run of business the last week at the list prices"; and a line-yard man as "satisfied that yard men would have to pay the list price for a while at least." Further circulars, issued on March 29, April 3, and April 10, gave similar optimistic reports. During April, 1911, the secretary worked upon a proposed change in the form of the price list and sent out copies to the members for criticism and discussion. The change in form was generally ap- proved. One member wrote : " This is a good idea. Would suggest 672 THE LUMBER INDUSTRY. that association print their own lists, and stick to them better." The new form of list was submitted to the association at its quarterly meet- ing in April, 1911. The official minutes do not show what action was taken upon it. A meeting of about 50 sales managers, not all members of the association, was held on January 3, 1912, to discuss the price list; and a committee was appointed "to formulate," as its chairman said, "a new code of prices to be recommended for adoption at the annual meeting of the Northern Hardwood & Hemlock Association." This committee presented its recommendations to the association committee on grades and information just before the annual meeting of January, 1912, and the committee on grades and information re- ported them to the association. The published reports and the official minutes of the association meeting, while ostensibly giving the report of the committee on grades and information in full, omits all reference to the price list. Secretary Kellogg admitted, however, in an interview with an agent of the Bureau of Corporations, that the committee did report recommendations to the association. When the agent asked whether the association adopted the report, he answered that "they simply talked it over." But on February 1, 1912, the day after the association meeting, he wrote to Hollister. Amos & Co., Oshkosh, Wis. : Referring further to your letter of January 26 and my reply of January 27. The association yesterday decided to recommend an increase of $1.00 in the price of both No. 1 and No. 2 1x4 stuff, which, I think, you will be glad to know. A new list, along the lines of the one sent you on January 27, will be issued soon. On February 16, 1912, J. W. Kaye of the Westboro Lumber Co. wrote to Secretary Kellogg about a company that had, he under- stood — issued a concession of from 2.00 to 2.50 off the 1911 list. I wrote them offering to sell their stock at much better prices. They might take me up and I would have to call for help from some of the fellows. I have no reply as yet from them, Dut if they do offer the stock I believe it could be handled by a few fellows getting together. Those coming in contact with their list west of the river are putting up quite a holler; have not heard of their prices in Wis. and IU. Secretary Kellogg says that this plan was not adopted in the case referred to or in any other that he knows of. However, another com- pany wrote on February 3 to the mill which was making the low quotations, saying that it was "unnecessary to take this price to the yards," and that the writers would give an order for 50 cars at the rate named, to be shipped within 30 or 40 days, and would make an ad- vance payment of $1,000 on account. PRODUCTION- AND WHOLESALE DISTRIBUTION. 673 All the information in possession of the Bureau establishes the following facts : 1. That the action taken by the board of directors on June 1, 1906, abolishing the committee on stocks and markets, was a mere blind and pretence; that the Northern Hemlock Manufacturers' Association, and its successor, the Northwestern Hemlock & Hardwood Manufac- turers' Association, has been actively engaged in trying to establish prices on hemlock that should be recognized as virtually "official" association prices ; and that the officers and members have been con- tinually engaged in organized price activities, under the cloak of acting as "individuals" and not as an association. 2. That the "Broughton standard price lists" on hemlock and probably most if not all of the Castle-Pierce lists have been the means of promulgating the association prices, and that there is a close con- nection between the action of the association committees dealing with prices and the issuing of the lists by these printers. 3. That attempts to hide this connection from the general public have been made repeatedly. Section 15. Extracts from lumber-trade papers relating to Lake States hemlock. Note. — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber-trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news items from various cities will refer to the action and for several weeks or months will comment on its effect, adds to the credibility of the extracts. 1901. Chicago— American Lumberman, March 9, 1901. page SS.—lt is said that some of the manufacturers have latelyissued lists quoting piece stuff at $9.50 at the mill. Others are said to be holding their stocks higher than that, but it is not certain that much is being sold. Association price list Issued, effective March 12, 1901. Chicago— American Lumberman, March 18, 1901, page 76.— The prices established at the recent meeting cannot be regarded as high, being based on $9.50 on 12 and 14-foot piece stuff and $10 for 16-foot f. o. b. mill; and many manufacturers claim that they are able to get these prices without difficulty. Chicago— American Lumberman, March 88, 1901, page ^8.— While the prices fixed by northern manufac- turers were $9.50 for 12 and 14-foot and $10 for 16-foot, there is still some shading, although a majority of the association people are holding firm at the list and are selling considerable. Association price list Issued, effective June 1, 1901. Chicago— American Lumberman, June 8, 1901, page #8.— An advance, effective June 1, has been made by the Northwestern Hemlock Manufacturers' Association, which tends to show that the manufacturers have confidence in the future of their product, and also that they are having a somewhat better trade than would be indicated in the local dealings. The reports from the Wisconsin mill men are generally to the effect that their trade is active and they believe that the slightly advanced prices will be easily maintained. Association price list Issued, effective Aug. 5, 1901. Milwaukee— American Lumberman, August 10, 1901, page S2 .— The meeting of the Northwestern Hemlock Manulacturers' Association held at the club rooms of the Plankinton House, Milwaukee, Wis., on last Monday, was attended by a fairly representative number of the manufacturers; also by a committee of three from the meeting of the price list committee of the Mississippi Valley Lumbermen's Association at Wausau on the preceding Saturday, who reported an advance of 50 cents to $1 upon the white pine price 25030°— 14 43 674 • THE LUMBER INDUSTRY. list and urged the hemlock people to take similar action. After considerable discussion of the influence of crop prospects and of the labor strikes upon the general situation and their probable influence upon lumber m general and upon hemlock products in particular the meeting decided upon a conservative course of action and confined the advance to those portions of the stock list which were in most short supply and general demand, also making an advance of 50 cents upon timbers 4x4 inches and larger in all lengths. [The price list is given in this issue.] Chicago— American Lumberman, August 17, 1901, page 41.— Wisconsin manufacturers report a good trade and that they are getting list prices for the bulk of their shipments. Chicago— American Lumberman, December 7, 1901, page ^.—Northern shippers state that they are getting somewhat better prices on mixed car orders. In fact, many of them holding firm at the list. Association price list Issued, effective December 26, 1901. 1902. Chicago — American Lumberman, January 4, 1902, page 46— Ks indicative of the growing confidence in hemlock the Wisconsin manufacturers have just advanced their prices onpiece stun and boards 50 cents and SI, although one or two items of long piece stuff are advanced $1.50. The new list it is said represents very closely actual selling prices. Association price list Issued, effective February 5, 1902 Milwaukee — American Lumberman, February 8, 190%, page 46. — What its producers think about the strength of the Wisconsin hemlock market is shown by the action at Milwaukee this week when prices on nearly all items in the list were advanced SI, and, on the remainder, 50 cents; the latter being chiefly con- fined to short lengths and piece stuff under 16 feet. * * * The Michigan producers had a meeting in Detroit and reaffirmed the old list which amounted to a substantial advance over the prices that have been made up to a recent time, inasmuch as the list has been virtually suspended. It is asserted that the list prices are being generally secured. This western situation is pleasing to those Pennsylvania producers who find their natural market in the western part of that State and in Western New York and eastern Ohio. They have been complaining for months that they were being undersold in their own territory by the western people, but these complaints have been less frequent of late and now have largely disappeared. Association price list issued, effective March 31, 1902. Chicago — American Lumberman, July 6, 1908, page 49- — Michigan manufacturers have lately sent out lists making an advance of 50 cents on short piece stuff, which is a comparatively scarce item and in excellent demand. Chicago — American Lumberman, August 2, 1902, page 60. — The recently advanced prices on hemlock have served rather to stimulate the demand than otherwise, as buyers are taking it freely and there is no com- plaint as to the better quotations. Association price list issued, effective August 20, 1902. 1903. Association price list issued, effective February 10, 1903. Chicago — American Lumberman, February 1 4, 1903, page 63. — Wisconsin manufacturers established prices at their meeting at Milwaukee this week, basing piece stuff on $13 f. 0. b. Wausau. Milwaukee, wis., February 10. — The annual meeting of the Northwestern Hemlock Manufacturers' Association was held at Hotel Pflster in this city to-day. * * * The report of the price list committee was called for and through its chairman, B . F . McMillan, it reported as follows: We, your price list committee, have adopted the following prices for your consideration, together with the appended resolution: We recommend that the list of August 27 be adopted with the exception of the following items: 2x4, 2 x 6, 2 x 8 and 2 x 10 — 16-feet long shall be raised 50 cents a thousand, making 2x4 $13, 2x6 $12.50 and the same price for 2 x 8 and 2 x 10 in 16-foot lengths; $12 for 2 x 10—12 and 14 feet long; that the price of hemlock lath be reduced to $2.75 from the former price of S3. (American Lumberman, Feb. 14. , 1903, p. 24.) Chicago — American Lumberman, March 21, 190S, page 68.— Prices seem to be gradually firming up to the list adopted February 10, and some of the manufacturers say that they are getting the full list prices on most ofthe stock that they sell, while others are still complaining of hard competition. Oshkosh, Wis.— American Lumberman, March 28, 1903, page 40.— Following the adjournment of the Wis- consin Hardwood Lumbermen's Association the executive committee of the Northwestern Hemlock Manufacturers' Association met and adopted the following revised price list: Official Price List of the Hem- lock Manufacturers' Association. Revised February 10, 1903. Effective March 30, 1903. [Prices follow.] Association price list Issued, effective March 80, 1903. _ Chicago— American Lumberman, April 4, 1903, page S3.— Confidence in the stability of hemlock quota- tions has been reinforced recently by last weeks' action of the Wisconsin manufacturers, who reestablished prices, which had been to some extent uneven during the winter. The new prices are about 50 cents above those adopted last August for 12 and 14-foot piece stuff and $1 above for 16-foot stock, while other prices are not materially changed. Association price list Issued, effective June 9, 1903. Chicago— American Lumberman, A ugust 8, 190S, page £4.— Northern interior manufacturers say that they are getting close to list prices for all that they sell, and that in many instances the full list is paid without a murmur, ranging from $13.50 to $14 for the ordinary sizes of short piece stuff in carload lots delivered on a Chicago rate. Association price list issued, effective August 28, 1903. American Lumberman, September 6, 1903, page 47.— At the meeting of the Northwestern Hemlock Manu- facturers' Association held at Milwaukee, on Thursday of last week, as reported in our issue of August 29,oneof,ifnotthechief,subjectsunderdiscussionwastheadoptionofapricelistforthefalltrade. * * * Chairman B. F. McMillan of the price list committee made a report recommending the adoption of the existing list as it stood, and supplemented this report with his individual opinion that if anythingsome articles should be advanced. After a thorough airing of the question from the viewpoints of the different PRODUCTION AND WHOLESALE DISTRIBUTION. 675 manufacturers, it was decided to raise the price 50 cents a thousand on 2-inch piece stuff 20-foot and longer; 3-inch piece stun 18 feet long and all 3-inch and thicker above 18 foot, as also 16-foot common boards shiplap. Wegive below the revised list which went into effect August 28. [List follows.] Chicago— American Lumberman, November 14, 190S, page 67.— Shippers who handle directly from the mills claim that they can occasionally get a shave off of prices of about 50 cents a thousand, but the list as a whole is well sustained. 1904. Association price list issued, effective January 19, 1904. Milwaukee, Wis., February 4.— The new hemlock manufacturers' selling organization, composed largely of members of the Northwestern Hemlock Manufacturers' Association, which embraces the bulk of the product of the mills of Wisconsin and northern Michigan, is an assured thing. After several conferences which were held during the past two months, the scheme focused is the result of an all-day session at the Hotel Pfister to-day. During this session stock subscriptions were accomplished to the amount required and officers were electedj whose duties it will be to navigate this new selling organization. The new corporation is called the Hemlock Company, articles of incorporation of which were filed at Madison on January 29 and Milwaukee on the 30, signed by B. F. McMillan, John R. Davis and B. neinemann. The company is capitalized at $100,000, divided into 2,000 shares of S50 each. It is understood that the organization of the company is on very much the same lines as the recently organized Western Fir Manufacturers' Company, and the purposes for which the corporation is organized asset forth in the articles of the incorporation, are to purchase or otherwise acquire, to sell or otherwise dis- pose of and deal in timber of all kinds; to manufacture purchase or otherwise acquire, to sell or otherwise dispose of and deal in lumber of all kinds; to engage in the manufacture or production of and to deal in any material or products which may be used in or in connection with the manufacture of lumber or any product or article manufactured therefrom; to purchase or otherwise acquire, lease, mortage, sell or otherwise dispose of any and all real estate and any and all personal property necessary or proper for manufacturing plants or for the purposes hereinbefore set forth, and to do and perform all other acts necessary or proper or inci- dental to the aforesaid business or the carrying out of the objects and purposes of thiscorporation. (Ameri- can Lumberman, Feb. 6, 1904, p. 57.) Chicago— American Lumberman, April 16, 1904, page OT.— Prices are scarcely up to the association list, but are being held in line quite well and promise to be stiffer when trade shall reach a full volume. Association price list issued, effective June 15, 1904. Association price list Issued, effective July 1, 1904. Association price list issued, effective September 20, 1904. American Lumberman, September %4, 1904, page 19.— Probably no man in Wisconsin is better informed in respect to the production and marketing of hemlock in that State than is A. L. Osborn, manager of the Hemlock Company, whose headquarters are in Oshkosh. In a late conversation in the office of the Ameri- can Lumberman Mr. Osborn reviewed the situation at some length. * * * As to prices the Hemlock Company's stock, which comprises that of the majority of the larger and better mills, is being sold at regular and uniform figures. It is well manufactured, is dry and can be furnished in any desirable assortment. Being in strong hands, altogether there is a good and substantial basis for the maintenance of uniform prices. In Mr. Osborn 's opinion a concession of 50 cents a thousand is all that is being made on the mass of stocks in Wisconsin, which may be regarded as a practical maintenance of the list. There may be instances in which some of the smaller operators are cutting prices to a greater extent than that indicated but such isolated and unimportant cases have but little effect on the general market. Chicago— American Lumberman, October 1, 1904, page M.— Prices are being well maintained at the list recently put into effect. Association price list Issued, effective November 14, 1904. 1905. Association price list issued, effective January 17, 1905. Association price list Issued, effective March 1, 1905. American Lumberman, March 4, 1905, page 84.— At a meeting of the price list committee of the North- western Hemlock Manufacturers' Association, held at the Hotel Pfister, Milwaukee, Wis., on Wednesday last, it was recommended that prices on all items excepting 3-inch plank, timbers and 4 and 6-inch No. 1 strips, be advanced 50 cents a thousand feet, to go into effect at once. Association price list Issued, effective May 12, 1905. Merrill, Wis.— American Lumberman, May IS, 1905. page 65.— As a result of the conference between the price list committees of the Wisconsin Vallev and the Mississippi Valley Lumbermen's Associations, held in Milwaukee last Monday, new price lists are in the hands of the printers. The lists are dated May 8. A general advance of from 50 cents to $1 a thousand is made. On the better grades of lumber the price is increased above those proportions. , . .„ , Milwaukee— New York Lumber Trade Journal, May 15, 1905, page 11.— The price list committee of the Mississippi Valley Lumbermen's Association, the Wisconsin Valley Lumbermen's Association, and the Northwestern Hemlock Association has agreed to advance the prices on ail classes of lumber 50 cents per 1,000 feet. ± . ,, Chicago—American Lumberman, May 17, 1905, page 71.— The recent advance of 50 cents is well main- tained, some dealers stating that list prices are more nearly uniform in this territory. Association price list Issued, effective August 12, 1905. North Tonawanda, N. Y.— American Lumberman, August 19, 1905, page 68— A continuation of the strong demand has resulted in another advance of 50 cents on Michigan during the week. Some dealers have already booked so many orders that they are expressing doubts as to being able to fill them this season. The greater part of the stock handled is consumed in this state, being shipped mostly by canal. Chicago— American Lumberman, September S, 1905.— Prices are firmer, the August 11 list being followed as closely as is found possible. 676 THE LUMBER INDUSTRY. Association price list issued, effective September 6, 1905. Milwaukee— American Lumberman, September 9, 1905.— The Northwestern Hemlock Manufacturers' Association met Tuesday of this week for its semiannual meeting and advanced the price on all grades of hemlock 50 cents. The advance was made in conformity to trade conditions as they exist in the opinion of the hemlock dealers. Chicago— American Lumberman, September 23, 1905, page 62. — Manufacturers have gradually advanced and maintained their figures, and another advance was made September 5, making a basis of $14 for 12 and 14-foot and $16 for 16-foot dimension f. o. b. Wausau, Wis. Association price list Issued, effective October 4, 1905. Association price list issued, effective December 28, 1905. 1906 Chicago— American Lumberman, January 6 : 1906, page 06.— Manufacturers along the Lakes are now getting from $13 to $13.50 for piece stuff at their mill points. Individual manufacturers have reported an advance of 82 on 22-foot and longer piece stuff and $1.50 on 10-inch boards and their products, with a like advance on No. 3 piece stuff. These advances have been lately given official recognition by the association members. Chicago — American Lumberman, January 20, 1906, page 68.— The recently issued price list is generally accepted as representing the current market. Association price list issued, effective January 30, 1906. Chicago— American Lumberman, February 10, 1906, page 77.— Trade in hemlock products has never been quite so good in this territory at this time of the year aa now. Certainly prices have never been higher, as the recently adopted list made short piece stuff $17.50 Chicago delivery and other items in proportion. Minneapolis — West Coast Lumberman, February, 1906, page SIS. — The Hemlock Association met in Mil- waukee. January 30 and raised their list $1 a thousand all the way along. All stocks have been badly broken into, and the year starts off as though there would be no cessation m demand. Manufacturers feel absolutely independent, and it is only a question of how far it is prudent to go in making advances. Association price list Issued, effective March 16, 1906. Minneapolis — Mississippi Valley Lumberman, March 28, 1906, page 84. — Manufacturers are turning down most orders in order to maintain their stocks for such trade as will not break them. There are offerings of items on which holders happen to be long, but nothing; is sold under the list. * * * Advances were recommended last Friday by the price list committee of the Northern Hemlock Manu- facturers' Association. The advance had already been made by the published individual list of manu- facturers and this action of the committee was merely placing the official list in conformity with the market. Minneapolis — Mississippi Valley Lumberman, March SO, 1906. — The advance in prices of two weeks ago has not served to quiet the demand. The market had reached the new list before it was recommended. Chicago — Mississippi Valley Lumberman, June 22, 1906. — Hemlock remains an active seller and devia- tions from the prices are reported by large buyers, who are securing 50 cents and sometimes 75 cents reduction. Minneapolis— Mississippi Valley Lumberman, July 27, 1906.— The shortage in all other kinds of lumber which comes in competition with hemlock has spread a very strong bull feeling among manufacturers of that lumber and they are disposed to value their product at even stronger figures than given in the last price list. Minneapolis — Mississippi Valley Lumberman, September 21, 1906. — The firm prices and the shortage in all kinds of other lumber has served to maintain the manufacturers in holding their product for list figures and now that the trade realizes that there is nothing in the situation to warrant a reduction in prices on hemlock it is beginning to place orders on the list bases. Chicago — Mississippi Valley Lumberman, November 9, 1906, page 35. — Hemlock is selling at irregular prices, reductions of 50 cents to $1 being made on occasional sales of carloads. Why any shading of prices should be made, with the demand large and the supply no heavier than it is possible to work off between now and spring, is one of the peculiar features of the market. Chicago — Mississippi Valley Lumberman, November 30, 1906, page 84. — Hemlock in the Chicago market is having a good sale and there is a firmer feeling in the market. There was no necessity for the recent cutting of prices and manufacturers and wholesalers, both in the Chioago market and at the other points, are beginning to discover it. Broughton standard price list issued, revised December 20, 1906. Minneapolis— Mississippi Valley Lumberman, December 28, 1906, page 85.— The advance as announced in these reports last week materialized this week when manufacturers commenced issuing lists advancing all items $1. 1907 Minneapolis— Mississippi Valley Lumberman, January 4, 1907, page 85.— The developments in the hem- lock trade during the past week substantiate the advance in that product which materialized a week ago. There was some strong buying during the past five days in the hope of securing stock before the advance took effect, showing that the buyers were not withholding themselves from the market because they were well supplied with stock. * * * Prices are well sustained and the advances upon the old baas well maintained. Chicago— American Lumberman, January 12, 1907, page 88.— The hemlock list was advanced December 20 $1 a thousand, but prices here have not varied perceptibly, except that manufacturers and wholesalers are a little firmer in their ideas regarding prices. The going figures are about 75 cents off the old list, Broughton standard price list issued, revised January 15, 1907. Chicago— American Lumberman, January 19, 1907, page 78.— It is a little difficult to say just what the price of hemlock is in this market. A new list was made effective December 20 which advanced prices on allitems $1 a thousand feet, but the advance has had no perceptible effect on the going price of lumber. Eight now it appears to be a question of how badly the buyer wants the stock, as prices range from $1 to $2 off the new list. This does not mean that there has been a slump in hemlock values from those obtaining last month, PRODUCTION AND WHOLESALE DISTRIBUTION. 677 but rather an increase as the going prices in December went about 75 cents off the old list, which would be $1.75 below the schedule now in force. Chicago— American Lumberman, January 26, 1907, page 88.— Values range from $1 to $2 off the new list, and at these figures buyers are placing a considerable amount of business. Chicago— American Lumberman, February 2, 1907, page 81,.— Prices are reported to be somewhat stronger and are practically at the old list, bringing them about $1 a thousand under the list now in effect. Chicago— American Lumberman, February 16, 1907, page 88.— Prices are about the same as they have been since the first ol the year, though if anything they are a little firmer. The bulk of the orders now being taken are upon the basis of about a dollar below the list of January 15. This would bring them to the prior list and shows an increase of about 75 cents since the new list went into effect. Chicago— American Lumberman, March 2, 1907, page 80.— No decided change in prices has occurred, but the tendency is toward firmness. The prices range from 50 cents to. 75 cents off the last list. Broughton standard price list Issued, revised March 16, 1907. Chicago— American Lumberman, March SO, 1907.— The March 16 list, which advanced the price on all hemlock items SI a thousand, is being fairly well lived up to, the basic price being about 50 cents off. Chicago— A merican Lumberman, A pril 6, 1907.— The demand for hemlock this week is fully up to the aver- age of the last thirty days and prices are at the high point. The going figures now are about 50 cents off the last list. Minneapolis— Mississippi Valley Lumberman, April 19, 1907, page 85.— The statement in last week's report to the effect that a quotation of SI. 25 off list had been made by a certain concern, has in some quar- ters been taken up in the wrong way, due to a superficial and not thorough reading of the article. That any company should make so large a concession, underpresent conditions is absurd. The intention of the statement was to bring out the absurdity of the report. On some items, fifty cents off is being given, but the majority are firm at list. Minneapolis— Mississippi Valley Lumberman, April 26, 1907.— A great many sales have been made at list, and tne largest concession made by local wholesalers to the retail trade is fifty cents off. There have been rumors of more strenuous price cutting but investigation finds no foundation for such reports. There is no reason why hemlock values should not be maintained strictly at list. Minneapolis — Mississippi Valley Lumberman, May 10, 1907. — Hemlock is strong, many wholesalers hold- ing firmly at list, while the greatest concession is not more than fifty cents off. Instances have been reported of sales at lower figures, but it has always been shown that the sales at declined values were specialdeals; the desire of the mill man to realize on his stock, or from the fact that the lumber was of inferior quality. Chicago — American Lumberman, May 11, 1907. — Prices range about $1 off the last list, although the showing is not quite as heavy on the cheaper materials. Minneapolis— Mississippi Valley Lumberman, May SI, 1907.— Quotations made on hemlock are in most instances not more than fifty cents off list. But there are constant rumors of considerably greater'conces- Bions, and these reports doubtless have some degree of truth in them. But why any holder of a stock of hemlock, under present conditions, should cut prices, is a matter of wonder to anyone conversant with the situation. Chicago — Mississippi Valley Lumberman, June 7, 1907, page 85. — The hemlock market here presents rather a peculiar aspect. While the demand continuing for several weeks has shown no signs of an early abatement quotations, according to several of the principal handlers of this product, are not strictly in accord with tie advance contained in the list issued m April. Their variance is only slight, however, vary- ing from 50 cents to a SI. Minneapolis — Mississippi Valley Lumberman, June 21, 1907. — It is reported that on some items certain concerns have given over two dollars off list. The average concession given is about one dollar off list. A number of companies claim that they will not cut their price more than fifty cents. Chicago— American Lumberman, July 27, 1907, page 87.— Values still range at from SI to $1.50 off the list on upper grades and full list on No. 3. Chicago — Mississippi Valley Lumberman, October 25, 1907, page 35. — Prices on shipments from interior rail points are between $2 and S3 below the March list, and in cargo quotations figures are correspondingly low. Chicago — Mississippi Valley Lumberman, November 22, 1907. — Concessions from the list on interior ship- ments still amount to about $2 or possibly S2.50, but dealers are not willing to meet any lower quotations as they anticipate a good call early in the spring, and inasmuch as the output next season promises to show a decrease the general belief is that stock will he none too plentiful. Chicago — Mississippi Valley Lumberman, November 29, 1907, page 85— The best news that the local han- dlers of hemlock have heard in a month was that conveyed in the calling of a conference of hemlock manu- facturers to be held at Minneapolis on December 3. It is generally understood that the purpose of the conference is to talk over the stock situation and reach some conclusion as to the advisability of curtailing production. Minneapolis — Mississippi Valley Lumberman, December 6, 1907. — One of the resolutions passed at the recent meeting of operators at Milwaukee is worthy of note at this time. Here it was agreed, though not in any binding way, that a reduction of about 40 per cent would be the desirable thing. This reduction made effective, they would consider that the market was in line for being placed in a satisfactory condition. Chicago— Mississippi Valley Lumberman, December 18,1907, page S5— With but slight chance that yellow Sine will strengthen much until well after the first of the new year, handlers of hemlock here are inclined to old on to their stocks rather than make sales at the low basis of prices. This policy has been all the more noticeable since the Milwaukee meeting at which the operators decided to decrease their output next year fully 40 per cent. The market has been further handicapped of late by a generous offering of stock in transit at prices several dollars off the list. Chicago— Mississippi Valley Lumberman, December 20, 1907, page 87.— The outlook has become a little more hopeful though now that navigation is closed and because of an expression of opinion at the Milwaukee meeting that the operators would keep their stock in pile rather than make any further sacrifices at the present low basis of values. Chicago— Mississippi Valley Lumberman, December 27, 1907, page S5.— Unquestionably the market has benefited because of decreased receipts, which evidences that hemlock operators are carrying out their intentions signified at the Milwaukee meeting— that they would keep their stocks in the pile rather than to make further sacrifices at the demoralized prices which have prevailed. 1908. Minneapolis— Mississippi Valley Lumberman, January S, 1908, page 34.— The hemlock curtailment of about fifty per cent seems to be effective, and is held by the hemlock operators that should they wish to meetcompetition, that they can secure orders any time they wish. This is certainly a better state of affairs than held a short time since, if it is true, for-only recently concessions of any amount would not tempt the orders to come forth. 678 THE LUMBER INDUSTRY. Minneapolis— Mississippi Valley Lumberman. January 17 1 1 908.— Curtailment seems effective, and many logs have been sold to the paper mills. Figuratively speaking, the market is stiffening in spite of the fact that the actual sales are light. The drop in demand came in tune to enable the logger to reduce his cut in the woods, and log at lower prices. With lighter operations in the woods, the manufacturer needs less money to finance operations than last year, and not being greatly pressed for money, he feels inclined to hold on to his stock for at least a moderate profit. Broughton standard price list Issued, revised January 28, 1908. Minneapolis— American Lumberman, February 8, 1908, page 90. — Hemlock is steadier, a new list issued last week bringing prices down $1.50 to $2.50 a thousand below the former list and about even with current quotations, which are pretty solid on the new list. Locally there is no surplus of low grade stock and it is being held firm. Minneapolis — Mississippi Valley Lumberman, April 17, 1908. — There will be at least a twenty per cent reduction in the log input for hemlock this year. If conditions remain in the present state the manufac- turers will not manufacture any more lumber than can be sold on the market. Chicago— American Lumberman, April 18, 1908, page 100.— The price tendency in hemlock is to compete as closely as possible with southern pine, and as a result the prices are not as high as usual at this season. At the same time the general report is that dealers are holding to list prices more firmly than for some time, and that with an increase in building operations advance in almost all hemlock prices can be looked for. Chicago — Mississippi Valley Lumberman, May 8, 1908, page 89. — The low prices at which yellow pine is offered precludes an early strengthening of values, and some concessions have been made locally as low as $6.50 to S7 off the list. Prices m the country though are several dollars higher than those ruling in the local market. Chicago — Mississippi Valley Lumberman, May IB, 1908, page #?.— In Chicago, however, handlers have been compelled to make further concessions in prices in order to meet in a way the strong competition of yellow pine. Concessions from the list are made as low as $6.75, and in some cases still greater reductions have been chronicled where the order was a large one. Broughton standard price list Issued, revised August 8, 1903. Minneapolis — Mississippi Valley Lumberman, August 14, 1908. — Most dealers are sending out new lists which contain prices averaging about three dollars under the lists that came out last January. Concessions of considerable size are still being made on this new list, but it forms a pretty fair basis for which hemlock ought to be selling and for which, without doubt, it will be selling with the beginning of a demand which may be reasonably expected under the conditions which give promise of a good buying movement this fall. Minneapolis — Mississippi Valley Lumberman, August $8, 1908. — On many other items orders are hard to land with concessions in price as large as two dollars off the August list. Minneapolis— Mississippi Valley Lumberman, September 4, 1908.— This market is showing steady improve- ment and prices are working up gradually toward the August list. Some dealers claim to be holding out for straight list throughout and it does not seem out of reason to believe they will get it before long. Chicago— Mississippi Valley Lumberman, September 4 1908, page 44. — A slightly firmer tone has been noted in the hemlock market, largely because of a steady betterment of the situation in yellow pine, but thus far prices have not strengthened to any great extent, and concessions are still made from the list as low as $5 to 86. Minneapolis — Mississippi Valley Lumberman, September 25, 1908. — Some producers have put August list f>riees on all their stocks and do not care to do business at any less. They do not profess to be moving a arge amount of stock at these prices, but they have the confidence in the situation that leads them to believe they will not have to wait long for the business at this level. * * * The better grades of stock are low and stocks as a whole are broken. Many items are selling strong at the new list. As we go down the scale of grades, however, the disparity between list and market prices grows wider. Number 1 dimen- sion has shown an improvement of probably a dollar and a half over the low prices of three months ago. Minneapolis — Mississippi Valley Lumberman, October 2, 1908. — Those concerns which have sold cheap have had a fair volume of business. Others who have adopted the August list as-their basis and have held to it firmly do not report a large amount of business. Mississippi Valley Lumberman, October 8, 1908, page 88. — The hemlock manufacturers appear very much encouraged by reason of the fact that the yellow pine market has advanced from one to four dollars per thousand and they are thus able to get higher prices for hemlock. A good many of them are still giving concessions from the August list, but there seems to be little reason for continuing this. Minneapolis — Mississippi Valley Lumberman, December 25, 1908. — Some concerns are taking a considerable number of orders at prices ranging from 50 cents to a dollar off the August list for practically all yard stock while in some cases the full list represents the actual selling price of some items. 1909. Minneapolis— Mississippi Valley Lumberman, January 22, 1909, page 68. — The market seems to be held firmly at a point slightly under the August list with very few concerns willing to grant concessions to move the stock and with prices of a practically uniform character throughout the market. Minneapolis— Mississippi Valley Lumberman, February 19, 1909, page 40.—A few new lists have appeared in the market this w«ek putting the prices of hemlock up from one to two dollars. * * * At present, however, there is not a large amount of business being done, although prices are holding firmly and in places there is a tendency to advance in accordance with the list. Broughton standard price list issued, revised February 20, 1909. Chicago— American Lumberman, March ':, 1909.— A new list was issued February 20 raising the price Jl above the August [list], but slight concessions are being made. The prices being quoted depend entirely on stocks held by the seller. Minneapolis— Mississippi Valley Lumberman, May 7, 1909.— Prices remain the same with most concerns quoting at an average of a dollar off the August, 1908, list. PRODUCTION AND WHOLESALE DISTRIBUTION. 679 Broughton standard price list Issued, revised August 25, 1909. Minneapolis — Mississippi Valley Lumberman, October 8, 1909. — Prices have stiffened up considerably in recent weeks, and quotations on the whole are getting near the August list without much concession by any of the manufacturers. 1910. Broughton standard price list Issued, revised March 16, 1910. Minneapolis — Mississippi Valley Lumberman, March 25, 1910. — The demand for hemlock still continues good and new lists being made up showing much firmer prices. While the trade in general have not uni- versally revised their prices, a tendency is shown to quote nearer the list price, and where some items in stock run low, make a decided advance. "The Market"— Mississippi Valley Lumberman, April 8, 1910.— Hemlock mills of northern Wisconsin arestillhavingtroublesecurmg_cars. * * * The latest hemlock list comes nearer being the market new than it has since it was issued in March and prices are constantly strengthening. Minneapolis— Mississippi Valley Lumberman, July 8, 1910.— There is some business to be had but this trade usually goes to tie concerns in need of business and who are willing to make price concessions. Under such circumstances, and in view of but little demand, it can be readily seen that the market price is hardly anestablihsed one. On the whole, however, taking a summary of the price situation the market does not seem greatly demoralized as small mills are allowed to take the business being offered at this time and no disposition s'.iown on the part of the trade as a whole to start a price war. Broughton standard price list Issued, revised February 8, 1911. Section 16. Comparison of list prices with prices of actual sales. Thef. o.b.Wausau prices, obtained from records of actual sales, have been compared on Diagram 22 (opposite p. 680) with theWausau basis list. Prior to 1 906 the list prices used were those officially issued by the Northwestern Hemlock Manufacturers' Association, and which also appeared in the "Broughton official price list" series. For a discus- sion of these lists seepages 647-654. After March, 1906, the association no longer "officially" issued lists, and the list prices, shown on the diagram from that date on, appeared in the "Broughton's standard price list" series. The discussion of the connection of these lists with the price activities of the Northwestern Hemlock Manufacturers' Association, and its successor, the Northern Hemlock & Hardwood Manufacturers' Association, will be found on pages 655-673. The evi- dence gathered by the Bureau shows that such Broughton lists were used, for all intents and purposes, in the same manner as the lists formerly "officially" promulgated by the association. No distinc- tion, therefore, has been observed in presenting them on the diagram. The Bureau has evidence, too, that the lists printed by the Castle- Pierce Printing Co. have had the same relation to the price activities of the association as have the "Broughton standard price list" series. Attention may be called to the close correspondence between the list prices and those of actual sales in the period previous to 1907. Since that time the correspondence is much less close. It is probable that some of the close correspondence before 1907 was due to the influence of The Hemlock Co., which existed in 1904-1906, inclusive (see discussion on pp. 651-652), but that does not explain the close correspondence in the period prior to 1904. 680 THE LTJMBEK INDUSTRY. Section 17. Definition of grade. No. 1 dimension is defined in the Northwestern Hemlock Manufac- turers' grading rules, adopted July 7, 1897, and revised February 20, 1906, in the following terms: 1 . The grade of No. 1 dimension will admit of shake that will not materially affect the strength of the piece. 2. Also knots, either black or red, that are well located and fairly sound. 3. Or a knot hole that will not impair its strength. 4. Or some slight cross checks, or sound water stain. 5. This grade, while admitting the above defects, must at the same time retain the element of strength required for any ordinary building purposes. Section 18. Prices of actual sales of lake States hemlock. Tabular statement. — Prices of actual sales made by several mills are shown on an f . o. b. Wausau, Wis., basis in Table 4B. Wausau is the most important distributing point for a large producing region, and it has seemed best to show prices on that basis only, although delivered prices were also obtained from records in Chicago and Milwaukee. Prices for the folio wing items are shown: No.l dimension, dressed, 2 by 4 inches, 16 feet, and 2 by 12 inches, 16 feet, and rough, 6 by 6 inches, 16 feet. Prices for boards were also obtained, but not enough sales were found to establish a satisfactory series of prices that would be strictly comparable with each other; so no prices for boards are given. The periods covered begin in 1896 with 2 by 4 inches, 16 feet, in 1898 with 2 by 12 inches, 16 feet, and in 1902 with 6 by 6 inches, 16 feet and ends in 1910. Diagram. — All of the prices shown in Table 4B, already described, are given on diagram 22. The most typical item for showing the gen- eral course of hemlock prices is 2 by 4 inches, 16 feet. In 1896 the price was about $6; in 1910 it was $16. The general rise throughout the lumber industry that culminated in 1900 and the decline in the last half of that year are shown on the diagram. A long, steady ad- vance of prices then took place and continued over several years. While the prices of yellow pine and fir dimension, its most active com- petitors, show marked declines in 1904, the Lake States hemlock prices were little changed. The advance in prices was rapid in 1905 and early in 1906, a slight depression folio wed, and then an advance in 1907 to the highest point shown on the diagram. Then followed a sharp decline in the last quarter of 1907 and the first half of 1908. A gradual advance followed, which was still in progress in 1910, but which had not reached the high point of 1907. Diagram 22. — Movement of Actual Prices of Eastern Hemlock Boards Delivered in Boston, and Comparison of Movement of Association List Prices with Actual Prices of Lake State Hemlock on an F. O. B. Wausau, Wis., Basis, 18961910. PRODUCTION' AND WHOLESALE DISTRIBUTION. 681 TABLE 4B.— ACTUAL PRICES OF LAKE STATE HEMLOCK F. O. B. WAUSAU, WIS., BASIS, 1898-1910, BY MONTHS. [All 16-foot dimension.] Dressed — X CO a 3 O Month. Dressed— o X co a 3 o « Month. Dressed— lb X Month. X cn CN X CN X CN cn X CN X IN In X CN CO ■a 3 o « 1896. January Febraary $6.50 6.50 6.50 1901. January February $8.50 9.00 9.00 9.75 9.50 9.75 9.75 10.00 9.50 10.00 9.75 10.25 10.50 10.75 11.75 11.75 11.75 11.75 11.75 11.50 11.75 11.75 11.75 12.00 12.00 12.00 12.25 12.75 13.25 13.25 13.25 13.00 13.00 13.00 12.75 12.75 12.75 13.00 12.75 12.75 13.00 12.75 12.75 12.75 12.75 12.75 12.75 12.50 12.75 12.75 12.75 13.00 13.25 13.50 13.75 13.50 14.00 14.50 14.75 15.00 $9.00 1906. February $15. 50 16.00 17.00 18.00 18.50 18.50 18.25 18.25 18.00 17.75 17.50 17.50 17.25 18.50 18.75 19.50 19.50 19.75 19.50 19.25 19.00 19.00 18.00 $16. 50 17.25 18.25 19.25 19.50 19.25 19.25 19.00 19.00 18.75 18.25 18.75 19.50 20.25 20.25 20.50 20.75 20.25 20.25 20.25 20.25 19.75 $16. 75 17.25 9.50 10.25 10.50 10.50 10.50 10.75 10.75 10.00 10.50 10.75 11.25 11.25 12.75 12.75 13.00 13.00 13.00 12.75 13.00 13.25 13.25 13.50 13.75 13.50 14.00 13.75 14.00 13.75 13.75 13.75 14.00 13.75 13.50 13.75 13.50 13.50 13.25 13.50 13.50 13.50 13.50 13.50 12.50 13.25 13.50 13.25 13.00 13.75 13.75 14.25 14.50 14.50 14.75 15.00 15.00 15.75 16.00 16.25 $12.25 12.50 12.25 12.75 13.00 13.00 13.25 13.50 13.25 13.00 13.00 13.00 12.50 13.00 12.75 13.00 12.75 12.75 13.25 13.50 13.50 12.75 13.25 13.50 13.50 13.50 14.00 14.25 14.50 14.75 15.00 15.50 16.25 16.50 18.25 19.50 May 7.50 6.75 19.75 19.50 July July July 19.50 August September... October 6.50 6.25 6.75 August September... October November... December 1902. January February April September... October November . . . December 1907. January February 19.50 19.25 19.25 1897. 19.50 19.75 March April May 6.75 6.50 6.50 20.00 20.25 20.50 20.50 July July July 20.25 August September... October November... 7.50 7.25 6.75 7.50 7.25 7.50 7.25 7.25 7.50 7.25 7.25 7.25 7.50 8.00 8.25 8.25 7.75 8.50 8.75 8.75 8.50 9.25 :::::: ::::::. September. . . November... December 1903. February August September... November... 20.25 20.50 20.50 20.50 1898. 1908. January February 18.00 18.25 16.25 15.00 14.50 14.00 13.75 14.50 14.25 14.75 14.75 14.50 15.00 15.00 14.75 15.00 15.00 14.50 14,75 14.75 15.25 15.75 15.50 15.75 15.00 15.50 15.50 16.00 16.25 16.00 16.00 16.00 19.50 Febraary April $7.75 "Y. 75 8.25 8.75 8.50 8.25 9.25 9.25 8.75 16.25 15.75 15.50 14.75 15.00 14.50 15.50 16.00 16.00 15.00 15.50 16.25 15.75 16.25 15.75 15.25 15.50 16.25 16.25 'l6."75 17.25 15.50 15.00 July... July July 16.00 September... October November... December 1899. January February August September... October November.. . December 1904. February March August September... October November... December 1909. January February March 15.00 17.50 17.50 18.25 17.50 March May June 9.25 9.50 ... 17.75 16.50 16.25 15.25 July 9.25 10.25 10.50 10.75 11.00 10.75 10.75 10.75 11.25 11.50 11.00 10.75 10.25 9.50 9.50 9.25 8.00 7.75 July July August September... 10.75 August September... October November... December 1905. January February March September... October November... December 1910. January February 16.00 October November... 11.75 11.75 11.75 11.75 11.75 12.50 13.00 13.00 12.25 "i6."75 10.50 10.75 10.00 9.50 1900. January February May 17.00 16.75 17.00 17.50 17.75 17.75 17.60 17.50 16.50 16.00 18.00 17.75 June 17.75 July July July 18.75 August September. . . October November... December September... November... December CHAPTER VII. SPRUCE. Section 1. Production of spruce lumber. The quantity of spruce lumber reported x cut in the United States in 1912 was 1,238,600,000 feet board measure. This lumber came principally from three regions — the Appalachian region, which con- tributed about 72^ per cent, the Lake States region with about 1\ per cent, and the Pacific slope with about 16£ per cent. The prices shown by the Bureau are confined to spruce from the Appalachian region. Three kinds of spruce are recognized in the New York market: "Eastern" spruce, usually received by water from Maine and New Brunswick; "Adirondack" spruce, sometimes called "short" spruce, which comes by rail from northern New York and Vermont; and "West Virginia" spruce, which comes by rail from West Virginia. In the Boston market hardly any spruce is dealt in except eastern spruce. It is the principal market for east- ern spruce and receives large supplies by rail and by water from New Hampshire, Maine, and New Brunswick. In the Philadelphia and Pittsburgh markets the principal spruce sold is from West Virginia, although occasionally some Adirondack spruce goes to Philadelphia. The following statement, compiled from Forest Service sources, 1 gives an idea of the relative production of the States in the Appa- lachian region in 1911 : Eastern spruce : Feet board measure. Maine 365, 331, 000 New Hampshire 115, 301, 000 Total 480, 632,000 Adirondack spruce: Vermont 72, 379, 000 New York 51,519,000 Massachusetts. 38, 805, 000 Total 162, 703, 000 West Virginia spruce: West Virginia 216, 589, 000 Virginia 13, 901, 000 Total 230, 490, 000 The Bureau shows prices for eastern spruce in two markets and for West Virginia spruce in three markets. It obtained some data ' Forest Products, 1912, p. 17. ■ 682 PRODUCTION AND WHOLESALE DISTRIBUTION. 683 on retailers' purchases of Adirondack spruce in the New York mar- ket; but as purchases of eastern and West Virginia spruce were found so mixed in with the Adirondack spruce that there was danger of confusion, these records were not used. Section 2. Competition met by spruce producers. As is the case with many other species, there is competition in some markets between spruce from different localities, as well as competition from other woods. New York and Buffalo are the two markets in which competition of spruce from different localities occurs to a marked degree. Eastern, Adirondack, and West Virginia spruce all have access to the New York market on freight charges which permit competition. The prices of all are therefore closely interrelated, especially on dimension stock, used for construction purposes, and this interrelation is the subject of comment on the part of the trade papers. For example, in 1902 a scarcity of eastern spruce was said to have sent up prices of Adirondack and West Vir- ginia spruce, while in 1907, 1908, and 1909 a good deal of stress was laid on the competition between West Virginia spruce and eastern spruce. The American Lumberman, July 15, 1905>, page 34, stated: The heavier stocks, such as the 2X10 — 12 and up to 20 feet, are supplied from Maine and eastern mills. This timber is used largely for floor beams and heavy uprights, for which there has been an unusually heavy demand this year, and prices are very firm, being on an average of from $24 to $25, according to size. West Virginia stock is a strong competitor for this class of trade and the number of shipments of that stock to this market is larger than ever before ; mills are working overtime and all night, and even though several manufacturers have remodeled their plants to meet conditions they are unable to keep pace with orders. ,* * * A large part of this class of stock [the smaller sizes, such as li X 9, 2 X 9, 2X3, and 2 X 4, as a general rule thirteen feet long] required for this market comes in from Adirondack mills and has to contend with strong competition from Canadian shippers. The following extracts from trade papers throw further light on the situation: NEW YORK SPRUCE TRADE EASTERN SPRUCE DULL; WEST VIRGINIA STEADY. Private advices concerning the spruce lumber situation in New York set forth these obvious conditions: There has been a noticeable degree of stagnation in the build- ing industry in the metropolitan district this season, which is attributed to overdoing in that line last year. The shrinkage of demand from the builders has the effect to make a quiet market for spruce lumber, which is reflected in some cutting of prices on cargo lots of eastern product. At the same time the dealers in 684 THE LUMBER INDUSTRY. West Virginia spruce are holding prices about on a level, having so far been able to withstand the influences to weakness charac- teristic of the eastern spruce trade. The firm holding of West Virginia spruce is especially the attitude of the larger operators, though it is admitted that small lots of lumber in the weaker hands are sold at reduced prices. The weakness in the eastern spruce market is attributed to the peculiar manner in which Maine and provincial stock is handled in the New York market. The cargo business is in few hands and consignments are largely sold on commission. As in every case wherein lumber is sold in that way, especially by the cargo, whether in this country or in Europe, prices fluctuate in accord- ance with the current demand and supply. Cargoes of spruce coming forward at the present time suffer under the influence of a slow market, the lumber selling at prices that will move it. Cargoes cannot lie long in port without sale. The habit of mill operators is to blame the commission men for not holding up prices in the face of a sluggish market, when as a matter of fact they must sell within a reasonable time at some price. It used to be so in the Chicago market, once the greatest in the world, where forty to sixty boat loads often changed hands in a single day. The commission men were frequently blamed because they did not put their broad shoulders under the market and hold up prices by main strength. But that would not make the wholesale yard dealers buy; rather, it had the effect to render them more stubborn in their determination to pound down prices. Probably the like condition prevails in the New York eastern spruce market. It is charged, however, that so few commission houses control the sale of eastern spruce that they have gotten into the selfish habit of slaughtering bunched car- goes of spruce in a virtual auction sale and that they do this without much regard for the interests of shippers. Of course the effect of a depressed market for eastern spruce and consequent sale of cargoes at cut prices renders it hard for Virginia spruce sellers to maintain prices. But they have good stock and can deliver it in shape by the carload to suit cus- tomers. Lumber thus handled usually commands better prices than that sold by the cargo, in which there usually are unbal- anced sizes and sorts that do not suit much of the general trade. (American Lumberman, June 22, 1907, p. 31.) In the spruce timber market there is considerable sharp com- petition noted between West Virginia products and Eastern sup- plies, and as a result there is some West Virginia spruce going at $2 to $3 less than the figures we quote in our Prices Current Supplement elsewhere, but this comes largely from the smaller mills who have an ill-assorted stock and the millmen are taking advantage of lists they can pick up to offer them at less, and, of course, are enabled to handle some stock in that way. The general spruce market is in an unsettled state due to this and other kinds of competition from smaller handlers, but the repre- sentative manufacturing interests are in the main holding firm to living prices, believing that ridiculous competition, as well as meeting the above-mentioned methods in certain directions, will not produce a dollar's worth of business. One thing is PRODUCTION AND WHOLESALE DISTRIBUTION. 685 certain, and that is, that considering the present value of stump- age there is only a fair return to the manufacturer on the list prices and the larger interests are so figuring in relation to E resent conditions. Short spruce is fairly firm on small orders, ut on the larger and more desirable business considerable com- petition is manifest. (New York Lumber Trade Journal, May 1, 1908, p. 28.) The arrivals of Eastern stock are all being absorbed at firm values, while, on the other hand, West Virginia stock as a rule is being quoted as much as S3 off the list. Short spruce is also quite firm. The situation in regard to West Virginia, stock is certainly peculiar and in our judgment not at all necessary. (New York Lumber Trade Journal, June 1.5, 1910, p. 34.) In connection with the New York market, however, attention should be called to the effect of the "Spruce Agreement" (to be described later), 1 which has modified the competition of the three kinds of spruce. Spruce competes with a number of other woods. The high-grade West Virginia spruce boards are often used in place of white pine, and spruce common boards and dimension stock compete with those of hemlock, yellow pine, and North Carolina pine in Pittsburgh, Philadelphia, New York, and Boston. EASTERN SPRUCE. Section 3. Conditions in production of eastern spruce. The spruce of New England has been used commercially since the earliest times of settlement. The long rivers reaching back into the heart of the dense forest, specially well fitted with their chains of lakes for log driving, afforded easy and cheap access to the timber. As a result, on each important river at tidewater, or where suitable water power could be secured near the tidewater, many mills were estab- lished, all getting their logs from the forest at the headwaters of the river. In early days most of the mill owners bought their logs, and owned no timberland. As the area of forest has decreased and as the advent of pulp mills has still further diminished the supply of logs available for lumber, these conditions have materially changed, and most of the lumber produced to-day comes from mills which own their own stumpage. There are, however, still a large number of comparatively small mills, the total product of which is not incon- siderable. There are a few concerns which appear to have a pre- ponderating influence in the production of eastern spruce, but appar- ently this influence has not enabled them yet to secure as marked a price domination as a few concerns have acquired in West Virginia spruce. i See pp. 718-721. 686 THE LUMBER INDUSTRY. The pulp interests of Maine, controlling a large amount of spruce stumpage, are generally credited with having a steadying effect on spruce-lumber prices, since the price paid for stumpage for pulp pur- poses leads to withdrawal of it from use for lumber in times of de- pression of lumber prices, and thus effects a curtailment of lumber production. The following figures taken from " Forest Products, No. 1 , Pulp-Wood Consumption for 1911," page 8, show the quantity of domestic spruce pulpwood consumed in four important spruce-producing States: Cords. Maine 545, 765 New Hampshire 150, 967 Cords. Vermont 46, 061 New York 396,334 The interrelation of the eastern-spruce markets of Boston and New York. — There is a close connection between the eastern- spruce markets of Boston and New York. Because of the ease of reaching both ports by water from the source of supply, cargoes can readily be sent to whichever market offers the better demand at the time of shipment. This shifting is so apparent at times as to call for extended comment in the trade journals. For instance, in 1900, at a time when Boston dealers were trying to maintain an arbitrary price list in the Boston market, it was stated under the head of Boston news of February 20 in the New York Lumber Trade Journal: The spruce manufacturers still remain firm as to their list, and are having no trouble securing same. The New York market, it is claimed, helped them out, as the demand in New England would not justify such firmness, and, if there was no New York market, you would see a decline in price. In September, 1902,it was pointed out: "Because of the strength recently manifested in New York, the local market for laths rules very firm." In May, 1903, the American Lumberman published the following item in its Boston news: "It is feared that cargoes will be sent here if the yards of New York continue closed, and that this will cause prices to be shaded. So far, however, they are firm at the old list for both car and cargo shipments." Conditions, however, were later reversed, as witness a similar item from the same journal in October: "Cargo spruce is still very stiff, owing to the demand from the New York market. In fact rail spruce, contrary to the usual custom, can in many cases be bought at less prices than by water." In 1905 the New York market drew heavily on sources that usually supplied Boston with spruce lumber, and early in 1906 shipments of lath were likewise diverted. In similar manner the interrelation of the markets was commented upon in 1907, 1908, and 1909. In 1908 it was pointed out in the August 15 issue of the Boston Commercial PRODUCTION AND WHOLESALE DISTKIBUTION. 687 Bulletin, commenting on local conditions, that while It-inch lath were not in good request, because of the failure in the New York demand, there was a slight strengthening in the market for lf-inch lath, which is the kind preferred in Boston and vicinity. Later in the year the conditions were just reversed. This close interrelation of the Boston and New York markets, through the ease with which supplies can be diverted from one market to the other, has facilitated, at different times, the maintaining of artificially fixed prices in one market or the other. Section 4. Concerted price activities of eastern spruce producers. Connection of spruce producers with uniform price lists and concerted restriction of output. — The Bureau has secured a large quantity of information, both documentary and through inter- views with well-informed persons, bearing on conditions in Boston, the chief market for eastern spruce. In the main, this information has supported and supplemented in detail the events described in the trade journals, extracts from which appear in following pages. The organization of the spruce manufacturers has at times been somewhat loose, but notwithstanding this fact it has often been credited with exercising considerable influence on prices. During the greater part of the year 1898 much complaint was heard about the low price of spruce lumber in Boston and vicinity. On October 18, 1898, manufacturers of spruce lumber held a meeting in Boston. At this meeting it was agreed that manufacturers should ask not less than certain prices for specified grades of spruce lumber, and more than a dozen of the leading manufacturers signed the agreement. An adjourned meeting was held on November 18, 1898, and again the minimum prices agreed upon at the October meeting were adopted. The following extracts describe the situation: At a meeting of manufacturers of spruce lumber, held at Young's Hotel on the 18th instant [Oct. 18], it was unanimously voted and agreed to sell at not less than the following prices, viz : Frames under 10 inch, $14; 10 and 12 inch dimension lengths, $15; 2 x 3, 2 x 4 and 3x4 random lengths, $12; 2 x 5, 2 x 6 and 2x7 random lengths, $12.50; all other random lengths not over 9 inch, $13.50; 10 inch random lengths, $14. * * * None of the small mills have yet signed this agreement, and many of the large ones have not, but the committee are in hopes of being able to secure the signatures of all of any importance. The mills not included in this agreement have been very busy, and a good many have secured enough orders to last them at least sixty days since the agreement went into effect, at a price of from twenty-five cents to fifty cents below the price made by the association, and the wholesalers or agents representing mills not included are finding more business now than they have in the last three months, and they seem well pleased with the 688 THE LUMBER INDUSTRY. prices adopted by the association. The demand for spruce is extremely slow, but there is no question but what they can secure association prices after the smaller mills are filled with orders. (Boston news in New York Lumber Trade Journal, Nov. 1, 1898, p. 20.) The action taken by the spruce manufacturers and jobbers has made a wonderful difference in the market, which, from all appearances, is favorable and beneficial. On the 18th instant they held an adjourned meeting at the Young's Hotel, Boston, Mass., when it was unanimously voted not to sell at less than the following prices. [Prices follow.] (Boston news in New York Lumber Trade Journal, Dec. 1, 1898, p. 15.) In July, 1899, and again in October of the same year, the spruce manufacturers held meetings and agreed on prices. In the early months of 1900 the steady rise in lumber prices which had been going on for about a year, was checked, and spruce, in com- mon with many other woods, dropped back somewhat. In April of 1903 the wholesalers and retailers of Boston and vicinity entered into an agreement in reference to the purchase and sale of spruce. The trade was divided into class A, composed of whole- salers, and class B, composed of retailers. It was agreed that class A should sell only to class B, and that class B should buy only from class A. The lumber- trade journals frequently commented on this agreement. The agreement, with the names of the firms signing under class A and class B, appeared in the account of the meeting given in the New York Lumber Trade Journal of April 15, 1903, page 11 : The following is the agreement as between lumber dealers of Boston and vicinity in reference to purchase and sale of spruce. It is mutually agreed as between the undersigned, lumber dealers in Boston and vicinity, that those designated as belong- ing to class B should purchase all their long and short spruce lumber, excepting laths, of members of class A, and that mem- bers of class A should sell only to members of class B for the period of one year from the date of this agreement, unless the time is changed by mutual consent of members of classes A and B. Any and all differences arising between members of classes A and B shall' be submitted to a committee consisting of three members of each class, and their decision shall be final, believing said action to be essential to the maintenance and welfare of the trade. We hereby pledge our active co-operation and moral support. Class A. [Signatures of 34 firms follow.] Class B. [Signatures of 37 firms follow.] A prominent dealer in Boston, whose name appears in one of the lists of signatures, informed an agent of the Bureau that although PB0DT7CTI0X AXD WHOLESALE DISTKIBrilOX. 6*9 the agreement went into effect it was not lived up to after a few months. There was a decided drop in the price of spruce lumber in 1906. In June of that year a large number of spruce manufacturers met in Boston and decided to curtail production. Efforts were made to agree to curtail 50 per cent for 30 days, to begin July 1, 1906, but as the time approached it was found that no concerted action could be agreed upon. The following extract chronicles the failure of this attempt: Nothing of importance has occurred in the local lumber market during the past two or three weeks. It was announced early in June that a curtailment of 50 per cent in the cut of spruce would be made during July, but tuis agreement did not become a fact, as many of the mills t erased to tie themselves up in an iron- bound agreement to curtail. 'Boston news in Xew York Lum- ber Trade Journal, July 15, 1906, p. 24., But some effect on the market is attributed, in the following extract, to the attempt: The general curtailment in the production of spruce expected to go into effect the first of this month did not materialize, although for a time the talk of a curtailment helped to steady the market. (Boston news in Xew York Lumber Trade •Journal, Aug. 1. 1906, p. 22.) In 1907 the production of spruce lumber was decidedly curtailed. It is described in the following extract : It will be remembered that a year ago at this time a move- ment was on foot toward shutting down the spruce mills in Maine and Xew Hampshire, but chiefly JIaine. with a view of curtailing the production and holding prices up. At that time selling prices were higher by $2 than they are to-day. The spruce manufacturers met in Boston early in June last year and practically agreed to shut down at least 50 per cent of their production, provided they could get other mills in their section, not represented at the meeting, to do the same thing. When the 1st of July arrived, however, the mills continued to saw. This year, without any special arrangements having been made, the mills are closing. Every week brings reports of additional milk that are not willing to continue piling up lumber with the pros- pects of orders unfavorable. It is thought by many that the effects of this curtailment will shortly make themselves felt and that prices will readjust themselves. (Boston news in American Lumberman, July 13, 1907, p. 55.) Early in the year 1909 a meeting of manufacturers and wholesalers took place at which an effort was made to advance the price. It is referred to in the following extracts: Of the large milk several have now taken enough orders to render them comparatively independent and an effort is being made to advance the base price to $26. 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This is indicated by the following from the American Lumberman of July 15, 1905, page 39: Only within the past two years has the market for spruce assumed anything like serious proportions in the Pittsburg district, according to the statements of the principal dealers and manufacturers of this locality. Prior to that time spruce was sold sparingly, and the greater portion of it came from New England. Since the opening up of the West Virginia spruce territory conditions for a more active development of the trade have been presented and been quickly grasped. The market has been broadened chiefly in the common grades, and for the last six months it has been enjoying a remarkable expansion. As a rule spruce is replacing hemlock in the eastern market, but locally it is more in competition with Norway and longleaf yellow pine. * * * As to the supply's availability, stock being shipped out of West Virginia is obtained well into the mountains, and producers are generally forced to build railroads of their own to reach the timber. The Whitmer Lumber Company, one of the largest producers of spruce exclusively, has a railroad forty miles long to reach its main supply, and this is being extended from time to time. These conditions are more favorable to operations on a large scale, requiring considerable capital investment, than to the small opera- tions possible in regions where logs can be cut on the headwaters of rivers and floated down to mills at tidewater. As a result a very large proportion of the West Virginia spruce that has been marketed has been the product of a relatively few large firms. They are re- ported to control most of the available spruce yet standing in West Virginia and North Carolina, and by their preponderating influence on amount of output and their facilities for conversion of spruce into pulp, instead of lumber only, they exert a large measure of control over the market price of their product. That this concentration of power into a few hands is generally recognized by the lumber trade is evident, not only from statements made to agents of the Bureau by important spruce dealers, but also from the comment on the sub- ject in the lumber-trade journals. The following statement appears in an article on "The Spruce of West Virginia" in the American Lum- berman of May 6, 1899, page 27: Everything like comprehensive bodies of this spruce and hem- lock timber lands is in the possession of actual operators, strong and few in number. The business is financiered at Philadelphia, in which city and surroundings and north and east as far as New York the product finds a ready market. The small, scattering ownerships of spruce, not owned by the present operators, are so inconsequential as not to warrant the building of a single additional sawmill in this field. As it is the present plants may possibly have a life of ten years' sawing. 700 THE LUMBER INDUSTRY. Reference may also be made to the extract from the New York Lumber Trade Journal of November 15, 1898, in which these state- ments are made regarding the West Virginia operators : As is well known a very large percentage (probably ninety-five per cent) of the output of the mills in that section is handled by three well-known firms, who, by their absolute compliance with association rules, feel themselves entitled to the fullest confi- dence of the trade and, especially, association dealers. * * * Prior to the summer of this present year the three operators above referred to acted under a tacit arrangement as to the price of their output, delivered at stated points. From the same journal, issue of January 1, 1904, page 9, is taken the following extract : It is higher to-day than ever before, and we look for no lower prices. Ihe stock is in the hands of a very few operators. A dozen firms perhaps own three-quarters of all the standing spruce in Maine, an equal number control the bulk of the timber in New Brunswick, while the spruce timber of West Virginia is in the hands of a few operators, and these owners are able to maintain a conservative policy. The demand for spruce for pulp makes them absolutely independent, and the financial standing of those concerned makes a conservative policy possible and probable. The American Lumberman of July 22, 1905, contains the state- ment: "From 1897 until 1902 the spruce business was in the hands of a few conservative men who made very few and slight changes in the prices either way. " A number of mills which cut West Virginia spruce are also so situ- ated as to be able to cut hemlock. As a result it sometimes happens that when the demand for West Virginia spruce has slackened, so that the usual supply can not be moved at prices satisfactory to the manufacturers, they turn their attention to cutting hemlock and manufacture less spruce. This, in turn, reduces the supply of spruce lumber available for the markets and steadies the prices. The demand for spruce for pulp wood also steadies lumber prices by reducing the supply of spruce logs available for lumber. Accord- ing to Forest Products for 1911, page 8, West Virginia in 1911 con- sumed 46,059 cords of spruce pulp wood. Section 9. Concerted price activities of West Virginia spruce pro- ducers. Connection of West Virginia spruce producers with uniform price lists. — No detailed investigation has been made by the Bureau into the various organized attempts by the manufacturers to establish and maintain uniform prices. Their activities in this line, however, have often been the subject of comment in the trade journals. The Bureau's brief historical outline is based on the references found in its examination of the trade journals. PRODUCTION AND WHOLESALE DISTBIBUTION. 701 The form of organization appears to have been a loose one down to 1909, when the present Spruce Manufacturers' Association came into being. Nevertheless, according to statements in the trade journals, the spruce manufacturers not only agreed on prices but usually lived up to their agreements. Particular attention may be called to the numerous references to meetings of manufacturers at which price lists were promulgated, and the subsequent comment on the manner in which these prices were actually obtained. Similar trade-journal statements in regard to manufacturers actually living up to their lists are also found for other kinds of wood thati West Virginia spruce, especially in the years previous to 1906; but a comparison of actual prices collected by the Bureau with the list prices of those woods shows that they only occasionally agreed. In West Virginia spruce, however, for the period prior to 1908, as will be seen by reference to Diagram 24 (opposite p. 71 2) , there was a close cor- respondence between list prices and actual prices. The records of an important dealer in New York were compared with his price lists, and it was found that from April 23, 1902, to October 1, 1907, there was hardly a sale of the millions of feet of West Virginia spruoe handled during that period, that did not agree with his list prices. His price lists agree, both as to date of issue and prices, with the so-called " offi- cial" lists referred to in the trade journals. The prices for New York shown by the Bureau for the years 1902-1907 do not include any sales from this firm, so it is evident that other dealers as well were following the "official" lists at this time. A member of a prominent firm in Philadelphia, in commenting on price data obtained from his records, stated that the uniformity of the spruce prices during that period was due to a trade agreement. The correspondence between the list prices of West Virginia spruce and the actual sales is too close and covers too long a period of time to be attributable to a mere coincidence. The West Virginia spruce price lists were lived up to in a manner equaled by no other species investigated by the Bureau, and lumber was either sold at the prices fixed by the agreement or no sale was made, and the intending pur- chaser bought some substitute for spruce. As has been repeatedly pointed out, it is not contended here that the organized price activities of the lumbermen have been the chief cause of the remarkable rise in lumber prices since 1897. It is clear, however, that such price activities have contributed in some measure to that rise, and that the close agreement of list prices and actual sale prices of West Virginia spruce, just described, is due to the organized action of the manufacturers. During the last quarter of 1907 prices were falling, and it was reported that price lists were not observed. The general business 702 THE LUMBER INDUSTRY. situation at this time was responsible for a slackening of demand, and West Virginia spruce was forced to meet severe competition from other woods, especially from yellow pine and North Carolina pine and, in the New York market, eastern cargo spruce. It was stated by several informants, also, that a disagreement in regard to business policies between two of the chief producers contributed to bring about the wide price differences. The following statement, made to an agent of the Bureau in August, 1911, by a man connected with one of the chief concerns producing West Virginia spruce, throws con- siderable light on the price conditions : Beginning about 1902 and continuing probably through 1905 the spruce manufacturers had an agreement on prices and main- tained it. At a meeting in Philadelphia, during the time that the prices were being maintained, some one got up and suggested that the only way to maintain prices was to have a $5,000 deposit by each manufacturer and impose a fine for any cut made in the price-list. I do not know whether this suggestion was carried out.. A little later, the manufacturers began to fear the Sherman law, and instead of having these hard-and-fast agreements as to prices, they had gentlemen's agreements. I remember at one time we met in Philadelphia and there was absolutely no organization of the meeting, so that they could not be held under the Sherman law. They merely met as individuals and discussed the situation. I think it was at this time that Robert Whitmer got up and stated, in substance: "We manufacturers of spruce must adhere to the list price. My spruce is worth that much money and I am going to get it, regardless of the price asked by other manu- facturers." Whitmer went right out of this meeting and cut the price from $4 to $5 a thousand and is supposed to have billed orders for several months before the other manufacturers woke up to the fact that the spruce market had been slaughtered. Since that time, the manufacturers have not been able to maintain their price list. This account differs in some respects from that given to an agent of the Bureau by another informant: Wm. Whitmer & Sons entered into an agreement with other wholesale lumber dealers to maintain a fixed price list upon spruce. At the time of entering into this agreement, Wm. Whit- mer & Sons held large contracts for future deliveries of lumber, the filling of which contracts consumed most of their supply of spruce lumber. As soon as the other dealers who had entered this agreement became aware of this condition, they immediately undersold the agreed price list, and Wm. Whitmer & Sons were forced to cut the price. I am of the opinion that the price list agreed upon was not maintained longer than a period or three or four weeks. At any rate, for several months the former close correspondence of prices which the Bureau obtained from the different dealers no longer prevailed. While there is evidence that the " official " price lists of 1909 and 1910 have been more closely followed than those of 1908, PRODUCTION AND WHOLESALE DISTRIBUTION-. 703 yet conditions in this respect are far from what they were before the break in 1907. In 1909 the new spruce association was organized. In the accounts of its formation published in the American Lumberman and the New York Lumber Trade Journal stress was laid on the fact that in the agreement signed there was the following clause: "No action shall be taken by members tending to obligate any manufacturer to sell at a fixed price." The comment in the trade journals at this time shows, however, that the new association was expected to have a definite influence in steadying or raising prices. The following examples of this style of comment are taken from the Pittsburgh news of the trade papers: Buying remains stationary and prices remain firm. The organization of the spruce manufacturers' association the last week it is hoped will stimulate matters considerably in this line. (American Lumberman, May 8, 1909, p. 96.) _ Spruce is stronger, and with the spruce manufacturers' asso- ciation meeting in Philadelphia this week, the outlook for a better regulated output and price is much more favorable. (New Orleans Lumber Trade Journal, June 1, 1909, p. 34.) At a meeting of the United States Spruce Manufacturers' Association in Philadelphia this week president E. V. Babcock of this city will preside. The influence of this organization is already felt in the betterment of the spruce trade. E. V. Babcock & Company report mills running steadily in hemlock and spruce districts. (American Lumberman, June 26, 1909.) In the American Lumberman of July 23d, 1910, the statement was made, in an article headed "West Virginia spruce," that spruce was so handled that there was no price competition in spruce; that it merely had to meet the competition of other species. This . statement, however, does not seem to have been borne out by the comment from various markets at this time. As early as Novem- ber, 1909, it was reported from the New York market that there was considerable competition among shippers in West Virginia stock. In Pittsburgh the lists were then said to be strictly followed, but by September, 1910, the Pittsburgh market was reported to show cutting from the list, and from that time on both Pittsburgh and New York comment on the wide variations in prices which are obtained. In 1911 an informant, who handled the product of one of the most prominent firms producing West Virginia spruce, in one of the most important markets, stated to an agent of the Bureau : At the present time the spruce price list of the manufacturers is not adhered to. You will find that probably no two whole- salers would give the same discount on a given item, unless it would be 2 x 12's, which are held firm, owing to the fact that there is a big export demand for this dimension. The export trade calls for 1 x 12, 1£ x 12, and 2 x 12, and the list price on these dimensions is usually maintained. At the present time 704 THE LUMBER INDUSTRY. we are really asking a little more than the list price for these items. However, for other sizes of spruce the amount of dis- count will vary probably from- $0.50 to $3.50 per thousand from the list price. Section 10. Extracts from lumber-trade papers relating to West Virginia spruce. Note. — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news items from various cities will refer to the action and for several weeks or months will comment on its effect adds to the credibility of the extracts. 1898. New York Lumber Trade Journal, November 15. 1898, page 10. — Owing to the conditions surrounding the sales of spruce timber in some localities, the writer desires to call attention to what appears to be unfair treatment with reference to the West Virginia operators. As is well known, a very large percentage (probably ninety-five per cent) of the outputs of the mills in that section is handled by three well lcnown firms, who, by their absolute compliance with association rules, eel themselves entitled to the fullest confidence of the trade and, especially, association dealers. It is not necessary to discuss theconditions laid down with reference to who may or who may not be enti- tled to be classed as free trade, for the reason that they are accepted as satisfactory to the manufacturers. What we refer to particularly has more reference to New Jersey than to New York dealers. Prior to the summer of this present year, the three operators above referred to acted under a tacit arrangement as to the price of their output, delivered at stated points. Competition among themselves, in such a staple article as they handled, appeared to be unnecessary, and we know of only one period, covering about thirty days, when the prices varied to any appreciable degree. That period of unsettled values, however, awakened the operators to the folly of such competition among themselves, and it resulted in an agreement, with a view ofsustainrng prices, thereby protecting not only themselves, but the trade. When they entered into this arrangement, however, they relied upon the hearty support of organizations whose success was, in a great measure, assured by the compliance of these operators with their regulations. This agreement was deemed the more necessary by reason of Adirondack, Eastern and Tide Water lumber, with which they could not and did not desire to compete. With these entangling surroundings, in the hands of a great number of operators, no good reason could be advanced why these few manufac- turers should not agree that they would stand together before the trade. If it is proper for New York and New jersey to associate, to protect their trade against unfair methods, it is, beyond question, right for these few manufacturers to agree among themselves not to disagree, and, at the same time, obligate themselves to sustain the associations in their efforts. Under association agreements in the Metropolitan District of New York, buyers of spruce lumber obligate themselves to purchase only of regular wholesale dealers who are members of that association, for and in consideration of which those wholesale dealers agree to sell to none but association members, parties to the agreement, for deliveries within certain stipulated boundaries. This so called Metropolitan District extends beyond the boundaries of New York State into the State of New Jersey as far west as the Hacken- sack River (this last named territory being included in the trade agreement above referred to). So far as New York dealers are concerned, we believe that they are using every effort to maintain both sides of the agreement, and we are cognizant of instances where infractions have been promptly discon- tinued. Outside of the Metropolitan District in New Jersey, however, no such mutual agreement exists between buyers and sellers, but, quite to the contrary dealers exercise their own discretion in making purchases— the wholesalers accepting their association regulations by declining to sell only to acceptable trade dealers. In certain sections of New Jersey, dealers agreed among themselves to maintain a regular schedule of prices, covering the sale of this commodity within certain described limits. The same condition prevails, and always has obtained, in the Metropolitan District of New York. While causes of complaint have arisen in New York under this agreement on certain occasions, we are advised that the New York Association members are well pleased with their efforts. In the section of Jersey referred to, however, we understand that their agreement has been abrogated— the benefits sought and the right to combine to maintain prices not at all entering into the discussion — resulting in abrogation. We have thus outlined the basic principles underlying the association structures erected thereon— not for the purpose of criticism or comment, but simply as a preamble, on which to bring about a discussion as to whether or not the West Virginia operators are censurable for combining to sustain prices on their product, surrounded as they are by vast Eastern Tide Water, Pennsylvania and New York State compe- tition. Eastern manufacturers have frequently made agreements, covering the prices of their outputs, which have always failed, owing to the vast number of operators engaged in the traffic. Writing as a believer in the rights of New York, New Jersey or any other section to organize for their mutual protection against unfair competition and discrimination, not as a stockholder, selling agent or manufacturer, but as one interested in West Virginia spruce (accepting as binding all of the conditions imposed by the different agreements of associations), the writer desires to submit that, in his opinion, it is only right and proper for the West Virginia operators to agree to maintain prices, and that it is not right or equitable for association dealers to assail such agreement to any extent, much less the arbitrary position assumed by a minority of such dealers. PRODUCTION- AND WHOLESALE DISTRIBUTION. 705 (We are very glad to print the above communication. It would hardly seem possible tbat such an arrangement as the West Virginia spruce people have should meet with any disfavor fom any orSn zation ?-I r w Ue ^- ™ ? l0Urnal wlthm 1* 3 own ^owledge, knows that, with one or two untaportan^ S™ the West Virgmia sprure manufacturers are backing up Eastern Associations in a mosSrtv and thorS manner. We do not believe that any of the West Virginia spruce people who are in thespru™ agFeement would under any conditions sell lumber for delivery to a consumer or a scalper in any of tteElste^ tod- tones covered by associations, if they knew it For this reason, they deserve the heWty support ™evefy associat on. If they have organized to get a fair living price for their spruce timber, no reSrshouS find fault with such organization and, we believe, every^retailer should'do his best to give SS proper and adequate support to accompish what they have set out to accomplish in this direction AsTociatFon matters are not atf one sided, and when they become so.they can only result in failure The lumber bus? ness must be run on the basis which has so often been promulgated bv the Journal- that h minnnrt tw> who support you. We are well aware that scalpers and their allies^scofl a?TiTp SZ "ft is tfe only principle upon which Eastern Associations can stand, and unless the members of Eastern Association! individually and coUectivelysupport those who support them, then they cannot long expect su^h support We sincerelyhope that our West Virgmia friends may have no further cause for complamt from anybody ' whether in New Jersey or elsewhere.— Ed.) !/•<*•**<■ "«"* ouj uuuy, Price list Issued, effective November 28, 1898.' New York-New York Lumber Trade Journal, December IS, 1S98, page W.-At a meeting of the West Virginia spruce operators, November 26, an amended schedule of prices was agreed upon, taking effect November 28. There are no material changes, except on large timbers, nine inch and over wide in which an advance was made of $1.00 a thousand, all other timber remaining as heretofore. 1899. Price list Issued, effective April 25, 1899; lists also issued In July, August, September, and October, Philadelphia— New York Lumber Trade Journal, October 18, 1899, page 19.— Spruce having reached the figures of $18.00 to $20.00. * * * 12-inch stuff is very scarce, and, in some cases, has brought $1.00 more to eld list prices. 1900. Price lists issued In December, 1899; June, 1900; November, 1900; and December, 1900. 1901. Philadelphia— New York Lumber Trade Journal, September 1, 1901, page 24.— Spruce remains firm at Quo- tations which are as strictly observed as the laws of the Medes and Persians. Whyshould theynot be? All mills are busy for the present and running some time into the future. 1902. Price list Issued, effective April 2$, 1902. New York— New York Lumber Trade Journal, May 1, 1908, page 13.— On April 23 the West Virginia spruce manufacturers advanced prices for spruce based on New York rate of freight. 1903. Philadelphia— New York Lumber Trade Journal, May 1, 190S, page 26.— Owing to the demand for spruce more than the list is being gotten in several items. New York— New York Lumber Trade Journal September IS, 1903, page 22.— West Virginia spruce is in good demand, owing to the eastern situation, and the price list with $19.50 as a basis for 8-inch and under 20 feet and under is well maintained. Philadelphia^- New York Lumber Trade Journal, October 1, 1903, page 26.— Spruce prices hold firm to the list, and there is every indication that the good trade and prices will continue. 1904. Philadelphia— New York Lumber Trade Journal, February IS, 1904, page S3.— The price, however is hold- ing strongly to the list. Philadelphia — New York Lumber Trade Journal, July IS, 1904, page 27.— Spruce is just as strong as it has been all along and there has been no attempt on the part 01 the manufacturers to get away from the list. 1905. Price lists issued, effective March 17, 1905, and June 2, 1905. New York — New York Lumber Trade Journal, June 15 } 190S, page 11.— Announcement was made on June 2 of a slight advance in one or two sizes oi West Virginia spruce, to wit, 2 x 4, 2 x 6, and 2 x 8, 18 and 20 feet, were advanced $1. A 50-cent advance was also made for every 2 feet over 26 feet in length. On the other hand a decrease was made of $1.50 on 1 x 10-inch merchantable boards. Pittsburgh — American Lumberman, July 15, 1905. — The steady advance in demand has been such as to affect the price materially and during the year the list has been raised from $1 to $3 according to sizes and has been accepted with little or no protest. Philadelphia— American Lumberman, July 28, 1905, page 29.— The spruce manufacturers to keep up a demand and steady the market agreed among themselves that no advance would be made without the consent of the others, therefore practically controlling the market in every respect. Buyers were assured that it was impossible to get any better quotations from any other dealer. From 1897 until 1902 the spruce 1 The price lists noted here are those referred to in the lumber-trade papers as "the West Virgmia spruce list," or "official" list. 25030°— 14- — 45 706 THE LUMBER INDUSTRY. business was In the hands of a few conservative men who made very few and slight changes in the prices either way, their belief being that if the product warranted an advance it should be a reasonable one and not one that would slide back. Under these circumstances no knifing was done among thehandlers. Since 1897 the mills have been increasing their output from 70,000,000 feet a year to 110,000,000 feet in 1904. Sales Manager Charles A. Blake, for A. Thompson, substantiates the foregoing in regard to general facts and output. Price list issued, effective August 8, 1905. New York— New York Lumber Trade Journal, August 15, 1905, page 10.— The basic price of spruce was advanced 81 August 8 by the West Virginia manufacturers. This makes the price of 8 x 8 and under, New York delivery, $21.50; 9, 10 and 12-inch, $23. That is, on the usual basis of twenty-foot lengths and under. Philadelphia — American Lumber, August 26, 1905, page 65.— The advance of $1 on practically all grades, made August 8, is being adhered to closely and so far as can be observed has not affected the call for spruce in any degree. Stocks are light and arrivals do not equal the call. Prices are not likely to change for at least sixty days. Price list Issued, effective October 25, 1905. Pittsburgh — American Lumberman, October 28, 1906. — Spruce is selling above list prices and has been for some time. The spruce association has been conservative in changing prices, but the dealers are advancing the list independently. Philadelphia— American Lumberman, November 4, W05, page 70.— October 25 the price of spruce was advanced $2 on the entire list. It has been selling over base for some time and this action was not unex- pected. The market continues firm in spite of the advance and more orders are offered than can be accepted. Pittsburgh— American Lumberman, November 4 X 1905, page 66.— Notices have been issued by the Spruce Manufacturers' Association of a general advance in prices of $2 flat, making $3 during the past six months. In spite of this fact it is announced that most of the dealers in this grade of lumber have not been adhering to the list but have been getting considerable advance for some time. The action of the spruce manufacturers in advancing the list has caused no surprise. The demand for this lumber has been increasing for some time and the larger number of dealers are holding out what stock they have for better rates than the list offers, while most of them declare that they have no difficulty in getting higher prices. The new rate will, therefore, not be particularly noticeable. New York— New York Lumber Trade Journal, December 15, 1905, page 1 7.— The official list of the West Virginia manufacturers is more than well held, and in many instances buyers are paying above the list as a bonus for prompt execution of orders. 1906. Price list issued, effective January 3, 1906. New York — American Lumberman t January 13, 1906, page 64. — S. E. Slaymaker & Co. report another advance in the West Virginia spruce list; 2 x 2, 2 x 6, 2 x 8, 14 feet and under, are listed at $22.50, an advance of $1 over the list issued about six weeks ago; 8x8 and under, 20 feet lengths and under, bring $25.50, an increase of $2; 9 x 10 and 12 inches, 20 feet and under, sell for $27; 14-inch, $29; 15-inch, $30, andl&-inch, $31. These last four items represent an advance of $2 over the old list. New York — New York Lumber Trade Journal, January 16, 1906, page 11. — At a meeting of the West Virginia spruce manufacturers in this city on January 3 prices of West Virginia spruce for delivery in this market were advanced from $1 to $2, coupled with an announcement that the mills within the association would take orders, for shipment within the next four to six months, at the new prices. Pittsburgh— American Lumberman, January 20, 1906, page 4?- — The second advance in spruce of $2, authorized at the meeting in Baltimore, has been stimulating the buying of this stock and spruce men say that January promises to be a record-breaker for the first mouth of a year. New York— American Lumberman, June 30, 1906, page 64- — New York stocks continue on a firm basis and West Virginia is very active. The curtailment of the eastern output has already had a slight antici- pated effect here, and there is every prospect of prices continuing on a firm basis. New York — New York Lumber Trade Journal, November 1, 1906, page 16.— The situation in West Virginia spruce is strong and the market is firm at the official list. 1907. New York— New York Lumber Trade Journal, February 15. 1907, page 19.— The spruce market is firm at the present list with a very fair demand, but the West Virginia mills are badly handicapped in the matter of cars which is greatly interfering with local receipts. New York— American Lumberman, April 20, 1907. — Prices are steady, that is, while considerable busi- ness is placed at prices averaging 50 cents or $1 below the listed figures/very little is taken at lower prices. Price list Issued, effective May 1, 1907. New York— American Lumbe*h*an, May 11, 1907.— While manufacturers insist strongly upon advances wholesalers report more or less difficulty in getting the extra $2 or $2.50 from the local trade. New York Lumber Trade Journal, May 16, 1907. page 16.— The price list of the West Virginia spruce lumber manufacturers has been advanced to the following schedule f. o. b. New York, lighterage free: (Advances follow.) New York— American Lumberman, June 1, 1907.— West Virginia dealers report no trouble in getting their last advance in 6 and 8-inch boards and all through the list there is much more activity in this stock because mills in West Virginia are getting much better attention as regards cars. New York— American Lumberman, June 8, 1907, page 61.— Spruce business is slow to develop, but man- ufacturers hold firmly for the advance prices at mill points. Pittsburgh— New Orleans Lumber Trade Journal, June 15, 1907, page 37.— Spruce men are reporting a slight advance in some of the more popular items and that the market sustains it. Pittsburgh— American Lumberman, July IS, 1907.— Spruce is moving very actively. There is the utmost firmness in this line of lumber owing to the well established trade and the understanding among the producers. Pittsburgh— American Lumberman, August 3, 1907, page 106.— The spruce trade has remained stationary, with a strong and well maintained list. The actual volume of trade is, of course, small, but dealers in spruce have matters in good shape and do not get frightened easily. Pittsburgh— American Lumberman, September 28, 1907, page 120.— The spruce situation has not changed. More than one spruce company admits that a shading of prices has been possible to large buyers, but the average is remarkably firm considering the inactivity of eastern centers. No quotations have been made on spruce at other than the official list. PRODUCTION AND WHOLESALE DISTRIBUTION. 707 1908. Price list Issued In January, 1908. Pittsburgh- American Lumberman, January 18, 1908, page 125.— Demand is quiet butpriees havestrenzth ened with the increase of orders and the belief that the situation is rapidly mrading Eastern tradfrenorts S T„ S l adi ? g °1 th0 - llSt ' } Ut 1* is not «' suffloton* 'orce to make any special change in l«al "nStionf Pittsburgh— American Lumberman, February 29, 1908, page 83.— Shading of list Drices con tirX* which has caused unrest and dissatisfaction in man/quarters! onauing oi ust prices continues, which Price list Issued, effective March 2, 1908. pmstmrgh-Amakan Lumberman, March 11,, 1908, page JM.-Spruce men are declining all business except that offered at tall list prices . This has been beneficial, for it has given added conndence to the buyers and thev are showing signs of interest. wiuiuoutu «, me Pittsburgh-American Lumberman, March 21,1908, page Mr .-Spruce men have held firmly to their new ^ r?J C LT?w U 22ii t ?° WeekS ag0 -' ^ w ^ le L act !?S todependently, all believe that with the better demand that there will be no excuse in inducing by shadmg of these prices of new business w!2;~7^i^S!llSlSt ,B H^ ma " , A l?iKb ,? ? S ' p y> e Ss --Spruce demand has been slowly increasing, but since the establishment of the new list there has been no special activitv noted * * * Snrupe liir* are behig maintained firmly by all of the Pittsburgh trade. J bpruce lists Philadelphia— New York Lumber Trade Journal, April IS, 1908, page SO.— The West Virginia Spruce manufacturers and the hemlock manufacturers of Pennsylvania held conferences at the Bellevue-Stratford Hotel in this city recently and agreed to continue the existing price lists Pittsburgh— American Lumberman, April 18, 1908— Spruce sales have become larger with the new price lists being well maintained. ° v Pittsburgh— American Lumberman, April 26, 1908, page 101.— Spruce men have been as firm as rock in maintaining then- list and report steady improvement m demand, which, while not large, is getting stronger don wgok. Pittsburgh— American Lumberman, May 9, 1908, page 87.— Spruce demand remains quiet The holding so firmly to the established list by dealers has brought about a halting in trade for the time being that will not be improved on. Until better conditions rule on other lines. New YmkXumber Trade Journal, May 15, 1908, page 12— At a special meeting of the manufacturers of West Virginia spruce held at Philadelphia on May 5, it was the sense of the meeting that the price list governing West Virginia Spruce supplies which has been in vogue )n recent months be maintained^ These prices were quoted in the Journal's Prices Current Supplement with our May 1 issue. Reports have it that the consensus of opinion, after a full consideration of present and prospective business conditions was that the situation warranted the manufacturers in so acting. New York— New York Lumber Trade Journal, June 15, 1908, page 21.— On West Virginia Spruce, the last official list still prevails, although it must be said that those prices are subject to severe competition from Eastern stock. Pittsburgh— American Lumberman, June 20, 1908, page 111.— Lists are being held fairly well, but this is because the stocks are low and there is no urgency for disposing of what is on hand for prompt shipment. Price list issued in July, 1908. Pittsburgh— American Lumberman, July 11, 1908, page 79.— A better demand for spruce is experienced in Pittsburgh at this time than in the eastern markets that are supplied by Pittsburgh dealers. This is largely due to the call for spruce as a substitute for higher priced stocks. In the East there appears to be a free-for-all contest and some heavy slicing of prices for what trade is going. E eports in Pittsburgh are that a IS cut in list prices for spruce has been made in the East during the last week. Pittsburgh— American Lumberman, July 18, 1908, page 78.— With eastern buying still far below the last established list, local spruce men are not pushing sales of this grade of lumberTln Pittsburgh territory proper the demand has been better during the last few days. Prices are weak and competition in securing any considerable orders is sufficient to keep the prices down. Pittsburgh — American Lumberman, July 26, 1908, page 91. — Better orders are coming in and while there are still some of the manufacturers who decline to hold back and are offering stock at from S5 to $6 off the list, the fact that the larger companies decline orders for more than a shading of S3 is considered significant. Pittsburgh — American Lumberman, August 1, 1908, page 84. — West Virginia manufacturers who had offered as much as $6 off the list have cut down this offer, and for the last week the best offer found possible has been $3.50 off list. This is the average. Pittsburgh — St. Louis Lumberman, August 1,1908. — Clear spruce is oversold and prices are held to the list* while other stock of this grade is being offered as low as $5 off the last list by some of the mills. Pittsburgh — American Lumberman, August 8, 1908, page 78. — Spruce demand has remained about the same with low prices and a general disregard for the list by some of the larger manufacturers. It is claimed by some that cutting .continues to be heavy and in fact so much so, that no attempt is made to meet the outside competition offered with a difference of from $5 to $6 on the present list. Eastern orders are bettei but they are given after the strictest competition in prices. Pittsburgh — American Lumberman, August 22, 1908, page 75. — Spruce orders are more frequent and prices have been better, but are still far below the list. The dealers are refusing to meet the heavier cuts in the price offered in the West Virginia district for the time and do not look for a continuance of the heavier slashing in the prices lor a much longer period. Many of the mills have curtailed production temporarily. Pittsburgh— American Lumberman, August 29, 1908, page 82.— The eastern buying of this lumber has improved materially during the past week, the majority of the larger dealers showing a determination to turn down offers of business at the former prices of from S3 .50 to $4 off the list. In some sizes the tall list is being demanded and without opposition on the part of the buyers. Pittsburgh — A merican Lumberman, September 6, 1908, page 84. — Spruce trade is still unsatisfactory. Many of the larger producers are making no effort to secure business in competition with the present low prices. Some big orders are being taken by West Virginia mills, however, at from $3 to 84 off and even better. Pittsburgh— American Lumberman, September 26, 1908.— The recovery in spruce is slow and it fa not expected that- any marked improvement can be made pending a more complete recovery of all yellow pine grades. However, sales are reported and prices hold at from $3.50 to $3 off the list. Heavier cuts are not heard of. 708 THE LUMBER INDUSTRY. Price list Issued In October, 1908. New York— American Lumberman, October S, 1908— Stock is more plentiful and while there are stronger price tendencies large orders are favored and some business is taken as low as $4 off list. Pittsburgh— American Lumberman, October 10, 1908.— Sales to date this month average $3 to $3.50 off the New York— American Lumberman, October 10, 1908, page 74.— While strong efforts are made to boost the spruce of West Virginia stocks so that quotations will be nearer the list price, the average order seems to be on the basis of $2.50 to $3 lower than the official list. Pittsburgh— American Lumberman, October 17, 1908, page 77.— Demand has become sluggish, the mills in some instances offering stock of common grades at from $3.50 to $5 off the last list. Clear spruce is hard to get and commands a premium. New York— American Lumberman, October 17, 1908, page 77.— Quotations vary considerably, and while most orders are apparently taken on a basis of $4 off the list, strong efforts are under way by leading man- ufacturers to put quotations on a basis of $3 off the list. New York— American Lumberman, October H, 1908, page 19.— A strong effort is made to keep sales on a basis of not more than S3 off the list, and rather than sell at lower prices some wholesalers refrain from bidding on undesirable quotations. Pittsburgh— American Lumberman, October SI, 1908.— About $3 is the lowest scaling of the list possible in Pittsburgh. Price list Issued In November, 1908. New York— American Lumberman, November 7, 1908, page SO.— The average order is on a basis of $2 off list, an increase of from $1.50 to $2. ... . . . Pittsburgh— American Lumberman, Novemver 7, 1908.— More activity is reported m spruce trade. There is a growing scarcity of stocks and mills now hold close to 50 cents better than a month ago. In other words where shading of $3 heretofore has been made only $2.50 now is offered off list, and that for stocks on hand . Where it has to be cut special $1 higher is demanded . It is believed that spruce will be returned to full list prices by early spring unless some unusual setback occurs. Clear spruce is getting from 25 to 50 cents above list and is scarce. . New York— American Lumberman, November HI, 1908, page 9$.— Prices have become very strong during the last month and there are few orders taken at prices lower than $1.50 and $2 under the list. Pittsburgh— American Lumberman, November 21, 1908.— Eastern buying of spruce has been steady and continuous. It has stiffened the market considerably, and to-day prices are holding firmly at from $2.75 to $2.50 off the list. New York— A merican Lumberman, November 28, 1908, page 83.— More than usual strength has developed the last two weeks in all grades of spruce and in another week or two wholesalers will undoubtedly get actual list prices. * * * One large order last week for 500,000 feet and upward was turned down because the wholesaler refused to quote at less than $1 off the list. Pittsburgh— American Lumberman, November 18, 1908.— The later sales of spruce show concessions of $1 and less from the prices contained in the last official list. Pittsburgh— American Lumberman, December IS, 1 908.— Eastern buying of spruce is so active that larger producers are refusing to take orders at existing prices for delivery after the end of the year. Many sales of odd lots for prompt shipment have been made at list prices. Clear spruce is being taken at $2 above list and is hard to get at that price. Pittsburgh—St. Louis Lumberman, December IS, 1908, page 42. — Spruce manufacturers have ordered a full return to list prices in the East for the first time in six months. The action was taken when demand for eastern shipments was proving beyond the supply. Mills are well cleaned out and cutting is under full swing. It is believed that this market will take care of itself in the future. Clear spruce is bringing above list some recent orders showing as high as $2 better than last for special sizes. Price list Issued, effective December 15, 1908. New York— American Lumberman, December 19, 1908, page 86.— West Virginia manufacturers and wholesalers are getting close to list prices on even the largest misiness. 1909. Pittsburgh— American lumberman, January 2, 1909, page 88— Spruce in the East is in strong demand and is stiffer than for a long time. The new list is being well maintained. New York— A merican Lumberman, January 9,1909— West Virginia stock is strong and prices are strictly at list or better, several big and desirable orders being turned down because the buyers refused to consider the advanced quotations. Pittsburgh— American Lumberman, January 9, 1909. — The mills are refusing all offers of business for the new year that are below the regular list and there seems to be a well grounded opinion that before any lowering of lists takes place there will be a further upward trend in prices that will make the situation even better than at present. Philadelphia, January 7 (special). — There was a meeting here of parties in interest to-day at the Beflevue- Stratford looking to the organization of a West Virginia spruce association. Several parties who were expected to be present were not here; not, obviously, through lack of interest (quite to the contrary, in fact) but because of stress of important business elsewhere. A committee was appointed and progress will doubtless be reported in due time. (New York Lumber Trade Journal, Jan. 15, 1909, p. 33.) Pittsburgh — American Lumberman, January 16, 1909, page 91 . — The new spruce list which advanced many items on the list has been held firmly since it was issued December 15, and the demand has not been affected to any extent. In fact, spruce seems to be in the best possible shape and is going along satisfactorily with mills all busy and orders comparatively more plentiful than for any other grade of lumber. New York— American lumberman, February IS, 1909, page 100.— West Virginia spruce wholesalers find offerings large enough to keep the average sale price, especially for large lots, slightly under the list. Pittsburgh— New Orleans Lumber Trade Journal, March 1, 1909, page S2.— Spruoe is active and strong and the advanced list of December is not shaken in the least. Pittsburgh — American Lumberman, March 6, 1909, page 85. — The worst report regarding spruce is that it is now showing a sympathetic quiet with the other lines, and in rare cases sale have been made at as much as $1 off the list. Many mills refuse business tendered at this lower rate and are convinced ihat the change is but a temporary one. PRODUCTION AND WHOLESALE DISTRIBUTION. 709 Pittsburgh-American Lumberman, March IS, 1909, page SS.-Such new business as is now being secured is taken at a shade under list prices; not more than $1, however, has been taken off the list Pittsburgh— American Lumberman, April S, 1909. -There appears to be a firmness among' the mills and no change is anticipated for the present. The average is probably 50 cents oil the last list/which is about the same as has been the rule for several weeks. Pittsburgh— American Lumberman, April 10, 1909.— The larger manufacturers are holding out for list or so slightly under list as to make the situation practically stationary ' pmburgh-American Lumberman .April 24, 1909, page SS.-Spruee men are working off stocks at a shading of about $1 off the list established earlier in the year. . Pittsburgh— St. Louis Lumberman May 1, 1909.— Spruce men report conditions unchanged with the prices holding at about SI off list and demand continuing fairly active. A better understanding among the manufacturers would restore the market without question, but this is not possible at this time Pittsburgh— St. Louis Lumberman, May 16, 1909.— The spruce manufacturers got together on April 27th and formed the Spruce Manufacturers' Association, in Philadelphia. Fully two-thirds of the standing spruce timber was represented in that meeting, and E. V. Babcock, of B. V. Babcock & Company of Pittsburgh, was elected president. Since the organization was completed, it has grown to larger pro- portions and it is believed that a far more healthy state of trade will result. The association is to meet monthly in Philadelphia, the last Tuesday of each month in the future, and will seek to prevent ruthless destruction of this important market in the East. Pittsburgh— American Lumberman, May 22, 1909.— Spruce has improved during the last week Prices are steady but not yet recovered to full list. There is a showing of a stiffer backbone by the dealers and offers of any business at much shading of prices are refused. Better times are apparently near at hand Pittsburgh— American Lumberman, June 12, 1909.— Spruce men report an improved demand and a steadiness in prices that averages well. Breaks here and there reported are not important and the list is being fairly well maintained. New York— American Lumberman, June 19, 1909— Vf est Virginia dealers say competition is not so keen and while the list is not adhered to in all instances, the tendency is better than it has been for some time ' Pittsburgh— American Lumberman, June 19, 1909.— The common stock is easier and some mills out of the district are disposing to compete lively for new business, though the actual shading is not taken as a serious menace to present prices. Mills are operating freely and are making record runs. The coming meeting of the Spruce Manufacturers' Association is expected to result in a still better understanding among the spruce men. Pittsburgh— American Lumberman, June 26, 1909, page 78.— All spruce men show stronger confidence in the outlook for spruce. Demand is satisfactory and prices are being well maintained at list, except where some stray lots of stock are caught in transit and where special inducements must be offered to dispose of it. Price list Issued In July, 1909. Pittsburgh— American Lumberman, July 17, 1909.— Mills as a rule are running mainly on hemlock but apparently spruce is getting low in stocks. Clear spruce is unusually strong, while full list is being secured with comparative ease by the manufacturers and dealers in this market. No advances have been made, but where weakness was apparent, there is a uniform firmness and a broadening of demand for all grades and sizes. Pittsburgh— American Lumberman, July SI, 1909.— Spruce men are not selling any large volume of lumber but are getting list for what they are handling, it is said. Price list Issued in Angust, 1909. yew York— New York Lumber Trade Journal, August 1, 1909, page SO.— In a recent interview with Mr. S. E. Slaymaker, S. E. Slaymaker & Company, 200 Fifth avenue, selling agents for the big output of West Virginia spruce manufactured by the West Virginia Spruce Lumber Company at Cass, W. Va., he stated that the general West Virginia list was very steady with an advance just made on 4/4 clear to $38 and 5/4, 6/4 and 8/4 clear to £40. Pittsburgh — American Lumberman, August 1^, 1909, page 79. — Common grades are more plentiful and some dealers claim that the list is variable and in some sizes are from 50 cents to S2 difference; others are firm in their declaration that there has been no weakness in the price lists. An improvement is looked for next month. Pittsburgh— American Lumberman, August 28, 1909, page 75.— Trade is steady and full list is obtained without difficulty. Pittsburgh— American Lumberman, October 2, 1909, page HI.— Spruce mills are operating steadily and shipping quite freely. The leading manufacturers are miking a good showing in holding the market in a healthy control. Pittsburgh — American Lumberman, October 9, 1909. — Conditions are very satisfactory. Demand remains stationary but with a good volume and prices are firm with no signs of weakening. The influence of strong conservative direction of this affair is felt and it is believed that the delays in placing business during the last month will have disappeared before the end of this month. Pittsburgh — American Lumberman, October 16, 1909. — Spruce men generally are talking of better demand and say that prices are steadier. * * * In the Pittsburgh territory the ruling price of spruce is about il off the present list, which is practically the old list. New York— New York Lumber Trade Journal, November 1, 1909, page 25— In West Virginia stock there seems to be considerable competition among shippers without just cause as several of the largest shippers are getting list prices, if not better, but with the closing of the Eastern season this competition may be done away with to some extent. Pittsburgh — American Lumberman, November 6, 1909, page 79. — The list is being held steadily as before. A little more activity means a reaffirmation of the new list in its entirety. The tendency is not to push sales or to look for much new business at this time, but merely allow the market to drift along pending a more complete recovery. Pittsburgh— American Lumberman, November 20, 1909, page 178.— The spruce men are showing a strong backbone in the market. The list as last adopted is not being held to, but it has been a gradual and informal return to the former list, which is SI lower. Pittsburgh — American Lumberman, November 27, 1909, page 79. — Sales of spruce hang close to the former list or about $1 off the last list issued by the manufacturers. Pittsburgh — American Lumberman, December 11, 1909, page 75.— Prices are holding strongly to the 1908 ' list, or about SI off the latest list. Some mills are taking business at the new list where stocks are broken and special mill operations are required to fill out bills. 710 THE LUMBER INDUSTRY. 1910. Pittsburgh— American Lumberman, January 1, 1910, page 83. — The price list is unchanged. Clear spruce is short of requirements and is expected to remain so during the first naif of the new year. Sales reported the last week are based on the new list adopted in the fall. New York — American Lumberman, January 1 , 1910, page 63. — S. E. Slaymaker, of S. E. Slaymaker & Co., Fifth Avenue Building, says his spruce mills at Cass, W. Va., are turning out a large output. While there are some reports of price shading the firm has more business than it can attend to at full list prices and is not anxious about booking business very far ahead, feeling that the opening of spring wtiTsee much higher prices. Pittsburgh—American Lumberman, January IB, 1910, page 1A6. — The list ruling now is that of the spring, of 1909 and is generally maintained. The market is dull in Pittsburgh circles but is fair in the East. Pittsburgh— American Lumberman. January 88, 1910, page 95.— Dealers report practically no change in prices but hope for a finning up of the list" as the spring season advances and demand becomes more general. Better grades of spruce scarce. Pittsburgh— American Lumberman, February 19, 1910, page Pi.— Spruce prices are very firm and the demand is fair. The larger manufacturers and dealers are getting from $1.50 to $5 above list on all clear and selected spruce in Nos. 1 and 2 and lower grades are selling at full list. Mills are wary in accepting orders for the higher graded stocks at present and very little seems to be on hand for ready shipment. An advance is expected to take place in the near future. Pittsburgh— American Lumberman, April 2, 1910, page 103.— Prices are firm and the list is fairly well maintained. Price list issued in May, 1910. Pittsburgh— American Lumberman, May 7, 1910, page 82.— Spruce mills are holding out pretty strongly for list prices and stocks seem to be well held. A few odd cars have been reported at weaker prices than list, but they are not such as to cause any significance in the general run of business. New York— American Lumberman, May 14, 1910 } page 7S.—S. E. Slaymaker, of S. E. Slaymaker & Co., Fifth Avenue Building, says there is room for improvement in the West Virginia spruce situation, although his firm has booked good business since the first of the month at full list prices. Mr. Slaymaker says low-grade stocks are a little ofi, but on upper grades prices run as high as $4 above the list. New York— New York Lumber Trade Journal, May 15, 1910, page 84. — West Virginia spruce, however, seems to be in a very unsatisfactory condition from the seller's standpoint the present list being cut from SI. 50 to S3. This is rather a peculiar pnd actually unwarranted condition of affairs, by reason of the general ability of the market to absorb offerings. Pittsburgh— American Lumberman, May 2i, 1910, page 80. —Prices are held more rigidly to the list and no changes are reported. Pittsburgh— American Lumberman, May 28, 1910, page 94.— There is a fair demand for spruce which is held firmly and with orders sufficient to keep mills going some time the outlook is considered fair. Spruce men are opposed generally to any change in the present list: leaders urge caution. New York— New Orleans Lumber Trade Journal, July 15, 1910, page &£.— Eastern spruce is selling firm, while West Virginia stock is quoted $2 to $3 off the list. Pittsburgh— American Lumberman, August 6, 1910, page 169.— Prices are under the list, as a rule, but not seriously, and the general trade is hopeful of a revival in the fall. Pittsburgh— American Lumberman, September 10, 1910. — A depression in the spruce trade has become the most disquieting feature of the trade in Pittsburgh. Prices are going off and, as a rule, there appears to be no special attention paid to lists of any kind. The lack of eastern buying of spruce has caused this condi- tion, as the demand from that section has fallen to almost nothing during the last week. Pittsburgh — American Lumberman, September 17, 1910, page 67. — One of the features of the trade is the sale of spruce, of which the larger dealers are unloading surplus stocks but holding firmly to list prices on wide board and all other stock not cut. Pittsburgh— American Lumberman, October 8, 1910. page 131 .— The volume of business shows no special eatures and prices are unchanged with the list of last May holding steadily in practically all grades. New York— New York Lumber Trade Journal, October 16, 1910, page 28. — The spruce market is not sat- isfactory in some directions. West Virginia stock shows wide fluctuations in price from the list range, and that market is very irregular. On eastern stock the market appears to be absorbing general arrivals in a fairly satisfactory manner and at prices which show very little change from those obtaining for some time. Price list issued in November, 1910. New York— New York Lumber Trade Journal, November 1, 1910, page 23. — Eastern spruce is fairly firm at the prices quoted and the market seems to be absorbing in satisfactory manner all arrivals of stock. West Virginia spruce is unsettled and prices continued to show a wide fluctuation from the list. Short spruce is holding up fairly well, although some concessions are noted on the larger and more desirable business. The grades most in demand are exceptionally firm. Pittsburgh — American Lumberman, November 19, 1910, page 79.— There is an abundant offering of all grades and sizes, but buying is held down to the smallest quantity; consequently, there has been no attempt to maintain price lists. New York— American Lumberman, December 3, 1910.— West Virginia wholesalers say they find demand fair enough, but prices are cut badly, and because of this situation it is reported that several of the larger operators are planning to curtail their outputs to the extent of about 50 per cent. Pittsburgh— American Lumberman, December 10, 1910. — Some offers of low grade spruce now vary as much as S3. 50 from the last lists, and demand is very light. New York— American Lumberman, December 10, 1910. — West Virginia distributers report a fair demand but extremely sharp competition and to offset this several larger manufacturers have indicated a decision to curtail operations. 1911. Pittsburgh— American Lumberman, March 25, 1911.— Demand continues light, and dealers say that con- ditions do not improve much. The inability of the spruce men to get together appears to prevent much betterment in prices and will continue to do so until a greater volume of buying absorbs surplus stocks PRODUCTION AND WHOLESALE DISTRIBUTION. 711 Section 11. Comparison of list prices with those of actual sales. On Diagram 24 (opposite p. 712) is shown a comparison between prices obtained by the Bureau from actual sales, with the prices shown on the so-called official lists, referred to in the foregoing discussion and newspaper extracts. Comparisons are made for dimension lumber, merchantable grade, 2 by 4 inches, 12 to 14 feet, and 9, 10, and 12 inches, 20 feet and under. The reasons for the close correspondence of list prices and actual sales, for the years previous to 1908, and for the lack of correspond- ence since that time have already been discussed in pages 701-704. Section 12. Definition of grade shown. But one grade is shown, that of "merchantable." This grade was defined, at a meeting 1 of the "West Virginia spruce operators," November 26, 1898, as follows: Merchantable. — Stock which will admit of no defect which ma- terially impairs its strength; which will admit of straight checks and heart on one side if other side is good; will admit of wane on one edge, not more than one-third of the thickness of the piece. The following grading rule was adopted by the "Spruce Manufac- turers Association," effective January 25, 1910: MERCHANTABLE. Boards: Thickness — 1, 1£ an d 1£ inches. Widths^4, 6, 8, 10 and 12 inches. Lengths— 8-foot and up. Knots of every size admitted, but no rotten knots or knot holes. Slight heart check or shake admitted on one side only. Small amount of black or discolored sap admitted. Wane or bark on one side equal to half the thickness and one-half the length of the piece admitted. Season checks or splits equal in length to width of piece admitted. No rot or other defect which will impair the general soundness of the piece is allowed. Dimension: Thickness, 2 inches and over. Any width and any length. Will admit of no defect which materially impairs its strength. Straight check and heart shake admitted, but no rotten knots or rotten wood. At the time of the adoption of the 1910 rules it was stated 2 that the rules were practically those that had long been recognized in actual use and were justified thereby in the light of best methods and experience. 1 New York Lumber Trade Journal, Dec. 15, 1898, p. 10. ' New York Lumber Trade Journal, Mar. 1, 1910, p. 19. 712 THE LUMBER INDUSTRY. Section 13. Prices of actual sales of West Virginia spruce. Tabulae statement. — Tables showing the delivered prices of West Virginia spruce in New York, Philadelphia, and Pittsburgh are shown. In Table 5A is shown prices for the following items in merchantable grade: Dimension (rough) — 2 by 4 inches, 12 to 14 feet; 2 by 4 inches, 18 to 20 feet; 8 by 8 inches and under, 20 feet and under; 9, 10, and 12 inches, 20 feet and under. Boards (rough) — 1 by 6, 8, and 10 inches, 20 feet and under; 1 by 12 inches, 20 feet and under. The period for which these prices are given is 1898-1910 except for 1 by 12 inch boards, which is 1901-1910, and 8 by 8 inch dimension in Philadelphia and Pittsburgh, for which the years 1909 and 1910 are not given. Diagram. — With the exception of 2 by 4 inch, 18 and 20 feet, and 8 by 8 inch dimension the prices shown in Table 5A, already described, are shown on Diagram 25 (opposite p. 716). All three markets are supplied from practically the same source of production, but on different freight rates. The character of the competition met from other species varies somewhat in the different cities. As will be seen by the diagram, in 1898 the prices of the items presented were between $12 and $15, and in 1910 between $20 and $28. There was a closer correspondence of the fluctuations in the same item in the different markets than between the fluctuations of the different items in the same market. The most complete data obtained were for dimension, a form in which a large part of the spruce is marketed. Considering the prices for dimension as typ- ical of the general course of spruce prices, it will be noted that the first important advance of prices in the period shown occurred early in 1899. A rise- of from $5 to $8 culminated in the first half of 1900. A decline then took place which carried prices back about one T third of the previous rise. They remained substantially at the new figure until the middle of 1902, when a rise of about $2 took place. The new' level of prices continued until the middle of 1905 when an advance of from $4 to $5 took place, and for the greater part of 1906 and 1907 prices remained unchanged at the highest point reached up to that time. The effects of the general financial depression which took place in 1908 are evident in rapidly fluctuat- ing and generally lower prices. By 1909 prices had again advanced nearly to the point before the panic, and while for the narrow dimen- sion there was a marked fall in 1910, in the wide dimension prices were well sustained at the high level of 1906-7. Diagram 24.— Comparison of Movement of So-called " Official " List Prices with Actual Prices of West Virginia Spruce Delivered in New York, Philadelphia, and Pittsburgh, 1898-1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 713 T3 £{2 o . il cc a : : I s : : '. '. '.00 ' '• '. '. '.t» '. '. P-< > 17.50 18.75 18.50 19.25 . . . .100 &-a in iqo o5c3 m -* -«■ -a- 14. OU 14.00 14.25 14.25 15.00 15.50 OO'W'O ..0'0» Om 'O. 'O ■ *o 'in • .-■ o >oo ■ '-. < • o >o • :g : :ss !od I !ooo6 s i-a +£ $- £1 lO ' ' • ■ • l~ in '■;;;; *o ...... 1-1 as •OO • in o •(N CC 8 :S 8 ;S i js -o -co co ■ -r ■ ■ ■* 16.75 17.00 17.00 18.25 18.00 18.00 18.25 18.00 17.00 17.00 17.00 17.00 17.00 II $13.50 13.50 13.50 13.50 13.50 13.25 13.50 13.50 13.50 14.50 15.50 16.50 17.00 17.50 18.00 18.50 18.50 18.50 ■ o ■ .oo ■ io ■ -low 3 s 1898. July August September October 1899. February March April. June July September October November 1900 January March April July August September October December 714 THE LUMBER INDUSTRY. i£ "v ■S3 '■OB p- a> z£ OJ cs c §s iO O Q MOO 9J -03 a -a J- ft Pi 0) oooooo GO 00 00 00 OO 00 388S te.M £l5 as ?3S ad ft o> lOOiOflOOOOOujOO NOl't-OflOOONOO QOOOOHOHHrlrlr «HHrtNW««N(NWC JiqiQOOQOQQio SMWiOiOOOOOf- ««n«Soi?Sct(noJ s :sa C4C4C4C4 8888 ■♦^ BO £1 8S 8S 888 OOOOOO r-r— 00 00 tOOOOOO ■~S. ~. C; ~. ~ T- OOOOOiOOOiOOiOO ododcd 060606000606060606 SOOOOOOOOOiClOSOlOlOi 06 !oo SSK iO o£o> OS 53 Ph « 888888 t^ t^ i>^ i>^ t^ r^ - r—r- r-oor- r- h- t-t- 82 ooooooooo>no>o >OiOkQiOC r^r-^r-^occoaoccoooooo :888 t^ccoooo 060O0606 e PRODUCTION AND WHOLESALE DISTRIBUTION. 715 t» g 8 s 5 c c OS 10 C CD CDcC CNCNCN CN s O CN cn OiO 00 «5 t- 10 O W3 -5 ^ --H (N J NNMW CN OO CN CN 10 CN cn s CN ?5 8 CN CN 3 si CN IN O O 00 OiO w t-r- 06 1^ t^oo 10 06 'OO i>t>o t-o — < ^ cn i-I cn (NINNNN 10 r- CN OOQOOOO OOOQ OOOOOOO OOOO 06060606060006 06060606 g 00 gg. 0606 06 000 X X* X S 06 OO CJLO cncn CNCN g a O 00 ft 00 100 0606 CO X CO s c3 s cn s ss 04 NN CN s CN ffR : do • CN CN ■ oinoinOinioioouMnin w ICNOMON^NONNN © CN CNtNCNCNCN NNNNNfitN c3 CN iflOiflOiOiOOU? CNiotNor--cNocN tpiOcdcOtCCCCDCC assssgsg N N (N CN CN CN CN CN 'I I" I" T I I." <" :_" .- I.* 1_~ I" 1 10 w in en n 3=i!3:dEi=! £3 CN tN CN CN CN tN CN CN CN CN S3 cS SI CN* CN CN c3 CN cS Cn" CN C§ CN CN oooooooiome ggggggggggs CNCNCNCNCNCNcNCNCNCNC« cn c-r- 060606 OOOOOOOOCOC^OiOC "5 ■niAOOQOU] t- 1- »o »ra t- 83 CN -r ~r -r ift ir; -f ~r CN CN CN C5 M CN tN — C- X X ~ Cl C?i CJs o^ o> C^ C^ ~- oi c^ o^ Oi — - C73 O^ OS C- SOOiQOOO OOf5mOO 38 S3SSSSSS ss ■3 IO lO OCRCSG>OlCfiOsC& cocjso^oiCscTic^cr-c 03 03 0>OC>OOh ssssss s's x' x'O) OO O 00 CO 00 Oi OS CO 00 00 0i 0> OlOJOiOlOiO tN«5»0 CNIO HriHNM CNCN CN CNtN OOOOOOWNNNOO ss'ss'ss's's's's's's' Oinioinin OCNtNCNCN ~ ~ -■ ~ ~ O^ 02 O G) ,- C"- OS 03 03 c^ c^ lOKJOWOiO CNCN lOt-WCN Soooo 00 00 SSSSSSSSS :SS iooio C-lOt- r-'oooo '/. yi ■/.■ — '. CN CN CN CN CN CN CN Of*t*r^r-c-- ^ 00 X CO X cc 00 cc5oo*e5 x" X X x* x' 5S8 IQCSiQCNiQCNiQiQ c6c6c6c6o6o6o6o6 COOOCOOOOOCOCOX' iflusiflio 06060606 oioiomc sss O^P a & o :d ■ ■a ^2% rt » © O w w 716 THE LUMBER INDUSTRY. Diagram 25.— Movement of Actual Prices of West Virginia Spruce Delivered in New York, Philadelphia, and Pittsburgh, 1898-1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 717 88S S3 888 B — O iO 'O >o OO m t* r- r» r» us »o as? 888888K8g (•J r- i - t-' i - r- ;~ [^ r> SSS3 OiQOQOiOiQO ON'OOiCt-l'-'O W N C* N Ol N C* S3 «?5 c5?5 S5(M S3 N?5 : : i i i iiS8 '. '. \ \ ■ - ■ 13 ^■a3-*-2S3fl* §tiS.«a«B« s « w rt .«- g-a s > w«-..«3 BS'a s 3 ■*« » JJ o o «? » i 05 o o y j Z ^ - a uJ O CL r/1 -ft f s u I T *S 5! ■«• a" ui 01 F HI a? < J -? - C a 51 _> i 4-V 00 © > £ 1 8> < 10 *H £ 5 s M 1 «» a * 1 - \ ir i) 1 O tf m °st of them atom aatZ price situa^n teffifn P "s * was a month ago and aver that 'there is no danger of any serlouVlump or Chicago-American Lumberman, March 28, 1908, page 89.— The competitive element introduced in the S£?S£±J2! hl Z g y l b0Ut co ^ ider aWe activWas to sales, although th Smcy to hade prfcesfe KSftt two "" E6 * he ™P r6ssion ° f dealers t»at P«<=es wiU get back to normal M iom1] s "/pricer 7! Z * m&<:m<;w ' ^ orc * **< "KW. P^ S9— Gulf mills are reported as offering stock at fully rnffft^SStt^w^S ^J™»<™«».. ^«"A *S ;«M, * S9.-Price concessions are about as they have S^^?^ P ^ tandl0 S alp ,f op \^ evOT y" ttles&km tbenmors of price cutting. * * * Cur- P^e^t I^frSonm 7 Pr ° bably "" ab ° Ut 35 per cent for the mon ' n < <=°mpanfd with forty-odd hi™? rhrfhS^l m^t\ m l^ ¥ a fi > ' 1908 > P T i 9 -- The dfa Pites among the larger cypress producers S ?s Put that trade a httle to the bad, but it remains to be seen whether muchxrf a break is to follow. * * * Evwybody is watching the situation, though it is not expected to result in any way as in case of southern M^^H7"^^T m , erC ^ 1 B g l * in > ^1 W??. s > W *--Since our last report we have again heard of the SftS» ™i Cb "" U & one of the belligerents and understand that the other ha! declared his in- tention of meeting such competition. th^M tf™?? - " Mri ?" £»»»&era— The agents of the Louisiana mills are asking pretty stiff prices, so it is quite common for dealers to get hold of some outside mills and buy at a dollar or two off, which insures thema sufficient margin. New York— New York Lumber Trade Journal, January 1, 1910, page 18. — The Louisiana mills have ad- vanced the price from $2 to $4 on all grades per thousand. Shipments have been very heavy and stocks lower at mill points than for years. The demand continues strong in the market and prices are very firm at the new list. The current prices are given elsewhere in our Supplement based on New York rail delivery rates. Some slight concessions are reported as being made on some items, but as a rule prices as given are applying. Kansas City— St. Louis Lumberman, February 1, 1910, page 127.— The price situation seems to be satis- factory from the viewpoint of the manufacturer. The recent advance is being held without apparent effort and there are rumors to the effect that further advances will be in order shortly on a few items that are particularly scarce. Chicago— St. Louis Lumberman, February 1, 1910, page 127.— Prices are said to be firmly maintained on the basis of the recent advance. Buffalo— St. Louis Lumberman, February 1, 1910.— The plan now is to take the cut of independent mills rather than to buy of the Louisiana mill agents, as they sell to consumers at prices that the jobber thin tot are too close to his, so he looks for something that promises more. New York— New York Lumber Trade Journal, February 1, 1910, page L7.—In cypress, the recent advance in prices is well maintained, stocks are in strong hands and supplies of lumber in shipping condition limited. Buffalo— St. Louis Lumberman, February 15, 1910, page 110.— Dealers for the most part claim that the regular Louisiana stock is pretty high-priced and they try to get hold of the cut of some side mill or cut out some of their own if they have the timber. New Orleans— Mississippi Valley Lumberman, February^ 18, 1910, page 40.— At present the average Lou- isiana manufacturer fixes nis quotations at what he considers a satisfactory figure, and then holds out lor it. PKODUCTION AND WHOLESALE DISTRIBUTION. 757 8t. Louis— New Orleans Lumber Trade Journal, March 1, 1910, page 44.— Prices are steadily maintained and there is an Increasing firmness on most items on the cypress fist. New York — New Orleans Lumber Trade Journal, March 1, 1910, page 45. — Prices are good, the advance a short time ago is being generally adhered to and sacrifices are less numerous. * * * The curtailment of stocks South has been of benefit as there is less lumber thrown on the market and bettter care is being taken to try and revive the price question as well as to stimulate trade. New Orleans — New Orleans Lumber Trade Journal, April 15, 1910, page 45. — The recent advance in quo- tations is being well maintained by the manufacturers and very little difficulty is being experiencea by them in securing the better prices asked. Buffalo— St. Louis Lumberman, May 1, 1910.— With the big mills sending agents here to sell direct and some of the dealers here having logs at their own mills, one would think that a conflict would result, but the increased demand seems to take care of that phase of it. New Orleans— New Orleans Lumber Trade Journal, May 15, 1910, page 45.— As a result of this policy of getting the business whether the price is profitable or not, concessions from the December 4 basing list, ranging from $1.10 to $7.50 have been made on a number of items in the cypress list. St. Louis— Mississippi Valley Lumberman, May 20, 1910. — Cypress is in fan" demand, especially for upper grade stock, with prices steadily maintained at list. New Orleans— Mississippi Valley Lumberman, May 27, 1910. — The price concessions made April 2i are said to be still in effect. St. Louis—St. Louis Lumberman, July 1, 1910. page 95. — The new list which has recently been sent out reflects the feeling of the manufacturers in red cypress territory in regard to the outlook. It makes quite a few price advances, along with a number of changes which are in the nature of a mere readjustment. Kansas City— St. Louis Lumberman, July 1, 1910. — A new cypress list is in effect which has made some price advances and a number of other changes. New Orleans— American Lumberman, July 9, 1910. — Manufacturers take the view that the statistical position of the wood is improved, millstocks snowing a loss in bulk for the first six months of the year, and this in the face of a somewhat restricted movement. In other words, the mill folk, it is argued, have demonstrated their ability to hold down their cut and prevent embarrassing accumulation, so that when the call develops in the early fall they will be in excellent shape to take advantage thereof. Kansas City— American Lumberman, July 9, 1910. — A new list is in effect with a few advances, but on the whole the concessions seem to be heavier than they were ten days ago. New York — American Lumberman, July 9, 1910. — Some wholesalers are anticipating their fall wants by arranging for some cargo shipments and for these prices are practically right at the list. Kansas City—St. Louis Lumberman, August 1, lalO. — Cypress yard stock has scored about the same improvement aa yellow pine so far as demand is concerned, and 'there has been a price betterment to the extent that concessions have been practically wiped out, putting the prices back to where they were about thirty days ago. Buffalo— St. Louis Lumberman, August 15 \ 1910.— The prices are stiff for the Louisiana cuts, but if the trade wants something else it is easy to find it at lower prices. Quite an amount of Alabama cypress and some from still further east comes in here. Chicago— St. Louis Lumberman, September 1, 1910. — The situation in cypress is not very encouraging. There is a good deal of cypress coming into this market at prices considerably under those at which the wood is being held by association mills, which naturally makes very hard competition for the local representatives of the industry. New Orleans— American Lumberman, October 15, I910.—Wbile it is still predicted that a determined effort will be made before the end of the month to shove the prices up by shoving the concession down, quotations at this time appear to be unstable. Buffalo— New Orleans Lumber Trade Journal, October 15, 1910. — The very best cypress comes from Louisi- ana, the prices are high and there is always much effort to find side mills that will sell it cheaper. St Louis— St. Louis Lumberman, October 15, 1910, pages 86-87.— Indeed, there is quite a little talk now to the effect that price advances may be looked for by the first of November or thereabouts on quite a number of red cypress items, provided conditions and prospects shall not weaken during the next ensuing two weeks. New York— New York Lumber Trade Journal, November 1, 1910, page 2S.— While there has been no change in the official cypress list, the actual market shows a wide fluctuation from the list. New Orleans — American Lumberman, November 5, 1910. — Some cypress folk, the movement of which wood has been hampered for a good while, have undertaken to advance prices or, rather, reduce concessions, on a number of items. The advances, some effective last week and others to take effect today, range from 50 cents to $2 and affect upper grade stock principally. New Orleans— New York Lumber Trade Journal November 15, 1910, page 46— An advance ranging from 50 cents to one dollar per thousand feet is applied by cypress manufacturers to all thick stuff, effective immediately. The increased quotations are on tank, first" and second clear, select and shop of two and a half inches and thicker. New Orleans— American Lumberman, December S, 1910.— Effective the 25th, small changes of price, affect- ing the list very generally and making a small average advance, were announced by some of the local cypress concerns, who state that the earlier increases have not perceptibly interrupted the call. Buffalo— St. Louis Lumberman, December 15, 1910. — Cypress prices are a little stronger than they were, but there are rather too many independent interests offering lumber here for the good of that market. Buffalo— American Lumberman, December 17, 1910, page 102.— The unsettled state of prices caused by cutting on the part of a few big concerns principally has not been felt much by the local trade. Chicago— American Lumberman, December 17, 1910, page 108.— Prices are not firm but wholesalers are making a laudable effort to keep them as close as possible to lists. 1911. New Orleans— New Orleans Lumber Trade Journal, January 1, 1911, page 45a.— The advances which were made at the beginning of December have been fairly well adhered to, and as a rule there has been no diffi- culty in securing the better prices. There have been occasions when, in order to land a large bill, con- cessions have been made, but most of the manufacturers are adhering pretty closely to their new lists. New Orleans — American Lumberman, January 14, 1911, page 88. — Some local operators have bulletined advances averaging about 50 cents, covering the upper grade stuff fairly well and effective January 10. New Orleans — American Lumberman, February 18, 1911, page 92.— Cypress quotations up and down the list are said to be firmly maintained. Car supply is reported ample for present needs. 758 THE LUMBER INDUSTRY. Section 8. Grades. Definition of grades and sizes shown. — The Southern Cypress Manufacturers' Association adopted new grading rules on November 23, 1905. The new rules, covering the grades for which the Bureau presents prices, are as follows: standard defects. A standard knot is sound and not to exceed 1J inches in diameter. Two small knots not to exceed in extent or damage one 1^-inch knot. One straight split not to exceed in length the width of the piece. Worm, grub, knot and rafting pin holes not exceeding in damage one l|-inch knot. Ordinary season checks shall not be considered a defect in any grade. Bright sap is not a defect in select or below. Pinworm noles, sound knots, and stained sap shall not be con- sidered a defect in No. 1 common or below. first and second clear. This grade shall be random widths, and will not be furnished in specified widths, and shall be graded from the poorer side. This grade shall be 8 inches and wider, 1 to 4 inches thick, and 10 feet and over in length. Pieces 8 to 10 inches may have 1 inch of bright sap on each edge, or its equivalent on one or both edges, otherwise, they must be clear. Pieces 10 inches and under 12 inches may have 1£ inches of bright sap on each edge or 3 inches on one edge, and may have one standard knot. Pieces 12 inches wide may have 2 inches of bright sap on each edge, or 4 inches on one edge and may have one standard knot; or, in lieu of sap, may have two standard knots or their equiva- lent. Pieces wider than 12 inches may admit of defects in pro- portion as width increases. Pieces 10 inches and wider may admit of one end split, which shall not exceed in length the width of the piece. Slight season checks allowed in this grade. Pieces free from other defects may have bright sap across one face at one end, but this sap shall not exceed in length one-tenth of the length of the piece. selects. This grade shall be random widths, and will not be furnished in specified widths, and shall be graded from the better side, but the reverse side shall not be more than one grade lower. This grade shall be 7 inches and wider, but will not be fur- nished wider than 12 inches; shall be 1 to 3 inches thick, 10 feet and longer. Pieces 10 inches and under in width shall admit two standard knots and an additional standard knot for every 2 inches in width over 10 inches. Pieces free from other defects, 10 inches and over in width, to admit pinworm holes on one edge one-tenth the width of the piece. Bright sap is not a PRODUCTION AND WHOLESALE DISTRIBUTION. 759 defect in this grade. Season checks are not a defect in this grade. Slight wane on pieces 10 inches and over in width is allowed on one edge not over 3 feet in length. When no other defect appears, slight amount of stained sap may be allowed. Pieces 10 inches and wider may admit of one end split which, shall not exceed in length the width of the piece. SHOP. This grade shall be random widths, and will not be furnished in specified widths; shall be 5 inches and wider, 1 to 3 inches thick, 8 feet and longer, and shall be graded No. 1 and No. 2 shop. NO. 1 SHOP. In this grade the 1 inch shall cut for shop use 60 per cent or better of the following cuts and rips : Five inches wide, or wider, by 3 feet long, or longer; and 9£ inches wide, or wider, by 18 inches long, or longer; and strips 2 inches wide, or wider, ripped the entire length of the piece. In the above cuttings bright sap and small sound knots shall be admitted. In this grade 1 j inches and thicker shall cut for shop use 60 per cent or better of the following cuts and rips: Five and one-fourth inches wide, or wider, by 3 feet long, or longer; 9 inches wide, or wider, by 2 feet 4 inches long or longer; and strips 2 inches wide, or wider, ripped the entire length of the piece. In the above cutting bright sap shall be admitted. no. 2 SHOP. This grade shall cut for shop use 40 to 60 per cent of the same size, cuts, and rips as the corresponding thicknesses in No. 1 shop, but in the cuttings small sound knots in addition to bright sap shall be admitted. CULL OR PECK. This grade may be random or specified widths, 3 inches and wider, 1 to 4 inches thick, 4 feet and over in length. Shall admit all pieces below the grade of No. 2 common, and shall also admit the product of that part of the log known as "pecky;" however, each piece shall have sufficient strength and nailing surface to permit its use as a low-grade boxing, crating, sheathing, and foundation material. FINISHING. Shall be specified widths, 4 inches and wider, 1 to 2 inches thick, 10 feet and over long, and shall be graded from the better side A, B, and C, but the reverse side shall not be more than one grade lower. All grades of finish, rough or S 1 S or S 2 S may vary | inch from the width specified. A Finish. — Pieces 4 inches and 5 inches wide shall be clear of sap, knots, and other defects. Pieces 6 inches wide may have 1 inch of bright sap, or in lieu of sap one small sound knot. Pieces 7 inches and 8 inches wide may have 2 inches of bright sap, or in lieu of sap one small sound knot. Pieces 9 inches and 10 inches wide may have 3 inches of bright sap, or in lieu of sap two small sound knots, or 1J inches of bright sap, and one small 760 THE LUMBER INDUSTRY. sound knot. Pieces 12 inches wide may have 4 inches of bright sap, or in lieu of sap one standard knot, or two small sound knots, or 2 inches of bright sap and one small sound knot. Pieces 14 inches or wider may have more defects in proportion as the width increases. B Finish. — Pieces 4 inches, 5 inches, and 6 inches wide may have 2 inches of bright sap and one or two small sound knots, or in lieu of knots may have all bright sap. Pieces 7 inches and 8 inches wide may have 3 inches of bright sap and two small sound knots, or in lieu of knots may have all bright sap. Pieces 9 inches and 10 inches wide may have 4 inches of bright sap and one standard knot or three small sound knots, or in lieu of knots ■ may have all bright sap. Pieces 12 inches wide may have 6 inches of bright sap and one standard or four small sound knots, or in lieu of knots may have all bright sap. This grade will not be furnished wider than 12 inches. Finish. — All widths in this grade may have knots or other defects that can be removed with waste not to exceed one-tenth of the length of the piece, and may have a small amount of stained sap or three pinworm holes in addition to above 10 per cent of wastage. The new rules are preceded by "Standard defects," which did not .appear in the rules adopted by the Southern Cypress Lumber Asso- ciation, in effect February 22, 1897. The new rules go into greater detail, so that there is less room for dispute than in the earlier rules. In discussing the new rules adopted November 23, 1905, the New Orleans Lumber Trade Journal, issued December 1, 1905, points out differences between the new grading rules and those of 1897, as follows: The new rules permit pieces of first and second clear 10 inches and wider instead of 14 inches and wider, to admit of one end- split, which shall not exceed in length the width of the piece. The 1897 rules did not admit a split longer than 12 inches. Select lumber will not be furnished wider than 12 inches. There was no limit provided by the old rules. The same pro- vision regarding splits prevails as in the first and second clear. Two grades of shop lumber will be manufactured and known as No. 1 and No. 2. Shop shall be five inches and wider. The old rules made the standard six inches and wider. No. 1 shop shall cut 60 per cent and No. 2 shop 40 to 60 per cent. Finishing lumber will be known as A finish, B finish and C finish. The new rules allow one inch more of sap than did the old, and permit the limit of knots provided for by the old rules, except that only one sound knot is permissible instead of two in lieu of sap in seven and eight-inch A finish. C finis h is more clearly defined than by the 1897 rules. Section 9. Proportion of grades of red cypress produced by various Louisiana mills. The following tables show the proportion of grades produced during the years stated at eight mills operated by eight companies. i. PRODUCTION AND WHOLESALE DISTRIBUTION. 761 All the mills were on substantially similar freight rates from the consuming territory, and such differences of proportion of the grades between one and another mill, as are shown, are probably due to the character of the timber holdings. LOUISIANA RED CYPRESS'— PROPORTION OF GRADES." [Figures represent percentages.] Grade. Company A, Company B. 1904 1905 1906 1907 1908 1909 1904 1905 1908 1907 1908 Clear 17.3 18.4 23.5 32.6 8.2 20.4 28.6 13.6 28.6 8.8 25.3 27.2 16.1 25.2 6.2 24.5 24.9 17.1 29.8 3.7 25.8 22.8 15.5 32.0 3.9 20.6 25.4 17.0 30.9 6.1 11.6 20.6 13.5 54.2 .1 11.4 13.5 13.1 62.0 9.8 15.9 20.7 25.7 27.9 6.4 15.5 25.5 24.2 28.4 Shop Peck Grade. Company C. Company D. 1905 1906 1907 1908 1909 1906 1907 1908 1909 Clear 20.9 25.3 16.9 21.4 15.5 17.6 21.9 20.8 30.0 9.7 17.4 24.3 22.1 26.8 9.4 17.9 18.6 17.9 36.2 9.4 22.4 22.9 19.0 27.5 8.2 15.3 27.2 24.7 21.8 11.0 14.0 22.4 28.4 32.7 2.5 10.1 16.5 26.4 44.0 3.0 10.4 27.3 Shop 28.3 30.1 Peck .-. 3.9 Grade. Company E. Company F. 1903 1904 1905 1906 1907 1908 1904 1905 1906 1907 1908 Clear 9.3 15.2 12.3- 63.2 9.0 13.8 12.6 64.6 8.3 11.2 13.2 45.2 22.1 7.0 11.2 15.7 41.6 24.5 8.9 14.6 25.4 33.8 17.3 17.3 23.1 23.0 33.2 3.4 9.5 21.8 13.9 54.8 8.5 29.6 14.8 39.5 7.6 9.8 19.1 24.6 31.2 15.3 9.9 24.4 25.9 29.5 10.3 7.3 32.1 Shop 17.2 33.1 Peck 10.3 Grade. Company G. Company H. 1904 1905 1906 1907 1908 1904 1905 1906 1907 1903 7.2 14.8 22.2 55.8 5.8 18.7 21.1 37.7 16.7 6.6 13.6 34.0 39.6 6.2 8.8 16.9 34.4 35.1 4.8 12.5 23.3 39.3 18.5 6.4 13.6 15.4 15.2 22.2 4.0 17.8 24.7 49.2 4.3 25.1 37.4 8.0 26.6 2.9 11.4 36.3 Shop 29.0 21.9 14.1 42.0 40.7 35.9 Peck... 2.3 1 Companies A, B, C, and D represent "Cut of mill records;" companies E, F, G, and H "Sales records." 'Diagram 2, opposite p. 44, shows these facts in graphic form. Section 10. Prices of actual sales of red cypress. Tabular statement. — Prices of actual sales are shown in Table 6 for New Orleans, St. Louis, and Boston markets. New Orleans is in the cypress-producing territory. The f . o. b. New Orleans price for lumber delivered largely in territory north of the 762 THE LUMBER INDUSTRY. northern boundary of Arkansas, Tennessee, and North Carolina is shown. Local conditions in the producing territory do not often seriously affect the price of cypress in a market such as New Orleans. A widespread epidemic such as yellow fever, if production is heavily curtailed, of course would affect the supply and price. The prices of cypress in the St. Louis market are for the Louisiana product. Considerable white cypress from Arkansas and Mississippi is sold in St. Louis, but sales of this lumber were not included in the St. Louis prices as shown in Table 6. During part of the period for which the Bureau shows prices the Arkansas and Mississippi product sold at about the same price as the Louisiana product, but at other times it sold for less. For that reason only sales of the Louisiana product were used. Some years ago nearly all cypress lumber was brought to St. Louis in barges by way of the Mississippi River, but owing to the frequent low stages of the water and the unsatisfactory methods and delay of shipment, this has largely been abandoned. At present practically all cypress enters the market by rail. In the Boston market only rail deliveries of cypress have been used in getting the monthly average prices. Considerable cypress enters the Boston market in vessel, but these shipments were not included. Some of the price items presented begin in 1898; others in 1899 or 1901. Most of them end in 1910. The following table shows the items for which prices are presented, the markets in which the items appear being designated by an asterisk (*). Grade. Thick Dess and width. Length. New Orleans. St. Louis. Boston. Chicago. Indies. 1 R. W. 2R. W. 1 R. W. 2 rt. W. 1 R. W. 2R. W. 1 Xl2 1 Xl2 1x12 1 x 4 1x4 1R. W. 1 Feel. 10-20 10-20 10-20 10-20 10-20 10-20 10-20 10-20 10-20 10-20 10-20 Random. 4 (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) Do (*) (*) Do Shopi (*) (*) (*) Do.i (*) (*) (*) No. Hath 1 The grade of lumber known as shop was changed in the new grading rules adopted on Nov. 23, 1905, to No. 1 shop and No. 2 shop. Beginning Jan. 1, 1906, the prices presented are lor No. 1 shop. Prior to that date the old grade of shop is presented. 2 Random peck was added to the new grading rules which were adopted Nov. 23, 1905. The Bureau, however, obtained prices of this grade from firms selling it prior to its being described in the new grading rules. Diagram. — Of the prices shown in Table 6, already described, inch stock in firsts and seconds and select, "or A finish 1 by 12 inches, for inch peck, and for lath are shown on Diagram 26 (oppo- PRODUCTION AND WHOLESALE DISTBIBUTION. 763 site p. 768). The prices shown for St. Louis and Boston are delivered prices; those for New Orleans are virtually f. o. b. mill prices, New Orleans being the basing point used by the lumbermen in quoting prices. It will be noted that the fluctuations of the same item at the different points are fairly similar, the difference in the height of the prices being due to freight differences. It will be noted, in the case o' firsts and seconds and select, which may be considered as typical of high and medium grade lumber, the price advance, usual in all species, which took place in 1S99 and 1900 was not succeeded by a considerable period of depression and level prices, but instead there was a marked constant advance to the begin- ning of 1903. Prices were comparatively level for about three years, then rose sharply to a new high level. In common with most other species there was a considerable decline of prices in 1908. Since that time there have been more marked fluctuations in the New Orleans market than at the distributing points, but in all of them, by the first half of 1910, the highest prices attained in the period shown on the diagram were reached. These were followed by a marked decline later in the year. The fluctuations in the prices of peck, a very low-grade item, were less marked than those of the higher grades. While the prices of select increased 100 per cent in the New Orleans market (from $14 in 1899 to $28 in 1903) those of peck advanced about 40 per cent (from about $5 in 1899 to $7 in 1903). In 1907 and again in 1910 the prices of select in that market reached $34, while the highest price shown for peck was $9, obtained in 1906-7, and after the decline in 1908 the price in 1909-10 remained constant at about $5. Lath prices do not appear to have fluctuated in close correspondence with the prices of the other items. Attention should be called to the difference in scale between the lumber and the lath prices, which makes a direct visual comparison difficult. 764 THE LUMBER INDUSTRY. SUB3[I0 ^9> '/,? 'qPT $1.15 1.20 1.25 1.25 1.45 1.50 1.70 1.80 2.55 2.80 2.90 3.25 3.25 ■SOB8IJ0 AV0j<[ 'sqipjjiA pire sq^3tro[ moptrej ,j *q3noj '3109J o o 5.50 5.00 5.00 5.25 4.60 4.50 5.00 5.00 5. 25 6.00 5.50 5.60 6.25 6.75 6.00 6.00 6.00 S3 A 4 a K ■smrapo M9 N 'a :::::: 88 : IN IN i W ' •streeiio A9 N ' V M 'sinoi -ig 'SUE91 -JO »3K m •sino-i -ig •sural -JO M3N ho § & a •SUB3I -JO *9N '„z ^ •nojsog; •oSBorqa •sinoa 'IS •sutrai -JO JieN b ■ • IQ ■ O • ■ «N ■ « ! ! !« i so . . . . 25.00 25.00 26.00 25.50 27.00 27.50 29.00 29.50 31.00 34.00 •smoq; 'ig -SHG9I -JQ M8N S14.25 14.75 16.25 17.00 18.25 17.76 19.00 20.60 20.00 20.75 fl to on y ll •SOT3[ -JO Avafj '„s :::::: :8 ! ' i ! • ! .'cc 'C-; o £•' •trojsog o ■ O ■ ■ 'O ...... o . lO ■ • 1-- '• c* -ci '• 'c6 n .C3 > •« w ■ < • 34.00 34.00 38.00 38.00 8 00 CO -sinoi -^g ■SUB9I -JO Avejs[ :::::• Si ^ o 1898. August 189J. January 1900. February 4 1 PRODUCTION AND WHOLESALE DISTRIBUTION. 765 HNNNNMnnn 01 a> o cn cn .-< co c NMcococococococoeo COCOCOCOCCCOCSCQCTN 88 K88S SO • © 'OOOiOHJ U3U3W3 IOU] SS :S . CO CO »0 »« (D tO 8 • CN CNCN CNtN ScnKS cocococ O O O O O O »Q tNOOOOOOiOiQ ■ OOiOiOiOW • O 0 "7 CN WMPJcOCficO CN CN CN CN CN CN CN IQCN m NOOC^OWiOt-uj in olq io 88 :S8 t- ooioioio: CNCNCN CN CNCN CNC 28SSS SIS 8ga gg CN CN CN CN CN CN CN SSf 333 3 :S 833 gSggggKgKgiSS (ON IOICOIO CNt-iO CN i« -* t« rf in ?0 CN CNCN CNtN CN t»-I>-t- t- CN CNCN CM 766 THE LUMBEK INDUSTRY. •suboijo Ava^i ',,? 'iw&j 2 CS CN CO'S(Dl0 1 10'T-^ cSkjNwMujonon OCO -o BCO ■ C :9 !c3ioo SQiOONO coeocococ SoomooomCOO 3123! 2; 3J 3 a;^ 3 3! 3; ^ 31 ■ *° inmOlO CMCMOCM N CM CM in iOO>CO 88 lOO t^O lO OOiQiO if? OOWN« •O O ■ • lO lO ' ' o ■ o minooooiQino r~CNiooooi-c5m ■ in O • Mm t--r- t^t- St-SN r- 1-- t- r- •* t}< o r- IDffllQlOV . TT Tf- ■ ■ in '----*'-- .■VTtt 5NOOOO g :$33333g 9 cocococacococococ' ION -i ooi CM '^ 8 81000QOOOQ t-inOOOOG© 5iOONO«iOU -in-w^co-r-n-iQ iQioinintp'r-t"* • to r- r- acMcTMCMCMCMCMCM eMCTCMCMCMCMCMCM ■ CM CM CM mm CM« 33.00 33.00 33.00 33.00 33.00 33.00 34.00 33.00 33.00 32. 50 32.00 •Tj • G ' -; .J - ~ ~ . ' -. c — - G ■ O O G O G G' G G G- © i~- 'ionioooooniooo o ■oooooooinmin cmo» coco CO ■ CO CO CO CO CO CM CM CM CM CO CO CO ■ CO CO CO CO CO CO CO CO CO CO IOIO WCM •n m io in in io>oio CMCMCMCMCM CmCMCM . m • ■ ■ ;CM ; ; ; '• oi • • ' ■ CM ■ • ■ 27. 25 20. 75 27.00 20. 75 20. 50 25.00 25.00 25.50 25.00 25.25 25.25 25.25 26.00 25.75 25.75 20. 25 25.25 CMI> CM ■ ■ OCR WW o> cs es o) Oi cncncn NCMCMCMCM N«C4 co m g . . CMCM CM • • 26.75 27.00 27.00 26.75 26.25 26.25 o m o o -o -inooom loom©©© UJr-GO ■ © ■WiOOiTJN CM O CM iO U5 O KgBKg • m CO T T -CO ■COCMCMCMCM CO CO CO CO CO CO • CM CM CM CM -CM ■ CM CM CM CM CM CM CM CM CM CM CM CO CO CO "*^ ^ lOIOIQIfJOOOO ■ iDOiOiOiOOiCOBWOO lOOOUJOifiiOOiQOlOlf) OOOlO ■ O t2 tS J2-J2 Sooln ■ NONNr-ONr-NNOn cSioioCMmc-r-o N in r~ t^ o >n m r- . o © oo ©in CMCMf> te WNNH ■ H CM .H i- NNNN ■ CM CM CM C CM CM CM CM CM CV C\ >-i HOQfflQONr-OONNt-N 00000000 ■ OS COOOOIOQ ,_!,_,,_(,_, CM :33$3 5333 oo ©o m CM CM OOO OOi 88 lOOiQOiQiQOOiO t-inCMOCMCMinirar- :sa ©m m m ©©mouse CM CN Cm"« smooogooc it-oooomou CO CO CO CO CO ;su in o CM © to id in ■ in mm cm . cm i-r- ooioi OH CM -CM CM CM wCM CM OOOOb-Oc^mO cocoeococococoeoco in m m in o © m CM I- CM t- o m CM g '£ r~- ui :u CO CO CO CO c &| j : : j isfjilf 768 THE LUMBER INDUSTRY. •streQUo A&n '„§ 'q^l •STTE91J0 uiopimi „'i 't[3noj '^toaj as ■SUB9IJ0^9N'a ■siraeijo -Ai3j^; ( y •smci 'q.g 'SUB9X -IQ -AS.9N ■srnoi -ig •STTB9I -10 msn ■srnoi ^g "STIB9I -IQ AWtf coco«Mcceceocoece4ciN '.,5 •a(*}sog; ■stnoi -ig 'SUB91 -JQ Aia^l •sneo[ -JO *9n; '„Z •nojsoa •sinoq -}g •SOT9[ -JO M9N lOUjiCOOWOOlOOOlO opoQi-HOogioioooooQopt^ 88 jpo)oa©woio> iOONt Sfi OiO ooo ONiQiOO SSSSSSSK oooooo OOlQiCiOlO oinu io cmc 6hf M O 00 oa tn to SSSSSSSKg oooioooocDioiQ-^'^ co ro co co co M i s'B|g| DIAGRAM 26.— Movement of Actual Prices of Red Cypress Delivered in Boston and St. Louis, and on an F. O. B. |Vew Orleans Basis, 1898 1910. CHAPTER IX. SHINGLES. Section 1. Production. The products treated in this chapter are red-cedar shingles and bevel siding, white-cedar shingles, and red-cypress shingles. By- far the most important of these is red-cedar shingles, to which the discussion is mainly confined. The quantity of shingles produced, together with the percentage of the total production from each kind of wood, is shown in the following statement for 1910, 1911, and 1912, taken from Forest Products, Bureau of the Census, 1912, page 42: Kind of wood. Shingles produced. 1912 Quantity (thousands). Per cent distri- bution. 1911 Quantity (thousands). Per cent distri- bution. Quantity (thousands). Per cent distri- bution. Total.... Cedar Cypress Yellow pine Kedwood White pine. . . . Chestnut Western pine.. Hemlock Spruce. All other kinds 12,037,685 100.0 12,113,867 100.0 12,976,362 100.0 9,500, 1,311, 578, 447, 68, 45, 30, 78.9 10.9 4.8 3.7 0.6 0.4 0.3 0.2 0.1 0.2 9,633,914 1,230,645 650,332 395, 786 83,809 40, 840 15,882 26,171 12,381 24, 107 79.5 10.2 5.4 3.3 0.7 0.3 0.1 0.2 0.1 0.2 108,643 180,217 863, 149 437,701 146,555 52,091 27,277 42, 447 68,745 49,537 77.9 9.1 6.7 3.4 1.1 0.4 0.2 0.3 0.5 0.4 Of the various woods used for shingles, the proportion of the total amount furnished by cedar has gradually increased. This is not due to an increased manufacture from this wood, but to a smaller pro- duction of shingles from other woods. The two kinds of cedar mainly used are the red cedar of the Pacific-Northwest, and the white cedar of the Lake and Northeast- ern States. Separate statistics for red and white cedar are not presented but it is estimated that at least 65 per cent of all our shin- gles are manufactured from red cedar. The State of Washington produces more than 95 per cent of the red-cedar shingle output of the United States. The Washington shingle mills are confined largely to the Puget Sound region. A 25030°— 14 49 769 770 THE LUMBER INDUSTRY. well-known Tacoma manufacturer quoted on page 40 of the Ameri- can Lumberman, issue of March 9, 1901, said: The Washington red cedar shingles control the market price of shingles in the United States. That I believe to be a fact. It all rests with the manufacturers as to whether they shall sell their product at good prices or shall permit the jobbers to cut those prices. Section 2. Competition met by red-cedar shingle producers. Red-cedar shingles meet some competition from British Columbia shingles and some from shingles made from other woods in this country. Probably the keenest competition, however, comes from roofing materials used as substitutes for shingles. The severity of all this competition has often been increased by the practice of some of the red-cedar shingle manufacturers of Washington and Oregon in grading their shingles loosely and in overdrying them in order to save freight. Competition with shingles of other woods. — The bulk of the red-cedar shingle output is sold in territory east of the Rocky Mountains. Cypress, white pine, and white-cedar shingles are pro- duced nearer to the great shingle-consuming territory, but they meet an active competition from the red cedar from the Pacific coast; and in many large consuming markets their price is largely controlled by the price of red-cedar shingles. Redwood shingles practically control the California market, and since the red-cedar and redwood shingles have about the same freight rate to the large eastern markets, redwood competes to some extent with red-cedar shingles in some of the eastern territory. The red- cedar shingle manufacturer has looked to "local trade" for a consid- erable consumption of the lower grades; and a portion of the cut has yearly been placed in the Southwest. In the Gulf States red cedar competes very httle with cypress and yellow-pine shingles. Not- withstanding competition from other shingles, red-cedar shingles occupy a dominating position in the great shingle-consuming terri- tory, so that any organized efforts among red-cedar shingle producers to control prices is especially significant. Competition with substitute roofings. — Although red-cedar shingles compete with shingles made from other woods, the keenest competition comes from substitute roofings. This competition has become increasingly active during the last decade. Shingle pro- ducers, through the manager of their association, are frequently reminded of the effect of keen competition from this source. The inroads of metal, felt, and other roofings into their trade are used as arguments in urging contributions to a common advertising fund. The following extract from a circular sent out by the manager of the PRODUCTION AND WHOLESALE DISTRIBUTION. 771 Red Cedar Shingle Manufacturers' Association, under date of Octo- ber 23, 1913, illustrates the importance attached to this sort of competition: The writer was startled on looking over the government sta- tistics recently to find that the production of shingles in the United States had declined from almost 15 billion in 1909 to 12 billion in 1911, the actual reduction amounting to 18£ per cent. This in spite of the growth of population and an increasing amount of building. We can only attribute this to the tre- mendous advertising Campaign of the substitute roofing people carried on without anything being done on the part ofthe Shin- gle manufacturers to refute the misstatements made except the small amount of advertising done by this Association. The above is typical of numerous similar communications that have been addressed to the manufacturers from time to time in urg- ging them to contribute to an advertising fund. Their attention is sometimes called to the effective advertising campaign that has been conducted by the cypress-shingle manufacturers. Section 3. Conditions in production of red-cedar shingles. The manufacture of red-cedar shingles differs from that of most others on account of the fact that the bulk of these are not produced as a by-product. Red-cedar shingles are produced by two distinct types of manufacturing plants, straight shingle mills and combina- tion mills. The straight shingle mill manufactures shingles exclu- sively. In 1911 they produced about 75 per cent of the total product in the State of Washington. Combination mills are plants producing both lumber and shingles. Some of the combination mills manufacture only cedar lumber and shingles, while others produce both fir and cedar lumber and cedar shingles. Shingles are to a greater or less extent a by-product in a combination mill. The combination mills are often a disturbing factor in curtailment movements because conditions in the cedar and fir lumber markets may be very satisfactory at a time when a close-down is desired by shingle operators. In times of at- tractive prices new mills are built, many of which use simple machin- ery and crude plants. In many of the straight shingle mills members of the firm work in the mills alongside of their employees. Red-cedar shingle mills are called interior and tidewater mills, according to their location. A very large proportion of the interior mills manufacture their shingles from bolts cut from old cedar stumps and from trees that were felled at the time of the early logging operations. The interior mills often obtain their raw material at a much lower ccst than the tidewater mills. However, their labor cost is considerably more than that of the tidewater plants. Most of the shingle manufacturers located on tidewater are depend- ent on the log market for their supply of raw material. They pro- 772 THE LUMBER INDUSTRY. duce the bulk of the red-cedar shingle output. The supply of cedar logs available to these shingle manufacturers is, at a given time, de- pendent upon three factors, namely, the demand for fir logs, the per cent of cedar in the timber being logged, and the proportion of cedar logs used in the manufacture of cedar lumber. Logging operations are conducted primarily for the purpose of securing fir logs; hence cedar logs are in the nature of a by-product. Consequently, when- ever there is a curtailment of output on the part of the loggers be- cause of low prices of fir, cedar logs become scarce. Shingle mills have occasionally had to shut down because they could not get logs at a price which would enable them to manufacture and market their product at a profit. An example of this was in 1910, when, according to the Mississippi Valley Lumberman of June 10, page 40: On the coast a few independent loggers have been offering some concessions, but association loggers are holding prices firm and under the conditions mills can not manufacture under the mill price of $1.70. Some mills during the week closed down and others will, it is thought, soon follow their example. It sometimes happens that a scarcity of cedar logs occurs at a time when cedar siding is in demand at high prices, and shingle mills, because of the high prices of cedar logs, are unable to manufacture shingles profit- ably, even when they h ave a good market. At such times the manufac- turers usually close their mills. The cost of the timber in a thousand shingles constitutes the major portion of the total cost. Each thousand feet of cedar logs will produce approximately 10,000 "Star A Star" ' shingles. The strong combinations among the loggers on the Sound have enabled them for a number of years to absorb almost the entire benefit of an increase in prices of shingles, and leave to the manufac- turers of shingles dependent upon the log market, at most, a nominal manufacturer's profit. Like the fir millman, who owns no timber and buys his logs, the shingle manufacturer must face the concerted efforts of the loggers and stumpage owners to raise the price of his raw mate- rial, while being unable to force up his own prices proportionately, because of the competition from other localities, and woods, and from substitute roofing. The case of the shingle manufacturer who buys logs has been even more difficult than that of the fir millman for, as stated before, added to the influence on log prices exerted by the concerted efforts of loggers and stumpage owners, has come the further difficulty resulting from the fact that the supply of cedar logs is not regulated by the direct demand for them, because they are a by-product of the logging for fir. During the early years when stocks at the regular mills got so low that green shingles were shipped to the trade, small mills at once started to take advantage of the demand. An extract from a letter 'This title is usually abbreviated: *A*. PRODUCTION AND WHOLESALE DISTRIBUTION. 773 dated March 26, 1906, addressed to the Oregon Lumber Manufac- turers' Association and signed by D. W. Bass, manager of the Shingle Mills Bureau, tersely expresses the situation as follows: We note what you are doing in regard to green shingles, and are afraid that this is a mistake, for if shingles are shipped green there will be a mill erected at almost every telegraph pole along the railroads where there is cedar obtainable, and there will be no way to control the output as there is when stock is kiln-dried. The trade-press comments and public utterances of large manu- facturers incline at times to overestimate the effect of small capital as a disturbing element in the shingle business. But small capital has found a good field here for profitable operations. It must be taken into account as one of the real forces influencing production. It should be noted, however, that the opportunities for small capital are growing less as the cedar on cut-over lands becomes scarcer. The price of shingles is peculiarly subject to wide and frequent fluctuations. The shingle market is dependent upon conditions in the building operations of the country, and prices fluctuate very largely with the activity in the building trades. With an increase in demand shingle-mill operations are increased, and by the use of dry kilns only a few days elapse between the time of cutting of the shin- gles and the time they may be shipped. The total capacity of the shingle mills is so great that if all mills operate, only a short time elapses until the supply more than equals the demand and a fall in price takes place. This, in turn, frequently brings about an organized curtailment of production. Section 4. Organized efforts to influence prices. Washington Red Cedar Shingle Manufacturers' Associa- tion. — The Washington Red Cedar Shingle Manufacturers' Associa- tion was organized at a meeting of Washington manufacturers held in Seattle on May 16, 1899, and a constitution and by-laws adopted. The objects of the organization as stated in Article I of the Constitu- tion were — To secure a full understanding of the conditions surrounding the red cedar shingle market throughout the United States; the establishing of uniform rules for grading and manufacturing; the establishing of uniform weights and prices; and for the purpose of carrying out such other measures as may be deemed for the welfare and in the interest of the manufacturers of red cedar shingles. A central committee was given — power to hold meetings at such times as they may deem proper; to appoint committees; to print and circulate documents in the interests of this association; to establish rules for grading, and a system of uniform weights ; to issue from time to time a minimum 774 THE LUMBER INDUSTRY. price, below which all members agree not to sell shingles to dealers or wholesalers; to work in conjunction with the Washington Red Cedar Shingle Dealers' Association; 1 to establish a system of prices at which shingles are to be sold to retail dealers; and, in the absence of a wholesale dealers' association, to establish prices to be paid by retail dealers; to order the closing down of all mills, and to take other necessary steps to curtail the output, when, in their judgment, the supply exceeds the demand; and to use such other means they may deem advisable to maintain a uniform price for shingles ; to receive and disburse the funds of this asso- ciation; to employ a secretary and other necessary assistants, and at such salary as in their judgment shall be for the best interests of the association; and shall advise and carry into effect such other measures as they may deem proper and necessary to pro- mote the interests of this association. The central committee at their first regular meeting, shall select some bank to act as treasurer, in which all funds of the association shall be deposited. The president and vice-president shall be elected by the central committee. (Constitution, Art. III.) At this organization meeting of May 16, 1899, the following action was taken: "Weights were adopted; prices established; a close-down voted; the manufacturers agreed to cooperate with legitimate whole- salers, and the underweights were ordered to go to the mills." The close-down that was authorized at this meeting became effec- tive July 1, 1899, and lasted until July 10, and "seventy-five per cent of the output ceased operations." At a meeting held July 7, 1899, the price of *A* shingles was ad- vanced 5 cents per 1,000 and the following resolution adopted: Resolved, That owing to the increased and unexpected de- mand for red cedar shingles due to the action of the Washington Red Cedar Manufacturers' Association in closing the mills, we deem it unnecessary to remain closed until July 17, and all mills will be permitted to resume operations on Monday, July 10, until such time as the association deems it wise to order another close down. (Mississippi Valley Lumberman, July 14, 1899, p. 18.) At the meeting held October 21, 1899— Resolutions condemning the action of certain wholesalers in cutting prices were ordered circulated, and in order to avert a panic a close-down of the mills was requested, on motion of Mr. Patten, to take effect November 1st. Prices were adopted on November 4, which made an advance of 10 cents per thousand on both stars and clears, and — On motion of Mr. Patten the mills were requested to close down November 11th for a period of 60 days. This action was taken to prevent a demoralization of prices. A vote of thanks was tendered the Eastern and Western jobbers for their stand in behalf of stable prices. i This was a wholesale buyers' and brokers' organization, with headquarters in Chicago, formed in April, 1899. PEODTJOTIOK AND WHOLESALE DISTBIBUTIOX. 775 According to the New Orleans Lumber Trade Journal of January 1 and February 15, 1900, during this curtailment "fully 95 per cent of the mills" were closed down, and remained closed until the middle of February, 1900. At a meeting held March 22, 1900— On motion of Mr. Patten the mills were requested to close from March 31st to April 9th, provided 75 per cent of the output would so vote. On motion of Mr. Young it was decided to advance the price of Stars and Clears 5 cents, effective April 9th. This close-down became effective March 31, 1900, and at a meeting held April 5 — The secretary announced the close-down vote as exceeding 80 per cent. On motion of Mr. Patten the mills were instructed to stay closed until April 16th. On motion of Mr. Patten whole- salers were allowed to become associate members of the associa- tion; the associate members to have two votes — one represent- ing the Western dealers and the other the Eastern dealers — the retail price to be quoted 10 cents higher than the wholesale price, and the associate members to be given preference. The conditions of the market which led to shutdowns during March and April and the effect of these curtailments were thus described: It was unfortunate, in view of later events, that an association winter price was authorized one year ago, 1 because it tempted mills to operate when they should not, and started up mills when they had agreed to close all winter the first part of January. Fifty-eight hundred cars were placed in transit between Decem- ber 1st and March 1st — many at higher prices than the associa- tion list — and when it was seen that the spring trade in the east was to be backward, the buyers began unloading the cars in transit at cut prices, and it required the very best skill on the part of the association to prevent a panic. In order to avert a disaster a close-down was ordered from March 31st to April 9 th. This was, at a meeting on April 5th, ordered to be continued another week, or until April 16th. Signatures to barely 75 per cent of the 263 mills in the state were obtained, but it, however, saved the day. At a meeting held on April 13, 1900, "it was decided after consid- erable discussion, to close down for two weeks commencing April 28th, the percentage to be not less than 90 per cent." This curtail- ment was not successful as — ■ Instead of 90 per cent, as expected, only 60 per cent were •willing to close, and the majority of the signers qualified same with conditions. This being the case, the committee could do nothing but declare the close down off and suspended prices, because a price list not upheld would soon become a farce. On May 9, 1900, a meeting was held: The object of the meeting was to take steps to preveDt fur- ther demoralization, the previous close-down not being effected. > This refers to the prices adopted Jan. 19, 1900. 776 THE LTJMBEE INDUSTRY. The cooperation of the mixed car mills was assured, and after discussion it was decided to close down the mills from May 16th to June 4th, and that in the event of the close-down having the desired effect, the old prices be restored. More than 90 per cent of the mills were closed down from May 16 to June 4 and it was claimed that, "The close-down had the effect of stiffening prices, which had dropped 10 cents, to the old basis." A meeting held June 21, "It was decided that the close-down was the best in the history of the shingle trade, but that trade conditions had not changed in the East, and the secretary was instructed to take a test vote of a close-down, effective July 1st." Only 58 mills favored a July curtailment so.no curtailment was ordered. In November, 1900, Secretary Beckman mailed inquiries to the mills asking whether they intended closing down during the winter, and received replies from 150 manufacturers. Of this number 132 have closed for a period of from 30 to 120 days — the majority being for 60 days — and 18 refused to close. There are many other mills closed besides the ones reporting, and the close-down is exceedingly good, considering the present demand and stiffness of prices. In the various close-downs the small mills followed the ad- vice of the association, as a rule, and several of the large mills did likewise, but there were other large mills which refused to close at any time, thereby hindering the good work of the offi- cers of the association and creating distrust and dissension among the smaller mills. The financial benefit derived from the price and close-down activ- ity of the association in 1899-1900 was estimated as follows: During the year the association's prices put into the pockets of the mill men no less a sum than $735,000 above the prices prevailing the same period in the year previous. This is based on prices current, and the official report of rail shipments. Only twice before in the history of the shingle trade were prices ob- tained so satisfactory as during the period of association activ- ity. During the years 1890-91, when the North Pacific Con- solidated Shingle Co. had a lease on all but four mills in this state, and the year after its collapse, when the mill men formed a strong organization, have prices been better than they were from May, 1899, to June, 1900. The information obtained on the shingle manufacturers' activities in 1901, 1902, and 1903 is derived principally from contemporary trade-paper accounts. A "spring schedule" was adopted at an association meeting on January 19, 1901, the mills increasing operations very soon after the schedule was determined. In May of the same year prices were reported to have reached the highest point obtained in 10 years, and to be still advancing; in August a slump in the upward move- ment was offset by the close-down of more than 175 mills until the PRODUCTION AND WHOLESALE DISTRIBUTION. 777 market recovered itself. There was a serious car shortage the last of this year which forced many mills to close down. It was estimated that over 50 per cent were closed by the middle of December, 1901, and from 80 to 95 per cent in January and February, 1902. Part of the January close-down was due to severe storms. List prices were advanced by the association on January 15, 1902, and again on March 28. Owing to a downward tendency in the shingle market the association ordered a shutdown for two weeks of the 300 shingle mills in the State, beginning May 17. The closing- down agreement was said to have been the most generally observed in years, 171 mills having been reported closed down. Another close-down, from July 3 to July 10, urged by the association, was less successful, about 100 mills complying with the order. At the meeting of the association held August 21, 1902, the list prices of shingles were again raised. Another car famine took place in November and December of 1902, which caused many mills to close down. Prices of shingles fell off sharply in March, 1903, and the association called a mass meeting of shingle manufacturers on March 27 to discuss curtailment. At a second meeting held April 4 a shutdown for 30 days was recommended. The following from the American Lumberman of April 18, 1903, page 40, is of interest in showing the nature of one proposition made at the second meeting: The Whatcom County Shingle Manufacturers' Association came to last Saturday's unofficial meeting of the shingle mill men, in Seattle, armed with certified checks in the sum of $300 each from forty-six mills of that association, guaranteeing the agreement to shut down their mills for whatever period the rest of the western Washington mills, to the number of 75 per cent of the whole, would determine upon. There does not appear to have been much curtailment. A meeting of the association was held on August 26, 1903, at which plans for a reorganization were put forward. According to the account in the Pacific Lumber Trade Journal of September, 1903, page 10, "Another matter of importance that was acted upon was amending the con- stitution and by-laws of the Washington Ked Cedar Shingle Man- ufacturers' Association, certain clauses being eliminated which had been declared unlawful by the Circuit Court of Appeals." The above changes were connected with a suit brought by S. A. Gibbs against E. J. McNeeley and others (McNeeley was the presi- dent of the association) to recover alleged damages due to the action of the association. The case was first tried in the United States Dis- trict Court, where the demurrer of the defendants was sustained on three counts and the plaintiff was allowed to bring action on the fourth, 1 which related to circulars issued by Secretary Beckman, in 1 Federal Eeporter, vol. 102, pp. 594-599. 778 THE LUMBER INDUSTRY. obedience to orders of the executive committee, denouncing S. A. Gibbs & Co., among others, as price cutters. (See resolution of Oct. 21, 1899, p. 774.) The case was heard in the circuit court on the fourth cause and on March 15, 1901, decided in favor of the defendants. 1 It was appealed to the circuit court of appeals and on October 13, 1902, this court rendered a decision in which the acts complained of in the second and third counts were declared to be in violation of the Sher- man Antitrust Law. 2 The acts complained of which the court held to be in violation of the Sherman Antitrust Law were stated as follows : For a second cause of action, the plaintiff in error alleged, in addition to the facts above set forth, that on or about August 15, 1899, the central committee adopted a schedule of prices for shingles, whereby the members of said association were required to and bound themselves to sell at the price so fixed, to wit: Extra A, $1.35 per 1,000, clears, $1.50 per 1,000, which price the plaintiff alleged was above the market price; the market price then being extra A, $1.20 per 1,000, and clears, $1.35 per 1,000. That by reason of said increase in prices the plaintiff was unable to carry on his business and supply the natural and ordinary demand for such shingles, or to purchase shingles at any other than the price so fixed, and he was injured thereby in his business in the sum of $1,200. For a third cause of action, the plaintiff, in addition to the facts above alleged, set forth that on November 11, 1899, for the purpose of further increasing the §rice of said shingles, the association ordered its mills to close own for the period of sixty days, which order was obeyed, whereby the trade in shingles was interrupted, and he was unable to purchase shingles with which to fill his orders, to his damage in the sum of $1,000. 3 Judge Gilbert summarized the object and effect of the Washington Red Cedar Shingle Manufacturers' Association in the decision ren- dered by the circuit court of appeals in the following words: The combination in the case before the court is more than a combination to regulate prices ; it is a combination to control the production of a manufactured article more than four fifths of which is made for interstate trade, and to dimmish competition in its production, as well as to advance its price. These fea- tures, we think, determine its object, and bring it under the condemnation of the law. The plaintiff in error is in the business of buying the manufactured article in the state where it is manufactured, and selling it to purchasers in other states. The acts charged against the defendants in error interfere with his "contracts to buy, sell, or exchange goods to be transported among the several states," — contracts which are made and nego- tiated between the plaintiff in error and his customers in various states, — and the acts of the defendants are in restraint of the interstate commerce in which he is engaged. We think the complaint states a cause of action.* 1 Federal Reporter, vol. 107, pp. 210-213. » Lawyers' Reports Annotated, Book 60, p. 153. 'Idem, vol. 118, pp. 127-128. 'Idem, p. 158. PRODUCTION AND WHOLESALE DISTRIBUTION. 779 In his article, "Organization in the far West," quoted at length on page 391, Victor H. Beckman measured the value and the cost of the organized efforts of the shingle manufacturers during 1899-1903 as follows: The Washington Red Cedar Shingle Manufacturers' Associa- tion was organized in 1899. The first year, by issuing a uniform list, it succeeded in putting into the pockets of the shingle manu- facturers at a conservative estimate $650,000 more than they could otherwise obtain. In the year 1900, owing to over- production, the amount was not as much, the estimate being $480,000. In 1901 the amount exceeded $1,000,000, and included $250,000 saved by an adjustment in freight rates, brought about by the efforts of the association. In 1902 it is safe to state that the shingle manufacturers gained $1,500,000. In 1903, while prices have been uniformly low, it is certain that the mill men are ahead by nearly $600,000 over any similar year prior to 1899. All this has been accomplished at an expense of not more than $2,000 per annum. As has been pointed out elsewhere in reference to similar claims Secretary Beckman's estimate of the monetary advantages is extrava- gant. Nevertheless, such statements did influence the minds of other lumbermen. As Mr. Beckman also predicted, in the same article, the work of the shingle association was later taken up by a new organization, the Interstate Bed Cedar Shingle Co. Interstate Red Cedar Shingle Co. — The Interstate Red Cedar Shingle Co., a selling agency, was organized in November, 1903. Meetings were held in Whatcom (now Bellingham), Sedro-Woolley, and Everett. Contracts were signed at these meetings which pro- vided that the Interstate Red Cedar Shingle Co. would pay the milk certain agreed-upon prices for a given quantity of shingles, based on the capacity of the mill. In case a mill shipped more than the quantity allotted to it, a lower price was to be paid, unless this excess had been shipped at the request of the Interstate Red Cedar Shingle Co. This was considered an effective plan of controlling production. On account of the failure of an attempt to handle the product through the wholesalers the committee on January 9, 1904, made the following recommendation, which was adopted: After thoroughly considering the situation we beg leave to recommend to the stockholders of the Interstate Red Cedar Shingle Company that the new board of directors and officers to be elected to-day, be instructed to open up an office and begin immediately to sell direct to the trade on any basis that they may deem advisable, and to negotiate with the various mills to change the contract, waiving the prices which the company agreed to pay the mills, and in lieu of their so doing the company to agree for the present to handle the shingles on 5 cts. per M commission. At a meeting of the trustees held January 21, 1904, C. E. Patten reported that about 80 per cent of the State's output had signed the 780 THE LUMBER INDUSTRY. price waiver. The contract price for *A* was $1.65, while the price that the committee proposed to quote to the trade on January 9, 1904, was $1.35 for *A*. 1 On January 21, 1904, the trustees voted, "that the prices of Stars, Clears, Perfections and Eurekas be advanced 10 cents per 1,000, to be effective immediately, and that there be no advance on seconds." The Interstate Red Cedar Shingle Co. failed to meet the wishes of the jobbers and considerable antagonism developed between the two inter- ests. At a meeting of the trustees held in Seattle, February 4, 1904, C. E. Patten stated " that the eastern jobbers had joined with the western jobbers in fighting the Interstate Company." Some of the whole- salers paid as high as 10 cents above the prices offered by the Inter- state Company to mills that were members of the company, and at the same time offered their shingles to the trade at prices lower than those quoted by the Interstate Shingle Co. The next step was an alliance in February, 1904, between the manufacturing and selling ends of the trade. The Interstate Red Cedar Shingle Co. was reor- ganized, its policy changed considerably, and the wholesale dealers were given representation with the manufacturers on the board of directors. The general policy as to prices was intrusted to an execu- tive committee. The following editorial comment on "The red cedar shingle indus- try permanently organized for profit," in the American Lumberman of February 20, 1904 (p. 15), deals with this situation: All doubt and difficulty in the way of the successful operation of the Interstate Red Cedar Shingle Company seems to have been brushed away by a compromise effected between that organiza- tion and the wholesale dealers of Seattle, Tacoma, Winona, Minneapolis, etc. This compromise gives the wholesale dealers equal representation in. the board of directors of the Interstate Red Shingle Company. The consolidation of the two interests will relieve the manufacturers of the work of marketing the product of their mills, as that function will almost entirely be taken up by the wholesalers represented in the directorate, and such others as may be engaged in the business. The wholesale dealers at first asked for one-half the capital stock of the company, but the compromise was finally effected on the basis of equal repre- sentation of the dealers on the board of directors only. 2 This consolidation of the two interests is one of the most impor- tant that has been accomplished in the entire history of the trade in forest products. It gives the new selling company control of 95 per cent of the shingle output of the State of Washington. The company claimed that prior to the com- promise over 300 mills had taken stock in or signed an agreement to sell their product through the Interstate Company. Now 'The contract price allowed a commission of 15 cents per M, while the prices of Jan. 9, 1904, reduced the commission to 5 cents per M. 2 The purpose of the manufacturers to control the output of the mills and fix market prices, which was one of the objects of the original Interstate organization, Is indicated here. PKODUCTION AND WHOLESALE DISTRIBUTION. 781 the jobbers who have joined the organization turn over 150 mills which they controlled. This seems to clean up about all the mill capacity of the State. It is believed that practically all of the independent mills will come into the association. Under the compromise, while not doing any marketing of shingles, the company will receive at least one cent a thousand on the shingles sold through the agency of the wholesalers, which will give the company an annual revenue of $50,000. This would make the amount of shingles annually handled 5,000,000,000. The following letters to the Interstate Ked Cedar Shingle Co. from the Lumber Manufacturers' Agency illustrate the work of the new company. That of February 26, 1904, relates to the company's prices. We are in receipt of your mimeograph letter of the 23rd, giving your reasons for the change in the management, etc., of your Company, and asking for our views on the matter, and would say, that we have been, and will in the future comply with your desires, ifyou will only let us know what the same may be at all times. _ We note that you have advanced the prices of Extra *A* Shingles to $1.45 to the mill, and we shall govern ourselves accordingly. We have quoted on several inquiries for Extra Clears, and we trust that in case we receive wire orders for diver- sion of these cars that you will protect us on the prices which you have formerly made us. We should be very much pleased if your Mr. Hill would advise us at all times of any changes at the time the change is made, relative to prices. The next letter, dated February 29, bears upon the efforts put forth at this time by the Interstate Ked Cedar Shingle Co. to cut off the supply of so-called "irresponsible jobbers:" We are in receipt of yours of the 27th, and carefully note con- tents. We appreciate the position of your Company and desire to again express our determination to comply with your desire relative to selling to irresponsible jobbers or underselling at your stated prices. We desire to have you keep us posted each day when changes are made, thereby enabling us to keep our traveling men and agents in immediate touch with market changes. The following letter of March 2, 1904, shows that the Interstate company's control of the market began to weaken about the first of March : We are just in receipt of letter from our Chicago Agent, in which he says that he has lost some business on Clears on account of Mr. Patton, your former president, having quoted them at 5 cents off the January list, or $1.75 f.o.b. mill. Is this on account of Mr. Patton being superceded, or is this a general move, or nearly so, with the different wholesalers at Seattle ? We have invariably asked all of our agents at the different points to maintain price of $1.80 on Clears and $1.50 on Stars, and have advised them of this extra 5 cents raise on Stars. 782 THE LUMBER INDUSTRY. A curtailment of production became effective March 12, when it was reported that 95 per cent of the mills were closed and that prices had been firmer this month than at any time for the previous six months. The Interstate Red Cedar Shingle Co. sent out a circular "to the mills," dated March 16, 1904, reading as follows: We have been receiving reports as to the close down of the shingle mills and are pleased to advise that the following mills are reported closed. This list is incomplete on account of the diffi- culty in getting information from remote points. Please advise us of any errors or omissions which you may find. Everything points toward a complete and effective curtailment of output. This list contains the names of 259 individuals, firms and companies. A meeting of shingle manufacturers was held in Seattle, April 14, 1904, and after a thorough discussion of conditions it was decided to close down the mills for two weeks beginning April 23. This meeting was attended by both members and nonmembers of the Interstate company. A committee composed of the board of trustees of the In- terstate Red Cedar Shingle Co. was commissioned to secure the signa- tures of the shingle manufacturers to the close-down agreement. The American Lumberman of May 21, 1904, page 41, stated: The shingle mills in this country are again in operation. About 90 per cent of the mills of this country observed the close-down of two weeks in conformity to the order issued by the Interstate Red Cedar Shingle Company. The reorganized Interstate Red Cedar Shingle Co. became inactive in May, though it continued a few years longer as a corporation. About the first of June the seven jobbers who were members of the board of directors resigned and mill men were elected in their stead. The mills were released from their contracts. A Seattle correspondent to the St. Louis Lumberman, of June 15, 1904, page 64, thus commented on the situation: Since the break that led to the partial disorganization of the Interstate Red Cedar Shingle Company occurred, and the sus- pension of the price list, shingles have gone down 25 per cent. Shingles are now selling as low as they were last December, when the organization of the new selling company put a stop, temporarily, to the demoralization of the market. It is esti- mated that the production is 10 per cent greater than the demand. If the mills would agree to a single day's close-down each week, members of the Interstate Company believe the demorali- zation of the market could be checked and prices restored. The trouble in the shingle trade is laid at the doors of the manu- facturers, who refuse to assist in the closing movement intended to sustain prices. From 20 to 40 per cent of the mills persisted in running during some of the periods when a shut-down was advised. These mill men kept feeding the market with new shingles, and the condition of the eastern demand was such that the weight could not be borne. PRODUCTION AND WHOLESALE DISTRIBUTION. 783 The effect of the company's effort to influence prices was discussed in the American Lumberman of June 25, 1904, page 24: The Interstate Red Cedar Shingle Company, however, did good work when it existed actively. It took hold of the shingle situ- ation early in January and for four months kept the prices at the mills at $1 .45 for Stars and $1 .70 for Clears, in the faceof the worst conditions that have existed in the shingle trade for years. Several shutdowns were brought about by the Interstate Red Cedar Shingle Company that greatly reduced the production, but as the demand from the east did not come up to expectations after 4 months it was found that the Interstate Company could not force matters, and it gave up the effort for the present. Immediately there- after shingles declined 15 cents a thousand and have gradually gone lower, showing that the Interstate Company exercised a beneficial influence while it continued. At this time shingle prices were low and uncertain. The mill men made preparations to meet the situation by concerted curtailment, agreeing that before they would stand a further cut the mills would close for "self -protection" and remain closed until such time as the market improved and prices raised to a normal standard. This result was accomplished during July, labor troubles and a strike among shingle weavers strengthening the shutdown. Closing of the mills had the usual effect of improving prices by August, when opera- tions were resumed on full working time. The year 1904 closed with the mills embarrassed by a serious car shortage. Shingle Mills Bureau. — Red cedar prices in 1905 remained practically unchanged for the first nine months. On September 30, 1905, the Shingle Mills Bureau was temporarily organized. Operators of straight mills formed the nucleus of the organization. Because the nature of the business of combination mills compels them to ship mixed cars of lumber and shingles, these operators generally held themselves outside the bureau, but they cooperated through an understanding to make as few shingles as possible while other mills were closed by "official" orders. The following extract from circular 36, of October 10, 1905, issued by The Southern Cypress Manufacturers' Association, shows the pur- poses of the new bureau, as understood by the lumber trade generally: Personal advices, confirmed by the lumber trade papers, are to the effect that the manufacturers of Washington red cedar shingles held a meeting at Seattle, September 30th, and effected a temporary organization to be known as the Shingle Mills Bureau. At this meeting about 80 per cent of the production signed an agreement to close down the mills during the whole of December and January, the agreement carrying with it a penalty for nonfulfilhnent. It is generally believed that practically all other mills will drop into Tine. We are told that this effort at curtailment is merely a preliminary step and that, if it is success- ful, the organization will be made permanent. 784 THE LUMBER INDUSTRY. D. W. Bass, of Seattle, was made president of the Shingle Mills Bu- reau, and Eichard W. Douglas, former secretary of the Lumber Trade Club, of Boston, Mass., was engaged in the beginning of November to systematize the curtailment work and act as assistant to President Bass and other members of the executive committee. D. W. Bass issued a general letter requesting that — each straight shingle manufacturer in the State of Washington, be and he is hereby requested to close his mill, on the evening of November 30, 1905, and to keep it closed during the following two months of December and January. More than 90 per cent of the manufacturers signified their intention of closing. According to the American Lumberman of December 9, 1905, page 31— The combination mills — that is, plants where lumber and shin- gles are made conjointly — have arranged to curtail production to the extent of 60 per cent of their outputs. This general action on the part of the manufacturers will relieve the car shortage situation immediately. The combination mills sustained the curtailment movement, favor- ing the close down in part because it would help to relieve a car short- age at this time interfering with the lumber shipments. The promoters of the Shingle Mills Bureau first agitated a close down for three months (to begin Dec. 1, 1905) among all plants in Whatcom, Skagit, and Snohomish, the three most important shin- gle counties in Washington. Meeting with complete encouragement in these counties, the crusade was carried into all the other shingle- producing counties of the State until one great central organization was perfected to conduct curtailment. The concerted shutdown went into effect on December 1 according to schedule, under agree- ment to continue two months, however, instead of three. Certified checks, ranging from $200 to $1,200 — according to the size of the m ill * — were deposited with the president of the bureau as evidences of good faith, to be forfeited if any of the mills in the agreement should cut shingles during the restricted season. The conditions which led to this close down, and the strenuous efforts put forth to secure it, were summarized by the American Lumberman of December 9, 1905, page 31, as follows in an article on "Curtailment of the Cut of the Shingle Mills of Washington," appearing under a Seattle date line of November 30 : As the result of some of the hardest and most persistent work in the lumber history of the Pacific coast, the work having extended over eight months, and especially during November, a "sweeping majority" of shingle manufacturers in Washington will close their mills tonight and will keep them closed until February 1. 1 The basis was S50.00 for each upright machine. PBODUCTION AND WHOLESALE DISTRIBUTION. 785 The conditions that have led to a close down of over 90 per cent of the shingle mills in this state have been: First — Annual recurrence of lack of demand for shingles during the winter months. Second — Usual disorganization of working forces during the Christmas-New Year's holidays. Third — Necessity for overhauling plants and making repairs. Fourth — The car shortage. The first three conditions were certain factors when Dan W. Bass, now the energetic president of the Shingle Mills Bureau, set out at the head of a small but earnest group of manufacturers pledged to the close-down movement. Advancing the movement day by day and often night by night the devoted group humorously styled the "forlorn hope" grad- ually overcame opposition, which showed itself in the short- sighted selfishness of some manufacturers and the fainthearted- ness of others, until the evils of unintelligent competition became plain. The influence of brokers whose interests at first merely, centered in the manipulation of the market was gradually won over until but few remained who were unwilling to help establish conditions that were almost vital to the manufacturers of the state. The curtailment campaign carried on by the Shingle Mills Bureau obtained support from other organizations. The Pacific Coast Lum- ber Manufacturers' Association at its November 24, 1905, meeting appointed a committee to canvass the cedar mills on the subject of curtailing production. At the annual meeting of the association December 12, 1905, the committee reported that "all combination mills, with but two exceptions, have agreed to curtail their output during the winter months." The minutes of this meeting also contain the following: Total number of straight mills in state 299 Number of mills agreed to close for 60 days 252 Mills not agreed to close 47 Daily capacity of mills closed . 25, 340, 000 Daily capacity of mills not closed 4, 530, 000 Total capacity 29,870,000 Keports indicate that 92 per cent of the shingle production has been closed down for 60 days. In addition there is a lumber cur- tailment amounting to 78,000,000 feet. Word was sent to the Shingle Mills Bureau that both the redwood shingle associations, representing every shingle mill in California with the exception of two, would join in the curtailment movement. Assurances were also received that many British Columbia manufac- turers were disposed to lend their assistance. The year closed with prices rising in the first sharp pitch of the rapid and continuous advance, which, during the 21 months from August, 1905, to June, 1907, raised prices of "clears" from about $1.55 per thousand, at which sales had been made for over a year OKnano i a Kn 786 THE LUMBER INDUSTRY. previous, to the unprecedented height of $3.20 per thousand. The course of these prices is graphically shown on Diagram 27 (opposite p. 830). The position is not taken in this report that the price activities of the shingle manufacturers, in the carrying out of their curtailment and price-list policies, were wholly responsible for this advance of prices. There were other causes not connected with the shingle manufactur- ers' price activities which affected the demand, such as the general prosperity of the Northwest in 1905 and 1906 as well as the car shortage, and the "embargo" declared by the Great Northern and Northern Pacific railways on eastern shipments which began in the last half of January, 1907, and continued until the latter part of March. The few cars which manufacturers were able to ship east naturally sold at abnormally high prices. Furthermore, because of the limited market that could be reached by the shingle manufac- turers, they had to remain shut down because of lack of cars, not- withstanding the high prices of their product. It is apparent, how- ever, that the organized price activities during this period contributed materially to the increase in price. A report of a mass meeting of shingle manufacturers held in Seattle December 19, 1905, appearing in the Pacific Lumber Trade Journal of January, 1906, contained the following: In calling the meeting to order President Bass reported that out of 299 straight shingle mills in Western Washington, 252 mills were then cooperating in the close down policy, and out of forty-seven mills outside the fold, not to exceed twenty-five were able to operate steadily owing to log jams, water conditions, and the car shortage. At the meeting five more mills signed up the closing agreement making 257 out of the possible 299 mills to be secured. He also stated that the mills had up $120,000 in cash forfeitures with which to bind their agreement and the actual cur- tailment effected was not short of 36,000,000 shingles a day. At this same meeting President Bass called attention to the assist- ance rendered to the manufacturers in this close-down "by the banks of Seattle, the machinery houses, the lumber journals and the daily press." 1 The following resolution was unanimously adopted: 1 Whereas, The combination cedar manufacturers of the State of Washington have, by curtailing the production of shingles and co-operation in the close-down movement, reduced the output of their mills by 224,000,000 shingles thereby largely contributing to the success of our movement. It is the sense of this meeting that the straight shingle manu- facturers of Washington, here assembled, extend a vote of thanks to the combination manufacturers for so greatly aiding in the success of the close down movement. 1 Pacific Lumber Trade Journal, January, 1906, p. 46. PRODUCTION AND WHOLESALE DISTRIBUTION. 787 All sources of information indicate that the close-down was a com- plete "price-manipulating" success. The extent and effect of this close-down was described by the Pacific Lumber Trade Journal for February, 1906, as follows: The "close-down" was an absolute and unqualified success. Ninety-three per cent of the shingle manufacturers in Western Washington were identified with the movement and not one broke the agreement. As a result of this curtailment probably 5,000 cars of shingles were kept off the eastern markets during a season when shingles cannot go into consumption and when buying is of a purely speculative nature. The benefit that this ' ' close down " has been to the manufacturer is represented in an advance of from thirty-five to fifty cents a thousand on the several grades — the ruling offers to the mills on February 1 being $1.95 for Clears and $1.70 for Star A Stars. If these prices slump it will be the fault of the manufacturers who now have the situation well in hand, and, by co-operating can eliminate many of the unnecessary evils that have demoralized the industry in former years, particularly the year of 1905. Prices continued to advance throughout 1906. Under date of March 10, 1906, a circular letter was sent out by D. W. Bass and R. W. Douglas, of the Shingle Mills Bureau, soliciting stock subscriptions to the Shingle Mills Bureau, in which they stated: As a result of information furnished by the Bureau, followed by the co-operation of the shingle manufacturers with their Central Committee, you are receiving from $80 to $100 pee CAR OF SHINGLES MORE THAN YOU WERE RECEIVING LAST FALL. What the Bureau has done, is only an earnest of what it can do for you in the future if you support the bureau. The Shingle Mills Bureau attempted to establish the f. o. b. mill price of shingles and fixed the wholesaler's profit at 10 cents per thousand. The object desired in protecting the wholesaler was to secure his hearty cooperation in maintaining the prices adopted by the Shingle Mills Bureau. A "private and confidential" circular sent out by D. W. Bass and R. W. Douglas, dated April 21, 1906, con- tained the following regarding the relations between manufacturers and wholesaler: Eastern market conditions are very unsatisfactory to whole- salers because some wholesalers have been selling shingles on a margin of only 5 cents per M or even at net cost. These unsat- isfactory conditions are largely due to lack of harmony on the part of wholesalers. According to several leading wholesalers, the above conditions are due, in a measure, to the fact that some manufacturers have been selling retail and lineyard dealers at prices only 5 cents per M higher than the prices at which they sell the wholesalers, and in some instances even at the ruling market price. 788 THE LUMBER INDUSTRY. Such sales made by manufacturers to retail and to lineyard dealers force wholesalers to compete with manufacturers,— oblige wholesalers to try to break manufacturers' prices. On the other hand, wholesalers who sell for the same prices at which they buy force certain manufacturers (who in times past have established selling connections with retail dealers under special conditions), to sell those retail dealers at the same prices at which they are selling to the wholesale trade. Sales made under the above conditions by either manufacturer or wholesaler, act and react on each of the two branches of the industry. Manufacturers, will, therefore, in the end profit greatly by selling through legitimate wholesalers exclusively, at the ruling market price, — if they find that they must sell some retailers they should do so only at an advance of 10 cents per thousand over the ruling market price at which they sell to the wholesaler. Wholesalers will in the end profit greatly by selling to the retailers at at least 10 cents per thousand above the price at which they buy. Wholesalers and manufacturers should each protect the other, thereby preventing demoralized market conditions which bring confusion and loss to both branches of the shingle industry. Business harmony is the best business policy for manufacturers, wholesalers and retailers alike. During the first four months of 1906 the Shingle Mills Bureau sent frequent circulars to its members informing them of market condi- tions and prices. Some of the Washington brokers made a practice of offering the shingle manufacturers less than the Shingle Mills Bureau prices. The "bear" movement was continued by some brokers and on May 5, 1906, according to the Pacific Lumber Trade Journal, May, 1906, page 20 — R. W. Douglas, organizer of the Shingle Mills Bureau, outlined a plan for a permanent closedown agreement among the manu- facturers of shingles, and set forth the following, as leading factors in such a permanent agreement: Each shingle manufacturer in Washington should sign an agreement binding himself to close his mill upon receiving a 30 days' notice from the trustees of the Shingle Mills Bureau so to do, further binding himself that within 15 days after receiving such notice he shall deposit with a treasurer to be decided upon, a certified check for amounts relatively the same as those de- posited during the last closedown. Mr. Douglas further stated that in order to bind the manufacturers to promptly deposit the certified checks within 15 days after receiving closedown notice, that they should at the time of signing the close-down agreement deposit with the treasurer an amount equal to one-fifth of the amount of the close-down forfeit, the said amount to be in the form of a certified check, to remain at all times in the possession of the treasurer, and said one-fifth amount to be forfeited through the treasurer in the event of the manufacturer's failure to at any time deposit the full amount of his close-down forfeit within 15 PRODUCTION AND WHOLESALE DISTRIBUTION. 789 days after being requested so to do by the trustees of the Shingle Mills Bureau. On the 1st of February of each and every year, the manufac- turers could by giving a reasonable notice, terminate his agree- ment, and withdraw his preliminary forfeit, otherwise the agree- ment should continue. The plan was favorably received. The cooperation of the British Columbia manufacturers in con- trolling the output of red-cedar shingles was pledged by their rep- resentatives, according to the account in the Mississippi Valley Lumberman of May 11, 1906, page 28: Seven representatives of British Columbia mills attending the meeting declared that Canadian manufacturers will unite in any closing movement inaugurated by Washington mills. They further declared that if they could not stay closed the entire sixty days they would keep their shingles out of American ter- ritory during the closed period. D. W. Bass and R: W. Douglas sent out the following circular letter under date of May 12, 1906: At a meeting of the Trustees of the Shingle Mills Bureau held in Seattle this day, at which every member of the Board was present, the question of closing the mills was brought up and discussed. After full consideration it was unanimously voted that on ACCOUNT OF THE WEAKNESS OF THE MARKET, SHINGLE MANU- FACTURERS OF THE STATE BE AND THET ARE HEREBY REQUESTED TO CLOSE THEIR MILLS ON THE EVENING OF WEDNESDAY, MAY 16TH, 1906, AND REMAIN CLOSED UNTIL THE MORNING OF THURSDAY, MAY 30TH, 1906, COVERING A PERIOD OF TWO (2) WEEKS. The Bureau wishes to further state that we have the pledge of fully 85% of the straight shingle and combination mills of the State in support of this movement to PROTECT THE SHINGLE MARKET FROM A RAPID DECLINE. D. W. Bass in a "private and confidential" bulletin sent out under date of May 21, 1906, said: The close-down is the most complete close-down ever had in the history of the shingle business, being better than the close- down last winter, there being about 15 mills in operation out of a total of 380 straight and combination mills in the State. We are in hopes of getting the 15 mills closed and are working to that end. The names of the mills running will be published after the close-down. 1 There is a feeling among a great number of manufacturers that the close-down should be extended for a period of one or two weeks, or to such time as the Trustees think the market con- ditions would remain steady at SI. 80 and $2.00. 1 The American Lumberman of June 2, 1906, p. 48, quotes President Bass as follows: We have every mill in the Grays Harbor country, every mill in Thurston County, all in Skagit County, except three: all Everett mills, except the Seaside and Blackman; every mill, except one, in King County; nearly all in Pierce County and every combination mill in the state, excepting the Whatcom Falls mill, of Bellingham, and E. J. McNeely, of Tacoma. 790 THE LUMBEE INDTJSTEY. PEIOES. The wholesalers or brokers are refusing to maintain prices set by the manufacturers at the mass meeting of May 5th, and are only offering the mills $1.75 and $1.95 and refusing to advance the price East thus forcing the manufacturer to bear the loss. The sole power of maintaining a steady market rests with you and with you alone — that is to refuse to let shingles go without the price of Stars at $1.80 and Clears $2.00 at the mill, or remain closed down until the price is paid. Just as many shingles are sold at the above prices to manufacturers as at cut prices. Only so many shingles will be used if you give them away or get a fair price for your goods. Every thousand sold at less than $1.80 for Stars and $2.00 for Clears is a break in your chain and will force you to sell more at less. Stand fibm and eefuse to delivee foe less than $1.80 and $2.00 if you wish a good price the balance of the year. According to a letter of R. W. Douglas, under date of May 28, manufacturers representing over 90 per cant of the output had closed their mills for the general close-down period of two weeks. The American Lumberman of June 30, 1906, page 53, reported: The Shingle Mills Bureau has adopted the annual shutdown agreement, the resolution reciting that it shall remain in effect for two years. During this period, without other formal notice, all the shingle mills belonging to the bureau will close their plants from December 16 to March 1. The agreement is the same as that offered by the Whatcom County mills. The bureau now has a membership of 365 mills and the num- ber is constantly being added to. Before the middle of next December it is confidently expected the few remaining outsiders will have been taken in and the annual shutdown be complete. Within the next few days the agreement will be circulated among the mills for their signatures. On July 3, 1906, D. W. Bass sent out bulletin No. 20, in which he made the following reference to the effect of the strike upon the close-down movements: The strike has greatly benefited manufacturers by helping to sustain the shingle market, as the strike has been very general in Skagit and Snohomish counties, and fairly heavy in Chehalis county, although in other counties it has been relatively ineffective. Without the strike a close-down of several weeks would have been necessary for the protection of the market, which was especially weak with respect to Extra *A*s. It was a foregone conclusion that prices would have declined 10 or 15 cents per M by July 1st if the supply had not been curtailed. The price of Clear shingles would have been forced down in sympathy with the decline in Stars. D. W. Bass presented a paper at the semiannual meeting of the Pacific Coast Lumber Manufacturers' Association held at PRODUCTION AND WHOLESALE DISTRIBUTION. 791 Seattle, July 27 and 28, 1906, in the course of which he made some rather extravagant claims for the work of the Shingle Mills Bureau: The trade up to the first of July of this year was not as great, in the number of cars shipped, as during the first six months of the year 1905, there being shipped during the first six months of 1905, over the N. P., G. N. and C. P. railroads from the state of Washington a total of 19,334 cars. In the same period of 1906 there were shipped 16,634 cars, being 2,700 cars less, but at the same time the manufacturers have made more money than they made on the total shipments of the whole year of 1905. The manufacturers have received on the 16,634 cars shipped during the first six months in 1906 an average of $90 per car more than they received prior to December, 1905, the time when the Shingle Mills Bureau was formed, through the information as to market conditions disseminated by the bureau. The 16,634 cars, at $90 a car, made a total of $1,497,060 added to the wealth of the state. The investment of the bureau, to gain this information, to the shingle manufacturers of the state, has been less than $5,000.00 up to date, or one-third of one per cent — i. e., for every dollar put into the bureau by the manufacturer, the bureau has returned $300 to the manufacturer, and this within six months. There is no other business in the world where manufacturers have, by contributing $1.00, realized $300 from the investment, and if manufacturers would readily contribute more money in order to carry on the information work of the bureau, there are vast fields which could be opened up for red cedar shingles. On August 24, 1906, a meeting of 90 per cent of those engaged in wholesaling shingles was held in Seattle at which it was decided that it would be better for every one concerned to maintain stable prices, and it was determined to keep the list where it was and combat any attempts to raise it. 1 During this period the Shingle Mills Bureau and many of the wholesalers were attempting to maintain the bureau prices and were averse to further advances. They feared a reaction, and held various meetings to oppose such advances, fearing a decrease in demand, and that there would be a reaction and a demoralization of the market. 2 At a meeting of the Pacific Coast Lumber Manufacturers' Asso- ciation held in Tacoma, October 27, 1906, President Bass of the Shin- gle Mills Bureau stated that the bureau had made 600 per cent for every shingle manufacturer in the State during 1906 and that for the first time a stable market had been maintained at $1.80 for stars and $2.15 for clears at the mill and that this price would be maintained until the end of the year. 3 This statement, as well as the one made at the July meeting (see above), was given considerable publicity 1 American Lumberman, Sept. 1, 1906, p. 66. sidem, Sept. 22, 1906, p. 69. "Idem, Nov. 3, 1906, p. 44, and The Timberman, Nov., 1906, p. 49. 792 THE LTJMBEB INDUSTR?. in the lumber press.. Such extravagant claims on the part of asso. ciation officials were not usual in 1906, though before 1906 they had been more common. The high prices of this period resulted in a vastly increased output. The Shingle Mills Bureau called attention to this increased produc- tion in carrying on the campaign for the proposed annual close-down. At a meeting held at Seattle, November 10, 1906, 250 shingle mills were represented, and they all agreed to close on December 15 and remain closed until February 18. The Shingle Mills Bureau was aided in its curtailment efforts by the car shortage, which became serious in the late summer of 1906 and lasted for almost a year. The situation at this time is de- scribed in the following from the American Lumberman of December 15, 1906, page 60: Whether or not there will be an official closedown of all the shingle mills of the state on December 15 for seventy days, under the direction of the Shingle Mills Bureau, is a question. As a matter of fact it will make little difference. At present 75 per cent of the straight mills of the state are closed owing to the car shortage and a large percentage of the balance have curtailed their output for the same reason. Yesterday a meeting of the combination mills was held in the Lumbermen's club for the purpose of discussing a proposition to close their shingle departments for half the period of the straight mill closedown. While no agreement was reached and no action which would be binding was taken the general sentiment was that if the situation demanded it the mixed mills would do their share to help out. The Bureau is still engaged in having the official closedown agreement signed by the straight mills. The signatures so far obtained are small, and among many of the miltmen there is a feeling that no official close down should be called, since cir- cumstances have closed so many of the mills, and that the manufacturers should be allowed to resume operation at any time the car situation and the market will warrant. This car shortage made it unnecessary for the Shingle Mills Bureau to require a signed agreement. The agreement entered into at a mass meeting of manufacturers held in Seattle December 13, 1906, was reported in the American Lumberman of December 22, 1906, page 57, as follows: At a mass meeting of shingle men held in the Lumbermen's Club Thursday afternoon an oral agreement was effected to close all the straight shingle mills of the state from December 15 to February 18, a period of sixty-nine days. The session lasted all afternoon and the decision was that it would be unnecessary to put into effect the regular signed contract, as the car shortage has already closed 75 per cent of the straight mills. While there has been no official action on the part of the PBODTJCTION AND WHOLESALE DISTRIBUTION. 793 combination mills it is the understanding that they will close down during January. The old closedown committee of twenty- four was reappointed and authorized to terminate the close- down at any time it should seem expedient or advantageous to the manufacturers. Should the situation cause the com- bination mills to continue cutting shingles during January the committee is given power to call the closedown off at any time and direct the straight mills to resume. As the matter is viewed at present there will be little cutting of shingles during the close-down period, the car shortage controlling the situation. This oral agreement was not well maintained. Many mills had been forced to curtail on account of their inability to secure cars at a time when both the demand and price were very satisfactory. The American Lumberman of January 5, 1907, page 78, stated: By January 15 a majority of the shingle mills of the State will have resumed operation. Already the oral close-down agree- ment has been broken. The mill price on all grades of shingles is advancing and the car situation continues to control the mar- ket. With the wholesalers' club, organized to hold prices level, disbanded, it is predicted clears will go to $3 before March. The car shortage continued during the greater part of 1907, and prices rose rapidly during the first half of the year. There was a tem- porary decline in prices in June, which led to preparations for a prompt curtailment of the output. 1 On June 12, 1907, E. W. Douglas wrote a letter to E. H. Habighorst, secretary of the Columbia River Shingle Association, in which he explained the decline in prices at this time as follows: The "bear" operators are making the strongest possible efforts to exert a depressing influence on the market — these efforts will perhaps be continued for the remainder of the month. The market is yielding slowly to these attacks. We are carrying on a consistent campaign to correct the retail disposition in the East. A report from Everett, Wash., dated June 21, 1907, stated: 2 An important meeting was held recently by the Everett Man- ufacturers' Association, represented by every shingle manufac- turer in the city, and called for the purpose of thoroughly dis- cussing market conditions and the alleged action of wholesalers to beat down prices with a view to so lowering current quotations that they would be able to fill a large number of orders written last winter, which at this time it is impossible to do without causing loss. The association cast a unanimous vote to curtail outputs by closing for a period of thirty days for straight mills and two weeks for combmation plants. The mills of this city and Marysvule are idle and will, it is believed, remain so for the • Mississippi Valley Lumberman, May 31, 1907, p. 34. > American Lumberman, June 20, 1907, p. 67. 794 THE LUMBER INDUSTRY. period above stated. The meeting was given to understand that the Ballard mills would follow suit for the same length of time. The association also passed a resolution prohibiting the sale of stars below $2.50 f. o. b. Everett mills. The action of the asso- ciation affects three combination mills and fourteen straight shingle plants. The American Lumberman reported in its issue of June 29, 1907, that "from 60 to 70 per cent of the shingle mills of the state have closed for thirty days at least and some will not open for a much longer period." The extent of this curtailment is further shown in the issue of July 20, 1907, page 76, by the following report from Seattle under date of July 13: "According to reports received at the Shingle Mills Bureau the output at the end of this week is about 65 per cent of capacity." Following this curtailment, and by the firm stand of the manufac- turers, prices of red-cedar shingles again went up to the abnormally high point that had been reached in May. The market was weak and a decline in prices began in August and continued until July, 1 908 . This decline was almost as abrupt as had been the spectacular rise which began the latter part of 1905 and culminated in the high prices of May to July, 1907. The decline was occasionally arrested by the efforts of manufacturers through close-downs and price agreements, as for instance, by a movement which began in September to bring about a close-down. A committee was appointed, at a mass meeting held October 10, to call upon all mills not represented at a former meeting to curtail from November 1, 1907, to March 1, 1908. A report from Seattle dated October 19, 1907, appeared in the American Lumber- man of October 26, 1907, page 64, describing the progress of the close- down campaign and the method of securing this curtailment as follows: The committee appointed at the shingle manufacturers' mass meeting, to interview all mills not represented and inform them of the unanimous sentiment of the gathering for a closedown of the shingle mills of the state from November 1 to March 1 next, is hard at work. The state has been districted for canvassing purposes, each member taking a part of the territory. According to reports the general sentiment for the close down is almost as unanimous as it was at the meeting. A few small mills in the interior declare they will be unable to close but their output will not be sufficient to affect the movement. While March 1 is spoken of as the time for resumption, either before or after that date may finally be decided upon, as the term of inactivity pro- gresses. The situation will be handled wholly as circumstances dictate. The following quotation from the Mississippi Valley Lumberman of October 25, 1907, page 27, shows that the Shingle Mills Bureau PRODUCTION AND WHOLESALE DISTRIBUTION. 795 did not desire to assume the responsibility for the close-down and that the leaders in the movement hoped to avoid legal complications by bringing about a curtailment by a "gentlemen's agreement" instead of requiring a signed one as in former years: There is apparently some question as to the success of the proposed close-down of shingle mills. Many of the larger mill owners are hesitating to join in the movement. In order to avoid the trust statute of the Sherman law no written agreement is being asked by those having the movement in hand. There is simply to be a "gentleman's agreement" not to open for four months. None of the officials of the Shingle Mills Bureau, with the exception of Secretary Douglas, are taking a part as officials to make the close-down successful, yet all members of the bureau have by word of mouth promised their support. From the northern part of the state comes the news that few of the mills there will agree to the close-down. By the middle of December the shutdown was described as "the most complete ever known." 1 On January 31, 1908, the Mississippi Valley Lumberman reported that "ninety-five per cent of the shingle mills of Washington at a recent date were down." According to the Seattle news in the American Lumberman of March 7, 1908, page 121, the following action took place: In the hope of stopping the operation of the mills, wholesalers met and agreed upon a greatly cut list, placing stars at $1.40 and clears at $1.80. In spite of this action, however, millmen at a meeting refused to agree upon a close-down, so the quotations on shingles are decidedly weak. In April a new scale of prices was made by the Shingle Mills Bureau, based upon an advance in freight rates. The Mississippi Valley Lum- berman of April 10, 1908, on page 30, says: It is generally believed that the effect of this action will be a virtual suspension of all operations in the lumber and shingle mills, for it is not thought that the east will call for northwestern products, and the manufacturers are not willing to go ahead, making lumber and shingles if they have no hope of profiting thereby. There is just barely a margin of profit on shingles at the new quotation. A general close-down embracing about 85 per cent of the mills began the middle of June, 1908. The latter part of July a report from Seattle stated: 2 About one-third of the shingle mills in this State are closed down, although the tendency during the last few weeks has been to open up. Prices reached their lowest point in June and July, 1908. ' American Lumberman, Dec. 14, 1907, p. 83. * Idem, July 25, 190S, p. 94. 796 THE LUMBER INDUSTRY. On August 31, 1908, K. W. Douglas, of the Shingle Mills Bureau, sent out a "private and confidential" bulletin in which he said: Your success or failure in the shingle business depends on what arrangements you and other manufacturers make now to avoid useless over-production during the winter; that is, whether you make preparations for closing your mill on December 1st, and for keeping same closed until March 1, 1909 — and more especially, that you persuade all of your neigh- bors to do like-wise — or, whether you delay such action for a week or two longer — when it will be too late for you to act with any hope of success. The present temporary advance in prices would be one of the greatest misfortunes that could befall the industry, if it in any way influences manufacturers to delay making preparations for a three months' close-down — beginning December 1st. There will be practically no true or consumption demand for shingles during the winter months — ■ There will be no considerable car shortage — The Hill-Harri- man railroad companies have had unusual opportunities to put their lines in condition to meet transportation demands, and the North Bank and the Milwaukee roads will add to the shipping facilities during '09. Practically no true demand for shingles this winter — The certainty of a full supply of empty cars next year — Have you talked this over with all neighboring manufacturers? The mills began to close down during the early part of November. 1 November 27 it was reported that * — Forty per cent of the mills are said to be closed down, and it is expected that after December 1st, the production will be shut "off almost entirely and that the mills will remain closed through the winter. This close-down movement was handled by committees represent- ing each important shingle-producing county. The effectiveness of the work of these committees is shown in the following: 3 The mills throughout the state are closing down due to the action of committees of seven from each county who are forming organizations with the hope of getting the shingle market on a better working basis. If this committee deems a close down necessary the mills that are members thereof are notified to this effect, which is all that it is necessary to bring about the proper result. This is a good move and should make a better market for shingles from now on. During the latter part of December a report from Seattle stated : * Shingles are stiffening in price, believed to be the result of the general closing down of the mills throughout the state. A meet- ing was held in Ballard the last of this week looking toward a close down of the mills in King county until a better price could 1 American Lumberman, Nov. 7, 1908, p. 85. 'American Lumberman, Dec. 12, 1908, p. 91. • St. Louis Lumberman, Dec. 1, 1908, p. 36. ' Idem, Dec. 26, 1908. PRODUCTION AND WHOLESALE DISTRIBUTION. 797 be obtained, which it is believed will be brought about. It is estimated that 40 per cent of the mills in this state are closed down at the present time. In the middle of January, 1909, 85 per cent of the mills were reported closed down. 1 The concerted action of the mill men in this close-down was aided by severe weather conditions the latter part of January. 2 The close-down continued throughout the month of February. The last of February 90 per cent of the mills were reported closed. 3 Early in March the close-down was made still more effective as shown by the following: 4 The manufacturers have strengthened their position this week by making the close-down of the mills on the coast more effectual than it has ever been before. This week the combination rrnlls which have been running all winter have decided to close down for at least two weeks, and it is the belief of some interests that they will remain closed for a longer period if conditions warrant. This means that at this time there are no shingles being manu- factured, that there are very few on hand at any point on the coast and scarcely a two weeks' supply for a good demand at all the eastern storage points. Part of the mills started up during the latter part of March and first part of April. 5 The results of this long close-down appears not to have been entirely satisfactory to the manufacturers. A report from Everett, Wash., dated May 22, stated: 6 The shingle market has been on the decline, but as yet there has been no concerted effort to curtail production. The effect of the long shut-down this spring was such that some of the mill men have lost faith in a shut-down as a panacea for all the troubles of the market. There seems to be a large demand holding back and every time there is a small reduction in the price of shingles a lot of orders come on the market so that the decline is very slow and as the price of shingle logs has declined the mills are in about the same position now as when they started up in the spring. The customary July 4 close-down took place from July 1 to 12.' Shingle Manufacturers' Agency. — On September 27, 1909, a selling company was formed under the name of the "Shingle Manu- facturers' Agency." C. J. Flack was elected manager of the com- pany, of which eight manufacturers were members. In March, 1910, a concerted effort was made by the Shingle Manu- facturers' Agency and the leading wholesalers to fix and maintain 1 American Lumberman, Jan. 16, 1909, p. 94. 'Hem, Jan. 23, 1909, p. 104. • Mississippi Valley Lumberman, Feb. 26, 1909, p. 47. 'Idem, Mar. 12, 1909, p. 40. 'Idem, Apr. 2, 1909, p. 39; American Lumberman, Apr. 10, 1909, p. 87. •Idem, May 28, 1909, p. 36. ' American Lumberman, July 10, 1909. 798 THE LUMBEK INDUSTRY. prices. About March 20 the wholesalers met and agreed to maintain prices at $1.80 for stars and S2.20 for clears f. o. b. mill. They imme- diately began to circularize both the manufacturers and the trade informing them of the advance in prices. Two or three wholesalers did not become parties to this agreement. There was a serious car shortage in December, 1909, caused by strikes on both the Great Northern and Northern Pacific railways. About 70 per cent of the shingle mills in the Seattle territory were reported closed at that time. 1 On April 6, 1910, the Shingle Manufacturers' Agency sent out a circular to the mills reading as follows : There is a determined effort on the part of two or three whole- salers to break the market if they can. We are very pleased to say, however, that the most of the wholesalers are doing every- thing they can to sustain the market. However, the whole question is up to you. We strongly advise that instead of placing orders with the railroads for three or four or five cars that you make it one or two. Stocks in transit and at the Transfer are now lower in number than they have been since the early part of 1907. There are very few Shingles in the various yards throughout the country, — dealers are simply waiting for a break in the price, and if you will just be conservative as to the number of cars that you load within the next two or three weeks and not force an excessive number of cars on the market the prices that you are now obtaining can be had throughout the season. In any event STICK! STICK! STICK! for $1.80 for Stars, $2.20 for Clears, $2.35 for Eurekas and $2.60 for Perfections. This Agency is owned and controlled by a number of Shingle manufacturers and our interests are to obtain as good a price as is possible for the mills. The present prices, we believe, can be maintained if you will stick for them. Circulars were sent to the mills daily by different wholesalers in turn who were in the agreement urging the mill men to hold for the agreed prices. The wholesalers met frequently at luncheons and planned their campaign. The Shingle Manufacturers' Agency wrote the Duncan Shingle & Lumber Co., of Kansas City, under date of April 8, 1910, describing conditions as follows: Keferring to your Night Letter, we have just wired you as per confirmation attached. Things looked pretty bilious here for a day or two but the outcome of it was that we had a meeting of the leading wholesalers and all of them agreed to hold for $1.90 and $2.30 to the trade and have agreed also to pay the mills $1.80 and $2.20. There are about fifteen concerns who are sustaining the market and we would like very much to have the information that we ask for, as to who are now issuing the low lists which are affecting the market unfavorably. 1 American Lumberman, Dec. 18, 1909, p. 87. PKODUCTION AND WHOLESALE DISTEIBUTION. 799 Some of the circular letters sent out at this time denounced the "bear" wholesalers as "unscrupulous wholesalers" and "pirates." The following is from a letter written April 12 by a manufacturer: We are in receipt of yours of the 11th inst, and have carefully- read same, and we want to congratulate you for sending out such a letter, it makes us all feel good, and you can rest assured we can be depended upon not to do anything to help the Pirates that are trying to break the market, but on the contrary will not sell them at all if we know it. The only mistake you made was not to tell us exactly who these fellows are, if you know, and if you did not feel like doing so in an open letter of this kind, we will appreciate it if you will confidentially tell us who they are, so we can be on our guard, and either not sell them at all, or quote them at least 10c higher. If you feel at liberty to give us this information, we will consider it as strictly confidential, and under no circumstances give you away in the matter, but we would like to have them spotted, so as not to help them in their nefarious work. On April 13 and 14 numerous circulars were sent to the manufac- turers by the larger wholesalers stating that an advance of 5 cents per thousand would be made. April 20 was the date specified by some for the advance, while others stated that the advance would be made "next week," the "coming week," or similar expressions. Another "luncheon" of the wholesalers was held to consider the situation, after which a final effort was made to maintain the prices agreed to on March 20. More circulars were sent to the mills urging them not to cut prices. However, a break in the market occurred before the end of April and low prices continued until the close of the year. This break was followed immediately by a close-down. The Mis- sissippi Valley Lumberman of April 29, 1910, contains a report from Everett, dated April 23, 1910, stating: For one reason and for no reason therefor last Monday saw a lot of low price lists issue but the mills did not fall over them- selves to accept the low price offers that were immediately issued from the brokers' offices; instead the manufacturers immediately got together and canvassed the situation and decided unani- mously to close their mills till such time as orders could be had at the old prices. Ballard mills closed on Thursday and Everett Friday night. The telephone was kept busy by the mill men and by Saturday probably 75 per cent of the capacity of the shingle mills was idle. During the coming week which is at what is usually the time of greatest demand there will not be within 80 per cent of the ordinary amount of shingles produced and if eastern buyers think that they can continue to dictate unprofita- ble prices to the shingle producers of Washington it begins to look as if they had another think coming. During the latter part of the week buyers who had commenced the week by advising that they did not want shingles at within ten cents 800 THE LUMBER INDUSTRY. of the former prices were out trying to buy at only five cents off. Reports were received here of wholesalers quoting as much as 15 cent reduction to the eastern trade. At present outlook the more orders they get the worse they will get stung and if the average manufacturer has much to say about future prices they will get stung good and hard and no one here will mourn. In a report to the same journal from Seattle, under date of April 24, occurs the following: The Ballard manufacturers were first to start the suspension movement Thursday, and the entire Puget Sound country quickly fell in line. Friday eighty-five shingle mills in the Bellingham territory suspended operations, and threw 1,500 men out of employment. Seventy-five more mills followed suit. Eleven big mills in Ballard, employing 350 men, ceased in unison. Sixteen mills at Everett closed the same day. The only mills now operating in Ballard are the Bolcom, and the Seattle Cedar Lumber Company's plants. Fifty mills in Pierce county are affected by the movement, while the southwest is falling in line. In a report from Seattle, in the May 6 issue of the same journal, it was stated that 300 mills had been closed and 9,000 mill employees thrown out of work. During September and October, 1910, there was considerable cur- tailment of production, but apparently it took place without concerted action on the part of the shingle manufacturers. The situation in 1910 was unsatisfactory to them, and an attempt was made to form a stronger organization. The result was the Red Cedar Shingle Manufacturers ' Association. Red Cedae Shingle Manufacturers' Association. — The Red Cedar Shingle Manufacturers ' Association was incorporated in Wash- ington during January, 1911, but did not begin business until May. F. A. Traill was elected treasurer and manager. The association desired to obtain higher prices and to increase the use of red-cedar shingles, and it was hoped that the wholesalers, would cooperate with the manu- facturers in bringing about these desired results. The association was organized as a selling agency and the original intention was to handle all shingles through wholesalers. The wholesalers were to sell the shingles "in all cases at not less than the price we invoice to them at, but they can get as much more as they can and all excess can be used as they see fit either by allowing addi- tional commission to their salesmen, or taking the entire excess themselves." The association at no time has marketed the entire product of its members but each member has contributed to the support of the association on the basis of all his sales, whether made through the association or not. PRODUCTION AND WHOLESALE DISTRIBUTION. 801 Prices were on the decline during May and June, 1911. The trustees of the association held a meeting in the White Building in Seattle on June 3, at which the following action was taken: Thereupon the Manager reported that in his judgment it was not advisable for the association to start taking stock at the present time because of the condition of the market. He fur- ther reported and recommended that the association attempt to secure a close-down for one day to-wit, Saturday of each week until further ordered by the association. After thorough dis- cussion of the said matter, it was regularly moved and carried that the stockholders, together with all other manufacturers of shingles, be requested to close their mills on Saturday of each week, and to sign a written agreement to the effect that each of the manufacturers so signing the agreement binds himself to close down his mills on Saturday of each week, and if the market was in such a condition that a further close-down became neces- sary, to close for one day additional in each week. It was further moved and carried that meetings be held in each county or district where convenient during the following week, and that the Manager attend such meetings and discuss the movement with the stockholders as far as possible to secure a, complete close-down, the meetings to be held as follows : Ballard, on Monday June 5; Aberdeen, Tuesday, June 6; Everett, Wednesday, June 7 ; Sedro-Woolley, Thursday June 8 ; Bellingham, Friday June 9. It was further moved and carried that the trustees close their mills or the mills represented by them as individual members of the association in accordance with the above motion, regardless of whether the other stockholders close. The curtailment movement was immediately taken up vigorously by association leaders, who called upon the mill men and secured signatures to the agreement. On June 12, 1911, Manager Traill wrote E. E. Case, one of the trustees, of Raymond, Wash., regarding the curtailment, in part as follows: I just got back from Whatcom County Sunday morning and feel that I have had a very successful trip. We had a very good meeting in Everett and all of the mills signed with the exception of one, who is closed down now and will stay closed for some time. On Thursday, Proctor and Bergstrom, with one or two others, went out and signed up eighteen additional mills and Friday got still more, and Proctor advises that they have now curtailing fully ninety per cent of Snohomish County. I have not had time to check up yet but will do so this afternoon. In Sedro Woolley we got everyone who was at the meeting, and this took m about seventy per cent of Skagit County, and Pingry with one or two others went out in an auto and picked up practically all of the rest of Skagit County, there being only three or four mills left out, but we will have fully ninety per cent of Skagit County. In addition to getting our own members and several other mills on the outside, we have the promise from Clear Lake Lumber Co. to close down their ten machines and from Bloedell of the Larson 25030°— 14 51' 802 THE LUMBEB INDUSTRY. Lumber Co. to close down their Belfast mill with, I believe, six machines, so that we feel we had great success. On Friday at our meeting in Whatcom County, we had a very good turn out, and signed up practically everyone present. One man who did not sign signed the following day when we went to his mill. Mr. Hemmi took his machine and took Galley, the inspector, Mr. White and myself out through Whatcom County and we took in ten additional mills, and they will start out again this morning with other machines and round up the other part of the County. Out of ten mills we signed up Saturday five were not members of the Association, and while we could not get them to agree to come in as members of the Association, we have them thinking about it and may get them later. The following letter written to the Co-operative Shingle Co. of Bothell, Wash., by Manager Traill, under date of June 14, 1911, shows the extent of the curtailment at this time: You undoubtedly have heard of the movement that is on foot to curtail the output of shingles by closing down every Saturday until further notice. Our Association nulls have practically all signed up and we are getting quite a number of mills outside the Association, so that we have a larger percentage of mills signed up to close down than we have in the Association, and probably have at least eighty per cent of the Shingle mills of the State signed up to close down every Saturday. This may last until the first of the year and may last longer, but it would be much better to run five days, or even four if necessary, and make money, than to run six days and lose money. The Association will not be in position to take stock probably until after the first of July, but we hope to begin taking stock at that time and then gradually work the price up to a reasonable figure. Would be pleased to have a letter from you, advising that you will join with the other good people in this close down movement. The price policy of the association is touched on in the foregoing letter, and also in one of the same date, written by Manager Traill to J. H. Cavanaugh, of Anacortes, one of the trustees: The close down movement is going to be successful and already we understand prices have shown a slight tendency to get a little stronger. However, it will be a good thing for the prices to remain low enough to close the mills between now and the Fourth and keep them closed for a little while after the Fourth. We do not want the prices to get stimulated too soon, although the sooner we can start the prices up and keep them up so much the better. At a meeting of the trustees held July 1, 1911, Manager Traill reported that 80 per cent of the mills in the State had signed the one- day-per-week close-down. Whenever an association member was reported to be operating his mill Saturdays Manager Traill promptly took the matter up and urged that the letter as well as the spirit of the curtailment agreement be PBODTJCTION AND WHOLESALE DISTRIBUTION. 803 lived up to by all signers. For example, answering the report of one company, he wrote, under date of July 11, 1911: We have your favor of the 9th and are glad to have your letter and appreciate the shut down that you have made. At the same time you know how everyone feels when they are closed down Saturdays in accordance with the agreement with the rest of the mills and find other mills who are members of the Association running. It is the moral effect as much as the actual curtail- ment that we are after. Other mills do not take into considera- tion what shut down the other mills have made; if they are not curtailing the same as they are every week they get restless and uneasy and feel that if one party can run that they should be allowed to do so, and it is just this thing that we want to avoid. On July 7, 1911, the Red Cedar Shingle Manufacturers' Association issued circular No. 4, announcing that it would commence taking shingles on July 10. The association price for stars was $1.45 and clears $1.83; the circular stated that "the market conditions do not warrant our paying this price for stars." In referring to the position of the association regarding the prices quoted the circular stated: Your Trustees are determined to maintain these prices at any cost, and as fast as possible increase them, but to enable them to do this they will have to depend on our members to keep the supply within the demand. Stay down as long as possible. When you do start do not fail to observe the one day per week curtailment. This is very essential if we are to do you any food. If you can change from Stars to Clears, we think it will elp the situation somewhat as we have better facilities for handling Clears in transit than Stars, as Stars are little used beyond the Transfer, where transits must be billed. The original plan to handle all the output through wholesalers did not work so the association began to sell direct to the trade. Sales- agency contracts were made with wholesalers and manufacturers. In a letter of July 18, 1911, to the Mumby Lumber & Shingle Co., of Bordeaux, Wash., relative to a sales agency, Manager. Traill called attention to the obligation to maintain the association's eastern prices: We enclose herewith letter of appointment as Sales Agent for the Association, which will enable you to handle your Shingles direct to the trade, accounting to us at the end of each month for the lc per M which is due the Association. I do not know that there is anything to explain in this matter any more than is down in the letter of appomtment. Kindly acknowledge receipt of the letter and we will then list you and keep you posted on all eastern changes in prices. You understand that our eastern prices must be maintained as a minimum. You can get as much more as you want but not less. Any time that you have any surplus stock, send it in here and we will take care of it for you. 804 THE LUMBER INDUSTRY. By the latter part of July the association had succeeded in securing the cooperation of many of the wholesalers. On July 21, 1911, F. D. Becker sent the following night telegram to F. W. Shepherd, of Minneapolis: Twenty five wholesalers met No change since last week All still acting as agents selling Traill's stock his price and arrange- ment Hope same condition prevails with Minneapolis whole- salers Traill says he would rather hold stock in transit than sell cheaper If necessary he says he will curtail output The following reply of July 22, 1911, from F. W. Shepherd describes conditions in the Minneapolis market: We are this morning in receipt of your wire of the 21st, and are very glad indeed to have it. So far as the Minneapolis wholesalers are concerned, they are standing firm on shingles and working according to the prices and directions from Traill's Association and they seem to have the utmost confidence in it's ultimate success, but at the present time are not taking any business. But it is not owing to price — it is owing entirely to the lack of demand. Price won't sell just now — we have got to wait until there are some willing buyers. In our opinion, were it not for the Red Cedar Shingle Manu- facturers Association, shingles would be offering at $1.25 for stars right now, with no more trade than there is at the present price. It seems to be the consensus of opinion that very little buying will be done before about Aug. 15th, and then only a moderate amount. Viewing it from it's brightest angle, we believe there is several months of very poor picking in the lumber and shingle trade, immediately ahead of us. Prices should stand, and we believe they will, as no one should become discouraged on account of price — the demand is the whole thing. The following letter, dated July 25, 1911, written by Manager Traill to H. C. Angell & Co., of Grand Rapids, Mich., describes the progress of the association's work: It is gradually spreading. It is going to take a little time to get all the old prices eliminated but ultimately we think you will find that the Association prices will be practically agreed to by everyone; Waite has not signified his intention of working with us and we are not counting on him very definitely. We are sorry for this as he is a large handler of Red Cedar Shingles. He has signified his intention of trying to get our prices and he is inter- ested in getting higher prices, as he is very heavily interested in the manufacturing end here in the Sobey Mfg. Co., having the controlling interest in that company, and they have a big mill at Ballard and a large combination mill at Granite Falls. For your own information and in strict confidence, we would advise that the following wholesalers are now lined up with us: [Here follows a detailed list of the coast offices of the various firms. It comprises 32 firms in Seattle, 3 in Bellingham, 5 in Tacoma, 5 in Sedro-Woolley, 5 in Everett, 1 in Elma, 1 in Cen- tralia, and 1 in Aberdeen.] PRODUCTION AND WHOLESALE DISTRIBUTION. 805 The following members of our Association are mills who sell direct to their trade as our Sales Agents on the same terms, Co- operative Shingle Co., Doty Lbr and Shingle Co., Bridge Shingle Co., Hoff and Pinkey, Grasmere Shingle Co., Heath Shingle Co., McLeod Shingle Co., Chas. Williams, McGee Mill Co. In addition to these, we have advice from practically all of the combination Siding and Shingle mills to the effect that they will work in harmony with us and that the prices we offer our stock for will in all probability be followed by them. The following letter, dated July 29, 1911, by Manager Traill, shows the activity of the association in keeping the members informed as to the wholesalers that were not supporting the association: We have not received any of your Shingles so far. We under- stand that you are now operating and it is reported that you have been selling your stock to the Erie Mill Co. at Blaine. They are nice people but they are not supporting the Association prices and are out to the trade with a list 5c below the prices the Association is asking. They are making it hard for us to hold the wholesalers in line and to maintain prices in the organ- ization. We think they will probably later on accept a Sales Agency contract from us when we will be very pleased indeed to have any sales made to them, but in any case all sales should pass through the Association. You may not have understood this and we just call it to your attention. Any future sales that you make, kindly pass them through the Association and we will remit you direct. The H. B. Waite Lumber Co. was the largest and most influential concern that did not either become a sales agent or agree to support the association at this time. An attempt was made to secure the support of this company just prior to the close-down, which became effective August 12, 1911. Considerable correspondence on the subject took place between Manager Traill and H. B. Waite, president of the company. In a long letter of August 1, 1911, Mr. Traill de- scribed the price situation as follows: Business is slowly increasing, but I am afraid that if your good firm continues to quote the trade at $1.50 and $1.90 that other wholesalers will be forced to do the same, and this will naturally result in a difficult situation at this end of the line. The Erie Mill Co. of Blaine, 1 who have been out at $1.50 and $1.90, have withdrawn their prices, and they were the only other concern of any magnitude that we have any record of going out at $1 .50 and $1 .90. M. R. Smith Shingle Co. of Kansas City was out at these prices, and in some cases lower, but they are all withdrawn, and their lists which were out in Texas at $1.53 and $1.94 have also been withdrawn. While they are not affiliated with us in any way, they apparently are endeavoring to get the same prices that we are asking. •Compare with the Traill letter of July 29. The Erie Mill Co. apparently got into line with associa- tion prices. 806 THE LUMBER INDUSTRY. Touching on the legal aspect of the question he said: I do not think that any correspondence of this nature between us could ever be construed as violation of any Sherman law, and our attorneys advise us that the recent decisions of the Standard Oil Co. and Tobacco cases make it absolutely sure that our Association is strictly within the law. There was little doubt about it before but these recent decisions have practically eliminated whatever doubt there was. The following day letter outlining the terms of the Association Sales Agency was sent by Mr. Traill under date of August 4, 1911: Will be glad to furnish stock same basis as others. Sales Agency does not confine you to our stock, it only binds you to sell our stock our figures. Cancellations and complaints can be excepted if necessary, can then furnish any stock you require. Can hardly furnish stock to fill one ninety orders. In Mr. Waite's reply of August 7, 1911, declining to accept the agency, he touched on the legal aspect as follows: It is not the policy of this concern, nor has it ever been, to try to sell stock cheaper than somebody else; but it has been, and will be, our policy to do our own business in our own way, and not to become identified with any movement which we consider either a violation of Law or interferes with our own methods of doing business. The following correspondence indicates the nature of an "under- standing" which existed at this time between a large part of the wholesalers and the Red Cedar Shingle Manufacturers' Association, and it also shows the care that was being exercised not to put in writing any statement descriptive of the relations existing between the association and the wholesalers which might be considered a violation of law. A carbon copy of a letter dated August 12, 1911, written by L. R. Fifer, manager of the Pacific coast department of the Long-Bell Lumber Co., to C. L. Knowles, of the same company at Kansas City, Mo., on the subject of shingle prices, was sent to F. A. Traill, manager of the association. Paragraphs 4 and 5 of this letter were as follows : We have again wired you that the salesmen must adhere strictly to our instructions, that all quotations must be $1.95 and $1.55 and concessions made only where it is absolutely necessary to meet competition. We do not want to quote lower prices to anyone, verbally or otherwise under any circumstances, but if any of your cus- tomers show you lower quotations from responsible competitors such as H. B. Waite Lumber Co., and desire to place the business with us, then we are willing to meet the price. If salesmen do not follow these instructions it will be necessary to cancel this privilege. PRODUCTION AND WHOLESALE DISTRIBUTION. 807 Mr. Traill took exception to these paragraphs and wrote Mr. Fifer on the subject. He took the precaution, however, of submitting the first draft of his letter to the attorney of the association, explaining: They have never accepted our Sales Agency contract but are supposed to have been working in harmony with us, and their letter to Mr. Knowles is really a distinct violation of the under- standing. The attorney replied on August 17, with the following cautionary letter: I am enclosing herewith the copy of the Long-Bell Lumber Company letter together with an answering letter which follows the line of the copy sent me. You will notice I have made very few changes in this letter. The points that I wish to eliminate from it is the question of our having too thorough an understand- ing, or committing ourselves to the policy of attempting to fix prices. The paragraph in the original draft which was criticized, and which, while indiscreet, seems to have clearly described the actual situation, is as follows: We have no control over the prices that you quote, you are at liberty to quote whatever you see fit, but we feel that your para- graphs #4 and #5 are hardly in line with the general understanding. The understanding has been that even to meet competition those who are acting with us should not make a lower price than $1.55 and $1.95, and your letter to Mr. Knowles simply lays the matter open for your people to take business, — not, of course, on any basis they see fit, but at least on the basis of prices quoted by those who are not working with the Association. This paragraph was changed by the association's attorney to read as follows: We have no control over the prices that you quote, you are at liberty to quote whatever you see fit, but we feel that your Earagraphs #4 and #5 are hardly in line with our view of what is est. Our Sales Agents to meet competition, can not make a lower price than $1.55 and $1.95, and your letter to Mr. Knowles simply lays the matter open for your people to take business,— not, of course, on any basis they see fit, but at least on the basis of prices quoted by those who are working against us. The view set forth in the foregoing paragraph coincides with that in a letter written about this time from the Seattle office of a promi- nent wholesale concern to its Omaha branch: We are entirely at sea as to what course to pursue with refer- ence to shingles at the present time. We are of course duty bound, as per our agreement, to hold at $1.55 and $1.95, these being the selling prices of the new shingle Association, but of course if we bump into competition from parties who are sup- posed to be representing this new association at less than $1.55 and $1.95, we will certainly jump over the traces and go after the business at the best prices possible. 808 the lumber industry. During the early part of August numerous letters were written to members of the association urging them to curtail their output in case the trustees ordered a shutdown. On August 7 the association sent out circular No. 8, which stated, in part: To our members: In view of the very satisfactory response from our members regarding the close down, and the assurances brought by the Trustees from each County, the Trustees at their regular meeting Saturday unanimously decided to ask the mills to close for two weeks, beginning Saturday, August 12th, and continuing until Monday, August 28th. Buying during the past two months has been very light and naturally Shingles have accumulated on our hands. Business shows a slight improvement but not enough to take our stock as it comes in. This curtailment will put us in good shape for the Fall trade and if the Association mills remain faithful to this close down the Trustees are satisfied that it will result in better market prices to the mills. This close-down, like some others, was aided by the personal solicitation of a committee. Manager Traill was often careful when urging the mills to close down to state that each manufacturer must decide for himself and that the association did not attempt to coerce the mills. The completeness of the close-down in the different sections of the State is shown in the following letter written by Manager Traill, under date of August 15, 1911, to R. Roggenstroth, a trustee of the association, of Concrete, Wash.: We have yours of the 14th with regard to McLeod Shingle Co. and will advise that they have been seen and are closed. The close down in Skagit County is in splendid shape, Burke was in to-day from Anacortes and it is possible that he will close down in spite of his troubles and in spite of the fact that the Anacortes mills (except Rodgers) are willing for him to run. The probabilities are that if Burke closes Rodgers will do the same and probably Vincent. The Ballard mills are down in good shape. All of the Association mills are down except Campbell and Burke-King, and Sobey and Wiley Shu- maker on the outside are down to make up for them. We understand from Everett that Clough-Hartley, and in all prob- ability Gould, close to-night. This takes in the biggest two mills in Everett outside of the Association, and all of our Associa- tion mills with the exception of one small mill. Marysville is all closed down with the exception of the Mutual Shingle Co. This is better than we had expected as we figured that Marys- ville would run almost entirely. We are sending a circular to the mills to-day and will get another one out later in the week. PRODUCTION AND WHOLESALE DISTRIBUTION. 809 To a shingle mill that complained of the lack of support given to the close-down movement, Manager Traill replied on August 18: We have your favor of the 17th and are surprised to hear the report that you give. If this is the condition in Whatcom County, it is the only County in the State that is not acting loyally with the Association, Skagit County, Snohomish County, King County, Chehalis County, Thurston County and Lewis County are all acting splendidly and we have in those counties the biggest curtailment that was ever had in the State in the history of the Shingle business. If the other sections of What- com County are as bad as the section around you Whatcom County is not in the best of shape, and we are taking the matter up to-day with Mr. Waples and Mr. White and will have them take an auto around and see what they can do about getting the mills in line. 1 If you could take a trip down through the other counties you would see how well the work is going there and would not feel so discouraged about it, but it is certainly discouraging to have your mill down when so many of the mills around you are running. We hope they will get the others in line. During the curtailment movement the association held prices firm. Meetings with wholesalers were held at frequent intervals. The following letter of August 17, from the Seattle branch of a wholesale concern to its Minneapolis office, described the action taken at two of these meetings: We sent you two messages to-day as per attached confirma- tions. Yesterday afternoon a number of the wholesalers got together and decided that they were tired of holding the sack any longer and determined to go to the trade on prices quoted by Waite in order to get more business. We did not wish to be the Goat any longer and after considering the matter last night, wired you this morning as we did. The wholesalers called another meeting today and after about three hours deliberation, decided that now or never was the time to hold the prices and the argument was so forceful all the weaker sisters have decided to get back in line, and we are wiring you to this effect to-night. However, we have told the bunch straight out that our list was going forward from Minneapolis, as per our wire instructions already sent, and that it was too late to cancel the same, but we further stated that we would immediately advance our prices to our salesmen and would hold strictly to the price of $1.55 and $1.95, other than we would protect any orders coming in on the list which we had made. 2 While this did not suit them, they were obliged to swallow it, and we hope to make a scoop. •The records show that a bill was rendered to the association on Sept. 5, 1911, by G. A. Bergslrom (or $25, "covering the hire of auto used for the purpose of visiting the mills during the shutdown period." "Under date of Aug. 18, 1911, this firm sent the following telegram to a customer in Nashville: "Must withdraw prices wired you on the sixteenth and hold one ninety-five and one fifty-five. Hate to do this but conditions such that we have no choice." 810 THE LUMBER INDUSTRY. The understanding reached at the meeting held August 17 is given in the following night lettergram from Manager Traill to H. C. Angell &Co.: Meeting of wholesalers today unanimous for prices. Some cut- ting early part of week but withdrawing all lower prices today. Advise names of any lower. Will see them. At a meeting of the trustees held in Seattle, September 2, 1911, it was — Regularly moved, seconded and carried that a committee of three be appointed by the chair to confer with the Manager, and the committee so constituted to have power to fix the price of shingles that the said Association will pay and for which the Association will sell the shingles now on hand, said committee to have power until the next regular monthly meeting of the trustees of said Association. The President thereupon appointed the following as members of the said committee: G. A. Berg- strom — E. E. Case — C. A. Johnson. At the same meeting it was decided to abandon the effort of the association to maintain the eastern price of shingles, and the following action was taken relative to the signed agreement for a close-down on Saturday of each week, which had been voted June 3: "Regularly moved, seconded and carried that all mills be notified that no further requirement is necessary for a close-down on Saturday of each week." In a letter from Manager Traill, dated September 5, 1911, some of the reasons for the foregoing action relative to the eastern price of shingles are given: Our well-meant intentions however to help the wholesaler to a decent margin have proved to be a failure inasmuch as the wholesalers themselves in many cases did not seem to want to have the situation handled in that way. Some were openly on the outside selling stock at any price that they saw fit and while they could not get shingles from us on the regular commis- sion basis, the market has been so quiet that they were able to get enough stock so that they could supply their trade fairly promptly. Recently others of the larger wholesalers joined this class and in fact we found that a good many wholesalers had actually been meeting any competition irrespective of the price that the Association was endeavoring to maintain in the East for their stock. The result was that when our trustees met Saturday to consider the entire matter, they felt that it was useless for them to struggle along endeavoring to maintain a margin for the wholesalers when they themselves did not seem willing to fight for [it] and we will content ourselves from now on with endeavoring to the best of our ability, to get a decent price for our stock here on the coast and leave it to the whole- salers themselves to get such margins as they see fit. Our sales agency contracts are therefore all withdrawn and we will not attempt hereafter to sell stock on a sales agency basis. PRODUCTION AND WHOLESALE DISTRIBUTION. 811 Another letter, dated September 7, gives other details of the new policy: Confirming our telephone conversation with your Mr. Weather- wax, this to advise you that there is no easternprice any more but that this is a matter left to the individual. We will endeavor to maintain the western price only. It was too much of a task to keep the wholesalers all in line and with a number of the larger wholesalers unwilling to work on that basis, the trustees thought it was best to go ahead and just work on a coast basis so you are at liberty to accept business from eastern parties on any basis that you may see fit providing it is higher at least than the Association coast price. Considerable opposition against the association developed among the wholesalers immediately following the adoption by the asso- ciation of the policy of selling direct to the retailer. Wholesalers who had worked in harmony with the association during July and August now joined the opposition. It was charged by some of the brokers that the association intended to eliminate the wholesaler. Inquiries relative to the purpose of the association were frequently made by wholesalers. In the course of a reply to such an inquiry Manager Traill wrote on November 28, 1911: You have every right to ask us what stand we expect to take and what proposition we have to make as to how the matter can be adjusted. The writer can hardly say. We can not enter into any definite agreement with the wholesalers, that would be illegal; but we can make the spread between our mill price and our Eastern selling price sufficiently large to enable the whole- salers to pay their expenses and get a reasonable return for their efforts, and this seems to be the only way in which this can be done, but it is difficult for us alone to do this, for if the wholesalers are willing to work on a 50 margin, as some of them seem to be willing to do, it would almost seem as though it would be up to the Association to do the same, so that all that can be done in the matter as far as we can see, would be to make the spread greater and see what the wholesalers do in the matter. The association became more cautious regarding "understandings" than it had been during July and August. Suggestions relative to arrangements with the wholesalers were referred to counsel before the association determined its attitude toward them. The following from a letter written by Manager Traill, November 29, 1911, illus- trates the consideration that was given to the legal aspect of suggested arrangements : We have your favor of the 25th inst., with copy of letter to Mr. Foster, and appreciate the suggestions. There is a good idea in it; the only question being whether or not such action could be. taken legally. Our attorney will be up here in the next few days, and we will submit the matter to him and see what he 812 THE LUMBER INDUSTRY. thinks about it. The government is so hard upon any combina- tions that might be made as to the maintenance of price that it would probably be best for us not to come to any agreement, but for the Association to maintain a reasonable spread between the buying and selling price, and let the wholesalers make the same price or not as they see fit. The Association of course would have to be governed accordingly. The legal aspect is again referred to in a letter written by him December 1, 1911: It has been a hard proposition to handle, but we feel that we are getting in a stronger position all the time, and feel that the Association is so adjusting itself that we will have the say-so as to how Shingies shall be handled and what they shall be sold for. We do not want to continue the fighting. We are perfectly willing to come to some decent understanding with the whole- salers, not that we can agree with them as to price — this would be illegal — but we hope that we can adjust things so that we can move along more harmonious fines. The mills began to shut down in November, 1911, for the winter months. Manager Traill, in his circular 22, of December 23, 1911, estimated that 50 per cent of the association mills were then closed. There does not appear to have been any concerted action to curtail. The influence of legal considerations on the organization of the shingle business in Washington is well shown in the correspondence between the Shingle Agency of British Columbia and the Red Cedar Shingle Manufacturers' Association. In a letter of January 11, 1912, the secretary of the Shingle Agency of British Columbia stated : Our laws, while probably not so stringent in this connection, are very definite concerning combinations, but we have conducted our Agency along the broadest lines, and seeing that the market was fully supplied with its requirements at a fair price. We might say that our laws against combinations are as stringent as your own, but the authorities have never yet interfered with any legitimate effort towards control which has been fair and reasonable, nor do we think you have any reason to fear hostile action from your Government towards an enterprise conducted on fines similar to our own. Manager Traill, in his reply of January 13, said: We note what you say with regard to our ability to form an Association along similar lines to yours, but we assure you that it would be impossible for us to do it, as while the laws on your side might be just as stringent as they are on this side, your gov- ernment is not taking the stand with regard to combinations, yet at least, that ours is. There is no question but that if we could make arrangements with the mills to run half or better, of their possible consumption [capacity], that it would be the best thing to do, but we would not dare to attempt anything of that kind over here. PRODUCTION AND WHOLESALE DISTRIBUTION. 813 To a correspondent who wrote that the remedy for prices lay in the control of the. output, he replied, under date of March 2, 1912: The control of the output is a difficult problem, and one of course which conflicts quite strongly with the "Sherman Anti- Trust Law;" but on the other hand we do believe that the vol- ume of the consumption of Red Cedar Shingles can be increased by judicious advertising direct to the consumer, and this' is what we are attempting to do now. In a letter of March 16, 1912, Manager Traill discussed the associa- tion's position in regard to close-downs in the following words: The Association has no agreement with its members for them to close. We cannot do that legally. Of course when things get quiet, we urge them to close down in order to keep the Shingles off the market and prevent it going to pieces, but so far as any compulsion is concerned, we cannot legally bring it to bear, so that you need fear nothing from that source. Throughout the spring months of 1912 the association advanced its prices several times. Manager Traill, in a letter of May 10, 1912, to a firm who wished to withdraw from the association, called attention to the price work of the association: We have been able so far to bring the prices on Shingles to a higher notch than they have been for over a year, and it is ad- mitted on all hands that the raise in prices is entirely due to the work of the Association. We are paying $1.50 now for Stars and $1.85 for Clears, having gradually worked the price up from the low notch of $1.35 and $1.70. 'Even these low prices would probably have been exceeded if the Association had not been in existence. Many mills outside of the Association sold their Clears as low as $1.65, and if the Association had not been in existence all Shingles would have been sold at that or lower. We were the only steadying force in the market, just as now, we are practically the only force that is making for higher prices, and we believe that it will pay you to stay with us and help the Association out in the work which it is doing in the endeavor to bring about better conditions for the Shingle manufacturer. There was a strong demand for shingles at this time. During this period of rapidly advancing prices the wholesalers frequently paid higher prices than the association. The following letter of July 29, 1912, from a manufacturer is an illustration: In reply to your letter of the 26th will say that we are selling all our shingles on this side. The reason we are not giving you the business is we receive more money for our shingles by selling to wholesalers. We are receiving for Clears at present $2.16 and for Eurekas, $2.32. We are after all we can get, and the party that gives us the best price gets the shingles. 814 THE LUMBER INDUSTRY. The danger of prices advancing to a point which would cause the substitution of other roofing material was early realized by Manager Traill. On August 17 Manager Traill took up the question of prices with the trustees in which he favored discouraging an advance above $2.40 for extra clears. Among the replies received was one dated August 20, from H. M. White, the secretary of the association, member of the board of trus- tees, and also a member of a firm of lawyers in Bellingham: I am heartily in favor of holding the price of shingles as they stand today. It would be a mistake to raise the price as high as we can get it and then have a drop on us. There is an addi- tional advantage: If we refuse to drive the price of shingles up as high as it will go, it will give us a better standing when the representatives of the Government examine into our business, if such should be done. I see no reason for calling the board of trustees together, but believe you should advise the mills of the position taken by the board. Every mill man here that I have seen is a strong advocate of this policy. The reply from another member was the following telegram, dated August 23: I am authorized by the shingle manufacturers of Thurston Co. to protest against any further advance in shingle, believe the price should be $2.00 and $2.40. And that the association should notify the trade that they are ready to furnish their entire out- put at this price. The market is now being manipulated to break the association by the same parties that attempted to break us when we organized. A special meeting of the board of trustees was held August 24, 1912. According to the minutes — The purpose of the manager in calling the trustees of the Asso- ciation together in special meeting was because of the rapid in- crease in the price of shingles. He submitted a report to the trustees that the price was advancing beyond what he consid- ered a reasonable price for shingles, and he recommended to the Board that the Association lend its aid in supplying the trade with shingles at the prices as they now exist, and that the Asso- ciation do not follow the price upward to any greater extent. The matter was considered at length by the trustees, and all those present expressed the opinion that the increase was not due to natural causes, but was due principally to the influence of the wholesalers. It was, therefore, moved and carried that the Association exert its influence to hold the price 1 as it now stands and not attempt to assist in the increase of the same. The minutes of the Red Cedar Shingle Manufacturers' Associa- tion make no mention of the fact that the trustees met with some of the larger manufacturers and two of the lumber selling agencies. The 1 The prices decided upon by the trustees at this meeting were ertra *A*'s, $2.15; clears, $2.50. PRODUCTION AND WHOLESALE DISTRIBUTION. 815 following letter of August 28, from the Atlas Lumber Co. to the Com- mercial Shingle Co., gives the names of the firms present and de- scribes the action taken: August 28, 1912. Commercial Shingle Co., BellingJiam, Wash. Gentlemen: Regarding the meeting held Saturday. There were present at that meeting, representatives of the following: Larson Lumber Co., Wash. Cedar & Fir Prod. Co., Clough- Hartley, Day Lumber Co., Clear Lake Lbr. Co., Northwest Lhr. Agency, The Atlas Lumber Co., Traill & his Board of Directors. The matter of fixing a price of $2.10 on Stars and S2.50 on Clears was pretty generally discussed, but after analyzing the situation, it was agreed that the price being made today by the manufacturers was legitimate in that it had been forced up by the buyer and was devoid of any speculative element. As far as our own Company is concerned, while we deplore the very high prices that are in effect and would be glad to see the price set at $2.10 and $2.50, we do not feel like getting in the way of the storm and be swamped. We therefore advised that we would hug the market pretty close. It was finally agreed that this was perhaps the only way to do, although everybody pres- ent agreed to use their moral influence toward keeping the price from going any higher. Traill advised he would go out at $2.25 for Stars and $2.60 for Clears to the trade. He is offering the mills $2.15 and $2.50. We are also out on that basis and a price of $2.75 for Premium brands. We took one order this morning for Premiums on this basis. This for your information. Yours truly, The Atlas Lumber Company. A circular was sent out immediately after the trustees' meeting calling attention to the danger involved in higher prices. By the middle of September the market began to show signs of weakness. On September 17, 1912, Manager Traill wrote a letter, in the course of which he discussed market conditions: We are up against a hard problem just at present. The market is weak and there is practically no reason for the weak- ness; there is no question but that the market was forced a little higher than it ought to have been, but at the same time there is no reason why there should be any drop back at this time. It will come later without any question, but we are in hopes that we will be able to prevent any decline at the present time. Still, the situation is not strong and we may be forced to with- draw present prices but will not do so until we are compelled to. I realfy believe that with the way the wholesalers are stampeded just now that had it not been for the Association Clears would have been back to-day at $2.25 with practically nothing to stop them from going lower, as when the shingle market stampedes it is hard to stop it. 816 THE LUMBER. INDUSTRY. On September 25, 1912, Manager Traill sent the following letter to numerous manufacturers : Until we see what result we obtain from our effort to obtain a curtailment we feel we had better reduce our prices ten cents all around. If we get a close down we will put the price back and may be able to return you the ten cents deducted on such ship- ments as we may get in the meantime. The sudden stoppage of lake shipments and the proposed elimination of transits leaves things in the air. If we get a close down for the first two weeks in October it will strengthen the market materially. If we don't get the close down it looks like a bad break in price, as orders just now are few and far between. The East is waiting for lower prices and the Association cannot work miracles, if we get more stock than the East will buy. PLEASE KEEP THIS STRICTLY CONFIDENTIAL. It will be noted from the above that an effort was made to keep quiet the part taken by the association in this cloce-down. There is some reason to believe this was due to legal coruid jrations. The Department of Justice had just x been taking testimony in Seattle in the case of the United States v. W. G. Hollis, Northwestern Lum- bermen's Association et al., and as shown on page 438, certain price list activities of the fir manufacturers were suspended during that time. It may be that the shingle association also felt the need of caution in its curtailment activities. The correspondence of Mana- ger Traill shows that he took an active part in urging the mills to shut down and in spreading the news regarding the progress of the movement. The organized nature of the curtailment is shown in the following from an association circular letter sent out on Septem- ber 27: Close your mill Monday and make yourself a committee of one to see that your neighbor does. If you cannot get him to close call up party shown in list below for your County and a com- mittee will wait upon him to see what can be done. If you make this close down a success you will probably prevent a rapid decline in prices. If not, it is hard to say where the bottom will be found. This is your fight. You alone will profit if it is a success. You alone will lose if it is not. Make it your business not only to close yourself but to see that those around you do. Report any information of value to the following: Whatcom County, S. P. Jones, Commercial Shingle Co., Bellingham; Skagit County, J. H. Cavanaugh, Anacortes; Snohomish County, E. D. Frost, Jamison Shingle Co., Everett; King County, F. A. Traill, Red Cedar Shgl. Mfrs. Assn., Seattle; Pierce County, J. E. Sampson, M. R. Smith Shingle Co., Tacoma; Thurston County, J. E. Sampson. M. R. Smith Shingle Co., Tacoma; Chehalis County, F. C. Wilcox, Aberdeen; Pacific County, E. E. Case, Raymond. If you cannot reach any of these phone F. A. Traill at Seattle. ' Aug. 27 to Sept. 6, 1912. PRODUCTION AND WHOLESALE DISTRIBUTION. 817 Get the contagion. Everybody; boost. Forget the past and pull together for the good of the industry and your pocket- book. Circular 48, dated September 28, 1912, states "the outside mills are joining in this movement heartily," and suggests: Phone this office what mills, if any, in your neighborhood are running. Try and induce them to close and we will take it up with them from this end and do what we can. Don't fail to notify us and if necessary we will send a delegation to see them. We must make this a success, get behind and push. The following letter of Manager Traill, written October 5, 1912, to urge a prominent shingle manufacturer to join the movement, con- tained the following description of the movement: We never had a close down which came with less effort, nor do we believe that we ever had a close down as complete, and the pity of it is that a few of the large manufacturers like yourselves continue to run and put Shingles on the market to hinder the goodworkthatwearetryingtodo. It begins to look now asthough the ones who had the control of themselves were the little mills. We have heard so much in time past of the detriment that the small mill is to the industry, and how much better it would be if the market was in the hands of the large operators. It cer- tainly looks now as though the shoe was on the other foot. All that we needed with the bulk of our straight Shingle mills was to send them a circular suggesting the advisability of a close down. In the past to secure a curtailment it has been necessary to send out a committee in each County with automobiles, etc., to scour the country and almost take the millmen by the scruff of the neck, and compel them to close. This time the Everett manufacturers practically started the movement themselves at the suggestion of the Association. They closed down Thursday night to set a good example. They made a trip to Marysville to bring them in line. The writer with two or three others made a trip to Ballard last Monday, and that is all the effort that was necessary to bring about the curtailment. It hurts to see promi- nent manufacturers like yourselves running full blast when you cannot but realize that it is a decided detriment to prices, if not, to the industry. The minutes of a meeting of the board of trustees held October 10, 1912, show: It was reported that a good many of the mills had closed down on account of market conditions, and the trustees expressed them- selves very well pleased at this action taken by the mills both in and out of the Association, and recommended a continuance. The legal difficulties, which beset any effective association activity in the curtailment, are referred to in a letter of October 14 from Manager Traill to a wholesaler: We have your favor of the 12th, inst., and the writer wishes to thank you very much for your good words. We are sorry that 25030°— 14 52 618 THE LUMBER INDUSTRY. we cannot arrange for a curtailment in the shape that the British Columbia people do, as it would be absolutely illegal and would kill us dead before we started. They are doing it over there in spite of the laws, but if we tried it here they are watching things so closely that we would get right up against it immediately. On November 1, in a letter to another correspondent, he touched upon the connection of the association with the movement: I should have answered your letter of the 12th, ult., sooner. I do not think that Mr. Waples had any thought of notifying the mills to start up. He might suggest it to them. That would be as far as he might go. As far as any authority is concerned, the close down was not an Association movement. It was started by outside mills and taken up by the Association to help it out, and nobody had any authority to either call it on or call it off. It was just a matter for the individual mills as to whether it was a good thing or not, and the only reason I sent out a letter practically calling it off was because the Association had taken an active part in the work. On November 15, 1912, the association sent out circular 50, in which the association prices of stars were stated to be $1.50 and clears $1.90. These prices represented the lowest quoted by the association for some time. On September 5 the association prices were $2.15 for stars and $2.50 for clears, and brokers' prices were in some cases 10 cents higher. On November 20, 1912, the association prices were $1.55 for stars, and $1.95 for clears. The winter's close-down began during the latter part of November. In a circular issued November 26, 1912, Manager Traill stated that about 50 per cent of the association mills had closed, or would close by December 1, and that a large number of outside mills were also closed. At the Interstate Commerce Commission hearings on the suspension of tariffs abolishing storage, transit and reconsignment privileges, held in February and March, 1913, several prominent shingle manu- facturers testified under oath concerning conditions in the shingle business. Charles E. Patten, in his direct testimony, when discussing the effects of the transit privileges made the following statement in regard to the shutdowns : Let me say in this connection the Commission must under- stand it — that the impression has been given in cross-examina- tion that the storage m transit and the transit privileges permit manufacturing to run steadily. That is not true in the least. There has never been a year in fifteen years when the shingle mills of this state have run steadily. We can produce in this state, or could six or eight years ago, before these mills went out of commission, in six months all the shingles that are consumed in the United States, cedar shingles in a year. I think that if the mills ran half the capacity, or two-thirds the capacity they would supply the demand. So that a number of manufacturers of shingles, small mills, as well as the large, are compelled to close PRODUCTION AND WHOLESALE DISTRIBUTION. 819 certain months, sometimes June, sometimes it is in August. Last year we had to close down, if I remember correctly, in September. Our mill ran half capacity, I think it was the entire month of September or October. Small mills controlled by this so-called Association were nearly all closed entirely during that period, because there was no demand, owing as I think to manipu- lation in prices, but however, they would only operate so many months in the year regardless of whether we have transit or have not transit privilege. H. S. Stine, in his testimony in the same connection, made several statements in regard to the price work of the Eed Cedar Shingle Manufacturers' Association. The following is from evidence given on the direct examination: Mr. Alexander: * How, in your opinion, is the market price of shingles determined ? What fixes it ? Mr. Stine: Supply and demand, in my judgment. _ Mr. Alexander: Do you know of any association or associa- tions, or group of wholesalers or anybody else that either can or does fix the price of shingles ? Mr. Stine: I think I testified, Mr. Alexander, that the Red Cedar Shingle Manufacturers' Association has been fixing the price since July of 1911. Mr. Alexander: You don't mean to say, do you, that they are able to fix th e pr ice; you mean, they name the price. Mr. Stine: Whatever you see fit to call it, and their price is the approximate price. There never was a time, I think, on the Coast that everybody paid exactly the same price. There is always a variation of possibly five cents between the high and the low price being paid. Further on in his testimony on direct examination the price power of the association was again touched upon : Mr. Alexander: Do you mean to say that the Shingle Manu- facturers' Association can fix the price without regard to Mr. Stine: Oh no, I don't mean to infer anything of the kind. They fix the price based on their judgment and the supply and demand. Mr. Alexander: Then, if I understand you correctly, there isn't anybody that can arbitrarily fix the price of shingles? Mr. Stine: I never found anybody or any organization or association of manufacturers or wholesalers ever able to do that. Examiner Walker: Have they ever attempted to? Mr. Stine: I think they have, Mr. Walker, in the past years. Mr. Alexander: In recent years? Mr. Stine: No, not in recent years. In his cross-examination, Mr. Stine was questioned on the subject of competition in the shingle business: Mr. Teal: 2 You stated also that there was the keenest kind of competition until the Red Cedar Shingle Association started, in prices. • Counsel for those in favor of retaining the transit privilege. '■ Counsel for those in favor of the abolition of the transit privilege. 820 THE LUMBER INDUSTRY. Mr. StiDe: In the buying, yes sir. ™ . , . Mr. Teal: And that since the Red Cedar Shingle Association started, competition has ceased 1 Mr. Stine: It practically — yes sir, it has ceased. Mr. Teal: So that today Mr. Stine: There is practically no competition in buying shingles today. Mr. Teal: Now, prior, if I understand you correctly, there was the keenest kind of competition. Mr. Stine: In the buying, yes sir. Mr. Teal: And there was no understanding about prices or anything of that kind ? Mr. Stine: No sir. Mr. Stine was questioned about a circular letter sent out by him October 4, 1911, which criticized the action of the association, and was asked if he considered it a friendly letter. In answer, Mr. Stine made the following statement, describing the work of the association and his reason for opposing it: The Red Cedar Shingle Association was organized for the purpose of being a clearing house for its members. They made arrangements with the wholesalers whereby they were to turn the shingles over to the wholesalers, the wholesalers to act as their selling agent. In order that the wholesaler would live up to his obligation to maintain both the Coast price and the trade price, ■ they entered into a selling arrangement with the wholesaler whereby the wholesaler was to receive a commission of twelve cents a thousand on Clears and ten cents a thousand on Stars. They agreed on a price of $1.83 to the wholesaler and $1.95 to the trade. It was simply a price-making proposition, an organ- ization to control not only the mill price, but the selling price. July, 1912 [1911], for some reason or other was as poor a month as we have ever experienced in the shingle business. The trade did not buy, the wholesaler had no transit stock, because the Red Cedar Shingle Association notified them, "We want to carry the transits, we will take care of the transit stock and sell you what you want, when you want it and where you want it, but we make the price." Along in September, they raised the price to $1.87 to the wholesaler and about eight cents spread to that to the trade, cutting our commission from twelve cents to eight cents. In October, I think possibly by the 1st of October, it was learned that in disregarding the arrangement they had with the whole- saler to let the wholesaler handle their stuff exclusively, they had gone to the trade at a price which was considerably less, I don't remember the amount, than the price they were holding to the wholesaler on the Coast. They advertised in the different little trade journals that they had decided to eliminate the whole- saler in the manner of handling their business, they were going direct to the trade. Under those circumstances, I naturally was incensed. I had always stood firmly for the Association, had done everything I could to make it a success, I fought its battles in the meetings of the wholesalers, and I felt that under the circumstances I had not been treated fairly, and the whole- PEODUCTION AND WHOLESALE DISTBIBUTION. 821 salers who had stood by the Association had not been treated fairly. And that prompted the writing of that letter,— iust the wav I felt at that time. J Mr. Teal: Then at that time you also wrote: "Suppose these combinations of manufacturers should succeed in the elimination of the wholesaler, what would happen along the line of price adjustment? Personally, I have no grave fears that the whole- saler would become a matter of history only, for we believe the commission salesmen will join forces with the wholesaler in fighting the common enemy." Mr. Stine: Yes sir. Mr. Teal: That is the way you felt at that time? Mr. Stine: Yes sir. Mr. Teal: Do you feel that way yet? Mr. Stine: No sir. I will tell you why I don't feel that way yet: Due to the fact that in 1912 the Ked Cedar Shingle Manu- facturers Association maintained a sufficient spread between the mill price and their price to the trade to give us a reasonable margin. Section 5. Grades. The shingle grades presented in this report were defined by the Washington Ked Cedar Shingle Manufacturers' Association on January 19, 1901, as follows: l Perfections. — Eighteen inches, random widths, five butts must measure 2^ inches plump in thickness when green or 2\ inches after drying; must be well manufactured, strictly clear in every respect, and 90 per cent vertical grain; will not admit any shingles narrower than 3 inches. Eureka. — Eighteen-inch random widths, five butts must measure 2^ inches in thickness when green or 2 inches after drying. Must be well manufactured, strictly clear in every respect and 90 per cent vertical grain. Will not admit any shingles narrower than 3 inches. Extra Clear. — Sixteen-inch widths, five butts must measure 2^ inches in thickness when green or 2 inches after drying; must be well manufactured, strictly clear in every respect and 90 per cent vertical grain; will not admit any shingles narrower than 2 inches. Extra *A*. — Sixteen-inch random widths, 6 butts must measure 2^ inches green or 2 inches after drying; must be well manufactured; will admit sound knots 10 inches from butt; otherwise must be strictly clear and 90 per cent vertical grain; will not admit any shingles narrower than 2 inches. The foregoing rules governed inspection of all red-cedar shingle product until March 16, 1908, since which time the grades have been defined as follows: 2 Perfection-18" — Variation of 1", under or over, in length, allowed in 10 per cent. Random widths, but not narrower than 'American Lumberman, Jan. 26, 1901, p. 40. ! West Coast Lumberman, April, 1908. 822 THE LUMBEB INDUSTEY. 3". When dry 20 courses to measure not less than 8 1". To be well manufactured. 97 per cent to be clear, remaining 3 per cent admits slight defects 16" or over from butt. Eureka-18" — Variation of 1 ", under or over, in length allowed in 10 per cent. Random widths, but not narrower than 3". When dry, 25 courses to measure not less than 9f ". To be well manufactured. 90 per cent, to be clear, remaining 10 per cent, admits slight defects 14" or over from butt. Extra Clear-16" — Variation of 1", under or over, in length, allowed in 10 per cent. Random widths, but not narrower than 2\" . When dry, 25 courses to measure not less than 9£". To be well manufactured, 90 per cent, to be clear, remaining 10 per cent, admits slight defects 12" or over from butt. Extra *A*-16" — Variation of 1", under or over, in length, allowed in 10 per cent. Random widths, but not narrower than 2". When dry, 25 courses to measure not less than 7 J". To be well manufactured. 80 per cent, to be clear, remaining 20 per cent, admits defects 10" or over from butt. If not to exceed 2 per cent (in the 20 per cent, allowing defects 10" from butt) shows defects closer than 10". The shingles shall be considered up to grade. Supervision over production through the agency of grading associa- tions and an inspection bureau has grown increasingly critical with the passing years. This work has been maintained and conducted by organized cooperation of the leading manufacturers, in response to definite economic requirements. The rules promulgated were at first loosely observed by individual producers. Material was often skimped, grades and sizes were mixed and lacked uniformity. Com- petition of patent roofings and constantly stiffening demand by the trade for superior quality and uniform grades and sizes has gradually forced greater care in the manufacture and marketing of" this com- modity. The bevel-siding grades given below for red cedar were adopted March 30, 1906, by the Pacific Coast Lumber Manufacturers' Associa- tion, Southwestern Washington Lumber Manufacturers' Association, and Oregon Lumber Manufacturers' Association: Clear. — 4 or 6 inch. Must be strictly clear except an occasional strip of white sap not over \ inch in width on thin edge. Grain of all grades will be as lumber runs. "A"-4 or 6 inch. The following defects will be allowed, but only two in any one piece: \\ inch sap on thin edge, \ inch sap on thick edge . Sligh t roughness in dressing, or equivalent defects. Section 6. Prices of actual sales of red-cedar products. Tabular statement. — Actual prices of red-cedar shingles and bevel siding delivered in New York, and f. o. b. Puget Sound basis, are shown in Table 7. Because of a difference in price which some- times appears between the all-rail shipments and the shipments which went partly by rail and partly by water (along the Great PRODUCTION AND WHOLESALE DISTRIBUTION. 823 Lakes), these two styles of deliveries of shingles in New York have been shown separately. Prices for the following grades of red-cedar shingles and bevel siding are shown by the Bureau for the markets designated by an asterisk (*): Puget Sound. New York. Grade. Rail de- liveries. Bail and water de- liveries. Shingles: (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) Bevel siding: Diagram. — The price movements of the items given in Table 7, are shown on Diagram 27 (oposite p. 830). It may be noted that there has not been the close correspondence between the price movements of the shingles from the Bast, West, and South that exists between the price movements of lumber from those regions. The cypress shin- gles show a marked rise and decline in the period 1900-1903 and again in the period 1906-1908. In the white-cedar shingles there are three general periods of rise and fall, 1898-1900, 1901-1904, and 1906-1909, but the movement is not as marked as for cypress. In red cedar there are two general periods of rise and fall — the first in 1901-1904 and the second 1906-1908. Attention should be called to the price movements shown for bevel siding, which materially differ from those of most of the items in other softwood species. In 1902 and 1903 the highest prices were reached for the 16-year period shown. The panic of 1907-8 had no depressing effect on the prices, and by 1910 prices had reached the 1902-3 high level. The contrast of the movement of red-cedar shingles and red- cedar bevel siding is striking. The reason seems to be that the siding is high-grade lumber, which has a special use, and little effective competition from other woods for those uses, and is produced in limited quantity. Section 7. White-cedar shingles. White-cedar shingles are produced in several of the Northern vStates, the principal points of production being Michigan, Wisconsin, and Maine. No prices were gathered for the Lake States white-cedar shingle. Prices of white-cedar shingles were obtained in the Boston market, which gets its supplies from Maine and New Brunswick. 824 THE LUMBEE INDUSTRY. Grades. — There are no association grading rules covering the eastern white-cedar shingle. The definitions of grades presented were obtained from a firm in the Boston market: In my opinion the cedar shingle, to be properly put up, should be smoothly sawed with parallel edges, and there should be noth- ing narrower than 4" in the Extras and Clears, and all the shin- gles should be full 16" long and should be sawed practically five to 2\" in thickness at the butt. Extras should be perfect — free from sap and knots or any other defect. Clears should be free from sap and clear of knots 6" or more from the butt. 2nd Clears should be free from sap and be strictly sound- knotted 7" from the butt. The Extra #l's should lay at least 4£" sound butted, and may include the narrower shingles which would otherwise go into the higher grades, and can of course include the Clear Saps unless a mill makes a special grade of Clear Saps. If so, they should grade the same as Clears except for the sap. In 2nd Clear Shingles a small per cent of shingles as narrow as 3" will go all right. In an Extra or a Clear there should be no shingles that show a blue streak or discolored sap. A little of this character of defect in a 2nd Clear will g t by. This is idea of the proper grading of Shingles, and if they are put up under these specifications, they will be acceptable to the trade here. At the present time, of course, the market here accepts four bunches to the thousand, packed 23 courses on one end and 24 on the other. The shingles should be bundled tight, that is, full courses of 20" in width. Tabular statement and diagram, — Prices for the following grades in the Boston market are shown in Table 7: Extras, clears, and second clears, for the period 1897 to 1910. These prices are shown in graphic form on Diagram 27 (opposite p. 830). Section 8. Red-cypress shingles. About 10 per cent of the shingles produced in the United States are cypress. Shingles of this wood are manufactured only as a by-prod- uct. The limited production resulting from this condition together with the natural qualities of this wood for shingles have furnished a ready market for the product. While a demand for this shingle comes from all of the large consuming markets of the Central and Eastern States, most of the product goes to the Texas field. 1 Cypress shingles meet with competition from red cedar shingles in all markets. In the southern field they compete also with yellow-pine shingles, and in Texas with redwood. ' American Lumberman, Apr. 2, 1904, and May 28, 1904. PRODUCTION AND WHOLESALE DISTKIBUTION. 825 Grades.— The definitions of the grades presented, as adopted by the Southern Cypress Manufacturers' Association, May 16, 1907, are: Bests. — A dimension shingle, 4, 5 and 6" in width, 16" long, each width packed separately, 5 butts to measure 2", to be all heart and free of shake, knots and other defects. Primes. — A dimension shingle, 4, 5 and 6" in width, 16" long, each width packed separately, 5 butts to measure 2", admitting tight knots and sap, but free of shake and other defects, but with no knots within 8" of the butts. This grade may contain shingles clipped two-thirds of the width and one-eighth of the length on the point. Tabular statement and diagram. — Prices for two -grades of cypress shingles are given in Table 7 for the New Orleans market. The prices selected in compiling the statistics are those for shingles shipped to Texas points. The two grades are 5-inch best and 5-inch prime. Prices of 5-inch "best" shingles are shown for the period 1898-1910, and of 5-inch "primes" for 1903-1910. These prices are shown in graphic form on Diagram 27 (opposite p. 830). 826 THE LUMBER INDUSTEY. a S5 ■< Izfai oW h e 2 K uri w a M i" R« H © PS s ^ 00 H „- oty H 5 Hi W W P « OJ - O P w^ Kb E ° h ^ °fl co" z: HI << M H hi PH fc P ~ fc hI«| w „ K H fe R O O po 5 R R -«S H PV ^ R 1 K J:h, h" e-a 'W! 8RSRI2KPSg8!2S SS lUlNOCMOtCMIQ HHNNNtHH HNQ>o>COOOO h^^^cocseo - * p_ o £-o ® X3 » Sid 3 5 £1- ° 11II-? ' Es-o ® 03 S.J HH T-t i a- ° SS i4iOiOiOUJiQlQ>OiOO OOOOUiOiOOQOOO S S O H K So? WCpqS 2z;°S » OS B S a * ftos 5^3 a S'o o « lllll PBODUCTION AND WHOLESALE DISTRIBUTION. 827 S22. 75 22.25 22.25 21.75 21.75 22.00 21.75 21.50 11.25 11.50 11.25 11.00 11.25 11.25 11.25 11.50 11.75 11.75 11.50 12.00 12.75 13.25 13.00 12.50 12.50 12.50 12.75 12.75 12.25 12.25 12.00 11.25 12.25 12.75 12.75 12.50 12.25 12.50 13.25 14.50 14.50 14.60 14 50 16.25 16.60 16.50 16.50 16.00 16.25 16.25 15.50 S3 Si COCO — — i ,— i 12.75 13.50 13.50 13.25 13.50 13.50 14.25 14.25 15.75 15.75 15.75 16.00 17.25 17.50 17.50 17.50 17.50 17.25 17.25 16.75 OUJiO '• i CO COCO • • » • • 2. (W 2.65 2.60 2.55 2.50 2.50 $2.70 2.75 2.70 l>oor~ cNciei oio^o>cao>c HCOCO MtN jgiflicowjio -j o in in ii-.i in c in lo " HCNNCNtNCNCOCOeOC COCOCOCOOOJ P» O iO iO coco t io»oix CO c o CO 1Q CO o CD CO o iog 1.70 1.70 1.60 OOW3 CO CO CO 1.60 1.65 1.60 1.55 1.65 1.65 1.60 1.60 1.65 1.65 1.65 1.65 1.65 1.70 1.80 1.85 1.90 1.90 1.95 coco 3.70 3.80 3.75 3.85 3.70 3.65 S3. 65 3.65 3.70 3.75 3.80 3.90 3.90 s CO 1.55 1.55 1.55 1.60 1.60 1.65 1.75 1.95 1.85 1.75 1.80 1.75 1.80 1.90 1.80 1.80 1.70 1.70 1.70 1.75 1.60 1.75 UJOIQUJOOO t~ t- t~ t~ I— r- 00 .4 i-H IH 1-5 IH l-H rH s s 1.90 2.05 2.05 2.00 2.00 1.95 3CiOOOWOO»000»0 DC»aOHi-l«rti-(NCqM H^r4cNNNeNCNeiNCNeN HHNMp cNOicNOitNoifNfN 8S2 CJtNCJ WCSCNCOCOCOCOeO ci ci c4 in ci c4 oi cn iO >C in iO u, W 'R O 'O C O ". C^MNCNCNCNCNeOeNCO^ieO e>ic^«Mcse4(Neic>ic4c>i« »0«000>OOOiOOOOO coco^»ocot^t^cot*t^t™^ MCseNCNCNcNtNPicNCNWN t»cocor-t>co-o^l CNNcNCNtNtNOJCN C4C4(N CKNCN -^t^COCO iniooo 888888888888 lAiACD(SCS i^^cMcs CO CO CO ■ ■■■<• ^ ^ *tfi Sffi88§8SS3SSK rHiHr^c^icNNoicqMcqpqDi sssssssaas |s ci ci C4 OJ CN e4 cn" ci cn ci ■« OOpiQOiOQiQOOiOO 883 ©ooFiS* co« s s NNC t> 00 00 00 00 OO t» 00 © i-( © r* H rH o >o K f ~ ii SSSSSSS 8S88S38888SS3 8? lOiOiONt-Nu Qot'-t^tocoininioinio'iriin iomoioSoooSo8o H ^H ^-1 I— 1 ^H ^H lH lH ^H ^H © O Ol OS 00 00 00 t"^ I-- C-lwRlNNNN N«CNCNCNeNCNCNWCNCNeN ,H r-l iH .-H .-H tH r. WNNS J^t-ooodcdoooocRosoioJa moomioio • • Oi ff 0> ffi O) 03 ■ ■ cn cn TP NWCNCnCN CO CO cot Mnnnnp OOOOOOOOr-fOTH CN oi ?i CN ^i C- 1 C~i C~i C-i C i C-j ci cicNCNOi CNCNCN iO'OCJQOO cn" cn cn cn cn «" iflioooiQOw .momo CN CN CO CO CN <•« CO ■HrtiHCO CN CN CN CN CN CN CN ! CN CN CN CN 88 CNCN CN CM CN CN IN CN tN ooocooio Qcncncnoofficncnooaw CO CO CO CO CO CN CO NCNCNCNWeO^CNCNCNCNeN CNCNCNCNCNeNeNCNCNCNtN ?oom OOOlOi cn cm" oi c-i c i cn c i oi c j cn c i oi CO CO CO CO CO CO CO CO r CO CO CO CO CO CO CO CO CO CO CO COCOCOCOCOCNtNO^HrHiH COCOCOCOCOCOCOCOCOCOCO eocoeococococoeocococoeo •CNCN CO ■ CN CN CN NCNCNCNeNtNCNCNCNtNtNeN CNCNCNtNtNCNCNCNCNCN iO CN CNCN tN CN CN CN CNCNCN CN , ej ' CD S ■ ■ 1 at • • • ■ 830 THE LUMBER INDUSTRY. 1 a 3 o> cb ci °* °* 2 2 2 2 2 2 2 2 °* 2 § S SSS S SSSSSS 3»o !S>o>o loioSSS -HCSNW«WN««C 5 i*3 r- I*- N> f-OON« mo 0>-H "m 1 ^T3 < moowooo'oo'fiwo iot--r— t^cococoooojoooooi )iQOOOlAiOO>AOOifl ■5«NM(NWNNN«Nei i8S ■ (ON o ■ CO • o 00 •rt TO -r , ■* IfllOW -fH -f if oo • e3 * -f • g£§Iisjjl>Pli DIAGRAM 27.— Movement of Actual Prices of Red Cypress Shingles on an F. O. B. New Orleans Basis, of White Cedar Shingles Delivered in Boston, and of Red Cedar Shingles and Bevel Siding Delivered in New York, and on an F. O. B. Puget Sound Basis, 1895-1910. »^ \S$§ \$96 1S97 1S0S 1SW 1900 1901 190£ t905 190^ 1 9o§ woe 901 190$ 1909 1910 M m JFjMAMJJASONDJFMAMJJASlONDJF mamjjasondjfmamjjasdndjf t~f~ x .L -• X X,,X X iXk X ••!;.! - « ,.», »» _ „, x x .•• |« .:.i.»l»i i .••».. onn ]K : "TTTx"^ XX. (X X .' *••'■-■ * • « ••••• «• •• •.!• • •;», -••• • • • > r .» *«.••••• * , .- -i-i H h- -j 1- -r--j- ^Tll •• T - b .00 X.X • ■ • • • • • • AAA 1 A* A i AA A A A A * * * -ijAAu^AAALAA _aLAA A J a AJA[ 1 |.^__|-* AA -J* A *Ap* A AAA _ _+_ ^ .••••••......*.. *** ALA A A ******** k A AAA *AA| AA A **A * A AA *~ " * A A i k i A | M i j .. 20 • • • • - JA A *!* * A *|a a j i i 1 T OQQ 2.00 - ■ ■■■• — " 1 A A k [ ; A ' 'en A ^i'iiiiAi'ii^A 11 S : j 1 j 1 ^ ^T" - cu I * 1 ! i 1 i ! t ; ~~" "i T" | 1 | r j T" ' J 1 | ! [ ! I 1 -^- 1 1 »i j - — -^ -j--p -h — 1 h~HH 1 — h — 40 j--- i : | - 1 " e0 n RFD CFDAR - .., t 1 . | i . ! . ...-._.... g^JQ "^ , NEW YORK MARKET 1 ! 1 j ! I sn ' >. jPERFECTiONS-f ALLRAil ; * i ! ! ,| ! I i * GO i : 1 i ■i-i-. ! ! i : * I "" ' ' ~ ' '" (RAIL& WATER X i i i ! | i *i* ! .. . ■ iG pica dc- ...i AL1 - "AIL B 1 1 . : : i . 1 t -| I | ♦ L_..J_ 5QQ RP . l] 'TADA^TAR- (ALl - RAIL A i 80 : ] ] HSTARASTAHS ^ RAILiwATEBA i 1 i 1 t H °kui ♦** j , , .*-*»p» i_ 1 ! i I , | X OOOOj ^0 00c ^ A ^0 1C i ' 'I | i : ! j j i* . c j c g^*- # ^U D [» ^•loio 1 * ° * "«■. J L v l^T*-*!— -H- 20 ! ' ! ! 1 ~^~T~ x: ooo-oo*"* *!*'*♦*, ■i.Jp vl .i_L^__l * x X x"? x X x # "X ■ tojj 1*^, ;o o > iX X ^ X )C • »„«: ;»... x x x x ' x ^xx . ..• , ! 1 ] X X XX \ >* o ,° i ° c, nn .°'*'\'''".. ... «•• §' A i i 1 ' 1 TV -x e • »•• 1 :.'*|ooO Ai V A ooc, » • «8 •**. °o B iA a a a ..J.. , A A a A^ A ....J ^_ 3QD o ;°° • •^ . i A A 1A A , iA| 4A 1 1 J_^ J_ _ ;... * * A *,* k\ o o o I**jf^ a A fl AA i ~ r ' i r^A A i T : ' ! ' ! 1 1 1 ! l i I | i 1 4 00 1 j ' "^^ l j ' RED CEDAR 60 ' ' ^T PUGET SOUND MARKET | ! 1 i ! i ■ • : i | i ! nr~ x X * 1 „ EUREKAS X : ! i i r ~V CLEARS * : i I i ] ! i ♦ j ^ ! _j_ 1 .♦♦♦ x x»! *' * * •* . ' ""^ **"V *'**U^..|* ^* „ v | crv ■H*ix ! V* X x IA A X kf X"X! 1 ■ ! 1 ». >'•*!•"■> . X T *v A V *'^.^. V If "■ A ' 1 1 _ •.*!_ x U. Xx ^.. U..+-4 ♦. J.-H -^^J {- 20 I ♦U „* *3 t* . .•• '»'• , x x •♦(♦♦♦^ [♦ xx J# • ! **!•.•*'..• * *• 200 i i i to. ! jjfxbtp *1.^ ***«^ xx ^ • • • *••••.. T ! ~"J5-*4*£x x x xk pebc^jj** JaaaI a J* aa * ' ! * A i ' '* AA ' A ** A A 80 !j- lx» >'/Vj-1 j r -18*x M? V *XX ! XX # » • A J I A '■ii* .. i. •• x r aa a i ! A .A A AA ,AA .A A ..AAA A . " aU i4A A AA AA A A * A ... J_ 60 A n '"' i i **IIr x r f ** ~£x xx 1. •;• !••••• r i • . • • (* • •;•• ' L • • A A k *, LAi l A AA^ ;,»», A * A A j | ! j ! -t~ .40 9 p *■ . ; i ^ x i ! .!• ** a|* *** •••.•?! k i" A A A ,i i J l«ii 1 *r a*^ ! ... 20 ,: .«.....«. •*•!«,•..!..• ••••aI *U*4 ; 1 1 i Tl_l I i | 00 i:±. Lt:±: i_ _. ._ :±_l _ _ -±. i :it±. DOLLAR : I ! | || | I I ^^ + n TJI h ±1_ r 1 1 i ! ; p ...4... 1 I ! ' i muss PER "= I ■ I ■ ) i I ! ill ■ , , __., _ ._._ . I ..,.-_. .. -. ... — ifEEr "^"l: - RED CEDAR BEVE 1 QiniMR i , FEET , ' NEW YORKMARKET 1 1 1 ' ! ■ 1 ^ L. OIL/IINw | 30 U ! " T nc , D fALLRAIL • -f- — j- -r- ■ -Lj 1 1 ( ' H--I 2 9 _ ZT 9 o I 1 A--- ( ALL RAIL * ! | ' l 1 ill ! , -J — 1- -4- 4- +-!-■ - ^-*4- s x-H n — 28 i i ! O O •JS ... •• •' .♦•.••..4_* < J.'* 1. 27 M 1 j ' | It 9 X* A m • •••••••••• •• ••••i_ _ A AAt>>» A k3i: A 5 AtA ** iAi '-* I J AAA AA 26 | .!' I 1 • ••••«•« A AAAAAAA °5 1 _i _u_L l. ■ .;t*i - 2+ .:• i r^ * _ t » i kj_ ] ! * A A AAA i .i o O O 1 J o i t, A I ** A A A |aA AAaA ! aa A |a; i A JA A A A ^ iA i j | i i | ! 20 fflO)OiO>010)AO) SSSfNMNMMCqNwS CNNNNCSCNNCNCNeMCMei (0COcdcOeOo O ^'l iO S S iO iO fl S 8 sis a si si sis si si sis 8SS8SR88 ssasssss OUS -ooooo •on 'iI5oo io icNcirHC>icNoi(Nc4NoJ N cn" oi ci ei CN N MHHO NNWWO»NNNNW ■ lOOiQOOOQOO 'Nt>oo c4 n n ei m* ci oi ■ ie}3$ ■ uo io u5 SS8 :§ § S ! 'i . © 3 C (u 9j » N N CNDioiciic>icie>icNic>ie>iNC>i NNNN(NN« «N«N«Cina(N!N OKjinomoioiocoLog ©oiflmifliO'f*-*-*^o COCOCOCQCOCOCOCOCOCOCOCO ■OOOOIQIQQQIOOOO ■*TH'*^5^-*T|5ij*co'*Tii^ iflioiaoooiomoio oj ej oi ei ei « w* n oi m ci «" ci ci ci ci ei c* COCOCOCOCOCOCOCOCOCO COCOCOCOCONCMO* "iO QOQQQiQOiQ j '£/ 3 iO <0 iO 'S o:> o) m CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CONN ^C>< !z .5 SI ft ■3 s 3 6 3 B d Sf CJ 3 o .2 3 o ►J In. 1 1 (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) ' Widths and lengths not specified. Diagram. — All of the prices given in Table 8, already described, are shown on Diagram 28 (opposite p. 866). Attention should be called to the fact that as both quartered and plain oak curves are shown on the same scale, care should be taken, if a comparison of their relative price fluctuations is attempted, to guard against as- sumptions based on a direct visual comparison without taking into consideration the proportional amounts of fluctuations. 856 THE LUMBER INDUSTRY. The quartered-oak prices show the rise and fall which took place in most woods in 1899-1900. The decline in the case of quartered oak continued until the end of 1901, when a marked rise took place, culminating in the last half of 1903. For several years prices declined and about 1906 a new rise began, which by 1910 reached the highest prices shown in the period, being slightly in excess of those of 1903. The fluctuations of prices in plain oak show the usual rise and fall of prices in 1899-1900, and a more or less steady rise, the fluctuations differing in the various markets, to a high point in 1907. The usual fall in prices occurred, but by 1910 the prices in firsts and seconds were back to about the high level of 1907, the highest shown for the period, while in No. 1 common the 1910 prices were somewhat below those of 1907. PRODUCTION AND WHOLESALE DISTRIBUTION. 857 tr- . a 2W ft 2s* q« S Ho" « >.i a bp & ® in I T3 SI 3888 888 WWW 88 88 :88 888888 8888 .'8888888 88 88 8 8 383 888 8888 88 :8 88 8388888 88 883 88S8S38SSS88 88888888SS8S opt- 2„ t<-t-TH-THT<_o-^L-;-tir;-r | ti 888888 1H Q -H t-I .-i .-3 iO >0 iO iO 'Q >Q SSSS : :88SSS8 88888 888 881 88888 888888888888 8 U] ifl IQ U) >o U) IO 1Q u 8888 §5-8: 83 :S 83 stir 1 858 THE LUMBEB INDUSTBY. P 03 ■■er ^r ^ ^ ^ 88 = -9 .a .9 8888 888888888888 888 CO CO CO CO CO ^ ^ ^* ^J 1 *^ ^ ^ '■T ^ ^* 888888888 88888 3333 888 lOCO CO o ■ .o 88888 = •9 PL, c *£ ^ goo o© oo o oo oooo © 8888 •.Odd COCO 8 10 888 >o CO 00 o o s SOOOOOOOOOO oooooooooo 8888 ID _C :D 88 888888888888 8888888 8888 too©'-* 888 888 8885 S3!3 8 :i OQOQO ooooo 03 9 J g£§'Ct ° Sod ' PRODUCTION AND WHOLESALE DISTRIBUTION. 859 8 :SS gggggS888 888 oo oo 5353 8 8 88 7.7 /r-C-C'inr. «««N«nwcocc sss g g ggg ■ OQQOOQ QOOOQOOOOQOO OOOOOOOOOOO© •oooooo oooooooooooo oooooooooooo 3COOOOC OCOCOCOeOCQCOCOCCCST P'V^iuiininuiioiGin 8 g 88 ?ggg iSSS 3 ^i '■G' ^T oooo oc 88 88 5881 888 g88 gOOOOOOOQOQQ OOOOOOOOOOO 888888 RSSSSP SOOQOOOOQ OOOOOOOO OO oo oo 8888888 81 88 S3 ooooooooc §888 ggg8 8 :S8ggggg888 i(0©O[--a?yg ©ooooc 5i!jS!;3s Soooo oooo §883 888 SSS 9 S3 S8§ 8SSS SSS S88S8 CD Tti ID ■* IQ "? W3 ■* ■* ** Up U3 IQ COCO'OtOCDCO'OCOCOtDCOeO CO <0 ^D CO CO CO ss r-r-r-r-r-r-r-r-t-t- 3S :SS SSSSSiiSS :SS §88! S .§ Eh = ■9 r^t-t-t-t-F §88! S88 SSS t'2 !ii! 111! PKODUCTION AND WHOLESALE DISTBIBTJTION. 861 sss ooSooooo 88 1888 8 8 888888 OOQOOQ OOOOOO 188 ooo %%4 SQQOOQOQO OOOOOOOO $33 oooo oooo ss; OOOOOQOQQO oooooooooo m ^ «s us ^" «3 »o OOOOOOOOOOOO oooooooooooo ooot5oo6oo6optocoooioi ^ T S t C t t -r t ■■: T f 00©©oqooooq oooooooooooo §88888888 i d m m i-i i-" 88 888S 88 888 888S 88 885 888 888 5ooo 800QOOOOOQ OOOOOOOOO ■J CO ^ CO Th CO c OOOOOOOOOOOO :SSS8 . I- 1>- r- 1- OOOO SOQ OO OOO OOOOOOO ItJ N T* T* TfH "* OOOOOOOOOOOO § 00 00 00 00 00 00 ooooo 8881 oioiooa ooooooo 888 S3S3S ■gEg SS SsSa £•9 5 S m^>c liliiltjpll |g-S« Sj>sf 3ft£-Bi>,S!>,ElS.SfS g.Bgg&S.&SPo 862 THE LUMBEE INDUSTRY. A 2 S3 SB . 3 ■SB Co z;£ o a tig S S So r-M*««xo inmoooiooin M I- ic idiccSo c» «)U)U)lO >NN^C)OiO i~ i— 1^ I- r- I* 1> r- r-r^30i-co cq 9 s.§£-L», a !» Sow = ►■'■S-S PRODUCTION AND WHOLESALE DISTRIBUTION. 863 • IO to V W lO COiQ>At0lQCOiQiQCOCO<0 ?SKS!38g8SS Si OSOSOJOO^GOOOOOOOQOOOOO QC GO CO OCOi 00 00 00 00 00 0)00 OOQOOOiOOOiftOO ©i/3jNcN(Nc5e^N ooooo HHH«« ea w c* c« e5 8Sggg88gg§88 sis a S3 si sis S3 si si sis OQOOOQ oooooo S3 « §3 cS t- r-i r-i t-i CN nSSc3S3cNMCN« ga C1CN ss'ssssss's^ Sg sis' :8!3 OS CO 00 CO 00 CN M t-CN CNNCNlNC'iCNGNCN 88888SSSSS8S gggg CO CO *#* CO ^t* CO CO CO "^ ^ M* ^ CO CO *■* CO eocoeocococococococococo coco coco gggggg CO CO CO CO CO CO 888g8888888g OONiOO ggsss -cSeS u gg CO CO CO CO CO CO CO 8g 888 88 888? 88 ggg 888 ggg .,-.2.2 ■£ g S gg , , ■- bin +S > o 03 s^2_; r^ fc- O — I ^ 3 5j3_; 864 THE LUMBER INDUSTRY. ?| S cs S e5 « « cn ooo gggg :EK :38 S :K8 5oN«NNNC ggKg 53 SB c§ S3 83 c§ 25 c* £q gSSJ S3 :Sgg§Sf e$ iSScSSiSSSS gg (M .-< gjco sgg 88888 cd in cO to CO 8888 PH OJ «ioot»ot»Nr»^eSNo »" s s SSWWMWM 88 So ©oes© © CO CO CO CO CO (TO CO co co w eo eo co co gggggggggg CO CO CO CO CO CO CO CO CO CO ioo»o Sg 388. 88B inoom NOOt* oil? US -^H CO CO CO CO lOOOOOQ t>-© 100*0*0 © SiOOC 8KS888 *$ ^* ^r ^ ^ co gggg 881 gg gg88 8 :S ■gl 3 o ggg? s's 88S ?88 S' lO ■* CN CN 8888 ■ ■Shll fi& 91b s&aS-gp £• « 5 8 SSSp, PRODUCTION AND WHOLESALE DISTRIBUTION. 865 CO GO GO Cj C- O* O O £888&8S3:3gi2Sg eq S3 c5 S3 c3 S5 c5 Si c3 Inci So miooooo Bnmoooo S88888S88S S8SSS8SaS888 8888888888 SSScMpacNClcS fl eo co CO co eo eo co 8>0000000 iOO • 000000© >oo 88888888888 COCOCOCOCOCOCOCOCOCOC' UJU5UJQIOI0000010U3 MCscscNeoMcocoeoeocoeo OO • • ■ ■ '• ■ »QiQO oo oc*5o o*oi !cioie$ CO« COCO CO : is ; ; i \ J8 ; i i • 'CO lO ■ ■ t , •eo co • • • ISOIOOQOiOQQiQIflO NeN-^irfwuSiriuSiooiriiri cocococococococococococo ooo ooi-t ooaaqiH o i-i i-t co co cn •* co ■* co co <* CO CO CO CO CO CO CO CO N GN CN CO COCOCOCOCOCOCOCOCOCOCOCO l TJ CS 88S »o lOioinioocflwinQ l> ■ O CN CS CN US U3 t- t> CN o oa i ■* •* in to u£ in co in wj in co ■ eo co co co eo co co co co co DOiOOOOOOOO JlONOiOOOOOO OmO>nOinQOQ»000 OOUJiOiOUJOOinOOin lOMCMOClOOONOO 00?lNWNOK)CS>QlOCi| coco coco coo 33.25 34.00 35. 25 35.00 35.00 35.00 36.00 in 37.50 37.50 37.50 38.00 37.25 37.00 36.75 ■ o • m • eo 37.00 36.75 36.50 37.00 37.50 '37.25 37.25 36.60 37.00 37.00 37.50 40.50 41.60 41.25 41.50 41.25 42.00 41.50 42.50 42.26 42.00 42.00 S OOOOOOO ooooooo T-TfT-i'TTTTT'TT gOOQO •OOOOO© OOOO 'OOOOOO CN^rH<-H(N ■ >-i ff4 CJ CO CO CO 8S88S8S8S888 P ^ ^ ^ ^f ^* ^ ^ 5cq>oiooNoe SOONNOMONIOOM § SJS SJ SJ 5 !§!£!§ ^j !g !§ !§ s ss g££ 3SS IOOKJOQQWO OC NIJI^OOONO OH OiOOWOO ONocqoo •lOMNOO 8888888 8888 8888 588 88 Ills 3 sja_j n ^. o — -S •§•2 - ■ m ca o.ca d^ a ro o eu lll^ll^ So g s go 0« tnOZO r* l~ O 3 C go O 0) 25030°— 14 55 866 THE LUMBER INDUSTRY. ■a 3& Ph CD SRSSRssg :gsg sgsggasssgg OQ t— f~ CT> 00 Q> OS -QOO gggggggg8888 888888888 rtcc coco com coco coco coco cocococococoeococo ss cotococococococococococo goioooiooiooiooifl cocococococococococococo NiOiOQiQ CO CO CO CO CO S? :S ss gg 888 gR8 ggSRg 8888 3 ^■3 *-3 lOQiOiOOOOOOOOO NONMOlQOiOOOCSiO lOOOO .0000000 NWOlO >u;iqiooooio COT|*CO<© • Ujj (D O lO CO CO rJ 8888a8SSRggg e3c3 >«00"OCNiOMOU5 "^ ^ ^ ^ ^ ^ ^* ^ ^* 8S88R ~~ -r -r t gSSSSig 8R88S :8S8 ?sa 8QIOOOOOOQQO ONioioonNiooo lOONSNC ■OUlujiOiiju sssss sssssss 888888888888 S88888g8gg8S 88g88 88Sggg RgSSaggagaag 8ggS 3cococa 8R88R ■%-A M 88 88888 88888 gggg 88 88 8888 888 CO CO CO v > ; .tiifi m DIAGRAM 28. — Movement of Actual Prices of Quartered and Plain Oak Delivered in Boston, New York, Pni i a< j e i P hia Buffalo, Chicago, and St. Louis, 18 28.-Movement of Actaal Prices of Quartered and Plain Oak Delivered in Boston, New York, P^adelpliia, Buffalo, Chicago, and St. Louis, 1894-1910. PBODtrCTIOH AND WHOLESALE DISTRIBUTION. 867 -rf Tf -V T <6 NOfl IN N a aaassssssssjs a • oinus ■ujcnc- • Up to -41 * American Lumberman, July 1, 1906, p. 23. 886 THE LUMBER INDUSTRY. The following action was taken in reference to it: "On motion duly seconded the report was accepted and ordered filed." The following discussion took place: "R. Hanson said that prices recommended by the committee were being secured in most cases and gave a very optimistic view of the outlook for trade. The sentiments expressed by Mr. Hanson were affirmed by W. W. Mitchell and F. A. Diggins." An account of the first annual meeting of the Michigan Hardwood Manufacturers' Association, held July 31, appears in the American Lumberman of August 3, 1907, page 56. The following extract is taken from the annual report of President William H. White: Through the efficient work of our secretary the membership has been kept informed of the market conditions, both as to the class and quality of material, also the market price of such material, with the result, I believe, that the manufacturer has been able more nearly to meet the demands of the trade than ever before, the trade in turn receiving our product at a more nearly uniform market value, which has been as low as the price of timber, labor and articles of consumption generally would warrant, and at a fair and uniform price to the manufacturer. We have thus been able to enjoy throughout the entire year a run of values based entirely upon the actual supply and demand. The activities of the Michigan Maple Co. appear to have diminished after the establishment of the Michigan Hardwood Manufacturers' Association in 1906. References to it in the trade journals became less numerous, and finally, in the Hardwood Record of June 10, 1907, page 56, there is an account of its approaching dissolution, beginning with the statement: "The Michigan Maple Company is clos- ing up its affairs as fast as possible and will go out of business as soon as its stocks are disposed of, which will probably be a matter of three or four months." The speech, already alluded to, of J. M. Harris at the meeting of the Michigan Hardwood Manufacturers' Association, July 31, 1907, contains the following on the relation of the activities of the Michigan Maple Co. to market prices: I was more or less closely associated with the organization of the Michigan Maple Company, with which most of you are familiar. It was not organized for the purpose for which you are, yet it accomplished very much along the lines you are working on here, and whatever weakness there was in the old organiza- tion I think you have successfully cured in your present one. However, whatever faults this organization may have had, I am impressed with this: In 1901 or 1902 I know maple was seeking a market at $5, $10, and $15 per thousand, and I remem- ber that when the company made the proposition that they would pay $6, $11, and $16, a great many of the manufacturers thought that could not be accomplished, that the company would be unable to market maple at a profit, and buy it at $6, $11, PRODUCTION AND WHOLESALE DISTRIBUTION. 887 and $16. My information now is that the company not only did that, but took the maple off the hands of manufacturers at that price and sold it at an advance which made them a handsome profit. At the October, 1910, meeting of the association the market- conditions committee made the following statement in regard to maple: We believe the maple situation to be unusually strong and that much higher prices may be obtained for the better grades of maple than the prices recommended, but we would recommend some caution in advancing prices as it may lead to substitu- tion of inferior and cheaper woods. There, however, is an unquestionable shortage in the better grades of maple lumber and it is no longer necessary for the manufacturer to sacrifice his good maple. We believe that the matter of production should receive the careful consideration of this Association. For a discussion of the Michigan Hardwood Manufacturers' Asso- ciation see pp. 840-844. Section 11. Extracts from lumber-trade papers relating to maple. Note. — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber-trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news items from various cities will refer to the action and for several weeks or months will comment on its effect, adds to the credibility of the extracts. 1898. Chicago — New York Lumber Trade Journal, July 1, 1898, page 10.— The Maple Flooring Association, at its recent meeting in Chicago, advanced prices $1 per thousand on all grades. This took effect Monday, June 20, and all sales now made are based on those figures. 1899. Chicago — American Lumberman, February 26, 1899, page 18. — [Meeting of the maple flooring manufacturers held in Chicago, February 16 and 17, 1899.] The ensuing discussion was on distinctly conservative lines and resulted in a revision of the list with reference to freight and other considerations covering advances at from 50 cents to $1 a thousand feet. [The list is effective February 20, 1899.J Boston— American Lumberman, July S9, 1899, page S6.— Maple flooring has no fluctuations to speak of agreement prices being very generally maintained. Boston— New York Lumber Trade Journal, November 1, 1899, page 16.— Maple flooring was advanced on the 15th instant $2 per thousand feet. Philadelphia— New York Lumber Trade Journal, November 1, 1899, page 17— Maple flooring prices have been advanced by the association now, 2-inch No. 1, $32; No. 21, $34; 31, $32.50. Boston— American Lumberman, December BS, 1899, page 87— Maple flooring is still held up and sells easily and quietly at agreement prices. 1900. Boston— American Lumberman, March S, 1900, page J,7— Maple flooring is sold steadily and in good rolume at the association prices and no recessions from these prices are reported. Boston— American Lumberman, March SI, 1900, page S6.— Maple flooring runs along in the groove set bv the association and is fairly firm at those prices. . Boston— American Lumberman, April H, 1900, page 1,0.— Maple is about steady at the agreement prices with orders in comfortable volume for the season of the year and no disposition manifest to either lower or raise prices. 888 THE LUMBER INDUSTRY. 1901. Chicago — American Lumberman, January 19, 1901, page 28.— The third annual meeting of the Maple Flooring Manufacturers' Association was held at the Victoria Hotel, Chicago, on Wednesday of thisweek with a very large attendance. Twenty-six of the twenty-nine firms and companies comprising themem- bership of the association being represented. Philadelphia— New York Lumber Trade Journal^ February 1,1901, page 26.— Prices remain at thesame figure, excepting in maple flooring. The association has notched up No. 1 3-inch 50 cents, andfactory 3-inch SI per inch. Boston— American Lumberman^ April 27, 1901, page 44.— Maple is moving quietly with no great fluctua- tions. The flooring men are stiff and firm at the association prices and make such inroads upon the maple stock that pronounced fluctuations are rendered almost impossible in the lumber as a whole. Chicago— American Lumberman, May 4, 1901 , page 42. — Maple flooring prices have recently beenadvanced and the demand, in that line is reported first-class, there being a prevailing scarcity of firsts and seconds. Chicago— American Lumberman, May 18, 1901, page 88. — The demand, for maple does not appear as yet to have increased sufficiently to favorably affect values which are inclined to be weak. Michigan manu- facturers are maintaining a firm front on the basis of their uniform quotations. Grand Rapids— American Lumberman, May 25, 1901, page 40— The Maple Flooring Manufacturers' Association held a two days' session at the Morton House, Grand Rapids, during the past week, with 26 members in attendance, including President W. M, Dwight, of Detroit, and secretary B. H. Cook, of Petoskey. Several new applications for membership were acted upon favorably so that the association now represents 95 per cent of the maple flooring manufacturers of the United States. Chicago— American Lumberman, June 15, 1901, page 35. — The efforts being made by manufacturers of Michigan maple to unify their interests is likely to be productive of results, which may be reflected in better prices later on. Nothing definite has been accomplished thus far, however, and meanwhile all kinds of prices are reported, from $5 to $7 for culls, 310 to $12 for common^ and $15 to $17 for firsts and seconds. Boston— American Lumberman, June 22, 1901, page 45. — Maple is in the dumps with lists coming in with various cuts in price. In flooring the manufacturers are making a vigorous effort to keep prices up to the list with good success. Boston— American Lumberman, June 29, 1901, page $8. — Maple flooring is inclined to be a little flat, although manufacturers are making every effort, with some degree of success, to hold together on the price. American Lumberman, July 20, 1901, page fff.— When the Michigan Maple Manufacturers saw the drift of the maple market a year ago, they wisely adopted the policy of radically restricting their output of thick stock last winter and it is estimated that the cut of the past season at Michigan mills was not over 10 per cent of that of the year preceding, though a large proportion of the stocks carried over from last year were and still are on hand, being chiefly owned by wholesalers in this and other distributing markets. Boston— American Lumberman, September 14, 1901, page Jfi.— Maple flooring is in very satisfactory con- dition, salesmen finding no difficulty in placing their stock at list prices and finding a continual active demand although not a clamorous one. Boston— American Lumberman, October 26, 1901, page 41- — Maple is moving in a fairly normal sort of way with no particular excitement, although the flooring men are holding it firm to the list prices and obtaining them. Chicago— American Lumberman, October 26, 1901, page Ifi — Maple has shown little strength, but with the organization of the manufacturers, which places them in control of practically the entire Michigan output, there need no longer be any hesitation among buyers of maple to take it on at present prices. It is now more than likely that the $5, $10 and $15 figure will not again oe heard of for some time at least. Grand Rapids— American Lumberman, October 26, 1901, page 28. — At the Morton house in this city yester- day was held a meeting of maple lumber manufacturers, a report in regard to which in a daily paper is prefaced by the statement that The hardwood lumber manufacturers of Michigan have organized a combine, including all the manufacturers in the state, to handle the annual output to the best advantage to the pro- ducer. While all of those represented were hardwood manufacturer^ they were there by virtue of their prominence as maple producers, and the organization which was decided upon will be in the interest of that wood especially. Those familiar with the hardwood business know that for a long time maple lumber has been in a depressed condition, seldom commanding the prices warranted by those obtaining for other and competitive woods. For several months leading members of the maple industry have been considering plans for some organi- zation to remedy this matter, which would lessen the cost of handling the product, might be able to exert some restraining influence upon production in times of light demand and to steady the market. The outcome of the meeting yesterday was a decision to organize a company with a capital stock of $250,000 to contract or buy outright the product of mills, and over 50 per cent of the above capital was subscribed at the meeting. An annual output of 107,000,000 feet of maple lumber was represented by the twenty-eight Michigan con- cerns in attendance. Boston— American Lumberman, November 2, 1901, page S8— The [maple] flooring men are monopolizing the center of the stage and holding firm. They seem to have gotten this product about where they want it and concessions are impossible, for by one and all the full list price is held to. Boston— American Lumberman, November 9, 1901, page -U.— Maple is moving quietly with an amount of business sufficient to keep the salesmen from getting rusty, while maple flooring is hard and fast at association prices with no hint of concessions from any quarter. There is perhaps no class of lumber In the market which seems to be bottled up tighter in the hands of the owners than this maple flooring. Boston— American Lumberman, November 30, 1901, page 38.— Maple is reasonably strong on 1-inch, l{, and 2-inch, which brings $28 and $29, but it is reported weaker on the thicker stock, 3 and 4 inch bringing $31. Flooring is exceptionally strong and in good request with the association holding with bulldog tenacity to its prices and the rules governing commissions, etc. 1902. Boston— Southern Lumberman, January 15, 1902, page 18.— There is a rumor abroad that efforts are being made to control the output and prices of maple. The story comes from Michigan. Buffalo— Southern Lumberman, January 15, 1902— There is much interest in the effort to combine Michigan maple interests and see if this sort of lumber can not be made to pay a profit in future. Another meeting is to be held soon at Grand Rapids to complete the arrangement. William H. White, who was down lately from Boyne City, Mich., speaks of the venture as already a success. Boston— American Lumberman, January 25. 1902, page 46.— Maple flooring is as steady as a clock at the highest range of figures yet advanced by the flooring association. Buffalo — American Lumberman, January 25, 1902, page 46.— Some dealers are turning their inch maple mostly into flooring and find it a good seller; besides they can in this way work off all their low grade. New York— New York Lumber Trade Journal, February 1, 1902, page 22.— On January 21 maple flooring was advanced by the Maple Flooring Manufacturers' Association $1 on clear, $2 on common, and $1 on PRODUCTION AND WHOLESALE DISTRIBUTION. 889 factory; same to take effect immediately, the advance applying to the various markets in the eastern territory . Chicago— American Lumberman, February 1, 1902, page BS.— Maple has not shown any great animation of late, but the new manufacturers' association promises advanced prices the coming spring Maple flooring has recently been advanced $1 on firsts and seconds, 52 on common, and $1 on factory American Lumberman, February 8, 1902, -page 11— For some time the leading manufacturers of maple flooring have had an association which has been of great advantage to that industry. These manufacturers are much scattered, had lacked any unity of methods, and had no common basis of information but their association remedied all this with effects which are recognized everywhere maple flooring is sold and used Prices nave been bettered and have been made substantially uniform. The rough lumber however has always been comparatively in poor shape. * * * Comparatively few of the maple lumber producers have made anything out of their business, and the importance of putting the rough lumber in substantially the same position as the flooring part of the finished product has long been recognized. There has been a hardwood association in Michigan, but it did not solve the maple problem. Finally however plans were taken up last year in earnest that resulted in the organization of the Michigan Maple Co which has its office in the Michigan Trust Building, Grand Rapids, and has now begun business. Its members are the leading mills of Michigan and it is estimated to control 85 per cent of the maple product of the State. * * * The company will handle the entire product of the mills of its members, and. with its ample capital will be ui position not only to enter the market to advantage but to buy outside products if desirable' Selling in this way, through one agency, the mills will save a large expense, and prices can be maintained more uniformly. It is not the intention of the company to advance prices to any great extent and it will especially avoid antagonizing anyone. We understand that it purposes to sell to the trade and to the very heavy consumers, leaving dealers to supply their ordinary trade. Thus it will not enter into com- petition with those to whom its members have heretofore sold their product, and, in fact the dealers will probably have a wider field of distribution than heretofore. Chicago— American Lumberman, February IB, 1902, page BS.— Maple is toning up finely since the new manufacturers' company was organized. Chicago— Americm Lumberman, March 1, 1902, page 45.— Maple has responded to some extent to the new forces that are at work in that industry and little can be obtained now at less than an advance of $1 to $1.50 over last fall's prices. Boston— American Lumberman, March 211, 1902, page 48.— Maple, particularly maple flooring, is steady and strong at association prices, with a lively demand and none too much to fill it. Chicago — American, Lumberman, March 22, 1902, page 4B. — Inch maple has improved in price as a result of the organization of the Michigan manufacturers, and there is very little stock obtainable at less than association values. Boston — American Lumberman, Aprils, 1902, page 46.— Maple flooring, however, is in an ideal condition; the demand is good at list prices and in some cases a trifle more. The association is holding strong and solid and experiencing no difficulty in getting the full schedule; 2£-inch face brings $35. Buffalo — American Lumberman, April 12, 1902, page 61.— Practically nothing else is advancing but maple which is still a low-priced wood. The Michigan combine is given credit for the improvement which is only a dollar or two. Chicago — American Lumberman, April 19, 1902, page 52.— Maple is steady and numerous sales are reported at the recently advanced quotations of the Michigan association. Thick maple is coming up in demand and is also improving in price. Buffalo — American Lumberman, May 17, 1902, page 47. — There are still reports of maple selling low in spite of the combine to put it up. Boston — American Lumberman, May 17, 1902, page 47.— The maple flooring people are not only holding their own prices stiff and strong with some recent advances to this market, but they have the effect of stiffening the market for maple lumber. Chicago — American Lumberman, May 24, 1902, page 71. — Maple flooring has advanced $2 a thousand, and this should prove a good stimulus to the values of rough stock. Thick maple is advancing and may now be safely quoted at $5 above the prices ruling last summer, stocks being in the hands of strong holders. Boston — American Lumberman, June 14, 1902, page 54. — Maple flooring shows some signs of surreptitious cutting and some cuts are rather deep at that. It is said to be done by some members of the association or their representatives in this market. Boston — American Lumberman, June 21, 1902, page BO. — The maple flooring quotations are reported at the old price and no sales so far as can be unearthed at the last rise. Judged hy the price list now in vogue, therefore, the price which is actually obtained may be said to be $2 below the list. Boston — American Lumberman, June 28, 1902, page 49- — Maple moves rather quietly with no change in price. This refers more particularly to the lumber, for there seems to be a strong disposition on the part of flooring men to move stock at the expense of the price list. There are few sales reported at the full price list while rumors of concessions are very rife. Chicago — American Lumberman, July 5, 1902, page 48. — Maple has again been advanced in price, and the ast quotations made by Michigan manufacturers, based at Lake shipping points, on lsts and 2nds common md cull, were as follows: One-inch, $20, $14 and $8; 2-inch, $22, $16 and $10; 3-inch, $24, $18 and $12; 4-inch, 25, $19 and $13: adding $2 for delivery in Chicago it can, be seen that prices have advanced from 25 to 33% an the past six months-. Boston— American Lumberman, July 5, 1902, page ^9.— Maple Is quiet, though not very weak, except as signs of cutting appear in the flooring end of the maple business. Buffalo— American Lumberman, July 5, 1902, page 49. — Maple is as plentiful as ever, with prices some- what stiffened by the combine in Michigan, but there is not much real firmness in that wood as compared with most of the others. Boston — A merican Lumberman, July 12, 1902, page SI. — Maple flooring is reported off in price, with rumors of cutting constantly confirmed. New York — American Lumberman, July 19, 1902, page 55.— Prices m the mam are firm and the recent advance in maple flooring will have no tendency to curtail the demand in any way. Chicago— American Lumberman, July 19, 1902, page 54.— Those who handle maple say that the recent prices adopted by the Michigan Association are being adhered to firmly and that no maple oi consequence can be bought at less than the Michigan prices, which are based on $20 for firsts and seconds inch, $14 for common, and $8 for cull. . Boston— American Lumberman, August 2S, 1902, page 47-— Thick maple is scarce at $33, but inch is druggy at $28. But few orders for maple flooring have been going west as the northern mills seem to be able to take care of the demand and sales at the new list are few and far between. Boston— American Lumberman, November 1, 1902, page 78.— Maple moves quietly at $28 with only indif- ferent buying. * * * Maple flooring is in a sort of a transition period pending the success of the latest endeavors of the association to get together and stay together. .„„„,,.,, Boston— American Lumberman, December 6, 1902, page 62.— Maple moves slowly at $28 for No. 1 and $33 for the 2-inch: the demand is only from hand to mouth There are some rumors of price cutting in maple flooring, although as a whole prices are held fairly firm. 890 THE LTJMBEE INDUSTRY. 1903. Boston — American Lumberman, January 10, 1908, page 61. — The situation in maple flooring Is far from satisfactory. It is claimed that there are few sales at the list and that mills outside the association are securing all the orders. Boston— American Lumberman, February 1, 190S, page 53.— The weakest spot in the whole market is maple flooring as the price cutting which was confined to a few firms has now become general. Buffalo— American Lumberman, February 7, 190S, page 63.— It is probable that most Michigan hard- woods can be shaded but the maple combine is holding its prices very firm. Boston— American Lumberman, February 21, (90S, page 67— Maple flooring has gone to pieces and it is impossible to quote current prices as they vary so much. New York — American Lumberman, February 21, 1903, page 57. — Maple flooring is selling away under list prices, but it is thought that the association will shortly take action that will remedy this. Boston — American Lumberman, June 27, 1903, page 68d. — Maple sells in the neighborhood of $30. The maple flooring mills are trying hard to restore the list but price cutting is still rife. Chicago — American Lumberman, July 11, 1903, page 51.— -Maple is said to be in good request at previous quotations based on 822, $15 and $9 for firsts and seconds, common and cull, respectively, f. o. a. Lake ports. Maple flooring is not as weak here as it has been reported in some of the eastern markets, a Chi- cago manufacturer stating that he sold this week 700,000 feet of firsts and seconds, clear maple flooring at full list price, which is good evidence that the market is far from going to pieces as had been asserted. Boston — American Lumberman, July 25, 1903, page 64. — Prices on maple flooring have not advanced in spite of the organized effort to raise them. Chicago — American Lumberman, August 1, 1903, page 53. — Maple flooring is selling in excellent volume with several of the manufacturers and prices are being shaded from $1 to $3. Buffalo — American Lumberman, August 29, 190S, page 62. — Maple is running up in price and will soon be one of the expensive woods. It brings $22.50 in Michigan, and report comes in that the Michigan Maple Co. is turning down all orders having sold so far ahead. Boston — American Lumberman, October 17, 1903, page 60. — Maple flooring still continues weak with con- cessions from the list and sharp competition on large orders. 1904. American Lumberman, January SO, 1904, page 50. — The 7th annual meeting of the Maple Flooring Mfrs. Assn. was held at the Victoria Hotel in this city [Chicago], on Tuesday last, Jan. 24, 1904. The flooring men reported that there were no stocks of dry maple on hand at lumber manufacturing points and stocks in the hands of the flooring manufacturers were about normal with prices well main- tained. * * * The question of prices was taken up but no changes were recommended to be made in the list. Buffalo — American Lumberman, April 16, 1904, page 65. — Maple flooring manufacturers still complain of light prices and jobbers agree that they can buy flooring in some instances at about $5 off the list price. Chicago — American Lumberman, July 23, 1904, page 61. — Maple is being held firmly by Michigan manufacturers, while maple flooring is being sold at a price that can leave little or no margin for the manufacturer. Boston — American Lumberman, September 3, 1904, page 68. — It is generally understood that on Septem- ber 1 the price of maple flooring will be advanced from $34.50 to $35.50 on 2J-inch face. Boston — American Lumberman, September 10, 1904, page 61. — As anticipated, the price of maple flooring has been advanced by a number of manufacturers, the advance varying from 50 cents to $1 on upper grades. Boston— American Lumberman, October 29, 1904. page 56.— A strong effort is being made to advance the prices of maple flooring, for which some wholesale nouses are asking $1 over last week's prices, but up to present writing no sales have been reported at that figure. Boston — American Lumberman t November 12, 1904, page 66. — The trade is beginning to pay the advance in the price of maple flooring, which has moved up 50 cents to $1 higher than during last month. 1905. Boston— American Lumberman, February 4, 1906, page 70.— Rough maple inch ones and twos still holds to $32 to $33, although last week maple flooring lists were withdrawn and a new list issued at a general advance of $3 on high grade items. Chicago— American Lumberman, February 11, 1906, page 64.— Prices on Michigan maple are much steadier while maple flooring is selling briskly at the advanced quotations. Bolton— American Lumberman, July 22, 1905.— Maple flooring is almost without exception holding close Boston— American Lumberman, September 2, 1905— Rough maple inch ones and twos holds at $32.50 and clear face maple flooring prices are well sustained at list basis of $37.50 Bay City and Saginaw— American Lumberman, September 16, 1906, pageU — The Michigan Maple Com- pany has advanced the price of No. 1 and No. 2 common all thicknesses $1 a thousand, and while the com- pany does not take in the Saginaw Valley operators it includes the Loud & Sons Company at Au Sable and firms at Alpena and the strength affects this market. Philadelphia— American Lumberman, September 16, 1905, page 66.— Maple flooring has advanced $1.50 on clear and No. 1 and 50 cents and $1 on factory, effective September 8 Philadelphia— American Lumberman, September 23, 1906— Maple flooring does not seem to be holding the recent raise and a good deal is sold at former prices. m B ™ t ^ A ^* a n Lum '>"™>n, September 23, 1905.- Maple flooring has advanced $1.50 on the clear, - making the price of 2} mch $39. No. 1 factory has been advanced 31. Philadelphia— American Lumberman, September SO, 1906, page 63.— All the advances made in price recently are holding well, except that in maple flooring, which seems not to have been warranted Chicago- American Lumberman September SO, 1906.— Michigan maple is firm and its principal product, maple flooring, is held steady at the recent advance. Nora TonawariAa-American Lumberman, October 7, 1906.— Dealers have been notified of an advance of $1 on Nos. 1 and 2 common maple. It has not gone mto effect and demand is considered hardly strong enough to warrant the increase. li«f S^A^f 1 ?^" ™ b ' rman > December 9, 1905, page «8.-Maple flooring is not so firmly held but the list price of $39 for 2j-mch face clear still stands. ,J'^!il' lh TA. mtr i can i "™?f r "«"i. December 23, 1906, page 41.— Maple flooring is becoming more sought for in spite of the advance in list ordered by the manufacturers. miubui PRODUCTION AND WHOLESALE DISTRIBUTION. 891 1906. Chicago— American Lumberman, January 6, 1906, page 66.— Michigan maple manufacturers are reported to nave advanced their prices on rough maple to $23 for firsts and seconds, $16 for common and $10 for cull Chicago— American Lumberman, January 27, 1906, page 71— Maple flooring manufacturers have lately advanced their prices to $37.50 for firsts and seconds, Chicago basis. Grand Rapids— American Lumberman, February 2i, 1906, page 46.— The Michigan Maple Co. held its fourth annual meeting at the Hotel Pantlind yesterday. The morning was given over to a stockholders' meeting, at which reports for 1905 business were submitted. * * * The following resolution was passed unanimously: Resolved, That it is the sense of this meeting of the stockholders of the Michigan Maple Company that it be continued after 1906 and that a committee of five be appointed by the president to present a report at a meeting to be called at a subsequent date, such committee to report any improvement in the plan of our organization to broaden its scope so as to handle other hardwoods. 1907. North Tonawanda—A mcrican Lumberman, April SO, 1907, page 91 .—Maple is one of the most active woods. The recent advance of $1 has made no apparent difference in the demand. Chicago— American Lumberman, April 27, 1907, page 1U-— Hard maple is meeting with a better market than it has known in the history of the Chicago hardwood trade, and it is selling at prices well up to the late advances. Chicago— American Lumberman, October 26, 1907— Receipts of hard maple have fallen off during the week and the demand continues very steady. Prices are firm. The agricultural implement people are calling for the heavy grades and are offering good prices for them. The floor manufacturers are absorbing everything suitable for their use. Clear maple flooring is quoted as steady at about $41. Cadillac— American Lumberman, November 9, 1907, page 66.— The Michigan Hardwood Manufacturers Association, organized July 14, 1906, which includes in its membership practically all the manufacturers of hardwood lumber in Michigan is just getting fairly down to business. Boston— New York Lumber Trade Journal, November 16,1907, page 26.— Maple flooring cannot be termed firm as sales have been heard of at considerably under list quotations. Boston— American Lumberman, December 21, 1907, page 87.— Reports of maple flooring selling at less than list prices are still heard. 1908. Chicago — American Lumberman, January 4, 1908. — The closing down of building operations has had its effect on the hard maple markets as the demand for maple flooring has fallen off materially. A num- ber of the flooring m ills have closed down temporarily and will not resume until conditions improve. Prices are lower than they were a month ago, but as soon as the flooring mills resume operations they will probably improve. American Lumberman, February 1, 1908.— The maple flooring men of Michigan feel that competition is so fierce in these dull times that it would be advisable to combine all stocks under one selling agency, probably located in Chicago. Some tentative efforts are being made toward that result. Chicago — St. Louis Lumberman, September 1, 1908, page 80. — Maple is in good shape, and being held in strong hands values remain firm, the upper grades in 1 inch being particularly active. Chicago — American Lumberman, November SI, 1908, page 9S. — Maple is selling more freely than for some time to flooring factories and prices are expected to advance on all grades suitable for flooring. A few sales of firsts and seconds have been made to furniture makers at better prices than have been secured for some time. 1909. Chicago— American Lumberman, January 9 1909, page 89.— Hard maple is in good supply here and is being taken up by the flooring factories, all of which are now running full time. Prices are fair. Chicago — American Lumberman, June 19, 1909. — Flooring manufacturers are practically the only buyers of hard maple, but the demand for this commodity is strong, with prices firm. Chicago— American Lumberman, October 16, 1909, page 76.— Maple flooring manufacturers are all well supplied with orders, and prices are firm at list quotations. American Lumberman^ November 6, 1909, page 31. — At the recent meeting of the Michigan Hardwood Manufacturers' Association in Detroit the recommendation was made that the hardwood manufacturers of Michigan should give special attention to hard maple— that it be not wasted in cutting nor sacrificed in selling. 1910. Chicago — Hardwood Record, May 10 t 1910, page 59.— One of the best selling stocks on the market at the present time is maple which is good in all grades and sizes. Thick soft maple, two and three inches, is worth about $31, and is extremely active. The maple situation is governed to a large extent by the floor- ing people, who as usual are doing a large and unfluctuating business, and call for their regular supplies. Chicago — American Lumberman, September 17, 1910. — Demand for thick maple is showing symptoms of revival. Inch maple is in fair request. Manufacturers of maple flooring are having about as lively a trade as they can supply, all the factories being well furnished with orders. There is a growing feeling in the trade that both rough maple and maple flooring should bring higher prices than they are doing at present. Those in close touch with conditions say that maple flooring will go higher in a few days. Chicago— American Lumberman, October 1, 1910, page 83.— Maple flooring is firm and is holding steady at the recent advance. 892 THE LUMBER INDUSTRY. Section 12. Grades. Maple flooring. — The following rules for grading flooring were adopted January 17, 1906, by the Maple Flooring Manufacturers' Association: Clear, f| inch. — Shall have one face free of all defects, but the question of color shall not be considered. Standard lengths in all widths in this grade shall be 2 to 16 feet, inclusive. The pro- portion of lengths 2 to 3£ feet shall be what the stock will pro- duce up to 7 per cent. No. 1, H inch. — Will admit of tight, sound knots and slight imperfections in dressing, but must lay without waste. Stand- ard lengths in this grade shall be trimmed from 1£ to 16 feet, inclusive. Factory flooring, xf inch. — Must be of such a character as will lay and give a good serviceable floor with some cutting. Lengths 1 to 16 feet. Rough maple lumber. — The rules adopted by the Hardwood Man- ufacturers' Association of the United States are shown on pages 848- 851, and those adopted by the National Hardwood Lumber Associa- tion, on pages 853-854. Section 13. Prices of actual sales of maple. Tabular statement. — Table 13 shows delivered prices in several markets for rough maple boards and for maple flooring. Some of the prices begin in 1897; others a year or two later. Most are brought down to 1910. Prices for the following items are shown by the Bureau for the markets designated by an asterisk (*). Grade. Width and thickness of lumber. Boston. New York. Philadel- phia. Buffalo. Inches. 8 «x3J »«X21 3 «x3J (♦) (*) (*) (*) (*) (*) (*) (*) (*) (*) (*) Flooring: Clear Do (*) (*) Do (*) I £#9°? were obtained for lower grades, but the returns were too few to warrant presentation. ' Width and length not specified. 8 Various lengths. Diagram. — Of the prices shown in Table 13, already described, those for rough maple boards and for 2£ inch flooring are shown on Diagram 29 (opposite p. 896). The prices show comparatively slight fluctuations over the period for rough maple, the principal advance taking place in 1903. In the flooring prices the fluctuations are more marked. In all the maple curves the highest prices shown are in 1910. PRODUCTION AND WHOLESALE DISTRIBUTION. 893 bi) a o o d o S a o u o" CO o -4-» o pa o" a "3 . it o ' in > a : •9 . S to O o 03 5 O o CO O o 8 8 O 5 OS "3 . 53 CM o CM o o o" CO 8 : CO ■ 5| o coco U3 CO m -a gw .■_, a> H C4 ■2S ^a J o3 !i o _2 s n S3 Oft o cm O o S3 oo • "3 . Ah 8 ad 8 3 o o is o 1 8 M o o s 3 88 as oo oo sis oo oo s?i ggs ooo § CO 1 1 I J- < 1 I k 1 1 1 S5 1 a. 00 OS CO s 1 1 * 1 c 1 1 1 1 1 5 1 a, 1 a .a 1 o 5 1 1 00 1 l-s 1 ■g ■C 1 8 1 1 ■1 1 i 5 894 THE LUMBEE INDUSTRY. kH -. y r. 1 CJ CN e3 S§ 888888888 o co co co co co T3 rt P-. &M 1%S CO CO CO CO 8 SS g pi a w bo n ID e3 5 ft feil a o a •2 uSS j£|s -£ o 2: © DDOIZin ss 8 8 ill! 8888 IN WMN Ss^S ft J5 3 a 3 »*5 * OOK3 88 888 PRODUCTION AND WHOLESALE DISTRIBUTION. 895 ss 00 O o o«o ss §8 Sg CO CO CO CO ssg iftiO coco gg §gggf lOiOiciflOOOQioinifl ssss oioioiopQOOu; ONf-«OOOiON ggg S 10S KSSSSSSStSc^SS ©OOOiOOOOiOiOt-lO SNUJIOtQiOiO SS; ggg :g :Si gg Si Si gg 88 8 SS88 i>r»£-oooo Ills lilliitlfill III** 88 ■ S . ® 53 88 11^ && • S'S-' ■ ■ p ® 896 THE LUMBER INDUSTRY. i-a ^ o3 EN ss ?ss I ■a :S S8SS :!S£ IS U ID II ■O'S §■8 sss P4 ss i— t- t- ofi oo o6 oi ., j_ 3? 30 FIRSTS AND SECONDS |4f1 — \ \\ I 1 1 1 I ' I " l"t~r ! • \ I' mm "m l t r J w X„*« w J«**Le4--^4---+^ ° ; * ; # V ■! i* *«^»^««^«^»|*» i Wtr* L ^ [_-U--_ **-1---h- | 1 | •'r&a Ui w »i , h U-p-.vAJ -H -t- 4 HOUGH INCH B0ARD5 ' -4- 1 -— )"-)—- .-44-- -i- 1 - TTiT— '-"T+H^" 1 X" "' X p.r L«_»4^..j^a^_ I L^aV.^ 1 .iL*R ■^^--i-^^ e +if-4 lj Kr 4*T X ^- A-i s 444 i r-V^-+- ?s ... uuotvn ^ i " o o o 1 ooo o[ OO^ •" l VL » X -L ss ^^ ri 4^ i ' _l 44 if" < ' i 4 'Mil 4- * 24. _, n PHILADELPHIA -- A o 4°° J. 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"ri~.. 1 1 i\ «•_; 1 14 . ,, t .. _ •• : L.4- h 44-*»p4--i ? -V--T-' M-^-J— 4—h— M ~t— <-— E-t4---t— 4-i-M-rr ,'x '£ -^-jHV-M-t- -rH-^ L-+V 7 i ~p^^M — L4tL j p^ ; - • -pM-- j — - 444 MEHMEEh 1+TTMTTL •'...•" »•*:»..♦ .».,.,.....• , ... 10 a vMMr -M-TT-f -T--E-H — -E 4 "^ 1 I --^4^T^VM7-vLT"M^M-4^Mii'^H^iT-MM--^gj 1—2- l-I-i — L— j— J— 11,^4 UJ i.L^^jjJjJJ— JJ^^J^JjjJIj,j,,1,j.LI.LlL--j-i U uxu._ J„_L» u_^J u 1 u , 1 1 — JJ 1 1 1 U-L. 44, 4 ..ill 1 J..L.L . 4THT..-J 4 M 1 11 1 i J..U— LiL M 1 1 1 1 1 i i i 1 M , -1 1 i 1 M 1 1 1 1 1 M 1, llkliJ-L. PRODUCTION AND WHOLESALE DISTRIBUTION. 897 oo 88? So-g oiaoiooooio ooiqno r- in oioN 4t-l> ONr ^p 1J1 O m 10 c« r- r- c5 10 iS8§ II 25030°— 14 J i- OS 3 §,a 5 a Ct».§t>,5f a9a SJ2 hi "' 1.8 57 898 THE LTJMBEB INDUSTRY. POPLAR. Section 14. Competition met by poplar producers. Poplar competes with a number of different species. Its most active competitors vary in different markets and at different times. It either crowds out some higher priced wood, or is itself crowded out by some cheaper wood. For certain uses it may have but few compet- itors, while for others it may have a dozen. During the early period for which the Bureau shows prices lumbermen frequently spoke of poplar being substituted for white pine. Even in such a white-pine center as Buffalo poplar had become an active rival of white pine along sev- eral hnes, but with the radical advance of poplar prices in 1903, white pine regained much of the trade previously lost to poplar. When poplar prices fell, it again slowly regained its trade. Poplar trees grow larger than other species east of the Rocky Mountains, and wherever wide boards are required it has been a prominent wood. Wide boards from 17 to 28 inches are furnished to the trade in con- siderable quantity, and their quality is such that they naturally succeed the high-grade white pine. Wide-panel stock, which is used in the manufacture of carriage bodies, has not had any serious com- petitors, although some manufacturers are using cottonwood as a sub- stitute. Wide boards, however, for certain uses are obtained from the Pacific coast. In pattern work poplar has a strong position, but white pine is still a favorite. In porch columns poplar competes with cedar and fir in many markets. Box factories have used poplar, and in this field there are many sub- stitutes. As poplar followed in the wake of white pine, so cottonwood and basswood have followed poplar. Any radical advance in price of poplar has brought about a return to the woods for which poplar was substituted and enabled cheaper woods to enter the field formerly held by poplar. Following the year 1903 even architects and builders called for substitutes for poplar. Section 15. Conditions in production of poplar. As has already been stated, poplar is chiefly produced in the Appalachian Mountain States. The finest trees grow in deep coves of the mountainous section of these States, and much of the timber is difficult to reach. No pure stand of poplar exists. From 1,000 to 2,500 feet per acre is considered a good stand of poplar. It grows among oak, chestnut, beech, ash, walnut, and other species, and a few large poplar trees per acre are often all that is found. When logs are cut near good driving water the expense is not exceptionally high, but when logging operations are carried on PRODUCTION AND WHOLESALE DISTRIBUTION. 899 near the headwaters of streams and splash dams are necessary to move the logs down the streams the expense is decidedly increased. Much of the poplar which is being cut at present stands a considerable distance from the railroad, and it is necessary to raft the logs and float them downstream. The streams are either mountain torrents or a half-dry pathway where rocks abound. Splash dams may be erected at great expense, and in that way the streams may be used during much of the year, but such dams are not often found, and without such provision log shortages are common. During dry seasons no logs come down the rivers and mills are compelled to shut down. Mills getting their supply of logs direct from the woods by rail, or those having splash dams in operation, are the only large plants assured of a steady log supply. But since most mills manufacturing poplar are com- paratively small plants, few have been able to make necessary river improvements. There are, however, four or five concerns operating large mills, and the importance of these as factors in the poplar trade is increasing. From time to time small mills cut out all of their available timber and disappear from the field. This results in a decrease in the number of operators and increases the control of the large concerns over the trade. Section 16. Organized price activities of poplar producers. Association price-list activities. — No detailed investigation of associations among poplar manufacturers has been made by the Bureau. The Bureau relies upon the information furnished by prominent poplar manufacturers and dealers, together with such information as is found in the lumber-trade journals. The poplar manufacturers at various times organized associations, but in each case the association existed for only a very brief period. The first association which attracted wide attention was the Yellow Poplar Lumber Manufacturers' Association of the United States, organized at Lexington, Ky., on April 17, 1902. At the organization meeting a price-list committee was appointed, which reported to the association at the same meeting, and it was then voted to advance the poplar price list $2. At the time of ' '.s organization it was claimed that the new asso- ciation included 90 per cent of all the poplar manufactured in the United States. On June 3, 1902, the poplar association was merged into the Hardwood Manufacturers' Association of the United States. The following extract is taken from Secretary Doster's annual report at the annual meeting of January 27, 1903, as reported in the New York Lumber Trade Journal of February 15, 1903, page 14: A price list and list of standard weights were published under date of June 9, 1902, for poplar only, and based f. o. b. Ohio 900 THE LUMBER INDUSTRY. River points taking a rate of freight of 21$ cents to New York City, suggested by the valuation committee, which met at Louis- ville, Ky., June 3, 1902. The valuation committee of the Hardwood Manufacturers' Asso- ciation met at Cincinnati, Ohio, on August 6, 1902, and formulated a new poplar price list known as the "pink" list, which became effective on August 11. The new list was a distinct advance. On January 27 and 28, 1903, the Hardwood Manufacturers' Association met at Cincinnati, Ohio, and adopted a new price list which included poplar prices. The new list was known as the "yellow" list and became effec- tive February 1, 1903. This list showed an advance in the price of poplar lumber. The American Lumberman of January 31, 1903, page 13, editorially comments on the association meeting of January 27, in part as follows: If there was ever a lot of men who evidently thought that, for the time being at least, they were masters of the situation in their line of business, it was this gathering of hardwood producers. Further on the statement is made: The association specifically disavowed any purpose of adopting or promulgating an ironclad list, but it recommends to its members that the prices thus adopted in convention as the result of the deliberations there be made the minimum prices. The following from the same journal refers to action similar to that described in detail in the account of the September 5, 1903, meet- ing, quoted on page 21: There was some disposition at first to hold the price action of the meeting as executive matter for the time being, but other counsels prevailed, and finally by unanimous vote the meeting put itself on record as willing publicly to stand by its action on values. The actual selling price of poplar advanced somewhat during the summer, but no change was made in the list until the Hardwood Manufacturers' Association met at Cincinnati, Ohio, on September 5, 1903. At this meeting a new poplar price list, known to the trade as the "blue list," was adopted, effective September 15, 1903. It advanced the price of various items of poplar from $3 to $9 per thousand feet. This decided advance brought, about much discussion in the lumber-trade journals. Not only did the news items and mar- ket reports refer to the radieal price action, but letters both pro and con were published, and the subject was freely discussed editorially. At the close of this chapter a number of letters and excerpts from lumber-trade journals appear, which give the nature of the comment and discussion which the poplar advance brought about. At the meeting of the Hardwood Manufacturers' Association at Cincinnati PEODTTCTION AND WHOLESALE DISTRIBUTION. $01 on January 26 and 27, 1904, it was unanimously decided to reaffirm the poplar list of September 15. The following is an extract from Secretary Doster's report at this meeting, appearing in the Southern Lumberman of February 1, 1904, page 23 : As a result of the deliberations at our first annual meeting, a list was published effective February 2, 1903, which was known as the yellow list, and which superseded the list effective August 11, 1902, which was known as the pink list. A number of changes were shown on the list of February 2, 1903, which continued in effect as the official list until the general meeting held here Sep- tember 5, 1903, at which time a blue list was effected, and whicb was published under date of September 15th, showing changes made to reflect the market conditions at that time, and which is effective up to the present meeting. The poplar people were not able to maintain the advance made on September 15, although they tried hard to live up to the list. Not- withstanding the fact that the list could not be maintained, a bold front was put on the matter, and the list was reaffirmed at the meet- ing in January, 1904. Other woods were being substituted for pop- lar, and prices continued to fall. Curtailment of production was decided upon, but even this did not enable them to maintain the list. Even extensive exporting of poplar left the actual prices received far below the nominal prices. Practically every price- boosting device known to lumbermen was tried by the poplar men, but they had moved too rapidly and were not able to hold their position. They were severely criticized by other lumbermen who were resorting to the same methods of raising and maintaining prices, but who moved more cautiously and discreetly and attracted less attention by making small advances at more frequent intervals. Some of the criticism shows clearly that what the lumbermen objected chiefly to was the crude way in which the poplar people attracted public attention to the means frequently employed by lumbermen for raising prices. Not the slightest objection was shown to the method itself or the end sought. The nature of this discussion is shown by the following editorial comments and letters published in trade journals near the end of 1903 : The sharp advance in the price of poplar lumber by the Hard- wood Manufacturers'' Association of the United States at their Cincinnati meeting, September 5, reports of which appeared in all of the lumber journals, continues to be an important topic in trade circles. The advance was made by the manufacturers on the ground that the conditions in poplar supplies both standing and manufactured at that time warranted such action, and that figures compiled show the amount of manufactured stock on hand to be but about 90,000,000 as against an annual consump- 902 THE LUMBER INDUSTRY. tion of 500,000,000 feet. While the action of the price com- mittee of the association received the indorsement of the mem- bers, subsequent development and communications, which have been received and published in some of the lumber papers from manufacturing interests who are not identified with the associa- tion present a wide diversity of opinion on the matter. Following the publication of the letter received from Mr. M. B. Farrin, of the M. B. Farrin Lumber Company, Cincinnati, Ohio, on the subject in our November 1 issue, the Journal is in receipt of the following letter from Mr. C. E. Lloyd, Jr., manager of the large operation of the Cherry River Boom and Lumber Company, of West Virginia, with sales headquarters at Phila- delphia, who assumes the same attitude as Mr. Farrin, but from another standpoint. Mr. Lloyd's letter is as follows : Philadelphia, Pa., November 14, 1903. Editor New York Lumber Trade Journal, New York City. Dear Sir: I have been very much interested in reading the articles on the poplar question and the advance in prices on page 10 of your issue of November 1. As you state, there are two sides to this question, and I am very much inclined to indorse Mr. Farrin's letter and his opinions. In addition to this there is another side to the question. It is not only the question of the cost of handling lumber, expenses per thousand feet, etc., but there is also the question of supplying the demand. I do not know where the poplar people got their figures from that there is such a shortage m supply. They tell us there is only about 90 to 100 million feet of poplar lumber in sight or ready to be marketed. This was in September. The facts are that as the annual consumption of poplar is about 500 million, it would seem that there is nearly as much on hand for the ensuing three months as will be required, for the reason that three-quarters of the year had passed when these figures were compiled, and furthermore, the months which have already expired include that period when the consumption is heaviest. On the other hand, the facts are that most of the dealers and buyers all through the country are well supplied with a full stock, and with only a few months to expire before the win- ter season sets in, there is nearly one-fourth as much poplar on hand as the annual consumption requires. I am very much of the opinion that there is plenty of poplar to go around during the winter, and, while there is no surplus, the conditions did not warrant any such advance as the poplar people made. This company manufactures some poplar and handles a great deal more, and we are honestly of the opinion that the price of poplar will advance within the next year or two and would have advanced during this fall if the price list had been let alone, as the natural conditions of only enough poplar to supply the demand would of necessity have made prices strong. The actual facts are, however, that on account of the $9 advance being heralded all over the country, a large number of poplar buyers PRODUCTION AND WHOLESALE DISTRIBUTION. 903 have become frightened and stopped using it altogether or have bought as little as possible or turned their attention to other substitutes. Hence instead of the new price list having bene- fited either the demand or price of poplar, it has had exactly the opposite effect. As stated before, we are exceedingly sorry that such a condition has arisen, as we believe that if poplar had been let alone the tendency would have been toward advanc- ing. But instead of that the markets are full of poplar being offered, and instead of its being taken up as fast as offered, there is a tendency toward weakening prices. As far as we are concerned we are simply holding back on our poplar, being satisfied that later on we will get a good price for it. We are turning our attention to selling other lumber in the , meantime, having a great deal of confidence in the value of poplar lumber, but we would rather see this price-list question left alone. Yours, truly, Cheeky River Boom and Lumber Company, C. E. Lloyd, Jr. (Editorial Comment in New York Lumber Trade Journal, Dec. 1, 1903, p. 10.) The following is an extract from a letter dated December 16, 1903, from M. B. Farrin to the New Orleans Lumber Trade Journal: Now while all of us are willing to accept as high prices for our stock as the market can or will afford, the majority are willing to accept such prices as the condition of the market demands, and are inclined to foster and build up our business rather than to sap its energy and vitality by wild and indiscriminate attempts to force prices to values that the market conditions do not warrant. In looking back over the three months we find to-day that the market is almost at a standstill and very little poplar is moving, and such stock as is moving is going at prices under the list in force before the "advances" referred to took place. This I am quite sure, is in consequence of the attempt of the manufacturers' association to extort from the buyers unreasonable prices, and is in the nature of a retaliation by the buyers, who , finding the market a little weak, are determined to crowd prices down as much as pos- sible. While we all know that the crop of poplar is none too large, and in fact, that a good demand would readily develop an absolute shortage, the condition that exists to-day is rather in the nature of a deadlock between seller and buyer. I am firmry of the opinion that had the convention above referred tohad its meeting without mentioning the matter of prices, business would have gone along steadily, of course, slowing down some as the end of the year approached, but prices would not have been attacked in the manner that they have been; a much better feeling would have prevailed between buyer and seller, aad a higher level of prices been maintained than that existing at E resent. This wo«ld have resulted in a better showing on the alance sheets at the end of the year for all of us than we will in all probability find. (New Orleans Lumber Trade Journal, Jan. 1, 1904, p. 17.) 904 THE LUMBER INDUSTRY. On March 26, 1904, the executive board of the Hardwood Manufac- turers' Association met in Cincinnati, and at a secret meeting reduced the price of poplar. 1 During the remaining months of this year the poplar manufacturers were busy not only in trying to hold the trade they then had but also to regain that which they lost after the price advance on September 15, 1903. In an editorial, in its issue of April 15, 1904 (p. 13), the New Orleans Lumber Trade Journal pointed out that, in its opinion, the collapse of the attempt to raise the poplar prices was due, not to a lack of control over the output of poplar, but to a failure on the part of the poplar producers to realize the force of the competition from other species. It was not a question of how much poplar was available, but how much cottonwood and gum and any other woods that could and would be substituted for it, there was to be had. The argu- ment that because the supply of poplar was restricted, buyers would have to buy it, proved, as those relying upon it ought to have known it would in the beginning, a fallacy. Events have now proven it. Meanwhile former consumers of poplar have been driven into every manner of available expedient to avoid paying asking poplar prices with the result that the latter has undoubtedly lost f round it will find it a difficult matter to recover. Perhaps, owever, that is just as well, because as a matter of incidental compensation, the requirement and supply of poplar alone are no doubt both undergoing continual depletion. So it is not likely that the reaction as to poplar will permanently depress it below what might be termed a normal limit. It also has been a favorite argument to compare the selling value of high grade poplar lumber to that of white pine. For years there has been no clear white pine worthy of consideration and the little there was has largely found a use neither poplar nor any other wood would serve so well — pattern making. In fact, as may now be seen in a light stronger than all forms of begging the question in mere pretense of argument, the light of events, the incident affords the world of traffic another and a conspicuously impres- sive example of the folly of relying upon artificial means to per- manently sustain markets. The result in the present instance should be for poplar to settle back upon a legitimate basis of marketable value and by natural processes to incidentally force the selling value of stumpage and logs back accordingly. It may take time to effect the readjustment, but it will work itself out sooner or later. 1 New Orleans Lumber Trade Journal, Apr. 1, 1904, p. 32: POPLAK PRICES REDUCED — A MEETING AT CINCINNATI MAKES SWEEPING CUT. Cincinnati, O. (Special).— The Hardwood Manufacturers' Association of the United States had a secret meeting here on March 26 and put down list prices of poplar as follows: 4/4 First and second clear $8— now $46. 4/4 Selects, $4— now S36. 4/4 No. 1 Common, 14— now $31. 4/4 No. 2 Common, $2— now $22. 4/4 No. 3 Common, $2— now 117. "PRODUCTION AND WHOLESALE DISTRIBUTION. 905 On January 24, 1905. the Hardwood Manufacturers' Association met at Nashville, Term. The following is an extract from Secretary •Doster's report to the association: At our last annual meeting the price lists were practically reaffirmed and published in line with our old lists, and the members representing the different committees, which were subdivided according to the kinds of wood represented, were at times, when conditions justified, communicated' with from the Secretary's office. Under date of August 20, 1904, after a meeting of the executive board, a general letter was submitted relative to the poplar con- ditions. In this letter it was recommended that a foundation for the establishment of market values should be placed in effect by us, the valuation committees being permanent for the year and appointed in such a manner to cover the entire territory of the different kinds of wood produced, and through these standing committees, monthly lists should be published in accordance with the conditions of the consuming markets. In fact, in the compilation of the information for these committees, if any slight deviation in the amount of production, or in the consuming markets, would be noticed, it would be at once made known on each monthly price sheet. These valuations also should be gauged from the manner in which the lumber is mar- keted by the producers, and always be in exact line with such conditions. The association's next annual meeting was held in Louisville, Ky., January 16 and 17, 1906. In the absence of Secretary Doster, Mr. Burchette reported to the association. The following is from his report as shown in the St. Louis Lumberman of February 1, 1906, page 80: A plan was outlined last year by which it was provided that a price list reflecting the actual conditions of the market should be issued as often as was deemed necessary, and in pursuance of this plan, canvasses have been made from time to time this year of the valuation committees, with the result that since the issue of our price list on January 27th but one published price list has been sent out during the year, and that was the list of May 2, 1905, known as the pink list. There was very little discussion in the trade journals regarding the list of May 2, 1905. The Hardwood Record of May 10, 1905, page 26b, says "R. H. Vansant, president of the Hardwood Manu- facturers' Association, held a meeting of the executive board of that association at Memphis, Tenn., on April 29." On page 26c of the same issue: "A meeting of the executive com- mittee of the Hardwood Manufacturers' Association of the United States was held at the Hotel Gayoso a few days ago, though nothing has been given out regarding the subject of the conference." At the meeting of the association on January 17, 1906, a new price list was adopted which was known as list No. 1. On February 24 906 THE LUMBER INDUSTRY. the executive board of the Hardwood Manufacturers' Association met at Cincinnati and formulated a new price list effective February 26, 1906, and known as list No. 2. Firsts and seconds 7 to 17 inches and No. 1 common were advanced $1 ; No. 2 common was advanced 50 cents. At the meeting of the Hardwood Dimension Association at Cincinnati, Ohio, on February 21 and 22, 1906, Lewis Doster, who was present- as a representative of the Hardwood Manufacturers' Association, said in his address: "We promulgate price lists for the benefit of the members. These lists are sent all over the consuming market, largely establishing the trend of values for production." 1 The list was again advanced in the spring of 1906. On August 25, 1906, the association issued another market report in which poplar prices show an advance. Again, on October 13, there was a meeting of the executive board at Chicago where an advance of $1 was made on a number of grades. This advance was made effective October 18, 1906. On December 8, 1906, another advance was made in the poplar list which became effective January 5, 1907. In 1907 market reports were issued as follows: No. 1, dated Jan- uarys; No. 2, dated February 6; No. 3, dated March 26; and No. 4, dated May 14. This was the last statement of market conditions for the year. In 1908 the following statements of market conditions were pub- lished: No. 1, dated February 14; No. 2, dated March 28; No. 3, dated May 1 ; No. 4, dated June 1 ; and No. 5, dated July 15. In 1909 statements of market conditions were issued as follows: No. 1, February 1; No. 2, October 11; and No. 3, November 20. In 1910 statements of market conditions were issued as follows: No. 1, February 15; and No. 2, May 16. The following appears in all statements of market conditions issued in 1908 (except No. 1, dated- Feb. 14), 1909, and 1910: This list is published for the purpose of showing to the mem- bers of this association, as well as the industry at large, the prices now being obtained from the manufacturing consuming trade, being an average of the reports submitted to us, and is not intended as an absolute and positive list, nor is it officially adopted by this association, but is merely a publication of values that are now actually being obtained.. The list is issued for selling the rough product, as well as giving an opportunity to the consumer to figure his future contracts accordingly. This list supersedes all former issues. Lewis Doster, Sec'y. Although the words "statement of market conditions" appear on the cover of all issues of 1908, 1909, and 1910, the secretary refers to 1 Ameriean Lumberman, Feb. 24, 1906, p. 38. PRODUCTION AND WHOLESALE DISTRIBUTION. 907 them as a "list" in the publications themselves, as shown by the above quotation. The lists give prices of other hardwoods as well as prices of poplar lumber. The prices of a few grades of poplar lumber, all 1-inch rough stock, are here presented as they are shown in various price lists or market reports. The prices are for f. o. b. Ohio River points: Date. Firsts and seconds. Selects. Saps. No. 1 common. No. 2 common S37.00 $30.00 $30.00 $26.00 $20.00 38.00 31.00 31.00 27.00 20.00 40.00 32.00 32.00 28.00 20.00 40.00 32.00 32.00 28.00 20.00 45.00 35.00 35.00 30.00 22.00 54.00 40.00 40.00 34.00 24.00 54.00 40.00 40.00 34.00 24.00 43.00 33.00 33.00 29.00 20.00 43.00 34.00 34.00 29.00 20.00 45.00 36.00 36.00 29.00 20.00 46.00 36.00 36.00 30.00 20.50 47.00 36.00 36.00 30.00 20.50 49.00 37.00 37.00 32.00 22.00 50.00 37.00 37.00 33.00 23.00 51.00 38.00 38.00 34.00 23.00 51.00 38.00 38.00 34.00 23.00 52.00 39.00 39.00 34.00 23.00 53.00 40.00 40.00 36.00 25.00 53.00 40.00 42.00 36.00 25.00 54.00 42.00 42.00 35.00 24.00 54.00 42.00 41.00 33.00 23.00 54.00 42.00 41.00 33.00 23.00 54.00 42.00 41.00 33.00 23.00 54.00 42.00 41.00 33.00 23.00 55.00 42.00 41.00 35.00 23.00 56.00 43.00 43.00 35.00 23.00 57.00 43.00 43.00 35.00 23.00 60.00 45.00 43.00 36.00 23.00 60.00 45.00 43.00 36.00 23.00 April 17, 1902 June 9, 1902 August 11, 1902 October 1, 1902 February 1, 1903 September 15, 1903.. January 27, 1904 January 27, 1905 May 1,1905 January 17, 1906 February 26, 1906... April—, 1906 August 25, 1906 October 18, 1906 December 8, 1906 . . . January 5, 1907 February 2, 1907 March 26, 1907 May 14, 1907 February 14, 1908. . . March 28, 1908 May 1,1908 Junel, 1908 July 15, 1908 February 1,1909. ... October 11, 1909 November 20, 1909. . February 15, 1910... May 16, 1910 The above prices show the rise in the poplar list to have been very marked between April 17, 1902, and September 15, 1903. The advance on firsts and seconds amounted to about 46 per cent within 17 months; and in the same period on selects, saps, and No. 1 com- mon the price list shows an advance of 33, 33, and 30 per cent, respectively. The poplar manufacturers had moved too fast, and they were compelled to lower the list in 1904. (See p. 904.) Several years elapsed before they again issued a list or market report which showed the high prices which they tried to establish on September 15, 1903. It has been frequently said that the poplar manufacturers tried to maintain the price in this country by selling extensively in Europe. The Bureau has no information on this matter other than export references in trade journals. The following are a few of the extracts taken from lumber-trade journals which refer to this matter: Poplar is in better shape than was the case some time ago. The foreign inquiry has picked up considerably, and while values are not back at the former figures, a better tone prevails in the trade. Of special consequence is the larger export movement, 908 THE LUMBER INDUSTRY. which gives strength to the situation at home and enables the manufacturers to maintain lists. (Baltimore news in New York Lumber Trade Journal, Dec. 15, 1903, p. 32.) Poplar is being distributed in fairly large quantities. All the mills are running whenever circumstances will permit and the aggregate of the output is quite large, in excess, perhaps, of the requirements of the trade at home. Congestion is to a consid- erable extent guarded against by extensive shipments abroad, which expedient, however, serves to make the range of prices there rather weak, or at least to keep them below the home level. Poplar lumber can thus be purchased in Great Britain at the sameprices as here, although the ocean freight must be paid on it. This condition is attributed to the alleged practice of many mills to dispose of their surplus by forwarding stocks on con- signment. (Baltimore news in New York Lumber Trade Jour- nal, Feb. 1, 1904, p. 30.) The poplar trade continues to be characterized by pronounced strength, current values being high as well as firm, and the demand sufficiently large to take up the output of mills. A notable feature in the business is the relatively lower price com- manded by the wood abroad than in the home market. This is attributed by some of the exporters to the action of the mill men in sending surplus stocks to the other side of the Atlantic and thereby keeping the home situation firmly in hand. (Balti- more news in American Lumberman, July 7, 1906, p. 67.) There is no accumulation of stocks beyond a fair selection and some trouble is experienced in making shipments. The forward- ings abroad have been fairly heavy and this is in part charged to a desire on the part of the manufacturers to keep the home market in good shape and avert a break in prices. (Baltimore news in American Lumberman, July 27, 1907.) Other references to the practice of selling poplar abroad at a less price (freight considered) than in the United States may be found in the following extracts from various trade journals. Attention may be called in this particular to the extracts from the New York Lum- ber Trade Journal of December 1, 1902, January 15, 1903, and Amer- ican Lumberman of April 30, 1904, September 1, 1906, and December 1, 1906. Section 17. Extracts from lumber-trade papers relating to poplar. Note. — The Bureau does not vouch for the truthfulness of the statements appearing in the extracts from the lumber-trade papers. Extracts have been taken from many of the leading trade journals. Not only have several trade papers been used, but news items from various cities have been selected. The fact that several different trade papers give an account of an action of some association, and that the news item from various cities will refer to the action and for several weeks or months will comment on its effect adds to the credibility of the extracts. PRODUCTION AND WHOLESALE DISTRIBUTION. 909 1898. New York Lumber Trade Journal, August 1, 1898, page IS.— In the case of poplar there is a movement on foot emanating from Nashville, Tenn., among the poplar manufacturers, looking toward the advance- ment of prices on that wood. No fixed price has been made as yet as they are simply getting tin opinion of the wholesale trade before going ahead. New York Lumber Trade Journal, A ugust 15, 1898, page 10.— The yellow poplar manufacturers got together in Nashville the last of July and, in view of the scarcity of logs, etc., decided that they would ask a dollar more a thousand. The manufacturers of West Virginia and Ohio expressed themselves as willing to cooper- ate, although they figured that they were getting prices in advance of their Nashville brethren. In faot, the top prices, already. The danger was also pointed out that, particularly in the East, any material advance was ill-timed, because it would likely result in substitution of other woods, thus defeating in a measure the object of the advance. 1899. Boston— New York Lumber Trade Journal, August IB, 1899, page SI.— White wood still remains firm and scarce, the larger manufacturers' have recently advanced their price from 50 cents to $1 per thousand. 1900. Boston — New York Lumber Trade Journal, March 1, 1900, page 19.— Poplar and all Hardwoods are main- taining their own, and prices adopted four months ago are holding their own. Poplar, perhaps, is a little more firm, and some of the manufacturers are securing from $1 to $2 per thousand feet more than they did sixty days ago. New Orleans Lumber Trade Journal, June 1, 1900, page 12. — At the recent meeting of poplar manufac- turers in Cincinnati an opportunity was afforded to analyze the conditions in this material specifically and the elements of strength surrounding this branch of the trade was a source of some surprise, even to those having fairly accurate general information. The cut of poplar this year will be about 15 per cent less thantnat of last, while the output of the smaller class of mills is practically contracted for. Stocks are at a minimum. 1902. New York— American Lumberman, April 19, 1902, page SB. — The advance at Nashville of 12 on the price of poplar will bring ones and twos up to a $41 basis here and no difficulty will, it is thought, be experienced in getting the advance. Baltimore— American Lumberman. April26, 1902,page SO.— Considerable interest is felt here in the organ- ization at Lexington, Ky., on April 17, of the Yellow Poplar Lumber Manufacturers Association of the United States and the statement made in connection therewith that an advance of $2 a thousand feet in the price of poplar had been decided upon as one of the first matters following organization. The price of poplar has been high for some t_me. This wood has been one of the most advanced and steadiest in the whole list, and an additional rise of $2 brings the quotations up to a higher figure than they have been at almost any other previous period. If as has been stated the new organization includes 90 per cent of all the poplar manufacturers in the United States, it will not be difficult to maintain the list as stocks are taken up, even before they are ready for the market. , , . .. , , ,_ „_ Chicago— American Lumberman, April 2$, 1902, page SO.— Thick poplar is wanted particularly by the factory men, while inch firsts and seconds and common are in demand above the ability of dealers to satisfy. Culls are also in request at considerably better prices than were paid the past' year or two. Squares are scarce and where any are obtainable bring full prices. Under the circumstances the advance recently put into effect by the poplar manufacturers at Lexington, Ky., is likely to hold indefinitely. Chicago— American Lumberman, May 8, 1901, page 47.— The price agreed upon for mch firsts and seconds, 137 on the Ohio River, is considerably higher than the price which has been ruling of late in this market, but members of the trade will undoubtedly get educated in time to pay a little more than they are now New York— American Lumberman, May 10, 1902, page 49.— The recent rise of 12 by the newly formed pop- lar association is easily secured here, and indeed some wholesalers report getting as high as $43 for firsts and spcoods - New York Lumber Trade Journal, May 1, 1902, page 12.— The Poplar manufacturers in various parts of the United States met at Lexington, Ky., on Thursday, April 17, * * * _,...,,. , It was voted that an association be organized, to be known as the Yellow Poplar Lumber Manufacturers Association consisting exclusively of manufacturers of poplar lumber. A general discussion was then held, and it was the unanimous opinion of all present that yellow poplar lumber was sold entirely too cheap; that hi most cases it was used as a substitute for white pine, a wood that sold for very much more than yellow poplar has ever sold for. Constitution and by-laws were adopted. The election of officers under the con- stitution being the next thing in order, the following were elected: * * * RnlMwern adopted for the inspection of poplar, and the Price List Committee made a report upon prices, whinh was Tdiscussed item by item, and finally adopted, as follows, to go into effect at once. [Prices follow.] BaUimSre-Southern Lumberman, May 1, 1902, page le.-Poplar retains its position at the head of the list and Dromises to go even higher. The general tendency with respect to this wood is indicated by the action of th™ manufacturers at the meeting at Lexington, ky., on the 17th when the price was advanced 12 ^^&an Lumberman, May IS, 1902, page S.-Quite a good deal of criticismhas been directed at the poplar miTfo trvtaE to "artificially" boostprices. As a matter of fact no "artificial" boosting of prices has i? 6 ^ V«»2n3a or contemplated by the poplar manufacturers. They realize as fully as do the manufac- tures MyeUow pinTtS m Fup?iySd demand alone control prices. . The price list adopted at Lexington fa ™ ™™ ironclad and binding than that put out by the yellow pine association. It simply represents !S XmSuSurers think they ought to get for their stock after a careful canvass of the situation as to what the L W™~^fnd if thev can not get it they will sell for less just as the pine men do. It is beside remark! VStf, to s\4ak of a wmbiiS and not to much purpose to make gloomy predictions of what v ^ A vJk-Nw U Yo\t Lumber Trade Journal, May IS, 1902, page SS.-The recent organization of the ~£ manufacturers and the advance in prices of that commodity is ooked upon with favor generally, K§ « feMkvedthat firsts and seconds wfll be scarce all season and bring the prices which are ™w ruling ?"1 J? to S42 tor 4 xT Lower grades are reported to be quite plentiful an| enough to supply the de- & Cd^Mcffi at the present time are ruling at $30 to $32 for common and $20 to $21 for cull. 910 THE LUMBER INDUSTRY. Chicago— American Lumberman, May 17, 1902, page 48.— According to the recently established values poplar js quoted at $40 delivered in Chicago for inch firsts and seconds. The bulk of the stock that is coming in is from small mills and at somewhat less prices than the above, about $37 being considered an average price for Chicago delivery by many buyers. Chicago— American Lumberman, June 7, 1902, page 52.— While prices are not yet established on the full list in this territory, there is a gradual strengthening and indications are favorable for a steady approxi- mation to association values. Chicago — American Lumberman, June 14, 1902, page 66.— As yet the association prices are not being obtained here, but it is believed that when the present sources of supply, which are mainly the small out- of-the-way mills, are exhausted, there will be no difficulty in putting the price a few notches higher. « Southern Lumberman, June 15, 1902, page 6.— The poplar association was mergedinto the new organization (The Hardwood Manufacturers Association of the United States at the meeting on June 3 in Louisville, Ky.) by a motion that allows the dues paid by the poplar men to apply on the dues of the new association. Southern Lumberman, June 16, 1902, page 6.— The following was printed in heavy type at the beginning of the account of the meeting of the Hardwood Manufacturers Association of the United States held in Louisville, Ky., on June 3: If the present prices on hardwood lumber are to be maintained or if prices are to be lifted to a level com- mensurate with the increased cost of production and the actual value of the stock compared with other woods, those results can only be achieved by concerted action of the manufacturers. The time is pro- pitious and the movement is well started. Will you as a manufacturer support it? Chicago— American Lumberman, July 5, 1902, page 50.— The demand for poplar throughout this territory is strong and insistent with stocks correspondingly limited. Prices have shown a strongly increased firm- ness throughout the spring and summer and are now at their highest point with little prospect of receding for some time to come. * * * The recent prices adopted by the manufacturers at the Louisville meeting have not been obtained here, the highest prices heard of recently being from $38 to $40 f. o. b. Chicago, while the manufacturers' prices are based on $38 for 1-inch firsts and seconds f. o. b. Ohio River points. - Chicago— American Lumberman, July 19, 1902, page 66.— The present price of poplar is based upon $33 f. o. b. Ohio River points, and this quotation is being generally adhered to. Chicago dealers are reluctantly meeting the views of the poplar millmen, although a few still claim that they are able to buy under tie official list. Southern Lumberman, August 16, 1902, page 6.— Meeting of the Valuation Committee of the Hardwood Manufacturers' Association of the United States, Cincinnati, August 6. In the afternoon the list printed below was formulated and announced to become effective August 11. Chicago— American Lumberman, August 16, 1902, page 51.— The recent advance in prices at the Cincinnati conference was not unexpected as from a manufacturing standpoint poplar was bringing less than it should. * * * xhe advance made Was $2 on firsts and seconds and high-grade lumber generally, and $1 on saps and lower grades, while squares were advanced from $2 to $4 a thousand according to size. Chicago — American Lumberman, August 23, 1902, page 4 8 -— The manufacturers' report that they are getting their prices for whatever they have to offer without difficulty, and as their stocks are not heavy there is every indication that they will eventually control the quotations in this territory as they have been doing in the eastern market for some time past. Boston— American Lumberman, August 80, 1902, page 63.— The recent efforts to put up prices have cut off the demand so that $43 is still the top limit, with some stock at $41. New York — New York Lumber Trade Journal, September 1, 1902, page 20. — The Hardwood Manufac- turers' Association recently marked up all grades of poplar and have issued a price list on all other kinds of hardwoods, which all show advanced prices over the market of thirty days ago. Chicago— American Lumberman, September 6, 1902, page 49.— There is little dry poplar in sight in this market and prospects for increased supplies in the near future are not at all flattering. Nevertheless there are still some dealers who are willing to dispose of what little they may have at from $36 to $38 for inch firsts and seconds, or several dollars below the association list prices. There is only a small amount of this low-priced stock to be obtained, however, and the millmen who belong to the association state that they are able to sell all the dry lumber they have on hand at the full list. Chicago — American Lumberman, September 20, 1902, page 53. — The large manufacturers along the Ohio River and in Kentucky and West Virginia, say that they are having no difficulty in getting the recently established list quotations based on $40 for 1-inch firsts and seconds f. o. b. Ohio River points and are pre- dicting an advance to $45 within a very shorb time. Chicago— American Lumberman, November 22, 1902, page 90. — At the present time good poplar will sell for almost any price the holder has the conscience to ask, though a fair quotation for Chicago delivery is from $40 to $43 for inch firsts and seconds. All of the upper grades are firm at or above the list. Common poplar can be bought slightly under the list quotation in this market although its price is said tJ be strong elsewhere. Pittsburgh— American Lumberman, November 29, 1902, page 54. — The poplar association price is the guide for present prices and the demand continues brisk. Baltimore— New York Lumber Trade Journal, December 1, 1902.— There is every prospect that poplar will score another advance, the demand being most active and all the mills being loaded up with orders. With the exception of a short period during the summer the tendency has been steadily upward. A sur- prising development in connection with this wood is that it can be bought abroad proportionately cheaper than in the United States. It has been sold at Liverpool a shade lower than in the United States, notwith- standing the additional freight charges. Chicago— American Lumberman, December 6, 1902, page 62.— Inch poplar is selling in this market at trom $40 to $44. * * * While the list is not always reached the quotations made by the members of the poplar association are not much if any above present selling quotations here. 1903. Baltimore— New York Lumber Trade Journal, January 15, 1903, page 2S.— Poplar continues to hold its own being in good demand at prices which encourage production. Values are well sustained notwith- standing the depression which prevails abroad, where stocks sometimes bring less than can be obtained for them here, regardless of the trans-Atlantic charges and other expenses. American Lumberman, January 17, 1903, page 14.—I11 the Hardwood Lumber Manufacturers' Association of the United States the Poplar interest is very strongly represented, and in fact it succeeded the only poplar association that has been in active existence for a number of years. Southern Lumberman, February 1, 1908, page 11.— [Poplar is included in the price list adopted by tie Hardwood Manufacturers' Association of the United States at their meeting In Cincinnati Jan 281 Buffalo— Southern Lumberman, February 16, 1908, page 16.— The full list prices are obtained in all cases Pittsburgh— St. Louis Lumberman, February 16, 1903, page SO.— The poplar demand is so great as to neces- sitate a scarcity; in consequence of which prices are high and firm. * * * There has been an advance of from $5 to $6 in firsts and seconds poplar. Other grades have also been recently advanced PRODUCTION AND WHOLESALE DISTRIBUTION. 911 Baltimore— New York Lumber Trade Journal, March 15, 1903, page «.— The movement of poplar as well as of the hardwoods is affected to a considerable extent by the exceptionally low freight rates. Not in years have the trans-Atlantic lines been so eager after merchandise, and all the lumber offered is now taken promptly at reduced figures. Baltimore has a rate as low as 12 cents, and the mail steamers out of New York, when they are caught short of cargo will cut even below the regular tariff of 10 cents. This tends to stiffen prices or keep them high, and an easing off is not to be expected for some time to come. Chicago— American Lumberman, March 28, 190S, page 65.— Prices are being steadily advanced, and while buyers are not yet willing to pay the full prices asked by the association the market is gradually but slowly approximating the list, which is based on $46 for inch firsts and seconds f. o. b. the river. Chicago—Southern Lumber Trade Journal, April 1, 1903, page SO.— Buyers are ready and willing to pay association prices when they can get good stock. Baltimore — New York Lumberman, April i, 1903, page SO. — The demand for poplar is very brisk, and large quantities of this lumber are believed to be going to foreign countries, which naturallv tends to increase the tension at home. Baltimore— New YorTi Lumber Trade Journal, May IS, 1903, page 80.— The export trade continues to call for large quantities of lumber, although the advance in ocean freight rates has caused a slight diminution in the foreign movement. Chicago — American Lumberman, Mag 18, 1903, page 69.— Dealers sav that thev are able to secure an occa- sional carload or two from some of the small mills at prices ranging slightly above $45, but that sales are now mostly based on the association list, which is $45 for firsts and seconds inch f. o. b. Ohio River points. Baltimore— New York Lumber Trade Journal, August 16, 1903, page 28. — The foreign market, in fact, seems to have been supplied to the point of meeting present needs. But the demand promises to remain fairly good , and that large quantities of poplar are going forward notwithstanding the high prices here attests the strength of the situation on the other side of the Atlantic. Chicago — American Lumberman, August 22, 190S, page 68.— In the general trade which involves the bulk of output prices In conformity with the associated list are well maintained, but in the city business a variety of consumers are able to buy poplar at prices about $5 a thousand below the regular list. Chicago — American Lumberman, September 6, 1903, page 64. — The association list is the basis of prices. It is said by some dealers that occasion ally sellers are willing to shade a little on some kinds of stock which do not move as freely as the holders would like; but when any buyer goes into the market for good regularly manufactured and properly graded lumber he wants a firm price list. Cincinnati, September 6. — The Hardwood Manufacturers' Association of the United States held a meet- ing at the Grand Hotel in this city to-day, fifty-nine members being present. The meeting was a most important one, particularly in regard to prices, which were advanced sharply on many kinds of stock, running anywhere from $3' to $9 a thousand. * * * Thereportsof the Valuation Committees, which were ratified at this meeting and which show the advanced prices, which become operative September 15, 1903, are being prepared by the secretary in the usual pam- phlet form. * * * (New York Lumber Trade Journal, September 15, 1903, page 11.) Cincinnati— Southern Lumberman, September 16, 1903, page S7.— A called meeting of the Hardwood Manufacturers' Association of the United States was held in the Grand Hotel in this city to-day [Septem- focr 51. ^ ^ * The main question before the association was the readjustment of the price list. In all of the hardwoods especially poplar and oak manufacturers have been making sales for several months at higher figures than the published lists of the association. * * * So the association was called together to rearrange its pub- lished list and bring it up to the prices being actually paid by the buyers. Some grades of poplar were advanced as much as $9 over the old list while quartered oak was advanced $11. It has been a well-known fact with manufacturers and wholesalers that the market prices of a great majority of the hardwoods, even through the summer months, which are usually dull, were higher than the association list. The Hardwood Manufacturers' Association has always been conservative. That was the keynote sounded for it in its organization. * * * All phases of the market of to-day and the market of the coining months were looked into with great deliberation. The result was the issuing of the new price list of Sep- tember 5. . . . Boston— American Lumberman, September 19, 1903, page 68.— The rumored rise in prices does not "cut any ice" with this market. The dealers will not place their orders ahead. New York— American Lumberman, September 28, 1903, page 56.— The poplar advance takes up the time and the talk of most of the local hardwood men. Prices were strengthened of course when the action took place out West but there is no very great activity to report. Chicago— A merican Lumberman, September 28, 1903, page 57— Sales are reasonably active at substantially the same quotations that have been ruling through the summer. The recent advance of $9 a thousand in prices of clear poplar by the manufacturers of the Ohio River district does not appear to have been fol- lowed here and it is doubtful whether the new prices will be paid by buyers in this market. _ _ Boston— American Lumberman, September 26, 1903, page 31.— The whitowood situation is exciting much interest- some of the larger concerns have put up their price lists from $5 to $10 a thousand, but no sales are reported at those figures, and several concerns have issued circulars calling attention to the rise but offering to fill orders at the old prices. Southern Lumberman, October 1, 1903, page 9— The price list adopted by the Hardwood Manufacturers' Association on September 5 has caused much discussion and some difference of opinion. * * * . The prices set by the Hardwood Manufacturers' Association at its last meeting can be easily maintained so far as the upper grades of poplar are concerned. Sufficient timber to create any serious over stock of wmlar lumber of high grades simply can not be put at the mills at one time. There are only three con- tinffincies that can reduce the consumptive demand for poplar— a constricted money market, excessive oTDrohib'itive prices and substitution. We have assurance from a high official source that our national finannw are in a fairlv healthy condition. The price list adopted by the association is not prohibitive and the substitution of other woods for poplar has already been carried to about the limit. S"fi™ Lumberman, October f,190S, page AJ.-It is not settled yet whether the advance ordered ^ImnkmLum^mlnl'Oclober 3, 1903, page 1 S.-Nothing else has transpired in the history of the lumber tratota a long tune that has excited such universal interest as the recent poplar situation. The Hardwood MmuSctureS' Association of the United States at a meeting a few weeks ago formulated an advanced ™ta> lift OT poplar, effective September 15th, which was one of the most radical advances in the price of Sn^lumbe? commodity that has ever been known in the history of the trade. The advance was so decid- SrVSdical thateven wiseacres in the lumber world have expressed serious doubts of the ability of the ^nSar manufacturers to maintain the values asked. P ETSw" Lumberman, October 10, 1903, page M.-The poplar manufacturers of .the , Ohio River . Ji wSvlreinia districts are making sales in this market on the new list on the basis of $56.75 for firsts and seconds inch, and seem confident of establishing and maintaining these prices. 912 THE LUMBER INDUSTRY. Buffalo— New York Lumber Trade Journal, October 16, 1908, page 28. — The effort to add $8 to $10 to the price of poplar has not succeeded very well, though it is too early to say how it will come out. Boston—American Lumberman, October 17, 1903, page 60. — The high prices have not materialized as yet and orders are being freely taken at the old list. The top of the market is probably 153 with most sales of inch on a lower basis. North Tonawanda— American Lumberman, October 24, 1908, page 56.— There is still a scarcity of certain items that have been in excessive demand, among them being poplar, the price of which is quoted bv some dealers nearly $10 higher than a month ago. Notwithstanding this advance there is a lively move- ment, the wood being preferred for siding instead of white pine at the prevailing prices. Boston — American Lumberman, October 81, 1903,^ page 60. — The market still continues to vary greatly though there can be no doubt that the smaller mills which have been cutting prices are inclined to ask higher figures. New York — Southern Lumberman, November 1. 190S, page 28. — The advanced prices of the Hardwood Manufacturers' Association are not obtaining in all current sales, but such poplar stocks as are in the hands of wholesalers are selling freely. Chicago— American Lumberman, November 7, 1903, page 68.— Sales are being made in this market at the list and holders are confident that there is a gradual tendency to base all transactions on the Ohio River quotations. Boston — American Lumberman, November 7, 1903, page 58. — The smaller mills are no longer cutting much figure in the market and prices are improving. A new feature is the decision by some of the medium- sized mills not to quote at all for the present but to hold their entire stocks for the spring trade. Chicago — American Lumberman, November 14, 1903, page 57. — Some sales are being made here at the full list and manufacturers are expressing great confidence that these prices will be eagerly paid Dy buyers before the spring supply is available. Boston— Southern Lumberman, November 15, 1903, page 22. — Whitewood is firm but buyers are slow in accepting the new association prices. They have prevailed, however, in a number of sales. New York — New York Lumber Trade Journal, November 16, 1903, page 28. — In poplar there is a wide range in prices, the demand is good in all lines of trade and quotations range from 549 to $58 for inch ones and twos. While this is a wide difference, it is explained by the fact that the lower prices show a desire on the part of some shippers to meet current market conditions irrespective of the price feature, while the higher prices are being demanded and maintained by those shippers who are holding stock in accordance with the manufacturers' list and are willing to wait for a future market where buyers are not willing to meet the present list. * * * There are many sales being made at the higher figures as well as the lower. Buffalo — American Lumberman, November 28, 1903, page 61. — Producer and buyer agree that the Buffalo market will not pay the advance and is getting what it must have for about the old prices. Boston — American Lumberman, November 28, 1903, page 61. — The demand is quiet as the large mills are determined not to sell at less than the list. New York — Southern Lumberman, December 1, 1903, page 21. — Prices are holding very firm, however, although they show a wide range. Firsts and seconds are bringing from $48 to as high as $59 for inch stocks. This range is explained by the different attitudes on the part of members of the Hardwood Manufac- turers' Association and those outside its membership. The recent sharp advance has formed a sort of bull and bear clique, but both seem to be getting their share of the business. Baltimore — New York Lumber Trade Journal, December 1, 1903, page 25. — Poplar shares in the general quiet. Some consumers are in the market to a considerable extent, but there is little snap in the trade, and a lower range of values prevails. Nor is the export situation more satisfactory. Inability to move stocks expeditiously at home seems to encourage extensive forwardings on consignment, and as a result lumber is piling up faster abroad than it can be distributed advantageously. Much undesirable stuff, too, is going over, and this helps to depress values. Poplar is quoted here as high as the price that can he obtained at Liverpool or London, and exporters say that they cannot take orders under existing conditions. Chicago — American Lumberman, December 5, 1903, page 63. — There is considerable poplar moving at figures that vary from the prices quoted by the manufacturers, particularly in this city and other central points, which are regarded as the dumping grounds for anybody's surplus. Boston — American Lumberman, December 6, 1903, page 68. — The situation is still unchanged. Only a few mills have well assorted stocks and all of these are holding firmly to the list. Boston— American Lumberman, December 12, 1903, page 62.— The large mills are determined not to sell at less than list prices. Southern Lumberman, December 16, 1908.— In poplar there is a stand-pat condition, apparently, on both sides— the aonsumers buying just as little as possible and the millmen holding out for their prices. There is some stock being sold at full list prices but it must be corifessed that orders are coming to the association mills only when first-class stock is wanted for quick delivery. Southern Lumberman, December 16, 1903, page «.— In the early part of last September an association hav- ing control of a large proportion of the output of poplar announced a shortage of raw material— logs, and put up prices of lumber. It was not generally agreed that the shortage of poplar was so pronounced as announced by the association and the demand has not yet been strong enough to fully sustain the advance. Chicago— American Lumberman, December 26, 1903, page 68.— Quite a bunch of poplar was sold in this market a week or so ago at a dollar or more above the list, which goes to show that the list price on firsts and seconds at least is on a safe basis of value. 1904. Baltimore— New York Lumber Trade Journal, January 1, 1904, Page 82.— Poplar is decidedly stronger than it has been for the past few months. The quotations have been marked up from $2 to $3 on nearly all grades and the demand for exports seems to be brisker. Millmen express the fullest confidence in ths future and adhere closely to list prices. Buffalo— New York Lumber Trade Journal, January 1, 1904, page 82— The one really off-color wood is poplar, and all because the effort to jump up the price $8 or $10 has been repudiated by the trade pretty generally. Buffalo— New York Lumber Trade Journal, February 1, 1904, page 81.— Of southern woods it seems that poplar is so scarce that it is firmer in price, and if there does not develop more stock this winter than is in sight now the manufacturers' combine will win. Buffalo— Southern Lumberman, February. 1, 1904, page S3.— For the first time the buyers of poplar in this market are predicting that the prices lnade by the association are likely to prevail. New York— Southern Lumberman, February 1, 1904, P"Se S3.— The price list of the Hardwood Manu- facturers' Association still has no bearing whatever in governing sales here, but notwithstanding this poplar stocks are bringing a very fair return. Southern Lumberman, February 1,1904, page 21.— The second annual meeting of the Hardwood Manu- facturers Association of the United States was held in Cincinnati, on January 26 and 27. In regard to values the association unanimously decided to reaffirm the old list on poplar— the list made effective by the meeting of the association in Cincinnati in September. PRODUCTION AND WHOLESALE DISTRIBUTION. 913 Buffalo— St. Louis Lumberman, February IB, 1904, page 40.— Poplar is still in the uncertain condition it has been since the arbitrary price was put on it. Nobody knows what to pay or ask for it. New York — New York Lumber Trade Journal, March 1, 1904, P"ge S9.— The poplar market is dull, due, it is claimed, primarily to the high price. There is a wide fluctuation in the prices of current sales ranging from $50 to S59, with some sales even less than the first figure. New York — Southern Lumberman, March 15, 1904, page 19.— The hardwood manufacturers' list with its high prices still plays an important part in the curtailing of business. Boston— Southern Lumberman, April 1, 1904, P"S' SS. — On whitewood the price continues to be too high to admit of free consumption. Buffalo— Southern Lumberman, April 10, 1904, page S^.— There is a report that the poplar manufacturers have given up its high prices and reduced their askings several dollars. Buffalo— St. Louis Lumberman, April IS, 1904, page 40— Poplar is still suffering from what this market calls ah unwarranted putting up of prices last season by certain manufacturers, but this advance is now said to have been given up. Chicago— American Lumberman, April SO, 1904, page 55.— A small number of logs are reported to have been received at the various poplar mills in the Ohio and tributary valleys and manufacturing prospects are not of the best. Prices are steady on the level of values recently established. Baltimore— American Lumberman, April SO, 1904, page 55.— The foreign movement continues to be active, although shipments are not always made at a profit, the quotations on the other side of the Atlantic being relatively lower than those in the home market. Buffalo— New York Lumber Trade Journal, May 1, 1904, page 20— The effort to readjust poplar prices continues. It is generally claimed here that the poplar manufacturers made a mess of it in trying to jump up prices as they did, and it of course hurt the trade both when they did this and when they gave up the attempting. Still there is demand for poplar and it will increase. Baltimore— New York Lumber Trade Journal, June 1, 1901, page 26.— Values are very much unsettled by reason of the large production and the congestion abroad which has checked the foreign movement of surplus stocks. The demand is not especially active and lumbermen generally report quiet in the trade. Baltimore— Southern Lumberman, June 10, 1904, page SB.— It is contended by some members of the trade that the poplar associations simply went ahead regardless of conditions to put up the list figures on stocks and that they were advanced so high as to bring other woods in competition. Baltimore— American Lumberman, June 15, 1904, page 57.— Quiet prevails at home as well as abroad. Nominally an attempt is made to maintain price lists, but cutting below them is said to be no novelty. Baltimore— American Lumberman, September 10, 1904, page 81.— This wood is m smaU demand at home as well as abroad, and notwithstanding the action of mills in curtailing the output no decided improve- ment has yet made itself felt in the trade. Stocks here are large but values are easy. Exporters say that in consequence of the low prices that prevail abroad and the figures they must pay here they are ^tffal^Am^nlu^^l, September 24, 1904, page W.-Whrt would have happened had ^not the effort to fix arbitrary prices for it driven consumers to using something else may only Be conjectured Chicago-American lumberman, October 19, 1904, page SB.-The demand is steadily growmg better both in the city and outside. There is, however, much room for improvement as.it is evident that buyers have neglected poplar in a rather studied fashion for a few months but m using substitutes they have become rather cSssatisfied with them and are now disposed to go back to poplar. „„„„<„„ „„j BaUimore-American Lumberman, October 29, 1904, page S7.-Foplar shows some sign. I of recoverj ^ and though no verv decided advance has so far taken place a more hopeful feeling prevails and the demand s Itontlv rtronSr » ' * * Even the export business appears to feel a quickening impulse and the whole Stint? ta become more hopeful. It is yet in order tokeep down the production as much as possible. *Xp^mert™Z%beX™NovemZer 19, 1904, page si-It is a fact that Buffalo at least is using much less poplar than it used to. 1905. Baltimore-New York Lumber Trade Journal, August IB, 1905, page ^.-Poplar seems to be less active boosted prices on it a few years ago. 1906. r .™t„™«« Tnmmrii IS 1906 page 69.— While other woods are in exceptiona Bmmmt-J.merminlMj^^n,^^VK,il^^g consumers who formerly used poplar demand the call for poplar does »?t «c«a moder ate pr o^o rt on ^^ ^ ^^ A^ ^ tm Ktete'toTobS* a * * * ?llui a^kept at a moderately high level, though pricesmust beregarded "ffi&SSiS*. Lumbe?™a°de JoTrZl°January U, 1906, page *8.-The poplar producers are purting ^^js^^iss^^^^. *>» «^*- haTe late,y been c8tabli8hed at * 5 to C ia firsts and seconds^ Ohio Wv-pomti getting - and Tennessee. 25030°— 14 58 914 THE LUMBER INDUSTRY. Buffalo—American Lumberman, February 17, 1906. page 81.— Dealers are not able to see why there will not be a general advance of prices before long. Everything else has become higher since poplar had its big New York Lumber Trade Journal, March 15 1906, page 10.— Effective February 26, the valuation com- mittee of the Hardwood Manufacturers' Association of the United States, headquarters Columbus, Ohio, issued a new price list known as list No. 2 which made the following advances on hardwood stocks govern- ing the members of that association: (Advances follow). Chicago— American Lumberman, March 17, 1906, page 77.— Prices are holding steady, and while the asso- ciation price of $45 at Ohio River points does not at all times govern prices in this market, still values are closely approximating that quotation. Baltimore— American Lumberman,' March $4, 1906, page 00.— -The recovery from the reaction after the heavy advance in the price list made last year by the manufacturers appears to be complete and the outlook is most encouraging. New York— American Lumberman, March 31, 1906, page 78.— Poplar, it is believed, will gradually recover and assume more hopeful proportions than reported for February and March, but while advances aggre- gating ?3 a thousand are said to have occurred within a few months in certain quarters, local buyers claim they are buying freely at prices lower than the list. Baltimore— New YorkLumber Trade Journal, April 1 , 1906, page $%,— In the hardwood trade the strength of poplar is one of the features that attracts much attention, this wood having been for sqme time weak when others had started on a boom. The demand is now quite spirited and much lumber is being exported. Baltimore— American Lumberman, April 14, 1906. page 66. — Poplar still looms up strong and is in active demand, the manufacturers seemingly oeing able to place their output at figures that afford an imcentive to rush operations. The activity shown by this wood for some time is one of the surprises of the trade; many members of which predicted that it had been weakened permanently by the action of the producers in pushing up prices beyond what was considered a fair limit and thereby encouraging substitution. Chicago— American Lumberman, April SI, 1906.— The market is gradually firming up under a more general comprehension of the strong conditions existing at the mills. Sales have recently been made in this territory at full list prices, which is a considerable advance over what buyers have been accustomed to pay. The demand is chiefly for firsts and seconds and culls, and on these items prices are stronger than on com- mon. Buffalo — American Lumberman, April kl, 1906, page 116. — Poplar is running very strong. Producers are afraid, that they are not going to get enough out for a fair supply and dry stocks are not keeping up. Prices are very stiff and would go still higher but for the slack condition of the basswood trade and the fear that the mistake of some years ago in putting poplar up too high could be repeated. Baltimore— American Lumberman, April 28, 1906, page 68.— All the gains made by poplar have been main- tained and stocks are now very strong. Baltimore— American Lumberman, Mag 5, 1906, page 6$.— While some of the other woods have eased off perceptibly poplar holds its own and is moving in large quantities. The range of values is calculated to avert the consequences experienced last year when the sharp advances made by the mill men checked the mquiry and drove the consumer to use substitutes, with the result that for months dullness prevailed. Baltimore— American Lumberman, June 16, 1906, page 65. — The market has regained all it lost after the heavy advance in the quotations decreed by the manufacturers last year, and is in more active request than ever. * * * Prices are firm. ( Baltimore — American Lumberman, June SS, 1906, page 64.— Poplar is holdin? its own firmly as to price and shows more strength at the present time than some other woods, notably those that were for a time used as substitutes. Boston— New York Lumber Trade Journal, August 15, 1906, page %4> — Whitewood is firmer under reports of a curtailment in the production. Baltimore— American Lumberman, September 1, 1 06, page 77. — Poplar is holding.its own as one of the most active woods on the list. The quiet in other divisions of the lumber trade does not seem to have affected this branch, in which stocks are freely called for and much competitive bidding prevails at the mills. Much lumber continues to go abroad and appears to be sold there at relatively lower prices than are being paid on this side of the Atlantic. Baltimore— New York Lumber Trade Journal, September 15, 1906, page £7.— Poplar is among the most active woods on the list, largely for the reason that the manufacturers learned the lesson oflmoderation and refrained from putting up prices so high as to be a check upon the consumption. Baltimore— American Lumberman, November B4, 1906, page 100.— Poplar easily retains the field which it won after the drop in prices to moderate figures and would be making decided gains but for the check upon the distribution. Baltimore— American Lumberman, December 1, 1906, page 69.— Prices are firm at figures as high as the market will stand without embarrassingshrinkage in the demand, a development which past experience has made the trade anxious to avoid. Foreign requirements are extensive though the prices realized at home are relatively better than those obtained abroad. Chicago— American Lumberman, December 15, 1906, page 68.— Chicago is not considered a good poplar market, or rather not for good poplar, but the fact remains that good yellow poplar sells here quite readily for full list prices, and in some cases above the list. There is considerable inferior southern poplar sold here and for this prices are considerably below list, hence the impression exists that good poplar will not bring as much in this market as elsewhere. 1907. Chicago— American Lumberman. February 16, 1907, page 89.— In the last several weeks a number of sales have been recorded at prices considerably above association market quotations, and some operators here are now confident that it will not be long before an advance is made in the prices governing the upper grades— that is No. 1 common and better. Pittsburgh— American Lumberman, August 10, 1907.— Poplar is much better and it is doubtful if large orders could be placed at list price if they called for the more popular sizes. Baltimore— American Lumberman, August SI, 1907.— Poplar is said to be holding its own with respect to values for the better grades. * * * Relative to low-grade stuff the foreign market is in about the same shape as the trade here, large quantities of this lumber having gone forward and caused congestion abroad. b Chicago— American Lumberman, August SI, 1907, page 97.— In company with most of the other woods poplar is rather quiet in Chicago now * * *. Low-grade stock is in very good request by the factory people and has been all year, but the higher priced lumber is not active just now and prices are a little lower than they were a month ago. PRODUCTION AND WHOLESALE DISTRIBUTION. 915 Section 18. Grades. In common with the other hardwoods the subject of poplar grading rules presents considerable difficulty. Both of the large hardwood associations have issued rules and have revised them from time to time. How far the difference in the rules has been reflected in the price of poplar lumber can not be determined. It can be stated, however, that for the grades and items for which prices are presented, inquiry from dealers who bought under the rules of both associations failed to show that any marked difference in price resulted from the use of one set of rules in preference to the other. Hardwood Manufacturers' Association of United States rules. — The following extracts are taken from the Hardwood Man- ufacturers' Association rules of June, 1902 (its 1908 rules are practi- cally the same for poplar) : general instructions. 1. The question of grading and inspecting Poplar Lumber is so much a matter of judgment to the inspector, as each piece comes before him, that no definite and positive rules can be laid down on paper by which any piece or any thousand feet can be inspected. 2. The variety of defects, their size and location upon a piece have such relations to each other that the inspector necessarily must depend upon his own judgment in grading, guided by the following rules, so far as they will apply practically. 3. Lumber must be inspected and measured as the inspector finds it, of full length and width. He shall make no allowance for the purpose of raising the grade. 4. In inspecting all lumber both sides of the piece shall be taken into consideration in making the grade, bearing in mind that ninety per cent of all lumber only shows one face when finished. 5. Lumber shall be well manufactured, of uniform thickness, having parallel edges, and all ragged and bad ends shall be trimmed off. 6. Tapering lumber shall be measured at one-third the length of the board from the narrow end, excepting Dimension Strips, which shall be measured at the narrow end. 7. All lumber shall be tallied surface or face measure, the tally counted up, and the one-quarter or one-half added to the total where the lumber is one and one-quarter or one and one-half inches thick, and two inches and thicker to be multiplied by the thickness. 8. In the measurement of all lumber, fractions exactly on the one-half foot are to be given alternately to the buyer and seller; the fractions below the one-half foot are to be dropped, and all fractions above the one-half foot are to be counted to the next higher figure on the board rule. 9. Splits that do not diverge more than one inch for each foot in length are to be considered straight sprits. 916 THE LUMBER INDUSTRY. 10. A straight split not exceeding six inches in length in one end of a piece of lumber eight inches and over wide shall not be considered a defect. 11. Wide pieces of lumber that would take two or three stand- ard knots may have one large knot equal to two or three standard knots. 12. Sap should be considered bright that will show bright after dressing. 13. The location of defects in a piece of lumber has much to do with its value, and should have great weight in deciding the grade. 14. Lumber shipped rough must be accepted on grades as shown in the rough, and not subject to any changes which may be caused by future mill working, excepting as to the stained sap as heretofore stated. 15. The face side of lumber is the side showing the best quality or appearance. 16. All widths and lengths mentioned in these rules shall be inclusive. 17. In the absence of eight foot lengths in the grades where same is allowed, the per cent of ten foot may be increased propor- tionately. 18. The rules for the inspection of lumber are intended to define the poorest piece that will go into a given grade. Where the defects are slightly beyond the specifications, making it a line board, fourteen feet and longer should be given advantage in grade, and twelve feet and shorter reduced. 19. All lumber less than one inch in thickness shall be meas- ured surface or face measure. 20. The standard thicknesses are f, £, f, f, 1, 1J, 1$, 2, 2\, 3 and 4 inches. 21. The standard lengths are as designated under the heading of each grade. STANDARD DEFECTS. 22. Each one of the following items constitute a standard defect: (a) Standard knot one and one-quarter inches in diameter. (b) Two knots not exceeding in extent or damage one stand- ard knot. (c) Worm or grub holes not exceeding in extent or damage one standard knot. (d) Kafting pin holes not exceeding in extent or damage one standard knot. (e) Sap to one-fifth of the width of the piece in the aggregate, unless otherwise stated. (f) One bark edge or wane not to exceed one inch in the aggre- gate, running not to exceed one-third the length of the board and only showing on one side, and to be measured. (g) Other standard defects as designated under the heading of each grade. PRODUCTION AND WHOLESALE DISTRIBUTION. 917 STANDARD GRADES. FIHSTS AND SECONDS. Lengths, 10 to 20 feet, admitting not to exceed 15 per cent of 10 feet. 8 v Widths, 7 to 17 inches. Standard thicknesses. In the combined grade of Firsts and Seconds, 50 per cent must be Firsts and 50 per cent may be Seconds. Firsts shall be 8 inches and over wide. Eight to 9 inches must be clear. Ten to 11 inches will admit 1 inch of bright sap. Twelve to 14 inches will admit one standard knot and 2 inches of bright sap, or 4 inches of bright sap if there are no knots or equal defects. Fifteen to 17 inches will admit two standard knots, or one standard knot and 3 inches of bright sap, or 4 inches of bright sap if there are no knots or equal defects. Seconds shall be 7 inches and over wide. Seven inches must be clear. Eight inches will admit of 1 inch of bright sap. Nine to 11 inches will admit one standard knot and 1 inch of bright sap, or 3 inches bright sap, or equal defects. Twelve to 14 inches will admit two standard knots and 2 inches of bright sap, or one standard knot and 4 inches of bright sap, or 5 inches of bright sap if there are no knots or equal defects. Fifteen to 17 inches will admit three standard knots or two standard knots and 3 inches of bright sap, or 6 inches of bright sap if there are no knots or equal defects. Splits not to exceed in length the width of the board in Firsts and Seconds and not over 20 per cent of the whole in either quality may be so .split. Lengths, 10 to 20 feet, admitting not to exceed 15 per cent of 10 feet. Widths, 6 inches and over. Standard thicknesses: One inch to 4 inches. Selects shall include the following different kinds of boards : 1. A board having a face side as good as a Second, the other side must be as good as a No. 1 Common. 2. A board having a face side as good as a First, the other side must be as good as a No. 2 Common. Sun checks admitted on the poor side of this board. 3. A board that has one more standard defect than would admit it to a Second. Splits not to exceed in length the width of the board in this grade and not over 20 per cent of the whole may be so split. 918 THE LUMBER INDUSTRY. Lengths, 10 to 20 feet, admitting not to exceed 15 per cent of 10 feet. Widths, 4 inches and over. Standard thicknesses, f, f, f, 1, U, H, and 2 inches. Saps shall be clear of knots up to 10 inches in width. Eleven and 12 inches will admit one standard knot. Thirteen inches and over will admit two standard knots. Splits not to exceed the width of the board up to 10 inches are admitted. Boards over 10 inches in width will admit a split one-sixth the length of the board, if there are no other defects. NO. 1 COMMON. Lengths, 8 to 20 feet, admitting not to exceed 5 per cent of 8 feet, and 15 per cent of 10 feet. Widths, 5 inches and over. Standard thicknesses, f to 4 inches. Bright sap shall not be considered a defect. Sound discolored sap one-third of the board admitted. No. 1 Common shall be inspected to grade according to the percentage of clear face rippings and cuttings as shown below, 1 subject to the restrictions on the reverse side of said cuttings and rippings, as hereinafter stated. The reverse side of any ripping or cutting may contain defects, excepting splits, which will not exceed 2 inches in the aggregate. NO. 2 COMMON. Lengths, 8 to 20 feet, admitting not to exceed 5 per cent of 8 feet and 15 per cent of 10 feet. Widths, 4 inches and over. Standard thicknesses, f to four inches. No. 2 Common shall include all lumber that will not come up • to the grade of No. 1 Common and that will work one-half of the piece into sap or clear face rippings and cuttings. No cutting to be less than 4 inches wide and less than 2 feet in length. Bright sap and sound discolored sap is not to be considered a defect in this grade. National Hardwood Lumber Association rules. — The follow- ing extracts are taken from the National Hardwood Lumber Asso- ciation rules of December 1, 1905: STANDARD DEFECTS. One knot \\ inches in diameter. Two sound knots not exceeding in extent or damage one \\ inch knot. One inch of bright sap, except as otherwise specified. One split not diverging more than 1 inch to the foot, and not exceeding in length in inches the surface measure of the piece in feet, except as otherwise specified. 1 A. table follows showing the percentages which range from 90 per cent in the case of boards 5 inches wide to 66f per cent in the case of boards 13 inches and wider. PRODUCTION AND WHOLESALE DISTRIBUTION. 919 Worm grub, knot, and rafting-pin holes, not exceeding in extent or damage, one 1 J inch knot, except as otherwise specified. Note—A straight split not exceeding 6 inches in length in one end of a piece of lumber 8 inches or over wide must not be con- sidered a defect. Firsts.— -Firsts from 1 to 4 inches in thickness must be 8 inches or oyer wide, 10 to 16 feet long. . _ Pieces 8, 9, or 10 inches wide must be clear; pieces 11 or 12 inches may have 2 inches of bright sap; pieces 13, 14, or 15 inches wide may have 2 inches of bright sap or one standard defect; pieces 16 inches or over wide may have 3 inches of bright sap or two standard defects or their equivalent. Seconds. — Seconds must be 8 inches or over wide, 10 to 16 feet long. Pieces 8 or 9 inches wide may have 1 inch of bright sap, but no other defects; pieces 10, 11, or 12 inches wide may have 3 inches of bright sap and one standard defect; pieces 13 inches or over wide may have 5 inches of bright sap and one standard defect, or two standard defects or their equivalent if there be no sap. The combined grade of Firsts and Seconds must not contain to exceed 10 per cent of 10-foot lengths. Sap clears. — Sap Clears must be 6 inches or over wide, 10 to 16 feet long, but not to exceed 10 per cent of 10-foot lengths admitted, and free from all defects except bright sap. No. 1 Commons. — -No. 1 Commons must be 5 inches or over wide, 8 to 16 feet long. Slightly discolored sap is no defect in this grade. Pieces 8 or 10 feet long must work two-thirds clear in not over two pieces; pieces 12, 14, or 16 feet long must work two-thirds clear in not over three pieces. No piece of cutting in No. 1 Common grade considered which is les3 than 3 inches wide and 3 feet long. No. 2 Commons. — No. 2 Commons must be 4 inches or over wide, 6 to 16 feet long. Pieces 6, 8, or 10 feet long must work one-half clear in not over three pieces; pieces 12 to 16 feet long must work one-half clear in not over four pieces. No piece of cutting considered in No. 2 Common grade which is less than 3 inches wide and 2 feet long. Section 19. Prices of actual sales of poplar lumber. Tabular statement. — Table 14 shows delivered prices of actual sales of poplar in several important markets. Some of the price series commence in 1897; others a year or two later. Most of them end in 1910. Prices for the following items (all rough inch boards; widths and lengths not specified) are shown by the Bureau for the markets designated by an asterisk (*) : Grade. Firsts and seconds.. Clear saps Selects No. 1 common No. 2 common Boston. (*) (*) Buffalo. (*) (*) New York. (*) Philadel- phia. (*) (*) (*) St. Louis. (*> 920 THE LUMBER INDUSTRY. Diagram. — The prices appearing in Table 14, already described, are shown on Diagram 30 (opposite p. 924) . Attention should be called to the fact that the differences in freight rate of the various markets from their points of supply establish a more or less constant differ- ential between the height of their prices at any given time. The rise of 1899-1900 is not as marked as in most species, nor is there much of a decline the last of 1900. The rise of prices in 1903 is very marked in the upper grades. In many other species a slight rise took place at this time to a higher level which was continued until 1905. In poplar, however, the sharpness of the rise and the length of the period of high prices show a course of prices different from most of the other hardwoods studied. Apparently the attempt in 1903 artificially to raise prices, described on pages 900-904, had some effect on actual prices, though it does not appear that the list pro- mulgated September 5, 1903, showing advances from $3 to $9 in the various items, which was the subject of so much discussion in the trade journals, ever represented actual sales prices. Quartered oak had a somewhat similar price movement, although there is no evi- dence that any special attempt was made at this time to force up oak prices. Prices of poplar shared in the general advance of prices which in the case of this wood culminated in 1907. It should be noted that there was a decided depression in prices in some items, for certain markets — notably St. Louis — after 1907. In all the mar- kets, in the case of the high grades, prices in 1910 were the highest shown for the period, being equal to or above the high prices of 1907. In the lower grades the prices are the highest in 1907, there having been little change after the decline which began that year. 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Antitrust laws, atoidaxce OP: 15, 17, 141-143. 288-290. 292, 309-310, 313-314. 360-351, 398-399, 411-412. 414 438, 517-524, 528-529, 654-655, 666-667, 777-778, 795, 805-W7. 811-813, 516-515. (See also Price lists, Policy of issuing association price lists changed in 1906.) Ash: Grading rules, S49-851; prices of actual sales, 868-869, 872-875: production statistics, 2-3, 832. Association activities: Associations and selling agencies — Alabama-West Florida Association, 75: Carolina Dressed Lumber Association, 255; Carolina Dressed Lumber Co., 255; Carolina Pine Lumber Association, 255, 257. 326; Columbia Kiver Loggers' Association, 371-375; Columbia River Log Scaling and Grading Bureau, 375; Cypress Selling Co. (Ltd.), 727-72S. 733; Douglas Fir Sales Co., 432. 434, 437, 440, 469, 471, 473; Georgia- Florida Saw Mill Association, 52. 61, 75, 159-171; Georgia Inter-State Saw Mill Association, 13, 159, 1 52 171; Georgia Saw Mill Association, 21. 52, 159-162, 171; Hardwood Lumber Manufacturers of Wiscon- sin, 647, 668, 844; Hardwood Manufacturers' Association of the United States, 13, 15, 52. 834-840, 84*- 5.51 svj-907. 915-919; Hemlock Co., 7, 651-652, 656; Hudson County Retail Lumber Dealers' Associa- tion, 720-721: IntersteteBedCedarShingleCo., 779-753: Louisiana Bed Cypress Co., 727-730, 734-736, 739: Lumber Manufacturers' Agency, 395, 399-402, 427. 430-432, 435, 460-471, 473; Maple Flooring Manufacturers' Association, S79-882; Michigan Hardwood Lumber Association, 882-883; Michigan Hardwood Manufacturers' Association, 646, 840-844, 878, 881, 883-SS7; Michigan Hemlock Association, 650- Michigan Maple Co., S-52-887; Mississippi Pine Association, 75; Mississippi Valley Lumbermen's Association, 6-7, 9-10, 22-23, 51, 494, 496--516, 554-5JS. 562-566, 649-650, 653, 673-675; Missouri & Arkan- sas Lumber Association, 75, 79-80; Missouri, Arkansas & Tesas Association, 75; National Hardwood Lumber Association, 834, 847, 851-855, 91S-919: National Lumber Manufacturers' Association, 51-70; New York Lumber Trade Association. 718-721; North Carolina Dressed Lumber Co., 255; North Carolina Pine Association, 13, 15, 25-26, 45, 52, SS, 248-249, 255-326; North Carolina Pine Lumber Co., 25-5 257' Northern Hemlock & Hardwooi Manufacturers' Association, 52, 646-647. 665-673. 845; Northern Pine Manufacturers' Association, 13-14. 52. 494-496, 510-511, 516-554, 558-562, 647; Northwest Lumber Agency, 433, 438-439, 468-469, 471, 473-474; Northwestern Hardwood Lumbermen's Associa- tion 846- Northwestern Hemlock Manufacturers' Association, 7, 13-14, 507. 646-668, 673; Oak Floor- ing Manufacturers' Association, 846-847; Oregon & Washington Lumber Manufacturers' Association. <159 385-3^5 414-442 453-462. 465, 477; Oregon Lumber Manufacturers' Association, 15, 23, 385-414, 420- Pacific Coast Loggers' Association, 37S; Pacific Coast Lumber Manufacturers' Association, 15, 359384-416 425-428, 431, 442-446, 449-456, 458-459, 475-481; Pacific Lumber Agency, 430-432, 434-436, 438* 469-474' Puget Sound Loggers' Association, 371: Puget Sound Timbermen's Association, 355; Red Cedar Shingle Manufacturers' Association, 9J0-S21: Saginaw Valley Lumber Dealers' Associa- tion. 583-586 ■ Shingle Agency of British Columbia, S12 : Shingle Manufacturers' Agency, 797-5 0; Shingl* vms Bureau" 783- 797; South Carolina Lumber Association, 245-249, 255. 255-257: Southern Cypress r rrtd.) 7 1 4-72o: Southern Cypress Lumber Association, 724-725; Southern Cypress Lumber Sell- • Co (Ltd ) 724-725, 731; Southern Cypress Manufacturers' Association, 24. 725 r 728, 731-739, 758; Sf them Dressed Lumber Association, 255; Southern Lumber Manufacturers' Association, 52, 75-77, - ino-103 106-110 125-l' x > 171: Southern Lumber Operators' Association, 149-1:5: Southwestern w hineton Lumber Manufacturers' Association, 13, 15, 383-389, 392, 394-398, 406, 408-416, 422-423, mfil 450-451- 5 pruce Manufacturers' Association, 701, 703; Tacoma 4 Eastern Lumber Co., 42 '"v 438 441 468-469, 473-474; Washington Cedar Products Co., 434, 469, 471. 473: Washington JS t Fir' Products Co'., 438, 443, 469; Washington Log Brokerage Co., 360-371; Washington Log- ^^ ti V rase Co 356-360 368; Washington Bed Cedar Shingle Manufacturers' Association, 773- ^ S Wert Coast Lumber Manufacturers' Association, 385-386, 431-432, 442-444, 453, 460, 463-466, 468, 7,9; Jl es |' Pennsylvania Planing Mill and Lumbermen's Association, 617; Western Pine Mann- 474; "2 Association 14 24-25.52; Western Pine Shippers' Association, 13-14, 51; Whatcom County ^'"iManufacturers' Association, 777; White Pine Association (Buffalo and Tonawanda), 2S7, 588- Wholesale Lumber Dealers' Association of Pittsburg, 617-619; Wisconsin Hardwood Lumber- " ; Association, 13, 845-846; Wisconsin VaUey Lumbermen's Ass T7„ - sst-558. 563-566, 650, 653-654, 675; Yellow Pine Manufacturers' Association, 13, 23-25, , , -nation 13, 845-846; Wisconsin Valley Lumbermen's Association, 9, 494, 496-498, 502-510, ID f 1 -i 4 T6^517 554-558, 563-566, 650, 653-654, 675; Yellow Pine Manufacturers' Association, 13, 23-25, 77I78, 80-81 85-100, 103-106, 108-126, 130-150, 157-159, 172-175; Yellow Poplar Lumber Mana fccturers' Association, 834, 899. rZocration of different associations. See Inter-association cooperation. VZLrJraie journal accounts 0/ association activities— 20-26. activities See Price lists and Curtailment of production, for each wood. Pr * X 927 928 INDEX. B. "Base " price in Pennsylvania and West Virginia hemlock: See under Hemlock, Prices. Basis lists for yellow pine: 79. Basswood: Grading rules, 849-852; prices of actual sales, 868-869, 875-876; production statistics, 2-3, 832. Birch: Grading rules, 849-853; prices of actual sales, 868-869, 877; production statistics, 2-3, S32. Brotherhood of timber workers: 153-154. C. Cedar shingles (red): Associations and selling agencies — InterstateRed Cedar Shingle Co., 779-783; Red Cedar Shingle Manu- facturers, 800-821; Shingle Manufacturers' Agency, 797-800; Shingle Mills Bureau, 783-797; Wash- ington Red Cedar Shingle Manufacturers' Association, 773-779; Whatcom County Shingle Manu- facturers' Association, 777. Car shortage— 777, 785, 792-793, 798; railroad "embargo," 786. Combination in restraint of trade — Washington Red Cedar Shingle Manufacturers' Association, so declared by Federal court decision, 777-778. Combination shingle milts defined — 771. Competition met by producers — With shingles of other woods, 770; with substitute roofings, 770-771. Curtailment oj 'production ^activities promoted by — Interstate Red Cedar Shingle Co., 782-783; Red Cedar Shingle Manufacturers' Association, 801-803, 808-810, 812-813, 816-819; Shingle Mills Bureau, 783-790, 792-797; Washington Red Cedar Shingle Manufacturers' Association, 774-777. Curtailment of production, agreements — Gentlemen's agreement — Shingle Mills Bureau (795); signed agreements— Certified checks deposited to bind signers of agreements (784, 786, 788), Interstate Red Cedar Shingle Co. (782), Red Cedar Shingle Manufacturers' Association (801-S03), Shingle Mills Bureau (783, 786), Washington Red Cedar Shingle Manufacturers' Association (775). Grading rules— 821-822. Legal precautions— Red Cedar Shingle Manufacturers' Association, 806-808, 811-813, 816-818. Price activities — Benefits claimed to be derived from association work — Red Cedar Shingle Manufac- turers' Association (804, 813, 815), Shingle Mills Bureau (787, 790-792), Washington Red Cedar, Shingle Manufacturers' Association (776, 779). Prices of actual sales— 822-823, 826-831. Production — Conditions in, 771-773; statistics of, 2-3, 769. Straight shingle mills, defined — 771. Washington shingle output, importance of— 771. Wholesalers— Attitude of associations toward, 781, 803-807; "bear" influence of wholesalers, 788, 790, 793, 798-796; price agreements with, 787-788, 797-798, 800, 811-812, 820; opposition of, 780; sales agents of association, 803-806, 820. Cedar shingles (white): Grading rules, 824; prices of actual sales, 823-824, 826-831. Cedar siding (red): Grading rales, 822; prices of actual sales, 823, 826-831. Chestnut: Grading rules, 849-851, 853; prices of actual sales, 868-872; production, 2-3, 832. Closedown agreements. See Curtailment of production, for each wood. Competition met by various woods. See Competition met by producers, for each wood. Curtailment of production. See treatment of this subject for each wood. Cypress lumber (red): Associations and selling agencies — Cypress Selling Co. (Ltd.), 727-728,733; Louisiana Red Cypress Co., 727-730, 734-736, 739; Southern Cypress Co. (Ltd.), 724-725; Southern Cypress Lumber Association, 724-725; Sputhern Cypress Lumber Selling Co. (Ltd.), 724-725, 731; Southern Cypress Manufacturers' Association, 24, 725-728, 731-739, 758. Close connection between associations and selling agencies — Southern Cypress Lumber Association with Southern Cypress Lumber Selling Co. (Ltd.), 725; Southern Cypress Manufacturers' Association with Cypress Selling Co. (Ltd.) and Louisiana Red Cypress Co., 733-735. Competition met by producers — 722. Curtailment of production — 737-739. Grades— Proportion produced, 760-761; rules, 758-760. Price lists— Comparison of lists of New Orleans Lumber Trade Journal, Brandao Printing Co., and Louisiana Red Cypress Co., 735-736; issued by Louisiana Red Cypress Co., 735-736; issued by New Orleans Lumber Trade Journal, 731, 735-736; issued by printing company, 735-736; standard form of price list adopted by Southern Cypress Manufacturers' Association, 731-734. Prices of actual sales— 761-768. Production— Conditions in, 723; statistics of, 2-3, 722. Trade-paper extracts relating to price activities — 739-757. Cypress shingles (red): Production, 769; grading rules, 825; prices of actual sales, 825-831, D. Demand: Seasonal changes of, 43. Discount price lists. See under Fir lumber, Price lists. Distribution: Important centers of, 33-34; methods of, 82-33. INDEX. 929 E. Embargo op 1907: Effect on cedar shingle market, 786; effect on fir market, 381, 446-447. Export trade: Fir export agreement of 1902, 389-393; poplar domestic prices maintained by exporting 907-908. F. Fir logs: Associations and selling agencies— Columbia River Loggers' Association, 371-375; Columbia River Log Scaling and Grading Bureau, 375; Pacific Coast Loggers' Association, 378; Puget Sound Loggers' Association, 371; Puget Sound Timbermen's Association, 355; Washington Log Brokerage Co., 360-371; "Washington Logging & Brokerage Co., 356-360, 368. Cooperation between loggers of different districts — 376-379. Curtailment of log output— Columbia River Loggers' Association, 371-374; Washington Log Brokerage Co., 362-366, 370; Washington Logging & Brokerage Co., 357-358. Manufacturers' attitude toward logging associations— Columbia River Loggers' Association, 372, 375; Washington Log Brokerage Co., 362, 364-370; Washington Logging & Brokerage Co., 358-360. Prices— Comparison ol list prices with prices of actual sales, 379; control attributed to loggers, 358, 367-368, 375. Production, conditions in — 354-355. Fir lUMBue: Associations, selling agencies, and information bureaus— Douglas Fir Sales Co., 432, 434, 437, 440, 469, 471, 473; Lumbermen's Information Bureau, 432, 474-475; Lumber Manufacturers' Agency, 395, 399-402, 427, 430-432, 435, 469-471, 473; Northwest Lumber Agency, 433, 438-439, 468-469, 471, 473-474; UregoD & Washington Lumber Manufacturers' Association, 359, 385-386, 414-442, 453-462, 465, 477; Oregon Lumber Manufacturers' Association, 15, 23, 385-414, 420; Pacific Coast Lumber Manufacturers' Association, 15, 359, 384-416, 425-428, 431, 442-446, 449-456, 458-459, 475-481; Pacific Lumber Agency, 430-432, 434-436, 438, 469-474; Southwestern Washington Lumber Manufacturers' Association, 13, 15, 383-389, 392, 394-393, 406, 408-416, 422-423, 427-428, 431, 450-451; Tacoma & Eastern Lumber Co., 433, 435, 438, 441, 468-469, 473-474; Washington Cedar & Fir Products Co., 438, 443, 469; Washington Cedar Products Co., 434, 469, 471, 473; West Coast Lumber Manufacturers' Association, 385-386, 431-432, 442-444, 453, 460, 463-466, 468, 474. Car shortage— 446-447; embargo of 1907, 381, 446-447. Competition met by producers— 380-382. Curtailment of production— Activities promoted officially by associations— Oregon & Washington Lum- "-> ber Manufacturers' Association (454-462). Pacific Coast Lumber Manufacturers' Association (444-446, 450-462) Southwestern Washington Lumber Manufacturers' Association (450-451); activities pro- 4 moted "unofficially" by association members, with assistance of association officers (447-450, 462-467). 4 Curtailment of production agreements— 445-446, 453-467. Export agreement of 190$— 389-393. Grades— Proportion produced, 479-481; rules, 477-479. •«« Information bureaus-Character of work, 474-477; relations with associations, 474-475. Price activities- benefits claimed to be derived from association work— 19, 389-392, 409, 412-^113; policy ' of West Coast Lumber Manufacturers' Association relating to prices (431-432). Price agreements— Agreement in 1901, 386-388; Centralia agreements of 1905, 393-409; complaints against nonobservers, 388, 399-408. Price lists— Discount lists compiled and officially adopted by associations, 424-426, 441-442; issued by Anderson & Duniway Co., 421-423; discount sheets applying to "Prevailing Prices" lists, 417-420; a lying to standard Price List of Pacific Coast Forest Products lists, 426-441; connection with Jsociation work, 419-420, 425, 427-429, 431-432, 443-444; lists issued by associations prior to 1906- Oreeon Lumber 'Manufacturers' Association (388, 413-414), Pacific Coast Lumber Manufacturers' A ciation (386-390, 393-395, 397-39S, 410-414), Southwestern Washington Lumber Manufacturers' a relation (387-389,' 397, 410-411, 413-414); lists issued by printing and publishing firms— Anderson * Duniway Co. (420-423), by Pacific Lumber Trade Journal (416-420, 426-441), "Prevailing p ■ " lists issued by Victor H. Beckman, secretary <414-416), by Pacific Lumber Trade Journal Mlfr420); P°W of issuing association price lists changed in 1906—13, 16, 413-414. Prices of actual sales— 481-489. Production-Conditions in, 382-383; statistics of, 2-3, 379-380. SemnTlimcies-Charactei of work, 469-470; price activities, 399-402, 427, 430-441, 469-474; relations with associations, 467-468. G. . proportion produced, 44-46, 48-49, 175-178, 328-329, 479-481, 567-569, 760-761; relative price move- GBADES e nts of high and low grades, 46-48; rules, see under each wood. 25030°-14 59 930 INDEX. H. Hakdwoods: Associations and selling agencies— Hardwood Manufacturers' Association of the United States, 13, 15, 52, 834-840, 848-861, 899-907, 915-919; Hardwood Lumber Manufacturers of Wisconsin, 647, 668, 844; Maple Flooring Manufacturers' Association, 879-882; Michigan Hardwood Manufacturers' Associa- tion, 646, 840-844, 878, 881, 883-887; Michigan Maple Co., 882-887; National Hardwood Lumber Asso- ciation, 834, 847, 851-855, 918-919; Northern Hemlock & Hardwood Manufacturers' Association, 52, 646-647, 668-673,. 845; Northwestern Hardwood Lumbermen's Association, 846; Oak Flooring Man- ufacturers' Association, 846-847; Wisconsin Hardwood Lumbermen's Association, 13, 845-846; Yel- low Poplar Lumber Manufacturers' Association, 834, 899. Competition met by producers — 833, 898. Curtailment of production, activities promoted by— Hardwood Manufacturers' Association of the United States, 835-838; Hardwood Lumber Manufacturers of Wisconsin, 844; Michigan Hardwood Manu- facturers' Association, 841, 843. Grading rules— 848-855, 892, 915-919; difficulty in securing uniformity, hardwoods, 8, 847-848. Price lists — Issued by associations — Hardwood Manufacturers' Association of the United States (13, 15, 835-840, 899-907), Hardwood Lumber Manufacturers of Wisconsin (844), Maple Flooring Manufac- turers' Association (879-882), Michigan Hardwood Manufacturers' Association (840-844), Michigan Maple Co. (885), Northern Hemlock & Hardwood Manufacturers' Association (845), Northwestern Hardwood Lumber Association (846), Oak Flooring Manufacturers' Association (846), Wisconsin Hardwood Lumbermen's Association (13, 845-846); policy of issuing association price lists changed in 1906— Hardwood Manufacturers' Association of the United States (13, 15, 835-836), Northwestern Hardwood Lumbermen's Association (846), Wisconsin Hardwood Lumbermen's Association (845-846). Prices of actual sales— 855-877, 892-897, 919-925. Production— Conditions in, 833, 878, 898-399; statistics of, 2-3, 832-833, 878. Hemlock: Associations and selling agencies— Hemlock Co., 7, 651-652, 656; Michigan Hardwood Manufacturers' Association, 646, 840-844, 878, 881, 883-887; Northern Hemlock & Hardwood Manufacturers' Associa- tion, 52, 646-647, 668-673, 845; Northwestern Hemlock Manufacturers' Association, 7, 13-14, 507, 646-668, 673; Western Pennsylvania Planing Mill and Lumbermen's Association, 617; Wholesale Lumber Dealers' Association of Pittsburg, 617-619. Competition met by producers— Between different regions of production, 608-611; from other woods, 611-615. Curtailment of production— KB. Grading rules.— Eastern hemlock, 615; Lake States hemlock, 680; Pennsylvania and West Virginia hemlock, 633-634. Prices— "Base" price in Pennsylvania and West Virginia hemlock, 621-622; comparison of list prices with prices of actual sales — Lake States hemlock (679), Pennsylvania and West Virginia hemlock (632-633). Price lists— Issued by associations— Northwestern Hemlock Manufacturers' Association (648-655), Wholesale Lumber Dealers' Association of Pittsburg (617-619); issued by printing companies— A. L. Broughton & Co. (655-671, 673), Castle-Pierce Printing Co. (655, 661-666, 671); issued following agreements between manufacturers— Pennsylvania and West Virginia hemlock producers (619-621); policy of issuing association price lists changed in 1906— Action of Northwestern Hemlock Manufac- turers' Association (13-14, 654-fi55), change in title of Broughton lists (655); relation between the associations and the price lists of the printing companies — A. L. Broughton & Co. (655, 659-671, 673) Castle-Pierce Printing Co. (655, 661-666, 671). Prices of actual sales— Eastern hemlock, 615; Lake States hemlock, 680-681; Pennsylvania and West Virginia hemlock, 634-644. Production— Conditions in— Lakes States hemlock (645-646), Pennsylvania and West Virginia hemlock (615-616); statistics of, 2, 607. Pulp wood, effect on lumber supply of demand for— Lake States hemlock. 646; Pennsylvania and West Virginia hemlock, 616. Tanning industry, effect on lumber supply of demand for tan bark— Lake States hemlock, 645-646; Penn- sylvania and West Virginia hemlock, 616. Trade^paper extracts relating to price activities— Lake States hemlock, 673-679; Pennsylvania and West Virginia hemlock, 622-632. I. Index prices: Discussion of use. 46-47; compiled on basis of 1901-1903, 47-48; results shown, 48-49. INTEKASSOCIATION ACHVITnM: Cooperation between individual associationi—la curtailment activities, 378, 417-462, 785; in grading rules, 6-10, 61, 496, 650, 847-848; in price-list activities, 365, 376-379, 387-389, 393-417, 422-442, 469-474, 502-510, 653-654, 720-721, 879-880. National Lumber Manufacturers' Association— Activities desoribed— Credit-rating bureau (54-55), efforts to secure favorable legislation (60-70), efforts to secure favorable publicity (55-60), statistical department (55); general description of organization— Declaration of purpose (52-53), organization, (51-54). KrPTEEDGE sesolbtion: 19-20. INDEX. 931 K. Legal om? °' aC * Ual Sales ' 940 ^ 44 > 687 > 695-698, 764-768; statistics of production, 4. «, !S ONS 0N 1 ™ber association AcnvmES: 80, 134-138, 141-143, 288-292, 309-310, 517-523, 528 LUMBE^'. m ' m - 806 ^° 7 ' ai - a2 - Lumber pr S B1JEEA1J Oxc-)- See under North Carolina pine and Yellow pine. 422-423^ Curta ilments promoted, 315-325, 447-449; policy in publishing prices, 26-32, 414-420, o^TtS' ™ 735 " 736 : reliability of statements, 28-32; reporting of association activities, 20-26, 124-125, 278-279, 286, 315-325, 732. Lumber production: Conditions in, 42-43 (.see also under each wood); curtailment of, see Curtailment of production; statistics of, 2-4 (see also under each wood). M. Maple: Associations and selling agencies— Maple Flooring Manufacturers' Association, 879-882; Michigan Hard- wood Manufacturers' Association, 646, 840-844, 878, 881, 883-887; Michigan Maple Co., 882-887. Curtailment of production— 881-882. Grading rules— 848-831, 853-854, 892. Price agreements— 879-882. Price lists— Issued by Maple Flooring Manufacturers' Association, 879-882; issued by Michigan Hard- wood Manufacturers' Association, 840-844, 885-886; issued by Michigan Maple Co., 885-886. Prices of actual sales— 892-897. Production— Condition in, 878; statistics of, 2, 832, 878. Trade-paper extracts relating to price activities — 887-891. Market reports. See under Price lists. N. North Carolina fine: Associations and selling agencies — Carolina Dressed Lumber Association, 255; Carolina Dressed Lumber Co., 255; Carolina Pine Lumber Association, 255, 257, 326; North Carolina Dressed Lumber Co., 255; North Carolina Pine Association (Inc. 1 ), 13, 15, 25-26, 45, 52, 86, 248-249, 255-326; North Carolina Pine Lumber Co., 255, 257; South Carolina Lumber Association, 248-249, 255, 265-267; Southern Dressed Lumber Association, 255. Competition met by producers — 249-253. Curtailment of production— Activities promoted officially by association, 302-308; activities promoted "unofficially" with assistance of association officers, 312-326; nonconcerted curtailment, 308-312. Grades— Proportion produced, 328-329; rules, 326-328. Lumbermen's Bureau (Inc.)— 28, 123-125, 299-302. North Carolina pine— Definition of, 248-249. Prices— Comparison of list prices with prices of actual sales, 302; information issued by the association not in the form of price lists, 267-269, 296-299. Price lists— Association lists issued prior to Aug. 16, 1906, 256-267; association lists issued under the title " Market Reports," 267-288; association list issued under the title "List of grades and values, " 286-296; concession sheets used with " List of grades and values," 292-296; issued by the Lumbermen's Bureau (toe ) 28, 123-125, 277-278, 299-302; policy of issuing association price lists changed in 1906, 13, 15, 267-274. Prices of actual sales— 330-353. Production— Conditions in, 253-254; statistics of, 249. Northern pine. See under White and northern pine. O. o • Grading rules, 849-851, 854-855; prices of actual sales, 855-867; production, statistics of, 2, 832. P. Poplar: Y*' VrfioTW-Hardwood Manufacturers' Association of the United States, 13, 15, 52, 834-840, 848-851, 899^77915-919; YeUow Poplar Lumber Manufacturers' Association, 834, 899. Competition met by producers— 898. Exported to maintain domestic prtes-907-908. Grading rufes-915-919. Price lists issued by association— 899-907 Prices of actual s0 Zes-919-925. Pr«fcH*io»-C ondltlons in, 898-899; statistics of, 2, 832. Trade-paper extracts relating to price aclwUies-908-9U. 932 INDEX. Peice lists: Basis lists, used with "compilation" sheets (of concessions). See under Yellow pine. Discount lists, used with discount sheets. See under Fir lumber, Price lists. Grades and values list, used with concession sheets. See under North Carolina pine, Price lists. Kinds of price lists— 10-11, 79. Nature and use of price lists— 11-12. Market reports. See under Yellow pine and under North Carolina pine, Price lists. Policy of issuing association price lists changed in 1906—13-15, 80-81, 85-86, 267-274, 413-414, 517-524, 654-655, 835-836, 845-846. Prevailing prices. See under Fir lumber, Price lists. Prices current. See under Yellow pine. Statement of market conditions. See under Hardwoods, Price lists. Prices: Agreements to maintain list prices. See Price agreements under Fir lumber, Maple, and Spruce. Causes of fluctuations — 42-43. Comparisons of list prices with prices of actual sales. See Prices under Fir logs, Hemlock, North Caro- lina pine, Spruce, White and northern pine, and Yellow pine. Index prices. See Index prices. Lumber-trade journal prices. See Lumber press. Prices of actual sales— Accuracy of, 37-39; methods used in collection of, 31-37; method used in com- pilation of, 38; source of price information, 36-37; species for which prices are shown, 35; wholesale prices, reasons for choice of, 34-35. Relation of proportion of grades and price changes — 48-49. Relative price movements of high and low grades — 46-48. Scope and nature of price discussion — 17-18. Pulpwood, effect ON lumbee supplt of demand for. See under Hemlock and Spruce. a. Restriction of output. See Curtailment of production, for each wood. s. Selling agencies. See under Fir lumber. Speuce: Associations— Spruce Manufacturers' Association, 701, 703. Competition met by producers — 683-685. Curtailment of production — 689-690. Grading rules— Eastern spruce, 694; West Virginia spruce, 711. Prices — Comparison of list prices with prices of actual sales of West Virginia spruce, 711. Price agreements— New York spruce agreement, 718-721. Price lists— Uniform lists adopted by eastern spruce producers, 687-690; uniform lists adopted by West Virginia spruce producers, 701-704. Prices of actual sales— Eastern spruce, 694-698; West Virginia spruce, 712-717. Production— Conditions in— Eastern spruce (685-687), West Virginia spruce (698-700); statistics of, 2-3, 682. Pulpwood, effect on lumber supply of demand for — Eastern spruce, 686; West Virginia spruce, 700. Trade-paper extracts relating to price activities— Eastern spruce, 690-693; West Virginia spruce, 704-710. Standardization of peoduct: 5-10. U. United States, lumber production in: 2-4. W. Western yellow pine: Associations — Western Pine Manufacturers' Association, 14; Western Pine Shippers' Association, 14. Change in policy of issuing association lists in 1906 — 14-16. White and northern pine: Associations— Mississippi Valley Lumbermen's Association, 6-7, 9-10, 22-23, 51, 494, 496-516, 554-558, 562-566, 649-650, 653, 673-675; Northern Pine Manufacturers' Association, 13-14, 52, 494-496, 510-511, 616-554, 558-562, 647; Saginaw Valley Lumber Dealers' Association, 583-586; White Pine Association, 287, 588-599; Wisconsin Valley Lumbermen's Association, 9, 494, 496-498, 502-510, 512-514, 516-517, 554-558, 563-566, 650, 653-654, 675. Buffalo-Tonawanda market described — 583. Competition met by producers — 491-492. Curtailment of production— 498, 501. Grades— Proportion produced in northern pine, 567-569; rules— Northern pine (563-566), white pine (Buflalo-Tonawanda grading) (599-600). Northern pine — Denned, 490; proportion of different species included under the name of "Northern pine," 562-563. INDEX. 933 White and nobthebn pine— Continued. Prices — Comparison of list prices with prices ol actual sales, 562. Price agreements— 497, 511-512, 583-588. Price lists— Issued by associations— Mississippi Valley Lumbermen's Association (497-510, 512-516), Northern Pine Manufacturers' Association (510-511, 516-517), Saginaw Valley Lumber Dealers' Asso- ciation (584-587), White Pine Association (588-599), issued by A. L. Broughton & Co. (524-554); policy of issuing association price lists changed in 1906— Action of Northern Pine Manufacturers' Association (13-14, 517-524), change in title of Broughton lists (524-525); relation between the asso- ciation and the Broughton price lists, 524-554. Prices of actual sales— Northern pine, 569-582; White pine (Buffalo-Tonawanda grading), 600-606. Production— Conditions in, northern pine, 492-494; statistics of, 2-3, 490-491. Trade-paper extracts relating to price activities in northern pine — 554-561. Y. Yellow pine: Associations— Alabama-West Florida Association, 75; Georgia-Florida Saw Mill Association, 52, 61, 75, 159-171; Georgia Interstate Saw Mill Association, 13, 159, 162, 171; Georgia Saw Mill Association, 21, 52, 159-162, 171; Mississippi Pin Association, 75; Missouri & Arkansas Lumber Association, 75, 79-80; Missouri, Arkansas & Texas Association, 75; Southern Lumber Manufacturers' Association, 52, 75-77, 80-85, 100-103, 106-110, 125-129, 171; Southern Lumber Operators' Association, 149-158; Yellow Pine Manufacturers' Association, 13, 23-25, 52, 72-73, 75, 77-78, 80-81, 85-100, 103-106, 108-126, 130-150, 157-159, 172-175. Basis lists. See Price lists, Different forms of association lists. Competition met by producers — 71-74. Curtailment of production — Activities promoted officially by associations — Georgia-Florida Saw Mill Association (163-164, 168-170), Georgia Interstate Saw Mill Association (162), Georgia Saw Mill Asso- ciation (161), Southern Lumber Manufacturers' Association (126-129), Southern Lumber Operators' Association (149-159); activities promoted "unofficially" by association members with assiitance from association officers, 129-149, 156-159. Curtailment of production agreements— 126-129, 141, 163-164, 169-170. Grades— Proportion produced, 175-178; rules, 171-175. Lumbermen's Bureau (Inc.)— 28, 123-125, 277-278, 299-302. Market reports. See Price lists, Different forms of association lists. Missouri ouster suit— SO, 98-99, 101, 110. Price activities— Association price information not in the form of price lists, 117-120; benefits claimed to be derived from association work, 19, 76-77, 127-129. Price agreements— 81-85. Price lists— Different forms of association lists, 79; issued by associations— Georgia-Florida Saw Mill Association (164-168), Georgia Interstate Sawmill Association (162), Georgia Saw Mill Association (161-162), Missouri & Arkansas Lumber Association (79-80), Southern Lumber Manufacturers' Association (79-85, 98, 100-103, 106-109), Yellow Pine Manufacturers' Association (79, 85-100, 103- 116); issued by printing firms— Lumberman's Printing Co., semiofficial lists (85-87), Lumbermen's Bureau (Inc.) (28, 123-125), E. J. Schuster Printing Co. (27-28, 120-122, 125-126); policy of issuing association price lists changed in 1906, 13, 80-81, 85-86. Prices— Comparison of list prices with prices of actual sales, 125-126, 182-211. Prices current. See Price lists, Different forms of association lists. Prices of actual sales— 179-247. Production— Conditions in, 74-75; statistics of, 2-3, 71. Schuster Printing Co., E. J.-27-28, 120-122, 125-126. Trade-paper extracts relating to price activities— 106-110, 170-171. o ADDITIONAL COPIES OF THIS PUBLICATION MAT BE PROCURED FROM THE SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTDSG OFFICE WASHINGTON, D. C. AT 11.50 PEE COPY V