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BOSTON  PUBLIC  LIBBARV 

IllllVlll     I 

3  9999  06317  513  5 

OFFICE  OF  NATIONAL  RECOVERY  ADMINISTRATION 
DIVISION  OF  REVIEW 


ECONOMIC  PROBLEMS  OF  THE  LUMBER  AND  TIIffiER  PRODUCTS  INDUSTRY 

By 

Peter  A.  Stone 
William  E.  Yost 
D.  N.  Burnham 
C.  Stowell  Smith 
Spencer  H.  Reed 
Sterling  R.  March 


WORK  MATERIALS  NO^  79 


INDUSTRY  STUDIES  SECTION 
MARCH,  1936 


OFFICE  OF  KATIONAL  HUCOV^'^.Y  ADMINI  STRATI  OF 
DIVISION  OF  REVIW 


ECONOMIC  PrtOBLEMS  OF   THE  LIIIBER  AND  '^livBER  PRODUCTS   INDUSTRY 

By 

P  -^ter  A.  Stone 
William  ^,  Yost 
D.  W.  Biarnham 
C.  Stowell  Smith 
Sijencer  H.  Reed 
Sterling  R.  March 


INDUSTRY  STUDIES  SECTION 
MARCH.  19 ?6 


9813 


F  0  R  E  U  0  H  D 


This  study  of  the  Lumter  and  Ti.iber  products  Industries  v/as  com- 
pleted by  Mr.  Uilliam  E.  Yost,  of  the  Industry  Studies  Section,  Mr.  Li.  D. 
Vincent,  in  charge. 

The  report  concerns  one  of  the  oldest  and  largest  industries  in  the 
United  States,  but  because  of  lack  of  time  and  personnel  the  original 
plan  for  a  report  covering  a  study  of  the  entire  subject  of  Lumber  and 
Timber  Products  has  been  curtailed  to  the  basic  portions  only.  Forests 
have  been  dealt  with  exliaiistively.   Logging  and  sa^-mills  have  been  co- 
vered extensively,  but  not  as  adequately  as  was  desired.   Other  parts 
of  this  industry  have  only  been  touched.   The  stresses  of  administration 
have  been  pointed  out,  and  their  effects  an.d  results  analyzed. 

The  National  Lumber  Manufacturers  Association  has  cooperated  with  the 
Division  of  Review  by  generous  contributions  of  data  and  by  cordial  avail- 
ability for  conference  and  discussion.   On  the  page  immediately  following 
this  foreword  will  be  found  a  statement  by  the  Association. 

It  should  be  pointed  out  that  there  are  masses  of  material  in  HRA 
files  and  in  the  files  of  the  Association  that  are  not  reflected,  or  are 
at  best  inadequately  reflected,  in  this  study.   The  report  is  precise- 
ly what  the  cover  page  implies,  work  ms,terials  for  further  study.   It 
is  to  be  hoped  that  in  some  way  the  subject  may  be  reopened  to  the  end 
that,  through  further  cooperation  with  the  industry,  a  more  complete  and 
informative  report  may  be  written. 

At  the  back  of  this  report  will  be  found  a  brief  statement  of  the 
studies  undertaken  by  the  Division  of  Review. 


L.  C.  Marshall 
Director,  Division  of  Review 


March  17,  1936, 


9813 


Division  of  Revie'.?, 

National  Recovery  Acininistration. 

In  response  to  a  req-.iest  from  the  National  Recovery  Adminis- 
tration, Division  of  Review,  the  national  Liim"ber  Hantif acturers  lissocia- 
tion  ap-oointed  a  representative  committee  to  review  and  comment  on  the 
work  of  the  Division  of  Review  in  the  preparation  of  a  study  of  Economic 
Conditions  in  the  L-mn"ber  Industry.   Early  in  December  the  Committee 
received  for  comment  a  copy  of  the  preliminary'-  draft  of  the  study.   The 
Committee  made  a  brief  review  of  the  preliminary  draft  and  sent  numerous 
suggestions  and  criticisms  thereon  to  the  Division  of  Review.   Subsequent- 
ly it  was  informed  that  the  proposed  report  had  been  substantially  changed 
in  scope  and  content. 

The  final  draft  of  the  study,  except  for  Appendices  II  and  III 
was  received  from  the  Division  of  Review  for  transmission  to  the  Commit- 
tee eaxlj  in  March.  Due  to  the  necessity  of  having  the  report  memeogra- 
phed  before  April  1st,  the  time  was  insufficient  to  permit  the  members 
of  the  Committee  to  make  adequate  study  of,  or  comment  upon,  the  report; 
and  they  have  not  done  so. 

The  proposed  revised  report,  however,  has  been  generally  re- 
viewed by  the  Association  staff  aided  by  conferences  with  members  of  the 
Division  of  Review.   These  have  resulted  in  a  partial  but  substantial 
correction  of  inaccuracies,  and  of  important  omissions  of  fact.  Upon 
many  points  the  Association  is  in  entire  accord  with  the  statement  of 
facts  and  conclusions  'by   the  Division  of  Review.  On  some  points  differe- 
nces of  opinion  concerning  the  facts  and  their  significance,  and  lack 
of  sufficient  time  to  collect  a.nd  prepare  pertinent  data  have  prevented 
.more  complete  agreement.  On  still  other  points  the  Association  believes 
that  the  material  has  been  presented  in  such  fashion  as  to  point  to  or 
at  least  readily  to  invite  erroneous  conclusions  p.nd  unwarranted  infer- 
ences. 

The  participation  by  the  ITational  Lumber  Manufacturers  Associa- 
tion in  a  review  of  this  work  does  not  imply  ei^•her  agreement  or  disagree- 
ment with  the  substance  of  the  report  or  v/ith  its  conclusions.  'Nor  is  it 
to  be  interpreted  as  signifying  agreement  with  the  approach  to  and  plan- 
ning of  the  study,  the  selection  of  material,  the  manner  of  presentation, 
or  the  concltisions  stated  in  and  to  be  inferred  from  the  report.   It  is 
in  entire  accord  with  the  judgment  of  the  Division  of  Review  that  the 
time  and  facilities  available  for  the  preparation  of  the  study  and  the 
difficult  cond^itions  under  which  it  has  been  conducted,  have  not  permit- 
ted the  full  achievement  of  s,  balanced,  thorough,  and  objective  study. 

It  is  understood  that  a  copy  of  this  communication  will  be 
inclxT-ded  as  a  part  of  the  rer)Ort  of  the  Division  of  Review  on  Economic 
Conditions  in  the  Kimber  Industry, 


Respectfully  submitted, 
lATIOl^IAL  LUviBER  MITUEACTURERS  ASSOCIATIOK 


March  25,  1936 


9813 


TA3LE  OF  CONTENTS 

..    -  Page 

HISTORICAL  SUI.MAEY  1 

CHAPTER  I .   IKTRODUCTION  , 7 

A.  General  Description  of  the  Industry  7 

1.  Forest  Lands  and  Species  8 

2.  Early  History  8 

3.  Western  Areas  9 

4.  Volume  of  Prod\xction  10 

5.  Effect  of  Logging  on  Production 11 

6.  The  Production  Cycle  12 

7 .  Lator 13 

8.  Lumber  Uses  14 

9.  Production  Costs  15 

10.  Transportation 16 

11.  Distribution  17 

12.  Improvements  in  Products  19 

13 .  Other  Lumber  Products  ; 20 

B.  Scope  of  Discussion  23 

CHAPTER  II.   THE  PROBLEMS  OF  FOREST  MANAGSlffiHT  24 

A.  Timber  Supply  and  Location  24 

1.  Present  Forest  Area  24 

a.   Commercial  Forest  Area 24 

2.  Forest  Stand  27 

a.  Stand  on  Total  Area  27 

b.  Stand  on  Saw  Timber  Area  28 

c.  Stand  on  Cordwood  Area 28 

d.  Stand  on  Restocking  Area 28 

e.  Saw  Timber  Stand  28 

B.  The  Problems  of  Timber  Ownership  and  Value  30 

1.  Ownership  of  Entire  Forest  Area 30 

a.  Industrial  Ownership  30 

b .  Farm  'vl'oodlands  31 

c.  Public  Ownership  31 

2.  Ownership  of  Saw  Timber  Stand 32 

a.  Industrial  Ownership  32 

b .  Farm  T7oodlands  32 

c.  National  Forests  32 

d.  Other  Federally  Owned  and  Managed  Forests 33 

G.   State,  County  and  Municipal  Ownership  33 

9813  -iii- 


Page 

3.  Average  Stand  of  Saw  Timber  per  Acre  33 

4.  Forest  Growth  .aiid  Drain 33 

a.  Forest  Growth  33 

b.  Forest  Drain 35 

5.  Value  of  Forests  and  Forests  Lands  39 

a.  Privately  Owned  Lands  39 

b.  Publicly  Owned  Lands  40 

6 .  Stunipage  Values  40 

7.  Concentration  of  Timber  Ownership  41 

C.  The  Problem  of  Holding  Timber  Land 43 

1.  Interest  44 

2.  Fire  Protection  Cost  45 

3.  Taxation 48 

D.  Pre  Code  Efforts  at  Conservation 50 

1.  Public  51 

2.  Private  52 

E.  Conservation  Under  the  Code  54 

1.  The  Private  Forestry  Program  57 

2.  The  Public  Forestrj'-  Program  60 

CHAPTER  III.   THE  PHOBLSlilS  OF  PRODUCTION  64 

A.  Capacity  64 

B.  Production  -  Volume  -  Usage  74 

C.  Financial  Structure  79 

D.  Production  Costs  90 

1 .  Raw  Material  Costs  , 92 

2.  Sawmill  or  Rough  Lumber  Conversion  Costs  93 

3.  Dressing  or  Planing  Costs  94 

4.  General  Expenses  and  Overhead  94 

5.  History  of  Costs  Under  KTIA 94 

E.  Prices  and  Mill  Realization  103 

1 .  Prices  103  ■ 

2.  Mill  Realization 110 

F.  Labor 115 

1.  Statistical  Coverage  115 

2.  number  and  Type  of  Employees  115 

a.  Wujaber  of  Employees 115 

b.  Seasonality  of  Employment  117 

c.  Type  of  Employees  118 

9813  -iv- 


^ 


,« 


Page 

3.  General  Labor  Conditions  121 

a.   Hazards  of  ItaploTinent  121 

"b.   G-eneral  La"bor  Conditions  on  the  West  Coast  ....  123 

(1)  High  Labor  Turnover  123 

(2)  C-^.uses  of  Labor  Unrest  124 

(3)  Improvement  in  Labor  Conditions  126 

c.   G-eneral  Labor  Conditions  in  the  South 127 

4.  Organization  and  Disputes  128 

a.  West  Coast  128 

b .  South  135 

c.  West  Virginia  136 

5.  Wages  138 

a.  Sawmill  and  Millwork  Combined  138 

b.  SaTCnill  and  Millwork  Compared 139 

c.  Area  Comparisons 140 

d.  Payroll'. 144 

6.  Hours  146 

7.  Prodvctivity 150 

8.  Code  Labor  Provisions  and.  their  Interpretation 153 

a.  General  Labor  Provisions  153 

b.  Hour  Provisions  154 

c.  Wage  Provisions  156 

9.  Operation  of  Code  Lrbor  provisions  159 

a.  Child  Labor  Provisions  159 

b.  Hourly  Previsions  159 

c.  Wage  Provlcions  160 

G.  Production  Control  164 

CHAPTER  IV.   PROBLEMS  OF  DISTRIBUTION  189 

CHAPTER  V 223 

A.  Future  Stu.dies  223 

B.  Timber  Ownership  Statistics  ' 231 

C.  Transportation  and  Cross  Hauling  232 

D.  Method.ology ■ 235 


APPENDIX  I.   HISTORY  OF  PRECODE  EFFORTS  AT  PRODUCTION  CONTROL  ...    237 
APPENDIX  II .   TABLES  AND  EXHIBITS  261 


9813 


APrEITDIX  II 

ECOHOMIC  PROBLEMS  OF  TKE  LUICBER  ArTD  TII.fflEE  PRODUCTS   INDUSTRY 

IlIDZX.Oy  TABLES 

TABLE  MO.  PAGE  NO. 

I  CoimiGrcial  Eorest  Area  of  the  United  States....  262 

II  Total  Stand  in  the  United  States  of  Saw 

Timber  Cordwood 263 

III  Stand  of  Saw  Timoer  in  the  United  States  by 

Regions,  States,  and  Classes  of  Ownership 264 

lY  Stand  per  Acre  on  Saw  Timber  Areas 265 

V  Production  of  Liirater  in  the  United  States  - 

1925  to  1929 266 

V  (a)       Softwood  and  Hardwood  ProdLiction  by  States  - 

1929  to  1934 267 

V  (b)       Softwood  and  Hardwood  Production  by  States  - 

1920  to  1934 268 

VI  Annua.l  Drain  of  Forest  Products  (other  tlan 

lumber)  Averages  1925  to  1929 269 

VI  (a)       Total  Forest  Products  Drpin  (individual 

products ) ' 270 

VII  Annual  Forest  Drain  (other  tlian  Forest  Products)271 

VIII  Total  Annual  Forest  Drain,  based  on  1925  to 

1929  average 272 

VIII  (a)       Timber  Cut  on  National  and  Indian  Forests 

compared  to  Total  Cut 273 

IX  Present  Current  Annual  Growth  of  Usable 

Material  on  Commercial  Forest  Areas  of  the 

United  States , 274 

IX  (a)       Comparison  of  Forest  Prodxicts  Drain  and 

Forest  Growth, . .  . ; 275 


9813 


TABLE  NO.  PAGB  IIP. 

X  Average  St-umpat^e  Prices  "by  States  and  Regions 276 

X  (a)  Stuinpace  Prices  by  States  -  1928  to  1933 377 

X  (t)  St-umpage  Prices  -  Selected  States  and  Periods 278 

XI  Fire  Protection  Expenditures 279 

XII        Estimated  Ann-aa.1  Tax  Surden  on  Commercial 

Privately  Owned  Forests  by  States  and  Eef:ions 280 

XIII         Estimated  Ann'oal  Tax  Surden  on  Coimnercial 
Privately  Owned  Saw  Timber  Areas  by  States 
and  Regions 281 

Timber  Taxation  as  related  to  rate  of 

Lumber  Prrductinn •  •  •  282 

Timber  Taxation  as  related  to  Lumber 

Production  and  Timber  Ovmed 283 

Relative  Statistical  Position  of  Principal 

Producing  States  for  Softwood  Lumber 284 

Relative  Statistical  Position  of  Principal 

Producing  States  for  Hardwood  Lumber 285 

Percentage  of  Canacity  and  llrjiibor  3f  Hills 286 

Lumber  Production  -  Softwoods  by  States 237 

Lumber  Production  -  Hcrdwo^ds  by  States 288 

Recapitulation  by  Intervals  of  L-omber 

Produ-cers 289 

XIX        Recapitulation  by  States  of  Known  Lumber 

Prodxiccrs 290 

'1 

XX        Comparison  of  Equipment  Utilization 291 

XXI         Table  of  Capacity  by  States  and  Ratio  of 

Stand  to  Capacity , 292 

XXII        Quarterly  Softwood  Stocks  by  Eivision 293 

XXIII         Quarterly  Kardwood  Stocks,  by  Regions 294 


XIII 

(a) 

XIII 

(b) 

XIV 

X7 

XVI 

XVII 

(a) 

XVII 

(b) 

XVIII 

9813 


TABLE  HO. 

XXIV 

XXV 

XXVI 

XXVII 

XXVIII 

XXIX 

XXX 

XXXI 

XXXII 

XXXIII 

XXXIV 

XXXV 

XXXVI 

XXXVII 

XXXVIII 


PAGE  NO, 

Quartoi'ly  Softwood  Prodvction  by  Re^jions 295 

Quarterly  Hardvrood  Production  by  Regions 296 

Quarterly  Softv;ood  Shipments  by  Regions 297 

Quarterly  Hardvrood  Shipments  by  Regions 298 

Southern  Pine  Costs 299 

Western  Pine  Costs 300 

Cost  and  Realization 301 

ConsvuTintion  of  Domestic  L^omber  by  the 

Constr^action,  Wooden  Container,  and  all 

other  Industrial  Users  for  the  year  1928 302 

Consurrrotion  of  Domestic  Luraber  by  the 

Construction,  Wooden  Container,  and  all 

other  Industrial  Users  for  the  year  1933 303 

Com?oarison  between  Total  Construction  and 

Units  Ship-oed  per  $1,000  of  Construction  iJor 

Selected  Products  dxu'ing  the  years  1920-1934 304 

Lumber  and  Timber  Corporations  (Forest 
Products  Industries)  Condensed  Balance 
Sheet  and  Profit  and  Loss  Data 305 

Lumber  and  Timber  Corporations  (Porest 

Products  Industries),  llumber  of  Corporations 

reporting  Profit  and  No  Profit  in  each  of 

the  Classified  Groups 3  06 

Corporations  Returns  Classified  by  Major 

Industry  Groups  -  PorcentagG  of  Corporations 

reporting  Profit 307 

Corpor':^te  Returns  Classified  by  Major 

Industry  Groups  -  Percentage  of  Asset  Values 

of  Corporations  reporting  Profits 308 

Forest  Products  Corporations,  Net  Income,  or 

Loss,  Cash  Dividends,  and  Federal  Income 

Taxes  Paid 309 


QRT^ 


« 


TABLE  NO.  FAGE_KO. 

XXXIX  Distribution  of  Hardwood  L-ojnbor  from  Produciug 

Regions   to   Consurain;'^  P.erionr-  and  States   1929 310 

XL       '  Distribution  of  IIardv70od  L-omber   from  Producing 

Regions   to   Consuming  Re£:ions  and  Str.tes   1932 311 

XLI  Distribution  of  Iferdv.-ood  Lumber  fro:n  Producing 

Regions   to   Cons\3.'nins  Regions  and  States  -  1934 312 

XLII  Shipments   of  Principal   Softwood  Species   of 

Lumber  to   States  from  Principal  Producing  Regions..    313 

XLIII  Imports   of  Softwood  Liamber 314 

XLIV  United  States  Exports  of  Specified  Lvmbcr  and 

Timber  Products   to  Principal   In-jporting  Co'Luatrics, 

1933  -  1934 315 

XLV        Softwood  Exports  -  United  States'  Share  of  V/orld 

Market 316 

XLVI        Retail  Lumber  Dealers  -  iramber  of  Dealers  and 

1934  Ouesticnnaires  Received 317 

XLVII        Retail  Lumber  and  Building  Materials  Code  - 

Recapitulation  by  Divisions  of  Reclassified  Data 

contained  in  1933  Questionnaires.  Total  of  Sales 

is  Base  of  all  Percentage  Given 318 

XLVIII        Retail  Lumber  Dealers  -  Recaoitulation  Expenses 

to  Het  Sales  Dollar,  1934  -  Known  Dealers  23,531  - 
Dealers  Reporting  3,  554 319 

XLIX       Retail  Lximbor  Dealers  -  Recapitulation  Modal 

Cost  Details  Year  1934  -  Knora  Dealers  23,531  - 
Dealers  Reportin.'^  3, 554 320 

L        Retail  Lumber  Dealers  -  Recapitulation  for 
Industry  -  Opera.tion  Results  1934  -  Known 
Dealers  23,531  -  Dealers  Reporting  3,554 321 

LI        Lumber  Cost  at  Chicago,  Illinois,  Code  Period 

January  to  ferch,  1934 322 

LII        Lumber  Cost  at  1-Icw  York,  Hew  York  Code  Period 

January  to  March,-  1934 323 

LIII        Stocks,  Shipments  and  Production  of  Softwood 

Lumber,  1923  -  1935 324 

LIV        Hours  of  Labor:  Ilvjnber  of  Sstablisliments  and 
H'omber  of  Wage  Earners  by  Prevailing  Hours  of 
Labor  per  Week,  1929 325 


9Bi:^ 


f 


EXHIBITS 
EXHIBIT  PAGE  NO. 

A.    Price  Trend  -  Southern  Pine  Roofers 326 

C.  Q-uarterly  Softwood  ShiiDments,  by  Regions, 

1023  -  1935 327 

D.  Quarterly  Hardwood  Shipments,    by  Regions, 

192^  "   1935 328 

E.  Softwood  Stock  on  Hand,  by  Regions,  1929  -  1935....   329 

F.  Hardware  Stocks  on  Hand,  by  Regions 

1929  -  1935 330 

G-.  Quarterly  Softwood  Prcduction,    by  Regions, 

1929  -   1935 331 

H.  Quarterly  Hardwood  Production,    by  Regions, 

1929  -   1935 332 

I.    Average  Lumber  Price  Breakdown  at  Chicago, 

Illinois , 333 

J.    Average  Lumber  Price  Bre"'kdown  at  Hew  York, 

New  York 334 

K.    Average  Price  of  Softwood  Lumber 335 


-X- 


9813 


i 


ECONOMIC  PROBLEMS  OF  THE  LUMBER  Affl3  TI^CBER  PRODUCTS  muSTRY 
HISTORICAL  SIWAIARY 

The  Lumber  Industry  is  one  of  our  oldest  industries.   It  ^iffer^  from 
other  industries  in  that  the  line  o^  de-.arc.atinn  between  Droce.sing  and  pro- 
duction of  rawmaterials  is  not  so  pronounced.   In  lurab^r  the  T^roduction  of 
raw  materials  is  mere  analogous  to  agriculture  th^n  to  industry  in  the  ac- 
ceiDted  sense  of  the  latter  terra. 

The  production  of  logs  and  timber  perhaps  preceded  agriculture  as  an 
activity  of  the  early  colonists  since  shelter,  as  well  as"  food,  was  an  in>. 
mediate  requirement.  Moreover,  clearing  of  land  in  most  cases  was  a 
^.^f^.^" V^^''^°  *^^  ^.^irsuit  of  agriculture.   It  is  no  wonder  then  that 
the  New  England  colonists  engaged  in  lumbering  as  a  principal  activity  and 
for  more  tnan  200  years  the  forests  of  New  En-land  x^roduced  not  only  the 
materials  for  shelter  required  in  America  but  could  exr^ort  considerable 
quantities  to  the  West  Indies  and  to  Eurotje  as  well. 

This  do«s  not  mean  that  New  England  was  the  sole  Tjroducer  o^  forest 
products  during  this  T)eriod.   The  Southern  colonists  also  found  rich  stands 
of  timber  and  rroceded  to  exT^loit  these  rasources,   Ho'-ever,  the  natural 
conditions  which  obtained' were  such  thaf  Southern  lumber  exDloitation  was 
only  a  minor  factor  as' comx)ared^  to  -agricultural- activities.   Nevertheless, 
.ho  f°i''lpn'  r   ^'^^  ^-""Sla-nd   were  the  TDrinci,,al  source  of  lumber  u.  until 
aoout  1880._  In  tnis  discussion  the  region  designated  as  New  England  includes 

the  Sr/T  "Tt'"'  ^--^^---^  --   --11  -  what  is  now  com.oSly  termed 
the  New  England  States.  -  .  j    m  u. 

Vall.f  *fL*?l°'li\'^^'"  ft  "^""^   *^"  devlopment  of  the  upper  MississiB.)! 
Vall.y,  the  Lake  States  of  Wisconsin.  Minnesota  and  Michigan  became  the 

rm^ro.?f  T^;'''';°^  ^'^^''■'  However,  by  this  time  production  methods  hai 
l^lnTft  J'   T   '^™'^^  '^^^^  '^^^  circular  saw  allowed  for  more  ra^id 

exploitation  of  greater  areas  in  a  shorter  time;  hence  it  was  only  tw-ntv 

South.    "  ''""'   '""^   "'"^-  °'  -^°^^-^l-  ----^  f--  the  Lake  sSes  lo  tL 

ev^loUatiof  °%^''°r'''°  \°-'^'^  represents  the  years  of  greatest  forest 
vTtlr^lT  T:  ^he  transcontinental  railroads  had  o^^ned  uv  vast  new  ter- 
rate  The  nhiT-f^'-'/r^'  ^""^  villages  were  b^ing  created  at  a  rapid 
cloJ:  at  L^f/fT^'  '"'■  '"'"^  '■'™'  ^^^  *°^"^  ''^^  ^^^^^-  ^°^-^ts  were 
1906  anl  1907  f  l^^^^/f  relatively  chea^.  This  era  reached  its  peak  in 
leAT.r  IIT'  ^^J^^^/^h^-i^  y-^^s  apT^roximately  46  billion  feet  of  lumber 
TDer  year  were  -oroduced. 

be^an^o'J^n*^^  x>eriod  after  189D  and  when  production  in  the  Lake  States 
the  e^lnft.f--'  ^'^!  ""^^  ^  considerable  movement  to  the  Pacific  Coast  and 
JactoT  "he  iL\°  .'"^'Z  ?  ''^  '^^'°"  °'  '^^-  N-thwest  became  an  important 
oSenin^  of  fv,  S  .^'  °^  ^^''  ""^^^"^  ^"^^^^'^  *^  interior  markets  with  the 
opening  of  the  Northern  Pacific  Railroad  in  1893  and  a  considerable  portion 

ZsTe.lTtTlr.T^''''   '"^  '^'°  the-devlooment  of  the  prairie  states 
OrSLn  and  L^'  IT'.      ^^'  ""'^  region  which  lies  west  of  the  Cascades  in 
renS?^  an^Washington  had  T)revlously  found  its  ^rincix^al  outlet  in  the 
requirements  of  the  fact  developing  State  of  California.  With  its  timber 


5813 


growirg  right  doTi  to  the  sho.'e  lino  it  wa^  relaliTely  e-^sj  to  load  its  ' 
nroducts  aboard  sailing  Tecseis  alrr-ost  at  the  p 'int  o"^  -Drod-.cti  :)n. 

In  1907  after  the  onenin^  of  the  Panama  Canal,  thus  -oroviding  an 
easie.-  access  Lo  che  Atlantic  Coact,  the  TDroduction  from  the  ^acific  North- 
west became  an  i';rortan-t  factor  in  d? stern  markets  anrl  has  continued  a 
struggle  with  the  South  for  the  softwood  market. 

It  may  be  ceen  that  the  Lu-nber  Industry  has  been  a  constantly 
migrating  one,  ex-cloiting  tne  most  accessible  natural  resoui-&es  and  moving 
on  to  richer  fields  when  its  operating  area  became  more  diffcult  of  -oro- 
ducing  both  spscalating  and  operating  profits.  As  the  industr  moved  on  it 
left  in  its  wake  a  less  important  segment  in  every  region  whion  had  been  ex- 
ploited. This  segment  expanded  or  contracted  as  •economi".  conditions  war- 
ranted, but  it  was  always  a  factor  in  the  control  of  eccaatiic  problems  of  . 
the  industry,   The  segment,  composed  c'  small  mills  wM'h  »e-e  more  or  less' 
marginal  factors  dxu-ing  the  greatest  period  of  croloitdtion  o.  an  area, 
became  the  mevgin^:  factor  which  determined  the  decree  cf  pr.isnerity  during 
the  decadent  era, 

THE  PROBLEMS 

In  a  ds-? eloping  country  with  rich  natural  resources  it  was  but  natural 
that  the  best  and  roost  accessible  timber  should  be  cut  firs'--.   It  was  this 
principle  that  motivated  the  ind.ustry  to  move  froiil  one  area  to  another  as 
rapidly  as  facilities  for  transporting  the  product  became  available,  How- 
ev=i  ,  after  the  (fevelopraent  of  the  Pacxfic  fir  region  had  reached  a  high 
stage,  in  which  it  was  produnin^r  a^  much  aa  the  South,  there  .-sre  no  new 
areas  which  offered  possiblities  of  easily  accessible  vlrsi:-.  forests.  It 
followed  then  that  as  the  indupcr:v  was  forced  beck  int'-  the  more  inacces- 
sible areas  rith  its  conseaucnt  higher  cost  of  rea.'hihg  the  consuming  market 
^here  was,  of  necessity,  an  incrtf  3c  in  the  Thrice  lev  l  . 

At  about  this  time  many  pvblic  spirited  people  becsme  a?  p'-med  at  the 
rate  of  ercpl citation  of  the  forest  an:"  were  led  to  pre  lict  an  early  ex- 
haustion of  forest  resources.  An  im\.  a-tant  result  ot  this  alarmist  at- 
titude which  had  ca^v^ht  the  popular  fancy  was  an  increase  in  timber 
speculation.   If,  reasoned  the  speed ators,  our  standirg  timber  is  rapiily 
becoming  exhausted,  higher  values  of  eiistirg  standing  timbe.-  must 
necessarily  follow.  As  a  conseouence  large  tracts  of  standing  timber  were 
TDurchased  at  motin.irg  prices,  with  no  thought  at  the  <-.ime  r'   converting  this 
timber  into  lumbe:-.   Subsequent  evpnts  forced  the  csts  -liihront  of  saw- 
mill facilities  for  the  cole  purpose  of  liquidating  ti  ese  investracnta,  but 
at  the  time  of  acquisition  thei  e  was  no  thought  given  ic  tr.is  necessity. 

Another  levelopmenc  of  this  period  was  the  ra-eid  increase  in  the  use  of 
o'-cel  and  cen,3nt.   The  perfection  of  the  Bessemer  pv»i.es3  made  steel  an 
iici-Lcrtant  coir.oetitor  in  buildings  and  other  structure'.   Tte  process  for 
making  cement  had  developed  to  "he  point  where  concrete,  wi.h  its  lasting 
qualities,  entirely  displaced  lumber  for  ridewalks  and  ?t. 'r  flooring 
puTTjoses  where  heavy  traffic  was  a  factor,   V.his,  coupled  .  itn  the  rising 
cost  of  1-umber,  brought  about  a  rapid  displacement  of  lumber  and  a  declining 
r,er  capita  consuTPDtion.   -^his  declining  conaumrjtion  wa-s  not  ip'^arent  to  the 
industry  -ijjitil  after  the  World  War,  but  toward"  the  declining  period  of  the 
post-war  building  boom  it  became  evident  that  stumuage  orices  were  likely 
9813 


to  remain  at  a  standstill,  and  with  mounting  taxes  sttimTja^e  "became  a 
liatility.  Hence  it  'became  necessary  to  tjrevide  facilities  for  liquidation, 
end  this,  with  the  adven*-  of  the  de-oresslon,  paused  a  coratjlete  demoralization 
of  the  lumber  markets* 

The  increase  in  the  urice  levels  brought  about  by  the  migration  of  the 
Industry  into  higher  cost  ar^^as  had  ano'^her  imr»nrtant  effect,  A«  stated 
previously,  the  smd.ll  sawmill  with  its  lack  of  volxune  facilities  was  always 
a  marginal  factor.  Paying  low  wages  and  with  small  investment  the  small  mill 
could  o-oerate  in  small  timber  that  would  be  unnrofitable  for  the  large  and 
medium-sized  mills  with  the  greater  investment.  However,  since  the  timber 
available  to  this  tyoe  of  mill  is  so  small,  the  mill  cannot  -oroduce  at  a 
•orofit  except  at  a  nrice  level  that  is  hi^h  enough  to  warrant  such  isroduction. 
Such  mills  operate  in  cutover  areas  located  for  the  most  part  close  to  the 
areas  of  consumption.  However,  the  r^->sult  of  their  operation  in  such  areas 
is  such  as  to  prevent  the  full  regrowth  of  a  given  forest  area  to  a  point 
where  it  might  again  become  .an  important  producing  region  lying  close  to  a 
consuming  area.  When  the  price  level  of  lumber  rose,  due  to  the  higher  costs  > 
the  major  portion  of  the  industry,  there  was  always  the  tendency  to  encourage 
the  small  mill  to  again  enter  production,  thus  increasing  the  volume  to  the 
point  of  over-production,  causing  a  price  decline  which  would  force  them  to 
retire  until  the  price  ros^  a^ain.  In  this  manner  the  small  mills  acted  as  a 
pressure  on  the  market.'  ,  ,  . 

The  need  for  liquidation  of  speculative  timber  became  apparent  with  a 
declining  volume  of  use,  particularly,  during  the  latter  part  of  the  building 
beora,  and  it  was  during  this  period  that  many  new  mills  were  put  into 
operation  for  that  purpose.  During  the  depression  this  situation  became  more 
acute  and  from  1930  to  1932  mills  continued  to  operate  fot  the  purpose  stated 
above,  although  consumption  'had  declined  to  about  25  per  'cent  of  the  peak. 
This,  of  course,  meant  an  enormous  stock  on  hand  each  year  during  the 
depression  years.   The  average 'amount  of  stock  on  hand  during  the  20's  was 
about  14  billion  feet;  -  During  these  years  between  25  billion  and  39  billion 
feet  per  year  were  used,  but  .between  1930  and  1932.  it  ran  between  10  billion 
and  17  billion  feet.  '  The  stocks  on  hand  at  the  -beginning  of  the  year 
receded  very  little,  averaging  from  9  to  11  billion  feet.  Naturally  prices 
were  demoralized,  wages  'were  cut,  and  conditions  became  chaotlc.  Although 
this  situation  might  not  have  appeared  so  rapidly  had  construction  remained 
at  the  same  level  as  that  of  the  late  20's,  eventually  the  over-capacity  of 
the  industry  and  the  need  tn  liquidate  speculative  holdings  would  become 
apparent;  and  although  the  depression  brought  ahout  the  chaotic  condition, 
a  depression- in  the  Lumber  Industry  must  have .eventually  come  about  under 
any  circumstances  if  the  industry  had  continued  ■^der  the  same  influences. 

TP  CODE  '■  .■   ■ 

After  the  passage  of  the- National  Recovery  Act  it  was  apparent  that  the 
industr'"  was  aware  of  the  condition  of  over-capacity  and  chaotic  prices,  and 
in  presenting  its  GOde  'it  had  three  major  proposals: 

(1)  The  Regulation  of  production  with  a  view  to  cutting 
■  doWn  Bt'dcks  on  hand  to  meet  demand.  . 

(2)  .An  incfease  in  '''he. wage  level,  wliich  had  fallen 
below  subsistence  levsls, 

981^ 


-4- 
,•.,.-•  •   :  .•?^  n--::(y'    •:•■;?■:,;;'-  :' ■'■    '■  r       .  ■■       ' ''  "   ,    '\ 

(■3)  _  The  fixin,?  of  min^imuri  Tjr'ices  of  luiDoer  at  a  noiiit     ■ 
'  ■   at  which  if  wars'  estimated  costs  of  -Droduction  wo-u'ld 
"be  recovered. 

The' o'-ber'atioh  of  the  first' ptovi'sioh  eventually  resulted  in  some  decline 
of ■  stocks.  However,"  it  provided  for  no  permanent  .improvement;  since  the 
elimination' of  the  C'ode  the  industry  is  in  apDrozimAtely,  the  same  -oosition  it 
was  in  "befoye,  as  far  as  the  fundamental  evils  are  concerned,  although  the 
reduction  of  stocks  during  the  Code  -Drovideda  teraiDpreiry- "benefit  which  will 
last  for  some  time. 

The  fixing  of  r^rices  aij-oarently  failed  to  "brip?'  any  .permanent  good  or 
contri"bute  to  any  permanent  improvement  in  the  industry.   One  of  the  results 
of  fixing  of  orices  at  a  point  of  cost  r=c6very  was  to  increase- the  price 
atove  the  point  which  would  encourage  a  greater  use.  In  fact  it  is  "believed 
by  many  students  of  the  situation  tha,t  the  prices  50  fixed  tended  to  retard 
an  increase  in  consumption.  Moreover  there  were  many  operating  difficulties 
inherent  in  all  attempts  at  determining  true  costs  or  in  setting  rigid  price 
regulations  for  so  vast  and  complex  an  industry  as  this  one.   In  any  ex- 
periment toward  an  improvement  through  public  regulation  or  even  industry 
regulation,  price  fixing  apparently  should  be  the  last  resort,  but  in  this 
particular  industry  it  is  highly  improbable  that  it  should  ever  be  resorted 
to  since  there 'are  so  many  other  ways  of  providing  more  permanent  cures  for 
obstacles  to  progress  within  the  industry. 

As  to  wa,ge  rates,  there  was  a  considerable  increase  in  both  the  Northern 
and  Southern  sections.  Without  price  fixing  th.e  increase  in  wage  rates 
alone, -it  is'believel, 'would  have  had  a  tendency  to  prevent  the  incursionof 
the  numerous  small  mills  dependent  upon  a  hip:he't   price,   H/iwg.ver.  with  this 
increase  in  price  level  provider!  for  under  the  Code  many  of  the  vmall' operators 
believed  they  could  either''raake"a  profit  at  the  "higher  -prices,  even  though 
they  paid. the  minimum  wage,  pr  ejcpe^cted  to  evade  the'higher  wages  while  thye 
collected  the  higher  prices'*  During  the  very  earl;^  part  nf  the  Code  the  former 
was  the  general  rule;  that;  i'sV.  a  higher  wage  level  was 'generally  paid.  But 
as  it  became  apparent  that  the'  products  could  riot  be  sold  at  the  price  level 
set,  there  was  a  greater  te'ndericy  to  .eva'dd  the  minimum  wage.   This  wage 
lev?l  for  the  South,  incidentally,^' was  "s'"et  at  appoint  eaual  .to  that  of  any 
period  in  its  history.   This  "eva-s'lon  of  minimum 'wages  produced  bitter  re- 
criminations, since  many  of-  the  sma'll  'and  medium-size  mills,,  havine-  once 
entered  into  production,  'were  "ioa-feh  to  discontinue.  Nevertheless,  toward  the 
latter  part  of  the  codal"  period  a  gre'at  number  of  them' did  discontinue.  How- 
ever, since  the  elimination  of  the' Code  it  is  apparent  that  the  general  wage 
level  has  remained  15  to  20  per  cent  higher  than  during  the  depression  period. 
In  the  West  Coast  it  is  probably  50  to  60  per  cent  higher  on  the  avera-^e  than 
during  the  lowest  point  of  the  depression. 

.  As  has  been  stated,  the  operation  of  fixed  minimum  prices  for  cost 
recovery  proved  burdensome  and  failed  of  any  permanent  ^r^od.   This  provision 
was  canceled,  therefore,  six  months  prior  to  the  Sche.chter  decision  which 
invalidated  the  NBA,'  There  appeared' no  immediate  after-effects,  since  by  that 
time  the  various  efforts  of  other  Government  departments  to' improve  con- 
struction began  showing'  results,  which  naturally  incre?ised  the  demand.  It  is 
believed  that  this  deiriand '  had  neached  a  point  toward  the  l-atter  part  of  1935 
that  justified  the  price  level,  which  had  remained  at  about  the  point  fixed 

9813 


-5"  . 

under  the  Code.  However,  with  a  lower  stock  on  hand,  in  coiriDarison  to  the 
general  demand  level,  it  is  believed  that  -Dricesmay  reach  a  dis-oro-oortionate 
level  again  if  industry,  through  its  own  efforts,  continues  to  keet)  stocks  at 
such  levels. 

CONCLUSIONS 

(1)  Chaotic  conditi'^ns  caused  by  excess  stocks  were  relieiv'='d  during  the 
Tjeriod  of  NIRA,  hut  the  Lumber  Code  f ail  =d  to  provide  a  rermanent  remedy  for 
causes  of  such  excess. 

(2)  The  o-oeration  of  rrice  fixing  has  proven  itself  to  be  im-oossible, 
even  under  Government  regulation. 

(3)  Labor  has  been  benefitted  by  a  rise  in  the  wage  level,  which  will 
a-onarently  remain  and  is  DroTDortionate  to  the  eeneral  wage  level  of  the 
entire  country.   However,  certain  inherent  cliaracteristics  of  the  timber  and 
the  TDSychology  of  those  engaged  in  the  Lumber  Industry  in  the  South  are  such 
that  labor  is  not  free  to  use  its  own  bargainins:  -oower  in  any  effort  to  main- 
tain a  reasonable  level  of  wages, 

(4)  There  are  certain  steiDS  which  might  be  taken  by  both  the  industrj'- 
and  the  Government  which  might,  in  the  long  von,    tend  to  im-orove  the  general 
level  of  the  industry  and  the  labor  em.-Dloyed  by  it.   Such  imTDrov=ment  must 
start  with  the  forests.   It  is- recognized  that  for  the  Durriose  of  a  stabilized 
industry  —  one  that  is  not  only  ke-ot  at  a  reasonably  high  level  but  is 
continually  imr)roving  —  there  must  be  a  continually  imrToving  forest  status. 
In  other  word's,  ^he  industr?/  must  be  removed  from  one  of  a  migratory  nature 

to  a  more  loermanent  Dosition.   This  involves  the  otjeration  of  a  forest,  which 
is  the  basis  of  the  industry,  on  a  long-time  continuous  loroduction  basis.   It 
has  been  demonstrated  in  'Euro-oean  countries  that  this  can  be  done.   Not  only 
in  Eurooean  countries  are  there,  continuing  forests  • —  that  is,  forests  with  a 
sustained  yield  —  but  there  are  a:  number  of  far-seeing  coroorations  in  the 
United  States  that  have  also  TDlaced  their  0"Derations  on  such  basis. 

It  must  be  remembered  that  first  there  are  large  areas  of  cut-over  lands 
which  will  not  come  into  rjroduction  for  many  years  —  narticularly  -oroduction 
of  saw  timber.   There  are  other  areas  where  saw  timber  would  come  into  nro- 
duction  in  a  reasonable  -oeriod  if  it  were  allowed  to  grow,  but  that  is  now 
being  cut  in  an  immature  stage,  urodiicing  an  inferior  product  at  a  higher  cost. 
For  such  areas  it  is  a^riarently  im-oossible  for  -private  industry  to  bear  the 
burden  of  taxation  and  other  costs  of  holding  until  the  timber  comes  to  the 
income--Droducing  stage.   Such  areas  might  be  -ourchased  by  the  Fore^^t  Service 
and  held  until  they  are  income--Drodacing,  then  sold  to  -orivate  industry  for 
private  production  on  the  basis  of  selling  the  product,  and  only  such  -croduct, 
that  will  permit  of  further  growth  and  further  yield.   It  is  realized  that 
this,  in  effect,  recommends  the  Government  ^-oing  into  the  business  of  managing 
forests  on  a  sustained  yield  basis,  but  as  already  -oointed  out,  the  costs, 
including  taxes,  fire  -orevention,  etc.,  are  such  that  these  areas  do  not  hold 
any  -oossiblity  for  -orofit  to  -orivate  industry.   These  areas  are  located  close 
to  the  consuming  markets  for  the  most  -oart  and  would,  in  the  long  run,  benefit 
the  cons-umer  by  affecting  the  -orice  level  of  ''-'amber-,  and  benefit  the  industry 
by  removing  a  considerable  threat  of  lumber  cut  frcn  i-rimature  trees,  thus  over- 
burdening the  market. 


9813 


-6- 

It  is  realized  that  there  are  cinsiderable  holdings  of  timber  areas  by 
very  small  nroducers  and  farmers  throughout'  the  Southern  states  to  whom  such 
holdings  are  not  burdensome.  In  order  to  encourage  a  -oroTDer  regard  for 
forestry  among  such  holders,  the  Government  might  take  advantae-e  of  the 
financial  stringency  among  these  holders  by  forming  coouerative  grouiDS  for 
sustained  yield  under  Government  aid  in  financing  and  fire  and  forest 
•orotection.  All  of  these  recommendations  noted  above  have  been  more  or  less 
accepted  by  the  Forest  Service,  who  ha,ve  partially  initiated  many  of  these 
■orovisions, 

(5)  TransTDortation  rates  should  be  lowered  from  the  Atlantic  seaboard 
west  to  Chicago  and  from  the  Pacific  seaboard  east  to  Chicago.   This  will 
encourage  the  use  of  timber  from  the  Pacific  Northwest,  where  er.ist  the  best 
resources  and  gr-atest  excess  holdings.  A  cut  in  rates  from  the  Atlantic 
sea  board  would  -oermit  an  extension  of  the  market  for  lumber  now  moving  by 
water  from  the  Pacific  Northwest. 

(6)  The  industry  may  imT5rove  its  -oroduct  by  the  manufacture  of  more 
com-olete  assemblies  for  building  -Durrioses  and  seek  to  -Dromote  shon  fabrication 
as  against  fabrication  on  the  Job.   This  will  enable  individual  manufacturers 
to  obtain  markets  in  which  quality  may  be  a  selling  factor.   This  would  also 
tend  to  eliminate  the  more  migratory  manufacturers  and  iDromote  forest 
management  on  a  sustained  yield  basis. 

(7)  There  has  been  considerable  contraction  in  the  lumber  market  along 
with  that  of  other  industries.  For  lumber  this  is  -Darticiolarly  due  to  the 
loss  of  the  Australian  and  other  British  "Empire  markets  as  the  outcome  of  the 
Toronto  agreement  of  1933,  in  which  iDreference  was  given  Empire  markets  for 
Canadian  lumber  as  against  American  lumber.   The- adjustment  made  in  the  recent 
trade  agreement  with  Canada,  in  which'  some  of  the  restrictions  have  been 
removed,  should  be  carried  forward  in  favor  of  the  American  lumber  industry 
into  any  trade  agreement  with  Great  Britain,  so  as  to  restore  to  the  American 
industry  at  least  a  -oortion  of  the  markets  equal  to  that  restored  to  Canada 
by  the  United  States. 


9813 


_7- 

irTJioDUCTioi: 

A.      GLIIEPJIL  DESCRIPTIO"  0?  'Tt'Z   IIDUST"! 

Tha  Liua'cer  and  ri:.;"ber  Prof.x'.ctr,   Ino.-ust:y  hr.s  no   clearly  iefined 
Units.      C-eneral^y  spea2cing,    it    ia   conponec.  of  all   those   enga<G;ed  in 
(a)  raanaj-inj  the   coiTinercial   forests  of   the  nation;    (b)    in  the  conversion 
of  strjidin.s  tir.foer  into  usefrJ.  products;    and  (c)   in  the  distrihution  of 
those  products  to  the   consui.iers.      The  priiicipal  tinhcr  products  are:    (*) 

Lu'ibcr,    lath  and  shingles 

IPiLvl  vrood 

Ileirn  ties 

Jence  posts 

Pulp  r.'ood 

i;ine   tinoers  r.nd  nine  props 

Veneers 

Cooperat^e   stocl: 

Poles  and  piling 

Distillation  rood 

Trnnin.-;  r^ood  and  harl: 

The  Bureau  of  the  Cens'as  defines  lurnher  and  timber  products  as 

"logfjing  canps,  merchant  savruills,  combined  savmills 
and  planing  inills,  including  those  engaged  in  the 
manufacture  of  boxes  if  connected  -rith  a  savmill, 
veneer  nills  and  cooperate  stocl:  i-iills."  (**) 

The  Lu-.iber  and  Tir.ber  Prot.ucts  Industries  Code  extended  a  bit  fur- 
ther than  the  Census  definition  ;u'.d  included:  (l)  Logs,  poles  and  piling; 
(2)  savra  lumber  and  other  sarai  vrood  -.roducts  of  sarmills,  and  products  . 
of  planing  nills  operated  in  conj'onction  -yith  sawmills;  (3)  shingles; 
(4)  T/oodrrork  (nilluork) ,  including  tl.e  products  of  planing  mills  opera- 
ting in  conjunction  uith  retail  lumber  yards;  (5)  hardnood  flooring; 
(6)  veneers;  (7)  plywood;  (8)  kiln  Sried -hardwood., di:'.onsion;  (.9)  latJi;  (IC) 
s.aued  boxes,  shook  crp,tes;  (11  plj^ood,  veneer  and  -^irebound  packages 
and  containers;  (12)  certain  additional  minor  products  specifically 
provided  for.  (***) 

(*)   "A  ITational  Plan  for  American  Jorestry",  p.  214.   A  report  of 
the  Forest  Service  (1933) 

(**)   "]rorest  Products  in  1932",  Bureau  of  the  Census,  Department 
of  Commerce. 

(***)  Article  II  (A),  Luuber  raid  Timber  Products  Industries  Code. 


9813 


1.  Forest  Lands  aJid  &3ecies 

The  "basis  upon  "hich  the  entire  industry'  rests  is,  of  course, 
the  forest  land  of  the  United  States,  \7hich  a^nounts  to  practically  one- 
third  its  total  land  area,  or  atout  600,000,000  acres.   (Originally  the 
forest  area  of  this  country  was  estinated  to  te  880,000,000  acres.) 
Hovrever,  not  all  of  this  forest  area  is  available  for  comnercial  use. 
About  495,000,000  acres  out  of  the  total  o,rea  have  been  classed  by  the 
Forest  Service  as  comnercial  forest  lajid  capable  of  producing  tinber 
of  commercial  quantity  and  quality,  according  to  present  day  standards, 
and  available  for  commercial  use.  (*) 

In  considering  availability  of  sa\7  timber,  species  play  an 
importr^it  role.   Not  all  species  are  suitable  for  the  same  purpose. 
Generally  spealiing,  the  entire  species  group  is  divided  into  two  classes 
—  softwoods  and  hardvroods.   The  tern  "softvoods"  is  generally  applied 
to  all  01  the  coniferous  trees  as  distinguished  from  the  broadleaf 
varieties,  and  does  not  necessarily  a.pply  to  the  actual  softness  or 
harcuiess  of  the  wood  itself.   The  term  "hardwoods"  is  generally  applied 
to  all  of  the  broadleaf  trees  vhen  used  counerciaJ.ly. 

The  geographical  distribution  of  these  species  has  determined 
to  a  great  extent  the  divisions  of  the  industry  which  have  been  followed 
more  or  less  in  its  organization.  Particular  uses  have  sprung  up  in 
industrial  processes  which  require  certain  species.   Such  species  may 
or  may  not  be  interchangeable  v.'ith  other  species.   This  division  is 
fundai-iental  in  the  industry's  organization,  and  perhaps  accouiits  for 
many  of  its  i^roblems,  due  to  the  fact  that  certain  species  axe  native 
to  certain  sections  of  the  countr;'-  only,  whereas  the  use  of  the  wood 
may  be  nationwide. 

2.  Early  History 

Since  this  industry  had  its  beginnings  '-ith  the  early  colonists, 
naturally  the  first  forests  exploited  were  those  of  Kew  England  and 
of  Virginia,  both  softwood  areas.   The  Hew  England  forest  consisted 
chiefly  of  ^^ine  and  spruce,  and  although  they  h?.ve  passed  through  a 
cycle  of  ercploitation  and  are  about  to  enter  into  the  second  cycle  of 
production,  the  area  still  produces  the  same  native  woods,  with  the 
possible  exception  of  northern  white  pine  which,  because  of  its  accept- 
ability for  most  purposes,  Mas   used  up  most  rapidly  and  had  not  been 
replenished  to  the  same  extent  as  spruce. 

Prior  to  1850  llexi   England  was  the  principal  producing  region, 
up  to  that  time  acco-onting  for  more  than  one-half  of  the  total  lumber 
used.   However,  between  1850  and  1850  ue\'   Yor^:  and  Pennsylvania  tool: 

(*)   See  Table  I.   See  Appendix  II. 


98i: 


the  lead.  (*)   Those  tiro  states,  'iiile  havin/;  a  conr.idera'ble  anount 
of  soft^'ood,  asB.in  principally  pine  njiC.   spruce,  had  a  greater  anount 
of  hardv.'ood,  more  suitable  for  !na;:iufact-j.rinifi  purposes  than  for  con- 
stractlon. 

r.1iat  is  said  of  IJe'.'  Yorl:  and  Pcnns^'lv^jiia  applies  as  v;ell  to 
Ner,'  Jersey,  L.aiyland  ajic.  Delavfare,  tliese  five  states  comprising  the 
i.iiddle  Atlantic  Piegion.   In  the  early  periods  of  production  in  the 
i.iiddle  Atlantic  Hegion  the  Boft"Oor-s  were  quickly  depleted,  the  hard- 
woods rei:aininf;,  since  uses  for  hardrraods  had  not  developed  to  the 
extent  that  they  ha,d  for  softvoods.   This  area  is  still  considered  a 
harduood  producing  section  and  uiider  the  Code  \7as  called  the  L'orth- 
eastei-n  Kard\70od  Subdivision,  though  combined  r/ith  part  of  the  easterly 
Lake  States  anc.  also  a  part  of  the  Appalachian  Region. 

The  ne?:t  najor  i-iroclucing  area,  chronologically,  '.'.'as  the  Lalce 
States  --  Uinnesota,  TJicconsin  pnd  .Michigan.   Here  the  species  nere 
chiefly  pine  and  henloch  —  both  soft -,'oods.   Hovrever,  this  area  has 
always  had,  in  addition,  a  connercial  gro^-'th  of  hard  naple,  though  with 
some  slight  exceptions  as  to  hemlocy:  it  novr  produces  little  softwood. 
It  is  still  the  principal  naple  prof-acing  section  of  the  countr^r,  some 
80  per  cent  of  the  maple  flooring  coning  fro:i  that  area.   The  peak  of 
production  for  this  area  was  around  1830,  in  which  year  the  Lal:e  States 
accounted  for  54  per  cent  of  the  totcl  lusaber  volume. 

i'rom  18S0  to  1919,  which  was  a  oeriod  of  rapid  progress  in  the 
develo-onent  of  this  nation,  the  forest  area  of  the  South,  embracing 
Alabana,  Arkansas,  Plorida,  Georgia,  kentuclcy,  Louisiana,  Uississippi, 
Llissouri,  ITorth  Carolina,  South  Carolina,  OklsJiona,  Tennessee,  Texas, 
Virginia,  and  Uest  Virginia,  was  the  principal  producing  area.   The 
species  in  this  area  consist  of  yellow  i^ine  and  practically  all  the 
laiO'.m  domestic  hardwoods.   The  forner  has  become  the  most  important 
cornercially. 

Short  leaf  pine  flourishes  on  the  Atlantic  Coastal  Plain  as 
one  01  the  fastest  growing  commercial  species  among  softwoods,  and 
its  renewabilitjT'  has  kept  the  region  a  continuous  lujuber  producing  area 
since  the  1890' s. 

It  should  be  ■understood  that  thii  shift  fron  one  area,  to 
another  does  not  nean  that  the  original  areas  were  completely  denuded, 
but  n.erely  that  the  new  areas  of  virgin  timber  presented  more  attract- 
ive possibilities  than  the  older  producing  regions,  all  of  -.hiich  are 
continuing  prochacing  regions  to  a,  minor  extent. 

3.   Tie  stern  Areas 

Perhaps  the  most  important  development  in  the  Lumber  Industry 
is  the  espolitation  of  the  western  forest  a,reas.   These  begin  in  the 
Hocltj-  kountaan  Region,  extendin  ;  throughout  all  the  Roclc--  l.io'untain  Region 


(*)   "An  Outline  of  General  Forestry",  by  J.  S.  Illick,  p. 52  (1335) 


9813 


-10- 


Tlie  Doxig;las  Fir  Hegion,  although  called  that,  is  not  oonf j.n'^d  ho 
Dougle-s  fir  but  grows  hemlock,  spruce  and  cedar  in  addition.  This 
region  contains  the  most  lu^curiant  stands  of  cedar  in  this  country 
and  is  therefore  the  center  of  the  cedar  shingle  production  industry 
as  '.Tell  as  being  highly  important  in  softrood  production. 

The  ILocky  I.iountain  Region,  \7hich  includes  the  area  east  of  the 
Cascades,  together  rith  the  Sieri-a  Uevada  Range  through  California, 
gro\"'s  'Jestern  pines.   Sone  spruce  and  rhite  fir  are  also  found  in  this 
region. 

On  the  ^./est  Coast  is  foruid  the  nost  lu:curiant  gro^rth  of  timber 
in  the  United  States,  with  the  greatest  connercial  ijossibilities.  The 
average  stand  per  acre  in  the  State  of  'Jashington  is  about  45,000 
feet  per  acre.   This  is  compared  vrith  6,000  to  7,000  feet  per  acre 
for  most  of  the  Southern  States.   In  California,  chiefly  in  the  few 
counties  in  the  north  central  part  of  the  state,  lies  the  Redwood 
Region.   Redwood  trees  are  well  laioiTn  for  their  enormous  size  and 
their  commercial  possibilities. 

Although  the  Lumber  Industry  in  the  West  started  in  the  early 
1850' s,  it  did  not  become  commercially  important  until  the  completion 
of  the  northern  Pacific  Railroad  in  1882.   (*) 

As  stated  at  the  beginning  of  this  chapter,  although  lumber 
is  only  one  of  the  products  of  the  forest  it  is  bj'-  far  the  most  impor- 
tant since  the  saw  timber  area  consists  of  approximately  five-sixths  of 
the  total  commercial  area.   The  o\7nership  of  this  area  therefore  in- 
volves the  Lumber  Industry  in  the  problems  of  forest  management.   How- 
ever, most  of  the  industry  itself  has  only  lately  given  adeo^uate  con- 
sideration to  such  problems.   With  the  shifting  of  the  industrj^  as  each 
new  area  was  tapped,  the  acquisition  of  the  virgin  forests  became  one 
of  the  important  factors  in  the  development  and  management  of  the  in- 
dustry, Iluch  of  it  was  included  \7ith  the  land  grants  to  the  trans- 
continental railroads  in  the  latter  part  of  the  nineteenth  centurj'-. 
Some  of  it  was  acquired  ^oj   those  who  were  interested  only  in  specula- 
ting on  the  increased  values,  but  for  the  most  part  lumber  producers 
attempted  to  acquire  sufficient  acreage  exid  stumpage  to  assure  them- 
selves the  longest  possible  period  of  continued  operation. 

4.   Volume  of  Production 

Turning  now  to  the  voluie  of  lumber  used  in  this  co\mtry, 
it  is  found  that  a  peak  was  reached  in  1905  and  1907  with  the  large 
total  of  45,000,000,000  feet  for  each  of  those  years.   Up  to  that 

(*)   "An  Otitline  of  Oeneral  Forestry" ,  by  J.  S.  Illick;  p.  53  (1935) 


9813 


-11- 

ti;ie  It  had  teen  continuo-asly  incroar.in;;.  After  that  time  it  started 
on  a  do-mvard  trend.  Kovevor,  ImfDemen,  intent  on  acqiiirin^j  a  volume 
Oi"  stuj,!^Da{^-e  for  their  operatioi.,  chiefly  speculated  on  the  increasing 
trend  ox  production  and  vfere  many  years  too  late  in  "becomins  a.r/are  of 
the  declinii_j  volu;.ie  of  consuription.  Tliv.s  lurabemen  found  thenselves, 
at  the  ■beginning":  of  the  deprcsrion,  overntoched  rrith  tinber  acreage. 

It  nay  be  veil  to  ercplain  here  that  the  tern  stumpage  is 
applied  to  the  standing  tree,  ajid  the  value  ox  stumpage  is  the  value  of 
the  lujnber  content  of  t]T.e  trees  -■ithout  regard  to  the  land  upon  nhich 
they  groT'.   This  is  usually  calculated  in  board  measure,  log  scale. 
The  term  "log  scale"  has  variotis  neaaiings  and  is  applied  rith  different 
rules  in  different  areas,  being  particularly  applied  to  a  given  species 
than  to  given  geographical  e,rea.   Ilov-ever,  in  speaking  of  lumber  pro- 
duction the  tenn  "board  measure"  is  used,  irrhich  ueans  one  board  foot 
equals  a  board  one  foot  long,  one  foot  i:7ide,  and  one  inch  thick. 

Tlie  first  saraiill  v/as  established,  according  to  one  historian, 
in  Jai.iesto'.-ni,  Virginia,  in  1625.   This,  as  rrell  as  other  early  colonial 
saTmills,  vas  ojjerated  either  by  r/ater  po-.7er  or  v/indinills.   It  is  be- 
lieved that  the  ma;:inim  capacity  of  these  early  savrr.iills  ras  not  more 
thaji  500  board  feet  per  day. 

The  first  record  of  steaiii  application  was  in  Her/  Orleans  in 
1311.   Hovever,  shortly  s-fter  that  ■•^eriod,  in  1814,  the  circular  saxr 
T/as  invented,  but  it  did  not  cone  into  general  use  until  about  1840. 
The  first  band  saci  was  exhibited  at  the  Philadelphia  Centennial  Ex- 
hibition in  1876.   Such  a  sav.-  today,  nith  all  other  modern  appliances, 
has  a  capacity  of  approximately  100,000  feet  per  day.  (*) 

5 .   Effect  of  Logging  on  Production 

One  inportant  factor  in  the  developnent  of  the  Lumber  Industry 
has  ^oeen   that  of  transporting  logs  from  the  noods  to  the  mills.   In  the 
original  development  of  the  industry  water  transportation  of  logs  by 
floating,  and  latter  by  rafting  and  similar  methods,  was  the  principal 
means  of  transporting  logs.   In  tl.ie  woods,  horses  aaid  mules  provided 
the  chief  motive  power  for  dragging  the  logs  to  places  where  they  could 
be  transported  by  water,  or  directly  to  the  mill  located  in  the  woods. 
Indeed  the  production  of  logs  was  more  a  separate  part' of  the  industry 
in  the  first  half  of  the  nineteenth  century  than  it  has  been. since,  due 
to  the  fact  that  logs  were  floated  to  central  booms  and  could  be 
purchased  by  mills  which  had  no  timber  lands  of  their  own.  iln  open 
log  market  exists  today  only  in  the  far  Korthwest. 

Beginning  about  1880,  with  the  developnent  of  lumbering  in 
the  Lake  Ststtes,  railroading  started  in  prominent  use  in  log  trans- 
portation, and  has  since  become  the  principal  factor  for  such  trans- 
portation.  This  is  an  important  factor  in  the  cycle  of  tinber  areas. 


(*)   "An  Outline  of  General  Forestry",  by  J.  S.  Illick,;  pp.  51,  56. 


981c 


-12- 

In   the   earlier  tir/iber  developments  uhere   the  noro  prinitive  nethods  r/ere 
used,    a  liraberin/;  operation  developed  to  uhat  viould  nor/  "be  termed  a  raedi-ura 
size  operation,   but  never  to   the  enomous   size  of  present  day  operation. 
This  restriction  was  due  to   the  limited  means  of  supplying  logs.     ¥ith 
the  development   of  railroad  logging,   however,   operations  grew  in  size, 
and  tov/ard  the  latter  part   of  the  Lcdze   States  Iwi'berin..^  period  the  ne'7er 
enterprises  were  much  larger  than  the  earlier  onos. 

6.   The  Production  Cycle 

Tlith  the  more  i^rinitive  neans  of  logging,  clear-cutting,  that 
is  the  cosiplete  denuding  of  an   area,  was  not  prevalent.   It  was  economic 
to  tL"'J:e  onlj'-  the  most  available  logs,  and  there  was  a  "thinning  out" 
operation  rather  th-an  a  complete  "logging  off"  opercition.   It  is  probable, 
for  this  reason,  that  the  older  areas  have  continued  producing  for  a  much 
longer  period  thaji  the  newer  areas,  and  their  renewability  has  been  more 
pronoTinced.   This  fact  brought  about  a  cycle  of  developments  which  are 
illustro^ted  in  parts  of  Penns;''lvaaiia  and  the  Ap'oalachian  Ilegion.   The 
cycle  consists  of,  first,  what  might  be  teamed  preliminary  operations  of 
fairly  snail  size,  then  the  ejqploitation  of  an  area  on  a  large  scale, 
and  then  the  return  again  to  snail,  portable  operations. 

However,  with  the  development  of  railroad  logging  this  cycle  was  not 
so  pronotuaced.   Eailroad  logging  sometimes  involved  the  laying  of  a  rail- 
road 80  miles  in  length.  When  an  area  was  cut  out  the  most  economic  thing 
to  do  was  to  salvage  the  rail  line  and  completely  abandon  the  workings. 
The  upkeep  and  overhead  of  a  railroad  logging  operation  being  so  great, 
it  wasn't  feasible  to  continue  on  a  small  basis  with  the  remaining  thin 
stands.   This  also  tended  toward  a  complete  cutting  out  opera,tion  rather 
than  a  thinning  out  operation,  and  in  a  measure  is  responsible  for  some 
completely/  abandoned  areas  of  the  Lal:e  States  and  of  the  far  TJest.   In 
such  areas  the  hope  of  sustained  yeild  opex-ations  presents  much  greater 
problems  than  in  the  older  areas  of  the  Appalachian  and  Southern  districts. 

The  foregoing  description  briefly  brings  us  up  to  the  situation 
of  the  late  twenties.   In  1929  the  Lu.iber  Industry,  as  defined  by  the 
Census  Bureau,  was  comiDOsed  of  approximately  18,556  units  doing  more 
than  $5, 000, in  business  anntially,  accovinting  for  a  total  production  amount- 
ing to  $1,962,000,000,  and  had  539,775  wage  earners,  with  an  annual  wage 
bill  of  $567,202,000.   The  mere  figure  as  to  the  number  of  sawmills  is  not 
of  important  significance  when  it  is  considered  that  the  first  census 
giving  the  number  of  sawmills  in  1840  recorded  31,650  sawmills  in  the 
United  States.   However,  the  18,556  sawmills  reported  in  1929  had  an  an- 
nual capacity  of  70,000,000,000  feet,  whereas  the  31,650  recorded  in  1840 
had  a  probable  capacity  of  7,000,000,000  feet,  although  the  total  produc- 
tion recorded  for  the  year  1839  was  only  1,603,000,000  feet.  (*) 


(*)   Forest  Service  estimate. 


9813 


-12- 


There  is  still  a  large  nuij'ber  of  very  Gnall  nillr  ''ith  a  capacity 
of  aroTmd  5,'')00  feet  n,  dp.y.   On  the  other  hand,  sone  of  the  laxgert 
mills  have  a  capacity  of  as  ntich  as  1,000, ")00  feet  a  da'"'.   The  im- 
portant factor  in  the  difference  today  is  the  fact  that  the  smaller 
mill  aust  compete  in  the  sane  market  as  the  giant  producer,  and  herein 
lier,  the  beginnin;-;  of  m-.ny  oi'   the  problems  of  prodviction. 

The  peal:  of  m-oduction  v7-xs  in  1W6  and  1907  rith  46,000,000,000 
feet.   It  cnist  be  rcraemoered  thn.t  this  pesJc  of  production  came   before 
the  rich  areas  of  the  Douglas  j<'ir  Hcr^ioja  and  the  western  Pine  Region 
viere   fullj'-  developed  and  that  the  capacity  in  these  areas,  T-'hich  is 
the  greatest  part  of  the  total  mill  capacity,  has  been  developed  since 
that  time.   Coincident  nith  thip  cr^r.city   development  there  has  been  a 
declining  voliirae  of  production.   Since  1917,  vith  the  exception  of 
1923  and  1925  ;7hen  a  total  of  41,000,000,000  feet  Fas  reached,  at  no 
tine  has  a  total  of  4(',000,0>;0,000  feet  been  reached.   In  1926  a  total 
of  39,000,000,000  feet  was  rerched,  Horrever,  in  1929  ^-'hich  is  gener- 
ally considered  the  peak  ye-ir  of  industrial  production,  only 
37,000,000,000  feet  of  liinbor  vere  produced,   Pollo-'ing  that  year, 
of  course,  came  the  deprnrsion,  the  Iott  point  being  reached  in  1932 
rrith  only  10,000,000,000  feet  of  production. 

At  the  beginning  of  1930  there  -vere  stocks  on  hand  of  9,500,000,000 
feet.   The  depression  did  not  become  fully  effective,  as  far  as  the 
Construction  Industry  vras  conct^rned,  until  the  latter  paxt  of  1930,  al- 
though shipments  dropped  from  an  averrge  of  7 , 0(,.0 , 000 , 000  feet  per 
quarter  in  1929  to  5,000,000,000  feet  per  quarter  in  1930.   Stocks 
increased  during  the  latter  half  of  the  year  1930  to  10,250,000,000 
feet.   This  grea.t  stock  on  h.-nd,  together  ^•'ith  the  pressure  of  liqui- 
dation of  the  indebtedness  incurred  in  the  development  of  the  Uest 
Coast  Region  dujring  the  Tdooli  period  and  particiilarly  in  the   tv-eritiB,s 
gave  ris'-^  to  the  most  important  problems  of  production,  (*) 

7,  Labor 

Uliile  no  figures  are  available  a,s  to  the  number  of  employees  in 
the  earl3''  days  of  the  industry,  there  has  be  n  a  vast  fluctuation 
during  the  later  years,  ■oa.rticularlj'-  for  the  period  from  1919  on. 
Prior  to  1919,  although  there  has  been  a  migration  of  the  industry,  . "  ■-' 
^"■here  it  dropped  employees  in  one  area  it  would  pick  them  up  in 
another,  bringing  about  a  migration  of  employees  as  well  as  a  mi.  :ra- 
tion  of  the  Indus trJ^■  itself ,  Hovfever,  in  the  period  of  declining 
production,  the  effect  of  the  crop  in  production  on  employees  may  be 
mea'"'ared  hy  the  fact  that  the  number  of  employees  declined  from 
539,775  in  1929,  when  the  total  production  was  37,000,000,000  feet, 
to  178,000  in  1932  r-hen  the  production  was  10,000,000,000  feet. 
While  it  is  possible  to  estim.ate  the  number  of  em-oloj'-ees  in  the  in- 
dustry back  in  1906  and  1907  ''hen  the  total  volume  was  46,000,000,000 
feet,  actual  statistics  on  th^t  score  a.re  lacking. 


(*)  Figures  from  national  Lumber  iianufacturers  Association 


-14r- 

In  general,    employees  mry  136   divided  into   two  main  groups-loggijc^ 
employees   and  sav»'mill   employees.        There  ic    some   difference  in  the 
type  of  la.hor  aJid  living  conditions  "betv/een  the  tv;o.      In  those  older 
areas  v/here   the  more  primitive  methods   still  prevail,  woodsme'^   still 
Saw  dovm  the   trees  and  te^-msters  haul   the  logs  to   the  main  point  of 
trajisportation,  whether  that  he  mill  pond  or  some  gathering  point 
such  as  railroad  siding  or  fluming  center.      In  the  Northwest  and  in 
some  of   uhe  larger  operations  of  the  South,  particularly  where  rail- 
road lojsjin ;  is  involved,  more  mechaiaic.al  methods  are  used.     Heavy  cahles 
are  stining  over  a  wide  area  and  large  logs   are  "brought   to  the  railroad 
"by  means  of  electric  or  steam  donlcey  en^iijines  and  loaded  onto   the  cars  hy 
steam  loaders.     More  recently  caterpillar  tractors  ha.ve  been  used  in  log- 
ging to   an  increasing  extend,   one   advantage  heing  that   it  is  less   de- 
structive  to   remaining  trees   than  the  vaii-ous   cahle  methods. 

The  actual  falling  raid  "bucking  (sav/ing  up   the  felled  tree  into  logs 
of  16   to  -1-0   feet  lengths)   have   char-ged  little  from  the   original  methods. 
One  of  the  later  developments  is   the  use  of  a.  porta-hle  gasoline   sav?  for  both 
falling  and  biicking. 

All   of  this   involves   a  higher  tiroe  of   labor,  with  a  consequent  higher 
staxidard  of  living  and  a  higher  wage  rate.     However,    the   significant  divi- 
sion between    -awnill   and  logging  labor  is  its  method  of  living.     Loggers, 
for  the  uio'-.t  "-■art,    are  by  necessity  forced   to   live   in  cajnps  v;hich  can  be 
moved  aboiit   from  one   center  of  log.^ing  to   another.     With  modern  methods 
it   takes  but  a  sliort   time  to  log  all  the   commercial   trees  on  quite  a  large 
a,rea.      It   is   not   feasible   to  have   those   engaged  in  these  operations  living 
too  far  from  their  work.     Tlierefore   there   are  very  few  permanent  living 
qua.rters  fo:''-  loggers.      This  means,   of  course,    that   they  are,    for  the  most 
•part,  unL-flarried  ajid  more  or  less  transient  in  most  of  the  producing  areas. 
Where  logging  are?s  are  more  or  less- contiguous  to  agricultural  areas,   as 
in  the  .^outli  cr.-l  Appalachian  Region,   logging  labor  is  more  or  less  inter- 
changeable; Vv-j  th  that .  of  agricultural  labor  and  there  is  no  cloar-cut  divi- 
sion het'.-'e.e.'i  i-h'-m,   most  loggers  working  part  of  the  year  in  logging  opera- 
tionn  hut  h-.vliig  their  permanent  residences  on  the  farms  in  tae  neighbor- 
hood. 

Savmill  wor'-ers  ma.;;!-  be  likened,   for  the  most  part,    to   any  other 
factory  lnbGr,and  in  the  western  arean   they  are  less   transient   than 
loggers.. 

In   tho  South  negro  labor  predominates   in  both  sav/mill   and  logging 
operai' -''■-:.'' ,  '[-c'c   oven  here  the  negro  labor  in    the  Liomber  Industry,  partic- 
ularly t"i,v,t   o-£  logging,   Can  hardly  be  set  apart  from  the  agricultural 
negro  labor  of  the  South,    of  which  it  is  also  a  part.     Likevdse,    sav/mill 
labor  in  the  South,   although  for  the  most  pa,rt  negro,   is   somewhat   similar 
to  all  factory  labor  in  the  South.     The  fact  that   such  a  great  percentage 
of  labor  in  the  South-  is  negro  labor,   and  that  there  is  considerable 
difference  in  the  density  of  the   timber   stands  of  the   South  aiid  those  of 
the  West,   led  to   the  important  differences  in  Code  wage  provisions  and  gave 
rise   to   the   im;'iortant  labor  problems   of  the   inc'justry. 

8.        Lumber  Uses 


The  cons-umers  of  lumber  ma;^'-  be  divided  into  three  general  classes. 
9813 


-15- 


Pirst,  and  foremost,  is  the  Construction  Ind^'-istry,  including  railroads, 
which  consvjnes  approximately  65  to  70  i-ier  cent  of  the  total,  llext  in 
importniice  are  the  Wooden  Paclr.a;i,'c  I/idastries ,  including;  "boxes,  "barrels, 
etc.-,  v/hicli  industries  consu.n^-  froni  15  to  "0  -.'er  cent  of  tho  total.  The 
"balance  goes  ii'xto  other  industrial  uses  of  varied  sorts.  Thij;s  it  may  "be 
seem  that  t?-e  most  important  determinnnt  of  where  Itijifoar  is  used  is  the 
volume  of  constiT.ction  in  different  places  and  at  different  times.   This 
also  means  t'nat  Ivixnber  is  used  to  the  gre.^/.test  extent  in  centers  of  pop- 
ulation. On  the  other  ha^id  the  gi'^atest  centers  of  merchantrhle  timber 
lie  where  there  is  the  least  population,  Tiiis  involves  an  important 
factor  in  .Marketing, 

At  the  oiitset  it  was  stated  that  the  ind\istry  may  "be  divided  "betv/een 
the  hardwoods  and  soft'./cods.   In  the  softwoods,  industrial  consumption 
aside  frora  wooden  pac]q?;.ges  aiuounts  to  an  insignificant  factor,  perhaps 
not  more  than  two  per  cent,;  wooden  pachages  a'bout  32  per  cent,  and  con- 
struction and  railroads  about  75  per  cent,(*)  Construction  l-um"ber  as 
used  here  includes  planinj  mill  products  and  raillwork  used  in  "buildings. 

The  softv/ood  areas  of  t  "lie  East  and  South  are  so  located  that  their 
shipments,  to  the  centers  of  popula.tion  of  the  I-.iiddle  AtLantic  States  must 
"be  "by  railroad.  The  Western  forests,  on  the  other  hai:id,  "being  located 
on  the  coast  with  its  har'bors,  require  very  little  transportation  to 
Waterside, . thus- offsetting  the  apparent  nearness  of  the  Eastern  softwood 
areas  of  production  to  the  centers  of  population,  and  "bringing  about  an 
important  comtetive  condition.  The  combination  rail  and  water  rates  in 
the  West  mp2;es  this  coinrietition  more  acute. 

9.  Production  Costs  : 

This  competitive  transportation  factor  rea.ches  into  production, 
which  ma^:es  the  cost  of  production  also  an  important  factor  in  competi- 
tion. The  corapa-rison  between  the  cost  of  .production  in  the  Southern 
Pine  Region  and  the  Douglas  Pir. Region  is  as  followsr 


Sturap3,ge    ......  "".'s  v' ' 

Log^:ing  and- mill- labor   .    .    . 
Other  logi'.ihg  aiid  mill   costs 
Shipping  and   selling  labor 
Other  shi-oping  and  selliiig 
Officers'    and  owners'   pay 
Adirdnistrative   overhead 


Douglas 

Southern 

Fir 

Pine 

Per  n  fee 

t 

Per  H  feet 

(Per  Cei- 

_tl 

(per  Cent) 

ls. 1 

17.6 

27.6 

30,9 

35,5 

25,0 

5.7 

6.5 

6.5 

4,4 

3.? 

4 .  4 

G.A 

11.1 

100.0 


100.0 


{*}     Table  XLIII 
9813 


-16- 

In  view  of  the  v/ide  difference  in  the   type  of  lator  employed   .  . 
and  the   dissimilar  conditions  of  oper,-.tion,    the   similarity  of  the 
proportidnate  relation  of  costs  ■bet\7een  the  two  areas  is  remarkahle 
and  indicates  that  methods  have  teen  worked  out   to  meet  the  competi- 
tion rather  than  to  talce  the  greatest  possitle  advantage  of  the   area. 
The  importance  of  transportation  as  a  competitive  factor  is  reflected 
in  the  "breakdovm  of  the   selling  price  of  Douglas  Fir  and  Souther  Pine, 
which  shows  that  manufacturing  costs  are  46  per  cent,    transportation 
costs  30  per  cent,    and  distritution  costs  22  per  cent  ^f  the  total 
price.      Thus  in  spite  of  the   com;jaratively  small  selling  mai*gin,    22 
per  cent,  the  manufacturer  received  less   than  ona-half  of  the   consumer's 
dollar.      (*) 

10.      TransTportation 

The   chief  means  of  transporting  lumher  has  teen  ty  water  and  rail. 
The  use  of  trucks  in  lumher  transportation  is  a  comparatively  recent 
development.      Water  has  always  "been  considered  the  most   favorahle  means 
of  transportation  because  of  the  hulkiness  of   the  product,  except  for  the 
finer  grades  of   some   species   easily  damaged  in  handling.      In  the  1870' s, 
when  canalization  was  making  rapid  strides  in  this   country,   this  means 
of  transportation  was  used  to   considerahle  extent.      In  1872  necrly 
1,500,000   tons  of  forest  products  moved  into   the  Hudson  River  from  the 
Erie  and  Champlain  canals.      The  development  of  the   railroads,   of  course, 
brought   about   the  replacement  of  .canals  to  a  greet  extent,    as  shown  by 
the  fact  that  by  1907  the  canal  movement   of  lumber  had  dropped  to  less 
than  250,000  tons  (**) 

In  the  1880 'g  when  the  center  of  prodx^ction  had  :ioved  to  the  Lake 
States  it  was  quite  natural  that  water  transportation  should  be  the 
chief  means  used,  and  this  is   shown  by  the  figures  reported  for  1885 
'when  659,000,000  feet  of  lumber  were   shipped  via  the  G-reat  Lakes  and 
149,000,000  feet' moved  by  rail.     Howevf^r,    as  western  railroads  developed 
this  also   changed,  and  in  1897,   379,000,000  feet  moved  by  rail- into 
Chicago,   as  against  89,000,000  feet  by  water.      It  is   stated  in  the  above 
cited  report   that    in  1885,    81  per  cent   of  the  lumber  reaching  Chi  cago 
cajne  by  water.      In  1913  less  than  nine  per  cent   arrived  by  this  route. 

When  the   center  or  production  moved  to  the   South  in  the  1890' 3 
water  shipment  of  lumber,  to  the  North  Atlantic  ports  was  most   important. 
In  1890  out  of  99G,000,000  feet   delivered  by  water  to  the  port  of  N«»w 
York,    393,000,000  feet   or  more  than  one- third  of  the  total  cejae  from  the 
South.     As  late  as  1907  out   of  a  total  of  447,000,000  feet   of   Southern 
pine   shipped  to  New  York,    224,000,000  feet  were  discharged  from  vessols. (***! 


(*)     Tables  LI   and  LI I 

(**)   Report   on  Transportation  by  Water  in  the  United  States,   by  the 
U,    S.    Commissioner  of  Corporations^  part  II    (1909). 

(***)  Report   on  Transportation  by  Water  in  the  United  States,   by  t'he 
U.    S.    Commissioner  of  Corporations,  Part  II   (1909) 


9813 


--17- 

However,    after  1907  as  the  netv/ork  of  railways  in  the   South 
increased,    rates   competitive   with  water  transportation  vrere  established 
and  the  area  closest  to  tidewater  was  logged  out,    'jhich  meant  that  as  the 
centers  of  production  receded  ihLcaid,    the  water-torne  movement  of  Southern 
pine  on  the  Atlantic  seahoard  decreased  to  an  insignificant   amount. 

The  early  development  of  the  Lui^iher  Industry  on  the  Pacific  Coast  is 
largely  linked  with  water  tronsportation.      California  was  the  earliest 
market  for  the  products  of  the  Douglas  fir  region  which,    as  has  teen  shown, 
lies  west   of  the   Cascades,   north  of  the   Callifornia  line.     Many  Mills  in 
the  early  days  were  erected  for  thti   sole  purpose  of  shipping  lumber  to 
California  "by  water,    and  as  heretofore   sho--n  it  wasn't  until  the   comple- 
tion of  the  Northern  pacific  Hallway  in  1882  that  rail   shipments  figured 
at  all  in  the  production  of  this  oxptc. 

In  the   ye.  r   1902   something  over   571,000,000   feet   of  lumber  were 
shipped  from   the   State   cf   rjashington  by  water  as  against   562,000,000  feet 
by  rail.   jU- though  production  increc.sed  by  1906,    there,  was  a  slight   change 
in  the  proportion  shipped  by  rail  and  water,,  the  former  talcing  the  le^.d. 
Total  water,  shipments  inthat'yiar  amounted  to  1 ,100,0^10,000  .feet   as 
against  1, 500,000,000' feet  by  rail.      However,    in  .the   early  1920' s  the 
shipments  of  Pacific  Coast  woods  to  the  Atlantic. seaboard  began  moving 
through  the  Panama  Canal  in  subtuntial  volume.     The  year  1922  saw 
1,122,000   tons  of  forest  products  going  throu£;h  .the   canal  from  the 
pacific  to  the  Atlantic  seaboard  (a  ton  equals  approximately  800  board 
feet).   By  1926  this  volume  had  increased  to  3,312,000   tons.     This  de- 
velopment of  wet  er  tran,  sport  at  ion  has  been  the  most    serious  factor  of 
competition  and  has  placed  .Douglas  fir  ona-  ^ari'ty  with  Southern  pine  in 
spite  of  the  latter' s  niore .  favorable  location  with  respect   to   consuming 
markets. 

The  fact   that   trucks  becatie  a  f£j.ctor  in  transportation  during  the 
period  of  the  depression  has  been  noted.     This  was  chiefly  dae   to  the 
increrse  in  highways  during. the  boon  period  of   the  late  twenties,    extend- 
ing through  the  years  1930  paid  1931.      It   is  chiefly  a  development   in  the 
delivery  of  lumber  from  the   Southerpi  pine  area  and  Southern  hardwood 
areas  to  the  l.Iid-Atlantic  end  Torth.  Central   States  from  the  more  nearby 
producing  areas  to   those  locations.      This  form  of  transportation  received 
some  impetus  during  the  Code. period,    since  in  most   cases,    with  fixed 
prices  based  on  costs,    the  amount  of   transportation  was  the,  only  competive 
factor.      Such  transportation  may  have  been  further  accentuated  by  the  fact 
that  throughout    the  entire  period  of  depression  purchases  were  made  in 
minimum  quantities.     Minimum  quantities   could  be    delivered  by  truck  at   a 
much  lovrer  cost  than  the  less-than-carload  rate  generally  applicable  to 
lujnber   shipraents. 

11.      Distribution 

In  the   early  history  of  the  inaustry,   with  the   small  output  per 
day, mills  usually  sold  their  output   in  their  im'iediate  locality.     Lumber 
was  used  close  to  its    sourroi  of  production  since  centers  of  pupulation 
and  the   centers  of  production  were  not   so  widely  segregated.     As  villages 
grew  into  towns  and  lumber  output   increased  there  developed  the  retail 
lumber  dealer.      Por  many  yec?rs  the   retail  lumber  dealer  was  the   sole' 
distributor  of  Itunber  products.      In  those  early  days   the  retailer's 
field  was  considerably  broader  than  that   of  today.     Evidently  there  was 

9813 


-18- 


some  competition  'between,  mills  selling  direct  within  a  given  retailer's 
area  and  the  retailer,    for  it   is  recorded  that   in  1850   a  convention  of 
lujnter  retailers  protested  against  manufacturers   selling  to   their  cus- 
tomers —  undoubtedly  the  local  builders. 

Not   only  was  there  an  increase,  in  the  number  of  individual   retailers, 
but  with  the  advent    of  the  large  band  saw  mills,    with  their  enormous  pro». 
duction,    such  mills  established  their  own  retail  yards  in  the  newer 
tovms  and  cities. 

No   records  are  available  as  to  when  the  wholesaler  enetered  the 
picture  but   it   is  quite  probable  that  with  the   demand  for  larger  and 
larger  quantities  a  distributor  might    require  the  output  of  a  large 
number  of  mills.     Further,    the  number  of  retailers  had  been  growing  at 
a  rapid  rate.     All  of  the  new  towns  which  sprang  up  in  the  last    25  years 
of  the  nineteenth,  century  and  t  he   early  part  of  the  twentieth  century, 
due  to  the  development   of  the  new  transcontinental  railroads,   resulted 
in  an  excess  number  of  dealers  when  such  nev;  developments  fell  off. 
However,   dxiring  the  period  of  this  development  ,  retailers,    dae  to  their 
number,   had  no  access  to  all  possible   sources,   and  it   is  quite  probable 
that  the  earliest  .development  of  wholesaling  was  that  of  the  establishr- 
ment  of  distributing  yards  to   serve  other  retailers  who  were  established 
in  the  larger  cities.     All  of  this  is  very  much  in  the  nature  of   surmise, 
since  no  historical  records  of  these  developments  are  available. 

Records  do   show  that   the  National  Aaerican  ^olesale  Lumber  Asso- 
ciation reported  573  members  in  the  year  1928,  and  estimated  that  in 
1933  there  were  approximately  1,438  persons  engaged  in  that  business, 
although  there  ware  only  238  members  of  the  Association.      Roughly  it 
may  be  estimated  that  during  the  boom  period  of  the  late  twenties  there 
were  approximately  2,000.  persons  engaged  in  the  wholesale  business. 

The  term  "v:holesaler"   may  be  applied  to  various  types  of  dealers. 
Little  is  kno\7n  of  the  development  of  each  type.     Ho '-'ever,    the  original 
type,  vrhich  still  fxinctions,   wa3  the  wholesaler  who   sold  only  to   re- 
tailers requiring  the  output   of  several  mills.     This  type  of  whole- 
saler maintains  regular  salaried  employees  v;ho  call  upon  the  trade,   and 
is  distinguished  particularly  by  the  fact   tliat    he   su:pplies  credit  to 
the  mills,    ofttimes  financing  some  of  the   smaller  and  mediumsized  mills 
through  a  contract  arrangement  whereby  he  disposes  of  their  entire  output. 
It  is  quite  probable  that  with  the  development   of  the  lumber  market, 
which  occurred  at  a  considerable  distance  from  the   sources  of  produc- 
tion,   the   smaller  mills  had  fewer  facilities  for  disposing  of  their 
product   andvere  forced  to  turn  to   this  type  of  distributor  rather  than 
sell  either  direct  to   consumers,   which  at   best   could  be  only  local   con- 
sumption,  or  to  retailers  at  distant   tovms  oii'-  cities. 

Coincident   with  the  development  of   this  type  of  distributor  was 
the  establishment   of  distribution  yards.    Such  wholesalers  maintained 
central  yards  within  a  given  area  from  which  they  could  supply  smaller 
amounts  to   the  local  retailer  and  furnish  quicker  service  than  could  be 
obtained  if  the  retailer  had  to  depend  directly  upon  the  mills  for  his 
source  of  supply.     Many  mills,  particularly  of  the   larger  type,    also 
maintained  such  distributing  yards  in  principal   centers  of  consumption. 

9813 


.19v. 


A  third  type  of  wholesaler  ceune  rith  the  development  of  large 
buildings.      It  became  apparent  to   contractors  requirin;^  20  and  more 
carloads  of  lumber  for  a  single  project   that  the j"" ,  should  be  in  a 
position  to  purchase  their  requirements  either  from  wholesalc-rs  or  di 
direct  from  the  mills.      The  older  established  retailers,  afi   shorai  here- 
tofore,  have  always  considered  themselves  tn  be  the  main  contact  be- 
tween the   consumer  and  the   source  of  supply,    whether  that    supply  be 
from  t  he.  whole '^aler,    distribution  yard  or  t  he  mill.      iTaturally  such 
retailers  were   at   all   times  under  vigorous   o.  ..josition   to   wholesalers 
who  acceded  to  the  demands  of  the  large  builder  in  supplying  such  build- 
er's needs.      Quite  naturally  they  used  every  means  at   their  disposal  to  mai 
maintain  such  business,    and  their  principaD.  m^ans  was  the  boycott   of 
wholesalers  or  mills  which  engcged  in   such  dealings.    This   led  to   the   es- 
tablishment of  wholesalers,  who  depended  in  t he  main  upon  the  business 
of  large   contractors  and  other  large  users. 

There  bas  also  developed  in  this  industry,  a s  in  most  other  manu- 
facturing industries,    the  broiler  and  the   commission  m.an.      There  is 
very  little   distinction  between  the  two,    the  princi;oal  distinction  being 
the  fact   that   a  commission  man.  usually  aligns  himself  with  one  producer 
and  represents  that  producer  in  all  his  de-r^lings,    whereas  a  broker  feels 
free  to  sell  lumber  on  a  commission  basis,    transferring  the  order  to   any 
prodvx.cer  he   thinlcs  can  fill   the  needs  and  v;ho   can  give  him  the  greatest 
advantage.      Brokers,  as  a  lule,   are  not   expected  to   supply  credit   to 
either  the  producer  or t he  buyer,   but   merely  to   act   as   an   intermediary 
betwesn  the  two. 

12.      Improvements  in  product 

In  the   early  days  of   the   indu.stry,    vdth  the   inadequate  facilities 
of  the  lumber  mill  of  that   time,   it  is  but  natural  that  the  product  was 
rather  crude,   being  but   a  slight  inrprovemont  over  the  hand  sawn  product. 
Dimensions  were  irregular  and  there  was  an  inadequate  loiowledge  of   the 
properties  of  the  various   species,   which  led  to   considerable  misuse  of 
lumber,     prejudice-s  grei;'  up  Y.'hida  had  no  foundation  in   scientific  fa.ct. 

The  first   stsp  toward  icrprovements  in  lumber  wa.s  a  realization  of 
the  importance  of  the  djying  process.      The  water  content   of  lumber 
determines  its   shrinkage;    hence  v/hen  green  lumber,    that   is,  newly  cut 
lumber,    is  used  it  may  shrink  considerably  upon  drying  out,    causing 
the  product  made  from,  that  lumber  to  become  loose  and  function  inproperly. 
In  the   early  days  air  drying  was  the  principal  method  used,    a  method 
which  is  in  considerable  use  todr.y  and  is,    in  many  cases,    the   cheapest 
way  of  curing  lumber.      However,   to  improve  the  product   and  to  make   it 
usable  as   soon  as  possible  .after  samng,    the   establishment   of  dry  kilns 
became   common.     Kiln,  drying  is  merely  a  method  of  drying  the  lumber  by 
heat  in  buildings  built,. e:q3ressly  for  that  purpose.      The  process,    con- 
trolled to  prevent   too   fast  drying  which  will  warp  and  clieck  the  lumber, 
enables  the  producer  to  accurately  control  the  water  content  of  the 
product  he   sells.     This  process  is  slso  import^-snt  in  the   competition 
between  the   small  mills  and  the  large  mills.      The   small  mills,    with 
inadequate  facilities  or  a  small  production  which  does  not   warrant  the 
investment   required  for  dry  kilns,   produce,    on  the  whole,    a  poorer 
product  than  the  large  mills. 

981S 


-20- 

The  investigation  of  the  properties  of  wood  was  a  further  step 
in  the  improvement  of  1-umher.   It  was  found  that  various  pieces  from 
the  same  tree  had  properties  different  from  other  pieces.  Also,  the 
effects  of  knots  upon  the  structural  properties  of  lumlaer  and  timber 
were  measured* 

¥ith  these  refinements  came  the  estalllishment  of  grades.  Origin- 
ally the  knowledge  of  hardwood  grade  was  kept  from  the  consumer.   It  has 
been  stated  by  a  prominent  hardwood  lumberman  that  one  of  the  eajrliest 
conventions  of  the  hardwood  lumber  producers  was  marked  by  a  vigorous 
fight  to  oust  one  of  their  members  who  had  disclosed  some  of  the  se- 
crets of  grading  to  one  of  his  customers.   This  tendency  to  withhold 
grades  from  Ithe  customer,  ?/hich  allows  ma,nipulation  by  unscrupulous 
dealers,  though  deplored  by  the  majority  of  members  of  the  industry, 
has  so  far  failed  to  become  of  sufficient  moment  to  the  producers  to 
induce  them  to  mark  the  grade  upon  the  product  except  in  some  instances. 
There  has  been,  however,  considerable  agitation  for  grade  marking  in 
the  past  fev7  years  and  grade  marking  has  received  considerable  impetus. 

There  have  been  a  few  recent  refinements  in  sawing  lumber.  However, 
many  of  the  old  prejudices  remain,  and  for  general  competitive  purposes 
the  buying  public  has  not  yet  been  educated  to  the  point  of  demanding 
individual  quality.  Hence  there  has  been  no  encouragement  to  individ- 
■ual  producers  to  improve  the  quality  of  their  products. 

As  yet  the  properties  of  the  producers  rather  than  of  the  con- 
sumers, which  malces  lumber  a  product  that  competes  vathin  certain  class- 
es chiefly  on  price,  the  general  species  of  softwoods  being  considured 
competitive  with  fe&ch"'other» 

13'.  Other  Lumber  Products 


Up  to  this  point  the  discussion  has  been , conf ire  d  princi- 
pally to  the  production  and  distribution  of  liomber.  However,  the 
Lumber  Industry  under  the  Code  considered  itself  as  including  woodwork, 
hard'-ood  flooring,  veneer  and  -plimood,   dimension,  and  wooden  package 
producers. 

Woodwork  is  generally  considered  to  include  planing  mill 
products,  that  is,  ..such  items  as  molded  pieces,  sash, doors,  frames, 
and  other  products  for  building  requiring  more  fabrication  than  just 
plain  1-umber.  Woodwork,  in  turn,  may  be  divided  into  two  branches 
namely,  stock  millTrork  and  special  millwork.   Stock  raillwork  is  con- 
sidered as  the  product  of  those  producers  who  manufacture,  sash,  doors, 
blinds  and  other  millwork  of  standard  dimension,  including,  of  course, 
molding,  which,  in  most  cases,  is  manufactured  directly  in  connection 
with  isai/Tmills  and  is  usually  stock.  Ivlany  large  sawmills  , have  woodwork- 
ing departments  for  the  production  of  stock  millwork. 

Special  millwork  has  no  defined  limits;  there  is  no 
point  where  the  craft  of  cabinet  making  is  sei^arated  from  that  of 
special  millwork.   Special  millwork,  besides  including  sash,  doors  and 
other  building  products  not  of  standard  dimension,  also  includes  special 


9813 


sliciper-  and  carved  work  wlierever  t..e     Tjdxxcer   of   suc.i  millwork  feels 
that  lie  is  ;:-l3le   to  prodace  it.      T  e  ip-ct  tlir.t   tliere  v/,?,3  no   such  defined 
limit  was  tl.e   source  of   tlie  :n-, '-t   Jitter  jarisdictionr.l  dis:mte  during 
the   entire  codal  period  r.s   it  coiicerned  tie  Lvjnber  Industry.      Ll^'Jiy  of 
tliese  products,   which  r.re  ra,  de  to  order  chiefly  frOiA  architects'    speci- 
fications,   are  liiade  in   shops  connected  with   retail  Ivunber  yards. 
However,    such   shops  cm  produce   the  requirements;  for  only  small  pro- 
jects.     Tlie  large   ouilding  project   requirin;!.;  special   woodwork  must 
look  to   the  large   sh.cps  caprble   of  producing  such..     i.iuch  of  this  is 
done   in  factories  whose  p-rinci-vai  output  is   tLiat  of   stock  millv/ork. 
iisnce  it  becomes  iiard  to    strictly  divide   f-.e  entire  woodwork  industry 
betv/een   sawr.-iills,    stock  millwork  producers  and  s/jecial  raillwork  pro- 
ducers.     Some  hiills   are' capable  of  producing  the  most  intricate  of 
woodwork  designs,   while  other,  mills  do  not  extend  beyond  planed  lunber. 
T.iere  ?.re  some   stock  millwor!.c  producers  and,    indeed,    some   special 
millwork  producers  among  tl:'.e  groups  v/itli' s.r^.ller   shops,   v/hc,    if  given 
such  an  order,   v/ould  have  it  executed  in  a  larger  plcnt  capable  of 
mo  re   e  c  o  nomi  c  p  r o  due  t  i  on . 

hardwood  flooring  producers  have  for  a  long  time  been  organized 
as   such,    due   to   tl^.e   fact   that   this   'iroduct   is  m.ade  on   special   machines. 
It.  does  not  follow  the-usaal   channels   of   distl-ibuticn  ,    rlthough  most 
lurnber  dealers   stock  hardwood  flooring.      '.laving  p,  larger  number  of 
grades  and   the  methods  of  production  and  distribution  being  different, 
hardwood  flooring  has  generally  been  considered  a   separa.te  part  of   the 
industry,    althougLi  its  base  product  is  hardwood  lumber.      Due   to   the 
fact  that  hardwood  flooring  is  produced  in   special  machines,    some  of 
it   is  made  by   those   eng.-^ged  in  producing  flooring  and  not   lumber. 

There  are   tiree   genc^ral  branches   of   this   industry,   namely, 
the  ock  flooring  producers,    whose  product  is  oal;  flooring  produced  in 
an  area  which  centers  'around  iiemphis,    Tennessee,    and  extends  through 
tie  Appalachian  and  U  orth  Central  hardwood  producing  states;    tlie 
ma.ple  flooring  producers,    located  cliieil.y  in   tlie  vicinity  of   Cadillac, 
Llichigan,   with  a  production   amounting   to    r.pproxima.tely  80  percent   of 
the  total  used,    about  15  percent  being  produced  in   tie  New  SnglrJid 
Spates  and  a   small   amount   in   the   Southern   States    (however,    the  ma'Dle 
flooring  industry  considers   itself  chiefly  a  hichigcji  producer);    and 
special   flooring  producer;3  v.ho   are   eng.aged  in  producing  made-to-order 
types   of  hardwood  flooring. 

Both  veneer  and  pljA-'oods  are  produced  by  maiiuf acturer-^  w::io 
are  very  closely  allied  with   tlie  Lumber   Industry  in  view  of   the  fact 
tiat  tney  are  produced  direct  from  tlie  log  rather  than  from  manufactured 
lumber.      Tliis   is  a  newer  part   of "  the  industry  and  represents   the  most 
economical  utilization   of   the   tree,    the  veneers  being   sliced  off    the 
log  in   tliicknesses   of   one    sixty-fourth   to   one-quarter  of  an  inch. 
'Alien   two   or  more  layers   of   such 'wood  are,  glued   together  they  are   called 
plywood.      The   finer  and  more  decorative  woods  are  produced  in  this 
manner  cud.  for   such   things  as   furniture '  are   ror'ly  com-jetitors   of    solid 
lumber.      Among   those   samnills   tir.t   .-.Iso   ;_"--r,:,duce  veneers  and  plywood 
the  principal    reliance   is   en   sr.wed  lumber.      ?lywo;-d,    particularly,    is   the 
one  part   of   the  industry  that   is  growing,    since  new  uses  are  being  found 


9813 


;        „       -22- 

for    this  I'jroduct   in  late  years.      As  a  co,n;;r3titor  of   solid  lurnber, 
l^lywood,    although,  producing  an  increa^se   in  dollar  voliiiiae  for  the  amount 
of   tree'  that  it  uses,  may  "be  largely  responsible  for  decrea.sing  the 
amount  of   solid  limber  in  industrial  and  construction  uses. 

The  next  most  important  Division  of   this  industry  is   tlie 
vVooden  Package  Industry.      Tliis  branch  of   the- industry  is  further  sub- 
divided principally  into   the   Sawed  Box  and  Shook  Division,,  the. others 
being  such  Divisions  as  Plywood  Package,   Egg  Case,    tVirebound  Box,    and 
Wooden  Pails  and  Tubs.      It  has  been   stated  that  wooden  packages 
'  represent  approxii'nately  15  to  20  percent  of   the  entire  lumber  produc- 
tion.     In  some  Divisions  of  the  Lumber  Industry,   however,   a,s,    for 
instance,    the  Western  Pine,    33  percent  of   the  production  goes  into 
wooden  boxes  and  shocks   ("shocks"   is  the   term  a.pplied  to   the  finished 
pieces   that  go   to  malce  up  the  wooden  box).      This  product  is  preponder- 
antly maniifac  tuT  od  in  factories  connected  with   sa.v/mills   and.  is  an   out- 
let for  m'?"li  Oj.    -,iie  lower  grades  of  lumber  and  the  poorer  species  of 
tirabcT", 

In  1'3>0   out  of   a  total   of  18,356  producing  plants,   792  pro- 
■duced  FOoc..'-n  box  products.      The  VTooden  Box  Division   is  also   the  more 
seasbn.able  :i"a.r :  n"   the  industry  because  a  grea.ter  part  of  its  products 
are  used  .for   shipping  agricultiiral  products,    a.nd  the   sea-son  therefore 
follows   ths  harvest    season. 

The   independent   esta.blishjnents   in   the  manufacture  of  wooden 
cfates,  boxes,    etc.,    are  located  chiefl.y  in   the  East  and  away  from  the 
lumber  producing  centers.      Such  plants  purchase   their  lumber,  usually 
the  lower  grades,   for- the  manufacture  of   the  various   types  of  boxes 
and  pa.ckages  for  industrial  use.      It  is  this' part  of  the  Wooden  Bex 
' Industry  that  has  been   the  hardest  hit  by  thp   substitutes  paper  board 
and  paper  boxes,    the  paper  box  field   having  not  yet  been   extended   to 
include  agricultural   products   in  any   substantia.1   amounts. 

0 

Another  Division  included  .as  a  part  of  the  industry,  chiefly 
because  the  product  is  manufactured  in  connection  with  sawmills,  is 
that  of  the  Kiln  Dried  Hardwood  Dii-iension  Industry.   By  hardwood  di- 
mension is  meant  both  the  cutting  ajid  siiaping  of  wooden  parts  used  in 
industrial  processes.   This  branch  of  the  industry  plays  an  important 
part  in  tlie  application  of  wood  to  industrial  products,  an  illustra- 
tion being  tlie  Furniture  Industry.   Y/ooden  parts  for  furniture,  in 
fact  entire  peiccs  of  unassembled  furniture  are  now  manirf a„ctured  in 
sawmills,  the  only  process  required  to  make  them  into  finished  furniture 
being  tha.t  of  assembling  and  finishing. 

Tliis  industry  has  developed  rapidly  witliin  the  -^xist  few  years, 
chiefly  because  it  represents  a  method  delivering  wood  products  nearer 
to  its  point  of  distribution  with  less  waste.   In  some  instances  as 
much  as  40  percent  of  the  l.jimber  used  in  the  majiufacture  of  various 
wood  products  represents  waste.   The  savings  from  malcing  finished  parts 
nearer  the  point  of  lumber  production,  and  the  avoidance  of  the  shipping 
of  waste  products,  re-iresent  a  considerable  saving  to  industry.   Eiis 
development  is  a  further  step  in  the  integration  of  the  industry  and 


99.17, 


seems   to  Iiold  tlie  cliief  lio:?es   of    o/ir.t  inrlustr/  in  maint.'^.inini2  a  higher 
ratio   of  hr.rdwood  liirauer  consiijir''tirn. 

Practically  all   of   these  auxiliary  Divisions,   while  not 
contrilDutin,!;  very  sit^^iiificantly  to   the  basic  iTrobleins  of   the  Lumber 
Industry,   were   included  under   the  Cde,   bringint;,  \iit'.\   tiCm  all   of 
their  minor  ^:)robleras   to   courlicate   t^io   j  -erati:n   of   the    Code,    which, 
in   the  first  I'^lace,   was    jointed  tovr.rd   tie   solution    :f   the  -problems 
of   the  L-oraber  Industry. 

B,  •  SCOPE  OP  Discussion 

To    sum  up,    the  broad   oaCxJiTT-iund  of   the   enti'.-e  Lumber   Indus- 
try as   it  presented  itcelf  u;;    to    the    time   of   the   Code  hc^s  been  out- 
lined here.      The  purpose   of   Code   action   \'ic,s  a   solution  of   the  problems 
of   the   industry.      Prora  tiis  point  forward  the  discussion  of  these 
problems  is  divided  into   the  followiu:'^;  fields: 

Pirst,    the  basic  problems   of   strndin;^   timber,    which  is   the 
base   of   the  Lu;Tiber  I^dustr.}^.      Tl~.ese    orobleras  concern   themselves  with 
volume,    location,    tiinber  o?mership  and  value,    and  costs   of  holding, 
Fjad  efforts   at   conservation  —   in  fact,    all    of   the  problems  of  forest 
management. 

Second,    the  problems   of  produ-ction.      Tliese,    vtoile  closely 
related  to   species  and  the  2'^roblems  of  forest  management,    are  also 
concerned  with   special   problems   revolving  around  volume,    costs,   labor, 
capacity,    capital,    credit,    etc. 

Tiiird,    the  problems   of  distribution.      Involved  here   are   the 
factors  01    competitim,   bet.;   regional   and   species,    the  demjind  factors, 
the  problem  of   substitutes,    prices,    transportation  costs,    etc. 

Fourth,    a  resune   of   the  atteinpts   to  meet   these  problems 
througji    the   i.iediujn  of  a  code   of  fair   coiapetition   and  an  analysis   of 
the  operation   of   that   code,    and 

Finally,    the  p-resent   status   of   the  industry  and  issues   re- 
lating  to   its  f\iture  needs. 


313 


-24- 

GHAJTK4  II 

THE  PR03LEIIS  OP  FOREST  IIAIUGZI^'J"}! 

Forest  mr.na.';ement   has  a  vide   rpn^'^e   of  mesnings  6epenc"in~  u'oon   tae 
loxirposes  "un&.erl'''ing  it.      Thus  in  commercial   forest  manfigement   there  is 
a  terjdency  to   stress   the  lorirjciples  of- profit   and  maximum  ^rocluction, 
T7hereas  in  -oublic  forest  management   special   emphasis  is  -.isual  1"''  placed 
iipon  the  -orinciples  of   sustained  yield  and  highest  use  and  service  of   the 
forest.      The  Society  of  American  ?oreste"s  '■'efines  it  as  follo^Ts:      "For- 
est management   is  the  practice  or  application  of  forestry  in  the  conduct 
of  the  forest  business." 

A.      TIIvBBR  SUPPLY  AiCD  LOCATION 

Like  all   natural   resource   industries,    the   successful   development   and 
management   of   the  lumber  and  timber  products  industries  are  (dependent 
upon:    (l)    The  location  of  ra^i  materials  '.vith  resioect   to  consumer  require- 
ments;   and   (2)    upon  the  form,    character,    volune  and  accessibilit"'-  and, 
therefore,    cost   of  ma,terial   in  a  specific   region  r/hich  vould  permit   its 
use  or  conversion  at  a  profit. 

These   de"oendencies  involve  problems   of   cutting,    of   transportation, 
of   competition  vith  similar  proc^ucts  rnd  "oos'^dble   substitutes,    of   costs 
of   ra"'  materirl  and  conversion,    and  of  demand.      Tlie   sixppl;-.',    location,    and 
other  characteristics  of   the  principal   kinds   of  timber  a.vrilable  for  con- 
version into  useful  -orocucts  are  described  in  this   section. 

1.      Pressnt   "J'orest  Area 

From   the   original   forest   area   of  more   tlian  800,000,000  acres,    ap- 
proximatel"'   304,000,000  acres,    or  38   aer  cent,    have  been  ^'ithd.raivn  from 
commercial   timber  growing.      This  "."'ithc'raval   is  made  up  of   150,000,000 
acres  chie:^l  ^  c\\t   to  clea-"-  land  for  farms  in  earfy  days  and  the  timber 
destro3''ed  becruse   of  no  raa.rket;    10,000,000  acres  of   reservations,    'oarks, 
preserves,    etc.;    and  the  balance   cut   over  for   tinber  and   subsequentl"'"  for 
use  for  other  purposes. 

The   conversion  of  forest   land  into   farm  lanc^   is    still   going  on, 
parti cularl"''   in   the  '.est,    'iiere   the   removal   of  vir~in  timber  of   relative- 
ly low  present   value  for  com-iercial  purposes   releases  good  soil  for  farm- 
ing.     It   is   estimated  that   eventuall^'   some  2,000,000  acres  of  commercial 
forest   land  in   the  '.'/est  '"'ill  be   removed  for   this  purpose.      In  the  East, 
however,    an  opposite   tendenc^"-  is  being  manifested  on  a  major  scale,    for 
here  farms  are  being  abandoned  and  becoming   increasingly  a.vailable  for 
forest  use.     Alreadir     some  52,000,000  acres  are  estimated  to  be   so  avail- 
able,   and  it   is   estimated  that   from  25,000,000   to  30,000,000  additional 
acres  of  abandoned  farm  and   other  lands  ma."""  be  ad.ded  to   the  commercial 
forest  area  b;'-  1950.      Further,    3,000,000   acres  of  treeless  prairies  could 
be  planted  if   the  need  for  increased   forest   area  develops.      This  acreage 
of  abandoned  or  potential  forest  area,    on  accovint  of  its  variable   oiianti- 
ty,    is  not   considered  in  this   study* 

a.      Commercial  Forest  Area 

The   remaining  495,000,000  acres  left   of   the  original   800,000,000 
9813 


••25— 


acres  of  forest   a""ea,    after  deductin^'^'  the  304,000,000   acres  cited  above 
r,<^  ^vithdrai''n  from   connerci'l.    timber   rro'.'inr,    constitute   the  ■Trere;:it   com- 
mercial forest   area  tijid  enconro8.r;-:-   tlie  f oXlo'' ir. '•:  c'iscusr.ion. 

The   South   coiitains   the   Ipr^iest   arer    of   comnercioJ.   forest   lanes,    '."ath 
a-o-orozii.irtel-'-  40  per  cent   of   th^^   tot£il    '"o^   t^ie  United   State?.      The  Pacific 
Coast  reiS;ion  ranks  next,    T'ith  a  Tittle  over  13  -oer  cent;    closel'"  follor-ed 
by  the  Central   re.";ion  'fith  aboat  1  j  -per  cent;    and  the  La'.ze  re.n^ion,    '.7ith 
sli.^htlv  over  11  pr?r  cent.      These   four  ref.^i'-'ns   contain   aoout  76  per  cent 
of   the   total   com'iercial  forest   area.      The  liiocle  Atlantic   re,-.;ion  contains 
the   smallest  area,    or  about  5  per  cent;     ■.'lile  the  other  threo  regions, 
irsTf  Jln'^lanc   ••'ith  6  per  cent   anc"   the  I'orta  anc    Soufi  "^.och"  I.'o-.mtpins  ''ith 
7  per  cent   and  5  --er  cent,    ren'oectivel'-,    -oossess   tlie  rest   of   the  acres.f;e.  (*) 


Ap-iro'-.imatel"-'  ?S5,000,000  .-crer:' 
f crept  Irnds  lie  ea'-t  of  the  C^rert  ? 
'.■"cst"pr^'   fron   the   '""oclc-  Loi^x tains. 


7'1-  per  cent,    of   the  coiimercii'.l 
3,    '".'ith  the  bf'lrnce   n  tret  chin,': 


About   30  per  c..:-.t   of   '"he   total   conner'cir.l  forci'^t   r-eo   of   the  'Jnited 
States  is   chercCtE'-i'^ed  b-   t-ees  lar^e   enourh   "or  ':^:-""  log^,    in  accordance 
vita  "orevailin';  lo-'ln™  r".id  nillin-;  ■•-'ractic'e,    and  ir    therefore  designated 
as   savf-timber  area.      Of   t  li  s  prea,    ''"'"  'oer  cent   is  located  ea.^  t   of   the 
Great  Plains.      Here  again   the   So-.xt'.  leadc   ii:   tais  ty-oe   O"^   land,    clairain- 
30  per  cent   of   the   total,    'rhile   the  Pacific   Coast  ran':s   next  ""itn  23  ^er 
cent.      The  Lalre   States  contadn   tlie   lea^st    ,"a""-tinber  land,    or  aj"oro:".i.nataly 

3  "per  cent   of   the   total,    .^ollo-.'sc    by   the  Liiddle  Atlrntic   Staters  '"ith  abo'it 

4  per  cent. 


(*)      Throu^-hout   this   re-no-?t   in   di?c"..\j 
regions  are  referred  to  a^    f oilers: 


'?.   ti'ibar  or   tinber  lands  various 


ilen  :H]n~land 


Hiccle  .Ltlantic 


Central 


Connecticut 

Maine 

Mas  sachus  e  1 1  s 

New  Hampshire 

Rhode  Island 

Vermont 


Delaware 
i  !:aryland 
i^e\7  Jerse^r 
ITev  York 
Penns''"lva~nia 


Michigan  Illinois 

;;innesota         Indiajia 
North  Dsl-ota  Iowa 
".'i  scon  sin         Kentuclc' 


liissouri 
Ohio 

Tennessee 
"Test  Virginia 


Sotlth 


Jr'acific   Coart 


'"-Ocky  Lit. 


-10  C 


:t. 


Alabama- 
Arkansas 
Florida 
Georgia 
Louisiana 
Mississi'Toi 
Forth  Ca.rolina 
Oklahoma 
South  Carolina 
Texas 
Virginia 

9813 


California, 
Oregon 
Va.shin  :ton 


I  daho 
Montana 


Arizona 

Coloraido 

i'evada- 

1  ea'  :  e:;ico 

South  Dakota. 

Utah 

TTyomin,": 


-26- 


r.ventv-four  (24)  ner   cent  of  the  comnercial  forest  lands  contain 
trees  too  small  for  sa'".'  logs  but  ler^e  enough  for  cordnood,  re.~f.rdless 
of  ^Thether  the  sta,nd  is  to  te  cut  for  cordvooc"  or  held  for  san  timber. 
As  \7ould  be  e::pected,  the  states  east  of  the  Great  Plains  contain  most  of 
the  cordr^ood  areas,  or  about  85  per  cent,  due  to  the  fret  that  a  greater 
proportion  of  the  virgin  timber  in  the  Ear.t  has  b?rsn  cut  over,  thus  re- 
leasing the  lands  for  second  grovth. 

The  bul':  of  cord'vood  lands,  or  44  per  cent  of  the  total,  a?'e  located 
in  the  South.   The  Central  States  come  ner.t,  rith  21  -ler   cent;  folloned 
bj'"  the  L'iddle  Atlantic  and  Lal'e  States  v;ith  9  ano  7  per  cent,  res'oective- 
"  ly.   Fe'"  England  has  the  least,  aporoximatel:''  4  per  cent,  rnd  tae  other 
threo  regior.s  possess  approximatelv  5  per  cent  each.   The  relatively 
smrlT  cord'^'ood  area  in  the  Pacific  Coast  States  is  c!ue  to  the  high  per- 
centage of  virgin  so;'  timber  on  tieir  total  corriercisl  forest  area. 

."Restocking  arer"^.  comprise  Irnor  that  once  supviorted  a  stand  of  tim- 
ber and  •.■■hich  rre  no'-  oeing  rene'  ed.   The  bulk  of  this  nev;  growth  is 
smaller  than  cordrood  size.   7filr  to  satisfactor"-  restoc]:ing  areas,  ac- 
cording to  -oresent  standards,  ma-"  be  defined  as  lands  40  -oer  cent  or 
more  eestocked  ^ith  connercial  species,  i-hile  areas  v'ith  a  lo^'er  "restock" 
percentage  are  considered  poor  to  non-restocking  areas. 

Restocking  lands  constitute  aboxit  37  iDer  cent  of  all  commercial 
forest  lands  anc,  as  is  to  be  expected,  tlie'"-  rre  found  in  those  regions 
where  the  largest  volume  of  lumber  hps  been  produced  over  a  considerable 
period  of  time,  nemely,  in  the  Sov\th  and  the  Lpke  States.   The  South 
contains  over  80,000,000  a.cres  of  such  area,  or  16  per  cent  of  the  total 
comnercial  forest  area  of  the  entire  countr;;-.   Oi  this  amount  nearly  one- 
half  is  considered  fair  to  satisfactor;"-  reprocuction.   The  Lake  region 
contains  restocking  lands  amotuiting  to  8  per  cent  of  the  total  commercial 
forest  lands,  v.dth  67  per  cent  of  them  fair  to  satisfactor;"-. 

The  eastern  regions  contain  nearl"-  si:-:  times  as  much  re;orocucing 
area  as  is  foiind  in  the  western  regions,  md  the  pro;portion  of  fair  to 
satisfactory  restocking  lands  to  total  restocking  lands  is  raiich  greater. 
Reproducing  areas  are  in  the  best  condition  in  the  Te\:   Sn^rlfind  and' Central 
regions,  approximately  70  "per  cent  containing  fair  to  sa^tisfactory  re- 
production.  The  poorest  reproduction  is  fo-and  in  the  South  Roclcy  '.foun- 
tain region,  irhere  onl-,?-  9  per  cent  of  the  re-^roducing  areas  are  fair  to 
satisfactor3'-. 

It  is  ap-oarent  that  the  ccviercial  forest  Irnds  of  the  United  States 
are,  generally  speaking,  so  cistributed  as  to  produce  future  supplies  of 
forest  prodiicts  fairly  close  to  la/rge  -oopulation  centers,  fn'."  therefore 
to  e:rpected  (demand.  Possible  exce":)tions  a:''e  the  Vev:   .iHngltJid  and  the 
Middle  Atlantic  regions,  r/here  the  expansion  of  forest  industries  to  any- 
where nea,r  their  f orraer  cr-pacity  might  necessitate  the  dra'-ing  of  "oartial 
future  suo'ilies  fro-n  the  South  and  7est.   The  commercial  forest  land.s  in 
these  t^o  regions,  hov/ever,  if  intelligently  mana^^ed,  ma-'-  be  e^rpected  to 
■iDroduce  forest  Tjroducts  considerably  in  excess  of  their  coi'S-om-ptive  demands. 
Of  course  there  may  be  a  trend  of  future  forest  incusti'ies  torard  regions 
of  abundant  supply,  a,  movement  uhich  has  characterized  such  industries  in 
the  -oast. 

9813 


-27- 

2.      Fore-t    Stand 

Prom  the    standpoint  of  future  ejenerations,    the  forest  area  nov/ 
available  will  furnirh  siiff icieiit   Ir.no    for   the  .^rorin..-;  of   required  forest 
crops.      For   the  T5reoent  anc   irr!;ieciate  future,    the   sup-oly   of   timber  novi 
stpnrlinfT,    its  location  '-ith  ro^-oect   to  the  need  for  forest  products,    and 

its  marketabilit'',''  are   of   ori'ie   concern. 

In  1928,    through  the  i^cSt'e  iney-L'ciTar';-  Act,    Con<^;:re!-s  a.uthorised  a 
national   surve3'-  of   the   timber  re^ourcen   of   the  United   States.      Its  objects, 
for  the   suri-ey  is  not  yet   cor-r-lete,    rre:    (l)    To  ma'';e  an   inventory  of   the 
jresBnt   supply   of   timber  and   other  forest   -rodiicts,    (2)    to   ascerta.in   the 
rrte   of  ^rowt!-;,    (o)    to   oeternine   the  drrin  .on  the  ■^orept'^.   tnrou^h  indus- 
trial and  other  uses,    anc    fron    fir-?s,    ciserse,    etc.,    (4)    to  deteiTnine   the 
•oresent  and  -orobable  fu-ture  reouirenents  for  timber  a.nd  other  forest  pro- 
ducts,   and   (5)    to  correlate   the   fii^cin.^;?  ''ith  existing-;  a.nr    oJitici^oated 
economic   conditions. 

Althou.^h  the  field  '-'ork  on  over  150,000,000  rcres  hap  been  completed 
and   Gubstantial  'T^ro^ress  nsds   on  the  comolicated  office  Trork  of  this 
nationa.l    survey,    no   ?'esult^-   a^e  "-et   e.vrilrble   for  an;'"  one   state  or  gro\\p 
of   states.      The  area,    stand,    ;i:ro''"th  pnc   -oartial   drain   fi Tares  in  t:iis   re- 
port,   therefore,    have  be:n  la'-'^-el-^   ta'.cen  f  ror-.  U.    S.    ?ore"^t   Servico 
sources.    (*) 

Preliminary  and  uriof."icirl   ertin  te=  gedned  f'^om    th.j    survey  cited 
above   indie?  fce    that   some   of   t.ie    st;  nc   rnd  ,.>;  ro^'th  fi,ijures   tD]:en  from  the 
Forest   Service   reports  are   too  Ic'.      It    is   believed,    therefore,    that   the 
conditions   described  and  conclusions   rer.ched  in  this   report  are   conserva- 
tive. 

a.      Stand   on  Tota,!  Area 

Products  derived  from  the  forests  £.re  of  '"'idel'"  varyin;-^  character, 
anc  their  unit  volume  is  expressed,  in  a  n-.imber  of  difi"erent  rrays.   Thus, 
Inmoer  and  log's  are  e>7nressec  in  feet,  board  neasare;  fuel  wood,  pulp 
rood,  distillation  vood,  and  ot/ier  cord  ''ood,  in  corc.s;  nenn  ties,  fence 
oosts,  staves  anc.   hoo'os,  shiniTle'^,  poles  and  pilin;~,  in  nieces;  roiuid. 
nine  timbers,  in  cubic  feet;  and  slaa:  he,',  car.g  and  ti;~ht  heading  co- 
operage, in  sets.   The  onl"'  ■oo^siDlo  connon  denominator  of  measurement  is 
cubic  feet.   Chart  II  and  Table  II  she  the  tota,l  stand,  erroressed  in 
millions  of  ci\bic  feet,  of  all  .forest  "orO(.  uct?  ectir.iated.  to  be  rta.nding 
in  tree  forra  on  the  a,o'oro::imatel--  495,000,000  acres  of  commercial  forest 
Irnd. 

Fift'"'-si::  (55)  per  cent  of  the  forest  pt-nd  of  the  ^.'nited  States  is 
in  the  ¥est.  The  Pacific  region,  ^.'ith  39  oer  cent  of  the  total,  hrs  the 
largest  stfnd.  The  South  is  ne.--t,  'ith  23  ;;jer  cent,  and  the  La.ke  re.^ion 
lapt,  "'ith  4  per  cent. 

(*)  U.  S.  Forest  Service.  The  Forest  Situ"bion  in  the  United  States; 
a  s'oecia.l  renort  to  the  Timbe"  Gonservrtion  'Joard,  Janurr;^  30,  1932; 
and  Senate  Doci:iment  ^12,  A  Tationgl  Plan  for  Americexi  Forestr^'-,  1933. 

9813 


-23- 

Softv'ood  comprise?,  about  74  per  cent  of  the  total  stf-ijJ.  in  the  United 
States.   In  the  eastern  re/?ions  40  per  cent  of  the  stpnd  consists  of  soft- 
r'ood,  and  in  the  \7estern  re,'jions  practically  lOi^  per  cent  is  softnood. 
Hard'^'oods  predominate  in  the  T.ev   England,  Kiddle  Atlantic,  Lake  and  Cen- 
tral regions.   Only  one  region  east  of  the  Great  Plains,  the  Soutlt,  con- 
tains a  greater  volume  of  softvrood  than  hardwood.. 

b.  Stand  on  Sav;  Timber  Area 

The  stend  on  the  .sa'^-timber  area  comprises  75  per  cent  of  the  total 
United  States  stand,  with  ha.rdwpod  predominating  in  the  eastern  region 
and  softwood  in  the  ITest.   Sighty-one  (31)  per  cent  of  the  total  stand 
on  tie  saw-timber  area  is  softwood.   The  stand  on  the  sr^'-tinber  area  is 
further  discussed  in  terms  of  boarc  feet,  under  the  ca^otion  "Saw  Timber 
Stand.  " 

c.  Stand  on  Cordwood  Area 

The  stand  on  the  cordvrood  area  amounts  to  20  per  cent  of  the  tot?.l 
stand  of  the  United  States.   About  81  per  cent  of  it  is  located  east  of 
the  G-reat  Plains.   Thirtjr- eight  (38)  per  cant  of  the  Eastern  total  and 
99  per  cent  of  the  Tie  stern  total  is  softv/ood.   The  South  has  the  largest 
cordwood  stand,  i.  e. ,  39  per  cent  of  the  total,  of  '"'hich  61  per  cent  is 
softv'ood.   In  all  of  the  Eastern  regions,  e::cept  the  South,  hardwood 
greatlv  predominates  in  the  cordwood  area. 

d.  Stand  on  Hestoclcing  Area 

The  stand,  on  the  restoc'cin.'::  area  amounts  to  4  per  cent  of  the  total 
stand  in  the  United  States.  ( *)   A  breakdown  of  the  restocking  area  into 
soft'"ood  I'nd  hardwood  is  impossible  from  existing  d.ata.   Of  the  various 
regions,  the  South  ags.in  leads  in  vororne  of  stand  on  the  restocking  area, 
with  42  per  cent  of  the  totl  volume.   The  i'orth  Hocky  i^oiintain  region 
is  ne::t,  with  over  14  per  cent,  follo^'ed  bv  the  Pacific,  Middle  Atlantic 
and  New  England,  regions.   The  South  ?t0ck;'-  iiountain  region  has  practicallj'- 
no  volume  on  the  restocking  a,rea. 

e.  Sa'"-  Timber  Stand 

From  the  standpoint  of  both  the  lumber  industr?''  and  the  public,  the 
amoiint  of  saw  timber,  its  character,  and  its  availability  are  forest 
mane^gement  problems  of  fundamental  importance.   Not  only  does  the  su-opl^- 
of  sa'"  timber  take  care  of  current  l^omber  and  other  important  reouire- 
ments  but  it  governs  present  and  -oossible  future  competitive  conditions 
for  the  industry  and  forest  prod.ucts  users.   Chart  III  and  Table  III  show 
the  present  sa\7  timber  stand  of  softwood  and  hardwood  and  the  various 
classes  of  ovaiership. 

The  saw-timber  stand  in  the  United  States  is  estimated  to  be  1,637,- 
803,000,000.  feet  board  measure.   Of  this  59  per  cent  is  privatelv  owned, 
and  the  balance  is  owned  or  administered  by  the  public  in  the  form  of 

( *)   Omits  data  for  Lalce  region,  which  are  not  available. 
9813 


-29- 


national,  Indian,  ctpte,  coxxnty,  rnd  mimicipal  forests..  Of  the  ■nrivatel:'- 
owned  timber  38  per  cent  i  r.  O'r.cc  b"-  l.^rrJ,  l-.inber,  pulp  r.nd   pproer,  and 
mining  companies;  naval  stores  o-oerators;  railroadr,;  and  niscellaneous 
individuals  and  a!-':encies;  rnd  the  balance  by  farmers. 

All  of  this  suppl',^  is  not  iraMeoiatel-'-  available  ueco-use  o"  noor  lo- 
cation i.lth  respect  to  transjortation  facilities,  -densit-'-  of  stand,  com- 
oosition  of  stand,  and  other  factorr..  Obvio^isl''-  it?  conolete  conversion 
into  forest  "oroducts  is  governed  bv  the  ^:fillingness  of  the  public  to  lay 
t  ".e  cost  of  getting  out  the  mora  inaccepsible  and  scattered  timber. 

Availabilit}'-  in  the  'Test  is  illustrated  by  the  Strte  of  California. 
In  a  study  of  the  timber  situation  in  that  state  in  1914  the  cuestion  of 
accessibility  nas  carefully  considered.  (*)   For  oxirposes  of  the  stud^s 
the  state,  .outside  of  the  red-.-ood  region,  vb'.s   divided  up  into  three  zones 
of  accessibility,  in  vrhich  the  lo.'jging  costs  vere  estimated  at  $6.50  per 
M  feet  or  lesr  for  Zone  1,  ;J;6.50  to  $9.50  for  Zone  2,  and  over  $9.50  for 
Zone  3.   It  v'as  found  that  34  per  cent  of  the  total  stand,  both  publicl-' 
and  -orivatel-y  ovned,  Mas  available  at  $S.50  or  lesp,  45  -^er  cent  at  Zone 
2  cost,  and  the  balance  at  Zone  3  cost.   In  1914  the  average  logging  cost 
for  20  representative  uine  mills  in  California  '.'^as  $5.  "4  per  H  feet.   In 
1934,  however,  according  to  statistics  furnished  by  the  "estern  Pine  As- 
sociation, average  log -ring,  cost  in  the  ^ine  region  of  California-  '"'P.s 
$8.61  per  K  feet,  or  still  rithin  the  Zone  2  cost  limit  of  1914. 

The  average  xirice  received  in  1914  by  the  20  representative  pine 
mills  in  California  for  their  product  f.o.b.  shipping  ;ooint  vrs  $15.08. 
Although  average  price  figiares  for  1934  are  not  available,  average  prices 
Tdy   s"oecies  f.o.b.  ship-oirt  ■ooint  a.re  reported  b;'-  the  TTestern  Pine  Asso- 
ciation as  varyi-.g  frora  about  318  to  about  $4?,  '-ith  aO  estimated  avera.ge 
for  all  species  in  the  -oine  re-^ior.  of  California  of  a^o-;5ro::imatelj'-  $25. 
Thus,  the  logging  cost  in  1914  -'n.s  31-  ^er  cent  of  the  selling  price,  or 
substantiallv  the  sane  ra'-.io  a'^-  in  1934.   This  indicates  that  as  logging 
costs  increase  due  to  rela-ive  inaccessibility^,  either  selling  "Trices 
increase  or  the  pro'^uct  is  sole  oelov  cost.   Further  discussions  as  to 
the  effects  of  eithor  of  these  courses  '"'ill  be  found  in  a  later  chapter. 

Another  "oroblem  incident  to  forost  manrgem3nt  lies  in  the  trend 
away  from  lumber  as  a  orinaaT  forest  "oroduct  and  to^aro  /mterial  that 
can  be  converted  into  -p-al.-o   end  tnen  made  into  a  variet""'  o:^  "oroducts. 
Timber  difficult  to  get  out  in  log  form  may  be  e:rploited  in  cordrrood  forra, 
which  is  more  suitable  foi:-  oulp  conversion,  and  at  a  substc;rtia,ll3'-  loner 
cost  than  that  reo"uired  for  the  removal  of  sa''  logs. 

Of  the  total  sa\"'-timber  su-rpl^^  39  per  cent  is  softvrood  and  11  per 
cent  hardv/ood.   About  83  per  cent  of  the  total  cut  during  the  period  1929- 
1934  vas  soft'-'ood.   It  is  thus  seen  that  the  relative  demsn.d  for  softv.'ood 
and  hardwood  is  in  about  the  same  proportion  as  the  supplv  of  soft\7ood 
and  hardwood  saw  timber.  (**) 

(*)   Smith,  C.  Stowell,  Ascistsr.t  District  Forester,  The  Lumber  Industr^'- 

in  California:  c-n   unpublished  report  of  the  U.  S.  Forest  Service. 
(**)   Table  V  (a)  of  tais  report. 

9813 


-30- 

Seventy-nine  (79)  per  cent  of  saw  timber  is  located  west  of  the 
G-reat  Plains.   Of  this  practically  all  isooftwood.   It  is  strikingly 
evident,  therefore,  that  the  'bulk  of  softwood  saw  timber  is  not  in  close 
proximity  to  the  centers  of  population  and  demand,  as  is  hardwood  saw 
timber.  However,  the  location  of  softwood  on  the  Pacific  Coast  makes  it 
possible  for  producers  to  take  advantage  of  water  transportation  through 
the  Panama  Canal,  with  consequent  shipping  costs  low  enougii  to  permit 
considerable  back  haul  by  rail  from  the  Atlantic  Coast  before  equaling 
the  all-rail  cost  overland  if  the  haul  were  made  that  way.   This  favor- 
able freight  differential,  together  with  the  relatively  larger  timber 
and  denser  stands  on  the  Pacific  Coast,  has  made  it  possible  for  Pa^ 
cific  Coast  liiraber  to  compete  successfully  in  the  East  with  lumber  pro- 
duced close  to  points  of  consumption. 

It  is  not  necessarily  unfavorable  to  have  timber,  the  raw  material 
for  certain  forest  products,  raised  under  conditions  of  maximum  growth 
and  at  lowest  cost  and  to  have  the  material  transported  considerable 
distances  to  the  industries  requiring  it.   The  important  matter  is  an 
adequate  supply  of  suitable  material  at  reasonable  cost  to  the  industry 
or  other  consumer  making  use  of  it. 

The  Pacific  Coast  region  contains  the  largest  stand  of  saw  timber 
(62  per  cent  of  the  total  in  the  United  States).   Of  this,  hov;ever,  less 
tnan  three-tenths  of  one  per  cent  is  hardwood.   The  largest  supply  of 
softwood  is  in  Oregon,  followed  by  Washington  and  California.  Most  of 
the  hardwoods  in  the  West  are  found  in  Oregon, 

The  next  largest  stand  of  saw  timber,  approximately  12  per  cent  of 
the  total,  is  in  the  South,  with  61  per  cent  softvzood  and  39  per  cent 
hardwood.  The  North  and  South  Rocky  Mountains  come  next  with  a  little 
less  than  9  and  about  7-1/2  per  cent,  respectively  —  practically  all 
softwood. 

The  Middle  Atlantic  region  possesses  the  smallest  amount  of  saw 
timber,  about  1-1/2  per  cent,  of  which  68  per  cent  is  hardwood.   The 
saw-timber  supply  of  the  Lalce  sind  Central  regions  is  also  preponderantly 
hardwood  —  74  per  cent  and  91  per  cent,  respectively. 

B.   THE  PROBLEM  OP  TlivIBER  OWNERSHIP  AND  VALUE 

1.   Ownership  of  Entire  Porest  Area 

a.    Industrial  Ownership 

Over  one-half  of  the  total  commercial  forest  area  is  owned  by  land, 
lumber,  pulp  and  paper,  and  mining  companies;  naval  stores  operators; 
railroads;  and  miscellaneous  individuals  or  agencies.   (*) 

Industrial  forest-land  ownership  is  the  predominating  type  of  own- 
ership in  the  eastern  regions,  comprising  over  60  per  cent  of  all 


(*)   Chart  I  and  Table  I. 
9813 


-31- 

ownership.  Eighty-six  (86)  ..per  cent  of  the  industrial  acreage  is  in 
the  East^'and  14  per  cent  in  the  West.   The  South  contains  nearly  50  per 
cent  of  the  industriil  lands  of  the  entire  United  States.   One-third  of 
the  total  area  under  industrial  ovmership  is  classified  as  saw-tiraber 
area.  Because  of  the  large  areas  of  softwood  and  hardwood  forest  which 
were  originally  culled  of  softv/ood  alone  on  account  of  easy  river  driv- 
ing, leaving  an  essentially  unliroken  old  growbh  hardv;ood  sav/  timber  for- 
est, over  50  per  cent  of  the  New  England  region  is  classed  as  sa'.v  timber. 
In  the  Lal^e  region  less  than  10  per  cent  is  saw  timber. 

Cordv/ood  areas  industrially  owned  in  the  United  States  amount  to 
23  per  cent  of  the  total  area  industrially  owned,  with  about  an  equal 
amount  of  fair  to  satisfactory  restocking  areas  and  somewhat  less  of 
poor  to  non-restockin;;  areas. 

The  Eastern  regions . contain  74-  per  cent  of  the  industrially  owned 
saw  timber,  93  per  cent  of  the  cordwood,  and  90  pet   cent  of  the  repro- 
ducing areas.  Although'  the  Western  regions  contain  a  relatively  small 
percentage  of  industrial  ownership,  that  ownership,  especially  in  the 
Pacific  Coasi  regiion,  is  very' important  because  it  includes  land  that 
is  potentially  highly  productive  and  also  because  considerable  areas 
possess  virgin  stands  vhich  are  pressing,  for  liquidation.   Industrial 
ownership  in  the  Soutn  includes  30  per  cent  of  all  restocking  lands  in 
the  United  States.   Of  this  44  per  cent  is  classified  as  fair  to  satis- 
factory. * 

b.  Earn  Vn'oodlands. 

Aporosimately  26  per  cent  of  the  commercial  forest  area  consista 
of  farm  woodlands.  Of  this,  95.  per  cent  is  in  the  East,  where  it  c(*i- 
stitutes  approximately  one-third  o'f '  the  Eastern  commercial  area.   In 
the  Central  region  it  includes  pibout  one-half,  and  in  the  South  and 
Middle  Atlantic  about  one-third  of  the  conaercial  acreage.   Earm  wood- 
lands consist  of  23  per  cent  saw  timber,  34  per  cent  of  cordwood,  and 
38  per  cent  of  restockin,?;  lands.   In  the  South,  where  the  largest  area 
of  restocking  farm  lands  is  located,  slightly  less  th?,n  50  per  cent  is 
in  fair  to  satisfactory  condition.   In  all  other  important  farm-wood- 
land regions  the  bulk  of  the  restocking  areas  are  in  fair  to  satisfac- 
tory condition,  with  the  exceotion  of  the  Pacific  Coast  region,  where 
54  per  cent  of  such  areas  range  from  poor  to  non-restocking. 

c.  Public  Ownership. 

Approx.imately  20. per  cent  of  the  comiuercial  forest  area  is  pub- 
licly owned.   Of  this  amount  about  90  pfer  cent  is  owned  or  managed  by 
the  Federal  G-overnmcnt,  a  little  less  than  10  per  cent  by  the  states, 
and  the  balance  by  other  public  agencies. '  Eighty-five  (85)  per  cent 
of  public  ownership  is  in' the  TTestern  regions  and  includes  about 
75,000,000  acres  of  national  forest..  Acquisition  of  lands  for  national 
forest  in  the  Eastern  regions  did  not  start  until' 1899.   The  largest 
ares,  of  publicly  owned  .commercial  forest  land  is  in  the  Pacific  Coast 
region,  amounting  to  34  per  cent  of  the  total. 


9813 


-32- 

Srxty-three  (63)  per  cent  of  the  total  pulalicly  owned  area  consists 
of  saw  timber,  16  per  dent  cordwood,  and  21  per  cent  restocking  area. 
The  greatest  publicly  owned  saw-timber  acreage  is  in  the  Pacific  region, 
followed  by  the  South  Rocl'Cy  and  the  North  Rocky  Mountain  regions.   The 
public  owns  a  little  over  10  per  cent  of  the  total  cordwood  axeas  and 
about  the  same  per  cent  of  the  restocking  area. 

2.   Ownership  of  Saw  Timber  Stand 

a.  Industrial  Ownership.  (*) 

G-enerally  speaking,  the  saw-timber  industrially  owned  is  the  best 
and  most  accessible.   It  includes  52  per  cent  of  the  total  saw-timber 
stand.   Sixty-six  (66)  per  cent  of  the  industrial  saw  timber  is  in  the 
Pacific  Coast  region,  consitituting  55  per  cent  of  all  classes  of  owner- 
ship in  that  region.   The  percentage  of  industrial  to  all  classes  of 
ownership  in  the  various  regions  is  as  follows;  New  England,  82  per 
cent;  Middle  Atlantic,  53  per  cent;  Lake,  61  per  cent;  Central,  48  per 
cent;  South,  59  per  cent;  Pacific,  55  per  cent;  North  Rocky  Mountain, 
27  per  cent;  and  South  Rocky  Mountain,  8  per  cent. 

Industrial  ownership  in  the  United  States  as  a  v/hole  is  divided 
into  86  per  cent  softwood  and  14  per  cent  hardwood  ownership,  although 
in  the  Eastern  regions  the  ownership  is  52  per  cent  softwood  and  48  per 
cent  hardwood. 

Next  to  the  Pacific  Coast,  industrial  ownership  of  saw  timber  is 
greatest  in  the  South,  accounting  for  17  per  cent  of  the  total.  New 
England  follows  with  5-1/2  per  cent  of  the  total,  and  the  North  Rocky 
Mountains  third  with  4-1/2  per  cent.   The  smallest  industrial  ownership 
is  found  in  the  South  Rocky  Mountains. 

b.  Parm  Woodland 

Of  the  7  per  cent  of  saw  timber  owned  by  farmers,  55  per  cent  is 
softwood  and  45  per  cent  hardwood.   The  bulk  of  farm  ownership  of  saw 
timber  is  in  the  East,  accounting  for  78  per  cent  of  the  total.  Of 
this  Eastern  group,  the  South  leads  in  farm  ownership,  with  39  per  cent 
of  the  total;  the  Pacific  region  is  next,  with  20  per  cent;  and  the 
Central  region  third,  with  14  per  cent. 

c.  National  Forests 

The  national  forests  claim  33  per  cent  of  the  total  saw-timber 
stand,  of  which  99  per  cent  is  softwood  and  1  per  cent  hardwood. 
Ninety-eight  (98)  per  cent  is  located  in  the  West.   The  national  for- 
ests are  concentrated  in  the  Pacific  region,  which  holds  65  per  cent 
of  the  total.   The  North  and  South  Roclcy  Mountain  regions  contain  34 
per  cent.  This  leaves  only  about  1  per  cent  for  the  rest  of  the  United 
States,  of  which  56  per  cent  is  in  the  South,  18-1/2  per  cent  in  the 
Lake  region,  17  per  cent  in  New  England,  7  per  cent  in  the  Central  re- 
gion, and  about  2  per  cent  in  the  Middle  Atlantic  region. 

(*)   Chart  III  and  Table  III 


-53- 

d.  Other  federally  Owned  or  Managed  Forests 

Appi-oxim,itely  ^  .,'x    cent  of  the  total  saw-tiiaber  stand,  largely- 
Indian,  is  ledei-ally  owned  or  managed  in  addition  to  the  national  for- 
ests.  It  is  almost  entirely  softwood  and  all  but  2  per  cent  is  located 
in  the  West.   Seventy-six  (76)  per  cent  is  in  the  Pacific  region,  V7ith 
the  balance  scattered.  New  Bn/j;iand  does  not  nave  this  type  of  ownership. 

e.  State,  Coionty  and  Municipal  Oivnership 

Approximately  3  per  cent  of  the  total  saw  timber  is  -onder  state, 
county  or  municipal  ownership.   Of  txiis  amount,  97  per  cent  consists 
of  softwood.   Ninety-three  (93)  per  cent  of  the  saw  timber  so  ovvned  is 
located  west  of  the  Great  plains  —  62  per  cent  m  the  Pacific  region; 
27  per  cent  in  the  North  Rocky  Mountain  region;  about  3  per  cent  in  each 
of  the  South  Rocky  Mountain  and  Ne'v  England  regions;  and  the  balance 
scattered. 

3.  Average  Stand  of  Saw  Timber  per  Acre 

One  of  the  principal  factors  affecting  the  cost  of  logging  is  the 
density  of  stand,  or  amount  of  timber  per  acre  on  the  forest  area. 
Adverse  factors  sometimes  offset  the  advantage  of  dense  stand,  such  as 
rough  topography,  swamps,  etc.,  but  in  general  the  forests  of  greatest 
density  can  be  logged  at  the  lov/est  costs. 

Table  I''^  shows  the  stand  per  acre  on  saw-timber  areas.   It  will  be 
noted  that  the  heaviest  stands,  33,127  feet  per  acre,  are  found  in  the 
Pacific  region  and  are  under  industria,l  ownership. 

In  all  classes  of  ownershio  the  Pacific  region  likewise  leads  in 
density,  with  an  average  stand  of  23,598  feet  per  acre;  whereas  the 
Central  region  ranlcs  last,  with  1,651  feet  per  acre.  As  the  Central 
region  contains  over  90  per  cent  hardwood  (*)  and  is  located  in  the 
heart  of  a  large  hardwood  consuming  section,  the  conversion  of  relatively 
small  trees  of  1o\y  yield  per  acre  into  saw  timber  is  normally  profitable. 

The  average  stand  per  acre  for  all  classes  of  ownership  throughout 
the  saw-timber  area  is  8,841  feet.  Publicly  owned  timber  lands  lead  in 
stand  per  acre,  with  10,393  feet,  followed  by  industrially  owned  lands, 
with  9,551  feet,  and  farm  woodlands,  with  3,456  feet.   The  relatively 
low  stand  per  acre  on  farm  woodlands  is  probably  due  to  the  continuous 
selective  cutting  on  such  lands,  partly  for  farm  use. 

4.  Forest  G-rowth  and  Drain 

a.   Forest  Growth 

In  the  following  discussion  computations  of  growth  are  based  upon 
past  standards  of  forest  products  utilization.   In  the  case  of  saw 
timber  it  refers  primarily  to  those  species  possessing  certain  physical 


(*)   Chart  III  and  Table  III 
9813 


_  .  .  -34- 

and  mor-iia.nical  qualities  which  have  appecled  to  consiiraers,  so  long  as 
they  could  be  secured  at  reasonable  competitive  prices.   Future  require- 
ments may  call  to  a  considerable  extent  i^or  species  which  will  produce 
the  greatest  volume  of  v/ood  in  the  shortest  possible  time.   Some  of  the 
most  rapid  growing  species,  at  present  considered  as  "inferior,"  may 
well  be  in  the  desired  class.   Accordingly,  the  growth  data  given  may 
prove  to  be  considerably  belov?  present  estinates. 

The  total  current  growth  of  usable  material  on  the  commercial  for- 
est areas  of  the  United  States  is  estimated  to  be  8,912,000,000  cubic 
feet.   (♦)  This  is  a  "net"  estimate,  which  allows  for  so-called  "nor- 
mal" losses  from  decay,  insects,  etc.  Abnormal  or  unusual  losses  from 
disease  or  insect  epidemics,  fires,  hurricanes,  etc.,  are  taken  care  of 
in  the  estimates  of  drain,   (**) 

Of  the  total  current  annual  growth  the  South  leads  by  a  wide  mar- 
gin, claiming  54  per  cent  of  the  total.   This  is  accounted  for  by  the 
fact  that  the  Ssuth,  besides  possessing  some  of  the  best  timber-grow- 
ing conditions  and  fastest  growing  species,  contains  largely  second 
growth  or  young  timber  that  is  putting  on  volume  at  a  much  more  rapid 
rate  than  trees  in  regions  containing  mature  or  over-mature  forests. 
The  Central  region  ranks  second,  v^ith  over  12  per  cent;  the  Lake  region 
third,  with  7  per  cent;  and  the  Middle  Atlantic  region  foiirth,  with 
slightly  less  than  7  per  cent. 

Softwood  accounts  for  55  per  cent  of  the  total  growth,  62  per  cent 
of  which  is  in  the  South.   The  Pacific  Coast  ranlcs  next  in  softwood 
growth,  with  ©ver  7-1/2 -per  cent  of  the  total,  followed  by  the  North 
Rocky  Mountain  region  with  4-1/2  per  cent,  ajid  the  South  Roclr,'-  Mountain 
region  with  2  per  cent. 

The  South  also  leads  in  hardwood  growth,  followed  by  the  Central 
region,  the  Middle  Atlantic,  and  the  Lalce  region. 

The  comparatively  low  growth  in  the  Pacific  Coast  region,  consti- 
tuting a  little  less  than  8  per  cent  of  the  total,  is  acco-'onted  for  by 
the  fact  that  the  forests  are  largely  matiire  and  over-mature  and  hence 
putting  on  very  little  new  growth,  although  that  region  includes  the 
fastest  growing  species  in  the  United  States.   Only  by  cutting  off  the 
mature  timber  aoid  releasing  the  land  for  reproduction  can  the  potential 
grovTth  capacity  of  the  Pacific  Coast  region  be  realized.   The  same  situa^- 
tion  applies,  but  to  a  lesser  extent,  to  all  forests  west  of  the  Great 
Plains. 

The  total  United  States  saw-timber  growth  amounts  to  11,731,000,000 
feet  board  measure,  of  which  the  South  has  58  per  cent,  followed  by  the 
Pacific  Coast  with  15  per  cent.  New  England  with  5-1/2  per  cent,  and 
the  Central  region  with  approximately  the  same.   The  Lalce  region  has 
the  smallest  annual  saw-timber  growth,  almost  entirely  laardwood. 


(*)   Chart  IX  and  Table  IX 

(**)  Table  VII 

9813 


-35-   ... 

Greatest  hardwood  saw-ti,iit)er  growth  is  in  the  South,  or  54  per  cent  of 
the'  total  hardwood. growth.   The  Central  region  is  next  with  20  per  cent, 
follov/ed;by_  the  fiddle  Atlantic  region  with  appror.imately  12  per  cent, 
arid  New  Engljjid  with  neerly  9  per  cent.  , 

b.   Porest  Drain 

In  addition  to  the  supply  oi  availat)le  timber,  the  rate  at  which 
it  is  "being  removed  and  reproduced  constitutes  a  major  problem  of  forest 
management,  and  is' of  prime  importance  in  taic  balancing  of  forest  ac- 
count s . 

This  removal,  or  drain  as  it  is  commonly  called,  is  brought  about 
in  many  ways,  chiefly  'oy   cutting  for  corainercial  purposes,  by  fire,  dis- 
ease, etc.  For  purposes  of  this  report,  the  average  annual  drain  for 
1925-1929  has  been  used  unless  othervrise  specified,  because  statistics 
en  average  drain  for  subsequent  years  are  available  only  for  l\imber. 
Obviously,  the  use  of  only  Imnber  data  would  distort  drain  figures,  for 
lumber  comprises  more  than  One-half  of  the  total  forest  products'  drain 
and  the  forest  products'  drain  accounts  for  89  per  cent  of  the  total 
drain.   The  yeaj.-s  1925-1929  cover  a  period  of  generally  ercpanding  busi- 
ness, including  the  peaic  lumber  production  year  of  the  past  -24  years. 
Each  of  those  five  years  shor.'ed  a  higher  production  thein  at  any  time  dur- 
ing the  past  twenty  years,  .with  a  few  exceptions.  Farther,  there  was  a 
general  decline  in  lumber  production  from  1925-1929  in  spite  of  a  gen- 
eral increase  in  the  production  of  commodities  of  a  covapetitive  nature. 

The  Luiaber  Industry  has  no  assurance  that  in  the  future  the  for- 
ests will  be  utilized  exactly  as  .in  the  past.  On  the  contrary,  a.  new 
conception  seems  to  be  lorning  as  to  what  products  shoiild  be  produced. 
For  instance,'  clear  bpards  are  possibly  no  more  valuable,  and  perhaps 
less- valuable,  than  built-up  pl^r'Vood'.   Such  substitution  of  plywood  for 
clear ■ boards"  would  mtJce  presently  available  mature  timber,  suitable  for 
vekeers,"  sufficient  to  supply  the  demands  of  a  market  thirty  times  as 
large  as  the  one  which  now  exists  for  clear  boards.   Thus,  there  may  be 
a  potential  surplus  of  clear  boards.  Farther,  large-dimension  timbers 
can-  not  now  successf-ully  compete  with  steel  or  reinforced  concrete  for 
many  purposes. 

Clearly,  new. developments  in  the  utilization  of  forest  products 
have  effected  a  decre^.sed  demand  for  tiiose  products  which  in  the  past 
have  formed  the  bulk  of  requirements ,  and  at  the  same  time  these  develop- 
ments arc  making  available  a  very  much  larger  volume  of  raw  material 
than  would  have  otherwise  been  the  case.   In  brief,  any  anticipation  of 
what  future  consumers  ox'  forest  products'  will  demand  must  be  predicated 
upon  present  conditions  rather  than  upon  those  of  the  past.  Any  dis- 
cussion of  forest  drain  must  taice  into  consideration  this  changing  market. 

It  is  common  practice  in  describing  the  relation  of  growth  to  drain 
to  make  this  comparison  without  taking  into  consideration  the  large  sup- 
ply of  standing  timber  which  must  in  many  regions  be  removed  before  the 
full  possibilities  of  growth  can  be  attained.  Again,  the  relationship 
of  gross  drain  to  total  stand  is  frequently/  stressed  without  reference 
to  either  ciurent  annual  growth  or  potential  growth.   The  first  prac— 

C 


-36- 

tice  overlooks  the  fact  that  the  production  of  any  comniodit-/  is  ordinar- 
ily governed,  so  far  as  financial  exigencies  will  -erinit,  by  the  amount 
of  stock  of  raw  material  in  inventory.   The  second  assumes  tnat  the  for- 
est is  static,  that  it  consists  onl/  of  what  can  "be  seen  and  meosured  at 
the  present  time. 

In  order,  therefore,  to  give  proper  perspective  to  the  problem  of 
dram,  a  compaxison  of  forest-products  drain  and.   forest  growth  in  relar- 
tion  to  the  available  stand  of  timber  is  here  presented.   Thus  the  pos- 
sible life  of  our  forest  resources  may  be  predicted  wxth  so  le  degree  of 
accuracy.  (*)       , 

The  upper  half  of  Table  IX  (a)  shows  forest  products  expectancy, 
assuming  that  the  lumber  drain,  otaer' forest-products  dr^in,.  and  drain 
occasioned  by  fire,  insects,  disease,  etc. ,  will  continue  indefinitely 
at  the  1925-1929  rate.  'The  lower  half  of  the  table  is  based  upon  the 
.;assumption  that  the  drain  of  lumber  and  other  forest  products  will  con- 
tinue at  the  1929-1934  rate;  and  that  fire,  insect  and  disease  drain  will 
continue  at  the  1925-1929  rate.   This  latter  drain  should  steadily  de- 
crease as  methods  of  control  are  perfected.   Ho\vever,  since  the  rate  at 
which  this  reduction  will  proceed  is  unknown,  past  experience  must  neces- 
sarily be  used. 

Considering  the  entire  commercial  forest  area  v/ithout  regard  to 
the  ultimate  use  or  form  of  its  products  and  assuming  no  increase  in  the 
.current  annual  growth,  it  is  estimated  that  the  average  1925-1929  drain 
of  all  forest  products  can  be  maintained  without  total  depletion  for  65 
years  in  the  Unitf-d  States  as  a  whole.   However,  d\aring  this  65-year 
period,  growth  will  increase  as  additional  growing  lands  are  released 
by  the  cutting  of  mature  timber  ojid  improved  forestry  practices  are  put 
into  effect.   (**)   On  this  latter  basis  it  is  estimated  that  growth  will 
exceed  drain  to  such  a  degree  that  a  perpetual  supply  of  forest  products 
at  the  1925-1929  rate  of  drain  will  be  available,  even  with  a  substantial 
increase  in  consumption.   It  should  be  re-emphasized,  however,  that  this 
prediction  refers  to  the  total  vdlvime  of  wood  available  for  the  total 
volume  of  wood  requirements  and  not  to  certain  specialized  products  such 
as  lumber. 

As  for  the  saw-timber  area  only  and  considering  only  saw-timber 
size  trees,  assuming  the  1925-1929  rate  of  drain,  and  that  growth  will 
continue  at  its  present  rate,  a-35-yeaxs'  supply  of  saw  timber,  accord- 
ing to  c-urrent  manufacturing  practices,  is  available,  varying  from  a 
7-years'  supply  in  the  Oentrai'  region  to  a  perpetual  supply  in  the  South 
Rocky  fountains.  Allowins~  for  increased  growth  as  mature  forests  are 
removed,  hov/ever,  and  applying. the  same  assumotions  just  cited,  there  is 
a  sufficient  supply  for  49  years,  with  a  minimum  of  8  years  in  the 
Central  region. 

(*)  Table  IX  (a),  Comparison  of  Forest  Products  Drain  and  Forest  Growth. 

(**)  Code  of  Fa.ir  Competition  for  tne  Lumber  and  Timber  Products 
Industries;  Forest  Practice  Rules. . 


9813 


-o7- 

Accepting  the  above  assuiniDtions  of  drain  nd  grov;th,  it  is  ap- 
■oarent  that  a  shifting  of  lun"ber  ^production  from  certain  regio  is  to 
ot.iers  is  indicated.   This  vill  autOTi..tiCc..ll  ^  tako  place,  as  it  has  in 
the  past,  as  available  supplies  of  sav?  timber  become  temporrj-ily  e:i-r.,... 
hausted.  On  the  other  h.nd,  the  conversion  of  increasing'  quantities 
of  trees  too  smdll  for  saw  timber  into  products  v.-hic-i  directly  compete 
v'ith  lumber,  aay  occasion  a  shift  to  ns'.v  i70od-manuf acturing  enterprises 
in  certain  regions  rather  th,..n  a  shift  to  ,ne-v7  saw-timber  fields. 

The  data  in  the  upper  half  of  Table  IX  (a),  b'\sed  upon  the  1925- 
192S  average  drain,  is  ordinarily  ta]<:en  as  an  indication  of  the  maicimum 
probable  relationsnip  of  for-st  drain  ojid  growth  to  the  supply  of  stand- 
ing tiraber  or  to  the  inventor-'-  of  raw  material  from  which  forest  pro- 
ducts are  derived.  A  uuch  sounder  analysis  is  possible  from  a  consider- 
ation of  the  lower  half  of  Table  i:Z   (a),  in  which  the  probable  drain  of 
forest  products  is  esti  .ateil  to  be  the  average  of  the  1S29-1934  period, 
with  the  exception  of  the  fire,  insect  and  disease  drain  (1925-1929). 

The  lower  h;,lf  of  Table  IX  (a)  snows  tnat  on  the  entire  commercial 
forest  arec  a  volvjne  of  j-aaterial  equal  to  tne  total  volume  of  sill  forest 
drains  will  be  avauall'-  available  for  over  700  years,  even  though  no  in- 
creased grov.'th  io  ta'cen  into  conf.ideration.  Tilth  anticipated  increased 
gro\/th,  it  appears  that  nearry  twice  the  1929-1934  drain  can  be  perpet- 
ually maintained. 

On  saw- timber  areas  onl-  and  considering™  no  increased  growth  as 
mature  timber  is  re-ioved,  tne  sav/-ti)nber  size  trees  will  sustain  the 
1929-1934  drain  for  an  averaj^e  of  73  years,  './ith  a  minimum  of  15  years 
in  the  Central  region.  With  anticipated  increased  growth,  the  supply  of 
saviT  timber  is  expected  to  l;.'st  204  years  in, the  Unitea  States  as  a  whole, 
varyin;-::  from  19  years  in  the  Central  region  to  a  perpetual  supply  in 
New  England,  the  I  addle  Atlantic  section  ;nd  the  South  Hoclcy  Liountains. 
Before  the  expiration  of  204  years,  and  if  sound  forest  practice  pro- 
visions such  as  v;ere  provided  in  the  Code  axe  carried  out  in  the  megji- 
time,  it  csjx  be  confidently  er.:pected  that  the  forest  ledger  will  be  per- 
manently 'balanced  *ith  respect  to  supply  and  demand. 

In  view  of  this  prediction  it  night  well  be  contended  that  the 
timber  supply  problems  of  forest  areas  and  forest  industries  are  en- 
tirely solved  tnd  require  no  further  cooperation  between  the  industries 
and  the  public.   The  probleas  are  not  that  simple.   If  liquidation  of 
forest  properties  existing  prior  to  the  Lumber  Code  were  allowed  to  con- 
tinue indefinitely,  at  least  some  of  the  following  results  -night  be  ex- 
pected during  the  ne::t  few  decades,  or  until  the  cut-over  areas  in  cer- 
tain regions  had  had  in  opportunity  to  recuperate; 

(1)  A  shortage  m  supply  of  certain  of  the  most  desirable  species 
or  grades  and  the  necessit3'-  of  either  subistituting  other  species  or 
grades  or  other  materials  for  them,  or  going  without  d^rring  the  period 
of  adjustjnent. 

(2)  A  continuation  in  certain  forest  regions  of  the  cutting  of 
immature  timber  during  the  period  of  its  greatest  volume  gro-./th,  there- 
by reducing  the  wood-producinr  capacit;''  of  those  regions. 

9813 


-38-      .   . . 

(3)  Gradually  increasing  cost  of  forest  products  as  the  most  acces- 
sible and  best  quality  material  is  removed.   This  in  turn  decreases  con- 
sumption and  forces  a  liquidating  industry  to  again  reduce  its  cc-^ts 
through  the  conversion  of  only  the  best  or  most  available  material,  with 
a  further  depletion  of  the  growing  stock.  Thus  a  vicious  circle  is  es- 
tablished which  makes  the  competitive  problems  of  the  industry  more  acute, 
prevents  the  maximum  utilization  of  the  forest  resources,  and  interferes 
with  the  economic  stability  and  general  prosperity  of  the  entire  country. 

(4)  A  shifting  of  forest  industries  from  locations  of  scarcity  of 
raw  materials  to  new  fields,  or  th^ir  tenporar-/  discontinuance. 

(5)  A  further  concentration  of  production  on  the  Pacific  Coast  and 
in  the  South. 

It  is  a  basic  premise  that  both  the  public  and  the  forest  indus- 
tries have  an  interest  in  seeing  that  ample  supplies  of  forest  products 
are  continuously  available  at  reasonable  prices,  and  that  stability  of 
employment  through  industry  prosperity  is  maintained.   The  removal  of 
all  possible  obstacles  to  that  result  is  therefore  the  obligation  of 
both  the  industry  and  the  public. 

Based  upon  the  evidence  of  migrating  forest  products  industries, 
rapidly  increasing  populations  and  consumption,  and  a  rather  sketchy 
kno^Tledge  of  potential  forest  areas,  stands  and  growth,  it  was  but  na^- 
tural  that  a  considerable  number  of  persons,  some  35  to  40  years  ago, 
should  raise  the  cry  of  an  impending  timber  famine  which  has  since  large- 
ly resulted  in  the  moulding  of  public  opinion  and  in  the  fixing  of  public 
policy  toward  forest  resources  and  those  industries  dependent  upon  them. 
It  seemed  logical  that  the  current  rate  of  consumption  of  forest  pro- 
ducts, which  had  developed  during  a  period  when  wood  was  cheap  and  plenti- 
ful and  housing  and  all  industry  was  expanding,  should  continue  indefin- 
itely.  The  "timber  famine"  idea  caught  the  popular  imagination  and  was 
at  least  partly  responsible  for  the  establishment  and  support  of  the 
national  forest  system  and  the  other  Federal  and  State  measures  affect- 
ing the  conservation  of  timber  resources. 

In  many  regions  the  time  at  \¥hich  the  timber  resources  were  es- 
timated to  disappear  has  long  since  gone  by,  yet  forest  industries  are 
still  much  in  evidence.   The  three  factors  which  vrere  eventually  largely 
responsible  for  dispelling  the  belief  that  a  timber  famine  was  impending 
were: 

(1)  A  general,  declining  lumber  consumption  during  the  past 
two  decades,  not  only  per  capita  but  total. 

(2)  Inaccurate  data  covering  the  total  available  supply  of 
standing  timber,  the  interchange  of  species  for  given  uses, 
and  particularly  the  ability  of  the  forests  to  renew  them- 
selves after  removal  of  the  mature  timber  with  little  and 
inexpensive  assistance  from  man. 

(3)  An  evolution  in  the  method  of  utilizing  the  raw  material 
through  its  manufacture  into  veneer  and  plywood  or  its 
conversion  first  into  pulp  and  then  into  pressed  boards 

9813 


-3S- 

and  other  products  whereby  a  greater  arao-ont  of  finished 
prodiAct  rri;ay  Tdg  sec^jxed  from  the  same  vol-ume  of  timber 
than  if  sawn  into  lumber.  (*) 

Although  any  prediction  o"  future  forest-products  requirements  is 
largely  speculative,  sufficient  facts  are  availaole  to  clearly  indicate 
that  a  "timber  famine"  is  improbable.   This  does  not  mean  that  reasonable 
care  should  not  be  taken  of  tne  present  forests  and  commercial  forest 
areas,  both  in  the  interest  of  the  industry  and  the  oublic,  nor  that  local 
shortages  in  supply  are  not  likely  to  occur  temporarily  in  certain  regions. 
It  does  mean,  hov^/ever,  that  the  forest  problem  in  the  United  States  as 
a  whole  is  not  one  of  timber  shortage  but  rather  one  of  proper  protection 
and  management  of  the  forested  areas,  including  adjustment  of  production 
of  forest  products  bet-;^'e(;n  and  ■'dthin  the  various  forest  regions,  so  as 
to  secure  the  best  results  from  e::isting  forest  grooving  stock.   The  area 
now  covered  with  commercial  forests  and  likely  to  renain  available  for 
that  purpose  is  more  thsn  sufiicient  to  meet  an/  predictable  future  de- 
mand. 

Aside  from  the  prudent  conversion  of  forests,  to  whicn  the  "timber 
famine"  idea  soecificallr  applies,  there  are  other  and  important  problems 
that  must  be  taJren  into  consideration  in  any  national  conservation  policy. 
These  include  the  protection  of  watersheds  where  forests  or  other  equally 
or  moie  suitable  cover  m;-3y  exert  i::iporta.nt  influences  on  absorption  and 
run-off;  recreation,  and  the  orotection  of  fish  and  game.   Since,  however, 
these  values  apply  onl/  indirectly  to  the  industrial  use  of  forests,  and 
since  the  industrial  forsst  user  is  interested  in  their  maintenance  no 
more  than  is  the  average  .?;ood  citizen,  tney  do  not  constitute  a  part  of 
the  present  industrial  pict-ure. 

''%i   Value  of  Porests  and  Porest  Land 

a.   Privately  O'-^ned  Lands 

The  total  estimated  value  of  land  on  which  the  comuercial  privately 
owned  forests  of  the  United  States  are  standin,--  is  a  little  over  $1,000, 
000,000.   (**)  On  this  land  is  timber  with  an  estimated  value  of  $4,759, 
000,000,  or  an  estimated  land  fmd  timber  value  of  about  $5,836,000,000. 

Land  values  are  estimated  at  from  $2  to  $4  per  acre,  with  an  average 
of  $2.72;  saw  timber  at  from  $1.58  to  $15.55  per  M  feet,  depending  upon 
species  end  location;  and  cord-vood  at  from  $0,35  to  $1  per  cord. 

The  average  softv/ood  value  is  estimated  to  be  $3.36  per  M  feet; 
hardwood  $6.34. 


(*)   If  consumption  had  continued  at  the  1S05  or  even  at  the  1915-1916 
rate,  and  if  fire  protection  had  been  longer  delayed  and  less 
readily  accepted,  a  timber  famine  would  have  been  in  sight  at  the 

present  time. 

(**)  Table  XI 
9813 


-40- 

Of  the  tnt«i  Xand  and  timber  value,  33-1/2  per  cent  applies  to 
fx>r-crs-rs  in  the  South.   The  Pacifi-c  Coast  region  comes  next  with  31-1/2 
per  cent,  the  Central  region  next  with  a  little  over  10  per  cent,  fol- 
lowed by  ilew  England  with  nearly  8  per  cent,  the  Lalce  region  with  7  per 
cent,  and  the  Middle  Atlantic  with'  6-1/2  per  cent.   The  forests  in  the 
South  Rocky  Mountain  region  are  of  least  value,  being  valued  at  less  than 
1  per  cent  of  the  total. 

b.   Publicly  Owned  Lands 

It  is  impossible  to  estimate  closely,  from  data  available,  the  val- 
ue of  publicly-owned  forest  lands  and  timber.  Questions  of  relative  ac- 
cessibility, species,  stand  per  acre  and  quality  of  the  land  itself  for 
other  use  if  the  forests  were  removed,  all  enter  into  the  pict-ure. 
However,  certain  facts  are  known  and  from  them  a  general  idea  may  be 
obtained. 

Publicly-owned  or  controlled  lands  include  an  area  of  98,559,000 
acres.  (*)  These  lands  contain  672,636,000,000  feet  of  softwood  and 
6,878,000,000  feet  of  hardwood  saw  timber  (**)  as  well  as  175,424,000 
cords  of  cordwood.   (***) 

Tor  the  purpose  of  estimate,  publicly-owned  lane,  values  are  figured 
at  $2  per  acre  (****),  softwood  st\iinpage  at  $2.50  per  M,  hardwood  stump- 
age  at  $5  per  M  and  cordwood  at  $0.50  per  cord.   On  this  basis  the  land 
value  would  be  $197,318,000;  softwood  timber,  $1,681,590;  hardwood  tim- 
ber, $34,390,000;  and  cordwood,  $87,712,000;  or  a  total  value  for  pub- 
licly-owned land  and  timber  of  $2,001,010,000. 

Thus,  the  total  value  of  all  commercial  forest  land  and  timber, 
regardless  of  ownership,  is  estimated  to  be  slightlv  less  than  $8,000, 
000,000. 

6.    Stumpage  Values 

For  several  years  the  United  States  Forest  Service,  in  cooperation 
with  the  Bureau  of  the  Census,  has  been  collecting  data  on  stumpage 
transfers.   In  some  years  and  in  some  individual  states  the  volume  of 
such  transfers  has  not  been  sufficient  to  accurately  determine  true 
values.  Accordingly,  records  for  the  years  1924-1933  have  been  averag- 
ed to  secure  estimated  stumpage  values  of  softwoods  and  hardwoods  by 
states  and  regions.   (*****) 


(*)       Table  I 

(**)      Table  III 

(***)     Forest  Service,  Department  of  Agriculture,  A  "ational  Plan 
for  American  Forestry. (1933) .  Senate  Document  No.  12, 
Table  9,  p.  188. 

(****)    Qj^  ^Yi^Q   basis  of  value  for  grazing. 

(*****)   Table  X 


-41- 
/ 
During  that  perioicL  the  total  volume  of  sales  reported  amoxinted  to 
104,784,859,000  feet  bpard  measure,  for  vzhxch  a  total  price  of  $392, 
097,586,  or  $3.74  per  M  feet,  was  received. 

By  regions,  the  highest  average  price  was  received  in  New  England, 
namely, '$6.64.   The  Middle  Atlantic  w-s  next  with  $6.55,  then  the  Lake 
region  with  $6.35,  the  ;Central  region  with  $6.14,  the  South  with  $5.43, 
and  the  Pacific  Coast  and  North  Rocky  Mountain  regions  with  $2.97  and 
$2.96,  respectively.   Not  enough  sales  were  reported  from  the  South 
Rocky  Mountain  region  to  provide  a  reliable  figure. 

The  downward  trend- in  sturapage  value  during  the  past  several  years 
is  quite  marked.   (*)  During  the  period  from  1928  to  1933  reports  of 
total  stumpage  sales  show  that  soft'.700d  stiunpage  dropped  27  per  cent; 
hardwood  stumpage  32  per  cent;  and  the  aggregate  sales  of  "both  hardwood 
and  softwood  stumpage  30  per  cent. 

The  above  percentages  ba,sed,  as  they  are,  upon  a  large  volume  of 
sales  throughout  the  timbered  states,  should  be  fairly  reliable  as  they 
iron  out  the  discrepancies  aropearmg  in  individual  state  reports.  Each 
stumpage  transaction  has  peculiarities  which  make  averaging  difficult. 
The  value  of  a  given  block  of  timber  depends  upon  its  location  with  res- 
pect to  market,  topography,  soil  and  climatic  conditions,  species,  tim- 
ber stand  per  acre,  and  several  other  factors.   Thus,  the  averaging  of 
soft\70od  and  hardwood  stumpage  sales  within  individual  states  and  by 
individual  j^ears  is  subject  to  considerable  criticism. 

In  a  few  states,  however,  the  number  and  voluiiie  of  stumpage  sales 
have  probably  been  sufficient  to  justify  averaging  over  a  three-year 
period  (**),  and  these  may  be  considered  as  representing  current  values 
of  accessible  stumpage. 

7.   Concentration  of  Timber  Ovmership 

As  a  result  of  the  U.  S.  Senate  and  House  resolutions  enquiring 
about  the  high  price"  of  lumber  ond  the  possibility  of  combinations  of 
lumber  manufacturers  and-  timber  or/ners  in  restraint  of  trade,  the  Bur- 
eau of  Corporations'  of  the  Department  of  Commerce  and  Labor  conducted 
an  investigation  from  1907  to  1910.   This  investigation  included  the 
amount  of  standing  timber,  timber  ownership  in  important  regions  and 
land  holdings  of  large  timber  owners.   (***) 

Although  the  investigation  TwaS  made  about  25  years  ago,  it  is 
believed  that  the  principal  consolidations  of  tiniber  ovmership  had  been 


(*)    Table  X  (a) 

(**)   Table  X  (b) 

(***)  Bureau  of  Corporations,  Department  of  Commerce  and  Lebor, 
The  Lumber  Industry,  Part  I,  issued  January  20,  1913,  and 
Parts  II  and  III,  July  13,  1914. 

9813 


.  .-42- 

completed  prior  to  tnat  time.   Certainly  for  tne  oast  several  years, 
with  decreasin,:;-  stumpage  -values,  the  tendency  has  been  to  break  up  large 
concentrations  through  sale,  often  forced,  or  to  liquidate  the  timber  by 
increasing  production. 

Considering  the  industry  as  a  whole,  the.  situation  has  develo-pod 
somewhat  as  follows; 

'In  the  beginning  the  most  available  timber  was  converted;  that  is, 
timber  which  was  located  close  to  market  with  low  delivery  costs,,  timber 
of  high  quality  and  occurring  in  dense  stands,  und.   timber  found  under 
■  conditions  of  easy,  logging  and  manufacturing.   All  of  this  meant  low  op- 
erating costs.   The  gradually  increasing  value  of  stumpage  over  a  long 
period  indicated. to  speculative  lumbermen  -that  this  would  continue  in- 
definitely.  Accordingly,  large  investments,  often  far  from  the  then  ex- 
isting market,  \7ere  made  in  standing  timber  v/hich  could  be  retired  only 
through  eventual  conversion. 

As  the  areas  of  virgin  timber ■bega'i  to  fail  in  availability,  new 
forest  areas  were   opened  up  farther' away  from  the  market,  thus  increas- 
ing the  cost  of  delivery  which  in  some  cases  became  as  great  as. the  total 
of  all  other  delivered  costs.   Costs  were  a:lso  increased  as  the  industry 
had  to  go  farther  and  farther  back  in  rougher  country  to  reach  the  timber. 

Thus  the  industrj^  ■.  as  faced  with  two  alternatives  —  either  to  get 
a  higher  price  for  the  product  or  to  reduce  costs.  Both  courses  were 
taken.   The  quality  of  the  product  was  improv.d  through  careful  grading 
and  seasoning,  which  made  it  more  desirable  to  the  consumer.  New,  lower 
cos-t  s.ystem  of  lodging  were  employed.   In  spite  of  these  efforts  the  in- 
creasing cost  of  holding  timber,  due  to  interest,  taxes,  and  other  carry- 
ing charges,  necessitated  a  price  for  the  product  that  permitted  many 
substitute  materials  to  successfully  compete  with  it,  and  made  possible 
the  exploitation  of  young  immature  timber  which  had  been  left  behind  in 
previous  migrations.  '      ■  ■■ 

Up  to  about  1921  to  1923  lumber  jprices  were  generally  appreciating, 
and  thus  compensating  in  part  for  gradually  increasing  costs.  About 
that  time,  however,  the  competition  of  'other  materials  became  acute, 
with  the  result  that  lumber  prices  could  no  longer  be  maintained. 
Furthermore,  stumpage  values  began  to  decline  for  the  first  time  in  his- 
tory.  Thus,  many  units  of  the  industry  faced  v/ith  steadily  mounting  car- 
rying charges  found  themselves  forced  to  a  policy  of  liquidating  their 
surplus  supply  of  timber  almost  regardless  of  cost.  Up  to  the  time  that 
the  Lumber  Code  became  effective  this  policy  was  generally  in  effect. 

The  above  outline  of  industry  development  covers  only  the  general 
long-time  trend.   There  were  many  deviations  from  it.   For  example, 
whenever  a  satisfactory  price  situation  was  attained,  new  manufacturing 
facilities  would  enter  the  production  field,  and  e"isting  ones  would  be 
increased  in  capacity.   Over-production  would  then  inevitably  follow 
with  a  resultant  price  drop,  thus  forcing  the  high-cost  operations  to 
close  down,  and  stay  do',7n,  until  curtailed  production  and  increased 
prices  again  permitted  them  to  compete. 


9813 


All  oif  these  factors  have  plsyed  a  part  in  removing-  txie  iiicent^vt 
to  large  concentrations  of  OT/nership. 

In  view  of  the  above  facts  the  conclusions  of  the  Bureau  of  Cor- 
porations are  of  little  present  application,  although  its  findings  cover- 
ing concentration  were  of  interest  in  shelving  how  mistaken  the  Lumber  In- 
dustry and  the  public  may  be  va  predicting  future  economic  trends. 

The  Bureau  found  that  at  the  time  of  its  investigation  t-,70  rail- 
roads and  their  subsidiaries,  through  land  grants,  and  one  timber  company, 
held  nearly  11  per  cent  of  the  estii.iated  total  privately-owned  timber  in 
the  United  States.   A  large  j-.mount  of  the  railroad  tiiaber  has  since  come 
back  into  public  control.  It  was  estimated  that  the  above  holders,  to- 
gether v/ith  five  others:,  iield  over  15  per  cent  of  the  total  private  timber. 

In  California,  Oregon,  "cshington,  Idaiio,  and  Montana,  it  was  esti- 
mated that  37  holders  o-.7ned  aoproximately  one-half  of  the  privately-owned 
timber  in  that  region. 

In  tne  South  it  vvas  estimated  that  67  holders  owned  39  per  cent  of 
the  long  leaf  pine,  29  ner   cent  of  the  c-'press,  19  per  cent  of  the  short 
leaf  8Jid  loblolly  pine,  and  11  oer   cent  of  the  hardwoods. 

In  the  Lake  States  it  was  estimated' that  215  holders  owned  65  per 
cent  of  all  the  timber. 

Uo  records  are  available  to  determine  the  present  degree  of  owner- 
ship concentration,  but  experience  during  the  past  several  years  has 
shown  that  it  is  not  noi;  a  material  factor  in  the  economic  problems  of 
the  industry. 

C    TH2  PHOBLEi/i  0?  HOLDIJG  TIi.BER  L.\iID 

The  cost  of  holcing  timber  land  includes  administration,  interest 
on  money  borrowed  to  acquire  the  land,  fire  -no.  other  protection  expend- 
itures, and  taxes,   i^lo  data  are  available  on  administrative  costs,  and 
are  incoirplete  on  the  balance.  However,  it  is  possible  to  roughly  ap- 
proximate the  theoretical  annual  burden  on  the  forest  products  industries 
through  their  sav/  timber  and  saw  timber  holdings,  as  follows: 

Interest  on  indebtedness  $  63,122,835.00 

Fire  protection 2,541,391.15 

Taxes   40,470,862.00 

$106,135,088.15 

The  Lumber  Industry  obviously  does  not  pa3''  the  annual  bills  for 
all  forest  products  mdustri  :s.   However,  it  produces  approximately  50 
per  cent  by  volume  of  all  forest  products  (*)  of  every  kind.   Moreover, 
it  is  common  knowledge  that,  as  compared  to  most  other  forest  products 
industries,  the  Lumber  Industry  carries  a  considerably  larger  reserve 


(*)   Table  VIII 
9813 


-44- 

supply  of  timber  to  justify  its  plant  and  railroad  investment.  Therefore 
it  seems  safe  to  assume  tha.t  it  should  stand  at  least  75  per  cent  of  the  - 
expj..i^o  of  holding  the  ".privately  d' -ned  .saw-timber  area.  On  that  basis 
ity  annual  burden  would  be: 

Interest  on  indebtedness  $47,342,126.25 

Fire  protection  1,906,043.36 

Taxes  50,353,146.50 

$79,601,316.11 

Since  conversion  of  timber  into  lumber  must,  in  the  long  run,  be 
relied  upon  to  meet  the-  carrying  charges,  this  annual  cost,  if  charged 
to  lumber  production  per  ivl  feet  would  be: 

Based  upon  1934  production $5.14 

Based  upon  average  1929-1934  production  4.01 

The  bases  for  these  estimates  are  developed  in  the  following 
sections: 

1.   Interest 

The  largest  cost  involved  in  holding  timber  consists  of  the  interest 
on  the  money  invested  in  it.  With  a  total  stand  of  privately  owned  saw 
timber  amounting  to  988,289,000,000  ft.  b.m.  (*),  and  valued  with  the 
land  at  approximately  $4,208,189,000  (**),  interest  at  the  rate  of  6  per 
cent  would  amount  to  $252,491,340  annually. 

It  may  be  contended  that  interest  represents  profit  on  the  invest- 
ment and,  therefore,  has  no  place  in  the  cost  of  holding  timber  and  tim- 
ber land.  This  might  be  conceded  if  the  privately  owned  timber  land  was 
paid  for.  However,  that  is  not  the  case  and  the  interest  on  money  bor- 
rowed to  acquire  and  convert  it  has  to  be  p;:iid  through  conversion  in  the 
long  run. 

Studies  made  in  California  and  the  Southeastern  States  in  1914  (***) 
show  the  following  relationship  of  indebtedness  to  total  investment: 

Ntimber  Total  Bonded   Per  Cent  of 

of                     or       Indebtedness 
Opera-     Total      Other  Indebt-    to  Total 
Region tions  Investment edness Investment 

California  Pine  12  $  19,248,014.32  $  9,029,672.48  46.9 
California  Redwood  18  38,691,393.63  17,139,710.30  44.3 
Southern  Pine     108  137,476,360.63  52,629,210,63      38.3 


(*)    Table  III 

(**)   Table  XIII 

(***)  U.  S.  Forest  Service,  The  Lumber  Industry  in  California,  and 

Timber  Ovmership  and  Lumber  Production  in  the  Southern  Pine 

Region;  unpublished  reports. 


9813 


~^5- 

The  a'oove  fle^irer,,  represent  ins;  pro"ba"bly  the  lar^nst  and  most  im- 
portant operations  in  the  regions  ctiicSicd,  indicate  that  a  sulDstajiticl 
portion  of  the  money  inrested  in  the  entero-rises  in  1914  was  "borrov/ed. 

A  consideratle  portion  of  this  consisted  of  honded  indeotedness 
incurred  larf-i^elj"-  for  the  p-urpo-e  of  acquiring  ti-uher  and  to-  extend 
short  temi  ooligations  over  a  period  of  years.   Such  bonds  were  sold 
with  the  provision  for  a  sinl'ing  fvnd  to  retire  them  within  the  speci- 
fied period.   Us^ially  from  $2  to  $3  per  M  feet  cut  (log  scale)  and  to 
"be  laid  aside  for  a  sinlcing  fond.   Bonds  carried  6  per  cent  interest  as 
a  rule  and  sold  at  from  90  to  98,  thus  making  the  actual  interest  obliga- 
tion 7  per  cent  or  over.   Short  term  notes  sometimes  tore  interest  at 
10  per  cent  or  more. . 

It  is  thus  shovvTi  that  in  1914  the  larger  operators  in  the  United 
States  were  carrying  a  debt  varying  from  38  to  -47  per  cent  of  their 
total  investment,   The  condition  of  the  small  operators  is  unlaiown,  but 
there  is  no  reason  to  believe  that  they  were  in  a  substantially  different 
position  e:ccopt  that  their  obligations  wore  generally''  short  term  end 
their  interest  rates  corresponaingly  higher. 

Statistics  of  Income  from  the  Bureau  of  Internal  Revenue  for  1933, 
covering  6,161  producers  of  irrcst  prodr.cts,  show  that  bonded  debt  ioid 
mortgages  amounted  to  only  17  per  ceat  of  the  depreciated  and  depleted 
capital  assets,  ".To  dataware  available  to  show  other  possible  liabili- 
ties against  the  capital  assets,  nor  is  there  information  on  interest 
rates  now  prevailing  on  indobbedne3s„  Accordingly,  for  the  purpose 
of  this  discussion, ■■ certain  assumptions  are  necessary. 

Tlie  first  is  that  23  per  cent  of  the  present  total  investment  in 
saw-timber  lands  consists  of  indebteduesr.   The  sacond  is  that  this 
indebtediiess  bears  at  least  5  per  cent  interest.   The  th ltd  is  that  the 
Lumber  Industry  pa.ys  the  bij.l  on  75  per  cent  of  the  saw-timber  lands. 
On  this  basis  the  annual  interest  charga  against  the  Lumber  Industry 
would  be  $47,342,126.25  or  $2.28  per  1.1  feet  on  the  1929-1934  production. 

2.  ?iro  Protection  Ports 

Since  public  and  privately-owned  forest  lands  in  certain  regions 
are  intermingled  or  adjacent,  it  is  often  impractical  to  protect  one 
class  without  protecting  the  other.   AccordinglYp  there  has  developed 
the  cooperative  system  financed  jointly  by  both  p-^blic  and  private  in- 
terests, with  the  benefits  spread  over  all  lands  included.   In  alditionj 
there  are  large  blocks  of  public  and  private  forest  lands  not  so  situated 
that  the  cooperative  plan  is  feasible.   These  may  be  protected  by  the 
particular  interest  involved.  Frecuently,  in  addition  to  coo-ocrative 
expenditures,  both  public  and  private  agencies  spend  substantial  amounts 
in  order  to  strengthen  the  protection  of  their  own  lands. 

Porests  are  not  alwa^'-s  foimd  in  solid  blocks,  but  frequently  include 
grazing  and  other  types  of  land.  As  fires  are  no  respecters  of  bounda-rj^ 
lines,  for  the  pixrposes  of  tnis  report  the  protection  of  such  included 
lands  is  considered  a  necessary  and  proper  part  of  the  whole  protective 
effort. 


9813 


-46- 

The  total  annual  ej^Tenditure  for  fire  protection,  both  prevention 
and  suppression,  is  ap;oroximately  $16,400,000,  (*)  or  one  cent  per  M 
feet  on  the  total  stand  of  sa\7  timber  in  the  United  States  regardless  of 
ownership.  Of  this,  $9,049,077.49  is  spent  by  the  Federal  Government 
direct  to  protect  National  Forest,  Indian,  and  national  Park  lands.   The  ' 
bulk  of  this  effort  is  in  the  West  where  the  largest  areas  of  such  lands 
are  located.   The  largest  expenditure  is  in  the  Pacific  region,   33  per 
cent  of  the  total,  followed  b;-  the  I'orth  Eocl:y  Llountain  region,  with^  22 
per  CQnt,  and  the  Lake  region  with  14  per  cent. 

Outside  of  these  straight  Federal  e.-q^enditures  for  the  protection 
of  federal  lands,  there  is  spent  annually  for  cooperative  fire  protection 
approximately  $6,000,000.  Of  this  the  Federal  Governnent  contribiites  32 
per  cent;  the  States  48  per  cent,  and  private  timber  land  owners  the 
balance.   This  cooperative  effort  covers  privatel^z-owned'.  State,  and  some 
Federal  lands  on  the  theory  that  only  through  a  pooling  of  resources  can 
a  satisfactory  job  be  accomplished  and  the  public  interest  in  all  forest 
landsV" regardless  of  ownership,  be  safeguarded.   Such  cooperative  effort 
is  administered  by  the  States.   In  addition,  private  owners  spend  ap-.ro::i- 
mately  $1,300,000  for  the  more  intensive  protection  of  their  own  lands, 
thus  mal-ring  available  approximately  $7,400,000  annually  for  the  protection 
of  private  and  State  lands. 

Of  this  amount  31  per  cent  is  spent  in  the  Pacific  region  alone,  19 
per  cent  in  the  Lake  States,  15  per  cent  in  the  South,  11  per  cent  in  the 
Middle  AtlaJitic  region,  11  per  cent  in  the.  ilorth  Eocl-:y  Mountain  region, 
and  8-1/2  per  cent  in  the  New  Sngltuad  region.  Less  than  1  per  cent  is 
spent  in  the  South  P.ocliy  Mountain  region. 

Charging  the  entire  fire  protection  expense,  outside  of  straight 
Federal  expense,  to  the.  average  Irunbor  production  of  1929-1934,  gives  an 
average  aiinual  charge  per  K  feet  of  $0.37,  varying  from  a  maximum  of 
$2.84  in  the  Middle  Atlantic  region  to  a  minimum  of  $0.07  in  the  South 
Rocl^y  Mountain  region.   It  is  obviously  incorrect  to  charge  the  entire 
cost  of  private  and  cooperative  fire  protection  on  State  and  private  lands 
to  the  Lumber  Industry,  since  other  forest  products  industries  participate 
to  a  considerable  extent  in  some  regions.  ITor  is  the  fact  that  lumber 
constitutes  only  approximately  50  per  cent  of  all  forest  products  produced 
a  safe  guide,  since  the  Lumber  Industry'  is  better  organized,  holds  more 
forest  land,  and  generally  cooperates  to  a  greater  extent  in  any  fire  -oro- 
tection  movement  than  most  forest  industries.   It  is  therefore  assumed 
that  75  T)er  cent  would  better  represent  the  Lumber  Industr:^,'-'s  stake  in  the 
fire  protection  effort.  On  that  basis,  the  cost  per  M  feet  produced 
(average  1929-1934)  woiold  be  $0.28,  varying  from  a  maximum  of  $2.13  in  the 
Middle  Atlantic  region  to  a  mininram  of  $0.05  in  the  South  Eoclsy  Mo-'ontain 
region. 

If  charged  against  the  stand  of  saw  timber  industrially  o\7ned,  the 
anmial  cost  of  the /present  fire  protective  effort  (private  and  cooperative) 
would  be  abou.t  8  mills  per  M  feet  for  the  United  States  as  a  whole,  vary- 
ing from  2  mills  in  the  South  Rocly  Mountain  region  to  $0,135  in  the  Hew 
England,   If  charged  against  the  total  saw  timber  stand  privately  owned, 
which  includes,  induiitrial  and  farm  ownership,  the  averaite  per  M  feet  for 
the  United  States  would  be  7..mills,  varying  from  2  mills  in  the  South' 
Roclcy  Mountain  region  to  $0,058  in  Hew  England. 

(*)  Table  XI. 
9813 


Since  the  forest  products  industries  a'lnually  pay  $2,541,391.15 
of  the  total  private  urA   coopei'^.tive  exaenditurcs  of  Eporoximately  $7, 
400,000,  and  since  the  Lumter  Tndusti^'-'^  sao.re,  is  asp^ined  to  be  75  oer 
cent,  its  annual  expenditure  wouD.d  amount  to  $1,906,043.36,  or  $0,096 
per  M  feet  on  the  average  193-1984'  ■Droduciion. 

The  U.  S.  Forest  Service  estimates  that  coinplete  aiid  adequate  pro- 
tection for  State  and  private  forest  area  ..'ill  cost  $13,381,100.  annual- 
ly.  This  would  involve  protection  of  209,557,758  acres  in  addition  to 
the  280,422,032  acres  now  protected. 

The  proportion  of  protected  to  •'unprotected  State  and  private  for- 
est areas  and  the  degree  of  present  protection  vary  widely  in  different 
forest  regions.   Thus  in  New  England  the  entire  State  and  private  for- 
est area  is  under  some  sort  of  protection,  r.nd  the  forest  industries 
and  the  Federal  and  State  agencies,  are  spending  approxi-nately  $641,453. 
48  oJinually,  or  61  per  cent  of  the  $792,000.  estiuat^d  to  be  needed. 
However,  in  Massachusetts  and  Itliode  Island  more-noney  is  "being  spent 
for  fire  protection  txian  is  believed  a.bsoratel_,^  necessary  in  comparison 
to  the  other  States. 

In  the  Middle  Atlantic  region,  where  nearly  1,430,260  acres  of 
State  and  private  forest  land  are  still  unprotected,  approximately  $808, 
000.  is  being  spent  as  against  needs  for  $955,000.,  or  a  coverrge  of 
about  84  per  cent.   Tne  amount  of  private  expendittjre  in  this  region  is 
relatively  smell. 

In  the  Lak-3  region  as  a  vmole,  where  all  State  and  private  forest 
areas  are  protected  to  some  extent,  e:-:penditur.es  are  82  per  cent  of  the 
amount  needed,  altnoiigh  in  Wisconsin  slightly  more  than  the  renuired 
amount  is  being  spent,  whereas  Minnesota  is  considerably  short  of  its 
needs. 

In  the  Central  region  over  65  per  cent  of  the  State  and  private 
forest  area  is  unprotected,  and  only  16  per  cent  of  the  amount  needed 
is  being  spent  for  fire  protection. 

In  the  Soath,  v/here  only  32  per  cent  of  the  State  and  private  for- 
est area  is  protected,  the  per  cent  of  actual  to  estimated  required  ex- 
penditures is  only  20. 

In  the  Pacific  region,  \7here  fire  risk  is  very  great  and  where 
most  of  the  State  and  priva,te  fore;:t  area  is  under  protection,  the  an- 
nual expenditures  for  fire  protection  are  esti^arted  to  be  approximately 
$2,275,159.02,  as  against  $2.135,0u0.  needed.   Over  60   per  cent  of  the 
total  is  paid  by  private  agencies.   In  Oregon  and  Uashington  more  tnan 
the  estimated  amount  required  is  being  spent. 

In  the  North  Rockj--  MoTintain  region,  another  region  of  high  risk, 
where  approximately  95  per  cent  of  the  State  and  private  forest  area 
needing  protection  is  protected,  .private  expenditures  are  over  one- 
half  of  the  total  expenditures  for  fire  irotcction.  Total  expenditures 
are  approximately  125  per  cent  of  the  amount  estimated  to  be  needed. 


9813 


"48- 

In  the  South  'Rocky   Mountain  region,  v.ith  only  a  nominal  fire  risk, 
about  80  per  cent  of  the  State  ,:  nd  private  forest  ijxoi.   is  "being  pro- 
tected. In  this  re(;;ion  only  $44,100,  is  considered  necessary  for  ade- 
quate protection,  or  less  than  the  ar.aoj.nt  required  for  ,aost  individual 
states.  Abovtt  one-half  of  the  required  aniount  is  "being  spent. 

3.   Taxetion 

The  annual  "burden  of  taj:ation  on  nature  standin,^  timber  is  one  of 
the  most  important  single  factors,  in  stinralating-  the  sale  or  cutting  of 
tira"ber  and  proportionally  influencing  the  manufacture  of  forest  products 

■  without  due  regard  to  current  mar'cet  demand.  Upon  the  solution  of  this 
pro"blem  substantially  depends  the  present  and  future  security  of  ormer- 

•ship  of  privately  owned  timber  as  well  as  the  maintenance  of  reasonable 
balance  between  production  -suid  consumption. 

Late  in  1931  the  Secretary  of  the  Timber  Conservation  Board  re- 
quested the  opinion  of  the  members  of  its  Advisory  Board  on  the  subject 
of  the  timber  taxation.   (*)   The  Advisory  Board  ras  composed  of  22 
leading  authorities  on  the  suliject,  including  foresters,  economists, 
educators,  conservationists  and  executives.   To  the  question  as  to 
whether  state  and  county  tarcation  had  become  a  sufficiently  heavy  burden 
in  enough  regions  and  instances  to  be  an  important  factor  in  determining 
ownership  ajid  management  plans  for  mature  timber,  all  answers  directly 
received  vifere  in  t"ne  affirmative. 

To  the  question  as,   to  ".iiether  ta;:ation  had  in  any   important  degree 
already  hastened  cutting  undesirably,  from  an  industrial  or  community 
vievi-point,  the  replies  were  in  the  affirmative,  although  two  members  em- 
phasized the  IocfI  rather  tiirn  the  national  effect. 

In  January,  1932,  tae  National  Lumber  uanufacturere  Association 
addressed  a  questionnaire  to  prominent  Itunber  producers  throughout  the 
United  States  for  the  purpose  of  determining  the  effect  of  ta:-:ation  up- 
on lumber  production.   (**) 

The  questions  were: 

First:   "I)o  you  think  ta^:ation  is  in  any  important  degree  the 
cause  of  hastening  timber  cutting  undesirably  from  an  indus- 
trial or  community  vie'wpoint?" 

Seventy-three  opera,tors  answered  unqufdif iedly  in  the  affirmative.   One 
answered  "No",  one  "Not  in  this  section",  and  one  "Difficult  to  say." 

Second;   "Plave  you  put  ixny   tiuber  into  production  in  order  to 
carry  tajies?" 

Forty-five  operators  tinswered  "Yes",  ind  27  "No."  Two  operators  answer- 
ing "No"  stated  that  they  owned  no  timber. 

(*)  Timber  Conservation  Board;  Taxation  (Questionnaire  (1931) 

(**)  Table  XIII  (a) 

9813 


-49- 
Third:   "How  much  ca-n&city  to  produce  have  you  added?" 

Of  the  replies  received,  19  indicate!  i.icroased  capacity  aiid  in  several 
cases  specified  the  aiiio-iiiit. 

The  catove  cro'^.s-section  of  industry  and  public  opinion  is  suifi- 
cient  to  indicate  the  serionsnesr  of  the  existijT";  ta:-:  system  in  its  ef- 
fect upon  the  hcindlin^j  of  privately-ovmed  tiirber  lands.   In  adf^ition  to 
the  cuiTent  and  known  tax  'barden,  the  undert?.dnty  of  the  future  offers 
little  enccuragenent  for  tiiaber-land  cwn^^rs.   This  is  illustrated  by 
Table  XIII  (b)  and  the  follo\/ing  suraraa-ry  based  upon  reports  from  '62 
lumber  manuf actiu'ing  companies  owning  ti-iber  aaid  producing  lu.aber  during 
each  of  the  three  years  1909,  1919  and  1929. 


per  per 
Cent  Cent 
In-  In- 
Total      Total                 Per   crease   Per  crease 
Timber    production              M  ft.   from  IJ  ft.    from 
Year   M  ft.  b.m.  M  ft.  bcm.     Gross      Q-.vned   i:.09    &it  1909 

1909   44,504,507  2,051,1G9  $   856,136.47  $.019    $.417 

1919   37,315,154  2,177,278   2, 27;;;,  312.31   .061    221  1.044    150 

1929   30,719,042  2,343,737   2,799,205.80   .,091    379  1.192    186 


The  rfitio  of  increase  since  1929  is  not  known.   At  any  rate  the 
owner  of  timber  lond  faced  witn  a  possible  tax   increase  of  from  200  to 
400  per  cent  every  20  years  is  hardly  .iu'^tifj  ed  in  withholding  such 
land  from  conversion  indefinitely,  particularly  since  stumpage  has 
shown  a  consistent  decline  in  value  during  the  past  suveral  years.  ( *) 

The  estimated  present  annual  tax  burden  on  commercial  privately- 
owned  forests  is  $58,356,675.  (**)   Tnis.  applies  to  396,239,000  acres 
with  an  estimated  land  value  of  $1,077  j  169,000 ;  saw  timber  amouritiiig 
to  988,289,000,000  feet  board  me.-.sm-e  ;:nd  926,719,000  cords  of  cordwood, 
together  valued  at  $4,758,498,540;  or  a  total  for  land  and  timber  of 
$5,835,667,520.   Land  values,  without  timber,  are  estimated  nt  an  average 
of  $2.72  per  acre,  varying  frcm  $2   to  $4.  Unit  stuffipage  values   (***) 
averaged  $3.40  per  M  for  softv/ood  and  $6.'^5  for  harawocd. 

The  timber  of  highest  value  is  found  in  the  Pacific  region,  namely,- 
$1,771,472,580.   The  South  is  next  with  ■51,397,561,450.  and  the  South 
Rocky  Mountain  region  last  with  ^24,150,500. 
__   _____ 

(**)   Table  XII 
(***)   Table  X 


9813 


-50-  . 

The  ratio  of  assessed  to  total  value  varies  from  a  high  of  9^.6 
per  cent  in  Wisconsin  to  a  low  of  1P..7  per  cent  in  Iowa. 

The  total  estimated  nasessed  v.-ilue  of  $3,313,398,247.  is  based  upon 
the  total  estimated  land  and  timber  v.nlue  for  each  state  multiplied  by 
the  ratio  of  assessed  to  total  value  for  that  state. 

The  highest  assessed  value  of  Imd  and  timber  is  in  the  South, 
$998,073,936.,  followed  by  the  Pacific  Coast  region  with  $937,388,826., 
the  Central  region  with  $381,526,562.,  and  the  Lake  region  with 
$354,815,452. 

On  the  basis  of  an  estimated  one  per  cent  tax  on  total  value,  the 
South  pays  the  largest  timber  land  and  timber  tax  bill,  amounting  to 
over  33  per  cent  of  the  total,  followed  by  the  Pacific  Coast  with  a 
little  over  31  per  cent,  and  the  Central  region  with  a  little  over  10 
per  cent.   The  South  Hocky  Mountain  region  pays  less  than  one  per  cent. 

The  estimated  current  annual  tax  burden  on  com^riercial  privately- 
owned  saw  timber  areas  is  $40,470,862.  (*)   The  maximum  is  in  the 
Pacific  Coast  region,  41  per  cent,  followed  by  the  South  with  a  little 
over  31  per  cent,  New  England  with  about  9  per  cent,  and  the  Central 
region  with  slightly  less.   Thus  the  Pacific  Coast  and  the  South  pay 
approxim.ately  70  per  cent  of  the  total  tax  bill  on  comrmercially-owned 
saw  timber  areas. 

Charging  the  entire  tax  burden  of  $40,470,862  on  commercial  private- 
ly-owned saw  timber  areas  to  the  Lumber  Industry  would  mean  $2.04  per 
I.*:  feet  produced  (average  1929-1934).  Assuming,  however,  the  same 
relationship  in  obligation  between  the  Lumiber  Industry  and  the  other 
forest  products  industries  as  in  the  case  of  interest  and  fire  protection 
costs,  namely  75  per  cent,  its  annual  tax  bill  per  I'   feet  produced  would 
be: 

Based  upon  1934  production  1 $1.96 

Eased  upon  the  average  1929-1934  production  ...$1.53 

D.   FHE-CODE  EFFORTS  AT  COFSEHV^TICK 

It  is  well  to  reiterate  that  both  the  public  and  the  forest  products 
industries  have  an  important  stake  in  conservation.   The  public  wants  a 
plentiful  supply  of  various  forest  produats  at  reasonable  prices.   It 
also  desires  permanent  and  prosperous  forest  industries  which  will  pro- 
vide stable  employment,   In  addition,  it  wants  its  soil  and  navigation 
safeguarded  through  watershed  protection,  its  fish  and  game  supply 
fostered  and  increased,  and  a  reasonable  area  of  forest  lands' kept  in 
forests  for  recreational  purposes.   The  forest  products  industries  are 
interested  primarily  in  the  perpetuation  of  their  supplyof  raw  material, 
but  at  a  reasonable  cost  and  in  location,  form  and  volume  most  attractive 
to  the  buying  public. 

The  operations  of  the  forest  products  industries  in  the  past  have 
been  neither  conducive  to  stability  of  emplo^mient,  nor  to  the  protection 
T*)      Table  XIII !        ~ 

9813 


-51- 

values   other   than   tnose   affe'ct^.rii:,-  tupir  i;nir>pii??te   timber  suTjrily. 
Such  protection   hs  v/as   given-  w?s  usuf>liy  ccnjrined   Co   the   tim<^   necessary 
tn  retire  a  cneciiic  f'ri'e^t   iiivect-nprt.     Forpstis  '."Rre   £.-■•>  r;lentiful   tnat 
the  cuttint^'  oat   of    i  given  locality  sxTOjly  meant  n^ovinii'  to  a  new  owe. 
Thus   there  develo-ned  tai^  gensral  idf^a  tViat  Torest  iudiiotrie"   vere  no 
more  perrranent    turn  mine?.-,    oil    wolis,    cr  ctn?-r   indust.'ieo  based  u:ion  nAn~ 
renewable  •oroducr,s,      Foxsst    i,  bo^-  w  :S   l-Ji-i^f  1/  ioj  iiijra.it   <ind   selciOiD  re- 
mained long  at   one   oper;.,tion,  ■  regaral -^s   uf   its  ■neiTn^jiPncy. 

As   tne  forer.t   industries  moved  fartaer   r.way   from   their  markets   and 
a«  costs  of  delivery  correspordingly  ii-'crpas^d,   leaders   in   the   iniustries 
began   to   realize,  that    i;imber   i^as  pocsibly  not    inexaausuible,    ac   least 
such  timber  as   could  be  cnnverted  at   a  co^t   low  enough  to  assure  its 
use   in  large  vol\ime   in  competition  witn  its   viarious   substitutes. 

Tne  public  alS'i   develoned    increasing  intierest   in   the- future   of  its 
wood   Pupplies,    as   evidenced    uy    uhe   es  tabli  Gi^'^en-t   of  fore-it   schools   and 
various  public  a^encie«  .fur  "ohe  -Durpos.-  of   stud::in:;   cLe   f6r''"Sf  problems 
and  assisting  in  their   scluticj..      In   tuis  m-:ven'.ont    th;'-  "'"^ureavi  of 
Forestry,  IT,3.   Department   cf  Agric-iil t\\i-e  (now-  it;Signaoed  Forest  Service) 
assumed  lea^ersuip.     •probably  vo   other  nitural   rf.  sources  have   received 
the   same   amount   of  con oidera'^ioi?.  arid   the  .sp.xae,  amount   of  ■nlanaing   as   to 
what   should  be   dohe-abcat  'it   as  have   the  fr'rest_s.      All    of   tnis   atudy  and 
discussion  has   resulted  in  a  clearer  urderstandlng  of  tnepublic   and 
industry  -oroblems   involved  and  the  d'evelo-umeut  of  a .  long-time Drogram 
for   solving   them.         '    '  ■■.-,;      ;;-..-■ 

Meas-ares  .taten   to  meet  tne   situation  -Dr+Dr  t';;   the  Code  of -Fair  Coa- 
petition,  for  tne  Lijmber  and  Sinioer  Products  Industries  are  as  follows: 
■>.  ■ .      ^    .     :  .    ' 

1.      Public 

The  -first  major  develo-nment   in  forest.  cons.(°T-'ra.*i-r?n   in  the  United, 
States   dates   from  1E.91-,    in' which' year  QoLgcosry  ^x\-hui±zed  the  President 
to -Bet  apart   as  public  reservations   suc'h  r'f  the  j5*il^ll,r;  Irnds.,  as  contained 
timber  or  ■aiidergro..;tn.      As  a  result   of   tnis  autn'oriz3r*''i'>n,    t.ogetner.  with 
later  legislation  permit  ,.ing   exch;mge  and   o-ircrLass,    npproximatoly 
155,000,000   acres   of  national   fo-^-e'sts  have  baen.  act.   afiide  under  mrmage- 
ment  of  the  Forest  £er\'icc,  U.   G.   Eepartmen-i  of.AeXJxuiture.      These  lands 
are  not   reserved  in   th'e   r-*jnne   that   the   ti-S':>\xrci-et  aro- ^.O.cked -up.      On   the 
contrary  the  G-over::'Jiient- -;olicy  is   to  permi  t '  their  ,\--^,.s,  .  cut. under  such    • 
conditions   that    tncir  •r'ei^pwablu   resources,    s-j.;!Hr  aP   tfX/ber,  .and   forage, 
-  ylLl.be  increased  in  volUEre  and  quality  to  the",'i;oll  Jattnoity  cf  the  land. 

In  addition   to    the   national   for<-sts,    ^•ov>Toy.inpt<Ji y  11,700,000   acres 
ef   tlLiber   and   wood  land  are   fouxid  en  Iiidian  xer.ervatirN^>6  under   tne   juris- 

"  diction  'if  the  Com.Tissioner.  of  Indian  Affairs ,- Droartincmt   of  the  Inferior. 
The«e   laada  are  handled,  in   subs  bant  i  ally  t-ie  •  ciaa-*  ffiani!«-"r  as   tne  national 

..  iflrcste   —   tnat   is,    to  .improve  v/hile  wisely  ^if^lng   tae.. rofiJUTC^s- 

The  National  Park  Service,   under   the  I)i--r}^.r*}:r<-r.t  of  tne   Interior, 
also  has-,iuj:-isdiction  over  approximately  IS-iC-OiOGO  RCi>as  of  puclic 
-..lands,    of  wnich  sligntly;  less  than -one-half  Lr/ tianb-sre-,^     The   timber 
r«sc-arc<>fi.  on  .. 


98X3 


-52- 

these  lands  are  kept  in  as  nearly  a  natural  state  as  possible  withoiat   ■^.■ 
regard  to  maximum  (.rrowth.  Tney   are  not  subject  to  exploitation. 

In  addition  to  the  Federal  Government,  several  states  have  set  aside- 
or  purchased  considerable  areas  of  forest  land  which,  outside  of  jiarks 
and  p,ther  special  use  areas,  are  managed  under  policies  somewhat  similar - 
to  those  of  the  Federal  Government.   Nearly  16,000,000  acres  of  forest 
lands  are  estimated  to  be  under  state  control. 

2..  Private 

The  problem  of  forest  conservation  by  private  timber  and  timber  land 
owners  has  generally  encountered  insuperable  difficulties.  These  have 
long  been  recognized  by  the  forest  products  industries  and  to  some 
extent  by  the  public.   The  objective  of  keeping  all  timber  lands,  both 
private  and  public,  in  a  high  state  of  productiveness  is  fully  endorsed 
by  leading  members  of  the  forest  industries,  and  they  have  been  willing 
to  assume  their  full  share  in  a  broad  program  of  national  forest  con- 
servation.  However,  many  of  them  have  felt  that  alone  this  could  not  be 
accomplished  on  most  of  the  privately-owned  forest  area. 

The  condition  of  the  Lumber  and  Timber  Products  Industry  may  be 
briefly  summarized  as  follows:   (a)  A  top-heavy  investment  in  standing 
raw  material  —  approximately  $6 ,0'"'0,000,000  worth  of  land  and  timber 
and  an  unknovm  amount  in  plants,  railroads,  etc.;  it  is  inconceivable 
that  this  investment  under  its  present  and  increasing  load  of  carrying 
charges  can  be^  retired  without  severe  loss  to  capital  assets;  (b)  a 
manufacturing  capacity  far  in  excess  of  reasonable  market  consumption 
resulting  in  recurrent  periods  of  over-production  and  low  prices;  (c) 
a  drastic  reduction  of  market  requirements  due  to  a  decline  in  domiestic 
use  of  v/ood  and  increasing  restrictions  in  foreign  trade. 

To  better  its  financial  situation,  leaders  in  the  industry  have  from' 
time  to  time  explored  the  possibilities  in  consolidation  and  in  coopera- 
tive control  of  certain  important  factors  affecting  it,  such  as  product- 
ion or  prices,  but  without  material  success.   The  first  failed  from  lack 
of  adequate  finances  and  the  second  from  lack  of  assurance  from  Federal 
and  State  authorities  that  the  cooperators  v/ould  not  be  held  liable  under 
State  and  Federal  anti-trust  laws,   ^'he  only  assiirance  possible  to  get 
from  Federal  agencies  has  been  that  the  legality  or  otherwise  of  a  sug- 
gested coiarse  of  industry  action  would  be  considered  after  and  not  before 
the  action  had  been  taken.   Under  such  circumstances  few  industry  leaders 
were  willing  to  jeopardize  their  investments  or  reputations  by  subscribing 
to  any  effective  price  or  production  control  plan. 

The  result  has  been  unrestricted  competition  between  producers  of   -^ ; 
single  species  or  similar  products  within  a  region,  competition  between 
different  producing  regions,  and  competition  of  all  regions  with  other 
materials. 

As  an  illustration  of  the  Lumber  Industry's  current  situation,  the 
record  of  lumber  consiimption  is  ill-uminating.  In  1906  the  visible  con- 
sumption was  approximately  45 ,000,Ono,0'"0  board  feet,  or  over  500  feet 


9813 


r-53- 

per  capita.   In  1926  it  had  dropped  to  38,ono,Ono,Ono  toard  feet,  or  a 
little  over  300  feet  per  capita,  and  in  1932'  it  had  dropped  to 
12,0^0,000,000  board  feet,  or  95  feet  per  capita. 

In  1926  the  nximber  of  v.'age  earners  engaged  in  primary  conversion 
was  aprroxirriately  455,000  as  compared  to  slightly  over  155,000  in  1932. 
In  order  to  keep  costs  down  and  remain  in  business,  long  hours  of  opera- 
tion and  low  wage  scales  were  inevitable  in  some  producing  regions. 
As  a  result  of  competition,  laborers  in  one  section  of  the  country  re- 
ceived for  a  long  day's  work  a  smaller  wage  than  did  laborers  in  another 
section  for  one  hour's  work. 

In  the  past  the  Lumber  Industry  had  usually  been  considered  as  a 
so-called,  "wasting"  industry  because  the  forests  had  persisted  for 
nearly  three  centuries  v/ithout  economic  necessity  for  replacement. 
Only  in  close  proximity  to  markets  capable  of  using  Iximber  derived  from 
second  growth  trees  had  it  been  feasible  to  establish  permanent  forest 
enterprises  based  upon  timber  regeneration.   Forest  management  had 
generally  meant  protection  of  mature  stands,  and  the  young  growth  had 
possessed  no  demonstrable  value  except  in  a  few  localities  accessible 
to  markets  which  could  absorb  low-grade  material  from  second  growth 
stands. 

Forest  ownership  is  divided  roughly  as  follows:   About  50  per  cent 
of  the  mature  saw  timber  is  owned  by  industrialists,  over  7  per  cent  by 
farmers,  and  38  per  cent  by  the  Federal  Government.   I'ost  of  the  cut- 
over  land  not  needed  for  agriculture  is  privately  owned,  although  from 
50,000,000  to  75,000,000  acres  may  return  to  public  ownership  through 
tax  delinquency.  Over  50  per  cent  of  the  cut-over  area  is  fairly  to 
satisfactorily  stocked  with  growing  forests  and  capable  of  producing 
annually  more  l\amber  than  was  cut  in  1934. 

Recognizing  that  fire  is  the  greatest  single  menace  to  forest 
replacement,  and  that  adequate  control  of  fire  will  solve  one  of  the 
major  problems  of  forest  management,  the  forest  products  industries 
have  vigorously  advocated  .fire  protection  and  have  cooperated  with  the 
State  and  Federal  authorities  financially  and  otherwise  to  secure  it. 
Toward  this  whole  protection  effort  on  private  and  state  forest  lands, 
including  cooperative  and  private  non-cooperative  expenditures,  private 
interests  spend  nearly  35  per  cent,  the  states  39  per  cent,  and  the 
Federal  Government  the  balance. 

In  1934  over  65  per  cent  of  the  private  and  state  forest  lands 
believed  by  the  U .  S.  Forest  Service  to  be  in  need  of  protection  were 
receiving  it,  varying  in  degree  from  practically  100  per  cent  coverage 
in  New  England,  the  Lake  State  and  Pacific  regions,  to  a  little  Over 
30  per  cent  in  the  South  and  Central  regions.   Of  the  amount  necessary, 
in  the  opinion  of  the  Forest  Service,  to  secure  adequate  protection, 
approximately  55  per  cent  is  now  being  spent  annually.   In  the  Pacific 
and  North'  Rocky  Mountain  regions,  where  the  heaviest  stands  of  mature 
timber  are  found  and  where  the  fire  risk  is  very  great,  more  than  the 
amount  necessary  to  do  a  good  job  is  now  being  spent.   Of  the  total, 
private  interests  put  up  approximately  60  per  cent.   In  the  Central 
region  and  the  South  the  lowest  ratios  of  actual  to  required  expenditures 
are  found,  namely  16  and  20  per  cent. 

9813 


In  spite  of  t.he  uncertainties  in  the  long-time  holciih;^^  of  timber 
lands  such  as  unpredictable  carrying  charges,  fire  and  other,  risks  and 
uncertain  future  markets   there'  has  been  a  considerable  effort  on'  the 
part  of  the  forest  industries  to  practice  forestry.   A  suryery  conducted 
by  a  Committee  of  the  Society'"  of  --imerican  Foresters  in  1930  shov/ed  that 
288  companies  and  individuals,  each  owning  tracts  of  more  than  1,000 
acres,  were  making  conscious  efforts,  to  grov  timber  com'^ercially  upon 
nearly  30,000,000  acres  of  forest  land.   Forty  of  these  had  put  their 
holdings  on  a  sustained  yield  basis.  .(*) 

Such  was  the  situation  on  June  16,  1933' "vhen  the  N.I.R.A.  was 
approved  and  the  Lumber  and  Timber  Products  Industries  were  invited 
to  submit  to  the  Federal  Governmient  a  plrm,  the  objectives  of  which 
were  to.  include, the  rehabilitation  of  those  industries,  conservation 
and  sustained  production  of  forest  resources,  sustained  yield  forest 
management,  and  permanent  sources  of  forest  products  employment. 

E.   CONSERVATION  UNDER  THE  CODE 

At  a  general  meeting  of  the  Luinber  and  Timber  Pt-oducts  Industries 
on  July  1,  1933,  the  outline  for  a  Code  of  Fair  Corripet'ition  was  sub- 
mitted for  consideration  by  representatives  of  the  National  Lumber 
Manufacturers  Association.,  the  largest  and  most  important  federation  of 
forest  industry  groups.   In  presenting  the  tentative  code,  it  was  pointed 
out  that  the  industry  could  not  permanently  thrive  while  destroying  or 
witnessing  the,  destruction  of  the  sources  of  its  own  livelihood, ' and 
that  no  rehabilitation  would  be  either  complete  or  lasting  which  did 
not  effectuate  the  protection  and  maintenance  of  th'e  forest  resource 
itself.   It  wa,s  further  stated  that  although  the  unsatisfactory  forest 
situation  might  be  largely  due  to  past  unwise  land  policies  ^^hd  present 
unwise  state  tim.ber  taxation  policies,  which  contributed  largely  to  ex- 
isting destructive  competition,,  the  remedy  was  beyond  the  combined  forces 
of  the  Federal  'Government,  the  State' G-overnments  and  the  forest  owners 
and  industries.   It  was  then  suggested  that  the  NIRA  afforded,  the  forest 
products,  industries  an  opportunitj'-.,  through  public  cooperation,  to 
establish  effective  standards  for  dealing  with  the  problems  of  occupancy 
and  administration  of  forest  lands  and  forest  resources. 

( *)   During  the  Code  period  only  10  concerns  were  granted  extra  allot- 
ments for  being  on  a  sustained  yield  basis  in  accordance  with  the  Code 
provisions.   However,  a  considerably  larger  number  of  applications  were 
in  process  pf  examination  at  the  end  of  Uay,    1935.   It  is  undoubtedly  a 
fact, that  a  large  number  of  operators  who  were  actually 'on  a  sustained 
yield  basis'  declined  to  make  application  for  various  reasons;  including 
the  following:  '.     ,    _ 

(1)  Unwillingness,  to  bind  the  corporation  indefinitfely  into  the 
future  by  action  of  the  Bo.-^'rd  of  Birectors,  as  com-nitted  to  arpermanent 
sustained  yield  piolicy. 

(2)  .  Unw,illj.ngness  to  spend  the_  necessary  money  f.qr  technical  ser- 
vices to  make'  forest  examination  and  prepare  management  plan'. 

(3)  Fear  of  imposition  of  higher  locp.l  taxes  following  acknowl- 
edgment of  use  values  resident  in  cut-over  lands  and  reproduction. 

(4)  .'Necessity, of  retaining  the  right  to  cut  heavily  in  over-ripe 
stands  and  stands  menaced  by  insects,  diseases,  etc. 

(5)  Inability  to  qualify  as  eligible  because  of  financial  l-'mi^"'^  ■ 
t'ion'3  OT-  i"Tr"ii -rmpnt  c 


-55- 

As  a  result  of  this  meeting  a  "Liiniber  and  Timber  Products  Industries 
Code"  was  submitted  to  the  President  by  the  National  Lumber  Manufacturers 
Association,  acting  in  behalf  of  48  associations  representing  almost  the 
entire  national  range  of  timber  products  industries  which,  after  public 
hearings,  was  approved  by  the  President  on  August  19,  1933. 

This  Code  declared  amon.^  other  purposes,  "and  to  conserve  forest 
resources  and  bring  about  tne  sustained  production  thereof."   Article  X 
provided  for  the  conservation  and  sustained  production  of  forest  re- 
sources as  follows: 

"The  applicant  industries  undertake,  in  cooperation 
with  public  and  other  agencies,  to  carry  out  such  practicable 
measures  as  may  be  necessary  for  the  declared  purposes  of  this 
Code  in  respect  of  conservation  and  sustained  production  of 
forest  resources.   The  applicant  industries  shall  forthwith 
request  a  conference  with  the  Secretary  of  Agricultiire  and  such 
State  and  other  public  and  other  agencies  as  he  nay  designate. 
Said  conference  shall  be  requested  to  make  to  the  Secretary  of 
Agriculture  recommendations  of  public  measures,  with  tne  request 
that  he  transmit  them,  vith  his  recommendations,  to  the  President; 
and  to  make  recomm.endations  for  industrial  action  to  the  Authority, 
which  shall  promptly  take  such  action,  and  shall  submit  to  the 
President  such  supplements  to  this  Code,  as  it  determines  to  be' 
necessary  and  feasible  to  giv-^  effect  to  said  declared  purposes. 
Such  supplements  ohall  provide  for  the  initiation  and  administra- 
tion of  said  measures  necessary  for  the  conservation  and  sustained 
production  of  forest  resources,  by  the  industries  within  each 
Division,  in  cooperation  with  the  aprroprinte  State  and  Federal 
authorities.   To  the  extent  that  said  conference  may  determine 
that  said  measixres  require  the  coop'3ration  of  federal,  state  and 
other  public  agencies,  said  measures  m,ay  to  that  extent  be  made 
contingent  upon  such  cooperation  of  public  agencies." 

Article  VIII,  v/hich  refers  to  control  of  production,  provided: 

"(i)   The  Authority  may  modify,  or  cause  to  be  m.odified, 
production  quotas  and  allotments  determined  hereunder,  and 
the  bases  therefor,  in  such  manner  and  to  such  extent  as  may 
be  necessary  to  effectuate  the  purposes  of  th^i  *^ode  in  respect 
of  the  conservation  and  sustained  production  of  forest  resources. 

"(k)   The  Authority,  as  promptly  as  practicable  after 
its  action  pursuant  to  Ai-ticle  X  hereof,  shall  submit  for  the 
approval  of  the  President  appropriate  changes  in  the  basis  of 

allotments." 

Immediately  after  approval  of  the  Code  by  the  President,  the  National 
Lumber  ^'arlufacturers  Association,  on  behalf  of  the  forest  products  in- 
dustries affiliated  for  th.-it  purpose,  requested  a  conference  with  the 
Secretary  of  Agriculture  to  lay  before  him  proposals  for  effectuating 
the  purposes  of  Ac'ticle  X.  In  the  meantime,  at  the  joint  invitation  of 


9813 


-56- 

the  Secretary  of  Agriculture  and  the  Lumber  and  Timber  Products  Indus- 
tries, the  Fulpv.,'ood  Industry,  the  Naval  Stores  Industry  and  the  owners 
of  farm  woodlands  were  invited  to  pnrticipate  in  the  proposed  conference 
through  their  various  organizations. 

^f'ith  their  request  for  a  conference,  the  forest  industries  submitted 
to  the  Secretary  of  Agriculture  a  complete  program  for  industry  and  pub- 
lic action,  and  in  doing  so  emphjisized  the  belief  that  the  purposes  of 
the  conference  would  not  be  served  by  a  review  of  past  conservation  his- 
tory but  rather  with  a  consideration  Of  the  present  and  the  future,  and 
the  hope  was  expressed  that  public  agencies  would  join  with  industry  in 
the  planning  and  establishment  of  permanent  productive  forest  industry. 

The  Secretary  of  Agriculture  issued  a  call  for  a  conference.   The 
first  session  was  held  on  October  24-26,  1933  and  was  participated  in  by 
delegates  representative  of  the  regional  d.ivisions  of  the  industry  and 
of  public  agencies,  including  Federal,  State  and  other  conservation 
agencies.   The  Secretary  of  Agriculture  was  represented  by  the  U.S. 
Forest  Service,  which  took  leadership  in  representing  public  agencies. 
The  purpose  of  the  first  session  was  to  formulate  a  preliminary  conser- 
vation program  to  be  subm.itted  to  the  regional  agencies  of  the  Lumber 
Industry  for  critical  analysis  and  suggestions  prior  to  adoption  of  a 
final  program  at  a  later  session.   Initial  deliberations  were  on  pro- 
posals submitted  by  both  public  and  industry  representatives.   In  order 
to  facilitate  discussion  and  the  forming  of  conclusions  appropriate 
committees  made  up  of  public  and  industry  members  of  the  conference 
were  designated  to  deal  with  various  .subjects.   The  reports  of  the  com- 
mittees were  laid  before  the  general  conference,  freely  discussed  and 
acted  upon  by  a  vote  of  the  whole  conference. 

Following  the  first  session  of  the  conference  the  proposals  as 
adopted  were  submitted  to  the  regional  agencies  of  the  industry  for 
their  further  study  and  recomm.endations  f^nd  with  instructions  that  each 
regional  agency  prepare  rules  of  forest  practice  applicable  to  its 
region  for  presentation  at  a  later  conference.   So  sim.ilar  were  the 
proposal's  of  industry  ana  the  public  on  forest  practices  that  an  execu- 
tive committee  was  provided  and  instru-cted  to  reconcile  the  proposals 
into  a  joint  statement.   This  statement  was  later  submitted  to  the 
regional  divisions  of  the  industry. 

In  recognition  of  the  im.mense  task  of  preparing  regional  reports 
and  formulating  regional  rules  and  regulations  of  forest  practice,  the 
second  session  of  the  Conference  was  not  called  until  January  25,  1934, 
Representation  at  this  session  was  the  same  as  on  October  24-26,  and 
the  subject  matter  was  handled  through  the  same  committees,  with  all 
reports  and  recommendations  finally  acted  upon  by  the  general  Conference. 

With  notable  unanim.ity  the  Conference  representatives  agreed  upon 
a  well-def inedplan  of  procedure  to  accomplish  the  objectives  of  conser- 
VFition  and  sustained  production  of  fofest  resources.   The  program  called 
for  definite  action  on  the  part  of  the  Lumber  Industry  in  the  prompt 
initiation  and  administration  of  forest  practices  designed  to  promote 
the  conservation  of  its  resources;  it  called  upon  the  States  and  the 
Federal  Government  for  a  cooperative  program  of  public  action  in  respect 

9813 


-57-   - 

jtp  forest  pj'otection,  putlic  timber  disposal,  public  acquisition  of 
forest  'landb. forest  credits,  forest  taxation,  forest  research  and  other 
aspects  of  the  forest  problems  involving  public  responsibilities. 

1.  The  Private  Forestry  Program 

On  February  26,  1934  at  a  Public  Hearing  there  was  presented  and 
approved  a  schedule  of  forest  conservation  rules  based  upon  the  Confer- 
enee  findings  and  officially  recommended  and  adopted  by  the  Lumber  Code 
Authority  and  unofficially  approved  by  the  Secretary  of  Agriculture  and 
his  representatives.  As  a  result  of  this  hearing  the  National  Recovery 
Administrator  submitted  the  recommendations  applying  to  industry  to  the 
President  on  N''areh  21,  1934  and  they  were  approved  by  him  on  March  23, 
1934,  becoming  amendments  to'  Articles  X  and  VIII  of  the  Lumber  Code  and 
designated  as  Schedule  C. 

The  declared  purpose  of  the  amendment  to  Article  X  was  to  conserve 
and  sustain  forest  growth.   This  was  to  be  accomplished  in  several  ways: 
First,  by  improving  logging  methods  so  as  to  conserve  yoxing  growth  and, 
where  possible,  to  leave  part  of  the  original  stand,  and  by  the  intensi- 
fication of  forest  protection.  A  long-time  goal  was  the  orderly  trans- 
formation of  the  industry  from  a  quick  liquidation  basis  to  sustained 
yield.   The  industries  subscribing  to  the  Lumber  Code  declared  this  to  be 
an  industry  undertaking,  and  public  representatives  agreed  that  it  should 
be  aided  by  a  broad  program  of  State  and  Federal  legislation  to  remove 
certain  economic  obstacles  and  to  aid  in  research. 

The  amendment  to  Article  VIII  provided  that  persons  securing  their 
raw  material  from  forest  lands  operated  on  a  sustained  yield  basis  might, 
upon  securing  the  necessary  certificate  to  that  affect  from  the  Code 
agency  \mder  whose  jurisdiction  they  were  operating,  have  their  product- 
ion quota  as  allocated  under  Article  VIII  increased  by  10  per  cent. 

In  submitting  these  amendments  to  the  President  for  approval,  the 
Administrator  said: 

"From  the  testimony  taken  at  the  hearing,  it  is  apparent 
that  these  amendments  represent  a  tremendous  step  toward  the 
establishment  of-  effective  mechanism  necessary  to  carrying  out 
a  successful  program  of  conservation  and  sustained  production 
in  one  of  the  nation's  most  important  natural  resources. 
As  you  know  so  well,  the  means  of  embarking  on  such  a  program 
has  long  been  sought  in  this  country,  but  the  divergent 
interests  involved,  while  seeking  a  common  goal,  defeated  each 
other  in  its  attainment  by  failing  to  reconcile  their  opinions 
in  the  matter  of  detail.   In  the  light  of  this  knowledge,  the 
'  \ananimity  of  opinion  supporting  these  proposals  revealed  at 
the  hearing  can  only  be  regarded  as  promising  much  in  future 
achievement.   That  this  reconciliation  has  been  possible  is 
undoubtedly  due  more  to  your  interest  and  leadership  than  to 
any  other  force," 


9813 


-58- 

Immediately  folloving  the  apfrovnl  of  these  amendments  there  were 
set  up  under>1the  .Lumber  Code  ten  adininistrative  agencies,  to  formulate 
local  rules  of  forest  practice,  and  to  administer  locally  the  provisions 
of  "both  amendments.   Each  division  or  subdivision  agency  consisted  of 
one  or  more  committees,  composed  of  industry  men  and  having  as  advisory 
members  representatives  of  the  State  Forestry  Departments  and  the  United 
States  Forest  Service.   Rules  of  forest  practice  suitable-  to  local  con- 
ditions were  formulated,  approved  by  the  Lumber  Code  Authority  and,  in 
the  absence  of  disapproval  by  the  Administrator,  became  effective.  June 
1,  1934. 

Production, control,  to  be  effectuated  by  a  mechanism  specifically 
set  up  in  .the  L\amber  Code,  promised  to'correct  one  immediate  economic 
ailment  of  the "subscribing  forest  industries,  -and  at  the  same  time  it 
was  recognized  as  offering  a  basis  for  the  permanent  .e»eouragement ,  of.,  • 
sustained  yield  forestry.    ■       ■  •   ■  ■. .      ,  ..,■.; 

The  subscribing  industries  now  undertook  to  do  three  things:   (l) 
.to  change  over ^ gradually;  but  as  rapidly  as  possible,  from  ^uick  liqui- 
dation to.  continued' forest  production;  (2)    improvement  of  woods  practices 
and  general  strengthening  of  forest  protection  upon  all  lands,  particu- 
larly those  being,  logged,  wnich  was  to  be  accomplished  by  the  forest 
practice  rules;  (3)  a  broad  program  of  study  to  improve  logging  praciices, 
encourage  ,sel.e.ctive  cutting  and  to  train  technicalpersonnel ,  which  was 
to  be  undertaken  in  cooperation  with  organized  public  agencies.  . 

Direction  of  conservation  in  the  divisions  was  handled  by  25 
technically  trained  foresters.   The  United  States  Forest  Service  organized 
a  st.:aff  of  approximately  the  same  size,  chiefly  specialists  in  economic 
study  and.  men  with  considerable  experience  in  contact  with  the  industry, 
to  cooperate.  At  the  end  of  the  first  year  of  ap-61icatian  of  Article  .X 
.•to  the  woods  (June,.  1933  -  June,  1934)  approximately  60  per  cent  of  all 
operations  were  estimated  by  the  Code  Authority  to  be  fully  complying 
with  the  forest  practice  rules,  and  an  additional  30 'per  'cent  were  com- 
plying in  part.  Definite  progress  had  been  made  in  fire  protection. 

Prior  to  the  Code  the  largest  holders  of  timber  land  were  well 
aware  of  the  over-supply  of  timber,  the  over-capacity  of  the  mills,  and 
the  chrqnic  over-production  of  the  Lumber  Industry,  flowever,  nothing 
effective , could  be  done  about  regulating  production  to  demand  on  account 
of  legal' restrictions  against  cooperative  action  to  that  end,  and  the 
thousands  of  small  producers  that  could  not  be  controlled  even  if  there 
had  been  no  legal  objection. 

..During  the  Code  period  it  was  found  that  the  larger  operators  were 
interested  in  and  anxious  to  observe  the  forest  practice  rules,  and  the 
colossal  task  of  educating  some  27,000  operators  was  well  under  way.   It 
was  impossible,  however,  to  discpver  all  of  the  scattered  small  operators — 
even  those  who  came  under  the  jurisdiction  of  the  Code.   If  they  had  been 
found  and  educated  as,  to  their  privileges  and  obligations,  the  problem 
of  Code  effectiveness  would  still  have  remained  unsolved,  owing  to  the 
fact  that  farmers,  owning  12-1/2  per  cent  of  all. the  saw  timber  in  the 
United  States  and  in  many  instances  producing  forest  products  for  the 


981S 


-59- 


general  market,  were  specifically  exempt  from  its  provisions.   In 
addition,  the  important  forest-using  groups  producing  pulpwood,  dis- 
tillation wood,  mining  timbers,  etc.,  not  subscribing  to  the  Lumber 
Code  were  entirely  outside  the  scope  of  Article  X  and  its  amendments. 
This  was  a  serious  disadvantage. 

The  Administration,  as  well  as  the  Lumber  Code  Authority,  recog- 
nized the  difficulties  involved  in  this  situation  through  lack  of  suit- 
able forest  practice  rules  applying  to  those  industries,  different  v<'age 
scales,  and  other  factors  directly  affecting  the  successful  operation 
of  the  forest  practice  rules  as  applied  to  the  forest  products  indus- 
tries under  the  Lumber  and  Timber  Products  Code.   Accordiiifly,  on  March 
12,  1934,  at  a  Public  Hearing'  called  for  that  purpose,  there  was  presen- 
ted by  the  Authority  the  so-called  "President's  Amendment"  to  Article  II, 
Section  (a)  of  the  Lumber  and  Timber  Products  Code,  providing  for  the 
inclusion  under  the  jurisdiction  of  that  Code  of  the  products  of  those 
industries  which  were  not  specifically  covered  by  a  Code  of  their  own. 
Coincidentally,  there  was  issued  by  the  Administration,  with  the  approval 
of  the  Authority,  an  "Office  Order"  which  provided  that  all  codes  then 
under  considerr.tion  or  '-hich  might  later  be  considered  and  which  covered 
primary  forest  products  not  then  clearly  \inder  the  Jurisdiction  of  the 
L\imber  and  Timber  Products  Code  , should  include  forestry  provisions  sub- 
stantially equal  to  those  in  the  Lumber  and  Timber  Products  Code. 
It  was  further  proviced  that  the  Deputy  Administrator _ in  charge  of  the 
Lumber  and  Timber  Products  Code  should  be  consulted  as  to  the  adequacy 
of  such  provisions.   The  purpose  of  this  order  /^as 'to  ^niarantee  that  all 
timber  lands,  except  those  owned  by  farmers  ard  which  v/ere  specifically 
exempt,  by  the  NIRA.,  should  be  haiidled  ■'oniformly  and' in  accordance  with 
sound  forestry  practices.   As  a  result,  forestry  provisions  were  included 
in  a  proposed  Code  for  the  Pulpwood  Industry,  nnd  suitable  amendments 
were  prepared  for. an'  existing  Hardwood  Distillation  Code. 

At  the  date  upon  which  all  Codes  were  terminated,  the  so-called 
"President's  Amendment"  had  not  been  approved. 

Althoua-h  accomplishments  under  the  forest  practice  rules  of' the 
Code  were  sxibstantial  during  the  short  time  it  was  in  effect,  it  was 
apparent  that  if  those  persons  subject  to  them  had  been  exclusively  large 
timber  ov/ners  and  producers,  those  accomplishments  might  have  been 
materially  increased.   Thus,  from  the  public  standpoint  of  getting  the 
timber  land  under  suitable  forest  mai'ia£;3ment  . with  the  least  possible 
delay,  greater  concentration  .  of  ownership  might  have  been  a  decided 
advantage.  .  ' 

A  second  difficulty,  and  one  which  made  almost  impossible  a  proper 
administration- of  the  forest  practice  rules  in  some  regions,  was  the  lack 
of  jurisdiction  over  nil  forest  products  producers. 

A  third  difficulty,  the  effect  of  which  it  is  impossible  to  appraise, 
was  the  delay  that  occurred  in  getting  the  public  portion  of  the  forestry 
program  under  way.  Article  X  of  the  Code  provided  that  if  the  Conference 


9813 


-60-. 

should  determine  that  the  measures  initiated  by  the  industry  required 
the  cooporrtion  to  sone  extent  of  federal,  State  and  ot  ler  public  agencies 
said  measures  might  to  th,at  extent  be  made  contingent  upon  such  cooperation. 
Schediole  G,  the  ajnen'mont  to  Article  X,  did  not  contain  this  language,  but 

stated,;  " it  being  recogni'.;.ed -that  the  extent  tr  v/hich  these  undertakirgs 

by  the  Ltunber  and  Timber  Products  Industries  are  capable  of  successful 
accomplishment  is  dependent  u^Don  the  extent  and  character  of  public  cooper- 
ation in  each  state."  The  industry'  promptly  put  into  effect  the  forest 
practice  rules,  and  it  is  reasonable  to  gu.ppose  that  the  failure  of  public 
agencies  to  initiate  and  carry  through  the  public  measures  approved  by  the 
Conference  during  the  life  of  the  Code  may  have  seriously  interf erred  vrith 
successful  administration  of  tlie  forestry  provisions  by  the  Code  Authority. 

Thus,  at  the  end  of  the  Cede  period  the  obstacles  to  continued  pro- 
gress in  private  forestry  largely  remained. 

2.   The  Public  forestry  Frog:i'am 

The  Conservation  Conference  of  October,  1934,  and  January,'-,  1935,  re- 
commended to  the  Secretary  of  Agriculture  a  definite  program  of  action  v/hich 
would  form  the  contribution  of  the  JTederal  and  State  governments  to  round 
out  the  private  Code  measures  in  a  coordinated  plaji  of  American  forestry. 
As  provided  by  Article  X  of  the  L-amber  and  Timber  Products  Code,  the 
Secretarjr  of  Agriculture  made  recommendations  to  the  President  for  a  Fed- 
eral program.   There  recommendations  f Dlljued  those  of  the  Conference  s-nd 
v/ere  presented  in  the  form  of  a  bill  drafted  by  the  Forest  Service  and  de- 
signated e.s   the  "Omnibus  Forestr--  Bill."   The  presentation  to  the  President 
took  place  on  May  9,  1934.   Congress  nas  anxious  to  adjourn  and  the  Presi- 
dent felt  it  inadvisable  to  request  the  proposed  legislation  at  that  Con- 
gressional session.  It  is  probable  that  the  large  appropriation  called  for 
in  the  bill  may  have  influenced  his  decision  to  some  extent.  Undoubtedly 
some  of  the  provisions  could  have  been  omitted  and  the  amounts  called  for 
reduced  in  some,  instances  v/ithout  materially  affecting  the  public's  immed- 
iate obligation  toward  the  whole  forestrj''  program.   Some  of  the  proposals 
of  the  Omnibus  Bill  are,  hoi/cver,  being  met  temporarily  in  other  waye/ 
For  esp.mple,  increased  cooperation  v;ith  the  states  is  being  carried  on  thr- 
ough increased  appropriations  under  the  existing  Clark  HcHary  Act  (43  Stat.   \ 
683).   The  usual  fire  protection  efforts  have  been  supplemented  by  those 
of  the  Civilian  Conservation  Corps.  Emergenc;?-  funds  have  oeen   made  avail- 
able to  acquire  large  areas  of  land  for  national  forest  puri^oses  and  credit 
has  been  extended  to  several  lumber  companies  by  the  Reconstr'action  Finance 
CorporPtion.   The  extension  of  long-term  G-overnment  credits  to  forest  ovmers 
through  a  forest  credit  bank,  to  enable  them  to  handle  their  properties  on 
a  basis  of  sustained  production  of  timber  crops,  as  recommended  by  the  con- 
ferences, was  presented  to  the  74th  Congress  in  Senate  Bill  3417  on  August 
14,  1935.   In  a.ddition,  on  Januarjr  2,  1935  the  President  wrote  to  the  Gov- 
ernors of  the  several  states  urging  them  to  call  together  representatives 
of  the  Federal  and  State  Governments  and  of  private  industry''  to  consider 
tax  deliquency  on  timber  lands  and  other  forestry""  questions  as  set  forth 
by  the  Conference,   Some  such  meetings  have  been  held. 

The  future  of  forest  management  necessarily  rests  upon  continuity  of 
forest  ownership.  Unstable  ownership  prevents  long-time  planning  and  dis- 
courages efforts  to  refine  mana^f^emcnt  m.ethods.  At  present  nearlj''  80  per 
cent  of  the  best  forest  Icinds  are  privrtely  owned.   There  is  small  lilreli- 

9813 


-61- 

hood  that  public  funds  can  be  made  available  sufficient  to  recapture  a 
large  portion  of  these  lands  ar.d  the  timber  upon  tnera  nithin  one  or  even  tT7c 
decades,  even  if  the  public  should  desire  to  do  so'i  Ormership,  then,  must 
remain  predominantly  private,  and  the  task  is  to  secure  continuity  by  re** 
moval  of  the  recognised  obstacles  such  as  excessive  carryin,^  charges,  un- 
certainty as  tD  future  mrrlcets,  ineffectual  protection  assistsjice  by  the 
public  and  inability  to  r-ecure  lou-cost  financing. 

At  the  close  of  the  session  on  January  25,  1934  the  Article  X  Forest 
Conservation  Conference  provided  for  a  comiittee  consisting  of  an  equal 
number  of  public  and  industry  rooresentativcs  Tjhore  duty  it  should  be  to 
take  promptly  su-C^h  action  as  might  be  appropriate  to  give  effect  to  the 
recommendations  of  the  Conference, 

-  It  wan  provided  further  that  the  Conference  should  not  definitely 
disband,  but  should  consicier  itcslf  in  recess,  to  be  reconvened  on  re- 
commendation of  the  Joint  Committee  upon  the  approval  of  the  Secretarj'-  of 
Agriculture. 

This  committee  met  frequently  during  the  period  of  the  L^'omber  Code, 
and  again  on  J^one  12,  19S5,  after  the  Code  had- been  dissolved.  After  con- 
sultation Tzith  public  and  induijtrj'-  lerders  it  found: 

"That  the  Joint  Conservation  Prc^rara,  recommended  by  the 
Forest  Conser'/stion  Conference  and  fur\;ber  developed  and  estab- 
lished by  ap'oro"^ri■^te  agencies  "nd  a-oproved  by  this  Committee  is 
adequate,  feasible,  and  should  be  carried  forr/ard  v/ithoao  change, 
except  as  to  method; 

"Tliat  the  Lumber  and  Timber  Products  Industry  be  urged  volun" 
tarily  to  continue  to  carry  out  the  provisions  of  Schedui  C  and  the 
Rules  of  Forest  Practice  throvigh  their  trade  associations  and  by 
their  individixal  members; 

"That  all  other  forest-using  industries  and  all  oxmers  of  for- 
est land,  ^j-hether  oublic  or  private,  including  farm  woodlots,  be 
urged  to  join  voluntarily  in  this  entei'prise; 

"Tliat  the  U.  S.  Forest  Service  and  other  public  agencies,  federal 
and  state,  be  urged  to  coninuo  and  enlarge  their  cooperation  in  carry- 
ing out  the  v/ork  toward  the  objectives  set  up  under  Article  X; 

"That  in  the  p-arsuit  of  the  federal  aiid  state  forest  acquis- 
ition program,.  pro~pt  step?-   be  t?k:on  by  the  U.  S-    Forest  Service 
to  bring  about  cooperation  of  federal  and  state  authorities  and  the 
forest  industries  in  \7orking  out  the  place  of  each  tj^e  of  ownership 
in  sustained  yield  "oi'a ts; 

"Tliat  the  legislatures  of  the  several  states  containing  forect 
lands  be  urged  to  meet  the  wishes  of  the  President  of  the  United 
States,  as  expressed  in  his  letter  of  Janioar:'-  2,  1955,  by  early  en- 
actment of  appropriate  laws  to  aid  in  carr;-ing  for:'ard  this  joint 
program; 


9813 


.  -.62- 

"That  the  President  of  the  United  States  be  respecrtfully  urged, 
as  promptly  as  is  compatible  V7ith  the  national  interest,  to  submit 
to  the  present  Con;3resK  the  profrrp.m  of  forestry  legislation  founded 
upon  the  recommendations  of  the  Joint  Cnminittee  nf  t?ie  "National 
Article  X  Conference  and  ar^proved  by  the  Secretary  of  Agriculture; 

"Tiiat  piiblic  r.ta.tej'ientr,  of  intention  to  carr;,'-  fonvr.rd  the  forest 
conservation  program  be  issued  by  authoritative  spokesmen  of  both 
industry  and  the  public." 

The  National  Limber  lianufacturers  Association,  a  federation  of  the 
principal  regional  lumber  manufacturing  associations  which  ha.d  functioned 
under  the  Lumber  Code  as  Division  and- Subdivision  Agencies  administering 
Article  X,  as  well  as  other  provisions  of  tho-t  Code,  hs,s  declared  the  in- 
tention of  its  member  organizations  to  proceed  volimtarily  with  the  indus- 
try' s  part  of  the  agreed,  program.   This  membership  represents  considerably 
more  than  half  the  lumber  production  of  the  coimtry. 

The  personnel  of  the  U.  S.  ^Forest  Service,  previously  assigned  to 
■this  work,  has  continued  to  cooperate  in  b3.sic  studies  and  in  educational- 
activities  among  private  operrtors. 

Tlie  Porest  Service  has  also  prepared  a  revision  of  the  original  "Om- 
nibus Bill"  for  consideration  of  the  present  Congress,  which  is  calciolated 
to  give  effect  to  the  recommendations  of  the  Conservation  Conference.   The 
outstanding  features  of  this  bill  are  proposals  to:   (l)   Increase  the 
Clark-McFary  cooperative  fire  money  authorization  from  $2,500,000  to 
$5,000,000;  (2)  authorize  an  ap-oropriation  of  $1,000,000  to  carry  on  For- 
est Service  end  State  and  private  forest  cooperation;  (3)  authorize  an 
appropriation  of  $6,000,000  for  completing  the  Forest  Survey  plvis  authori- 
zation for  an  annual  aj^propriation  of  $250,000  to  keep  the  data  current; 
(4)  provide  authorizations  for  forest  research  along  several  lines;  (5) 
authorize  the  Secretary  of  Agriculture  to  enter  into  cooperative  sustained 
jj-ield  management  agreements  with  private  operators,  vdio  should  place  their 
forests  in  units  to  be  jointlj'-  manr^e'^^!.  with  public  forests;  (5)  provide  by 
bond  issue,  or  otherv/ise,  for  a  large-scale  Federal  forest  acquisition 
program  to  be  carried,  on  for  ten  yea.rs  b;r  the  ap-propriation  of  $50,000,000 
per  year  to  permit  acquisition  by  the  Federal  Government  of  224,000,000 
acres  of  forest  land  and  150  "billion  feet  of  privately  owned  timber. 

As  already  stated,  there  is  before  the  Congress  a  proposal  (Fletch- 
er-Caldwell  Forest  Credits  Bill)  to  extend  the  fpcilities  of  the  Farm 
Credit  Administration  to  the  field  of  forest  management,  in  order  that 
forest  ov/nors  who  desire  to  operate  on  a  sustained  yield  bgsis  mav  secure 
loans  at  low  rates  of  interest  commensurate  with  the  risk  and  return. 

It  is  apparent  that  this  joint  conservation  program  contains  the 
beginnings  of  an  effective  national  forestry  enterprise.   Three  actions 
are  necessary:   First,  the  Legislatures  o.f  the  forested  states  should 
overhaiil  their  tax  systems,  should  arrange  for  Sta.te  management  of  tax 
"reverted  lands,  and  should  assure  the  raainte.nance  of  adequate  Forestry 
Departments;  second,  the  Congress  must  enact  legislation  to  carry  out 
its  recognized  obligation  to  encourage  continued  forest  ownership  ajid 
thus  make  private  forestry''  possible;  third,  private  operators  and  timber 
owners  must  carry  on  that  portion  of  the  joint  program  assumed  by  the 

9813 


-63- 

Lumber  Code  Authority  under  Article  X.   It  is  also  necessary  to  bring  into 
the  picture  owners  of  f8.rm  v/oodlots  and  forert  users  not  members  of 
existing  lumber  man\ifactarers'  associations. 

Although  the  forestrjr  provisions  of  the  liumb'er  and  Timber  Products 
Code  were  in  effect  less  than  one  year,  that  experience  was  s'ifficient 
to  demonstrate  that  the  system  of  control  set  up  under  the  Code  was  sound 
and  would  adequately  meet  all  the  needs  of  the  public  interest  in  private- 
ly owned  forests  if  it  had  continued  to  receive  the  wholehearted  support 
of  all  those  tinder  its  jurisdiction  and  public  forestry  agencies  and  if 
it  had  been  legally  enforceable. 


9813 


CHAPTSR  III 

THic  FROBLais  or  FaOr'ICTIOII 

A.   CiiPACITY 

Capacity,  as  related  to  samnills,  is  a  relative  term,  and  the  basis 
for  tlie  v.se   of  the  \7ord  in  this  cha;pter  is  as  follouj;:  54  hours  per  u-eok, 
50  weeks  to  the  year  (2,700  hours)  nultiplied  hjr  the  rated  hourly  out;.mt 
of  the  saTT-.rill  equipment.  .Some  such  arbitrary  basis  must  be  deternined 
for  the  reason  that  there  are  many  samnills  that  are  equipped  to  operate 
only  diu'ing  the  hours  of  daylight,  while  other  and  larger  plants  are  so 
equipped  as  to  permit  operation  during  all  hours  of  the  twenty-four. 

On  the  basis  of  the  formula  outlined  above,  the  annual  capacity  of 
17,467  se.w.uills  to  v/hich  a  rated  hourlv  capacity  was  allocated  under  the 
NPiA  Code,  amounted  to  more  than  69,000,000  M  b.ra,  (Thousand  Feet  Board 
Measure.)  (*)  The  largest  production  within  the  last  ten  years  was 
39,000,000  li  b.ra,  (**)  And  it  is  a  matter  of  record  that  many  of  the 
verj'-  largest  mills  in  the  country  operated  regularly  on  a  two-shift  day 
during  the  year  1929  when  this  pea!c  of  production  was  reached. 

In  discussing  the  capacity  problem  the  standing  timber  will  be 
referred  to  as  being  in  areas  or  in  regions,  but  when  reference  is  made 
to  sawmills  and  production  the  reference  \dll  be  to  divisions  as  compre- 
hended in  and  established  by  the  Code  of  Pair  Competition  for  the  Lumber 
and  Timber  Products  Industries.   The  divisions  and  subdivisions  under  the 
Code  generally  follow  the  geographical  boundaries  of  the  regions,  but  for 
specific  delineation  of  any  division,  reference  should  be  made  to  the 
Code  in  Appendix  I. 

Area,s  of  merchantable  standing  timber  have  been  or  are  now  in  ex- 
istance  in  practically  everj^  state  in  the  Union  except  Kansas,  Nebraska 
and  Horth  Dal'ota,  and  as  the  settlement  of  land  progressed  from  New 
England  and  the  Eastern  seaboard,  small  sawmills  were  established  to 
supply  local  needs.   These  mills  v/ere  followed  by  larger  units  for  the 
commercial  production  of  lumber,  and  then  as  the  supply  of  merchantable 
timber  was  exliausted,  or  as  centers  of  demand  developed  closer  to  other 
areas  of  merchantable  standing  timber,  commercial  sawmills  were  established 
in  these  new  areas.   Thus  many  small  neighborhood  cjid  some  commercial 
samaills  have  been  left  behind  in  areas  practically  or  completely  denuded 
of  comi.ieirial  saw  tinberand  in  areas  where  saw  timber  is  available  but  is  so 
far  away  from  the  centers  of  demand  tha.t  it  is  not  possible  for  the  fin- 
ished product  to  compete  with  raraber  from  other  areas  more  advantageously 
sit'uatcd. 


(*)  Unpublished  compilation  by  Research  &  Planning  Division,  NRA,  Hill 
Caioacity  Statistics,  June  1,  19L-.5  -  and  Table  XIX. 

(**)  Table  V, 


9813 


-65- 

With  the  chan,5e  of  production  centers  for  lumber  influencing 
the  establishment  of  neii^  mills,  it  can  readily  be  seen  thpt  a  very 
considerable  portion  of  the  rrted  capacity  of  the  sawmills  is  not  much 
more  than  a  fig'are  of  sneech.   It  is  known  that  many  hundreds  of  mills 
still  carried  on  the  records  as  being  able  to  produce  have  not  act\ially 
producfed,  find  thn.t  many  thousands  of  other  mills  have  been  in  operation 
for  but  a  very  small  fra,ction  of  the  basic  hours  -oer  year,  in  any  year 
of  the  pa.st  ten.   This,  is  true  particularly  of  several  thousand  small 
mills  located  in  the  Northeastern  Softvrood  and  Hardrood  Divisions  and 
in  the  North  Central  Division  where  the  supply  of  virgin  stands  of  saw 
timber  was  virtually  eliminated  several  years  ago  and  only  second  growth 
timber  is  now  available  or  i s  becoming  available.  Many  of  these  small 
sawmills  have  reverted  to  original  tj^pe  and  are  operated  only  to  supply 
an  immedaite  neighborhood  lumber  requirement. 

Many  of  the  small  sawmill  s  do  not  have  the  type  of  equipment 
that  would  permit  them  to  produce  a  grade  of  lumber  that  would  compete 
with  the  output  of  the  larger  mills  in  the  principal  consuming  markets. 
Coupled  with  the  fact,  as  nreviously  discussed,  that  so  many  of  these 
mills  are  located  away  from  the  present  centers  of  production  where 
distributors  tend  to  congregate,  the  lower  grade  of  output  and  the 
difficulty  of  placing  the  product  in  the  market  would  normally  tend  to 
reduce  the  effective  capacity  of  this  very  considerable  group  of  mills. 

There  must  also  be  taken  into  consideration  the  fact  that  as  a 
resiolt  of  the  movement  of  centers  of  production  and  the  consequent  change 
from  large  mill  to  snail  mill  operation  within  nroducing  centers,  there 
are  known  to  exist  many  large  mills  with  ratpd  hourly  capacities  ranging 
upward  into  the  thous-^nds  of  feet  that  can  not  produce  more  than  a  frac- 
tion of  this  rated  capacity  for  the  reason  that  the  timber  supnly  either 
has  been  completely  ei±austed  or  is  so  far  removed  from  the  mill  site 
that  it  is  practically  impossible  to  deliver  logs  to  the  mill  in  quantity 
sufficient  to  keep  the  machinery  operating  even  the  theoretical  number 
of  specified  hours. 

These  sawmills,  under  liandicap  of  location,  are  always  potential 
producers  of  lumber  but  seldom  actually  produce  except  when  the  price  of 
lumber  reaches  a  level  that  rill  permit  recovery  of  high  costs  from  the 
sale  of  this  marginal  production. 

The  West  Coast  Region  is  an  exception  t^  the  general  statements 
above.   In  this  region  the  standing  timber  areas  had  been  the  object  of 
speculative  purchase  since  the  period  of  the  land  grants  to  railroads, 
and  particularly  after  many  in  the  Lumber  Industry  became  convinced  that 
when  the  supply  of  virgin  rine  of  the  Southern  states  was  exhausted  there 
would  be  no  further  production  from  that  region  and  the  only  available 
softwoods  would  be  those  of  the  West  Coast  Region.  MaJiy  large  and  costly 
mills  were  erected  in  the  West  Coast  Region  to  meet  this  expected  demand, 
but  the  South  continued  to  produce  softwood  lumber  when  much  second  growth 
timber  began  to  reach  maturity  or  merchantable  size,  and  that  region  has 
not  yet  failed  to  offer  competition  for  its  share  of  the  consumer  demand 
for  softwoods. 


9813 


With  Southern  pine  -conpetition  continuing,  the  West  Coast  mills 
could  not  find  a  profitatlo  maz-ket  for  lumber  from  all  of  their  in- 
stall cd  capacity,  and  many  have  never  -lanufactured  even  to  50  per  cent 
of  the  rated  capacity.   In  fact,  soi'ie  of  the  finest  sa\Tmill  machinery 
Drocurable  has  never  operated  i,n  actral  production  althouf^h  installed 
in  West  Coast  Region  sawnills  bacliEi"'.  hy  ownership  of  standing  timber 
sufficient  to  sustain  capacity  ot)eration  for  fifty  years. 

Carrying  charges  of  interest  and  taxes  ultinately  became  too  great 
a  burden  and  in  many  cases  i't  ras  necessary  to  liquidate  the  investment. 
Under  this  economic  pressure  large  areas  of  standing  timber  was  converted 
into  saxTmill  products  even  though  it  was  recognized  that  this  center  of 
production  ivas  handicap-oed  by  a  location  distant  from  the  then  existing 
centers  of  demand  and  that  difficulty  would  be  encountered  in  marketing 
such  products  in  competition  v.'ith  those  originating  in  areas  much  more 
advanta,geously  located.   Data  (*)  indicate'^  that  rated  mill  capacity  in 
the  West  Coast  Division  is  equal  to  several  times  the  annual  effective 
demand  for  its  products.   This  excess  capacitj"-  and  the  economic  demand 
for  liquidation  of  the  investments  in  standing  timber  have  forced  saw- 
mills to  produce  when  there  was  no  effective  demand  for  the  lumber  and 
when  the  market  was  created  largely  through  reduced  ririces  and  without 
regard  to  return  of  total  cost  of  production. 

Seasonal  weather  conditions  and  the  terrain  upon  which  the  merchan- 
table stp-nds  of  timber  are  located  also  have  a  decided  effect  upon  the 
actual  as  comiDared  to  the  theoretical  or  rated  capacity  to  produce.   In 
the  Southern  Pine  Region  the  land  is  fairely  level  and  the  weather  con- 
ditions will  permit  woods  -o-oeration  and  consequent  sawing  of  lumber 
practically  throughout  the. year,  ■   In  the  West  Coast  Region  generally 
favorable  wea,ther  conditions  are  also  encountered  but  there  is  a  more  dif- 
ficult terrain  and  logging- o-oerations  can  not  always  be  carried  on. 
Moving  inland  to  the  Western  Pine  Region,  generall  comprising  the  mountain 
range  country,  severe  seasenal  dislocations  and  unusually  rough  terrain 
are  encountered,  adding  to  the  difficulty  of  -producing  logs.   Ra.t;ed  cap- 
acity of  the  sawmills  in  these  latter  two  regions  is  undou'jtedly  a  very 
different  quantity  froip  effective-  capacity  to  produce  lumber. 

Other ■  fa.ctors  governing  capacity  of  ■  sawmills  are  size  of  trees;, 
compactness  of  timber  stand  and  character  of  logs.   It  has  been  pointed 
out  that  production  in  the  Southern  Pino  Division  is  now  largely  re- 
duced to  utilization  of  second  growth,  and  consequently  smaller  trees 
"are  being  logged  and  worked  into  lumber  with  greater  ease  of  operation 
than  would  be  the  case  if  a  virgin  stand  of  large  trees  was  being  utilized. 
The  stand  of  trees  is  not  heavy  but  the  logs  are  sound  and  clean.   It 
is  true  that  the  small  trees  will  not  produce  lumber  in  similar  quantities 
and  grades  as  will  the  large  virgin  stock,  but  the  case  of  operation  per- 
mits lar'^e  use  of  manual  .labor  and  does  not  require  expensive  mechanical 
equipment  for  logging  and  handling  to  the  saws. 


(*)  Unpublished  compilation  by  Research  &  planning  Division,  NRA. 
Mill  Capacity  St.atistics,  June  1,  1935. 


9813 


-6J- 

The  production  in  the  Tfest  Coast  Region  is  nractically  all  -from 
virgin  timter.   The  trees  are  large,  the  stand  is  very  dense,  and  most 
of  the  OTjerations  are  "clear  cuttin;^"  (talcing  all  merchantatle  trees 
and  disregarding  condition  'of  reniaining  yc-ong  growth)  so  that  logs 
of  all  sizes  and  conditions  reach  the  saws-  (*)  Being  required  to  handle 
a  preponderance  of  large  logs  over  difficult  terrain,  these,  logging 
camps  and  large  sawmills  are  highly  mechanized  units  requiring  that  the 
majority  of  the  employees  shall  have  some  degree  of  technical  training. 

The  production  in  the  TTestern  Pine  Region  is  largely  from  virgin  . 
timber  and  over  very  rough  terrain.  Here  again  clear  cutting  until 
recently  has  "been  the  rule  but  the  timber  stands  range  trr^m   sparse  to 
very  dense,  and  the  trees  from:smali  to  very  large.   To  fit  these  widely 
differing  conditions  the  sawmill  capacity  is  made  up  of  many  small  mills 
and  some  few  large  mills.  All  mills  are  required  to  handle  the  miscellan- 
eous types  of  logs  resulting  from  clear  cutting. 

Hardwood  is  produced  in  every  state  in  the  Union  except  Arizona, 
New  Mexico,  North  Pa'cota,  South  Dakota  and  Wyoming,  the  production  in 
the  states  of  California,  Nevada,  Colorado,.  Idaho,  Montana  and  Utah  being 
very  slight.  (**)   Small  mills  predominate  but  tuere  are  a  few  large 
mills.   The  canacity  of  these  large  mills  is  largely  talcen  up  with  pro- 
duction for  special  orders  'and  for  use  by  integrated  processing  plants. 
Selective  logging  (cutting  trees  selected  as  best'-.suited  to  produce  the 
type  of  lumber  desired)  is  largely  prr^cticed  in'  the  hardwood  divisions 
and  usually  the  mills  have  only  first  class  logs'to  handle  through  the 
saws.  '       - 

:.  .  The  over-extended  capacity  to  produce  lumber  has  t  andeci  to  the 
establishment  of  excessive  inventories,'  'for 'in  many  instances  the  shadow 
of.  this  unused  capacity  has  forced  other  operating  units  -into  production 
schedules  which  they  knew  to  b'e  in  excess  of  rjie  effective  deraand  for 
their  product.  Ylith   the  unused  production  capacity  .in  ■existence  it  has 
always  been  necessary  for  those  sawmills  producing  lumber  to.  avoid  any 
semblance  of  under-riroduction  that  would  tend  to  a:,  real  or  an  imagined 
shortage  of  lumber.   This  was  demonstrated  about  the  'time  the  Lumber  Code 
was  being  discussed,  and  when  it  was  expected  that  there  would  be  a  very 
considerable  demand  for  lumber  in  the  carrying  out  of  the  then  proposed 
Government  building  program.   It  has  been  reported  that  many  thousands  of 
small  mills  in  the  Southern  Pine  Division  were  then  encouraged  to,  and 
actually  did  start  operating  under  the  reported  prospective  shortage  of 
lumber  as  a  result  of  that  proposed  building  program.   Not  only  did  the 
small  mills  go  into  production  but  many  of  the  large  mills  stepioed  up 
production,  not  only  in  the  Southern  Pine  Division  but  in  the  TTest  Coast 
Division  and  in  the  Western  Pine  Division;  and  this  hopeful  production 
was  indulged  in  despite  the  -fact  that  tbo  industry  then  had  on  hand  a 
heavy  inventory  of  wholly  or  i>s«-ti«»iJ-y  raaunfactured  stock  and  the  effective 
demand  for  the  p-rior  -r^ar   had  been  at  the  low  for  more  than  fifty  years. 


(*)   Oregon  and  Washington  have  slash  disposal  laws  which  do  not  allow 
consideration  of  young  growth. 

(**)   Table  XVII  B 


9813 


-68- 

References  have  been  nade  to  the  three  major  softwood  divisions 
only,  as  these'  three  divisions  have  -Droduced  from  Gl  to  84  -oer  cent  of 
all  lumber  consumed  over  a  •oeriod  of  years.  Reference  also  has  been 
made  to  the-Southern  and  Appalachian  Hardwood  Divisions,  which  two 
divisions  have  produced  apiDroximately  70  ner  cent  of  the  total  hardwood 
consumption.   The  above  quoted  figures  are  particularly  anplicable  to 
the^period  from  1929  to  1934,  inclusive. 

Commenting  briefly  on  the  above  displayed  data,  and  bearing  in 
mind  that  production  in  the  year  1929  was  the  largest  in  any  of  the  past 
ten  years,  it  will  be  noted  that  the  peak  production  of  1929  utilized 
less  than  50  per  cent  of  the  Southern  pine  rated  capacity  and  slightly 
more  for' Western  pine,  -while  TlTest  Coast  utilized  about  70  per  cent  of 
its  rated  capacity,  with  the  Appalachian  and  Southern  Hardwood  Divisions 
utilizing  less  than  25  per  cent  «f  their  rated  capacity. 

When  the  results  of  the  depression  began  to  be  definitely  felt  in 
1931  and  1932  the  position  of  these  four  principal  lumber  producing 
divisions  was  rorticularly  acute,  and  the  actual  utilization  .of  the  rfited 
capacity  of  the  sawmills  in  those  divisions,  as  indicated  by  the  data, 
was  almost  negligible. 

In  viewing  these  data  it  should  also  'he   borne  in  mind  that  the 
rated  capacity  of  the  sawmills  in  the  Southern  Pine  Division  is  about 
equally  divided  between  small  mills  and  large  mills,  and  that  this  con- 
dition also  largely  prevails  in  the.  Western  Pine  and  the  Appalachian 
and  Southern  Hardwood  Divisions.   The  rated  capacity  of  the  mills  in  the 
TYest  Coast  Division  is  largely  that  of  the  big  mills. 

■  ■  •  Remembering  that  large  mills  generally  are  expensive  installations 
almost  universally  backEd  by  extensive  timber  holdings  all  requiring 
considerable,  investment,  and  that  the  small  mills  are  almost  universally 
without  extensive  timber  backing  and  usiially  represent  but  small  invest- 
ment in  equipment,  it  can  be  seen  that  the  economic  pressure  of  taxes 
and  of  interest  would  be  less  severe  on  the  small  'mill  capacity  than 
on  those  divisions  in  which  the  large  mills  predominate.   These  economic 
considerations  woiild  largely  dictate  whether  mills  actually  continued 
operation  in  the  face  of  declining  prices  and  over-extension  of  stock  or 
whether  production  would  stop  and  the  rated  capacity  be  not  utilized. 


9813 


-69- 

The  excess  capacity  of  the  sawmills  may  'best  be  illustrated 
by  the  tvro  following  very  brief  tabulations: 


Sawmills:...  Eatio  of  Rated  Caijacity  for  1934 
to  re-QOrted  Production  in  the  Princinal 
Lumber  Producing  Divisions 

Southern  West  Coast.,   Y^estorn   Appalachian 
Pine  a/   Fir,  etc.  a/  .  Pine  a/   &  Southern 

Hardwoods  b/ 

10,147        5,217      5,315 


1929  Product 

ion 

(million  fee 

t) 

11 ,  63( 

Year 

1929  ■. 

,2.3 

1930 

3.6 

1931 

6.1 

"?•"■?  1932 

8.0 

1933 

6,4 

1934 

5.8 

1.4  2.1  4.2 

1.8  2.7  3.8 
2.6  4.0  4.4 
4.4  6.0  5.7 

2.9  4.7  6.8 
3.2  4.1  6.6 


1934  Production 

(million  feet)      4,680     4,275'       2,649      1,950 

a/   These  softwood  producing  Divisions  reported  81  to  84  ner  cent 
of  all  liimber  shi-oraents  originated  therein. 

b/  This  hardwood  -oroducing  group  shipned  a,pprox:iraately  70  ■oer  cent 
of  all  hardwoods. 


9813 


-7C- 


Sawmills:   Ratio  of  Ha.ted  Capacity  for  1934 

to  reported  Troduction  in  the  minor 

Lumber  Producing  Divisions 


Hortheas 

■tern 

TTortiic 

■rn 

Northern 

Soft^oc 

ids 

Henlock 

Pine 

Hed-^ood 

Cynress 

1929  Product 

ion 

(million  fee 

:t) 

"46 

■  486 

352- 

590 

.-381 

1929 

2.4 

1.4 

1.3 

1.3 

1.6 

1930 

2.8 

1.8 

2.2 

1.6 

1.6 

"'•-X   1931 

4.7 

2.7 

5.0 

2.7 

2.4 

1932 

6.6 

6.2 

8.2 

4.4 

5.2 

■■:"  '  1933 

6.0 

6.0 

9.8 

3.7 

5.4 

1934 

5.4 

3.9 

5.7 

2.2 

5.6 

1934  Product 

ion 

(million  fee 

t) 

290.9 

110.3 

84.4 

350.5 

110.3 

In  connection  vith  this  group  of  data  relating  to  minor  lumber  -oro- 
ducing  divisions,  it  should  "be  considered  that  these  various  divisions  and 
the  capacity  and  the  production  listed  represent,  for  the  entire  groxsp, 
only  from  10  to  15  -oer  cent  of  all  lumber  used;  so  while  the  figures  are 
informative  and  are  presented  for  comparison  rlth  similar  data  for  the 
principal  1-umber  producing  divisions,  this  indicated  excess  of  ca-oacity 
would  have  no  serious  effect  upon  production  in  general.   The  above  com- 
ments do  not  apply  exactly  to  the  Redvrood  Division,  for  in  this  particular 
type  of  operation  the  large  mills  and  highly  mechanized  operations  are 
again  found,  but  the  number  of  operators  is  very  limited.   It  will  be  noted 
that  the  data  disclose  the  Redwood  Division  onerated  at  nearly  80  percent 
of  its  canacity  in  the  pealc  year  of  1929;  that  in  the  low  year  of  1932 
it  was  operating  at  less  than  25  per  cent  of  its  rated  capacity;  and  that 
in  1934  the  mills  were  operating  at  nearly  50  ner  cent  of  their  rated 
capacity. 

As  would  naturally  be  supposed,  with  more  than  17,000  sawmills  lo- 
cated in  nractically  every  state  in  the  Union,  many  different  manufactur- 
ing methods  are  involved.   These  methods  can  be  roughly  classified  into 
the  methods  and  practices  followed  by  the  small  sawmills,  the  methods 
and  practices  followed  by  the  intermediate  size  sawmills,  and  the  methods 
and  practices  that  are  a  necessary  part  of  the  ox)erations  of  the  large 
sawmill  units. 

Aside  from  the  size  of  these  operating  units  there  must  also  .bt  con- 
sidered the  methods  cf  manufacturing  used  by  the  different  tyoes  of  saw- 
mills.  Generally  sneaking,  a  considerable  TDart  of  the  Droduction  of  the 
small  hardwood  mills  is  custom  sawing.   This  is  simply  the  bringing  in 
of  logs  by  their  owners  who  desire  them  to  be  sawed  up  into  certain 
specified  articles  of  lumber  generally  for  their  own  consumption.  Another 
type  of  small  savmill  is  more  prevalent  in  the  Southern  Pine  Division. 
Here  are  several  thousand  mills  that  are  engaged  in  the  manufacture  of  some 
lumber  products  from  the  available  standing  timber  in  their  particular 
neighborhood.   The  production  by  this  group  of  mills  is  a  more  direct  and 
less  purposeful  utilization  of  the  standing  timber.   It  is  in  fact  a  type 


9813 


\ 


-71- 


of  operation  that  may  best  "be  described  as  mopping  up  an  area.   In 
other  words,  these  sawmills  are  engaged  in  the  sawing  of  logs  from  trees 
that  are  too  small  in  siz3  or  too  far  removed  ib6  make  their  utilization 
profitable  in  regularly  established  sawmill  operations.   The  purpose  is 
simply  to  get  the  most  possible  out  of  the  logs  and  to  get  that  pi'<j'liu;t, 
all  too  often  of  a  low  grade,  into  tho  market  and  sold  for  ginything  tiiB.t 
it  might  bring.  Most  of  the  equipment  is  of  low  efficiency  and  -Droduces 
lumber  of'  distinctly  substandard  quality.   Among  mills  of  this  classi- 
fication is  the  group  known  as  "roofer"  mills  of  the  State  of  Georgia. 
Thes*  mills  produce  lumber  from  small  and  immature  trees  and  the  product 
is  usually  the  roughest,  the  poorest  and  the  most  irregular  of  any  lumber 
production  worthy  of  that  name.   The  products  of  these  mills  are,  as  the 
term  would  indicate,  simply  rough  boards  of  varying  widths  and  lengths 
that  are  used  as  a  foundation  for  other  lumber  or  substitutes  for  lumber. 
Thesis  boards  do  nfet  have  to  be  of  any  particular  width  or  length  and  they 
simply  replace  better  manufacturing  material  in  any  type  of  construction 
to  which  they  are  adapted. 

Manufacturing  of  lumber  products  of  standard  grades,  sizes  and  re- 
presentative qualities  cannot  vary  considerably  between  mills  in  the 
same  species  area  or  between  mills  in  areas  producing  competitive  stDecies. 
Th?  lumbpr  must  bfl  produced  and  sold  in  competition  with  the  products  of 
all  other  mills  of  similar  character.   Hence  the  manufacturing  processes 
and  procedures  must  be  such  as  to  produce  lumber  comparable  in  grade  and 
sizes  with  other  mills  prudncin/r  tvh^-;  vf^mc   or   i^umpt- (■i  f.ive  suocies. 


9813 


-72- 

There  is  another  t:/pe  of  mill,  and  one  Tvhich  added  a  distinct  factor 
to  the  general  protlem  of  orod^iction  —  those  mills  which  are  produ- 
cing lumter  from  their  OT.-n  tre^:s,  in  their  own  mills,  :7hich  is  not  ex- 
pected to  and  generally  does  not  evei  reach  the  channels  of  distribution 
■for  the  reason  that'  these  products  are  put  into  other  processes  for 
finishing  special  items  for  their  own  use.   These  sawmills  with  inte- 
grated operations  created  a  distinct  problem  under  the  Code  administra- 
tion and  a  problem  which  apparently  had  not  been  given  adequate  conside- 
ration and  had  not  been  solved  in  the  drafting  of  the  Code.   It  is 
plain  to  be  seen  that  if  one  of  those  integrated  operations  —  the  , 
making  of  sawed- wooden  boxes  --  was  carried  on  by  a  sawmill  manufacturing 
its  own  material  for  the  box  making  oparcitions,  it  would  have  a  distinct 
competitive  advantage  over  other  box  plants.  Not  only  v/o^ald  such  an 
integrated  mill  have  the  advantage  of  being  able  to  use  short  length 
and  low  grade  1-amber  from  its  actual  lumber  producing  operations,  but 
it  also  would  be  possible  for  it  to  transfer  gill  of  its  products  over  to 
the  box  making  factory  at  a  price  which  might  .result  in  a  loss  for 
the  sawmill  but  in  an  exorbitant  or  \mreasonably  large  profit  for  its 
box  making  activities.   This  is  just  a  sample  of  several  of  the  per- 
plexing conditions  which  arose  through  failure  to  properly  comprehend 
and  provide  for  the  effect  of  integrated  manufacturing  operations 
within  the  sawmill  industry.  .         ,     , 

The  method  of  manufacturing  b?/  the  various  types  of  mills  as 
discussed  above  added  one  other  phase : to  the  general  production 
problem.   It  can  be  readily  seen  that  the  small  mills  operating  spo- 
radically would  secure  their  labor  onlv  from  people  in  the  immediate 
neighborhood  who  would  necessarily  provide  themselves  with  other 
means  of  livelihood  than  working  in  the  sawmills.   In  fact,  practically 
all  of  the  labor  in  such  type  of  mill  was  purely  the  type  that  used 
the  sawmill  wages  as  a  supplement  to  other  earnings.   This  type  of 
mill  could  suspend  production  at  ajiy  time  or  fail  to  resume  production 
at  any  time  and  it  would  still  not  seriously  affect  any  considerable 
number  of  wage  earners.   This  same  condition  oreva.iled  also  in  con- 
nection with  other  small  sawmill  opei-ations  whether  those  sawmills 
were  of  the  movable  type  or  whether  they  were  of  reasonably  perma.nent 
installation.   In  either  event,  with  production  not  being  forced  upon 
the  mills,  the  labor  that  would  be  employed  in  those  mills  would  or- 
dinarily be  supplementing  other  earnings  with  their  sawmill  wages. 
Also,  as  a  general  rule,  these  small  mills  were  not  burdened  with  any 
investment  in  standing  timber  and  consequently  added  no  burden  of 
interest  and  taxes  to  be  met  reg'alarly. 

But  the  condition  would  be  very  different  when  the  production  of 
the  larger  sawmill  units  would  be  interrupted.   These  larger  mills 
were  accustomed  to  and  were  expected  to  operate  about  60  or  more  hours 
per  week.   It  was  thei-efore  necessary  for  them  to  build  a  reservoir 
of  labor  upon  which  they  could  depend  for  the  sustained  ho\irs  of 
Operation.    As  a  consequence  of  these  conditions,  labor  migrated 
to  the  vicinity  of  the  sawmills;  in  fact  there  had  been  many  towns 
and  small  cities  located  or  built  up  around  sav/mill  activities. 
These  mills  were  dependent  upon  this  labor  and  this  labor  was  de- 
pendent upon  them.   The  mills  also,  because  of  their  size,  the 
amount  of  capital  required  for  their  building  and  the  securing  of 
the  necessary  timber  to  back  them  up,  involved  very  considerable 

9813 


-73- 

investraent  aiid  the  properties  './ere  all   subject   to   taxation.      In  connection 
with  thia  i^roiips  of  lar^e  mills,    economic  pressure  for  continued  operations 
wrtuldi    in  raaiiy  cases,   force   these   savmiills  into  production  even  when 
there  v/as  no  imnediate  demand  for  their  products.      With  demand  hein^ 
redu-ced,    prices  would  decrea:;e  under  the  pressure  of  the  increasing- 
suoply  and  these   sswmil'i.s   found   themselves   compelled  to   operate   at   a 
direct  loss,      Thi;  necessarily  caused  the  labor  wa^e  to  be  reduced. 
The  v/a/je  of  labor  v/rs   the  most   important  factor  of  the  out-of-pocket 
or  actual  money  cost   of  production;    it  v/as   the   one  which  would  be 
subjected  to  the  most  pressixi-e  for   reduction  and  in  most  instances 
vv'as   the   least  fixed  it-sm  of   cost  of   any  that  had   to   be  met   currently 
by  the  mills   if  they  were   to   continue   in   ■sxistence, 

■    After  the   adoption  nf  the  Code  many  hundreds   of   these   small 
mills,    fe.ced  v/itli   the  necessity   of  payin^^-  a  minimum  wage  and  supplyin^;^ 
information  relative   t»   their   operations,    did  not   a^ain  resume    saw- 
in^'.      The   Ic.r^-er  mills,    however,   were  not  able   to   dispose   of   this 
problem   so   easily,    but  v;ere   actually   faced  with  the  necessity   of 
continuin-'j  their  manufacturing,-  operations.    They  paid  the  minimiun 
wa^-e   specified  in  the  Code;    t}iey  operated  the  maximum  number  of 
hours  peraiitted;    they  produced  their  liomber  and  jTilt  it   on   the  market 
exoectini^;  to  find  it  mflvinj];  in  the  usual   channels   of   trade  at   the 
minimum  prices   set   by  the   industry  Code  Authorities,    only   to   be   faced 
with  c,  volume  of  productioii   from  other  similarly  located  mills   that, 
in   the   u^r^ve^sXet   vvas  more  than  the   market  was   demanding.      Those  mills 
were  virtually  forced  to  continue  production   and   their  products  had 
to  be   disposed  of  in  some  manner  and  at   some  price   so   th^-'t  additional 
money   could  be   secured  for  continuing  operations. 


9813 


-74-  ,. 

B.   PRODUCTLON  -  VOLUI^E  ~   USAGE  .        >     ■: 

Lumber  prodiwtion  is  l,'=rgel;v  i  forced  aiid  irvoliantar^'-  process.   It 
is  not  similar  to  factorv  production  vhera  specified  materials  are  pro- 
cessed to  make  par.ticular  products.   Articles  produced  in  the  usual  factory 
may  te  for  orders  already"  in  hrnd.,  for  replenishment  of  stocks,  and  in 
anticipation  of  results  from  a  pr.earran-;ed  selling  campaign.  JJsually 
tnese  production  -processes  may  he  trought  to  a  stop  at  rny  time  and  not 
leave  any  large  stock  of  raw  materials  on  hand  to  hui'den  the  cash  re- 
sources with  recurring;  fixed  charges  of  interest  and  taxes.  ' 

ti'erchantahle  standing  timber  is  the  raw  matepial  of  the  saw  mills. 
It  must  be  either  owned  or  controlled,  in  such  quantities  as  to  furnish 
sav;  logs  at  the  mill  for  such  n  period  as  Y/ill  be  economic  justification 
for  the  establishment  of  the  converting  -units  and  at  such  a  cost  as  will 
permit  the  sale  of  the  resulting  lumber  products  at  a  price,  under 
reasonable  competitive  conditions,  that  vill  return'  a  profit.   Standing 
timber  must  be  converted  into  logs  and  other  forest  products  under  pressure 
of  nature,  for  trees  reach  maturity-  as  do  other  crops  and  then  deteriorate, 
and  slowly  but  certainly  lose  value.   Logs  usually  must  be  so  sawed  as  to 
produce  the  best  possible  assortment  of  sises  and  grades  of  lumber, 
whether  those  sizes  aAd  grades  are  vranted  or  needed.  I 

Thus  it  will  be  seen  that  in  the  -production  of  savmill  products, 
as  a  usual  thing,  there  cannot  be  a  particular  choice  of  the  raw  m.aterial, 
and  that  the  product  will',  to  a  very  large  extent,  depend  upon  the  size 
and  quality  of  saw  logs,  "the  efficiency  and  ability  of  the  men,  and  on 
the  type  of  mill  equipmient  operated  by  them.   ?his  is  particularly  true 
where  lumbering  operations  are  carried  on  purely  as  a  salvaging  operation. 
In  later  years,  salvaging  of  values  from  standing  timber  has  been  the 
predominant  factor  in  the  production  of  lumber,  as  the  mills  were  estab- 
lished and  equipped  and  the  standing  timber  had  been  acquired,  all  of 
which  necessitated  payment  of  the  carrying  charges  for  the  investment 
vhich  in  turn  forced  the  savmrdlls  to  operate  without  regard  for  the 
immediate  value  of  the  products. 

Other  economic  pressures  required  that  quantities  of  standing 
timber  be  converted  into  sawr'ill  products.   Land  under  lease  must  be 
cleared  before  the  lease  period  expired.   Standing  tim.ber  purchased  to 
be  paid  for  out  of  progressive  utilization  demanded  liq-ciidation.   Vast 
holdings  of  standing  timber  (*)  acq\iired  possibly  as  a  speculation  and 
covered  largely  by  mortgages  and  bond  issues,  demanded  sufficient  oper- 
ation to  realize  cash  to  pay  carrying  charges  of  interest  and  taxes. (**) 


(*)   Table  III  -  Stand  of  Saw  Timiber  in  the  United  States  by  Regions, 
States  and  Classes  of  Ownership. 

(**)  Tables  XII',  XIII,  XIII  (a).  XIII  (b) 


9813 


-75- 

These  conditions  were  particularly  true  of  the  larger  virgin  timber 
lends  in  the  West  Coast  region,  and  competing  woods, while  not  possibly 
under  the  same  economic  pressure  for  liquidation  saw  their  market  dis- 
appearing unless  they  in  turn  stepped  up  production  even  though  the 
products  were  in  excess  of  demand  and  had  to  be  sold  only  on  a  glutted 
and  falling  market.   S'rom  the  earliest  days  liamber  has  been  produced  to 
meet  a  natural  and  not  a  created  demand.   It  is  true  the  industry  has 
made  many  refinements  in  its  products,  largely  to  meet  the  competition 
of  its  own  members,  but  except  for  these,  the  products  of  most  mills 
today  are  little  different  from  those  of  the  earlier  mills.   The  princi- 
pal products  are  not  readily  susceptible  to  any  uses  other  than  those  of 
long-established  custom. 

The  capacity  to  produce  lumber  has  been  shown  to  have  been  always 
in  excess  of  the  demand  for  the  product.  (*)  Changing  centers  of  demand 
and  changing  centers  of  production  have  worked  one  with  the  other  to  build 
up  a  capacity  to  produce  that  has  always  been  a  weight  upon  the  industry. ( **y 

Ascending  volume  of  Ixomber  production  marked  the  westward  movement 
of  population  with  the  settling  of  new  farms,  and  the  opening  up  of  towns 
to  supply  the  new  farming  communities.   This  impetus  to  production  was 
followed  by  a  long  maintained  demand  resulting  from,  city  improvements, 
better  buildings  on  the  farm,  and  finally  by  the  turn  of  population  to 
the  city  requiring  other  and  further  duplication  of  habitation.  (***) 

( *)   Table  XX-Comparison  of  Equipment  Utilization. 

(**)   See  Table  IV  -  Percentage  of  Distribution  of  Lumber  Production,  by 

Hegions  -  1849-1934;  the  Evidence  Study  Series  No.  22,  "The  Lumber  and 

Timber  Products  Industry",  W.  E.  Yost,  Division  of  Review,  NRA. 

(***)   The  Department  of  Commerce,  Bureau  of  Foreign  and  Domestic 

Commerce,  Forest  Products  Division,  published  in  January  1935, 
data  indicating  that  the  peak  cons\imption  of  lumber  was  from  1904  to 
1913.   During  this  period  the  consumption  of  lumber  did  not  fall  below 
40  billion  feet,  and  in  the  year  1906  reached  almost  45  billion  feet. 
From  1914  on  to  1928  consumption  fluctuated  from  a  low  of  28  billion 
feet  in  1921  to  a  high  of  39  billion,  700  million  feet  in  1923. 

This  high  consumption  of  lumber  in  the  period  from  1904  to  1913, 
and  which  was  partially  maintained  up  through  1917,  very  closely  follows, 
and  it  is  fair  to  assume  is  linked  with  the  movement  of  population  that 
is  very  definitely  shown  in  a  publication  by  the  U.S.  Department  of 
Commerce,  Bureau  of  the  Census,  entitled  "State  of  Birth  of  the  Native 
Population"  (l932.)   This  publication  is  based  upon  the  Census  of  1930, 
and  on  page  11,  Table  VII,  the  migration  of  population  is  very  clearly 
depicted  covering  the  period  from  1870  to  1930.  Data  therein  presented 
shows  that  Ner  England  constantly  lost  population  and  that  the  Middle 
Atlantic  States  also  showed  a  continual  loss,  gradually,  however,  de- 
creasing to  1930.   The  West  North  Central  States  gained  population  con- 
stantly fjrom  1870  to  1910;  then  this  section  began  to  lose  its  native- 

9813 


-7t^ 

The  downward  treud  of.  the  VQlumc  of  Imnber  production  has  been 
marked  by  the  well-recogiiizud     turn  or  treud  of  population  from  the  rural 
to   the  urban   centers.      (*)    Then  the  density  of  city  population  required 
more  and  larger  buildings,   bringing  about   fire  hazards   and  result in^  in 
the  adoption  of  stria,5ent   fire  ref^ulahions  restricting  the  use  of  wood 
for  construction  purposeG  in  mpny  of  the  larger  cities.      Coupled  with  ■ 
this  downward  trend  of  luraber  use  and  as  one  of  .its  contributing  causes 
was  probably  the  development   of  the  use  of  brick  and  the  dev.elopment 
of  the  use  of  concrete  ai"'d  construction  materials  which  had,  come  ontp , 
the  market  with  the  development  of  science,  and.  the  arts.      This  influx 
of  materials,    new.  in  fact  or  nev;-  in  use,    was  of  prime  importance,  to'  the' 
Lumber  Industry  as.  it.  coincided  with  a  period  of  rising  costs  which  had-  " 
made  necessary  rising  prices   for  a  great'  mar".y  of  the  products'  of  tlii's   ■'  ■.' 
industry.      With  these  increasing  prices  diuunishing  the'  price  different-- :-3-''- 
tial  between   liomber  products  and  these  new  building  materials,    there 

(Footnote  continued)  ':■        -    •:  ;. 

born  population.      The  Soxith  Atlantic  and'  the  East   South  Central -.St-ateg  ■.   ; 
all  lost  population  throughout  this  60-year  period.  •     ..;    .,  .   ...    . 

There  was  a. gain  in  population  in   the  West  South  Centxal   States 
and  in  the  Mountain  and  Pacific  Region. 

The  movement  of  population  i.nto   the  West  Horth  Central  States 
reache.d  its  peak  in  the.  period  1890   through  1900.      The  movement  of 
populatiori  into  the  .West .  South  Central   States,    while  continuous  from 
1870  to  1930,    reached  Its  pealc  from  1900 'to    1920.     Beginning  in  1910 

and' continuing  through  1930  the  Pacific  Stntes  absorbed  population. _ 

apparently  from  every  other  group  of  states,    as   those  sections  which 
were  .losing  population  registered  heavier  losses  in  the  years  from';'l910 
to   1330,    and  usually  tho.se  sections  gaining  population  gained-at  -a  lesser 
rate  in  this  period  tlian  in  the  prior  period.  •  •■-''-    - 

(*  )   In  1933  the  U.    S.    Department  of  Commerce,    Bureau  of  the  Census,    re-' 
printed  a  part  of  Chapter  I,    Volume  2,    15th  Census,    Reports. on  Popular- 
tion.      In  this  reprint,    oh  page  9,    are  displayed  data   concerning 
urban  and  rural  population.      In  Table  III  are  published  data  from 
1790  to '1930,    and  it   is  therein  cle-arly   sho-,wi.. that -population  in  places 
of  8,000  or  more  has  increased  from  3,3  per  cent  of  the  entire  population, 
in  1790  to  49,1-  per  cent  in.  1930.      It  is  fixrther  shown  that  one  very 
definite  movement  took  place  between  1880  and  1890,    and  that   from  1900  to 
1930,    the  Tovement  to  urban  centers  of  8,000  or  more  increased  more  tlian 
17  per  cer.':- 

It  tz  a3 so    shown  in  Table  IV  that  the  population  concentrated  in 
places  f3c::i  2.500  i.pwf r-l  increased  from  3r  4  per  cent  of  the  popular- 
tion  in  I'j^O    ho  5.),?  i^v  cent  of  the  pop j'.'  -.tion  in  1930.      It  is  also 
interf^o'i  in.j   ;,o  i;;' o    ^i -.- i;    this   same  tabic   r-hows  tliat  the  greatest   concen- 
tration  :ni.  : -rate' ;i.r.LS  be.-.n  in  places  of  ore  irdllion  or  more,    although  all 
size  grov.-oi  iuiir--, .aed  i.,  population  excep!'   tliat  group  of  cities  between 
500,000  aru  1,000,000  e. .cept   fo.r  a  slight  decrease  in  the  population 
centers  of  100,000   to   200,000. 


-77- 

was  a  constantly  increasing  trend  evar/   from  the  use  of  l-uni"ber.  (*) 

Dtiring  this  time-  when  this  IhtVar   movement,  v.as  in  progres  and  was 
contributin,^  to  the  decrease  i;:  the  effective  aenand  f'^r  l-LLT-lier  products, 
the  capacities  of  the  nii.lls  had  bc;?n  increasing:_  largely  throu=;h.  ths  es- 
tablishment of  nev/  production  centers  in  the  Lrke  Stpl-es,  thin  in  the 
Southern  pine  section  of  the  country  and  tntn  in  the  Vi'e..  t  Coast  region.  (**) 

Apparently  it  was  thoufht  that  with  the  increase  in  population  of 
the  United  States  tnere  would  never  cease  to  be  a  prOiP^ressively  increas- 
ing demand  for  lumber  products  which  v-oald  drive  to  their  approximate 
capacity  the  vast  number  of  sawmills  which  hsd  br-i-n  put  into  operation 
in  the  United  States.   During  the  last  oO   years  vhere  has  te^n  an  enormous 
increase  in  the  nurnber  of  uses  to  which  luir.ber  has  been  put,  but  in  spite 
of  this  wider  use  the  actual  volume  per  capita  has  declined  and  the  total 
volume  of  consumption  and  of  effective  demand  has  been  constantly  on  the 
decrease  for  a  number  o-fJ  years  except  for  the  peak  period  of  production  ■ 
in  1928  and  19?!9. 

Up  to  the  beginning  of  the  depression  there  had  been  a  constant 
increase  in  the  capacity  of  the  sawmills  in  the  United  States  and  this 
increase  was  inst-^lled  m  the  face  of  the  constant  decline  in  the  use  of 
lumber  both  in  total  volume  ana  in  consumption  per  capita., 

After  the  adoption  of  the  Code  and  even  under  the  maximum  hours 
limitation  and  in  spite  of  otner  specific  methods  adopted  to  control 
production,  it  was  practically  impossible  to  apr.reciably  reduce  the  total 
stock  of  lumber  products  on  hand  awaiting  demand,  (***) 

It  is  fair  to  state  that  this  condition  did  not  arise  as  a  result 
of  increased  production  but  largely  did  reGu].t  from  the  unforseen  and  vn- 
predictable  constant  decrease  in  demand  for  1-jjibor  products.   L"'amber 
simply  did  not  move.  There  was  practically  ro  der.and  for  it  as  its  best 
customer  -  the  Construction  Industry  -  was  virtually  out  of  the  market  in 
1932  and  in  1933.   So  in  spite;  of  all  the  actions  that  were  tsken  to 
place  the  Lum.ber  Industry  in  a  better  eicnomac  position,  it  is  found  that 
as  a  result  of  the  overcapacity  of  the  mills  and  the  economic  necessity 

(*)   Table  XXXIII,  comparison  between  total  construction  and  units  shipped 
per  $1,C00  of  construction  for  celccced  products  during  the  years 
1920-1934. 

(**)  See  Table  IV  -  Percentage  of  Distribution  of  Liarber  Production,  by 
Regions  -1849-1954;  the  Evidence  Study  Series  No.  22,  "The  Lumber 
and  Timber  Products  Industry,"   W.  E.  Yost,  Division  of  Revie"',  NRA. 

(***)  Table  LI  II  -  Stocks,  shipments  and  production  of  Softwood  Lumber 
1923-1935. 


3813 


-78- 

for  most  of  them  to  operate  at  least  some  of  the  time,  and  vath  the 
decrease  in  shipment  of  lumber  to  the  consuming  market,  the  stocks  on 
hand  continued  to  "be  unwieldly  and  an  actual  threat  to  the  ultimate 
souridness  of  the  industry.  After  the  adoption  of  the  Code  and  with  the 
promulgation  of  minimum  prices  and  more  stable  conditions  in  the  indus- 
try in  general  through  the  elimination  of  many  unethical  trade  practices 
there  was  a  general  settling  down  and  the  reduced  production  was  more 
nearly  "balanced  by  effective  demand  for  lumber  and  timber  products. 
There  was  later  a  very  noticeable  drop  in  the  demand,  and  with  production 
remaining  at  the  established  minimum  under  production  control  there  was 
another  short  period  when  stocks  of  lumber  on  hand  again  increased. 

However,  until  a  very  considerable  quantity  of  the  over  capacity 
of  the  sf'wmills  in  the  industry  have  been  eliminated  by  the  passage  of 
•time,  which  will  make  many  of  these  mills  ineffective,  and  \antil  a  con- 
dition of  more  stability  in  the  industry  has  released  many  of  the  units 
from  the  econeffiire-necessity  of  producing  lumber  to  raise  money  for 
carrying  charges,  there  will  still  hand  over  the  industry  the  constant 
threat  of  unrestrained  production  vfhich  can  again  over  balance  stocks 
and  bring  a  chaos  of  price  cutting  and  the  consequent  wrecking  of 
industry  units  whenever  prices  rise  to  such  a  point  as  will  make  it  at 
least  seemingly  possible  for  this  vast  overload  of  marginal  capacity  to 
gain  some  advantage,  however  slight,  from  again  operating  this  class 
of  mill. 


!)813 


-79- 

C.   FINANCIAL  STRUCTURE 

The  capital  or  financial,  stnictnre  and  the  changes  therein  over 
a  period  of  time  naturally  constitute  a  very  imnortant  nart  of  the 
protlems  of  the  industry.   To  proioeriy  study  this  plia.se  of  the  industry 
there  should  be  available  quite  detailed  data  concerning  the  assets, 
the  liabilities  and  the  capital  structure  in  addition  to  -orofit  and 
loss  data  of  the  organizations  or  firms  in  the  industry.   There  are 
not  available  any  authoritative  and  reasonably  comx)lete  data  on  these 
phases  of  this  industry.   There  are  a  number  of  firms  and  organizations 
purporting  to  suo-nly  certain  of  these  data,  but  each  covei:.s  only  a 
limited  sector  of  the  whole  industry. 

The  Bureau  of  the  Census  conducts  n  census  of  manufactures  in  the 
odd-numbered  years.   The  classifications  ado-oted  by  them  are  not 
exactly  comparable  with  classifications  of  the  industry  used  by  other 
reporting  services  and  esDecially  by  the  Bureau  of  Internal  Revenue. 
The  census  of  manufactures  also  includes  data  from  individuals  and 
partnerships,  but  excludes  all  below  '^5,000  annual  volume.   It  does 
not  report  any  balance  sheet  or  -profit  and  loss  data  for  these  business 
units  so  reported  otherwise.   The  Bureau  of  Internal  Revenue,  in  its 
annual  vol^ume  "Statistics  of 'Income,"  is  the  only  dependable  source 
giving  the  related  balance  sheet  and  the  nrofit  and  loss  data.   Their 
figures  are  presented  only  for  corporations  classified  as  forest  product 
corporations  which  include,  in  addition  to  sawmills  and  t)laning  mills, 
manufacturers  of  furniture  and  vehicles.   The  .u:ber  of  corporations  so 
reporting  to  the  Bureau  of  Internal  Revenue  ranged  between  5,500  and 
7,200  for  the  years  from  1920  to  1935.   The  Bureau  of  the  Census  reports 
many  additional  organizations  of  comparable  classification  but,  as 
noted  above,  this  grout)  of  figures  includes  all  types  of  financial 
organizations.   The  Lumber  and  Timber  Products  Code  Authority  under  the 
NRA  variously  reported  that  manufacturers  of  lumber  and  timber  products, 
exclusive  of  manufacturers  of  furniture  and  vehicle  products,  numbered 
anywhere  from  17,000  to  24,000.   The  largest ^number  of  cost  reports 
Beciared  by  them  under  Coae  administration  was  about  5,000,  and  there  was 
no  information  from  any  of  these  reporting  members  of  the  industry  as 
to  assets,  liabilities  and  type  of  financial  structure. 

As  the  data  published  by  the  Bureau  of  Internal  Revenue  are  the 
most  reliable  data  tliat  can  be  secured  and  cover  not  only  "the  financial 
factors  but  also  the  profit  and  loss  rosults, 'these  are  the  data  which 
have  been  classified  and  analyzed,  although  it  is  recognized  that  such 
data  also  represent  only  a  cross-section  of  the  industry  as  they  do  not 
include  reports  from  many  of  the  large-;"  corporations  in  the  United  States 
which,  while  not  principally  engaged  in  sawmill  and  lumbering  activities, 
do  control  a  very  considerable  area  of  standing  timber  and  produce  a 
large  volume  of  sawmill  products;  nor  dp  the  figures  include  any  of  the 
business  results  of  a  not  inconsiderable  group  of  the  partnership  or 
sole- trader  type  of  financial  organizations. 

Remembering  that  stands  of  merchantable  timber  exist  in  nea,rly 
every  state  in  the  Union  and  that  conversion  of  this  standing  timber 
into  sawmill  products  is  being  carried  on  by  practically  every  type  and 
size  of  sawmill  equipment  under  conditions  of  weather  and  terrain 

9813 


-so- 
differing  just  as  widely,  it  was  only  to  be  expected  that  there  would 
te  a  wide  range  of  financial  results  secured  hy  the  differing  tyoes  of 
mill  operations.   These  were  affected  also  by  the  varying  methods  of 
conversion  made  necessary  by  the  changes  within  the  industry  that 
largely  resulted  in  the  establishment  of  mills  with  rated  hourly 
capacity  of  production  largely  in  excess  of  any  effective  demand  within 
the  later  years. 

Wliile  this  industry  is  mostly  one  of  manufacturing  and  the  actual 
usable  products  are  the  result  of  one  or  more  inan'ofacturing  processes, 
the  industry  itself  is  based  upon  a  natural  resource.   It  must  -orovide 
a  dependable  source  of  the  ra.w  material  for  its  manufacturing  plants, 
and  by  the  very  nature  of  this  raw  material  the  industry,  as  it  has 
been  constituted  up  to  this  time,  has  been  compelled  to  ca,rry  very 
heavy  investments  in  standing  timber.   Owing  to  the  shifting  bases 
of  production  made  necessary  by  actual  or  effective  elimination  of 
first  one  area  of  standing  timber  and  then  another,  and  to  a  certain 
extent  by  the  shifting  centers  of  demand,  the  industry  has  built  up  a 
duplication  of  manufacturing  equipment  and  has  acauired  an  excessive 
supply  of  the  raw  material  or  standing  timber. 

While  it  is  true  tha,t  a  considerable  portion  of  this  duplication 
of  manufacturing  equipment  a,nd  of  the  ownership  of  excessive  q^uantities 
of  standing  timber  may  be  charged  to  faulty  judgment  on  the  part  of  the 
industry,  such  a  condition  actually  does  exist  and  must  be  considered 
in  the  broad  view  of  the  industry  necessary  for  a  study  of  its  economic 
problems. 

Viewing  the  industry  only  from  the  standpoint  of  the  actual  available 
figures  covering  not  all  but  most  of  the  corporations  engaged  in  the 
industry,  the  following  analyses  are  submitted.  All  figures  auoted  herein 
are  from  Statistics  of  Income,  Bureau  of  Internal  Revenue,  or  are  de- 
veloped from  those  statistical  data. 

While  the  presentation  of  data  by  the  Bureau  of  Internal  Revenue  is 
quite  complete  for  the  industry  as  a  whole,  the  classification  of  data 
is  not  as  detailed  as  might  be  desired  for  the  forest  nroducts  industry. 
The  deficiencies  principally  to  be  noted  are  that  there  arc  no  separa- 
tions of  capital  assets  into: 

(a)  Standing  timber. 

(b)  Plants  and  plant  facilities. 

( c)  The  related  depreciation  and  depletion  are  not 
separately  disclosed. 

There  is  no  segregation  of  the  source  of  borrowed  capital  employed 
in  the  industry.   It  would  be  particularly  desirable  if  information  were 
available  as  to  the  current  loans  from  banks  and  from  individuals  and 
parent  or  subsidiary  corporations. 

The  published  data  of  the  Bureau  of  Internal  Revenue  do  not  permit 
a  classification  of  the  invested  capital  of  this  industry  but  it  is 

9813 


-81- 

telieved  that  a  very  considerable  portion  is  And.   must  "be  in  standing 
timber,  and  without  definite  da.ta  as  to  the  exitent  of  this  particular 
investment  one  especially  interesting' viev?  of  the  industry  is  either 
completely  obscured  or  very  materially  foreshortened. 

Over,  the  period  of  j'-ears  ret)resented  by  the  statistics,  the 
cornorations  whose  renorts  are  tabulat-^d  in  the  yearly  Statistics  of 
Income,  Bureau  of  Internal  Revenue,  from  1926  to  1933,  inclusive,  are 
classified  by  the  Bureau  as  corporations  reporting:      •. 

1.  Net  income 

2.  }In  not  income. 

3.  Inactive 

These  classifications  and  data  cover  a  period  from  the  year  1926, 
most  commonly  referred  to  as  the  major  or  standard  year,  up  through 
the  year  1929  and  the  following  years  of  the  deiDression,  which  reached 
its  depth  insofar  as  this  industry  is  concerned  in  the  year  1932, 

The  Bureau  of  Internal  Revenue  does  not  require  all  corporations 
to.  accompany  their  income  data  with  balance  sheet  information,  so  that 
while  the  cornorations  actually  reporting  to  the  Bureau  have  ranged  in 
number  from  7,862  in  192&  nv   to  7,947  in  1928,  and  since  that  date 
continuously  declined  to  6,707  in  1932,  with  a  sli-^ht  increase  to  6,879 
in  1933,  those  corporations  which  have  submitted  balance  sheets. have 
been  smaller  in  number  and  have  decreased  from  7,244  in  1926  to  6,137 
in  1931,  with  a  slight  increase  to  6,147  in  1932  and  to  6,161  in  1953. 
Therefore,  data  concerning  assets,  liabilities  and  capital  structure 
are  from  a  group  of  corporations  about  five  per  cent  fewer  in  number 
than  the  groups  submitting  data  as  to  income. 

The  division  of  these  corporations  into  classes  of  those  reporting 
a  net  income  and  those  having  no  net  income  will  nrobably  offer  as 
complete  a  gauge  of  the  actual  trend  in  this  industry  as  any-  other 
possible  factor.  (*) 

The  corporations  r'e-oorting  a  net  income  n'onbered  4,591  in  the  year 

1926  and  4,135  in  the  year  1929,  decreasing  to  2,340  in  1930,  to  1,525 
in  1931,  and  to  541  or  just  about  nine  per  cent  of  the  total  number 
reporting  in  the  year  1932,   In  1933  profitable  operations  was  reported 
by  1,638  out  of  6,879  corporations.   Except  for  the  elimination  of  some 
1,100  corporations  between  1926  and  1932  this  difference  was  naturally 
taken  up  by  that  class  of  corporation  which  j-eportcd  no  net  income. 
This  group  numbered  3,271  in  1926,  increasing  slightly  each  of  the  years 

1927  and  1928  and  being  "oractically  the  s-me  in  1929  as  in  1926,   Be- 
ginning with  1930,  however,  the  number  of  corp'^rati  jns  reporting  no  net 
income  in  the  forest  products  group  numbered  4,868,  a  50  per  cent  in- 
crease over  the  previous  year,  and  this  group  had  increased  to  5,929 

in  the  year  1932  and  decreased  to  4,882  in  1933. 

(*)  See  Table  XXIV 


9813 


-82- 

This  review  of  the  res^ults  of  TDusiness  operations  of  the  corpo- 
rations is  given  as  one  of  the  details  concerned  with  the  very  definite 
and  marked  changes  in  the  capital  structure  of  the  industry  as  reflected 
by  this  group  of  comorations.  While  the  very  marked  decrease  in 
corporations  reporting  incomes  and  increase  in  number  of  corporations 
re-Dorting  no  net  income  has  been  one  of  the  imiDortant  reasons  for  the 
change  in  capital  structure,  one  other  factor  should  be  considered, 
which  is  that  the  corporations  as  a  class,  irrespective  of  the  yearly 
profit  or  loss  results,  continued  to  disburse  cash  dividends.  (*) 

These  dividends  and,  income  tax  payments  to  the  Government  were  in 
excess  of  earnings  .in  each  of  the  years  from  1926  to  1929,  inclusive,- 
and  dividends  we're  paid 'in  the  years  1930,  1931  and  1932  although  t  he 
industry  as  a  whole  had  lost  nearly  $110,000,000  in  1930,  more  than 
$177,000,000  in  1931,  more  than  $202,000,000  in  1932,  and  $66,000,000 
in  1933.   Some  corporations  reported  a  net  profit  each  year,  but  in  no 
year  were  the  reported  earnings  of  the  industry  as  a  whole  eq\aal  to  t'le 
cas>i  dividends  paid  out  by  all  of  t':e  corporations  reporting  the  pay- 
ments. 

While  the  year  1929  was  generally  represented  to  be  and  is  shown 
by  the  statistics  of  most  industries  to  have  been  t/;e  peak  business  year, 
t'iis  condition  was  not  true  in  tl:is  industry.   Tne  dollar  value  of  gross 
sales  of  the  industry  was  t..e  >-ig]:iest  in  1926,  being  slig-'.tly  more  than 
$2,900,000,000.  Gross  sales  decreased  to  $1,910,000,000  in  1930,  to 
$794,000,000  in  1932,  with  a  slight  upturn  to  $923,000,000  in  1933.  (**) 

Analyzing  the  balance  siicet  figures  of  the  industry  as  a  whole 
from  the  close  of  1926  to  the  close  of  1933  (***)  it  will  be  noted  that 
the  assets  decreased  from  more  than  $4,023,000,000  to  less  tlian 
$2,549,000,000  or  36,.6  -ner  cent.   In  tiiis  very  material  shrinkage  of 
assets  over  this  period  of  eight  years  the  following  items  are  of 
interest  and  should,  in  themselves,  reflect  information  important  to 
those  interested  in  the  industry. 

Cash  and  receivables,  the  -principal  elements  of  the  current  assets 
of  this  industry,  reached  their  -neak  of  about  $751,000,000  in  each  of 
the  years  1926  and  1928,  and  beginning  with  1929  decreased  sharply  to 
about  $360,000,000  at  the  close  of  the  year  1933.   Tlie  other  very 
important  factor  in  the  current  assets  position,  tha:t  of  inventories, 
also  registered  a  very  material  and  a  much  greater  loss  shrinkage  from 
a  high  point  of  $770,000,000  in  1926  to  a  low  of  $338,000,000  in  1932, 
with  a  slight  upturn  to  $367,000,000  in  1933. 

A  reference  has  previously  been  made  to  the  fact  that  in  these 
statistics  the  capita,l  assets  of  this  industry  were  not  segregated  as 
to  standing  timber  and-  plant  facilities,  sc  the  shift  in  this  class 


(*)  See  Table  XXXVIII 

(**)  See  Table  XXXIV 

(***)  See  Table  XXXIV 

9813 


-83- 

of  assets  cannot  be  as  accTirately  and  as  cr-rtmlctcily  analyzed  as  it  should 
te  to  "bring -oat  the  true  conditions.   The  group  cf  car)ital  assets,  less 
depreciation  and  depletion,  shrank  ahout  !^400,000,000  over  the  Tjeriod  of 
seveh  years  from  the  hi^h  mark  of  $1,854,0(30,000  in  1926  to  the  low  of 
$1,448,000,000  in  1932.   If  it  were  -nossible  to  segregate  the  canital 
asset  group  into  its  principal  factors  cf  standing  timber  and  of  plant 
and  mill  site  and  manufacturing  facilities,  it  would  doubtless  be  shown 
taat  many  of  these  larger  corporations  Jia,ve  divested  themselves  of 
considerable  values  TJreviously  invested  in  standing  timber.   While  there 
are  no  definite  figures  available,  it  is  safe  to  say  that  during  the 
period  from  1926  to  1929  there  was  a  very  heavy  investment  in  sawmill 
machinery  and  in  rilants.   Necesrarily  during  those  years  when  -Droduction 
was  auite  high  there  was  also  a  corresnondingly  high  decrease  through 
depletion  of  the  dollar  value  of  the  standing  timber  assets  and  de- 
preciation of  the  plant  facilities.   It  is  also  believed  th-at  the 
forest  iDroducts  industry  has  made  but  very  little  addition  to  its  ■ 
capital  assets  of  mill  sites  and  eauipment  since  the  close  of  1929.   As 
a  consequence  of  these  factors  and  because  of  the  fact  that  most  de- 
preciation in  mill  site  and  equirrment  is  on  a  basis  of  amortization  with 
the  natural  resource  and  not  on  a  straight  line  basis,  much  of  the  equin- 
ment  and  many  of  the  plants  have  suffered  actual  deterioration  consider- 
ably larger  than  that  measured  by  the  write-down  of  the  values  reflected 
in  the  comoosite  item  of  capital  assets,  which,  by  reason  of  paucity 
cf  data,  must  include  these  two  very  differing  t.ypes  of  assets. 

As  the  total  assets  em-olcyed  by  this  industry  had  decreased  36.6 
per  cent  over  the  period  of  seven  years  and  '-iS  the  current  assets  de- 
creased ap-oroximately  50  -oer  cent  in  that  period  of  time,  the  changes 
in  the  current  liability  and  bended  indebtedness  position  of  this  in- 
dustry also  reflected  a -differing  but  understandable  trend.   The  current 
liabilities  did  not  -oace  downward  with- the  ciirrent  assets,  the  shrink 
here  being  49.4  xier'cent  instea,d  of  63.5  percent.  •  The  capital  "liabili- 
ties represented  by  honded  debts  and  mortgages  were  about  $160,000,000 
in  1926  when  the  caiDital  assets  were  over  $1,860,000,000.   These  capital 
liabilities  had  showii  a  constant  yearly  increase  vco   to  $265,000,000  in 
1931,  decreasing  to  $231,300,000  -in  1933.   But  during 'this  time  the 
capital  assets  unon  which  these  cariital  liabilities  were  based  h^ad 
decreased  more  than  $400,000,000.   The  data  compiled  by  the  Bureau  of 
Internal  Revenue  classified  "other  liabilities"  under  one  general  heading. 
Without  the  details  and  the  information  that  would  come  therefrom  the 
bare  statement  of  the  change  in  this  particular  liability  is  not  as  in- 
formative as  it  might  be.   Nevertheless  it  is  very  important  to  note 
that  this  group  of  liabilities  decreased  from  nearly  $462,000,000  in 
1926  to  about  $168,000,000  in  1933.- 

With  the  very  definite  shrink  in  the  assets  employed  in  this 
industry  it  v/.mld  be  expected  that  the  stockholders"  participation  or 
interest  in  the  corporations  would  have  changed  materially.   There  has 
been  a  change  in  the  actual  capital  structure  as  preferred' stock  has 
decreased  from  $285,000,000  in  1926  to  $176,000,000  in  1933,  and  the 
common  stock  has  decreased  from  $1,378,000,000  in  1926  to  $1,159,000,000 
in  1933. 


9813 


-84- 

Naturally  the  greatest  measure  of  decrease  in  the  stockholders' 
interest  is  represented  in  the  decrease  of  the  surt)lus  accounts.   This 
decrease  was  from  $1,047,000,000  in  1926  to  $463,000,000  in  1933.   In 
this  connection  it  should  'be  noted,  however,  tliat  all  of  this  decrease 
in  the  stcckholders'  participation  is  not  alone  tlie'result  of  losses,  but 
can  be  largely  attributed  to  the  dividends,  both  cash  and  stock,  that 
were  disbursed  to  the  stockholders  as  previously  referred  to,   Tlie  cash 
dividends  over  this  rjeriod  of  eight  years  araoiinted  to  $593,000,000,  and 
stock  dividends -Were  declared  amounting  to  $56,717,000. 

In  consideration  of  the  broader  problem  of  credit  which  is  also 
connected  with  the  financial  "oroblera,  tiie  analysis  of  th.e  balance  sheet 
data  of  the  corporations  classified  by  the  Bureau  of  Internal  Revenue 
as  members  of  the  Lumber  and  Forest  Products  Industry  show  tlie  following: 
Current  assets  (consisting  of  cash,  receivables  and  inventory)  repre- 
sented 37,8  per  cent  of  the  total  assets  in  the  year  1926,  27,4  per  cent 
in  the  year  1932,  and  2R.3  per  cent  in  the  year  1933.   The  capital  assets 
in  1926  represented  46  per  cent  of  the  total  assets;  in  1932,  53.5  per 
cent;  and  in  1933,  52,5  per  cent.   Miscella.ne(Dus  assets  and  tax  exempt 
securities  together  represented  14,2  per  cent  in  1926,  19,1  per  cent 
in  1932,  and  19,2  per  cent  in  1933,   As  has  been  noted  previously,  the 
total  fund  of  assets  of  this  group  of  corporations  decreased  more  than 
36.6  per  cent  from  1926  to  the  close  of  1933. 

In  a  similar  analysis  of  the  liabilities  and  the  capital  structure 
or  proprietorship  items  other  very  startling  changes  are  found.   In  the 
year  1926  all  liabilities  represented  32.7  per  cent  of  the  assets  and 
the  capital  stock  and  surplus  represented  67.3  per  cent.   In  1933  total 
liability  had  been  reduced  to  29.4  per  cent  of  the  total  fund  of  assets, 
and  the  capital  structure  represented  70,6  per  cent.   Considering  tlie 
separate  classifications  of  liabilities  and  their  percentage  to  the 
total  of  all  liabilities, • it  is  found  that  in  1926  the  current  liabilities 
represented  52,7  per  cent  cf  the  total  and  tliat  the  capital  liabilities 
represented  12.1  per  cent.   The  classification  of  "other  liabilities"  is 
a  very  indefinite  ene,  but  as  tabulated  these  liabilities  represented  35.2 
per  cent  of  all  liabilities  in  1928  and  22.5  per  cent  in  1933.   In  1933 
the  current  liabilities  represented  46,7  per  cent  of  the  total  liabilities, 
this  being  a  drop  of  six  per  cent  as  compared  with -1926,  and  the  capital 
liability  represented  30,8  per  cent  of  all  liabilities  in  1933  a.s  com- 
pared with  12.1  per  cent  in  1926. 

In  the  period  under  comparison  the  changes  in  -the  capital  items 
have  been  quite  sharp.   In  1926  the  stock,  both  common  and  preferred, 
was  equal  to  41,3  per  cent  of  all  assets,-  while  in  1933  it  was  eq^ual  to 
52.4  per  cent.   In  1926  the  surplus  of  all  of  these  corporations  was 
equal  to  26  per  cent  of  all  the  assets,  but  in  1933  this  item  had  de- 
creased to  18.2  per  cent  of  all  assets.   Again  it  must  br  remembered  that 
during  the  period.  1926  to  1933  the  total  fund  of  assets  had  shrimk  more 
than  36.6  per  cent. 

In,  analyzing  these  data  from-  the  credit  standpoint,  consideration 
must  be  given  to  those  factors  which  affect  the  credit  of  the  industry 
and  probably  the  best  gauge  is  the  simple  but  effective  and  long-used 
formula  of  the  banking  fraternity,  namely:   that  current  assets  must  be 


-85- 

at  least  two  and  one-half  times  the  current  liatilities  "before  S  'business 
is  considered  to  be  in  a  current  borrowing  state.   De-nendine:  u-oon  this  formvila, 
^he   generally  acce-oted  elerfient  o-^  curront  assets  should  be  further  analyzed. 
This  com-oarison  wo\ild  not  be.' n  fair  one  if  consioeration  was  not  also  given 
to  the  -particular  character  of  this  industry.  And  this  is  tjarticularly  so 
when  the  inventory  factor-  of  the  current  asset  ^rou-o  is  considered.  While  the 
available  fisu-res  and  data  do  not  defi'-.itely  disclose  these  facts,  it  is 
reasonably  ass-umed  that  this  industry  must  include  as  inventory  in  the  usual 
cycle  of  manufacturing  a  very  considerable  quantity  of  so-called  raw  material, 
de-oending  upon  the  -Dractices  of  the  individual  manufacturer,  ranging  from  logs 
in  the  yroods,  down  through  trans-porta-tion  from  woods  and  uv   to  the  so-called 
saw-deck  and  then  through  to  the  drying  and  the  -planing  -orocesses. 

In  many  instances  and  in  several  localities  the  cycle  of  broduction 
extends  over  a  number  of  months  in  each  tjroduction  year.   In  some  sections 
it  is  not  -Dossible  to  fall  trees  in  the  winter.  In  other  sections  it  is  not 
-Dossible  to  trcins-Dort  logs  from  the  woods  to  the  saw-deck  during  all  -oeriods 
of  the  year.   In  other  sections  and  with  certain  s-oecies  of  wood  it  is  not 
conducive  to  good  first  quality  -oroducts  to  ciit  logs  in  the  woods  if  they  can  not 
be  almost  immediately  sawn  into  rough  lumber  -oroducts.   With  these  considera- 
tions in  mind  it  is  natural  that,  this  industry  as  a  whol?-  should  carry  an 
inventory  which  in  other  manufacturing  indiistries  would  be  considered  excessive. 
The  com-oarison  to  be  now  given  should  be  read  with  the  above  facts  in  mind. 

Based  on  the  amount  of  inventory  of  the  industry  a^-  the  close  of  each  year 
it  is  found  that  in  1926  the  gross  sales  were  sli-ehtly  less  than  four  times 
the  inventory  and  this  condition  -orevailed  with  gradually  decreasing  -ner- 
centage  through  the  year  1^29.  Beginning  ^ith  1930,  hoTOve.r,  with  the 
inventory  remaining  high  and  the  sales  constantly  decreasing,  it  is  found  that 
the  sales  for  1930  were  just  about  three  times  the  inventory;  less  than  three 
times  in  1931;  about  two  and  one-half  times  iii  1932;  and  two  and  6ight-tenths 
times  .in  1933.   The  cost  of  goods '.'sold' o-*^-"ers  a  more  reliable,  indicator  of 
merchandise  turnover,'  and..' using-  this  as' the  basic  f-i.'nire  to  be.  com-oared  with 
the  inventory  on  hand  it  is  found  that  in  no  year  between  1926  and  1933  did 
the  goods  or  merchandise  moving  out  into  channels  .of  trade  amount,  to  three 
times  the  inventory.  '  In  1933  the  cost  of  goods  sold  aggregated  less  than 
twice  the  value  of  the  goods  on  hand  to  b"  sold. 

In  addition  to  this  slow  turnover  o^   inventory,  the  analysis  of  the 
figures  also  indicate  collections  for  billed  merchandise  to  have  been  very 
slow.   In  1926  on  the  basis  of  the  usual  method  o-f  com-outation  (the  -oer- 
centage  of  outstanding  accounts  to  total  sales  a-p-olied  to  th=5  days  in  the 
year),  the  average  sale  was  not  collected  until  75  days  after  invoice  date. 
This  condition  had  gradaslly  grown  worse  even  during  the  -oariod  u-d  to  1929,  at 
which  time  the  average  between  invoice 'and 'collection  was  84. days.   Naturally 
during  the'  de-oression  -oeriod  this  condition  was  aggravated,  and  in  1932  there 
was  an  average  of  150  days  between'  the  da^te  of  invoice  and  the  date  of  -payment, 
and  this  excessive  number  of  days  was  almo-S't  a  50  -oer  cent  increase'  over  the 
year  1931,  when  the  average  ela-psed  -period  between  invoice  and  -payment  was 
105  days.   In  1933  this  neriod  between  billing  and  collection  had  decreased  to 
117  days,  but  even  tnis  reduced  -oeriod  is  very  much  in  excess  of  the  ez-oerience 
record  of  other  industries  not  indulging  in  sales  on  the  deferred  or  installment 
-olan. 


9813 


-86-   . 

A  compilation  has  been  rasde  presenting  as  .to  all  major  classifica- 
tions of  industry  an  analysis  of  the  number  of  firms  in  each  such  indus- 
try that  reported  profits  for  the  years  from  1920  to  1930,  inclusive  (*) 

While  it  has  been  usual  to  refer  to  the  year  1926  as  the  basic  or 
measuring  year,  an  analysis  of  the  data  shows  that  actually  1920  was  the 
best  year  for  the  greatest  number  of  firms  in  all  industries  to  report 
profits.   In  that  year  73  percent  of  all  renorting  corporations  in  the 
forest  products  group  earned  a  profit.   This  percentain;e  was.  exceeded  by 
only  two  other  major  groups  -  those  of  Paper  pulp  and  Printing  and 
Publishing,  which  had  respectively  80  and  79  percent  of  their  numlser 
reporting  profits  in  that  year. 

Even  diaring  the  so-called  peak  years  of  1928  and  1929  the  groups 
of  corporations  did  not  report  such  high  percentage  of  the  number  of 
members  of  the  industry  making  profits. 

From  this  relatively  high  point  of  73  percent  in  number  reporting 
profits  in  1920  (1926  to  1929  ranged  between  58  and  53  percent),  the 
data  show  that  in  1932  only  eight  percent  of  all  corporations  in  the 
forest  products  classification  reported  a  profit.   This  is  the  poorest 
record  of  any  class  of  corporation,  as  no  other  industry  group  shows 
less  than  10  percent  of  its  total  number  reporting  profits. 

Extending  this  comparison  and  using  total  capital  employed  as 
the  basis  (**),  again  it  is  found  that  the  Forest  Products  Industry 
was  among  the  highest  in  1920  and  the  lovrest  in  1932,   During  the  year 
1920,  89  percent  of  all  assets  employed  in  the  Forest  Products  Industry 
earned  a  profit,  but  during  1932  only  11  percent  of  all  assets  employed 
in  the  industry  reported  a  profit.  Again  this  11  percent  is  the  lowest 
of  all  classes  of  corporations,  the  nearest  beinp  the  Metal  Industry 
in  which  only  16  percent  of  total  assets  employed  were  able  to  report 
profitable  operations  in  the  year  1932, 

The  Bureau  of  Internal  Revenue  has  furnished  for  the  years  1931- 
1933,  inclusive,  certain  data  concerning  corporations  classified  on  the 
basis  of  the  extent  of  the  assets  employed.   This  information  is 
included  herein  as  Table  XXXV. 

It  will  be  noted  that  the  corporations  are  grouped  begin^^ing  with 
all  of  those  having  assets  of  under  $50,000  each;  the  next  grouping  is 
from  $50,000  to  $100,000;  and  the  final  grouping  is  of  corporations 
having  assets  of  over  $50,0  0,000  each.   It  will  be  noted  from  the  table 
that  a  very  considerable  number  of  the  corporations  in  this  industry 
fell  within  the  first  two  groups,  namely,  corporations  having  total 
assets  of  less  than  $100, 000  each.   In  each  of  the  years  tabulated  the 
corporations  in  the  two  groups  of  less  than  $100,000  totaled  more  than 
50  percent  of  all  corporations,  in  the  industry, 

T*)  See  Table  XXXVI 
(**)  See  Table  Xl-iVII 


9813 


-87- 

It  is  shown  that  there  hf:d  beeh  a  gradual  downward  shifting:  of  the 
corporations  from  the  larger-asset  classifications.   This  is  natural  and 
normal  in  view  of  t)reviously  discuss's'i  shrinkage  in  all  classes  of  assets 
employed  in  the  industry'  over  the  period  covered  'by  the  statistics  fur- 
nished by  the  Bureau  of  Internal  Ee'v^MLie, 

As  the  number  of  corporations  in  '^his  industry  reporting;  profits 
during  1933  was  more  than  three  times  those  reporting  profits  during'  193?, 
it  would  be  natural  to  eJipect  that  this  change  from  a  loss  status  to  a 
Tjrofit  status  would  be  relatively  normal  in  the  various'  classifications 
and  this  is  Dorne  out  oy  detailed  figures  with  one  or  tv;o  notable 
exceptions.   In  the  classification  of  ^bOjOOO  cor'porations  the  change 
over  1933  was.  less  than  two  and  one-half  times,  but  in  the  next  three 
higher  groups  the  change  was  at  a  ratio  of  more  than  three  to  one.   This 
classification  wr  s  not  prepared  by 'the  B\ireau  of  Internal  Revenue  prior 
to  the  ye'ar  lb(31;  consequently  the  comparison  can  go  no  further  back 
than  that  year. 

As  has  been  mentioned  before,  the  Bureau  of  Internal  Revenue  does 
not  publish  complete  .details  iii  connection  with  the  sub-classification 
of  "capital  assets".  -lTe:'.ther  do  they  publish  any  information  upon  which 
an  accurate  division  could  be  made  of  notes  and  accounts  bearing  interest 
as  distinguished  from  those  accounts  payable  upon  which  no  interest  is 
tq  be  computed;  nor  is  there  any  information  as  to  what  constitutes 
"other  liabilities". 

In  viewing  all  "capital  assets"  of  the  corporations  reporting  to 
the  Bureau  of  Internal  Revenue  (*)  it  is  found  that  from  the  close  of 
the  year  1926  through. the' close  of  the  year. 1933  the  "bspital  assets"  on 
Eecember  31,  1926,  in  the  amount  ot  $1, 85o; 868,000, . had  been  subjected 
tc  a  write-down  of  $708, 453., 000,   This  sum  is  made. up  of  $454, 061, ©00  ■ 
of  depreciation  and  $254,392, 0'^O  of'  depletion,  'Considering  these 
amounts  written  against  "capital  assets",  it  is' developed  that  as  of 
December  31,  1933  there  haye  been  added,  d.uring  the  period,  assets  of 
the  net  value  of  more  than  $194, O00,6o0,_ 

There  is  no  information  upon  which  can  be  basfed  any  real  computa- 
tion of  the  values  added',  to  'the  capital  assets  classification,  but  the 
figures  do  show  that  in  J;he  year  ,1927' mo r'e  th'an'  $41,000,000  of  net  values 
were  added;  this  addition  'in  192.8  amounted  to  m'ore  than  $173,000,000  and 
in  1929  to  nearly  $44,000,000',  with  a  net  addition  in  ly30  of  more  than 
$65,000,000.   In  1931  there  was  a'  net  redaction  in  "capital  assets"  of 
nearly  $85,000,000;  about  $500,000  reduction  in  the  year  1932;  and 
nearly  $45,000,000  measures  the  decrease  in  the  year  1933,   These 
additions  end  deductions  must  be  computed  without  any  information  as 
to  the  value  of  "capital  assets^'  sold,  upon  which  profits  and  losses 
were  sustained  'oy  the  industry.   The  published  figures  do  not  show  any 
information  on  this  subject  for  the  years  1926,  1927  or  1928.   In  1929 
it  is  shown  that  prafits  on  the  sale  of  "capital  assets"  exceeded 
$27,000,000,  but  there  are  no  data  as  to  any  loss  that  might  have  been 
incurred.   Beginning  with  1930  the  xsureau  of  Internal  Revenue  separately 
tabulated  and  published  figures  representing  both  losses  and  profits  on 
the  sale  of  "capital  assets".   In  1930  they  reported  profits  of  $6,636,000 

(*)  See  Table  XXXIV        ''  '  \  = 

9813 


-88- 

and  losses  of  $6,879,000;  m  1931  profits  of  $6,504,000  anci  losses  of 
$6,9j8,000;  in  19o2  profits  of  $2,332,000  and  losses  of  $14,321,000;  and 
in  1933  profits  of  $4,795,000  a.nc  losses  of  $9,894,000.  These  quoted 
figures  can  be  only  partial  inf ormati-..n,  as  t;.e  actual  nev;  additions  to 
plants  and  equipment  and  to  stpndin,e;  timber  caji  not  be  gauged  without 
knowing-  the  cost  value  of  these  assets  which  had  been  sold  during  the 
period. 

In  connection  with  the  liabilities  it  ifould  be  informative  to  know 
the  extent  of  the  amount  upon  which  interest  vould  have  to  be  paid  and 
the  rate  of  that  interest.  However,  vdthout  complete  information  as  to 
the  character  of  these  liabilities  only  an  effective  rate  of  interest 
upon  the  total  of  all  liabilities  at  the  close  of  the  year  can  be  com- 
puted,  ^his  interest  rate  starts  with  ,0376  in  1926,  increases  to 
,0443  in  1928,  and  is  reduced  to  ,0425  in  1931,  ,034  in  1932  and  ,0318 
in  1933. 

One  of  the  larger  elements  of  cost  in  tnis  industry  is  the  amount 
of  taxes  paid  other  than  jTederal  income  tax.   Again  complete  informa- 
tion is  not  a,vailable;  hence  it  can  only  be  stated  that  beginning  with 
1926  the  reporting  corporations  paid  almost  $41,(^00,000  in  tajces,  and 
these  taxes  were  gradually  reduced  in  amount  to  $30,000,000  in  1931. 
This  latter  amount  is  a  reduction  of  nearly  $5,000,000  over  1930,  and 
is  the  greatest  single  reduction  in  any  one  year  of  the  period  mentioned. 
However,  between  1931  and  1932  there  evidently  was  either  a  sharp 
reduction  in  the  amount  of  taxes  actually  accruing  or  else  this  group 
divested  itself  of  a  very  considerable  amount  of  values,  for  the  tajc 
burden  in  1932  had  been  reduced  to  about  $23,600,000  and  there  was  a 
further  reduction  of  about  $500,300  in  the  taxes  paid  in  1933,   "Ry 
reason  of  the  lack  of  information  these  reductions  can  not  be  classified 
or  explained  but  can  only  be  cited  from  the  actual  published,  and  in 
most  cases,  audited  figures. 

In  connection  with  the  profits  and  losses  sustained  by  this  indus- 
try, it  can  be  pointed  out,  but  without  a  full  discussion  by  reason  of 
the  lack  of  information,  that  durine-  this  period  oi  eight  years  when  the 
industry  actually  incurred  a  loss  of  $235,496,000,  it  reports  other 
income, to  the  extent  of  $696,943,000,   Of  this  sum  about  $160,000,000 
was  received  from  interest,  rents  and  royalties,  about  $52,000,000  was 
received  as  dividends  from  other  corporations  and  the  industry  received 
from  tax  free  investments  the  sum  of  $17,139,000, 

The  forest  products  industry  is  based  upon  a  natural  resource  and 
it  would  be  expected  normally  to  find  that  most,  of  the  depreciation  and 
the  depletion  of  the  physical  assets  and  of  the  standing  timber  would  be 
computed  on  an  amortization  basis  that  would  extinguish  the  assets  with 
the  actual  resource.   The  figures  presented  by  the  Pureau  of  Internal 
Revenue  very  largely  sunport  this  general  premise,  but  it  is  also  evident 
that  a  very  considerable  portion  of  the  physical  assets  are  depreciated 
upon  some  straight-line  basis.   For  the  right  years  of  operati-on  the 
■industry  charged  out  against  cost  o±  goods. sold,  depreciation  and  depletion 
amounting  to  $843,731,000,   The  percentage  of  this  charge  remained  fairly 
constpnt  during  the  first  four  years  when  the  industry  had  a  reasonable 
amount  of  ■Drod.uction,   In  1926  this  rate  "••as  6  percent  of  the  cost  of 
goods  sold,  increased  to  6,46  percent  in  1928,  and  V7as  reduced  to  6,12 
percent  in  1929,   Beginning  with  the  depression,  however,  the  percentage 

9813 


-89- 

of  the  cost  of  goods  sold  represented  by  these  items  of  cost  emoanted  to 
7.27  percent  in  1930,  7.46  perc^rt  in  l^ol,  9.17  percent  in  193:^,  pnd- 
9,18  percent  in  1935. 

'  With' the  vast  preas  of  timber  land  ovned  by  the  organizptions  making 
up  the  Lumber  and  Timber  Products  Indi.:stry,  and  with  shiftint;  centers  of 
production  as  well  as  shifting  centers  of  d.ernand  having  caused,  a  "duplica- 
tion of  production  capacity  far  in  excess  oi  the  actual  effective  demand 
for  the  products  of  the  industry,  it  is  a  noteworthy  fact  that  the  data 
from'  the  J^^eau  of  Internal  -c-evenue  (known  to  not,  cover  the  entire  indus- 
try) show  that  the  capital  structure  of  this  not  inconsiderable  grout)  of 
corporations  (having  over  $4,000,000,000,  of  actual  assets  in  1926)  has  a 
remarkably  conservative  division  between  that  contributed  by  owners  and 
that  contributed  by  creditors,  especially  those  .creditors  of  the  more 
formal  class  whose  indebtedness  is  represented  by  bonds  and  mortgages. 

This  industry  "is  faced  vdth  the  necessity  of  carrying  in  its  own 
ownership  standing  timber  sufficient  for  the  production  needs  of  its 
lumber  manufacturing  equipment  for  periods  ranging  from  20  to  25  years 
in  the  Southern  Fine  Division  and  from  50  to  75  years  in  the  Iffest  Coast 
Division,  with  all  the  a.ttendant  carrving  charges  of  a  fixed  nature  such 
as  interest  and  taxes.   It  laast   provide  for  the  carrying  of  a  considerable 
body  of  costs  into  its  production  schedule  that  are  more  in  the  nature  of 
production  or  manufacturing  costs. 

The  costs  of  production  constitute  the  next  problem  of  this  indus- 
try to  be  considered. 


9813 


-9C^ 


D.    FHOrUCTION  COSTS 

The  cost  of  production  in  the  Lumber  and  Timber  Products  Industry- 
is  primarily  concerned  with  costs  of  log.'^ing  and  of  aanuf p.cturing,  plus, 
of  course,  f:eneral  -verhead  expenses  of  the  unit  and  the  shipping  and 
selling  expenses. 

Logging  includes  all  operations  in  the  roods  from  falling  (the 
cutting  down  of  the  tree),  bucking  (cutting  the  tree  into  log  lengths), 
skidding  and/or  yardin.';:  (moving  of  logs  from  where  felled  to  loading 
center  for  trans-nortation  to  mill),  and  the  many  and  varied  operations 
of  establishing  the  logging  cpmps  on  the  site  of  the  standing  timber 
(timber  or  logging  chance). 

Transportation  is  the  moving  of  the  logs  by  any  of  several  methods 
from  the  logging  chance  to  the  sawinill  yard  or  log  pond. 

Manufacturing  is  the  conversion  of  the  saw  log  into  usable  lumber 
products. 

The  logging  of  standing  timber  is  variously  performed  by  casual 
workers  in  their  own  timber  lot  or  on  their  own  small  forest  holding, 
by  groups  of  men  especially  engpged  for  that  particular  work  either 
on  the  timber  lot  of  one  uwner  ^r  of  several,  as  the  case  may  be,  and 
by  groups  of  men  regularly  empluved  bv  the  organization  actually 
owning  the  timber  and  sawmill.   It  can  be  seen  that  the  costs  of  such 
widelv  diversified  operations  will  oe  from  the  verr/   sketchiest  to  the 
most  definitely  recjrded  figurep. 

In  connection  vith  logging  costs  there  also  must  be  considered 
the  general  subject  of  transportation  of  the  logs  from  the  stump  to 
the  rail  or  other  transportation  head  and  from  there  to  the  saw-deck. 
This  first  transportation  may  consist  of  skidding  over  the  ground  for 
a  limited  distance  by  motor  or  other  comparable  power,  or  by  the  use 
of  air  lines.   The  second  stage  is  usually  by  ,iotor  truck,  spur  rail- 
roads or  common  carriers  and  waterways. 

V/ith  the  logging  operations  (and  transportation)  being  variously 
performed  under  varying  conditions  of  climate,  thickness  of  the  .stand 
of  timber  and  size  of  trees,  and  differences  in  the  topography  from 
the  swamp  lands  of  the  Southeastern  section  where  cypress  is  produced 
tu  the  steep  and  rocky  mountain  sides  of  the  Western  section  of  the 
United  States,  it  can  be  seen  that  the  actual  cost  of  the  saw  log 
delivered  to  the  sa"-raill  can  and  necessarily  iaust  vary  considerably 
as  the  conditions  briefly  sketcned  aoove  '-'ill  vary  in  the  different 
localities. 

Along  with  differences  in  the  kind  and  the  cost  of  the  actual 
logging  of  timber  will  come  the  cost  of  that  standing  timber.   Standing 
timber,  as  one  important  problem  of  this  industry,  has  been  thoroughly 
discussed  in  a  previous  chapter.   The  cost  of  standing  timber  will 
naturally  varv  depending  upon  whether  the  organization  has  owned  and 
has  been  prying  the  maintenance  ana  carrying  costs  upon  the  timber 

9613 


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land  lor  a  nurabei*  of  yeprs,  and  aiDon  vhether  the  logger  or  the  sawmill 
operator  is  ou.ying  a  tiarticular  stand  of  timber  or  is  only  buying  so 
many  thousand  feet  (log  scale)  uf  1o?j;s  os  and  when  actually  removed 
from  the  forest  stand.   The  cost  will  also  vary  for  the  same  soecies 
in  different  localities  uf  the  same  general  timber  rrnge,  and  also  for 
competing  species  in  entirely  differeht  sections  of  the  United  States, 

In  considering  the  subject  of  milling  or  manufacturing  costs  it 
will  be  found  that  the  vrriations  in  size  and  character  of  sawmill 
plFint  will  have  a  very  noticeable  effect  uoon  the  total  cost.   The 
number,  location  and  capacity  of  the  savmills,  the  c^^cle  of  development 
in  the  character  and  size  of  the  mills  and  the  changes  in  lumber  manu- 
facturing centers  have  been  treated  previously.  The  larger  plants 
necessarily  must  include  among  their  costs  a  great  many  items  of  expen- 
diture generally  classed  as  ad:iiinistrative  anc  overhead,  to  -vhich  the 
smaller  units  are  not  subject  in  the  same  degree.   The  larger  plants 
generally  keep  a  reasonably  complete  set  of  bookkeeping  records  but  many 
of  the  smaller  plants  operate  with  only  the  sketchiest,  if  any,  definite 
records  of  their  costs  of  o-oeration, 

Viith  this  review  of  the  field,  vhich  necessarily  can  touch  only 
the  high  spots  of  the  existing  differences,  it  can  be  seen  that  the  "cost 
of  production"  must  be  subjected  to  m?ny  differing  treatments  producing 
figures  in  many  instances  of  the  most  doubtful  validity. 

The  history  of  the  industry,  from  the  standpoint  of  its  accoianting 
and  its  general  efforts  at  development  of  costs  of  production,  has  been 
altogether  a  history  of  relatively  siarll  'i,TOupE  of  uanufacturers  in  the 
same  general  field  working  together  in  smpll  associations  covering  only 
a  fractional  part  of  the  industry  for  the  gathering' and  consideration  of 
costs.   It  has  been  variously  reported  that.,  many  of .  the  larger  units 
have  very  extensive  and  informative  cost  records.   NJiA  has  not  had  an 
opportunity  to  examine  any. of  these  recounting  or  cost  records  and  has 
not  had  an  opportunity  to  directly  review  the  finished  -orOducts  of  the 
systems  in  the  form  of  definite  costs. 

Certain  associations  of  manuf acturei s,  uf  certain  species  have 
attempted  to  pccuraalate  costs  from  their  members  and  to  gather  these  costs 
into  averages  for  all  of  those  participa.ting  in  the  cost  gathering. 
Apparently  there  has  been  a  disposition  on  the  part  of  the  member  of 
the  i'ldustrv  not'  to  participate  in  such  an  undertaking,  and  consecuently 
practically  .^11  of.  the  costs  which  have  been  developed  are  sa.aples  of 
only  r'   part,  and  a  .small  part  at  that,  of  the  industry. 

The  costs  of  log.'^ing  and  of  sawmill  operation  have  also  been  the 
subject  of  study  by  the  Ui  S.  Department  of  Agriculture,  Forest  Service, 
through  the  iorest  Products  Laboratorv.   These  cost  studies  necessarily 
could  be  only  spmples  and  not  actually  representative  of  the  entire  industry. 

Costs  concerning  the  Lumber  Industry  have  been  gatr.ered  uv  the  U.S. 
Tprriff  Commission.  (*) 

(*)   U.S.  Tariff  Commission  Report  to  the  President  on  Lumber  -  Report 
No.  32,  Second  Series  (1931) 

9813 


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This  report  '"f  s  isQv.ed.  in  ly.'^l  -nd  '-rr.  onsed  arjon  p  study  covering 
the  costs  of  the  year  19£9.   Tiie  ^asis  ol  this  C'jst  stidy  "'?ti  covered, 
as  to  the  United  States,  bv  17b  -nills  lucated  in: 

The  NortheL.tern  States:   Maine,  FeiF  Jlampshire 

»nd  Massachusetts. 

The  Lake  States:   I'/irnesota  and  '.Jisconsin 

The  Inland  Emr)ire;  western  Montana,  Forthern 
Idaho,  Eastern  n'ashin^ton, 
and  Eastern  and  Central  Orefjon, 

The  Pacific  Northwest:   ':et;tern  OreiT^on  and  '.estern 

Ivashinf  t.^n 

The  Southern  States:   Alabama,  Arkansas,  ilorida, 

C-eorg'ia,  Louisiana,  Lississi-opi, 
Forth  Carolina,  South  Carolina, 
Texas  ^nd   Vir-j:inia. 

It  was  soufe'ht  to  develop  the  costs  based  on  average  cost  per  thousand 
feet  board  mea,sure  of  dressed  luinoer,  and  it  ^-s  accordin-^ly  necessary 
to  develop  first  the  cost  of  roigh  lumber  anc  then  to  add  the  cost  per 
thousand  feet  of  dressing  the  lumber.   This  separat ion  was  necessary  by 
reason  of  the  fact  that  aisny  oi  the  mills  did  not  sell  dressed  lumber 
and  that  in  most  instances  even  where  the  mills  oid  have  facilities  for 
the  dressing  of  lumber,  a  considerable  portion  oi  their  output  was  sold 
as  rough  green  or  rough  dry  lumber.   In  developing  the  costs  for  the 
production  of  lumber  it  v-as  necessary  to  exclude  certain  costs  that  were 
not  involved  in  the  prodaj.ction  of  lumber  and  it  '-as  also  necessary  to 
exclude  sources  of  income  and  of  loss  other  than  those  connected  with 
production  of  lumber. 

The  normal  grouping  of  costs  entering  into  production  of  lumber  may 
be  described  briefly  as  follows: 

1,   ilAW  tlATERlAL  COSTS 

The  logs  are  either  produced  as  a  part  of  tne  sai^mill  operation  or 
are  purchased  from  independent  loggers  or  other  sources.   i.hen  so  purchased 
the  raii"  material  costs  are  a  k-no'^n  and  definite  factor,   "'hen  the  logs 
are  produced  b^  the  mill  the  cost  has  to  be  ascertained  and  these  costs  are: 

(a)   Sturapage  either  as  a  charge  covering 
depletion  of  timber  holding  ov-ned  or 

Payment  made  on  various  contractual 
bases  for  the  privilege  ol  cutting 
timber  under  either  public  or  private 
oii^nership. 


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(t)   Costs  for  '"nods  orernti  m,  incluoin-"; 
direct  lr:bor,  i-uoplici,  ?nd  e..perses 
of  felling  the  trees  anc  catting  the 
lo£;s,  pno    01  other  ■oreppration  of  tne 
■logs  for  movement  to  the  niill.   These 
expenses  may  je  either  rctuslly  DE.id  out 
f or  •  the  various  services  perforiQcd  directly 
for  the  loe;^':er  or  sa'"'inill  operator,  or  may 
be  paid  in  a  lump  sum  on  the  uasis  of  so 
mixch  per  thousand  feet  to  some  one  vho  is 
superintending;  such  opcr?tj.ons, 

(c)  Transportation  of  the  logs  from  the  stump 
or  woods  to  the  mill  includes  the  operation 
of  the  logger's  own  transportation  ecuipment 
and  payraents  made  to  others  for  the  actual 
transportation. 

(d)  There  is  also  the  element  of  general  and  pq- 
mmistrative  expenses  vrhich  must  be  apportioned 
between  log;-;ing  operations,  sai^mill  operations, 
planing,  mill  operations,  and  selling  and  delivery, 

2.    SAV.MILL  OE.  HOUGH  LUI\£3ER  C01\TVERSI0IT  COSTS 

The  varying  practices  oi  the  6?'='iaills  in.  the  difierent  sections  of 
the  United  States  as  to  inclusion  or  exclusion  of  certain  factors  in 
sawmill  costs  reouire  some  explanation  ano  some  reaj-rarigement  of  the 
data  assembled.   The  conversion  costs  generally  include  direct  labor, 
operating  expenses  and  supplies  for  the  sav';.riill  proper,  "dth  "vard  costs" 
and  a  proportion  of  general  and  administrative  .expense.   Yard  costs  gen- 
erally include  all  costs  of  handling  the  logs  from  the.  pond  or  sawdeck 
to  the  saY/s  and  the  handling  of  the  lumoer  after  it  is  first  away  from 
the  saws  through  the  drying  and  ref  inishing  proces.ses  to  the  yard  piles, 
and  sometimes  includes  loading  and  handling  for  sjaipment. 

In  the  Douglas  lir  division  a  part  of  the  "vard  costs"  usuall.y  are 
charged  to  rough  lumber  and  a  part  to  dressed  lumber. 

In  the  Southern  Pine  Idvision  in  the  Inland  EM'^ire  arid  in  the 
Uorthestern  Division  "yard  costs"  are  not  commonly  divided  bet"'een  rough 
lumber  or  s'^wmill  .operations  and  plrning  or  dressing  operations. 

Shipping  or  leading  expenses  consist  of  costs  incurred  in  loading 
the  lumber,  either  rough  or  dressed,  for  shipment.   And  again  the  method 
of  treating  tiiese  costs  varies  in  different'  mills...  Such  variances  range 
from  total  inclusion  of  such  costs  into  and  with  "yard  costs,"  to  a 
partial  se£;regation  to  roufh  lumber  costs  and  a  partial  segregation  and 
taoulation  with  selling  expenses  and  witn  costs  of  dressing  lumber. 

It  is  necessary  also-  in  developing  costs  to  give  consideration  to 
and  to  uniformly  treat  various  methods  used  ov  the  sawmills  in  the  same 

9813 


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divisions  and  bet'^een  divisions  in  the  hancling  of  credits  to  the  cost 
of  production.   These  credits  normplly  come  from  the  sale  of  "^sste 
and  of  some  bv-produ.cts.   Other  credits,  derending  upon  the  specific 
o-oeration,  mieiht  come  from  the  sale  of  electricity  or  -DOwer  generated 
as  8  vart   of  the  sa^'-mill  operation.   It  is  necessary  also  to  consider 
credits  for  certain  lumber  prodacts,  especially  lath  and  similar  items, 
ii^hich  in  some  divisions  am^dnted  to  considerably  more  than  in  other 
divisions. 

3.  DRESSING  OR  PLANING  COSTS 

These  items  of  the  cost  of  prepr-ring  the  finished  lumber  for  market 
include  labor,  operating  expenses  of  the  planing  mill,  of  the  dry  kilns, 
and  an  apportionment  of  general  acministration  expenses. 

4.  GENERAL  EXPENSES  AND  OVERHEAD 

Incidental  to  all  of  the  operations  up  to  the  production  of  the 
rough  or  dressed  lumber  must  come  those  expenses  generally  classed  as 
overhead  items,  including  interest,  depreciation  upon  machinery  and 
equipment,  and  taxes  other  than  Federal  Income  Tax. 

The  depreciation  of  the  Pnysical  property  as  distinguished  from  the 
depletion  or  exhaustion  of  the  natural  resource  of  standing  timber  is 
comuonly  computed  in  this  industry  upon  a  oasis  that  will  '.i^rite  down 
the  value  of  the  plant  and  other  physical  properties  with  the  declining 
quantity  of  raw  material  available.   This  is  especially  true  when  the 
sawmills  own  the  timber,  but  where,  as  in  the  nest  Coast  Division,  .nany 
of  the  sawmills  are  operating  on  logs  purchased  from  commercial  loggers 
and  own  very  little  if  any  tiraoer,  such  depreciation  is  computed  upon  one 
of  the  accepted  straight  line  bases. 

In  the  developbient  of  costs  it  has  been  the  practice  to  allocate 
the  general  expenses,  including  depreciation  and  taxes,  to  the  various 
types  of  operations  carried  on. 

In  the  final  taoulation  of  the  cost  data  it  is  sought,  by  selection 
and  tabulation,  to  show  the  averages  computed  according  to  species  in 
the  various  sections  of  the  country  for  the  character  of  the  operations. 

As  costs  have  been  developed  by  the  various  agencies  concerned, 
the  above  detailed  plans  has  been  generally  followed.   This  is  especially 
true  of  the  cost   data  gathered  by  the  Vestern  Fine  Association  and  by 
the  Southern  Pine  Association,  and  was  more  or  less  the  general  policy 
of  costing  adopted  by  the  Lumber  Code  Authority  as  discussed  i,n  the 
following  sub-chapter. 

5.  HISTORY  Qj'  COSTS  UNDER  NRA 

One  of  the  problems  that  faced  the  industry  and  the  NRA,  from  the 
earliest  discussions  concerning  the  Code  was,  in  general  terms,  "how 
could  the  industry  increase  hours  of  employment  and  hourly  wages  and  get 
back  at  lepst  the  ' out-ol -pocket  costs'  of  production  of  lumber?" 

9813 


-95- 


This  was  especially  troubltsorie  in  the  fpce  ot  the  kno"'n  lacts  that: 

(a)   the  industry  had  oeen  ooerati'nr  &t  a  loss  for  a 
number  of  years, 

(u)   stoclcs  of  luraoer  in  th.-  hands  of  the  manufac- 
turers were  very  lar  'e. 

(c)   demand  for  lumber  had  been  decreasing  i  or 
several  years. 

(c)   the  construction' industry,  vhich  annually  ab- 
sorbs a  considerable  -oo,  ti3n  oi  lumber,  vas  at 
the  absolute  lov  point  of  its  history. 

As  a  partial  solution  of  this  problem  it  was  mutually  agreed 
that  pny  of  the  additional  charges  incident  to  the  Code  could  be  as- 
sumed by  industry  only  I'^hen  sucn  increased  costs  could  concurrently 
be  recovered  by  cora-oensating  adjustments  in  prices  for  lumber  and  timber 
products.   It  was  realized  that  this  principle  involved  the  application 
of  minimum  prices,  and  in  recognition  of  the  fact  that  there   ra-ast 
be  protection  of  the  public  agfinst  the  abuse  of  the  pov er  to  fix 
minimum  pricea.there  must  necessarily  rfisult  a  formula  for  determining 
cost  of  production.   It  was  therefore  proposed  that  reighted  average 
costs  should  be  deter^iined  and  that  lumber  and  timber  products  should 
not  be  sold  or  offered  ior  sale  at  prices  ^hich  did  not  cover  such 
costs. 

The  record  is  clear  that  industry  v.-ps  rot  e^-pecially  interested 
in  determining  pure  costs  of  production,  and  apparently  the  KPJL  also 
was  not,  at  least  in  the  beginning,  especially  concerned  with  this 
matter.   It  seemed  to  be  the  paramount  consideration  on  the  part  of 
both  industry  and  KRA  that  "cost  protection"  was  the  object  and  the  aim 
rather  than  "cost  of  prodaction. " 

Throughout  the  record,  the  recommendations  and  the  reports  in 
connection  iwith  the  Code  of  J'air  Competition  for  the  Lumber  and 
Timber  Products  Industries  there  runs  this  continued  reference  to 
and  consideration  of  "cost  protection"  and  direct'  "out-of-pocket 
costs."  Also  throughout  the  record  runs  discussion  of  the  necessity 
for  the  establishment  of  a  "lorriiala  ior  cost  protection"  and  the 
necessity  of  establishing  a  "minimum  p rice"  that  ■  ould  permit  the 
industry  to  maintain  itself  on  the  price  "hich  it  could  secure  for 
its  products. 

The  record  of  negotiations  leading  up  to  the  presentation  of  the 
Code  also  is  replete,  wdth  discussions  concerning  debatable  items  that 
must  be  in  some  manner  included  in  any  formula  for  the  development  of 
cost  of  production  but  '"hich  might  or  might  not  oe  included  in  a  formula 
for  cost  protection.   These  debatable  items  '^ere; 


9813 


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(a)  vplue  of  stumppge. 

(b)  depreciation. 

(c)  cost  of  conserving  and  replacing  as  mach 
timber  as  was  harvested. 

Article  IX  of  the  Code  was  titled  "Cost  Protection"  and  gave  the 
Code  Authority  the  right  to  establish  and  revise  minimum  prices  f.o.b, 

mill  "to  protect  the  cost  of  production  of   lumber  and  timber 

products,"  when  in  its  opinion  it  ^rps   able  "to  determine  cost  of  pro- 
duction" as  defined  in  Section  A,  Article  IX.   It  was  also  provided  in 
Article  IX  of  the  Code  that  "current  veighted  average  cost  of  production 
....  shall  be'  established  by  uniform  accounting  prj-ctices,"  and  then 
followed  an  itemization  of  all  of  the  direct  and  indirect  costs  of  pro- 
duction and  sale  of  the  product  and  the  administration  of  the  properties. 
There  '"ere  certain  limitations,  however, 

(a)  selling  costs  should  not  include  adver- 
tising or  trade  promotion 

(b)  insurance  should  not  incluoe  insurance 
oS  standing  timber. 

(c)  taxes  should  not  include  amounts  on 
standing  timber  in  excess  of  a  12  year 
su-pTDly. 

(d)  interest  was  not  to  include  any  charges 
accruing  on  obligations  to  carry  timber 
in  excess  of  a  12  year  supply. 

It  was  also  specified  in  Article  IX,  that  depreciation  should  not 
be  included  "until  such  time  as  the  Authority  shall  have  formulated  and 
secured  the  general  application  by  the  several  Divisions  and  Sub-divisions 
of  the  methods  of  accounting"  by  which  the  depreciation  was  to  be  ac- 
curately ascertained  ....   It  was  specified  also  in  Article  IX,  that 
depreciation  should  be  computed  "on  straight  line  method  and  based  on 
fair  value  or  the  cost  whichever  is  lower  .  .  ,  ,"  and  that  this  item 
should  also  include  amortization  of  investments  in  logging  railroads, 
docks,  and  other  logring  and  plant  facilities. 

The  cost  of  production  for  each  species  determined  as  specified 
in  Article  IX,  was  to  be  allocated  by  the  Authority  to  the  several  items 
or  classifications  of  lumber  or  other  products  for  which  minimum  prices 
were  to  be  established.   It  was  specified  that  "weighted  average  min- 
imum price  of  all  items  and  classifications  for  each  species  shall  not 
be  more  than  cost  of  production"  including  all  of  the  items  specified 
in  the  cost  formula  nor  "less  than  said  cost  after  deducting  capital 
charges  of  dfpreciation  and  the  fair  market  value  of  standing  timber 
that  was  to  De  determined  bv  the  Administrator," 

9813 


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Thus  it  will  be  seen  thst  there  '■-s  erected  under  the  Code,  a 
so-c?lled  formalp  for  ascertaining  cost  of   production  i^hen  the 
actual  and  avowed  purpose  of  the  industry  vas  to  develop  facts  as 
to  costs  and  that  as  to  e?ch  Pivision  or  Suj-division  or  group  of' 
members  of  the  industry  tnes-e  costs  i^'ere  to  oe  developed  on  "the 
weii^hted  averafje"  of  all  in  the  particular  group  of  manufacturers  and 
that  this  '"eighted  average  cost  oi  production  was  to  be  applied  purely 
for  the  purpose  of  protecting  the  rainiuiam  prices  that  had  been  or  were 
to  be  eptablished  by  the  Code  Authority.   All  of  this  involved  proceeding 
was  to  be  carried  out  ov   the  Code  Autnority  of  an  industry  of  vhich  it 
was  stated  "adequate,  uniform,  and  realistic  accounting  particularly 
among  small  establishments  is  not  charpcteristic  of  this  industry." 

Here  was  an  irdustry  composed  of  at  least  17,000  manufacturing 
units  operating  in  practically  every  state  of  the  union,  that,  most 
emphatically,  i?'ps  not  cost  conscious.   It  was  not  a  nev^  industry,  and 
although  the  principal  producing  centers  had  shiited  very  materially, 
in  general  the  manufacturing  processes  remained  largely  similar.   It 
had  successively  passed  through  .lany  periods  of  famine  and  of  plenty, 
but  up  to,  and  even  through  the  code  period  the  great  Majority  of  the 
members  of  the  industry  had  not  oeen  educated  to  the  necessity  of 
knowing  their  costs  of  production. 

It  cannot  be  overlooked  that  the  industry  does  offer  some  con- 
siderable obstacles  to  exact  costing.   The  products  of  the  irldustry 
are  numerous,  -and  many  of  the  variations  betveen  products  are  too 
often  matters  of  expediency,  rather  than  actual  differences  in  character 
of  product. 

Costs  of  production  can  and  should  be  deterviined  for  the  industry. 
Only  with  true  and  dependable  costs  as  a  backgro-ond,  c»n  the  industry 
hope  to  find  its  way  out  of  the  difficulties  in  ^hich  it  is  no  immersed, 
and  to  solve  its  rnfny  problems. 

The  determination  of  direct  costs  is  not  unduly  difficult.   It  is 
in  the  interpretation,  analysis  and  distrioution  of  indirect  costs 
that  the  principal  difficulty  is  usually  encountered.    ith  the  "-ide 
geographical  spread  of  this  industry  and  with  the  necessity  of  compiling 
costs  for  the  small  neighborhood  sawmill  and  the  vast  manufacturing 
plants  of  the  .est  Coast  Kegion,  the  task  of  determining  true  costs 
for  this  industry  was  mcsi  unlikely  of  successful  accomplishment.   The 
determination  of  "we ie:hted  average  out-qi -pocket  costs"  with  all  of  the 
indef initenesses  coraprehended  in  such  an  undertaking  would  be  the 
accomplishment  of  a  super-man.   It  is  not  deemed  unfair  either  to  the 
industry  or  to  FL.A  to  state  in  retrgspect  that  had  the  industry  and  ITEA 
sought  to  estrblish  true  costs  of  production  i or  individual  sawmills 
and  then  to  properly  and  intelligently  interpret  these, facts,  many  of 
the  difficulties  met  in ■ attempting  to  utilize  the  methods  of  expediency 
that  were  adopted  in  the  attempt  to  determine  and  to  recover  out-of- 
pocket  costs  and  to  protect  prices  would  not  have  been  encountered. 
Both  industry  and  C-overnment  have  profited  by  this  experience  and  .it  is 
safs-to  state'  that  neither  w-juld- 'again  eabtirk-upo^i  .such- -an- -indef  ini-te 
project. 
9bl3 


-98- 


Doubtless,  one  of  the  fruits  of  the  code  experience  has  been  a 
cooperation  betvern  manufacturers  in  a  division  end  between  divisions, 
and  the  consideration  of  TDrobleras  common  to  them  all. 

Under  the  authority  granted  in  Article  IX  oi  the  LumDer  and  Timber 
Products  Industries  Code  the  Code  Authority  began  the  imDlication  of 
price  bulletins  in  October,  1953,  and  completed  the  issuance  of  this 
first  edition  in  December,  1933.   These  miniraam  prices  thus  established, 
i^ere  cased  upon  data  incomplete  anc  unsatisfactory  for  the  purpose 
of  determining  cost.   Data  had  been  received  from  many  of  the  divisions 
of  the  Lumber  Code  Authority,   A  considerable  portion  of  this  cost  data 
was  available  for  study  by  the  Lumber  Code  Authority  late  in  December 
of  1933,   This  material  v^as  plainly  labeled  "Cost  Substantiation  Data." 
Upon  this  information  other  price  bulletins  were  issued.   The  accountants 
for  the  Lumber  Code  Authority,  in  discussinii-  this  cost  substantiation 
data,  raised  many  points  as  to  its  authenticity.   It  was  recognized 
that  the  costs  that  were   to  be  secured  vere  not  upon  the  usual  ac- 
counting basis  but  vere   purely  upon  an  industry  basis  as  specified 
under  the  Co:'e.   It  was  recognized  that  much  of  the  information  first 
gathered  was  not  reliable  and  that  the  basis  of  cost  gathering  for 
purposes  of  later  minimum  price  substantiation  must  be  changed,   There- 
UTjon,  the  industry,  acting  vxion   advice  of  its  Code  Authority,  developed 
a  ne-'  cost  auestiornaire  which  was  issued  to  industry  jneraoers  in  April, 
1934,  and  requested  submission  of  cost  data  for  Januar:/,  February,  and 
March,  1934, 

This  latter-mentioned  cost  data  was  raach  more  definitely  arran^ced 
than  any  of  that  previously  submitted  and,  under  reasonable  conditions 
of  compliance  on  the  part  of  the  sa'^mill  operators,  i^ould  have  supplied 
the "Administration  and  the  Code  Authority  with  standardized  data  from 
all  divisions,   Naturally,  many  of  the  members  of  the  industry  were 
not  accustomed  by  past  practices  to  the  orderly  and  systematic  develop- 
ment of  cost'  data;  others  were  not  interested  enough  to  present  such 
data  and  many  others  had  no  records,  so  there  was  considerable  variation 
in  the  extent  of  their'  compliance  with  the  request  for  this  material. 
These  variations  naturally  tended  to  destroy  a  considerable  part  of  the 
inherent  '"Orth  of  these  cost  data. 

One  of  the  deficiencies  in  the  cost  data  submitted  under  the 
Code  Authority  was  lack  of  inventories.   Data  concerning  inventories 
of  raw  material  and  of  finished  product  were  ignored  in  the  prepara- 
tion of  the  cost  data  for  the  first  three  months  of  1934,  although 
the  industry  was  advised  in  Novemoer,  1933,  that  it  then  appeared  im- 
perative for  all  Code  Division  and  Sub-Division  Autxiorities  to  prepare 
their  calls  for  information  in  such  a  manner  as  would  require  the  in- 
dividual operators  to  furnish  the  inventory  material,  (*) 

(*)   L.CA,   33-45,  dated  November  30,  1933  -  C.  Arthur  Bruce, 
Executive  Officer,  Lumber  Code  Authority. 


9813 


-99- 

The  cost  datfL  for  the  first  three  months  of  1934  were  iar{;ely  in 
the  hands  of  the  Lumber  Code  Authority  in  ./'ashintjton  early  in  June,  1934. 
In  reviewing  these  data  many  inconsistencies  with  established  account- 
ing loractice  and  even  with  the  formula  e:?qDrcssed  in  the  Code  were 
"brought  to  the  attention  of  the  Code  Authority  by  their   own  depart- 
ment of  Costs  and  Prices  and  by  the  accountants  under  contract. 

Many  revisions  of  the  cost  data  wex-e  necessary,  ranging  from  the 
substitution  of  estimated  for  actua.l  costs  to  the  necessity  for  vir- 
tually a  complete  abandonment  of  the  procedure  outlined  in  Section  IX 
of  the  Code  which  also  involved  the  chan.-ing  of  the  Approved  Cost  For- 
mula published  as  a  part  of  that  Article. 

The  changes  most  far-reaching  in  effect  on  actual  costs  were  as 
follows:       . 

(a)  Substitution  of  approved  stumpage  costs  for  actual 
stumpage  costs  i*^ 

(b)  The  arbitrary  determination  that  all  depreciation  must  be 
comiDuted  Qn.   a  straight  line  basis  (*) 

(c)  The  invoking  of  a  new  principle  -  "adjustment  of  inva- 
riable overhead  costs."  ; 

Certain  of  the  incongruities  in  the  cost  data  were  as  follows: 

(a,)      The  failure  to  provide  comprehensive  data  concerning 
grade  and  size  outturn  of  the  product  of  the  saw-log 

(b)  'iThe  computation  of  de-ijreciation  on  a  straight-line  basis 
",:    and  on  present  value  of  assets,  when  it  had  previously 
been  commuted  on  the  diminishing  supply  basis,  with 
production  only  a  fractional  part  of  the  usual  pre-do- 
pression  production  and  of  the  capacity  to  produce. (**) 

For  the  first  time  cost  data  were  sought  on  the  basis  of  all  mills 
in  a  division  without  regard  to  the  species  predominating  in  the  pro- 
duction.  Such  procedure  did  not  particularly  affect  the  costs  deve- 
loped in  the  Southern  Pine  Division,  for  in  these  states  the  production 
of  the  mills  is  generally  predominantly  Southern  Pine,  althoiigh  in 
some  sections  some  cypress  would  be  cut  and  in  other  sections  some  hard- 
woods would  be  encountered.   In  the  western  area  where  Douglas  Fir, 
hemlock,  spruce,  ponderosa  pine  and  Idaho  white  pine  are  generally 
found  intermingled  in  timber  stand,  the  development  of  costs  by  areas 
rather  than  by  mills  producing  specific  species  offered  considerable 
obstacles  to  the  development  of  costs  for  this  period  comparable  to 
costs  develoood  for  prior  periods.   In  most  instances  the  cost  for 
the  production  of  combined  species  has  generally  been  considered  the 
cost  of  the  principal  scecies.   Thus  we  find  in  the  West  Coast  Division 

(*)   This  was  mandatory  under  the  Code. 
(**)  Mandatory  under  the  Code. 


9813 


-liDO- 
where  Douglas  Fir,  spruce  and  hemlock  are  interningled,  that  the  costs  are 
considered  as  representative  of  Douglas  Fir.  Similarly,  in  the  Western  Pine 
Division  in  vmich  Pondtrosa  arid  Idaho  v/hite  pine,  -.Tith  some  Douglas  Fir,  are 
the  major  scecies,  the  costs  that  were  developed  were  considered  as  re- 
presentative of  Ponderosa  pine  production. 

Costs  /or  southern  pine  for  the  years  1921  to  1930  shown  in  the  ta- 
"ble  published  by  the  Southern  Pine  Association  (*")  in  July  1931,  present 
a  very  informative  and  interesting   group  of  data  as  to  costs  of  large 
mills,  each  -oroducing  more  than  six  million  fejt  per  year.   The  mills, 
some  100  in  number,  are  reported  to  have  produced  over  32-1/2  billion 
feet  during  the  period,  or  an  average  of  3-1/4  billion  feet  each  year, 
or  32-1/2  million  feet  per  mill,  per  year. 

This  information  is  presented  in  Table  XXVIII,  and  interpolated 
in  that  table  are  data  secured  by  the  U.  S.  Tariff  Commission.  (**) 
Also  interpolated  with  these  data  are  costs  developed  from  the  industry 
questionnaires  for  January,  February,  and  March,  1934,  which  were  sub- 
mitted to  and  reviewed  by  the  Research  and  Planning  Division,  NRA.  (***^. 

In  considering  the  data  displayed  on  this  table  it  should  be  borne 
in  mind  that  the  data  for  ten  years  from  1921  to  1930,  inclusive,  were 
all  developed  on  the  sojne  set  plan,  but  that  the  .U.  S.  Tariff  Commis- 
sion figures  were  developed  on  a  slightly  different  base  and  do  not  in- 
clude shipping  and  selling  expenses.   It  should  be  noted  that  the  South- 
ern pine  Association  presented  costs  of  $25.80  per  M  feet,  for  the 
year  1929,  including  shipping  and  selling  expenses  amounting  to  $2.13 
per  M  feet,  and  the  U.  S.  Tariff  Commission  for  the  same  year,  1929, 
developed  costs  of  $25.41  per  M  feet  without  including  any  shipping 
and  selling  expense.   Ftirther  analyzing  those  samB  figures  it  will  be 
seen  that  one  of  the  principal  items  of  difference  was  the  stiompage  ■ 
cost  which  the  Southern  Pine  Association  shov;ed  as  being  $6.04  per  -M 
feet,  and  the  U.  S.  Tariff  Comiaission  found  to  be  only  $5.23  per  M  feet. 
Other  diffeiences  will  be  noted  in  comparing  the  items  but  not  all  of 
these  differences  are  as  great  as   the  first  comparison  would  indicate. 
The  Southern  Pine  Association  in  determining  the  costs  segregated  all 
depreciation  amounting  to  $1,62  per  M  feet,  but  the  U.  S.  Tariff  Com- 
mission did  not  segregate  this  depreciation  but  included  it  as  a  part       . 
of  the  costs  of  the  various  operations,  principaDly  in  logging  and  mil-     ^ 
ling^ — — -   * 

The  costs  for  Ponderosa  pine  and  Idaho  white  pine,  both  species 
being  largely  produced  by  the  same  mill  groups,  were  presented  in  re- 
ports to  its  members  by  the  V/estern  Pine  Manufacturers  Association, 


(*)  Economic  conditions  in  the  Southern  Pine  Industry  presented  to 

U.  S.  Timber  Conservation  Board  by  the  Southern  Pine  Association, 
page  53,  (July,  1931.) 

(**)  U.  S.  Tariff  Commission  -  Report  to  the  president  on  Lumber  - 
Report  No.  32,  pages  21-22  (1931.) 

(***)  Unpublished  report  of  Research  and  Planning  Division,  N?A, "Cost 
Protection  Prices  and  Cost  Substantiation  Data,"  dated  May  6, 
1935. 


9813 


-101- 
as  follows: 

Operating  Costs  1927  -  Circular  #3920,  3/21/28 
II      II   1929  -     'I    #-1446,  5/23/30 
I'      II   1932  -     I'    #  431,  3/25/33 
1934  Production  Costs  in  Circular  #081,  b:/  the  TJestern  Pine  Association. 

This  information  is  Dresented  in  Table  XXIX  with  dato,  collected  by 
the  U.  S.  Tariff  Commission  i*^    for  1929,  and  also  cost  data  tabulated 
by  the  KRA  (**"). 

It  will  be  noted  that  the  arranj^'eraent  of  the  costs  as  compiled  and 
TDublished  by  the  Western  pine  Association  varies  somewhat  from  the  detail 
of  costs  presented  by  the  Southern  Fine  Association.   This  variation  in 
presentation  of  costs  by  two  G^O'U-PS  of  manufacturers  in  different  sec- 
tions of  the  United  States  who  -oroduce  competing  products,  to  a  very  con- 
siderable extent,  is  just  another  evidence  of  the  general  attitude  of 
the  members  of  the  industry  toward  one  another,  and  of  one  group  toward 
another  group.   The  failure  on  the  part  of  the  members  of  the  industry 
to  agree  among  themselves  as  t o  a  reasonably  standard  form  or  method  of 
presenting  their  costs  of  operations  crystslized  when,  under  the  Code,  it 
was  imperative  that  the  industry  should,  through  its  Code  Authority,  pre- 
sent cost  data  reasonably  unifoi'm  in  form  and  content. 

The  Code  of  Fair  Competition  for  the  Lumber  and  Timber  Products  In- 
dustry did  not  provide  that  NRA  should  have  any  direct  supervision  over 
or  control  of  any  of  this  cost  data,.   There  were  no  provisions  making 
it  possible  for  ITRA  to  pass  upon  the  sufficiency  of  the  cost  data  as 
secured  or  upon  the  minimum  cost  protection  prices  that  were  to  be  es- 
tablished by  the  Liimber  Code  Authority  and  based  upon  such  cost  data. 

It  is  true  that  a  representative  of  the  Division  of  Research  and 
planning  of  iniA  had  attended  a  conference  in  Chicago  in  April,  1934, 
when  the  Cost  Committee  of  the  Code  and  the  cost  representatives  of  the 
Divisions  met  to  develop  the  form  and  content  of  new  cost  reports  which 
were  to  be  used  for  the  development  of  the  costs  by  each  of  the  various 
Divisions  for  the  months  of  January,  February,  and  March,  1934. 

The  cost  data  was  collected  and  collated  by  each  Division  and  re- 
ported upon  by  it  to  the  Lumber  Code  Authority.   The  Lumber  Code  Au- 
thority performed  a  review  of  such  data  through  their  own  Cost  and  Pri- 
ces Committee  and  their  own  accountants  under  contract  and  based  all  of 
their  actions  upon  such  reviews.   The  Code  did  not  require  results  to  be 
submitted  to  NRA  for  approval. 

NRA  did  not  have  access  to  any  of  this  cost  data  until  late  in  June 
1934  at  which  time  the  Lumber  Code  Authority  was  moving  toward  the 

(*)  U.  S.  Tariff  Commission-  Report  to  the  President  on  Lumber  -  Report 
No.  32,  pages  21-22. 

(**)  Unpublished  report  of  the  Research  and  Planning  Division,  NRA,  nCost 
protection  Prices  and  Cost  Substantiation  Data,  "  dated  May  6,  1935. 


9813 


-102- 

declaration  of  the  emergency  as  finally  proraultjated  "by  Administrator 
Johnson  on  July  16,  1934.  Between  June  20  and  July  16,  a  great  deal  of 
this  cost  data  was  presented  to  the  Research  and  Planning  Division  of 
NRA.   This  Division  reported  adversely  upon  such  cost  data  as  it  had 
"been  able  to  review  tut  the  emergency  order  was  signed  and  included 
most  of  the  already  published  price  bulletins  then  in  effect.   Thereafter, 
from  time  to  time,  the  Division  of  Research  and  planning  made  reports 
upon  specific  groups  of  cost  as  it  was  enabled  to  progressively  com- 
plete its  review.   In  this  review  work,  many  questions  arose  as  to  the 
adequacy  of  the  data  submitted.   These  questions  were  referred  to  the 
L\amber  Code  Authority  for  answer  by  them  or  by  the  Division  affected. 
The  answers  to  the  questions  and  much  additional  information  developed 
as  a  result  of  the  questioning  was  all  included  in  and  given  effect  to 
when  final  reports  of  the  Division  of  Research  and  Planning  were  made 
as  to  the  cost  of  production  for  all  of  the  divisions  and  subdivisions 
of  the  Liomber  Code  Authority  which  had  been  in  existence  on  March  31, 
1934. 

The  entire  and  voliminous  record  covering  the  investigation  and 
including  report  statements  of  costs  for  each  of  the  divisions  with  ap- 
propriate explanations,  has  been  prepared  and  is  in  the  files  as  "Re- 
port on  Project,  Cost  protection  Prices  and  Cost  Substantiation  Data 
of  the  Divisions  and  Subdivisions  of  the  Liiraber  Code." 

It  would  bo  virtually  useless  to  enter  into  any  discussion  and 
comparison  of  the  cost  data  submitted  by  the  industry  as  referred  to 
above.   That  data  now  is  purely  historical  and  those  interested  in  de- 
tails may  peruse  them  in  the  above  mentioned  report. 

The  objectives  of  the  National  Industrial  Recovery  Act  (declared 
and  interpreted")  were  sought  to  be  attained  under  the  Code  of  Fair  Com- 
petition for  the  Lumber  and  Timber  Products  Industries  and  the  question 
will  long  be  mooted  as  to  whether  the  industry  and  the  National  Recove- 
ry Administration,  either,  neither,  or  both  had  adequate  concept  of  the 
scope  of  problems  clamoring  for  solution  and  well  thought  out,  workable 
methods  for  their  solving  or  if  the  necessity  to  compromise  differing 
views  to  reach  Article  IX  of  the  Code  made  abortive  all  attempts  under 
it  to  orect  "minimvun  cost  protection  prices"  founded  upon  "weighted 
average  cost  of  production." 

Further  segments  of  this  whole  problem  are  discussed  in  the  fol- 
lowing chapter  on  Prices  and  Mill  Realization. 


9813 


-103- 

E.      PrJCES  1I"L  KILL  iillALIZATIOI' 

1.      Prices 

ITaa.t   is  virice?      Wo.cv.,    rxiC.  where   ?;':c'.  for  v'hat   steps   in   the  move- 
ment  of   Ivj.foer  ^.rocucts   frci.i   che   sr ■«iill    to   the  -.iltiinate   consumer 
shov-ld  the    )rice   of   that   liuitier   oe   corisic.ered?      Ihese  are   some   of   the  ^ 
questions   thrt  i.iast  be   ansv/ered  uefore   fx-.y  {vienerr.l   discussion  of   the 
price   of  liTnLer   c-n  be   inteili  /tntly  carriec    on. 

Prices  'i  nder  the   co.  petitive   systeia,   .is   pii   expression  of   the 
meetin£j  ox    the  mine's  v/hich  represents   a  co.  .riforaise  betv;een  t]ie  juyer 
and  the   seller.      It  is   not  \:hr.t    the  bviyer  would  lilie  to   secure  nor   is 
it   exactly  v/hat   the   seller  v;i si.es   to  pay.      G-enerf  lly,    a  price  is  mace 
in  the   open  market  and  always  is   affected  with  a    /.iblic  inter^-st.      Pro- 
ducers  are  baJanced  p^~r-inst   consiuaers   as  producers  v;ish  to    sell   at   the 
highest  possible   price   obtainr'ble   rnd  consiv/iers  vash  to  b\iy  at   the 
cheapest  price  posr;ible.      Erch  is   controlled,    to   a  ^^eat   extent,    in 
the  desire   to   drive   the  best    oossible  bar-.-ain  rnu  is  prevented  from 
overreachin.^  himself  by  the   rivalry  of   other  procaicers  who   sell   rjid 
of   other   consumers   to   b~iy.      The   pi'ice   so   detenained  cannot   be  s.n  aoso— 
lute  thi„g   ^ut   is   rlwpys   relative   p^iC    ±n   the  abstract   the  contractions 
of   supply-  and  cemand  meet   to  make   a  price,    which,    after  a  fashion, 
represents   liberty  of   contract  between   the  buyer  and  the   seller. 

Price   in  orth-odoz   economics   is   (i'cnerally  considered  to   oe  nn 
expression  of   the  mar-liirl   cost   of  production,   but   price   .and  cost   ai'e 
in  diffeient   rerli.is.      Price   is   a  definite   sum  generolly  quoted  in   the 
market   rr.C-  always  knorn   to   the  buyer   and  seller.      Cost,    however,    is 
seldom  definitely  Ijiown  :.s   it   is  -asually  derived  from   the   rainif icrtio.is 
of  the   industriEl  process  by  involvea  and  teclmical   ca.lculations.      ^lat- 
ever  may  be  the   philosophy  rnd  the   theory  of  prices   tnd  of  costs,    it   is 
n    ^elf-evident   fret   that   over   r   reasonably  extended  period  the  price 
of   a  na^u'.facturerd  article  r.ai.st   be   in  excess   of  the   cost   of  manu.fr ctvrir.j; 
pnd  distributing  ,    or   thone   a':encies  v;hich  are   i'nvolved  in  those  processes 
will   eventually  fade   out   of  the     licture,    ustially  thrciv,'h  the  bcijiknaptcy 
courts,    after   rll   invested  crpitrl   h?s    oeon  ;. exhausted  anc.  all  possible 
credit  ha,s  been   secLired. 

A    jrice,    even   thou.'^h  it  mry   ..le   eased  upon  cost   is   relftiv.e   and  not 
absolute   in  the  majority  of  inst^inces.      A  specific  price  may  not   retva-n 
cost,    but   the  nrice   .-^nd  the  cost   of   the   article  may  be   related,  to   the 
price  :nd  t;.e  cost   of   other   rrticles  manufactured' in  the   same  procesres 
and  tkesj  -oriccs   ai'id  costs  rll   talren  to/^ether  merge   into   composites 
that   are   economically  spund  . 

Prices   of  lumber  products  have  been,    rnd  continue   tr   be,    g,et 
largely  on  the  basis   of   this    irinciplfe.      It   is  known  thrt   the   cost   of 
production  of   the   v,arious   articles  nanui^.ct- .red   -nd  of  the  various 
maiiufacturing  plrxits  v^uit    v-..y    p-valy  ^■nH  si.nply  upon   the  basis   of 
their  cost    structure   rnd  of  the  iir-rket   f'or  the   articles  manufr,cturec.. 
In  the  LujTiber  Industry,    rs   iw  every  other   indiistry  heaving  a  ;,iultiplicity 
of  produ.cts,    :a'ny  of  Y/hich  rre   cl-  ssecl  as  mr  jor  products   rnd  m-^ny  others 

9813 


..  -10-ir- 

01   v.'hich  rre  clrssed  rs  ninor    .'rocucts  but   rll   rcGiilti-.i;;   i'ro;:i  the   srrne 
process   of  inrm.if-cture ,    it  vrs  only  -..'turrl   thrt   rn  rllocr.tion   of   the 
cost   of    n'ocuction  would  be  rar.Ce  lrr,\;el,/  •  uon   the   brnis   of   the   price 
v/hich   tliese  (.'.ifferent   articles  would  brin-   in   the  mn,r":et  br.sec-  upon 
past   e::  J c ri  caic e. 

Lvery  ioot   of  rou  :h  lur;;oer  ;;5roauced  by  the   "r-.vs   from  the    s'-j.ie   sr.v; 
l»gs  usurlly  i".   considered  to  have   cost   ex.-'Ctly  the  sme  in   r.-^w  r.ir.terir.l, 
direct   Irbor,    rnd  mr^nuf "Cturin^j;  overhead.      But   some   of   the  lumber  pro- 
duced jiiay  br    of  the  poorest   -rp.de  rue  nell   rt   the  lower   end  of  the 
price   scale   r^nd  some  may  be   of  the   ■d:^^hest  grade   md  sell   at  r    correo- 
Ijondinj  hi^.:h  price.      Acttially,    the   low  ;;jrade  product  im.i.st  be   sold  at   a 
heavy  loss   ■''nd  the  hi,;h  rrade  lui.iber  will    ret\irn  r    relatively  lar;:;e 
profit   if   exact   "nd  true   costs   rre    to   be  considered.      It   is   common 
practice   r-nd  in   conformity  with   the  nbove  principle   to   relrtu   the   costs 
to  'the  prices  of   the  products   so   th^t   er.ch  p/roducu   result m;;  from  a 
coi-ir.on  process  will   theoretic   11^,    r-bsorb   its   relative  nart   of   the 
cost   and  return  its   relative  portion  of   the  profit. 

'w'hen  .'^nd  where   rre   the  prices   to   be   consit'ered?      Is  the  price  rt 
the  mill   to  be   trhen   as    the  criterion  and  is   th   t  jjrice   at   the  mill    to 
be   corisicered  when  mr.de   to   the  v/holesaler  or  when  hirde   to   the  mill 
directly  to  rn  industrirl   or  construction   consuiaer  or  to   a  retailer?      It 
is   a   fret  _;roven   by  -^n   ertendec    su.rvey  of  prices   quoted  in  these  dif- 
ferent  fields   of  ,-ctivity  th.-t   exr-ctly  tlie   sr^me   size,    species   and  jrade 
of  Tomber  \.'oul(     be   quoted  at   ■"    retail     :rice  biit  that   the  products 
wou-lc.  move   in  diflerent   aurntitiet;  unt.er   thrt   retail   price   and  at   every 
pof:,r;ible   li^^ure   from   thrt     iri^e  downwrrd  to   an   even  below  the  quoted 
mill  piice   lor  t:-e   srne  jirotuct.      '/ith  the   constrnt   competition   existing 
betv/een  the   saTimills,    the  wholesalers,    the   conanission  ;.ien  rnd   the 
retailers   for  the   consujviin;;:  ^a-^rJiet,    the   price   of  liombei-  for  ,,  ears  hrs 
been  lar.i;ely  dependent  -.pon   the   enc.\\;y  of   the   buyer   in  e:djaustin^7  t]ie 
various   chrjmels   throu'h  v.-hich  his   needs  could  be  met  anc    in  pittin^i; 
a,;;ainst   one   another   erch   of   these  varioiis   sup-:)lyin;"  ardencies. 

The   competition  between  mrnufnctiirers   rnC   c.istributors   of  lumber 
products  for  the  market,  in   not   the   only  competition    that   the  Lumber 
Industry  has  been  compellec.  to  meet.      There  has  been  the  competition  of 
a,rticleG   readily  siibsti tutable   for   the  luir.ber  products.      There  has  been 
the   chr.n^.:e   in  fashion  and  in  type   of  builo.intj  construction  and  there 
has   been   the  barrinj   from  the  mai-lcet   or  lar^e    sections   of   the  market 
of  the   li^jnber  procucts   by   the  buili.in^,-  restrictions   or  r  e^u.lations   of 
urb"r.  cei  ters. 

The  sup^)ly  of  rxi  -rticle   on   the  m-^rhet,    coupled  with   the   demand 
for  that   article,   must  necessarily  a-ve   r  very  considerable   effect  upon 
the  price   ^t  which  the   carticie  cm  be   sold.      «»'ith   ^11   of   the   economic 
factors   as  tefore  mentioned  pressiri'^    for  the  production  of  liunber   rnd 
with  very  little,    if   any,    cohesion   oetween   the  manufacturers  who  were 
wa,^in._,   rn  independent   fij^ht   for  individurl   existence,    the  price   of 
lumbei    has  not   rercted   to  many   of   the   economic   theories   nnd  princi'dcs 
b^^t  has  been  Irr,  :ely  dependent  upon  the  old  natur.^'l   Irw  of   t}ie   sun/ivrl 
of   the   fittest. 


981C 


-105- 

The  price  of  lumber  ir>  r.  co;.ipo;;lte  of  these  mrny.  elements  ""nc.  is 
not  r.olely  ^.ependent  upon,  nor  is  it  po'-itively  controlled  by  cny  one 
o  I    til  em, 

Tl.e  Lviiber  I'.iriiufr.ctia-ii'  ■   Industry  is   quite  i^enerrlly  sprerd 
tlirou.hor.t   every   St^-te   in  the   union.      There  r.re,    of  course,    ccrt'^.in 
v/ell-deilne,;.  centers   of   ,)ro'..uction  end  it  hrs  been  sljQivn   thp.t    the 
principal  nirmifrctr rin;;  centern   rre   now  in   the   Southern  Strtes   for 
Southern  pine,    in  the  V/er;t   Co'  ct   rejior;   lor  Lou^^lr.s   fir,    -ind   in  the 
V/estern  Pine  He.. ion  for  Pono.eros?  ]>ine.      It  hns   .--Iso   been   shown   that 
the  princi|)r.l   consuinin/,-  centers   rre    in  t'^e   Centrrl   St'  tes  with 
Chicr,;jo,    Illinois,    rs   the  princippl   o.i  stilo'  tin  ;   center,    and   in  the 
Northerstern  Strtes  vath  Kev;  Yorl:  .'  s   the  princi;;"l   distributing   center. 
Lumber   in   some   of   its  mu"!  titucdnous   forms   is  consimned^in   every  vicinity 
of   the  United  Strtes. 

With   savmill  prodi'.cts   rpn^,;in;   from  rou^jh  :";reen  lumber   rnd  timber 
to   the   hi;.;hly  linishec,    l,:iln  Crieo.,    olrned  nid  iDolished  cabinet 
woods   for  mill  v'ork  and   inteiior  finish  purposes,    the    iroducts   to  be 
used  for  this   c.Lisciission  will    oe  limited  to   the  most   common   species, 
gr   des   and   sizes.      After   rll,    the   eonnnonly.used.  species,    grades  rnd. 
sizes  ua:e  u.p  the  preponL.erant  part   of   the  products   of   the   incustry. 

The   question  of  nrice   then,    will  be   considered  from  the   stpaidpoint 
of   the   sav.Tnills   (ra;  nuf.-^cturers)  ,    the  vmolesalers   and  the   retrilers, 

and   tiic  u.ltimate   consusaers   of  liunber  procucts. 

With   the  progressive  westward  .'^nd  southwestward  movement   of  popu- 
lation,   the  procuction  centers  moved  from  the   northeastern   states   to 
the  Lrl:e   rnd  Centrrl    States  rnd  then  to   the  South   vnC.  Inst   to   the 
western  region. 

Hasily  accessible   st.^ncr-   of  comi.ierci"l   saw   timber  in  close 
pro::imity   to   the   demrnd,    estrblished  rxid  for  rar.ny  years  raaintainea 
lumbei    prices   vt   sv.c.  €   l.'evel   as   to  nake   it   the   cheapest  anci  most, 
favored  br'Hclng;. material,      ''-nien  the   softwood  area  of  the  Lrke   and 
Centrrl   States   regions  had  been   effectively  eliminated,  from  the   ord.i- 
nary   softwood  competition  by  high  costs   rnd  chrn  ;es   in  use  of  the 
lumber,    leaving   the   Sor.thern  Pine  Hegion  as   the  principrl    softwood, 
producing  center,    the   distance  between  producing  rnd  consuming   centers 
involving  high  transportation  costs  begrn  to   register   its    effect  upon 
the  ;.u'ice  of  lumber   to   the   conrjumer. 

The  reaction   of   this   increase   in  price  was   first    to  bring 
back  into  production   some   o.f   the  mills   in  the  former  production 
centers  v/hich  could   eke   out   r   nrofit   on  some  marginal  production; 
another    effect  wrs   to   foster   the   small  mills   thrt    could  rendily  move, 
to   small   areas  of   timber   that  by   rerson  of   distance   from  established 
uiills   could   not  have  been  advrntrgeously  workec.  by  them.      Then  as 
distcnce   incre-'^sed  between  procuction   rnc    c.'T'iisiuTiption   centers   and 
as     production  of  established  mill-   bcc;  me  more    costly   rs   the  result 
of  increasing  inrcces^.ibility  ol    t'le   st-^nf'in-   timber,    the  Vest   Coast 
region   came   into  proc'iiction.      As   iirs  be.n  discussed  t.ie.;e  were   other 
reasons    for  this   rc;-ion   to   come    into  procuction,    but   riter   all    the 
sellin_,     )rico   of   lumber   in   consvmin,-   centers   v/rs   the   m,-ior   considerrtioi 

9813 


-106- 

The   .Tcrathtrn  Piue  He  ;ion  hp.c.  cut   rvr.y  p11   of   its   re   dily 
r.cces::il:)2.e   timber  contiguous  to   ^^r-'terwrys.      *^onnequently,    rrilror-d 
tr,'^.'j;^-)ortc.tic:-.  v.- s   r.ecesr,  ?ry  to     .et   'ce  ijroc.iict   tn   the   er.3tern   aevr- 
borrd,    to   the   nouthv/est ,    rnC    to    the  miex'..le  v.'e[;t   conHUJiiii'}, ;  centers. 
At   thin   -'oir.t   .u'lces   be,_  ru   to   re.  ul'rly   re'-ch  hi,  her  levels   nnd  r.bo\''-t 
thi';    ti:!K   r.lso   en  le   t]ie   ooenia-;  of   the  Fciirmc.  Crnr-,1.      Prior   to    the 
0  )eai:.  :   oi    the  Pr.nciiiv  Cmr-l    tl:e  i;;enerrl   competitive  position  of   tne 
rej^'ions      rocAicin  :   s;oftr/ooc\  liiuber  y/r.s   r.bcut   as   follows:      The  IJp.^tern 
States,    the  Lrke   St.-^tea   rnc:  th.e  Ctntrr.1    Strtes   offered  Ifit  very 
little   competition   to   oonthern  pwie   for   softwood  liirnbex'   ii.   constnactior 
'^nc".  in  j,io:it   iiic'.ustrirl  uses. 

Prior   to    the   o^enin;  of   the  Crjirl,    houjlrs   lir  from  the  Meat 
Coast   wr.s  prrcticrlly  barred  from  e^'stern  seaboard  marhets,    but  vath 
the  0  )cninj  of   the  Crn.-l,    this  '.Test   Coast  he  :ion,    by   rerson  of  low 
water   tirnnpoi'tption   r;  tes,    v/rs    enaoled   to    deliver    itn  prod'icts   on 
the   eastern  seaborrt.  and  to    orc.d,.;ii.l    to  laany  er-^stern  'territorial 
cons\''j.''.in_     joints   i/i  direct   competition  witLi  rril   moved  Southern  2^i-".e 
Liimbcr. 

The   trrnfjport^  tio:.   cost   of  lumber  has   alv/ays   been  r  very 
considerable  prrt   of  itr,   cost    to   t.;e   consumer,    rnd.  durin  ;  the  Code 
period  when  minimxiin  prices   at  tr.e  mill   were   in  effect   for  'the  larnu- 
frcoured    jrodi.ct   rnd  vmen  the  ret' il   cerlers,    rlso  "^nder  r.  Code,    v/erc 
required   to   limit   their  cost   of  hrncl  .n  ;   to   certriu  definite  per- 
centa._,eb   oi   mr.rlaip   on   their  cost,    rersonably  comp'^rfble   fi  .ures   cov.ld 
be   secured.      Tables  LI   rnd  LII,    in  ApjendixII,    .;ive   coiiiMarisons   of 
these   costs   at   Cldca.po   .•"nd  ft  Kev-  York.      These   costs   arc  qn.ite   aefi- 
nitely  divided  oetween  i.irn\..f "  ctiiriii      costs,    frei,:ht,    -m.   the  costs 
of  the   ret-iler,    rnd   fll   of   the  drtr    as   p;vplyin:.;   to   erch  of  the   three 
principrl    coftwood     ■roc.uci.i';   re   ion;-;   were  .y-^thered  under   the   spxne 
general  pirn  rnd  on   the   scune  peneral   forii'iula.      It   will  be   noted  in 
anal:,  sin, :  the   information  of  Trble  LI   that   the  f  rei.,ht   rate   on  DoU;;,las 
Pir   to   CV.ica;:jo,    Illinois,    was   35.  Lb  x^er  cent   of   the   tot-l   cost   of   the 
Itimber   nt   retail.      This   coru)",,es  w,  th  la-anuf acturinj  rnd  L.istributiU;^ 
cost   of   5o.  17  per   cent    '^nd  with   letail   h.'^ndlin;;   costs   of   51,27  per 
cent   of   the  totrl   cost. 

This   table  ver;/   definitely  brir.j;s   out   the  preferentirl    .-osition 
of  SoutJiern  pine   rnd  Western  pine   ar.  co';i;rei".  with  Doti/l'  s   fir  in   the 
Chlca^jo  market,    rs   it   is    shown   th,-  t   tlie   trr.isportation  cost   of 
Southern      hie   rep'revented  21.58  per   cent   of  the   totrl   cost   p.rd  that 
'iVestern  .,  ine   cou.lc    ue   trransoortot.  to    tL.e  Chicago  ;arr"_:et   rt   ^2.92  :?er 
cent  of  the  totrl   cost. 

Considerin:  Trble  III    rejjresentinp   tj;.esc.   costs   at  i"ew  fork 
rnd  considering;  only  the  Loxiglas   fir   rcachin,;  th-t  mrr]-et  by  water, 
these  drtr.  show   that  Doi'..;las   fir  v.'cre   or;  cticrlly   exclt^c.ed  from  fre 
Hew  fork  mrrket   o:.   rril   trrnsportation,    out   thr.t  Dou  :las  Pir  movin/j 
by  '..'ater  and  rlfjioivh  payin^;:  in  freijht   for   trans. >ort<ation  char/;es 
rn  nnount   equrl   to   25.63     -tr   cent   of   tiie   totrl   cost,    coulc.  still   be 
Irid  i.ov/n  ii-   hew  York  a-t  prr  coicalli'    s>10   ucv  a  less    thrn  Southern    -ine 
movinj    .y  rail. 


981S 


-107- 

These  instr^nces  '.vill  serve  to  rej^resent  in  ^;enerrl  the  proportion- 
ate :.T.rt  of  tlie  finrl  cost  of  Imnber  borne  by  the  trrnsport^.tion  chrr^es 
of  the  i.irterial   from  produ.ciA.  ■  to   cou'".'jain,:-;   centers. 

The  cost   of  trrnsportin, ;  Ivjnbcr  f.oi:-  producer   to   cjns'umer,   bein;: 
a  very  comiderrbl^  factor  in   t';e  price  of  Ivuaber,    has  been  the 
point   aboiit  which  has   turnec'.  l '^  or.i  time    to   time,    the   fortuiies   of  cor- 
sic.errble   sectors   of   tlie   sr,r:nill   im''Ustry.      7/ith   t?ie   turn  of   the 
century  Southern  pine   v/rs   in  ujii.ispv.tec.  Ic-'d  over   all   other  I'OJTiber 
producing  rreas.      It   tlien  jrot  o.ced  nearly  32  per  cent  with  the  Ldie 
r.nd  Central   States'    procuction  n.iountin.;   to  about   2.,  per  cent   and 
the  Western  States  producin,;  les'^i    thrn  10  per  cent.      Ten  years  later, 
Southern  ;.3ine  production  was  ■^--4.9  per   cent,    the  Lalce   Stntes   12.3  per 
cent,    and.  the  V/estern  Strtes   18,4  per  cent   of   total    softwood  luraber 
prodtice"d,      3y  1919   the   Southern   .)ine   production   represented  46.  6  per 
cent,    the  Western  States   29.2  per   cent,    and  the  Northeast   a.nd  the 
Lolce   States  v/ere   out   rf  the   competition.      When  1929   arrived,    Soxithern 
pine  ha,d     surrendered  dominance   of   orouuction   to   the  Western  States 
and  Southern  Pine   in  thrt   year  produced  41.9  per  cent,    the  V/estern 
States  43,4  per   cent   of   rll    softwooc"   production  and  in  1931   these 
percenta:^-es  were   Southern  pine   36.2  per  cent   and  Western  States  50.7 
per  cent   of   total  production. 

Sotithern  pine  had  hy  this   tiiae  cut   out  most   of   its  virgin 
timber  adjacent    to    the  mills;    costs  hr.d  increased,    and  West  Coast   fir 
could  D-XiC  cad  come   throu^,h  the  canal   and  cover  the   eastern   seaboard 
with  water   rates   rnd  bpclchaul   rail   rates   and  meet   or  ujidersell   Southern 
pine   in  those  rarrkets. 

For  many  years   the  Leunber  Industry  had  been  primarily   a  sawmill 
indiistry  shippini;,'   some   nf  its  products   to   other  mills   and  factories  for 
further   fa.brication.      As   the  producin;;   centers   receded  farther  from 
principal   industrial   cons"i:u..ini^,  centers -rnd  costs      of  raanufr-cturinj  in- 
crep.sed  pud  the   trrnsport-tion  costs   continued   to  become   m  increasinj 
factor  in  the  cost,    lumber   f -^bricrti'^n  tender    to    turn  bach  upon  the 
sawmills. 

To   eliminate   the   trrnspcrt;  tion  cost   on  r     ,reat   deal   of   the 
waste   that   results   from  manuf r  cturin,;  .-.nd  fabrication,    the  mills   and 
pla.nts   for  the  utiliza.tion  of  I'omber   tended  to   c^esert   their  former 
loca.tions   and  were   esta.blished  adjacent   to   or  as  .a  part   of  the   sawmills 
producina;   the  lumber.      This   inte;;ration  ^f   the   industry  has   eliminated 
competition  for  ma.rlcet   at  e.  price   on  a  very  considera.ble    jortion  of   t]ie 
mill  production  of   certain  ^-ra-cies   and  species   of  lumber.      This   is  par- 
ticularly  true   of  the  manufacture   of   sawed  wood   containers  where   the 
shoohs  now  are   lar^jely  manufatctured  in  plants   connected  with   sawmills 
and  the  finished  shook  ma.terial    ship.ed  for   a.ssen.blin ;,■  at   the  plants 
where  used. 

Price  had  alv/ays   been   the  factor  influencin,,-  control   or  dominance 
of  market   and  thus   largely  governed  sectors   of  the   inuustry  in   its 
desire   to"   obtain  a  profit,    and  then,    ,■  Imost   in  desperation,    to  permit 
liquidation  of   and  at   least   a   iiartial   s,:  Ivr-an.:   of  the   investment   in 

9813 


-103- 

strnt.in^:  timber  rnd  in   sa'.-vraill    eqi.i.n.ient.      Becruce   oi"  this   element   of 
price   ciid  its   effect  v.;>on  the   inc  i.;stry,   ip.r.ny  ei'forts  hc.ve  been  i.ir.c-c   to 
control   or   to   estrblish  a  bottom  for  prices.      I.iostly  these   efforts  vere 
by   snrll  ^'roiips   snd  had  no   rerl   rnd  Ir'stin.™  effect,    as   it   appeared   to 
be  impossible  to   control    nny   conaideraL/le  nruber   of   the  inenDers   of   the 
indu-stry.      But  yrhen   certain   sections   of   the   industry  had  ^,-otten   tojetl^cr 
on  a  pro;_:rrji  that   bade   frir   to   be   successful,    the  '  p.nti- trust  lav/s  v/ere 
invohed  and  industry  pirns  har.   to  be     .abandoned. 

a.      Price  under  the   Code. 

Ihe  TRA.  Code   for  the  Lui'nber   .?nd  Timber  Products   Industries 
offered  another   opportunity  for  the   industry  luembers    to   eliminate 
cut-throat   competition  pnd  the  continued  aestruction  of   industry 
units   throU;^;h  bpnliruptcy   oy  the  estrblishiiient   of   f   price   that  was 
planned  to   return   to    the    )rodvi.cei's  r.t  least   tjie  cost   of  production, 

Witli  all    ~f   the  known   cdfficulties   surrcuiidinj   the   establishment 
of  a  price   for  products  manufactured  and  ^old  throughout   the  length 
mid  breadth  of  the  United  St^.tes  rnd  v;ith  all  possible  gradations   of 
products  manufactured  in  the  v;ic.est   ran.,,-e   of  factories   as  to    equipment, 
labor  rnd  me,rlceting  cbility,    the  Lioriiber  Industry  boldly  set   o\it   to 
determine   "minimi^jn  cost   protection   'irices.  " 

The   record  of   the  hearings     jrecedent   to   the  Code    contains 
much  testimony  or   evidence  on  minimi'in  prices   and  cc^st  protection. 
The   indv.stry  imderstood   that   it  avust   r.cccvt   some  minimum  hourly  wa^;e 
rate  v/hich  v.'ould  add  materiii.lly  in  most   sa.m.iills    to    the  cost   of  pro— 
ducinj;  luvfcer  rni.  it  bf.r.^-lned  for  and  obtained  the   ri.;.ht   to   establish 
mini;. .urn  prices   nt  v/hic.     its  proco-icts   should  be   sold.      The   industry 
selected  as   its  point   for  the   determination  of   these  minimum  prices 
the  movement   of  Iwaber  from   the   sr-v-raills   or  the  manufacturei".      It   sou  ht 
to   deteimin.e  what   tliese  iiiiuiraun  prices  ii/ould  be  upon  the  basis   of 
"protecting   the  cost   of  production.  "     The  industry  rnd  1\THA  were  both 
definitely  fearful   of  the   effect   on  the  piiblic   of   the   establishment   of 
these  minimiian  prices   and  realized  and  recognized  that   tnere  must  be 
some  protection  for   the     .ublic  against   the   abuses   of   svich  o  pover.      It 
v/;- s   tlic  purpose   to    establish  a  mathematical   foncula,  for  determining  the 
cost   of  proo-uction   rnd  then  to   limit  prices   that  were   to  be   established 
so   that    there   coidd  not  possibly  be   any  element   of  pjrofiu   includot.  in 
such  minimfan  cost  protection  prices.      The  theory  v.'as   a  good  one  but   the 
practical   obstacles   to'. its  reasonable  performajice  were  majiy  and  almost 
ins'Lirmountable.      The   difficulties    surroimding   the   securing  of   cost   in- 
formation  and  the   establisli-nent   of   the   basic   nverr,_^e   of   cost  have  been 
discv.ssed  elsev.'.iere   iii  triis   reoort. 

With  the   establishment   of  prices   at  the   sa'.'nnill   tliere   necessarily 
o.rose    the  problem  of   determinin;^-  v/h-r  t  was   or  would  be   the  proper  adii- 
tional   cost   of   the   hrjndling  of  the   lijmber  in  its  various   stages   from 
the  mill   to   the  consumeri'     It  was   so;.jnt   to   establish  various  fair 
trade  practices  wiiich  largely  v/ere   the   e.'xpression   of  past  methods   of 
doin^;  business   and  to   define   pnd   to   control   the  rctivities   of  the 
principal  h.andlers   of  luinber   in  so-cnlled     v.holesale   quantities.      At 
this  point   the  varied  activities   of   the  mills   in   the   sale   of   their 

9813 


-109- 

proc.ucts,    in  conflict   ar.   they  were  nith  vihs.t   the  v/holesale    trc.de  con- 
sic.ered  to    oe  their   ri  jhts   rm..  cutics,    rncl  nil   of    the  self-preservpr- 
tion   tactics   of   the  mills   i'lv    the  hnr  ,;^inin:_j   c?.prcitie:;   of  the  buyers 
enterec.  to   create  dissension   and   to   establish  a  problem  in   the -opei'r tion 
of  the   Code   that   tended  lar^^ely,    through  its  non-solution,    to   the   final 
breaia"ov/n  of   the  mininiuiri  price   rnd  e."iier ;,ency  provisions. 

The   industry  was   not   ■^C.r^^iteo.  to    tlie  main':.enn,nce  of  minimum 
price   for   its  multitudinous   .iroucts,    for   it  has  been  accepted  a,lmost 
as   rji   a::iov.;  that   if  minimum  pricec   rre   to  he   established   there  must 
be   cohesion  in  the   incaistry,    rnd  r'urdnistratio.i  facilities   of   the 
or^\?jii  zation    crpable  of  maintainin,,-   co^iplirnce  must   be   available   and. 
there  must    lc  a  reco,;;nized  standard  of  products   and  <?   relative  bal- 
ance between   supnly  rnd  the  dem-^nd. 

Pxirsufint   to   the  nrovisions   of  tlie  Code,    the  dode  Authroti^^y 
for  the   indiistry  i)roceedec'    to   estrolish  miniiiwa  prices  rna  publish 
these  in   "iviinimum  Price   Eulletins.  "      'These  miniiaum  prices   as  pub- 
lished  :'.;eneially  affected  the   incus tr,/  members   as  vouid  any  other 
price   sta,bilization  plan  by  ere- tin  :   serioi^.s   dislocrtions   in   the   in- 
dustry,     Hrjiy  of  the   operatin,;  -on'its   v/ere   rdversely  effected  by   thc;-.e 
miniLrom  prices   and  there  were  many   ccmnlr;iuts   thrt   such  minimuni  prices 
were   so   lov/  as   to   further   contrijute   to   the  ba,n]truptcy  of  the   orga- 
nizations.     There  were  laaterirl   benefits   resulting,    naturally,    as   the 
lov.'  cast  mills  v/ere  able   to  produce   rnd  tonmalre   a  profit  which  they  had. 
not   bec-n  able  to   cio  under  prior  conditions.      The   stabilization   of 
prices   nrturally   stiimilated  output  which,    of   course,    in   this   inL.ustry 
was   to   a  certfiin  extent   controlled  by   the  procuction   control   features 
of   the   Code,   but   in  most   cr.sez   the   operators  raajiufoctured  their  quota 
whether   or  not   there  was   a  marhet   for  the  product.      Most      of  the  estab- 
lished minimum  prices  were    somev/hat   in  excess   of  prices   that  had.  been 
prevailing;   theretofore   and  this   tended  lar^.-ftly  to   a  reduction  in   the 
effective   cemand  for   the   liunber  products. 

By  June,    1034,    the  Code  Authority  for  the  L-omber  and  Timber 
Produ.cts  Industry,'   realized  t]ia,t   the  minimiim  prices   were  not  being 
lived  up   to  by  the  manuff cturers.      The  price   structure  had  also   been 
seriously  affected  by  the   failure   of   the  v/holesalers   to  be  governed 
by  the  Code  as  it  was   interpretec    by  the  L\:uaber  Code  Authority.      Price 
cutting  ha.d  become   prevalent  and.  v/hen  the  Code  Authority  requested 
the  MA  to   start  proseciitiori  there   wr.s   immediately   ra.ised  the  point   tlia^t 
the  Governnent  had     not  had  a  hand  in  the  making   of  these  prices  rnd 
that   it   cox^-ld  not   and   should  not   set   out   to  prosecute  violators   of 
re julationu   not  made  by  the   Government,      On  the  other  hand  the   industry 
claii.ied   tha.t   in   approving  the  Code   the  Government  had  r.pproved.  the   ri  ,ht 
of   the   industry  to   set    .'riceg  tinder  the  Codal   limitations   and  thrt    there- 
fore  it    (the  Government)   was   obligated  to   enforce   those  provisions. 

These  contritions  were   teiT.ii.i;' ted  by  an  Order  of -Adjuinistrator 
Johnson  issiied  on  July  16,    1054,    r  eclrriug  ;n  enerrency  and  adopting 
and  proLiulgatin-^-  with   some   cha.n  .es,    as  Government   prices,    the  jjrices 
that  ha,d.  ''oeen  set  up  by  the  Lrjiiber   I.idustry  in  its  minim^'orn  price 
bulletins. 


9813 


-110- 

With  tnese  minira-um  price?  becoming  3^rices  set  ''o-j   the  G-overnment,  tlie 
storr;  of  j^i-'otest  a,,^;:oinst  these  'rices  nnc".  other  f..ctors  in  the  Code  "becojiie 
of  Fuch  proportion  th-it  the  ji.dmii.istr  tioi;  v/-b  coinjielled  to  tahe  cogniz',nce 
of  it,-,ind  the  -ie?.rint;  on  minimiim  prices  in  the  Limber  I-,',dustry  v/as  called 
for  December,  1'324,  As  o,   result  of  the  he;\ri;t;^  an  Order  vas  issued  lo.te 
in  Decemher,  19o4,  withdrr.v/i:".^;  the  minimvini  price  piovisions  of  the  Code, 

i.In.ny  .nd  dire  prophesies  i  di  Leon  in;-.de  ■^s  to  cae  ellect  on  the  in- 
dustry of  this  withdrawal  of  miniraun  •••rice':-  tut  none  of  these  forpc  sts 
Ii.'.ve  cone  true,  as  the  industry  ]^„^   co:^.tinued  to  act  and  react  just  ahout 
as  it  a.id  throughout  most  of  the  later  /ears  of  its  existence  and  there 
was  no  s-ii^rp  readjustment  of  ~ricer,  in  fact,  fre'?d  frci  control,  prices 
rose. 

Betvi/ron  Decemher,  I'^C'ia,  iv'nen  arices  '.-'ere  virithcrawn  :".nd  Ma;^,  1935, 
vdien  the  Su^ireiae  Court  rendered  its  decision  in  the  Schechter  case,  there 
had  'been  considerable  grunhling;  ancl  discontent  in  the  industry  "because 
many  of  the  nemuers  v/ere  still  alaidin.'^,'  by  the  miniraimi  v/a^,e  provisions  and 
were  living  up  to  production  control  schedules  set  ''oj   the  Code  Authority, 
With  the  coiTTilete  abando:ii:ient  of  Code  activities  the  industry  in  ^-eneral 
lias  fuiictioned  very  largely  in  a  normal  v/ay.   The  memherr  of  the  indixstry 
apparentl:,'  .i:.ve  ret.lned  many  of  the  fruits  of  the  cooaeration  resulting 
from  their  associati'jn  mider  the  Code, 

E,  Pilic::s  KiVi:   mill  a5;ALIZATI0;.I 

2,      Mill  Healizatl'hi' 

There  is  r.lmost  a  corplete  lacl:  of  authentic  c.-ata  u  on  the  subject 
of  re  ^liz'',t  \on  from  the  aroduct  of  the  mills  during  any  period  of  time 
and  especially  diirin;^;  period;^  covered  by  available  data  as  to  cost  of 
production.   Certain  associations  of  Itimber  producers  ho.ve  mf'.de  attempts 
to  secujre  costs,  >-,s  previouslj-  disctissed,  hut  the  record  is  almost  d. 
complete  blanl:  on  the  subject  of  mill  realization  or  value  of  mill  pro- 
duct until  the  Code  period.   Consequently  this  discussion  must  be  almost 
exclusively  concerned  with.  th£  dci,ta  submitted  during  the  Code  period. 

Differences  of  opinion  exist  'as  to  wricLt  is  the  proper  definition  of 
"mill  realiz^i.tion.   In  some  branches  of  the  industry  mill  realization 
is  considered  to  be  the  net  retllrn  to  the  manufacturer  for  the  i^roduct 
sold.   This  is  not  either  gross  sales  :r  ;iet  siles,  but  is,  in  many 
instances,  net  sales  less  freight  paid  and  less  selling  ca '.missions ,  and 
in  many  cases  also  less  cash  discounts.  Mill  realization  is  also  frequently 
considered  to  be  the  value  of  the  mill  production  whether  sold  or  not. 
In  other  or  .nches  of  the  industry  mill  realization  maj'  mean  pny  combination 
of  the  above  b.ases  rnd  the  mienbioned  deductions  therefrom. 

Mill  realization  finally,  of  course,  is  Y/h^t  the  product  actually 
brings  in  casli  or  othei'  values  w'len  such  ^iroc^uct  is  moved  from  the  possess- 
ion of  the  ma.nufacturers.  As  the  ultimate  factor  this  crji  not  be  ignored, 
but  it  v/as  also  re.alized  that  in.  determining  prices  under  a  system  governed 
by  an  irbitrar;."  maximimi  of  cost' of  production,  the  quantities  of  product 
manufictured  but  not  disposed  of  must  be  considered. 

It  has  been  more  or  less  conmvon  practice  in  the  industry  to  consider 
9813 


-Ill- 
gross  mill  realizr.tion  for  n.l.i  1101111)6.'  -.rooucts  to  he   represented  "by  the 
selling  price  ot  certain  £,ri,des  c.nC.   sizes  of  finislied  Itunber  erpanded 
"by  the  calculable  hut  indefinite  nd  lOiifixeu  factor  of  the  "average 
outturn  of  the  aver^ige  log,"   In  no  inst'vnce  within  the  availatle  record 
has  any  one  inill,  let  "lone  rxi-j   sub-divi?lon  or  division  of  the  industry, 
proved  this  hy::)othctic"l  mill  realiz  vtion  by  definite  facts  concerning 
sales  or  saleabilit;-  of  ohe  product  manuf '.ctured. 

The  indi.istry  itself  ms  recognised  the  f  ;,ct  that  such  a  computation 
of  fverage  realization  baset  on  the  average  outturn  of  the  average  log 
would  be  subject  to  many  variables.   Two  sawyers  worlting  in  the  same 
mill  and  on  exactl  the  same  log  would  not  produce  similar  gro.des,  sizes 
ana  quantities  of  roo^vlT-  green  lumber.   The  rou^^h  green  lumber  as  it 
came  from  the  saws  nifiit  be  subjected  to  cariabions  in  grade  and  tally, 
and  tliat  post  certainlp  the  luinclin^--  of  the  rou«n;h  green  lumber  in  air 
drying  and  especially  kiln  drying  v/oald  cause  variation  in  grade,  de- 
pending upon  the  treatneiit  ^.ccoro.ed  it  in  those  o'erations- 

During  the  depression  "oeriod  esTecially,  if  not  before  to  the  same 
extent,  there  iir.d  been  "swoetening  of  gr..cl9s"  if  not  the  actual  billing 
of  a  certain  qur^ntity  of  higher  grace  of  lumber  ^s  and  at  the  price  of 
a  lower  grade. 

With  all  of  these  conditions  existing,  or  T;ith  any  considerable 
number  of  them  entering  into  the  qiiestion  of  mill  ret-lization,  it  is 
patent  to  even  the  most  disinterested  observer  that  any  mill  realization 
co.-puted  upon  an  unsuT:  stantiated  average  outturn  of  the  average  log 
v/ould  be  a  very  weal:  reed,  upon  which  the  industry  could  lean.  But  this 
v;as  the  only  t:rje   of  inf orm£i,tion  submitted  in  su:p-iort  of  mill  realization 
and  without  the  backing  of  any  considerable  data  concerning  sales  for 
any  particular  period  to  be  offset  a,gainst  or  considered  y/ith  the  cost, 
qtiTintity  ana  grade?'  of  lumber  jvi-oduced  during  that  period. 

It  i?  realizet  tlicat  an  f\t':em;.)t  to  develop  an  average  figure  of 
mill  realization  for  any  specific  period  will  be  a  difficult,  if  not 
an  a.lnost  impossible  procedure.   The  cliar,acter  of  the  -oroduct  of  the 
mill  will  differ  as  betv^pen  -neriods  depending  urpon: 

(1)  Character  of  the  timber  from  ?/hich  the  saw  logs  are  being 
produced 

(2)  Efficiency  of  the  machinery,  equipment,  and  management 
of  the  mill 

(3)  The  efficiency  of  employees 

(4)  -Competitive  position 'of  the  industry  and  the  particular 
producing  unit  being  consic'cred. 

With  the  industry  --producing  lum'^cr,'  its  fin  1  usable  product,  of  many 
different  anc'  competing  specier,  with  v  ri-.t  ..ais  in  manufacture  as 
previously  outlined  and  with  commonly  used  tr  do  terms  having  mea,nings 
different  from  those  given  ..n  the  r  icti  on-iry  and  the  commonly  accepted 
meaning  of  those  same  wordr,  it  c  n  oe  re  .dilv  seen  that  even  reports 
accurate  as  to  o^^uantity  and  vxAt   price,  only  cross  sections  of  the 

9813 


-112- 
determinat ion  of  o.n  avoro.^e  •irice  for  the   product  or  otittTorn  of  the  log. 

It  vn.s  ,'^,cce;~'ted  as  a  tasic  conclusion  by  }1^:A   tlir.t  this  'bothersome 
question  of  mill  realization  could  not  he   c-~.tisfictorily  ansv/ered  unlers 
and  until  the  reporting  unitr  of  the  industry  accepted  it  as  a  fact  th^'-t 
the  mill  realization  could  c-e  determined  only  on  the  b.-isis  of  inventory 
of  production  unsold  and  on  hand  e.t  the  end  of  any  cost  accounting 
period,  coui^led  with  analyses  of  actuzil  sales.  The  NRA  realized  just  as 
clearly  as  did  the  industry  tlnat  this  basis  was  not  absolutely  correct 
for,  until  the  mr.nufo.ctured.  product  was  actually  sold,  influences  of 
v;eather  and  of  tine  were  tending  to  de^^raae  that  product. 

Ail  import;;,nc  factor  in  determining^  mill  realization  for  the  pro- 
ducts nnnufo.ctxijred  is  the  coMj>arability  of  the  several  species.   In 
certain  m-rhets  and  for  cert,\i;i  uses  Southern  pine  lumber  of  a  g;iven 
grade, and  size  conmiards  a  someTifiu\t  higlier  price  thrm  the  corresponding 
Douglas  fir  lumber.   It  is  reco-'^nized  that  the  j.iroportion  of  the  higher 
grades  is  not  so  j'-^reat  in  Southern  pine  as  in  Dou£;las  fir,  Wliile  Douglas 
fir  and  Soutacrn  ;jine  are  coripetitive  v^oods  cind  interchangeable  for  ma.ny 
uses,  they  are  not  the  so.me  species  or  identical  -.TOods,  and  for  some 
uses  they  i.re   not  e>Tictly  comp:irable,  and  they  are  not  ratarketable  at  the 
same  price.   However,  eacn  of  these  species  had,  thro-agh  custom,  developed 
exclusive  raarl'ets,  relatively  speaMng,  and  infirl:ets  in  which  they  vrere 
directly  competitive.   This • competition  between  species  is  a  factor  which 
very  materially  affected  the  realization  of  the  mills.   It  ¥;as  not 
possible,  or  at  le^st  it  was  not  considered  possible  by  the  industry, 
tliat  prices  of  sizes  and  grades  of  'rs    species  could  be  determined  purely 
on  the  basis  of  the  cost  of  th-^t  species.   The  competing  species  v/ith 
its  cost  and  rel.ated  price  al^o  Itul  to  be  considered.   In  tills  coordina.- 
tion  betvifeen  specier-  it  W'.s  ::'otijid  tliat  very  definitely  determined  minimum 
.cost  protection  prices  based  on  weighted  average  costs  in  the  producing 
divisions  must  necessarily'  be  .adjusted  either  upward  or  downward  so  tlia.t 
one  or  the  other  should  not  be,  by  the  establisliment  of  such  price  eliminated 
from  or  eliminate  the  other  from  p.  market  in  which  both  had  participatnd 
prior  to  the  :^,do"-'tion  of  the  Cod.e, 

Actually  itnd.er  the  Code  eo.ch  division  of  the  Lumber  a.,nd  Timber 
products  Industry  ]")resented  certain  data  concerning  mill  realization. 
As  previously  stated  not  one  of  the  act-i:u;il  lumber  producing  divisions 
presented  conclusive  material  on  this  subject.   Certain  data  on  mill 
realization  were  presented  by  the  Southern  P^ne  Division  but  were  based 
on  studies  of  several  years  prior.   Other  divisions  were  in  practically 
the  sojne  position  and  the  statistics  quoted  as  mill  realization  v;ere 
in  the  majority  of  cases  theoretical  as  they  applied  to  the  then  current 
conditions. 

Cert  .in  uat"'.  as  to  reporter"  cost-  and  reported  realization  under  the 
Code  and  .au-ing  a  Code  period  of  January,  5ebru?.ry,  o.nd  March,  1934, 
compared  with  the  Tariff  Coirudssion  costs  of  1929,  are  presented  in  Table 
XXX,   The  data  fron  the  industry  are  fouiio  in  an  u:"ipublished  report  of 
the   Uese'irch  end  Planning  Division,  SRA,  (*) 


(*)  Unpublished  report  of  Resi^.arch  and  planning  Division,  NRA,  "Cost 
Protection  prices  ;  nd  Cort  Substantiation  Do.ta,  "May  6,  1935, 


-iic;- 

and  the  info-rrap.tion  fron  the  Tariff  Conr.dssion  (*)  licx!?  boen  dincussec]. 
previously. 

The  infoj-mation  is  cupplier'.  oil;'  ;id  to  cert:'iu  of  :he  divisions 
under  the  lumber  Code  Authority  v/hich  produced  a  very  lar^e  percentage 
of  all  lumber.   The  Soutliern  Pine  Division  submitted  cost  reports  from 
136  large  mills  .^nd  181  smr-ll  mills.   The  large  mills  produced  410,705,000 
ft.  b,  m, ,  which  quantity  v/as  reported  to  be  about  76  per  cent  of  the  pro- 
duction of  all  1'  rge  mills,   x.ie  cost  reports  from  the  181  small  mills 
covered  56,705,000  ft.  b.  m.   It  war.  "Iso  estimated  by  the  Southern  Pine 
Division  tliat  50  per  cent  of  the  production  of  Southern  pine  came  from 
the  sm,all  mil^o  in  tliat  division.   It  v/ii   be  noted  tlu.t  ohe  cost  of 
production  and  the  re^'^orted  realization  was  -.p'roximately  $4  per  thousand 
less  for  the  small  mills  tlian  was  reported  by  the  lar(_^e  mills  although 
it  may  be  noted  tliiit  the  productr  are  different.   The  U.  S.  Tariff  Com- 
mission corts  of  19.?9  did  not  distinguish  between  small  mill  and  large 
mill  costs.   There  is  one  other  point  to  be  considered  in  this  comparison, 
namely, the  costs  c'evelo'^ed  by  t-ie  industry  included  selling  costs  and  in- 
terest as  pa.id  or  accrued  v/hile  the  costs  developed  bj''  the  Tariff  Com- 
miscron  did  not  incluJe  r:,ny  selling  cost  but  did  includ.e  interest  ?.t  six 
per  cent  on  the  depreciated  value  of  fixed  assets  (including  standing 
timber  and  land)  and  the  average  v  ;.lr:.e  of  inventories  as  shovm  by  the 
boohs  of  the  companies  investigated, 

Tlae  cocts  for  iicvrdvrood  were  not  developed  by  the  U,  S.  Tariff  Com- 
mission. Under  the  Code  costs  were  developed  for  the  tv;o  principal 
iiardv/ood  grox-^os,  the  Appalachian  Hardwood  and  tiis  Southern  Hardwood 
Subdivisions,   Originally,  under  the  Code  tliese  two  groups  were  combined, 
but  later  -ander  a  Code  amendment  separate  sub-divisions  were  set  up. 
These  sub-divisions  were  outlined  generally  on  the  basis  of  the  forest 
range  of  tne  specific  v/oods  anc.  not  tipon  state  lines.   The  costs  and 
realization  as  submitted  by  the  Southei-n  Hardwood  I'.nd  Al3pa,lacMan  Hard- 
vrood  Subdivisions  were  subject  to  certain  :~djustnents  peculia,r  to  these 
t^TO  groups.  An  item  very  definitely  set  forth  i";i  amount  as  a  reduction 
of  the  realization  v/ps  for  de,;:rulc  and  shriniaige ,  and  no  conclusive 
supporting  datr  v/as  subm-itted  for  this  item.   In  the  Southern  Hardvirood 
Subdivision  realisation  figure  as  presented  on  Table  XXX,  $4,53  is 
included  for  degr.-„de  and  shrinkage.   For  the  Appalachian  Ha,rdwood 
Subdivision  the  amovint  of  this  item  is  stated  as  $4,35  per  thousand. 

In  connection  with  the  realization  item  for  Western  Pino  lumber 
it  should  be  stated  tlrnt  the  quoted  amount  was  produced  oy  applying 
the  formula  based  on  the  average  outturn  of  tlie  log  as  submitted  by 
the  Western  Pine  Division,   There  was  no  definite  data  as  to  v^hat  the 
sav/mills  actxr.l'y  did  receive  for  actual  lumber  produced  for  the  costs 
deto-iled  by  them. 

The  West  Coast  Division  submitted  informrition  as  to  costs  of 
production  and  realiz.at;-on  for  ooth  large  anl  sma.ll  mills  producing 
Douglas  fir  sjid  hemlock,  and  the  S'.uae  data  for  Sitk?,  spruce.   It  will 
be  noted  tlmt  as  between  tne  large  mills  and  the  smo.ll  mills  producing 
Douglas  fir  a.no  hemlock,  the  cost'^  of  the  sm.all  mills  vrere  approximately 
only  two-thirds  of  the  costs  of  the  lar^;e  mills.   It  will  also  be  noted 
that  the  reported  re-.lization  of  the  smll  nilis  was  -52,35  per  thousand 


9813 


-114- 

in  excess  of  the  cost  tut  tk-.t  the  realizrti on  nf  t?ie  large  mills  was 
60  cents  "oer  thousand  las;;  tlian  the  cost  to  produce. 

The  U.  S.  Tariff  Coi-.imission,  in  developing  their  costs -of  production 
of  Douglas  fir  and  hefnlock  for  1929,   presents  a  composite  total  cost  of 
$23.96  per  LI  ft.  t.  ra.   This  cost,  as  well  as  the  cost  of  $23.07  for   ■ 
Western  pine,  is  suhject  to  the  sarue  qualifications  expressed  above  in 
connection  \Yith  the  cost  of  $28.25  per  M  for  Southern  pine  lumber. 


9813 


-115- 
r.   LABOR 

1.   Statistical  Coveraf';e 


As  mentioned  in  Chapter  1,  the  Census  classificf.tion  "Ltunter  and 
Timter  Products"  is  much  more  restricted  tlin.n  the  industry  covered 
ty  the  Code,* the  former  ueing  defined  as  including:  "logging  camps; 
merchant  saYmiills;  combined  sai'.inills  rnc  planing  mills ,  including 
those  engaged  in  the  manv.facto.re  ox  "boxes;  veneer  mills;  and  cooperage 
stock  mills." 

The  Census  classification  "Planing  Mill  Products"  embraces 
"independent"  planing  mills;  th-^t  is,  planing  mills  not  OT)crated  in 
conjuLiction  v'ith  sav.mills*  .    • 

■The  Census  term  "Wooden  Boxes"   includes  estcablislmients  engaged 
primarily  in  the  rmufacture  of  vr:.o'''.en  boxes  (not  including  cigar 
boxes);  crates  for  butter,  fry.its,  berries,  and  vegetables;  box  shocks; 
cases  for  efgs  anO  canned  good:;  carrier  tra,ys;  etc. 

These  three  Census  classifications,  "L'omber  and  Tim.bcr  Products", 
"Planing  Mill  Products",  and  '.'Wooden  Boxes,  except  cigar  boxes'.',  do 
not  conform,  even  in  their  combined  scope,  v/ith  the  coverage  of  the 
Godal  definition  of.  the  industry,  but  together  they  represent  the 
nearest  a.pj3roxinmtion  to  tliat  scope  for  which  statistics  are  available. 
In  this  connection  it-  should  be  borne  in  mind  that  the  Census  statis- 
tics are,  iu  general,  restricted  to  establishments  reporting  products 
valued  at  $5,000  or  more  annuD.lly,   Tnis  applies  to  tne  data  for  1933, 
but  for  earlier  years  a  mill  .which.. ss-wed  200,000  feet  of  lumber, 
1,000,000  laths,  or  2,500  squares,  of  shingles  v.-,as  treated  as  an  estab- 
lishment vifith  -products  valued  at.  g5,Q00. 

2 . .  Mui.ibe-'  and  llYpe   of  3r.Tolo,"ees  ... 

a.  ITumbcr  of  Employees, 

The  .aggregate  employivient  in  the  three  Census  classifications 
of  the  industry  just  described  sxiouiited  to  539,772  wage  earners  in  1929. 
Of  this  number  over  77  per  cent  was' represented  by  the  Census  classi- 
fication "Lunber.and  Timber  Products",  which,  in  general,  covers  logging, 
sawmills,  combined  sawmills  and  planing  mills,  veneer  and  cooperage 
stock  mills.  Over  16  iDcr  cent  of  this  emiiloimient  v?as  represented  by 
planing  mills  not  operated  in  conjunction  with  savmills.  The  remainder, 
or  less  tlaax  7  per  cent,  was  engaged  in  the  manufacture  of  wooden  boxes 
and  j"'ac'-;ages. 

The  logging  and  sav/mill  branch  of  the  industry  (Census  classi- 
fication "Lumber  and  T.imber  Products"),  rasalred  third  .-in  1929  among  all 
American  industries  with  respect  to  the  n.anb'er  of  isalge  earners  employed, 
being  exceeded  by  only  the  Foundry  v.r'j   MncMne  Shop  products  and  the 
Cotton  Goods  Industries,  and  followed  by  ti.r  Iron  .and  Steel  (Steel 
Works  and  Rolling  liills)  Industry.  (*) 


(*)   Census  of  I.Ln^nufa'ct-urers ,  Bureru  of  the  Census  (1929), Vol. II, p.  34 
9813 


123.5 

34, 

,834 

613, 

,253 

113.6 

107.2 

30, 

,797 

541, 

,332 

100.3 

100.  C 

30, 

,554 

539, 

,772 

100.0 

60.5 

22, 

,864 

274, 

,004 

50.8 

39.3 

21, 

,753 

246, 

,508 

45.7 

-116- 

A-oproxiraately  162,000  T7age  earners,  or  39  -oer  cent  of  the  1929  log-  . 
ging  and  sawmill  employment,  were  loggers,  the  remainder,  or  atout  61  per 
cent,  teing  engaged  in  the  mills. 

The  following  tatle  shows  the  numher  of  wage  earners  in  the  three 
Census  classifica,tions  of  the  industry'-  for  the  odd  years  1925  to  1933  in- 
clusive.  Similar  data  for  the  even  years  are  not  available. 

Uumher  of  Wage  Earners  (Census  Classifications') 

Boxes 
Lurnher  Wooden 

and  Planing  Except  Total 

Timber    Index     Mill       Index    Cigar   Wage     Index 
Year  Froducts(1929=100)  Products     (I929fl00) Boxes  Earners  (1929=100) 

1925  467,090  111.5  111,329 

1927  413,946  98.8  .    95,539 

1929  419,084  100.0  90,134 

1931  196,647  46.9  54,493. 

1933  189,367  45.2  35,388 

Source:   Census  of  Kanufactures,  Bureau  of  the  Census  -  1929  and  1933, 

It  will  be  seen  from  the  foregoing  table  that  the  number  of  wage 
earners  in  the  three  Census  classifications  declined  from  613,253  in  1925 
to  539,772  in  1929.   Under  the  influence  of  the  business  depression  this 
employment  fell  sharply  to  274,004  in  1931,  a  loss  of  approximately '50  per 
cent  from  the  1929  level.   The  year  1932  represented  the  bottom  for  the 
industrjr,  both  in  production  and  emplojonent,  but  actual  employment  figures 
for  that  year  are  not  available.  However,  the  index  of  employment  for  saw- 
mills and  millwork,  prepared  by  the  Biireau  of  Labor  Statistics  and  shifted 
to  a  1929  base,  fell  to  37.8  in  1932,  as  compared  with  49.5  in  1931  and  44.3 
in  1933.   On  the  basis  of  the  1932  index  it  is  computed  that  employment  in 
that  year  fell  to  204,034  wage  earners.   In  1933  the  employment  level  was 
about  5  per  cent  below  the  1931  level  and  represented  45.7  per  cent  of  the 
1929  employment. 

Technological  unemployment  has  been  less  in  this  industry  than  in  most 
other  industries.   There  have  been  notable  improvements  in  manufacturing 
methods,  but  these  have  taken  place  gradually  over  the  past  quarter  of  a 
century,  with  no  sudden  displacement  of  labor.  (*) 

Prom  Census  statistics  (**)  it  is  compiited  that  the  average 


(*)   Verbal  statement  of  Pranlc  Read,  forner  Assista.it  Deputy  Administrator, 
N.R.A.  ,  on  the  Lumber  and  Timber  products  Code,  Februar;;^  4,  1936, 

(**)  Census  of  Manufactures,  Bureau  of  the  Census,  1933. 
9813 


-117- 

reportinc  ertablisliment  in  the  s-ivmillo,  "Lii.i'ber  and  Timber  Products", 
employed  about  32  wa^^e  earners  in  1939,  39  in  1931,  p.nd  50  in  1933;  (*)  the 
average  "inde-iendent"  planing  mill  (rnillv/or''.:)  ectabliGlment  employed 
between  18  and  19  vi/age  earners  in  192-7,  nearly  IG  in  1931,  arid' 15  in 
1933,  while  the  average  vrooden  box  or  pacloage  establicliment  employed 
about  39  wage  earners,  in  1923,  S-l-  in  1931,  and  37  in  1933.  When  it  i-s 
realized  that  in  some  caches  t^-o  or  ciore  mills  operated  uiider  common 
ownership  are  counted  arj  a  single  establisliment  and  that,  in  general, 
the  Census  statistics  do  not  cover  mills  whose  products  are  -volued  at 
less  tnan  $5,0"""  annur.ily,  it  is  seen  tha.t  the  average  wdrking  group  of 
employees  in  the  industry  is  ouite  Rm;\ll, 

The  follov;in^  table  shov;s  the  average  n^ombcr  of  wtige  earners  in 
establishnents  of  various  sizes  for  the  ve?r  19J9. ' 


In  Establishments  v/ith 
Products  Valued  at: 

$5,0 JO  to  $19,999 
20,000  to  49,999 
50,000  to  99,999 
100,000  to  24-9,999 
250,000  to  499,999 
500,000  to  999,999 
1,000,000  to  2,499,999 
2,500,000  to  4,999,999 
5,0)0,000  and  over 


Avera-,e  'lumber  of       Average  Nuuber  of 
Wage  Er'.rncrs  in  Sav-    'fege  Earners  in  Mill- 
mill  Establisliments  a/  worh  Establishments  'hj 


4.9 

2.5 

13.5 

6.1 

27.4 

11.7 

58.5 

25.0 

Xco  •  t_/ 

54.2 

216.6 

109.3 

411.2 

219.4 

841.8 

421.8 

2,179.7 

none 

Source:   Computed' from  Census ■ of  Manuf- ctvxes ,  1929. 
a/  Census  classification  "Lumber  and  Timber  Products" 
b/  Census  classific  ■  tioh  "Plani;ig  '.'ills" 


b.   Seasonality  of  'Emviloi'T.ie:it 


The  extent  of  seasonal  fluctuations  in- employment,  in  the,  savmiill 
branch  of  the  industry  _is  shown  by  the  following  indices  of  emploj-ment  i 


(*)   This  increase  was  undoubted.ly  due  to  the  decline  in  the  number  of 
sino.li  establislmients. 


9813 


-118- 

Index  of  Employment  (1229=1:30 ) 
S'lvmillG 

1926   1927  1928  19:,9  l'?bO  19ol   19o2  1955  1934  19J5 


Jan, 

i:.4.7 

98. G 

90.3 

94,6 

35.3 

51.6 

36 . 3 

34.8 

49.7 

50.0 

Pet, 

104.5 

97.4 

90 . 3 

95.1 

82 .2 

5C.5 

35.8 

33,7 

50,7 

52.9 

Mar. 

104,9 

96.9 

92.4 

96.6 

82.9 

50.1 

35.5 

33,1 

52.8 

54.2 

Apr. 

109,6 

97.4 

95.9 

101.0 

82.0 

49.9 

35.6 

34,8 

55.5 

56.3 

May 

111,8 

99.9 

97.0 

103.2 

81.1 

50.0 

35.7 

37.1 

58.4 

55.0 

Jim, 

112,7 

IOl.4 

99.2 

105.1 

73.4 

49.6 

37.1 

43.1 

56,8 

50.0 

Jul, 

112.1 

100.1 

97.8 

105.1 

73,7 

47.3 

36.4 

49.1 

54,7 

55.0 

Aug, 

112,5 

101.0 

10').  3 

106.3 

70.0 

46,3 

56.6 

53,7 

54.9 

Sep, 

110.2 

101.5 

101.1 

103.9 

60,4 

45.1 

37.8 

57,2 

55.2 

Oct, 

108.4 

99.9 

10-'.8 

ICO. 3 

64.9 

44.0 

39,2 

53,4 

54.9 

Nov, 

106.6 

98.1 

100.3 

97.0 

61.1 

42.4 

33,6 

55,1 

53.1 

Dec, 

104.2 

94.0 

07.5 

91.8 

56.3 

38.7 

37.0 

53.9 

51.1 

Aver- 

age : 

108.5 

98.8 

97.1 

100.0 

75.7 

47.1 

37.0 

45.4- 

54.0 

Source:      Bureau  of 

Labor 

'   S  t='  ti 

sties 

Index, 

shift 

ed   to 

1929   oase. 

Slnil.-^r  data  for  millvorl;  (Census  classification  "planing  Mills") 
are  presented  in  tlis  folior/in;'::  tnlile: 

Index  of  EiirTlo:./7;ient  (l929al '.»■"') 
Millworl.: 

1926   1927   1928  1929   1950  1931  1932  1933  ,1934  1935 


Jan. 

124,9 

110,6 

99.0 

100.0 

82.9 

62.9 

49,0 

33.6 

37.7 

40.7 

Feb. 

125,1 

108,8 

99   '^<- 

10-. 5 

84.2 

64.3 

46  »  7 

34.4 

40.9 

42;9 

Mar, 

126.3 

108.0 

99   '-■ 

100.4 

81.7 

64.4 

45.6 

31.7 

42.6 

43.4 

Apr, 

123,5 

108.9 

102.4 

104.3 

81.5 

64.5 

43.4 

53.6 

44,6 

45.0 

May 

122.0 

103.8 

104.3 

105.1 

81.7 

65.4 

42,8 

36.2 

45.8 

46.1 

Jun, 

121.7 

109.9 

105.1 

105.1 

79.3 

63.2 

41,0 

39.8 

42.9 

47.5 

Jul. 

121.4 

109.0 

105.4 

104.9 

75.7 

51.6 

38,9 

44.0 

42.0 

50.6 

Aug. 

121.4 

109.0 

106.5 

104.5 

73.3 

60.8 

38,6 

45.2 

41.0 

Sep. 

119.9 

106.9 

104.5 

101.2 

68. 9 

56.8 

38.5 

45.3 

■v.o    o 

Oct, 

119.4 

104,7 

101.6 

9  ^) ,  3 

69.6 

54.8 

58.0 

43,9 

41.1 

Nov, 

117.7 

102.2 

102.5 

89.9 

68.1 

54.3 

57.5 

42,2 

41.1 

Dec, 

113.6 

103.7 

99.2 

84.8 

67.3 

52.8 

36,5 

41.1 

41.6 

Aver- 

age: 

121.4 

107.5 

102.5 

100.0 

76.2 

60.5 

41.4 

39.2 

41.7 

So-orce:     Bureau  of 

Labor 

Statist 

icG   Inc^ex,    s' 

iiiftcd 

to   1929  bas 

c. 

G.   Tyif^e  of  Employees 

It  v:.';  seen  iii  Cliapitor  I  tliat ,  in  f^eneral,  employees  in  the  industry 
may  be  divided  into  tv/o  principal  groups,  najnely,  log^^ing  einployees 
and  sawmill  employees.  Logger?.,  for  tOie  most  ;:'art,  must  live  in  c--"jrrps 
which  Can  be  moved  readily  f ro;i\  one  logging  center  to  another,  for  with 
modern  methods  it  requires  only  a  short  time  to  fell  -,^11  the  comir.ercial 
trees  on  a  considerable  area.   There  are,  therefore,  very  few  permanent 

9813 


-119- 

living  quarters  for  log£;erc,   Sucli  v;or''.:erc  are,  for  the  i.iost  riart , 
■unmarried  e,nd  are  more  or  less  tro,nsicnt  in  most  of  the  producing 
regions.  An  exception  to  this  situati'on  e;:iGts  in  those  logging 
areas  which  are  fairly  contiguous  with  agricultural  areas,  as  in  the 
South  and  App'alachian  regions,  where  logging  lahor  is  frequently  inter- 
changeable with  that  of  agricultural  lahor,  with  no  clearcut  division 
"betv/een  them.   In  such  cases  log,i:ers  frequently  iiave  more  or  less  perm- 
anent residences  on  farms  in  the  vicinity  'ncl  are  engaged  part  of  the 
year  in  logging  opers,tions, 

Savmill  v/orhers  fill  into  the  c'ite;-;ory  of  factory  workers.   They 
are  less  transient,  particularly^-"  in  the  Tifostcrn  areas,  than  the  loggers. 

Planing  mill  workers  mxy   be  enga,':ed  in  operations  adjacent  to  the 
savmiill,  or  they  may  he  employed  in  independent  planing  operations 
located  near  the  centers  of  demrand  and  f;'.r  from  the  logging  and  savmiill 
operations.  Wliichever  is  the  case  v/iil  determine  whether  the  workers 
will  have  the  advantage  of  tiie  lov/er  living  costs  of -the  country  or  must 
incur  the  higher  url^an  costs, 

Questionnaire  data  compiled  "by  the   Southern  Pine  Association, 
November  18,  1935,  covering  85  large  sawmills  in  10  states  in  the  Southern 
Pine  area,  gave  the  following  riercenta'ges  of  negro  to  total  labor  employed 
in  the  month  of  September:   193£;,  52.5;  1935,  50.1;  1954,  52.2;  and  1935, 
50.9.   Similar  data  for  sma,ll  mills  would  probably  show  a  larger  per- 
centage of  negroes  due  to  a  lesser  degree  of  mcclia.nization  and  therefore 
of  required  skill.  Dat-^.  comi-^iled  by  the  Southern  Pine  Association  in 
connection  with  the  above-mentioned  study  and  cove?i?Jfij  18  small  sawmills 
in  seven  Southern  Pine  states,  shoT/ed  the  follov/ing  percentages  of  negro 
to  total  labor  for  the  m-;nth  of  Sentember:   1952,  55.3;  1955,  55.5; 
1934,  55.5;  1935,,  59.2. 

The  logging  and  sarmill  worlrrnen  of  the  lloVth  and  West  are  genera,lly 
of  a  roving,  independent  nature,  wliile  t'ilose  in  the  South  are  inclined 
to  spend  their  lives  in  the  same  locality,  changing  from  lumbering  to 
agriculture  and  back  agedn  according  to  demandt. 

With  reference  to  the  sex  of  employees,  a  study  made  by  the  Bureau 
of  Labor  Statistics  in  1929,  covering  58,007  employees  of  319  representa-; 
■  tive  sawmills  in  22  states  and  6,968  employees  of  51  logging  camps  in  10 
states,  revealed  the  fact  that  only  18  of  the  sa^vmill  employees  and  only 
29  of  those  in  the  logging  cam.js  v;ere  females.  (*) 

In  1930  there  were  20,7'61  persons  under'  18  years  of  age  employed  as 
lumbermen,  raftsmen,  v/oodchoppers ,  and  ih  saw  and  planing  mills,  4,228 
of  these  being  between  the  ages  of  10  and  15  and  the  balance,  or  15,535, 
being  16  and  17  yeo.rs  of  age.   These  statistics  are  set  forth  in  detail 
in  the  following  table: 


{*')     Bulletin  No,  497,  Bureau  of  Labor  St-tistics,  page  1, 


9813 


-120- 
Children  10   to   17  yer-.rs,    incl-asiive,    of  age 
gainfully  occupied,  -^.b   Ixun'berrnen,    n,ftsnen,   and 
woodcliop:  erp;    :\ncl   in    s-.w  rvn-."    -olcnm,-;-  laills    in   1930 

Occupations  Tot,!  10-15  yrs. ,    incl.      16~17  yrs.,   incl. 

Tot-1      ■  20,761  '        4,228  16,5S3 

Lumbermen,    riftsaen 

and  woodchoppers:  5,025  1,047  3,973 

T9iu:)isterr   anc    lir.ndlers  237  57  240 

Other  lun'roeri.ien,  r-,ftG- 

men  anc'.  woodchopv^ers      4,72G  990  3,738 

Saw  rnd  Pl'.nia;;;  Uilis  a/       15,736  3,181  13,555 


Source:  Prepared  by  the  Children's  Bureau,  Dc-oartment  of  La"bor,  froi.i 
Census  of  Pov'ulation,  1330,  Volune  V. 


a/   Includes  Wooden  Box  factories. 


During  the  ;ieriod  193.-J  to  1935,  inclusive,  slcilled  latur  in  103 
cawmills  in  11  st- tes  in  the  Southern  Fine  area  averaged  atout  37  per 
cent  of  the  total  v/orlanen  on  the  p-iyrolls  of  these  mills,  and  common 
labor  63  per  cent,  (*)  '  Similnr  statistics  for  the  Northern  and  Western 
portions  of  t.ie  industry  are  not  available,  hut  in,  vie".'  of  the  greater 
degree  of  .meclii\niKat:l.Qn  of  those;  areas  ,anc.  the  corresponding  greater 
degree  of  skill  required,  the  proportion  of  skilled. vrorlcnen  in  su(?h 
areas  is  doubtless  larger. 

Some  idea  of  the  r^nge  of  occupations,  in  savmills  may  be  gained 
from  the  follovdnt;,  list  of  the  principal  occupations  ;nublishcd  by  the 
U.  S.  Bureau  of  Li-,bor  Statistics  in  connection  v/ith  its  hour  and  v/age  d?,ta; 
(*) 

Pondmen,  log  yardmen,  head  b,i,nd  sawyers,  head  circular  sawyers, 
doggers,  setters,  sa.w  tailers  on  'lead  saws,  garig  sa.w3'"ers,  resaw 
sav/yers,  sm.all  saw  savryers,  edgemen,  edger  tailers,  transfermen, 
trimmer  loaders,  trimiuer  operators,  gang  or  resaw  offbearers,  graders, 
sorters,  Ixand  truckers,  power  truckers,  liand  stackers,  -n Lining  mill 
machine  feeders,  t.':'.lleymen,  mil].\Yrights ,  laborers,  and  other  env;3loj''ees, 

In  logging  the  tj^oes  P.nd  nomenclature  of  rccu'^ations  differ  con- 
siderably in  different  parts  of  the  country,  and  even  between  states  in 
the  same  general  area,   Tliis  difference  is  especially  noticeable  in 


(*)  Analysis  of  questionnaire  dat  b.y  the  Southern  Pine  Association, 
ilcw  Orleans,  Lomsiana,  November  18,  1955. 

(*)  U.  S.  Sure  ai  uf  Labor  Statistics,  TiTages  and  Koui's  of  La.bor  in  the 
L-umber  JA.:ustry  in  the  United  States;  1932,  Bulletin  Ho.  586 

9813 


rrl21- 

comp?.ring  the  Northwest  --^.nd  t:ie  South,  cue  largel;/  to  the  larger  and 
tr.ller  lumher  in  the  former  area  and  the  greater  de^-ree  of  meclianiza- 
tion  in  tli;;,t  ■  area. 

The  ari"ncipal  occupations  in  tlic  log,  ir^'  camps  of  North  Carolina, 
listed  by  the  U.  S.  Bureau  of  Labor  St-- tistics,  are  as  follovrs: 

31ac;]:smiths,  sladder  .0 alile  pullers,  clcan-ui")  men,  cooks, 
'cutters,  fallers,  filers,  s":id-"er  firemen,  foremen-,  assistant 
forBmen,  fel"'-in£;  crcnv  foreuen,  section  foremen,  teamster  foremen, 
tr?.ck  foremen,  t^rab-jac':  :uen,  hookers,  laborers,  labor  leaders, 
laborers  and  hookers',  loader  levernen,  skidder  levermen,  loadermen, 
log  s towers,  rigji.ers,  roacmen,  ropers,  sawyers,  sldLdder  yard 
sawyers,  stuimping  tr:e  sav.'yer's,  section  lands,  spikers,  swampers, 
teamsters,  ton^-  hoo'::ers,  to;'i  loaders,  trr.ctor  operators,  o.nd  vrood 
cutters. 

By  v.ay  of  co}itrast,  the  follb'.7in:j'  list  of  ;orincipal  occuoations 
in  the  l.og.'^ing  cninps  of  Oregon,  -lublished  by  the  same  source,,  is  of 
interest: 

Balcers,  'becmak.ers,  blacksuiths ,  buckers,  head  buckers,  bull 
cooks,  log  buncliers,  caterpillar  drivers,  caterpillar  greasers, 
chasers,  choker' setters ,  climbers,  cooks,  crane  operators,  cruisers, 
dishv/ashers,  donlcey  engineers,  loa^der  engineers,  fallers,  filers, 
firemen,  donlrey  firemen,  loader  firemen,  fire  v/o,rdens,  flunld.es, 
head  flunltie"?,  'h^andymen,  hi^'h  climbers,  hookers,  hook  tenders, 
knotters,  laborers,  linemen,  loaders,  he3,d  loaders,  second  lo3.ders, 
machinists,  machinists'  helpers,  mecli?.nics,  -^-unpraen,  camp  repairmen, 
car  repaii-men,  he?,a  car  repp.iinen,  caterpillar  repainnen,  don]:ey 
engine  repairmen,  crm".  rc;oair„ien's  helpers,  cater--:iillar  repairmen's 
helpers,  riggers,  head  riggers,  riggers'  helpers ,  sawyers,  scalers, 
swampers,  termsters,  tong  setters,  w?vtclTmen,  \7elders,  wh-istle  punks, 
and  v/ood  buc]:s,  .  . 

3 ,   General  Labor  Conditions 

a.   Hazards  of  Sniploynient 

Records  of  tlie  National  Sp.fety  Cc^mcil  indicate  that  the  lunbering 
industry  ranlcs  among  the  most  kazardous  of  industries,  (*)   The  re-->ort 
of  tlie  Council  for  19c3  shovrs  lumbering  as-  tv/enty-ninth  in  frequency 
and  tvrenty-seventh  in  severity  of  accidents  amon^,  thirty  uir.jor  industrial 
classifications,  (*) 

The  accident. frequency  a;Ki  severity  rates  for  1S30  given  in  the 
above-mentioned  rei^ort  are  as'  follows  J  .'  . 


(*)  Children's  Bureau,  Departvaent  of  Labor,  nemor  ndum  of  Jan^uary  17, 
193o,  prepared  for  the  Lumber  -.ad  Timber  Products  Study  Unit, 

(*)  Accidentr-.l  Injury  I^otes  in  f.e  Woodv,'orl3.ng  ,nd  Li^nbering  Industries, 
1933  -  National  Safety  Co-oiicil, 


9813 


—1-32— 

Frequency  Rate      Severity  Rate 

All  Inclustries         14.56  1.59 

VJoodworking  18.26  1.56 

Lumbering  59.67  5.00 

The  need  for  exclusion  of  minors  from  industries  ps  hazardous  as 
this  industry  has  for  many  years  teen  recognized.   In  1932  the  Advisory 
Committee  on  the  Employment  of  J'inors  in  Hazardous  Occupations,  a  technical 
committee  of  health,  industrial,  and  insurance  excerts,  after  a  study  of 
dangerous  occupations  and  accident  exTjeriencc,  included  in  Its  reioorts  a 
recommendation  that  minors  under  18  should  be  nrohibi'ted  from  employment 
in  lumber  and  logsiing  operations,  in  saw  and  planing  mills,  on  the  OTjera- 
tion  of  poT7er-driven  woodworking  machinery,  and  in  the  loading,  unloading, 
piling  or  storing  of  heavy  lumber.  (*) 

In  a  study  made  by  the  U.  S.  Children's  Bureau  (**)  some  years  ago 
covering  accidents  in  a  single  -^ear  to  minors  under  20  years  of  age  in 
"I'isconsin,  the  Lumber  and  Furniture  industries  were  found  as  a  group  e  ven 
more  dangerous  to  these  young  workers  than  the  Iron  and  Steel  industries, 
causing  137  injuries  per  1,000  boys  in  semi-skilled  occur>ations,  and  35 
per  1,000  laborers.   Boys  in  serai-skilled  work  in  saw  and  planing  mills 
had  an  injury  rate  of  153  per  1^000  and  in  other  woodworking  industries 
(excluding  furniture)  a  rate  of  204  per  1,000.   For  tlie  laborers  in  these 
.saw  and  planning  mills  the  rates  were  lower,  being  47  and  28,  res-oectively. 

In  a  later  study  of  accidents  to  illegally  employed  minors  in  this 
same  state  (Wisconsin),  madealso  by  the  U. " S.  Children's  Bureau  (***), 
woodworking  machines  rahl^ed  first  among  machines  causing  accidents. 
Three-fourths  of  these  accidents  occurred  i n  t he  manufacture  of  lumber  and 
allied  products,  sa'-'s  and  planers  being  resnonsible  for  a  very  large 
proTDortion  of  the  woodworking  accidents.   Those  injured  by  T^oodworking 
machines  included  a  large  proportion  r)erma.nently  disabled. 

In  spite  of  the  recogni-red  hazards  in  the  industry,  bovs  16  and  17 
years  of  age,  as  indicated  by  the  Bureau  of  the  Census  figures  previously 
given,  were  still  permitted  to  wor^;  utd  to  the  time  the  Lumber  and  Timber 
Products  Code  ^a.s,   aiDDroved,  and  the  prohibition  in  that  Code  against  the 
employment  of  those  under  18,  with  a  few  specified  exceiDtions,  re-oresented 
a  real  advance  in  protecting  minor  workers  from  industrial  injuries,  (****) 


(*)     Statement  of  the  U.  S.  Children's  Bureau,  Department  of  Labor, 
January  17,  1936,  prepared  for  the  Lumber  and  Timber  Products 
Studv  Unit. 

(**)    U.  S.  Children's  Bureau,  Industrial  Accidents  to  EmT)loyed  Hinors 

in  ffisconsin.  I'assachusetts.  and  iJew  Jersey.  Publication  152,  v,    20 

(***)   The  Illegally  Employed  Kinor  and  the  Compensation  Act,  Publication 
214,  Table  11,  p'.  108. 

(****)   Statement  of  the  U.  S.  Children's  Bureau,  De-oartment  of  Labor, 
January  17,  1936,  prepared  for  the  Lumber  and  Timber  Products 
Study  Unit, 


9813 


-123- 

t.   General  Lator  Conditions  on  the  West  Coast 

1.   High  Labor  Turnover 

One  of  the  signs  of  a  contented  labor  force  is  a  low 
labor  turnover.   If  men  are  hapry  and  contented  rith  their  work  they 
will  usoallj''  stay  T/ith  it;  if  they  are  restless  and  discontented  they 
will  move  on  to  another  job.   In  the  West  Coast  Lumber  Industry  the 
labor  tiirnover  has  usually  been  very  high,  although  like  so  nany  other 
aspects  of  the  situation',  adequate  figures  on  the  subject  are  difficult 
to  find.  A  few  mills,  however,  have  made  careful  turnover  studies. 
Four  Oregon  mills  report  that  durin.^:  the  three  years  1919,  1920,  and  1921 
the  average  number  of  separations  was  703  per  mill  ver   year,  while  the  average 
working  vforce  per  mill  was  343,  indicating  a  turnover  of  about  205  per 
cent.  (*)  Jive  Washington  mil^s  during  the  same  Deriod  had  an  average 
yearly  turnover  of  266  -^er  cent,  (**)  and  there  probably  v:as  little  labor 
trouble  in  these  mills  during  this  TDeriod.  Had  figures  been  available 
for  the  years  1917  and  1918  they  would  undoubtedly  show  a  much  larger 
rate  of  turnover, ■ particularly  for  the  six  months  preceding  the  shortening 
of  the  work  day.   It  is  generally  admitted  thpt  the  turnover  during  the 
period  ran  from  500  to  1,000  percccis  pj5«-  aBi'itun(**'*)  in  1915  the  Federal 
Industrial  Relations  Commission  estimated  that  the  annual  turnover  in  the 
logging  camps  was  about  500  per  cent.  (****) 

The  causes  of  this  turnover  have  been  many  and  have  rami- 
fied through  all  the  rela.tions  of  workers  and.  owners  in  the  industry. 
Some  turnover  is  inevitable  in  any  industry,  due  to  sickness,  accident, 
death,  old  age,  promotions,  removals,  etc.   Some  of  the  turnover  is  ■oecu?*  ' 
liar  to  this  industry  but  inevitable  in  it.   Ten  find  it  too  exacting  to 
continue  working  indefinitely  in  some  of  the  extreme  weather  of  the  West 
Coast  Region  and  leave  it  to  rest  up  or  dry  but.  (*****)   Rain,  even  when 
it  reaches  a  precipitation  of  four  or  five  inches  -oer  day,  does  not  hinder 
operations  in  mill  or  camp  until  something  washes  away.   High  wind,  how- 
ever, may  stop  logging,  nnd  snow  sometimes  interferes  with  it,  esTJecially 
well  up  in  the  mountains.   There  is  also  a  considerable  amount  of  idle  time 
due  to  breakdo\"ns  or  necessary  repairs.  All  of  these  causes  result  in 

increased  labor  turnover. 

(*)      Industrial  Relations  in  the  West  Coast  Jiumber  Indus  try,  i.Bulle  tin 
No,'  349,  December,  1923.   Bureau  of  Labor  Statistics. 

(**),     Four  L  Bulletin,  April,  1922,  p.  35. 

(***)    Bureau  of  Labor  Statistics,  Industrial  Relations  in  the  West 

Coast  Lumber  Industry.  Bulletin  llo.  349,  December,  1923,  p.  38. 

(****)   U.  S.  Commission  on  'Industrial  Relations:   Final  Report,  p.  167 

(*****)   Bureau  of  Labor  Statistics,  Industrial  Relations  in  the  West 
Coast  Lumber  Industry.  Bulletin  .!Io.  349,  December,  1923. 


9813 


-124- 

2.  Ga,us?s  of  Labor  Unrest. 

Sporadic  strikes  and  \inion  activity  in  the  logt,i'^-g  and  1-umber 
camps  of  the  Northwest  from  1905  to  1933  (discussed  later  in  this 
chapter)  threw  a  penetratinii,'  searchlight  on  the  bad  conditions 
existing  in  such  camos.   Professor  V;'illi?jn  7.   Ogbum  of'  the  Univer- 
sity of  ?/ashinii;ton  wrote,  in  1918,  (*)  that  the  chief  causes  of  labor 
unrest  in  the  industry  were:  (l)  lon^  hour^^j  (2)  lev?  wages;  (3)  un- 
sanitary camps;  (4)  lack  of  family  life;  (5)  absence  of  commnity 
life;  (S)  unsatisfactory  workins"  relationships  v;ith  foremen;  and  he 
stated  that  those  v;ere  of  iiirportance  nearly  in  the  reverse  order  to 
tliat  in  .which  they  are  mentioned.   These  causes  will  be  discussed  in 
turn.  Hours  of  labor  and  v/ages  will  be  treated  in  greater  detail  lat-  . 
er  in  the  clapter.  The  space  given  to'  this  discussion  is  believed 
warranted  by  the  fact  tha.t  the  gz'eatost  amount  of  labor  unrest  ha.s 
been  oh  the  West  Coast,  and  also  by  the  fact  that  the  States  cf  Ore- 
gon and  Washington,  on  the  basis  of  the  1931  census,  accounted  for 
one-fourth  of  the  total  wage  earners  in  the  "Lumber  and  Timber  Pro- 
ducts" (Census  classification)  bi-anch  of  the  industry,  and  in  1933 
these  states  accounted  for  a  slightly  lar:-.:cr  slrnre  of  the  industry's 
wage  earners.         "   ■ 

Tan  hours  was  the  standard  working  day  in  the  Lumber  Industry 
almost  from  its  inception,  although  in  some  operations  longer  or 
shorter  days  were  worked.  While  there  had  been  dissatisfaction  with 
the.lO-Jiour  day  for  many  years,  it  did  not  assume  important  propor- 
tions until  1917.   The  great -strike  of  that  summer  was  chiefly  for 
:the  S-hour  day,  and  it  was  not -until  the  day  was  shortened  to  8 
hours  on  March '1,  1918  fiiat  it  was  possible  to  quiet  the  unrest  at 
that  time.  (**)   Since  the  8-hour  day  first  went  into  effect  there 
have  been  .few  deviations  'from  that  norm  on  the  West  Coast.   In  April, 
192i3,  a  survey  .of  the  camps  B.nd  mills  on  the  West  Coast  showed  that 
of  749  operations  only  15  were  i-unning  over  8  hours.  (***) 

Wage  rates  have  created  labor  unrest  chiefly  when  wages  liave 
been-  decreased  or  when  pi'ices  iaave  risen,  or  on  acco'ont  of  the  wage 
spread  between  adjoining  camps.   Sach  of  these  conditions  has  been 
frequent  enough  to  cause  considerable  dissatisfaction.   In  Fe^i'uary, 
1923,  in  the  Centralia  and  Grays  Harbor  districts  on  the  West' Coast, 
about  50  miles  apart,  the  vvage  spread  for  laborers  was  $1.25  per  day. 
While  this  spread  was  probably  above  the  average,  there  lias  usually  been 
considerable  variation  in  wages  from  plant  to  plant.  (*.***) 

(*)  University  of  Washington  Forest  Club  Annual,  1918,  pp.  11-14,  Causes 
and  5emcdids  of  the  Labor  Unrest  in  the  Lumber  Industry,  by  Wm.  F. 
Ogburn. 

(**)  Bureau  of  Labor  Statistics;  Indiistrial  Relations  Jji  the  West  Coast 
Lumber  Industry,  Euiletin  llo.  349,  Decenbjr,  1935. 

(***)  Four  L  Bulletin,  May,  1923,  p.  12.  (Pacific  Horthwest) 

(****)  Four  L  Bulletin,  ferch,  1923,  "o.  13. 


9813 


-125" 

Practically  nona  of  the  camps  on  the  Wect  Coast  is  so  arranged 
tliat  the  men  can  live  at  home  and  for  most  of  them  there  is  no  alterna- 
tive to  living  in  the  camp  'btnilc  hon.se  and  eating  at  the  camp  cool:  house. 
The  bad  living  conditions  in  the  hunk  houses  furnished  for  loggers  in 
the  Pacific  lTorth\7est  prior  to  1917  nre  indicated  in  a  mass  of  testi- 
mony on  the  subject  ;^iven  hufore  the  Industrial  delations  Commission. 

Professor  Oghum  reported  tl'ist  of  the  large  mirnbur  of  camps  he 
inspected  in  the  llorthwest  during  the  winter  of  1917-1913,  one-half 
had  v70oden  bunks,  one-lialf  Md  bed  "ov^s,    one-third  had  bad  toilets, 
and  only  rne-half  had  showers,  while  as  a  rul..  the  camps  had  about 
one-lmlf  the  requisite  axnount  of  3.ir  s-oace  and  one-third  the  window 
area  required.   The  men  nearly  all  furnished  their  own  bedding.  (*) 
In  most  of  these  camps  the  food  was  fairly  substantial  and  plentiful, 
as  was  necessary  to  enable  the  men  to  endure  the  long  hours  and  liard 
work,  but  this  was  not  always  the  case,  and  in  some  camps,  especially 
in  hard  winters  when  men  were  plentiful,  the  food  was  insufficient  in 
quantity  and  of  poor  quality.  (*'i) 

Some  of  the  most  careful  stud.ents  of  labor  unrest  in  the  industry 
hold  that  the  more  fundamental  causes  lie  below  the  surface  even  of 
the  worker's  though^,  and  tliat  the  chief  of  such  causes  liave  been  the 
lack  of  family  and  community  life  in  the  camp  and  the  unsatisfactory  -• 
relations  between  worfcnen  and  foremen.  (?"*)  There  was  practically  no 
provision  for  orga,nized  recreation  at  the  camps  except  in  the  few 
places  where  the  Y.  M,  C.  A.  has  been  established. 

In  most  cases  men  havo  been  chosen  for  positions  as  foremen  on 
the  basis  of  their  knowledge  of  machinery  or  technique  rather  tlian  on 
the  basis  of  their  ability  to  handle  men.  -Accordingly,   it  lias  been 
common  to  find  that  the  foreman  had  little  understanding  of,  or  any 
sympathy  with,  the  feelings  and  prejudices  of  his  men.  (****)  A 
particularly  distasteful  outgrowth  of  this  situation  has  been  wliat  '  \  • 
the  workers  call  "highballing",  which  usually  consists  in  crowding 
the  workers  to  as  rapid  a  pace  as  possible,'  This  has  been  most  common 
in  connection  with  yarding  in  the  logging  camps,  where  the  hook  tendet 
has  speeded  up  the  work  by  e:cs.mple,  and  by  giving  signals  to  the  en- 
gineer to  go  ahead  before  the  men  were  entirely  ready.   Such  a  practice 
has  greatly  increased  the  liazard  of  a  business  dangerous  at  best,  and 
protably  has  increased  the  accident  rate, (*****) 


(*)      University  of  Washington  Forest  Club  Annual,  1918,  pp.  11-14; 

Causes  and  Remedies  of  the  labor  Unrest  in^the  -Li^mber  Industry, 
by  Wm.  F.  Ogburn. 

(**)     J,  Rowan,  The  I.  V,,   Z.    in  the  Lumber  Industry,"  pp.  9-10. 

{***)  Carleton  H.  Parker,  The  I.  ',7.  VJ. ,  in  "The  Casxial  Laborer  and 

other  3ssays",  p.  103  (ig^O) 

(****)   Bureau  of  La.bor  Statistics;  Industrial  Relations  in  the  West 
Coast  Lumber  Industry.  Bulletin  Ho,  349,  December,  1923. 

(*****)   Ibid. 
9813 


-125- 
3.  Improvement  in  Labor  Conditions 

California  was  a  pioneer  in  legislation  designed  to  improve  the 
conditions  of  the  T/orkers  on  the  VJes.t  Coast.  The  first  lator  camp 
sanitation  law  for  the  state  v/as  passed  in  1S13  and  became  effective 
on  Ausust  10  of  that  year.  (*)   Its  enforcement  was  placed  with  the 
State  Board  of  Health  hut  no  soocial  funds  v;ere  provided  to  carry- 
on  the  work.   This  same  legislation  created  the  Commission  of  Immi- 
gration and  Housing,  -vhich,  among  other  powers,  was  given  the  right 
to  inspect  labor  camps, -~ 

The  1913  law  set  forth,  in  general  terms,  th-at  the. hunk  houses 
and  other  sleeping  quarters  and  the  grounds  about  the  camps  should  be 
kept  clean.   It  also  provided,  in  general  terms,  that  there  should  be 
sufficient  air  space  in  the  sleeping  quarters  and  that  the  beds  or 
bunlcs  should  be  made  of  sanitary  raaterial,  so  constructed  as  to  9-fford 
reasonable  comfort  to  the  occxtoants.   There  were  no  requii-cments  .for 
toilets  or  bathing  facilities,,  nor  for  the  disi^osal  of  garbage  or  other 
refuse  which  rao-de  many  of  the  carons  unfit  for  hninan  habits-tion.   In 
1915  this  act  v/as  completely  revised  and  contained  in  its  provisions 
many  of  the  features  T/hich  li3.d  been  established  by  rule  and  found  to 
be  practicable.   The  power  to  enforce  this  law  was  placed  in  the  hands 
of  a  Commission  of  Imi'nigration  and  Housing,  (**) 

The  act  lias  since  been -further  amended  until  the  jjresent  law, 
though  not  ideal,  assures  reasoimble  comfort  to  the  occupants  of 
these  caraiDs,   To  aid  in  the  establisliment  ,of  goo.d  CAmps  the  Commis- 
sion publishes  an  advisory  pamphlet  on  camp  sanitation,  giving  all 
necessary  information  for  their  construction.  This  pamphlet  has  re- 
ceived international  recognition.  In  addition,  the  Commission  gives 
operators  the  benefit  of  the  advice  of  its  experts  whenever  called 
upon,  and  many  logging  and  lumber  camps  have  been  built  with  their 
aid,  (***) 

The  amended  Act  of  1913  prohibits,  the  use  of  platform- bunks 
and  discourages  the  use  of  the  double-deck  bunl:.   It  has  eliminated 
the  wooden  bunl:s  filled  with  loose-  stray/,  which  generally  became 
vermin  infested.   The  screening  of  vdndov/s  and  other  openings  in  the" 
kitchen  and  dining  quarters  has  improved  kitchen  and  dining  services. 
Such  practices  and  the  proper- care  of  ga.rbage  have  relieved  the  camps 
of  many  flies  and  improved  liying  conditions  of  the  workers.  (***.*) 

{*)  _  Kearney,  R.  17,,  Chief,  Division  of  Housing  and  Sanitation, 

.  ,      Department  of  Industrial  delations,  State  of  California,  Calif- 

oniia  Sets  Standards  for  Lg.bor  Camps;  National  .Safety  Council, 

IvLarch,  1930, 

(**)  '   Ibid, 

(***)'    Ibid.    '         ■  .   .   ■ 

(****)   Ibid 


9813 


-127- 

The  major  1-um'ber  companies,  vdth  few  exceptions,  are  reported 
to  have  cooperated  f-ally,  and  some  of  them  liave  gone  beyond  the  re- 
qjiirements  of  the  act  in  furnishing  hotel  service,  including  the 
making  of  beds  with  sheets,  for  which  a  reasonable  charge  is  made. 
The  operators  of  small  millshave  usually  been  harder  to  get  in 
line.  They  frequently  hire  neighbors  for  some  of  the  operations 
and  contract  other  parts  of  the  work.  The  wife  of  a  worker  operates 
the  cookhouse,  such  as  it  is,  and  the  housinn;  is  anything  from  a  few 
cull  boards  thrown  together,  or  tents,  to  automobiles  converted  into 
sleeping  quarters.  Tlie  small  mill  operator  1ms  frequently  discledmed 
responsibility  for  the  condition  of  the  grounds,  unscreened  coolchousos, 
unsanitary  toilets,  etc.  (*) 

While  the  foregoing,  refers  only  to  the  Sta.te  of  California, 
it  is  a  matter  of  common  knowledge  tlaat  the  improvement  in  living 
conditions  of  the  workers  in  that  state  is  reflected  elsewhere  in 
the  West  Coast  area.  While  crowded  b\-ailchouses,  uaisanitary  conditions, 
lack  of  drying  rooms,  and  absence  of  showers  are  still  found  in  some 
of  the  camps,  the  most  flagi-^nt  evils  liave  been  eliminated.  (**) 

c.  General  Labor  Conditions  in  the  South. 

Similar  detailed  data  for  the  South  are  not  available,  but  it 
may  be  stated  that  the  causes  of  labor  unrest  in  the  West  Coast  sec- 
tion, Just  discussed,  do  not,  in  general,  apply  to  the  South.  This 
is  due  mainly  to  the  fact,  mentioned  earlier  in  this  chapter,  that 
in  the  latter  regions  the  loggintC  areas  are  more  or  less  contiguous 
with  argiculiural  areas.  Logging  labor  is  largely,  therefore,  inter- 
changeable with  agricultural  labor  and  loggers  often  have  more  or 
less  permanent  residences  on  farms  in  the  vicinity,  working  only 
part  of  the  year  in  logging  opera,tions.  For  this  reason  the  lack  of 
family  and  community  life,  which  lias  been  such  a  fertile  source  of 
labor  troubles  on  the  West  Coast,  has  riot,  in  general,  applied  to  the 
South.  On  the  other  hand,  however,  the  South  is  confronted  with  the 
problem  incident  to  the  large  nirnbers  of  negroes  employed  in  the  same 
camps  and  mills  as  the  whites  and  often  conroeting  for  the  same  Jobs. 
The  negro  workers  are  more  or  less  resigned  to  their  station,  seek 
wliatever  security  they  can  gain  from  a  low  wa.ge  scale,  from  the  un- 
complaining perfonnance  of  disagreeable  tasks,  and  from,  occasional 
benevolent  sentiments  of  the  more  influential  elements  of  the  white 
population.  There  is  evidence,  also,  of  poor  housing  conditions  in 
some  of  the  logging  and  lumber  carajs,  especia.lly  in  those  of  the 
smaller  companies. 

The  coiTiparatively  low  wages  paid  in  the  South  have  been  rcndorod 
somewhat  less  of  a  hardship  due  to  the  milder  climate  and  the  fact 
that  many  of  the  workers  have  permanent  homes  or  farms  where  they 


(*)    Ibid.  .        ■   - 

(**)      Todes,    Charlotte,    Labor  and  Lumber,    International  Publishers, 
Hew  York   (1931) 

9813 


can  supply  part  of  their  food  requirements  and  Y/hile  on  the  joh  are 
frequently  furnished  with  coMpany-ov/nod  cottages  at  low  rentals. 

A  survey  made  hy  the  Southern  Pine  As sr elation,  covering 
103  mills  in  the  Southern  Pine  area,  revealed  the  fact  tlmt  of 
6,045  houses  owned  hy  these  mills,  552,  or  9  per  cent,  wore  occupied 
rent  free  in  the  first  quart  n-  of  1934,  216  hy  white  tenants  and  336 
hy  negro  tenants.  (*) 

The  same  survey  indicated  tlvat  of  11,313  lahorers  ernployed 
hy  127  conpanies  in  Fohruary,  1934,  S4  per  cent  were  housed  in 
company-ovned  huildings.  The  avera^^e  rents  of  these  company- 
owned  houses,  accordinf;  to  this  s'arvey,  ranged  from  50  to  60  cents 
per  week  for  two-room  cotts-ges,  to  $4.75  a  weel:  for  certain  six  and 
seven-room  cottages. 

4,  Organizations  and  Disriutes 

Lahor  organization  activity  in  the  industry  lias  heen  largely 
confined  to  the  West  Coast,  althotigh  there  Ims  heen  some  such  activity 
in  the  Southern  States  of  Louisiana,  Arkansas  and  Texas,  and  in  the 
West  Virginia  Hardwood  field.  Organization  in  the  latter  area  did 
not  begin  until  the  end  of  the  Codal  period  (Ma.y,  1935).   These  areas 
will  "be  discussed  separately. 

a.  Wast  Coast. 

The  first  union  activity  on  the  West  Coast  occured 
among  the  workers  in  the  shingle  mills,  commonly  called  "shingle 
weavers",  ahout  1890.    These  vrorkers  were  never  verj''  numerous, 
the  group  in  any  mill  being  sroall.   They  were  very  mobile,  the 
range  of  skill  required  was  small,  and  most  of  the  work  could  be 
done  by  any  one  of  the  group.   In  addition,  the  method  of  v/age  payment 
— ^by  the  piece — and  the  dependence  of  all  the  crew  upon  the  pace  set 
by  the  shingle  sawj^ers,  drew  them  together.   This  group  was  well 
fitted,  therefore,  to  take  the  lead  in  \inion  activity.  (**) 

About  1890  this  group  formed  the  West  Coast  Shingle 
Weavers'  union,  v/ith  six  locals  in  the  State  of  Washington.   In 
Jantiary,  1903,  the  variov.s  shingle  weavers'  locals- united  to  form 
the  International  Shingle  Weavers'  Union  of. America.   This  union  was 
involved  in  many  strikes  during  the  first  few  years  of  its  existence, 
most  of  these  being  of  minor  importance.   The  more  im;,oortant  were  the 
general  strike  of  1906  at  Ballard  and  the  Gray's  Harbor  strike  in 
1911-1912,  all  of  which  were  located  in  the  State  of  Washington. 


(*)   Brief  in  belmlf  of  Southern  Pine  Industry  submitted  to  the  Nation- 
al Industrial  Recovery  Board  by  P.  A.  Bloom;r,  Februa.ry  2,  1935. 

(**)  Bureau  of  D?.bor  Statistics;  Industrial  ^^..lations  in  the  West  Coast 
Lurnb.jr  Industry,  Bulletin  ilo.  349,  December,  1923. 


9813 


-129- 


The  general- strike  of  1906  "began  at  Ballard  en  April  1  when 
the  union  there  went  on  strike,  octensihly  to  oht^.in  the  union 
scale  of  wages  which  was  teing  paid  elsewhere.   Since  this  meant 
only  a  siTiall  increase,  it  was  generally  vinderstood  tmt  the  strike 
was  for  recognition  of  the  -cuiion.   This  the  owners  refused.   The 
strikers  were  siipported  "by  the  International  Union,  while  the 
mills  were  aided  hj   those  in  other  parts  of  the  state.   On  July  27 
the  International  Union  called  out  all  of  its- members  on  the  Uest 
Coast,  tyins  '^P  a-hout  60  per  ce.nt,  of  the-  shingle  production.  About 
two  weeks  later  the  union  called  the  -  strike  off  and  the  men  went 
tack  to  work  wherever  they  could  obtain  Johs,  the  union  being  almost 
destroyed.  (*) 

The  Grays  Harbor  stri'ce  in  1911-1912  was  the  next  one  of 
importance.  An  organization  cairipaign  had  been  started  at  Grays 
Harbor,  but  on  October  10,  1911,  before  the  coirrpletion  of  the  cam- 
paign, two  plants  discharged  their  union  employees,  whereupon  the 
union  called  a  strike  at  both  plants.   Soon  two  other  plants  joined 
in  the  lockout.  Considerable  bitterness  was  aroused,  especially  i-n 
Hoquiam,  where  some  disorder  occurod,  and  the  strike  dragged  out  until 
it  merged  into  the  I.  W.  W.  strike  of  March  14,  1312.   Most  of  the 
original  demands  of  the  shingle  weavers  were  granted  with  the  settle- 
ment of  the  I.  W.  W.  strike.  (**)   It  should  be  mentioned  here  tha.t 
frequent  attempts  were  made  to  withdraw  the  Sliingle  Weavers'  Union 
from  the  American  Federation  of  Labor  and  affiliate  it  with  the 
I.  VJ.  V/',,'  but  that  these  efforts  were  all  -unsuccessful.  (***) 

Many  attempts  were  made  before  1913  to  orga.nize  the  logging 
and  sa^vmill  workers  on  the  \Vest  Coast,  but  few  are  worthy  of  men- 
tion. (****)  In  1905  the  .International  Brotherhood  of  '.ToodmBn  and 
Sawinill  V/orkers  were  grarited  a  cha^rter  by  the  American  Federation  of 
Labor  and  by  1906  this  union  had  attained  its  greatest  strength,  with 
less  than  1,250  members.   The  members  had  fallen,  to  iialf  tr^a.t  number 
by- 1911  and'  the  union  was  suspended  by  the  Federation  of  Labor  for 
failure  to  p3.y  the  per  capita  tax.  (****<)  After  this  suspension  the 

(*)     Ifeshington  Stats  Bureau  of  La.bor,  Biennial  Report,  1905-1906, 
pp.  194-196;  Pacific  Lumber  Trade  Journal,  June,  1906,  v.    9; 
July,  1906,  p.  9,  33;  August,  1906,  p.  10;  September,  1906, 
p.  9:  Shingle  ^Teavers  Hevvs,  Febrxia.ry  8^  1913,  p.  1 

(**)    Aberdeen  World,  Oct.  25,  1911,  p.  4;  Oct.  27,  pp.  1,4;  Shingle 
VJeaver,  Oct.  28,  1911,  p.  1;  Hov.  18,  p.  1;  Bee.  16,  p.  1,  Jan. 
27,  1912  p.  2,  et.  seq;  March  9,  1912,  p.  1. 

(***)    Industrial  Worker,  January  23,  1913,  p.  1;  The  Everett  Massacre,  by 
Walker  C.  Smith,  Chicago,  1917,  ^,    29;    Shingle  Weaver,  Feb.  1,  1913, 
p.  10. 

(****)    The  Timberman,  June,  1901,  p.  5;  July,  1903,  p.  16, 

(*****)  American  Federation  of  Labor;  Proceedi-iii;,-s  of  the  Fortieth  Annjial 

Convention,  1920,  13,33  et.  seq.;  1911,  ii,  87. 
9813 


-130- 

Anericor.  ?edern,tion  of  Lr'oor  extended   the    jui-isdiction   of   the   Shiiirjle 
Uervers'   Union  to  cover   the   entire  Li.i  .ber   Industry,    (*)      The  nri^e  of 
the  union  T7as   ch.-in;.;ed  to  "Interr.rtion.-l  tlnioj-i  of.  Shinjle  '^er.vers, 
Sawmill  7or]:ers  nnd  Uoodsmen"    end.  tl.e   n''-;o   oJ   its   Journp.l   to   the 
"Timber  T7orI:er" .    (**)   .About  Vir.voh.,    19l9,...the  luiion  "ijr.in  chmged  iti;     . 
nrrne   to   "Interno.tior.r'l  Unio:?.  of  Tinbs.-  T7orkers".    (***) 

In  J.'inuary,    1914,   r,  conventio/;a. -0.7   the  unio:i  voter  to  uonsiid  .?.n 
3-h6ur  day  in   the  L\i;ibor   Industry-  ;--t   the   r.;.".}ie  hourly  rnte   as  for  the 
10-hour  dny,    e:-ce  :t   th-^t   the   :  lininu.j 'd."ily  "r,:;e  uas   set   at  0^.25,   rrith 
tine  and  a  half  for  overtine.    (**•*=*)      iho   e:T^lo"'-ers ,   hoiTever,    oyjosed 
the  de-iands  and  launched  an  aggres;;ivo   rtt-c!'  on  the  imion.      A  strike 
nhich  developed  -oroved  unsuccessful.      Durin  ;  1913  this  union  fought   55 
lockouts,    lost   in  ner rly  every  case,    rnd  -as   al;-iof5t   coi.TOletcly  destroyed. 
/  side***  \ 

Innedi-.telv  folio-  l'.;   these  o-isr^.trous    stri^Tes   and  the   failure   of 
the   Timber  TJorhers  Union  to   orr:;ani-:e   the  Lumber   Industry,    the  Ai.ierican 
Federrtio:''.  of  Labor  revo^:ed   the   jurisdiction  of   the  union  over   the 
sawmill   rnd  cpjto  vjorlters ,    thus   li-utinii   it  P:-;ain   to   t?ie   shingle 
weavers.    (*«****)      jhe  shin-:^"le,.  weayers'   unio.i  vo-s   thereupon  reorganized 
under   its  former  nane,,   "Internr.tion;!   Shin;;-le  '..'epvers'   Union   of 
Arjeri'ca" . 

Logginjc:  and  sai-jnill  vrorliers   ou/van   to   form  locals   rfter   they  had 
been  excluded  from  the   Jurisdiction  of   the   International   Ti?iber  TTorkers' 
Union.      Finally   these  locals  neri;ed  into  a  ner  International  Union  of 
Tirnjer  Uor]:ers,  vhich  did  not   include   the   shinz-^le  vreavers,    yjid  in  1917 
were  granted  r   charter  by  the  American  Federation  of  Labor.    (*******) 

At   this  point   it   is   ap'orojriate   to   consider   the   Intern'^.tional 
ITorkers   of   the  "orla  ;.-.nd. their  part   in   the   labor  organization  and  dis- 
putes on  the  Uest  Coast.      To   this  end-  it   is  ^/ell   to  recall   the  analysis 
of   labor.  t"'~o.es   made   earlier  in   tliis   chapter,      ilo  .bers   of   the   I.T7.T7. 
-(*)      Shingle  TTeaver,    January  27,    1012,.  "o.    10. 

(**)    Shingle  'Tc-^ver,   Februar^-  1,    l')13,   jj,    2;    Febraarv  22.,    1914,   v.    2. 

(***)Timber-;Trorker,   March  51,    1314,    :>.    3. 

(****) Timber  TTorker,  January  31,  1914,  p.  12..  Proceedings  of  Twelfth 
Annual  Convention,  Sesolution  ilo.  104. 

t. 

(***** )Americpn  Federation  of  Labor.   'Proceedings  of  Thirty-fifth  Annual 
Convention,  1915,  ■>.  38, 

(****=''*)Shina'le  Ueaver,  Aoril  4,  1916;  Seattle  Union  Hecord,  Februa.ry  12, 
1916, .p.  4. 

(******* )T7ashington  State  Federation  of  Labor,  Proceedings  of  Sixteenth 
Annual  Convention,  1917,  p.  1J6;  Aueric  n.  Federation  of  Labor, 
Proceedings  of  Fortieth  ipinual  Conve:ition,  1930,  p.  35;  Shingle 
Weaver,  January  20  and  27,  1917, 


9813 


-131- 

have  been  iecraited  rliio^t   e:.:clasivel  '  fro'T   tho   nij'^rptor;^  .^roa-os,   vfho 
have  had  an  importrnt     irrt   in   shr  rin  ;  the    lolicias  and  t  rctics   of   this 
frankl/  revolutiono.rv  or^ani-rrtion.    (*) 

Ainong  the    ^riiicioles   oj?   tho   I.l.'.'',    are   the   follo'dn,-:      (l)      That 
the   interest3   of  tho   ei.roloyer  and   tlio   enilo/ees  hpve   nothin':;   in  con.'ion; 
(2)    that   the  wage   system  r.iust  he   re  laced  hv  rn   industrial   societj'' 
managed  b;'   the  -Torirers   thei.-.selves;    (u)    that  labor   or':;anizations  must 
be  bp.sed  on   industrial   rather   than  cr-^ft   lines.    (**) 

This  ^io.cirl  philosophy  ^'as  not  -oQ-oulrir  i^dth  the   ernjloyers   rnd  it 
T7as   not  al'7ays   clear  '-'hether   their  reaistrnce    to   I.T7.TJ,    dej.iands  was   due 
to   this  philoso'ohy,    its   Ip.bor  denajids,    or  both.      TTith  reference   to   the 
denrjid  for  industrial,    rather   than  cr-'^ft,   unions,    it   shov.ld  be   noted 
that   the  Ltrnber   Industry,   --jarticiilarly   the   lo£r.'inT  br.mch,    does   not 
readily  lend  itself   to   orcrnization  alon^;   craft   lines.      The   logr:ing 
canp   erroloys   a  lar^^e  niimber   of  unshilled  and  seni-skiMed  "orkers   rand 
only  a  fe"  hi^;hl-'-  skilled  ;aen  of  nr.n-r  different   crafts.      These    include 
engineers,   machinists,    croenters,   blacksniths   rnd  many  other   crp.fts, 
but   there   are  usually  not  nore   than   t'-'O   or   three   men  of   any  ohe   craft 
in  a  given  camp   or  plant.      In   the   cnros   most   of   the   nen  live   tOf;ether 
in  the  bunk  houses  nnd  when  not   at   rrork  ,are   very  closely  associated. 
The   contact   in   the  nills   is   iiot   so   close,   but   the  irorl^ers   iDecone  r^ell 
acquainted.      These   fj'ctors  h.'-.ve  milita.teu.  a,;ainst'  the   craft  union  and 
favored  the   industrial   t;r3e.    (***) 

The   or.-'anizrtion  ,«nd  initial  ;oro-iaganda  of   the    liV.l.'.    on  the  TTest 
Coast   takes  us  back  to  1905,    vfhen  a  nuiibor  of   locals  rrere   formed,   but 
its  most   important  lumber   strike   did  not   start  until  !"arch,    1912,   ;rhen 
members   of  a  sa;-'raill   crev  at  Hoquian,    Washington,   '--alked  out   pjid  closed 
the  mill.      No   demands  nere   made   at   the    time, 'but   it  ^'as  generallj''  under- 
stood that   the   strike  -as   for   i)etter  '-ratios.      The  mill  ^-'as  ^aj''ing  $2- 
for  a  10-hour   day.      ITithi;:   tlie  nonth  the    stri'  e  had  si^road,   many  mills 
had  closed,    and  some   violence  hod  resulted.      A  citizens'    comiiittee   at 
Grays  Harbor  finally  :)ro->osed  thrt   the   strike  be   settled  on  the   oasis   of 
a  minimum  r/a^e   of  $2.25  per  da;'";    thrt  -Treference   should  be   ';iven   to 
American  labor;    that  no  members   of   the   I."'. 'J.    should  be   enmloyed;    nnd 
that  an  otherwise  open  shop   should  be  maintained.      The  mills  accepted 
tnese  proi^osals   and  ^although   the   strikers   apoarently  did  not   formally 
acceipt   the   proposals   or  call   off   the   strij'e,    all   mills  rrere   running 
with  full   crews,  about  a  month  after   tho    initial   stri]re.    (****) 


The  yearn   follc'in-j  1912  \70re  very  unfavorable   for   the   I.".rJ.  ,   Tjith 
declinin:;  membershim  and  strength,    and  it   was   severrl  years  before   this 
(*)      BTire-^u  of  L,'-.bor   Strtistics;    Industrirl  Relations   in   the  TTest   Coast 

Liyab e r   I ndus t ry .   .julletin  Ilo.    349,   Decerfoer,   1923, 

(**)      Ibid.  '  ■  ■  '  ■ 

(***)      Ibid.  ■     *         ■       ' 

i**"*")     Aberdeen  T7orld,   A  )r.    3,   1912,    pp.    1,    6;   Aor.    5,    1912,   mp.    1,    8; 
Apr.    8,    1912,   p.    1;    Apr.    17,    1   12,   m.    1 

9813 


-132- 

loss  Fas  recovered.   Attervots  to  locate  and  re:nedy  the  faults  in  the 
organization  led  to  the  ador)tion  of  the  "can'o  dele'^ato  system",  whereby 
a  camp  delegate  vr.s   'olaced  on  each  job,  his  duty  being  to  receive  dues, 
hold  meetings,'  look  after  the  general-  interests  of  the  nen  on  the  job 
and  i-ee^  in  touch  with  the  nearest  local.  (*)   This  change  in  orgajiiza- 
tion  ivas  acconpanied  by  a  considerable  change  in  the  attitude  toward 
the  job.   The  I.",T7,  found  tha.t  its  o\7n  strength  depended  u-non  binding 
the  uenbers  to  their  jobs-  —  a  discovery  '-'hich  tended  to  break  do-n  the 
propaganda  "or  sabota.:';e  v/hich  was  so  evident  in  the  files  of  its  naoers 
fro":  1912  to  1917.  (**)   In  the  meantine,  however,  (1916)  the  I.U.!7. 
had  becone  involved  in  trouble  at  Hverett,  State  of  TJs.shington,  growing 
out  of  the  shingle  weavers  strike  .there,   A  free  sioeech  fight  was  con- 
ducted i-;hich  culminated  in  bloodshed  on  both  sides.  (***) 

The  strike  in-  the  Lur.iber  Industry  in  the  llorthwest  during  the 
sumner  of  1917  will  be  given  special  attention  not  only  becaiise  it 
represents  ■  .  by  .■''ar  the  most  extensive  la^bor  disturbance  in  the  history 
of  the  industry,  but  nlso  because  of  i.ts  irrportant  influence  on  future 
industrial  problons.   Extending  to  most  of  the  Hest  Coast,  this 
strike  brought  to  a  head  influences  which  had  been  gathering  strength 
for  years,  and  its  settlement  deeply  affected  subsequent  industrial 
relations.  Both  the  I.U.TJ.  and  the  Aiaerica.n  Federation  of  Labor  felt 
that  with  the  improved  lumber  raai'ket  in  the  errly  part  of  191-7  the 
time  had  come  for  a  deteriiiined  stand  for  im>roved  labor  conditions. 
Demands  drawn  U3  at  an   I.U.I7.  convention  nay  be  sumnarized  as  follows: 
Better  living  conditions  in  the  cam-ps,  an  8-hour  day,  better  wages, 
and  union  recognition.  (****) 

The  strike  begon  i-n  April,  1917, '•gind.  spread  until ,  it  is  estimated, 
nearly  70,000  men  throughout  the  Northwest  -/ere  idle,  (*****)  As  the 
strike  developed  ell  of  the  demands  except  that  for  an  8-hour  day 
droprjed  into  the  background  and  the  struggle  centered  -on  that  question. 
The  Federal  Gove'rniiient  was  br-o-a,ght  into  the  trouble  through  interference 
with  the  supply  of  lumber  for  the  Array,  rnd  the  Secretary  of  War  and 
the  Governor  of  I'pshington  urged  the  employers  to  grant  the  8-hour  day, 
with  time  rnd  a  hc-^lf  for  overtime.   The  employers  refused  to  yield, 
however,  clriraing  thrt  -the  3-hour  da}'-  was  economically  impossible 
owing  to  the  keen  competition  of  other  lunber  regions  "here  cajn^os  and 


(*)   Industrial  ¥-or]:er,  ?eb.  1,  I^IS,  p,  3;  Solidarity  (l.''.".  Organ) 

Jan,  3,  1914,  p.  3;  Kov.  21,  1914,  p.  2  et  sea;  Nov.  28,  1914,  p.  2. 

(**)  Bureau  of  Lnbor  Statistics;  Industrial  Relations  in  the  ^est  Coast 
Lumber  Industry.  Bulletin  Ho,  349,  December,  1923. 

(***)Colemrm,  IT.  F.  ,  The  l.V.XJ.    and  the  La-;  Lverett;  Sunset  magazine, 
July,  1917,  pp,  35,  -33-70;  Smith,  Uallrer  C.  ,  The  Everett  Ilassacre, 

(****)^est  Copst  Lumberman,  April  1,  1917,  p.  42, 

(***'^*) Bureau  of  Labor  Statistics;  Industrial  RelatiOiis  in  the  'Test 
Coast  Lumber  Industry.  .Bulletin  No.  .349,  December,  1923. 


9313 


-133-  . 

mills  T^ere   on  a,  lO-iioiii'  "oasis.    (*)      "ith   ths  ■rosT...i--'tinn  of   o;oerD:tions 
on   the  -oart   of   the   :i,ills    m  Se^tcn.irr,    1317,.  the   3hin;';le  Servers'    and 
Tirnl>er  TTorkers'   Unions  dro\':iec.  oi;it  ,of   si  ;ht,    rnd  the  remainin.5  trouble 
^ps   furnished  b/   the    I.  ■..".7.':'    stxi^re   on   the   Job,    or.  as   then  terned, 
"conscious  irithdrfivrl   of  cf  "icionc-".    (**) 

At   this  "ooint  a  re-or^seatative   01    the  U.    3.    '..'rr  Deoart'ient  held  a 
conference   of   the   leading;  e-v.iloyers   of   tiie  "Jest   Corst,    out   of  -Thich 
gren  the  Loyal  Le^jion  of  Lo/:  ;ers  a.nd  Lvaiberien,    en  organizatio.i  of 
ernployers   rnd  ei.rolo-'-ees    •'ith   the    ouipose   of   coo")erating  \7j.th   the 
Governnent  for  a  ma.::inxi-m  outfit   of  lu  :ber   pnd  sui^pression  of   seditious 
activity.      Coijinissioned  officers  vrere   detailed  to  visit  .tlie   lumber 
caii^s   and  enroll   the  men  in   tlie   Loyrl  Legion.      The   or'janization  was   at 
once  a  success   and  installed  a  con^]ete   system  of   collective   dealing 
bet'.'een  e;.iplover  a.id  e'loloyee.    (***) 

There  were  nunerous   CCToloyers   on   the  Uest   Coast  ^-fho  believed  that 
it  Tjas  necessrr-'   to  (Vrrnt    the   S-hour  day   to   nuiet   the  unrest,   but  a 
majority   of   then  vere   convinced  that   this  v;-a.s   an  economic   iirmossibility 
as   lonj  as   other  lu'nber  regior.s  i.:-ith  'Thich   tlie"''  were   coyneting  had  a 
longer  day.      A  raee.ting  of  e.r-ilo.-'ers  held   in  Portland  on  I'ebru.arj''  27, 
191J  attempted  to   ree.ch  an  agreene:it   on  this   question,   but  without 
success.      It  was   finally  agreed,'  therc'ore,    to  leo,ve   the    settlenent   of 
the  matter   to  a  re-oresentative   of   the  T7ar  Deoartnent,    Colonel  Irice  P. 
Disque,   who  announced  that   on  Harch  l,.iyi3   the  Lu'iber   Indu.^try  in   the 
ilorthwest  would  go   on  an  8-hour  basis.      I),;,  ledia.tel  7   thereafter  this 
action  w'S  unajiinously  a^y^roved  by   the  4-L   orgajiisation.      Employers   also 
accepted  the   conference  nethod  -jrovirled   j-y   the   4-L  •".-^chinery,   b.ut   con- 
tinued to   oiToose   the   closed  shop,    (****)      The  4-L  bec:".jie    the-  domina,nt 
organisation  for  e-iployer-em-'ilo-yee   negoti'^tions,    aj. though  after   the  war 
its  menbershiiD   shrank  fron  ±30,000   in  191C>   to   10,000  i-n  1922.    (*****) 

A  few  local  unionn   of   s-vni"!  wor]:e:'s   and  log'-ers   rei.iained,   but 
the   International  Uaioii  of  Timb,er  T7or!:er3,    affiliated  with  the  American 
Federation  of  Labor,   disbanded  In  l'^22.      The   old  1.7.7.    organization, 
■■'hich  had  been  active  before^   the  ■-'a.r,    also   declined   into   obscurity. 

(*)      Washington   State  Bureau  of  Labor,   "''■iennial  Re  'ort,    1917-1918,  p. 
67  et   seq.  ;   Uest  Coast   Liuiberraan,   AUi:.,xist   15,   1917,    j.    19;   U*   S. 
Congress,   House   of  rie-oresentatives.    Select   Cou"ittee   on  IZxpendi- 
tures   of   the  '..'a-r  De'oartiient ,    SuoconMittee   on  Aviation  Testimony, 
Vol.   2,  pp.   1182-1192   (G6th  Congress,    2d  Session). 

(**)   Bi.u-eru  of  Labor   Statistics;    Industrial  delations   in  the  7est   Coast 

L-'jjnb o r   I nduB t ry .   ]3ulletin  No.    C49,   Dtceiiber,   19S3. 

(***)Perl.ia:a  rnd  Taft,   Histro'^  of  Labor  in   the  IT.    S.    189o-1932.    The 
Macl.iiliv^.11  C...    (19;:5). 

(****) Ibid. 

T**'***")lbic'.   ■  l.Ionthly  Labor  ileview,'  Se-)t.    19o5,   U.    S.   3ureau  of  Labor 
Statistics. 


98i; 


-134- 

Durir.g  the  depre-:5sion  the  Loyal  Legion  suffered  loss  in  nembership  and 
influence  in  connon  ^^ith  regular  r!,nd  corrvonny  unions,  some  companies  and 
their  iTorkers  nithdra.i-'in;;;  plto,;;ether,  "hile  others  maintained  an  in- 
different attachment.  (*) 

I7ith  the  --jassage  of  the  irationel  Industrial  Recovery  Act  in  1933 
the  4-L's  claimed  collective  bargaining  control,  hut  the  Arnericnji 
Federation  of  Labor  became  very  active  in  an  orj!5?.nization  orop;rarn  and 
is  reported  to  have  partially  controlled  90  per  cent  of  the  workers  by 
August  1,  1935.  (**) 

A.  P.  of  L.  federal  locals  of  loggers,  sp'-rnill,  plyr-iill  and  shingle 
workers  spr".ng  up  throughout  Washington  o.nd  Oregon.   On  A-oril  1,  1935 
these  feder.-.l  locals  organized  the  Sawmill  and  Timber  Worlrers'  Union 
and  became  a  i^art  of  the  United  Brotherhood  Qf  Cari^enters  and  Joiners 
of  America. ^.***) 

Discontent  with  low  earnings  and  reduced  employnent  had  been 
growing  among  all  lumber  workers  due  in  part  to  the  fact  that  while 
the  Code  had  increased  their  hourly  wa,ge3,  their  hours  had  been  so 
limited  that  there  was  no  increase  in  weekly  earnings.  (****) 

The  new  Saivnill  and  Timber  I'orkers'  Union  voted  to  go  on  strike  on 
May  5,  1935  if  at  that  tine  they  had  'not  been  successful  in  negotiations 
with  the  various  limber  operators.   Their  orojosed  agreement  providing 
for  a  30-hour  week,  75  cents  an  hour  nininum  wage,  and  ■union  recognition 
was  either  ignored  or  rejected  by  all  operators,  who  made  no  counter 
proposal.   The  strike  was  called  and  by  the  first  of  June  had  reached 
its  loeak,  with  pra.ctically  aJl  camps  and  mills  tied  uo,  involving 
32,000  lumber  workers.   Shi-',TOing  and  other  affiliated  industries  were 
seriously  affected.  (*****) 

'The  4-L  agreed  uoon  a  scxle  of  wage  increases  a.mounting  to  5  cents 
on  the  niniraun  rates  from  45  to  50  cents,  6  cents  on  wages  iro;:i  55  to 
o2-l/2  cents,  and  7  cents  on  rates  from  6;3  to  72-1/2  centc. 

The  partial  success  of  the  4-L.,  together  with  the  Sujrene  Court 
decision  oh  the' HEA  on  Kay  27,  1935,  influenced  many  members  of  the 
union  to  moderate  their  demands.   An  interesting  side-ligh-t  on  the 
situation  is  a.fforded  by  the  following  excerpt  from  the  4-L  Lumber 
Hews  of  June  15:  -"The  production  of  the  mills  and  cainps  now  closed 
is  not  needed  in  the  present  condition  of  the  national  and  foreign 
lumber  markuts  ....  The  mills  no"  do\7n  could  remadn  closed  for  the 
rest  of  the  year  without  affecting  particularly  the  national  lumber 
market,  except  to  bring  more  -orosperity  to  the  South  and  other  regions. 

(*)  U.  S.  Bureau  of  Labor  Str.tistics,  i.ionthly' Labor  H'eview,  Sept.,  1935. 

(**)  Department  of  Labor,  Piles  of  the  Dj.vision  of  Conciliation. 

(***)U.S.  Bureau  of  Labor  Statistics,  Monthly  Labor  Revie-,  Sept.,  1935. 

(****)U.  S.  Department  of  Labor,  Piles  of  the  Division  of  Conciliation. 

(***** )U.  S,  Bureau  of  Labor  Statistics,  Monthly  Labor  Review,  Sept.  1935, 

(******)lbid, 
9813 


-135- 

To';ard  the   Ipst   of  Jane    the  Federal   Liinber  I'edirtion  Bor.rd,   a:o;oointed 
by   the   Secretary  of  Labor,   be-ran  nerotiations  betvreen  the  union  and 
individual   coiiVO-'^nies.      A  little   lator  a  n-nj-iber  of  comanies  be.'^an 
o-oerations   on  a  50-cent  ninimi-jn  rrte  aiid  40-houi-  basis  but  'without 
'written  agreenents ,   vrhile   so-ne   corroiivnies   3i;';ned  a  union  apreerisnt  pro- 
viding for  this  ivo^je   scale  and  union  recognition.     By  the  middle  of 
August  practically  all  mills  hrd  reo-ienei  on  the  basis  of  individuo.l 
agreements,    some  written  and  sorie  verbal,    but  all  granting  increases 
in  wages   and  li-nited  recognition  of   the  union.      In  general   this   recog- 
nition consisted  of  no  discrimination  against  union  i.ien   out   refusal 
to   nm  a  closed  shop..(*) 

Ooinions   on   the   restilts   of   the   stri]:e   vary.      The  4-L  was   vory 
emphatic   in  denouncing  it   ps  \innece3sary ,    claiming  that  wage   iiicreases 
had  been  obtained  through  peaceful  negotiation.     Union  officials, 
however,   maintained  th^t   the  best  -Dossible   settlements  had  been  made 
and  thrt   trade  unionism,    for   the   first   ti;ie   since   the  war,   was   again 
a  dorainrint  factor   in   the  llorthwest  Lumber   Industry.    (**) 

b.      South 

During  1910  an  attem-ot  was  made  to  organize  the  timber  workers  in 
Louisiana,  Arkansa.s  and  Texrs  into  the  Brotherhood  of  Timber  Workers, 
an  independent  org.anization  inspired  by  followers  of  the  I.T7.T7.   In 
1913  the  Irotherhood  was  formrll-;,^  aff i'li.-'ted  with  the  I.T7.W.   Its 
headqurrters  were  in  Alexandria,  Louisiana.  (***) 

In  July,  1911,  a  convention  of  the  compa.ctly  organized  Sawmill 
Operators'  Association  in  this  region  ordered  the  shut-down  of  mills 
with  3,000  employees  and  gftve  its  e-;ecutive  conmitt'ee  powr,r  over  the 
closing  of  the  300  mills  in  Texas,  Louisiana  and  Ar!;ansas.  A  war 
on  the  Brotherhood  of  Timber  TTorkers  and  the  I.!7,T7.  w,as  on,  but  the 
organizing  canpa,ign  ria^Le  considerable  headway.   The  chief  obstacle  was 
friction  oetween  i-^hites  and  colored,  which  the  workers  claimed  was  en- 
couraged b"y  the  employers.   The  iinion  lerders  took  the  position  that    ,  . 
since  the  em-oloyers  obvioasl/  had  not  objected  to  the  nixin-^  of  races 
on  the  job,. the  union  had  excellent  precedent  for  inviting  whites  and 
colored  to  a.  joint  consideration  of  their  coyyion  job  interest. 

The  Brotherhood  map-oed  out  the  follo\:ing  series  of  demands  to  be 
"oresented  gradually  to  the  lumber  companies:  A  r:inimum  wage  of  $2  for 
a  10-hour  day;  bi-monthly  payment  in  lawful  U.  S.  currency;  freedom 
to  trade  in  independent  stores;  reasonable  rents;  a  revision  of  insur- 
ance, hospital  and  doctor  fees;  im-orovenent  in  the  sanitary  conditions 
of  the  luJTiner  ca'HJS  and  towns;  disarming  and  discharge  of  company 
guards;  and  the  right  of  free  speech  and.  free  assemblage,  (****) 


(*)   Ibid 

(*)   Department  of  Labor,  ?iles  of  the  Division  of  Concilia.tion. 

(**)  Ibid. 

(***)  Perlman  and  Taft,  Historj'-  of  Labor  in  the  United  States,  1895-1932; 
The  Macmillan  Co.,  ITew  York,  1935. 

(****)lbid. 
9313 


-136- 

The  demand  chosen  to  "be  presr.ed  iinnodi-^tely  -.'as  for  e  seni-raonthly 
pay  day.   Under  the  once-r-nonth  "oa;'"  doy  it  is  reported  thot  the  em- 
ployees i7ere  frf^queatly  forced  to  fr;)!-'  for  rdvrnces  in  corricny  Scrip,., 
good  at  f"ce  value  only  at  conpany  s'-tores  ^hore ,  in  some  int^tnnces, 
prices  '-'ere  frou  15  to  40  -jer  cent  roove  the  outside  prices.   "Joninally 
the  employees  h"d  the  option  of  taJr.in-;;  thoir  scri'o  to  .the  indeoendent 
stores,  but  at  a  discount  which  in  some  cases  ran:';ed  from  25  to  40  per 
cent.   The  companies  refused  the  demand  and  p.  strike  follo'Ted.   The 
strike  v^as  uneventful  at  first,  but  soon  violence  arose,  resulting  in 
the  death  of  three  union  nen  and  one  com'orjiy  ^aan.   The  Coroner's  .jury 
chargea  officers  of  tlie  conorny  '/ith  murder,,  but  the  grand  jury  re- 
turned indictments  for  first  de^'ree  nurder  agsint  58  union  members,  and 
did  not  indict  the  officers  of  the  co-:.rocnr.      Nine  defendants  nere 
brought  to  trial  early  in  Octooer  and  a,  verdict  of  not  guilty  "as  re- 
turned.  The  murder  charges  against  the  other  defendants  ^lere   dismissed. 
(*) 

Ten  days  after  the  verdict  r  strike  involving  1,300  rrorkers  began 
at  Herryville,  Louisiana,  for  the  reinstatement  of  the  en-oloyees  of  the 
American  Lumber  Co^rpany  '-'ho  had  testified  for  the  defense.   Stpte  tro'ops 
were  sent  but  ijiiiediately  nithdravm.   The  limber  ■  comornies  are  reported 
to  have  encouraged  p  Good  Citizen  Lea,gue,  npde  u-o  on  non-union  workers 
and  business  men  in  the  West.   The  strike  lasted  seven  months  pnd, 
together  irith  the  union,  uas  suppressed,  according  to  the  strikers,  by 
the  activity  of  vigilante  committees.  (**) 

c.  T7est  Virginia. 

About  May,  1935,  an  orgpjiizer  for  t^ie  jkierican  federation  of  La.bor 
started  a  campaign  to  orgrnize  the  timbex'  and  sar,'.ull  ^vorkers  of  the 
West  Virginia  hard'^ood  field  into  locals  of  the  Samiill  Workers'  .Union. 
(***)   This  orgo,ni'3er  stated  that  by  August,  1934,  he  had  succeeded  in 
organizing  5,000  'jorkers  'a.nd  on  Au.'-ast  o  caJled  e.   general  strike  \7hich 
affected  4,000  em":)loyees  and  12  plnntn.      The  demands  consisted  of  re- 
cognition of  the  Union,  increased  vages  and  si,;ned  working  contracts.  , 

From  the  date  the  stri!:e  rras  called  xmtil  Hovember  li>,  1934  it 
i^^as  gradually  settled  on  the  basis  of  individual  contracts  -'ith  en,ch 
□ill  nhich  generally  contained  a  repetition  of  7-A  of  the  National 
Industrial  Recovery  Act  and  called  for  tb.e  return  of  all  strilcers 
without  23rejudice  at  three  and  one-half  cents  an  hour  increase,  and 
signed  agreements.   There  does  not  seen  to  have  been  an.}''  direct  recog- 
nition of  the  union,  since  the  individual  contracts  vere  signed  by  a 
com;iittee  representing  e:roloyees  rather  than  a  corr.;ittee  re-oresenting 
the  union.   However,  the  Director  of  Conciliation,  Department  of  Labor, 
wrote  the  Secretary  of  one  of  the  locals  on  October  13,  1934  that  as 
bargai:aixa;  •  -',-m;  "itn  the  union  officers,  this  might  be  considered  a.s 
recognition.   Possibly  the  en  iloyers  did  not  understand  their  agreements 
to  constitute  recognition  of  the  union,  since  in  one  mill  the  check-off 
system  provided  for  in  its  ;i.,':roement  never  operated.   In  two  of  the 

(*)   Ibid. 

(**)   Ibid, 

(***)   De'oartiient   of  Labor,    Tiles   of   the  Director   o"  Conciliation. 
9R1  3 


-137- 

agreements  there  was  no  iucropse  in  vnres,    ''out   those  enployees  living 
in  company  houses  wero  allo-'ea  rent  free.  (*) 

After  the  liRA  decision  o;"  tlie  Su-'jre.it:  Court  oi  iir.y  37,  1335,  sons 
of  the  opers.tors  endeavored  to  cancel  their  afrue-.ients  "by  f;oinj  back 
to  a  48-hotu"  '.Teel:  and  cuttin.;;  the  •,-';u-;qs  to  the  jrevious  scale,  hut 
these  atte;.ipts  appearted  to  he  unsuccesoful .   The  Anerican  Federation 
of  Labor  -granted  the  Brotherhood  of  Carpenters  -^.nd  Joiners  Jurisdiction 
over  the  locals,  effective  Ajril  1,  1935.  (**) 


(*)   Ibid. 
(**)  Ibid. 


9813 


-1"8- 

a»   Siiwmill  and  L'ill^7ork  GoraliinecL. 

The  serious  effect  of  13113111633  depression  on  hourly  wage  rates  in 
the  Lumber  Industry  is  seen  in  the  follov/ing  aver.age  hourly  rates,  in 
cents,  v;hich  show  the  ra.pid  downward  spiraling  of  such  rates  since  1929« 
These  data  represent  the  conbined  cora'outed  rates  for  the  census  classi- 
fications "Lumber  and  Timber  Products"  and  "Pl??Jiin£  llills",  otherwise 
referred  to  as  "SaATnills"  and  "Ilillwork",  respectively, 

1929     1930     1951     1932     1937.     19.^4 


Avero,ge  Hourly     45.5     44.9     41,2     34.2     33.9     43,5 
Wage  (cents) 


41,2 

34,2 

■.".: 

..      ^ 

90,4 

75,0 

Index  (1929=100)   100,0     98.4     90.4     75.0     74.3     95.5 


Source:   Corrouted  bjr  Code  Industry  Analysis  Unit,  Division  of  Research 
and  Planning,  111111,  on  following  bases:   IT.I.C.B.  tines  .792 
from  Jan^^ary,  1925,  to  December  1931;  B.L. S.  from  January, 
1932,  to  1934,  combining  "sa-'.Tmills"  and  "millwork"  by  using 
estimated  total  man-hours  .'.s  wei-vhts. 


It  will  be  seen  from  the  foregoing  table  that  averr^e  hourly  xiagos 
declined  from  45,5  cents  in  1929,  the  yeoT   preceding  the  depression,  to 
33.9  cents  in  1933,  or  to  74  per  cent  of  the  1929  level.  At  first  the 
decline  was  slight,  but  it  increased  iu  severity  during  the  years  1931 
and  1932. 

The  codal  yepx   1934  witnessed  a  very  substantial  recovery  in  wa.ges, 
raising  the  1933  rate  of  33.9  cents  to  43.5  cents,  thus  representing  a 
gain  of  nearly  29  per  cent  over  the  low  oint  of  the  depression. 

Ina.smuch  as  the  weekly  wage,  rjiither  than  the  hourly  w.-^ge  rate,  de- 
termines the  earnings  of  the  worker,  it  will  be  of  interest  to  examine 
the  following  average  weel-d.y  wages  for  the  same  industry  classificj.tions! 


1929  1930  1931     1932  1933    1934 

Average  Weekly 

Wage  (dollars)       21.14  20.21  15.78  12,41  12.50  14,43 

Index  (1929=100)      100,00  95,6  79.4  58,7  59,5  58.3 


Source:   Computed  by  Research  and  Planning  Division,  IIRA,  combining 

3oL.S.  statistics  for  sawmills  rnd  nillwork  by  using  estimated 
number  employed  as  weights. 

9813 


-139- 

It  will  "be  seen  fron  p  co:Tpp.rison  fo  the  t'-'O  preceding  ta'bles 
that  average  vieekly  -wages  declined  rauch  nore  dr;\stically"  than  avera^je 
hourly  wage  rates,  indicating  the  effect  of  reduced  hours  of  enploy- 
ment.  The  1933  \7eel-ly   earnings  of  $1'";.60  represented  less  than  60 
per  cent  of  the  1929  earnings,  whereas  the  hourly  wage  did  not  fall 
beloT/  74  per  cent  of  the  1989  level, 

h.   Sawmills  and  Millwork  Coiapared 

The  following  table  comaares  average  hourly  wages  in  the  sawmill 
(Census  classification  "Lumber  ajid  Timber  Products")  and  millwork 
(Census  classification  "Planing  Hills")  brojiches  of  the  industry  for 
the  years  1932-1934,  the  only  years  for  which  this  coriparison  is  avail- 
able. 

Branch  of  Industry 


1932 

1933 

1934 

(Cents) 

(Cents) 

(Cents) 

33.0 

33,0 

43.5 

39.4 

37.2 

44.3 

Sawmills 
Milwork 

Source:   U.  S.  Burea.u  of  Labor  Statistics 


The  foregoing  table  indicates  that  the  differential  between  aver- 
age hourly  wages  in  the  so-called  sawmill  branch  of  the  industry,  and 
the'  higher  average  hourly  wages  in  the  millwork  or  inde-oendent  planing 
mill  braJLch  decreased  step.dilj''  from  5.4  cents  in  1932  to  4.2  cents  in 
1933  ejid  0.8  cents  in  1934.  This  situation  may  be  due  to  the  reported 
increased  coiqoetition  which  independent  plaaing  or  millwork  plants  ex- 
perienced from  such  plants  operated  in  conjunction  with  sa.wmills. 

Average  hourly  wages  for  1934  have  not  as  yet  been  com^-Duted  by 
the  Bureau  of  Labor  Statistics,  but  fig-ures  for  individual  months,  with 
the  exemption  of  only  the  first  three  months,  are  well  above  the  1934  ., 
average.   The  1935  hourly  wages,  by  months,  ranged  from  42.3  cents  in 
January  to  47.2  cents  in  September  for  the  sawmill  branch,  pjid  from 
44.0  cents  in  March  to  46.0  cents  in  Decerab  -r  for  millwork. 

Because  of  the  importance  of  averrge  weekly  wages,  the  following 
comparison  of  auch  wages  for  sawmills  and  millwork  may  be  helpful* 


9813 


-140- 


1929 

(dol.) 

1930 
(dol.l_ 

1931 
(dol.) 

1952 
(dol.) 

1933 
(dol,) 

1934 
(dol,), 

SavTTnills   rj 

20.62 

19o63 

,    16.00 

11,77 

12,33 

14,30 

l.IillTTork  t/ 

23,56 

22.59 

19,58 

15.08 

13,90 

15,21 

Sawnill   Index 
(1929  =   100) 

100.00 

95.4 

77,5 

57,1 

59,8 

69.4 

liillwork  Index 
(1929  =   100) 

100,00 

95,9 

83.1 

64.0 

59,0 

64.6 

Source:,  U,  S,  Bureau  of  La"bor  Statistics 

a/  •      Census  Classification  "Lumber  p,nd  Timber  Products'' 

b/  •  ■     Census ^Classification  "Planing  Mills" 


Prom  the  foregoing  table  it  appears  that  average  neeld-y  wages  in 
the  sawnill  "branch  of  the  industry  declined  from  $20,62  in  1929  to  $11,77 
in  193"',  a  money  loss  of  43  per  cent,  and  that  in  millwork  these  rrages  de- 
clined from  $23,56  in  1929  to  $15,08  in  1932,  r  money  loss  of  36  per  cent. 
In  the  Ir.tter  branch,  however,  the  loss  continued  into  1933,  so  that  the 
average  ,f  or  thr.t  year  was  nearly  41  per  cent  below  the  1929  level.  The 
codal  year  1934  showed  considerable  improvement  in  the  weeldy  wages  of 
both  branches,  the  amounts  of  $14,30  for  sawmills  and  $15.21  for  millwork 
representing  approximately  69  per  cent  njid  65  per  cent, ' respectively,  of 
the  1929  wages, 

c.  Area  Comparisons 

The  striking  divergence  between  wages  in  the  South  and  TTest  is  indi- 
cated in  the  following  corajarison  of  average  hoxirly  wage  rates  and  weekly 
earnings  in  these  areas: 


9813 


-141- 


Year 


AVT^KA^-E  HCUKLY  '"^A'"tE  RAT"S  AW" AYFMCr?. 
WEEKLY  EAHi-IINGS  ,  ir  T^ffi  LUi^OER  17D\]S1!1V{  (SA' 'MILLS) 
IN  THE  TOST  Al\D  S0UT7  a/ 
'■? 

Avevp-g-e  ToTirly     "Rrti^   of  Averfge  ^''eekly  Hatio  ".f 
Wa,?re  Hates  S'-uth  t'^  Er-rnings  South  to 

West  West 

South     Per  Cent  West  South  Per  Cent 


1923 

June. 


^est 


"50.552 


$0,270 


49 


1925 

Pehruary  to   June. 


1930 

Mpy  t''  August. 


193; 


1933 

July  -  Average 

Decemher  -  AvetRre. 


,533 


1928 557 


.558 
.38=^ 

.366 
.530 


.27'^ 
.275 

.260 
.170 

.150 
.290 


51 

49 

S26.01 

$14.44 

56 

47 

25.17 

12.74 

51 

44' 

14.24 

7.11 

50 

41 

13.40 

6.80 

51 

55 

13.83 

8.44 

61 

1934 

Average  fir?t  ten 
months 


.548 


295 


17.76 


3.70   49 


Source:   Research  and  Pl;inning  l^ivision,  ITRA,  Pe-Qort  entitled  "Hours, 

.Wages  and  Enrol  oyinent "  *  -orerjared  for  hearings  on  emt>loyment  -nro- 
visions  of  C^des,  January,  1935,  -o.  58. 

a/    "West"  includes  Oregon  and  ^'fashingt^n.   "South"  includes  AIp- 
.  bama,  Florida,  Georgia,  :assissir)'Ti,  North  Carolina,  South 
Carolina,  Virginia,  Arkansas,  Louisiana  and  Texas.   Since  the 
■orincipal  t)roduct  of  the  Southern  States  is  nine,  which  comnetes 
chiefly  with  the  Douglas  fir  of  the  ^^^est  Corst,  the  Southern 
States  have  "been  cnrn-pared  \"ith  the  "''estern  States  where  Douglas 
fir  is  produced  Figures  :f or  Pre-code  years  are  weighted  averages 
of  State  averages  airoQaring  in  the  ^Viges  and  Hours  Bulletins  for 
the  Lumher  Industry  "oublished  by  the  Bureau  of  Labor  Statistics. 
.  Figures  for  1933  and  1934  represent  conditions  in  the  Southern 
.  Pine  and  West  Coast  (Douglas  Fir)  Divisions,  as  reported  to  the 
Code  Auth'-'rity. 


This  -oreceding  table  indicates  that  aver^ige  hourly  wage  rates  in  the 
Southern  states  were  a.T)TDroxiraately  one-half  of  those  in  the  West  Coast 
States  of  Washington  and  Oregon  for-  the  years  1923,  1925  and  1928,.  the 
1928  averages 


9813 


-142- 

being  $0,557  for  the  West  nnd  $0,275  for  the  South.   It  annears  also  that 
■beginning  in  1930  the  excess  of  the  ^-estern  average  over  tha.t  of  the  South 
increased  until  in  July,  1933,  Just  -nrior  to  the  Cor'e,  the  latter  was 
only  41  -Der  cent  of  the  former.  (*) 

The  effect  of  the  Code  a-oriears  to  be  reflected  in  the  fact  that  in 
December,  1933,  the  fourth  month  of  oneration  of  the  codal  wage  tdpo-. 
visions,  the  Western  average  vfas  53  cents  as  com'nared  with  less  than  37 
cents  in  July,  1933,  and  the  Southern  average  was  29  cents  as  comt)ared 
with  only  15  cents  in  July.   It  is  also  seen  that  under  the  Code  the 
Southern  s.vera^^e  hourly  wage  rate  rer^resented  a  larger  -DroTDortion  of  the 
Western  avera,;Te  than  at  any  other  period  covererl  by  the  table. 

These  statistics  show  that  until  1934  the  ra,tio  of  average  weekly 
earnings  in  the  South  to  those  in  the  West  was  greater  than  in  the  case 
of  average  hourly  wage  rates,  due,  doubtless,  to  the  longer  average  work- 
week in  the  South.   In  1928  these  Southern  earnings  averaged  $14.44  as 
compared  wit.i  $26.01  for  the  '''est  —  a  ratio  of  56  Per  cent.   Subseauent 
reductions  brought  these  earnings  down  to  $6.80  in  the  South  rnd  $13.40 
in  the  West  In  July,  1933,  representing  a  ratio  of  51  per  ceilt.   These 
pre-code  earnings  in  the  West  were  apprcximately  50  per  cent  of  the  1928 
average  and  in  the  South  were  47  per  cent  of  the  1928  level. '  '  ■ 

The  codal  month  of  December,  19r'3,  shoif'ed  only  a  slight  increaee  in 
average  weekly  earnings  in  the  '"est,  as  contrasted  with  an  increase  of 
nearly  one-third  in  the  South  over  the  July,  1933,  earnings.  During  the 
ten  months  of  1934  this  situation  was  reversed,  for  the  $17.76  weekly 
average  for  the  West  in  that  period  represented  a.  substantial  increase 
over  that  area's  December,  1934,  earnings,  whereas  the  $8.70  average  for 
the  South  was  only  slightly  above  the  December  level. 

It  has  often  been  assumed  that  it  costs  much  less  to  live  in  the 
South  than  in  any  other  section  of  the  country,  and  considerable  stress 
was  laid  on  this  point  in  pre-code  hearings  on  the  subject  of  territorial 
wage  rate  differentials.   One  approach  has  been  to  compare  in  the  South 
and  in  the  North  the  prices  of  a  large  quantity  of  goods  needed  by  a 
family.   The  defect  of  this  method  is  that  the  goods  priced  are  not  used 
in  both  regions,  and  to  this  extent  the  comparisons  are  artificial.   More 
corn  bread,  for  instance,  is  cons^umed  in  the  South  and  more  wheat  bread 
in  the  West  and  East.   More  rice  is  used  in  the  South  and  less  coal.  (**) 

Professor  William  F.  Ogourn,  of  the  University  of  Chicago,  recently 
employed  a  different  method  of  attack,  using  the  percentage  of  the  family 
income  spent  for  food  as  an  index  of  the  plane  of  living,  and  on  this 
basis  reached  conclusions  which  would  throw  some  doubt  on  the  existence 
of  a  large  differential  between  living  costs  in  the  South  and  elsewhere. 


(*)   The  President's  Reemployment  Agreement  went  into  effect  in  July,  1933. 

(**)  Ogburn,  William  F. ,  University  of  Chicago,  Does  it  cost  less  to  live 
in  the  South?  University  of  North  Carolina  Press,  Social  Forces, 
December  (1935),  pp.   211-214. 

(***)lbid, 
9813 


-143- 

Insuff icient  data  havp  "opco^-ie  ■■'v?o.l.---''-)le  to  enaolc  definite  conclusions 
en  this  -ooint  to  te   -ofesented  in  the  -orcpent  report,  but  it  is  believed 
that  such  observations  as  those  of  Ti-ofer-sir  Og^hurn   indicate  the  need 
of  further  research  on  this  subject  nnd  its  importance  as  one  factor  in 
determining  or  justifyin^^  territorial  wa£:e  rate  differentials. 

The  following  table  com-nares  av^ra.f^c  earninsis  "oer  hour  -oer  em- 
X)loyee  and  average  full-time  earnings  ner  '-"eek  -oer  employee  in  logging 
camps  and  sawmills  for  three  Southern  states  and  three  Northwestern 
states  for  the  years  19'38  and  193,'^.   The  data  for  these  years  afford  a 
basis  also  of  com-paring  nre-depression  and  bottom-of -depression  earnings. 

Percontagc  of  Decline 
ig.-'S  1933  from  1928 


Logging       Logging       Logging 
Camps  Saw-  Crmps  Saw-     Camps       Sawmills 
nills  _   ■  mills 

Average  Earnings  per 
Hour  per  Employee: 

3  Southern  States  a/  $0,322  SO.  292  '-^0.179  50.181   44.4         38.0 
3  N. Western  Statesb/   .663   .566   .461    .393   30,5         29.3 

Average  Full-time  Earnings 

per  Week  per  Employee:'      •  .      . 

3  Southern  States  a/   19.42  17.37  10.76   10.72   44.6         38.3 
3  N.VJestern  Statesb/  32.26  26.78  22.62   IB. 93   29.9         29.3 


Source:  Bureau  of  Labor  Statistics,  Jiulletins  Ko.  497  (1928)  and  No. 
586  (1932),  "^''.Tes  and  Hours  of  L^^bor  in  the  Lumber  Industry 
in  the  United  Statps". 

a/   Arkansrs,  Louisianr*^  ?nd  "'ississip'ii. 

b/   Oregon,  T"ashington  and  Idr'ho. 


This  table  indicates  that  in  1928  average  earnings  per  hour  per 
eranloyec  in  logging  carans  and  .sawmills  in  the  Southern  states  of  Ark- 
ansas, Louisiana  and  Mississippi  were  appro3:imately  laalf  of  the  Corres- 
ponding earnings  in  the  thr^e  Northwestern  states  of  Oregon,  'Washington 
and  Idaho. 

It  also  appe-irs  that  average  hourly  earnings  in  the  Southern  states 
suffered  more  during  the  business  depression  than  in  the  Northwestern 
states,  since  in  1932  the  differentials  between  the  two  were  considerably 
greater.   It  will  be  noted  that  in  the  Southern  states  these  1932  earnings 
represented  declines  from  the  1928  earnings  of  44.4  per  cent  and  38.0 
per  cent  in  the  logging  camps  and  sawmills,  respectively,  whereas  in  the 
Northwestern  states  these  declines  were  30.5  per  C(pnt  and  29.3  per  oent, 
respectively. 

In  average  full-time  earnings  per  week  per  employee  the  spread  be- 
tween the  two  areas  under  consideration  was  not  so  great  as  in  hourly 

9813 


-144- 

earnings,  due  to  the  longer  hourp  worked  in  the  So-uth.   It  is  interest- 
ing to  note,  hov'evpr,  thf't  the  declines  in  1932  from  the  1928  level 
were  almost  identical  with  those  for  hourly  earnings. 

d.   Payrolls 

'^e  long-time  trend  of  -oayrolls  in  sa^^mills  (Census  classification 
"Lumber  and  Timber  Products").  '">-s  well  as  seasona.1  fluctuations  in  such 
payrolls,  are  shown  in  the  following  indices,  which  are  based  ur)on  the 
year  1929  as  IOC. 

Index  of  Payrolls  ( 19'?9  =  lOO) 


S-'wmills 

„i926 

-192?... 

1928 

1929 

1930 

ig.-^i 

1932 

1933 

_1934_ 

1935 

Jan. 

96.4 

92.5 

86.0 

88.3 

80.1 

40.9 

21.4 

16.7 

29.8 

32.3 

Feb. 

101.5 

94.3 

9". 6 

91.5 

78.7 

40.  ft 

•-;1.0 

16.0 

32.8 

36.7 

Mar. 

102.1 

95.9 

93.4 

94.2 

83.7 

41.1 

20.8 

15.7 

35.5 

38.4 

Apr. 

105.4 

94.  ^i 

96.3 

100.4 

83,  f^ 

39.7 

21.2 

16.6 

38.6 

40.6 

^fay  • 

109,0 

100.7 

99.5 

105.8 

82.8 

41.1 

21.5 

19.0 

''1.5 

34.5 

Jun. 

111.9 

101.5 

10T.2 

105.0 

79.9 

41.1 

20.9 

24. 1 

39.8 

35.8   ■ 

Jul. 

107.0 

97.3 

97.  P 

106.2 

7.-.0 

37.0 

19.6 

28.  7 

25.8 

39.3 

Aug. 

110.  0 

100. 3 

99.9 

105.6 

64.7 

36.3 

19.3 

34.3 

37.9 

Set). 

109.9 

102.3 

101.6 

107.1 

62.9 

35.4 

20.5 

39.6 

38.2 

Oct. 

110.2 

102.1 

102.6 

104.5 

60.8 

32.8 

22.0 

39,9 

38.=! 

Nov.- 

107. 1 

99.^ 

100.6 

98.2 

54.7 

29.8 

''1.0 

37.4 

36.5 

Dec. 

102.5 

94.6 

96.6 

93.2 

49 . 7 

25.5 

18.7 

34.3 

34.3 

Aver- 

age: 

106.1 

98.1 

96,9 

100.0 

71.0 

36.9 

20.7 

27.0 

36.6 

Source:   Derived  from  Bureau  of  Labor  Statistics  unadjusted  index  (1926 
=  100)  by  adjusting  to  Census  with  ITRk   method. 


It  will  be  seen  from  the  foregoing  that  r^ayrolls  in  the  sawmill 
branch  of  the  industry  declined  from  1926  through  1928,  rose_ slightly 
in  1929,  and  thereafter  droiD-ned  shprioly  until  1932  when,  at  the  bottom 
of  the  degression,  these  nayrolls  renresented  r-n-oroximately  21  -oer  cent 
of  those  in  1929,  or  a  loss  of  79  r,er  cent.   It  will  be  observed  also 
that  after  l.)32  there  was  a  grPdua.1  increase  in  these  ■nayrolls  which 
continued  inuo  1935. 

Trends  in  millwork  or  nlaning  mill  ■DP^yrolls,  shown  in  the  follow- 
ing table,  are  somewhat  similar  to  those  in  the  wawmill  branch,  exce^Dt 
that  in  millwork  the  decline  ■«'hich  began  in  1926  continued  without  a 
break  through  the  first  half  of  1933,  so  that  the  average  T)ayrolls  for 
1933,  desi^ite  some  improvement  during  the  latter  half  of  thr  t  ye^r, 
were  only  22  -oer  cent  of  the  1929  level. 


9813 


-k45- 

In<ic>-   of   ppyrollF-  (1929   =    1")0) 
"illv'crk 
192G        1937        192R        1929        1930     1921      193'-'      193?      igs-^v      1935 


Jan.        122,0      107.1        92,2       95.?        77,1      53,1      ?4,?      17.7     22.5     26.2 
Feb.        126,5      107.2       9^\  1        98.0        Rl.O      55. f;     31.2     17.4     24.7     28.8 


Mar. 

128,9 

108,0 

100.0 

104..'^ 

80.4 

56 , 5 

28.4 

15.1 

26.4 

29. 

,4 

A-or. 

124.7 

110.7 

304.2 

105.3 

81,0 

56.3 

27,3 

17,6 

28,1 

31, 

,6 

May 

125.3 

112.8 

107,1 

106 . 5 

83.1 

57.8 

27,1 

19,9 

28.8 

33, 

,? 

Jun. 

126.4 

113.4 

109.4 

106 , 1 

80.5 

55.6 

25,1 

23.1 

27,5 

35, 

.9 

Jul. 

120,7 

109.2 

105 . 8 

103.5 

71,4 

52,4 

23,3 

26.0 

26.4 

38, 

.7 

Aug. 

125.8 

113.4 

107,6 

106.5 

70.9 

50.8 

22 .  ,3 

27.2 

26.4 

Se-D. 

121,8 

107.9 

104 .  8 

105,6 

66.0 

44.9 

22,3 

27,5 

24.8 

Oct. 

124,2 

107,6 

105.2 

lO-"'.  0 

65.3 

42,2 

22,4 

26.8 

27,5 

Nov. 

121.1 

102.'" 

102.8 

87.3 

61.? 

:^9,8 

22,2 

25,2 

27.3 

Dec. 

117.0 

101,3 

100.4 

83.0 

60.0 

39.1 

20. 1 

25,0 

28.0 

Aver- 

age: 

123.7 

108,4 

103.1 

100,0 

73.2 

50.3 

25.5 

22.4 

26.5 

Source:      Bureau  of   Labor  Statistics    Index   shifted    to  1929  base;    '^A 
adjustment   to  1933   Census. 


An  indication   of   comnosite  nayroll   trends   for  both  sav/mills   and 
mill'j^ork   is   afforded  by   the  following   tible: 


Index   of  Payrolls   (1929   =   lOn) 
Saijnnills  and   Millworlc 
1926        1927        1928        1929      1930     1931      1952      193?      1934      1935 


Jan. 

102.0 

95.7 

87.3 

89 . 8 

79.5 

43.5 

2---.2 

16,9 

28.2 

51, 

,4 

Feb. 

106.9 

97,1 

90.7 

92.9 

79,  2 

44.0 

23,2 

16 , 3 

31.0 

55. 

,0 

■'ar. 

107.9 

98.5 

QA.  ^  p 

96,4 

83,0 

4^'. .  0 

22,4 

15,5 

53.5 

36. 

,4 

A-or. 

109.6 

98,2 

93.0 

101.6 

83,2 

4? .  ? 

22,5 

16.8 

36.3 

38, 

,6 

'.'lay 

112,5 

103,3 

101.1 

106,0 

8''.  9 

44.  7 

22,7 

19,2 

38.8 

34. 

,2 

Jun. 

115,0 

1^4.1 

102.2 

105.2 

80.0 

44.2 

21,8 

23,8 

37.1 

35. 

,8 

Jul. 

110.0 

100.3 

99,5 

105.6 

70.4 

41.0 

20,4 

28,1 

33 . 8 

39. 

,2 

Aug, 

113.4 

103.2 

101,5 

105.8 

66.0 

39,4 

19.9 

32.8 

35.4 

Set). 

11-^,5 

10?,. S 

102,3 

106.3 

63.5 

37,5 

20.9 

37.0 

35.3 

Oct. 

113.2 

103.3 

103.2 

103.5 

61.8 

34,8 

22,1 

?7.1 

36.'^- 

Nov, 

110.1 

100.4 

101.1 

95.8 

56,1 

32.0 

21.3 

34.8 

34.5 

Dec. 

105,6 

96.1 

97.4 

91.0 

51.5 

28,4 

19,0 

32.3 

32.9 

Aver- 

age: 

110,0 

100.3 

93.3 

100,0 

71.4 

39,7 

21,7 

25.9 

34.4 

9813 


-146- 

Source;   Bureau  of  Labor  St?'tiBtics  datp.  shiftpc^  to  19*^.9  base  by  the 
Division  of  Research  rnd  Planning,  I*^A. 


Estima' 'd.  average  weekly  -nayrolls  for  sa-'rmills  and  millwork  over 
the  period  19^9  to  1954,  ipclusiye,  a^-e  shown  in  the  following  table: 

Estimated  Average  ^''^eekly  Payrolls 
(Thousrinds  of  Dollars) 


1929 


1930 


1931 


193' 


1933 


1934 


Sawmills 
Viillwork 


8,107   5,754   2,98".   1,675   2,17S   3,044 
2,239   1,638   1,127     571    '  501     594 


Source:   Commuted  by  Research  rnd  Planning  Division,  "TPJ\.,  ?.-n-nlying 

•oayroll  index  of  Bureau  of  Labor  Statistics,  sh.ifted  to  1929 
-  bf  se,  against  Census  -oayroll  statistics  for  1929. 


6.   Hours 

In  1932,  which,  in  general,  marked  the  bottom  of  the  depression 
for  the  industry,  the  sawmill  brancn  averaged  36.4  hours  ner  week,  and 
the  fflillwork  branch  34.9  hours,  according  to  data  of  the  Bureau  of 
Labor  Statistics.   Unfortunately  no  official  or  other  comnrehensive  data 
covering  hours  actually  worked  throughout  the  country  are  available  for 
earlier  years. 

Average  hours  worked,  -oer  week  in  the  sawmill  branch  are  inresented 
by  months  for  the  years  1932  to  1935,  inclusive: 


9813 


-147- 

AV7T^0.-n 

T-TQ-ps  '■'OT'SD  P7P.  '"'^r;' 

-. 

SA'-:iLLS 

fiontli 

1932 

1933 

1934 

1935 

Jan-oa.ry 

33.6 

33.1 

31.8     •' 

33.4 

FelDruP-r:/ 

35.7 

33.  A 

33.0     •■ 

34.  7 

March 

35. 6 

34.6 

34 . 8    • 

35.3 

Anril 

35.7 

36.2 

34.7    • 

36.  <i: 

May 

37.2 

40.4 

34.3 

33.2 

June 

35.6 

43.0 

34.1  • 

37.3 

July 

35.4 

44. 1 

32.3  • 

36.8 

Augus  t 

36.5 

43.1  ■ 

33.3 

39.3 

SeDtemlDer 

38.2 

37.1 

33.3 

40.0 

October 

39.3 

34.7' 

33.7 

41.1 

Koveci'ber 

38.6 

S4.- 

33.1 

38.9 

Decemoer 

34.5 

33.1 

32.9 

39.9 

Average 

36.4 

37.-: 

33.5 

1/ 

Source:      CcTiTjiled   from  data   of   the  Bureau  of  Lahor  Statistics  ty  the 
Division   of  Research  and  Planning,    iWA. 

!_/   Hot  yet  available. 


It  will  he  seen  fron  the  foregoing  table  that  the  average  of  37.3 
hours  worked  in  1933  '-as  slightly  -bove  the  1932  average,  ovt   that  during 
the  codal  year  1934  the  average  fell  to  33.5  or  nearly  three  hours  below 
the  depression  Ic^  of  1932. 

An  average  for  the  year  1935  has  not  been  officially  com-outed,  but 
it  is  evi'"'ent  from  the  monthly  averages  that  hours  worked  in  that  year 
considerably  exceeded  those  in  1934.   The  Code  for  the  industry,  i^rhich 
was  termnated  by  the  Suorerae  Court  decision  of  !fey  27,  1935,  stipulated 
a  maximum  work  week  of  40  hours  with  certain  exce'otions.   It  is  ihterest- 
ing  to  note  that  in  Jxme,    1935,  the  first  month  following  termination  of 
the  Code,  the  average  work  week  was  about  foiir  hours  in  excess  of  that 
for  the  TDreceding  month,  and  tha„t  for  the  balance  of  the  year  average 
hours  continued  to  increase.   The  effect  of  the  Code  on  hours  of  em- 
■nloyment  will  be  discussed  later  in  this  clia-oter. 


9813 


■- 

-1'18- 

AVERAfrE 

MILL'TOP-K 

'•'EFK 

Month 

193? 

1935 

19r'4 

1935 

Janiiary 

36.8- 

35.5 

32.7 

34. 1 

February 

36.7 

35.8 

34 .  4 

35.3 

March 

3".0 

31.5 

35.5 

35.8 

Anril 

36.4 

39 . 3 

34.8 

36.4 

May 

35.2 

40.? 

33.9 

37.4 

June 

3^.  8 

43.3 

34.2 

38.9 

July 

34.8 

4^.7 

33.2 

39.1 

Augus  t 

33.7 

39.6 

34.3 

40.3 

Ser)teniber 

34.8 

34.7 

33.6 

41.5 

Octoher 

35.6 

34.2 

36.0 

43. 1 

Hovemher 

34.1 

3^.? 

34.9 

40.9 

DecemlDer 

34,4 

34.5 

35.6 

42.2 

Average 

34.9 

37.  3 

34.4 

1/ 

Source:      Coimiled  from  data  of   the  Bureau  of  Labor  Statistics  by  the 
Division   of  Hesearch  and  Planning,    IsTRA. 

!_/       Hot   yet  available. 


A  comparison   of  Pverr.^e  hours  worker   -oer  ^"eel:   in   the   Southern  states, 
which  -oroduce  iDrii^ciDallj,''  loine,    with  average  hours   in   the  '"'est  Coast 
states   of  ^I'ashington  and   Oregon,   "rhose  Douglas  fir   con-oetes  with  the 
Southern  -oine,    may  be  helpful.      The  basis   for   ?uch  3   corariarison  is  af- 
forded by   the   f olloirinf'   table,   i"hich  covers    the   sawmill  branch  of   the 
industry. 


9813 


-149- 


AVE^AOIi;  EO^^.3  •"0''-'Er)  ?-'?.   "1EKIIT  T^T  LW07F  IlIDUSTHY 
(SAVJ-qLIS)  11?  T^  --^IST  AHD  SO^r^  19P3-19Z4  a/ 


■Ratio  of  South 


t< 

0  "■est 

Ye^T 

Wept 

South 

(P' 

gr  Cent) 

1928 

46.7 

45.1 
36.7 

36.6 
26.1, 

52.5 

49.0 
41.8 

45.3 
29.1 

112 

1930 

May  to  A-ugust 

1932, 

109 
114 

1933 

July  Average 

Deeeraber  Average 

125 
111 

1934 

Average  first 

10  months 

32.4 

29.5 

93 

Source:   "Re-nort  entitled  "Hours,  Wages  and  Emr)loyment" ,  nre-n.^red  for 

hearings  on  emolo.yiTient  -orovisions  of  Codes,  January,  1935,  hy 
the  Research  and  Planning  Division,  ITRA,  t).58. 

a/   ""^est"  includes  Oregon  and  ""ashinrton.   "South"  includes 

Alabama,  Florida,  Geo-gia,  '  iisrissinoi,  North  Carolina,  South 
Carolina,  Virginia,  Arkansas,  Louisiana,  and  Texas.   Since  the 
princit)al  nroduct  of  the  Southern  states  is  ijine,  which  conroetes 
chiefly  with  the  Douglas  fir  of  the  West  Coast,  the  Southern 
states  have  been  comoared  ^-ith  the  "''estern  states  where  Douglas 
fir  is  "oroduced.   Figures  for  -ore-code  years  are  weighted  aver- 
ages of  state  averages  a-orierring  in  TYage  and  Hour  Bulletins  for 
the  Ltimber  Industry,  of  the  Bureau  of  Labor  Statistics.  Figures 
for  1953  and  1934  rcTDresent  conditions  in  the  Southern  Pine  and 
V'est  Coast  (Douglas  Fir)  Divisions,  as  rer)Orted  to  the  Code 
Authority. 


The  foregoing  table  shows  that  -average  hour^  ^J'orked  rte-r   i^eek  in  the 
West  declined  from  46.7  ho-'ors  in  1928  to  36.7  hours  in  1932,  the  year 
which  marked  the  det)ression  Ic^  in  r)i"oduction  and  errmloyment,  r-hile  in 
the  South  these  hours  declined  from  52.5  hours  to  41.  S  hours  durir,g  the 
same  rieriod.   It  is  note^vorthy  that  the  decline  in  hours  in  each  area 
during  this  period  w^s  the  same,  namely,  21.4  -oer  cent. 

In  July,  1933,  Just  "orior-  to  the  a^'or'^val  o:<^  the  Code,  the  hours 
worked  aver^'ged  36.6  in  the  West  and  45..3  in  the  South,  whereas  for  the 
codal  month  of  December,  19C3,  the  averf-ge  had  dro-o-oed  to  26.1  hours  for 
the  West  fnd  29.1  hours  for  the  Soutn,  re-oresenting  declines  of  nearly 
39  and  36  ver   cent,  resT)ectively,  from  the  -Dre-code  average.   Seasonality 
ma.y  have  been  a  factor  in  this  decline,  but  judging  from  the  monthly 
averages  given  earlier  in  this  re-ocrt  it  is  not  believed  that  seasonality 
was  an  imoortant  factor. 

Probably  the  most  striking  feature  of  this  table  is  the  indication 

9813 


-150- 

that  whereas  in  193B  aver-ve  hours  in  the  South  were  12  ner  cent  p>)ove 
those  in  the  ^"^est,  and  v^herens  in  July,  19"3,(*)  just  -nrior  to  the  Code, 
this  differential  had  increased  tc  35  r)er  cent,  this  situp.tion  ^as  re- 
versed during  the  first  ten  months  of  193^;,  under  Code  operation,  when 
the  average  for  the  South  dro-Q-'^eH  to  a  levl  7  TPr  cent  below  thf  t  for 
the  West. 

Full-time  hours  in  the  industry  h-'ve  varied  considerably  between 
the  South  and  the  Northwest.   The  following  com-oarison,  based  on  da.ta,of 
the  Bureau  of  Labor  Statistics  for  three  Southern  states  and  three  Forth- 
western  states,  indicates  that  full-time  hours  in  the  South  ,h?.ve  cons.ider- 
ably  exceeded  those  in  the  Northwest.  '  <''■'■   r,  T 

AVERArrF  NUI.BEP.  OF  FULL-TIlffi  MOUP.S  PF~  '"FEK  PK^  EMPLO'jfEE-  ■*..-.'■■*• 

1928  1932 


Logging  Logging 

Camps   Sawmills     Cam-ps-  Sawmills 
Three  Southern  States      a/       60.4     59,4       60.2     59.3 

Three  Nortb-estern  States  b/       48.7     48.2       49.0     48.1 

Source:   Bureau  of  Labor  Statistics*  Bulletins  No.  ^97  (1928)  and  586 

(1932),  "'"ages  and  Fours  of  Labor  in  the  L-'ambef  Industry  in  the 
United  States". 

a/   Arkansas,  Louisiana,  Mississi'rni. 

b/   Oregon,  'Washington  and  Idp,ho. 


7.   Productivity 

In  1929,  the  latest  year  for  which  com-olete  Census  returns  are 
available,  the  eleven  -orincipal  Southern  -oroducing  states  had  203,324 
wage  earners  in  tne  Census  classificf tion  "Lumber  and  Timer  Products", 
or  48  per  cent  of  the  total  wage  earners  in  this  classification.   The 
three  leading  lumber  ■oroducing  states  of  the  -oacific  coast  —  California, 
Oregon,  and  'Washington  —  had  115,224  wage  earners,  or  only  28  ver   cent 
of  the  total.   Yet  des-oite  the  fact  that  the  Southern  states  employed 
76  per  cent  more  wage  earners  than  the  Pacific  Coast  states,  Droduction 
by  the  latter,  on  a  4B-hour  single-shift  week  basis,  aggregated  14,149, 
301,000  feet  board  rae-sure  of  lumber,  ^s  against  15,462,485,000  feet 
produced  in  the  eleven  Southern  states  on  a  60-hour  single-shift  week 
basis. (**) 


(*)    The  President's  Reemployment  Agreement  began  to  be  effective  in 
July,  1933. 

(**)   Brief  in  behalf  of  the  Southern  Pine  In'^iistry,  submitted  to  the 
National  Industrial  Recovery  Board  by  P.  A.  Bloomer,  February  2, 
1935. 

9813 


-151- 

The  production  rier  wgge  errner  jn  the  Sonthorn  stnter;  in  1929  wps 
76,048  feet,  against  12'-i,798  feet  ner  w^^^e  earner  in  tlie  thme  Pacific 
states.  Tims,  the  average  Pacific  Coast  w;  ge  earner,  working  48  hours 
a  week,  -produced  61  ner  cent  more  luinber  than  did  the  average  Southern 
wage  earner  working  50  hours  a  week.  Thin  is  due  ma.inly  to  the  larger 
yield  per  log  find  per  acre  of  standing  timber  obtained  on  the  Pacific 
Cop.st,  to  the  absence  of  hardwoods  in  the  Pacific  Coast  isroduction,  and 
to  the  highly  mechanized  otjerations  coirJlon  to  th-  t  region.  (*) 

A  study  of  the  -nroductivity  of  labor  in  the  Lumber  Industry  in  the 
Pacific  Coast  states  in  1929,  made  by  the  Bureau  cf  Labor  Statistics( **) , 
revealed  the  fact  that  efficiency,  as  measured  by  man-hour  nroductivity, 
depended  more  upon  the  extent  of  raechaniz'  tion,  nnd  possibly  wages  paid, 
than  upon  such  factors  as  size  of  nlant.   In  fact,  it  v:&s  found  that  such 
efficiency  decreased  with  the  size  of  plant  as  measured  by  number  of  wage 
earners  employed,'  espeically  for  those  mills  which  prodticed  their  own 
logs.   It  appeared  tha.t  productivity  did  not  increase  with  the  size  of 
mill  as  measured  by  either  number  of  wage  earners  employed,  aggregate 
output,  or  even  aggregate  horsepower,  although  for  those  mills  which 
bought  their  logs  there  was  some  increase  in  productivity  with  increase 
in  size  of  mill  as  measured  by  total  output. 

This  study  also  revealed  that  for  the  Pacific  Coast  states  those 
mills  which  paid  the  highest  hourly  wage  sawed,  on  the  average,  about 
40  per  cent  more  l^uniber  per  man-hour  than  did  the  low-wage  mills,  but 
only  about  30  ner  cent  more  per  wnge  earner.  The  average  wage  cost  per 
thousand  feet  of  lumber  sawed  was  'much  lower  in  the  case  of  the  high- 
productivity  mills  than  of  the  low-productivity  mills. 

Referring  again  to  this  Pacific  Coast  study,  it  was  found  thr t  the 
most  reliable  indicator  cf  efficiency  in  this  industry  is  horsepower  per 
w"ge  ea^rner,  the  increase  in  productivity  with  increase  in  horsepower 
per  wage  earner  being  appreciable.   It  appeared  also  tha.t  the  wage  cost 
per  thousand  feet  sawed  wa,s  perhaps  a  little  smaller  in  the  case  of  those 
mills  with  much  horsepower  per  wa-^e  ertrner  than  in  the  case  of  those  with 
little  horsepower  per  wage  ea.rner. 

Probably  the  most  reliable  available  basis  for  a  study  of  relative 
productivity  of  labor  in  the  industry  is  afforded  by  a  special  tabulation 
made  by  the  Bureau  cf  the  Census  for  use  in  this  report.   This  ts.bulation 
shows  lumber  production  rier  mfm-hour  in  the  year  1929  in  372  selected  es- 
tablishjuents  in  the  Census  classification  "Lumber  and  Timber  Products" 
industry;  by  districts  and  states.   There  establislments  were  selected 
from,  and  represent,  rtbout  one-fourth  of  those  lumber  producing  estab- 
lishments w?iich  reporte''''  individually  products  vfilued  in  1929  at  $100,000 
or  more.   They  repre'^ent,  therefore,  the  larger  establishments.   All  of 


(*)    Ibid. 


(**)   U.  S.  Bureau  of  L' bor  Statistics,  Productivity  of  Labor,  Monthly 
Labor  Peview,  October,  19.'^2. 


9313 


-15  3- 

them  produced  lijmber  and  most   of   then  m?^nu.factured  .-planing  mill  Torod\icts 
nlso.      In  calculating   the  smount   ol'   l-uniher' -Drodxiced  -oer"  man-hour,    the.' 
nuraher  of  feet   nf   roUtTh  lumber  has  been  divided  by  .the    total   number   of 
rie,n-hour5  worked   in   the   eptablishrnentp   covered  by  the   table.      Thug   the 
dividend  refers    to   roiigh  lumber   onl^-,   whereas    the  divisor  represents 
the   labor  enroloyed  both  in  Toducing  rou^-'h  lumber  and   in  remanufacturing 
a  pprt 'of   it.  .  ' 

The  followiTig   tnble  "oresents   these  ■nroductivity  data,    summarized 
for   the   three  grand  divisions:      North,    South  anc   '^est:  ... 


Kuraber   of 
Wage  Parners     Lumber  Produced 
Kuraber   of  (avera,£-e  per  ifen-hour 

Area  Estaolislnrients  for   year)    (?t.b«m. )'      (Per  Cent) 

Total 


The  North  a/ 
The  South  b/ 
The  i^est  -c/ 


372 

79,093 

47  Avg. 

lOn.O  Avg 

74 

11,675 

34 

■  51.1 

130 

20,177 

23 

59.6 

168 

47,241 

62 

131.9 

a/  Ilaine,  New  >>moshire,  Ve^^mont,  j-iassachusetts,  New  York,  N^w  Jersey, 
•  Pennsylvania,  Michigan,  Ohio,  Indian^,,  Illinois,  Wisconsin,  Minne- 
sota, South  Dakota,  Iowa,  Missouri,  and  Kansas. 

b/  Maryland,  West  Virginia,  Virginia,  North  Carolina,  Kentucky,  Tenn- 
essee, South  Carolina,  "eorgia,  Florida,  Alabama,  Arkansas,  Louis- 
iana, Mississir)-ni ,  Oklahoma,  and  Texas. 

_c/  Montana,  Idaho,  Colorado,  New  Mexico,  Wfi.phington,  Oregon,  and 
California. 


The  foregoing  data  reveal  tliat  the  average  man-hour  production  of 
the  372  :establiskments  covered  was  47  ft.  b.ra.   This  average  is  not  re- 
•nresentative  of  man-hour  -oroduction  in  any  one  of  the  three  great  areas 
covered,'  namely  24  feet  in  the  North,  28  feet  in  the  South,  and  62  feet 
in  the  West.   The  man-hour  production  in  the  North  and  South  was  49  and 
40  per  cent,  respectively,  below  the  average  for  all-  the  establishments, 
xvhereas  the  man-hour  production  in  the  "'est  was  32  per  cent  above  the 
average. 

Limitiji..cn  the  cora-narison  to  the  South  and  West,  the  main  lumber  pro- 
ducing areas,  it  is  found  that  the  average  man-hour  ■oroduction  of  the 
West  re-orerented  an  increase  of  more  than  121  -oer  cent  over  the  average 
man-hour  i:)roduction  of  the  South. 

The  variations  among  the  several  areas  and  states  in  the  amo-ont  of 
lumber  produced  per  man-hour  a-^e  due  to  a  number  of  causes,  the  most 
important  of  which  are  the  degree  of  meclia.nization  and  amount  of  horse- 
power available  per  worker,  the  size  of  logs  sawed,  the  average  timber 
stand  per  acre,  the  degree  of  soft'^ood  production,  and  the  size  of  the 

9813 


-153- 

nroduct.      In  all.    o-f    the?"   rof'nr-cts    ti'io  i''o?t   excelled.      It    i?    interesting', 
for  instance,    to  note   th'  t  .tiies   State   of  ■"  shington,    \«/hose  -orod-uction  Tser 
man-hour  of   96  feet   excelled    that   of  any  otaer  state,   had   the  gjreatest 
average   stand  ver  ^icre   of ■,in(''ustri''lly-0"'ned    sai-'   timlier,    namely,   45,283 
feet.(*)      As   in   the  cape   of    the  ,ot]\er  factors   Just  mentioned,   ho'vever, 
there   is  .no   conmlRtc  correlation  bet'veen  average   tirriber  stand  and  -Droduct- 
ivity  -oe'r  man-hour,    owin^   to    the;   effect   of   other  f-'^ctors. 

It   is   interesting   to   note   in   co.nnection  yiitli  the  foregoing  com- 
parison  that   the  average   nunber   of  wage   earners  loer   establishment  cov- 
ered was   much  gre.ater  in   the  '"'ept   than  in   the   South  ^nd   Worth,    the 
averages  being  as   follo\Ars:      ^''est,    2^1;    "Nort?a,    1.58;    and  South,    155.      This 
does  not'  indicate   tliat   the   sara-oles   in  ouestion  are.  not.  rer)repenta.tive, 
but   rather  indicates    that    the   "verage   '"estern   establishment   is   larger 
than  is  found  else^^here. 

8.    Code  Labor  Prox'isions    and    Their  Interpret-"' ti on 

The   Code   of  Fair  Competition   for   the  Lumber  and   Timber  Product? 
Industries,   which  ^^as  aT)""irovecl    by  the      President  August   19,    193.",    was 
adopted   only  after  an  active  Tjeriod   of   code   formulation  during  AB'hich 
strenuous   efforts   were  raiide^by  the   industry   to  ha.rmonize   its  varied   in- 
terests and  at    the   same   time   satisfy  reauirements   of   the  National   In- 
dustrial P.ecovery  Administration,      In  view   of    the  wide   sco'':)e   of   the 
industries   covered   by  tho   code,    from   the   stand-^Tcint   of   location,   "oro- 
duc-s,    markets,    labor,    etc.,    it   is   not  surprising   that    the  "oro-oosed   code, 
as   finally  aDprov^.J,    rfor'^rerted   a  corsi^'er'^'ble   degree   of   compromise. 
This   is   certainly  true   of   the    labor  -orovlFions   of   the   code,    which  are 
covered   in  the  followiiig  discussi^ri.  ' 

.    a.      General  La,bgr  Provisions  .     •    .  ■ 

The  general   labor  provipions  ,  f  o.and   in  .Article  V   of   the   code   con- 
tained  the  usual  -nrcvi?' ons   '-eQi"'-irnd  by  the  National   Industrial  Recovery 
Act,    nai.n.elyj    atsaiauce   of    thorrgh'c   of   t>_e   emTDioj'oes    to   org?.nize  and 
bargain  coll^^-j  f'  'tl^    through  representatives   of    their   wn  choosing; 
freedom  from  intTi.-'^erence   of   employers   in   these   rerpects;    the   ■^ight   of 
emuloyrnent  free  from  reouirement   to  join  a    comt)any  ■union   or   to  refrain 
from  joining,    organizing   or  assisting  a   l-'bor   ovganizaition   of   their  own 
choosing;    a  ni   the   reQuii-ement   that   each  emu  1  oy er -c&m-oly  with  the   stand- 
ards   of  wa^s  and    hours  and   other  conditions    of   em-oloyment  ax)r)roved    or 
urescribed  by  the  President. 

An  outs  tan''"' ing  provision  in  view  -of    the  haza-rds   of   this    industry 
was    the  urohibition  of   employment   of  any  individua.l  under   18     years   of 
age,    exce^it  boys   13   years  and    over  who  might  be   employed   in   the  'Tooden 
Package  Division   and   in  non-hazardous   occupations   during  school  vacations 
or   in  case   tl-.ere  vere   no  wage   earners    of    18  years    or   over   in   their 
families. 

The  Code   contained   no   suecific   -orovision  covering  hnndica-o-oed  work- 
ers.     However,    this  '"as    taken  care   of  by  Fxecutive    Drder  6606-F,    of 


(*)        Table   IV,    Stand  -oer  Acre   on  Saw  Timber  .A.reas. 
981S 


•154- 


February  17,  1934,  which  permitted  handic^^pped  workers  to  be  em-Dloyed 
at  light  work  at  wages  below  the  codal  miniimim  on  condition  that  the 
employer  obtain  a  certificate  in  each  case  from  State  authority  desig- 
nated oy  the  U.  S.  Department  of  Labor,   Employers  hiring  such  persons 
were  required  to  file  monthly  reports  covering  such  employment. 

It  was  known  to  the  Deputy  Administrator's  office  (*)  that 
handicapped  workers  were  employed  at  less  than  the  codal  miniimim  wage 
rates  under  authority  of  this  Order,  since  evidence  of  this  was  presented 
from  time  to  time  in  connection  with  specific  cases  that  came  before 
the  compliance  councils.   No  statistics  are  available,  however,  sh-wing 
the  extent  of  such  employment. 

There  were  no  apprentice  or  learner  provisions  in  the  Code,   Other 
than  handicaTDTJed  workers,  who  were  taken  care  of  by  Executive  Order 
6606-£'   (discussed  earlier  in  this  cnapter),  no  one  was  permitted  to 
be  employed  in  the  industry  at  less  than  the  minimum  wages  set  forth 
in  Article  VII.  (**) 

Considering  the  wide  scope  of  the  industry  covered  by  the  Code, 
the  interpretations  of  its  labor  provisions,  made  oy  the  Code  Authority 
and  its  agencies,  were  very  few  in. number.   Likewise  very  few,  if  any, 
of  these  interpretations  ^ere  opuosed  by  the  NBA.  (**)   These  interpre- 
tations will  be  discussed  under  the  appropriate  heads,  according  to 
the  type  of  provision. 

b.   Hour  Provisions 

Article  VI  prescribed  a  40-hour  maximum  work-week,  subject  to  certain 
specified  exceptions.   These  ej>ceptions  included  executives  and  suT^ervisorv 
personnel,  traveling  sales  force,  and  camr)  cooks  for  whom  no  hourly 
limitation  was  made;  eraplovees  such  as  watchmen,  firemen,  and  repair 
crews,  where  the  nature  of  their  work  required  that  the  hourly  maximum 
be  exceeded,  constituting  not  more  than  10  per  cent  of  the  employees 
in  any  operation,  in  which  CFses  time  and  a  half  imist  be  paid  for  over- 
time, and  tem-Dorary  emplo-yment  in  cases  of  emergency.   For  none  of  these 
exceptions  was  there  any  limitation  with  respect  to  hours. 

To  provide  further  flexibility  it  ^^as  stimulated  that  the  Admini- 
strative Agency  of  a  Division  or  Subdivision  might  authorize  employment 
in  a  seasonal  operation  for  a  maximum  number  of  hours  not  exceeding  46 
in  any  week,  with  the  exception  of  parts  of  an  operation  depending  on 
climatic  conditions,  such  as  stream  driving  and  sled  hauling,  in  which 
a  greater  excess  was  authorized;  provided  that  average  employment  in  any 
seasonal  o-peration  in  any  calendar  year  did  not  exceed  the  standard 
schedule. 


(*)     History  of  the  Code  of  Fair  Competition  for  the  Lumber  and  Timber 
Products  Industries,  NEA,  p.  307. 

(**)    Ibid. 

(***)    Ibid.  p.  308. 

9813 


,  -155- 


It  '"as  further  provided  that  m.^nufacturei's  of  voolen  packages  for 
perishable  fruits  and  vegetables  raisght  be  authorized  by  the  Administra- 
tive Agency  of  the  V/ooden  Package,  Division  to  exceed  the  standard 
schedule  for  a  period  not  to  exceed  four  ■■-eeks  for  any  one  crop,  ^hen 
required  to  furnish  p?>.cksgeE'  for.  any  perishable  crop,  provided  that 
the  average  employment  of  any  individual  in  any  calendar  year  did  not 
exceed  the  standard  schedule.   Here  again  was  a  provision  for  long- 
time averaging  of  hours  v^hich  '"as  fr.aught  vdth  administrative  difficulties, 

A  striking  feature  of  these  codal  hourly  provisions  was  the  failure 
to  restrict  daily  wor,kin:g  hours  in  any  v-ay.   In  vie'"  of  the  extent  of 
seasonal  operations  in  this  industry,  the  above  provision  for  permitting 
an  excess  of  codal  maximum  ho\irs  per  'veek  in  such  operations  was  also 
noteworthy,  especially  since  it  permitted  the  averaging  of  weekly  hours 
over  an  entire  calendar  year.   Averaging  over  such  an  extended  period 
was  obviously  very  difficult  to  check  on  the  part  of  the  enforcement 
agencies. 

Article  VI,  '."hich  prescribed  maximam  hours  of  labor  in  the  industry, 
was  interpreted,  in  general,  (*)  as  not  applying  to  an  independent 
contractor  o'sning  his  owa  track  and  driving  it  himself. 

Article  VI,  SnbseCuion  A  (2)  a,  '"hich  excepted  certain  personnel 
from  the  maximum  h'lvsr   provision,  was  interpreted  by  the  Lumber  Code 
Authority  June  cO;  lto4..  (**)      Accoraing  to  this  interpretation, 
"Executive"  included  ei^fccuti'^a  officers  and  their  personal  secretaries, 
traffic  managers,  sales  manager's,  auditors,  legal  advisors  and  other 
department  heads,' -'.^hile  "supervisorv"  included  all  persons  '"ho  plan  for, 
direct,  or  superivse  the  T-onc  of  otner  employees.  ..','Cooks"  were  inter- 
preted to  irclude  all  employees  ^ho   have  to  do  with  preparing  and 
serving  of  meals. 

•Article  VI,  ..  ■>  cir'.'cion  A  [2)    b  permitted  ^regular  emplovraent  for 
watchmen,  firemen,  .-.r^j.-ir .  cre'=';.,  etc.,  beyond  the  codal  maximum  where 
required  by  the  ns -.^uro  of  their  "^ork,  for  not  more  than  10  percent  of  • 
the  employees  in  any  oirp-ration,  but  required  the  payment  of  time  and 
one  half  for  overtime.-  , 

This  provision  was  interpreted  by  the  National  Control  Committee 
on  October  10,  1933  (***)  as  rather  broad  and  as  applying  to  employees 
such  as  watchmen,  firemen  and  repair  crews  "rho,  by  the  nature  of  their 
work  could  not  conveniently  comply  'i^ith  the  maximum  hour  limitation. 
A  truck  driver  enijaged  in  long  distance,  h-^uling  \-fes  stated  to  fall 
'"ithin  the  terms  of  this  exception. 

(*)    Lumber  Code  Authority,  June  iO,  1934.   Code  Authority  Bulletin, 
Volume  II,  No.  51,  August  3,  1934,  F.  1 

(**)   Lumber  Code  Authority  Bulletin,  Vol.  II,  No.  51,  August  3,  1934, 
p.  1,  '  (Supercedes  rule  N.C.C.  of  August  £1,  1933) 

(***)   Lumber  Code  Authority  Bulletin,  Vol.  1,  No.  128,  p.  2,  May  28,  1934. 

9613 


-156- 


It  was  interpreted  also  that  teamsters  might  come  vithin  the  terms 
of  this  exception  if  a  declaration  to  that  effect  '-ere  made  ty  the 
Division  or  Subdivision  A.";ency  under  '"hose  jurisdiction  they  came.   It 
^"'as  ruled  also  that  employees  '^hile  rctually  engaged  in  inventory 
taking  could  be  classified  under  this  exception  "'here  such  '^'urk  could 
not  be  done  during  regular  hours. 

Article  VI,  Subsection  A  (S)  c,  'f/hich  excepted,  from  the  maxiinam 
hours  of  the  Code  temporary  employment  in  case  of  emergency,  was  inter- 
preted by  the  National  Control  Committee  October  10,  1933,  (*)  by 
way  of  limiting  "emergency"  to  such  events  as  fire,  flood,  tornado, 
accidents  to  ecuinment  and  the  like,  and  not  to  be  construed  as  covering 
such  matters  as  a  large  excess  of  orders  or  any  other  matters  under  the 
jurisdiction  of  the  Code. 

t.      '.'age  Provisions 

The  Code,  in  Article  VII,  specified  tvo  sets  of  basic  minimum 
wage  rates;  i.e.,  minima  for  various  divisions  and  subdivisions  ranging 
from  23  cents  to  45  cents  per  hour  on  territorial  and  population  bases; 
and,  '."here  no  such  specific  minima  applied,  a  .%'eneral  ::iinimam  of  40 
cents  per  hour. 

For  those  receiving  more  than  these  codal  minimum  rates  up  to 
$30  per  'reek,  it  '.■■'as  required  that  the  existing  vege   differentials  be 
maintained. 

It  vas  further  specified  that  the  minimum  compensation  for  '"orkers 
employed  on  a  piec^worK  or  contract  basis  must  not  be  less  than  the 
codal  minimum  '"age  for  the  number  of  hours  employed. 

Several  general  interpretations  were  made  of  Article  VII,  which 
prescribed  minimum  '-ages.   The  Resident  Committee,  on  May  25,    1934, 
and  the  National  Contrul'  Committee,  on  July.?,  1934  (**),  specified  that 
the  time  spent  by  an  engineer  in  getting  ready  for  the  day's  ""ork  prior 
to  starting  time  need  not  be  deducted  from  the  hours  of  regular  employ- 
ment nor  compensated  for,  provided  that  the  employee  be  not  required  to 
be  on  the  premises  for  a  perijd  "longer  than  that  for  ""hich  he  is 
compensated". 

The  National  Control  Comi'aittee,  on  July  2,   ,1934  (***),  ruled  that 
the  use  of  company  scrip  '."here  the  employee  '."as  unvdlling  to  accept  it 
'.•'as  a  violation  of  this  Article,  but  that  the  Authority  did  not  feel 
it  could  validly  object  tt)  the  payment  of  employees  in  company  scrip, 
provided  there  '"as  no  state  laF-  prohibiting  its  use,  and  provided  the 
employee  was  '-dlling  to  accept  at. 


(*)  Ibid, 

(**)  Lumber  Code  Authol-ity  Bulletin,  Vol.  II,  Nu.  51,  p,  1,  Aug.  3,  1934. 

(***)  Ibid,  same  page. 

9813 


-157- 


Article  VII,  Subsection  A  (l),  'iiich  required  that  the  minimam 
compensation  for  "'Orkers  employed  on  a  piece'."ork  or  contract  basis 
be  not  less  tnan  the  codal  rainiinura  wag-e ,  f  oi'  the  number  of  hours 
employed,  was  interpreted  oy  the  National  Control  Committee,  June  7, 
1934  (*)  to  be  a  matter  of  averages  rather  than  of  the  amount  earned 
in  any  one  day.   Payment  in  such  cases  vas  interpreted  as  a  question 
of  the  total  amount  earned  in  the  period  from  pay  day  to  pay  day.   The 
average  rate  of  the  total  amount  paid  for  '"ork  done  from  pay  day  to  pay 
day  could  nut  be  less 'than  the  minim'am  rate  specified  for  the  class  of 
work  performed. 

It  was  also  interpreted  (**)  tnat  any  person  subject  to  the 
jurisdiction  of  the  Code  who  employed  or  dealt  with  contractors  must 
not  only  provide  in  his  'contracts  for  code  compliance  but  must  take 
all  reasonable  steps  necessary  to  assure  such  comioliance. 

Article  VII,  Section  A  (c),  prescribed  that  the  ej4.isting  amounts 
bv  which  minimum  wages  in  the  higher  paid  classes,  up  to  workers 
recpiving  $30  per  week,  exceeded  minimum  x^ages  in  the  lowest  paid 
classes,  must  be  maintained.   This  was  interpreted  ijy  the  National 
Control  Committee  on  October  11,  1933  (***)  as  meaning  that  only  two 
figures  are  necessary  to  deterniine  the  "existing  amounts",  these  being 
the  minimum  wages  under  the  Code,  and  the  prevailing  "minimum  wages  in 
the  lowest  paid  classes"  at  the  time  the  Code  v/as  approved  by  the 
President.   The  difference  betvreen  the  t'"0  detetriined  the  amount  by 
which  wages  in  the  hign^r  nald  classes  in  effect  at  the  time  the  Code 
was  approved  must  be  increased  in  order  to  conform  to  the  provisions 
of  Article  VII  (a)  2, 

In  the  case  of  salaried  employees,  ac'cording  to  this  interpretation, 
the  weekly  or  monthly  '"^age  must  be  reduced  t'o  an  hourly  wage  by  dividing 
the  total  wage  by  the  average  number  of  hours  previously  worked.   The 
increase  per  hour  was  then  to  be  acde'd  to  the  hourly  '"age  and  the  new 
weekly  or  monthly  ^'age  ascertained  by  rmiltiplying  by  the  number  of  hours 
permitted  under  the  Code.   It  was  interpreted  that  the  Code  imposed  no 
reouirements  with  respect  to  the  maintenance  of  '"eekly  or  monthly 
earnings. 

It  was  also  interpreted  that  in  applying  this  section  tne  wages 

to  be  considered  were  the  prevailing  minimum  wages  paid  in  the 

particular  mill,  plant  or  factory  in  question,  or  that,  on  the  other 
hand,  the  application  might  be  broadly  applied  to  operators  '"ithin 

a  Division,  Subdivision  or  group.   It  was  interpreted  that  the  Code 

was  not  specific  in  this  respe.ct  and  was  subject  to  either  of  these 
interpretations  by  the  agency  of  the  Code  Authority. 


(*)    Ibid.  pp.  1  and  Z.  ■      ■       .  •    .   • 

(**)   National*  Control' Comniittefe 's  interpretation  oi  December  22,    1933 

in  Lumber  Code  Authority  Bulletin,  Vol,  I,  No,  1.-8,  P,  2,  May  29,  1934. 

(*♦*)   Lumber  Code  Authority  Bulletin,  Vol,  I,  No,  126,  p.  3,  May  29,  1934, 

9813 


-158- 


It  'f'a.s  farther  intei'preted  thet  "fr^^istiriif;  amounts"  as  used  in  this 
section  referred  to  the  differentials  in  cents  per  hour  bet'Teen  the 
lowest  and  the  hi,!j'her  psid  clp.-sses  rt   the  ti:ne  of  the  approval  of  the 
Code,  August  IS,  1933.   It  Tdll  be  noted  that  such  an  interpr'eta-tion 
is  quite  different  in  aripliortion  from  the  maintf-nance  of  differentials 
on  s  percentage  basis. 

l/'ith  reference  to  Article  VII,  (a)  3,  T-hich  prescribed  that  charges 
to  employees  for  rent,  boarc,  medical  attendance,  and  other  services 
must  be  fair,  it  vps   ruled  (*)  that  until  further  regulations  on  this 
subject  should  be  issued,  epcn  operation  '.".  s  recuired  to  advise  the 
appropriate  Division  agemcv  of  any  added  charges,  and  of  any  advances 
in  .the  charges  imrosed  on  e.'.ioloyees  for  such  services  since  the  a-opro'val 
of  the  Code,  together  with  su-DT3orting  evidence.   In  the  event  that  the 
Division  agency  was  of  the  opinion  that  the  advance  was  rot  justified 
or  tended  to  circumvent  the  Code  in  letter  or  m  spirit,  the  operator  vas 
to  be  recuired  to  amend  such  charges  to  comply  '"ith  the  .codal  reouirement 
that  they  be  "fair"  to ' employees, 

Vith  reference  to  the  question  as  to  ?.'hether  an  employee  could  be 
required  to  live  in  a  coraprnv-owned  house,  the  Resident  Committee  ruled 
on  May  ?5,  1934  (National  Control  Committee,  July  2,  1934)  (**)  that   . 
the  matter  of  bargaining  as  to  whether  or  not  an  employee  might  be-'re- 
quired  to  live  in  such  houses  as  e   pre-requisite  to  his  employment  was 
not  covered  by  the  Code,  but  that  if  rent  for  these  houses  was- excessive, 
such  charges  constituted  a  violation  of  the  Code. 

In  response  to  the  question  as  to  whether  deductions  from  wagfes 
might  be  made  by  employers  for  board  and  servicer;  if  such  services  were 
furnished  by  concessionaires,  the'  Resident  Committee  ruled  June  19,  1934 
(National  Control  Committee,  September  10,  1934)  (***)  th^t  the  Code 
Authority  had  no  jurisdiction  over  concessionaires  or'  their  methods  or 
means  of  collecting  their  charges. 

Article  VII  (B)  specified  that  minijiun  wages  could  not  be  less  than 
40  cents  per  hour  unless  in  any  Division  or  SrUbdivision  the  prevailing 
hourly  rate  for  the  same  class  of  employees  on  July  15,  19?9  was  less 
than  40  cents  per  hour,  for  which  cases  r-    schedule  of  rates  was  set 
forth.   This  provision  y-as  interpreted  by  the  National  C ontror  Committee 
October  10,  1933  (****)  as  merely  stating  the  principle  applied  o^r   the  ' 
Administrator  in  determining  the  minimum  rates  of  "-ages  specifically  ■■ 
set  forth  i-^  subsection  D  of  the  same  Article,  anc  therefore  not  tq  be 
applied  in  determining  wages  to  "be  paid  by  any  person  under  the  juris- 
diction of  the  Code. 


(*)     National  Control  Committee,  October  11,  li:i33.  Code  Authority 
Bulletin  Vol,  I,  No,  l"b,    F.  3. 

(**)  Lumber  Code  Authority  'ullttin.  Vol.  II,  No.  51,  p. 2,  Aug.  3,  1934. 

(***)  Lumber  Code  Auth.-rit'^  loilletin,  Vol.  II,  No.  :7,  p,l,  Nov,  15,  1934, 

(****)  Lumber  Code  Auth.^ritv  Bulletin,  Vol,  I,  No.  128,  p,3.  May  29,  1934, 

9813 


-159- 

9 .    Opergtion  o f  Code  Lr-bor  Pr ovisions 

Child  Labor  Pr  visiont; 

The  need  for  the  child  labor  restriction ' of  the  Code,  mentioned 
previously  in  conuection  with  general  laboi'  provisions,  was  shovm  earlier 
in  this  chapter.   It  was  seen  that  in  1930  there  were  ^^0,761  persons 
under  18  years  ot  a^^e  employed  as  lumbermen,  raftsmen,  v;ood  choppers  and 
in  saw  and  planing  mills,  4,528  of  these  being  between  the  ages  of  10 
and  15  and  the  balance  between  16  and  17  years  of  age.   The  need  for 
protecting  such  minors  was  eiiiphasized  by  the  records  of  the  National 
Safety  Council,  which  indicate  that  the  lumbering  industry  ranks  among 
the  most  hazardous  of  industries. 

The  codal  provision  prohibiting  the  employment  of  individuals  under 
18  years  of  age  with  certain  exceptions,  was  designed  to  meet  the. need  for 
the  orotection  of  minors.   Between  July  ?1,  1934  and  May  T7 ,    1935  the 
Compliance  Division  received  ?8  allegations  of  violation  of  this  provision 
of  the  Code,  representing  onlv  1.6  percent  of  all  allegations  received 
of  violation  of  all  labor  provisions.  Thus  it  appears  that  this  provision 
was  verv  generallyobserved,  (*) 

b.   Hourly  Provisions 

The  effect  of  the  codal  hourly  restrictions  on  actual  hours  worked 
is  a  matter  very  cifficult  to  deterraine,  owing  to  the  numerous  factors 
involved,  -which  are  principally  the  following:  (l)  the  failure  to  provide 
any  codal  restriction  of  daily  working  hours;  (2)  the  exceptions  to  the 
codal  maximum  work  week  and  the  provisions  in  certain  cases  for  averaging 
'•eekly  hours  over  an  entire  calendar  year;  and  (3)  production  control 
under  the  Code,  whicELpro viced  for  allotment  of  production  on  a  general 
basis  of  30  hours  per  week,  or  10  hoars  belov.'  the  general  codal  maxim-am 
v;ork-week,  ■  but  permitted  this  allotment  to  be  worked  out  on  a  quarterly 
basis,  thus  allowing  mills  to  produce  their  entire  allotment  as  rapidly 
as  desired,  subject  only  to  the  ''"eekly  restrictions  of  the  Code,   The 
influence  of  this  last  factor  in  reducing  hours  of  employment  telow  the 
level  permitted  by' the  Code. would  depend  upon  whether  the  individual 
operator  found  it  advantageous  to  work  out  his  entire  quarterly  allotment 
in  a  short  time  at  full  cooal  hours,  multiple  shifts,  or  both,  or  on  the 
other  hand,  whether  he  found  it  advantageous  to  ppread  his  quota  more 
evenly  over  the  entire  ouarter.   Just  how  this  i^orked  out  in  actual 
practice  can  not  be  accxiratelv  determined  at  this  time. 

The  fact  remains,  however,  thpt,  according  to  statistics  presented 
earlier  in  the  chapter,  average  hours  worked  per  week  in  the  sawmill 
brpnch  wer..  pbove  40  hours  for  the  months  of  1933  just  prior  to  the 
effective  aate  of  the  Code,  being  40.4  hours  in  May,  43,0  hoars  in  June, 
44,1  hours  in  July,  43,1  hours  in  August  (the  hour  provision  did  not 
become  effective  until  August  52'"  ,  whereas  for  the  Dplance  of  tne  year 


(*)   History  of  the  Code  of  Fair  Competition  for  the  Lumber  and  Timber 
Products  Industries,  NEA. ,  pp.  506,  507. 

9813 


-160- 


these  hours  decrep.sed  ?nd  never  Pgpin  ri.pched  the  40-h.yur  level  until 
after  tne  elimination  of  the  Code  in  1935, 

The  records  of  the  Liti'^rtion  Division  sho^vdng  the  number  of 
cases  of  Code  violatiim  beinj-"  pre-oared^  those  in  Court,  and  those 
closed,  are  of  little  or  no  help  ps  an  ino.ication  of  the  extent  of 
compliance  "'ith  the  hourlv  r)rovisions  of  tiie  Code,  inasmuch  as  violations 
of  such  provisions  v"ere  lumped  tOj^ether  -'-ith  other  violations  pn6    can 
not  now  be  sei^regated. 

The  follovinf';  analysis  of  violations  of  hourly  provisions  of  the 
Code,  found  in  the  files  of  a  Deputy  Aoministrat ':)r,  can  not  be  checked 
by  other  data,  but  may  be  helciul  principally  as  indicating;  the 
relative  volume  of  complaints  in  principal  -producing  areas  of  the  in- 
dustry.  It  is  possible  that  these  statistics  iierely  relate  to  violations 
chari^ed,  without  any  check  as  to  the  justification  of  such  charges. 


Ajialysis  of  Violations  of  tfourlv  Provisions 
■of  the  Code  charged  in  Complaints 
July  1  to  Decemoer  ^;t,  1934 

l^uraber  of  Percentage 

Producing  Area       Viola t ions  Charged  of  Total 

53.5 
13.9 
6.4 
12.8 
13.4 

Total  9S0  100.0 


Southern  Fine 

492 

Southern  and   ApDalachian 

IZS 

v.est   Coast 

59 

V.estern  Pine 

118 

All   Others 

1?3 

Source:    Code  Administration  Study,  Preliminary  Keport  on  Lumber  and 

Timber  '^x-oducts  Inductr/,  I.lnrch  30,  1935,  p.  147. 


It  will  be  seen  from  the  foregoing  table  that  more  than  half  of 
the  cora-claints  concerned  the  Southern  pine  area,  and  only  six  percent 
related  to  the  '..est  Coast,  /i-'estern  Pine  and  the  Southern  and  Appalachian 
areas  ranked  close  together  \''ith  13  and  14  percent,  respectively,  of 
the  total  complaints.  •      • 

c,   ./age  Provisions 

The  industry 'a  compliance  ^-'ith  the  Code  vpr.e   rates  '^as  initiall'/ 
quite  high.  (*)    In  some  Divlsijps  and  Subdivisions,  such  as  Hardv-ood 


(*)   History  of  the  Cxi  e  of  x'air  C.;!apetition  for  the  Luaber  and  Timber 
Products  Industries,  MIA.,  p.  ^-94.  .     .     ■     • 

9813 


-161-  ■ 

Dimension,  Northern  Hardvooc,  .oodwork  Livisiun,  , est  Coast,  Western 
Pine  and  other  Viectern  divisi''ns,  volantpry  cumpli-'nce  rith  these  pro- 
visions held  up  fairly  veil,  while  in  the  lerpe  and  influential 
divisions  of  the  lumber  manuf ecturin^^  branch  in  the  South  — such  as 
the  Southern  Pine  Division  and  the  Southern  Hr?rd"'Ood  Subdivision  — 
the  degree  of  compliance  declined,  steadily  in  the  face  of  continued 
lack  of  effective  action  in  the  field,  of  enf  orceiaent.   This  is  a 
matter  of  record  in  the  corre^spondence  iiles  of  the  of  x  ice  of  tne 
Deputy  Administrator  in  charge  of  the  Code, 


As  in  the  cp.se  of  violations  of  hourly  provisions  of  the  Code,  the 
following  analysis  of  violations  of  the  rage  provisions,   found  in 
the  files  of  a  Deputy  Administrator,  can  not  be  checked  by  o*her  data 
but  may  be  helpful  mainly  as  indicating  the  relative  volume  of  complaints 
in  principal  producing  areas. 

Analysis  jT  Violationa  of  Wage  provisions 
of  the  Code  charged  in«Complaints 
July  1  to  December  29,. 1^34 

Perdentage 
of  Total 

39.1 
33.7 

7.4 

3.4 

16.4 

Total  1,527  '     100.0 


Number  of 

Producing  Areas 

violations 

Southern  Pine 

£97 

Southern  and  A-ppalachian 

514 

Wer-t  Coast 

113 

Western  Fine 

52 

All  Others 

251 

Source:   Code  Administration  Study,  -reliminary  Report  on  Lumber  and 
Timber  Products  Industry,  /arch  30,  1935,  p.  147. 


The  foregoing  t«ble  indicates  that  the  Southern  Fine  and  Southern 
and  Appalachian  regions  together  accounted  for  nearlr  73  percent  of  the 
violations  of  wage  -Drovxsions  charged,  in  complaints,  y-hereas  the  west 
Coast  and  Western  ?ine  regions  accounted  in  the  aggregate  i or  only 
11  percent. 

The  Code  Authority's  attitude  toi-ard  these  wage  provisions  was  set 
forth  in  the  follorin^  testimony  by  David  T.  Mason,  Executive  Officer 
of  that  body,  before  the  Senate  Finance  Committee  on  Anril  16,  1935: 

"Lumber  Code  minimara  wage  rates*  for  most  ol  Western  United 
States  are  higher  than  those  set  in  most  other  codes  ....   Prior 
to  the  approval  of  the, Code,  minimum  ''ages  in  the  South  in  our 
industries  averaged  slightly  below  12  cents  per  hour.   The  Lumber 
Code  rhen   presented  to  NiiA  by  industry  representatives  on  July 
10,  1933,  placed  Southern  minimum  vr^c   ^ates  at  TO  cents  per  hour. 
General  Johnson  stated  th.-'t  ?0  cfntr-  "-as  ^'hollv  unacceptable. 

9813 


-162- 


The  industry  then  revised  t;j  c''~l/''    cents  and  so  stated  at  the 
public  hearing  beginning?  July  26,.  1933.,  In  the  ipjst-heoring 
conferences,,  under  pressure  x'rora  NBA,  the-  Southern  miniraun  vas 
raised  to  23  cents,  or  m^jre  than  100  per  cent,  above- the  pre- 
viously prev-i'' irf:  average  j.iirji  lum  .  ..  .  Since  the  p-nproval  of 
the  Code  many  .com-olaints  have  corae  in  that  the  Code  is  ODpressive 
and  destructive  of  small  enterprises  in  the  South,  because,  as 
is  asserted,  the  ..lininxuia,  vage  rate  is  too  high. 


"Lack  of  effective  enforcement  of.  the  raininrara  "^age  rate  in 
the  South  is  the  niust  important,  cause  contributing  to  the  nresent 
crisis  of  the  Lumber  Code." 

Vi'ith  reference  to  the  allegation  referred  tu  aoove,  that  tne  Code 
was  oppressive  and  destructive  to  small'  enterprises' i"n.;  the  South,  it 
should  be  noted  that  the  sprae  testiiaony  stated  that  the  ii'ederal  Trade 
Com.nission  made  an  irvestigation  of  the  situatiuh  ir  the  South  and  on 
ivlay  7,  1934  reported  in  effect,  that  the  o-^errtion  of  the  Code  ':'as  not 
discriminatory  against  small  enterprises. 

This  testimony  also  indicated  that  the  Coda  renresented  an  effort 
to  restore  1929  minimum  haarly  '^'age  rates,  and  that  this  standard  '"as 
followed-,  excepting  in  certain  parts  of  the  country  where  such' 1929  rates 
v^rere  below  30  cents  per  hour,  in  rhich  cases  the  Code  rates  rere  estab- 
lished at  a  level  higher  than  in  1929,   It  wps  claimed  that  the  result 
for  the  whole  industry  was  an  average  mini^oura  '-^ge  rate  higher  than  at 
any  time  since  1920. 

In  estimating  the  effect  of  the  Code  on  hourly  '-age  rates  and 
weekly  earnings  in  the  industry,  the  following  data,  which  were  pre- 
sented in  a  more  detailed  table  earlier  in  the  c/.a'oter,  may  be  helpful: 

Average  Hourly  wage  Bates  and  Average  Weekly 
Earnings  in  the  Lumber  Industry  (3p"'':.iills) 
in  the  west  and  South- 


Average 
Hour ly  Vage  Hat e s 


Average 
Ueekly  i]arnings 


Period 

Y^est 

b/ 
South 

\-»  est 

b/ 

South 

1933 

July  Average 
December  Average 

$0,366 
.530 

$0,150 
.290 

$13.40 
13.83 

$6.80 
8.44 

1934      ,  ,  . 

Average  first  10  : 

ionths 

.548 

.295 

17.76 

8.70 

Source:   Research  and  Flanning  Tdvician,  llT\k,    ne,0'.-rt  entitled  "Hours, 
V.'ages  and  ■Em-Dlo.''ment",  prepared  for  hearings  on  employment 
provisions  of  codes,  Januar/,  193;':,  p.  58. 


9813 


-163- 


a/   Includes  Orec:;on  and  WnshinjErton, 


b/   Includes  Alabama,  I'^loridr,^  Geoi'gia,  wlississippi,  North  Carolina, 
South  G arolina,  Virginia,  Arkansas,  Louiriana  and  Texas, 


The  preceding  table  indicates  that  average  hourly  wage  rates  during 
the  first  ten  months  of  1934,  all  under  the  Code,  were  $0,548  in  the 
Vifest  and  $0,295  in  the  South.   These  rates  reprecented  increases  over 
July,  1933,  just  prior  to  the  Code,  of  apDroximately  16  cents  in  the 
'Vest  and  15  cents  in  the  South,  and  in  terms  of  percentage  ^ere  nearly 
50  percent  and  97  Dercent,  respectively,  above  the  Tsre-code  level. 

The  fore:?;oing  statistics  also  show  that  the  average  weekly  earnings 
in  July,  1933,  were  $13.4)  in  the  West  and  $6.bO  in  the  South,  and  that 
for  the  first  ten  months  of  1934  these  earnings  increased  to  $17,76 
and  $8.70,  respectively.   In  terras  of  money  these  gains  were  $4.36 
and  $1,90  for  the¥&stand  South,  respectively,  but  in  terras  of  percentage 
the  increases  were  more  nearly  equal,  being  approximately  33  per  cent 
for  the  Wect  and  28  per  cent  for  the  South. 

The  fact  that  during  the  codal  period  under  discussion  average 
weekly  earnings  increased  to  a  lesser  degree  than  average  hourly  wage 
rates  was  due  to  the  decreased  working  week  in  1934. 


9813 


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G.   PRODUCTION  COUTROL 

In  previous  sections  some  of  the  problems  of  timber  supply  liquida- 
tion have  been  discussed,  and  as  a  bnsic  coiiclusion  it  wps  stated  that 
both  the  public  and  the  forest  industries  have  an  interest  in  seeing  that 
ample  supplies  of  forest  products  are  dontiriually  available  at  reasonable 
prices  and  that  stability  of  emplo;,mient  through  irdustry  prosperity  is 
maintained.   The  removal  of  nil  possible  obstacles  to  that  result  is  the 
obligation  of  both  the  industry  and  the  public. 

Although  any  prediction  of  future  forest  product  requirements  is 
largely  speculative,  sufficient  facts  are  available  to  clearly  indicate 
that  a  timber  famine  is  im.probable  if  conditions  and  trends,  reasonably 
comparable  to  those  of  the  past  ten  years,  are  continued.   This' does  not  • 
mean  that  reasonable  care  should  not  be  taken  of  the  National  forest  and 
commercial  forest  areas,  in  the  interest  of  both  the  industry  and  the 
public,  nor  that  shortage  of  certain  species,  if  not  complete  exhaustion, 
are  not  likely  to  occur.   It  does  mean,  however,  that  the  forest  problem 
in  the  United  States  as  a  whole  is  not  one  of  timber  shortage  but  rather 
one  of  proper  protection  and  management  of  the  forest  areas,  including 
adjustment  of  production  of  forest  products  betv;een  and  v;ithin  the  various 
regions  so  as  to  secure  the  best  results  from  existing  forest  growing  stock. 

In  the  begining  the  most  available  timiber  was  converted  into  lumber, 
which  meant  low  production  cost.   These  costs  increased  as  the  industry 
continued  its  logging  operations  in  continuously  widening  circles  and  had 
to  go  farther  ahd  farther  back  in  rougher  country  to  m.eet  the  timber. 
As  the  areas  of  virgin  timber  began  to  fall  in  availability  new  forest 
areas  were  opened  up  farther  away  from  the  market,  thus  increasing  the 
cost  of  delivery  which  in  some  cases  became  as  great  as  the  total  of  all 
other  costs. 

Thus  the  industry  was  faced  with  two  alternatives,  either  to  get  a 
higher  price  for  the  products  or  to  reduce  cost  through  more  efficient 
methods  of  manufacture.   And  both  courses  were  resorted  to.   The  quality 
of  the  product  was  improved  nnd  logging  and  milling  methods  were  revised 
to  produce  at  a  lower  cost.   In  spite  of  these  efforts,  the  increasding 
cost  of  holding  timber  due  to  interest,  ta.ces,  and  other  carrying  charges, 
necessitated  such  a  high  price  for  the  products  that  many  substitutes  were 
able  to  successfully  compete  with  lumber,  and  made  possible  the  exploitation 
of  young,  immature  timber  which  had  been  left  uncut,  or  had  grown  up  after 
previous  cuttings  over  the  sam.e  areas. 

Up  to  about  1921-19?3  Inomber  prices  were  generally  increasing  thus 
compensating  in  part  for  the  higher  production  costs.   About  this  time, 
however,  the  competition  of  other  materials  became  acute,  with  the  result 
that  lumber  prices  could  no  longer  be  maintained.   Furthermore,  stumpage 
prices  began  to  decline  for  the  first  time  in  history.   Thus  many  units 
of  the  industry,  faced  with  steadily  mounting  carrying  charges  found  them- 
selves forced  to  a  policy  of  liquidating  tneir  areas  of  standing  tim.ber 
almost  without  consideration  of  either  the  ability  of  the  market  to  absorb 
the  manufactured  products  or  of  its  cost.  Up  to  the  time  that  the  Lumber 
Code  became  effective  the  industry  in  ^;cenernl,  through  pressure  of  various 


9813 


-165- 

economic  forces,  was  virtually  coimDelled  to  adar)t  its^-lf  to  this  -Droce- 
dure. 

There  were  many  deviations  from  the  T,l)ove- cited,  long  trend.   For 
examiDle,  whenever  a  satisfactory  rrice  TDOsition  was  reached  new  manufac- 
turing facilities  would  enter  the  nroductinn  field  and  existing  ones 
would  "be  increased  in  cacacity.   Overoroduction  would  th^n  inevitably  ■ 
follow,  with  a  resultant  nrice  drop,  again  forcing  the  high  cost  opera- 
tions to  ciose  down  and  stay  down  until  curtailed  Toroduction  and  in- 
creased prices  permitted  them  to  again  operate  their  clants. 

All  of  these  factors  have  ijlayed  a  Toart  in  removing  incentives  to 
large  concentrations  of  ownership  and  toward  the  hreaking  utd  of  large 
tracts  into  a  multitude  of  smaller  ownershin  interests  with  decreased 
feeling  of  resTDOnsibility  for  eliminating  excess  mill  ca-oacity  and  over- 
production. 

The  era  -orior  to  1923  was  also  one  of  lessening  of  virgin  timher 
sunply  in  the  main,  -oroducing  region  of  Southern  -oine,  which  made  it 
economically  xiossihle  for  the  West  Coast  operations  throiogh  exranding 
use  of  the  Panama  Canal,  to  enter  the  Eastern  market  and  unload  some  of 
the  products  of  the  tremendous  mill  ca-oacity  which  they  had  developed. 
By  1929  they  had  wrested  the  suDremaCy  of  -oroduction  from  Southern  pine, 
tut  the  pressure  exerted  hy  their  invasion  had  forced  T5rices  down  from 
the  former  level  and,  it  was  claimed,  "below  the  cost  of  iDroduction. 
With  the  continued  decline  of  x>rice  and  surplus  of  unsold  stocks  of 
lumber,  accentuated  by  the  deiDression,  the  demand  for  -croduction  control 
and  coincident  price  control  became  insistent. 

This  can  be  attributed  to  two  na.jor  conditions:  (l)  the  ownership 
of  large  tracts  of  virgin-  tinber  in  the  hands-  of  -oeoDle  who  were  either 
unable  to  carry  it,  or  to  whom  it  wa.s  nroving  a  burdensome  -Droblera, 
and  who  in  innumerable  cases  were  manufacturing  the  timber  into  a  loroduct 
which  the  market  did  not  demand,  and  conseauently  were  sacrificing  their 
investment  without  corres-oonding  accrual  of  benefits.   This  was  nrevar- 
lent  over  Large  areas  and  involved  millions  of  acres  of  timber;  (2)  the 
loremature  cutting  and  destruction  annually,  •  of  millions  of  acres  of  yotaig 
ttuber   vhAch  was  not  large  enough  id   produce  good  lumber,  having  been 
held  through  the  period  of  the  least  volume  growth  and  was  being  manu- 
factured instead  of  being  allowed  tb  reach  maturity. 

Both  of  these  conditions  raised  the  need  for  effective  relief  for 
the  holders  of  the  timber  who  in  the  past  had  been  forced  to  cut  to 
realize  cash  far  accumulating  interest  and  taxes,  and  to  obtain  a  live- 
lihood from  their  holdings.   In  view  of  the  need  of  the  holders  of  this 
,  .timber  to  cut  and  -oroduce,  and  in  order  that  the  -nressure  of  liquidation 
may.  npt  in  the  future  cause  the'  distress  attendant  on  the  overoroduction 
of  the  past,  with  the  corresnonding  decline  in  price,  some  sort  of  nro- 
duction  control  would  seem  necessary.   In  view  of  the  multitude  and 
diversity  of  ownershi-o  interests,  and  tyoes  of  ODerations  engaged  in 
the  production  of  lumber  and  the  difficulties  of  maintaining  an  ade- 
quately balanced  su-p-oly  it  can  be  seen  that  it  is  a  very  difficult  prob- 
lem to  effectually  protect  our  forests  from  wasteful  and  .premature  cut- 
ting and  destruction  and  provide  for  conservation  of  our  National  Resource, 


9813 


-166- 

The  subject  of  control  of  -Droduction  has  teen  decreased  ty  the 
industry  for  many  years  but  the  nrohlem  did  not  attain  sizeable  BroiDor- 
tions  \intil  1924,  at  which  time  the  West  Coast  -oroducing  rea-ion  with  its 
tremendous  "sUTDnly  of  virgin  timber  and  its  extensive  mill  car)acity, 
shipping  throU(?;h  the  ranama  Canal,  began  to  dominate  the  eastern  market, 
and  the  lack  of  earninjers  of  this  industry,  as  com-oared  with  others,  be- 
came recognized  and  was  larf-'oly  attributed  to  overuroduf tion.   In  Novem- 
ber, 1925,  a  movement  to  consolidate  a.  •considerable  nunberof  mill  and 
timber  owning  comtDanies  was  s-nonsored  by  a  member  of  West  Coast  onera- 
tors  renresentinu?  an  estimated  30  ver   cent  of  the  -oroduction  of  Douglas 
fir,  backed  by  BaVer,  Fentress  8r   ComiDany,  The  Commercial  Trust  and 
Savings  Bank  of  Chicago,  and  Dillon,  Reed  &   Cbmnany,  of  Hew  York,  By 
the  time  the  details  of  this  merger  became  public,  a  number  of  other 
mergers  were  being  proposed  and  discussed,  but  ao  a  result  of  careful 
investigation  it  was  found  that  profits  in  the  industry  were  decreasing 
to  such  an  extent  that  there  would  be  no  Drobability  of  servicing  and 
retiring  the  securities  necessary  to  finance  any  merger,  and  the  plajis 
were  dropped.  This  subject  was  again  brought  up  in  1931,  with  the  same 
result. 

About  this  time  the  Oil  and  Coal  industries,  ind'^'oendent  of  each 
other,  and  of  the  Lumber  Industry,  were  seeking  TDroduction  contrail  of 
some  sort  both  in  the  States  and  nationally  and  it  may  be  that  what 
they  weie  doing  had  at  least  a  suggestive  effect  UDon  the  Lumber  Indus- 
try. At  any  rate  conversations  in  regard  to  control  began,  and  continued, 
until  early  in  192f\,      Then  came  into  being  The  Committee  of  Fifteen, 
the  membershiis  consisting  of  outstanding  lujTiber-men  from  the  West,  South, 
and  Lake  States,  to  formulate  plans  for  -orpduction  control.  Among  the 
plans  evolved  was  one  for  a  Director  General,  as  in  organized  baseball 
or  in  the  Moving  Picture  Industry,   The  resTilt  of  work  of  this  Comnittee 
was  intangible  but  at  least  made  the  industry  more  conscious  of  the 
problems  before  them  clamoring  for  solution. 

In  the  period  immediately  following,  many  other  plans  were  discussed 
and  worked  on,  one  of • which  was  the  attempt  by  the  National  Lumber  Manu- 
facturers Association  in  1928  to  affiliate  with  the  Coal  and  Oil  indus- 
tries to  obtain  legislation  for. the  control  of  production  as  a  natural 
resource,  which  overture  was  rejected  by  the  Coal  and  Oil  Industries.- 
Other  major  plans  were  The  Holding  Company  Flan  in  1928;  The  Hardwood 
Conservation  Flan  in  192R;  The  West  Coast  Advisory  Plan  in  November, 
1929;  The  Compton  Plan  in  1930;  Southern  Pine  Curtailment  Plan  in  1931; 
and  the  Fir  Stabilization  Flan  in  1932.   That  the  Government  recognized 
the  problem  is  shown'  in  the  U.  S,  Tiriber  Conservation  Board  report  in 
1930e  (the  "Copeland"  report  generally  referred  to  as  Senate  Document 
No.  12,)  and  by  the  fact  that  steps  were  taken  to  relieve  the  situation 
by  the  starting  of  the  Federal  acquisition  of  timber  lands  in  1931. 
Mention  should  be  made  of  the  Wisconsin  Stabilization  Agreement  pporaiil- 
gated  in  1931,  for  the  control  of  production,  under  State  sanction. 

All  available  material  clearly  shows-  that  many  operators,  probably 
a  majority  of  those ' involved,  approved  the  above-cited  plans,  but  that 
always  a  few  large  oi'terators  "who  never  cooperated"  either  objected  or 
failed  to  assist  and  caused  the  abandonment  of  these  plans. 


9813 


-167- 

In  March,  1932,  agitation  'be+'an  among  a  number  of  industries, 
including  the  Lumber  Industry,  fbr  i*elief  from  the  anti-trust  acti   In 
the  Lumber  Industry  apioarently  the  motivating  force  was  the  desire  to 
control  production.  The  idea  seemed  to  many  lumbermen  to  be  so  fair, 
so  easy  to  put  into  effect,  and  so  beneficial  to  the  t)ublic,  as  well 
as  to  private  lumber  interests,  that  tney  began  to  fe=3l  certain  that 
it  would  settle  most  of  their  -crobleins  find  that  the  entire  industry  had 
concentrated  on,  and  apTjroved  it.   During  this  period  at  least  two  types 
of  control  were  considered,  one,  a  Commission  to  be  appointed  by  the 
President;  and  the  other  a  Joint  committee  composed  of  five  members  each 
of  the  House  of  Representatives,  and  of  the  Senate.  Legislation  was 
proposed  along  these  lines  but  never  passed. 

A  complete  description  of  each  of  these  proposals  has  been  prepared 
by  former  Deputy  Administrator  A.  C.  Dixon,  and  is  attached  as  Appendix 
III  of  this  report. 

The  need  and  demand  for  production  control  was  further  intensified 
by  the  continued  reduction  of  per  capita  consumption  of  lu-nber  which, 
as  shown  in  previous  sections  of  this  report,  declined  steadily  from 
525  feet  in  1906,  to  90  feet  in  1934. 

The  opportunity  to  make  effective  the  plans  and  hopes  of  the 
industry  for  production  control  came  in  1933,  under  the  NSA,  when  in- 
dustry was  invited  to  present  their  plans  for  cooperation  between  in- 
dustry and  Government  under  Codes,  and  as  one. of  the  features  of  the 
Lumber  Code,  Article  VIII,  entitled  "Production  Control"'  w'as  approved 
in  Code  No.  9,  on  August  19,  1933. 

The  Code  in  part  provided  as  follows: 

_  "This  is  an  undertaking  in  industrial  self-government 
under  such,  public  sanctions  as  are  necessary  to  carry 
out  in  the  lumber  and  timber  products  industries  the 
purposes  of  the  National  Industrial  Recovery  Act,   It 
is  the  declared  purpose  of  the  lumber  and  timber  prod- 
ucts industries  and  the  adherents  of  this  Code  to  re- 
duce unemployment  in  the  industries  reported,  improve 
standards  of  labor,  maintain  a  reasonable  balance  be- 
tween production  and  consumption,  restore  prices  to 
levels  which  will  avoid  further  depletion  and  destruc- 
tion of  capital  assets,  and  to  conserve  forest  resources 
and  bring  about  sustained  yield  from  the  forests. 

The  applicant  organizations  shall,  with  the  approval  of 
the  President,  establish  and  empower  a  suitable  agency 
.,  named  "Lumber  Code  Authority,  Incoi*porated"  hereinafter 
referred  to  as  the  authority  to  administer  this  Code  in 
conformity  with  the  provisions  of  the  National  Industrial 
Recovery  Act  under  the  authority  of  the  President. 

The  Authority  shall  issue  and  enforce  such  rules,  regular 
tions,  and  interpretations,  and  impose  upon  persons  subject 
to  the  jurisdiction  of  this  Code  such  restrictions  as  may 


9813 


-168- 

V  "be  necessary  to  ef-fectiiate  the  TDuroos'es  and  enfor-'pe  the 
.,  provisions  .  of  .  this  Code.         •■[■'^-./-c;  .  •  .•.•:''"'^; 

The  Authority  may  delegate  to  said  a^rencies  all  necessary 
power  and  authority  for  the  administration  of  this  Code 
within  the.  Divisions  and  Subdivisions,  including;  the 
adoption  of  Divisions  and  Subdivisions  code  -orov.isions 
within  the.  scope, of  the  power  granted  under  this  Code  and 
not  inconsistent  with  it;  but  the  Authority  shall  reserve 
the  power  and  duty  to  enforce  the  provisions  of  this  Code. 

The  Authority  shall  make  such  reports  as  the  Administrator 
may  require,  .xieriodically  or  as- often  as  he  may  direct. 

Any  decision,  rule,  regulation,  order  or  finding  made  or 
course  of  action  followed  pursuant  to  the  provisions  of 
this  -Code,  may  he  cancelled  or  modified  by  the  Administrar- 
to.r  whenever  he  shall  determine  such  action  necessary  to 
effectuate  the  -Drovisions.  of  Title  I  of  the  National 
Industrial  Recovery  Act.    . 

Any  interested  TDarty ,  shall  iiav-e  the  right  of  comt)laint 
to  the  Authority  and  of  -crompt -hearing  and  decision 
thereon,  under  such  rules -pnd^ regulations  as  it  shall 
prescribe,  in  respect  of  any  decision,  rule.,  re^^lation, 
order,  or  finding  made;  by ^ the  Authority. 

It  also  -prcvided  for  a  maximum  work  day  of  eight  hours  and 
week  of  40  hours  with  certain  cxoections  for  all  sections,  whereas, 
it  had  been  shown  by  testimony  at  -oublic  hearing  that  usual  hours  were 
60  in  the  South  and  48  in  the  West.  •'  ■  :   ' 

Minimum  wages  were  established  which  in  some  sections  were  four 
times  those  previously  paid.  --  i 

Production  control -was  -orovided  for  with  certain  specif ic-  rules,  as 
were  minimum  prices.   The  major  point  which  it  is  desired  to  emphasize 
is  that  of  the  complete  delegation, of  power  to  the  Code  Authority,  (and 
their  right  to  redelegate  this  power  to  their  agencies)  of  interpreting 
the  Code,  making  of  rules  and  regulations,  and  enforcing  .them,  with  the 
reservation  to  NRA  only,  as  contained  in  Article  IT,  to: require  reports, 
and  in  Article  XII  (b)  to  cancel  or  modify  actions  of  the  Authority. 

Following  this  delegation  of. power  the  Administration  did  not  set 
up  any  machinery  by  which  it  could-  be  automatically  apprized  as  to  how 
the  details  of  the  production  control  plan  were  working.  "'When  asked 
for  certain  data  by  the  Administra,tion  pertaining  to  timber  ownership 
the  industry  held  that  it  could  not  give  out  facts  which  had  been  col- 
lected from  members  with  a  pledge  that  they  wotild  be  held  confidential. 
The  failure  to  register  in  any  one  place  full  data  on  the  issues  which 
arose  and  the  way  in  which  they  were  handled,  created  uncertainty  on 
the  part  of  the  NEA  Administration  as  to  how  the-  plan  was  jurorking  out 
in  practice.  ; , .  ... 


9813 


-169- 

Judgment  regarding  the  functioning  of  administrative  machinery 
must  te  iDased  mainly  on  indirect  evidence  except  for  the  few  cases  sub- 
sequently recited.   There  are  no  data  availaljle  which  would  show  in  a 
comprehensive  way,  on  a  quantitive  1)3318,  how  production  control  af- 
fected the  business  of  the  individual  operator. 

It  has  teen  impossible  to  accurately  determine  the  volume,  or 
character  of  complaints  against  production  control,  or  the  manner  in 
which  decisions  were  rea.ched  by  local  authorities  exce-ot  for  the  few 
cases  which  reached  the  N.RA  Administration  on  appeal ,  and  which  are 
covered  in  detail  later  on  in  this  chapter. 

There  can  be  no  question  as  to  the  magnitude  of  the  prohlems  in- 
volved in  this  undertaking  hy  the  Lumber  Code  Authority  of  control  of 
production. 

In  view  of  the  hroad  field  covered,  with  approximately  20,000 
operators,  a  producing  lumber  capacity  approximately  four  times  produc- 
tion, a  proportionately  large  inventory,  and  species  or  inter-divisional 
competition. 

Any  attempt  to  control  whether  hy  industry  or  Government  was  "bound 
to  result  in  some  friction  and  inequities. 

As  previously  stated  no  provision  was  made  for  keeping  the  Adminis- 
tration informed  as  to  the  Details  of  actions  of  the  Code  Authority  on 
this  subject  and  not  much  is  known  as  to  what  happened  except' for  the 
few  cases  following  which  were  appealed  to  the  Administration  or  called 
to  their  attention.   In  view  of  the  problems  involved  the  number  of 
known  cases  are  surprisingly  few  and  it  is  not  the  intent  to  place  undue 
stress  on  them,  rather  merely  to  report  them  as  evidence  of  the  troubles 
resulting  from  the  kind  of  system  the  MA  and  industry  created. 

There  is  no  doubt  that  the  difficulties  surroiinding  the  establish- 
ment of  production  control  on  such  a  far-flung  industry  were  realized, 
as  in  all  the  meetings  and  conversations  prior  to  this  date  the  subject 
had  been  sufficiently  discussed.   So  the  rules  as  set  forth  in  Article 
VIII  were  the  result  of  much  planning,  and  not  an  immature  concept,  when 
the  industry  proceeded  to  put  them  into  effect. 

The  position  of  the  Authority  was  promptly  defined  as  outlined  in 
Article  I ,  as  that  of  industry  self-government,  and  it  was  early  ruled 
by  the  Code  Authority  that  the  method  of  appeal  from  any  action  of  the 
Code  Authority  should  be  as  set  forth  in  Article  XVII,  progressively  to 
'"he  Subdivision,  Division,  Authority,  and  then  to  the  Administrator. 
In  the  early  days  of  the  Code  all  complaints  and  appeals  reaching  the 
Administration  were  forwarded  to  the  Code  Authority  to  answer  and  handle, 
but  later  were  acknowledged  by  the  Deputy  Administrator,  advising  appel- 
lants to  take  their  problems  direct  to  their  governing  body.   It  can 
readily  be  seen,  with  the  purpose  of  the  Code  Authority  to  (as  they  so 
often  term  it)  "wash  their  dirty  linens  in  private"  and  with  the  assent 
of  the  Deputy  Administrator  to  this  procedure,  coupled  with  the  expense 
and  lengthy  controversy  of  carrying  a  protest  through  to  the  Administra,- 
tor,  why  so  few  formal  complaints  ever  came  before  the  NRA  officially. 


9813 


-170- 

The  foregoing  'background  is  necessary  to  the  discussion  of  Article 
VIII  of  the  Code  entitled  "Production  Control." 

The  Assistant  Administrator  Dudley  Gates  in  renorting  on  the  Code, 
stated: 

"On  the  assuTn-otion  that  interindustry  coin-Detitive 
equilibrium  will  "be  maintained,  and  increase  in  volume 
of  sales  permitting  an  increase  of  about  50  vev   cent  over 
recent  rates  of  -oroduction  would  "be  necessary  to  restore 
employment  to  as  many  rersons  as  were  occunied.  with  lumber 
and  timber  products  industries  during  1920.  About  65  ner 
cent  of  the  total  lumber  production  is  absorbed  by  the  con- 
struction industry,  therefore,  sustained  improvement  in  the 
l\imber  industry  cannot  be  expected  apart  from  revival  of 
building  construction." 

This  revival  of  business  activities  did  not  materialize,  thus  making  the 
problems  of  production  control  even  more  acute. 

"There  are  now  some  20,000  sawmills  in  the  United  States 
of  which  more  than  15,000  are  small  enterprises  whose  mills 
are  valued  at  less  than  $5,000  each.   The  Code  as  recom- 
mended contemplates  their  continued  operation  and  guarantees 
free  access  to  the  market  to  new  enterprises  subject  to  the 
same  limitations  as  are  applicable  to  those  already  in  the 
market." 

The  provisions  for  the  granting  of  allotment  to  any  person  upon  request 
and  evidence  of  ability  to  operate,  and  the  high  levels  of  prices  estab- 
lished held  out  a  promise  of  lara-e  profits  resulting  in  the  establishment 
of  some  95  new  large  mills  each  with  annual  capacity-  of  five  million  feet 
or  over  and  a  great  number  of  small  mills  variously  estimated  as  high  as 
five  thousand  in  Southern  Pine  territory  alone »     ,   , 

In  order  to  prevent  flooding  the  markets  through  this  potential 
production  the  Authority  was  forced  to  cut  down  the  quota  to  each  opersr- 
tor  for  each  succeeding  Quarter  during  the  expiration  of  the  Code.  As 
an  example,  the  Hardwood  Division,  which  reported  a  great  increase  in 
new  mills  was  able  to  allocate  but  1,100  hours  per  mill  for  the  entire 
year,  1934. 

Assistant  Administrator  Dudley  Gates,  who  conducted  the  public  hear- 
ing on  this  Code,  reported  to  the  Adrainistratoi-  as  the  x-easons  for  the 
inclusion  of  this  Article:  (l)  "Logging  and  sawriiii.  activities  have  con- 
tinued at  a  low  level  for  so  protracted  a  period  of  time,  and  capacity 
is  so  greatly  in  excess  of  even  the  enlarged  operations  of  recent  months, 
that  control  of  proiuction  is  imperative  if  renewed  a,nd  .accentuated 
deToralizP.bion  of  'the  industry  are  to  be  avcidnc^''  and  (2)  "the  excess 
volirae  of  1-ojnber  produced  without  regard  to  demand  ib  responsible  for  the 
demoralized  price  and  selling  below  cost." 

The  principal  arguments'  developed  at,  the  hearing  against  production 
control  were  that  the  plan  was  difficult  of  equitable  administration, 
that-  its  execution  would  inevitably  fall  into  the  hands  of  large  operators, 

9813 


-171- 

and  also  that  without  control  over  the  erection  of  new  mill  caT:acity  it 
would  iDe  .extremely  difficult  to  make  such  control  effective.   However, 
despite  the  latter  argument,  Article  VIII,  provided  that  each  -oerson 
known  to  "be  in  operation  was  entitled  to  an  allotment  for  -oroduction, 
and  that  any  person  desiring  to  operate,  uPon  evidence  of  ability  to  so 
do,  should  te  eligible  to  join  the  ranks  of  producers. 

It  will  be  observed  that  the  Lumber  Code  is  specific  in  its  numer- 
ous production  control  mandates  as  included  in  Article  VIII,  which  for 
the  purposes  of  this  report  is  quoted  in  part  as  follows: 

"The  Authority  shall  determine,  and  from  time  to  time  revise, 
not  less  frequently  than  each  three  months,  estimates  of 
expected  consumption  including  exports,  of  lumber  and  timber 
products  of  each  Division  and  Subdivision;  and  based  thereon 
it  is  empowered  to  establish,  and  from  time  to, time  revise, 
production  quotas  for  any  Division  or  Subdivision  of  the 
Lumber  and  Timber  Products  Industries. .  Allotments  within 
each  Division  and  Subdivision,  for  the  persons  therein,  shall 
be  made,  sub.ject  to  the  supervision  of  the  Authority,  by  the 
agencies  designated  by  it.  Said  quotas  as  tetween  such  Divi~ 
sions,  or  Subdivisions  shall  be  in  proportion  to  the  shipments 
of  the  products  of  each  during  a  reprGraiitlWve  cocant-  past 
period  to  be  determined  by  the  Authority. 

Each  person  in  operation  shall  be  entitled  to  an  allotment. 
Each  person  known  to  any  Division  or  Subdivision  agency  to  be 
in  operation  shall  be  registered  by  such  agency  immediately 
and  shall  be  assigned  an  allotment.   The  agency  shall  also 
immediately  give  public  notice  reasonably  adapted  to  reach 
all  persons  operating  or  desiring  to  operate,  stating  the 
date  on  which  the  allotments  will  be  determined;  and  any  per- 
son desiring  to  operate  who  shall  give  the  agency  Trritten 
notice  of  such  desire  ten  days  before  the  allotment  date, 
supported  by  accr^ptible  evidence  of  ability  to  operate,  shall 
be  registered  by  the  agency  and  assigned  an  allotment.  Any 
person  so  registered  shall  be  deemed  an  "eligible  person" 
for  the  purpose  of  this  Article, 

The  allotment  for  each  eligible  person  shall  be  determined 
from  time  to  time  for  a  specified  period  not  exceeding  three 
(3)  months  and,  except  as  anywhere  permitted  under  the  provi- 
sions of  Section  (d)  hereof,  shall  be  as  follows: 

The  basis  for  determinatio.n  of  Division  and  Subdivision  quotas 
and  of  individual  allotments  and  any  revisions  thereof,  all 
quotas,  all  allotments,  and  all  appeals  therefrom  and  all 
decisions  on  appeals  shall  be  published. 

Allotments  from  two  or  more  Divisions  or  Subdivisions  to  the 
same  person  shall  be  separate  and  distinct  and  shall  not  be 
interchangeable.  Allotments  shall  not  be  cumulative  except 
as  authorized  in  specific  cases  under  Section  (d)  I  of  this 
Article,  or  in  cases  of  seasonal  operations  of  a  Division  of 
Subdivision  under  Section  (d)  (s)  of  this  Article,  and  shall 


9813 


-173- 

-  not  be  transferable  eTtCP-ot  as  between  operations  under  the 
same.  ownershiiD  within  the  same  Division  or  Subdivision. 

Whenever  in  the  case  of  any  eligible  -oerson  it  shall  be 
necessary  in  order  to  accent  and  execute  orders  for  report, 
to  have  an  addition  to  his  re^lar  allotment,  provision  for 
such  necessary  excess  shall  be  made  by  the  Division  or  Sub- 
division agency,  provided  that  any  excess  above  his  allotment 
shall  be  deducted  from  his  subsequent  allotment  or  allotments. 

The  Authority  shall  issue  interpretations  and  shall  promulgate 
rules  and  regulations  necessary  for  the  enforcement  of  this 
Article,  to  prevent  evasion  and  sec\ire  eauitable  application 
thereof,  and  assign  quotas  to  each  Division  and  Subdivision 
which  shall  become  effective  on  the  dates  specified  by  the 
Authority.  Each  Division  and  Subdivision  shall  assign  allot- 
ments to  all  eligible  persons  effective  on  the  dates  specified 
by  the  Authority." 

As  quoted  above,  it  was  specifically  provided  that  the  Code  Authori- 
ties should  determine  expected  consumption  and,  based  thereon,  establish 
quotas,   liio  application  of  this  provision  immediately  resulted  in  trouble. 
If  strict  interpretation 'of  this  rule  had  been  applied  and  production 
allotted  on  the  basis  of  expe.-!ted  demand,  the  allowable  production  would 
have  been  so  small  that  instead  of  creating  employment,  which  was  one  of 
the  main  purposes  of  the  Administration,  the  closing  down  of  many  mills 
and  laying  off  of  a  great  many  men  would  have  resulted. 

The  Code  Authority  cho':?2  to  take  a  very  optimistic  view  of  conditions 
and  increased  the  Nation';'!  c^cola  for  the  fourth  quarter  of  1933,  to  26 
per  cent  above  the  estimates  Timber  Conservation  Board  for  that  period, 
and  to  18  per  cent  above  such  estimates  for  the  first  quarter  of  1934. 
The  members  of  the  industry  produced  roughly  up  to  the  limits  allowed 
and,  as  increased  demand  did  not  materiali-ze,  a  sharp  increase  in  stocks 
resulted.   This  increase  in  already  top-heavy  stocks  created  an  additional 
burden  on  the  operators  and  exerted  tremendous  pressun  on  the  price 
situation. 

It  must  be  borne  in  mind,  however,  that  other  forces  contribute  to 
increased  production.   The  profits  expected  from  the  new  minimum  prices 
had  much  to  do  with  the  production  of  lumber  by  many  o-nerators  who 
would  not  have  been  enticed,  by  production  control  alone,  to  add  to 
their  already  excessive  visible  supply  bf  sawmill  products. 

Article  VIII  (b)  provided  that  allotments  should  not  be  transferable 
except  as  between  operations  under  the  same  ownership  within  the  same 
Division  or  Subdivision.   It  was  ruled  by  the  Code  Authority  that  this 
made  raanda'-,cry  the  transfer  to  any  person  qualifying.   This  right  of 
transier,  of  course,  could  only  accrue, to  a  large  operator,  owner  of 
several  plants,  and  the  result  was  to  permit  one  plant  of  several,  to 
operate  much  longer  hours  than  could  the  under  sale  ownership  plants. 
This  condition  caused  much  bitterness,  particularly  in  the  Hardwood 
Divisions,  with  their  multiplicity  of  small  units,  and  quite^  a  number  of 
complaints  in  the  other  lumber  divisions.   The  Artirle  was  finally 
forced  before  the  Administration  for  amendment,  with  the  IfflA  Advisors 

9813 


-173- 

maintaining  that  transfers  of  allotvient  redoMdcd  to  the  benefit  of  the 
large  operators  only  and  shoiold  not  he  allov/ed  voider  any  circ-uraotances, 
and  the  Code  Authority  incistin/^  tliat  there  v/ere  certain  conditions 
\7here  it  should  l)e  |rc3:"«-?''-'tcd,  '  The  suhject  vns  finally  cornprcmised  by 
Amendment  llo.  53  \-fhich  was  approved  by  Administrative  Order  9-139, 
providing  for  the  transfer  of  allotirients  if  the  Authority  should  find 
that  non-transfer  would  cause  undue  iiardship,  and  under  certain  limi- 
tations, and  that  notice  of  such  action  with  a  find.ing  of  facts  should 
be  immediately  forwarded  to  the  Administration.  Certain  Divisions  con- 
tinued to  transfer  allotments  and  no  reports  vere  forthcoming  to  the 
Administrator.  After  a  nxmber  nf  months  of  delay  and  repeated  requests 
the  Divisions  begf?n  to  send  in  reports  as  follovfs; 

"Tho  Division  upon  a  finding  of  facts  h-'.s  traiisferred  allotments 
as  follows :" 

No  details  as  to  .ivmers  and  amounts,  or  explanation  of  the  reasons 
for  these  transfers  were  given.  The  failixre  to  furnish  the  Adminis- 
tration with  the  required  inf orma,tion,  and  the  failure  ct   the  Deputy 
Administrator  to  force  the  issue,  prevented  any  control  or  supervision 
of  the  actions  of  the  Code  Authorities. 

The  inequity  of  allowing  transfers  of  production  quotas  to  mills 
under  the  scjne  ovmership,  permittin-'j  them  to  concentrate  production 
and  work  full  time,  and  the  difficulty  experienced  b;'-  the  owners  of 
only  single  mills  who  had  geared  np  their  production  to  tvo  shifts 
and  v/ere  forced,  by  the  r-mount  of  taeir  allocation,  to  reduce  their 
operations  to  less  than  an  economical  single  shift  v.'as  shoi."/n  in  the 
case  of  the  appeal  of  a  Ircaber  com-p-ny  in  Ar'^ansas,  (*)   This  company, 
in  its  appeal  cited  the  c-.se  of  -nother  com;'Dany  which  had  transferred 
to  its  operating  mill  the  --roJuction  quota  of  ^  nill  v;hich  had  not  run 
since  1929,  thus  enabling  them  to  operate  t'.vo  shifts  in  the  one  mill, 
whereas,  the  a-opellant  was  allotted  only  sufficient  production  quota 
to  run  a  single  sliift.  riowever,  t'neir  petition  to  operate  longer  hours 
was  denied. 

The  Division  of  Heoearch  and  Planning,  IIPA.,  had  for  some  time  boen 
attempting  to  investigate  the  operation  of  this  ;'-iroduction  control  pro- 
cedure and  had  made  specific  requests  for  informa.tion  thro"ugh  the 
Deputies'  offices,  but  certain  efforts  to  obtain  definitn  information 
from  the  Code  Authority  in  re;::ard  to  the  methods  in  establishing  quotas 
of  production  used  by  the  divisions-  and  the  applici.tion  thereof,  met 
with  refusal.  However,  the  limited  study  wMch  wa.s  made  of  this  sub- 
ject, from  published  bulletins,  leaves  some  doubt  whether  eq"ua-l  -appli- 
ca.tions  of  the  provisions  of  the  Code  w.'-s  accorded  to  all  operators. 
Hot  many  -irotests  were  appa.rent  in  the  first  four  months  of  operation 
of  the  Code,  but  from  January  1834  on,  there  v/as  evidence  of  greater 
diss  o.tisf  act  ion. 

In  the  West  Coast  Division  the  very  large  c-p'^.city  of  the  mills 
and  the  metnod  of  quota  allocation  c-used  gre^t  dissension  and  claims 
of  preferential  treatment  until  adjusted.  At  first  the  allotments  were 
ma,de  on  the  basis  of  proportioning  .the  Divisional  quota  rjnong  all 
operators  according  to  the  crlculated  or  rated  capacity  of  their  pl-^nts, 

based  on  reported  past  perf orin.ances  of  their  tliree  best  yea.rs, 

(*)      Tschud^Lumber  Company,  Weona,  Ar^r'.nsas.  public  Hearing 
^813       j-iiiy  3,  1S34. 


Because  of  the  Division' f  vrt  C'.p'^.city  30  greatly  exceeding  the 
quota  allotted  it,  and  the  ^Treponderauce  of  large  mills  whose  past 
record  gave  them  the  moct  of  the  quotra,  some  of  the  small  operators 
received  a.s  little  as  11  hours  per  v.eek  operating;  time,  v/hereas,  the 
large  plants  were  Vble  to  opero.te  "t  least  a  part  of  their  equipment 
to  the  maximum  of  40  hour?  rallovred  hy  the  Code. 

There  was  further  objectio.i  hir   the  sm.all  mills  on  the  £;round  tliat , 
as  provided  by  the  Code,  all  Imown  operators  received  an  allotment  p,nd 
were  operating  for  the  full  time  allowed  even  though  they  h:.\d  formerly 
operated  very  intermittently,  devotin.,":  the  balance  of  their  time  to 
other  business,  and  th-^t  this  was  not  fair  to  those  whose  only  business 
was  iTjmbering. 

The  objections  v/ere  partially  net  by  a  compromise  which  consisted 
in  adding  to  all  those  receiving  less  than  30  hours  of  operating  time 
each  week,  sufficient  hours  to  equal  this  minimum,  and  deducting  pro- 
portion.ately  from  those  above  the  3D  hour  level  to  equalize. 

There  were  other  protests  from  the  West  Coa,st  Division  regarding 
provicion  for  export  allotments.   The  beginning,  of  this  controversy 
dates  bacic  to  the  formulation  of  the  Code,  Ludley  Gates,  in  reporting 
on  the  hearing  to  the  Administrator,  stated: 

"Certain  West  Coast  operators  lorged  that  exports 
should  be  exem:nt  from  production  control.   The 
West  Coast  district  ship  over  half  of  all  1-umber 
".  exported,}  Tliese  exports  constituled  about  16  ^er 
*■  ■■     -  cent  of  the  entire  production  of  the  Wost  Coast 
district  in  19^9,  and  -bout  18  per  cent  in  1932. 
At  least  40  ii-er  cent  of  all  '.".'est  Coast  inills  share 
in  this  business," 

Again  at  the  public  hearing  of  January  9,  1934,  persons  vitally 
interested  in  exinort  shipnents  appealed  for  relief  from  all  control 
of  production  for  export  and  a  controversy  as  to  whether  or  nc^  the 
control  of  production  should  a,;iply  to  mills,  manufacturing  1-umber  for 
export  was  carried  on  during  practically  the  entire  year  of  1934,   It 
also  appeared  that  in  the  applica.tion  of  the  formula  i^rovided  in  the 
Code,  the  West  Coast  Division,  in  order  to  arrive  at  the  o^uota  for 
mills  v:hich  were  shipping  for  ej^^ort  and  for  those  which  were  L-hipping 
for  export  and  domestic  consvjm-ition,  and  for  those  ship;ung  for  domestic 
consumption  only,  took  the  total  production  quota  allowed  them  by  the 
Code  Authority  for  domestic  business,  added  thereto  the  exj^ected  export, 
consumption,  and  divided  this  total  pro  rata,  a.mong  all  mills  in  their 
Division  irrespective  of  whether  they  hae  ever  shipped  for  export  or 
ever  intonc-ed  to.(*)   They  claimed  that  to  allow  an  export  shipping 
mill  unlimited  production  for  e^rport  and  also  allow  them  a  domestic 
quota  comraensura.te  with  their  capacity  would  result  in  their  operating 
longer  hours  than  adjacent  mills  which  did  not  compete  for  export 
business. 


(*)  Mandatory  under  the  Code 
9815 


-175- 

It  was  claimed  ty  one  of  the  apoell'ints  (*)  that  the  application 
of  this  ^irinciple  resulted  iu  th-t  compaiiy  beinc  forced  to  turn  C.ovm 
larf^e  orders  for  Inmbcr  to  be  exjr.ortet'.. 

The  increase  i;'  the  cost  of  i.ianuf  ,cture  of  lumber  under  the  Code, 
due  both  to  the  cstablisiir:ent  of  minimum  w\zes   and  maximum  hours  and 
the  establishment  of  control  of  production  ¥;hich  increased  cost  by 
cutting  down  volume,  led  to  the  ado;"'tion  of  cost  protection  prices  v/hich 
protect'ed  the  producer  a-.ainst  a  loss  v.'hile  selling,  in  the  domestic 
narliet.   These  minimum  prices  did  not  generally  apply  in  the  highly 
competitive  export  field  v;here  nrices  were  c^nerc^.lly   lovrer.   The  tendency 
vras  therefore  exhibited  to  e3::port  a'  smaller  amount  of  lumber  than  had 
been  shipped  during  pre-code  days.  To  stimulate  export  sales,  vmich 
v;ould  benefit  the  producer  by  lowerinti  his  cost  per  unit  and  benefit 
labor  through'  incre'ased  employment,  the  Authority  proposed  in  Amendment 
No.  54  a  variety  of  devices  which  might  be  adopted  by  the  division  or 
subdivision  agency  to  stim.ulate  eiqsorts.   These  devices,  in  essence, 
called  for  a  reduction  in  quota  to  mills  who'  v/ould  list  themselves  as 
export  mills  ydth  the  compensatory  feature  th'^.t  such  m.ills  m.ight  be 
en  -.bled  to  produce  more  lumber  ior  ezqDort  than,  they  vrould  have  if  their 
quotas  had.  not  been  reduced. 

Certain  of  the  Adviso^  Boards  felt  th  t  the  proposal  to  est'^.blish, 
at  the  discretion  of  the  administrative  agency,  one  of  several  optional 
methods  increasing  exports,  v/as  contrary  to  IIIIA  policy.   The  Lumber 
Code  Authority  tooh  the  position  th^  t  due  to  the  diverse  nature  of 
conditions  faced  by  the  varioiis  divisions  and  subdivisions,  a  certain 
option  in  raethodi  of  treatm.ent  was  necess'-rj^.   Failure  to  agree  on  this 
question  was  responsible  for  non-approval  of  this  amendnent. 

There  is  evidence  that  in  the  West  Coast  Livision  an  allotment  to 
one  of  the  largest  companies  (**)  was  increased,  not  only  as  to  their 
base  for  allotment,  which  was  increased-  nearly  100  per  cent,  from 
55,666,660  to  105,302,300  board  feet,  but  also  additional  time  was 
accorded  them  on  their  plea  that  the  brid.ges  which  served  the  timber 
to  be  cut  were  in  such  condition  that  they  vrould  have  to  be  repla.ced 
in  a  short  time  and  therefore  the  timber  must  be  cut  -^.t  once  or  the 
expense  of  prodiiction  vrould  be  greatly  increasedi.   This  additional 
quota  was  ordered  to  be  deducted  from  allotments  to  be  granted  the 
company  after  October  1,  1935,  but  the  uode  expired  by  limitation  not 
later  than  June  16,  1935. 

The  Ch'.innan  of  the  Committee  ^llo^'dng  this  increased  allotment 
was  an  officer  of  the  company.  Protests  were  made  to  the  Divisional 
Code  Authority,  and  a  committee  which  vias  appointed  by  them  recommended 
as  follov/s: 

"Without  going  into  the  merits  of  the  case  we  find 
th"t  the  '57est  Coa.st  Committee  on  Control  of  Pro- 
duction erred  in  granting  the  Crossett  Western  Company 
additional  p.llocation  which  wa.s  to  be  returned,  after 


(*)   Coos  Bay  Lumber  Com.T3",ny 

(**)   Crossett  l^Vestern  Lumber  Company 
9813 


the   ei'Cjnir-^tion  ol    the   Indus tri",l  Zlecovci-y  Act, 
J-ane   IG,    1935,       .Wo   recor.imend  to   the  West   Co-^-st 
Lumhermen ' s  AssociT,ti-on   Tr-ostees   th'^.t   they   c^Jicel 
the   ''j'jJ.ition'\l   '\lloc-'.tions   -^.s   sriven  to   the   Crossett 
T.f e  s  t  e  r n  C  oiTt;o  -^.ny . " 

The   I'ollovifin^,  motion  vn,s   '^^dopterl  hy  the  Bo".rd  of  Directors   of 
the   West   Co-^,st  Pivision: 

"Th-^.t   ■^ll   s'Teci-^.l   l-um'oer  .■^lloc-.tions  nov  civen 
manui'^.cturers   w'.iich  CMinot  "be   deducted  during  the 
first   ',nd   second   qu'-.rters   of  1935  "be   rescinded  -.nd 
th-^.t  no  further  speci'^.l  lumher  "illoc^tion  he  grr.nted 
th",t  v/ould  recjuire  dedxictions    \fter  June   15,    1935." 

This   p.ction  v;t,s   overruled  "by  the  Piesident   Comraittee   of   the   Lumber 
Code  Authority  in  Yif-^.shington,   which,    it  '^^'pep.rs ,   h".d  p-^.ssed  upon  n,nd 
confirmee    the   '^,ction  of  the  Division  1  Control   Committee   immedi-^.tely 
after   tlicir   -action. 

As   p.   result   of  the   ra'^.ny  difficulties   encountered   in  the   •^^wiinis- 
tration   of  -oroduction  control  hy   the   industry,    the  West   Coast  Division, 
shortly  after   tne   Schechter  tecisian  in  I;  .y,    1935,   vrent   on  record  -^s 
being  opoosed  to   industry  h  ndling  control  under   any  new  lef^islation, 
but    stated  th  t    they  were    still   convinced  th-t   it   was   for   the   good  of 
the    indvistry  and  they  vrould   suhmit   to   Government   a^' mini  strati  on  only 
of   this    feature. 

The  Red  Ceda/r  Shingle  Division  c-jne   in  for   a  i-;reat  ntuTiher  of  pro- 
tests by  the  various   oper-tors   re;,  rdingthe  "fasis   of  allotment   in   their 
Division.     Discrimin-tion  -,nd  unjust   allotment  were   claimed,     A  check 
of   the   correspondence  ■  concerain,;.  this  Divi'iion   tends   to   show  that   the 
production  control  j-irovisions   yrere  not   adequately  '^.ncl  equitably  adminis- 
tered,   '^nu  that   cert'dn  operators   vrere   allotted  production  quotas  much 
larger  thar   others   of  lihe   capacity,     A  preliminary  check  of  allocation 
in  this  Division  was  made  ''oy  the  Division  of  Research  and  Planning  from 
the  published  bulletins,    and   the   following  questions  were   r-.ised:      "Why 
were    tncre   such  discrepancies   in  -^dlotments   to  mills   of  the   s-^iae   size 
between   the   third   and   fourth  quarters   of  1934?     Why  v/ere   some  mills 
granted  up   to  200  per   cent  more    alloc-.tio;:   for   the   fo-jrth  f^iarter  of 
1934,    than  ixi  previous   qu".rters?     "^Piiy  were   such  large   exce"otions   and 
additions  granted   to   cert- in  mills   for  list  production  in  p'-.st  periods?" 

A  check  of   the  public-tions   of   the-  .lorthern  Pine  Division  tro-ught 
out    tha  question  -"s   to  why  a  proc'ucer   should  anr'   did  receive   a  fuota  in  one 
quailisrgrf^aterr   tn-.n  p-^st   experience   records  had   sho¥/n  him  to  produce 
in    '.n  t;i.cj.re   yea.r. 

There   vrere    •,  n"umoer  of  conrpl'lnts     .bout   the    '."implication  of  the 
provisions   of  productioii   control   in  the  ■..'estern  Pine  Division  ¥/here 
the  provisions   covering  seasonal   operations   had   to  be   av.jplicd.      It   w-s 
provided,    in  general,    th\t   if   the   operatirig  records   of  a  mill   showed 
inability  due   to   seasonal   conditions,    to   oper-^.te   less   th-.n  nine  months 
in  a  year,    it   should   receive   "-oprov".l   to  work  4S  hours  per  week,   but 
if  more    th-.n  nine  months   of  oper■^tion  v/as   shown  the'i  only  40  hours  per 

9813 


-177- 

vreek  would  "be  approved. 

In  one  case  v/aicn  \;ac  inves  tijjatec' ,  where  the  operator  furnichcd 
ills  records  sliov/ini';;  O'oeratin^;  time  oi  lesc-  tiian  nine  months  for  a 
n-uiTiber  of  years,  the  -oetitioji  for  additionr.l  time  was  denied  on  the 
f^roraids  that  the  nill  could  '.inwe   worhed  lo.i^;er  hut  dif  not  hecause  it 
was  unprof  it  ihle  for  the'n  to  o  vo,     Hov/ever,  it  ^rs.   developed  that 
another  mill  located  on  tne  v.v  ^e   L-^-I.e  v.'.?s  receiviiv;  t^'.e  48~hour  allot- 
ment • 

In  ^:eneral,  investi/r.tion  oi  i;:,ll  toa   subject  rmtter  in  regard  to 
-oroduction  control  shows  ti:iat  -r-cbically  every  7/ivision  was  represented 
in  the  complaints.  ^ 

As  previously  stated,  the  machinery  set  uo  hy  the  Code  Authority 
for  appeals  provided  that  they  riust  he  m.ade  in  tn-;;  first  instance  in 
writing  or  toy  personal  a-.r-iearance  to  the  Suodivision '1  arency,  then  to 
the  Divisional  aj^'ency,  then  to  the  :"ationc^l  Code  A'Atliority,  and  finally 
to  the  National  he  c  every  AC /".ini  strati  on. 

No  exa.ct  record  is  availaole  a.s  to  tae  mijicer  of  coiirplaints  or 
appeals  thrt  were  .nade  to  the  Suhdivisiona,l '  or  I'ivisior.al  a;;cncies 
nor  as  to  the  ntu.iber  of  rules,  re^~alations ,  or  interpretations  made  toy 
them  in  interpreting  nud  appl^^i-.y  the  production  control  provisions  of 
the  Code,  but  in  checl-in;,'  the  records  of  the  Code  Authority  reference 
is  fouAid  to  the  fact  that  on  the  question  of  production  control  the 
administrative  a;"encier>  of  the  Divisions  issued  153  rules,  regulations, 
and  iviteriDretrtions ,  and  received  C^o  ap'reals.   The  Lumtoer  Code  Author- 
ity received  39  appeals,  and  for  the  period  from  An<mst,  1935  to  March, 
1934,  issued  15  major  rules  and  interoretations  on  this  subject,  Un- 
douhtedly  there  were  some  operators  who  v/ould  not  or  did  not,  after 
discussion  v/ith  t.;e  Autiiority,  consider  it  v;orth  v/hile  to  put' their  plea 
into  writing,  or  f.:o  to  the  expense  of  carr^'ivi/;  tlirou,';h  their  rppeal  will 
never  be  loio^mi.  There  were  only  foior  appeals,  under  Article  XVII, 
officially  hrou,'jht  hefore  the  NRA  a{;ainst  production  quotas.   The  pre- 
viously mentioned  case  (CroSsett  'Testern  Coim.any)  rras  the  onlj''  a"'^':>eal 
from  a  lumber  division.   The  otner  were  f;'ora  the  f-ihricatin^-  divir^ions. 
A  veneer  "comp.^ny  (*)  n.ppealed  f-^om  tne  p^'O'hiction  quota  set  for  it  on 
the  froimds  th- fc  tne  oj^mntit;.'  a'.lqv;ed  was  i.^s'afiicient  to  enable  them 
to  take  care  of  the  orders  tliey  ia?,.;'  on  h'l.nd.   It  \7as  ueveloped  that 
tneir  trade  was  entirely  thao  of  cuttinp  stocL:  to  order  for  other  com- 
paiiies.   It  Was  held  by  the  Code  Authority  that  it  was  unfair  to  nllow 
this  company  to  ta.he  more  th^n  its  slaare  of  the  avili^blc  businesr;  and 
to  operate  loniper  hours  tii£i..i  its  competitors,  as  those  comr'etitors  would 
:_  ladly  tahe  cere  of -the  surplus  orders  of  the  rv   .rJlant  and  thus  spread 
emiDloyment  anc"  allow  all  plants  to  cerate. 

In  the  Sp'rin;!.  of  1935^  .a  com-\a::,y(**)  was  cited  for  consistent 
viole.tion  of  its  production  oi^ota  and  ar'ieared  before  the  xHlA  in  an  un- 
official attenpt  to  settle  its  differeir  es  with  the  Code  Authority, 

(*)   Lr.peer  ''.'ood..  products  Con-:i.ny 

(**)   iLaxwell  Brotaers,  Cnica^o,  Illinois 


981C 


-178- 


Tiio    corn;-".-..y  cl   inicd   tli  t  prior   to   th  .   Coilc    it   h^d  dor.^    "-iroxira-.twly 
wif;ht  23^.-'   cent   of   th,.    tot'.l  "bujjir.^sc    of   t'a^   V^;iccr  livir-ior.  tuidcr  rrlrich 
it   \/-.3    cl -.Eirificd      ;-.d   thvt     ,r.y  l^rrcr    -jnoixit   would   c  mxsv,    ^■.•.   o'^:  r  ".ti'.'.j;; 
Iocs    to   'Jiiich  it   './ould  :".ot    '.i^^rc,    to   be   sutjcct^d.     By  tiiis   time    the  Ad- 
mi. listr  \tio::    -.diTiitted   the  j^J'^ti 'ble   illc":"  lity  of  p:'oduction  cortrol 
features   of  the    Code,    rnd  ^'ould  r.ot    cor.sert   to  proseciitc   the   conijo-,r.y» 
Ther.   the   Code  Authority   -.djusted  the  productior.  quot",   of   thin-   comp'iiy 
to   the    '.moiiiit  den-.:-.ded  by  it. 

A  compr..y  v/hich  oper.ted   -.  box  f.ctory   (*)   "orodeici::/^  boxes   for  its 
ovr.i  \ise,    "Oioe'^led  or.  J  :iu-.ry  10,    1934,    fron  the   prodtiction   quot-^, 
-,ccordcd   it,    cl ■  imin;';^-  th  .t   it   -.--.s  not   sufficiert    to   t -he   ere    of  its 
reouiremce.ts    'r.d   th-.t   if  r.ot      llo'Tcd  to  "v-oduce    rufficier.t  boxes   for 
its    ovfj.  use,    it   vould  be    compelled  to  buy  ir    the    op^"r.  n-.rket   the  b-.l^r.cc 
required  v/hilc   its   ovr.-i  pl^r.t   stood   ii'le   for  p~rt   of  tii^   tiiue.      It   vr.s 
held   th-,t    there   v;  ,s    v.":   excessive    c-.p^city  i.e   the    i.v^ustry    "nd   th'\t    it 
\7ould  be   irif-ir   to    ^llou   l-,bor  ir   this  pi -at   to   -Tor'r  full   time    Thilc 
l-bo:-   in   otner  pl-nts   i7orI:ed  p  .rt    tine.      The  victitior   ■■..'-?   denied, 

Le  ",vir..     the   field   of   specific   c   ses    ':.\c.    objections,    the   -ttempt? 
by   the    Code  Authority  to   correct   the  m-.l-^.djiistments    of  the   Code   should 
be    shovrn.      The   fQllov/in{;;  -^.mcndmcnts    to  Article  VIII   vc  :x  7oroposcd   -.nd 
it    is   v;o-'thy  of  note    ^,s   shovrn  by  the   number   of  propop-.ls   th-.t    sincere 
efforts   vere   m-,dc    to    -dijust   the  pr -.ctic^.ble   worhin,';,   of   the  provisions, 

LCAJjnendment  0,1  1, 

>IRA  Amendmc.it   #8 

A  pprovcd:     Ijr^l'.lS,    i934 

Si^i^ed  by:     HU(^n  S.   Joh-ison,   Administrator 

This   ".mendmcnt  provided  th-.t    in   the   -pplic-.tion  of  Article   VIII 
(c)    (2)    shipments  mi^ht  be   used  iri  jil-.ce    of  production.     The  u.sc    of 
shipments   r-.thcr  th-,n  prodtiction   -,s    ■,  b^sc    for  dctcrnininL^;  production 
quot~.s   vr.s    to  be   discrction^.ry  vdth  the   division    vnd   subdivision   ^  encics. 
The   Lumber   Code  Authority  in  ;a-cscntin;^  this    -mendment   s-.id  th-.t   it 
believed   th-.t   ccrtnin   c-.ses   shovred  the  use   of  shirmcjjts   -.s   •",  l".sc  mi^ht 
be   more    fnir,   bec-.usc    in  cert's/in   c-,scs   the  u'~e    of  p'^.st  production   -,^   '^. 
b-,sc   mi;:ht   :;ive  imduc   vrcifht   to   the   fi-.TH  who   during:  the  p-".st   yc-^.rs  jiro- 
duced  -t   full  c-.p-.city  rc.::,-.rdlcss   of  m-.rkct   conditions. 

1./   Tr-.nscript   of  he-.rin^:.;,    J-nu-'V;^  22,    1934,   pp,    1242-1245,   Vol.11   on 
Amend .   #8 

(*)      Du]ront  de  i-Tcmours.     Public   I-Tc^.rinG  of  J-,nu'-.ry  9,    1934 


9813 


-179- 

The  companj'-  claimed  that  prior  to   the   Code   it  had  done  approximately 
eight  per  cent  of  the  total  businesn  of  the  Veneer  Division  under  r/hich 
it  was  classified  ^uid  that  any  lessor  omoiint  uo-uld  cause  an  operating 
loss  to  which  it  v;ould  not  agree   to  he   suhjected,     B;/-  this  time   the 
Administration  admitted  the  prohahlc  illeijality  of  production  control     , 
features  of  the   Code,   .and  v/ould  not  consent   to  prosecute   the  company, 
Tlien  the  Code  Atithority  adjusted,  the  production  quota  of  this  company 
to   the   amount   demanded  "by  it, 

A  company  which  operated  a  box  factory  (*),  producing;  "boxes  for 
its  own  use,   a-ppealed  on  January!-  10,   1934,    from  the  production  quota 
accorded  it,   claiming  that   it  was  not   sufficient   to   take  care  of  its     ; 
req.u.irenents  and  that  if  not  allowed  to  produce   sufficient  "boxes  for 
it§  own  use,    it  would  "be  compelled  to  "buy  in  the  open  market  the 
"balance  required  ^.'hile  its  omi  plant   stood  idle  for  part  of  the   time. 
It   was  held  that  there  was  an  excessive  capacity  in  the  industr;,--  and 
that  it  would  "be  unfair  to   allow  labor  in  this  plant  to  work  fu.ll  time 
while  labor  in  other  plants  vrorked  part  time.      The  petition  was  denied. 

Leaving  the  field  of  specific   cases  juid  objections,    the  attemints 
by  the  Code  Axithority  to    correct   the  maladjustments  of  the  Code   should 
be   shown.      The  following  amendonents   to  Article  "VIII  vrere  propo-^ed 
and  it  is  worthy  of  note  as.    shown  by  the  number  of  proposals  that 
sincere  efforts  v/ere  made  to  adjust   the  practicable  working  of  the 
provisions, 

LCA  Amendment  #11     1/  '  • 

ITBA  Amendiient  #8  .  -  .  - 

Approved:       April  13,   1934 

Signed  by:   Hugh  S,   Jolmson,  Administrator 

Tlais  ninendment  provided  that   in  the  application  of  Article  VIII 
(c)      (2)    shipments  might  be  used  in  place  of  production.      The  use  of 
shipments  rather  than  production  as  a  base  for  determining  production 
quotas  was  to  be  discretionary  with  the  division  and  subdivision  agen- 
cies.     The  LuT'iber  Code  Authority  in  presenting  this  amendment    said 
the.t  it  believed  that  certain  cases   showed  the  use  of  shipments  as  a 
base  might  be  more  fair,   because   in  certain  cas-es  the  use  of  past  produc- 
tion as  a  base  might  give  imdue  weight  to  the  firm  who  during  the  past  few 
years  produced  at   full   caTiacity  regardless  of  market  conditions. 


(*)      Dupont  de  ilemours.      Pu.blic  Hearing  of  January""  9,    1934, 

1/   Transcript  of  hearing,  Janua^y  3£,   1934,  pp,    1242-1245,   Vol,    II 
on  Ai:iend.   #8. 


3813 


-130- 


LCA  Amc:-.dmc-t  #12      ij 
Hot    --D-orovcd, 


Tliir    -mcr.dmc-.-.t  li-/.  to   rlo   ■.Itli  tlic  'tr-./.rfcr   of      llotnc-tr.      It 
v/~^   '.'it'x'.i"vr.-.  "by   the    LumTDcr   Coc.c   Atithoiity  -::A   i-cj-obmlttcd     .r  AncncV 
mc:it   #53. 

ij      T---v.-.?c-i-it   of  :ic-ri::_,    J  -u-.ry  22,    13-34,   p:o.    1245-1255. 

LCA  Ai-nc-cl;-ac..t   #15      l/ 

bRA  Amcr-c!jnc::t  #8 

Approved:        Arpril   13,    1934 

Sio--cd  ty:      K-Uti.li  S.   Jok'-'joii,   Ac'jiur.iGtr-.tor 

Tills  --jncndricnt  provides  tr.-.t  Qiiot'.r  of  imiiortr  or  productior-  es- 
tablished by  the  M-.:io;;-r_y  Bivisior.  wv:.   -  llotncr.t'-  thereof  t  o  cli.-_iblc 
pcreor.s,  rn-y  "bo  rodo  for  -,  prriod  .-,rc -tcr  th^r.  throe  nor.ths ,  in  .y  be 
"b-.scd  or.  shipments,  -.r-d  sh-,11  not  preclude  vny  person  f  rom  m  int  -  inin^ 
-n  inventory  cqu-.l  in  foot',,";c  to  his  "oreviou^  ye-r''.-  shipmc'-.ts. 

The  provision  for  re;:-al~.tio;-.  of  shipiic:ts  of  im;iDorts  r -.ther  th-n 
reculntioei  of  s -'.vir.;;;,  is  'fw.  to  thn  f.ct  th-.t  v/hil.e  r.o  m  hO;;;;-ny  is 
;,ro'.-n.  in  t]iis  coniitry,  some  prrsonr  dax^ctt  th"  lo^'s  :.\C.   ciit  them  them- 
selves, v'hilc  ot!ierr  im:iort  --xl    m  ho^^-ny  l-onber.   To  c  stehlish  off  cctivc 
control,  it  v/ns  therefor^  r.ecess-ry  to  piece  th'-  limit -.tion  on  imports* 
The  provisior.  for  th:  scttinr  ixo  of  quotes  for  .  nuriod  of  ;rc^tcr  th~n 
three  mor.ths  is  occ-,sioned  by  the  n-thod  of  productio.-  of  m-hoj^'ny 
timber.   The  timber,  exit  in  tropical  1-nds,  is  floeted  to  the  ocenn 
durine  flood  time,   Th:  tropical  operators  usiaally  do  not  have  cnoijigh. 
money  to  finance  their  operations  for  a  year's  time,  i.e.,  the  time 
between  flood  periods,  and  it  is  the  habit  of  the  American  importers 
to  enter  into  contracts  with  the  tropical  operators  a  year  in  advance 
of  delivery.   In  order  to  make  such  contracts,  the  Mahogany  Subdivision 
felt  it  necessary  tliat  production  quotas  be  given  for  a  period  of  a.p- 
proximately  one  year.  Another  unusual  feature  of  this  industry  is  the 
fact  that  unusually  lar^re  inventories  are  necessary.   This  is  occasioned 
by  the  fact  that  many  sizes  and  thicknesses  of  mahogany  lumber  must  be 
carried  in  stock.   In  order  tiuxt  nev/  members  of  the  industry  who  did 
not  liff.ve  large  inventories  should  not  be  liandicapped  ,  the  provision  v/as 
written  in  providing  for  an  inventory  a.t  least  equ£-.l  to  the  volune  of 
shijoraents  for  the  preceding  year. 

It  is  not  possible  to  say  how  this  -erovision  worked  in  practice, 
A  year's  time  v;as  scarcely  a  sufficient  test.   It  sho\ild  be  mentioned, 
however,  tliat  -ornduction  control  was  being  evaded  by  many  importers  who 
v/ere  bringing  stocks  in  this  country  v/ith  irajDunity,  and  the  mahogany 
Subdivision  was,  during  the  last  few  months  of  code  activity,  consider- 
ing various  methods  by  vmich  such  importation  cotild  be  stopped.  2/ 

ly  Transcript  of  hearing,  Jamiary  22,  1934,  pp.  1253-1229,  Vol.11 
on  Araend,  #8,  Code  Record  Section 

2j   Files  3f  Ass't  Dcp.  Adm.  J.  C.  Wickliffe  on  Mahogany  Division. 

9813 


LGA  Amendment  #16  l/ 

NRA  Amendment  #6 

Approved;   April  1'6 ,    1534 

Signed  by:   Hugh  S.  Johnson,  A'dminictrator 

This  amendment  empowered  the  Executive  Committee  of  the  Philippine 
Mahogany  Suhdivision,  v/ith  the  apvroval  of  the  Lumber  Code  Authority, 
to  estahlich  maxim.um  import  allotments  on  Philippine  Mahogany.   The 
amendment  provides  thlt  only  eligible  persons,  those  v.-ho  had  registered 
with  the  subdivision  agency  the  name  of  the  Philippine  mill  from  which 
exiports  were  to  be  made,  might  import  Philippine  mahogany  lumber.   The 
quQ-^-as  assigned  were  not  based  upon  past  performances  of  the  importer 
but  rcre  based  upon  the  productive  capacity  of  the  mills  from  v/hich 
they  into:-:ded  to  import  their  products.   Thus  this  particular  scheme 
of  limitation  of  importation  was  not  subject  to  the  criticism  so  often 
made  against  control  of  production  under  the  Lumber  Code,  i.e.,  that 
it  tended  to  freeze  the  industry's  distribution  as  of  the  date  pro- 
duction control,  for  the  Philippine  mahogany  scheme  permitted  a  change 
in  the  relative  size  of  import  quotas  assigned  to  the  various  distribu- 
tors by  the  simple  aevice  of  a  distribu.tjr  gaining  for  himself  the 
right  to  sell  the  prodiicts  of  another  Philippine  mill. 

The  limitation  of  imports  of  Phili-opine  mahogany  vjas  necessary 
to  prevent  that  wood  from  gaining  L^ro'Uiid.  at  the  expense  of  other 
hardwoods  which  were  subject  to  production  control.  The  provision 
also  had  the  advantage  of  preventing  an  over  supply  of  rruihogany  coming 
into  this  country  v/ith  the  demoralization  of  price  v/hich  v/ould  be  its 
consequence, 

1/    Transcript  of  hearing,  J-^.nuary  22,    1934,  pp.  1147-1159,  Vol, II  on 
Amend.  #8,  Code  Record  Section, 

LCA  AME1MD!:EMTS  #17,  IS,  19  and  ,?1   Ij' 

WRA  Amendment  #8 

A  proved:    Ajiiril  13,  1934 

Signed  by:   Hugh  S.  Johnson,  Administrator 

These  amendments  provided  that  in  the  Northern  Hq.rdwood  Subdisision, 
the  Northeastern  Hardwood  Subdivision,  the  Northern  H^nJlock:  Division, 
and  the  ixforthc-astern  Softwood  Division,  quotas  of  production  and  allot- 
ments thereof  to  eligible  persons  might,  in  the  discretion  of  the  adminis- 
trative agency  and  v/ith  the  approval  of  the  Lumber  Code  Authority,  be 
for  periods  of  greater  than  three  months, 

Amendm.ent  #17  also  amended  Article  VIII  (a)  to  permit  the  sotting 
up  of  production  quotas  for  longer  tmm  the  three  months  period  provided 
in  the  orijf.-inal  code. 

Those  a'-.endjiients  v/ere  designed  to  take  care  of  a  difficulty  arising 
in  the  above-named  divisions  and  subdivisions  du.e  to  the  fact  that  many 
of  the  operators  were  engaged  in  seasonal  operations.   The  locations  of 
these  divisions  and  subdivisions  is  in  the  northern  part  of  this  country 
where  it  has  long  been  the  -oracticc  to  foil  timber  from  early  fall  until 
heavy  snow  comes  and  then  to  transport  tue  timber  to  the  mill  on  sleds. 
The  operations  arc  usually  some  distance  back  in  the  woods.   It  is  there- 

9813 


-182- 

fore  necessary  to  set  up  rx  log.^ing  camp  and  f-urnish  supplies  and  equip- 
mcnt  for  the  season,   TiU'  mal:in[.;  of  such  arrangemonts  v/as  of  course 
difficult  as  lon^;  as   it  was  impossible  to  loiow  vfhat  quota  v/ould  "be 
assigned  to  a  given  firm  for  the  v;hole  year. 

As  a  result  of  these  aitr-ndments ,  quotas  were  thereafter  assigned 
over  such  a  period  as  vrould  permit  the  seasonal  operator  to  knov/  what 
ho  would  'bo  allov;ed  to  cut  durinf;;  the  winter  season,  and  to  enable 
him  to  plan  for  his  canii:^  an'l  o^ierations  without  the  necessity  of 
making  further  chan.'^es, 

1/      Transcript  of  h-aring,  January  22,  1934,  pp.  1194-1207,  Vol.11 
on  Amend,  #8,  Code  Record  Section. 

LCA  Amend:nent  #55   l/ 
Not  approved. 

This  amendmrnt  co:\cernin£  regulations  for  export  allotments  was 
withdravm  by  the  Lumber  Code  Authority  and  amendment  #54  was  submitted 
in  its  place, 

1/     Files  of  Assistant  Deputy  Administrator  H.  H,  Heloney,  on 
Amendmont  #35. 

LCA  A-nendmont  #50  1/ 
1-Io't  approved. 

This  amr-ndmr^nt  Vifa?  d'^ signed  to  i;^ivr   the  Code  Authority  power  to- 

withhold  production  allotments  from  persons  vmo  violated  Article  IV 

of  the  code,  either  through  failujre  to  mak"  reports  or  to  "oay  code 

foes.  •  ■ 

At  the  hearing  a  representative  of  411  small  southern  savmills 
protested  strongly  against  this  proposal,  stating  that  these  small 
mills  werr-  unabl-  to  furnish  th'-  r--ports  asked  for  by  the  Lumber  Code 
Authority  and  its  atiencies.   The  ainendment  was  not  approved,  partly 
because  of  the  feeling  that  it  was  not  altogether  fair  to  the  small 
operator,  and  partly  because,  at  tha.t  time,  the  Administration  began 
approving  amendments  to  codes  providing  for  supposedly  compulsory 
collection  of  code  fees, 

1/   Transport  of  hearing,  Iferch  27,  1934,  pp.,  33-92,  files  of  Assistant 
Deputy  Adjninistrator  H.  M,  Moloney,  on  Amendment  ,#50, 

LCA  Amendment  j^l  l/ 
Not  approved. 

This  a^i-ndment  proposed  to  give  power  to  the  Lumber  Code  Authority 
in  cases  where  a  portion  of  the  lumber  uiidcr  the  jurisdiction  of  any 
division  or  subdivision  was   im:iTorted,  to  fix  prodiiction  quotas  nn  the 
basis  of  imports.   This  amendment  was  strongly  endorsed  by  the  North- 
eastern Lumber  Manufacturers  Association  v/hich  stated  tliat  the  effect 
of  production  control  in  their  territory  with  the  consequent  decline 
in  domestic  production,  was  merely  to  raise  the  amount  of  lumber  which 
was  imported.   The  representatives  of  the  Association  argued  that  the 

9813 


-183- 

measurc  wruld  n^t  be  unfair  t-^   ir.TO^rters   f'r   it  iT'iilr!      nly  ^ut   them   -n 
the   same  "basis  as   d'niestic  pr-^ducer?. 

T'"   '^pTD'siti'^n   t      this   amendmrnt  ''/ns   sh^-vn  at   the  public  hearing 
but   the  Legal  Divisi-'n  refused    t     a>-nr-vc    it  -"nd   ^n  August   21,    tuc  Lum- 
ber C'^de  Authority  reouestrC    thpt  n"   further  acti'n  be   taken   --n  it  f-^r 
the  present.      3/ 

!_/      Transcrint     f  he-^Ting,   torch    '7,    19:54,    vr,.    93-llG 

2/     Piles    '1.'  Assistant  Deputy  Adrainistrnt  "r  11.    :'!.     icl'-ney  Ti  Amendment 
#51. 

LCA  Amendment  -;'-52._  lj_ 

NTLA  Amendment    '-11 

Appr-ved:      June   5,    1934 

Signed  by:  HugJi  S.  J-hns-^n,  Adninistrat'T 

This  amendment  Pr-^vides  that  the  Lumber  C'de  Auth-^rity  may,  after 
having  been  renuesteri  by  a  divisi-n  r  subdivision  agency  by  vte  ~f  2/7 
^f  it~  I'.mbers,  auth-rize  the  allotment  "f  pr'^ducti'-n  therein  '-n  «  basis 
''.f  h"urs  of  ^perati'^n. 

The  idtP  f  this  aiaendment  is  s'und.   In  certain  divisi-ns  and  sub- 
divisi'^ns,  either  due  t"  the  fact  that  n'^  str~ng  trade  associations  were 
built  up,  -.T  due  t'"  the  nature  'f  the  '^pera ti''ns,  there  were  n'-'t  avail- 
able records  '"~f  pa.st  performance  sufficiently  accurate  to  enable  the 
allocati'n  'f  pr-^ducti'^n  -^n  p;'st  performance.   This  was  particularly  true 
in  divisions  where  there  were  a  predominant  number  -"f  small  operators. 
Als'~'  in  certain  cases  the  result  ■"f  applicati'n  -f  the  f^'rraulae  originally 
,C'"ntained  in  Article  VII J  would  be  t-"  give  certain  persons  such  a  small 
QU^ta  that  it  was  har'ly  w-rth  while  runniiig.   "^he  advantage  ^f  alloca- 
tion 'n  an  allowable  number  ''f  h  urs  or  sis  is  th;  t  it  treats  everyone 
alike  and  will,  generally,  give  s^ifficient  number  of  h-^urs  -^f  '^perati~n 
t"  gi^e  1  .b  r  fairly  decent  ei.Tnl- j/ment. 

1./  Transcript  "f  hearing,  March  27,  19r.;4,p-o.  116-126,  V-1.  IT  n  amend- 
ment vll,  C'~'de  ?.ecord  Secti  -n. 

LCA  Amendment  --"'53  1/ 

NRA  Amendment  v23 

Approved:   Oct"ber  5,  1934 

Signed  hy:      G-.  A.  Lynch,  Administrative  Officer 

A;tticle  VIII  (g)  of  th(  c  de  permittee  tne  transfer  f  allotments 
"between  o-nera,ti'~ns  under  thr-  same  ownership  within  t/ie  same  divisi'^n  "r 
subdivision,"  Qualified  o^ly  by  the  provisi-^ns  of  Secti"n  C  which  rpQuired 
"a.ccepta.ble  evidence  of  ability  to  o-rjeratc. "   This  provision  for  tlie 
tra.nsfer  of  allotment  auotas  was  taken  advantage  'f  by  (l)  purchasing 
of  mills  which  "'o-L-t]_^  probably  never  run  ao:ain  s^  tha.t  their  allotment 
Quotas  might  be  transferred,  (2)  tra.nsfer  "f  allotment  ouotas  fr^m  mills 
which  had  n  available  timber  resources  and    (c)   by  transfer  "f  ? llotmcnt 
t-  an  area  where  the  minimum  wage  was  lower. 

9813 


-134- 

In  r^I•dpr  t'  f.vid  thepc  difficulties,  the  amendment  -oroT^scd  liy  the 
Lumber  C''de  Authority  stated  in  essence  (l)  that  n'^  transfer  sh-uld  he 
allowed  fr~m  n  mill  T"hich  load  n't  been  ^Doratec''  in  g"~ri  faith  f-r  six 
months  after  its  acauisiti '^n,  if  such  acnuisition  was  after  the  effec- 
tive date  -^f  the  c^de;  (?)  m  transfer  could  be  made  fr'~m  '^ne  mill  t'^ 
another  unless  the  sTiecies  ■or^duced  were  ordinarily  the  s.^.me;  ('^O  n^ 
transfers  c^uld  be  allowed  t-^  any  mill,  the  greater  part  'f  wh'^se  oroducts 
could,  under  the  -orovisions  of  Article  I"  (d)  "f  the  cr.de  be  s^lr!  at 
less  than  minimum  cost  -orotecti^n  -orices,  and  (4)  n^  transfer  sh-uld  be 
allowed  unless  it  arj-orieared  tliat  such  transfer  w^uld  make  for  greater 
efficiency  &nd  ecn^my  of  onerati^n. 

The  Consumers'  Advisory  Beared  recommended  disaTo-or'^val  of  this  amend- 
ment because  it  felt  the  ability  t^^  transfer  alli^tments  between  t^^-^  mills 
under  the  same  management  gave  an  unfair  advantage  t'^  the  large  o-oerat'^r 
over  the  sraf-11  individual  mill  owner. 

The  desirability  -^f  some  method  ^^f  check  o£  transfers  of  all'-'tments, 
however,  causfd  favorable  action  n  this  amendment  by  the  Administration. 

1/  Transcript  -f  hearing,  March  27,  1934,  pp.  1S6-144,  V-1.  II  -n 
Amendment  #23,  Code  Record  Section. 

LCA  Amendment  #54   ij 

Not  approved.  (Previ-uslv  referrod  t   in  this  report  per- 

taining t""  E:cp'Ort  C'ntr'l.) 

The  increase  in  the  C"st  of  manufacture  'f  lu.nber  under  the  C^de, 
due  both  to  the  establishment  ^f  minimum  wages  and  maximum  h^urs  and 
the  establishment  'f  control  ^f  ■nr-'ducti'n  which  increased  cost  by  cut- 
ting down  vol-ume,  led  t^  the  ado-nti-n  ^f  c^st  pr'""tection  prices  which 
protected  the  producer  against  a  loss  while  selling  in  the  domestic 
market.   These  minimum  prices  did  not  generally  apnly  in  the  highly  com- 
petitive expert  field  where  prices'  were  generally  l^wer.   The  tendency 
was  therefo^re  exhibited  to  expert  a  smaller  amount  of  lumber  than  liad 
been  shinped  during  ■ore-co'de-  days.   To'  stimulate  sales,  which  would 
benefit  the  producer  by  lo^^ering  his  co-st  per  unit  and  benefit  labor 
through  increased  employment,  the  Authority  prop-sed  in  Amendment  -'^54 
a  variety  of  devices  which  might  be  adopted  by  the  division  "t   sub'^'ivi- 
sion  agency  t^  stimulate  experts.   These  devices,  in  essence,  called  for 
a  reduction  in  auota  to  mills  wh'  would  list  themselves  as  export  mills 
with  the  compensatory  featiire  that  such  mills  might  be  enabled  t'O'  produce 
more  lumber  for  export  than  they  would  have  if  their  au~tas  had  n't  been 
so  reduced. 

Certain  "f  the  Advisory  '.^^^<r^z   felt  that  tae  pro-o^sal  t  -  establish, 
at  the  discreti-n  of  the  administrotive  ae-tncy,   ne  of  several  o-ntional 
methds  increasing  exports,  was  cntr^ry  t'  I'TRA  "policy.   The  Lumber  Code 
Authority  took  the  position  that  due  to  the  diverse  nature  of  c  nditions 
faced  by  the  vari'us  divisions  and  subdivisi  ns,  a  certain  o-ntion  in 
method  of  treatment  was  necessary.   Failure  to  agree  "n   this  ouesti'n 
wa^  responsible  f^r  non-approval  of  this  amendment. 


9813 


-185- 

1/  Trnnscri^t  of  hePrin.g,  March  ?.l ,    19^4,  n->.  144-15:^.   Files  of  As- 
sistant De-nuty  Administr'  tor  K.  M.  i.'eloney  on  Amendment  #54. 

LCA  Amendment  #55  \J 
Not  ■■n-nrcved. 

This  amendment,  ■  declaring'  th-.t  the  -nroductive  c?>-nacity  of  the  in- 
dustry was  far  larj^er  tha.n  ^^'arranted  by  current  needs,  -Droriosed  that, 
until  the  Administrator  found  thr  t  additional  c'--DPcity  was  necessary, 
no  new  mills  be  created  and  no  existing  -nroductive  facilities  he  en- 
larged.  The  Authority  pronoF.ed  this  -iraendraent  for  the  following  rea- 
sons: 

1.  That  whereas  in  IQ"?'?,  69  -^er  cent  of  the  ■oroc'uctive  ca-pacity 
of  the  indiustry  was  being  utilized,  in  the  first  ouarter  of 
1933,  this  use  of  -nroductive  caTDacity  hnd  shrunk  to  19  -oer  cent. 

2.  Control  of  -Droduction  ^-'hich  rnf-de  m.'=!nd.atory  the  frranting  of  an 
allotment  to  every  mill  canable  of  -oroduction  had  resulted  in 
the  STDringing  -or,   of  several  thousand  new  mills,  particularly 
in  the  South.   These  mills  were  gr-^nted  nuotas  with  a  conse- 
oiient  reduction  in  the  size  of  the  ouot-'' s  given  to  already  ex- 
isting mills.   This  -nrocess  beinf  continued,  woul-^  result  in 
slicing  thinner  f.nd  thinner  the  amount  of  business  which  cculd 
be  given  to -any  mill  during  ft  given  -oeriod  with  the  result  that 
costs  would  be  highly  increased  and  competitive  -nroducts  would 
take  the  place  of  lumber  -nroducts. 

The  amendment  -nroposed  that  mills  might  be  transf  erri- c!  from  one 
site  to  another  when  their  timber  was  cut  out  and  also  proposer!  that  the 
administrative  agency  might,  in  exceptional  cases,  authorize  the  build- 
ing of  new  productive  machinery  when  such  buildin?;  was  necessary  to  cut 
mature  timber  which  might  otherwise  be  lost. 

The  adoption  of  this  amendment  was  strenuousl:"-  apposed  from  many 
Quarters.   The  Administration  felt  that  it  not  onl:/  granted  too  much 
discretion  to  the  administrative  a.^encies,  but  that,  it  was  unconstitu- 
tional as  constituting  a  deprivation  of  -nrcperty  -'ithout  due  -nrocess  of 
law. 

1/  Transcript  of  hearin/-,  March  37,  19-34,  ryr).    15o-P70.   Files  of  As- 
sistant Deputy  II.  M.  '.ieloney  on  Amendment  #55. 

For  a  considerable  number  of  year?  about  ?.-!5  per  cent  of  the  red 
cedar  shingles  consumed  in  the  ^'nited  States  had  been  imported  from 
Canada.   In  19.32  the  rate  of  exchange  tnen  existing  caused  the  -nropor- 
tion  of  Canadian  imports  to  rise  to  35  per  cent;  and  the  25  per  cent 
ratio  was  again  exceeded  during  the  early  part  of  the  Coc^e  period. 

In  the  administration  of  production  control  the  Code  Authority  had 
to  meet  the  problem  of  restricting  domestic  production  of  a  product  '^here 
a  portion  of  the  supply  was  imported. 

Although  the  workers  in  t/ie  Canadian  shingle  industry  "'as  endeavoring 

9813 


-186- 

to  advance  wajes  and  the  industry  to  advance  trices  in  line  with  ad- 
vances in  the  United  States  -under  the  Code,  it  •"as  agreed  \)Y   re-oresent- 
atives  of  the  industry  on  "both  sides  of  the  border  tliat  it  would  be  im- 
nessible  to  control  production  and  prices  for  any  length  of  time  unless 
there  was  developed  some  control  over  the  ouantity  of  Can^^dian  iirmorts. 
Section  3  (e)  of  Title  I  of  the  N^ational  Industrial  Recovery  Act  ruth- 
orized  the  President,  in  case  competitive  goods  were ' imported  into  the 
United  States  in  substantial  quanitites,  or  in  inore-^sing  ratio  to 
domestic  production,  in  such  manner  as  to  endanger  the  maintenance  of  a 
Code,  to  authorize  an  investigation  to  be  made  by  the  United  States 
Tariff  Commission,  and,  following  the  completion  of  such  investi|?ation, 
to  limit  the  Quantity  of  such  goods  "hich  might  be  imported  into  the 
United  States,  or  otherwise  determine  the  conditions  undpr  which  entry 
would  be  permitted. 

In  response  to  the  President's  direction,  the  Tariff  Cominission 
made  an  investigation  of  the  red  cedar  shingle  -oroblen  ^nd  recommended 
that  the  Quantity  of  shingles  ^-'hich  could  be  imported  be  restricted  to 
25  per  cent  of  domestic  consumption,  either  through  cooperation  with 
the  Canadian  Government  or  by  Executive  Order.   The  problem  was  settled 
by  the  Canadian  and  American  raan-ufaccturers,  aided  by  the.  DeTiartments  of 
State  of  the  two  countries,  co'nin,<^  to  a.  voluntary  agreement  on  a  P.5   -ner 
cent  limitation,  go  that  it  was  not  necessa:i"y  for  the  American  Govern- 
ment actually  to  exercise  the  authority  riven  it  un'''er  the  National  In- 
dustrial Recovery  Act.   As  a  means  of  ap--ilying  necessary  control,  the 
Canadian  producers  had  first  formed  an  organize ttca  foy  tKit  pu2rp'v'<$e-». 

In  1935  the  production  program  for  the  Red  Cedar  Shingle  Industry 
was  upset  by  a  strike  which  lasted  from  May  to  September,   Under  there 
circumstances,  it  would  have  been  impossible  to  supply  the  markets  in 
the  United  States  on  the  basis  of  the  auotas'set  up  under  the  Lumber 
Code.   In  order  to  permit  increased  importation  of  Crnadian  shingles, 
both  in  absolute  Quantities  a'nd  in  proportion  to  total  consumption,  the 
entire  red  cedar  shingle  auota  i^-as  increased.   As  American  Droducers 
were  unable  to  meet  their  auotas,  this  in  effect  increased  the  percent- 
age allotted  to  Canada. 

It  was  expected  that  the  administrative  machinery  ?et  up  under  the 
Code  for  the  Red  Cedar  Shingle  Industry  would  disap-oear  at  the  end  of 
the  Code  period  but  it  has  not.   The  American  producers  have  retained 
their  organizations  and  apparently  have  some  gentleman's  agreement  '"ith 
Canadian  producers,  with  the  tacit  support  of  the  United  States  Depart- 
ment of  State.   To  determine  exactly  how  matters  have  worked  out  since 
the  Code  period  ended,  field  cont'  cts  would  be  necessary  which  have  not 
yet  been  possible. 

Altho-ugh  mahogany  is  not  produced  in  this  country,  imports  of  this 
wood  T"ere  restricted- vnArr  "the"  Code,  Some  firms  that  had  imported  mahog- 
any irregularly,  and  had  not  imported  in  the  three  years  prior  to  the 
codes  which  was  the  basis  of  determination  of  ouota,  did  not  receive 
Quotas  and  could  not  make  imports. 

The  by-laws  of  the  various  associations,  which  became  administrative 


9813 


-187- 

agencies  londer  the  Code,  ^rerc   ;imended  so  tlipt  p11  mernlDP'"?  of  the  industry 
could  gain  easy  entr^.ri.ce  to.PSBOciP tion  mern'oerphi-n,  nnd  -to  establish 
eouality  in  voting  -ooiver.   1?hree  snecific  erce^itions  are  noted  in  such 
by-la-'.^'s.   The  first  is  that  of  the  Northern  Pine  Division,  whose  "by-laws 
provided  that  voting  -"fi-  to  be  on  the  basis  of  one  vote  for  each  one 
million  feet  of  -oroductive  caxiacity  or  frtSiCtion  thereof,  '^ith  no  one  mem- 
ber receiving  more  th^m  15  votes.   A  -nrelirainary  check  of  the  production 
ouotas  established  for  this  division  durin,^  the  year  19.'^4,  showed  that 
some  producers  received  Pllotraents  for  one  puarter  tl>"t  were  larger  tha.n 
their  records  had  shown,  them  able  to  -nroduce  in  an  entire  year. 

The  Mahogany  Subdivision  by-lfiws  carried  a  nrovision  that  voting 
should  be  on  the  bnsis  of  one  vote  for  each  SlO*^  dues  naid.   No  in-oorter 
was  limited  t.o  the  amo-ont  of  dues  that  he  could  rjay,  ^^nd  conseouently  not 
limited  to  the  number  of  votes  he  could  receive.  l\o   check  ha,s  been 
nossible  on  the  allocations  of  this  .Division,  due  to  the  difficulties 
mentioned  above. 

The  Phili-D'oine  Mahogany  Subdivision  by-laws  contained  a,  clause  Ber- 
mitting  votes  on  the  basis  of  "each  100,000  feet  of  allotment."  Due  to 
the  fact  that  there  wa,s  a  com-nlainrnt  who  appealed  to  the  Administration 
the  Division  of  Research  and  Planning  was  enabled  to  obtain  the  allot- 
ment records  and  found  that  six  -Drcducers  received  a.llotraent=:  eouivalent 
to  51  Tier  cent  of  the  total  for  the  Division.   These  six  -oroducers,  ac- 
cording to  the  by-laws  controlled  all  future  ouotas  and  could  keeio  them- 
selves in  power  as  long  as  they  wished  or  until  amendment  of  the  by-laws. 
In  the  case  mentioned,  arrangements  were  made  to  sa.tisfj''  the  aiToellant. 

It  might  be  well  to  note  that  one  of  the  results  of  -oroduction  con- 
trol as  administered  under  the  Code  ■■'as  the  encouragement  of  selective 
sawing  —  bringing  out  of  the  forest  only  the  best  nart  of  the  tree. 
With  restrictions  only  on  the  nuantity  of  sawn  lumber  produced  the  aim 
of  the  maniif acturer  must  be,  of  cor.rse,  to  get  the  highest  return  from 
this  Guota.   The  production  control  -orovisions  limited  sawn  lumber  and 
not  logging,  and  therefo^^-e  increased  waste  in  the  forest  by  encouraging 
the  "omctice  of  leaving  on  the  ground  to  decay  all  but  the  best  logs 
from  the  trees. 

The  National  Industrial  Ppcovery  Borr'''  recognized  certain  conditions 
as  inevitable  in  any  attemrjt  at  control  of  -nroduction,  I'^nd  in  a  i-iublica- 
tion  dated  April  33,  1935,  entitled  "Administrative  Policy,"  st-^ted  in 
part  a,s  follows: 

"A  control  of  -Droduction  is  inevitable  under  -^ny 
industrial  system.   A  long  ex-oerience  has  led  us 
to  leave  thpt  ■oroblem  to  the  onen  market.   In  a 
few  industries  in  which  competition  h?s  -n-^oved 
unus"ua.lly  disorderly,  it  ma.y  be  necessary  to  in- 
tervene to  bring  production  into  line  with  demand; 
but  such  intervention  should  avoid  'restriction  of 
output'  and  should  aim  at  the  kind  of  eouation  be- 
tween production  and  consumijtion  a?  the  market  is 
suT5-oosed  to  effect.   The  strategy  of  nolicy  must  find 
ex-nression  in  a  multitude  of  decisions.   But  its 

9815 


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end  is  single  —  an  economy,  not  of  scnrcity  but  of 
nlenty.   In  other  ""ords,  raeans  and-  end?  mvist  not  be 
confused.   Means  should  "be  flexible,  reouiring  the 
use  of  a  miscellany  of  devices  and  nrocedures.   Ob- 
jectives should  be  stable.   The  goal  is  the  estab- 
lishment of  conditions  under  which  in  p.  free  and 
open  market  comT)etition  may  determine  a  fair  r)rice." 

Production  control  will  remain  a  -nroblem  of  this  industry,  and 
methods  to  solve  it  will  continue  to  bp  off erpd  r s  long  as  the  presently 
existing  tremendous  -ootential  capacity  to  produce  goes  hand-in-liand  with 
a  much  restricted  consumer  demand  for  lumber  and  timber  oroducts. 


9813 


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CliAPTER  IV 

FHOBLEI.IS  OF  PISTRIBUTIOIT 

The  successfiil  marketing  of  foi-est  productc  is  as  imisortant  as  the 
■unquestioned  need  for  aggressive  and  farsighted  action  in  maintaining 
the  grorrth  and  protection  of  timber  stands.  This  axiom  is  well  sub- 
stantiated "by  the  fact  "that  had  the  per  capita  lumber  consimption  from 
1899  to  1909  continued,  the  1929  gross  consumption  i/ould  have  been  almost 

twice  what  it  was fsr  while  consumption  of  all  other  major  building 

material  was  greatly  increased,  gross  lumber  consumption  actually  de- 
creased or  barely  held  its  own,  (*) 

The  intimate  relationship  of  the  growth  and  distribution  of  forest 
products  to  (a)  land  use,  (b)  employment,  (c)  government  investments,  is 
a  challenge  to  the  industry  and  to  the  consuming  public  to  put  forth 
every  effort  to  retain,  to  recapture,  and  to  expand  the  market  for  for- 
est products. 

Patently,  the  attainment  of  these  objectives  is  a  problem  of  indus- 
trial efiiciency  centering  chiefly  a.round  (a)  productiori,  (b)  price, 
(c)  channels  of  distribution,  (d)  trazisportation,  (e)  increased  satis- 
faction in  the  use  of  the  products,  (f)  competitive  practices  and 
(g)  integration  of  industry. 

Not  the  least  of  these  intimate  factors  is  that  having  to  do  with 
the  inorovement  of  the  products  which  may  be  accomplished  in  various 
ways,  some  of  which  are: 

1,  By  controlling  moisture  content  througli  better  seasoning 

2,  By  exercising  greater  care  in  selection  and  grading, . and 

3,  By  mak;ing  decay-resistant  lumber  generally  available. 

Sight  should  not  be  lost  of  the  fact  that  low  production  cost,  pjid  not 
so  incidentally. either  a  nigher  degree  of  satisfaction  to  the  consumer, 
calls  for  radical  chsjiges  in  industry  organization  and  in  practices  re 
forest  holdings, 

'  Fnile  there  are  of  course  various  disadvanta^ges  controlling  the 
cost  of  lumber  (lumber  is  the  principal  fo'rest  product  and  presents  the 
most  difficult  marketing  piroblem) ,  possibly  the  most  dominant  is  the 
heavy  transportation  charge.  Lessened  transportation  costs  vdll  depend 
on  at  least  three  conditions:  (l)  freight  rate  a,djustment,  (2)  decreased 
cross-hauling,  (3)  putting  those  forest  ared,s  clo'sest  to  consuiaers  into 
maximum  production,  and  (4)  fabrication  of  lumber  at  the  source  rather 
than  at  the  point  of  consumption, 

Few  people  realized  how  intimately  and  extensively  wood,  as  wood, 
enters  into  our  every  day  requirements.   Fewer  still  r.re  av/are  of  the 
fact  that  an  ever  increasing  qu'iiitity  of  vrood  is  used  in  mailing  articles 
in  which  the  identity  of  the  wood  is  not  obvious.   There  are,  for  example, 
thanks  to  laboratory  and  chemical  treatment,  products  such  as  paper, 
.Jayon,  cellophane,  artificial  leather,  paper  dishes,  drinlcing  cups,  roof- 
r^l   "A  National  Plan  for  American  Forestry."  A  reT)Ort  of  tlie  Forest 

Service  (1933)  p.  1365. 
9813 


-190- 

ing  felt,  and  even,  conduit  pipes,  all  nade  from  wood.   Then  there  are 
wood  e:ctracts,  dye  stuffs,  essential  oils  and  naval  stores,  each  one 
creating  a  demand  and  its  consonant  problem  in  distribution. 

In  the  past,  lumber  and  the  other' major  forest  products  have  "sold 
themselves,"   Quite  the 'contrary  is  true  now,  for  those  commodities 
must  be  pushed  against  the  increasingly  keen  competition  of  other  mater- 
ials.  There  is  important  needi  therefore,  for  strong  promotional  effort 
not  only  to  maintain  established  outlets  but  to  generate  latent  wants, 
all  of  \7hich  calls  for  distributor  cooperation  in  a  well  coordinated 
sales  policy  to  the  end  that  the  consumer  ma;A  obtain  material  of  the 
type  and  quality  desired  to  meet  his  particular  requirements. 

Taming  to  the  more  specific  discussion  of  distribution  problems 
as  such  it  is  to  be  noted  that  there  are  as  many  and  as  wide  variations 
of  marketing  methods  as  there  are  sections  and  regions  of  the  co-untry. 
This  may  veil  be  accounted  for  by  the  fact  that  the  industrjr  took  its 
beginning  largely  from  agriculture  with  its  early  market  of  new  farms 
-caused  out  of  the  ever  receding  wilderness  and  the  methods  which  grew 
up  during  this  period  have  been  carried  on  through  the  transition  period 
to  the  present.  Any  attempt  to  define  specifically  methods-  of  distribu- 
tion would  be  entirely  erroneous  except  for  the  section  or  region 
specifically  under  discu'ssion,  therefore,  this  portion  of  the  subject 
will  only  be  touched  on  in  a  broad  way, 

Tlie  entire  distribution  mechanism  is  governed  by  specific  demand 
factors.  While  these  factors  are  legion,  if  individual  purchasers  are 
considered,  there  are  actually  but  fe\7   variant  factors  if  purchasers  are 
reduced  to  major  consumer  groups.   The  Construction  Industry  comprises 
by  fa.r  the  most  important  of  these  groups,:  followed  by  the  Wooden  Con- 
tainer Industry,  and  majiy  other  lesser  industries  -  all  discussed  in 
some  detail  in  subsequent  pages. 

In  order  that  the  reader  maj"  have  some  sort  of  a  yardstick  by  which 
to  measure  the  Lumber  Industry's  field  of  distribution  and  thus  more  in- 
telligently comprehend  its  demand  factors  and  distribution  problems,  the 
following  observations  and  data  are  presented. 

As  already  stated,  although  lumber  is  but  one  of  the  many  products 
of  the  forest,  it  is  by  far  the  most  important,  since  the  saw  timber  area 
consists  of  approximately  five-sixths  of  the  total  commercial  area,  With 
the  shifting  of  the  industry,  as  each  new  area  was  tapped,  production 
and  origin  of  shipment  naturally  shifted  and  correlatively  influenced  the 
distribution  problem. 

In  the  beginning,  timber  and  other  forest  -products  v;ere  located  under 
favorable  conditions  adjacent  to  their  markets,  making  for  low  production 
and  distribution  costs.  But  as  these  supplies  of  virgin  timber  were  de- 
pleted, new  areas  were  opened  up  farther  and  farther  from  the  market, 
thus  increasing  transportation  costs  which  were  passed  on  to  the  constuner 
in  increased  prices.   The  inevitable  result  was  lessened  demand, 

G-oiigback  a  step  further  into  the  field  of  Traduction,  it  is  evident 
that  these  recurring  shifts  and  consequent  resvilts  generated  a  dilemma 
on  the  horns  of  which  the  industry  was  and  still  is  securely  caught.   To 

9813 


-191- 

raal--:e  a   profit    it  has  always  had  to    cither  increase  prices  and  face  a 
diminishing  demand,   occasioned  in  part  ty  consumer  demand  for   substitutes, 
or  roduce  cost  in  an  effort  to  Maintain  and  expand  markets. 

Bearing  in  mind  that   the  principal    soft-jood  producing  regions  are 
Southern  pine   in  the  Southeastern  section  of  the  United  States:    the 
Douglas  Fir  region  comp lined  of  most  of  the   States  of  Washington  and 
Oregon;    end  the  yestem  Pine   region  comprised  of  the  inter-mountain 
states,    it  can  be  readily  seen  with  the  principal  consuming  markets  on 
the  Kortheastem   Seaboard,    in  the  ccntrr?J.   \7est  arid  in  California,    that 
there  woiild  be  a  very  considerable   cross-haul  of  lumber  and  timber  prod- 
ucts to   effect  the  distribution  of  the  manufactured  pi-oducts  to   the  con- 
suming areas»      This  raovomont   of  lumber  and  timber,    is  very  completely 
sho\m  in  Table  XLTI;   Appendix  II,   of  tLiis  report  vmich  deals  only  with 
the   softwoods,   but   as   scftwpods  inal:e  up   from   85   to   90  per  cent   of  the 
total  ajinual   cons'JUiJpt  ion  of  lumber  rnd   timber  products,    this   data  is   in- 
dicative  of   the  whole   field. 

Certain   suimaar;'-  fngii-es   from   tliis   complete   table   are  presented  in 
tabulation  on  tiic  follo,7xi?g  p. ■■::■■ 

Fnerever  the  manufacture  of  lumber  has  been  a  major  undertaking 
the  first  mills  were  usually  situated  along  waterwa^/'s  and  the  logs  were 
rafted  to   them  but  as  the   timber  axlja.ccnt   to   the  water  was  depleted,    the 
mills  moved  inland  end  resorted  to   rail  and  other  transportation  agencies 
to   reach  the  consoling  areas.     About  the  only  rafting  now  done  of  logs 
is  along  the  Pacific   Coar^t   fron   the  northwest   to  mills   in   that   area  and 
in  California,  '■ 

THien  most   of  the  production  of  liimbsr  was  confined  to  the  northeast- 
em  states,   a  large  amciuit  of  it  moved  thro-ogh  the  variovis  canals.      In 
1872  a  tcta,l  of  1,467,865  tons  of  forest  products  moved  into  the  Pludson 
River  from   the  Erie  and  Ohamplain  Canals,      From  this  peak  year,    cana,l 
tonnage   declined  to   232-325   tons   in  1907, (*) 

Lalce   and  all-rail   shipments  of  liunbi.  r  from   Saginaw  River  points   in 
1885  amo-jntrjd  to   about  149,0GJj000   ft,    by  rail  and   slightly  over 
559,000,000  ft,   by  water^      Rail   shipments  increa^sed  steadily  until  in 
1897  they  amounted  to  379,000,000  ft,    as  against  slightly  over 
89,000,000  fta   by  water r.      Water   shipments  of  Itunbrr  into    Chicago    reached 
their  peak   in  IScT-'^  araoun-uing  to  1,850, 000, 000   feet,   but  have  dropped  to 
175,000,000  by  1914,      In  1371,    61  per  cent   of  the  lumber   reaching  Chicago 
came  by  ','atcr  whereas   in  1913.    such  j^ovcment  wa-s  less   than  9  per  cent, 

AS   the  areas  of  production   shifted  to   the   South,    coa.stwise  movement 
from,  the   South  Atlcaitic  ports  'oj  sailing  ajid  steam  vessels  became  of  in- 
creasing ir.poi-trc'ce.-,      The  annus,!  report  of  the  New  York  Chtimber  of 
Commerce   for  18yi>-91   contains  a  table   shewing  that   1.301,3585762   ft,    of 
lumber  -ere   received  at  the  port  of  iTew  York  in  1390.      Of  this  amctnt, 
304,823,000  ft,   verc   dolrvered  by  rail   an.d  99:;5::4.762   ft,   by  water.      In 


(*)  Canal  data  Lai.yn  from  "Rjp'-rt  ,-;:^  rransportation  by  waiter  in  the 
United  State:;."  by  the  U,  S.  Co:.: rdssioner  of  Corporations,  July 
19,   1909,   Part,    2, 


9813 


•193- 


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9813 


-193- 

1907,  447,229,565  ft.  of  Southern  Pine  were  received  at  ITev;  York  ty  water 
aJid  of  this  anount  224,433,208  were  discharged  from  sailing  vessels,  the 
remainder  from  steam  vessels. 

Prior  to  1900,  and  to  an  evci"~decreasing  extent  following  the  turn 
of  the  century,  a  considerable  anount  of  the  water-borne  lumber  which 
entered  the  North  Atlantic  ports  from  Baltimore  north  was  shipped  by  rail 
to  interior  points  as  far  west  as  Cleveland,  Much  of  the  lumber  which 
was  back-hauled  was  remanufactured  in  plants  located  in  the  llorth  Atlan- 
tic ports*  However,  as  manufacturing  facilities  were  increased  at  the 
mills,  and  as  the  network  of  railroads  spread  out  throughout  the  South 
and  West  this  movement  of  lumber  inland  from  the  Atlantic  Seaboard  ports- 
has  very   materially  decreased. 

In  the  early  1920' s  the  movement  of  Pacific  Coast  woods  to  the  At- 
lantic Seaboard  ports'began  to  gain  impetus.   In  1920,  205,000  short 
tons  of  lumber  passed  through  the  Panama  Canal;  in  1922  this  had  in- 
creased to  1,122,000,000  short  tons. 

Tliis  w3.ter-bome  movement  from  the  Pacific  to  the  Atlantic  of 
low-grade  lumber  at  low  freight  rates  was  a  blow  to  the  producers  of 
Southern  Pine,  Although  wages  in  the  nills  on  the  West  Coast  were  two 
or  more  times  higher  than  they  were  in  the  southern  mills,  the  effici- 
ency of  labor,  the  class  of  timber,  and  the  facilities  for  manufactui>- 
ing  lumber  on  the  West  Coast  were  such  that  it  could  be  shipped  6,000 
miles  by  water  and  yet  compete  in  price  with  lumber  of  other  areas 
shipped  by  rail  from  300  to  1,500  miles  to  the  metropolitan  centers. 
Farther,  it  could  be  back-ha.uled  by  rail  400  or  500  miles  from  the  At- 
lantic Coast  and  still  compete  with  Southern  Pine,  shipped  to  such 
points  as  Youngstown  and  Cleveland,  Ohio, 

Within  the  last  few  years  there  has  been  a  movement  by  truck 
from  the  mill  to  the  consumer.   This  trend  was  to  be  expected  in  re- 
mote districts;  it  has,  however,  been  highly  developed,  particiilarly 
along  the  Eastern  Seaboard,  and  much  lumber  is  now  hauled  from  Virginia 
and  the  Carolinas  into  such  cities  as  Washington,  Baltimore  and 
Philadelphia,   In  many  instances  the  lumber  hauled  by  truck  is  sold 
direct  by  the  mill  to  a  contractor  or  a  builder,  and  delivery  is  often 
made  over  night. 

This  method  of  transportation  has  materially  added  to  the  burden  . 
of  and  increased  the  competition  of  the  retailer  in  certain  areas. 
It  has  further  served  to  break  down  general  price  levels,  A  contractor 
btiying  direct  from  a  mill  at  a  cheaper  price  thaii  a  retailer  exerts 
pressiire  on  the  retail  yard  to  meet  the  competition  of  the  mill,  and 
this  pressure  is,  in  turn,  exerted  by  the  retailer  on  his  sources  of 
supply, ^ 

Although  there  are  no  figures  available  to  confirm  definite  changes 
in  the  method  of  distribution  under  the  Code  it  is  believed  that  much  of 
the  growth  of  truck  transportation  was  due  to  the  Code.   Certainly  it 
cannot  be  denied  that  many  purchasers  of  lumber  exerted  themselves  to 
the  full  in  an  endeavor  to  brealc  down  not  only  the  Code  prices  set  up 
by  the  manufacturers  but  also  to  evade,  if  possible,  the  modal  mark-up 
of  the  retailers.   It  is  also  an  undisputed  fact  that  some  shippers  and 

9813 


wholesalers  of  lumter  coo-nerated  rrith  this  class  of  purchasers.   Diiring 
the  Code  period,  the  majority  of  retail 'Itunher  dealers  not  wishing' to 
increase  their  low  stocks  were  most  desirous'of  h-uying  in  small  q-uantities, 
less  than  carload  lotso   This  reason,  together  with  the  fact  that  low 
stocks  were  replenished  more  rapidly  hy  track  deliveries  than  "by  rail 
shipments  Often  led  to  truck  transportation.   The  great  increase  in  num- 
ber of  good  roads  and  in  the  efficiency  of  trucks  has  al6o  contributed 
to  this  method  of  distribution.  ;' 

With  the  expansion  of  the  west,  particularly  upon  the  completian  of 
the  transcontinental  railroad,  came  considerable  increase  in  farms. 
During  this  period' there' were  approximately  60,000  farms  established  an- 
nually^  each  taking  m'any  thousands  of' feet  of  liiunber.   This  building 
reached  its  high  point  in  1906  and  1907,  when  46 ,'000,000, 000  board  feet 
annually  were  consumed,  inciting  wild  stumpage  speculation.  With  the 
continuation  of  agricultural  expansion  and  its  concurrent  increased  de- 
mand for  lumb.er,  the  val'u.e  o-f  stumpage- "rose"  steadily  to  about  1927, 
This- speculation  and  acquisition  in  the  West,  of  large  timber  holdings, 
is  the  key  to  many  of  the  problems  T/hich  appeared  during  the  years  of 
the  depression. 

With  the  declining  demand  and  the  resultant  decline  in  value  of 
stumpage,  timber  holding' became  a  liability  due  to  the  tetx"  problem  For 
example,  a  study  in  northern  Michigan  shoves  that  on  16  representative 
timber  tracks,  average  annual  taxes  per  acre  increased  from  14  cents 
in  1906  to  96  cents  between  1926  and  1930,  Is'with  ail  other  products, 
when  stumpage  values  were  no  longer  increasing,  the  tendency  was  to 
liquidate  holdings.   This  in  turn  brought  keener  competition  and  a  de-  . 
sire,  to  Convert  standing  timber  into  cash.  New  mills  were  constructed 
at  a  rapid  rate,  Prom, 1921  to  1929' the  number  of  establishments  produc- 
ing more  than  $5,000  annually  grew  from  14,961  to  19,142  —  this  in 
spite  of  the  fact  that  the  volume  of  lumber  consumed  was  steadily  de- 
clining.  The' pressiirs  to  liquidate  timber  became  even  greater  during 
the  depression  years,  although  practically 'all  holders  of  timber  land 
realized  that  there  was  already  large  over-production. 

Until  about  I9'2;3  the  generally  increasing  lumber  prices  were 
accepted  by  the  public,-  then  the  competition  of  substitute  m'aterials  be- 
came acute,  with  the  result  that  profitable  lumber  prices  could  no 
longer  be  maintained  under  the  current  regime.  Literally  forced  to  the 
wall  by  the  two  battering  rams  of  nounting  costs  and  relentl.ess  competi- 
tion, the  industry  in-  desperation  resorted  to,  lower  cost  formulas  and  im- 
proved methods  of  grading  and  seasoning  to  make  its  products  more  attrac- 
tive to  the  consumer.   What  little  advantage  was  gained  in  this  manner, 
however,-  was  frequently  offset  by  new  concerns  entering  the  production 
field,  particularly  in  the' older  areas,  where  a  second  growth,  though 
immature,  was  put .on  the  market,  and  by  old  concerns  setting  up  an  al- 
ready sufficient  capacity.   Overproduction  would  inevitably  follow' with 
a  resultant  drop  in  prices,  thus  forcing  the  high-cost  operators  to  close 
do\7n  until  curtailed  production  and  increased  prices  again  permitted  them 
to  compete,      ■ 

As  already  stated,  although  lumber  is  bat  one  of  the  many  produc  '  , 
of  the  forest,  it  is  by  far  the  most  important.   Some  graphic  idea  of 
the  general  demand  faqtor  of  at  -least  the  major  forest  products  may  be 

981S 


-195r 

gained  from  the  followine  table  of  forest  products  and  the  per  cent  of 
demand  in  terras  of  the  total  amount  used  annually  from  1925  to  1929: 


POEEST  PRODUCTS  PER  CEIIT  OF  TOIAl 
USED  AHIWALLY 

Lumber  50,8 

Puelv/ood  27,6 

Heued  tiqs  4,4 

Pence  posts  4,3 

Pulpwood  4,1 

Mine  timber  (round)  If 6 

Veneer  logs  If  6 

Cooperage  (slack)  "          1»1 

Logs  and  bolts  in  maniifacture  1«1 

Cooperage  (light)  1»0 

Shingles  '  0.9 
Miscellaneous  (poles,  piling,  e^qjort,  logs, 

distillation  and  extract  wood,  excelsior, 

etc,)  1.5 

Source:  Bureau  of  the  Census,  1925-1929. 

Through  its  years  of  developnent  and  vicissitude,  the  industry  has 
had  to  cope  with  a  sluffing  away  of  same  and  the  growth  of  new  demand 
factors.  Just  what  future  demands  may  be  is  pure  conjecture.   The  con- 
viction is  growing,  however,  that  our  forests  will  be  requii-ed  to  fur- 
nish material  for  many  derived  products  such  as  cellulose,  lignin  and 
acetate  of  lime,  rather  than  chiefly  logs,  lumber  and  cordwood  as  in 
the  past.  Whatever  the  demand,  though,  the  pioneers'  attitude  of  des- 
truction is  being  replaced  with  an  attitude  of  care  and  conservation. 

It  is  quite  evident  that  the  brevity  of  this  chapter  does  not  per- 
mit even  a  passing  discussion  of  the  lesser  maniford  uses  and  the  ger- 
mane factors  entering  into  their  individual  collective  distribution. 
It  will  suffice  to  devote  consideration  merely  to  those  major  demand 
factors  or  consumer  groups,  which  have  dominated  and  still  control  the 
consumption  of  the  Lumber  Industry's  chief  products. 

The  consumption  of  Itunber  may  be  roughly  divided  into  five  general 
demand  divisions.  They  are: 

1,  Lumber  used  for  construction  purposes 

2,  Wooden  containers 

3,  Industrial  use- 

4,  Railroads,  including  ties  and  other  structural 
lumber  for  railroad  jjunioses 

5,  Tlie  export  market  - 


9813 


-195-   ■' 

It  is  difficiilt  to  obtain  data  as  to  the  proportion  of  the  total 
cons-umption  going  into  each  class  enimerated  ahove.   The  Department  of 
Commerce,  however,  in  conjtmction  with  the  United  States  Forest  Service, 
made  such  a  "livision,  and  found  that  in  1928  approximately  63  per  cent 
of  the  total  lumber  used  was  for  construction  purposes,  including  the 
lumber  that  uad  been  fabricated  into  construction  parts,  such  as  doors, 
sash,  etc,   'Jhis  included  all  railroad  lumber  except  that  used  for  car 
construction,  irhich  'was  placed  in  the  industrial  classification.  Ap- 
proximately 15  per  cent  v.-ent  to  the  UTooden  Container  Industry  in  1928; 
and  about  14,5  per  dent  to  the  lesser  industrial  uses;  vrith  6,5  per 
cent  to  exiDorts«(*)  " 

In  1933  the  Construction  Industry  took  about  65  per  cent,  the  ' 
Wooden  Container  Industry  16,4  per  cent,  other  industrial  users  .12,5  . 
per  cent,  and  5,1  per  cent  was  exported.   It  is  thus  seen  that  the 
Lumber  Industry  is'prretty  definitely  wedded  to  the  Construction  Indus- 
try, for  better  or  for  worse,   Correlatively,  large  centers  of  popula- 
tion furnished  the  idost  enticing  consuxaing  areas, 

The  total  lumber  consumed  in  the  'early  part  'of  the  20th  Century 
exceeded  even  that  u'sed  during  the  building  boom  period  of  the  late 
20' s.   This,  to  some' extent,  was  duo  to  the  enormous  amount  of  rail- 
road building  at  the  turn  of  the  century-,  together  with  new  towns  and- 
farms  opened  up  along  their  right-of-way. 

According  to  the  National  Lumber  Manufacturers  Association,  produc- 
tion in  1906  and  1907  surpassed  45,000,000,000  feet.   The  nearest  ap- 
proach to  this  figure  was  in  1923  and  1925,  when  slightly  in  excess  of 
41,000,000,000  feet  of  production  was  reported.  Lumber,  though  used 
for  fewer  purposes  during  this  period  to  1907,  was  used  in  greater 
quantities  than  at  any  time  feince, '  Tlie  railroads  for  example  then  used  • 
enormous  quantities  for  ties  and  trestles;  some  of  the  latter  have  since 
been  replaced  with  concrete  and  steel  and  perfected  methods  of  treat- 
ment have  reduced  decay  and  replacement.   The  planlc  sidewalks,  and  these 
took  a  lot  of  lumber,  were  common,  and  green  lumber  houses  sprang  up 
like  mushrooms. 

The  United  States  Census  reports  for  the  decade  1920  to  1930 
showed  construction  of  4,500,000  buildings  with  a  dollar  value  of  such 
construction  amounting  into  tremendous  dollar  investment  as  seen  from 
the  following  table: 

YEAR  VALUE  .■BUILDIiro  COHSTRUCTIOIT 

1920  $4,133,000,000 

1921  3,786,000,000 

1922  5,302,000,000 

1923  5,829,000,000 

1924  6,421,000,000 

1925  .  8,036,000,000 

1926  8,163,000,000 

1927  7,975,000,000 

1928  8,237,000,000 

1929  7,234,000,000 

-^^ 1930        5,062,000,000  j'^*) 

(*)   See  Table  XXXI,  Appendix  to  this  Report 

(**)  See  "The  Construction  Industry  and  NM  Construction  Codes,"  Division 

9813  °^  Review,  NRA,  March,  19S6. 


50.5 

79,5 

45.2 

77.9 

65.1 

88.0 

71.5 

101.4 

79,0 

98.2 

■     98.8 

104.3 

100,0 

100,0 

89.0 

92.3 

100.5 

102.4 

89.0 

97.2 

62.0 

69.2 

39.5 

50.9 

17.3 

37.4 

16.4 

43.7 

20.7 

40.6 

-197- 

Tlie  use  of  iTJUiter  follows  the  general  trend  in  construction  as   shovm 
by  the  follOT;7ing  index  comparisons  of  building  volume  rith  total  volume 
of  lumber   shipped: 

Year  Construction  Lu-nber  ShiToned 

1920 

1921 

1922 

1923 

1924 

1925  . 

1926 

1927 

1928 

1929 

1930 

1931 

1932 

1933 

1934 

Wliile  it  is  apparent  that  the  volume  of  lumber  used  during  the 
boom  years  of  the  late  20's  as  shomi  in  Appendix  II,  of  this  report, 
Table  XXXIII  did  not  parallel  the  total  increase  in  construction, 
there  has  been  less  disparity  than  is  generally  thought.   The  compari- 
son shous  that  for  every  $1,000  '•'orth  of  construction,  there  was  4,520 
feet  of  lumber  used  in  1920,  2,796  feet  in  1925,  the  lowest  point  being 
in  1927,  when  2,470  feet  were  used.   There  was  an  increase  in  1929  to 
2,861  feet,  with  the  highest  point  in  the  15  years  rea.ched  in  1933,  ^-^ith 
5,768  feet.   This  may  have  been  due  in  part  to  the  large  number  of 
C.C.C,  camps  built  in  that  year  as  compared  to  total  construction,  but 
this  has  not  been  accurately  determined.   In  1934  some  4,523  feet  of 
lumber  were  used  for  each  $1,000  of  construction. 

In  1928  a  total  of  25,822,230,000  board  feet  of  domestic  lumber 
went  into  construction,  as  compared  with  10,162,661,000  board  feet  in 
1933,  or  a  drop  of  more  than  50  per  cent  for  the  period.   Softwood  ac- 
counted for  about  91  per  cent  of  the  total  softwood  and  hardwood  con- 
sumed by  the  Constraction  Industry  in  1923,  and  for  about  87  per  cent 
in  1933,   It  is  seen,  therefore,  thctt  softwood  consumption  has  lost 
somev/hat  to  hardwood  consumption,  althou^gh  the  cause  is  not  definitely 
discernible. 

Of  the  total  lumber  consumed  by  the  Construction  Industry  in 
1928,  by  far  the  largest  amoujat,  or  more  than  31  per  cent  of  the  soft- 
vrood  was  taken  by  ITew  York  State.   Illinois  ranked  ne::t,  taJ-^ing  nearly 
one-third  as  much  as  Kew  York,  followed  by  California,  Pennsylvanigi, 
Michigan,  and  Ohio,  in  the  order  named.   Considerably  lesser  amouiits 
were  t?ken  by  the  remaining  States.  New  York  likewise  took  the  largest 
proportion  of  the  hardwood  prodiiction  in  1928,  or  about  31  per  cent, 
followed  by  Illinois,  California,  Pennsylvania,  Llichigan,  and  Ohio,  in 
order. 

In  1933,  five  years  later.  New  York  still  outranked  all  other  States 
9813 


-198- 

in  its  total  consimption  of  "both   soft\70od  and  hard^vood,   "but  the  percent- 
age difference  'bet\7een  itn   tnl:e  and  that  of  Cslifornia,    the  next  ranlcing 
consiraer,   vas   slight,     llev  York  took  23  per  cent  of  the   total   softrood 
production,   v/hereas  California  took  21  per  cent,  llev;  York,   23  per  cent 
of  hard\7ood  production,    and  Co.lifornia,   21  per  cent,      Illinois,  which 
held  second  place  in  toth  softwood  snA.  hardwood  in  1928,    dropped  to 
fifth  place  in  1933,     Pennsylvania  moved  up  from  fourth  to   third  place, 
Ohio  fron   sixth  to  fourth  place,   and  Lichigan  dropped  to    sixth  place. 

Comparisons  of   State   consumption  are   even  more   significant  when 
studied,  in   relation  to   the   total   amounts   consumed  in   the   two  ^'■ears, 

COIiTSUl'.iPTIOH  OF  LUMBER  BY  THE   CPU  STRUCT  I  Oil  INDUSTRY 

(LI.    Feet  B.  1,1.) 

WOOD  ai:d  state  1928  1933 

Softwood: 

Total                  ■  21,634,717  8,859,570 

New  York  6,838,518  2,075,568 

Illinois  2,434,555  244,445 

California  1,340,271   ■  1,884,784 

Pennsylvania  1,298,516  483,392 

Michigan  1,191,424  163,732 

Ohio  1,183,419  291,277 


Hardwood: 
Total 
New  York 
Illinois 
California 


2,r87,513  1,293,0,91 

691,451  302,596 

246,161  35,637 

-^ ..-^                     135,516  274,782 

Penns3'lvania                    131,295  70,473 

Michigan            ■           120,466  23,870 

119,557  42,455 


Ohio 

It   is  noted  from  the  foregoing  table   that  while  New  York  consump- 
tionin  1928  was  31  per  cunt  of  the  total,    as  against   California's  5 
per  cent  in  1933,  New  York  took  "but  23  per  cent  and  California  increased 
her  tai:e  of  21  per  cent  of  the  total.     Not  onls?-  that,    California  in- 
creased its  softwood  consumption  in  1933  over  1928  ahoxit  46  iier  cent, 
and  its  hardwood  consumption  doubled,      Tli.e  consumption  for  all  other 
States   in  1933  was  considerably  below  the   consumption  of  1928. 

Undoubtedly  the  greatest  amount  of  labor  used  for  railroads  is 
that  used  for  ties.     Here  was  the  most   important  influence  on  the  de- 
cline of  the  total,"    No  figures  are  available  for  the  early  part  of 
the  countrj'  when  railroad  building  was  at   its  height,  but  fig'j.res  show 
that  there  was  a  drop  from  135,000,000  ties  in  1923  to  46,000,000  ties 
in  1932. 

The  prime   reason  for  the  drop  vras  of  course,  decreased  railroad   • 
building  btit   in,  addition,   the   introduction  of  a  treatment  which  in 
some  cases  trebled  the  life  of  the  tie,    influenced  a  reduction  in  the 
use  of  new  ties, 

9813 


-199- 

As  stated,  the  next  largest  consu-ner  of  lirnlDer  after  the  Constmc- 
tion  Industry  is  the  Wooden  Packaf;e  Industry,  vhich  talies  about  16 
percent  of  the  total  production.   There  has  been  much  complaint  in  the 
industry  regarding  numerous  displacements  of  '-'ooden  containers  by  fibre 
and  iiaper  bo::es.  Undoubtedly  thii:,  is  tome  to  a  considerable  extent  but 
there  is  no  statisticrJ  means  of  measuring  this,  due  to  lack  of  infor- 
mation on   the  Paper  Container  Industiy  at  this  tine.   The  onlj'-  \7ay  id  to 
compare  the  index  of  industrial  production  vith  the  total  amount  used 
for  \70oden  containers.   Table  XXXI  of  this  report  indicates  that  in  1928 
about  5,474,000,000  feet  of  lumber  -jere  used  for  this  purpose.   The 
Federal  Heserve  Board  Index  on  Industrial  Production  with  1929  equal  to 
100,  stood  at  93  for  1928,  and  in  1953  only  2,949,000,000  feet  of  lumber 
were  used  for  containers.   The  index  of  industrial  production  stood  at 
64  -  e^   droi^  of  31  percent  in  industrial  production  as  compared  to  a  drop 
of  more  than  50  percent  in  wooden  containers. 

Certain  sections  of  the  industry-,  notably  California,  and  Oregon, 
show  somewhat  less  decline  in  wooden  containers  due  to  the  fact  that  the 
fruit  packing  industry  in  the  llorthwest  and  the  fru.it  and  vegetable  pack- 
ing industry  in  CsJ-ifornia  are  still  large  users  of  \700den  containers. 
In  the  East,  the  practice  of  using  large  veneer  conta,iners  rather  than 
the  sa.wed  wooden  box  containers  so  prevalent  in  the  Vfest,  reduced  the 
amount  of  lumber  used  for  that  purjDOse. 

Over  75  percent  of  the  l\ijnber  tal:en  by  the  IJooden  Container  Indus- 
try is  softv-ood.   In  1929  Washington  ranked  first  in  the  .amount  con- 
sumed, talcing  about  12  percent  of  the  total,  followed  by  Oregon,  liichigan, 
Pennsylvania,  Liassachusetts,  and  Ohio,  in  the  order  named,  each  consuin- 
ing  more  than  200,000,000  board  feet  annually.  Pennsylvania  tal:es  the 
most  ha/rdwood  for  container,  followed  by  California  and  Ohio  in  the  order 
named.   Considerabl;''  lesser  amounts  were  talcen  by  the  other  States.   In 
1933  California  took  by  far  the  largest  amount  of  softwood  for  contain- 
ers, followed  bj'  Oregon,  althpugh  it  ranked  seventeenth  in  ir!28,  Washing- 
ton (first  in  1928),  Llichigan,  Pennsj'-lvania,  Lascachusetts  and  New  York 
in  the  order  named. 

Tiie  Construction  Industry  ai'.d  the  Wooden  Container  Industry'-  to- 
gether took  approximately  SO  percent  of  the  1928  lum.ber  consumption, 
leaving  about  14  percent  for  other  industrial  uses  and  6  percent  to  be 
exported.   Pra.ctically  tho  sam.e  relationship  prevailed  in  1933. 

In  1928  the  tota.l  lumber  used  for  industrirJ.  purposes  was 
4,945,000,000  feet.   This  dropped  in  1933  to  1 ,  90?",  000 ,  000  feet—  a  de- 
cline of  slightlj"-  more  than  60  percent  as  compared  to  the  decline  of  31 
percent  in  industrial  production  of  all  other  industries.   It  appears 
from  the  above  that  the  decline  in  the  use  of  wooden  products  was  great- 
er than  the  general  decline  in  consoxiption  of  other  industrial  products. 

Wliile  over  the  longer  period  there  had  been  some  increase  in  the 
use  of  lumber  for  industrial  purposes,  other  than  has  already  been  dis- 
cussed, due  to  the  increased  use  of  wooden  automobile  parts,  this  consump- 
tion began  to  decline  during  depression  years  \Tith  the  'xdv^nt  of  the  steel  body, 
Further,  some  displacement  has  been  made  by  metai  furniture  and  metal 
parts,  which  were  formerly  made  of  wood.   While  the  Automobile  Industry 

9813 


-200- 

is  still  using  ei  considerable  share  of  the  l/tunber  production,  its  rapid 
substitution  of  inetal  for  '.70od  has  now  placed  consumption  of  vrood  at 
appro xinately  the  level  contained  "by   the  carriage  and  huggy  industry'. 
IJhile  there  are  clains  of  a  reversion  to  v/ooden  pa,rts  for  nany  things, 
this  nay  he  due  in  a  large  measure  to  special  development  in  the  indus- 
try itself;  and  the  trend  nay  be  further  increased  by  the  price  level 
of  lumber  as  compared  v/ith  the  price  level  of  metal  products. 

It  is  vTorthy  of  note  that  whereas  the  great  preponderance  of 
lumber  consumed  by  both  the  Construction  Industry-  and  the  Wooden  Con- 
tainer Industrj"-  was  softwood,  more  hardwood  than  softwood  is  talien  by 
other  industrial  users. 

Although  iiichigan  ranked  first  in  1928  in  its  consumption  of  lum- 
ber for  industrial  uses  other  than  for  construction  purposes  and  for 
wooden  containers,  and  North  Carolina  was  second,  in  1933  llorth  Carolina 
ranked  first,  and  Uichigan  second.   California,  though  prominent  in  its 
conswAption  of  wood  for  construction  purposes  and  for  containers,  ranlced 
eleventh  in  its  consumption  of  wood  for  other  industrial  uses  in  1928, 
and  even  lower  in  1933. 


table: 


The  major  hardwood  consuming  industries  are  shown  in  the  following 


LlAJOa  PJURPffOOD  C0IISFi.:I1:G  IimuSTRILS 


imUSTHY 


Furniture 

Boxes  and  Crates 

Building  and  Construction 

Raili'oad  Construction 

Railroad  Car  Construction 

Flooring 

Vehicles 

Caskets  and  Coffins 

Sash, Fram.es, Doors, Blinds,  and 

General  Kill  Work 
Handles 
Miscellaneous 
Unaccounted  for 


IvI.  FT. 


PERCEIIT  OF 


TOTAL  COlIsmiPTIOH 

628,000 

21.38 

516,000 

17.57 

492,000 

16.75 

328,000 

11.17 

38,000 

1.29 

222,000 

7.56 

191,000 

6.50 

46,000 

1.57 

44,000 

1.50     . 

32,000 

1.09 

234,000 

7.97 

166,000 

5.65 

Source: 


national  Lumber  Manufacturers'  Association,  Docket  No.  5, 
1933. 


9813 


-201- 

It  '.Till  "be  noted  that  the  Furniture  Industry  taJ:es  the  largest 
share  of  hardv/ood  shipments.   The  Box  and  Crate  Industry  ranks  second 
nith  der.and  areas  scattered  over  the  entire  eastern  section  of  the  coun- 
try.  This  latter  industry  uses  the  lov-t'^rade  product  of  the  logs  and 
as  a  rule  the  less  expensive  ^70ods,  such  as  gum,  tupelo,  and  cottonnood. 
It  is  an  industry  that  in  the  past  decade  has  had  to  face  intense  and 
ground  gaining  competition  from  substitutes  such  as  fibres  and  paper 
containers.   The  saving  in  ti-azi  sport  at  ion  cost  through  the  utilization 
of  a  lighter  weight  container  has  been  ajn.  economic  competitive  factor 
that  the  manufacturer  of  the  Tvooden  box  has  had  to  meet. 

As  early  as  1626,  the  Colonists  sent  some  lumber  to  Holland  and 
from  there  it  nas  reshipped  to  England.   It  is  also  worthy  of  note  that 
for  many  3^ears  the  timbers  of  the  finest  ships  in  the  British  Navy  came 
from  1-Tew  England.  Nor  should  it  be  forgotten  that  lumber,  logs,  masts, 
planl:s,  stairs,  tar,  pitch,  turpentine,  and  other  forest  products  en- 
tered largely  into  that  first  nursery  of  foreign  comnerce.   Trade  with 
the  Uest  Indies;  growing  out  of  these  Island  transactions  was  the  fa- 
mous "three-cornered  trade,"  in  which  New  England  and  the  Carolinas 
shipped  forest  and  agricultural  products  to  the  West  Indies;  the  Uest 
Indies  shipped  sugar  and  molasses  to  Europe;  and  Europe  shipped  manu- 
factures to  Hew  England,  so  closing  the  circuit. 

After  the  Revolution,  great  emphasis  was  given  to  the  exclusion 
of  the  foreign  trade  of  this  country  to  the  Orient.   As  a  result  ship- 
ments increased  a  pace,  including  lumber  and  forest  ;products.   By  1821, 
according  to  Department  of  Commerce  data  recorded  exports  of  sawmill 
products  and  naval  stores,  gums  and  resin  (wood  manufacturers  not  re- 
corded) amounted  to  $1,828,000,000  —  43.5  percent  of  total  exports  for 
that  year,  and  in  1S13,  just  prior  to  the  Uorld  War  these  exports  in- 
cluding wood  manufactxirers,  amounted  to  $134,190,000,  or  5.5  percent 
of  total  exioorts. 

The  table  on  the  follovring  page  shows  lumber  ex^Torts  for  the 
years  1S29  and  1932-1934. 

The  above  mentioned  table  does  not  include  total  shipments,  be- 
cause comparable  figures  are  obtainable  only  for  the  items  shown.   They 
constitute,  however,  the  major  portion  of  the  footage  shipment  of  the 
industry.   While,  again,  there  are  no  footage  and  value  fi;gures  direct- 
ly comparable  which  completely  encompass  the  Lumber  Industry,  it  is 
perhaps  worthy  of  note  here  that  the  total  value  of  exports  in  1929 
constituted  about  three  and  one-half  percent  of  the  total  exports  of 
the  United  States.   If  this  percentage  is  set  off  against  eight  and 
nine  percent,  the  amount  of  exported  manufactured  goods  of  this  coun- 
trj"-  in  relation  to  total  production,  the  relatively  collective  unim- 
portance of  lumber  exports  is  evident. 

Aside  from  the  fact  that  e:q5orts  of  both  softwood  and  hardwood  lum- 
ber dropped  off  rapidly  from  1929  to  1935,  the  preceding  table  is  sig- 
nificant as  showing  that  small  hardwood  dimension  stock  increased  over 
the  same  period.   The  1934  shipments  represent  an  increase  of  about  74 
percent  over  1929  shipments. 


981J 


Kind 
SOFWOODS^ 


1929 


-202- 
LUMBER  EXPORTS 
(M.  Bd.  Ft.) 
1932 


Firot  0  rnonthr.  of 
1933     1934         1935 


Douglas  Fir 

1,450,115 

495,708 

574 , 504 

591,402 

398,140 

■Mo.   Pine 

810,782 

331,265 

341,924 

383,985 

280,780 

Wes.  Pine 

41.482 

14,353 

17,358 

28,409 

24,948 

Hedvood 

62,280 

8,219 

14,185 

18,611 

11,544 

Cypress 

11,087 

2,847 

3,764 

4,611 

3,436 

Other 

239 , 520 

45,699 

30,505 

28 , 741 

22,871 

lall  Dimension 

Stock 

5,337 

65 

TOTAL 

2,620,603 

898,156 

982,240 

1,055,759 

741,719 

1 

HARDWOODS* 

y' 

Ash 

38,781 

27 , 849 

35,995 

44,381 

26,660 

G-iim 

53,904 

28,776 

36,996 

33,000 

25,860 

Oak 

231,024 

132,347 

155 , 549 

130 , 124 

115,571 

Popular 

40 , 383 

16,265 

21,979 

23,903 

20,629 

Other 

87,626 

23 , 763 

28,677 

34,060 

25,799 

nail  Dimension 

Stock 

5,407 

4,984 

6,600 

9,415 

6,355 

TOTAL 

457,125 

233,984 

285,796 

274,883 

220 , 874 

JTAL  -  SOFT  AND 

HARDWOODS 

3,077,728 

1,132,140 

1,268,036 

1,330,642 

962,593  , 

SOURCE:   Foreign  Commerce  and  Navigation  of  the  United  States  -  1929-1932- 
1933-1934. 

*  Includes  boards,  planks,  scantlings  and  sawed  timber. 


The  hardwood  dimension  segment  of  the  Lumber  Industry,  though  relatively 
small,  felt  the  depression  effect  to  but  a  minor  degree  in  the  volume  of 
the  export  business.   This  fact  would  seem  to  point  to  a  fast  grov/ing 
tendency  of  consumers  of  this  industry's  product  to  purchase  requirements 
as  far  as  possible  in  the  form  of  semi-fabricated  material  at  the  source 
of  supply.   This  trend  presages  an  evolution  of  the  lumber  industry  and 
one  that  will  doubtless  be  found  to  be  of  value  in  its  competitive  battle 
with  substitutes. 


9813 


Products  competing  with  lumber  and'  timber  productc  are  numerous 
and  varied.  Nearly  all  building  materials  compete  directly,  and  either 
have  displaced  or  are  displacing  lumber  to  a  large  extent  in  the  con- 
struction field. 

Displacement  of  lumber  by  structural  steel,  cement,  stone,  and  fire 
clay  products  (brick,  terra  cotta  tile,)  and  other  shifts  in  commodities 
consumed,  may  be  separated  into  three  classifications:  (a)  Shifts  due  to 
changes  in  relative  volumes  of  different  types  of  building  construction, 
(b)  temporary  shifts  due  to  price  competition,  (c)  permanent  commodities' 
substitution.  The  first  factor  measures  long-term  but  only  partially 
permanent  shifts  in  displacements;  the  last  factor  of  primary  importance 
measures  the  permanent  changes  in  potentialities  for  consumption  of  com- 
peting commodities. 

The  following  table  Shoes  the  percentage  of  displacement  of  lumber 
by  steel,  cement,  brick  and  stone  for  the  period  1919  to  1932: 


PERCENTAGE  CONSIB/iPTION  OF  MAJOR  BUILDING-  MATERIALS 


Year 

Lumber 

Steel 

Cement 

Brick 

Stone 

Total 

1919 

59.7 

10.8 

11.8 

15.7 

2.0 

100.0 

1920 

52.6 

13.6 

14.9 

16.4 

2.5 

100.0 

1921 

56.4 

5.9 

17.2 

17.3 

3.2 

100.0 

1922 

50.8 

11.8 

15.6 

18.4 

3.4 

100.0 

1923 

50.6 

11.9 

15.3 

19.2 

3,0 

100.0 

1924 

48.7 

12.2 

15.8 

18.9 

3.4 

100.0 

1925 

49.1 

12.2 

16.3 

19.1 

3.3 

100.0 

1926 

47.2 

13.5 

16.  8-; 

18.9 

3.6 

100.0 

1927 

45.4 

13.8 

18.0 

19.0 

3.8 

100.0 

1928 

48.3 

14.2 

16.8 

17.2 

3.5 

100.0 

1929 

44.1 

17.2 

17.3 

17.4 

4.0 

100.0 

1930 

40.4 

17.1 

20.6 

17.1 

4.8 

100.0 

1931 

44.0 

14.6 

21.2 

14.3 

5.9 

100.0 

1932 

46.0 

11.8 

21.4 

12.1 

8.7 

100.0 

Source:   Mr.  Victor  Ferlo,  Division  of  Research  and  Planning,  NRA, 

Table  I,  of  unpublished  report  of  February  20,  1934,  -  entitled 
"Displacement  of  Lumber  in  I'uilding  Construction." 

Brick  includes  common,  face,  and  vitrified  brick,  terra  cotta, 
hollow  building  tile,  and  fire  brick. 

Stone  includes  buidling  stone,  rubble,  and  riprap. 


9813 


-204- 
According  to  the  preceding  table,  Itmiber  supplied  by  far  the 
largest  percentage  of  major  ■buii-ding  materials  for  the  entire  period 
1919  to  1933.- '  Although  somewhat' irregular  there  was,  however,  a  con- 
sistent downward  trend  in  this  percentage  to  1930  when  the  trend  turned 
upward  and  became  sharp  in  1932.   This  spurt  was  due  to  price  competi- 
tion, for  there  was  a  decline  in  lumber  prices  in  1931.   Quite  the  re- 
verse is  generally  true  for  the  other  four  commodities  tabulated. 

Steel,  with  exceptions  in  1920  and  1921,  increased  in  use  lontil 
1931,  when  it  dropped  off  rapidly.   The  percentage  consumption  of  brick 
increased  slowly  to  its  high  in  1923,  where  it  held  steadily  until  1927, 
thereafter  dropping  rapidly  as  a  result  of  displacements  by  cement  or 
stone,  until  by  1931  its  percentage  was  less  than  in  1919.   Cement  and 
stone  steadily  increased  in  use  until  in  1932  when  cement  had  about 
doubled  its  proportionate  consumption,  and  stone  had  more  than  quad- 
rupled its  consumption.   It  is  evident,  therefore,  that  although  they 
have  a  long  way  to  go  to  supplant  lumber,  cement  and  stone  are  slowly 
but  surely  whittling  away  lumber's  predominant  place  as  a'major  building 
material. 

The  following  table  showing  percentage  distribution  of  major  build- 
ing materials,  by  class  of  building,  is  particularly  significant,  clear- 
ly indicating  the  large  losses  lumber  has  made  to  its  four  competitors 
in  all  three  types  of  construction. 


PERCENTAGE  DISTRIBUTION  OF' MAJOR  BUILDING  MATERIALS 
BY  CLASS  OF  BUILDING 


Year 

Lumber 

Steel 

Cement 

Brick 

Stone 

Total 

Residential: 

1919 

92   • 

0   ■ 

6 

2 

0 

100 

1931 

68 

0 

9 

■   22 

1 

100 

Industrial : 

1919 

25 

27   ■ 

11 

36 

1 

100 

1931 

.19 

42 

15 

22 

2 

100 

Public: 

1919 

40 

10 

28 

14 

8 

100 

1931 

29 

16  ' 

39 

2 

14 

100 

Source:   Mr.  Victor  Ferlo,  Division  of  Research  and  Planning,  NRA,  Table 
I,  of  unpublished  report  of  February  20,  1934,  entitled  "Dis- 
pl:icement  of  Lxunber  in  Building  Construction." 


9813 


-205- 

The  foregoing  tables  and  broad  generalities  should  not  entice  the 
reader  into  assuming  that  the  l-umber  industry  is,  as  a  result  of  its 
market  loss  to  vigorous  competition,  about  to  relinquish  its  preponderant 
dominance  of  construction  materials.   The  age-old  use  of  wood,  its  com- 
paratively easy  fabrication  into  a  multiplicity  of  products,  and  its 
relative  cheapness,  to  say  nothing  of  intangibles  which  have  always 
given  it  a  particular  allure,  will  probably  keep  it  well  to  the  fore- 
front of  major  industries. 

The  intrusion  of  other  materials  in  fields  of  wood  use  is  an 
inevitable  expression  of  the  modern  age  and  the  eagerness  of  consumers 
for  new  and  improved  products  and  services.   It  is  quite  obvious,  there- 
fore, that  there  Is  a  Vital  need  for  more  scientific  and  technical  re- 
search in  wood  and  its  products  to  the  end  that  the  increasing  encroach- 
ment of  extra  industry  products  may  be  countered  successfully. 

The  competitive  surge  within  the  Lumber  Industry  of  the  present 
date  had  its  beginning  in  Colonial  days,  when  lumbering  was  pursued 
in  a  primitive  way  in  all  new  communities  in  connection  with  the  clear- 
ing of  fields  and  the  founding  of  settlements.   As  settlements  grew, 
demand  increased.   Because  of  inadequate  means  of  transportation  in 
those  days,  the  increasing  demand  had  to  be  supplied  largely  from  the 
neighborhood.   Thus  there  developed  the  hundreds  of  little  lumbering 
centers  with  their  varying  regional  distribution  problems  and  embryonic 
competitive  practices.- 

.  As  consumer  demands  increased  through  the  years,  competition  be- 
ffame  keen,  even  vicious,  in  its  malpractice  and  blindness.  Up  the 
spiral  of  increasing  prices  the  industry  chased  the  consumer's  dollar, 
only  to  find  that-  such  myopia  actively  lessened  consumption  and  thus 
forced  prices  to  fall  almost  as  rapidly  as  tney  rose,  more  often  than 
not  to  a  demoralizing  plunge  belov;  cost. 

Many  competitive  causes  have  contributed  to  the  impoverished  and 
distracted  condition  of  the  Lumber  Industry  today,  prime  among  which 
are:   (a)   Regional  and  species  com.petition,  (b)   extra-industry  competi- 
tion, (c)   intra-industry  competition,  (d)   competition  from  exports, 
(e)   and  distributor  competition.   Obviously  all  of  these  contributing 
causes,  discussed  below,  are  flanked  with  their  own  disturbing  satellites 
such  as  production  costs,  transportation  costs,  prices,  etc. 

Broadly  speaking  there  are  three  principal  regional  areas  producing 
softwood  that  are  in  competition  for  the  consuming  markets  of  this  in- 
dustry.  The  first  is  -the  Southern  Fine  Region  which  includes  all  of 
the  Southeastern  States,  also  Arkansas  and  Texas.   The  second  is  the 
Western  Fine  Region  embracing  'practically  all  of  .the  mountrun  States  and 
third,  the  West  Coast  Re^^ion.   This  V/est  Coast  Region  produces  principally 
Douglas  fir  and  this  wood  comes  directly  into  competition  with  Western 
pine  in  all  of  the  western  and  mountain. States  and  enters  into  direct 
competition  with  Southern  pine  in  all  of  the  central  western  area  on  a 
rail  transportation  basis.   The  Douglas  fir  from  the  West  Coast  Region 
also  enters  into  com.petition  with  Southern  pine  on  the  East  Coast  through 
the  medium  of  water  transportation,  but  Western  pine,  being  required  to 
transport  by  rail,  cannot  extend  its  area  of  competition  all  the  way  to 
the  Eastern  Seaboard.   It  has  generally  been  considered  in  the  industry 
that  the  meeting  point  of  competition  for  these  three  species  was  the 
9813 


-206- 

middle  western  consuming  area  centering  around  Chicago,  Illinois,  and 
the  states  immediately  contiguous  thereto. 

Naturally,  transportation  costs  enter  largely  into  the  delinea- 
tion of  the  markets  available  to  these  species  and  especially  "betv/een 
'Douglas  fir  from  the  West  Coast  and  Southern  pine  the  control  of  the 
softwood  market  has  fluctuated  depending  upon  advantage  that  first  one 
or  the  other  region  might  secure  in  transportation  rates. 

In  the  middle  western  area  all  three  of  these  softwood  species 
enjoy  equal  opportunities,  and  this  is  the  major  price  "battleground. 
In  the  North  Atlantic  and  the  Middle  Atlantic  States  where  there  is  also 
a  very  considerable  consuming  population,  Douglas  fir,  through  its  water 
transportation  rates,  has  been  in  a  position  to  largely  take  away  the 
major  portion  of  the  softv/ood  market.   A  very' considerable  part  of  the 
softwood  delivered  by  water  at  the  principal  ports  of  the  Eastern  Sea- 
board is  not  consumed  in  that  area.   Just  what  volume  this  backhaul  of 
Douglas  fir  amounts  to  is  a  matter  for  conjecture  as  there  are  no  de- 
pendable statistics  available,  but  it  is  presumed  to  be  very  consider- 
able portion  of  the  lumber  products  being  landed  at  the  Eastern  Sea- 
board ports  from  the  West  Coast  ports. 

In  the  West  Coast  and  the  major  part  of  the  inter-mountain  area 
competition  is  entirely  between  Douglas  fir  and  Western  pine.   In 
California,  which  is  the  largest  West  Coast  market,  there  has  been  a 
continual  shift  back  and  forth  between  Douglas  fir  and  YiTestern  pine. 
Moving  out  of  the  inter-mountain  area,  competition  between  softwood 
species  is  confined  to  Western  pine  and  Douglas  fir  in  the  two  mid- 
western  states  of  North  and  South  Dakota  and  in  the  Lake  State  of' 
Minnesota. 

Southern  pine  is  the  most  used  softwood  species  in  the  Lake  States, 
the  'jouthern  group  of  mid-western  States,  the  Southwestern  States  and 
in  t":.e  Southeastern  States,  with  Douglas  fir  and  Western  pine  alter- 
nati:;.£  for  second  and  third  places.   This  is  natural  for  here  Southern 
pill:-'  ;ids  the  co^lpetitive  advantage  because  of  the  shorter  haul  from 
prod"i:;cing  to  consuming  centers. 

The  production  of  the  Northeastern  Softwood  Division,  consisting 
principally  of  hemlock,  spruce  and  white  pine,  is  largely  consumed  with- 
in the -New  England  States,  New  York,  Pennsylvania,  New  Jersey  and  West 
Virginia;  they  are  all  competitive  within  that  area  with  the  softwoods 
from  the  other  main  softwood  producing  divisions.   Aside  from  use  in 
general  construction  the  products  of  this  division  are  used  in  large 
quantities  in  the  manufacture  of  sash,  doors,  blinds,  aid  general  mill- 
work,  boxes,  baskets  and  crates. 

The  products  of  the  Northern  Fine  Division  consist  of  white  pine, 
Norway  pine  and  miscellaneous  softwoods  produced  in  the  State  of 
Minnesota.   The  distribution  of  these  woods  for  general  construction 
purposes  is  confined  to  a  more  or  less  limited  territory  adjacent  to 
Minnesota.   One  of  the  principal  outlets  of  pine  in  this  territory  is 


9813 


-207- 

to  man-ufacturerS'Of.sash,  dc^rs,  "blinds,  and  general  millwork. 

The  spruce,  white  pine  and  hemlock  shipped  from  the  Northeastern 
and  Northern  Divisions  arc  all  competitive  with  W(?storn  pine,  the 
West  Coast  woodn-and  Southern  pine,  and  when  used  in  general  con- 
struction work  their  territory  ends  where  freight  rates  and  othor 
factors  permit  the  products  of  the  three  major  divicions  to  meet 
them  on  a  competitive  "basis. 

The  geographical  arc"ac,  of  ccrapetition  f or  hardwood  lumber  are 
to  a  certain  extent  dictated  by  rail  freight  rates  which  rach  pro- 
ducing division  has  to  pay,   Becau.se  of  this,  certain  divisions 
furnished  th'?  majority  <tf   stock  in  certain  areas.  For  examole,  the 
Northeastern  Division  furnished  the  North  Atlantic  area  with  58.58 
per.  cent  of  that  area's  total  hardwood  consunrption  in  1929. 

The  New  England  States  are  farthest  removed  frnm  other  hardwood 
producing  arear,.   It  is  therefore  to  be  expected  that  this  area  wruld 
draw  most  of  its  hardwood  from  the  Northeastern  Division.   The 
Southern  and  Ap-oalachian  Division  competes  for  second  Dlace  in  us« 
in  the  North  Atlantic  arra.   This  may  be  because  of  the  fact  that 
while  on  the  whole  freight  rates  from  the  A-ooaiachian  Division  are 
less  than  .from  the  Sriuthern  Division,  this  advantage  is  somewhat 
offset  by, .Southern  hardwood  being  priced  somewhat  lower  than 
Appalachian  hardwood. 

The  mi  l^Atlantic,;arca',  comprised- of :  New  Ygirk,  New  Jprsey,  Penn- 
sylvania, D;jlaware,  Majryla^nd  and^  the.  District  ■  of-  Col''jnbia,  affords 
a  better. competitive  o-oportunity  to  Southern  and  Appalachian  hardwood 
than  does  the  North  Atlantic  area.   The  large  volume  of  lumber  sup- 
plied the  middle  Atlantic  aroa  by  the  Northeastern  Division,  which 
almost  eq'iiallcd  that  supplic?d  by  Apioalachian,  is  occasioned  by  th<? 
fact  that  Pennsylvania  and  New  Yqrk,  particularly  the  former,  rare  ■ 
large  hardwood  producing  States..  .  ;      -  ,•.,:..;■...,     .  :  ,-.fi''  .  ■ 

The  Southern  Hardwood  Division  supplies  the  larger  part  of  the 
hardwood  rpquirements  of  tho  Southeastern  area,  with  the  Appalachian  , 
Di-vision  +urnishing  almost  the  balance.   It  is  the  second  largetst  area 
of  consurn-ption  for  hardwood.   This  is  because  of  the  heavy  conversion 
of  lumber  into  fabricated  products  or  finished  parts  within  the?f» 
states-  of  .production.  ;There  is  a  larg'>  manufacture  of  flooring,  fur- 
niture .and  automobile  parts  in  these  States.   This  activity  is  fin 
evidence  of  the  tendency  toward  fabrication  at  the  source  of  supply 
of  the  raw  materials,  and  of  .progressing  integration  of  maniifacturc 
in  the  industry. 

The  Lake  Statos  arra,  comprising  Ohio,  Indiana,  Illinois, 
Michigan,  Wisconsin  and  Minnesota,  is  the  largest  hardwood  consuming 
arp.a.  in  tile  country  because  of.  thn  many  woodworking  plants  located  in 
that  area.   Michigan  is  th(^  largest  consuming  state,  with  Illinois, 
Indiana  and  Ohio  alternating  for  second  place.   The  Northern  Divieion 
supplies  the  larger  -oart  of  thr  Lake  States'  c^nsuniotion,  with  the 
Southern  Ha.rdwood  Division,  bocause  of  price,  furnishing  the  next 
larger  part.   The  Midwestern  Area,  comprised  of  the  States  of  Missouri, 


9313 


-203-  , 

Kansas,  lova-,   Nebraska, •■  South  Dakota- and  North  Dakota, .  draws  the 
greater  tiart  of  its  hardwood  requirements  from  the  Southern  Division 
"because- of  its  chea-oer-TDrice,  .... 

While-  the  inter-mountain  area,  comprised , of  the  States  of 
Montana,  Idaho,  Wyoming;,  Colorado,  Utah,  Nevada,  Arizona  and.  New  Mexico, 
drew  75  -oer  cent  .of .  dts;  total  consum-otion  in  1929  from  the  Southern 
Division,  in  1932  it  drev  hut  52  per  cent  from  that  Division;  while 
the  Northern  Division  shipment  into  the  area  went  up  from  5  per  cent 
in  1929  to  29  per  cent  in  1932.   This  might  be  accounted  for  by  a 
compet-itive  price  effort  of  the  Northern  Division  to  market  its  pro- 
duction although,  of  course,  it  might  be  the  result  of  a  preference 
for  a> particular  type  of  wood.   In  1933  and  1934  the  Southern  Division 
shipped  a  trifle  over  57  per  cen-t  of  the  hardwood  consumption  of  this 
area.   The  Northern  Division  dropped  back  to  a  little  over  8  per  cent, 
and  the  Western  Division  went  up  to  slightly  over  33  per  cent,  a 
material  increase  over  its  percentages,  of  1929  and-  1932.   This  large 
increase  might-  have  been  due  to  the  effect  of  Code  prices,  ?is  such 
prices  may  have,  encouraged  the  hardwood  consumers  in  that  area  to 
purchase  more  stock  produced  within  the  territory..  However,  this 
area  is  a  small  conjjimer  of  hardwood. 

Th^  Pacific  Coast  area  is  pne  in  which  the  ccnsum-ntion  of  hard- 
wood appears  to- be  growing.   This. is,  doubtless  because, of  the  increase 
in  fabrication  taking  place  in  the  Pacific  Coast  States..,  While 
Washington  and  Oregon  draw  the  majorit.y  of  their  hardwood  from  the 
Western  Division,  California  secures  the  larger  part  of  its_.  require- 
ments -from  the  Southern  Div-ision.-  In  1929  California,  was  decidedly 
the  heaviest  cons'omer,.  the  shipments  into  it  being  more  than  twice  as 
much  .as  into  Washington  and-  Oregon. 

California  c-onsumes  more  redwood  than  any  other  State;  it  is 
shippedin  .lesser  qua-ntities  to  Illinois,  Indiana,  Michigan,  Minnesota, 
New  York,  Ohio,  Pennsylvania,  Wisconsin.,  .  In  fact  some  redwood  goes  to 
all  States,  except  those  in  the  deep  South  and  the  States  in  which  the 
direotl-y  competitive  wood,  c-yoress,-  is  produced.  Redwood,  is  chiefly 
used-  in  planing  mill  products,  woodwork,  tanks,  silos,  caskets  and 
coffins. 

Cypress  is  widely  distributed  throughout  the  South,  the  East  and 
the--€entral  States,  and  is  shipped  in  fair  quantities  to  practically 
every  State  east-  of  the  Rocky  Mountains.-  It  was  for  many  years  largely 
used  i'n  the  production  of  doors,  frames  and  sash,  but  within  the  last 
two  decades  has  lost  much  of  its  consumption  to  Western  pine  and 
Douglas  fir. 

No  figures  a'r.e  .available  to  show  the  destination  of  the  imports 
of  lumber  or  of  forest  products  into  the  United  States;  however,  the 
areas  a-re  well-  known  in  which  the  species  are  used  and  it  is  a  reasonable 
assunipticn  that  the  majority  of  the  imports  are  consumed  in  the  areas 
which  'they  enter.  -   ■     . 

In^-fehe  year  1929, -86,9,94  -E  ft.  of  fir,  spruce  or  Western  hemlock 
logs -w.ere  imported,  all  of  which  came  from  Canada.   In  1929,  37,936  M  ft. 
of  lumber  ',^ere  imported  from  Soviet  Russia,  and  while  the  species  is 

9813 


-209- 
not  known  it  can  be  concluded  that  the  majority,  if  not  all,  of  it,  was 
spruce.   In  1932  the  imports  of  fir,  snruce,  or  Western  hemlock  logs, 
dro-oped  from  just  under  87,000  M  ft.  to  58,933  M  ft.,  all  of  vrhich 
came  from  Canada. 

The  imports  of  softwood  luraher  also  dropped  materially  in  1932. 
In  this  year  126,819  M  ft.  of  softwood,  species  not  specified,  were 
imported,  of  which  125,704  M  ft.  came  from  Canada.   In  addition  to 
the  unspecified  softwood,  there  vrere  50,185  M  ft.  of .  fir,  all,  of  which 
came  from  Canada.  •        • 

Hemlock  lumlDer  ira-oorted  in  1932  was  negligible,  amounting  to  only 
3,153  M  ft. ,' all'  from  Canada.   The  imioortation  of  s-nruce  lumber  in 
1932  totaled  125,698  M  ft.,*  of  which  90,580  M-  ft.  came  from  Canada, 
31,410  M  ft.  frura  Russia,  and  the  remainder  in  small  quantities  from 
Germany  and  other  Euro-pean  countries.   The  total  imports  of  pine 
lumber  in  1932  amounted  to  45,928  M  ft.,  of  which  43,085  M  ft.  came 
from  Canada,  and  slightly  over  2,000  ft.  from  Mexico,  the  majority 
of  the  remainder,  587  M  ft,  coming  from  the  British  West  Indies. 

In  1933,  86,579  M  ft.  of  fir,  snrxice  and  Western  hemlock  logs 
were  imiDorted,  all  of  which  came  from  Canada.   The  volume  of  un- 
spacified  softwood  lumber  amounted  to  only  4,199  M  ft.,  all  from 
Canada.   Th-^  vcltune  of ,  fir  ,liai:iber  imported  in  this  year  also  dronned, 
the  total  bHng  22^729  M  ft,,  most  of  it  from  Canada.   The  irat)orts 
of  hemlock  amounted  to  only  2,473  M  ft.,' all  of  which  came  from- 
Canada.  ,  Th i  imports, of  spruce  increased,  the  total  iranorts  amounting 
to  176,000  M  ft.   The  imnorts  of  pine' lumber  in  1933  increased  in 
excess  of  100  per  cent,  104,066  M  ft;  being  imxiorted,  of  which 
102,626  M  ft.  came  from,. Canada,  1,400  M  ft.  from  Mexico,  and  26  M  ft. 
from  Trinidad  and  lobago.   .  ' 

Thi?  importation  of  spruce',  fir,  or  Western  hemlock  logs  decreased 
materially  in  1934.   In  that  year  there  were  only  17,340  .M  ft.  imr)ortcd, 
of  which  17,338  M  ft.  came  from  Canada;  the  other  2  M  ft.  came  from 
Kwantung.   The  imports  of  unspecified  soltwood  lumber  in  the  year  1934 
amounted  to  5,237  M  ft.,  all  of  which  came  from  Canada.   ImiDorts  of  fir 
lumber  amounted  to  4,085  M  ft.,  of  which  4,076  M  ft.  came  from  Canada. 
Import';  cf  hemlock  were  only  821  M  ft.  ,  all  of  which  came  from  Canada. 
The  ianorts  of  spruce  ^amounted  to  142,260  M  ft.,  of  which  124,088  M  ft. 
came  f.-om  Canada  and  13,023  M  ft.  from  Russia,  the  remainder  coming 
from  other  European  countries.   The  imr)ortation  of  uine  declined  to 
^1,194  M  ft.  of  which  86,959  M  ft.  came  from  Canada. 

Advance  data,  suliject  to  revision,  of  tho  Bureau  of  Foreign  and 
Domestic  Commerce  of  the  Department  of  Commerce,  show  that  in  the  first 
eight  months  cf  1935  there  were  im-norted  66,560  M  ft.  of  fir,  spruce, 
and  'Western  hemlock  logs,  all  of  which  came  from  Canada.   In  this  same 
■Dcriod  13,865  M  ft.  of  unspecified  softwoods  werr  in.oortcd,  also  from 
Canada.   The  imoorts  of  fir  lumber  in  the  first  nine  months  amounted 
to  53,255  M  ft.  from  Canada;  imports  of  hemlock  6,312  M  ft.,  all  from 
Canada;  imp'-'rts  of "  spruce  133,655  M  ft.  of  which'  11,905  M  ft.  came 
from  Canada  and  15,855  M  ft.  from  Russia.   The  imports  of  pino  amounted 
to  70,184  L  ft.  of  which  66-, 332  II   ft.  came  from  Canada. 


9813 


-210- 

The  total  imr)orts  of  soft'^ood  liunber  declined  steadily  from  1929 
throiigli  1934.   In  the  latter  year  tl-e  smallest  amount  was  im-oorted 
for  any  year  since  19.39,  the  total  footage  being  ?!43,597  M  ft.  of  which 
approximately  233,000  fl  ft.  rerr  s-nruce  and  -oine. 

The  figures  for  the  first  nine  months  of  1935  show  an  increase 
over  the  total  of  the  year  1934  and  a  marked  increase  in  the  quantity 
of  fir  imDorted  —  about  53,000  M  ft.  in  the  first  nine  months,  as 
against  4,000  M  ft.  in  the  entire  year  1934.   It  is  of  interest  that 
of  this  53,000  M  ft.  only  841  M  ft.  were  ira-norted  during  the  first 
four  months  of  the  year.  Atj^oroximately  2,400  M  ft.  entered  the 
United  States  in  May,  the  June,  July,  August  and  September  imports 
increasing  respectively  to  ap-nroximately  the  following:   9,800  M  ft., 
16,500  M  ft.,  11,700  M  ft.,  and  11,700  M  ft.  for  September'. 

This  marked  increase  from  June  on  can  nrobably  be  attributed  to 
two  factors:   (l)  The  strike  on  the  West  Coast  which  tied  up  many 
coastal  mills,  and  (2)  the  fact  thrit  Canadian  shi-o-oers  may  have  avoided 
sales  in  the  United  States  during  the  Code  period  due  to  the  feeling 
that  a  quota  such  as  was  established  for  red  cedar  shingle  shipments 
might  also  be  established  for  lumber  and  that  this  feeling  was  abated 
after  the  decision  in  the  Schechter  cpse. 

It  is  further  known  that  during  the  summer  of  1935  some  16  cargoes 
moved  from  British  Columbia  at  freight  of  from  $8.50  to  $9.00,  whereas 
the  Inter-coastal  Conference,  rate  at  tliat  time  was  $12  per  M  ft. 

The  imports  of  spruce  and  pine  lumber  present  a  different  picture 
from  tliat  of  the  West  Coast  woods,  l^hile  fir  and  hemlock  were  de- 
clining in  volume  dioring  1932  to  1933  and  1934  the  imports  of  spruce 
increased  from  approximately  125,000  M  ft.  in  1932  to  176,000  M  ft. 
in  1933  and  decreased  to  142,000  M  ft.  in  1934.   Imports  of  pine  in 
1932  amounted  to  just  under  46,000  M  ft.,  increasing  to  slightly  over 
104,000  M  ft.  in  1933  and  decreasing  to  just  under  87,000  M  .ft.  in  1934. 

The  figures  for  the  first  nine  months  of  1935  indicate  tliat  the 
imports  in  1935  will  equal  and  probably  somewhat  exceed  those  of  1934, 
but  will  not  exceed  the  1934  figures  .to  the  extent  tliat  the  importations 
of  fir  and  hemlock  in  1935  exceeded  those  of  1934. 

The  species  of  softwood  lumber  that  are  native  to  ITortheastern 
states  are  approximately  the  same  as  those  found  in  the  adjacent  areas 
in  Canada;  therefore  the  imported. spruce  and  pine  is  highly  competitive 
in  the  Northeastern  territory  with  the  native  woods  produced  in  that 
territory,  the  competition  becoming  still  more  accentuated  as  the  domestic 
Northeastern  and  imported  woods  enter  those  areas  into  which  Southern 
Pine  and  the  West  Coast,  woods  are  being  shipped. 

While  it  is  a  fact  that  same  of  this  imported  softwood  l"umber 
moved  out  of  the  New  England  and  New  York  area,  it  can  safely  be  con- 
cluded that  the  competition  of  the  southern  wood  •.confines  the  use  of 
the  majority  of  the  imported  softwood  to  that  area.   Approximately  the 
same  conclusions  are  applicable  to  the  Lake  states  and  the  importations 
of  lumber  which  enter  through  the  Dakotas,  Duluth,  Superior  and 
Michigan  customs  districts. 

9813 


-211- 

The  effect  of  these  imports  on  domestic  nrices  and  domestic 
■Droduction  cannot  te  definitely  established.   It  is  known,  however, 
that  irai3orts  of  fir  and  hemlock  materially  increased  in  the  first 
nine  months  of  1935  over  the  year  1934,  altho\agh  there  was  a  combined 
duty  and  tax  of  !t4.00  ner  M  feet  in  favor  of  the  American  wood. 

Competition  within  the  L-umher  Industry  itself  is  and  always 
has  been  rife,  and  as  in  many  other  industries  has  tended  in  its 
avaricious  and  headlong  way  to  destroy  the  very  value  it  would  enhance. 
'Wasteful  felling  of  trees,  merely  to  secure  a  more  profuse  and  easier 
cut  for  competitive  markets,  regional  disputes,  .species  propaganda, 
transportation  problems,  stumpage  speculation,  price  fixing,  produc- 
tion .control,  over-capacity,  apathy  toward, changing  consumer  demand, 
trade  association  antagonisms  and  other "competitiye,  factors  have  all 
helped  in  the  past  to  ensnare  the  industry  in  a  net, from  which  the 
Code  attempted  to  free  it  and  with  a.  modicum  of  success. 

Although  some  of  the  foregoing  competitive  practices  resorted  to 
by  the  Lumber  Industry  in  an  effort  to  hold  old  business  and  gain  new 
markets  have  been  alluded  to  and  have  been  discussed  in  other  sections 
of  this  report,  it  is  deemed  advisable  to  bring  them  together  here  to 
focus  attention  solely  on  their  bearing  unon.ccm-petition.   These  named 
may  not  be  a  conrslete  catalog  of  the  -practices  and  conditions  making  up 
the  complete  .competitive  fiel-d  within  the  industry  itself  but  are 
sufficient  'fo,r  the  purpose  indicated. 

?erha.ps  the  most  im-portant  ,c.omT)etitive  prqblem  of  the  industry 
prior  to  the  Code  was  that  h9.ving  to  do  with  the  actual  sale  of  the 
products.   There  was  little  cooxieration  between  general  sales  plans 
and  no  clearly  defined  function  for  the  various  types  of  distributors. 
Small  dealers  were  fast  going  into  bankruptcy.   In  1933  sales  by  saw- 
mills were  only  t'"0  and  eight-tenths  times  inventory,  whereas  in  1926 
they  had  been  four  times  inventory.   Collections  were  slow,  the  elapsed 
time  between  invoice  and  collection  in  1933  being  117  days  against  75 
days  in  1936.   Earnings  for  assets  employed  were  the  third  highest  of 
all  industries  in  1920,  with  89  per  cent  of  asf^ets  employed  in  that  year 
earning  a  profit;  whereas  in  1932  the  industry  earned  a  profit  on  only 
eight  per  cent  of  its  assets. 

Just  where,  the  creaking  machine  needed  the  most  grease  no  one 
knew.  .3efore  the  Code  the  industry  was  not  fu]ly  orcanized,  with  only 
a  framework  of  warring  trade  organizations  engaged  principally  in  looking 
after  their  own  legislative  requirements  and  in  gathering  statistics  of 
the  industry.   The  process  of  code  f orraulatiooi  and  code  operation  served 
to  integrate  the  industry  and  to  encourage  a  more  democratic  approach  to 
its  distril ition  problems.   Under  the  Code  the  industry  attempted  to 
define  the  ".iiannels  of  distribution.   Just  wha.t  was  done  and  the  re- 
sults thertTrom  are  discussed  in  other  sections  ci  this  report. 

It  has  already  been  pointed  out  that  changes  in  consumer  demand 
are  to  be  recognized  and  met,  net  combatted,  if  competitive  markets 
are  to  be  retained,  much  less  expanded.   One  might  well  go  a  step 
further  and  urge  that  aggressiveness  be  the  order  of  the  day  and  not 
merely  a  laissez-faire  attitude  taken,  even  though  it  cannot  be  denied 
that  for  certain  forest  products  recent  consumption  trends,  aggravated 

9813 


-212- 

by  the  depression,  have  been  discouraging  to  producers.  Periiaps  the 
way  to  greater  heights  for  the  industry  is  through  closer  cooperation 
among  its  '."^idely-scattered  and  generally  inarticulate  membership, 
wise  synchronization  of  the  technological  improvement  with  employment 
needs,  increased  research,  and  more  unified  and  less  capricious 
distribution  methods,  to  the  end  that  the  industry  raa,y  be  an  entity 
in  combatting  the  onrushing  tide  of  extra  industry  competition. 

There  are  three  major  distribution  channels  in  the  Lumber  Industry, 
namely,  the  wholesaler,  the  commission  salesman,  and  the  retailer. 
In  addition,  sales  are  made  by  sa'Tinills  direct  to  manufacturers  and 
to  retailers  through  their  own  sales  department,  directly  for  export, 
and  in  other  miscellaneous  ways.   The  object  of  this  section  is  to: 
(a)  Define  and  describe  these  nmjor  agencies;  (b)  to  delineate  their 
competitive  activities;  (c)  to  review  pre-code  efforts  and  their 
results;  and  (d)  to  discuss  code  efforts  at  regulation  and  the  results 
of  such  efforts. 

The  Lumber  and  Timber  Products  Code  defined  the  wholesaler  as: 

"A  person  actively  and  continuously  engaged  in 
buying,  assembling,  or  rehandling  lumber  and  timber 
products  from  manufacturers  or  other  wholesalers  in 
quantity  lots  and  selling  it  principally  to  wholesalers, 
retailers  and  recognized  wholesale  trade,  who  maintains 
a  sales  organization  for  this  piJTpose,  assumes  credit 
risks  and  such  other  obligations  as  are  incident  to  the 
transportation  and  distribution  of  lumber  and  timber 
products.   Wholesale  Assembling  and  Distributing  Yards 
as  de-fined  in  Divisional  Rules  and  Regulations  shall  also 
be  classed  as  wholesalers." 

In  addition  to  the  functions  performed  by  t he  wholesaler  as 
described,  certain  wholesalers  likewise  financed  mills  and  retail 
yards.   A  wholesaler's  organization  will  naturally  vary  with  the  type 
and  scope  of  his  activities.   Some  maintain  b'dying  representatives 
or  agents  in  the  producing  areas  when  headquarters  are  located  else- 
where. 

The  variation  in  the  type  of  wholesale  activity  is  partially 
due  to  the  development  in  the  distribution  channels  of  the  Lumber  In- 
dustry.  In  its  earlier  years  there  were  relatively  few  wholesalers 
and  these  were  in  a  strong  financial  position  and  handled  a  large 
volume  of  lumber.   The  customary  operating  practice  of  that  day  vfas 
for  the  wholesaler  to  buy  very  large  stocks  of  lumber  on  contract 
and  not  infrequently  to  contract  the  entire  cut  of  a  number  of  mills 
for  the  year.   Many  times  the  arrangement  provided  for  certain 
financial  assistance  and  often  for  instruction  and  advice.   In  that 
day  nearly  every  wholesaler  had  one  or  more  yards  either  in  the  con- 
suming area  or  at  the  mills,  or  both. 

As  time  progressed  and  industrial  conditions  changed,  there 
came  into  being  a  relatively  larger  number  of  wholesalers,  and  buying 
practices  changed  to  the  point  where  today  the  wholesaler  is  in  the 
main- a  financial  broker  and  salesman  p-urchasing  units  as  small  as  a 

9813 


-213-  ,  , 

car  at  a  time  and  carrying  a  relatively  snail  ntock,  if  any  at  all. 

Wholesalers  of  Irm'^Jier  are  located  in  all  parts  of  the  country, 
the  bulk,  ho-.-rever,  bein^  east  of  thr-;  Mi osissiptji  River.   The  principal 
wholesale  trade  association;  the  national  American  Vtoclesale  Lumber 
Association,  with  headouarterr,  in  Jre^r  York,'  had  a  rnerr.bership  of  573  in 
1928  and  approxii::ately  300  in  ±934  and  1955,   Hhile  there  are  no 
available  statistics,  the  association  est^dates  tliat  in  1933  there 
were  approximately  1,300  wholesalers  who  were  not  members  of  that 
association. 

Because  of  distance  from  lar,!;©  ccnsiming  areas  and  consequent 
lack  of  constant  contact  with  the  buyers,  the  Douglas  fir  manufac- 
turers and  the  Western  pine  manufactiirers  U3e  the  wholesale  channel 
of  distribution  to  a  relatively  larger  extent  than  do  other  d..  vicicns 
of  the  Lumber  Industry  which  are  located  nearer  to  the  points  of 
ultimate  consumption.   This  condition  is,  of  course,  being  changed  to 
some  extent  through  the  establif.hmenx;,  by  these  romoteTiy  located  manu- 
facturers in  the  Douglas  fir  section,  of  wnnierale  distributing  yards 
on  the  Atlantic  seaboardo   Shipments  of  Do-ijilas  fir  oy   wpter  through 
the  Panama  Canal  to  the  Atlantic  seaboard  'las  had  a  continuous  growth 
in  volume  and  in  this  both  the  wbol^spler  and  the  intercoastal  whole- 
sale distributing  yards  ha,ve  played  a  large  part. 

This  develn-omont  in  distribution  has  given  birth  to  the  probiera 
of  "transiting"  of  sr.^cksj  co::ruzance  of  wh,ich  T^as  taken  by  the  Code 
and  outlawed.^  A  wholesaler  would  undertake',  to  dispose  of  certain 
cargoes  of  lumber  after  they  had  be'en  put  m  transit  from  the  West  . 
Coast.   If  unsuccessful  inchis  effort  either  in  whole  ot  in.  part, 
the  only  alternative  was  to  "carry  these  unsold  stocks  uyon  arrival 
on  trucks  or  cars,  or  incur  the  expense  of  yarcling  if  ,  the  wholesaler 
had  a  yard.   Storage  in' cars  w-'.s  used,  at  pDipts  where  car;  service 
charges  were  less  than  yarding  chai'ges,  ?  nd  this  naturally,  tied  up 
railroad  equipment.   The  pressure  to  mo/e  ';hese  Lihs.oii  stocks  in  order 
to  avoid  carrying  charges  conscituted  a  prersure  on  mrtrket  prices  that 
was  unjustified  by  the  volume  of  these  unsold  stocks  as  related  to 
total  consumption. 

There  also  arose  the  practice  of  consigning  stocks  to  the  retail 
yards  to  be  paid  for  when  sold.   This  also  was  outlawed  under  the 
Code  as  it  was  held  that  it  was  unfair  to  the  small  producer  who  was 
unable  to  cope  with  this  type  of  comi^etition. 

The  outlets  of  the  wholesaler  are  the  retailer,  the  industrial 
buyer,  the  railroads,  government  (state  and  municipal)  purchasers, 
and  to  some  extent  the  contractors.   The  first  four  were  generally 
recognized  in  the  Lumber  Industry  prior  to  the  Code  as  legitimate 
customers  of  the  wholesale  group,   TJiere  has  always  been  some  question 
as  to  whether  the  contractoi-  was  the  legitimate  customer  of  the  whole- 
saler or  of  the  retailer  and  a.round  this  point  developed  the  difficulty 
in  the  Code  period  of  dsfining  what  constituted  \7holesale  trade,  as 
well  as  the  effect  of  the  wholesaler  upon  the  Code  and  of  the  Code 
upon  the  wholesaler. 


9813 


There  are  no  available  statistics  as  to  the  actiial  qioantity 

of  the  industry's  producticn  that  is  mrrlcoted  through  the  wholesaler, 
tut  according  to  the  lfe.tional  American  Wliolesale  Lumber  Association  it 
has  been  for  years  estimated  that  this  movement  can  conservatively  be 
placed  at  60  per  cent. 

In  the  earlier  days  of  the  industry,  and  even  yet  to  a  very 
considerable  extent,  the  wholesaler  of  lumber  who  would  buy  mill  stocks 
or  large  quantities  of  lumber  and  yard  and  classify  such  material  and 
then  sell,  had  a  very  important  place  in  the  industry.   He  is  still  an 
important  factor  but  does  not  dominate  the  movement  of  lumber  from 
manufacturer  to  retailer  as  in  the  past. 

The  commission  salesman  is  a  very  valuable  sales  outlet  for 
many  lumber  man-ufacturers.   They  are  probably  more  valuable  when  they 
represent  one  or  more  companies  producing  different  products,  for  they 
provide  a  sa,les  outlet  for  those  companies  at  much  less  cost  than  a 
wholesaler  or  a  sales  organization  financed  by  the  company  or  companies 
themselves.   On  the  other  ha.nd,  the  commission  salesman  who  acts  as  a 
buyer's  agent  and  uses  his  knowledge  of  a.  producer's  stock  to  beat 
down  the  price  is  a  competitive  factor  that  is  very  detrimental  to  the 
industry  at  large. 

Numerous  cooperative  activities  on  the  part  of  lumber  manufacturers, 
like  organized  collection  bureaus,  the  interchange  of  mill  prices  and 
the  publication  of  association  price  lists  and  discount  sheets,  have 
in  the  past  tended  to  check  competitive  fluctuations  in  the  wholesale 
markets.   The  same  is  true  of  various  informal  local  agreements  and 
other  attempts  to  maintain  imiform  prices.   The  effect  of  such  forms 
of  cooperation  among  lumber  producers  has  been  exceedingly  variable 
both  in  different  regions  and  at  different  times.   It  has  depended  upon 
the  number  and  financi,al  strength  of  the  plants  concerned,  the  qijality 
and  volume  of  their  output,  pressure  of  timber  land  investments  to 
increase  mill  capacity  to  mainta.in  continuous  production,  the  manufac- 
turing conditions  to  be  met,  like  the  necessity  for  prompt  shipment  of 
some  species  and  grades  of  lumber,  and  the  condition  of  the  market. 
Cooperation  has  usually  been  more  effective  when  the  demand  for  lumber 
is  strong  and  prices  are  rising,  -and  has  largely  been  ineffective  when  • 
opposite  conditions  prevail.   This  was  exactly  the  condition  prevalent 
for  some  time  prior  to  the  Code. 

To  just  what  extent  dishonest  and  deceptive  grade  manipulations 
or  substitutions,  the  raising  of  invoices,  and  similar  nefarious  prac- 
tices prevailed  in  the  wholesale  merchandising  of  lumber  and  timber 
products  is  undetermined.  Perhaps  of  the  total  volume  of  Ixomber  sold 
daily,  a  relatively  small  proportion  is  subject  to  such  practices, 
although  it  is  generally  admitted  that  a  great  volume  of  lumber  passes 
through  a  process  called  the  "ethical"  blending  of  grades.   Such 
practices  obviously  not  only  cheat  the  customer  but  tend  to  disrupt 
the  market  locally  by  establishing  a  fictitiously  low  price  for  the 
grade  which  has  been  manipulated. 


9813 


There  have  been  many  concerted  efforts-  in  the  -c/it  by  associaticnfs 
of  lumber  retailers  separately  or  in-  cpr.^-cjyotion   riith  mar'Ufacturers 
to  cc-iitrol  the  comoetition  of  wholesalers  oy  a  ''clasaif ication"  of 
the  trade.   Thess  clacsssif icalviois  were  par.Liallj''  effective,  though 
subject  to  many  local  excc-^nti  ons  and  variations..   Just  -orior  to  t];.e 
Code,  hcvever,  while  the  dictaoes  of  "tx'ode  ethics"  as  between  whole- 
salei  and  letailcr  were  yliil  reco^uizrjd  to  sr\ae   extent,  the  trend 
was  sway  from  restrictions  upon  competition. 

This  attitude  of  at  least  a  negative  regulrtory  rr^echanism  of 
the  wholesaler  is  exemplified  in  many  .v/aya„   Tr,.ke  for  instance  the 
retaliation  of  whclosalers-  a{:ainst  retailer?  wno  bou.-;>-b  dirfcct  from 
millp.  Wholesalers,  as  an  offsf^t  of  this  iattor-da.7  Tirrictice  of 
retail  dealers,  became  proficient  in  looking  after  tlie  noeds  of  the 
contractor,  whose  purchases,  incidentally',  had  'becorae.  greater  tl'ian 
those  of  the  master  carpenter.   The  bitterest  kind  of  competition 
between  the  v/hplesaier-o  and  retailers  ensued,  Ihe.Liimber  Industry 
its&if,  represented  at  beat  bv  loosely  feaerated  associations,  was  in 
no  -Dosition  to  framo  either  local  or  national  regulations,  much  less 
to  carry  out  punitive  measures,.   ... 

In  general,  but  v/ithout  limitation,  the  abcve-cited  attem-pts  at 
regulation  of  'who'lesale  ijractices  brings  this,  type  'f  eff  "rt  in  the 
Lumber  Industry  d  -wn  t'  the  time ,  "f  C  de  cnferences,   G'de  effTts  at 
regu.lati'-ns  and  their  results  ar-e  discussed  immediately  after  the 
following  discucs.'- "n '"f  -ore-c^de  eif"'rts  a.t  regulati' n  m   the  retail 
trade.   In  additir-ri'  t"  "^Lher  s,  urces,  C'^do  licarings  and  .the  c"c'al 
history  of  the  induu try  contained  illuminating  infrrmation  on  this 
subject.  .    .  ■  '  . 

The  retail  lamber  dealer  wa.s  defined  under  the  Retail  Lumber 
Code  as: 

"A  Tjers'^n  who  maintains -an  adecuate  a.ni  -Darmanent 
plant  or  plants  which  are  prop^e-rly  eq-.iiriood  f'r  sc^rvice  to 
the  public,  -"ith  rffice,  -with-^sp'^rage  yard  rr   warehouse,  kppt 
open  daring  business  h-^ars,  witlj  .s^,:!'.  handling  facilities  and 
sales  service  an  are   commensurate  wi  Lh  ..the -nature  f  the  busi- 
ness.; and  who  carries  a  s^'ufficient  stock  of  lumber  and  build- 
ing ma.terials  (for  the  purpor,,.  -f  reiling  at  re't-ail  in  small 
or  large  quantities  and  not  f^r  hit  '^■rn   c-ns-j-miotion)  to  supply 
the  general  req-oa.rsmenos  of  the  comr.miityJ.'. 

In  the  early  days  the  retn-iler'^  p'iition  w'^'.s  much  more  definitely 
fixed  and  in  a  very  much  br'^ader  f ie7.d  tha.n  at  ohe  present  time.   Up 
until  recent  yea.ry  the  retailer-  supplied  pi-actically  all  of  the  lujnber 
requirements  of  those  located  in  his  trade  prae.   or  vicinity,  and  the 
user  of  lumber  in  practically  any  q-'ja.ntity  dealt  v;ith  the  reta.iltr  as 
the  only  sr^urce  of  his  lumber  supply.   As  com'pstition  increased 
between  mills  and  mill  selling  .agencj  es  or  reprr-?fcn*'.atives,  this  repre- 
sentative position  '^f  tne  retailer  in.   m-.st  crjr'.riities  was  destroy^^d 
and,  generally,  he  is  now  the  supplier  of  lumber  in  only  small  quantities. 


9813 


-216- 

A  contracts,  a  builder,  f^r  an  individual  owner  contemplating 
the  erection  cf  even  nne  structure  that  may  use  as  little  as  one 
carlrad  of  lumber  (ap-oroximately  20,000  feet)  wuld  be  solicited  to 
buy  this  lumber  from  other  than  the  local  retail  lumber  dealers.  As 
quantities  needed  would  increase,  the  prospective  Durchaser  w^uld 
have  other  channels  open  t-"'  him  through  which  his  wants  could  be 
supplied. 

The  manufacturers  of  lumber  and  other  distributive  agencies 
recognize,  however,  that  the  retailer  of  lumber  has  a  very  imnortant 
part  in  the  industry.  Practically  every  C'-mmunity,  however  small, 
has  had  s^me  type  '"f  retail  l^umber  suDply  offered  t'^  it  even  though 
this  lumber  supt)ly  might  have  been  carried  simply  as  a  side-line  to 
other  merchandising  activities. 

There  are  approximately  23,500  retail  lumber  dealers  in  the 
United  States.   They  liandle  a  great  many  materials  '^ther  than  lumber; 
however,  the  latter  represents  abo\it  72  per  cent  ^f  their  total 
business. 

In  the  retail  lumber  business  consideration  must  be  given  to 
the  different  kinds  of  retailer  and  retail  establishments,  primarily 
from  the  standt>oint  '"f  the  machinery  of  the  control  of  such  unit.   It 
was  recognized  that  a  very  considerable  majority  ''f  these  retail 
dealers  were  owned,  cntrolled  and  operated  as  independent  economic 
units.   It  was  also  realized  that  there  were  a  considerable  number  of 
retail  yards,  especially  in  certain  sections  '"f  the  country,  which 
are  known  as  "line  yards."  These  yards,  ranging  from  tw-  in  number 
upward,  are  operated  under  one  management  with  buying  and  selling 
methods,  credit  p^'licies,  and  'ther  elements  being  controlled  by  a 
common  head  and  generally  uniform  in  practice  in  each  of  the  con- 
stituent yards.   Some  of  these  "line  yards"  groups  are  purely  re- 
tailer organizations  with  activity  based  primarily  ut)on  the  buying 
and  the  selling  of  the  nroducts  t-^  loroduce  a  -orofit  for  the  owners. 
Other  groups  of  "line  yards"  were  established  by  manufacturers  whose 
principal  motive  was  the  setting  up  of  retail  outlets  for  the  products 
of  their  own  sawmill  and  manufacturing  tilants.   Other  "line  yard"  groups, 
smaller  in  number,  were  reputed  to  be  largely  controlled  by  wholesalers 
of  lumber,  and  again  in  practically  every  instance  the  actuating  motive 
was  to  supply  distribution  centers  and  outlets  for  certain  if  not  all 
of  the  products  controlled  by  the  particular  wholesaler. 

In  the  field  of  retail  distribution  the  co-^perative  groups  have 
also  grown  up  within  the  past  few  years.   Lumber,  as  one  ^f  the 
products  needed  by  many  of  the  individual  members  of  these  cooperatives, 
became  one  of  the  products  handled,  and  in  the  section  of  the  United 
States  where  the  C'operative  movement  lias  gained  the  m'^st  ground,  it 
was  not  uncommon  to  find  lumber  yards  connected  with  the  other  activities 
of  the  cooperatives,  which,  of  course,  primarily  consisted  of  the  mar- 
keting of  products  of  the  members  and  the  purchasing  of  those  articles 
of  commerce  most  commonly  used  by  them. 


9813 


-217- 

These  various  types  of   retail  distritutir-n  units  naturally  came 
into  competition  with  one  another.   It  can  readily  be  seen  that  the 
small  independent  lumber  yard  located  in  a  rural  or  urban  community, 
being  compelled  to  purchase  its  material  as  a  single  unit,  would 
find  itself  at  a  disadvantage  in  selling  when  it  came  in  competiti'^n 
with  a  "line  yard"  unit  where  the  lumber  for  that  unit  had  been  pur- 
chased as  a  part  of  the  quantity  needed  for  the  supplying  of  several 
similar  and  allied  yards.   Again  competition  would  be  faced  from  th-^se 
yards  controlled  by  the  man\ifacturers  who  would  not  need  to  calculate, 
in  his  final  costs,  at  least  one  intermediary  step.   The  comoetiti^n 
of  the  cooperative  organizations  with  the  retailers  would  not,  of 
course,  be  particularly  effective  unless  the  cooperative  organization 
was  of  sufficiently  broad  coverage  to  include  a  considerable  portion 
of  the  rural  users  of  lumber. 

In  considering  retailers  thought  must  be  given  to  the  differences 
between  the  retail  lumber  yard  in  the  urban  communities  and  the 
retail  l-umberyard  in  rxiral  communities.  Kot  only  does  the  first 
class  of  lumber  yards  have  high  rents,  high  wages  and  high  inventories 
to  Contend  with,  but  they  must  also  be  in  a  Tj-^sition  to  extend  con- 
siderable credit  and  te  make  deliveries  'ver  an  extensive  field.   On 
the  'ther  hand,  lumber  yards  I'cated  in  rural  communities  have  rents 
and  wage  scales  considerably  lower  than  the  urban  yards,  and  generally 
speaking  they  are  not  required  to  deliver  their  merchandise  and 
naturally  are  not  required  t-^  carry  particularly  large  st-^cks.   In 
many  cf  the  rural  yards  their  business  has  developed  in  later  years 
to  practically  a  cash  and  carry  basis. 

The  channels  of  distribution  discussed  above  relate  particularly 
to  the  softwoods  and,  to  a  limited  extent,  t-^  some  f^f  the  more  commonly 
used  hardwoods,  but  the  production,  sale  and  use  of  the  principal  hard- 
woods differ  s^  materially  from  the  softwoods  that  a  specialized  service 
of  distribution  grew  up  for  this  narticular  species. 

Important  in  the  business  of  the  retailer  of  lumber  were  the 
various  and  constantly  growing  number  and  character  of  products  com- 
peting with  lumber.   The  retailer  has  been  compelled  to  carry  competing 
products  and  many  other  substitution  products.   His  stocking  of  these 
items  was  made  as  easy  as  "possible,  as  naturally  the  raaniifacturers  or 
distributors  of  any  products  competing  with  lumber  were  anxio-us  to 
have  these  competitive' articles  as  widely  distributed  as  possible. 

The  retail  trade  is"  r-ughly  divided  into  two  classes.   The  first, 
commonly  called  "retail  sales"  or  "wagon  trade"  constitutes  the  small 
transactions  incident  t""  the  current  demands  of  the- community  for 
small  job  work  and  repairing.   Such  sales  are,  by  and  large,  made  under 
far  less  competition  than  the  large  sales  of  the  second  class.-  Efforts 
at  their  regulation,  theref-re,  have  been  less  important  and  correla- 
tively  less  attendant  with  any  action  in  that  direction. 

The  second  broad  class  of  retail  trade  is  that  commonly  called 
"estimate,"  "bill  sales,"  ^r  "contract  business."   These  are  the  larger 
sales  such  as  house  sales,"  special  contracts,  etc.,  which  are  made 
usually  upon  competitive  quotations  or  at  fixed  discounts  to  contractors 
and  carpenters  who  are  in  the  habit  of.  dealing  exclusively  with  '^ne 

9813 


-218-  ■   •  • 

c^ncerrt.   It  is  ^tvirus  that  this  definitirn  inherently  contains 
regulatory  measures  resnecting,  quotatirns  and  disc'unts.. 

Under  the  Retail  Lumber  Code  it  was  hoped:  that  a  bottom  could  be 
placed  under  retail  prices  by  the  devel'^pment  ""f  industry  cost  data 
and  the  determination  ^-f  the  s-"-called  ra^de.rf  these  csts  in  each  of 
the  32  divisions  of  the  retail  trade. 

In  the  early  aTDt)llcati'^n  r,f   this  Drinciple  it  was  pi^inted  out 
by  the  retail  dealers  that  certain  c^sts  of  handling  lumber  were  rela- 
tively the  same.  'This  group  of  costs  were.- generally  classified  as 
yard  and  delivery  expenses,  and  the  the'Ty  was  tha.t  it  cost  the 
retail  lumbor  dealer  just'  as  much  per  th'^usand  feet  to  unload,  yard 
and  deliver  a  grade  and  size  lumber  that  c"ftt  .^20  .'oer  thousand  feet 
as  it  did  a  grade  and 'size , of • lumber  casting  much  more. 

The  Administration  accented  the  view  of  the  retail  dealers  and 
sought  t'  establish  a  com-nosite  ra"dal  mark-up  consisting  ^f  a  flat 
price  for  yard  and  delivery  c "sts  varying  essentially  only  in  accordance 
with  the  different  minimum  wage  rates  specified  in  the  Code,  and  the 
additional  c^sts  were  then  to  be  expressed  in  a  percentage  of  mark-up 
on  cost  of  the  lumber  plus  freight.   This  added  a  further  complication 
to  the  development  of  a  minimum  ^t   floor  selling  price  for  lumber  at 
retail. 

The  majority  of  -the  retail  dealers  reacted  favorably  to  the  general 
application  of  the  Code  provisions  establishing  or  seeking  to  establish 
minimum  retail  prices,  but  there  was  considerable  uncertainty  by  the 
dealer  as  to  exactly  what  he '■oouid  quote,  which  was  increased  by  diffi- 
culties experienced  by  the  Code  Authority  f-^r  the  Ltmiber  and  Timber 
Products  Industries  in  their  attempt  to  regulate  and  to  establish  the 
prices  at  which  the  retail  dealers  could  purchase  their  supplies. 

There  was  the  objection  by  strictly  cash  yards  tliat '  they  should 
not  be  compelled-  to  include  in  their  selling-  price  a  percentahe  cal- 
culated upon  the  cost  of  dealers  who  were  required  to  maintain  ex- 
pensive bookkeeping  and  credit  departments.   !l?hese  matters  were  again 
apparently  satisfactorily  adjusted  by  negotiations  between  NEA  and  the 
CrAe   Authority  for  the  retail  dealers. 

As  the  result  of  these  yar,ious  adjustments  it  was  necessary  to 
again  estab;ish  a  modal  mark-up  and  to  specify  the  application  of 
its  various  factors  in  such  manner  as  would  work  as  few  inequities  as 
possible.   I'^his  basis  was  established  by -order  of  the  Administrator 
carrjdng  forti^ard  to  March  1,  1935,   It^was  recognized  in  the  industry 
that  the  establishment  of  the'  modal  mark-up-  did  increase  many  of  the 
prices  and  did  materially  stabilize  the  retail  prices  of  lumber. 

There  seems  to  be  no  doulpt  that,  selling  direct  to  consumers  by 
the  mills  and  by  the- wholesalers  increased  during  the  codal  period, 
which  was  undoubtedly  brought  about  by  the  discount  of  eight  per  cent 
to  the  wholesaler  as  specified  in  the  Code  and  by  the  modal  mark-up 
which  left  such  a  large  spread  between  the  wholesale  or  mill  price  and 
the  retail  price  that  the  mill  and  wholesaler  co-uld  well  afford  to  com- 
pete for  retail  business,  particularly  with  the  limited  demand.   The 

9813 


-219- 

baSing  point  system  and  delivered  prices  had  the  effect  of  increasing 
truck  transportaticn  as  distributors  attempted  t^  regain  lost  groTond 
and  even  to 'secure  a' larger  margin  <^f   -nrofit. 

Unfcrtunately  there  are  n"'  comprehensive  statistics,  either 
reliable  or  otherwise,  available  as  to  the  quantities'  of  luiiber 
handled  by  wholesalers  or  retailers.  According  t'^  a  report  of  the 
Denartment  of  Agriculture  the  increasing  number  of  wholesalers  in 
the  middle  west  during  the  first  decade  of  the  20th  century  caused  a 
ohrinkage  of  from  50  to  60  per'cent  in  the  average  volume  of  lumber 
laandled  by  each  wholesaler.   It  is  further  nointed  '^ut  that  the  same 
over-expansion  occurred  in  lumber  retailing.   "3y  1900  Nebraska  had 
a  retail  yard  for  every  1,485  pe'^ple;  Iowa  a  yard  f^r  1,600  people; 
and  Illinois,  outside  of  Chicago,  a  yard  for  1,720  people.   From  1900 
to  1915  the  number  of  yards  in  these  three  states  increased  on  the 
average  nearly  26  net   cent  although  their  population  increased  hut 
7  per  cent. " 

In  view  of  the  fact  that  the  -oer  capita  consuinption  of  lumber 
reached  its  zenith  in  1906  at  525  feet,  and  steadily  decreased  until 
1529  when  it  amo\inted  to  only  275  feet,  and  plumhed  the  depths  to  the 
low  of  95  feet  in  1932,  increasing  to  110  feet  in  1934,  it  is  readily 
understandable  that  with  the  increase  in  the  number  of  units  in  the 
industry  the  competitive  situation  in  the  various  distribution  . 
channels  increased  tremendously.   Although  there  was  a  comparatively 
large  volume  of  lumber  consumed  from  the  year  1925  through  1929,  the 
price  trend  in  the  majority  of  iteins  was- downward;  and  while  profits 
retreated  in  both  the  wholesale  and  retail  branches  of  the  industry, 
employees  of  many  companies  hroke  away  and  established  either  retail 
yards,  wholesale  businesses,  or  went  into  commission  selling,  and  all 
of  them  to-k  away  s^me  of  the  business  of  their  former  employers  and 
matorially  increased  the  competition  in  the  various  distribution 
channels.   This  trend  was  growing  steadily  in  the  early  part  of  the 
century  and  continued  to  increase  until  probably  1930,  when  the  . 
economic  pressure  of  the  depression  caused  many  who  had  been  engaged 
in  lumber  distribution  to  seek  other  vocations. 

The  large  manufacturers  of  lumber  have  shown  a  decided  tendency 
over  quite  a  long  period  of  years  to  sell  their  products  direct  through 
their  own  sales  organization  to  retailers,  railroads  'and  industrials, 
and  other  large  consumers  of  lumber,  and,  while  it  has  been  estimated 
that  wholesalers  handle  approximately  60  per  cent  of  the  lumber  pro-? 
duced,  this  figure  cannot  be  substantiated  for  all  producing  areas. 
Direct  selling  by  the  large  mills  t'"'  the  retailers  has  forced  many 
wholesalers  to  seek  other  .outlets,  and.  they  have  been  selling  increasing 
quantities  of  lumber  to  contractors,  b'th  large  and  small,  and  the 
small  contractor,  particularly,  has  been  considered  by  the  retailer  and 
many  others  engaged  in  the- industry. as  the  sales  outlet  of  the  retailer 
alone.    "  . 

Although'  there  has  oeen   this  tendency  of  tfie  large  manufacturers 
to  sell  their  products  thr'"' ugh.  their  '^wn  sales  organizations,  the 
part  played  by  the  retailers,  .wholesalers  and  commission  salesmen  of 
lumber  in  the  distribution  of  ,  lumber  is  a  vitally  iraporta.nt_  one  for  the 
industry,  and  the  sales  volume  of  the  industry  is  dependent  to  a  major 

9813 


--Ssu- 


extent  on  these  outlets,  for  without  the  close  contact  with  the  consu-iier 
that  they  nfford,  the  latter  would  seek  and  TJurchasc,  to  an  even  greater 
extent  thaa  he  does  today,  substitutes  for  lumber  products.   Decreased 
volume  of  consuraiDtion  and  sale-  of  lumber  i^-ould  increase  the  per  thousand 
feet  costs  and  -Drices,  and  thus  oyrrmid  the  competitive  disadvanta.«^e. 
V/hile  many  retfilcrs  handle  substitutes  and  materials  that  are  comneti- 
tive  Ti^ith  lumber,  the  wholesaler'  and  commission  man  almost  invariably 
handles  lumber  or  timber  products  alone,  and  his  existence  is  based 
u-con  his  abi'' ity  tcdisDOse  of  these  products. 

The  tremendous  increase  in  the  facilities  of  the  telegraph  and 
telephone  coapanies,  as  well  as  'the  distribution  of  mail  through  the 
most  remote  areas,  has  brought  the  lumber  manufacturers  into  much' 
closer  'touch  with  the  retail  yards  as  well  as  with  the  ultimate  con- 
sumer of  lumber  and  has  permitted  the  purchaser  to  communicate  direct 
with  the  seller  without  havinf;  to  go  through  the  medium' of  the  ^riiole- 
saler.   All  of  these  changes  in  the  economic  life  of  the  nation  have 
enormously  increased  the  conipttition  between  the  various  distributors 
of  forest  products. 

One  of  the  earliest  problems  that  the  Lumber  Code  Authorit:/  had 
to  solve  wr. s  that  of  the  position  of  the  ^^holesaler  in  connection  with 
this  Code.   With  few  exceptions  the  general  terins  in  the  jurisdictional 
clause  describing  each  division  under  the  Code  did  not  include  whole- 
salers or  distributors.  The  exceptions  w?iich  included  wholesalers  and 
distributors -were  :   The  Hard^food  Division;'  the  wholesale  Distributors 
rivision  (.  of  Iviillwork) ;  the  Sa-^ed  "•:ox,  Shock,  3rate  and  'Tray  subdivision 
of  the  'Vooden  Package  Division;  the  Oak  ilooring  Division;  and  the 
Veneer.  Division.  ' 

Viith  the^  exception  of  the  definition  of  the  wholesaler  previously 
quoted  which  occurred  in  Section  1  (c)  of  Schedule  3,  ahd'  reference  in 
Section  2   of  Schedule  3  as  follo?fS,  there  is  no  further  reference  to 
wholesplers:  . ,   ■■ 

"Section  ?.   \;holesalers.-  The  Lumber  wholesaler  is 
an  economic  lactor  in  the  distribution  of  lumber  and  it  is 
recognised  that  he  is  entitled  to  compensation  for  nis  dis- 
tribution services. 

"(-■)   Each  division  and  each  subdivision  through  its 
designated  agency  shall  establish  for  its  members  and  file 
with  the  Authority  a  schedule  of  maxiimim  discotmts  to  ."hole- 
salers  for  distribution  services'.   Trade  discounts  when  ap- 
proved by  the  Authority  shall  remain  in  effect  until  changes 
are  approved  by  it, 

"(b)..  As  ,;a  condition  of  the  grant  pf  '--holesale  discounts, 
.  the  ii*iolesaler  shall  not  rebate  or  allow  any  part  of  trade 
discount  to  any  customer,  or  cell  or  offer  to  sell  any  item 
01  lumber  or  timber  products  under  the  minimum  or  ices  es- 
t.ablished  .as -provided  in -this  code,  except  to  another  whole- 
saler or  manufacturer;  and  he  shall  conform  to  all  provisions     ' 
of  this  code,  .as  they  apply,  to  him  in  the  sale  and  distribu- 
tion of  .each,  species.   •   »,   .  • 

9613 


-221- 

Ancl  under  Section  5  are  inc?L\ided  certo,in  dir.coimtE  and  terms  of 
sale  to  I'TOvem  transactions  v;ith  Trliolesalars. 

Except  for  these  references  to  the  wholesaler  the  Code  contains  no 
provision  for  inclusion  of  jurisdiction  over  wholesalers  except  for  the 
few  divisions  previously  mentioned  v^hich  inclvidcd  distrilautors  under 
their  jurisdiction. 

Shortly  after  the  adoption  of  the  Lumher  and  Timher  Products  Code 
is  was  conceded  that  the  wholesalers  were  not  hound  "by  the  rules  and 
regulations  established  thereimder. 

The  Retail  Limber  Code,  when  written,  contained  a  section  which 
encompassed-  jurisdiction  of  all  carload  business,  but  when  it  was 
sought  to  put  this  into  effect  such  a  s.torn  of  protest  arose  from  con- 
sumers and  lumbermen  alike  that  this  article  was  stayed,  and  during  the 
life  of  that  Code  altho^jgh  considerable  discussion  was  had  on  this  sub- 
ject, the  stay  was  never  lifted  and,  accordingly,  jurisdiction  over  all 
mill  sales  of  carload  shipments  of  lunber  remained  under  the  Lumber 
and  Timber  Products  Code. 

Hie  definition  of  v.'holesale  Irade  and  j-iarisdiction  over  wholesalers 
continued  to  be  a  problem  to  the  industry  throughout  the  life  of  the  Code. 

For  a  groat  many  years  prior  to  the  Code  various  coromittees  and 
individuals  within  the 'industry  had  been  working  on  plans  for  a  defini- 
tion of  wholesale  trade.  After  the  signing  of  the  Code  all  activities 
were  combined  and  on  April  3,  1934  the  Code  Authority,  at  a  public 
hearing,  submitted  certain  propossls  bearing  on  this  question  as  Amend- 
ment No.  68.  A  complete  record  of  this  proposal  as  submitted  and  the 
objections  thereto  is  cont?.ined  in  the  Transcript  of  Hearings  in  the 
NBA  files,  the  text  of  which  is  too  lengthly  to  discuss  specifically  in 
this  chapter.   It  is  sirfficient  to  remark  that  they  included  complete 
definitions  and  jirrisdictional  delineations  for  the  entire  Lumber  In- 
dustry, and  vrould  have  effected  a  rigid  sj/^stem  of  distribution  fion  the 
producer  through  the  wholesaler  to  the  retailer  and  then  to  the  cons"'jmer, 
and  woiild  have  eliminated  any  possibility  of  cutting  imnecessary  distri- 
bution costs.   In  fact  they  would  have  added  materially  to  the  price  of 
lumber  to  the  consumer. 

numerous  details  of  this  plan  were  questioned  or  objected  to  by 
the  National  Recover^'-  Administration,  but  the  principal  objection  was 
to  the  establishment  of  the  rigid  distribution  system,  which  would  have 
meant  the  elimina.tion  of  wholesalers  who  liad  for  many  years  past  sold 
direct  to  consumers  and  contractors. 

As  a  result  of  a  plea  to  the  National  Recovery  Administration  in 
July,  1934,  by  the  Lximber  Code  Authority  that  conditions  in  regard  to 
the  distribution  of  lumber  had  become  so  involved  that  action  must  be 
tal<:en  on  the  distribution  problem,  the  National  Recovery  Administration 
drew  uo  a  compromise  solution  with  the  provision  that  this  would  be  ap- 
proved only  if  the  wholesalers  would  agree  to  accept  the  plan  and  corae 
under  the  Lumber  and  Timber  Products  Industries  Code  as  a  wholesale 


9813 


-222- 

division.  'The  national  American  Fnolesale  Lumber  Dealers  Association, 
acting  for  'the  v/holecalers,  refused  to  accept  this  conpromise  and  the 
attempt  to  settle  the  vzholssale  question  o-gain  failed. 

Havinr;  failed  to  obtain  aporoval  of  this  plan,  on  July  18,  1934 
the  Code  Axithority  svibmitted  aRendraents  75,  76,  and  77,  '-"rtiich  proposed 
the  establishment  of  a  rrholesale  division  in  the  Lumber  and  Timber  Pro- 
ducts Industries  Code  to  raalce  effective  and  bind  the  trholesalers  to 
the  cost  protection  features  of  Article  IX.  Amondinent  77  proposed  a 
new  definition  of  wholesale  trade  which  was  tmsatisfactor;?-  to  many 
wholesaler  protestants  at  the  public  hearing. 

On  April  3,  1935  the  Code  Authority  submitted  Aracndnent  78,  again 
proposing  a  distribution  nlan  which,  with  few  minor  e::ceptions  was 
the  same  as  that  proposed  in  Ainendment  58. 

The  Code  Authority  fin^-lly  submitted  Amendment  85,  which  again 
outlined  wholesale  trade  practically  the  same  as  the  other  submissions. 
As  in  the  other  cases  cited  above  the  objections  raised  by  the  National 
Hecovery  Acljiiinistration  and  protestants  co^jld  not  be  reconciled  and  the 
amendments  were  not  approved. 

Hatters  thus  stood,  until  the  elimination  of  the  Codes,  with  the 
wholesalers  selling  more  and  more  in  competition  with  the  mills  and 
with  the  retailers  through  the  device  of  cutting  prices  Arhile  acting  as 
a  shield  for  rianufacturers  who  were  violating  the  Code.   This  -undoubted- 
ly played  a  large  part  in  breaJcing  down  Code  prices  and  the  Code, 


9813 


-223- 

;    CHAPTER  V 
I'UTURE  STUDIES 

The  TDurpose  of  this  chapter  is  threefold;:  First,  to  set  out  the  more 
important  sources  of  serial  statistical  data;  second,  to  desctihe  briefly 
and  evaluate  each  soui-ce  according  to  its  research  value;  and  third,  to 
point  out  additional  serial  data  that' would  contrihute  greatly  to  a  better 
understanding  of  the  industry  and  its  rianifold  -iroblens.   This  bibliography 
is  not  exhuistive  because  of  the  limited  time  alloted  for  its  coir/oletion 
and  must  not  be  considered  as  other  than  -i  preliminary  gij.ide  for  fut-ore 
research, 

A.   DESCRIPTION  OP  SOURCES  OP  SERIAL  STATISTICAL  DATA  TOR  TIIP  LUl'.IBER  AMD 
'  TIMBER  PRODUCTS  IIJDUSTRY 

Serial  statistical  data  for  the  Ltunber  Industry  can  be  classified 
into  eleven  major  groups  which  include:   standing  timber,  number  of  mills, 
production,  shipments  and  stocks,  labor,  distribution,  transportation, 
costs, and  finance,  ta^-ces,  prices,  and  grades.   Series  of  data  pertinent 
to  each  will  be  discussed  in  the  above  order  and  will  be  treated  in  as 
chronological  a  man.ier  as  the  material  will  permit. 

In  general,  the  available  data  covering  many  of  the  subjects  sxe 
meager.   In  other  instances  an  apparent  abundance  of  information  is  only 
superficial  as  either  the' coveraf^-ce  is  poor  or  the  same  basic  sources  have 
been  used  by  several  sta,tistic-gathering  agencies,  each  of  whom  revise 
the  data  according  to  his  particular  ideas  or  to  siiit  speciaJ.  purposes 
for  which  the  information  is  to  be  used. 

In  the  preceding  cha.pters  there  has  been  explained  the  widespread 
geographical  location  of  this  industry  with  its  multiplicity  of  small 
linits.   Because  of  the  lack  of  adequate  booldceeping  records  in  these  small 
units  most  of  the  statistics  of  this  industry  are  based  on  the  reports 
from  the  large  -units  which  are  of  course  rela.tively  few  in  number.  TThile 
these  units  represent  a  large  proportion  of  the  total  production,  estimates 
based  on  an  imknown  shifting  quantity,  (the  number  of  small  mills  operat- 
ing and  their  production)  must  be  made  to  obtain  a  total  for  the  industry; 
or  this  small  mill  production  disregarded.  Either  method  makes  the  figures 
of  doubtful  value. 

All  second",ry.  sources"  have  been  eliminated  in  the  references  cited 
in  this  description  and  the  accompanying  charts,  precept  in  such  cases  as 
additional  information  has  been  added  or  a  new  form  of  presentation  had 
been  used, 

1,   Standinp-  Tirabor 

'Statistical  data  concerning  standing  timber  cannot  be  ta''::en  currently 
and  is  not  currently  available,  only  one  series  having  been 'found, 
The  Forest  Service,  .of  the  U.  S.  Department  of  Agricuilture, 

The  Forest  Service  had  "published  a:anual  data  since  1920,  covering 
average  log  and  stumpage  prices  for  each  of  the  more  -orominent  species 
9813 


-22-3- 

and  for  each  State,  as  well  as  suranary  tables.   The  basis  of  these 
statistics  is  actual  stiunpage  and  I0.-5  sales  from  all  parts  of  the 
United  State  s  as  reported  to  the  Forest  Service. 

The  log  prices  are  on  a  delivered  basis  which  includes  all  costs 
of  transporting  the  log  from  the  forest  to  the  mill.   In  some  in- 
stances, chiefly  with  the  more  rare  species  such  as  American  Walnut, 
the  cost  figures  cited  are  not  true  cost  of  the  log  alone.   As  a 
result  comparability  of  prices  does  not  necessarily  exist  between 
different  localities  utilizing  the  same  specie. 

2.  Number  of  Hills 

Prior  to  1904  the  Decennial  Census  of  the  United  States  report- 
ed the  number  of  mills  covered  in  its  canvass.   Annually  since  19C4 
the  Bureau  of  the  Census  and  the  Forest  Service  have  published  num- 
ber of  mills  data  in  conjunction  with  volume  of  lumber  production. 

Ttie  data  gathered  by  the  two  sources  are  comparable,  as  in 
formation  gathered  in  the  Decennial  Census  has  been  made  use  of  in  the 
anriual  report.   However,  complete  coverage  was  not  obtained  in  the 
annual  report  as  questionnaires  were  mailed  only  to  kno'^n  operating 
mills. 

Complete  coverage  has  not  been  attained  in  either  compilation, 
as  statistics  are  quoted  for  only  those  mills  doing  an  annual  bus- 
iness of  $5,000  or  nver  per  year  in  the  annual  re-oorts  and  $500  or 
over  per  year  in  the  Decennial  retjorts.   These  two  sources  give  ex- 
cellent figures  for  actual  operating  units  but  not  for  units  which 
can  operate  but  are  not  in  operation. 

Each  trade  association  has  more  or  less  complete  figures  as  to 
the  number  cf  mills  in  its  particular  region.   The  coverage  is  good 
when  viewed  from  the  volume  of  production  represented  by  these  mills, 
but  coverage  is  much  less  when  considering  all  units  actually  oper- 
ating. 

3.  Production 

The  Decennial  Census  of  the  United  States  also  has  compiled 
production  figures  for  each  year  in  which  the  Census  was  taken.   No 
annual  data  exists  for  the  intervening  years  bet".'een  census  years 
•until  1904,  when  a  special  census  was  taken.   Since  1904  annual 
production  reports  have  been  issued  by  the  Forest  Se-vice  and  the 
Bureau  of  the  Census. 

In  1904,  and  from  1906,  the  Bureau  of  the  Census  conducted  the 
studies,  assisted  by  the  Forest  Service.   From  1913  to  1918,  and 
in  1920,  the  Forest  Service  was  responsible  and  since  then  the  Bureau  , 
of  the  Census  has  gathered  the  material  with  the  Forest  Service  co- 
operating. 

Since  1921  the  odd  year  repo-ts  have  included  not  only  pro- 
duction data  on  lumber,  lath  and  shingles,  but  also  general  labor 

9813 


-325- 

data.    In  the  even  years  under  the  title  of  "Lurater,  Lath  and 
Shingles,"  only  production  is  reBorted.  All" annual -lumbor  productidn.  data 
are  reriorted  by  State  and  species. 

These  production  figures  do  not  represent  100  per  cent.   As 
no  date  are  included  for  mills  productinr'^  less  than  50,000  ft.  b.m. 
of  lumber  per  year,  no  factual  data  exist  as  to  what  portion  of 
production  is  represented  by  these  very  small  mills.   It  is  es- 
timated to  be  between  5  and  10  per  cent  in  mOst  years. 

From  1904  to  1920  except  for  the  decennial  year  the  Forest 
Service  compiled  "total  estimated  cut"  based  on  reported  cut.   From 
1920  to  1931  the  Federal  Reserve  Board  continued  the  estimates. 

Lumber  manufacturing  associations  began  during  the  second  de- 
cade to  compile  monthly  production  data  gathered  from  members  of 
the  association.   As  the  membership  included  the  Ip.rger  mills  of  the 
country,  a  substantial  portion  of  production  could  be  accurately  ac- 
counted for. 

In  1915,  the  National  Lumber  Manufacturers''  Association  began 
publishing  a  weekly  lumber  barometer  based  on  dnta  collected  from 
several  of  tho  largest  associations.   Its  sources  of  information  have 
increased  greatly,  and  for  the  past  several  years  have  served  as  a 
good  indicator  of  general  conditions  in  the  lumber  industry.   Com- 
parability is  not  possible  in  these  figures,  as  identical  mills  are 
not  used  for  continuous  periods  of  time. 

From  November  1922,  to  September,  1923,  the  National  Lumber 
Bulletin,  published  by  the  National  Lumoer  Manufacturers'  Association, 
carried  a  m^onthly  series  on  production  which  annual  total  represent- 
ed approximately  40  per  cent  of  the  production  reported  by  the  Census. 
The  number  of  mills  covered  by  the  data  varied  -from  489  to  705.   This 
succeeded  a  "Monthly  Bulletin"  of  the  Association  published  from  1912 
to  1918,  containing  monthly  reports  by  states  and  regions  for  10  to 
13  reporting  trade  associations. 

The  Survey  of  Current  Business  has  published  a  series  of  month- 
ly statistics  since  1923,  based  on  reports  submitted  directly  from 
trade  associations  whose  members  produce  the  more  important  soft- 
wood and  hardwood  species.   Only  in  the  case  of  redwood  does  re- 
ported production  near  the  100  per  cent  raarh.   Even  then  reported 
production  varies  from  40  to  90  per  cent  of  capacity.   (*)   Total 
hardwood  and  softwocd  data  in  the  Survey  of  Current  Business  are 
now  furnished  by  the  National  Lumber  Manufacturers'  Association  and 
are  estimated  National  totals. 

Seasonality  and  variation  in  the  number  of  mills  reporting  each 
month  greatly  influence  the  utility  of  the  above  two  series  as  shown 


(*)   Survey  of  Current  Business,  1932  supplement,  footnotes. 


9813. 


-226- 

ty  the  monthly  fluctuations. 

4.   Shipments  and  Stocks 

In  the  National  Lumber  Bulletin,  the  National  Lumber  Trade 
Barometer,  and  the  Survey  of  Current  Business,  previously  mentioned, 
efforts  have  been  made  to  publish  assembled  shipments  and  .stock  data 
of  the  trade  associations.   The  first  named  published  only  produc- 
tion and  shipment  information,  v/hile  the  last  two  have  carried  stock 
and  new  and  unfilled  orders  in  addtition.   The  first  two  sources 
combined  shipment' figures  from  all  associations  and  o    ^  them  as 
total,  while  the  Survey  of  Current  Business  auotes  the  figures  on 
regional  lines  alone. 

The  information  given  by  these  three  sources  is  only  partial 
and  merely  indicates  trends'  on  shi-oments  and  stock.   It  is  question- 
able as  to  how  accurate  the  represented  monthly  trends  are,  becp.use 
of  wide  variations  in  the  number  of  mills  reioorting  each  month  and 
the  lesser  variations  in  the  representativeness  of  those  mills  which 
are  included  in  the  reports. 

After  the  year  1900,  the  Y/ar  Department  began  gathering  tonnage 
figures  of  water-borne,  commerce  which  includes  all  freight  leaving 
or  arriving  at  all  ports  in  the  country.   These  statistics  also 
includes  all  coramerco  carried  on  in  the  inland  waterway  systems. 

The  value  of  War  Department  tonnage  data  is  not  great,  as 
all  reshipment'  which  takes  place  is  not  segregated  from  original  ship- 
ments.  For  exemple,  a  partial  cargo  of  lumber  leaving  a  Southern 
port  billed  for  a  Northern  city  is  also  included  as  an  outboiind 
shipment  at  any  port  in  between  where  the  ship  may  put  into  port  for 
the  discharge  of  other  ca.rgo.   Thus  the  statistics  reported  by  this 
cource  are  somewhat  exaggerated. 

The  United  States  Shipping  Board  has  r)ublished  a  series  on  in- 
tercoastal  distribution  by  "ater  since  1928.   The  importance  of  this 
series  is  diminished  by  the  fact  that  all  lumber  products  such  as 
pulpwood,  cordwood,  baskets,  boxes,  furniture,  etc.,  are  assembled 
under  a  "lumber  and  logs"  classification. 

The  quarterly  reports  of  the  Lumber  Survey  Committee  (*)  quoted 
stock  figures  in  addition  to  production.   The  stock  figures  are  based 
on  association  data.   No  evaluation  can  be  placed  on  the  accuracy  of 
the  estimates,  as  there  is  no  comparable  information  against  which 
they  may  be  checked. 

Beginning  with  1923  the  Bureau  of  the  Census  has  reported  stocks 


(*)  Appointed  in  1931  by  the  Timber  Conservation  Board  now  report- 
ing to  Department  of  Commerce. 


9813. 


-227- 

on  hand  at  the  beginning  and  end'  of  the  odd  ye.-.r.   These  date  are 
comparable  to  -orodtiction  data  '"ron  the  same  source  and  for  this 
reason  have  considerable  value. 

5,  Labor 

Series  of  laoor  datp.  did  not  ap'-iear  until  after  1910,  when 
the  Bureau  of  Laboi  Statistics  be^jan  -Dubiishin^;  index  nonbers  of  era- 
ployraeat  and  payrolls.  Polloiving  1520,  the  series  of  euipluy^ient  and 
payroll  data  was  published  by  the  Monthly  Labor  aeviev;.  Soth  have 
been  monthly  series  and  serve  only  as*  trends,  rs  the  in-fomation  -does 
not  cover  identical  mills  and  the  numbe^  of  mills  re-oorting  varies 
considerably. 

The  Bureau  of  Labor  Statistics  has  also  compiled  rather  ex- 
tensive wage  and  hour  data  for  selected  years  since  1920,  covering 
sawmill  workers  in  more  than  twent;'  states.   The  dat"-  have  been 
based  on  full  time  hovirs  and  average  hours.   Earnings,  however,  are 
given  as  to  the  hourly  rate  and  the  actual  weekly  earnings  of  several 
classes  of  workorsc. 

The  Bureau  of  the  Census  in  its  Biennial  Ee^'orts  of  "Principal  Liimber 
Industries"  -nubiicption  gives  very  mer.ger  Inbo^^  information  for  those 
esta.blishinents  producing  less  tha,n  200,000  Tt.  b,n.  per  year,  con- 
sisting of  averr\ge  nujiber  of  wage  earners  i^et-  year,  and  total  wages 
paid.   While  this  elii^iinates  a  large  numoer  of  eStaPlishments,  its 
effect  upon  niimber  of  exioloyees  is  not  so  g-^eatj  as  employment  in  the  ^ 
very  small  establishments  is  seaso?;al  and  the  same  workers  are  prob- 
ably employed  in  other  industries  s.s  well, , -Thereas  the  principal 
erjployment,  is  in  the  large  .plants  9,nd'is  'that  reported  by  census. 

6.  Distribution  and  ConsunTitiGn 

Prior  to  19C0  the  available  distri j.tution  data  was  thr.t'  cafr^ied  by 
Foreign  Ccmmerce  and  Navigation,  relative  to  ei-morts  and  imports  of 
lumber.   This  source  is  "•ondoubtedly  one  of  the  most  accurate  as  the 
question  of  duties  are  involved. 

The  Pacific  Lumber  Inspection  Bureau  began  gathering  ca.rgo 
figures  from  the  States  of  Vfeshington  rnd  Oregon,  arcTond  1910.   They 
quote  monthly  cargo  movements  botn  't/p  donestic  ?,nd  foreign  markets 
by  points  of  origin  and  points  of  destination.   Due  to  the  fact  that 
most  of  the  exporters  in  this  territory  make  use  of  tie  services  of 
this  Bureau,  its  statistics  are  looked  uucn  as  being  authoritative. 

In  19C8  and  1933,  the  Forest  Service  in  "Luinber  Used  in  Man- 
ufacture" gave  quantities  of  lumber  used  in  the  manufacturing  in- 
dustries of  the  United  States  by  SToecies,  by  State  of  consumiDtion, 
and  for  the  even  years  beginning  with  1926,  the  Forest  Service  has 
gathered  valuable  statistics  of  all  lumber  shi-rjments  according  to 
States  of  origin  and  destination.   This  series"  indicates  not  only  the 
interstate  nature  of  lujnber  shiriments  but  also  the  shift  in  consump- 
tive markets. 


9813. 


-228- 

The  three  large'  trade  associations,  Southern  Pine,  V/estern 
Pine,  and  the  West  Coast  Lumbermen,  and  smaller  associations,  have 
published  distribution  data  as  to  origin  and  destination.   Although 
the  infornation  they  dissiminate  does  not  represent  100  per  cent 
distribution  from  their  territories,  it  does  indicate  the  large  markets 
of  consumption  and  the  direction  of  movement  of  their  respective  species. 

The  Lumber  Survey  Committee  appointed  in  1931,  by  the  Timber 
Conservation  Board  has  a  quarterly  series  of  estimated  total  con- 
sumption by  major  lumber  uses  which  is  based  upon  Forest  Service, 
Census,  and  Trade  Association  data.   Its  contribution  to  statistical 
data  relative  to  distribution  data  lies  in  the  attempts  to.'shov?  100 
per  cent  lumber  consumption  a.nd  the  distribution  thereof, 

7.   Transportation. 


Transportation  statistics  (rates)  appeared  in  the  "Timbernan" 
shortly  after  1900.   This  trade  magazine  quotes  water  rates  on  lumber 
from  Pacific  Coast  ports  to  both  foreign  and  domestic  ports  of  desti- 
nation. 

Another  source  of  Pacific  Coast  water  rates  appears  in  the 
publication  of  the  Pacific  Lumbe-  Inspection  Bureau, 

The  trade  association,  chiefly  Southern  Pine,  Western  Pine,  and 
West  Coast  Lumbermen's,  have  gathered  voluminous  rate  data  concern- 
ing rates  important  to  their  respective  memberships. 

A  fourth  source  of  rate  data  are  the  publications  of  the  Inter- 
state Commerce  Commission.  Although  this  body  sets  and  regulates  all 
rates  it  is  more  of  a  repository  for  rate  data  than  a  primary  source 
as  its  manner  of  operation  is  to  hold  hearings  at  which  trade  asso- 
ciations and  others  submit  the  information  which  it  finally  sanctions 
as  the  acceptable  rates.   Its  great  value  lies  in  the  fact  that  i^te. 
data  are  gathered  at  this  one  fountain  of  infornation, 

8.   Costs  and  Finance 

Published  statistical  data  regarding  costs  and  finance  are 
very  meager.   The  Bureau  of  Internal  Revenue  in  its  annual  "Statistics 
of  Income"  docs  give  some  information  relative  to  total  assests,  lia- 
bilities, and  costs  for  reporting  corporations.   While  this  covers  a 
considerable  portion  of  the  industry  no  data  are  available  for  many 
thousands  of  small  units  which  are  unincorporated.   Internal  Revenue 
data  are  of  a  most  general  nature  and  are  entirely  inadequate  for  de- 
tailed stud.}'-. 

During  the  period  from  1918  to  1931  the  Southern  Pine  Associa- 
tion, the  North  Carolina  Pine  Association,  the  V/est  Coast  Lumbermen's 
Association,  and  the  Hardwood  Manufacturers'  Institute  published  month- 
ly per  thousand  feet  b.ra,  costs  of  a  small  number  of  their  members. 
These  costs  were  shown  in  detail  for  each  mill  and  as  an  average  cost 
for  all  mills. 


9813 


-229- 

Although  the  cost  samples  pre    smrll,  some  de-Tee  of  compar- 
atility  is  attainable  "between  different  sections  of  the  country. 
In  order  to  aid  connarison,  stiTapage  costs  ^.ere  either  left  out  or 
a  unifor'H  price  aoplied  to  all  individual  nill  reports. 

9.  Taxes 

The  only  serial  statistical  data  concernin,?  taxes  appears   in 
the  Internal  ReX'enue  puolication  "Statistics  of  Income",   These  date 
hack  to  the  early  part  of  tlie  1920' s  and  re^er  only  to  corporc^tions. 

In  spite  of  the  fact  that  corporations  have  trcraendous  timher  hold- 
ings there  is  a  considerable  portion  of  the  industry  uirepresented 
in  this  series.   The  cheif  objection  to  the  above  data  is  that  the  . 
amount  of  taxes  paid  is  given  in  one  lump  sum  which  canbe  segregated 
neither  as  to  the  particular  levies  under  '^vhich  the  taxes  were  paid 
nor  to  the  geographical  distribution  of  the  tax  cost. 

10.  Prices 

The  principal  published  source  of  price  data  is  trade  publi- 
cations.  The  sources  cited  in  the  chart  of  "Sources  of  Serial 
Statistical  Data"  are  not  exhaustive  of  the  industry  but  have  been 
selected  as  repreienting  both  an  extended  period  of  time  and  dif- 
ferent sections  of  the  cotmtry. 

The  Bureau  of  Labor  Statistics  has  also  been  publishing  a 
price  indes  for  soiae  time,  but  the  items  have  been  cnr-nged  from 
time  to  time,  so  that  the  prices  are  of  doubtful  value. 

In  the  Census  of  Lianufactures  have  been  Dublished  yearly 
since  1906,  an  avei^age  realized  price  of  f.o.b.  mill  (per  thousand 
feet  b.m. )  for  each  of  the  nore  prominent  species  of  hardwoods  and 
softwoods.   These  "orices  should  not  in  any  way  be  confu§Q8.  nith  tiae 
trade  publication  drta,  as  Census  prices  made  no  distinction  be- 
tween grades  or  sizes.   Its  information  is  indicative  of  only  the 
average  per  thousand  feet  b.,rao  realization  to  mills.   Also,  private 
st-atistical  agencies  have  published  information.   Among  these  are 
the  Davis  Statistical  Service  and  the  Southern  Pine  Liimber  Ex- 
change.  The  forr.er  published  monthly  dn.ta  from  19C4  to  1931  on 
Southern  pine  prices  ar.d  West  Coast  Lumoei  prices  from  191B  to  1931. 
Since  then  the  latter  has  assumed  these  duties  for  Southern  Pine. 

The  basis  of  this  data  is  individual  mill  sales  re-oorts  of 
amount,  grade,  size,  specie  rind  price  from  v/hich  average  prices 
are  compiled. 

This  type  of  data  is  valuable  on^y   in  so  f8,r  as  it  concerns  a 
certain  number  of  mills.   There  is  no  way  of  checking  how  representa- 
tive of  the  entire  industry  such  data  may  be» 

11.  G-rades 

Very  little  serial  statistical  data  regarding  volume  grades 
produced  can  be  found.   The  Southern  Pine  Association  did,  for  a 

9813, 


-230- 

few  years  in  the  192o's,  quote  quantities  of  each  grr.de  sold  in  its 
monthly  sp.les  renorts.   No  recent  published  infornation  can  be  found 
of  Southern  Pine  Association  authorship. 

Late  in  the  -1920 's  the  Western  Pine  Manufacturers  Association 
began  publishing  grade  statistics  conniled  from  sales  reports  of 
their  raembershix).   These  data  sho'v  the  quantity  of  various  sizes  and 
grades  sold  and  also  the  destinations  of  such  sa.les,   IJo  information 
is  available  as  to  whether  this  is  still  in  existence, 

■  The  information  appears  to  be  very  good  for  the  Western  Pine, 
but  other  series  covering  all  major  species  ':vould  be  of  great  value. 

12.   General 

In  some  cases,  lumber  statistics  are  inadeauats,  in  others  they 
are  incomplete,  and  still  others  lacking  in  bases  for  camparability. 
There  are  better  data  available  on  some  subjects  than  others.  Pro- 
duction statistics  are  very  good,  although  ;in  abundance  of  Drice 
sources  indicate  that  this  subject  is  well  cover&d.   Such  is  not  the 
case,  a,s  grades  and  sizes  are  changed  so  freauently  in  the  quota- 
tions of  "orice  that  it  is  very  hard  and  in  most  cases  iirroossible  to 
find  a  series  of  comparable  Tjrices  covering  a  span  of  several  years. 
Objection  to  present  data  is  also  based  on  their  representativeness. 

The  labor  ds.ta  cover  only  a  few  classes  of  la.bor  in  some 
cases  chan-^e  the  bases  of  the  data  so  that  coraDarability  is  im- 
possible. 

In  tne  case  of  shipments  the  coverage  is  small  and  the  data 
can  be  compared  only  with  production  data  in  which  identical  mills 
have  reported  both  iDroduction  and  shi"'oments. 

The  only  distribution  d-^ta  wnich  are  complete  are  information 
relative  to  imports  and  erports.   Onjy  in  recent  years  have  data 
been  corciJ-jd  pertinent  to  distribution  from  points  of  production  to 
points  ci  CO  '.sumptionc   The  more  recent  data  have  been  gathered  only 
for  every  ether  year   and  a,s  yet  a  considerable  portion  is  estimated. 

Transportation  drita  are  reported  partly  in  tonnage  and  partly 
in  thousand  feet  b.m.   The  two  are  hard  to  reconcile,  as  species, 
grade,  and  size  must  be  considered  before  a  conversion  figure  can 
be  detr^rrj-iiijd  for  changing  both  to  the  same  basis,   llo  data  are 
availa.rJe  It,?  the  determination  of  an  accurate  figure  cf  conversion. 

All  o^-ner  statistical  data  are  of  a  very  sketchy  nature. 


9813 


-231- 
B.   TIMBER  OTfKEESHTp  STATISTICS  (BUREAU  OF  INTSEITAL  EEVEITUE  DATA) 

In  preparing  tho  chapter  on  Capital  ani  Credit  in  the  Prelininary 
Report  on  the  Eccnomic  Pro^blems  of  the  Inimher  and  Timher  Troducts  Indus- 
try, it  was  necessary  for  us  to  use  tasic  data  relating  to  a  consider- 
ahle  group  of  corporations  generally  classed  as  "forest  products  cor- 
porations," when  in  fact  the  principal  "business  of  such  corporations- 
was  other  than  sawmill  and  planing  mill  opera.tions.   This  necessity 
grew  out  of  our  ina'bility  to  officially  establish  the' proper  contacts 
with  the  Buroau  of  Internal  Revenue  to  enahle  us  to  secure  and  "broaJc 
down  tho  information  from  their  files  and  also  "because  the  Bureau  of 
Internal  Rovenue  did  not  extend  the  scope  of  its  statistical  analyses 
to  Include  several  of  the  factors  which  we  considered  necessary  to  a 
complete  and  axhaustive  study  of  these  particular  factors  of  the  Lum"ber 
and  Timher  Products  Industries. 

The  "othor  wood  products"  corporations  are  classified  as  manufac- 
turers of  carriages,  wagons,  furniture,  "baskets,  etc.  We  are  concerned 
with  none  of  these  except  "baskets,  and  so  this  group  of  "dther  wood' 
products"  corporations,  consisting  of  more  than  50  per  cent  of  the  total 
num"ber  of  corporations  classified  "by  the  Bureau  of  Internal  Revenue,  it 
is  "believed  should  "be  excluded  from  any  study  that  has  as  its  o"bject 
the  presentation  of  data  in  connection  with  sawmills,  planing  mills,  and 
other  wood  fa'bricating  plants  integrated  with  sawmills. 

The  act lal  data  in  the  files  of  the  Bureau  of  Internal  Revenue  re- 
lating to.  samills  is  quite  extensive  and  appears  entirely  edequate  if 
it  were  poss_ble  to  secure  the  necessary  "breakdown  into  the  segmonts 
actually  pertaining  to  the  type  of  manufacture  which  we  wish  to  in- 
vestigate. This  material  is  not  only  concerned  with  the  financial 
status  of  these  corporations,  "but  also  consists  of  a  very  complete  col- 
lectio.i  of  information  in  connection  with. the  investment  of  the  industry 
in  standing  tira'ber.  You  will  recall  that  our  information  as  to  standing 
timber  ownership  at  the  present  time  is  neither  relatively  complete  nor 
th«r-0Ui;hly  relia"blB. 

It  should  "be  "home  in  mind  in  planning  for  such  a  study  of  informal 
tion  in  tho  files  of  thfl  Bureau  of  Internal  Revenue  that  such  informa- 
tion from  the  financial  standpoint  is  availa"ble  only  as  to  corporations 
definitely  classifying  themselves  as  "being  in  the  sawmill  "business, 
&ueh  corporations  for  1952  num'bered  less  than  3,300.   In  this  connection 
it  is  well  to  renif;ni>,er  that  standing  tim"ber  areas  owned  ty  corporations 
■whose  principal  "business  is  not  sawmilling  would  not  "be  cla.ssified  in 
this  group,  and  it  s'nould  "be  our  purpose  to  quite  thoroughly  develop 
thi3  particular  t^^^pe  of  information  and  to  assera"ble  it  with  the  gro-up 
already  segregated.  What  has  "been  said  a"bove  as  to  ownership  of  tim"ber 
lands  also  applies  to  the  ownership  and  operation  of  sawmills.   TS^e  also 
must  consider  that  the  specialized  da.ta  in  the  files  i^f   the  Bureau  of 
Internal  Revenue  rsla'^ing  to  standing  tim"ber  is  not  confined  to  corpora>- 
tions  and  tliat  from  t"nis  data  we  can  secure  leads  to  information  relating 
to  sawmills  operated  "oy  other  than  coi^orations. 

As  the  purpose  of  this  investigation  should  "be  to  develop  informa- 
tion concern"  ;ig  sawm:llls  and  standing  tira"ber,  efforts  should  "be  concen- 
trated at  tht  "begiiining  on  an  investigation  of  those  corporations 

9813 


-232-.  •   ■ 

definitely  so  classified  and  extend  from  that  field  our  investigation 

into  thase  otner  orgr'ni^^stions  thpt  form  .-•"-'  riart  of  this  ■  industry," 

We  are  particulprlv  interested  in  the  clpsi:if ication  of  "cppital 
assets",  especially -the  division  bet'^'een  plant  pnd  equipment  and  standing 
.timber.   Concerning  the  latter  ^re  particularly  wish  to  secure  informa" 
,,tion  concerning  annual  charges  for  taxes  and  interest  as  definitely 
related  to  this  asset, 

'  A  very  considerable  quantity  of  this  financial  information  has 
already  been  developed  by  the  Buieau  of  Internal  Revenue  and  is  avail- 
able for  analysis  and  re-analysis.   The  information  concerning  the 
standing  timber  ownership  has  not  been  classified  except  roui:hly  into 
.geographical  areas. 

The  re-analvsis  and  the  re-classification  of  the  financial  data 
would  be  a  project  not  particularly  difficult,  nor  ^^ould  it  be  very 
costly-.   However,  the  ni'oper,  classification  after  careful  analysis 
of  the  data  relative  to  the -ownership  of  standin.-::  timber  vould  be  a 
,pi:oject  of  considerable  scope,  and  would  be  quite  costly. 

You  will  also  remember  that  this  Division  has  prepared  a  list  of 
,the  names  and-  ad'df esses  of  1,200  of  the  largest  sawmill  operators  in 
the  country,  which  we  had  expected  to  use  in  the  first  planri-ed-  inves- 
tigation of  the  Bureau  of  Internal  Revenue  statistics.   This  list 
could  ..be  subjected  to  a  special  study  and  classification  of  data  in- 
cTudii^ -both  the  financial  and  the  standing  timber  phases, •■  As  such 
a  study  -"-'ould  involve  a  complete  re-classification,  eyen.  of  •  the  finan- 
cial data,  the  project  vould  be,  one  of  considerable/ size  and  it  is 
believed  would  cost  a  considerable  sura  of  laoney  to  properly  conclude  it* 

'  .  The  information  is  available  for  all  past  years -up  to  and  including 
1933  (.1934  is  now  being  classified,)   It  is  suggested  that  any  one  of 
these  .above  suggested  project::,  should  be  very  carefully  outlined  and 
that  no  one  of  them  should  be  undertaken  unless  it  was  reasonable 
certain  that  dat'  received  in. later  years,  at  least  through  the  year  1936 
should  be  similarly  assembled  and  classified. 

Such  data  is  believed  to  be  invaluable  to  Government  and  industry 

if  gathered  for  a  particular  period.   If  such  study  could  include  years 

prior  to,'  during,  and  after  the  depression,  the  value  would  be  almost 
incalculable, 

c,    teai'tsfortatlof  and  cross-hauling 

Very  little  has  been  done  .in  this  study  with  the  subject  of  trans- 
portation and  crosg-hauling.   The  Cii-apter  on  "Distribution"  has  indirectly 
and  briefly  touched  upon  the  vo.lume  aspect  but  only  in  so  far  as  volume 
was  related. , to  specie  movement  and . consuming  centers  of  the  more  prominent 
specifes.   Limited  time  and' personnel,  as  v/ell  as  insufficient  data, 
prohibited  an  adequate  stady  of  this  important  subject,  .As  a  study  for 
future  consideration  the  following  will  briefly  outline  the  major  aspects 
of  the  "uestipn  and -indicate  broad  lines  upon  which  investigation  may  be 
carried.   The  question' of  data  necessary  for  a  cafeful  examination  of  the 
subject'  will  also  be  analyzed  in  the  later  paragraphs. 


-233- 

It  is  p-DPFTent  from  a  cursory  expminationof  available  datp  that  a 
mnjor  portion  of  lumber  is  consu'.ied  a  CTeat  distance  from  the  point  of 
production.   Considerin;:  the  bulkiness  of  the  merchandise  in  relation 
to  its  value,  it  necessarily  ioIIofs  thnt  even  by  use  ol  the  cheapest 
form  of  trfinsportation,  considerable  expense  is  incurred  in  bridging 
such  distances. 

Two  broad  uses  exist  from  lumter,  namely,  construction  and  fabri- 
cation.  Little,  if  ;i.nythin;r  ever  can  be  ;--ccompliEhed  to-vard  decreasing 
distances  between  consumption  rnd  production  centers  of  that  lumber  used 
in  and  for  construction  purposes. 

The  lumber  fabricating  industries,  vhich  consume  a  considerable 
portion  of  lumber,  were  located,  ft  their  inception,  close  to  the 
source  of  their  stocks.  As  the  center  of  production  shifted  from  the 
North-eastern  and  Lake  regions  to  trie  South  and  far  "West,  distances  over 
which  lumher  must  be  shipped  hrs  increased  tremendously.   Fabricating 
plants  were  not  moved  nearer  to  prociuction  centers  to  any  great  extent 
as  large  suras  had  been  invested;  the  major  portion  of  which  would  be 
lost  in  moving  the  frctory.   One  notable  exception  in  the  migration  of 
a  consuming  industry  is  that  of  tne  Furniture  Industry.   It  has  been 
gradually  moving  from  Michigan  to  ITorth  Carolina,  which  state  produces 
large  quantities  of  softwoods,  is  much  nearer  hardwood  forests,  has 
cheaper  labor  and  overhead  costs  and  borders  on  the  ocean  with  its 
cheaper  means  of  trpnsportation. 

Transportation  and  cross-hauling  has  "been  suggested  as  a  topic 
for  future  study  in  order  to  throw  light  upon  tne  increased  costs  of 
lumher  due  to  the  situation  outlined  above. 

The  study  of  lumber  transportation  resolves  itself  into  two  major 
aspects,  namely,  volume  and  cost.   Certain  investigations  should  he 
made  relating  to  both,  among  v,hich  are:  (a)  the  rmount  of  traffic  in 
lumber  between  states,  (b)  amount  of  traffic  in  lumber  within  states, 
(c)  competition  between  types  of  carriers  £.nd  the-  effects  of  such 
competition,  pnd  (d)  the  causes  and  effects  of  cross-hauling  upon 
price.   Cost  and  volume  of  transportation  are  so  closely  inter-related 
that  great  difficulty  is  encountered  and  imich  care  must  be  taken  in 
distinguishing  between  the  efiects  of  each  upon  the  economic  life  of 
the  lumber  industry,   Sather  comprenensive  data  are  necessary  for  an 
adequate  study  of  this  nature.  Some  information  is  available  in  usable 
form  while  some  of  the  available  data  will  have  to  be  reworked. 

Data  essential  for  an  adequate  study  will  include  statistics 
relative  to  the  following:  production,  and  production  facilities  in  the 
various  states;  volume  of  lumber  carried  by  r^il,  water  and  trucks, 
volume  of  lumber  shipped  from  states  to  strtes  "s  well  rs  quantity 
distributed  within  states;  location  and  types  of  lumber  used  by  various 
fabricating  industries;  rate  data  from  all  important  centers  of  pro- 
duction of  the  more  prominent  species  to  the  many  consuming  markets; 
the  extent  and  quantities  of  reshipped  lumber;  and  the  volume  of  imports 
along  with  general  information  as  to  their  ultimate  destination,   A 
great  deal  of  the  required  data  cp.n  be  oota.ined  from  existing  sources. 
However,  some  will  undoubtedly  require  reworking  end  supi:lementing, 

981S 


-234- 

The  chief  sources  from  which  the  above  data  may  be  obtained  are: 
B-areau  of  the  Census,  Forest  Service,  Interstate  Commerce  CoramiEsion, 
jiureau  of  l\eilvB.y   Economics,  United  States  Shipijin,'^  Board,  and  the  7/ar 
Department, 

The  -^reau  of  the  Census  co;apilcs  annual  production  statistics  by 
states  and  species  within  states.   This  information  is  reliable  and  has 
the  best  coverage  for  state  !?v,.d   species  statistics  in  existence, 

Forest  Service  has  two  sets  of  data  T'hich  would  prove  to  be  of 
great  value  in  a  st\idy  of  transportation.   One  entitled  "Lumber  Used 
In  Manufacture"  has  been  published  for  the  years  19?8  and  1935,   These 
publicationa  show  the  species  and  quantity  of  lumber  used  in  fabricating 
industries  by  industry  and  state.   The  other  series  is  published  under 
the  title  of  "Lumber -Distribution  and  Cohsum-otion, "  Althou^-h  it  is 
available  for  every  other  even  year  beginn?,nj?  with  1924,  data  for 
several  of  the  years  have  not  beeii  published  but  can  be  obtained  from 
the  work  sheets  at  Forest  Service,   These  data  give  shipments  from  states 
to  states  and  within  each  state  sep;regated  according  to  hardwoods  and 
softwoods. 

The  Interstate  Commerce,  Com  iisf:ion  reports  volume  of  rail  ship- 
ments over  all  Class  I  railroads  in  the  United  States  under  the  title 
of  "Freight,  Commodity  Statistics"  which  is  available  for  such  years. 
The  data  since  January  1,  1926  have  included  many  more  classifications 
of  freight  and  are  therefore  of  greater  utility. 

All  data  are  reported  by  railroads  and  by  general  railroad  districts, 
which  is  a  serious  disadvantage  to  the  study  of  transportation,   Compara- 
bilit?/  cannot  be  obtained  betve'en  data  from  previously  cited  sources  nor 
is  it  likely  that  a  state  breakdov^n  can  be  obtained  without  a  great  deal 
of  work  and  expense,   A  second  disadvantage  exists  in  the  fact  tha^t 
volume  of  transportation  by  rail  is  reported  in  tonnage  rather  than 
thousand  feet  b,  ra. 

The  Interstate  Commerce  Commission  can  also  provide  necessary  all 
rate  data  relating  to'  railroad  freight. 

The  United  States  Shipping  Boara  reports  intercoast  movements  of 
lumber  by  water  under  the  title  of  "United  States  Vteter-Borne  Intercoastal 
Traffic,"  which  is  available  for  several  years  to  date.   This  source  also 
quotes  all  volume  in  tonnage  and  has  an  additional  disadvantage  in  that 
lumber  and  all  wood  products  are  included  -under  a  "logs  and  lumber" 
classification.   Before  an  adequate  evaluation  of  this  source  can  be  made 
the  quantity  of  wood  products  other  than  lumber,  appearing  under  this 
title,  will  have  to  be  determined. 

The  ''<ar  Department  reports  annually  water-Dorne  commerce  statistics 
entitled,  "Commercial  Statistics,  Water-Borne  Commerce  of  the  United 
States,"  v;hich  is  available  both  for  fiscal  and  calendar  years.   It  will 
not  be  of  great  value  in  its  present  form  but  basic  data  are  in  the  hands 
of  Army  Engineers  which  could  be  compiled  to  show  origin  and  destination 
of  all  water-borne  comTnerce  in  the  United  States,   Lack  of  i"unds  have 
prohibited  the  publication  of  data  in  this  form  as  yet, 

9813 


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lumber  transportation  in  this  re'S       ^^^^^^^^^  quite  a  lactor  in 
Also,  datp  f^r  ?'ater  ratfc;  m-i  i  '  -,,^,.,  +  _  i  '  ,,  . 

The  need  for  addition?!  dat-  oth-r  th-n  th,^..  .,,    .    ^    ■ 
preceding  paragraphs  will  undoubtedi;"no  h^  e  ^Sff:  ^Ms  tf    . 
which  can  arise  after  the  study  is  ur.der  wf,7.  "  ''™'^"^  "^^  *-"^  t^'^e  ^<i 

D.   METHODOLOGY 

Timbef ProJ^ctrirdustri''"o   '°/^f^^-,*-   --"^ems   of   the  Lumber  and 

.anner   in  ^hi^h  Jf o^^SeH^^  rSe      ode'^tf^r^bl^  ^""'^   ^^  ^^  ^^^ 
not   for   each  particular  p^rt   of   the   ir^i^.f*-.  ^f  problems   are   analyzed 
into   types   on%he  basis   L      h.   origin        Tni'^   fl  f  "'^'"^  ''''  ^'^'"^^'^^ 
industry  as   a  whole   except   th-^t   hprX'^.:^   i      i  "^   "■"   ^^PPl^^d   to   the 

considered  as  rep^esentiS   *^-*J^^^^^°^d  dumber  and  softwood  lumber   are 

Of  the  industrrth::tr?o'd:  :i  h%h:^  ^b^ricltin:  j^'r'7-  ■'''''  ^^^^^ 

products,  but  Which  under  the  Lu:nbL^d  Tim'^f Produ  t  Td"  ""'^  °''"^ 
ered  part  of  the  indu=;trv  «nH  fv,<,+    4.  -  ■"  "°^^  Products  Code  was  conoid- 

-hich  are  product'  o^ the  ^odf  r',"""'  Tlu""   '"  "'   "''^  ^'^^^^^  ^^^^^cts 

disregarded  to  ^^^  1^  ^t^^Zr^^^^l^T'  l^  '^'^ 

except  standing  timber  have  n.t  been  analyzed.        ^"   --blems,  of  all 


been  tre:Lf  L^r'i:i:  ^o^l^'^''T'^l    ''^'^^   -^  ^--^  ^-^^  ^-e 
the  problem^  of  the  ..1^^!  f  .  ^^  contributed  and  were  the  genesis  of 

problems  of  "^.roduction  o"v  t   t'^-'°?^"'  ""^'"^"^  '"  ^^^^^"^  ^^^^  the 
production  only  tue  Luraoer  Industry  has  been  treated. 

far  af:o::ible  intf^rgHns'^^^a:;  to  T^t^  ''I'i^^^  ^^°^^-^  - 

one  region  and  another  ^h'^v^:  lit  11  f  h'  f ^^f ^^^-^/^tween 
particular  region  have  h^tr^Zl   I   T      r    \:^     .    ^^'^^^'^   problems  of  a 

attempt  has  hSn  madrchienv  to  divi  ^'\  ^^  "^T""   '"'""^'^^  P^°P-  - 
and  these  in  turn TLf  S^  to  diviae  between  hardwood  and  softwood, 

with  a  mer  reference   0  thfrnin^'r^''"'''""'  ''   '^^^'^'^°^^  ^^'    -"--^-. 
the  problems.  ^'"^  aivisions  and  their  contribution  to 

its  most'^outst^.'dl^  ''"'''   '-f   '^''^^''-^^  -^^^  ^^^^  *^«-ted  at  best  onl..  in 
should  be  made   S^fh'aT;  ^   "T^  '^'^''^'^  ^^"^^^^^  -  "-^^^i  -^ 

and  timbe^^^^ductrof^S^S::  ete^'  Jhe^^reT  h^^'d  .°^  ^^^  ^^^^^^ 
part  of  a  statP   «ir,^=      ""  ^■^^^-  should  be  a  state,  or 

?he  industry  nd  ItTlZT"""   "It''   ''^"  contribute  to  the  operation  of 

Should  be  tL  t  d :  tS:' s:  !r  f  :^n  thf'^^'^  '^^'%^^-  '^^  ^^^^^^-^ 

to  and  all  inclusive  oJ.m        -H  tne  way  irom  forest  management 
within  that  area.  '''''"'^'■'  '"'  ^^maunfactured  forest  products 

obstaSerto'^SpLL'^n'^^dT"  P^^'^-^--^^^-^  --Id  ^e  made  as  to 

expansion  .  nd  tne  cause  of  any  retrogression,  particularly 

9813 


-336- 

along  the  lines  outlined  in  a  research  project  proposed  by  the  Harvard 
Tl'ureau  of  Business  Research  snd  the  Harvard  forest  entitled  "The  Present 
Situation  and  Future  of  Timber-producin!?;  Regions  as  related  to  the 
Utilization  of  Non-virgin  Timber,"   This  project  was  proposed  for  the  Nei- 
England  territory  only.  Hovever,  such  a  project  might  be  designed  and 
developed,  ivith  only  sli.^'ht  changes.,  to  apply  to  each  one  of  the  regions 
as  shown  in  Section  "A"  of  Chapter  II,  or  i"here  required  for  particular 
states  within  those  regions. 

After  such  studies  riave  been  completed  it  would  then  be  'possible  to 
make  a  more  thorough  analysis  of  the  entire  Luralser  and  Timber  Products 
Industry, 

Attention  sh^-uld  also  be  directed  to  a  publication  available  in  the 
files  of  NRA  entitled  "Scope  And  Status  of  Research  In  Forest  Economics" 
(available  through  the  cour'tesy  of  the  Social  Science  Research  Council) 


9813 


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APPEliDIX  I 
EITORTS  OF  TIE  L'UIIBZR  IITDUETHY  AT  PRODUCTION  COHTROL 
PRIOR  TO  I'.  R.  A. 


A  report  prepared  "by   A.  C.  Dix.on,  'based  on  personal 

knowledge  and  an  examination  of  the  files  of  the 

National  Lumter  ManufL-cturers  Association 


You  have  as]:ed  me  to  malre  a  stn.dy  of  the  prodiiction  control  efforts 
of  the  liamlier  industry  prior  to  the  period  of  code  administration.   In 
doing  this,  I  have  thought  that  on  account  of  the  time  limitations  I  should 
confine  the  study  to  the  major  divisions  of  the  sav-milling  "branch  of  the 
industr;''  on  the  theory  that  the  action  taken  "by  these  m.ajor  divisions 
would  fiu-nish  a  satisfactory  seiaplo,  and  "because  I  know  that  most  of  what 
the  smaller  groups  had  done  r/as  "bj"-  vay  of  following  the  programs  of  the 
larger  ones. 

I  have  not  paid  any  attention  to  t"ne  fa"bricating  divisions  although 
I  know  that  some  of  them  operated  imdcr  the  so«?called  Stenenson  Plan  and 
that  perhaps  some  of  the  others  attempted  to  practice  types  of  production 
control. 

In  going  through  the  material  availa"ble,  I  was  impressed  hy  the  fact 
that  all  of  the  efforts  to  control  production  which  attained  any  siza"ble 
proportions  occurred  su"bsequont  to  1924.  Prior  to  that  time,  it  is  trae, 
there  were  conversations  and  perhaps  some  correspondence  relative  to  the 
future  possi"bility  of  the  need  for  control,  "but  nothing  was  done  which 
could  "be  called  a  serious  effort. 

In  searching  for  the  reasons  ps  to  ".7hy  the  efforts  were  made  during 
the  period  mentioned,  I  ran  across  the  follov/ing  facts  which  seem  to  me 
)        to  "be  worthy  of  note  and  as  having  a  pro"ba"ble  "bearing  on  the  chronology 
of  the  efforts  that  were  made. 

1.  Transfer  to  The  V^ect  of  Production  Supremacy. 

Th.e   United  States  Census  of  Manufacturers  shows  that  up  to  and  in- 
cluding 1869,  the  northeastern  states  were  the  largest  producers  of 
lum"ber,  and  that  in  the  next  census  period,  in  1879  and  the  following 
in  1889,  the  laJ^ce  states  predominated  in  production,  and  that  t"hereafter 
and  uaitil  1919,  the  southern  str^tes  were  in  the  lead,  while  late  in  the 
twenties  the  western  states  forged  ahead  and  at  the  time  of  the  census 
taking  in  1929  and  subsequent  thereto,  the  western  states  have  produced 
more  l-'ain"ber  each  year  than  any  other  area, 

2.  Influence  Of  The  Panama  Canal. 

Tlae  Pacific  L!ii:i"ber  Inspection  B'tU'eau  for  a  generation  has  inspected 
and  kept  a  record  of  all  foreign  and  domestic  cargo  shipments  from  the 
Pacific  Coast  and  has  "become  a  worldwide  authority  not  only  as  to  its 

9813 


-238- 

statistical  record.   Its  records  show,  prior  to  1914,  practically  no  ship- 
ments to  the  Atlantic  Coast,  the  total  aiaoiinting  to  less  than  fourteen 
iiiillion  feet,  which  would  only  amount  to  three  1  arge  car.^oes  measured  Id;'- 
the  size  of  cargoes  today.   In  1914  these  Atlantic  Coast  shipments  jumped 
to  thirty-four  million  feet;  in  1915  to  eighty-six  million  feet;  during 
the  war  period  the  shipments  were  nominal  but  in  1921  they  reached  the  tots-1 
of  two  hundred  and  eleven  million  feet;  in  1922  six  hundred  and  sixty- five 
million  feet;  the  next  year  nine  hundred  and  t;7ent3''-five  million  feet;  in 
1924  one  thousand  and  sixty-five  million  feet;  in  1925  two  thousand  million 
feet;  in  1926  suhstEintially  the  sane,  and  each  j^ear  from  1925  to  1929,  in- 
clusive, nineteen  hundred  million  feet  or  more.   Ti70  thousand  million  feet 
is  the  equivalent  of  80,000  carloads,  or  sufficient  to  huild  well  in  excess 
of  100,000  five  and  six  room  residences.   I  "believe  these  figures  indicate 
that  during  the  period  referred  to  there  was  a  tremendous  pressure  put  on 
the  Atlantic  seahoard  raorkets  hy  the  influx  of  Uest  Coast  lumher,  and  while 
guaging  this  pressure,  it  night  "be  well  to  remei.iter  that  luinher  delivered  by 
water  to  the  Atlantic  Coast  ports  was  very  often  transferred  to  tr\\cl:s  or 
the  railroads  and  hatGLed  hundreds  of  miles  inland. 

3.  Loss  Of  Earnings. 

Possibly  as  an  effect  on  what  is  recited  above,  and  certainly  a  con- 
tributing cause  to  the  desire  forproduction  control,  was  the  steady  decline 
in  earnings  during  the  period' beginning  immediately  after  the  war.   Statistics 
of  income  furnished  by  the  Bureau  of  Internal  Revenue  give  net  profit  or 
deficit  of  all  companies  reporting,  and  the  showing  covering  saw-nills,  con- 
sidering the  nearest  million  dollo.rs,  is  as  follows: 

1919  -  137  profit 

1920  -  179  profit 

1921  -  38  deficit  (this  was  a  year  of  temporary 

de-oression  in  the  construction  industrj'', 

1922  -  110  profit 

1923  -  191  profit 

This  T/as  the  high  point  from  which  the  yirofits  dropped  until  in  1927 
they  show  only  as  six  million  dollars,  while  in  1930,  1931,  and  1932  the 
deficits  show  respectively  as  seventy-three  million,  one  hundred  nineteen 
million  and  one  hundred  and  twenty-four  million  dollars,  the  amount  in  1935 
being  equal  to  32.24;o  of  the  gross  income  of  the  industry. 

I  have  noted  with  interest  from  the  records,  aided  by  my  personal  re- 
collection of  vriiat  happened,  that  the  uiiiversal  desire  for  some  tYpe   of 
production  control  developed  at  approximately  the  time  when  profits  began 
to  disajppear.   In  1925,  1926  and  1927,  without  having  the  benefit  of  a 
com-oosite  statement  of  the  industry  for  any  given  year  until  the  year  was 
well  past,  the  operators  generally  knew  tha.t  the  industry  as  a  whole  was 
either  losing  money  or  making  only  a  nominal  amount,  \7hile  at  the  same  time 
industry  in  other  lines  was  reported  to  be  paying  vast  amounts  in  profit 
taxes  o.nd  to  be  in  a  prosperous  condition.   Eie,  question  was  frequently  put 
as  to  what  was  going  to  happen  to  the  lumber  industr:7  when  other  industries 
started  to  lose  money,  in  view  of  the  fact  that  when  other  industries  were 
making  money  the  lumber  industry  was  moking  none. 


9813 


-239- 
4.   Other  Industry  Activities  Along  Production  Control  Lines. 

Aliout  this  same  tirae  the  oil  and  coal  indxistries,  independent  of 
each  other  so  far  as  I  knor/,  and  indejiendent  of  any  action  on  the  part 
of  the  lixiifoer  industry,  v/ere  seeking  production  control  in  one  v/ay  or 
another,  "both  in  the  respective  states  and  nationally,  and  it  may  be  that 
what  they  uere  doing  had  at  least  a  suggestive  effect  upon  the  lumlDcr  in- 
d\xstry. 

5,   Hailroe-d  Suilciing  In  the  'iTest. 

Beginning  soon  after  the  war,  there  was  a  period  of  intense  activity 
in  railroad  "building  in  the  far  TTest,  and  the  Southern  Pacific,  G-reat 
Northern,  Northern  Pacific,  Union  Pacific,  Chicago,  Milwaukee  and  St, 
Paul,  as  well  as  the  TTestern  Pacific,  huilt  many  hundreds  of  miles  of  main 
lines,  in  some  cases  opening  up  vast  areas  of  virgin  tinher  either  directly 
trihutaiT  to  the  main  lines  or  easily  made  so  hy  short  tranches,  and  on 
these  now  main  lines  and  "branches  there  were  erected  a  n^jmher  of  new  mills, 
some  very  large  and,  of  course,  adding  to  what  was  already  considered  a 
condition  of  overproduction, 

5.   Tax  Intreases. 

Tliere  was  a  notahle  increase  in  taxes  paid  "by  tinher  owners  as  well 
as  taxes  generally  in  the  western  states  hetween  1920  and  1930.   This  was 
an  era  of  road-huilding,  "building  of  new  school  houses  and  other  p\i'blic 
"buildings,  and.  more  or  less  riotous  state  and  municipal  spending.   In 
some  heavily  timbered  counties,  the  total  load  increased  while  the  timber 
availa"ble  for  taxation  decreased,  with  the  resultant  multiplication  of 
the  tax  load  and  neither  could  the  other  assessed  valuation  carry  the 
"balance.   Some  of  the  co-ujities  have  had  to  go  into  a  state  of  hanlo'iTptcy, 

Some  of  the  a"bove  nuiTi"bered  paragraphs  may  "be  considered  as  causes, 
some  as  effects,  ajid  some  as  merel:'''  coincidences,  "but  I  think  all  are 
worthy  of  consideration  as  having  some  sort  of  a  hearing  on  the  various 
efforts  later  made  "by  the  industry  to  "balance  supply  and  demand.   In 
gathering  material  for  what  is  to  follow,  I  have  had  an  opportunity  to 
look  over  considera"ble  material  in  the  files  of  the  National  Ltimher 
Manufacturers  Association  "bulletins,  news  letters,  releases,  etc.,  "but 
mostly  in  the  nature  of  private  corresnondence  "between  persons  in  the  in- 
dustry, relating  to  the  various  movements  that  were  under  waj'"  at  different 
times,  and  giving,  in  many  cases,  their  confidential  views  and  "beliefs 
which  the;'-  did  not  e:cpect  to  have  broadcasted  either  to  the  industry  or 
to  the  public.   Consequently,  I  have  refrained  in  the  main  from  using  the 
names  of  individu£.ls,  but  feel  quite  sure  that  if  any  checking  is  desired 
by  some  responsible  person  in  authority,  that  it  can  be  done. 

It  has  been  my  intention  to  list  the  varioixs  production  control 
efforts  in  chronological  ord.er.   I  have  done  so  as  nearl"^'-  as  I  can  but 
could  not  be  entirely  accurate  for  the  reason  tha.t  the  movements  overlapped 
in  a  nuLiber  of  cases,  in  fact,  in,  most  cases,  and  one.  was  not  out  of  the 
way  before  another  began.   In  the  mo.in,  I  have  put  them,  in  the  order  indi- 
canted  by  the  first  definite  '^/orthw'iile  mention  in  the  correspond.ence  and 
data  I  have  looked  over, 

9813 


.  -24C- 
I.   Y/EST  COAST  IliilRGI-ER. 

In  ITovein'ber  1925,  tliere  had  "been  enof.gh  thought  and  discussion  on 
the  proposal  to  merge  sone  large  ITest  Coast  tiinter  properties  co   that  a 
man  prominent  .in  the  industry  v/as  aslted  by  "¥est  Coast  people  and  haiilrers" 
to  act  as  a  leader  in  the  raoveiaent,  and  late  in  that  month  a  prominent 
firm  of  timber  "bond  specialists  and  bpnicers  in  Chicago  rrote  a  letter  to 
an  officiaJL  m  the  industry  stating  that  they,  v/ith  o  ne  of  the  leading  ITew 
York  bond  houses  and  one  of  the  largest  benics  in  Chicago,  had  been  tTjlng 
to  wor]:  out  o.  merger  among  fir  operators  in  the  West.   The  letter  states 
that  tro  conditions  existed  at  that  time  which  had  never  existed  before 
and  which  r/ere  favorable;  first,  "the  government  attitude  toward  mergers", 
second,  that  "money  was  available  beyond  anj^  sums  previously  thought  pos- 
sible." ITith  these  conditions  which  they  mentioned,  they  cilso  coiipled  the 
idea  of  the  "depressed  conditions  and,  therefore,  psychological  position 
of  the  fir  operators",  and  reached  the  conclusion  that  "there  is  at  least 
a  chance  to  merge  some  of  the  greatest  operr  tors  in  the  Pacific  Coast, " 

This  group  (Baker,  Pentress  and  Company,  Comuercial  Trust  and  Savings 
Banlc  of  Chicago,  and  Dillon  Eeed  and  Company  of  3ew  York)  spent  some 
months  of  time  and  a  great  deal  of  money,  and  the  lumbermen  interested 
a-lso  spent  Liuch  time  and  money,  in  working  out  the  possibilities  of  the 
scheme.  They  secured  the  ten-year  record  of  produ.ction,  cost,  sales,  e^nd 
net  returns  of  a  large  number  of  companies,  on  the  Pacific  Coast,  estimated 
to  have  arov-nd  30^  or  more  of  the  capacity  of  the  Douglas  Fir  producers, 
to  see  whether  or  not  when  projected  into  the  future,  the  operations  of 
these  concerns  by  reason  of  what  they  had  shown  they  could  do  in  the  past, 
and  giving  consideration  to  ei^^ipected  economies  and  benefits  to  come  from 
the  merger,  could  from  the  conversion  or  "net  avails"  service  the  various 
classes  of  seco.rities  which  it  was  felt  necessary  to  issue.   The  g^-neral 
plan  0 f  this  and 'Other  proposed  mergers  to  be  mentioned  later,  contemplated 
the  issuance  of  three  classes  of  securities.   Pirst,  the  operators  would 
be  paid  in  cs-sh  for  their  current  assets,  e,nd  first  mortgage  bonds  wotild 
be  sold  to  t'lie  public  to  orovide  this  cash  and  provide  working  capital. 
Secondly,  preferred  stocl:  would  be  issued  to  co^mpensate  the  operators  for 
transfer  of  title  of  their  '-'orking  fp-cilities,  such  as  sa''  Ills,  logging 
railros.ds,  ships,  docks,  etc,,  and  tliirdly,  common  stock  would  be  issued 
to  the  operators  for  their  timber.   There  were,  of  cotxrse,  variations 
in  these  plans  as  the  banlcers'  group  aiid"  the  industry  group  worked  together 
and  raajiy  different  tentative  schemes  were  drawn  up  on  paper,  some  ninoograph- 
ed  and  some  printed,  but  running  a.ll  through  the  discussions,  conferences 
and  planning,  was  the  central  thought  that  vTha-tever  basis  the  merger  wa,s 
formed, on, .the  prospective  income  must  in  any  event  be  sufficient  to  retire 
the  obj.iga-tions. 

The  first  publicity  as  to  this  merger  was  given  under  a  Chicago  data 
line  as  early  as  February  6,  1926,  and  the  indications  are  that  this  was 
the  first  publicity  that  was  given.  About  this  same  time,  the  National 
City  Baiilc  of  Hew  York  came  into  the  picture  and  it  was  thought  by  some  of 
the  v/estern  operators  that  a  br-tter  deal  coiild  be  made  with  them  than 
could  be  riade  with  the  first  group  n(?ntioned,  and  accordingly  committees 
were  appointed  to  meet  v/ith  representatives  of  this  bark  and  tentative 
plans  were  developed  approximately  along  the  lines  referred  to  above. 


9813 


-243- 

Bu-rin/;;   the   time   the  Coitv.ittee   of  Fifteen  r/as   in  existence,    the 
thoi)^:ht  was?   e.-pressed  (pro'ba'bly.  not   ori.^inptin-;:  with   the  Couiinittee,   brt 
furthered  h;,    them)    thrt   t]ie   lnd'\tsti-:    dioiJc    have  r^  c" irector-;':eneral,    fnd 
freqi'.ent   corinj-.riKons  v/erc  ^^^.e  to  b"  '■-imgII   mic  Jv.v.'.;^e  Lc;ndis;    t'Jie  movie 
incustr;,    rnt    T/ill  H&ys;    mC    the  ii.-u.b"er   Institute  fiiL  &enerf:l  Ar.drev/s. 

I    oi'.ecjtion  if  it   i':    corve't   to   r.i:y  that  no   benei'icij'l    re- tilt  n  . 
accrv.eJ,  i I'O- 1   the  woj'K:  oi'   tiiis   co:.i,,iittce.      I    thirilt  it   cr-n  be  said  tha,t 
there  v/ere  no   tangible   recorded  re'iailts   in  eviJ.ence   and  nothin;^  thrt 
CGUlc     DC     -..t   on  cit]"Ler    pide   of  the   ie'.  >"er  in  firrLiref;,    bat   the  movement 
did  rern.lt,    esMeciall      thioujh  the.   cv'llin,';   to3;ether  of  lr;r,;;c   .groups   of 
serioUGly  i::terented  operators,    in  r-   :;prer-.o.  of  Liiovdedge  as  to  the   con- 
dition of  the  incustry  end  unist  jiave   coiivoellcc.  utn^,   persons   to   taice   a 
more   rep.lir'tic  view  of  the    sit.mtiori   them  they  otherv.'ir,e  roiild  have   trhen. 

The  ;yrobabilities   are   tlict   tiie   comjaittee   revcr  formally   disb£.nded, 
their  pi-o.)os?.l   tu   chen;:;e   the  'fotionrl  Lumber  lMairaff.ctr.rers  Associrtion 
to   :'.r.  i.iGtit.i.te  was  never  cairiec.  o",  .t,    there  w.ao   no  director- -general 
secure^.,    anc    in  time   the  ..lember::.   of  the   regional   'croujs   tvmed  their 
attentio'.:    to  variour:   nthev  pla,n3  .and   fjchemes   cesi^jned  to   adjust  production 
to  aem?v,d,      "SiTnile  the  nieetin;.;^   of  the   lar,':er  ^jToups   above   referred   to 
\vere  bBin:^  held,    and  as  ,;ien  went  home   from  thev^e  meetings   carr^'in,^  the 
hiesza,";^  to   their  or/n   associations   ai;d  regions   in   some   sections   efforts 
were    .;n.e   to  ;■  ether    strtistics  r-.i-iL  lind  ot.t  more   about   facta  with 
regard  to   the   industry,    ana  rt   one   time   later   in  1928   the   Southern  Pire 
Associr.tion  htd  as  rianj    a.s   eighteen  men   in  the   ficD.d  a.ttempting  to 
secure   data  on  the  productiori  of  the   3m.all  millr   vmich  did  not   re.'^'dril;' 
report   to   the   ar;sociaticn.      At   the   same  ti.ne   tiie  North  Caroline   Pine 
people   r/ere   doing  oome   of   the   snme  v-ork.      It   is   difficult   to   relate  the.e 
re;;ion,:.l   i,.ctivities   to   an:;   particular  movement   uut   I    thinlc  ineii  cat  ions 
are  rer  voncJoly  clear   thet   at  least   some  of  the      scouting  amd  .investi- 
gatin,,  v'orl:  that  was   done   in  1928   and  early   1929   was   the   result   of  tJie 
thinlci'v,  oi    some  of  those  vho   a.tteneed  the  meetings   of  the  Corai'.ittee   of 
Fifteen. 

III.      A?ThI3TID  ALLIAIICL  UIT^I   COAL  AI"J  OIL. 

In  1923  there   crme   to   tr^e  attenoion  of  the  IT.^tionaJ.  L^'ynbcr  I.iani"- 
facti.rers  Association   the  fact  that    t;.ere  was   a  movement   on   the  -^art 
of  coal   rnd  oil   interests   tc   secure   Ict^islation  desi.gned  to  have  a 
be.?,ring  on  the  production   of   those  nat^'.rpl   resources.      There  v.'as   consi- 
derable  correspondence  back  rnd  forth  between  mem.bers   of   the  indur^try 
and  with  associations   executivesj    and  the  industry  became   interested 
eno\.-gh  so   that   on  December  6,    1928   the  Hational  Liunber  i,Iariufacturcr3 
Associatio.:   _;assed  a,  resolu.tiqn   calling  attention  to   the  fact   th^- 1   t..ere 
were   ".inilrr  rnd  a^.iitional   reasons   why,    if  oil   and  coal  had  le^'i-jlation 
providin-;,   for  "control' -ng   orod-uction  under  ]jroper   safeguards"   of 
oil  rnc.  coal,    or  both,    the  legislation  should  also    oermit   controlled 
production  of  l"iii.,ber,      When   the   a.ctivitien   of  the   liriibermen     came 'to   the 
attention  of  the   oil   peo;ile   erpeciellj,    the:.,-   let   it   be  laiown  that   they 
dic.  not  wrjit   the   lumber-t?.il   fttf  chec-.  to   their  kite,    jnd  whether  or  :iot 
the   efforts   of  the  liTinoen-nen  were  quieted  cx'-ra   'o:,    res'jnn  of   this   objec- 
tionj    ■c];e  frets   are   th'-t   the   throu  -lit  was   not    airsucd  to   the  point   that 
legislation  V7as  had  in  beji.?lf  of  lu^-fcor, 

9813 


TL3    oriei    recit."'!  liere   of   thi:;    thQW.;ht   ia  not  coinjenm^rate  '"ith 
the   fi.ioiuat   of  corresponO.cnce   anc.  confei-riiz:;  en.jejec'.  in'  ay  the  liunljer 
iiid-'.st::'y   ^■.^^ri^:':;  th/ t   ti:..o ,   '.,'Ut    f.ere  vere-  ';»o    .:;;t.cifl   lumber  or^'anizations 
brou  a-c   ii.to  lieii'.^  to    fui'ther   tl  .i:3     v..,r_)0!ie   rud   relF.l'vely  r.  snell   rnowit 
of  yxiblicity  ves  I'lad. 

]'OTS:      At   t;.iis    joint,    i'n   or;  er   '^/O  civoi'.    i rec._i.-eiit   repotitioa,    it  urj''  "be 
veil    CO   'jtr.te   tl  at   in  all   of   t:u     'ij.roit::   oi    I'le   inc.Mstrv  '.vhich  are   re- 
corCec.  ;.,eie  und  ^.Iven   Kiu'iicient   .  rominenct:;   to  T:.r4e  a  nurnbereu  ;:Jsra;:raJi 
or  cha:;ter,    there  v/jr;  j.r.'it.I.   le  'al   «..isoussion  on  the   oprt   of  attorney's 
of  ui  ;1;.   strnr.in/,:  in  the  pro:i;  fsf^ion  coi.cerj;  in  ■   tie   le/j-ality  of   the  v,:.rious 
ideas  rnd  ^ilrr.s  |jromoted  by  the   inuustry.      ihese   attorneys  ^"ere  jjrincipal- 
ly  c;tij]  o„'X.d  re^jularly  "by  the   lri,r:;'er   operators    in  the   ino.ustry,   "isvially 
from  vo   or  three   to   o,  n.olf  (.■-OL;er  or  iio^'e   oi   thera  lire  p,;"  r.if^ned   to 
jointly    HGiid,    t:.e  ^jrourcuio;.  control   ideas   r  s   they  crme  alon,;?;  and   to 
advise  their  clients   as   tc   the   1  e  ;rlity  of  the  prn:)osal  under  cons.  .".erati« 
on.      At   tiuG'^    some  of  t^iere  /^roi, .t;   went   entirely  r.ccross    the   continent 
for  the     .1  rpose  of  laectirin  vitl!   thcii:   lu'incip'^.ls   or  to  meet   attorneys 
vho   CO'  1,.  not   travel    to    .leet   t    e::i.      hrny  written   opinions   are   in  existeiv- 
ce      s   to   the  conCl-usiorn-   ai'inved  at   t-nd,    s."   aiipht   be   ez^ecte^  ,    in  a. 
nomber   of   inbt^nces  no  Uiipniinous   conclusion  was   reached.      It   is  probably 
that   Icter  on   in  this  renort   it   v/ill    .  e  necessary   to   refer   to   thase 
le;;rl   co-ferences  or  discu33io.:G  but   for  the   salreof  brevity  such  reference 
will    mC   elihiinated  as  rraich  r!5   neeias   expeo.ient  and  the   jeneral   sta.tement 
v/ill      tand  that   the   i:.d^^Gtry  ano    its  Lieiifoers  tooh  great   care   to   cliech  on 
the  le.^clity   of  every    production  control   plant   to   vmich  they    ;-ave 
serio"".s   consideration. 


981S 


-245- 

IV.  DIRECTOR  OF  PJlCDTICTirN. 

During  this  period  .GOTn^on'-^ ,  I  do  not  'enow  who,  evolved  the  idea  that 
the  industry,  should  have  a  "director  of  production"  to  act  in  tehalf  of  all 
firms  who  would  si^n  a  contract  with  him,  and  various  tentative  forms  of 
contracts  were  proposed.   One  provided  that  the  duties  of  the  director 
should  te  (l)  "to  survey  stoc'-s,  production,  sales,  demand,  etc.,  of  dif- 
ferent companies  in  relation  to  demand  and  production  as  a  whole";  (2) 
"to  determine  production  necessary  to  maintain  reasonable  inventories  and 
"balance  tetween  supply  and  demand";  (3)  "to  instruct  th'^  manufacturing; 
department  accordingly."   This  form  provided  for  a  monthly  salary  for  the 
director  and,  for  the  operator,  promised  that  all  the  departments  of  his 
business  would  comply  with  instructions  from  the  director. 

About  the  same  time  various  sales  agency  plans  weire  written  up  and 
circulated  and,  if  carried  into  effect,  theoretically  would  have  had  some 
control  of  production  inasmuch  as  the  operator  boixnd  himself  to  sell  his 
entire  output  through  .the  sales  agency  and  to  abide  by  the  contract  for  a 
minimum  of  on?  y^ar,  a.nl  th^r-^aft^r  to  .eiv.^  at  I'^ar^t  six  months  of  inten- 
tion to  canc'^l. 

It  was  evidently  the  t?i0ught  of,  some  that  if  enough  operators  would 
sign  this  contract  with  the  central  agency  that  they  obviously  could  not 
over-produce  because  the  agency  would  not  sell  or  offer  to  sell  more  than 
it  could  market  at  a  reasonable  price  and  the  operator  could  not  sell  at 
all. 

V.  TH3  HOLDING  COivIPAKY  IDEA; 

In  April  1928  there  was  some  corre?pondence  relative  to  i:he  sugges- 
tion of  a  leader  who  was  a  ra'=mber  of  the  Committee  of  Fifteen,  also  a 
member  of'  one  of  the  special  committees  selected  to  negotiate  with  the 
banking  groups  relative  to  the  West  Ccast  merger,  as  to  the  possibilities 
of  a  holding  company  modeled  somewhat  along  the  lines  of  public  utility 
holding  companies,  with  the  idea  that  this  might  take  the  place  of  the 
merger,  that  it  would  involve  less  preliminary  "or"'^  in  the  way  of  ascer- 
tainment of  va-luGS  and  marketing  of  securities,  and  that  the  holding 
company  with  lesser  capital  ^ould,  under  the  proper  setup,  control  sales 
and  fix  policies  as  to  production  and  distribution.   This  movement  did 
not  get  under  very  considerable  headway,  probably  because  of  the  legal 
opinion  of  the  lawyers  who  were  advising  this  particular  man  and  others 
with  whom  he  conferred.  Possibly  the  holding  company  idea  could  hardly 
be  considered  as  a  definite  movement  toward  production  control  but  I  am 
citing  it  as  showing  that  the  members,  of  the  industry  were  reaching  out 
for  every  possible  straw.       •  . 

VI.  HARDWOOD   CONS^RVATIOi\I  PLAN. 

This  program  was  apparently  started  in  February  1928.   The  plan 
was  only  developed  and  put  into  effect  after  careful  work  on  the  part 
of  the  legal  advisers  and  after  a  conference  by  members  of  the  Industry 


9813 


-246- 

with  Assistant  United  States  Attorney  General  Donovan.   In  setting 
forth  the  :olan  use  \7as  iirde  of  statenents  nade  by  President  Hoover  con- 
cernin,-'i  the  need  for  economic  inquiry  ana.   fs,cts,..and  vrha.t  he  said  '7as 
quoted  in  '^rrt  in  circulrrs  and  letters  "hich  vere  sent  out. 

The  plan  contemplated  a  division  of  the  hardwood  nianufacturin.?;  area 
into  ten  geographical  districts,  'to  each  of  which  were  to  be  asai,;;ned 
twelve  field  men  whose  princioal  '-or!'  would  be  to  gather  production  rnd 
stock  data.  Each  week  there  was  a  barometer  issued  for  each  district 
and  the  statistics  taken  from  these  barone'ters  were  coiTpiled  and  used 
in  a  iia.ster  barometer  showing  production,  orders  rnd  shi orients  for  the 
entire  industry.   The  theory  as  announced  by  menbers  of  the  industry 
was  that  operators,-  Icnowing  the  exact  facts  as  to  vital  statistics  of 
the  industrv,  could  and  would  produce  for  a  'orobable  deraand  rather  than 
by  g-uessor  runor,  and  instances  rrere  cited  of  ronors  relative,  to 
surplus  or  scarcity  of  stock  in  variov.s  areps  and  relative  to  possible 
new  denaj.ids  or  falling  off  in  denand,  which  rujriors  ha.d  been  acted  upon 
by  nembers  of  the  industry  with  disastrous  results. 

I  find  no  record  .-jiving  the  figures  03  to  hoi-^  this  plan  worked 
out  but  no  doubt  some  statistics  could  be  gathered  from  officials  of 
the  Hardwood  lianufacturers  Institute,  which  .has  recently  gone  through 
a  reorganization  and  will  be  in  better  sk'.'oe  later  on  than  it  is  no^ 
to  furnish  any  information  desired.   Ho'"'ever,  in  some  corres'oondence  in 
March  1930  relative  to  another  matter  then  xinder  consideration,  the 
president  of  one  of  the  Irrgest  concerns  in  the  country,  manufacturing 
both  softwood  and  hardwood,  said  "organization  of  districts  in  hard- 
wood and  meetings  worked  well  un.til  production  droir^ed  belov?  de?io.nd 
and  price  came  uo  a  little;  then  the  operaJ;ors  lost  interest."   In 
this  sane  letter  th-e  statement  was  made  that  "Oak  Plooring  hs.d  a 
better  method  of.  reporting  sales  than  any  other  c?.nd  in  one  yea.r,  with 
demand  25^3  less  than  in  the  previous  two  years,  they  sold  their  pro- 
duction ata  profit. 

"In  December  a  number  of  manufacturers  reached  the  conclusion  the^''- 
could  not  stand  the  strain  on  account  of  a  selfish  dis-:)Osition  of 
others  and  quit  coopera.ting.   The  industry  then  became  demoralized." 
Prom  this  I  think  it  vdll  be  seen  the  hardwood  conservation  pirn  faded 
out  of  the  pciture  during  the  yerr  1930  and  that  is  according  to  iiy 
personal  recollection  of  what  occurred  at  the  time. 

VII.  BEST  COAST  ADVISORY  PLiill. 

On  November  25,  1929,  Colonel  U.  B.  Greeley,  former  Chief 
Forester  of  the  United  States,  and  at  that  time  secretary- manager  of 
the  TTest  Coast  Luiiberraan' s  Association,  wrote  to  the  United  States 
Attorney  General  setting  forth  the  reasons  for  this  )lan  fmd  what 
it  was  hoped  to  accomplish  throu^'-ch  the  olc?.n.   Colonel  Greelsy  referred, 
first,  to  the  demoralized  condition  of  the.- industry;  second,  gave 
some  of  the  reasons  for  its  over-develo  :)ment,  such  as  the  abundance 
of  available  timber,  heavy  carrying  charges  on  the  properties  and 
overly  optimistic  attitude  on  the  -lart  of  the  industry  on  the  trend 
of  national  consumption.   He  then  referred  to  a  combined  re-nort  of  a 
considerable  grou  of  large  and  small  mills,  covering  the  previoun  ten 

9813 


-247- 

years  esDecially.   Thic  reioort  showed  a  loss  in  six  of  the  ten  years  and 
only  a  very  slight  gain  in  the  other  four  years.   Colonel  Greeley  also 
referred  to  -Dublic  losses,  such  as  loss  in  employment  and  lowered  loayrolls 
due  to  the  demoralized  condition  of  the  industry.   He  s-ooke  of  the  timber 
waste  and  the  necessity  on  the  -oart  of  the  emnloyers  to  use  only  the  creaii 
of  the  forests  and  leave  to  burn  and  waste  all  timber  not  of  the  best. 
He  called  attention  to  tne  fact  that  .60'^/  of  the  remainine:  softwood  was  in 
the  northwest  ref^ion  and  that,  therefore,  the  TDublic  interest  had  to  be 
considered  and  the  su.^gestion  was  that  this  interest  would  be  best  served 
by  bringing  about  a  condition  of  reasonable  balance  between  surnoly  and 
demand. 

Colonel  Greeley  said  in  conclusion  that  "what  w.>.  desire  is  to  stabil- 
ize the  process  J^nd  avoid  the  erctr-me  fluctuations  in  both  -oroductions  and 
Tjrices  which  have  lead  to  demoralized  conditions".   The  rlan  itself  was 
entitled  "A  Plan  for  Advisory  Statistical  and  Merchandising  Service  to 
West  Coast  Lumber  Manufacturers"  and  was  -catterned  after  the  Stevenson 
Plan.   Without  going  into  detail  the  reader  will,  I  think,  set   sufficient 
information  as  to  the  working  of  the  -clan  from  this  statement  from  the 
pamiDhlet,  a  copy  of  which  was  sent  to  the  Attorney  General:   "The  kej'  to 
the  advisory  plan  is  the  limitation  of  sales  by  each  comnany  over  a  reason- 
able period  to  its  percentage  of  the  adjusted  ca.-oacity  of  the  industry. 
Such  a  plan  could  not  be  carried  out,  however,  without  kee-oing  iDroduction 
and  stocks  in  sound  balance  with  sales." 

The  letter  referred  to  was  presented  in  noerson  and  subseauently  several 
efforts  were  made  to  secure  a  rerily  which  was  not  forthcoming  until  January 
9,  1930,  when  the  Attorney  General's  office  wrote  refusing  either  to  ari- 
•orove  or  disapprove  the  lolan  or  advise  as  to  changes  in  the  -olan  which 
might  be  made  to  remove  the  auestion  of  its  legality.   In  his  letter  he 
said  that  if  the  plan  should  be  nut  into  oneration,  "It  seems  not  unlikely 
that  the  Department  of  Justice  would  find  it  necessary  to  test  its  legality 
in  the  courts." 

In  view  of  the  altitude  of  the  Attorney  General,  the  West  Coast  Asso- 
ciation decided  in  February  1930  not  to  give  further  consideration  to  the 
plan  at  that  time.   Comments  were  ma,de  by  those  of  the  industry  who  had 
Tbeen  in  close  touch  with  the  negotiations  with  the  Attorney  General's 
office  to  the  effect  that  "it  was.  evident  the  Attoroiey  General's  office 
felt  the  previous  Attorney  General  had  made  too  many  -oromises  and  too  many 
gestures  in  the  direction  of  laxity  of  enforcement  of  anti-trust  laws." 

VIII.IKITED  STATES  TIlVffiEH  COKSERVATION  BOABI). 

Some  time  in  1928  a  suggestion  was  made  to  the  directors  of  the 
national  Lumber  Manufacturers  Association  that  there  be  organized  an  of- 
ficial government  committee  or  groun  or  board  with  special  reference  to 
the  lumber  industry.   At  least  some  of  those  in  association  work  and 
active  in  the  industry  at  this  time  felt  that  there  was  merit  in  the 
idea  of  an  official  organization  of  this  sort  for  the  reason,  first, 
that  such  a  group  would  have  the  facilities  for  ascertainment  of 
facts,  and  secondly,  that  the  fa.cts  when  Dut  before  the  industry 
and  public  would  have  more  weight  and  influence  than  if  put  out  by 
private  industry.   Furthermore,  that  suggestions  and  advise  from  a 

9813 


-248- 

board  of  thin  character  could  ;orobably  be  acce.ited  by  those  Yzho  wero  so 
minded  without  the  industry  beinij  chD,rg'3d  ^ith  collusion  or  ponsoiracy 
to  violate  any  sto.tute,  and  that  if  .the,  board  found  that  ainon.5  the 
difficulties  of  the  industry  w^n   that  of  overijrodnction,  they  could  so 
state  and  set  forth,  the  remedy  in  a  .much  more  ..authoritative  nny  than 
could  any  other  or.'jenisation. 

In  April  1930  the  directors  of  the  lunoer  rssociation  v.j.jrovoA. 
the  plan  and  in  May  of  the  same  yep,r  it  was  formally  presented  to 
President  Ploover.   In  rppointinc  the  nembers  of  the  board  in  llovenb'er 
1930,  the  President  stated,  amonc.  other  things,  that,  the  purpose  of,  the 
board  was  "to  develop,  constructive  methods  for  dealintj  ■-'ith  this 
problem",  the  problem  being  "consequences  of  overoroductioa  in  the 
forest  industries.",. 

At  first  there  were  various  r'^actions  to  the  findin;,-s  and  cuL^i^es- 
tions  of  the  bo9.rd  v/hich,  after  it'.:;  organization  .and  as  soon  as  the 
data  could  b,e  assembled,,  issued  statenents  indicatin,;^.,  the  necessity  for 
a  drastic  reduc'tion  in  inventories.  Some  jiembers  of  the  industrv'  and.  . 
some  .groups,  felt  .thr?.t  the  suggested  reductions  v.ere  too  great,,  while 
a?oparently  most  of  the  industry . felt  that  the  dj.ta  assembled  was,  the 
best  that  could  be  secured  ahd  that  the.  suggestion?  s.hould  be  followed.: 
Finall.y,  I  think  it  can  be  s,';i,id  that  the  industry  almost  unanimously 
accepted  the  finaingsof  the  board  and  to  a  very.  con.s,idera,ble  extent 
complied;  with  its  suggestions.,'  and  it,  is  a  well-.laiow;ri  fact  that  the 
industry  inventory.  i7as  cut,  very  ,ma.terial'ly  a.nd  apoi^oxinately,  from 
tiiae  to  tine,  in  line  .rdth  the  siiggestions  of  jthe  board.  ,     :  '    .  ,.. 

The  Lur,iber  Survey  Committee,  of  the.  Timber  Conservation.  Board,  which 
.is  the  statistical:  and  i"ac,t-findinf];-.ipajrt  of  the.  .organization, ,  as 
originally  aJoointed  on  July  9,  1931,  is  still  serving  and  the  member- 
ship consists,  of  the  following:   Thomas  S.  Holden,  vice-president  of 
the, P.  V.  Dodge  CoriDoration,  Kew  .York  Cityj'  H.  '.7..  Sta.rk,  economist 
of , Chicago;  .  Calvin  Fentress,  chairman  of . the  Board  of  3^aker  and 
Fentress  and,  Comoany,  CMcag.o;  Phillips  A.  •  HajT.70,r.d ,  Chi e;r, .  Pores t 
Products  Division  of  the  Department  of  Co.m;ierc.e;  •  aJio.- Wilson  Compton, 
secretary-manager  of  .the  National  Lumber  ."lanufaeturers  AssociFtion, 
Washington ,  D.  C. 

It  has  been  their  practice  to  issue  a  quarterly  report,  the  first 
page  of  which  was  a  release  for  the  press,  usually  settingvf orth  e::pept- 
ed  consumption  for  the  current  quarter  with  a  record  01'  reduction  or 
additions  to  inventories  for  the  ye^r  to  date,  or  in  the  case  of  first 
quarter  ,  reports ,  for,  the  -oast  year.   This  release  would  indicate  ;thG  ,  •  -  ■, 
relation  of  demand  to  sup'^ly  px.,d,  what  correction,  •  if  any,  was, needed  tc 
bring  these  two  .factors  ,  into  balance-,  ajid  qtiit.e  often  carried  some 
suggestions  as  to . trade  rjromotion  and. research  needed,  and  called  atten- 
tion to  new  constructio-i  ^rejects  or  new  t3r.-)es  of  construction  in 
accordance  with  wliat  appeared  to  be- the  .curreiit  o^.Toortunities  for  the 
lumber  industry.  :       ■ 

The  , body  of  the  .rcoort,  addressed  to  the  .  Secretar'-  of  Com-ierce, 
i^sually  gives  .first  the  recommendations  and  conclusions  in  a  more 
extended  form  than  shcTn  in  the  release,  and  then  goes  on  to  give  a 


detailed  aiiolysi-.i  of  consunptinn  o-id  stoclrs  by  regions  and  species. 

It  is  the  common  )rac^ioo  of  t-ie  re::;ionr'.l  assocititions  to  extract 
fro;n  the  report  the  pertinent  naterial  arolicrble  to  their  res  )ective 
proble ;■!'-,  and  to  circnJ.'rize  their  ■  lenbersl'.ip  sui'^fjesting  the  r.dvisabil- 
ity  of  complifoice  TTith  the  recoiT-iendrtionG  of  the  Board,  the  secretaries 
of  the  assocxr:,tion'3  toMnj."  t'.ii?  om  ^ortunit.'-  to  lake  their  otto  narket 
consents.   Thus  the  recoriMend- tions,  conclusions,  su--;jestions,  and 
detailed  infornatic-:  pronulg^'ted  b'  the  board  quicldy  passed  through 
the  various  association  offices  <'md  to  the  individual  operator  T^hon 
it  is  ho^ed  'jill  see  thR  necessit-'-  for  doin^  his  Ti.art  tO'Trru  adjusting; 
oroduction  to  de.ipjid. 

While  thir  laovenent  in  its  entirely  porhaos  sho\ild  not  be  desi;gnat- 
ed  as  an  industr;''  novenent  because  of  its  bein^  s  censored  by  the 
^overn^iient,  still  so  f-^.r  as  is  '■aio-rn  the  iiidustry,  throu^^h  the 
executives  and  directors  of  the  Ii'ational  Lurfoer  llanufacturers  Associa- 
tion, did  V70rl:  up  the  )lan,  h."d  a  very  great  deal  to  do  ^ith  gathering 
statistics  and  '■'aterial  for  the  use  of  the  board  and  had  a.   great 
influence  on  the  industry  in  settin.';  forth,  the  merits  of  the  idea  pjid 
urging  acceptance  of  the  sv^pgestions. 

The  Lumber  Code  Authority,  in  fixing  the  no.tions.1  quotas  of  soft- 
wood and  hardrrood,  used  as  a  basis  the  fig-ures  provided  by  the  Tinber 
Conservation  Joard  in  their  qua.rterly  reports.   For  various  reaoons, 
(such  as  at  tines  the  necessity  for  providing  employnent)  the  Luraber 
Code  Authorit-'  did  not  rigidly  adiiere  to  the  3oa,rd's  estimates  but  in 
all  cases  used  then  as  a  b.-ise  fron;  v/hich  to  start.   There  nere  times 
Tjhen  subsequent  to  the  issuance  of  the  re  5ort  and  before  a  quota  rras 
arrived  at,  changes  in  condition-  nrde  it  seen  to  the  Code  Authority 
advisable  to  depa,rt  to  sone  erctent  froii  the  Dor.rd's  estimptes. 

IX.   BEST  COAST  i^ISIEICI  -iLSTI:" -S. 

Throughout  the  material  available  there  are  more  or  less  frequent 
r,eferences  to  efforts  rirde  on  the  T7est  Cor.st  in  1929  to  loirer  produc- 
tion a,nd  a  series  of  district  meetings  th-  t  vera  held  at  important 
producing  points,  such  as  Fortlajia,  Seattle,  Gray's  Ha.rbor,  Uillamotte 
Va.lley  and  others,  and  to  n  ^Irn  '"hich  v:as  advocated  rrherebv  operators 
with  tvTO  mills  rijnning  t'70  shifts  e'^ch  '-^OTild  discontinue  one  shift, 
thus  reducin ;  their  individual  oroduction  ^,5^,   'fhile  single-shift  mills 
would  run  five  days  per  week,  cutti^ig  their  -production  lo-2/Z',:.     Refer- 
ence is  m-'de  to  the  dissatisfaction  of  Inhor  at  the  single-shift  mills 
hpving  onl"'  five  days  of  'lork  oer  neelz  vhile  -oerhaj^s  just  across  tiie 
riv«r  or  on' an  adjoining  operation  on  the  Sound  or  Harbor  mem  rrcre 
ivorking  si::  da"ys  per  week.   The  correspondence  shows  that  some  coeraitors, 
in  fact  probs,blv  r  majority,  conolied  "ith  this  plan  for  adjustme:it 
of  production  but  thrt  a  fen  large  operators  "who  never  co-operated" 
would  not  lend  pny  hel-o  to  the  idea,  which  mut  the  iss-iJ.e  up  to  the  others 
as  to  whether  they  wanted  to '■'"hold  the  -Ojurella"  over  the  others.   I 
know  from  personal  contact  of  these  meeti}-.  -s,  havin-:  attended  ^anj'"  of 
them,  that  there  were  no  minutes  he-it  and  r  r/  detr.il  rel-tive  to  the 
meetings  and  the  results  wiould  have  to  bo  ;;ec'.ired  from  corres -'oudence 
files  or  recollectior.  of  the  martici-oaiats. 


9813 


-25C- 

The  attempt  to  secure  voluntpry  coo'oeration  looking  toward  the 
adjustment  of  production  continued  off  and  on,  and  while  other  ideas 
and  plans  v/ere  'beini;   ivorked  on,  until  xiq  vere   '7ell  into  the  depression, 
and  then  i^roduction  a„nd  other  factors  connected  v/ith  the  operation 
of  the  industry  iTere  regula.ted  hy  the  necessities  of  the  individuals 
more  thrn  by  anythinf;  else  until  the  code  period. 

X.   THE  COlIPTdl^  PLAir 

Early  in  1930  the  attention  of  the  industry  was  called  to  proposals 
na.de  hy  Dr,  Wilson  Compton  settin;^  ."orth  "A  course  of  a.ction  for  the 
lumher  industry  in  the  orderly  control  of  lumber  production  cjid  supply", 
and  advr-nce  copies  of  the  vrritten  proposal  were  circulated  arnon^,-  a  few 
members  of  the  industry  prior  to  its  deliver?/-  by  Dr.  Compton  at  a 
meeting  of  the  board  of  directors  of  the  National  Lumber  Manufacturers 
Association  in  Chicago  on  April  24,  1930.   The  promise  was  set  forth 
in  the  statement  that  what  is  needed  are  (l)  wider  no.r]:ets  and  uses 
for  lumber  and  (2)  better  control  of  supply,  and  a  proposal  was  nade 
involving  the  ascertainment  of  facts  relative  to  production  and  "ex- 
pected production"  and  indicating  methods  which  might  be  used  for  the 
secui'ing  of  facts  and  for  making  use  of  these  facts.   As  to  the  latter, 
it  was  suggested  that  there  be  (l) 'regular  monthly  meetings  in  each 
imoortant  lumber  manufacturing  locality  or  wholesale  center;  (2)  the 
formation  of  logicpl  regional  groups  for  the  collective  consideration 
of  "production  quotas'-'. 

The  suggestion  involved  the  dividing  of  the  United  States  into 
several  geographical  sections,  originally  intended  to  be  five  in  number, 
and  the  selection  of  eight  to  twelve  meeting  points  in  each  district 
or  locality,  with  a  chairman  selected  in  each  locality,  with  arrange- 
ments being  nade  for  regular  meetings  which  would  be  arranged  for  and 
handled  as-  to  all  details  by  local  people  with  representatives  of  the 
national  association  in  attendance,  not  to  lea.d  in  the  program  but  to" 
give  those  present  the  benefit  of  economic  analysis  that  had  been  nade 
of  vihat   was  goi -ig  on  in  the  countr"'-  at  Irrge,  end.   to  bring  in  reports 
of  the  exoerience  or  the  lack  of  it  at  other  meetings  of  like  character. 

This  ad'.ress  of  Dr.  Com"itoJTi  also  made  direct  mention  of  the 
method  of  securing  orderly  control  of  "oroduction  through  the  employment 
of  a  director  of  production,  t-hich  idea  has  heretofore  been  discussed. 

Subsequent  to  the  meeting  of  Hay  24,  t"-o  Iprge  committees  were 
appointed  by  the  National  Limber  manufacturers  Association  directors, 
one  to  "suggest  plans  for  securing  orderly  control  of  lumber  produc- 
tion and  distribution"  and  the  other  to  "consider  ways  and  means  for 
broader  cooperation  with  retailers  *  *  *."  About  this  time,  because 
of  the  interest  that  seemed  to  be  taken  in  Dr.  Compton' s  plan,  a 
strong  legal  committee  was  appointed,  consisting  of  the  lawyers  em- 
ployed by  several  of  the  largest  firms  in  tiie  industry.   Just  prior 
to  the  meeting  of  April  24  referred  to  a.bove,  one  of  the  Del  I.ionte 
meetings  was  held  on  At)ril  15  and  an  effort  was  made  to  bring  up 
Dr.  Compton' s  nlan  and  discuss  it  at  thrt  .leetlng  in  lieu  of  any  other 
progress,  but  matters  did  not  wor]:  out  tlvat  wa;''. 

The  special  committees  aoowinted  in  A-ovil  met  iu  Chicago  on  June  11 
9813 


and  12,  1930,  r-mtL  consiclera'ble  effort  ^7as  ^Tut  forth  in  order  to  c^t  the 
men  '-fho  T7ere  considered  to  be  le-^ders  in  the  industr?'  ,to  attend  the 
neetinf;.   One  of  the  larg-est  -Toducers  nhose  -oreserice  r.t  the  neeting 
^as  considered  essential,  indicated  his  '•'illiivjness  to  attend  it  on  any 
date  Trhich  '-^as  o-ion  on  his  calendar,  but  he  said  beforehajid  that  he 
thouf'^ht  the  olan  v'oulu  not  vorlc,  thn.t  I'/heh  lunber,  by  reason  of  control 
of  oroduction  or  rn/  other  rea.son.^vas  u)  in  -orice,  there  '■■oiO.d  be  an 
increase  in  the  auraber  of*,  rails;  '-hon  it  "ent  Co-^m   the  ne^r  riills  vould 
becoLie  inactive  a^^iin  pnd  tha.t  this  -^roceos  ''ould  be  re-oeated  fro:i 
time  to  tine.   This  i^rn  had  every  reason  to  lish  thpt  sone  'oleja   could  be 
found  \7hich,  '7hen  put  into  O'leration,  "ould  ir.rprove  the  situation,  but 
seeiied  to  hp,ve  a  hopeless  attitude  and  as  a  natter  of  fact,  that  sort 
of  attitude  -oervri.ded  the  industr:.''  at  thrt  tine  r-jid  still  does,  as  could 
be  shown  by  a  nui.iber  of  rea:is  of  corres  ^oidence. 

Another  lar,=;e  oper.c  tor  .aid  one  who  had  been  a  l.e,-  der  in  vo.rious 
industry  novenonts,  said  at  the  conclusion  of  a  lenrjthy  letter,  "It 
is  goinc  to  be  necessa,ry  for  us  to  find  some  le,-;ol  vs:r   to  secure 
control  of  ■Droduction  and  sales  policies."   This  is  only  a  so,raple  of 
any  number  of  extracts  nhich  could  be  taken  fro-.i  letters  written  by' 
industry  menbers  and  this'  azid  siinilca'  quotations  are.  only  drop-^ed  into 
this  narrative  to  sho\7  that  the  industry  hrd  its  nind  continually  on 
this  iiroblem. 

The  resolution  adopted  ;'t  tl;e  special  connittee  neetini^s  on  June  11 
and  12  vrere  equivalent  almost  to  a  comi^lete  endorsement  of  Dr.  Conoton's 
plan  and  provided  for,  first,  a,  system  of  reports  md  surveys  related 
to  supply  and  demand,  luioer  consu'-iption  ar-d  volume  of  production 
necessary  for  supx)ly  and  de-'-iand  to  balance.   Second,  regular  monthly 
meetings  at  "perhaiDS  forty  to  fifty  designated  convenient  -ooints  *  *"  , 
and  further  approved  the  ap'^ointnent  of  a  SDecirl  connittee  to  'Torh  out 
the  nechancis,   So^iie  other  resolutions  vrere  passed  relative  to  sales 
agencies,  and  then  a  resolution  that  the  president  of  the  association 
should  ap-Qoint  a  special  comnittee  to  be  authorized  to  secure  counsel 
to  make  an  intensive  study  of  "the  possibilities  of  reduction  in  the 
number  of  producing;  units  *  *  *  being  a  nerger  through  holding  con- 
panes  *  *  *  in  order  to  permit  necessary  eco'aonies  in  production,  con- 
servation, etc."   This  connittee  "as  authorized  to  report  at  a  sub- 
sequent meeting.   There  ;7ac.  3cne  considerable  publicity  given  to  this 
movement  in  neirsnapers  of  general  circul-ition  and  more  space  given  by 
trade  papers.   The  Chicago  Journal  of  Con-^erce  of  June  3,  1930,  carried 
an  article  headed  "Lumber  Group  To  Disc\iss  Supply  and  Demand  Relations"; 
"The  Development  rrithin  this  industry  of  means  of  encouraging  closer 
adjustment  of  the  supply  of  luiaoer  to  the  denadd  rrill  be  discussed  hy 
a  snecial  comi-ilttee  of  directors  of  the  National  Lumber  llanufa.ctiirers 
Association  to  be  held  June  11  and  12,  etc." 

To  sho'--  the  fear  in  the  ninds  of  sone  as  to  anj^thing  that  night 

have  the  color  of  a  violation  of  the  anti-trust  act,  sone  of  the  lea,d- 

ing  and  most  active  men  in  the  industry  took  e::ception  to  even  this 

much  publicity  and  one  lerdoir  th:^3rte:i.ed  to  -nthdraT?  from  any  a^ssocia- 
tion  activities. 

A  23lan  for  the  •  'atherin;  of  st^'tistics  and  the  holding  of  meetings 
9813 


-252- 


TTc.s   finp.lly  approved  and  the  work  started.  Lieetings  were  held  at  least 
at  rarjay  points  throiifhout  the  coimtry   and  re^nJ.arlj'-  at  many  of  the  man- 
ufacturing; centers,   Protably  no  one    .v-.s  entirely  satisfied  with  the 
results  and  "business  ^•^nerplly,  immediately  subsequent  to  this  period, 
Mrs   fretting  into  a  worse  condition  rith  the  lumber  industry  probably 
declining  faster  thnji  -Imost  pxiy   other.   I  do  not  kno\7  whether  it  can  be 
said  thr^t  the  working  of  the  machinery  of  t]-ie  Com-oton  Plan  sto'oped  at 
any  certain  date  or  whether  a  better  staterent  would  be  that  in  these 
vnricus  meetings  many  other  subjects  of  interest  were  discussed  b3'-  the 
assembled  luinbermen,  and  the  statistics  gatherec".  '.-pre  such  a,s  were  made 
use  of  by  the  National  Lumber  Manufacturers  Association  in  its  regular 
statistical  ^rogrr'in  md  service,  faid  tii-xt  orobablv  this  plan  gradually 
merged  into  natters  having  to  do  with  the  Timber  Conservatioh  Board 
statistical  v^ork  and  recorinendations  ^uid  merged  into  the  regular  as- 
sociation activities, 

XI.  TK£  HARDWOOD  5PF0RT, 

During  the  spring  and  earlj'  siimner  of  1S30,  according  to  correspondence 
passing  at  that  tiyne,  the  hardwood  people  were  more  depressed  tha,t  at  any 
other  time,  had  overly  large  inventor;-,  and  the  statement  was  ma.de  that 
it  wca'd  tr>e  a  forty-five  day  shut  down  to  balance  stocks.   In  May  ajnd 
before  the  Corapton  Plan  got  under  ^'ay,  the  hrrdwood  industry  w-s  holding 
a  series  of  meetings  in  an  effort  to  ascertain  the  facts  and  mal^ie  the 
operators  see  that  the;;-  should  limit  their  production,   Tliere  is  little 
information  available  here  at',  to  tne  number  of  these  meetings  or  the 
period  of  time  covered,  but  it  is  indicated  that  they  later  merged  into 
the  type  of  meeting  provided  for  in  the  Compton  Plan. 

Again  showing  the  continuity  of  thought  on  this  subject,  the  follow- 
ing quotation  is  from  an  article  by  3,  C.  Forbes  in  the  We'j  York  Herald 
Examiner,  of  July  26,  1920,  in  which  he  writes  relative  to  conditions  in 
the  West  where  he  was  then  travelling,  saying  with  regard  to  the  lumber 
industry;  "The  bane  of  this  industry  is  gross  overproduction  *  *  *•" 

XII,  FEDERAL  ACQ,UISITI01I, 

During  the  s-omrner  of  1931  and  Dnrhapd  earlier,  there  bo grai  to  be 
discussion  of  a  suggestion  that  the  Federal  governm.ent  re-acquire  the 
"excess  overload,  of  irivr'tely  owned  timber  reserves,"  The  suggested  plan 
was  formally  incorpor-ted  in  a,  "memorandum  on  proposals  for  improvement 
of  the  lumber  industry  r-ituation''  written  by  Dr.  Compton  during  1931 
a.nd  circulated  among  -iembers  of  the  industry.  Letters  back  and  forth  be- 
tween operators  and  timber  owners  on  this  sr.bject  were  quite  plentiful  and 
the  tim.ber  referred  to  was  freeuently  designated  as  "distress"  timber, 
"menace"  tii.iber,  etc.  The  indi-.strj''  generally'"  seemed,  to  accept  the  idea. 
One  member  • -rites  that  tl"e  r.cuuisiticn  program  would  be  a  "wonderfully 
good  thing  for  the  industry,"  The  objectors  were  exce-dingly  few  in 
n^dmber  ajid  only  two  or  three  persons  recorded  an,y  definite  objection,  and 
it  is  evident  that  they  did  not  ojiderstaJid  the  program  E,nd  it  is  known 
that  some  of  them  have  since  changed  their  views. 

The  president  of  the  National  Lumber  M.ani;.f octurers  Association  at 
that  tine,  in  a  letter  to  one  of  tne  directors,  said  on  October  9,  1931, 


9813 


-253- 

"I  have  yet  to  discuss  this  Id^a  with  any  operator,  or  anyone  actively 
intereeted  in  the  industry,  who  did  not  approve  it."  The  thou,p;ht  as 
proposed  in  Dr,  Corraton's  menioranduTn,  referred  especially  to  virgin 
timber  in  the  Northwest,  since  that  is  \/hei-e  the  largest  remaining  stand 
of  such  timber  exists,   A  very  large  southern  operator,  in  Septenher  1931, 
writing  relative  to  the  matter  of  production,  said,  "The  problem  *  *  * 
""is  with  the  West",  and  goes  on  to  say  that  v/e  will  have  to  correct  the 
bliinder  made  there  in  ;gotting  "too  much  tinber  and  too  many  facilities 
in  private  industry",  ajid  points  out  that  the  West  will  have  to  correct 
that  situation,  that  "it  is  little  the  rest  of  as  cajn  do." 

Some  years  'orior  to  this  period,  there  had  been  authorized,  through 
an  act  of  Congress,  tiie  formation  of  the  National  Forest  Reservation 
Commission  consisting  of  three  Cabinet  officers,  two  Senators  and  two 
Representatives  who,  corhing  with  the  Chief  Forester  of  the  United  States, 
could  establish  P\irchpse  Units  and  re-accuire  forest  lands  or  lands 
saitable  for  forest  pro~jagation. 

Not  by  reason  of  legal  requirements,  but  as  a  matter  of  policy,  until 
recently  the  Reservation  Connission  has  confined  its  activities  to  the 
eastern  part  of  the  cc'>intr^-  and  very  largely  to  the  purchase  of  cut-over 
lands.   The  corar-dssion  has  spent  or  has  authoriTed  the  exipenditure  to 
date  of  something  in  excess  of  $50,000,000  and  further  appropriation  and 
expenditures  are  exoected.  Recently  the  commission  has  indicated  a 
change  in  policy  and  h.as  authorized  some  piurchases  in  tl:e  far  West  and 
authorized  the  investigation  of  other  possible  p\irchase  areas. 

In  1933  the  so-calTed  Co'Teland  Report,  Senate  Document  No,  12, 
consisting  of  well  over  1000  pages  and  covering  a  great  many,  if  not  all 
phases  of  the  lumber  industry,  was  issued  and  one  of  the  outstanding 
recommendations  was  that  this  matter  of  acquisition  be  carried  on  because 
of  the  inability  of  private  oimers  to  carry  this  "menace"  or  "distress" 
timber,  and  riointing  out  the  evils  accruing  from  forced  liquidation. 

Article  X  of  the  Lumber  Code  made  provision  for  the  appointment  by 
the  Secretary  of  Agriculture  of  a  joint  committee,  representing  the 
government  and  the  industry,  to  study  conservation  measurers  and  problems. 
This  committee  met  in  October  1933,  again  in  January  1954,  spending  a 
number  of  dc\ys  at  its  task,  and  issued  a  printed  report  wherein  it 
recommended  as  one  of  the  things  to  be  done,  the  acquisition  and  control 
by  the  government  of  that  portion  of  the  timber  of  the  country  which 
cannot  be  c^.rrisd  by  private  industry  with  satisdactory  results  to  the 
industry  or  to  the  public  interests  involved.   The  correspondence  shows 
that  the  acquisition  program  was  discussed  with  President  Hoover  and  also 
with  the  President  Roosevelt,   The  Copeland  Report  and  .also  the  report 
of  the  conference  appointed  by  Secretary  Wallace  above  referred  to,  were 
both  approved  hy   the  Secretar3'-  of  Agriculture,  and  it  is  generally  under- 
stood that  President  Roosevelt  has  ap?rovi=d  both  in  principle. 

In  a  recent  letter  (September,  1955)  from  President  Roosevelt  to 
Governor  Martin  of  the  State  of  Oregon,  the  following  paragraxjhs  occurred: 
"It  now  seems  evident  that  passage  to  private  CTnership  of  so  much  of  the 
most  acceptable  productive  forest  land  in  Oregon  had  aggravated  rather 
than  simplified  the  problem  of  permanent  forest  management.   It  will  be 
necessary,  as  you   suggest,  to  restore  to  public  ownership  a  great  deal 
of  forest  land  that  unwisely  was  allowed  to  pass  into  private  control, 

9813 


•■      -254- 

ajid  to  creats  conditions  under  which  private  onnership  of  forest  resources 
may. be  constructive  rather  than  destructive,  Arrnngeiftents  to  that  end 
which  clearly  would  dontrihute  to  the  permanent  ouhlic  interest  and  could 
not  he  capitalized  to  private  advantage  deserve  sympathetic  gonsideration, 

"Legislation  to  create  an  organic  hasis  of  the  Federal  forest  program 
continues  to  command  my  interest,  but  so  many  vital  matters, have  claimed 
the  attention  of  the  Coragress  during  the  present  session  that  I  have 
hesitated  to  iirge  consideration  of  .the  forestr;;"  legislation  (for  sustained 
yield  management).   It  is  my  hope  that  it  can  receive  attention  early  in 
the  ney.t  session."     ■ 

Conferences-  between  representatives  of  the  industrir  and  of  the  De- 
partment of  Agriculture  indicate  that  the  legislation  referred  to  will 
probably  contemplate  the  providing  of  a  bond  issue  to  finance  timber 
purchases,  or  the  isGua,nce  of  bonds  in  direct  payment  for  such  purposes 
in  a  sufficient  amount  to  t.al;'e  out  of  private  ownership  enough  surplus 
timber  so  th-^t  the  press .i.re  for  hurried  liquidation  will  be  removed  and 
the  industry-,-  with  government  cooperation,  can  then  "oroceed  to  the 
marketing  of  the  forest  products  of  the  country  in  an  orderly  and  fairly 
well  regulated  manner  and,  where  loossible,'  th3,t  operations  will  be  on 
a  "sustained  yielf "  basis,  tha.t  is,  as  to  any  given  -onit  of  timber  of  any 
size,  production  will  only  be  carried  oq  at  a  rate  equivalent  to  natural 
replacement  by  growth,  the  theory  being  that  the  government,  when  it  has 
added  to  its  present  holdings  the  so-called  "distress"  timber  will  resell 
it  to  those  vmo  operate,  on  a  sustained  yield  basis  only  so  fast  as  the 
market  demands  the  product,  thus  tending  to  stability  in  the  industry 
and  permanency  of  payrolls  and  comnunities  established  for  forestry  and 
lumber  producing  operations. 

It  is  contemplated  by  industry  and  Administration  people  who  have 
discussed  this  subject  at  great  length  that  the  program,  if  carried  out, 
would,  in  addition  to  the  obvious  benefits  to  the  industry  and  the  public 
at.  large,  be  a  'orofitable  undertaking  for  the  government  and  that  what- 
ever sums  are  provided  should  and  can  be  returned  to  the  government  with 
interest,  administrative  charges  and  orofit. 

The  question  miglit  be  asked  as  to  why  the  government  should  purchase 
more  timber  \7hen  it  alrea,dy  has  such  a  large  percentage  of  the  virgin 
timber  in  the  most  heavily  timbered  states,  and,  if  this  o\7nership  in 
Oregon  and  W.^.shington,  for  inst;ince,  (ajiounting  to  ap  iroximately  45^  \ 
of  all  standing  softwood  timber),  does  not  ^rivide  s-officient  stabilization, 
how  any  addition  to  this  amount  wou2.d  provide  increased  stability.  At 
least  a  partial  answer  would  lie  in  the  explanation  __that  generally  speak- 
ing, privately  owned  timber  is  the  most  accessible,  having  been  selected 
very  largely  because  it  was  accessible,  being  nea.r  deep  wati=r,  or  navigable 
streams  or  railroads,  while  the  timber  belonging  to  the  Porest  Service  and 
the  Interior  Department  is  further  back  and  not  so  available  to  the  market. 
On  a  flat  map  one  body  of  timber  might  appear  to  be  as  accessible  as  another, 
while  on  a  contour  , map  the  facts  are  more  clearly  brought  out,  rnd  it  will 
be  observed  that  in  many  casps  large  bodies  of  timber  c^n  be  aprjroached 
only  from  one  direction  nnd,  by  reason  of  the  typography  and  accessibility 
to  transportation,  there  exist  many  key  tracts  which,  if  acquired  by  the 
government,  would  control  very  considerable  cxens   which  the  government 
would  not  have  to  p-orchase.   It  is  true  that  no  one  had  advocated  any 
attempt  at  entire  control  and  it  is  realized  that  there  will  be  bodies 


-255- 

of  tinber  scattered  throughout  the  producing  area  that  are  not  large 
enough  or  in  other  rasp'cts  suitahle  to  he  included  in  sustained 
yield  units.  Also  there  will  he  some  large  operators  especially 
who  will  not  desire  to  dispose  of  any  of  their  holdings  and  it  is  thought 
that  these  people,  one  of  whom  controls  in  excess  of  5;b  of  the  softwood 
production  of  the  United  States,  would  as  a  matter  of  self-interest,  act 
in  harmony  with  the  government  in  attempting  to  regulate  the  amount  of 
timber  furnished  the  mills  to  the  approximate  exoccted  consumption.  The 
small  mills  woiild  he  to  some  extent  uncontrollable,  but  the  volijme  of 
their  production  as  shown  by  all  the  records,  is  relatively  small  and  by 
reason  of  small  voliame  and  also  because  the  small  scattered  operations 
do  not  produce  the  high  grade  of  na.terijil,  their  influence  on  the  m.arkets, 
if  not  inconsequential,  would  be  relatively  unimportant. 

Estimates  made  by  the  government  and  private  inter-^sts  over  the  last 

five  or  six  years  indicate  that  in  the  ten  forest  regions  into  which  the 

Forest  Service  has  diviscd  the  timber  holdings  of  the  government,  which 
regions  comprise  all  of  the  timber  areas  of  the  United  States,  probably 

$?50, 000,000  to  $500,000,000  would  be  required  to  complete  a  satisfactory 

acquisition  progr.am,  and  a  period  of  from  five  to  seven  years  would  be 

needed  to  properly  select  the  tracts  and  complete  the  nurchases. 

There  is  evidence  to  indicate  that  the  acquisition  idea  originated 
with  the  industry,  consequently  it  is  listed  as  an  industry  activity 
directed  toward  production  control  and,  if  it  can  be  placed  in  this 
category,  it  remains,  I  believe,  the  only  active  v.ovement  now  in  force 
looking  toward  anything  like  a  permanent  solution  of  this  oroblem, 

XIII.   Wisconsin  STIBILIZATICU  AGREEliLElW. 

The  first  notice 'that  I  have  found  of  this  agreement  was  dated 
August  1931  and  the  pirn  was  put  into  effect  in  that  year  -^nd  generally 
considered  by  the  participants  to  have  been  successful.   The  ITisconsin 
State  Journal,  in  a  news  item,  referred  to  "Lumbermen's  plan  to  Maintain 
Jobs,"  The  correspondence  and  arguments  in  behalf  of  the  plan  which  were 
put  out  in  rdmeographed  form  show  that  the  industry  in  Wisconsin,  not- 
withstanding a  falling  off  in  business  in  1950,  continued  to  produce  at 
nearly  a  normal  rate  for  'the  salce  of  keeping  employment  as  high  as 
possible  with  the  hope  that  by  doing  this  they  could  shorten  the  depression. 
In  1931  conditions  were  worse  and  a  s-urvey  as  of  July  1st  of  that  year 
showed  two  years'  supply  of  lumber  at  the  then  rate  of  demand,  which 
demand  was  considered  to  be  approximately  one-third  of  normal.   The  em- 
ployers then  gave  consideration  to  the  general  situation  as  it  affected 
them  and  their  employees,  A  report  of  the  State  Tax  Commission  issued 
about  this  time  showed  the  sawmills  in  Wisconsin  earned  Zfo   of  their 
Capitalization  in  1928,  with  a  bmall  return  in  1929,  but  lost  in  1930 
more  than  the  earnings  of  the  previous  years. 

Considering  the  rate- of  production  and  consumption  at  this  time  the 
employers  feared  complete  stagna„tion  \7ith  severe  depletion  of  capital 
assets  and  possibly  almost  total  unemploj'-ment  in  the  industry,   Ihiring 
this  period  considera^tion  was  given  by  the  Wisconsin  operators  to  what 
was  being  done  by  other  industries,  such  as  coal  and  oil,  and  possibly 
to  interstate  and  state  pacts  of  one  type  or  another,  the  possibility  of 

9813 


-256- 

of  relir-f  from  st-'te  and  Federel  c.Tti-trust  la-'s,  (thfj  Wiaconsin  anti- 
trust la^T  beiiif;  more  severe  than  the  Peder-l  lavr)    and  ctatenents  were 
mad-e  that  the  pu'dlic  as  well  •-■.g  private  interests  '"praanded  that 'something 
be  dene.   There  vip.s   a  series  of  consultations  and  conferences  -vith  the 
State  gpvernor's  industry  advisers  and  tie  reports  indicated  a  sympathetic 
attid.ute  on  the  o^rt  of  state  officials. 

The  plan  cr  a.^-reenient  vrhen  fina.ll:''  viritten  provided,  (1)  the 
signing  hy  the  opera,tors  of  an  agreenent  to  produce  during  the  "oeriod 
prior  to  July  1,  1932,  .at  ca.ch' of  t/ie  Tiills.^SJa  of  the  average  production 
fpr  the  years  192?,  1928  and  1929,  and  not  produce  ■•iiore  or  less  than  this 
figure  except  for  god  reasons.   The  thought  behini".  this  arrangement  t/as  that 
demand  at  the  time  -;7as  appro::iinately  30^'f-  of  normal  for  the  three  years 
used,  that  "by  producing  not  ^lare  than  3Bfs   there  would  te  at  least  no  in- 
crease in  inventories,   and.  it  'jv'^s  desired  tha,t  the- opera^tors  produce  at 
least  28Jj  for  the  sal:e  of  erToloyiient, 

(2)  A  committee  of  seven  -lanufa.cturers  T^as  to  be  chosen  by  the 
signers  of  the  agreement  and  this  com-nittee  '/ould  have'  t'le  rir:nt  tb  sa.y 
whether  any  individual  operator  "lad  sho\7n  good  reason  why  he  should  be 
allowed  to  vary  fron  the  agreed  uoon  "oercent'-ge  of  'orodaction. 

(3)  The  conmittee  of  seven  w -s^  tc  collect  statistics  relative  to 
production  said  if  increase  in  demand  developed  cculd.  increase-  the  per- 
cnetage  above  28,t-,  or  could,  end,  the  agreement. 

(4)  In  order  tc  protr-'ct  the  oj.biic's  interest  and  keep  within 
reasonable  limits  frcm  the  pablic  viewpoint,  there  was  to  be  a  puhlic 
policy  committee  of  five  not  connected  with  the  industr^r.  This  comnittee 
v/as  appointed  hy  tie  governor  and  consisted  of  one  ba.nl'er,  the  dean  of  the 
Agriculture  College  of  the  University  of  Wisconsin,  a  University;-  exoncmist, 
a  man  formerly  presid.ent  of  the  Eetr.il  Lunbemen's  Association  (ass-aned 

to  protect  the  customers'  inter-^sts),  :nd  one  State  official,  the  secretary 
of  the  State  Industrial  Accid.ent  Com;nissicn.  'The  public  policy  committee 
iras  to  meet  -.vi-th  the  com:iittee  of  sev^n  -^nd  the  State  Department  of 
Agriculture  ajid  Markets  to  offcer  and  receive  suggestions  and  to  counsel 
with  this  department,  and  had  the  -oower  to  declare  the  agreement  at  an  end 
ajid  to  withdraw  state  support  whenever  the  committee  thotight  public  interest 
Was  not  being  promoted. 

(5)  The  powers  of  the  committee  of  seven  were  qualified  by  a  pro- 
vision that  this  com;uttee  could  not  increase  or  decrease  the  oercentage 
of  industry.'  -production  or  end  the  agreement  without  the  consent  of  the 
Public  Policy  Coiiraittee. 

The  record  shows  that  tixe  legal  a.dvie(„-rs  of  the  state  officials  said 
that  the  plan  was  not  illegal,  that  it  was  reasonable,  there  was  no 
penalty  provided,  that  it  was  canstantly  under  the  insp'='ction  of  the  State 
Department  of  Agriculture  and  Liarkets,  jind  that  the,  dean  of  the  College 
of  Agricalture  would,  protect  the  fa.rmers'  interests,  nnd  that  others  on 
the  committees  would  -arotect  all  public  and  private  interest^,  and  that 
because  the  Wisconsin  and  },iichiga,n  prodacers  together  were  responsible 
for  less  than  5)b  of  tlie  nation's  oroducti^n,  they  c^uld  not  be  charged 
with  heing  a  monopoly.   The  Michigan  iroducers  did  not  sign  the  Wisconsin 
agreement  but  worked  a.long  a  less  publici'/ed  line  of  their  own  which  con- 

9813 


-257- 


templat"d  production  on  a  slightly  higher  basis,  probably  32^  of  the 
average  of  the  three  years  chosen.   The  Michigan  operators,  however, 
while  not  signing  this  same  agreement,  did  furnish  their  statistics  to 
the  comnittee  of  seven  and  in  return  were  furnished  statistics  showing 
the  results  attained.   The  plan  v/as  enough  in  favor  with  the  public  and 
the  legislators  so  that  there  was  proposed  a  new  chapter  to  the  statutes 
of  Wisconsin,  being  Chscjter   109,  with  suggested  headings,  such  as 
"Stabilization  of  Employment;"  "Equitable  Distribution  of  Employment", 
etc.  Public  statements  were  made  as  to  the  stabilization  plan  and  its 
effect  and  apparently  all  considerations  were  carefully  weighed  but  the 
proposed  legislation  v;?.s  not  enacted  into  law,  losing  by  one  vote.  The 
st-ntute  T'ould  have  exempted  industries  in  the  state  from  the  state  anti- 
trust lavs  under  certain  fj'j.arded  conditions. 

Such  reports  ps  are  available,  which  consist  of  correspondence  be^ 
tween  members  of  the  industry,  and  membprs  of  the  industry  and  associa- 
tion executives,  indicated  that  the  result  of  the  first  year's  operation 
was  up  to  expectations,  that  is,  the  production  in  Wisconsin  was 
ap-iroxiraately  r,s  anticipated,  between  2dfo   and  29fo   of  the  average  used, 
while  in  Michigan  it  was  slightly  higher  but  not  enough  to  disturb  the 
situation.   Losses  were  not  entirely  checked  but  were  lessened  in  amount 
^nd  it  was  upon  the  basis  of  the  showing  of  this  first  year  that  the 
proposed  legislation  was  introduced.   The  plan  and  the  record  of  its 
working  were  sent  to  other  districts  s,nd  studied  in  other  production 
areas  and  in  other  statns,  ajid  wa.s  then  generally  considered  to  be  the 
most  advanced  and  successfully  operated  plan  yet  proposed.  The  plan  was 
in  operation  up  until  the  discussion  of  ISA  and  the  possibility  of  codes 
began,  but  there  is  no  record  available  here  as  to  Just  how  and  when  the 
transfer  was  made  from  the  stabilization  plan  to  the  code  plan, 

XIV,  INTERSTATE  COMPACTS. 

During  the  period  between  and  including  1331  to  1933,  there  was  a 
great  deal  of  study  by  lawyers  selected  for  that  purpose  and  by  members 
of  the  industry  of  sta.te  anti-trust  laws  and  of  state  and  i  nterstate 
com.pacts,  and  in  this  discussion  study,  which  was  not,  however,  confined 
to  the  lumber  industry,  the  lixmbermen  had  a  considerable  pa.rt  at  about 
that  time.   In  other  indvistries,  state  legislators  pa.ssed  bills  attempting 
to  control  production  but  I  find  no  record  of  any  of  this  legislation 
directly  affecting  the  lumber  industry  or  made  use  of  by  the  .industry 
or  made  usg  of  by  the  industry  although  some  members  thereof  felt  at 
times  that  something  ha.d  to  be  found  which  could  be  made  ase  of, 

XV,  SOUTHERN  PINE  CURTAILMENT  PLAN, 

Correspondence  da.ted  in  Se'oteriber  1931  between  members  of  the  in- 
dustry in  the  South,  refers  to  a  committee  of  five  with  an  outstanding 
operator  as  chairman,  having  met  in  New  Orleans  on  Tuesday  previous  to 
calling  a  meeting  of  lu'iber  executives  for  September  18  ^nd  19,   The 
letter  carries  the  statement  that  it  is  proioosed  that  "manufacturers 
produce  at  least  10^  less  lumber  than  they  ship  in  any  three  i^.onths' 
period  in  order  to  overcome  surplus  stocks,"  The  letter  further  states 
that  the  v:riter  feels  this  reduction  is  not  drastic  enough  and  from 
statements  made  deploring  any  "attempt  at  government  control",  it  is 

9813 


"■rim- 

pro'bs.'ble  that  the  effort  -xncL  "tne  p:;5etinr,3  referred  to  ra:f  have  'been   con- 
nected uith  the  -desire,  of  the  Gouthern  Fine  Assncin.tion  to  copperate 
with  the  pla,n  of  the  Tii^.ber  of  the  Co  iservi.tion  Boai'd.  !Jp  until  ahout 
this  time  the  Southern  Pine  Association  hnd  heen  e.-xeedingly «caref\il  to 
avoid  any  connection  vrith  an^r  noverient  designed  to  control  or  affect 
production  and  the  e::ecative  officers  of  the  associa.tion  frequently  • 
stated  their  attitude  in  this  regr?rd. 

At  leo,st  one  of  the  reasons  for  this  attidude  is  found  in  the 
charter  of  the  Southern  Pine  Association  from  the  State  of  Missouri, 
one  paragraph  of.nhich  roads  "hut  none  of  said  piirposes  shall  he  deemed 
or  cohstrued  to  hold  any ■  sug;;]:estion  th:_',t  control  of  the  amo-ont  of  pro- 
duction of  lumber  he  in  any  '.7ay  affected  or  attempted,"  A  letter  of 
July  51,  1931,  fro"]  an  as£;ociation  executive  to  a  nenher  of  the  industry 
states  in  cQniiection  r/ith'  the  expressed  desire  to  assist  the  Timher  Con- 
servation i3oard  in  its  efforts  that  "it  happens  tha.t-  the  Southern  Pine 
Association  ha^s  called  a  numher  cf  dist]::ic.t.  neetings  ?,mong  the  small 
mills  to  discuss  the  situation  which  confronts  them.  From  reports  we 
have  received,  these  smaller  operators  are  a.hout  to  h-^coi.ie  more  active, 
and  it  is  felt  that  they  sho-ijild  he  acquainted  vrith  all  facts  concerning 
the  present  condition  of  the  industry," 

Essential  features  of  the  idea  tna^t  v;as  heing  carried  out  hy  the 
Southern  Pine  Association  at  tha.t  time  had  to  do  very  largely,  if  not 
entirely,  with  control  of  inventories  and  it  is  entirely  orohahle  that 
the  work  that  was  done  was-  not  onl;/  in  line  with  previously  conceived 
ideas  of  the  Southern  Pine  Association  people,  hut  fitted  in  very  sell 
with  the  plan  of  the  Tinher  Conservation  Board,   The  Southern  Pine 
territory,  for  the  piixpose  of  gathering  statistics,  was  divided  hy 
state  lines  into  seven  districts.  The  operators  were  individually 
asked  to  make  an  estimate  of  the  amount  of  stock  that  each  shall  carry 
on  the  hasis  of  a  supposed  normaJ.  dema.nd,  such  .a.s  existed  in  1928,  the 
demand  heing  the  sales  of  the  individ'^oal  o-oerator,  .?jid  then  to  ascertain 
what  percentage  rela.tionship  e-isted  hetween  the  normal  stock  and  the 
demand  or  sales  of  1928  and  to  project  this  percente.^'Te  into-  the  current 
period,  attempting  to  keep  the  stoclcs  a,t,the  same  percentage  of  current 
sales  as  they  were  to  the  sales  of  1928.  For  illustration,  the  total 
knovTn  stocks  as  estimated  hy  the  operators  in  12S  O'Terations  for  1928 
were  S83  viiHion  foetj  the  total  sales  or  demand  for  this  same  period 
was  3,307  mj.ilion  fe=t,  the  hudgeted  normal  stocks  heing,  therefore, 
20.66^0  of  tne  demajad.   The  demand  in  1931,  of  course,  was  verj''  much  less 
than  in  1928,  amounting  to  only  1,785  million  feet,  and  the  desire  was 
to  hring  the  inventories  down  to  20. 66;c>  of  that  amount,  .The  plan 
apparently  worl.ed  out  with  varying  degrees  of  success  and,  by  those 
who  cooperated  and  put  into  effect,  was  and  still  is  considered  sound. 
Reports  late  in  1932  shovred  in  the  previous  four  months  a  decline  in 
stocks  of  31-^  of  u^jpers,  and  52^o  of  lower  grades,  which  developed 
shortages  in  some  items  and  the  estimate  was  na.de  that  the  plan  had 
worked  so  well  unsold  stocks  were  then  at  KY/o  helow  nornal,  total  re- 
duction among  the  mills  reporting  of  483  million  feet  between  Januarj''  1 
and  October  1,  1932  was  indicated.   The  plpji  was  in  effect  up  until  the 
beginning  of  the  agitation  for  an  ITRA  code. 


9813 


-259- 


XI' I.   ECONOLIIC-  TRUCE. 

In  L'arch  1S52,  there  "opgan  to  "oe  a^^itntion  an'iong  a  niomber  of  in- 
dustries, including  machinery,  te;-tile,  food,  lunter,  and  others,  for 
relief  from  the  anti-tnast  acts.   In  the  lumlaer  industry  the  motivating 
force  \7as  the  desire  to  control  production  and  the  idea  seemed  to  majiy 
lumbermen,  as  '••ell  as  those  in  other  industries,  to  be  so  fair,  so  easy 
to  put  into  effect,  and  so  beneficial  to  the  public  a-5  ^nell   as  to  private 
interests,  it  seemed  as  though  the  entire  industry  had  concentrated  on 
this  idea.  At  least  two  tyoes  of  control  vere   thought  of,  one,  a 
commission  to  be  appointed  by  the  President,  and  the  other  a  joint 
committee  to  co;isist  of  five  members  of'  the  House  of  Representatives  and 
five  Senators,  The  disciissions  and.  conferences  finally  reached  the  point 
Trhere  a  bill  was  introduced,  in  the  Senate,  5.  J.  Resolution  87,  by  Senator 
Steiwer.   This  bill  orovided  for  a  joint  congressional  committee  of  five 
members  of  the  Eouse  of  five  members  of  the  Senate  "which  shall  investigate 
and  report  to  the  Congress  its  findings  and  recommendations  whether 
amendnents  should  be  nade  to  the  anti-trust  lav/s'^,  and  provided  in 
Section  2  thereof  that  "-until  s^-id  committee  shall  have  reported  its 
findings  niid  recoi.inendations  to  the  Congr?ss  and  Congress  shall  h^ve 
actpd  thereon",  nothing  contained  in  the  various  anti-tru.st  acts  •■'hich 
C'xe   enumerated  "shall  be  construed  to  applj'  to  agreements  between  com- 
petitors in  the  natural  resourf  ^   adustries  for  the  purposes  of  regulatp 
ing  oroduction,  conserving  na.+    l  resources,  and  maintaining  continuity 
and  sta.bility  of  eraploj'-ment  *    ■'  unless  such  a.greements  are  contrary 
to  the  public  interest,"  ll"turi,l  resources  industries  •:ere  defined  to 
include  those  engaged  in  the  production  of  minerals' and  forest  products, 
while  Sections  3  and  4  referred  to  the  administration  of  the  Act  by  the 
Federal  Trade  Com-iission,   The  resolution  w^'S  never  passed  but  later  the 
substaaice  of  it  was  incorporated  in  an  amendment  to  another  bill,  which 
amendment  never  became  law, 

XVII,   FIR  STABILISATIGil  PL-ilT. 

The  first  :cention  I  find  of  this  proposed  plan  was  early  in  1932 
¥/hen  it  hnd  a.ttained  sufficient  importance  in  the  minds  of  industry  and 
others  so  that  Governor  IJeier  of  Oregon  and  Governor  Hartley  of  Washing- 
ton joined  in  an  effort  to  ha,ve  the  Attorney  General  or  Congress  approve 
a  plan  permitting  an  agreement  among  operators  to  not  sell  below  a 
standard  cost  a.ud  the  two  governors  also  joined  in  a  telegram  to 
President  Hoover,   The  interest  of  the  states  were  said  to  have  arisen 
because  of  the  shipping  otit  of  these  states  of  a  tax-paying  natural 
resource  without  any  taxable  returns  and  reference  was  made  to  waste  of 
natural  resources,  the  effect  on  enplojnnent,  and  other  fa.ctors.   The 
plan  provided  for  the  forming  of  a  corporation  which  would  (1)  establish 
minim-am  standard  costs;  (2)  regula,te  production  month  by  month  tv"^  what 
the  markets  •jOLild  absorb;  (5)  coo'oerate  with  the  government  to  keep 
within  all  laws,   A  state^-ient  was  made  'in  the  press  that  the  President 
stated  tha.t  the  government  would  cooperate  in  every  possible  way  and  one 
of  the  wa^rs  that  cooperation  wp,s  expected  was  through  a  test  ca.se.   The 
'i— L  Lumber  ilov-s  of  Julj'"  15,  19S2,  stated  that  the  indiistry  was  desperate 
and  a  prominent  eperator  heavilj'-  interested  in  the  South  ajid  West  said 
in  the  sane  month  that  "the  time  for  quibbling  over  legal  technicalities 
has  passed  *  *,"  This  and  similar  industry  expressions  bears  out  the 

£813 


-260- 


theorj''  of  des'oex'atipn  reieri'PcL  to  in  the  ne'-'s  itora  abovp.. 

The  forra  of  organization  required  t]i->t  suliccri'o<--rs  tcr  stock  in  the 
corporation  suhscribe  in  proportion  to  their  relative  ■oroducticn.   The 
stock  v.'ould  not  he  di.elivp.red  tut  -rs  held  in  escrow,  pjid  failure  to  c0;3ply 
v'ith  the  agreement  as  to  not  selling  below  standard  cost  ::aight  retxlt  in 
a  -oenalty  or  fine  which  would  he  trken  from  the  fu^ids  deposited  for  pay- 
ment of  the  stocko 

Industry  lemhers  had  def icuj-tj'-  in  agreeing  to  the  feattirps  to  he 
incorporated  in  the  plan,  snne  good  sized,  t-^riff  li'jhts  having  sorung  ui? 
between  raembprs  of  the  industry,  industry  attorne-^s  rendered  adverse  legal 
opinions,  rmd  for  these  and  ^^erhapd  other  reasons  the  plan  was  dropped 
without  the  corooratiori  actun.lly  being  formed..   It  mny  be  noted  that 
this  plan  with  its  attempt  to  fix  a  standard  cost  below  which  opera-tors 
should  not  sell  r>iid  the  va,rious  other  plans  providing  for  certain  oercent- 
ages  of  former  "Troduction  pnd  the  .like, -vfe re  verj   similar  to  the  ideas 
incorporated  in  the  uirabcr  Code  covering  -jrices  ■■md  production. 

XVIII.   FIE  MSHGEE. 

In  the  suniner  of  1931,  some  large  western  operators  again  brought 
forth  the  idea  of  the  possibility  of  a  fir  merger  and  a  plan  was  written 
up  and  given  the  name  of  the  author,  discussed  at  some  length  in  the 
industry  and  to  some  extent  with  the  bpiil-ing  fraternity,  but-  beyond 
occupying  the  • -attention  of  a  number  of  people  in  the  industry  for  some 
few  weeks  or  months,  did  not  ajiount  to  ^ajiything, 

Recent  nevrs  in  v:\rious  trade  journals  '-nd.  other  publications, 
supplemented,  by  the  observations  of  an  -executive  in  the  Forest  Service 
who  has  recent I3"  made  a  two  months'  trip  throughout  the  producing  sections 
of  the  West,  indicate  that  there  is  an  increasing  nuiaber'of  new  S'^all 
mills,  .and  mills  both  large  and  sii-11  which  have  been  shut-  down  for  a 
number  of  yeaxs,  now  coming  into  -oroduction,  quite  a  few  of  them  ^r, 
reason  of  loans  from  the  Federal  pLeserve  Baail'  and  from  the  aeccnstrj.ction 
Fint.,nce  Corporation,  ranging  in  anouiits  up  to  several  hundred  thousfuid 
dollars.   The  4-L  Luober  Uev;s  of  October  1,  1935,  sa;''S  that  for  several 
weeks  lumber  production  has  been  "creeping  upon  orders  ajid  shipments." 
It  states  also  that  employment  in  camps  -and  mills  in  the  best  in  a  decad-e 
an.d  add.s  that  "it  is  hoped  that  uncontrolled  "iroducticn  \7ill  not  spoil 
this  improved  situation," 

Recent  lumber  statistics  show  in  some  \7eeks  an  e-:cess  of  production 
covering  the  entire  Unit^^d  States  of  p  •.luch  as  10^^  over  shipments  or 
sales.   The  question,  it  seems  to  me,  naturally  arises  as  to  whether  or 
not  the  industry  will  shortly  be  forced  to  seek  other  ,and  perhppd  new 
methods  of  controlling  production  and  whether  or  not,  in  the  absence  of 
the  ability  to  find  such  methods,  the  industry"-  will  not  .agfin  find  itself 
in  about  the  situation  it  was  at  the  beginning  of  the  code  era. 


October  29,  1935. 


981S 


APPMDIX  II 
■TABLES  C^  EXHIBITS 


MUMl 

, IKaU 

HI  tiMr^i  i/ 

r 

a  TwiUM 

rn 

11a  P—r^lm 

Total 

cort- 

Total 

Aroaa  3/ 

Cort- 

Araaa  I4/ 

Sav 

TlabBF 
Araaa  2/ 

":^k/ 

Baat 

dtlaa 

TUWr 

A^I    S/ 

teflon  ud  SUta 

'.'TmI, 

*lr  to 

itolUDc 

Total 

r.irio 
aati*. 

•toeklDi 

raatoi7 

ttoaldac 

Iw  BlriMd 

CoajMottcnt 

1.5R 

209 

889 

3*7 

157 

895 

123 

501 

197 

7I4 

600 

78 

3140 

126 

56 

•7 

8 

w 

23 

1 

Uu 

II..I190 

10.177 

1,279 

2.175 

859 

11.819 

8,602 

986 

1.618 

611 

2.2ia 

1,278 

252 

"91 

220 

1150 

297 

111 

6< 

» 

lU-Chn..!!. 

3.255 

1470 

1.063 

1.235 

1W7 

2.157 

318 

690 

813 

316 

863 

119 

291 

313 

lUO 

235 

33 

82 

90 

30 

I>«  RM^iiMr. 

U.MS 

99» 

69U 

1.9*7 

n6 

2.876 

6142 

352 

1.565 

J17 

1,072 

115 

230 

9oe 

225 

M7 

2<41 

m 

UO 

1> 

Tamoot 

JI9 

1.992 

<U 

2n 

55 

1»5 

7 

57 
275 

73 
193 

714 

1,5011 

ap 

JO 

557 

» 

27 

lA 

19 

3 

' 

' 

fct.1 

J7.!7! 

1;,!60 

«.81.3 

s.i"" 

:."?5 

19.576 

10,8314 

2.8141 

14.279 

1.622 

6,1102 

2,«r7 

1.700 

1.571 

70I4 

1.295 

599 

302 

2911 

100 

UdAle  AtlfSllc 

I^..^-. 

3!0 

32 

268 

u 

7 

86 

9 

72 

■3 

2 

2114 

25 

196 

11 

11 

- 

. 

. 

HaiTlud 

!.1M 

500 

1.395 

176 

97 

863 

196 

5145 

72 

50 

1,275 

296 

830 

108 

U 

30 

I 

20 

1 

1 

I..J».« 

1.97? 

29U 

610 

687 

382 

1.523 

152 

1470 

5»5 

376 

35I1 

11* 

101 

75 

29 

96 

IJ 

39 

51 

13 

InT»n 

9.»J 

I1.637 

2.816 

1.376 

76» 

5.808 

2.918 

1.590 

770 

550 

3,718 

1,70« 

1,217 

57I4 

219 

67 

11 

9 

311 

13 

■      »1  HI 

11.M5 

l.JII 

5.W9 

3.7W 

2,079 

7.190 

U77 

5,li08 

1.957 

1.5148 

3,880 

1,292 

1.269 

955 

56I4 

2.015 

62 

752 

860 

3111 

Total 

?7.13» 

7.29U 

10.518 

5.998 

3,529 

15.1470 

3.752 

6.085 

3,5117 

2.506 

9,1161 

5,1168 

3,613 

1.723 

657 

2.201 

914 

820 

926 

368 

IM 

UdUO 

19.000 

1.750 

2,5^ 

9.m 

14.823 

12.9147 

1.209 

1.563 

6,915 

5.1160 

5,7(0 

1450 

1,085 

1.5211 

701 

2.293 

91 

102 

I.I133 

667 

■lo...ot. 

ao.joo 

1.650 

2.6,0 

10.670 

5.210 

12.178 

1490 

5I46 

7,1426 

5.716 

11,7116 

653 

1.239 

1,955 

899 

3.276 

W7 

906 

1.285 

999 

IortbIi.«ot. 

W 

10 

uo 

252 

125 

50 

9J 

- 

- 

1130 

10 

60 

*7 

115 

15 

- 

10 

9 

ntoooalD 

16.200 

1.705 

5.550 

7.367 

5.598 

9.617 

952 

1.267 

»,9l4l4 

2.11714 

5,3115 

680 

2.221 

1,673 

769 

1.238 

93 

no 

7511 

351 

tola 

55.855 

5.095 

8.880 

28.166 

15.75I1 

311.792 

2.651 

3.226 

15,285 

9.650 

11..28I 

1.793 

I4.607 

5,399 

2,1.82 

6.222 

671 

1.0117 

3.1182 

1.622 

Cantral 

IU1K.1. 

3.196 

2.MI 

5» 

123 

52 

250 

ua 

70 

57 

25 

2,9112 

2,377 

1470 

65 

30 

ll 

1. 

- 

- 

- 

IoU»» 

'■'" 

1.815 

1.090 

371' 

159 

810 

192 

266 

252 

100 

2,615 

1,620 

8111 

1211 

57 

13 

3 

10 

- 

lo.. 

2.35» 

1.755 

581 

15 

7 

152 

120 

32 

- 

- 

2,206 

1,635 

5I19 

15 

7 

5/ 

5/ 

- 

- 

- 

lonnicJqr 

10.256 

2.767 

U.1U.1 

2.169 

919 

».iia 

1.790 

1.905 

1.035 

Wl 

5,136 

971 

2.528 

1,123 

511. 

19 

6 

8 

3 

2 

Hlaaowl 

16.500 

3.166 

6.735 

11,636 

1.901 

9.ST> 

1,«B9 

3.eaB 

2.511 

1.026 

7,076 

1,269 

2.836 

2,0140 

955 

146 

7 

19 

111 

6 

(Mo 

».651 

2.736 

1.519 

278 

lie 

1.686 

916 

611 

UU 

115 

2,8911 

I.77I4 

887 

160 

73 

71 

1.6 

21 

3 

1 

Tofloaaaa 

llt.DUl 

5.067 

7.170 

1,267 

537 

7,6112 

3,005 

5.956 

502 

199 

6.071 

1,858 

3.115 

755 

3115 

328 

2014 

121 

2 

1 

taat  nmu. 

9,769 

1,1.38 

3.516 

3,3«2 

1.1133 

6.262 

751 

2.236 

2.51411 

951 

3,216 

65U 

1.235 

911 

1.16 

291 

33 

I15 

1115 

6< 

Mil 

61..2U9 

21.22U 

25.592 

12,!lrt 

5.189 

51,319 

8,763 

12.936 

6.885 

2.755 

32,158 

12,158 

12.1132 

5.193 

2.575 

772 

303 

2211 

167 

78 

Smih 

1UI..O. 

21.6M 

7.127 

U.M7 

11,538 

5.308 

111,791 

11, 9» 

5.006 

5.0511 

5.801 

6,522 

2,281 

I.5I18 

1.UJ6 

l.»57 

367 

196 

53 

67 

51 

lA-aa, 

22.000 

7.700 

7.000 

3.565 

3.955 

15,051 

5,818 

3.857 

2.386 

2,990 

5,9P 

890 

5.II15 

9142 

956 

1.018 

992 

- 

15 

1' 

nortj. 

23.600 

6.030 

6.921 

li.90« 

5.7I41 

20,759 

5.525 

5.950 

14.121 

5.165 

2.266 

265 

901 

5W 

55I4 

595 

2U0 

90 

151 

UH 

Oaorr  . 

22.S72 

6.900 

7.566 

5.8711 

11.552 

13,637 

14.172 

11.5117 

2.183 

2.755 

8.966 

2,557 

2.967 

1.708 

1.75I1 

269 

171 

52 

26 

20 

Lonlal^ 

17.922 

7.383 

2.U59 

3.7211 

14.556 

114.851 

6.157 

2.032 

2.957 

3.705 

2.999 

1.218 

W! 

685 

695 

72 

8 

26 

22 

16 

Htaalaalppl 

H.29) 

5.067 

2.1M 

11.969 

5.811 

12.007 

3.282 

1.531 

5.193 

k.cm 

6.2611 

1,778 

9111 

1.773 

1.799 

22 

7 

1 

' 

6 

-rtl.  t„ol,„ 

20.216 

■..192 

7.890 

3.7*9 

11.585 

10.077 

2.360 

3.782 

1.7147 

2.188 

9.759 

1.659 

3.997 

2.026 

2.017 

W) 

175 

m 

66 

» 

*.?79 

1.800 

7*" 

781 

9114 

).73l4 

1,661 

I4I45 

715 

896 

U90 

152 

329 

lU 

15 

55 

- 

P 

211 

K..1.  Carol,™ 

12,«15 

3.757 

3.9U7 

2,171 

2.5W> 

7.979 

2,»11 

2.525 

1.262 

1.581 

11.393 

917 

1.613 

925 

958 

113 

29 

9 

3 

2 

Ia,U 

12.62U 

1..150 

3.700 

2,200 

2.57I1 

9.618 

3,260 

2.3W 

1.7814 

2.2314 

5.000 

885 

1.360 

375 

580 

6 

5 

1 

nrsioi. 

1U.857 

2.859 

5.582 

2,957 

3.1159 

6,91U 

1,1488 

2.1419 

1.555 

1.672 

7.296 

1,1117 

2.816 

1.65* 

1.679 

6U7 

22U 

3I17 

115 

33 

I...1 

190.75" 

57.265 

52.702 

37,236 

113.555 

129.398 

I4I.I49I 

32.2211 

214.717 

50.966 

57.866 

15,729 

19.789 

12.0814 

12.2611 

5.I49I1 

2.0145 

689 

1435 

327 

Pa«!tlo  Cout 

c^ironi. 

17.538 

12.587 

306 

1,813 

2.852 

8,7514 

5,6314 

230 

i.on 

1.813 

60 

- 

28 

52 

8.7211 

6.953 

76 

655 

1.01.0 

0,«o. 

2!.«3< 

19.675 

5.815 

2,087 

3.261 

10,581 

7,6714 

815 

779 

1,315 

5.1110 

1,087 

567 

6«U 

802 

15.117 

10,9111 

2.1455 

6«U 

1.086 

I.^,^.. 

20.309 

11,878 

2.562 

2,390 

3.579 

8,603 

3,859 

1.125 

1.5I18 

2,271 

1.899 

655 

361 

1107 

U7! 

9.807 

7,166 

1.076 

527 

>38 

Total 

*b.6J5 

W.IW 

6.613 

6.190 

9.672 

27,938 

17,167 

2.170 

5.2014 

5,397 

5.099 

1,7110 

928 

1.119 

1,512 

33.6M 

25,233 

3.5»5 

1.866 

2.994 

Rrtli  «ookr  Honolaln 

17.I46I1 

9.964 

1.964 

3,1122 

2,1114 

3,380 

1.550 

31411 

8314 

652 

807 

286 

50 

2^ 

212 

15.2n 

8,128 

1.570 

2.299 

1.280 

Hontau 

1U.R5 

7.062 

3.7W 

2,511 

1.552 

2,5145 

1.61-. 

372 

299 

25» 

606 

78 

259 

1U8 

121 

11,7111 

5,314' 

3.109 

2.0914 

1.167 

Total 

52.325 

17.026 

5.70» 

5,933 

3,666 

5,925 

3.190 

716 

1.133 

886 

1.1113 

361. 

309 

W7 

533 

211,991 

13,1.72 

14.679 

11.593 

2.1*7 

Soath  BocKr  Motmtaln 

5.651 

■3.61I' 

5 

511 

W 

142 

. 

. 

. 

. 

. 

. 

. 

3,609 

3.572 

. 

5 

32 

Colondo 

12.516 

7.839 

3.651 
95 

7 

958 

711 

2,579 
177 

985 
97 

1.2U7 
77 

' 

3UI 

3 

" 

" 

" 

" 

9,937 

6.8511 

2.WU 

9 

997 
69 

laa  Uazieo 

3,so6 

3.710 

- 

8 

88 

1,092 

1.018 

- 

1 

75 

- 

- 

2,7111 

2.692 

- 

5 

19 

Soath  Dakota 

1.2!li 

675 

!»>6 

2 

21 

310 

IW 

165 

- 

5 

- 

- 

- 

9711 

535 

1121 

2 

16 

HUh 

3.3M 

!.>32 

378 

Ot 

1492 

310 

.   1.6 

53 

14 

227 

113 

3' 

3 

5 

1 

2.995 

2.352 

3112 

37 

2611 

lyiMnc 

5.5M 

».270 

1.219 

6 

63 

588 

106 

161 

- 

11 

- 

- 

- 

- 

- 

5.000 

3.e5i. 

1.088 

' 

51 

Total 

50.570 

22.7»1 

5.959 

160 

1,710 

5,098 

2.71* 

1.683 

11 

660 

m 

311 

J 

5 

1 

25.1429 

19.963 

11.273 

11.5 

I.OM 

Uatam  Parion. 

565.31k 

10U.73S 

102.535 

89,789 

68.252 

250,555 

67.1451 

57.512 

58.15 

117,279 

120,168 

13,575 

142.1U1 

25.970 

11.1182 

114.591 

5.712 

3.082 

5.302 

2.»95 

I,ata™  Saflon. 

129.5S' 

83.907 

IJ.tW. 

12.283 

I5.OM 

38,961 

23.101 

11.569 

I4.3W 

6.9I15 

6,555 

2.118 

1.2140 

1.551 

1,6116 

eh.ou 

58.668 

12.537 

6.1.011 

6.1499 

All  BagloM 

U9».!9J 

1S8.H.5 

120.881 

102,072 

83.300 

269.516 

90.552 

M.Kl 

62.861 

5)4,222 

126,725 

55.713 

1'5.5»1 

27.501 

20,128 

98.659 

►2,580 

15.619 

11.706 

8.951. 

lacloB  aad  fliata 

Total 

SS'aV 

Coi4- 

A"a.y 

faotOT 

itniTo. 

Total 

8a» 

Cort- 

•f""! 

atooU.. 

Total 

Sa> 

Tl-liar 
Araaa  1/ 

^°^y 

TaiitotT 

atooklB* 

Sa* 
Ar».  i 

A^;!y 

i;ii:k_ 

itodanit 

All   Cl»....  ot  oJ, 

erahlp 

Indaat 

rial  OaoaraliiF  2^ 

^ 

~  ■""— 

?o 

»1U  «.,.u,^      _ 

low  By  »ppl7ln«  thi.  regional  parceDUfl  i 


k11    for   ••■   \ogt  but    Imrgt  ■»}ucb  ( 


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0813 




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"USaSij/" 

___.^«r_?^^JJ^ 

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C,^^ 

T  '^ 

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■■ 

, ^**^  il . 

laftaoad  l|/_ 

~Tw 

15) 

m 

(71 

(1) 

01 

(10) 

■W   ^1M« 

0>r.xuni 

l.W) 

>M 

•31 

2ak 

109 

159 

936 

Uk 

>92 

r> 

I|J.»MI<«<11. 

15.W 

5.IM 
5»l 

9.ru 

12.167 

22a 

7.7tO 

1.172 

vt 

lU 

I.ISO 

«-  Sjaptfllr. 

;.«ii 

LOW 

l.«2 

1.7*7 

705 

1.062 

taa 

21. 

661 

219 

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•5 

?1 

5« 

3 

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57 

15 

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T.n...t 

».1!» 

1.5D0 

2.65< 

!.7ii. 

i.om 

1.630 

1.127 

25'> 

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317 

I.<l.i»l  Kia 

n.'W 

5.W« 

16.132 

lr.l9' 

7.2" 

10.9» 

5.112 

i.tta 

'.77' 

1.921 

maan  m»aitc 

y,s 

65 

301 

W 

„ 

3> 

2» 

36 

2.2 

,, 

II..71UI 

!.«! 

!55 

1.635 

5'.3 

1.* 

I.H 

l.M 

155 

1.096 

in 

a-  J.rm 

!T« 

17« 

»12 

309 

79 

2» 

579 

72 

907 

" 

>..  T.A 

ID.IK 

i.n) 

■  .0> 

<.96> 

1.521 

a.u.1 

3.237 

<03 

2.«)» 

917 

r...Mi— !■ 

;.!)<. 

1.6JT 

1.-^ 

...uio 

615 

1.79' 

•.953 

7i« 

5.-1. 

•33 

»*■"->  w 

-■2.B.1 

>.0J1 

1!.6U 

9.291 

2.'71 

6.921 

11.306 

l.W* 

9.100 

2.052 

U£ 

a.5« 

l.,« 

-.•m 

a.31. 

I  til 

.■X17 

'41 

Hlaw*<i> 

S6V. 

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3.0)> 

2!590 

all 

l!a» 

t.OWt 

925 

2.119 

W 

;; 

95 

17 

17 

7. 

- 

7. 

W 

I1.C.U1. 

4.9?5 

1.U.I 

5.>76 

3.257 

769 

2.a" 

t.<W 

1.113 

>.55' 

loy 

itloatl  Total 

11.550 

..no 

15.7» 

lo.aa. 

2.161 

7.91' 

11.106 

'.3»9 

7.757 

a/ 

Cantral 

55i 

: 

;■: 

1.996 
1.096 

7» 

z 

E 

1! 

E 

» 

I.«..a>7 

1.555 

M 

!."7 

1.707 

lit 

1.59" 

2.007 

lao 

1.B7 

21.1 

...aourt 

).o» 

«) 

..9« 

1.7.1 

110 

1.62. 

•.239 

225 

).olu 

m 

T.™.... 

l.W 

«.2J7 

a.ou 

268 

3.79) 

a.'!)5 

295 

1.9«0 

5>0 

I..I  nvau 

5.511 

J75 

5.136 

1.9X 

131 

1.9« 

3.1« 

222 

2.966 

357 

S<«loBal  TOlal 

30.S56 

2.»0 

29.576 

i».7ia 

97. 

"■'" 

ia.06< 

9T9 

.'.o« 

i,n» 

SmU 

ia.!?6 

;•- 

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z 

3.3S5 

z 

i.!9« 

C25 

9«5 

n.na. 

9.2U 

5.275 

J.967 

5.'39 

2.926 

2.U63 

'.213 

1.963 

1.250 

OO 

5..rfl. 

15.W* 

t.610 

t.m 

6.9» 

3.790 

3.130 

7.059 

a.n2 

•.7'.7 

l,i»5 

t^U.I^ 

IJ.OS! 

6.90J 

5.190 

9.55! 

S" 

«.»= 

l.l' 

■5» 

5:.a 

■37 

.......IW 

'.57» 

t.M 

6.01! 

'.2«5 

2.7>7 

1.W.7 

I» 

565 

555 

.a,a,  C.r.11.- 

u.m 

..™ 

6.»!0 

6.356 

1.132 

2.9* 

7.5«2 

>.636 

2.952 

1,037 

CUJ,». 

J.TO 

I.IU. 

•a 

1.W7 

76» 

6»J 

'm 

251 

17! 

139 

s™tb  e.r.11.. 

lo.atl 

5.555 

a.>7« 

6.0»7 

3.2* 

2.763 

1.6» 

2.25! 

H26 

72! 

UlMZ 

j.sj: 

».!57 

1,T76 

ii.oi, 

•.t^ 

2.262 

2.155 

I.'IS 

!39 

529 

nrBaU 

s.ia 

5.66! 

».sa 

»,0« 

2.210 

1.559 

■.16« 

3.155 

2,010 

6n 

RaClaaU  Total 

ut.m 

*.963 

la.lM 

S7.2H 

16.512 

30.726 

3S.692 

23.637 

15.055 

7.«n 

yadflc 

Calir-inda 

50.076 

50.076 

- 

»9.a9i 

U9.U91 

11 

11 

57> 

Otaca. 

n.a^; 

n.m 

!« 

76.621 

76.U11 

277 

3.907 

'.775 

32 

»!» 

TaaUB«taa 

to.ai 

59.990 

237 

56.!.'! 

56.31! 

!«■ 

3.013 

'.9!« 

2" 

692 

Hactaaal  Tatal 

Wi.Ije 

191.176 

556 

1.2.701 

1«.220 

W 

S.571 

o.TTt 

" 

2,S0 

lortlt  BMka  Klwtala 

.-'.s.i 

25.SO 

. 

21.161 

21.161 

. 

2.6K 

2.6.2 

1.-.7 

Hantaaa 

=..T. 

'•-'•" 

"••'" 

''■'" 

6.7-2 

'.732 

1.2CT 

Santa  aodn  U"  ■.-,:  " '  r 

irlioa. 

3.036 

3.62^ 

- 

3.625 

3.625 

- 

1 

ea..™,. 

SJO 

12.«t 

* 

11.2-« 

IK 

■ 

1.192 

1.16! 

2a 

9 

>..  ItaUaa 

2.521 

2.921 

- 

2,919 

2.919 

- 

2 

'""■°-°- 

512 

912 

- 

719 

719 

192 

192 

- 

' 

1^'^a* 

1o!k! 

lo.«! 

9.719 

"m 

. 

1.136 

1.136 

. 

', 

Bactaaal  Tatal 

IJ.Bi 

33.299 

* 

30.»9 

30.6«9 

2.65J 

2.626 

» 

" 

batan  U,  S.  Total 

ns.isa 

!5.9<2 

127.9H 

119.90 

»9.57i 

lo.toti 

lO.-U 

'0.705 

19.579 

13,732 

laataiti  U.  S.  Tat.1 

J7J.52J 

272.S3 

581 

2M.970 

2tia.li* 

h!l 

19.816 

19.995 

^ 

a,95« 

Otitad  Stataa  Tatal 

W.Tl! 

35S.225 
(2) 

i2«.i«a 
(3) 

•      l») 

29t.o65 
15) 

70.7B 

99.17< 

69.521 

«9.65« 

(9) 

1..690 

Iraa  aad  Stata 

Total  a/ 

softoooa  ay 

Bart-oo*  a/ 

fatal  5/ 

!.m..J6/ 

Total  5/ 

Mt-^JJ 

ito-.4«aas/ 

Total  9/ 

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uioumconiBm 

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roBiiiT  oi^<aiuxu» 

»>»oi>n« 

«>ICIN1 

todn  ud  tu%< 

I>«u\rtal 

it 

2._  folUX 

Total 

«• 

loMl  rar 

at 

Ottov 

fottl 

tonroo* 

Ktfte»*« 

tout 

ToUl 

taftnol 

fold 

kflooot  1  lu4no4 

Total      tonooo.  1 

.atU          ..f.^ 

Total    li.n-0.1 

fcilllll 

f-  te«l.nd 

Cac.n*otl«t 

7» 

n 

651 

702 

l.)0 

66 

3» 

272 

50 

262 

- 

- 

- 

- 

■ 

5 

» 

lUltM 

3S.750 

*.7« 

19.0U 

y.657 

36,719 

21.601 

13.11. 

3.95» 

2.690 

1.6a 

52 

52 

5) 

19 

- 

!.« 

t6. 

595 

IU.».t.«^tt. 

?.IM 

i.^j 

565 

l.BO 

1,579 

995 

5» 

519 

T7» 

169 

- 

- 

- 

- 

166 

U6 

60 

■-  !l«P-"« 

6.S56 

».J97 

2.559 

5.I51 

»,«9! 

5.096 

i.m 

9)6 

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?* 

1.067 

1.067 

676 

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5. 

V 

» 

■boi*  laud 

n 

n 

ie 

n 

119 

16 

55 

59 

12 

27 

- 

- 

- 

- 

- 

1 

1 

• 

TMMBt 

<.J06 

e.ioi 

6.205 

1.117 

5,9119 

1.505 

6,661l 

2.26. 

575 

1.695 

- 

ty 

U 

J«.oi 

J6 

25.0ft 

71 

B.)9) 

107 

67,1121 
29 

27.257 

!0.16> 
19 

7.972 

6.051 
2t 

3.961 
92 

1.U9 

1.119 

707 

1.565 

- 

n6 

fn 

lurruad 

1.27» 

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i.o« 

1,25» 

501 

O 

620 

755 

121 

•32 

- 

- 

5 

17 

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J2J 

55» 

•2) 

505 

115 

190 

51. 

195 

325 

- 

- 

5> 

15 

a 

I^Tork 

11.015 

6.559 

U.MD 

17.956 

11.5M 

6.107 

7.05 

6.636 

2.60T 

6,2Z9 

6 

- 

6 

1 

5 

55 

20 

99 

PaooKrlTW^a 

5.0T 

l,Ui 

H.751 

5.691 

1.676 

326 

1.550 

6.015 

7B 

5.2)5 

96 

9> 

U 

76 

- 

112 

22 

90 

>.UI 

16.150 

i.M 

17.905 

1S.>)1 

1).I)1 

6.639 

9.192 

12.000 

3.529 

..67. 

9. 

96 

'■ 

76 

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t 

5 

m 

9" 

165 

Uk* 

«.»)0 

!.>90 

12.SB 

16.)»5 

12.52il 

2.715 

10.213 

3.6I7 

71. 

2.699 

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<.5>0 

5.l.)» 

5.II16 

6.1192 

2.«o! 

1.000 

1.500 

3.992 

1.997 

2.595 

1.219 

1.106 

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m 

69 

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90 

KrU  JkUU 

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53 

55 

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5) 

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10.»» 

2.509 

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1.35) 

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2.75) 

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11 

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9 

9«9 

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762 

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9.193 

26.65U 

32.733 

a. 771' 

5.06. 

l«.TO) 

10.962 

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7.»0 

2,2«i 

1.200 

662 

75. 

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17 

3.117 
2.165 

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2.075 

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2.990 
2.057 

5 

. 

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5 

3/ 

5 

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1.107 

- 

1.107 

1.107 

77 

- 

77 

1.030 

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l.OJO 

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- 

31 

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5.57'- 
3.6!5 

7!» 
2.9 

l.Ml 

5.562 
5.6n 

5.765 

2.5)7 

696 
199 

5.269 
2.55. 

1.797 
1.166 

2)6 
90 

i.sa 
1.056 

. 

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. 

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51 

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11.155 

1.220 

15 

1.205 

2.915 

35 

2. IK 

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- 

- 

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99 

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5. 

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9.U3 

l.ltb 

6.519 

9.290 

5..511 

701 

5.13) 

5.656 

615 

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369 

65 

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26 

0 

■•■t  nrclnla 

5.06a 

6J1 

1..I.J1 

6.9» 

2.951 

369 

2.5» 

2.0)3 

255 

1.7" 

79 

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9 

66 

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) 

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5 

fia 

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2.900 

31.722 

51..O66 

16.613 

1.7.2 

16..32 

17.65) 

1.05. 

16.)95 

669 

56 

590 

5 

3/ 

5 

107 

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101 

1!S<> 

tl^«u 

F1.176 

.    16.799 

l'.!77 

20.6U 

16.157 

11.230 

2.927 

6.509 

5.166 

1.3>5 

276 

256 

202 

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20 

16 

6 

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m 

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l«u.u 

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12.127 

22.72< 

20.21* 

9.501 

10.763 

2.6*1 

1,165 

1.315 

1.662 

1.662 

677 

7«5 

- 

- 

- 

- 

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mria 

15.J1! 

15.169 

2.111) 

I5.IUI 

111.6)0 

12.610 

2,080 

711 

612 

99 

171 

171 

167 

a 

- 

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- 

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a.no 
M.590 

lll.KlT 
12.Uk 

6,05) 
15.706 

20.U72 
26.579 

12.7,6 
23.915 

9.0.5 
10.776 

J.7M 
15.1)9 

7.67. 
6.66]. 

5,651 
2,10) 

2.561 

59. 

5 

59. 
5 

2n 

115 

5 

■ 

6 

5 

5 

HtialtUypt 

ao.UD 

12.960 

7.521 

20.666 

12.6„ 

7.W 

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54.561 

lortb  Sdntft 

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230.952 

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8KS.055 

353.837 

494.a« 

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nilnola 

U.TW 

279 

I8.470 

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75.7a 

20 

75.708 

1^2/ 

9.5» 

37 

9.489 

Iratuky 

lUJ.USO 

11.782 

131,668 

IU««rarl 

101.133 

19.179 

81,954 

(Wo 

n.W5 

324 

n.i6i 

»»>..<. 

339.656 

bl.S04 

277.852 

!■■%  Tlr«lftlft 

3014,980 

59.071 

245.909 

Kt.1 

1.074.707 

152.496 

922.ai 

JojU 

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1.015.1«* 

865.372 

150.0J2 

bb..u 

b9O.b70 

450.0J7 

240.633 

nortd» 

b>7.00 

582.313 

54.768 

«.<»»« 

635.  U12 

550.566 

84.84« 

LOTdiluu 

1.160.99S 

766.077 

394.921 

Uidi.trpi 

1.202.6k 

946.492 

256.130 

■c«l.  0.„U„ 

664.253 

532.538 

131.715 

>V1.... 

120.073 

108,265 

11.808 

fc«bC.r.llU 

557,010 

420,018 

137.062 

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77it.3» 

659,945 

114.439 

ntclnlA 

U1.U7! 

276.302 

135.171 

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7.869.450 

6.157,925 

1.711.525 

FMino  c.»«t 

l.lbS.wt 

1.169.001 

187 

Callforala  2/ 

»w 

2.K4.2» 

2.869.254 

15.02< 

fc*iactea 

4.190.541 

4.175.46! 

■  15.078 

I..J 

8.244.009 

8.a3.71B 

30.291 

lorti  >pd9  nnxali 

lUM 

565.173 

564,976 

197 

KoBtVM 

2O8.655 

208,613 

42 

total 

n3.828 

773.589 

235 

iottth  fcdteF  Mowrtala 

96.102 

96.102 

IrlaoM 

UUrU. 

49.9* 

49,401 

103 

>mHu1o« 

102.0JT 

102.097 

- 

go«tk  OikoU 

J8.027 

J8.027 

- 

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6.<U 

6.657 

153 

•>«•< 

19.682 

19.646 

3« 

J.t.1 

312.222 

Jll.JJO 

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209 

'  fOraST  FHCCUCT8   (OTHtH  1 


Total 

Soft.ood. 

HardaotdJ 

aa,  lUb, 

r  Slta  Traaa 

■ 

Oor 

4M«d  Alia  traaa                      1 

u    a.    TS^    " 

•'u      .        •  li 

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Hardai 

>ol. 

Total 

TStSaa"^ 

lari—oJ. 

R4&10D  A   auta 

H.   Cu.    Ft. 

H.    Ou.    Ft. 

H.   Cu.   Pt. 

H.    Cu.Tt^ 

■  .    Ft.    I.H. 

H.  flu.  rV. 

1.  ft.  ».y. 

1.   Jo.   ft. 

1.  n.  i.». 

».  STtt 

■  .    0».    Ft. 

K«»  gmgiifl 

(11 

(2) 

(31 

(4) 

(51 

(61 

171 

(81 

(91 

(101 

(Ill 

(121 

Conosotlout 

2«.''?« 

3.533 

22.945 

10.543 

48.824 

3.159 

14.772 

7.3»» 

3».052 

15.935 

J7» 

»5.5«1 

lUUu 

176. )61 

72.650 

103. 7U 

72.780 

339.617 

64,412 

301.021 

8.368 

38,596 

103.581 

t.rjt 

»5.3»J 

ll.>»clm.«tU 

50.  MS 

17.913 

32.575 

a.  273 

99.159 

15.853 

74.141 

5.420 

25,018 

29.215 

2.060 

17.155 

New  lUapBhlro 

1J1.6M 

54.459 

77.150 

5».587 

254.756 

48.280 

225.666 

6.JO7 

29,090 

77.022 

6.179 

70.W3 

RfaQd«  Zelud 

«,»!» 

661 

3.753 

1.758 

8,186 

661 

3.122 

1.097 

5,0« 

2,«5« 

- 

2.656 

V,rmorit 

63. 6M 

16.432 

47.217 

Z6.tt6 

122.978 

14.560 

68,062 

U.906 

54.916 

J7.M3 

l.»7« 

35.311 

Total 

»5J.599 

165.648 

287.351 

187.407 

873.520 

146.925 

686.784 

40.482 

186.736 

265.592 

18.723 

2M,a« 

mam.  Ati^iti. 

D.Urar. 

11,220 

4,126 

7.094 

3,218 

14,941 

1.074 

5.0*2 

2.144 

9,899 

8.0O2 

3.052 

•.950 

UATTlMd 

62,25« 

15.982 

46.276 

17,538 

81,282 

5.036 

23.621 

12.502 

57,661 

*«.7» 

10.9»« 

33.77* 

»,.  J,r,.j 

63,360 

6,016 

57.344 

5,045 

23,320 

526 

2.473 

4.519 

20,847 

58.315 

5,»90 

52.825 

N..  York 

281.551 

39.814 

241,737 

40.144 

186,761 

21.526 

100,922 

18. 6U 

85.839 

241.407 

U.2W 

223.119 

P.™rlT.„l. 

233. "65 

25.925 

■     207.540 

45.814 

ai.743 

6,474 

30.336 

39,3*0 

Ul,407 

187.651 

19.451 

168.200 

Tot.1 

651. »5« 

91.863 

559.991 

111.759 

518. 047 

- 

162,394 

77,123 

J55.663 

5*0.095 

57.227 

t<2.a68 

ias. 

UlcMg&n 

253.199 

43.810 

209.389 

50,947 

223.143 

14.175 

63.572 

36,772 

159.571 

202,252 

29.6J5 

172.617 

lllo„..ot. 

213.0*3 

117.569 

95.474 

43,413 

193.981 

39.123 

175.352 

4.290 

U.629 

169,630 

7a,«*< 

SliU* 

North  DakotA 

41 

- 

1 

- 

40 

- 

- 

- 

Wlnoonnln 

353.082 

99.064 

254.018 

72.540 

319.483 

32.820 

147.100 

39.720 

172.383 

280.542 

66,2*4 

a*.29e 

Tol.1 

619. 32» 

260,443 

558,881 

166.900 

736.648 

86.118 

386.025 

80.782 

350.623 

652.42* 

174.325 

478.099 

CgeJlSl 

ZlllnolB 

79.763 

177 

79.586 

37.428 

163.316 

177 

a«5 

37.251 

162,451 

42.335 

- 

•s.335 

IniUwia 

127.970 

68 

127.902 

60.233 

262.453 

68 

355 

60.165 

262,098 

67.737 

67.737 

loo  • 

U3.119 

5.550 

107.569 

53.849 

237.748 

4,181 

21.128 

49.668 

216,620 

59.270 

1.369 

57.901 

Konuiokj 

262.258 

47. 506 

214.752 

126.784 

577,863 

35,640 

180.373 

91.1*4 

397,490 

135.47* 

U.8«6 

123.608 

lU..o>u-l 

228.237 

9.187 

219.050 

109,698 

482,647 

6.905 

34,952 

102.793 

4*7,695 

118.539 

2.282 

116.257 

OHIO 

127.508 

54 

127.454 

59,771 

260,685 

54 

307 

59.717 

260,378 

67.737 

67.737 

Teuioiact 

456.944 

92.471 

364.473 

219,865 

1,006,648 

69.196 

350.152 

150.669 

656,496 

237,079 

23.275 

213.80* 

West  Virginia 

227.152 

26.811 

200.3*1 

108,613 

487,256 

19.965 

101,054 

88,648 

386,202 

118,539 

6.8*6 

111.693 

To<.,a 

1.622.951 

181,824 

1.441,127 

776,241 

3,478,616 

136,186 

689,186 

640,055 

2,789,430 

844.710 

46.638 

801.072 

aouth 

U.tBU 

328,426 

183,690 

144.736 

209,7), 

984. 5«2 

106.386 

550,306 

103.351 

434,276 

118,689 

77.30* 

•1,395 

Ark&neae 

393,177 

191,615 

201,562 

250,750 

1.164,367 

114. 311 

591,332 

136.439 

573.035 

142,427 

77.30* 

65.123 

noria. 

ia,626 

106,848 

14.778 

74,151 

370.291 

60,466 

312,933 

13.685 

57.358 

47,475 

W.3*: 

1,093 

Oeorela 

339,519 

257.057 

82. 442 

220,820 

1.072.182 

148,832 

769,608 

71.998 

302.57* 

118,689 

108,225 

10.*«t 

Lwlalua 

301,467 

162.607 

138.660 

194,647 

908.201 

93.033 

481,206 

101,614 

*26.995 

106.820 

69,57* 

37.2»« 

Hleimippl 

368,861 

219.343 

149.518 

238.303 

1.124,458 

126,578 

654,749 

111,725 

469.709 

130.55a 

92,765 

37,793 

Horu  C«-olln. 

459.861 

281,180 

178. 6S1 

293.697 

1.394,714 

165.224 

854,653 

126,473 

540,061 

166.16* 

U5,956 

50.206 

Otlahom 

96.548 

19.345 

77.203 

60.941 

267,204 

11.615 

59,966 

*9,326 

207,238 

35.607 

7.730 

27.9n 

aouth  OroUn. 

227.109 

164,886 

62.223 

144.027 

697.446 

95.313 

492.7*2 

48,71* 

204.704 

83.082 

69.573 

13.509 

Tsna 

354.665 

117,812 

236.853 

224,107 

1.010.408 

71.430 

369.310 

152.677 

641.098 

130.558 

*6.38« 

8*.  176 

Vlrslnla 

302,450 

154,225 

148.225 

195,630 

911,734 

92.382 

477.922 

103.2*8 

»33.ai2 

106.820 

61.8*3 

**,977 

T0..1 

3.293.709 

1,858,608 

1.435,101 

2,106,820 

9,905,587 

1.085.570 

5,614,727 

1,021,250 

4,290.860 

1,186,889 

773,03« 

•13.851 

62.205 

56,198 

6.007 

48,951 

280,078 

48.951 

280,078 

13,254 

7,2*7 

6.007 

OragoQ 

152.927 

149. 4<2 

3,465 

145,620 

829.735 

142,676 

815,403 

2,9*4 

14.332 

7.307 

6,786 

5a 

VKSlilngtOQ 

285.383 

282.518 

2,865 

274,957 

1.567.663 

272,360 

1.555.025 

2.597 

12,638 

10,426 

10.15" 

26a 

Total 

500,515 

488.178 

12,337 

469,528 

2.677.476 

463,987 

2.650. 506 

5.5*1 

26.970 

30,987 

2*.191 

6.796 

Ho.  Roon  K. 

46,090 

46,089 

J 

38,628 

163.745 

38,627 

163.742 

1 

3 

7,462 

7,»62 

. 

Idaho 

Itontao. 

14,530 

14,530 

8,290 

35.155 

8,290 

35.155 

- 

- 

6,240 

6,2*0 

Total 

60.620 

60,619 

1 

46.918 

198,900 

46.917 

198.897 

1 

3 

13.702 

13,702 

- 

So.   Rootr  HI. 

Arltona 

11.394 

U,394 

5.869 

28,383 

5.869 

28.383 

- 

5.525 

5.525 

Colorado 

5.207 

5.087 

120 

2,696 

13.011 

2,576 

12.459 

120 

552 

2.511 

2.511 

Harada  •• 

- 

- 

- 

- 

lea  Halloo 

11.373 

11,373 

- 

5.848 

28.277 

5.848 

28.277 

- 

- 

5.525 

5.525 

South  Dalota 

3.732 

3,719 

13 

1.891 

9.134 

1.878 

9.076 

13 

58 

1.841 

1.8*1 

- 

Utah 

77s 

422 

356 

443 

2.091 

220 

1.068 

223 

1.023 

335 

202 

133 

»yo.lne 

1,982 

1,982 

97a 

4.730 

978 

4.730 

1,004 

1.004 

- 

Total 

34.466 

33.977 

489 

17.725 

85.626 

17.3® 

83,993 

356 

1.633 

16.741 

16,608 

133 

AIX  REOIONS 

7.436.438 

3.141.160 

4.295,278 

3.883,298 

"■  "■  "toI 

18.474.420 

2.017. 708 

10.472.512 

1,865,590 

11     »t     B  ti — 

3.553.140 

1,123.452 

2.429,688 

y.  Cu.  Ft. 

Raglon  •  Slat. 

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338 

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7.511 

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526 

329 

197 

159 

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203 

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70 

142 

311 

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335 

210 

125 

101 

67 

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1.76 

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130 

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127 

103 

68 

55 

1185 

353 

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7.852 

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367 

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89 

87 

2 

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501 

6 

11..1I39 

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MO 

675 

5 

313 

308 

1. 

1.755 

1.7S5 

20 

50.823 

north  Hocb  HOMStolii 

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a. 

. 

71 

71 

. 

501 

301 

. 

11.929 

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19» 

19« 

- 

61. 

6U 

- 

275 

275 

10.101 

KIJ 

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U6 

- 

135 

135 

- 

576 

576 

22.790 

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in.oo. 

25 

25- 

- 

10 

10 

119 

l« 

- 

3.61J 

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ao 

SO 

- 

32 

32 

- 

157 

157 

- 

11, M9 

R«T*d« 

2 

2 

- 

1 

- 

» 

1. 

- 

296 

Ve«  Moxlw 

26 

26 

- 

10 

10 

- 

50 

50 

- 

3.711 

Soutb  SakotB 

9 

19 

9 
19 

. 

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8 

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17 
38 

■ 

1.260 

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15 

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71. 

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5.519 

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199 

199 

- 

80 

79 

- 

JW 

389 

- 

28.69I 

TOTAL  AU  STATES 

J.912 

u.sio 

1..102 

2.685 

1.709 

976 

11.731 

8.511 

3.W 

3M.52« 

(1) 

(2) 

13) 

m 

(!) 

(6) 

(7) 

(8) 

(9) 

(10) 

3tott  ud  ItMtloa 

'Total 

'ioftvood 

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'  Total 

'  Softvool 

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k*  nakar  aai 

KrtrminM 

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I  r*sl0&Al  total*  la  eolsa  5  e 


•  7  allii  S  roapMttvalj. 


aaayfffjM  ^ 


■ntlty  Sold  -  TotrJ 


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pr.t:"^:.,.j 

Total    '■ 
ftj.nUtj 

.  !lhM««S< 

Avorae^ 

Prlc-  Rtcalvad 

lletf  E.ipjand 

»9,W 

1        298, «M 

t  t-of 

4.9,1 

•          '2.85« 

•  6.» 

24.893 

1       144,885 

•  5. 82 

'l.ln. 

5,6M  OJJ 

7.00 

7r-j.086 

e.  250. 159 

7.29 

47.759 

192,078 

4.02 

U....c«i..ctt. 

Ite.sU; 

979,06* 

6,9' 

74.936 

579.251 

7.73 

8.5«7 

57.753 

6,14 

::-  ■i™.,hir. 

367, 5M 

2.»',.-Jll 

6,69 

245,655 

1,759.290 

7.16 

13. w 

70,705 

=  .«> 

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V 

2/ 

V 

J/ 

tl 

1/ 

SI 

s/ 

V 

V.a.„„l 

^:^6^■•k 

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6.07 

'5,89': 

199,282 

=  .=■■ 

"71.65' 

!,<«-, 0!6 

■-.00 

Tol-l 

1.9)7.171 

l^-?7.5»^ 

6-64 

1,081,486 

7.120,836 

7.23 

46;.  991 

2.-22,437 

4.98 

UldaX«  Atlp-ntlo 

«.oa6 

5".  661 

6.76 

4,726 

33.980 

7.19 

1,659 

13.768 

8. 30 

D,U..-r, 

lir.leaa 

OS. 86! 

606,720 

6.14 

49,669 

340.W 

6.85 

33.50? 

174,919 

5.22 

!i™  .Vrt.y 

2/ 

2/ 

1/ 

il 

il 

1/ 

V 

V 

>!-.   York 

JJ6.661 

2,106,»O5 

6. 45 

ir,r'2 

142,749 

B.14 

144,408 

1,056,557 

7.32 

Penneylvwiln 

.»69,-95» 

3,149,1402 

6.70 

37,097 

234,752 

7.6; 

306,238 

2,043,U1 

6.67 

•ot,l 

W.W 

5,917.208 

6.55 

109,024 

801,180 

7.J6 

485,807 

i^ 

1.U.?.109 

9,16»,05; 

6.35 

.98,123 

1,62', 204 

4.08 

696,900 

5.JJ5.614 

7.66 

lilnnKoU 

012. ';o 

5.900,000 

6.47 

817,842 

5,704,958 

6.98 

72,214 

1.64 

norih  D.Sof 

i/ 

V 

2/ 

il 

il 

il 

il 

tl 

t/ 

IJl.con.lr 

1.0mU,057 

6,762,219 

6.24 

78,172 

322,241 

4.12 

90,0« 

708.183 

7.86 

lot.l 

'.■»3».M6 

21.826,27? 

6.35 

1,294,137 

7.650.403 

5.91 

859,199 

6. 161. 934 

7.17 

Siiiiril 

IU,712 

212.821 

14.47 

y 

il 

il 

12, '62 

204.621 

Inainni 

iw.;«7 

2. '97.098 

16.38 

il 

il 

il 

89,588 

1.412,393 

15.77 

Ion 

£/ 

^ 

2/ 

SI 

il 

il 

-entu.Ky 

207,000 

1,039,360 

5.02 

2.204 

8.241 

3-74 

197,593 

988,027 

5.00 

L".„»rl 

210,502 

1,136,160 

4.93 

72.852 

350.077 

4.81 

68,802 

361.132 

5.25 

Ohio 

210.109 

2,167,167 

193 

1.340 

6.94 

208,801 

2,159.543 

10. 3» 

T.nn.s.et 

6;o.29i' 

1,437,517 

5.29 

47.026 

194,110 

4.13 

193,407 

1.317.390 

6.81 

■*eet  Vlrelola 

1,22;.»61 

0,W0.60U 

4.98 

8.570 

25,574 

2.98 

1^0,726 

i.97i,;i; 

•  .1' 

Total 

2,6S2.»51 

16,480,727 

6.14 

130.845 

579.342 

4.42 

1.251,279 

5,121.621 

6.» 

AlBbama 

2.0>l.lUi6 

.;, 680.615 

4.27 

1.218,4*4 

4.802,184 

3.94 

80,874 

367.344 

4.54 

Arfc.... 

S,)!*,!!! 

12,J90,«04 

5.62 

831.881 

4,350,683 

5-23 

283,291 

I.8O3.733 

6.37 

noria. 

2,712,!*; 

a.yu.m 

5.5J 

2.70!.m 

I5.I3.TO 

5.» 

a.  jK 

A  »■"' 

-    J.» 

0«orslB 

967,629 

3.766.552 

'.89 

629.70' 

2,226,933 

-:-'A 

22.664 

LOUl.lM,, 

E.S^O.te'i 

17.235,613 

6.09 

1.159,810 

6,925,318 

5.97 

489,481 

2.  859.  028 

5.84 

l!l„I„lppl 

2,60«.566 

12.549,507 

4.81 

1,865.101 

9,103,097 

4.88 

137,440 

657.604 

4.78 

north  Cu-ollra 

1.2W.J55 

5.519.800 

4.44 

749,202 

',478,378 

4.64 

188. 549 

»5.7>3 

4.49 

aa,j..o.. 

775. ;90 

2,304,550 

2.97 

5'7.861 

1,5*2,887 

2.69 

42.363 

2.65 

south  CaroUh. 

1.772.S93 

6,306,495 

4.59 

568,776 

2,842,214 

5.00 

95,395 

317.473 

3.33 

Texu 

J.6-2.J7» 

24,899,272 

6.85 

1.933,095 

15,607,507 

8.07 

150,994 

729.4*6 

4.33 

Vlrglr.16 

981.397 

5,036,934 

5.13 

350,827 

1,741,022 

4.96 

149,416 

695.550 

4.66 

Total 

3.913,219 

11^.6*7.5)7 . 

W» 

i2.5«».ra 

67.«».00« 

».)• 

■.«..[« 

•.8J».J»  . 

MJ 

Paciric 

lli,U.^5,46U 

44.49S,30: 

3-07 

14,485.354 

44,496,018 

'.07 

il 

y 

SI 

Or-Soo 

26.7'*2,lt«5 

77.935.167 

2.71 

2S.  716. 652 

77,877,391 

2.71 

23,663 

54,551 

2.31 

•••""Ston 

27,766,1164 

88.162.060 

3-18 

27,755  911 

88,140.474 

3.18 

7,879 

18.179 

2.31 

Total 

70, jy,..;-*' 

210.5^5,^29 

2.97 

70,957,917 

210.515.683 

2.97 

'1,542 

72,730 

2.31 

Idaho 

2.133.991 

7.867,117 

3.69 

2,1'7.925!>/ 

7.653.104 

3.69 

Lontaha 

1.151,081 

1,865,624 

1.62 

1,151,016 

1.865.521 

1.62 

65 

103 

1.5a 

I.tal 

3,285,072 

9.732.7''l 

2.96 

3,278,941 

9.718,626 

2.96 

65 

103 

1.58 

So.  Rooky  lit. 

i/ 

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SI 

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V 

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SI 

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TOTAL  ALL  STATES 

14P».T*.«» 

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2fi0 


TABLE  XVI 
rePCDTTAOE    OF   CAPAClrY   AlID   NUMBrP    CF    laLLS 


Arkaneae 

California 

Colorado 

Connecticut 
Delaware 
Florida 
Georgia 


O.JS 
0.04 
1.06 

e-33 


7.17 

0.67 
3.55 
■5.50 
O.Jg 

0.12 

0.07 
3.'*7 
6.23 


1,390 
16 

l»5 
73 

29 


Louisiana 

Ualne 

Uaryland 

UaesacbusettB 

WloMgan 


Mln 


Ota 


Mleelselppl 
lIlBBOurl 
Uontajia 
Nebraska 

Kerada  (See  Calif,  supra) 
New  Hampshire 
Now  Jersey 
New  Mexico 
New  York 

North  Carolina 
North  Dakota 
Ohio 

Oklahoma 
Oregon 

Pennsylvania 
Rhode  Island 
South  Carolina 
South  Dakota 
Tennessee 

Texae 

Utah 

Vermont 

Virginia 

Washington 


0.39 
2.20 
0.01 
0.06 
6.«1» 

5. 60 
2.10 
O.gJ 
l.Og 
3.82 


6.'il 


3.40 
0.70 
0.13 


0.«6 
l.gQ 


0.61 
0.01 
0.89- 
0.39 


0.01 
0.61 
14.50 

0.36 
0.01 
3.03 
0.36 
1.2« 

3-55 
0.15 
0.25 
4.28 
17.69 

0.00 

0.76 
0.17 


5^ 
^3'^ 


111 

56 

5? 
9"* 


56 
4JZ 


i 

50 

204 
1,382 


>t«2 


526 
25 
361 

"^35 
5a 

50 
908 

37"* 


9813 


f   287 


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CSC-    9SiO« 


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9813 


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288 


9813 


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-^5.    ^5^:s^ 


iiSto     wcri     "Ocji         iTif^Qty     oor^'O         Bo^^«)Q<^     i-<vo;*r^    S 

r-*rH        r-I'>       r^  C\JpwK\  OJ -O         rr\  f^W         ^05         r^^  r^  >0 


5(yr*\cy      cuwksovo      gv^O\*ooi      "O^OOf^vo      r^^o^r'-vg;      wiO^t-         »o  rH^  h^      rr\cyBOr 


fir^ifirH^      CTMnr-*^^      H  r^      f^;:t         ^  r-r-ij-      r-«)^  r- 


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289 


SABIX  ZVIII 

BICAFlTnLATlOH  BT  IKTEHTALS  07  UMBSB.  PBOSQCIBS 
IHOSI  MILL  CiPACITT  IS  EHOU  (*) 


Siaib«r  of 
Producers 


Total  Eotirly 
Capacity  for 
Intarral 
(la  Bd.  rt.) 


0  . 

101  . 

201  . 

301  • 

401  • 

501  . 

761  . 

1,001  . 

2,001  . 

3,001  . 

4,001  • 

6,001  ■ 

6.001  • 

7,001  . 

8,001  . 

9,001  ■ 

10,001  . 

11,001  . 

12,001  • 

13,001  . 

14,001  • 

15.001  • 

16,001  - 

17,001  - 

18,001  - 

19,001  - 

20,001  - 

22,001  - 

24.001  • 

26,001  - 

28.001  • 

30.001  • 

36.001  . 

40,001  - 

45,001  - 

50,001  - 

60,001  - 

70,001  - 

-Total 


100 

200 

300 

400 

600 

760 

1,000 

2.000 

3.000 

4,000 

6,000 

6.000 

7,000 

8,000 

9,000 

10,000 

11,000 

12,000 

12,000 

14,000 

15.000 

16.000 

17,000 

18,000 

19,000 

20,000 

22,000 

24,000 

26,000 

28,000 

30,000 

35,000 

40.000 

46,000 

50,000 

60,000 

70,000 

Vp 


492 

1,371 

2,442 

2,101 

2,122 

2.126 

3,189 

2,016 

664 

289 

165 

89 

64 

45 

50 

26 

27 

28 

15 

16 

26 

7 

14 

16 

13 

10 

29 

17 

16 

17 

16 

IB 

12 

10 

11 

12 

7 

1 

17,467 


49,200 
274,200 
732,600 
840.400 
1,061,000 
1,594,500 
3,189,000 
4,030,000 
1,692,000 
1,156,000 
775,000 
534,000 
378,000 
360,000 
450,000 
260,000 
297,000 
336.000 
195,000 
224,000 
390,000 
112,000 
238,000 
270,000 
247,000 
200,000 
638,000 
408,000 
390,000 
476,000 
480.000 
630,000 
480,000 
450,000 
550,000 
780,000 
490,000 
80,000 

25,736,900 


Soorea:  Blyitlo&al  Coda  lathorities 
*Iaclud«8  all  codal  dlTlsions  and  sabdiTlaions  i^lek 
and  Phllii)pine  Uahosaay.  4 

9813 


saw  Itmber  except  Mahogany 


290 


fABLjt   ZIZ 

EECAPITtJLATION  BT  STATES  0? 
asaVS   LUUBZB  PB0DUC2SS* 


^ 

Nvmher  of 

Number  of 

Total 

Producers 

Producers 

Number 

Whose  Mill 

Whose  Mill 

Total  Hourly 

of  Known 

Capacity 

Capacity 

Capacity 

Producers 

is  Ibknown 

is  Known 

(In  Bd.  Tt.) 

Alabaaa 

1,695 

104 

1.591 

1,638.600 

Alaska 

6 

6 

27.800 

Arizona 

22 

6 

16 

140.200 

Ai^ansae 

1,157 

49 

1,108 

1,101,600 

California 

195 

51 

144 

1.136.500 

Colorado 

103 

29 

73 

79.100 

Connecticut 

67 

16 

51 

42.300 

Celawara 

26 

1 

25 

16.700 

District  of  Columbia 

2 

1 

1 

3.000 

yiorida 

537 

4 

633 

770.500 

Georgia 

1,455 

37 

1,418 

1,405.150 

Idaho 

S07 

68 

139 

700.400 

Illinois 

239 

185 

54 

19.650 

Indiana 

400 

166 

234 

111.300 

Iowa 

I 

1 

400 

Eansaus 

3 

» 

^.300 

Usatvuzky 

001 

2 

599 

367,000 

Louisiana 

394 

394 

986,100 

Maine 

231 

62 

179 

250,900 

Maryland 

92 

1 

91 

70,500 

Massachusetts 

ISO 

29 

91 

129,450 

Michigan 

894 

760 

144 

295,750 

Minnesota 

286 

82 

204 

177,200 

Mississippi 

2,046 

68 

1.978 

1.947.100 

Missouri 

651 

8 

54? 

287,400 

Montana 

131 

44 

87 

372.700 

ITerada 

1 

1 

2,000 

New  Hampshire 

201 

39 

162 

219.300 

New  Jersey 

6 

1 

5 

3,700 

New  Mexico 

52 

12 

40 

184,660 

New  Torlc 

197 

65 

132 

138,850 

North  Carolina 

1,438 

26 

1,410 

1.363.850 

Ohio 

570 

297 

273 

117,250 

Oklahoma 

187 

5 

182 

172,350 

Oregon 

517 

65 

462 

2,998.100 

PennsylTania 

271 

111 

160 

129,850 

Ehode  Island 

11 

6 

6 

5,100 

South  Dakota 

29 

4 

25 

76,500 

South  Carolina 

639 

4 

635 

744,850 

Tennessee 

1.163 

17 

1.146 

791.000 

Texas 

542   ■ 

3 

539 

860.400 

Utah 

93 

41 

52 

30.650 

Vermont 

116 

29 

87 

89.150 

Virginia 

1,472 

34 

1.438 

1.307,350 

Test  Vii'ginia 

384 

2 

382 

378.200 

Washington 

423 

43 

374 

3,656.350 

Wisconsin 

972 

748 

224 

452,850 

Wyoming 

37 

11 

26 

36.000 

20,781 

3,314 

17,467 

25.736.900 

Source:  Dirisional  Code  Authorities. 

* Includes  all  codal  dirisions  and  subdivisions  which  saw  lumber  except  Mahogany  and 
QQ^  oPhilippine  Mahogany. 


9   S 


3  E  S  fc  a 


Illc 


il^- 


29i 


C'Hs  RSRS  S^S ^Sl-S^SiJ  S^^£SI.eI  ^&I ^I.SSi^&S?:l$.l  8  S  s 


3S^oc^^x^SW■o  r^r-tlr^Or■ 


h(oo\0  f*Mrvos  ^*^^-l  r^o»«)  r'x'Ow  ri-i^j*  «)  iH^ 


H ^  BO  If -*  »0  CT»  O  inwj  >o3  ^  t\j\5p 


lotricUf^rHOJr^LnftJlTtd-H-^^  r^OJ  KnOJ  rH  KAH^  ftl  f'M^M'V*  W  in  W  CJ  ftj 3- ^  tVj  OJ  r^  If  .rH^  fVl  If  .CJ^O,  f^. 

0^5lHt=^^o^^e^r^t^^fK^■o3^^B.HWc^JOr^o^lf^oCJf<^■-^w)^^f<^w)Or^o^  "O 

cuo\0  cO«J  d^o  cOc.  i-4r^vd  ir^r    i*^a\f^r-«  if\r«xd-  if.O^  wt-MTiO  O  rnOoO'OWBOOsd-rHu-  iTitO  rji^^  ^ 

Oi  oj  ^-BO^O  (miTaO^o^j*  f^M  K>B3  r— r^cQW  o  (M  f--^  mpj^o  cy  r— ov  cy  oj  t^r-r^p  [u  r^  (^  ''>£^,':^  Ji"!^  JT  JH 

v5  o  r'^^  -o  «3  OJ  M  r— »D  Q  pj  Cij  ir^  c\j 


£5  I   ~- 


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Ifc*" 


Sit" 


l°i 


I  s 


r'V*OMfV*^^  rHr-tr-MArHlf.'Or-tWr^        lf\Hir.r^rH         Oi'-t        H  iH        CV  W 


U    ^•«52£S§     S«^>    I^S^^l 


^oa3oB>i55jE5^ul«S£^l«aa  =  z2=Bo<zfc^ow>omHo»3^HQ2zi-.  *<o 


Cnpncltyl/ 

Hardwood  Softwood 


Arlcflnpas 

Cpllfornla 

Colorpdo 

Connecticut 

Delpwarp 

Florida 


IlllnolP 

Indians 

Iowa 

KansfF 

Kentucky 

LouiBlanr 

r?inp 

Wary land 

Uar-rachueettB 

Michigan 


J.:iFSOurl 
i^ontana 
Nebraska 


York 


North  Cprollna 
North  Dakota 
Ohio 

OklPhona 
Oregon 

Pennsylvania 
Rhode  leland 

SoutV)  Carolina 
South  Dakota 


Utph 
Vermont 
Virginia 
Washington 

Wer.t  Virginia 


1H9 

4,00? 

379 

992 

1,983 

3,066 

Plk 

118 

66 

6 

39 

lUfi 

1,935 

?1S 

3, 476 

1,891 

53 

301 

1 

9 

9?1 

60 

76? 

i,90n 

286 

391 

116 

74 

148 

202 

1520 

279 

478 

l,26h 

3,993 

527 

249 

1,006 

159 

216 

882 

2,800 

311 
120 

346 
8,095 

148 

6 

319 

1,422 

202 

6 

1,692 

204 

714 

342 

102 
872 

1,981 

8-? 

139 

2,388 

9.872 

1,004 
756 

.1] 
97 

Ratio  Stand 

to  OaoacltyS/ 

Hardwood 

Softwood 

10.45 
12.93 

4.19 
52.31 

5.72 
92.12 
221.39 

13.56 
11.83 
14.78 

19.03 

1.19 
.92 
6.81 
4.26 
51.07 

58.81 
7.19 
11.07 

5.20 

12.23 

20.  RS 
52.51 
9.22 
V84 
24.96 

6.7« 

7.29 
12.37 

m 

7.18 
3.24 
1.16 
49.50 

10.19 
133.50 

72.20 

12.86 

55.3? 
28.84 
30.25 

9.49 

3.95 

13.32 
9.03 

10.20 
54!  08 

72.10 
28.  f  4 
5.99 

5.67 
4.83 
5.53 
15.73 
1.63 

12.88 

60.83 
7-18 

5.94 
93.86 
15.12 

2.02 
32.50 

4.41 
11.26 

37-12 

5.41 
335.91 

U.  S.  Forest  Service  Releape. 

Total  Hardv/ood  and  Softwood  St?nd  aivldet^  by  Softwood  Ca 


omplled  by  the  DlvlBlon  of 


2/ 


Stand  of  Saw  Tlmb?r   In  the  United   Gtatee. 


9  8'  5 


293 


1    Cl3 

^<  -p  S 


9813 


H  Ht~-C\J 


isoosH  ir> 


C\J  oj  CVJ  c\j 


o^  CM  irv 


rHcyr^Mt      f^     i-iWKv* 


cMir.^-io 


60  O^ONC 
«0    rM   O  I 


0\iJ-K)KO 


OOO  i-l 

o  oo>o 

0000\ 


H  OJ  ^'^*      r^     rH  cu  ^'^:*      r^     HC\Jr<%=)-      r^     fHCur<%^ 


i 


294 


TABLE  XXII I 


Appalachian 

and  Southern  Northern 

HardwoodB  Hardwoode 

U  Ft.    B.M.  M  Ft.    B.M. 


North 
Centrel 
U  Ft.    B.U. 


2,189,000 
2,203,000 


'M\ 


19,000 
20,800 
2't,700 
30,000 


let  Quarter 
2n4    " 


2,571*, 000 

2,700,000 
2,673,000 

2,71'', 000 


670,000 
Ti9 ,  600 
742,300 
jl'.OOO 


11,900 

33,1*00 
31,900 

30,100 


let  Quarte 
2nd    ■ 
3^^    " 


2,621,000 
2,557,000 
2,1*20,000 
2,35l*,000 


801,100 
831,900 
771,500 
692,000 


26,900 
26, 100 
21,100 
22.100 


2,203,000 
2,159,000 
1,992,000 
1,827,000 


676,100 
62l*,600 
53't,100 
1*22,000 


21,100 
20,200 
18,800 
17.000 


let  garter 
2nd         ■ 

Ira 
Uth        « 

1934 

let  Quarter 
2nd    ■ 

3rd    ' 


1,700,000 
1,413,000 
"  '"",000 
,000 


J.,-TJ._7,^ 

1.433,0 
1,534,0 


1,566,000 

1,604,000 
1,628,000 
1,572,000 


416,700 
345,400 
295,700 

311,000 


156,006 

161,643 
140,789 
322,122 


120,200 
125,479 
109,242 
94,013 


70,000 
72,500 
71,400 


15,900 
11,400 
11,800 
15,500 


15,700 
17,o4« 
17,561 
17,716 


Source:  Lumber  Code  Authority  Docket  #5,  2nd  Quarter,  1935- 


9813 


(i 


295 


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cu      i^oino     in     ooinc 


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r^    to  irvto  cu 


OOOO       IT.      O  O  < 


r-novDto      ON      ^^O^^Or'^    -d-      On  I^no  cy 


KiifXij-m     to      ^  OJ  O  O 


^       0\  CVJ  I^^       K\     NO  CU  l<^H       O       O  KNNO  CT\ 
r^    :d-^r<%d-      o     ^  r^\ini^     in     to  0\  to  to 


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t\i     to  mir  cvi     o     No^ojr-     r^     mo.  to-=J"     to     cuinNO-*     t<^     HNOONin    no     i<->CT\tom 


r^tc  O  NO       to       TO  r-l  O  On 


r'"\tQ  r~i  m 


ON  r-l  r^O         K\       O^.Jlf  h-CJ        NO         ON  O  O  O         0\        KANO  CNJ  NO 

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9813 


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oooo 

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oooo 
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oooo 

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8 

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oooo 
oooo 

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8 

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NO 

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o 

NO 

r^i^to  CNj 

CO  cj  CNJ  m, 

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m 

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r-l  o  ^^l^^ 

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to 

NO 

o 

h^to  ojm 
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c--to^-r- 

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o 

CNJ 

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to 

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mf--o^ 
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to 
in 

en 

r- 

r<^roo,'  cv.' 

r~ 

CNJ  C\J  rH  rH 

d- 

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I  OJ  r<\^       rr\     rH  OJ  ri%d-      r^      rH  cnj  r<-v:)- 


S96 


DIVISIONS 


Appalachian 

and  Southern 

Hardwoods 

U  Ft.  B.M. 


Northern 
Hardwoods 
a  Ft.  B.M. 


North- 
Hardwoods 
U  Ft.  B.U. 


North 
Central 
U  Ft.  B.U. 


1929 

let  Quarter 


1,2S6,000 
1,251,000 
1,1*57,000 
1,321,000 


313,600 
277,900 
196,300 
151,200 


130,250 
130,250 
130,250 
130,250 


95,250 
95,250 
95,250 
95,500 


13,200 
19,200 
19,700 
19,H00 


1,838,300 
1,773.600 
1,898,500 
1,717,350 


let  Quarte 
2nd         " 
3rd         " 
ftth  " 


1,189,000 

1,086,000 

810,000 

707,000 


335, ?oo 
25s,  kio 

121,600 
79,500 


96,250 
96,250 
96,250 
96,250 


57,500 
57,500 
57,500 
57,500 


11,900 
11,100 
6,300 
7,000 


1,690,150 

1,509,250 

1,091,650 

91*6,250 


let  Quarter 
2nd    • 

}'^         '. 
4th    " 

1932 

1st  Quarter 


1933 

let  Quarter 


19?!* 

1st  Quarte 
2nd    " 
3rd    > 
ftth    ■ 


661*,  000 
646,000 
476,000 
459 , 000 


408,000 
1*25,000 
289 , 000 
273,000 


279,000 
488,000 
749,000 
574,000 


566,000 
603,000 
458,000 
323,000 


11*4,800 
62,200 
51,500 


59,250 
59,250 
59,250 
59,250 


134,100 
52,000 
19,500 

24,400 

32,500 
32.500 
32,500 
32,500 

240,000 

l4o,ooo 

46,000 
^6,500 
71,800 
85,700 

35,000 
35,000 
35,000 
35 , 000 

281,075 

144,676 

112,420 
80,326 
46,076 
1*2,253 

56,000 
54,223 
18,160 
16,293 

37,000 
37,000 
37,000 
37,000 


21,000 

21 , 000 
21,000 

21,000 


27,600 

27,600 
27,000 

27,600 
150,752 

48,352 
1*6,500 
31,600 
24,300 


4,500 
7,100 
5,000 
6,600 


2,700 
2,800 
1,600 
2,100 


2,900 
3,500 
6,300 
9,300 


4,624 
4,154 
3,329 


970, 250 
894,150 
639,450 
613,350 


598,300 
533,300 
363,600 
353,000 


390,500 
590,600 
889,100 
731,600 

2,543,465 

7«7,627 
788,673 
557,990 
409,175 


Source:      Lumber  Code  Authority  Docket  #5.    2nd  Quarte 


»8ia 


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€         S5   8    3 


;*       OS     W 


S    8 


2    2^3         $   5    S 
^    ^   5    ^         5    o     M 


3  P; 


s  S  IS       ;^ 


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9813 


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a 


Table   XXIX 
Wastom  PljM  Oosti 


First 
Quarter 

'If 

Year 

Tear 

w 

Tear 

Tear 

Tear 

Tear 

Logging 

%  6.93 

%  7.53 

%  7.53 

*  9.17 

$9.73 

110.28 

$10.02 

Samnlll  and  yard 

^.11 

4,54 

4.40 

Pond  to  trimmer 

1.77 

2.27 

2.41 

2.41 

Chain  to  pile   inclusive 

l.5»^ 

1.40 

1.72 

1.63 

Overhead 

KIO 

•^.35 

2.44 

1.53 

3.46 

1.91 

1.77 

Depreciation  (Sawmill,   eto.) 

.g? 

.&6 

.55 

0 

56 

53 

Cost   In  pile 

-     16.40 

17.24 

14.14 

14.92 

17.59 

16.94 

16.37 

Pile   to  planer  inclusive 

1.27 

1.67 

1.40 

2.03 

3.01 

1.97 

1.67 

Shipping  ejqjense 

1.5"^ 

1.56 

1.20 

1.23 

1.40 

1.45 

Depreciation  (Planing  mill, etc. 

.27 

.36 

.25 

.32 

.29 

Selling  expense 

2.12 

2.64 

1.55 

1.39 

5/ 

1.32 

1.19 

Cost  in  car 

■    21.33 

23.33 

IS.  65 

19.82 

20.60 

21.94 

20.96 

Stumpage   (Lumber  tally  basis) 

2.11 

2,86 

2.89 

2.17 

2.47 

2.42 

2.46 

Operating  costs  and  stunipage 

23.m 

26.24 

21.54 

21.99 

23.07 

24.36 

23.42 

Other  costs 

.00 

.00 

.30 

.77 

.00 

.87 

1.05 

Total  -  All  coBta 

23.44 

26.24 

21.84 

22.76 

23.07 

5/ 

25.23 

24.47 

I 


Industry  questionnaires. 

Western  Pine  association. 

U.S.  Tariff  Commission. 

Western  Pine  Manufacturer's  Association. 

Without  selling  and  interest. 


Sources:   Indicated  by  column  references 
Compiled  by:   D.  N.  Burnham,  C.P.A. 

Division  of  Review.NRA. 


o 
o 


o 


304 

liBLE  X7X 

LDUBEBt   Costs  and  Bealization* 

BASIS t   Ihaosand  Feet  Board  Measure 


Heported 
Costs 

Industry  Data 
Under  Code 
Jany-Feby-Mch . 
I93I; 

United 
States 
Ikriff 

COIB* 

Beported 
fiaalization 

mission 

Costs 

1929 

Southern  Piziei 

Large  lails 

$21^.53 

♦  26.63 

»(1) 

Small  ULlls 

20.1i2 

22.21^ 

(1) 

All  Hills 

2h.0h 

26.07 

28.25 

Southeim  Eardvoodt 

28.58 

32.33 

(1) 

J^palachian  Hardirood 

32.68 

35.i<2 

(1) 

Western  Pine 
"(Ponderosa) 

2i^.08 

23,18 

23.07 

West  Coast t 

22.96 

Douglas  Fir  and  Hemlock  - 

Large  lails 

I8.5I 

17.91 

(1) 

Small  laUs 

12.31 

li^66 

(1) 

Sitka  Spmoe 

22.83 

22.19 

(1) 

(1)  Hot  separately  tabulated  by  United  States  Tariff  Conmission. 


98ia 


Con^>iled  Byt  D.  N.  Bumham,    C.P.A. 

Review  Division,  H.R.A. 
Sources t  Industry  Data  from 

Industry  Questionnaires 
Tariff  Commission  Data 
from  Report  to  the 
President  on  Lamber  Re- 
port No. 32,  Second  Series. 
Page  22. 


302 


is 


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5. 

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6 

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305 


SECT .    II   CHAPTER  2  TABW  HXn 

LUMBER  AND   TIIIBKR  CORPORATIONS 

(FOREST   PRODUCTS    rNDU3TRIl:S) 

OONDENSEB  BALANCE  SHEET  AND  mOFIT  AKD  LOSS  DATA 

(000  omitted   In  all  dollar  amounte) 


BALANCE  SHEET  DATA 


ASSETS 

Caah 

Recelvablee 

Inventorlee 

Capital  AseetE  -  Lees  Depreo. 

and  Deple. 
SeourltlsB  -  Not  tax  exampt 

■           -  Tax  exempt 
Uleoellanaoue  ABsets 

A 

142,403 
609.463 
770.014 

1.853,88« 

73^071 
571,519 

B 
124,880 
558,985 
740,276 

1,766  315 

62,355 
540,893 

0 
138,678 
612,707 
707.050 

1,804,793 

,  57,519 
428,091 

D 

121,666 
620,034 
705.313 

1,723,264 
264,368 
54,054 
183,660 

E 

113,808 
490,624 
637,856 

1,677.301 
257.991 
42,156 
224,058 

T 
82,978 

241;^? 

1,511,880 
292,381 
38.403 
150,155 

0 

77.100 
1,448,283 

143,010 

68,823 
297.506 
356.613 

3*. 059 
156,379 

Total  AeeetB 

4,023.358 

692,017 
461,580 
159,972 

285,434 
1.377.612 
1,046,743 

3.793,704 

666,449 
322,649 
161,010 
209,910 
1,345,422 
1,088,264 

3,748,838 

650,411 
231,647 
212,191 
229,118 
1,340,409 
1,085,062 

3,672,359 

3.443,793 

2,892,578 

2,704,425 

2.548,733 

LIABIUTIES  CAPITAL 

NotcB   and  Accounte  Payable 

Other  LlabllltleB 

Bonded  Debt  and  Mortgagee 

Preferred  Stock 

Common  Stock 

SurplUB 

594,746 
231,049 
237.848 
217.177 
1.278,737 
1,112,802 

530,086 
203^7 
259.567 

1,266; 844 
968,218 

380,349 
181,010 
265,498 
197.869 
1,190,320 
677. o?2 

366,171 

177,804 
253,441 
1*3,035 
1,224,870 
499,104 

350.652 
168.590 
231.307 
175,894 
1,159,225 
463,065 

4,023,358        3,793,704        3,748,838        3,672,359        3,443,793         2,892,578         2,704,425         2.548,733 


mOTIT  AND  LOSS  DATA 


Oroes  SaleB                                                    2 

LeBB   Coet  of  Salee                                         2 

OroBB  Profit  from  Salee 

Other   Income 

Net  Profits 

CaBb  DlrtdendB  Paid 

Stock  Dividends   Paid 

Income  Tax  Paid 

,938,014 
,254,973 
683,041 
88,950 
116,810 
124,291 
15,072 
21,907 

2,694,795 
2,072,926 
621,869 
111,934 
43,379 
108,586 
9,672 
15,61' 

mniBER  OF 

2,730,761 
2,088,316 
642,445 
114,004 
81,958 
112.558 
11,643 
15,210 

CORPORATIONS 

2,684,104 
2,050,193 
633,911 
112,979 
78,018 
102,973 
12:418 
13.437 

REPORTIWl 

1,910,432 

68,962 
4,528 
3,591 

1,284,660 
1,076,945 

„     64,539 

^  177.752 

35.241 

1.678 

1.379 

793,996 

687,884 

106,112 

,,     61,623 

2/   202,266 

25,860 

411 

2,237 

922,936 
696,691 
226.245 
,/    64.071 
2/     66,069 
1».655 

Number  Reporting  Net  Income 

4,591 

4,178 

4,290 

4,195 

2.340 

1,525 

541 

1,«3« 

Number  Reporting  No  Net  Income 

3,271 

3.353 

3.367 

3.294 

4,868 

5.150 

5.929 

4,882 

Number  Reporting  Inactive 

y 

285 

290 

380 

293 

279 

237 

359 

Total  Number  Reporting 

7.862 

7.816 

7,947 

7.869 

7,501 

6.954 

6,707 

6,879 

Number  Reporting  with  Balance  Sheets 

7.244 

7.230 

7,190 

7,094 

6,824 

6.137 

6,147 

6,161 

1/     Not  eegregated  from  Ulscellaneous 
2/     Deficit  or  Net  Lobs. 
y     Not  tabulated. 

Assets  in 

this  year. 

Prepared  "by: 
Source : 

D.    N.   Bumham,    O.P.A. 
DlTlBion  of  Review,  WU. 
Statistics  of   Income, 
Bureau  of  Internal  Revenue 

306 


SECT.  II  CHAPTER  2  TABLE  HCT 

LUMBER  AND  TIKBER  COBPORATIONS 

(FOREST  PRODUCTS  INDUSTRIES) 

NUMBER  OF  CORPORATIONS  REPORTINO  PROFIT  AND  NO  PRCTIT 

IN  EACH  OF  TIC  CLASSIFIED  0R0UP3 


All  Corporatlor.a 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

Oorparstlone  With  Total  Aesete  Under  150,000 
Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

♦50,000  -  1100,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

1100,000  -  1250,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

$250,000  -  $500,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

$500,000  -  $1,000,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

$1,000,000  -  $5,000,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

$5,000,000  -  $10,000,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

$10,000,000  -  $50,000,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 

Over  $50,000,000 

Number  Reporting  Profit 
Number  Reporting  No  Profit 
Total  Number  Reporting 


1.35t 
6,177 


460 
1,572 
2,052 

262 

818 

1,080 


321 
1,078 
1,399 


126 
570 
696 


<35 


65 
332 
397 


520 

5.627 
6,147 


210 
2,157 
2,367 


102 
1,187 
1,289 


i 


1,584 
*,577 
6,161 


499 
1,995 
2,494 


1,2Z4 


365 


«7 
233 
320 


Prepared  by:  D.N.Bumham,  C.P.A. 

DlTlelon  of  Review,  SRA. 
Source:      Statletloe  of  Inooffle 

Bureau  of  Internal  Revenue . 


9813 


^ 


d 


307 


aEOT.    Ill   OHAPTIR  2  TABLI    COTI 
OORPORtTIOH  RITURNS 
OLASSIFUD  BY   MAJOR  INDUSTRJ  OR0UP3 
PEHCEUTAOI  OF  0ORP0RATIOII8  REPORTIIIO  PROriT 


1920 

1921 

1922 

1923 

192U 

1925 

1926 

1927 

1928 

1929 

1930 

1931 

1932 

All  OorporatloBi 

IgTloultun 

HZ 

36 

W 

HI 

46 

47 

44 

45 

44 

42 

32 

23 

11 

Uinta  i  ^uxTjiag 

UO 

25 

36 

28 

'  27 

29 

31 

28 

28 

29 

27 

22 

17 

Manufaotur  Ing- Total 

63 

H6 

59 

63 

59 

61 

59 

57 

57 

57 

1*3 

33 

16 

Food  Product! 

55 

52 

59 

62 

63 

63 

60 

59 

59 

60 

53 

44 

24 

Tobaooo       ■ 

1/ 

y 

1/ 

t9 

46 

1/ 

58 

59 

54 

56 

48 

41 

30 

Taxtllea 

55 

k9 

a 

65 

56 

61 

57 

59 

56 

55 

39 

33 

17 

LaatlMT 

57 

U5 

58 

57 

55 

58 

57 

57 

56 

54 

36 

33 

20 

Rubber 

112 

31 

M 

45 

51 

55 

50 

51 

48 

49 

37 

32 

18 

Foraet  Produota 

73 

W 

66 

71 

62 

61 

58 

53 

54 

53 

31 

22 

08 

Paper-Pulp 

«0 

W 

61 

68 

64 

66 

67 

67 

64 

66 

53 

40 

23 

Print  Inf^Publlahlng 

79 

64 

66 

67 

65 

66 

66 

63 

64 

63 

52 

39 

18 

Ohsmloali 

52 

US 

57 

55 

55 

57 

56 

55 

56 

51* 

45 

39 

23 

Stons,  Olay,  aiasa 

73 

5H 

63 

69 

63 

62 

60 

55 

55 

53 

38 

26 

10 

Ketal 

67 

35 

53 

63 

56 

59 

60 

56 

59 

61 

39 

24 

10 

Hot  Eleewhexe 

Olaaalfled 

60 

W 

55 

60 

58 

59 

53 

51 

50 

48 

37 

26 

13 

OonatTuotlon 

70 

58 

62 

65 

66 

63 

60 

57 

57 

52 

44 

33 

11 

Transportation  & 
Public  ntilltles 

63 

62 

67 

68 

65 

63 

62 

60 

59 

57 

51 

46 

28 

Tiada 

66 

19 

62 

68 

65 

66 

63 

61 

61 

59 

44 

31* 

15 

Profeealooal  -Ho tele 
AffluaementB 

ee 

56 

58 

62 

59 

57 

55 

53 

52 

51 

45 

37 

15 

Bazililng,    Ina.    Real 
Eataie  Stooka  It  Sonde   70 

65 

64 

65 

64 

63 

59 

57 

55 

53 

47 

39 

18 

1/     Kot  available  aa  aaparata  Item 

Prepared  by: 
Source : 

D.  'N.   Bumham,   O.P.A. 
Dlvleton  of  Review,   KRA. 
Statistic e  of  Income 
Bureau  of   Internal  Revenue. 

9813 


aow 


SECT.    Ill   CHAPTER  2   TABLE   XXCTII 
CORPORATE  RETURNS 
CLASSIFIED  BY  MAJOR  INDUSTRY  OROUPS 
OP  ASSET  VALUES   OF  CORPORATIONS  REPORTING  PROFITS 


*grloultur» 

71 

55 

68 

Ulnlng  A  Quarrying 

87 

W 

64 

Manufaoturlng- Total 

67 

63 

80 

rood 

61 

67 

77 

Tobaooo 

1/ 

i/ 

1/ 

TejtlloB 

69 

68 

84 

Laather 

5* 

58 

79 

Rubbar 

77 

18 

59 

Foreat 

89 

58 

84 

Paper-Pulp 

96 

56 

79 

Printing 

90 

82 

99 

ChemloalB 

82 

55 

87 

Stona  Clay 

9U 

77 

87 

liatal 

89 

62 

77 

Not  eleevhare 

83 

66 

82 

Clasalflai 
Conatruotlon 

»h 

72 

74 

Transportation 

85 

80 

83 

Trade 

75 

61* 

79 

flerrloa,  Profeealon- 
sl,  ABUseaents, 
Hotels 

85 

75 

76 

Finance 

80 

77 

80 

V    Hot  available 

as  eepi 

irate  Itea. 

71 

77 

77 

77 

54 

71 

59 

70 

75 

5'* 

85 

79 

85 

83 

66 

86 

67 

89 

71 

64 

97 

98 

98 

96 

93 

69 

81 

73 

72 

32 

74 

82 

77 

72 

53 

72 

72 

67 

64 

51 

76 

69 

72 

71 

36 

D.   N.    BumhaJn.    C.P.A. 
Division  of  Review  NRA 
Statistics   of  Income. 
Bureau  of   Internal  Revenue 


1932 
36 


9813 


309 


TABLI  XI3C7III 
JOHIST  PRODUCTS  COHPOBATIOHS 

nr  iicouE,  OB  loss,  cash  ditidskds 

IBS  FEDERAL  INCOME  TAXES  PAID 


(,000  oaltt«d  In  all  dollar  amounts) 


Tear 

Het  Income 

or 

Het  Loss 

Cash 
Dirldenda 

Federal 
Income  Taxes 

Het  Surplus 
Reduction 

1936 

$116,810 

$124,291 

$  21,907 

$  29,388 

1927 

43,379 

108.586 

15,612 

80,819 

1928 

ei,95S 

112,558 

15,210 

45,810 

1929 

78,018 

102,973 

13,437 

38,392 

1930 

1/  109,576 

68,962 

3,591 

182,129 

1931 

1/  177,752 

35.241 

1,379 

214. 372 

1932 

1/  202,266 

25,860 

2,237 

230,363 

1933 

1/  66,069 

14,655 

3,254 

83,978 

Totals 

for 
period 

l/$235,498 

$593,126 

$76,627 

$905, 251 

1/  Het  Loss 


Prepared  ty  D.  N.  Bumham,  C.P.A. 
Division  of  Review,  HRA 


Source:  Statistics  of  Income 

Bureau  of  Internal  Revenue 


9813 


Ifft 


"8 


niu 


K?R(!iRrRB«R»a 


at, 


SvJ ; ':  t!  I' E  vl.  i(^  Mt,  if;  vl  ?,if  i^Hfi(^3  is  ii'Ii  r ' ! 


■'fiKffSSiSo'fSS  SicS^  Sil^i 


!r>p 


8"     ' 

ft;  .- 

Is  « 

Co    "S 


j,;iWK,|i'''s^|jp>2i;;''""'ra^='^''''-^a^S!i;/.:.,:,. ' B^"' 


■"PS 2 IP   &      Co 


Hs     -v  »       *R!^!~gaK  si«g?    ^  ^  E«  "s^    esss 


Si 

51    a  ig 


gSc^^ 


i 


2    ^,M^ 


<1II 


li!2llil|lMlllplll!l|Pl 


\ii\ 


'F'l 


.a 


..I  r'^ 

la  ..s 

H  B  «  • 

« i3  -4  • 

as  p  6 

^  si  I 

h*  ?'  I 

r-  l«  ii 

^«  ".I  '". 


>     Xn 


f!.i 


y      t 


^  S  H  in      |t 


■r.r.      u 


UHl.'l 


2C 


5' 


31  i 


7,  ,  iR.K'Si.lCRgiSi  I |C3:^RS»S'.SR,«»i| KSffBtCf:,  ,  ,RW,!X 


|¥,r;KSi;,rHS.?,.!i-.;??,  ,3 , , ,  .Sp^ai 


S^^ 


SI! 


'j  i^'' 


an 


iiJl  - 


312 


DISTRIBUTION  OF  HAHDWOOD  UniBER 
FROII  mODUCINO  HBJI0N3  TO  CONSUUINO  RBttlOllS  ANB  STATES 
1934 
(U  rt.  Bd.  U.) 


ReSlon 

====== 

== 

== 

== 

from- 

State 

Appala- 

North 

North 

South- 

Appala- 

North 

North- 

North 

to: 

Southern 

chian 

Central 

Northern 

saetem 

Western 

Total 

chian 

Central 

1.49 

eaetem 

72-29 

Western 

l(onih  AtjlsnlUs 

10,259 

11.285 

1,154 

1,338 

65,146 

937 

90,119 

11.38 

12.52 

1.28 

1.04 

Ualna 

331 

239 

27 

343 

18,476 

427 

19,843 

1.67 

1.20 

.14 

1-73 

93-11 

2.15 

N««  HampsMr* 

221 

287 

171 

13,019 

13,698 

1.61 

2.10 

1.25 

95-04 

Tarmont 

110 

143 

- 

10,654 

_ 

10,907 
31,794 

1.01 

1.11 

_ 

97.68 

_ 

UaBeaohuettta 

7,170 

6.025 

859 

584 

17,051 

105 

22.55 

18.95 

2.70 

lT84 

53-63 
27-49 

"33 

Rhode  Iiloncl 

662 

1,100 

69 

694 

2,525 

26.22 

43.56 

2.73 

Oonneotlcut 

1.765 

3,491 

268 

171 

5,252 

4^5 

11,352 

15.55 

30.75 

2.36 

1.51 

46.26 

3.57 

ma-Atimtio 

190, gl« 

106,011 

7,570 

4,322 

108,326 

603 

417,680 

45.69 

25.38 

1.81 

1.04 

25.94 

-H 

H*w  Yort 

63,322 

45,284 

2,255 

1,543 

38,641 

352 

151,397 

41.83 

29.91 

1.49 

1.02 

25-52 
14.20 

•  23 

Hew  Jereej 

17,320 

8,129 

201 

69 

4,258 

29,977 

57-78 
39.49 

27.12 

.67 

-23 

Penni7lTanla 

76,339 

45,235 

4,510 

2,504 

64,714 

. 

193.302 

23.40 

2.33 

1.10 

33.48 

_ 

Delamre 

2,868 

430 

- 

. 

- 

_ 

3,298 

86.96 

13.04 

_ 

_ 

UuTland 

30,227 

6,503 

604 

137 

713 

251 

38,435 

78.64 

16.92 

1.57 

.36 

1.86 

.65 

Wetrlct  of 

Coluabla 

772 

430 

- 

69 

- 

- 

1.271 

60. 74 

33.83 

- 

5.43 

- 

- 

Southeastern 

411,0110 

220,197 

2,174 

823 

2,194 

56 

636,484 

64.58 

34. 60 

•  3'* 

.13 

.3* 

.01 

West  TlTRlnla 

2,648 

55,850 

67 

3^ 

1,669 

. 

60,268 

4.39 

92.67 

.11 

.06 

2-77 

Virginia 

71,044 

3,873 

103 

- 

- 

75,020 

94.70 

5. 16 

.14 

_ 

Horth  Carolina 

119,252 

2,821 

- 

69 

. 

_ 

122,142 

97.63 

2.31 

_ 

.06 

, 

_ 

South  Carolina 

5,516 

- 

- 

_ 

_ 

5,516 

100.00 

. 

_ 

_ 

Georgia 

12,907 
22,174 

48 

81 

274 

525 

- 

'^.:Ul 

93.29 

'36 

.58 

1.98 

3.79 

« 

norlda 

430 

- 

- 

- 

98.10 

1.90 

_ 

_       ; 

Alateiia 

20,409 

669 

- 

3t 

- 

. 

21,112 

96.67 

3.17 

_ 

.16 

- 

.        1,      ' 

klBeleelppl 

44,347 

48 

- 

- 

. 

44,395 

99.89 

.11 

. 

_ 

_         ' 

Tenneeeee 

93.327 
19,416 

107,39s 

13 

2M0 

. 

- 

200,978 

46.44 

53.44 

.01 

.11 

« 

» 

Kentucky 

49,060 

2,013 

69 

- 

56 

70,614 

27.50 

59.48 

2.85 

.10 

- 

-07 

Lake  States 

177,831 

125,759 

120,224 

331.798 

11,799 

1,484 

768,895 

23.13 

16.36 

15-64 

43-15 

1.53 

.19 

Ohio 

35,191 

70,292 

52,508 

5.830 

8.216 

45 

172,082 

20.45 

40.85 

30.51 
41.35 

3.39 

i».77 

.03 

Indiana 

36,405 

10,079 

37,703 

6,071 

900 

22 

91,190 

39.92 

11.06 

6.66 

-99 

.02 

IlllnolB 

60,895 
39,714 

23,526 
17,453 

20,295 

56.jt55 
144,497 

1,913 

714 

693 

163,777 

37.18 

14.36 

12.39 

34.47 

1.18 

.42 

Michigan 

8,040 

m 

210,793 

18.84 

8.28 

3. 81 

68.55 
92.49 

.3^ 

.18 

WlBOoneln 

2,75« 

2.391 

1.302 

«3.13« 

56 

89,889 

3.07 

2.66 

1.44 

.07 

•  27 

Ulnneeota 

2,868 

2.008 

376 

35.807 

105 

41,164 

6.97 

4.88 

.91 

86.99 

.25 

Hld-Ieatem 

70,603 

9.324 

2,846 

3,738 

113 

535 

87.159 

81.00 

10.70 

3-27 

4.29 

.13 

.61 

KlBoourl 

58.027 

8.6O7 

2,846 

1.748 

113 

41 

71,382 

81.29 

12.06 

3.99 

9!64 

.16 

.05 

Eaneas 

41744 

191 

- 

617 

296 

6.399 

82.75 

2.98 

- 

4.63 

Ioi<a 

526 

- 

892 

- 

116 

6.278 

75.57 

8.37 

- 

14.21 

- 

1.85 

Nebraska 

2.537 

- 

309 

- 

41 

2,887 

87.88 

- 

10.70 

- 

1.4a 

South  Dakota 

- 

— 

69 

- 

41 

110 

. 

_ 

- 

62.73 

- 

37.27 

North  Dakota 

- 

- 

- 

103 

- 

- 

103 

- 

- 

- 

100.00 

- 

Sjmthweetam 

228.356 

2,630 

- 

3"* 

- 

209 

231,229 

98.76 

1.14 

- 

.01 

- 

.09 

Arkaneae 

119,363 

1,769 

. 

. 

_ 

209 

121,341 

98.37 

1.46 

. 

_ 

. 

-17 

Loulalana 

59,571 
47,216 

765 

- 

- 

- 

- 

fl^^^ 

98.73 

1.27 

- 

- 

- 

Texas 

96 

- 

3"* 

. 

- 

99.73 

.20 

- 

■  07 

- 

- 

Oklahooa 

2,206 

- 

- 

- 

- 

2,206 

100.00 

- 

- 

- 

- 

Inter-Mountain 

1,655 

48 

- 

240 

- 

959 

2,902 

57.03 

1.65 

- 

8.27 

- 

33.05 

Montana 

. 

. 

. 

137 

. 

139 

276 

. 

. 

_ 

49.64 

. 

50.36 

Idaho 

- 

- 

- 

- 

112 

112 

. 

- 

. 

- 

- 

100.00 

doming 

221 

- 

- 

- 

- 

- 

221 

100.00 

- 

- 

- 

- 

-f 

Colorado 

772 

48 

- 

- 

- 

86 

906 

85.21 

5.30 

- 

- 

- 

9.41 

Utah 

331 

- 

- 

103 

- 

112 

546 

60.62 

- 

18.86 

- 

20.5? 

IferadB 

- 

. 

- 

510 

510 

- 

. 

- 

- 

- 

100.00 

Arltona 

331 

. 

> 

- 

- 

331 

100.00 

- 

- 

- 

- 

- 

Hew  Mexico 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Pacific  Coaat 

12,576 

2,917 

255 

686 

- 

32.698 

49,132 

25.60 

5.94 

.51 

1.40 

- 

60.55 

Washington 

883 

239 

. 

137 

. 

12,964 

14,223 

6.21 

1.68 

- 

.96 

. 

91.15 

Oregon 

221 

96 

. 

103 

. 

16,402 

'16,822 

1.11 
63.43 

.57 

- 

.61 

- 

V.-^2 

California 

11,472 

2,582 

255 

446 

- 

3,332 

18,087 

14.27 

1.41 

2.47 

- 

Grand  Total 

1,103,168^/ 

478,171^/ 

134, 223^^ 

342, 979^/ 

I87,578i/ 

37,48li^ 

2,283.600^ 

48.31 

20.94 

5.88 

15.02 

8.21 

1.64 

Luaber  Code  Authority  Docket  #5,  Snd.  quarter,  1935- 

"Lumber  Dletrlbutlon  and  Coneufflption, "  Department  of  Agrioulture,  Forest  Service         193'^.  (Alto  work  sheets  of  similar  data  fo 

the  years  192S  and  1934.) 
■World  Lumber  Press  Information,"  Department  of  Commerce,  Torelgn  and  Domestic  Commerce,  Issue  #7.  February  10,  1935.  P*  3- 

region  of  origin  and  the  total  of  each  of  origin 
Forest  Servloe  data. 

L.  C.  A.  hardwood  shipments  less  hardwood  exports. 


9813 


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TABLE  XLV 
Softwood  Exports:  United  States  Share  of  World  Market 


1 

I 

i 


Year 

United  States 

Per  Cent 
of 
Total 

All  other 
Countries 

Per  Cent 
of 
Total 

World  Total 

Per  Cent 
of 
Total 

(M  ft.  b.  ra.) 

1929 

3,213,325 

20.7 

12,285,805 

79.3 

15,499,130 

100 

1930 

2,268,655 

19.9 

11,398,150 

80.1 

13,667,005 

100 

1931 

1,664,778 

15.6 

8,998,078 

84.4 

10,662,856 

100 

1932 

1,066,100 

10.8 

8,801,326 

89.2 

9,867,426 

100 

1933 

1,197,152 

10.8 

9,880,130 

89.2 

11,077,282 

100 

1934 

1,386,498 

12.3 

9,863,893 

87,7 

11,250,391 

100 

Source:  Pacific  Lumber  Inspection  Bureau,  Seattle  Washington. 
See  Table  -  World  Imports  and  E3q)ort8 


•l 


9813 


31V. 


TABl£  NO.  XLVI 


DlvlHlon  -   Stst 


Alabimo 

Callfnrnla  (North) 
North  Carolina 
South  Carolina 

TotPl  for  DlvlFl:^ 


■; 

-  Georgia 

6 

-  Illlnole 

7 

-  Indlcna 

s 

-  Kentucky 

9 

-  Loulelena 

10 

-  Michigan  -  South 

11 

-  Delawfire 

District  of  ColumblH 

Uaryland 

New  Jersey  -  South 

Pennsylvania  -  East 

Total  for  DlvlBlon 

l^ 

-  MlBBlBSlppl 

13 

-  Colorado 

Now  Mexico 

Wyoming 

Total  for  Dinelon 

It 

-  Nebraslra 

15 

-  New  Jereey  -  North 

16 

-  New  York  City 

17 

-  Connecticut 

Maine 

Maesachupette 

New  Hamoshlre 

New  York  {excl.  NYC) 

PennBylvanla  -  McKean  Cty. 

Rhode  lEl-'nd 

Vermont 

Total  for  Division 

>lg 

"  MlnneBota 

North  Dakota 

South  Dakota 

Iowa 

Total  for  Division 

19 

-  Ohio 

20 

-  Pennsylvania  -  West 

SI 

-  Arkansas 

Missouri 

Kansas 

Oklahoma 

Total  for  Division 

S2 

-  TennSFsee 

?1 

-  Texas 

?k 

-  Utah 

25 

-  Virginia 

26 

-  Idnho 

f-iontana 
N<>vHda 

Oregon 

Washington 

Total  for  Division 

27 

-  Wept  Virginia 

28 

-  Michigan  -  North 

Wisconsin 

Total  'or  Division 

29 

-  Illlnole  -  Cook  Cty. 

10 

-  :JleB0url  -  St.  Louis  Cty. 

'^l 

-  Arizona 

^2 

-  California  -  South 

TOTAL 

Percentage 

Nunber 

of 

of 

Dealers 

Reporting 

Known  Dealers 

Reporting 

to  Known 

652 

11 

5-67 

633 

7.11 

197 

~ 

- 

362 

- 

- 

559 

3 

0.005 

296 

11 

31.42 

372 

3-76 

1,011* 

119 

11.74 

614 

'1^ 

28.66 

323 

12. 3« 

235 

24 

10.21 

726 

120 

16-53 

39 

5 

12.82 

19 

1 

5.26 

13« 

28 

20.29 

105 

21 

20.00 

689 

ll« 

17.13 

990 

173 

17.47 

147 

g 

5.44 

312 

96 

30.77 

115 

IS 

15.65 

90 

17 

18.89 

517 

131 

25.34 

m 

12« 

40 

'VM 

453 

^ 

8.61 

176 

22.73 

167 

11 

6.59 

723 

58 

17.96 

67 
61 

1,979 
401 

III 
626 

1,327 

914 
497 
254 
775 
924 
726 

2,679 

398 
2,076 

115 
1,091 

229 

309 
35 

582 

l,5?o 


23.531 


7 

121 

5 

7 

5 

254 
53 


173 

127 
174 


253 

257 

32 
21 
62 

154 

3,554 


11.29 
11.06 
17.24 
10.45 
8.20 

12.83 
13.22 


23.29 

26.37 
19.32 
3.15 
22.32 
13.74 
23-97 

17.99 

6.53 
10.93 
10.43 
3-76 
3. 06 
16-18 
8-57 
4-53 
10-14 

8.89 

9.15 
6.67 

27-80 


16.84 
20-00 
69-66 
26.?? 

15.10 


In  Division  #18,    North  Dakota,    the  nuTiher  of  known  dealers   reporting  1 
Thlp  high  percentage   of  return  for  this    state   may   be   attributed   to  the 
Lumbci    Coi^pany  at  Mlnot,    covering  R"?  yards,    throughout  the    state.      It 
company   was   recorded  fs   only   one   til    known  dealer  by   tha  Code  Authority   whe 
5}    separate  reports.      Counting  this   company's  report 
would  be  reduced  to  26  or  17-61  per  cent- 


wn  as  80  or  TO. 31  per  cent. 
rt   submitted   by   the  Midwest 
ry   probable    tr.at   this   lumber 
have   Included  It  as 
only  1  report,    the  number  reporting  In  N.   D. 


0813 


id.t^ 


,5  i 


S    "3° 


J  to    . 

I 


I"!    ^ 


318 

WJ*c^o^-+^Ol*^or^r^^-lr^^o«)wo^r^Olpc^lJ^^-^ocycuc>Jl^HK^cyr^^  5 

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r^^^OK^5(\Jlr^c^J(H      r-<f^OwvDir.KNr»-^h-«ojiHKNrHO      ir»w)r^j*      r^w  ^o 

Rr?,   sl?,?ii?,  S^CS-*!^.  S<Sf;S.SSS?.g.SK?.l?;^S!i5'§S!S,S!  3 

K  ^"  K  5  i"  I   *:  S"   fi   S   ?   si  S   I    §■   g"  ^  ^  f  S   g   ^  J   g'   5   g"  &   g  i  S    K  «  I 

ri     J      |i-     "v     o      K     to     5      o      K      e      S      IIN     cvJ_     »      T~-     «      w      1^     J_     ■<>     «      i^     ■*      ~      >".     1^     'O.     "^     ~  "» 
F-    J      o      Oi     r--     1^    ni      o_     li-.     os_     »     J-      a      w_     -o_    »      cu      o_     lI^     o_     1I^     ir\     ■©_     r~     rt     w_     o,      w      r^     o.     'o      o_         o>_ 


I      5 

H  § 


9813 


§-•"       >.  s  i  t      ges.      SessI      si 


«    E 


c  s  ^ 


i  ^  I 


S    ^ 


e  I  ?  5 


i    H 


£  h 


lalllisllllllllllliiesH 


TABLE  HO.  XLVIII 

RETAIL  LUMBER  DEALERS 

RECAPITULATION 

EXPENSES  TO  NET  SALES  DOLLAR 

YEAR  19Tt 

KNOWN  DEALERS  2?  531    -  '  DEALERS  REPORTING  3,551 


(see  Exhibit 


Percentage 

of  Each  to  Net 

Bale. 

™ 

Handling 

Selling 

Interest 

Total 

Sales 

OroBs 

Rework 

Delivery 

Admin. 

Bad  Debts 

Mad, 
Expense 

Profit 

000  Omitted 

Profit 

Mill  Exp. 

Expense 

Expense 

Expense 

Loss  - 

Industry 

I  166,763 

27-71* 

.75 

7-12 

17.08 

3-27 

28.22 

.4*. 

DlTlelon  -  State 

1  -  Alabama 

1,1*09 

35-01 

3.86 

8-04 

17-17 

3.20 

32-27 

2.84 

2  -  No.  Ca  If. 

2,1*26 

27.43 

1.03 

7-11 

14.78 

3-18 

26.10 

1-3? 

3  -  Carol  Inas 

4  -  Florida 

107 

37-58 

5-90 

7-82 

20.52 

1.18 

35  •'*2 

2.16 

6,06a 

29-36 

1-08 

6-77 

14.58 

3-17 

25. 60 

3.76 

5  -  Georgia 

1,786 

28.31 
27-46 

2-24 

7-52 

13.82 

1-93 

25.51 
27.41 

2.80 

6  -  Illinois 

3,872 

-12 

7-18 

16.89 

3-22 

.05 

7  -  Indiana 

6,307 

27-78 

-53 

6.66 

17.63 

3.36 

28.18 

.40- 

S  ~   KenUioky 

1,81*3 

31.08 

-75 

6.99 

19-48 

3.15 

30-37 

-71 

9  -  Loulolana 

1,630 

27-18 

.11 

7.17 

16-73 

1.55 

25-56 

1-62 

10  -  So.  Mloh. 

6,099 

27-99 

-69 

7-97 

16. 50 

3-18 

28-34 

•35- 

11  -  Total 

12,883 

28-04 

-63 

8-44 

16.80 

3.58 

29.45 

1-41- 

Delaware 

5IW 

28-87 

_ 

7-27 

14.98 

1-24 

23-1*9 

5-38 

D.  of  0. 

1*1 

21-33 

- 

5-40 

8.62 

1.28 

15-30 

6.03  • 

Maryland 

1,827 

27-66 

-91 

6.95 

15.83 

2.88 

26-57 

1.09 

So.  N.  J. 

1,283 

28.01 

.84 

8.49 

22.05 
16.54 

10.31 

41.69 

13-68- 

East  Penna. 

9,030 

28.22 

.60 

8.87 

2.95 

28.96 

-7lt- 

12  -  MlsBlselppl 

551 

30.7s 

.05 

7-1*3 

21.25 

5-03 

33-76 

2-98- 

13  -  Total 

5,073 

25-87 

.10 

5-35 

16.29 

2-70 

24.44 

1.43 

Colorado 

3,'t36 

24.67 

.12 

5-81 
4.02 

15-82 

2.27 

24.02 

.65 

Ne»  Mexico 

82* 

25.96 

.12 

16-01 

2.58 

22.73 

3-23 

Wyoming 

30. 81 

- 

4.74 

18-51 

4.61 

27.86 
24.16 

2-95 

lit  -  Nebraska 

3,785 

23.28 

.21 

5-98 

15-99 

2.18 

.as- 

15  -  No.  N.  J. 

1,111 

32-41* 

-39 

9-95 

21.23 

3-64 

35-21 

■  ?:2t 

16  -  N.  Y.  City 

3,9X5 

31.64 

-65 

11-13 

19.00 

2-70 

33-48 

17  -  Total 

23,173 

29.21 

-98 

8.60 

17. 51* 

3-71 

30-83 

1-62- 

Conn. 

1*,9S6 

29.40 

-05 

l:% 

15.85 

4.3« 

29-25 

-15 

Maine 

661 

30.26 

2-51 

16.16 

2.67 

26-98 

3-28 

Maes. 

'•m 

29.21 

1-21 

9.75 

10.14 

17-51 

i4.si 

3. 16 

31.63 

2.42- 

N.  H. 

32.70 
28.46 

5-21 

3.42 

33-58 

.88- 

N.  Y.  State 

9.350 

.88 

7-83 

18.04 

3.46 
4.67 

30.21 

1.75- 

Pa.  3  C'tles. 

884 

3"*.  59 
31.49 

8. 63 

5-97 

10.00 

30.27 

43. oe 

4.32 

R.  I. 

.65 

9-84 

24.30 

8.29 

11.59- 

Vermont 

354 

31.62 

1.67 

4.88 

21.31 

.98 

28.84 

2-78 

18  -  Total 

«.657 

24.27 

- 

6.01 

14.24 

2.02 

22.27 

2-00 

Iowa 

3,690 

24.10 

_ 

7.40 

11.85 

1.93 

21.18 

2.92 

Minn. 

2,5''8 

24.87 

_  ' 

6.86 

13.50 

':% 

23-03 

1.84 

North  Dak. 

1,^^82 

25.06 

_ 

1.-?2 

18.29 

22-55 

2-51 

So.  Dak. 

1,01*8 

22.37 

_ 

2.59 

19.09 

2.23 

23-91 

1-5*- 

19  -  Ohio 

10,590 

30.66 

1.06 

7.68 

18.65 

3.90 

31-29 

.63- 

20  -  Penna.  Weet. 

4,269 

29.62 

.96 

7-57 

19.32 

4.08 

31-93 

2.31- 

21  -  Total 

13,575 

25-89 

.12 

4.13 

17.39 

2.89 

24.53 

1.45 

Arkansas 

167 

i,oi4 

28-02 

_ 

8.63 

14.44 

^.53 

27.60 

.42 

Kaneae 

27-39 

.01 

3-99 
4.95 

18.79 

3.20 

25.99 
24.45 

1.40 

Missouri 

5,040 

25-64 

-32 

16.92 

2.26 

1.19 

Oklahoma 

5,351* 

25-23 

_ 

3-31 

17-13 

3.27 

23.71 

1.52 

22  -  Tennessee 

1.276 

30.45 

-89 

6.20 

20.20 

30.52 

.07- 

23  -  Texas 

24  -  Utah 

6,914 

27.59 
24.52 

.18 

2.28 

19.75 

^94 

25.60 

1.99 

551 

.42 

5.87 

13-79 

25-02 

.50- 

25  -  Virginia 

3,293 

27.25 

2.16 

7-05 

15-22 

2:75 

27-18 

.07 

26  -  Total 

5,007 

29.81 

-38 

7-48 

16.36 

'*.33 

28-55 

1.26 

Idaho 

281 

27.06 

4.63 

l-?.45 

9.95 

28-03 

.97- 

Montana 

2,079 

29.32 

•  30 

6-57 

15.26 

4.90 

27.03 
28.74 

2.29 

Nevada 

96 

27.04 

5-30 

21.05 

2.39 

1.70- 

Oregon 

633 

32.15 

-02 

6-34 

■im 

2.53 

29.22 

2.83 

Washington 

1,917 

30.10 

.64 

9-38 

Ul 

30.03 

.07 

27  -  West  Va. 

1,001 

27. 61 

-76 

6-75 

14.99 

27. 06 

.55 

2S  -  Total 

9,142 

24.56 

-21 

6-6S 

14.29 

3.03 

24.21 

.35 

Mloh.  No.  Pen. 

211 

26.16 

- 

8.09 

12.18 

2.11 

22.3s 

3.78 

WlBooneln 

8,932 

24.52 

-22 

5.65 

14.34 
20.49 

3.p5» 

24.26 

.26 

29  -  Chicago  Area 

3,510 

29.65 

.24 

8. 17 

3-46 

32.36 

2.71- 

30  -  St.  Louis  County 

1,855 

31-07 

1.84 

9-52 

21.50 

2-08 

14.94 

3.87- 

31  -  Arizona 

2,536 
10,548 

27-97 

.01 

7-7'^ 

17.31 

3-I3 

28.19 

.22- 

32  -  So.  Calif. 

23-19 

2-39 

7-67 

16.33 

3.S6 

29.95 

6.76- 

Complied   By: 
Source : 


Industry  ^Mstloimalrei . 


Sslrr 

_ 

Volume 

Grose 

000  Omltts't 

Pront 

Industry 

»  166. 763 

38.39 

ClTle 

ion  -  Stnte 

1 

-  Alabama 

1.U09 

53.87 

2 

-  No.   Calif 

2,1*26 

^7-80 

I 

-   C[,rollna8 

107 

60.21 

-  Floriao 

6,068 

41.  "^6 

5 

-  Georglp 

1,786 

39.49 

« 

-  IllinolB 

3,«7i 

37.86 

7 

-  Indiana 

6,307 

^8.47 

e 

-  Kentuclty 

l,tU2 

45.il 

9 

-  Loulelana 

1,6-C 

37-32 

10 

-  So.  Mloh. 

6,099 

38.87 

11 

-  Total 

12,8b2 

38.97 

PelttFftrB 

5W 

40.58 

Diet,   of   '51. 

193 

27.12 

Maryland 

1,827 

38.23 

So.  N.  J. 

1,282 

38.91 

E.  P«nna. 

9,030 

m\ 

1? 

-  Mlap. 

551 

1} 

-  Tots] 

5,0,2 

34.90 

Colo. 

3,1(35 

32.71* 

N.   lls.x. 
Wyo. 

813 

823 

3,7S4 

35.05 
44.54 

11* 

-  Neb. 

30.35 

15 

-  No.   tl.    J. 

3,111 

48.01 

16 

-  N.   1.    Clt.v 

3,914 

46.29 

17 

-   Total 

23,173 

41.25 

Conn. 

i*,9S>; 

41.64 

Malnp 

661 

43.40 

Wans. 

<    349 

U05 

4i.26 

:i.  H. 

48.59 

N.   Y.    State 

9,3'*9 

39.78 

Penna.   Part 

183 

52.88 

R.   I. 

SS3 

1*5.97 

Vermont 

353 

46.  ?4 

18 

-   Total 

8,657 

32.05 

Iowa 

3.689 

31.75 

Minn. 

2.538 

33-11 

No.  DaK. 

i;38l 

33.  i*? 

So.    Dak. 

1,01*7 

28.  SI 

19 

-  Ohio 

10,590 

44.21 

20 

-  W.  Penna. 

4,26s 

42.08 

21 

-   Total 

13.574 

34.94 

Ark. 

167 

38.92 

Kane. 

3.013 

33.74 
43.78 

Mo. 

5,03? 

Okla. 

5.354 

22 

-  Tenn. 

1.275 
6,914 

12 

-  Texae 

38.10 

-  Utah 

551 

■^2.48 

25 

-  Va. 

3,29? 

37.46 

26 

-  Total 

5,006 

42.46 

Idaho 

280 

37.10 
41.48 

Mont. 

2,078 

Nevada 

96 

37.03 

Oregon 

633 

47.38 

fash. 

1,917 

43. 06 

27 

-  W.   Va. 

1,001 

38.14 

28 

"  Total 

9,142 

32.56 
35-43 

Ho.  Mich. 

210 

.03 


13.41 
1.05  9.33 

.28  8.86 

10.95 

»180.  8,931  32.49  .29  8. 81 

29  -  Cook  Oty,  111.  3,509       42.15         -35  11-61 

30  -  3t.  Louie.  Oty.  1,855       45.07        2.66  ?  .81 

31  -  Arliona  2,535       38.84         .01  lj.75 

32  -  So.  Calif.  10,547        30.20        3.12  9.98 


TABLE  ;.c;  XIIX 

RETAIL  LUUBF.H  3EAU:P.S 

RECAPITULATION 

UODAL  COST  DETAILS 

YFAR  19'4 

KrOWN  CEALWS  P^.^i^l  -  DEAL^i-S  PCPCBTIKO  3,';=4 

(Sp"  Table   No.      1 

„._Pw*'.-pnta£_e  of  Each  to  Total  Coat  of  Goofle  Sold 

Ttrnd'llng  SelTTne"*  Interest  Total " 

Re»ork  IcllTerj  Ad"lltj_  9.id  Debts  Made 

ViLl    Fxp.  Expense  Expense  rxrjir.pe  pypeVr' 


5.93  12.37 

1.41  l.go 

9.45  u,53 

1-53  9.59 

3.13  10.69 

.17  9.89 

.73  9.22 

1.09  10.14 

.15  9.84 

.96  11.06 

.88  11.72 

10.21 

6.87 

1.25  9.61 

1.16  11.79 

.84  12.35 

.08  10.73 

.14  7.22 

.16  7.72 

.16  5.43 
6.85 

.01  7. SO 

■  57  14.73 

.96  16.29 

1.18  12.15 

.67  12.71 

1.60  8-09 

1.71  13-78 

7.73  15.0S 

1.23  10.95 

13-19  9.12 

.95  14.37 

2.45  7.13 

7-53 

9-74 

9.14 

4.43 

3-33 

1.53  11-07 

1.36  10.76 

.16  5.58 

11.99 

.01  5.50 

.43  6.65 

4.42 

1.28  8.91 

.25  3-1" 

-55  7-78 

2.97  9.69 

.54  10.66 

6.35 

.44  9.29 


26.43 

4.92 

49.65 

4.22 

20.38 

4.38 

mi 

1.83 

32.87 

20.64 

1.89 

3-47 

4.49 

36.25 

5-31 

19.28 

2.69 

35-59 

3-90 

2'.  29 

4.43 

37-78 

.08 

24.42 
28.27 

4.65 
4.57 

39-02 
44.07 

i:Er 

22.97 

2.13 

35-09 

2-23 

22.93 

4.41 

39.36 

.49- 

23-35 

4.97 

40.92 

1-95- 

21.06 

1.75 

33-02 

7.56 

10.95 

1.63 

19-45 

7.67 

21.88 

3.98 

14.32 
4.11 

36-72 

1.51 

30.65 
23.04 

U:ll 

19.01- 
1.03- 

30.70 

7.27 

48.78 

4.32- 

21.97 

3.64 

32-97 

1-93 

20.99 

3.02 

31.89 

.85 

21.63 

3.48 

30.70 

i*-35 

26.75 
20.84 

6.66 

4o.26 

4.28 

2.84 

31.49 

1.14- 

31.42 

5.39 

52.11 
49.00 

4.10- 

27.80 

3-95 

2-71- 

24.78 

5.24 

43.55 

2.30- 

22.45 

6.20 

41.43 

.21 

23.18 

3.82 

38.69 

44.68 

4.71 

2''-73 

4.46 

3-42- 

22.01 

5. 08 

49.90 

l:^-- 

25.21 

6.84 

42.23 

16.82 

7.14 

46.27 

6.61 

35  •'*7 

12.09 

62.88 

16.91- 

31-17 

1.43 

42.18 

4.06 

18.80 

2.68 

29.41 

2.64 

15.62 

2.55 

27-91 

3.84 

17.96 

24.40 

3.55 

30.65 

2.46 

1.26 

30.09 

3-?4 

24.59 

2.SS 

30.80 

1  9P- 

26.89 

5.62 

li5.ll 

.90- 

27-45 

5. SO 

45 -37 

3.S5- 

23.46 

3-91 

33.11 

1.S3 

20.06 

6.29 

38.34 

•  58 

25-87 

4.41 

35-79 

1-95 

22.75 

3.04 

32-87 

1.60 

22.91 
29.04 

31.70 
43-87 

2.04 
.09- 

27.27 

4.69 

35-35 
33-14 

2.75 

18.27 

6.54 

.66- 

20.93 

3-78 

37-37 

.09 

23.11 

6.16 

40.67 

1-79 

18.44 

13.64 

38.43 

1-33- 

21.'=;9 

6.93 

38.25 

3-23 

P8.S4 

3-28 

39.39 
43-O6 

2-36- 

29.95 

3-74 

4.32 

23-52 

5.11 

42.96 

.10 

20.71 

6.30 

37.39 

-75 

18.94 

4.02 

32.10 

.46 

16.49 

2.86 

30.30 

'■'^ 

19.00 

4.05 

32.15 
46.01 

29.13 

4.92 

3.86- 

31.19 

3.02 

50.68 

5.«i- 

24.03 

■*•'? 

39.14 

.30- 

21.26 

L.61* 

39.00 

8.20- 

Coraplleri 

:-.:     D.  N. 

BurnhaA,   C.P.A. , 

DlTlBl 

on  of  Revleif,   NRA 

Source: 

Induet 

.ry  Questionnaires 

9813 


ss^ 


TABU  NO.   L 

RETAIL  LUMBER  DEALERS 

RECAPITULATIOH  FOR   IHDUSTRI 

OPERATIOK  RESULTS      ig'^'* 

KNOWN  DEALERS   23,531      -      DEALERS  REPORTING    3, 55** 

Percentage 


LuBbar,   bullfllng  Katerl&le 

Direct  eai^lot   aUpaente,    luaber,  and  bulldlnjt  materlBli 

Stook  alllvork 

Special  manufsutured  nillwork 

Builder*"'    euppllee   (aee   luaber  code,    aJ't,    II,    par.    1) 

Direct  oar-lot   ehlpaente  buildere'    euppllea 

Retail   atore   Itame  and  building  epeolaltlee 

Ooal  and  other  fuela 

Feed,    aeed, grain,    fertilizer 


Other  I tea a 


II: 


Total  aalea 

Dlioounts  and  allovanoee 

Net  sales  (12  alnua  1?) 


61.9lt 

1  103,S96,326 

3. 12 

5,206,990 
6,lt39.elll 

T.«6 

3-16 

li'jsi'.'in 

8.83 

1,816,769 

10,573.159 

7.96 

13,273,603 

1.73 

2,893.715 

3.13 

5,2114,99'' 

I.  COST  or  ooocs  sole 

15.  InT«ntory   -   Beginning  January   1,    193'*,    or  ei 

16.  Purohsse   of  all   Itooe  1   to  11 

17.  Ksnufaoturwl   apeolal  mllwork   ( Iteoi  01-11) 

18.  Iot»l  15-16-17 

19.  In»«ntor7  -  Cloelng  Dao.  31,  19W,  or  aarll. 

20.  Coat  of  gooai  aoia  (18  mnue  19) 

21.  Oroaa  profit  tltao  *-l'»  nlnua  B-20 

22.  Total  saw  ana  planing  mill  azpanae  (02) 

23.  Total  handling  and  dallvory  oxpenee  (D) 

24.  Total  BfllliDg-adminiatratiTa  expenaa  (E) 

25.  Total  other  deductions  (D 

26.  Total  mode  expense  (22  to  25) 

27.  Depreciation 


Total  (26  to  29) 

31.  Het  profit  (21  le«>  30) 

32.  Other  incase 

33.  Interest  and  discount  earned,  lost  aoci 
jJ*.  Net  profit  for  period  per  the  books 

01.  KU,  TOR  iiANurACTura;  of  spkciai.  yiLLwom 


Superintendent  and  forenan  wages 
mil  labor  -  dirsct  and  indirect 
Supplies 


36. 

38.  Maintenance  and  repairs  -  mill  only 

39.  Hsat,  lights  and  power  -  mill  only 

40.  Kill  expense,  other  -  not  including  ta 

depreciation,  and  rent 
In.   Total  Bill  costs  (include  as  B-I7) 

02.  SAW  A1II>  PLAinro  MILL  (incidental  remaiiufa 


■2.  Labor 

.3.  Supplies  and   incidental  expense 

4.  Total   saw  and  planing  ffllll   expensi 

hanhlins  uid  celivxhi  expensi: 

^.  Tard  labor 

•6.  Tard  maintenance  and  repairs 

.7.  Yard  supplies 

k8 .  Denurrage 

i9.  Truck  labor 

iO.  Truck  and  garage  maintenance  and  : 

il.  Truck  gas  and   oil 

)2.  Hired  trucks 

13.  StSble  labor 

A.  stable-wagon  mai 
Feed  and   supplis 


(transfsr  total 


''.97 
1.97 
2.26 


56.  Other  items  ( specify)  .69 

57. 

58.  Total  handling  and  asliirery  expenss  (transfsr  total  to  lins  23)  23.32 


SnjJNO  AND  ADIONISTRATIVE  EXPENSE 

'9.  Salssmsn's  salaries,  commission, 

0.  AdTertising 

11.  Officers'  or  partners'  salaries 

>2.  Office  wages 

•3.  Postage,  stationery,  and  euppliei 

A.  Telegraph  and  tslsphons 


yard  and  office) 


Heat,  light  and  water  (f 

66.  Accounting  fees 

67.  Legal  fees 

68.  Dues  and  eubecrlptlona 

69.  Collsction  expense 

70.  Donations 

71.  Travel  and  promotion  other  than  E-59 

72.  Office  maintenance  and  repairs 

73.  Payments  to  Cods  Authority 

74.  Insurance  (all  kinds  except  life) 

75.  Taxes  (except  Federal  income  tax) 

76.  Rent 

77.  Other  (specify) 
7«. 

79.  Total  (transfsr  to  lins  2t) 


7.33 
1.70 
15.13 
10.90 


3.15 

5.52 

2.55 

1.91 


t  62,075,916 
111,792,607 
3. 190. 861 
180,059,387 
59. 5^15. 677 
120,503,710 
16.260.062 

1,217.317 
11,873,811 
28,190,608 

5.151.156 
17,065,952 

3,001,339 

219,361 

622.262 

50,908,911 

1,618,852- 


5,895,273 
■180 ,  167 
118,080 

2,532,595 

1,002,582 

1,150,972 

358,652 

85 ,  201 


3,731.810 

861,838 

7,701,276 

5,517,637 

717,613 

722,051 

163,153 

111,265 

251,562 

287,736 

161,928 

99,117 

287,081 

193,160 

157,553 

1.775,039 

2,808,969 

1,398,309 

971.176 


3.1»0.<g1' 


38.39 

I.OI 
23!  61 

39 !« 


r.      OTHER  DEDUCTIONS 

80.  Interest  paid   (not 

81.  Bad  debts 

82.  Total  other  deduct 


Compiled  By: 


Industry  Qusstlonnalr 


9613 


322 


TABLE  LI 
Lumber  Cost  at  Chicago,  lillnois 
Code  Period  January  to  March,  1934 


Douglas  Southern  Western  Oak 


Pir 


Shipping  Weight  per  U  Ft. 

Freight  rate  per  100  pounds 

Costs  per  U.  B.  li, 

Stuiopage 

Logging  and  Uilling 
Labor 
Other  Costs 

Shipping  £uid  Selling 
Lahor 
Other  Costs 

Overhead  and  Administrative 

Officers  and  Owners  Peor 

Other  Costs 

Total  Mill  Costs   1/ 

Freight 

Cost  to  Betaller 

Retail  Costs   2/ 


2,800# 
$  .72 


Labor 

Officers  4  Owners  Pay 

Other  Costs 


6.89 
2.71 
8.13 


Total  Cost  to  Consumer 


Stumpage 

Logging  and  Milling 

Selling  and  Administrative 

Preigli* 

Retailers  Costs 

Cost  to  Constmer 


$56.69 

HECAPITULAIION 

2.42 

11.69 

4.69 

30.16 

17.73 


Pine 


3,000# 
$  .38 


Pine 
2,300# 
$  .51 


4,300# 
$  .295 


$  2.42     $  4.31    $  2.11  $  6.31 


5.11 
6.58 

7.58 
6.13 

6.35 
7.77 

9.27 
6.91 

1.06 
1.21 

1.61 
1.07 

1.90 
1.95 

2.35 
1.53 

.62 
1.80 

1.05 
3.50 

.76) 
) 

2.60) 

4.11 

$18.80 

$25.25 

$23.44 

$30.48 

20.16 

11.40 

11.73 

12,75 

$38.96     $36.65    $35.17  $43.23 


6.43  6.22 
2.55  2.44 
7.65      7.34 


7.64 
3.01 
9.03 


$53.33    $51.17  $62.91 


4.31 
13.71 

7.23 
11.40 
16.68 


2.11 
14.12 

7.21 
11.73 
16.00 


6.31 
16.  IS 

7.99 
12.75 
19.68 


$56.69     $53,33    $51.17  $62.91 


1/  Total  mill  costs  derived  from  Industry  cost  questionnaires. 
981.3  2/  Retail  costs  derived  from  Industry  cost  questionnaires 


323 


TiBLI  LI I 

Lumber  Cost  at  Haw  Tork,  New  York 
Code  Period  January  to  Uarch  1934 


Douglas 

Douglas 

Southern 

Western 

Fir 

Fir 

Pine 

Pine 

3,100# 

Shipping  Weight  per  U  Jt. 

2,800# 

3,000f 

2,300# 

Freight  Bate  per  100  pounds 

$  .87 

$  .37 

$  .73 

post,  oer  U.  B.  M. 

Stunpage 

$  2.42 

2.42 

4.31 

2.11 

Logging  and  Milling 
Labor 

5.11 

5.11 

7.58 

6.35 

Other  Costs 

6.58 

6.58 

6.13 

7.77 

Shipping  and  Selling 
Labor 

1.06 

1.06 

1.61 

1.90 

Other  Costs 

1.21 

1.21 

1.07 

1.95 

Oak 


6.31 


9.27 
6.91 


2.35 
1.53 


Orerhead  and  Administrative 

Officers  and  Owners  Pay 
Other  Costs 

Total  Mill  Cost  1/ 

Freight 

Cost  to  Retailer 


.62 
1.80 


.62 
1.80 


1.05 
3.50 


.76) 
2.60) 


$18.80  $18.80  $25.25 
10.20  24.36   11.10 


$23.44 
16.79 


4.11 


$30.48 
17.75 


$29.00  $43.16  $36.35   $40.23    $48.33 


Retail  Costs   2/ 

Labor 

Officers  &  Owners  Pay 

Other  Costs 
Total  Cost  to  Consumer 


6.51 

9.69 

18.16 

9.08 

10 

1.77 

2.64 

2.22 

2.46 

2 

5.96 

8.88 

7.48 

8.28 

9 

$43.24  $64.37  $54.21   $60.00 


Stumpage 

Logging  and  Milling 

Selling  and  AdministratiTe 

Freight 

Retailers  Costs 

Cost  to  Consumer 

Water  Rate  83^1  of  $12.00f-25^ 


RECAPITULATION 

$  2.42  $ 

2.42  $  4, 

,31 

$  2. 

11 

$  6. 

31 

11.69 

11, 

,69 

13, 

.71 

14, 

,12 

16. 

,18 

4.69 

4. 

,69 

7, 

,23 

7, 

,21 

7. 

.99 

10.20 

24, 

.36 

11. 

.10 

16, 

,79 

17, 

.75 

14.24 

21. 

.21 

17. 

,86 

19, 

,77 

23. 

'22 

$43.24  $64.37  $54.21   $60.00 


1/  Total  mill  costs  derived  from  Industry  cost  questionnaires. 
9oX«-*  2/  Retail  costs  derived  from  Industry  cost  questionnaires. 


32<i 

TABLE   LIII 


Total   Stocks,    Shl.Mients 

and  Production 

of  Softnood  Lumber  In  Mllllonn   of  Feet  and 
Show  Secular  (long  tljne)    Trend 

EUmlnatlt 

in  0*"   Seaeonal  Fluctuations   to 

Stock  on  Hand  At 
Beginning  of  Period 

Trend  of 
Stocks 

Shipments 
During  Period 

Trend   of 
Shipments 

Production 
During  Period 

Trend   of 
Productlor 

1923 
1924 
1925 
1926 

1927 
192S 

6,600 
7,500 
7,800 
8,500 
8,800 
9,300 

1     1.019 
1.019 
1.019 
1.019 
1.019 
1.019 

-     6,470 
7,360 

IX 

8,610 
9,120 

10.004        J 

29,106 

31,010 

10,169 

27,942 

29,367 

I        4 
4 
4 
4 
4 
4 

7,501 
7,276 
7,752 
7,542 
6,986 
7,1'*? 

10,904       i 

29,406 

11,710 

10 , 469 

28,442 

28,345 

4 
4 
4 
4 
4 
4 

=        7,726 
7,352 
7,928 
7,617 
7,110 
7,086 

1929  let 

2nd 
Ird 
4th 

Quarter 

8,416 
8,148 
8,143 
8,661 

1.019 
.992 
.996 
.993 

8,259 
8,214 
8,176 
8,722 

7,107 
8,121 
7,t50 
6,248 

.908 
1.074 
1.082 

.936 

7,827 
7,561 
6,885 
6,675 

6,839 
8,116 
7.968 
7,020 

.863 
1.08S 
1.087 

.962 

7,925 
7,460 
7,310 
7,297 

1930  let 
2nd 
Ird 
4th 

Quarter 

9,433 
9,4T? 
10,030 
10,068 

1.019 
.992 
,996 
.993 

9,257 
9,509 
10,070 
10,139 

5,586 
5,791 
'^.092 
4,113 

.908 
1.074 
1.082 

.936 

6,152 
5,192 
4,706 
4,629 

5,586 
6.3S8 
5,110 
4,  227 

.863 
LOSS 
1.087 

.962 

6,472 

4,719 
4,394 

1931  let 
2nd 

4th 

garter 

9,962 
9,4l0 
9,  ■148 
9,036 

1.019 
.992 
.996 
.99? 

9,776 
9,486 
9,186 

9,ioo 

4,067 
4,100 
3,921 
2,879 

.908 
1.074 
1.082 

.916 

4,479 
4,004 
3,62U 
3,076 

1,515 
4,238 

1,609 
2,561 

.861 
1.088 
1.087 

.962 

'*,073 
3,895 
3,320 
2,662 

1932  let 
2nd 
3rd 
4th 

Quarter 

8,718 
7,997 
7,610 
7,069 

1.019 
.992 
.996 
.993 

8,5-5 
8,061 
7,641 
7,119 

2,701 
2,720 
2,848 
2,516 

.908 
1.074 
1.082 

.916 

2,975 
2,533 
2,632 
2,688 

1,980 
?,3?i 
2,307 
2,222 

.863 
1.088 
1,087 

.962 

2,294 
2,144 
2,122 
2,310 

1933  1st 
2nd 
jrd 
4th 

Quarter 

6,775 
6,183 
5,715 
5,645 

1.019 
.992 
.996 
.993 

6,649 
6,414 
5.738 
5,68=; 

2,216 
1,450 
3,997 
3,133 

.908 
1.074 
1.082 

.936 

2,441 
3,212 
1,694 
3,31*7 

1,824 
2,782 
3,927 
3,176 

.863 
1.088 
1.087 

.962 

2,114 
2,557 
3,613 
3.301 

1934  1st 
2nd 
3rd 
4th 

Quarter 

5,688 
5.895 
6,218 
6,071 

1.019 
.992 
.996 
.993 

5,582 

5,943 
6,243 

6,ll4 

3,116 
3,112 
1.123 
2,827 

.90S 
1.074 
1.082 

.936 

3,'t32 

3,102 
3,071 

1,020 

.863 
1.088 
1.0S7 

.962 

3.851 
3,359 
2,922 
2,583 

1935  1st 
2nd 
ird 
4th 

Quarter 

5,729 
5,435 
5,o46» 

1.019 
.992 
.996 

5,622 

5,479 

5,066 

2,941 
3:545* 
3,679* 
3,182* 

.90S 
1.074 
1.082 

.936 

3,241 
1,100 
i,4oo 
3.400 

2,649 
3.156* 

.861 
i.08« 

3.070 
2,901 

*  Anticipated 

Note:     ^arterlj  figures 


not  available  prlo 


9813 


325 


TABLE  LIV 


Hoxirs  of  Labort  Number  of  Establlsrunents  and  Number  of  Wage 
Sarners  by  Prevailing  Hours  of  Labor  per  Weelc,  1929. 


Sanmills 

Per  Cent 
of 
Total 

Millwork 

Per  Cent 
of 
Total 

Sawmills 

and 
Millwork 

Per  Cent 
of 

Total 

(Total  Establinhments 
(Total  Wage  Earners 

12,915 
419,084 

100,0 
100.0 

4»849 
90,134 

100.0 
100,0 

17,764 
509,218 

100.0 
100.0 

(Establishiaents  vith 
(hours  not  reported 
(number  of  wage  earners 

6,333 
31,514 

49,0 
7.5 

560 

1,442 

11,6 
1,6 

6,893 
32,956 

38.8 
6.5 

(40  hours  and  under 
(Number  of  establishments 
(Number  of  wage  earners 

350 
15,874. 

2.7 
3.8 

300 
4,787 

6.2 
5,3 

650 
20.661 

3,6 

4.1 

(Over  40  nours  but 
(\inder  45  hours 
(Number  of  establifiiments 
(Number  of  wage  earners 

75 

4,635 

0,6 
1.1 

1,098 
17,984 

22,6 
20,0 

1,173 
22,619 

6.6 
4.4 

(45  hours  to  48  hours 
( inclusive 

(Number  of  estaDlishnients 
(Number  of  wage  earners 

1,803 
95,068 

14.0 
22.7 

680 
16,637 

14.0 
18.5 

2,483 
111,705 

14.0 
21.9 

(Over  48  hours  but  not 
(over  54  hours 
(Nivnber  of  establinhinents 
(Hvunber  of  wage  earners 

1,391 
48,125 

10,8 
11,5 

1,377 
27,980 

28,4 
31.0 

2,768 
76,105 

15.6 
14.9 

(Over  54  hours 

(Number  of  establishments 

(Somber  of  Wage  carters 

2,963 
223,868 

22.9 
53.4 

834 

21,304 

17,2 
23.6 

3,797 
245,172 

21.4 
48.2 

Sourcat  Census  of  Manufactures,  1929;  Percentages,  and  sums  for  Sawnills  and 
Millwork,  computed  from  Census  figures  shown. 


9813 


imaiT  'If 

3a<i_ 


INDEX     NUMBERS 

(AVERAGE    OF    I905,'l0,'l5,'20, 

'25.'30,'35-  100) 


PRICE    TREND 

SOUTHERN    PINE  ROOFERS  3/4x5i/2,*4 
BY  YEARS.    1905-1935 


leo 

1 

1 

1 

1 

160 

1 

12- MONTH    AVERAGE  PRICE  .' 

140 

1 
1     / 

\ 

; 

^„       3-YEAR    SLIDING  AVERAGE  PRICE            1 

130 
120 

no 

100 
90 
80 
70 

i\  /- 

// 

i^>- 

'"-\^o 

/    i 

1  iV 

1    / 
,   / 
;  1 

\ 

I 

NADJUSTED 

// 

y 

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// 

^.    ADJUST 

W  0 

ED  PRICE  TREND   \   \      /     / 

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/-"^ 

^■~ " 

/     V 

/^<\V 

/^ -— 

—  1/        / 
'/        / 
.'/       / 

1 

/    %\>r<?^ 

3-YEAR  SLIDING   AVERAGE  PRICE 

ADJUSTED     FO"    DiipruA<;iNr: 

SO 
40 
30 
20 
10 
0 

* 

-'-•      \ 

A          / 

VALUE   OF    DC 

)LLAR 

1  1  1  1 

1       1      1       1 

1    1    1     1 

1      1      1      1 

1       1      1      1 

1  1  1  1 

1905  1910  1915 

SOURCE  "new  YORK  LUMBER  TRADE  JOURNAL" 

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1925 


1930 


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NRA 

DIVISION     OF     REVIEW 

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NO.  495 


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EXHIBIT   "I" 
AVERAGE    LUMBER    PRICE    BREAKDOWN   AT  CHICAGO.  LLINOtS 

CODE     PERIOD     JANUARY     TO    MARCH,    1934 


D0U9LA8  Fl*     tOUTHCIM  ntl       WttTCRN  nHI 


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SOURCE'      LUMBER     ANO    TlueER    PRODUCTS     STUDY    UNUt, 

division'    of  review,    N   R  a. 


N  R  A 
DIVISIOM    or    REVIEW 
STATISTICS    SECTION 

Wl  SW 


334 

EXHIBIT   "J" 
AVERAGE    LUMBER    PRICE    BREAKDOWN    AT    NEW   YORK,  N.Y 

CODE    PERIOD     JANUARY    TO    MARCH,  1934 


ReT»lL    COSTS-OTHER 


RETAIL  COSTS-OfFICERS 


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OVERHEAD,  ETC. 
OFFICERS    AND  OWNERS    MY 
SHtmNO  AND  SCLUNa-OTHER  COSH 
AND  SEUJNe-LABOR 


LDCGMG  <K>  MIUMS-OTWR  COSTS 


LXieOINIi  AND  MLUNC-LABOR 


SOURCE-  LUMBER     AND   TIMBER     PRODUCTS     STUDY    UNIT, 
DIVISION     OF    REVIEW,    N.R.A- 


NR  A 
DIVISION    OF    REVIEW 


9813 


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OFFICE  OF  THE  NATIONAL  RECOVERY  ADMINISTRATION 
THE  DIVISION  OF  REVIEW 


THE  WORK  OF  THE  DIVISION  OF  REVIEW 


Executive  Order  No.  7075,  dated  June  15,  1935,  established  the  Division  of  Review  of  +he 
National  Recovery  Administration.   The  pertinent  part  of  tha  Executive  Order  reads  thus: 

The  Division  of  Reviev/  shall  assemble,  analyze,  and  report  upon  the  statistical 
information  and  records  of  experience  of  the  operations  of  the  various  trades  and 
industries  heretofore  subject  to  codes  of  fair  competition,  shall  study  the  ef- 
fects of  such  codes  upon  trade,  industrial  and  labor  conditions  in  general,  and 
other  related  matters,  shall  make  available  for  the  protection  and  promotion  of 
the  public  interest  an  adequate  review  of  the  effects  of  the  Administration  of 
Title  I  of  the  National  Industrial  Recovery  Act,  and  the  principles  and  policies 
put  into  effect  thereunder,  and  shall  otherwise  aid  the  President  in  carrying  out 
his  functions  under  the  said  Title.  I  hereby  appoint  Leon  C.  Marshall,  Director  of 
the  Division  of  Review. 

The  study  sections  set  up  in  the  Division  of  Review  covered  these  areas:  industry 
studies,  foreign  trade  studies,  labor  studies,  trade  practice  studies,  statistical  studies, 
legal  studies,  administration  studies,  miscellaneous  studies,  and  the  writing  of  code  his- 
tories.  The  materials  which  were  produced  by  these  sections  are  indicated  below. 

Except  for  the  Code  Histories,  all  items  mentioned  below  are  scheduled  to  be  in  mimeo- 
graphed form  by  April  1,  1936. 

THE  CODE  HISTORIES 

The  Code  Histories  are  documented  accounts  of  the  formation  and  administration  of  the 
codes.  They  contain  the  definition  of  the  industry  and  the  principal  products  thereof;  the 
classes  of  members  in  the  industry;  the  history  of  code  formation  including  an  account  of  the 
sponsoring  organizations,  the  conferences,  negotiations  and  hearings  which  were  held,  and 
the  activities  in  connection  with  obtaining  approval  of  the  code;  the  history  of  the  ad- 
ministration of  the  code,  covering  the  organization  and  operation  of  the  code  authority, 
the  difficulties  encountered  in  administration,  the  extent  of  compliance  or  non-compliance, 
and  the  general  success  or  lack  of  success  of  the  code,  and  an  analysis  of  the  operation  of 
code  provisions  dealing  with  wages,  hours,  trade  practices,  and  other  provisions.  These 
and  other  matters  are  canvassed  not  only  in  terms  of  the  materials  to  be  found  in  the  files, 
out  also  in  terms  of  the  e:-:periences  of  the  deputies  and  others  concerned  with  code  formation 
and  administration. 

The  Code  Histories,  (including  histories  of  certain  NRA  units  or  agencies)  are  not 
mimeographed.  They  are  to  be  turned  over  to  the  Department  of  Commerce  in  type^-ritten  form. 
All  told,  approximately  eight  hundred  and  fifty  (S50)  histories  *ill  be  completed.  This 
number  includes  all  of  the  approved  codes  and  some  of  the  unapproved  codes.  (In  Work 
Materials  No_  18,  Contents  of  Code  Hi: tries,  will  be  found  the  outline  which  governed 
the  preparation  of  Code  Histories.) 

(In  the  case  of  all  approved  codes  and  also  in  the  case  of  some  codes  not  carried  to 
final  approval,  there  are  in  NRA  files  further  materials  on  industries.  Particularly  worthy 
of  mention  are  the  Volumes  I,  II  and  III  which  constitute  the  material  officially  submitted 
to  the  President  in  support  of  the  recommendation  for  approval  of  each  code.  These  volumes 
9768~l . 


-ii- 

set  forth  the  origination  of  the  code,  the  sponsoring  group,  the  evidence  advanced  to  sup- 
port the  proposal,  the  report  of  the  Division  of  Research  and  Planning  on  the  industry,  the 
recommendations  of  the  various  Advisory  Boards,  certain  types  of  official  correspondence, 
the  transcript  of  the  formal  hearing,  and  other  pertinent  matter.  There  is  also  ouch  offi- 
cial information  relating  to  amendments,  interpretations,  exemptions,  and  other  rulings.  The 
materials  mentioned  in  this  paragraph  were  of  course  not  a  part  of  the  work  of  the  Division 
of  Review. ) 

THE  WORK  MATERIALS  SERIES 

In  the  work  of  the  Division  of  Review  a  considerable  number  of  studies  and  compilations 
of  data  (other  than  those  noted  below  in  the  Evidence  Studies  Series  and  the  Statistical 
Material  Series)  have  been  made.  These  are  listed  below,  grouped  according  to  the  char- 
acter of  the  material.  (In  Work  Materials  No.  1.7,  Tentative  Outlines  and  Summaries  of 
Studies  in  Process,  these  materials  are  fully  described). 

Industry  Studies 

Automobile  Industry,  An  Economic  Survey  of 

Bituminous  Coal  Industry  under  Free  Competition  and  Code  Regulation,  Economic  Survey  of 

Electrical  Manufacturing  Industry,  The 

Fertilizer  Industry,  The 

Fishery  Industry  and  the  Fishery  Codes 

Fishermen  and  Fishing  Craft,  Earnings  of 

Foreign  Trade  under  the  National  Industrial  Recovery  Act 

Part  A  -  Competitive  Position  of  the  United  States  in  International  Trade  1927-29  through 

1934. 
Part  B  -  Section  3  (e)  of  NIRA  and  its  administration. 
Part  C  -  Imports  and  Importing  under  NRA  Codes. 
Part  D  -  Exports  and  Exporting  under  NRA  Codes. 

Forest  Products  Industries,  Foreign  Trade  Study  of  the 

Iron  and  Steel  Industry,  The 

Knitting  Industries,  The 

Leather  and  Shoe  Industries,  The 

ijumber  and  Timber  Products  Industry,  Economic  Problems  of  the 

Men's  Clothing  Industry,  The 

Millinery  Industry,  The 

Motion  Picture  Industry,  The 

Migration  of  Industry,  The:   The  Shift  of  Twenty-Five  Needle  Trades  From  New  York  State, 
1926  to  1934 

National  Labor  Income  by  Months,  1929-35 

Paper  Industry,  The 

Production,  Prices,  Employraent  and  Payrolls  in  Industry,  Agriculture  and  Rail.vay  Trans- 
portation, January  1923,  to  date 

Retail  Trades  Study,  The 

Rubber  Industry  Study,  The 

Textile  Industry  in  the  United  Kingdom,  France,  Germany,  Italy,  and  Japan 

Textile  Yarns  and  Fabrics 

Tobacco  Industry,  The 

Wholesale  Trades  Study,  The 

Women's  Neckwear  and  Scprf  Industry,  Financial  and  Labor  Data  on 

9768—2 


ihi'f'l    y-  < -.     ,   .,f 


-  IIX  - 

Women's  Apparel  Industry,  Some  Aspects  of  the 

Trade  Practice  Studies 

Commodities,  Inforaiation  Concerning:   A  Study  of  NRA  and  Related  Experiences  in  Control 
Distribution,  Manufacturers'  Control  of:   Trade  Practice  Provisions  in  Selected  NRA  Codes 
Distributive  Relations  in  the  Asbestos  Industry 
Design  Piracy:  The  ProbJem  and  Its  Treatment  Under  NRA  Codes 
Electrical  Mfg.  Industry:   Price  Filing  Study 
Fertilizer  Industry:   Price  Filing  Study 

Geographical  Price  Relations  Under  Codes  of  Fair  Competition,  Control  of 
Minimum  Price  Regulation  Under  Codes  of  Fair  Competition 
Multiple  Basing  Point  System  in  the  Lime  Industry:   Operation  of  the 
Price  Control  in  the  Coffee  Industry 
Price  Filing  Under  NRA  Codes 
Production  Control  in  the  Ice  Industry 
Production  Control,  Case  Studies  in 

Resale  Price  Maintenance  Legislation  in  the  United  States 

Retail  Price  Cutting,  Restriction  of,  with  special  Emphasis  on  The  Drug  Industry. 
Trade  Practice  Rules  of  The  Federal  Trade  Commission  (1S14-1936) :   A  classification  for 
comparison  with  Trade  Practice  Provisions  of  NRA  Codes. 

Labor  Studies 

Cap  and  Cloth  Hat  Industry,  Commission  Report  on  Wage  Differentials  in 

Earnings  in  Selected  Manufacturing  Industries,  by  States,  1933-35 

Employment,  Payrolls,  Hours,  and  Wages  in  115  Selected  Code  Industries  1933-35 

Fur  Manufacturing,  Commission  Report  on  Wages  and  Hours  in 

Hours  and  Wages  in  American  Industry 

Labor  Program  Under  the  National  Industrial  Recovery  Act,  The 

Part  A.   Introduction 

Part  B.   Control  of  Hours  and  Reemployment 

Part  C.   Control  of  Wages 

Part  D.   Control  of  Other  Conditions  of  Employment 

Part  E.   Section  7(a)  of  the  Recovery  Act 
Materials  in  the  Field  of  Industrial  Relations 
PRA  Census  of  Employment,  June,  October,  1933 
Puerto  Rico  Needlework,  Homeworkers  Survey 

Administrative  Studies 

Administrative  and  Legal  Aspects  of  Stays,  Exe.mptions  and  Exceptions,  Code  Amendments,  Con- 
ditional Orders  of  Approval 

Administrative  Interpretations  of  NRA  Codes 

Administrative  Law  and  Procedure  under  the  NIRA 

Agreements  Under  Sections  4(a)  and  7(b)  of  the  NIRA 

Approve  Codes  in  Industry  Groups,  Classification  of 

Basic  Code,  the  —  (Administrative  Order  X-61) 

Code  Authorities  and  Their  Part  in  the  Administration  of  the  NIRA 
Part  A.   Introduction 
Part  B.   Nature,  Composition  and  Organization  of  Code  Authorities 

9768—2. 


Part  C.  Activities  of  the  Code  Authorities 

Part  D.   Code  Authority  Finances 

Part  E.   Summary  and  Evaluation 
Code  Compliance  Activities  of  the  NRA 
Code  Making  Program  of  the  NRA  in  the  Territories,  The 
Code  Provisions  and  Related  Subjects,  Policy  Statements  Concerning 
Content  of  NIRA  Administrative  Legxslatitn 

Part  A.  Executive  and  Administrative  Orders 

Part  B.   Labor  Provisions  in  the  Cedes 

Part  C.  Trade  Practice  Provisions  in  the  Codes 

Part  D.  Administrative  Provisions  in  the  Codes 

Part  E.  Agreements  under  Sections  4(a)  and  7(b) 

Part  F.  A  Type  Case:   The  Cotton  Textile  Code 
Labels  Under  NRA,  A  Study  of 

Model  Code  and  Model  Provisions  for  Codes,  Development  of 

National  Recovery  Administration,  The:  A  Review  of  its  Organization  and  Activities 
NRA  Insignia 

President's  Reemployment  Agreement,  The 

President's  Reemployment  Agreement,  Substitutions  in  Connection  with  the 
Prison  Labor  Problem  under  NRA  and  the  Prison  Compact,  The 
Problems  of  Administration  in  the  Overlapping  of  Code  Definitions  of  Industries  and  Trades, 

Multiple  Code  Coverage,  Classifying  Individual  Members  of  Industries  and  Trades 
Relationship  of  NRA  to  Government  Contracts  and  Contracts  Involving  the  Use  of  Government 

Funds 
Relationship  of  NRA  with  States  and  Municipalities 
Sheltered  Workshops  under  NRA 
Uncodified  Industries:  A  Study  of  Factors  Limiting  the  Code  Making  Program 

Legal  Studies 

Anti-Trust  Laws  and  Unfair  Competition 

Collective  Bargaining  Agreements,  the  Right  of  Individual  Employees  to  Enforce 

Commerce  Clause,  Federal  Regulation  of  the  Employer-Employee  Relationship  Under  the 

Delegation  of  Power,  Certain  Phases  of  the  Principle  of,  with  Reference  to  Federal  Industrial 
Regulatory  Legislation 

Enforcement,  Extra-judicial  Methods  of 

Federal  Regulation  through  the  Joint  Employment  of  the  Power  of  Taxation  and  the  Spending 
Power 

Government  Contract  Provisions  as  a  Means  ;f  Establishing  Proper  Economic  Standards,  Legal 
Memorandum  on  Possibility  of 

Industrial  Relations  in  Australia,  Regulation  of 

Intrastate  Activities  Which  so  Affegt  interstate  Gpmmsrce  as  to  Bring  them  Under  the  Com- 
merce Clause,  Cases  on 

Legislative  Possibilities  of  the  State  Constitutions 

Post  Office  aiid  Post  Road  Power  —  Can  it  be  Used  as  a  Means  of  Federal  Industrial  Regula- 
tion? 

State  Recovery  Legislation  in  Aid  3f  Federal  Recovery  Legislation  History  and  Analysis 

Tariff  Rates  to  Secure  Proper  Standards  of  Wages  and  Hours,  the  Possibility  of  Variation  in 

Trade  Practices  and  the  Anti-Trust  Laws 

Treaty  Making  Power  of  the  United  States 

War  Power,  Can  it  be  Used  as  a  Means  of  Federal  Regulation  of  Child  Labor? 

9768—4. 


THE  EVIDENCE  STUDIES  SERIES 


The  Evidence  Studies  were  originally  undertaken  to  g,athor  material  for  pending  court 
cases.  After  the  Schechter  decision  the  project  was  continued  in  order  to  assemble  data  for 
use  in  connection  with  the  studies  of  the  Division  of  Review.  The  data  are  particularly 
concerned  with  the  nature,  size  and  operations  of  the  industry;  and  with  the  relation  of  the 
industry  to  interstate  commerce.  The  industries  covered  by  the  Evidence  Studies  account  for 
more  than  one-half  of  the  total  number  of  workers  under  codes.  The  list  of  those  studies 
follows: 


Automobile  Manufacturing  Industry 
Automotive  Parts  and  Equipment  Industry 
Baking  Industry 

Boot  and  Shoe  Manufacturing  Industry 
Bottled  Soft  Drink  Industry 
Builders'  Supplies  Industry 
Canning  Industry 
Chemical  Manufacturing  Industry 
Cigar  Manufacturing  Industry 
Coat  dnd  Suit  Industry 
Construction  Industry 
Cotton  Garment  Industry 
Dree.s  Manufacturing  Industry 
Electrical  Contracting  Industry 
Electrical  Manufacturing  Industry 
Fabricated  Metal  Products  Mfg.  and  Metal  Fin- 
ishing and  Metal  Coating  Industry 
Fishery  Industry 

Furniture  Manufacturing  Industry 
General  Contractors  Industry 
Graphic  Arts  Industry 
Gray  Iron  Foundry  Industry 
Hosiery  Industry 

Infant's  and  Children's  Wear  Industry 
Iron  and  Steel  Industry 


Leather  Industry 

Lumber  and  Timber  Products  Industry 
Mason  Contractors  Industry 
Men's  Clothing  Industry 
Motion  Picture  Industry 
Motor  Vehicle  Retailing  Trade 
Needlework  Industry  of  Puerto  Rico 
Painting  and  Paperhanging  Industry 
Photo  Engraving  Industry 
Plumbing  Contracting  Industry 
Retail  Lumber  Industry 
Retail  Trade  Industry 
Retail  Tire  and  Battery  Trade  Industry 
Rubber  Manufacturing  Industry 
Rubber  Tire  Manufacturing  Industry 
Shipbuilding  Industry 
Silk  Textile  Industry 
Structural  Clay  Products  Industry 
Throwing  Industry 
Trucking  Industry 
Waste  Materials  Industry 
Wholesale  and  Retail  Food  Industry 
Wholesale  Fresh  Fruit  and  Vegetable  Indus- 
try 
Wool  Textile  Industry 


THE  STATISTICAL  MATERIALS  SERIES 


This  series  is  supplementary  to  the  Evidence  Studies  Series.  The  reports  include  data 
on  establishments,  firms,  employment.  Payrolls,  wages,  hours,  production  capacities,  ship- 
ments, sales,  consumption,  stocks,  prices,  material  costs,  failures,  exports  and  imports. 
They  also  include  notes  on  the  principal  qualifications  that  should  be  observed  in  using  the 
data,  the  technical  methods  employed,  and  the  applicability  of  the  material  to  the  study  of 
the  industries  concerned.  The  following  numbers  appear  in  the  series: 
9768—5. 


-  vi  - 

Asphalt  Shingle  and  Roofing  Industry  Fertilizer  Industry 

Business  Furniture  Funeral  Supply  Industry 

Candy  Manufacturing  Industry  Glass  Container  Industry 

Carpet  and  Rug  Industry  Ice  Manufacturing  Industry 

Cement  Industry  Knitted  Outerwear  Indvstry 

Cleaning  and  Dyeing  Trade  Paint,  Varnish,  and  Lacquer,  Mfg.  Industry 

Coffee  Industry  Plumbing  Fixtures  Industry 

Copper  and  Brass  Mill  Products  Industry  Rayon  and  Synthetic  Yarn  Producing  Industry 

Cotton  Textile  Industry  Salt  Producing  Industry 

Electrical  Manufacturing  Industry 

THE  COVERAGE 

The  original,  and  appro-ved,  plan  of  the  Division  of  Review  contemplated  resources  suf- 
ficient (a)  to  prepare  some  1200  histories  of  codes  and  NRA  units  or  agencies,  (b)  to  con- 
solidate and  index  the  NRA  files  containing  some  40,000,000  pieces,  (c)  to  engage  in  ex- 
tensive field  work,  (d)  to  secure  much  aid  from  established  statistical  agencies  of  govern- 
ment, (e)  to  assemble  a  considerable  number  of  experts  in  various  fields,  (f)  to  conduct 
approximately  25%  more  studies  than  are  listed  abo\e,  and  (g)  to  prepare  a  comprehensive 
summary  report. 

Because  of  reductions  made  in  personnel  and  in  use  of  outside  experts,  limitation  of 
access  to  field  work  and  research  agencies,  and  lack  of  jurisdiction  over  files,  the  pro- 
jected plan  was  necessarily  curtailed.  The  most  serious  curtailments  were  the  omission  of 
the  comprehensive  summary  report;  the  dropping  of  certain  studies  and  the  reduction  in  the 
coverage  of  other  studies;  and  the  abandonment  of  the  consolidation  and  indexing  of  the 
files.  Fortunately,  there  is  reason  to  hope  that  the  files  may  yet  be  cared  for  under  other 
auspices. 

Notwithstanding  these  limitations,  if  the  files  are  ultimately  consolidated  and  in- 
dexed the  exploration  of  the  NRA  materials  will  have  been  sufficient  to  make  them  accessible 
and  highly  useful.  They  constitute  the  largest  and  richest  single  body  of  information 
concerning  the  problems  and  operations  of  industry  ever  assembled  in  any  nation. 

L.  C.  Marshall, 
Director,  Division  of  Review. 
9768—6 . 


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