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rations to establish some way whereby we could secure higher
prices than to always be flooding the poor manufacturer with
these low price circulars which certainly can do no good, and I
am of the opinion that they do a great deal of harm in the way
of making lower prices.



120 THE LUMBER INDUSTRY.

I presume this circular is gotten up with a great deal of accu-
racy and painstaking on the part of your office force and no
doubt shows the weakness of the market in general at the present
time, but I beg to advise that in no instance have we been com-
pelled to accept these suicidal prices, and for your information
would say that we are securing full May 25th, 1909 list and in
no case during the last six months have we cut over 500 off of
May list which is just about your August list with the first con-
cession sheet sent out. For Heaven's sake let us begin to
paddle up stream and not be continually floating down stream
with the tide, and if we will all individually go to work and look
after our sales managers closer, giving them to understand that
prices should be based on the cost of our production instead of
selling at any old price to get a few dollars to meet our pay roll,
and trusting to luck for the next pay day, I believe now is the
opportune time for changing for the better.

Trusting you will take these few remarks in the spirit which
they are written, I am,

Mr. Smith replied, under date of June 18:

Yours of the 16 th received and contents carefully noted.
There has been a very urgent demand made that information
which is up to date relative to prices be compiled and furnished,
and the report of actual transactions seems to come nearer
filling this requirement than the plan we have been operating
under of showing what the different manufacturers claim to be
asking for their stock. It is further claimed that we cannot
improve our condition by evading or trying to' forget what is
actually going on.

We shall try this plan for a while and shall include the Houston
market very soon and we may arrange to get reports from some
Mississippi and Alabama manufacturers, so that the scope of
territory covered can be somewhat widened.

I fully realize that you believe thoroughly in the plan you are
pursuing but it does not seem to fit the case for the large number
of manufacturers engaged in selling Yellow Pine.

Thanking you for your letter and assuring you it is received
in the spirit in which it was written, I am,

Other correspondence was found which bears out the statements
made by Mr. Smith in the foregoing letter.
Attitude or the association toward yellow-pine lists

ISSUED BY PRINTING FIRMS WITHOUT ITS AUTHORIZATION. — In the

efforts to promulgate and make effective an official list of prices the
association officers have met with some difficulty because of "unau-
thorized" lists, issued by printing firms in competition with the
association official lists. The essence of the objection to these
private lists seems to have been that they promulgated prices that
were too low.

Price lists of the E. J. Schuster Printing Co. — For some years before
1906 E. J. Schuster issued a pamphlet showing delivered prices figured
on different freight rates, and in compiling it he used as a basis the
official prices promulgated by the association. Under date of



PKODTJCTION AND WHOLESALE DISTEIBUTION. 121

October 10, 1906, he published a "price current," which was attacked
in the lumber press and by various prominent association members.
One of these attacks, an editorial in the St. Louis Lumberman of
October 15, 1906, under the heading of "Unwarranted and mislead-
ing," was sent out October 16, by Secretary George K. Smith to all
the association members:

A considerable number of manufacturers and wholesalers of
yellow pine lumber have been somewhat annoyed of late by the
sending out, broadcast, of what purports to be a yellow pine
price Est, or price current by a printing concern located in
St. Louis. It is needless to say that this printing concern does
not own a single yellow pine tree, nor carload of lumber. Just
why it should undertake the issuance of what purports to be a
yellow pine price list is an open question. Its issuance at this,
or any other time, can only prove harmful and a detriment to
the yellow pine people. It is issued as a weekly without the
authority of anyone except its publishers. No manufacturer, or
wholesaler, is under the slightest obligation to pay any attention
whatever to the list issued or to the prices quoted. In a con-
siderable number of items the prices named are not such as can,
or will, be recognized by responsible manufacturers, or whole-
salers. The attempt, therefore, of an outside party, one who
has no interests at stake, to issue a price list on a staple com-
modity like yellow pine should be treated by manufacturers,
wholesalers and retailers alike, with contempt, as it does not
represent the views of the lumbermen or the actual condition
prevailing.

Our Kansas City correspondent wires us, under date of Oct.
15, as follows: "The sending out of a price list by the Schuster
Printing Company, Oct. 10, purporting to be an authoritative
basis for yellow pine values, came as a surprise to Kansas City
manufacturers, all of whom are very indignant. No one here
was consulted by Schuster, and letters received from outside
manufacturers indicate that none of the yellow pine manu-
facturers were consulted. The Central Coal and Coke Com-
pany is issuing a circular to the trade, which, in part, says:
'This (Schuster) list is being sold and buyers are purchasing it
with the idea that it represents the prices of yellow pine lumber
companies; and this list is to advise you that so far as this com-
pany is concerned, we do not so regard it, and will sell only on
our own quotations and on such lists as we may issue ourselves
from time to time.' Other manufacturers are issuing similar
letters, and all are instructing their salesmen to pay no attention
to the Schuster list. R. A. Long characterizes the issuance of
this list as an outrageous piece of presumption, and done for the
purpose of selling these lists to the dealers, and this seems to be
thegeneral sentiment of the yellow pine people here."

This for your information,

In the Kansas City news of the Mississippi Valley Lumberman of
October 19, 1906, page 35, occurs the following statement:

A new list issued by the Schuster Printing Company, of St.
Louis, dated October 10th, is repudiated by the yellow pine



122 THE LUMBEB INDUSTRY.

people, who say that it does not represent the market, and was
not authorized by the yellow pine manufacturers. They are
notifying their customers to this effect.

Mr. Schuster continued to publish his lists, and a comparison of
his prices on a Kansas City delivery basis with corresponding asso-
ciation ' ' official ' ' figures is shown elsewhere, on Diagram 5. This com-
parison shows that during this period the Schuster lists were generally
below the association lists. That he continued to meet with some
opposition from the association sources is indicated by the corre-
spondence in the files of this Bureau. On January 3, 1910, C. D.
Benedict wrote to Secretary George K. Smith the following letter
marked "personal":

Notwithstanding the fact that we are not subscribers to
Schuster's Market Keports they have continued sending us their
issues and I enclose herewith copy of letter I have written to
them. It is simply a damnable outrage that such a concern as
this should have any patronage at all.

I presume you have read their letter to the trade on the green
sheet in their report and while I am not inclined to exaggerate
the actual trade condition, I feel with most everyone in the
business that prices, for the last few weeks, have been better
and conditions more favorable towards maintaining an even and
more profitable market.

I do not know if it is good policy to write such a letter as I have
written to them but I cannot help to give vent to my feelings.

The following is a copy of the letter referred to by Mr. Benedict:

Jan. 1, 1910.
E. J. Schuster Pub. Co.,

St. Louis, Mo.

Gentlemen: We ask you to kindly discontinue sending us
your market reports. Your letter in your issue of Dec. 21st,
trying to portray the true market conditions, is not only foolish
but absolutely untrue. We consider you an absolute menace to
the interests who have their money in the Yellow Pine business
and we do not want anything more to do with you.

You have placed yourselves in a position where no responsible
wholesale concern or manufacturer can afford to give you any
support and no matter what your motives are for misrepresent-
ing the actual conditions the results will not be what you antici-
pated.

To which Mr. Smith replied on January 4, 1910:

Yours of the 3d instant received and contents carefully noted.
I imagine that you have expressed the feelings of quite a number
of lumbermen, but I think the general policy has been to ignore
rather than to argue and it is only occasionally that we ever
hear of the publication you refer to.

I thank you for sending me carbon copy of your letter and
trust the writing of same will relieve you of the annoyance of
looking over literature which you feel is absolutely worthless.



PRODUCTION AND WHOLESALE DISTRIBUTION. 123

Price lists of lumbermen's bureau — When J. R. Walker, for
many years secretary of the North Carolina Pine Association, re-
signed and began the publication of yellow-pine price lists by his
Lumbermen's Bureau (Inc.) (see page 299), he came into conflict with
the Yellow Pine Manufacturers' Association official price lists as well
as with those of the North Carolina Pine Association. The following
correspondence illustrates this. On May 21, 1909, the Kaul Lumber
Co. wrote to George K. Smith, secretary, as follows:

We hand you herewith file of correspondence, which explains
itself. We desire to ask if you do not think that the work which
this Bureau proposes to do is very apt to interfere with the work
of our organization, and also if it is not calculated to depress
values rather than to help them.

We should be glad to have you treat this matter confidentially,
and would say that we do not believe the work should be en-
couraged; the experience we had, which is set forth in one of these
letters, will show you just exactly how that is likely to work out.

Will you please return the file at your early convenience, and
greatly oblige,

Mr. Smith wrote in answer the following letters of May 24 and 27 :
Letter of May 24 :

Yours of the 21st instant, enclosing correspondence relative
to Lumbermen's Bureau, incorporated in Norfolk, Va., received.

I am going to Kansas City tonight and will take this corre-
spondence with me and discuss it with Mr. Long, Mr. White and
others. No doubt the Alabama manufacturers, who market
their product largely in the East, would be much more affected
by this Bureau than parties farther West.

As soon as I am through with the file will return it to you.
Thanking you for submitting it to me, I remain

Letter of May 27 :

Again referring to yours of the 21st instant, subject "Lumber-
men's Bureau," will say that I have had copies made of the
entire correspondence and return the originals to you herewith.

It occurs to me that Mr. Walker is attempting to do in the
Eastern territory very much what E. J. Schuster is doing in this
territory, that is — publish a rate book and price list.

The question of any one other than the authorized representa-
tive of a lumber association endeavoring to publish a price list
is one which should have careful consideration, and we thank
you for sending us the correspondence in question.

I did not have an opportunity of discussing this matter with
Mr. Long and Mr. White, as I had hoped to do, but as they are
very little interested in the Eastern territory, do not suppose
they would take more than a passing interest in the conditions
set forth by the correspondence, which we are returning herewith.

Hoping you will keep me advised of any further developments,
I remain



124 THE LUMBER INDUSTRY.

The following letter of December 14, 1911, from B. A. Johnson,
President and General Manager of the Lumber World Review, to Mr.
Smith bears also on the work of the Lumbermen's Bureau:

The Lumber World Review, a consolidation of the Lumber
Review of Kansas City and the Lumber World of Chicago, will
have its first Chicago issue about January 5, 1912. It is not
taking itself with desperate seriousness, but only speaking
frankly, when it states to you, that it fully expects to TELL
THE TRUTH ABOUT THE LUMBER MARKET, whenever
it refers to the Market.

This writer has been connected with the Lumber Press in this
country for twenty- three years, and in that time has seen the
lumber markets of the country exploited all the way down from
vigorous truthfulness, to a condition most inane and purposeless.

There was a time, fifteen years ago, when market quotations
on lumber were as correctly placed between the column rules,
and as carefully changed each time the paper went to press, as
at the present time the stock market quotations are changed
and corrected.

This condition of constitutional prevarication which has per-
vaded the lumber Press of the country for ten years, received,
about two years ago, a most desperate jolt by the assumption of
two or three young men that they might open a Bureau in an
eastern city, and from that place prepare each month, and send
to the trade, a market report about lumber conditions, which
would be the absolute, unadulterated, brutal facts.

The Lumber Press cried it down; many lumbermen talked
against it. But the work of the Bureau went on, and the purpose
of this letter to you, besides making an announcement as to
what the LUMBER WORLD REVIEW expects to do in con-
nection with the markets, is to call your attention to the fact that
the "Lumbermens' Bureau, Ltd." of Washington, D. C. has
actually succeeded beyond a doubt, and that it is today serving
with a monthly report, no less than 7,000 subscribers in these
United States in all branches of the lumber business, builders,
retailers, wholesalers and manufacturers. It is doing to-day
what, insofar as I know, the Lumber Press of the country
believes is unethical, and considers it really not countenanced by
the lumber trade.

Before I ask you a pointed question, I want to quote from a
letter, which I recently received from one of the lest known
general sales agent of lumber in the United States, who wrote
me frankly and personally on this subject, day before yesterday,
as to the ethics of telling the truth about the lumber market, as
follows :

"It seems to me that your idea that a true letter from the
various producing sections twice a month free from any extrava-
gant expression as to the bull side of the market, would be very
fine news for the lumbermen as a whole. The average lumber
paper of today, and of the past several years, has never con-
veyed the true condition, even when the average price was
$10.00 per M. Feet f. o. b. mill. You have doubtless learned
that in reading our lumber journals, when the conditions were as
bad as they could possibly be, you could get an idea that lumber



PKODUCTION AND WHOLESALE DISTRIBUTION. 125

was selling for extremely goodprices. What the people in this
country today are demanding is the absolute truth, and, in my
opinion, the sooner the newspapers and journals get down to
point of telling the truth, without any exaggeration, just that
much earlier we will have good times and more confidence in
our fellowmen and competitors. I hope the time is not far
distant when the newspapers and journals of our country will
give less space to murder, scandal and muck-raking, and give
more prominence to items that go to make men and women
better, happier and promote more confidence in their neighbors."

While I have fully made up my mind to "tell the truth and
shame the devil," as the countryman might say, I have just got
a great big notion that I would like to hear from you, as to what
you personally think of the policy.

This lumber newspaper is going to weigh all facts, and do what
it believes to be right in the end, and we want to know from such
men as yourself, wherein is the consistency of lumber people in
all lines, demanding the truth privately, — as by the deserved
patronage they have accorded the Washington institution — and
refusing to have it dealt out to them publicly, through the
columns of their lumber papers ?

Under date of December 16, 1911, Mr. Smith replied to the fore-
going letter as follows :

Yours of the 14th instant received and contents carefully
noted. I have never attempted to determine the market on
anything but Yellow Pine, and from my experience in that I
know how difficult it is to write anything or publish any figures
which will definitely describe the Yellow Pine market in its
entirety. Just at the present time there is a very wide dif-
ference in conditions existing West of the River and in the
Southeastern portion of the Yellow Pine Territory. The market
is very active in Georgia and Florida and prices are firm and
advancing, while the direct opposite is true in the territory West
of the Mississippi River.

I am unable to give you any advice as to how the market
should be handled in your paper.

Thanking you for your letter, I remain

Comparison of association and private list prices and prices of
actual sales. — The Bureau presents in Diagram 5 (opposite p. 126)
a comparison, made on the freight basis of Kansas City, of the list
prices issued by the Yellow Pine Manufacturers' Association and its
predecessor, the Southern Lumber Manufacturers' Association ; by the
E. J. Schuster Printing Co.; by three prominent manufacturers who
sell most of their product in Missouri, Iowa, Nebraska, Kansas, and
Oklahoma; with prices of actual sales of lumber shipped into Kansas
City and vicinity, taken from the records of some of the mills whose
i. o. b. mill prices appear in Diagrams 8 and 9. The items for
which prices are shown are in flooring, B rift, B and No. 1 common
flat; in No. 1 and No. 2 common boards, 1 by 12 inches; and in Nos, 1
and 2 dimension, 2 by 4 inches.



126 THE LUMBER INDUSTRY.

In the examination of this diagram it should be borne in mind that
with the exception of the prices shown by the yellow-pine triangle
symbol, all the prices are list prices ; that is, asking prices, not neces-
sarily those of actual sales. Except in the case of the Schuster prices,
each series of list prices is believed to be complete. The Bureau was
not able to obtain a complete file of the Schuster lists for the years
1909-10. Attention should be given to the relation of the prices of
the official lists of the Yellow Pine Manufacturers' Association to
those of the Schuster lists, for the period from 1906 on. The discus-
sion on pages 120-122 bears on this point. It will be noted that a large
part of this time the Schuster list prices were materially below those
of the association lists.

The prices presented on Diagram 5 will be found in Table 1 on
pages 182-211.

Section 8. Concerted attempts to restrict output.

Curtailment in 1904. — The first organized attempt on a large
scale to curtail output seems to have taken place in 1904. The
market for yellow pine was weak, with falling prices and not much
demand in prospect, so, under the auspices of the association, a
concerted attempt was made to strengthen prices by curtailing
production.

The St. Louis Lumberman of May 1, 1904, refers to a movemen
in the Southern Lumber Manufacturers' Association looking to ai
agreed reduction of output. The first official action in this directio]
s,eems to have been taken at the semiannual meeting of the associa
tion at St. Louis June 14 and 15. The official action was taken-i
executive session, and the account in the official proceedings states

The- meeting then went into executive session, to deal with tl
question of curtailment of output as referred to in the pres
dent's address, and secretary's report. The matter receivi
very careful consideration, and from the figures submitted it wi
thought advisable to recommend to all manufacturers a red$
tion of 33$ per cent of all the output of all sawmills until sue
time as the demand would more clearly absorb the supply. J

Circular No. 589, issued by the Mississippi Valley Lumbermen
Association, June 18, 1904, begins as follows: 1

At the semi-annual meeting of the Southern Lumber Mam
facturers' Association held in St. Louis June 14 and 15, the qirf
tion of the curtailment of output was the principal topic of dii
cussion.

The following resolution was adopted: I

"WHEREAS, The secretary's report shows a surplus of pre
uct which, with the stock being manufactured in excess of.ci
mand, is the direct cause of sale values being at or below cost '
production, be it

RESOLVED, Effective upon notice from the secretary th
manufacturers producing 70% of the product, on the basis of 19'



Diagram 5. — Comparison of the Movement of Association, Schuster, and Individual Company List Prices and of Actual Prices of Yellow Pine on a Ka



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Online LibraryUnited States. Bureau of CorporationsThe lumber industry .. → online text (page 18 of 119)