OFFICE OF NATIONAL RECOVERY ADMINISTRATION DIVISION OF REVIEW ECONOMIC PROBLEMS OF THE LUMBER AND TIMBER 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 33 2 U585w UNIVERSITY OF FLORIDA LIBRARY OFFICE OF NATIONAL RECOVERY ADMINISTRATION DIVISION OF REVIEW ECONOMIC PROBLEMS OF THE LIMBER AND MEMBER PRODUCTS INDUSTRY By P ster A. Stone William E. Yost D. N. Burnham C. Stowell Smith Spencer H. Reed Sterling R. March INDUSTRY STUDIES SECTION MARCH, 1976 9813 338 11585* no. 13 FOREWORD This study of the Lumber and Timber Products Industries was com- pleted by Mr. T7illiam E. Yost, of the Industry Studies Section, Mr. M. 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 exhaustively. Logging and saw-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 and 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 URA 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 materials 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. wn 9813 -l- Division of Review, National Recovery Administration. In response to a request from the National Recovery Adminis- tration, Division of Review, the National Lumber Manufacturers Associa- tion appointed 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 Lumber 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 early 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 and 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 and unwarranted infer- ences. The participation by the National Lumber Manufacturers Associa- tion in a review of this work does not imply either agreement or disagree- ment with the substance of the report or with 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 conclusions 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 conditions under which it has been conducted, have not permit- ted the full achievement of a balanced, thorough, and objective study. It is understood that a copy of this communication will be included as a part of the report of the Division of Review on Economic Conditions in the Lumber Industry. Respectfully submitted, NATIONAL LUMBER MANUFACTURERS ASSOCIATION March 25, 1936 9813 -li- TABLE OF CONTENTS' -• - Page HISTORICAL SUMMARY 1 CHAPTER I. INTRODUCTION 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 Production 10 5. Effect of Logging on Production 11 6. The Production Cycle 12 7 . Labor 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 MANAGEMENT 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 Woodlands 31 c. Public Ownership 31 2. Ownership of Saw Timber Stand 32 a. Industrial Ownership 32 b . Farm Woodlands 32 c. National Forests 32 d. Other Federally Owned and Managed Forests 33 e. State, County and Municipal Ownership 33 9813 -iii- Page 3. Average Stand of Saw Timber per Acre 33 4. Forest Growth and 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 . Stumpage 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 Forestry Program 60 CHAPTER III. THE PROBLEMS OF PRODUCTION 64 A. Capacity 64 3. 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 MA. 94 E. Prices and Mill Realization 103 1 . Prices 103 2. Mill Realization 110 F. Labor 115 1. Statistical Coverage 115 2. ITumber and Type of Employees 115 a. Number of Employees 115 b. Seasonality of Employment 117 c. Type of Employees 118 9813 -iv- Page 3. General La"bor Conditions 121 a. Hazards of Employment 121 "b. General labor Conditions on the West Coast .... 123 (1) High Labor Turnover 123 (2) Causes of Labor Unrest 124 (3) Improvement in Labor Conditions 126 c. General 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. Sawmill and Millwork Compared 139 c. Area Comparisons 140 d. payroll 144 6. Hours 146 7. Productivity 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 Labor Provisions 159 a. Child Labor Provisions 159 b. Hourly Provisions 159 c. Wage Provisions 160 G. Production Control 164 CHAPTER IV. PROBLEMS OE DISTRIBUTION 189 CHAPTER V 223 A. Future Studies 223 B. Timber Ownership Statistics 231 C. Transportation and Cross Hauling 232 D. Methodology 235 APPENDIX I. HISTORY OE PRECODE EFFORTS AT PRODUCTION CONTROL ... 237 APPENDIX II . TABLES AND EXHIBITS 261 9813 -v- APPENDIX II ECONOMIC PROBLEMS OF THE LUMBER AND TIMBER PRODUCTS INDUSTRY INDEX. OF TABLES TABLE NO . PAGE HO , I Commercial Forest Area of the United States.... 262 II Total Stand in the United States of Saw Timber Cordwood 263 III Stand of Saw Timber in the United States by Regions, States, and Classes of Ownership 264 IV Stand per Acre on Saw Timber Areas 265 V Production of Lumber in the United States - 1925 to 1929 266 V (a) Softwood and Hardwood Production by States - 1929 to 1934 267 V (b) Softwood and Hardwood Production hy States - 1929 to 1934 268 VI Annual Drain of Forest Products (other than lumber) Averages 1925 to 1929 269 VI (a) Total Forest Products Drain (individual products) 270 VII Annual Forest Drain (other than 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 Products Drain and Forest Growth 275 -VI- 9813 TABLE NO. X X (a) X 00 XI XII PAGE NO. Average Sttmipage Prices "by States and Regions 276 Stumpage Prices "by States - 1928 to 1933 277 Stumpage Prices • Selected States and Periods 278 Eire Protection Expenditures 279 Estimated Annual Tax Burden on Commercial Privately Owned Porests "by States and Regions 280 XIII Estimated Annual Tax Burden on Commercial Privately Owned Saw Timber Areas "by States and Regions 281 XIII (a) Timber Taxation as related to rate of Lumber Production 282 XIII ("b) Timber Taxation as related to Lumber Production and Timber Owned 283 XIV Relative Statistical Position of Principal Producing States for Softwood Lumber 284 XV Relative Statistical Position of Principal Producing States for Hardwood Lumber 285 XVI Percentage of Capacity and Number of Mills 286 XVII (a) Lumber Production - Softwoods by States. 287 XVII (b) Lumber Production - Hardwoods by States 288 XVIII Recapitulation by Intervals of Lumber Producers 289 XIX Recapitulation \)y States of Known Lumber Producers. 290 '/ XX Comparison of Equipment Utilization 291 XXI Tablo of Capacity by States and Ratio of Stand to Capacity i 292 XXII, Quarterly Softwood Stocks by Division 293 XXIII Quarterly Hardwood Stocks, by Regions 294 -VI 1- QQT -7 ABLE HO , XXIV XXV XXVI XXVII XXVIII XXIX XXX XXXI XXXII XXXIV XXXV XXXVI PAGE NO . Quarterly Softwood Production by Regions 295 Quarterly Hardwood Production by Regions 296 Quarterly Softwood Shipments by Regions 297 Quarterly Hardwood Shipments by Regions 298 Southern Pino Costs 299 Western Pine Costs 300 Cost and Realization 301 Consumption of Domestic Lumber by the Construction, Wooden Container, and all other Industrial Users for the year 1928 302 Consumption of Domestic Lumber by the Construction, Wooden Container, and all other Industrial Users for the year 1933., 303 Comparison between Total Construction and Units Shipped per $1,000 of Construction for Selected Products during 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 (Forest Products Industries), number of Corporations reporting Profit and Ho Profit in each of the Classified Groups 3 06 Corporations Returns Classified by Major Industry Groups - Percentage of Corporations reporting Profit 307 Corporate Returns Classified by Major Industry Groups - Percentage of Asset Values of Corporations reporting Profits 308 Porest Products Corporations, Het Income, or Loss, Cash Dividends, and Federal Income Taxes Paid 309 -VI 11- TABLE HO , XXXIX XL XLI XLII XLI 1 1 XLIV XLV XLVI XLVII XLIX LI LI I LIII LIV PAGE HO . Distribution of Hardwood Lumber from Producing Regions to Consuming Regions and States 1929 310 Distribution of Hardwood Lumber from Producing Regions to Consuming Regions and States 1932 311 Distribution of Hardwood Lumber from Producing Regions to Consuming Regions and States - 1934 312 Shipments of Principal Softwood Species of Lumber to States from Principal Producing Regions.. 313 Imports of Softwood Lumber. 314 United States Exports of Specified Lumber and Timber Products to Principal Importing Countries, 1933 - 1934 315 Softwood Exports - United States' Share of World Market 316 Retail Lumber Dealers - Number of Dealers and 1934 Questionnaires Received 317 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 Retail Lumber Dealers - Recapitulation Expenses to Hot Sales Dollar, 1934 - Known Dealers 23,531 - Dealers Reporting 3, 554 319 Retail Lumber Dealers - Recapitulation Modal Cost Details Year 1934 - Known Dealers 23,531 - Dealers Reporting 3, 554 320 Retail Lumber Dealers - Recapitulation for Industry - Operation Results 1934 - Known Dealers 23,531 - Dealers Reporting 3,554 321 Lumber Cost at Chicago, Illinois, Code Period January to March, 1934 322 Lumber Cost at Hew York, Hew York Code Period January to March, 1934 323 Stocks, Shipments and Production of Softwood Lumber, 1923 - 1935 324 Hours of Labor: ITumber of Establishments and Humber of Wage Earners by Prevailing Hours of Labor per Week, 1929 325 -IX- EXHIBITS EXHIBIT PAGE NO . A. Price Trend - Southern Pine Roofers 326 C. Quarterly Softwood Shipments, by Regions, 1929 - 1935 327 D. Quarterly Hardwood Shipments, by Regions, 192«J - 1935 328 E. Softwood Stock on Hand, by Regions, 1929 - 1935.... 329 P. Hardware Stocks on Hand, by Regions 1929 - 1935 330 G. Quarterly Softwood Production, 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 Breakdown at New York, New York 334 K. Average Price cf Softwood Lumber 335 -X- -1- ECONOMIC PROBLEMS OF THE LUMBER AND TIMBER PRODUCTS INDUSTRY HISTORICAL' SUMMARY .,. , The Lumber Industry is one of-oUr oldest industries. It differs from other industries in that the line of "demarcation "between processing and pro- duction of raw materials is not -so pronounced. In lumber the production of raw Materials is more analogous to agriculture than to industry in the ac- cepted sense of the latter term. The production of logs and timber perhaps preceded agriculture as an activity of the early colonists . since' shelter, as well as food, was an im- mediate" requirement. Moreover, clearing of land in most cases was a reouired process to the pursuit of agriculture. It is no wonder then that the New England colonists .engaged in lumbering as a principal activity, and for more than ^200 years the forests of 'New England -broduced not only the materials for shelter .required in America but could export considerable auantities to the West Indie-s and to Europe as well, ' . .. This does not mean that New England was the sole producer of forest oroducts during this period. The Southern colonists also found rich stands of timber and proceded to exploit these rssources. However, the natural conditions which obtained were such that Southern lumber exploitation was only a minor factor .as. ..compared- «to agrl.cultural activities,. Nevertheless, the forests of New England were- -the principal source of lumber up until about 1880. In this 'discussion the- region" designated as. New. England includes Northern' New York and^ Pennsylvania as well "as'what is now commonly termed the New England' States.- .-.•■' After the Civil'War and with the devlopment of the upper Mississippi Valley, the Lake States of Wisconsin, Minnesota and Michigan became the principal sup-olier of lumber. However, by this time production methods hai improved and the steam sawmill with the circular saw allowed for more rapid exploitation of greater areas in a shorter time; hence it was only twenty years later that the peak of production passed from the Lake States to the ; South. ..'■.•-'-; "■ ' ' ' ' The'period from 1870 to 1910 represents the'years of greatest forest exploitation. The transcontinental railroads Tiad opened up vast new ter- ritories, and new farms, towns -and villages' "were being created at a rapid rate. The chief material for both farms and "towns was lumber. Forests were close at hand and lumber, was. relatively cheapb • This era reached its peak in 1906 and 1907, dur in* which, years approximately 46 billion feet of lumber oer year were' produced. . ... . -During 1 * the period after 1890 and when production in the. Lake States began to decline there was. a considerable movement to the Pacific Coast and the exploitation of the rich fir region of the Northwest became an important factor. The products of' this region entered 'the interior markets with the opening of the No'rthern Pacific Railroad in 1892 and' a considerable portion of the production found its way into the devlooment of the prairie states just east of ' the Rockies. . , The fir region which lies west of the Cascades in Oregon and Washington had previously found its principal outlet in the requirements of the fact developing State of California. With its timber 9813 • - •••• ' . 2- growi-<\g right dc»n to the sho*e lira H was relatively eas;> to load its products aboard sailing vessels almost at the pjint r* -or ^cKcti on. In 190? aiter the opening of the Panama Canal, thus orr/iding an easie, access lo cne Atlantic Coant. the production from the »aciilc North- west "became an i— ccrtant factor .in i?.stern markets an 3. has continued a struggle with the South for the s=of twood market, Ix, may he ?een that the Lu-iber Industry has been a constantly migrating one, exploiting t.ae most accessible natural resouiees and moving on to richer fields when its operating area "became more diff'cult of pro- ducing "both speculating and operating profits. , As the iviustr, ' moved on it left in its *vake a less important segment in every region whiufl had been ex- ploited. This segment expanded or contracted ac economic oo.iditions war- ranted, hut it was always a factor in the control of ecc,.K..Dic problems of the industry. The segment, composed o small mills w % W. we^e. more or less marginal factors during the greatest period of exploitation ol an area, became the m arginal factor which determined the decree ef oz.isperity during the decadent era. THE PROBLEMS . In a. da\ sloping country with rich natural resources it was but natural that the best, ard most accessible timber sheuld be eut fl* , & ,, .« It was this principle that motivated the industry to move from one area to another as rapidly as facilities for transporting the product became availa>le, How- evei , after + ht envelopment of the Pacific fir region had reached a high stage, in whi.-n it *as producing a j much as the South, ther; .ere no new areas which rffered possiblities of easily accessible virgin ferests. It followed then that >is the industry was forced beck int the more inacces- sible areas v.ith its conseoucnt highe." cist of reaching the consuming market there was, of necessity, an increfjg in the orice lev "i , At about tnis time many p.blic spirited people became (i! ?~med at the rate of exploitation of the forest anr were led to preJict an early ex- , haustion of forest resources. An inn ^rtant result of this alcrmist at- titude which had caryrht the popular fancy was an increase in timber speculation. If, reasoned the speculators, our utandirs: tirobor is rapidly becoming exhausted, higher values of existing standing timbe/ urcst , necessarily follow. As a conseouence large tracts of standing timber were purchased at mounting prices, with nc* thought at the Mae cf converting this timber into lumDe^. Subsequent events forced the ests li shrrent of saw- mill facilities for the eole purpose ef liquidating ti sse investments, but at the time of acquisition there was nc thought given \c vt is necessity. Another development of this period was the raBid increase in the use of steel and cedent. The perfection of the Bessemer prp^ess made steel an inrccrtant competitor in buildings and other structure*. Trs orocess for making cement had developed to + he point where concrete, wl oh its lasting qualities, entirely displaced lumber for sidewalks and jti. r flooring purposes where heavy traffic was & factor. Chis, eour-led •. xth the ri6ing cost of lumber, brought about a rapid displacement of lumber and a declining: per capita consumption. T lis declining consumptien was not t D^arent to the industry until after the World War, but toward" the declining -period of the post-war building boom it became ovident that svurrroage orices were likely 9812 -3- to remain at a standstill, and with mounting taxes stumnage "became a liability. Hence it became necessary to provide facilities for liquidation, and this, with the adv'en 4 " cf the degression, caused a comolete demoralization of the lumber markets. The increase in the Drice levels brought about by the migration of the industry into higher cost ar^as had another important effect. As stated previously, the small sawmill with its lack of volume facilities was always a marginal factor. Paying low wages and with small investment the small mill could operate in small timber that would be unprofitable 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 r>roduce at a profit . except at a -crice level, that is high enough to warrant such production. Such mills operate in cutover areas iocated for the most -oart close to the areas of consumption. However, the result of their operation in such areas is such as. to -orevent the full regrowth of a given forest area to a noint where it might again become an important producing region lyine; close to a consuming area. ^ Wnen the price level of lumber rose, due to the higher costs of 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.ea.in. In. this manner the small mills acted as a pressure, on the. market.. ,-.'.-,; The need for liquidation of . speculative timber became a-o^arent with a declining volume of use, particularly during the latter nart of the building boom,, and it. was during this, period that many new mills were -out into operation for that purpose. During the degression this situation became more acute and from 1930 to 1932 mills continued to operate for the .purpose stated above, although consumption had declined to about , 25 -oer cent of the -oeak. This, of cour.se, meant an enormous stock op. .hand each year during the degression 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 y were used, but between 1.930 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 chaotic. 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 to liquidate' speculative holdings would become a-onar ent ; and although the degression brought a"bout the chaotic condition, a depression in the Lumber Industry must have eventually come about under any circumstances if the industry had continued under the same influences. THE CODS './'• After the passage of the' National Recovery Act it was apparent that the industry- was. aware . of the condition of over-capacity and chaotic prices, and in presenting its Code it nad three major nrooosals: . . (l) ' ..The. regulation ^f production with a view to' cutting .... down stocks on hand to meet., demand. (2)- An increase, in i"he was-e .level, which had fallen below subsistence levels. .", 9813 . ...... li ■■->&• , ;,, (3) The fixing o:f~minimum prices of lumber at a point , at which it was estimated costs of -oroduction would "be recovered. The operation of the "'first provision eventually resulted in some decline of stocks. However, it provided for no permanent im-orovement ; since the elimination of the Code the "industry is in approximately the same -oosition it was in "before, as far as the fundamental evils are concerned, although the reduction of stocks during the Code provided a temporary "benefit which will last for some time. The fixing of prices apparently failed to brin.°" any permanent good- or contribute to any permanent improvement in the industry. One of the results of fixing of prices at a point of cost recovery was to increase the price above the point which would 'encourage a greater use. In fact it is believed by many students of the situation that the -orices so 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 ■oarticular 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 wage rates, there was a considerable increase in both the Northern and Southern -sections. Without price fixing the increase in wage rates alone, it is believed, would have had a tendency, to prevent the incursion of the numerous small mills dependent upon a higher price. However, with this increase in price level provided- for under the Code many of the small operator? believed they could either make a profit at the higher -prices, even though they paid the minimum wage, c»r expected to evade the higher wages while thye collected the- higher prices. During the very early part of the Code the forme] was the general rule; that is, a higher wage level was .generally paid. But as it became apparent that the products could not be sold .at the price level set, there was a greater tendency to evade the minimum wage. This wage lev\L for the South, incidentally, was set at a point eaual to that of any period in its history. This evasion of minimum wages -produced bitter re- criminations, since many of the small and medium- size mills,- having once entered into production, were loath to discontinue. Nevertheless, toward the latter part of the codal period a great number of them did discontinue. How- ever, since the elimination .if 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 average than during the lowest point of the depression. As has been stated, the operation of fixed minimum prices f'-r cost recovery proved burdensome and failed of any permanent good. Th J s provision was canceled, therefore-, six- months prior to the Schechter 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 increased the demand. It ie believed that this demand had reached a- point toward the latter 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 comparison to the general demand level, it is "believed that prices may reach a disproportionate level again if industry, through its own efforts, continues to keen stocks at such levels. CONCLUSIONS (1) Chaotic conditions caused by excels stocks were relieved during the period of NIRA, but the Lumber Code fail ^d to provide a permanent remedy for causes of such excess. (2) The operation of price fixing has proven itself to be inroossible, even under Government regulation. (3) Labor has been benefitted by a rise in the wage level, which will apparently remain and is proportionate to the general wage level of the entire country. However, certain inherent characteristics of the timber and the psychology of those engaged in the Lumber Industry in the South are such that labor is not free to use its own bargaining -cower in any effort to main- tain a reasonable level of wages v (4) There are certain steps which might be taken by both the industry and the Government which might, in the long run, tend to improve the general level of the industry and the labor employed by it. Such improvement must start with the forests.. It is recognized that for the purpose of a stabilized industry — one that is not only kept at a reasonably high level but is continually improving — there must be a continually improving forest status. In other words, "he industry must be removed from one of a migratory nature to a more permanent position. This involves the operation of a forest, which is the basis of the industry, on a long-time continuous production basis. It has been demonstrated in European 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 corporations in the United States that have also -olaced their operations on such basis. It must be remembered that first tnere are large areas of cut-over lands which will not come into production for many years — particularly production of saw timber. There arc other are.^s where saw timber would come into pro- duction in a reasonable period if it were allowed to grow, but that is now being cut in an immature stage, producing an inferior product at a higher cost. For such areas it is apparently impossible for private industry to bear the burden of taxation and other costs of holding until the timber comes to the income-producing stage. Such areas might be purchased by the Fore c t Service and held until they are income-prodacing, then sold to -orivate industry for private production on the basis of selling the product, and only such product, 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 pointed out, the costs, including taxes, fire -orevention, etc., are such that these areas do not hold any oossiblity for -orofit to private industry. These areas are located close to the consuming markets for the most part and would, in the long run, benefit the consumer by affecting the price level of lumber, and benefit the industry by removing a considerable threat of lumber cut from immature trees, thus over- burdening the market. 9813 ~6~ It is realized that there are considerable holdings of timber areas "by very small producers and farmers throughout the Southern states to whom such holdings are not burdensome. In order to encourage a -oro-oer regard for forestry among such holders, the Government might take advantage of the financial stringency among these holders by forming cooperative groups for sustained yield under Government aid in financing and fire and forest protection. A] 1 of these recommendations noted above have been more or less accepted by the Forest Service, who have partially initiated many of these provisions. (5) Transportation rates should be lowered from the Atlantic seaboard west to Chicago and f rnm the Pacific seaboard east to Chicas-o. This will encourage the use of timber from the Pacific Northwest, where exist the best resources and gr-atest excess holdings. A cut in rates from the Atlantic sea board would permit an extension of the market for lumber nov? moving by water from the Pacific Northwest. (6) The industry may improve its product by the manufacture of more complete assemblies for building purposes and seek to promote shop fabricator: as against fabrication on the job. This will enable individual manufacturers to obtain markets in which duality may be a selling factor. This would also tend to eliminate the more migratory manufacturers and promote 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 particularly due to the loss of the Australian and othor British Empire markets as the outcome of the Toronto agreement of 1933, in which preference' 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 portion of the markets eaual to that restored to Canada by the United States. 9813 „ 7 ~ CHAP Tim I IIiUODUCIIOi: A. GEK1EAX DESCHIPTTO:: m TEH IH3USU3Y The Lumber ancl Tinker Products Industry has no clearly defined limits. Generally speaking, it is couponed of all those engaged in (a) managing the commercial forests of the nation; ("b) in the conversion of standing tinder into useful products; and (c) in the distribution of those products to the consumers. The principal timber products are: (*) Lumber, lath and shingles Fuel vrood Hewn ties Fence posts Pulp wood mine timbers an d n i n e p r op s Veneers Cooperage stock Poles and piling Distillation mood Tanning vrood and bark The Bureau of the Census defines lumber and timber products as "logging camps, merchant sawmills, combined sawmills and planing mills, including those engaged in the manufacture of boxes if connected with a sawmill, veneer mills and cooperage stock mills." (**) The Lumber and Timber Products Industries Code extended a bit fur- ther* than the Census definition and included: (l) Logs, poles and piling; (2) sawn lumber and other sawn wood products of sawmills* and products *. of planing mills operated in conjunction with sawmills; (3) shingles; (4) woodwork (millwork) , including the products of planing mills opera- ting in conjunction with retail lumber yards; (5) hardwood flooring; (6) veneers; (7) plywood; (8) kiln dried .hardwood.. dimension; (.9) lath; (10) saved boxes, shook crates; (11 plywood, veneer and wi rebound packages and containers; (12) certain additional minor products specifically provided for. (***) (*) "A national Plan for American Forestry", p. 214. A report of the Porest Service (1933) (*a) "porest Products in 1932", Bureau of the Census, Department of Commerce. (***) Article II (A), Lumber pxi'± Timber Products Industries Code. 9813 1. Forest Lands and S'pecies The "basis upon which the entire industry rests is, of course, the forest lane 1 , of the United States, which amounts to j^actically one- third its total land area, or about 600,000,000 acres. (Originally the forest area of this country was estinated to he 880,000,000 acres.) However, not all of this forest area is available for commercial use. About 495,000,000 acres out of the total area have been classed by the Forest Service as commercial forest lend capable of producing timber of commercial quantity and quality, according to present day standards, and available for commercial use. (*) In considering availability of savr timber, species play an important role, riot all species are suitable for the same purpose. Generally speahing, the entire species group is divided into two classes — softwoods and hardwoods. The term " sof twoods" is generally applied to all of the coniferous trees as distinguished from the broadleaf varieties, and does not necessarily apply to the actual softness or hardness of the wood itself. The term "hardwoods" is generally applied to all of the broadleaf trees when used commercially. 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 with other species. This division is fundamental in the industry's organization, .and perhaps accounts for many oi its problems, due to the fact that certain species are native to certain sections of the country only, whereas the use of the wood may be nationwide. 2. Early His tor:/ Since this industry had its beginnings with the early colonists, naturally the first forests exploited were those of Hew England and of Virginia, both softwood areas. The Hew England forest consisted chiefly of pine and spruce, and although they have passed through a cycle of exploitation 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 adapt- ability for most purposes, was used up most rapidly and had not been replenished to the same extent as spruce. Prior to 1850 New England was the principal producing region, up to that time accounting for more than one-half of the total lumber used. However, between 1850 and 1860 Hew York and Pennsylvania took (*) See Table I. See Appendix II. 98i: -9- the lead. (*) These two states, 'kile having a considerable amount of softwood, again principally pine and spruce, had a greater amount of hardwood, aore suitable for manufacturing purposes than for con- struction. "hat is said of New York and Pennsylvania applies as well to "Sex: Jersey, Maryland and Delaware, these five states comprising the Liiddle Atlantic Region. In the eariy periods of production in the liiddle Atlantic Region the softwoods were quickly depleted, the hard- woods renaining, since uses for hardwoods had not developed to the extent that they had for softwoods. This area is still considered a hardwood producing section and Under the Code was called the North- eastern Hardwood Subdivision, though combined with part of the easterly Lake States and also a part of the Appalachian Region. The next major producing area, chronologically, was the Lake States. — Minnesota, Wisconsin and Michigan. Here the species were chiefly pine and hemlock — both softwoods. However, this area has always had, in addition, a commercial growth of hard maple, though with some slight exceptions as to hemloc] : it now produces little softwood. It is still the principal maple producing section of the country, some 30 per cent of the maple flooring coming fro:.: that area. The peak of production for this area was around 1830, in which year the Lake States accounted for 34 per cent of the total lumber volume. From 1890 to 1919, which was a period of rapid progress in the development of this nation, the forest area of the South, embracing Alabama, Arkansas, Florida,, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Oklahoma, Tennessee, Texas, Virginia and West Virginia, was the principal producing area. The species in this area consist of yellow pine and practically all the known domestic hardwoods. The former has become the most important commercially. Short leaf pine flourishes on the Atlantic Coastal Plain as one oi the fastest growing commercial species among softwoods, and its renewability has kept the region a continuous lumber producing area since the 1890' s. It should be understood that this shift from one area, to another does not mean that the original areas were completely denuded, but -merely that the new areas of virgin timber presented more attract- ive possibilities than the older producing regions, all of which are continuing producing regions to a. minor extent. 3. !7e stern Areas Perhaps the most important development in the Lumber Indus trjr is the expolitation of the western forest areas. These begin in the Rocky Mountain Region, extending throughout all the Rocky mountain Region (*) "An Outline of General Forestry" , by J. S. Illick, p. 52 (1935) 9813 -10- Th e Douglas Fir Region, although called that, is not confj-rt^'i to Douglas fir but grows hemlock, spruce" and cedar in addition. , This region contains the most luxuriant stands of cedar in this country and is therefore the center of the cedar shingle production industry as v;ell as being highly important in softwood production. The Rocky mountain Region, which includes the area east of the Cascades, together with the Sierra Nevada Range through California, grows Western pines. Some spruce and white fir are also found in this region. On the Vest Coast is found the most luxuriant growth of timber in the United States, with the greatest commercial possibilities. The average stand per acre in the State of Washington is about 45,000 feet per acre. This is compared with 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 known for their enormous size and their commercial possibilities. Although the Lumber Industry in the Vest started in the early 1850' s, it did not become commercially important until the completion of the northern Pacific Railroad in 1882. (*) Ac stated at the beginning of this chapter, although lumber is only one of the products of the forest it is by far the most impor- tant since the saw timber area consists of approximately five- sixths of the total commercial area. The ownership 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 adequate con- sideration to such problems. With the shifting of the industry 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, much of it was included with the land grants to the trans- continental railroads in the latter part of the nineteenth century. Some of it was acquired by those who were interested only in specula- ting on the increased values, but for the most part lumber producers attempted to acquire sufficient acreage and stumpe^ge to assure them- selves the longest possible period of continued operation. 4. Volume of Production Turning now to the volume of lumber used in this country, 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 Outline of General Forestry", by J. S. II lick; p. 53 (1935) 9813 -11- tine it had "been continuously increasing. After that time it started on a downward trend. However, lumbermen, intent on acquiring a volume of sturnpage for their operatic:., chiefly speculated on the increasing trend of j^roduction and v.-ere man3~ years too late in becoming ar/are of the declinig volume of consumption. Thus lumbermen found themselves, at the beginning of the depression, overstocked with timber acreage. It may be veil to explain here that the term sturnpage is applied to the standing tree, and the value of sturnpage is the value of the lumber content of the trees ithout regard to the land upon which they grow. This is usually calculated in board measure, log scale. The term "log scale" has various meanings raid is applied with different rules in different areas, being particularly ajjplied to a given species than to given geographical area. However, in speaking of lumber pro- duction the term "board measure" is used, vhich means one board foot equals a board one foot long, one foot wide, and one inch thick. The first sawmill v/as established, according to one historian, in Jamestomn, Virginia, in 1625. This, as well as other early colonial sawmills, was operated either hy vater por/er or windmills, It is be- lieved that the maximum capacity of these early sawmills vras not more then 500 board feet per day. The first record of steam amplication was in Hew Orleans in 1311. However, shortly after that period, in 1814, the circular saw was invented, but it did not come into general use until about 1840. The first band saw was exhibited at the Philadelphia Centennial Ex- hibition in 1876. Such a saw today, with all other modern appliances, has a capacit}.r of approximately 100,000 feet per day. (*) 5. Effect of Logging on Production One important factor in the development of the Lumber Industry has been that of transporting logs from the woods to the mills. In the original development of the inc'ustry water transportation of logs by floating, and later b3 r rafting and similar methods, was the principal means of transporting logs. In the woods, horses and mules j^rovided 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 b; r mills which had no timber lands of their own. An open log market exists today only in the far Northwest. Beginning about 1880, with the development of lumbering in the Lake States, 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 timber areas. (*) "An Outline of General Forestry", by J. S. Illick, ; pp. 51, 56. 9813 -12- In the earlier timber developments where the more primitive methods were used, a lumbering operation developed to what v70uld now be termed a medium size operation, but never to the enormous size of present day operation. This restriction was due to the limited means of supplying logs. With the development of railroad logging, however, operations grew in size, and toward the latter part of the Lake States lumbering period the newer enterprises were much larger than the earlier ones. 6. The Production Cycle Uith the more pri: litive means of logging, clear-cutting, that is the complete denuding of an area, was not prevalent. It was economic to take only the most available logs, and there was a "thinning out" operation rather than a complete "logging off" operation. It is probable, for this reason, that the older areas have continued producing for a much longer period than the newer areas, and their renewability has been more pronounced. This fact brought about a cycle of developments \ hich are illustrated in parts of Pennsylvania and the Appalachian Region. The cycle consists of, first, what might be termed preliminary operations of fairly small size, then the exploitation of an area on a large scale, and then the return again to small, portable operations. However, with the development of railroad logging this cycle was not so pronounced. Railroad 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 end 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 operation rather than a thinning out operation, and in a measure is responsible for some completely abandoned areas of the Lake States and of the far T7est. In such areas the hope of sustained yeild operations 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 Lumber Industry, as defined by the Census Bureau, was composed of approximately 18,556 units doing more than $5,000 in business annually, accounting 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 18,555 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. (*) (*) Porest Service estimate. 9813 ~1 '7— There is still a large number of very snail mills "ith a capacity of around 5,000 feet a day. On the other hand, sone of the largest mills have a capacity cf as much as 1,000,000 feet a da"'. The im- portant factor in the difference today is the fact that the smaller mill must compete in the same market as the giant producer, and herein lies- the beginning of many of the problems of production. The peak of production was in 1906 and 1907 ruth 46,000,000,000 feet. It must be remembered that this peak of production came before the rich areas of the Douglas i\ir Region and the western Pine Region were fully developed and that the caoacit"' in these areas, which is the greatest part of the total mill capacity, has been developed since that time. Coincident with this capacity development there has been a declining volume of production. Since 1917, with the exception of 1923 and 1925 when a total of 41,000,000,000 feet was reached, at no time has a total of 40,000,000,000 feet been reached. In 1926 a total of 39,000,000,000 feet was re-ched. However, in 1929 which is gener- ally considered the peak year of industrial production, only 37,000,000,000 feet of lumber .fere produc* d. Policing that year, of course, came the depression, the low point being reached in 1932 with only 10', 000, 000, 000 feet of production. At the beginning of 1930 there were stocks on hand of 9,500,000,000 feet. The depression did not become fully effective, as far as the Construction Industry was concerned, until the latter part of 1930, al- though shipments dro-aoed from an average of 7,0u0,000,000 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 great stock on hand, together with the pressure of liqui- dation of the indebtedness incurred in the development of the West Coast Region during the boom period and particularly in the twenties gave rise- to the most important problems of production. (*) 7. Labor While no figures are available as to the number of employees in the earl3r days of the industry, there has be n a vast fluctuation during the later years, oarticiilariy for the period from 1919 on. Prior to 1919, although there has been a migration of the industry, . " ■»• where it dropped employees in one area it would pick them up in another, bringing about a migration of employees a.s well as a migra- tion of the industry .'itself, However, in the period of declining production, the effect of the d roo in production on employees may be measured by 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 when the production was 10,000,000,000 feet. While it is possible to estimate the number of enroloyees in the in- dustry back in 1906 and 1907 -hen the total volume was 46,000,000,000 feet, actual statistics on that score arc lacking. (*) Figures from national Lumber Manufacturers Association -14- In general , employees may "be divided into two main groups- logging employees and sawmill employees. There is some difference in the type of labor and living conditions "between the two. In those older areas where the more primitive methods still prevail, woodsmen still saw down the trees and teamsters haul the logs to the main point of transportation, whether that be mill pond or some gathering point such as railroad siding or fluming center. In the Northwest and in some of line larger operations of the South, particularly where rail- road logging is involved, more mechanical methods are used. Heavy cables are strung over a wide area eii r l large logs are brought to the railroad by means of electric or steam donkey engines and loaded onto the cars by steam loaders. More recently caterpillar tractors h-we been used in log- ging to an increasing e::tent, one advantage being that it is less de- structive to remaining trees than the various cable methods. The actual falling and bucking (sawing up the felled tree into logs of 16 to er cent of the total. The "balance goes into other industrial uses of varied sorts. Thus it may he seem that the most important determinant of where lumber is used is the volume of construction in different places and at different times. This also means that lumber is used to the greatest extent in centers of pop- ulation. On the other hand the greatest centers of merchantable timber lie where there is the least population. This involves an important factor in marketing. At the outset it was stated that the industry may be divided between the hardwoods and softwoods. In the softwoods, industrial consumption aside from wooden packages amounts to an insignificant factor, perhaps not more than two per cent, wooden packages about 22 per cent, and con- struction and railroads about 75 per cent.(*) Construction lumber as used here includes planing mill products and millwork used in buildings. The softwood areas of t he East and South are so located that their shipments to the centers. of population of the Lliddle Atlantic States must be by railroad. The Western forests, on the other hand, being located on the coast with its harbors, require very little transportation to waterside, thus offsetting the apparent nerrness of the Eastern softwood areas of production to the centers of population, and bringing about an important comtetive condition, ^ae combination rail and water rates in the West makes this competition more acute. 9. Production Costs This competitive transportation factor reaches into production, which makes the cost of production also on important factor in competi- tion. The comparison between the cost of production in the Southern Pine Region and the Douglas Fir Region is as follows: Stumpage Logging and mill labor . . . Other logging end mill costs Shipping and sell in,;' labor . Other shipping and selling . Officers' and owners' pay Admi ni s t r at i ve ove rh e ad Douglas Southern Fir Pine Per H fee t Per M feet (Per Cer It) (per Cent) 13.1 17.6 27.6 30.9 35,5 25. C 5.7 6.S 6.5 4.4 4.4 n a b • fi 11.1 100.0 100.0 (*& Table XLIII 981: -16- ' In view of the wide difference in the type of la"bor employed and the dissimilar conditions of Operation, the similarity of the proportionate relation of costs "between the two areas is remarkable and indicates that methods have "been worked out to meet the competi- tion rather than to take the gre c .test possible advantage of the area. The importance of transportation as a competitive factor is reflected in the breakdown of the selling price of Douglas Fir and Souther Pine, which shows that manuf a.cturing costs are 46 per cent, transportation costs 30 per cent, and distribution costs 22 per cent of the total price. Thus in spite of the comparatively small selling margin, 22 per cent, the manufacturer received less than one-half of the consumer's dollar. (*) 10. Trans-port at ion The chief means of transporting lumber has been by water and rail. The use of trucks in lumber transportation is a comparatively recent development. Water has always been considered the most favorable means of transportation because of the bulkiness 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 considerable extent. In 1872 nerrly 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 great 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 »s when the center of production had noved 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 Great Lakes and 149,000,000 feet moved by rail. However, 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 came 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' s water shipment of lumber to the north Atlantic ports was most important. In 1890 out of C96, 000,0^0 feet delivered by water to the port of New York, 393,000,000 feet or more than one-third of the total came 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 vessels. (***) (*) 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 the U. S. Commissioner of Corporations, Part II (1909) 9813 -17- However, after 1907 as the network of railways in the South increased, rates competitive with water transportation were established and the area closest to tidewater'' was logged out, which meant that as the centers of production receded inland, the water-borne movement of Southern pine on the Atlantic seaboard decreased to an insignificant amount. The early development of the Lumber Industry on the Pacific Coast is largely linked with water transportation. California was the earliest market for the products of the Douglas fir region which, as has been shown, lies west of the Cascades, north of the California line. Many Mills in the early days were erected for the sole purpose of shipping lumber to California by water, and as heretofore shown it wasn't until the comple- tion of the Northern pacific Railway in 1882 that rail shipments figured at all in the production of this fired. In the ye, r 1902 something. over 571,000,000 feet of lumber were shipped from the State of Washington by water as against 562,000,000 feet by rail. Although production increased by 1906, there was a slight change in the proportion shipped by rail' and water, the former taking the lead. Total water shipments in that year amounted fc'0 1,100,000,000 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 subtontial volume. The year 1922 saw 1,122,000 tons of forest products going 'through the canal from the pacific to the Atlantic seaboard (a ton equal's approximately 800 hoard feet). By 1926 this volume had increased to 3,312,000 tons. This de- velopment of wat er transportation has been the most serious factor of competition and has "'placed Douglas fir ona- pari'ty with Southern pine in spite of the latter' s more favorable location with respect to consuming markets. The fact that trucks became a factor in transportation during the period of the depression has been noted. This was chiefly due to the increase in highways during the boom period of the late twenties, extend- ing through the years 1930 end 1931. It is chiefly a development in the delivery of lumber from the Southern pine area and Southern hardwood areas to the Mid-Atlantic and North' 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 lower cost than the less-than- carlo ad rate generally applicable to lumber shipment s , 11. Distribution In the early history of the industry, with the small output per day, mills usually sold their output in their immediate locality. Lumber was used close to its source 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. For many years the retail lumber dealer was the sole distributor of lumber 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 lumber 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 towns 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 new developments fell off. However, during the period of this development , retailers, due 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 establish- 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 American ^Wholesale 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 "wholesaler" may be applied to various types of dealers. Little is known of the development of each type. However, the original type, which still functions, wao the wholesaler who sold only to re- tailers requiring the output of several mills. This type of whole- saler maintains regular salaried employees who call upon the trade, and is distinguished particularly by the fact that he supplies 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 tha^i sell either direct to consumers, which at best could be only local con- sumption, or to retailers at distant towns anu 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 .19* A third type of wholesaler came with the development of large "buildings. It "became apparent to contractors requiring 20 and more carloads of lumber for a single project -that they should "be in a position to 'purchase their requirements either from wholesalers or di direct from the mills. 'The older established retailers, as shown here- tofore, have always considered themselves t^ be the rnain contact "be- tween the consumer and the source of supply, whether that supply "be f rom t he wholesaler, distribution yard or the mill. Naturally such retailers were at all times under vigorous opposition 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 principal ni:-ans was the "boycott of wholesalers or mills which engaged in such dealings. This led to the es- tablishment of wholesalers, who depended in t he main upon the business of large contractors end other large users. There has also developed in this industry, a s in most other manu- facturing industries, the broker and the commission man. There is very little distinction between the two, the principal distinction being the fact that a commission man usually aligns himself with one producer and represents that producer in all his dealings, whereas a broker feels free to sell lumber on a commission basis, transferring the order to any producer he thinks can fill the needs and who can give him the greatest advantage. Brokers, as a rule, are not expected to supply credit to either the producer or t he buyer, but merely to act as an intermediary between the two. 12. Improvements in Fro duct In the early days of the industry, -with the inadequate facilities of the lumber mill of that time, it is but natural that the product was rather crude, being but a slight improvement over the hand sawn product. Dimensions were irregular and there was an inadequate knowledge of the properties of the various species, which led to considerable misuse of lumber, prejudices grew up v. r hich had no foundation in scientific fact. The first step toward improvements in lumber was a realization of the importance of the drying process. The water content of lumber determines its shrinkage; hence when 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 e^rly days air drying was the principal method used, a method which is in considerable use today- 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 sawing, the establishment of dry kilns became common. Kiln drying is merely a method of drying the lumber by heat in buildings built expressly for that purpose. -The process, con- trolled to prevent too fast drying which will warp and check the lumber, enables the producer to accurately control the water content of the product he sells. This process is also important 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. 9813 -20-- The investigation of the properties of wood was a further step in the improvement of lumber. 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 lumber and timber were measured. With these refinements came the establishment of grades. Origin- ally the knowledge of hardwood grade was kept f rem t he consumer. It has been stated by a prominent hardwood lumberman that one of the earliest 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 tthe customer, which allows manipulation 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 few 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 makes lumber a product that competes within certain class- es chiefly on price, the general species of softwoods being considered competitive with fcachrother. 13. Other Lumber Products Up to this point the discussion has been confined princi- pally to the production and distribution of lumber. However, the Lumber Industry under the Code considered itself as including woodwork, hard"ood flooring, veneer and plywood, 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 lumber. Woodwork, in turn, may be divided into two branches namely, stock millwork and special millwork. Stock millwork is con- sidered as the product of those producers who manufacture, sash, doors, blinds and other millwork of standard dimension, including, cf course, molding, which, in most cases, is manufactured directly in connection with sawmills and is usually stock. Many 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 separated from that of special millwork. Special millwork, besides including sash, doors and 3ther building products not of standard dimension, also includes special 9813 -21- shapes and carved work wherever tlie producer of such mi 11 work feels that he is able to produce it. T e fact that there was no such defined limit was the source of the most bitter jurisdictional dispute during the entire codal period as it concerned tie Lumber Industry. Many of these products, which are made to order chiefly from architects' speci- fications, are made in shops connected 1 with retail lumber yards. However, such shops can produce the requirements for only small pro- jects. The large building project requiring special woodwork must look to the large shops capable of producing such. I.iuck of this is done in factories whose pririci; ai output is that of stock millwork. Hence it becomes hard to strictly divide the entire woodwork industry between sawmills, stock millwork producers and special millwork pro- ducers. Some mills are capable of producing the most intricate of woodwork designs, while other mills do not extend beyond planed lumber. There. are some stock millwork producers and, indeed, some special millwork producers among the groups with smaller sheps, who, if given such an order, would have it executed in a larger pi ail t capable of more economic production. Hardwood flooring producers have for a long time been organized as such, due to the fact that this product is made on special machines. It does not follow the— usual channels of distribution, although most lumber dealers stock hardwood flooring. Having a larger number of grades and the methods of production and distribution being different, hardwood flooring has generally been considered a separate part of the industry, although 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 engaged in producing flooring and not lumber. There are three general branches of this industry, namely, tiie oak flooring producers, whose product is oak flooring produced in an area which centers around Memphis, Tennessee, and extends through tie Appalachian and IT orth Central ha.rdwood producing states; tie maple flooring producers, located chiefly in tie vicinity of Cadillac, Llichigan, with 'a production amounting to approximately 80 percent of the total used, about 15 percent being produced in the New England States and a small amount in tie Southern States (however, the maple flooring industry considers itself chiefly a kichigan producer); and special flooring producers who are engaged in producing made-to-order ty^es of hardwood flooring. ■v _ Both veneer and plywoods are produced by manufacturers who a.re very closely allied with the Lumber Industry in view of the fact that they are produced direct from the log rather than from manufactured lumber. T:is is a newer part of the industry and represents the most economical utilization of tie tree, tie veneers being sliced off the log in thicknesses of one sixty-fourth to one~qua.rter of an inch. 'Jiien two or more layers of such wood are glued together they are called plywood. The finer and more decorative woeds are produced in this manner and for such things as furniture are really competitors of solid lumber. Among those sawmills that also produce veneers .and plywood the principal reliance is en sawed lumber. ?lywo:d, particularly, is the one part of the industry that is growing, since new uses are being found 9813 -22- for this product in late years. As a competitor of solid lumber, plywood, although producing an increase in dollar volune for the amount of tree that it uses, may be largely responsible for decreasing the amount of solid lumber in industrial and construction uses. The next most important Division of this industry is the Wooden Package I n dustry. This 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, Wi rebound 3ox, and Wooden Pails and Tubs. It has been stated that wooden packages represent approximately 15 to 20 percent of the entire lumber produc- tion. In some Divisions of the Lumber I n dustry, however, as, for instance, the Western Pine, 33 percent of the production goes into wooden boxes and shocks (" shooks" is the term applied to the finished pieces that go to make up the wooden box). This product is preponder- antly mailv.f ac tur el in factories connected with sawmills and is an out- let for i: i x she lower grades of lumber and the poorer species of timber, In : out of a total cf 18,356 producing plants, 792 pro- duced wooden box products. The Wooden Box Division is also the more seasonable part of the industry because a greater part of its products are used for shipping agricultural products, and the season therefore follows the harvest season. The independent establishments in the manufacture of wooden crates, boxes, etc., are located chiefly 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 packages for industrial use. It is this part of the Wooden Bex Industry that has been the hardest hit oy the substitutes paper board and paper boxes, the paper box field having not yet been extended to include agricultural products in any substantitil amounts. ft 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 Dimension Industry. By hardwood di- mension is meant both the cutting and shaping of wooden parts used in industrial processes. This branch of the industry plays an important part in the application of wood to industrial products, an illustra- tion being the Furniture Industry. Wooden pa.rts for furniture, in fact entire peices of unassembled furniture are now manufactured in sawmills, the only process required to make them into finished furniture being that of assembling and finishing. This industry has developed rapidly within the past 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 lumber used in the manufacture of various wood products represents waste. The savings from making finished parts nearer the point of lumber production, and the avoidance of the shipping of waste products, represent a considerable saving to industry. This development is a further step in the integration of the industry and 9813 seems to hold the chief hopes of that industry in maintaining a higher ratio of hardwood lumber consumption. Practically all of these auxiliary Divisions, while not contributing very significantly to the basic problems of the Lumber Industry, were included under the Cede, bringing with them all of their minor problems to complicate t-ie operation of the Code, which, in the first place, was pointed toward the soluti:n of the problems of the Lumber Industry. B. SCOPE OP DISCDSSICH To sum up, the broad background of the entire Lumber Indus- try as it presented itself up to the time of the Code has been out- lined here. The purpose of Code action was a solution of the problems of the industry. Prom this point forward the discussion of these problems is divided into the following fields: Pirst, the basic problems of standing timber, which is the base of the Lunber Industry. These problems concern themselves with volume, location, timber ownership and value, end costs of holding, and efforts at conservation — in fact, all of the problems of forest management. Second, the problems of production. These, while closely related to species and the problems of forest management, are also concerned with special problems revolving around volume, costs, labor, capacity, capital, credit, etc. Third, the problems of distribution. Involved here are the factors of competition, both regional and species, the demand factors, the problem of substitutes, prices, transportation costs, etc. Fourth, a resume of the attempts .to meet these problems through the medium of a code of fair competition and an analysis of the operation of that code, and Finally, the present status of the industry and issues re- lating to its future needs. 9813 -24- THE PR03LE1.IS OF FOREST MAUAGEIBI'T Forest management has a vide range of meanings depending upon the "ourposes underlying it. Thus in commercial forest management there is a tendency to stress the ari.'ciples of profit and maximum -orodAiction, r/hereas in public forest management special emphasis is usually "olaced upon the principles of sustained yield and highest use and service of the forest. The Society of American Foreste~s defines it as follows: "For- est management is the practice or application of forestry in the conduct of the forest business. " A. TIMBER SUPPLY AMD LOCATION Like a,ll natural resource industries, the successful development and management of the lumber and timber products industries are (dependent upon: (l) The location of re.' materials with respect to consumer reouire- ments; and (2) upon the form, character, volume and accessibility and, therefore, cost of material in a specific region which vould permit its use or conversion at a profit. These dependencies involve problems of cutting, of transportation, of competition with similar products and possible substitutes, of costs of rav material and conversion, and of demand. The supplv, location, and other characteristics of the principal kinds of timber available for con- version into useful products are described in this section. 1. Present Forest Area, From the original forest area of more than 800,000,000 acres, ap- proximately 304,000,000 acres, or 38 per cent, have been withdrawn from commercial timber growing. This withdrawal is made up of 150,000,000 acres chiefly cut to clea 1, lane for farms in early days ,and the timber destroyed because of no market; 10,000,000 acres of reservations, parks, "oreserves, etc.; and the balance cut over for timber and subseauentl - '" for use for other purposes. The conversion of forest land into farm lane 3 is still going on, particular! - - in the "."est, where the removal of virgin timber of relative- ly low present value for commercial purposes releases good soil for farm- ing. It is estimated that eventual!" some 2,000,000 acres of commercial forest land in the 'Jest will be removed for this ourpose. In the East, however, an ooposite tendency is being manifested on a major scale, for here farms are being abandoned and becoming increasingly available for forest use. Already 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 may be added to the commercial forest area b - r 1950. Further, 3,000,000 acres of treeless prairies could be planted if the need for increased for:-st area develops. This acreage of abandoned or potential forest area, on account of its variable ouanti- t}', 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 area, after deducting the 304,000,000 acres cited above as withdrawn from cor lm 1 » ,-, ., rrowin' constitute the present com- mercial forest area and encompass the following ciscussion. The South contains the largest area of commercial forest lanes, with approximately 40 per cent of the total for the United States. The Pacific Coast region ranks next, with a little over 13 per cent; closel _,r followed by the Central re ion ^rith about 13 per cent; and the Lake region, with slightly over 11 per cent. These four regions contain about 75 per cent of the total commercial forest area. The Middle Atlantic region contains the smallest area, or about 5 per cent; .'Mile the other three regions, ire-" Snglanc "~ r ith 5 per cent ant? the Forth pnd South 'lock" Mountains with 7 per cent and 5 per cent, resuectivel •-, possess the rest of the acreage. (*) Approximately 365,000,000 acres, or 74 per cent, of the commercial forert lands lie ea^t o: ?lr i r ith the balance stretchine istvarc from the foe 1 . UOUIW About 33 per cent of the total commercial forest area of the United States is characterized h" trees large enough "o^ sr T ' logs, in accordance with prevailing louring anc milling praetice, and if therefore designated as saw-timber arer. Of this area., 5" per cent is located east of the Great Plains. Here again the South leads in this type o^ land, claiming 30 per cent of the total, while the Pacific Coast ranks next v?ith 23 oer cent. The Lake Strtes cor, tain the least saw-timber land, or approximately 3 per cent of the total, followed by the i.Iidc!le Atlantic States with about 4 per cent. (*) Throughout this report in discussing timber or timber lands various regions are referred to as follows: Hew England Hido.1 ; Atlantic Lake Central Connecticut Maine Massachusetts Hew Hampshire Rhode Island Vermont Dela.' 'are Maryland Mew Jersey He T :' York Pennsylvania i !i chigan 1 1 1 i no i s Minnesota In di ana North Dakota Iowa Mi scon sin Kentucky Missouri Ohio Tennessee Mest Virginia South Pacific Coast M. Mocky Lit. 3ocky Mt. Alabama. Arkansas Florida Georgia Louisiana Mississippi Morth Carolina Oklahoma ■ South Carolina Texas Virginia f^n -i -r.- Jalifornia Oregon Washin -ton Idaho Montana Ari z ona Colorado ITevada I ew i r exico South Dakota. Utah Wyoming 9813 -25- Twenty-f our (24) rjer cent of the commercial forest lands contain trees too small for saw logs "but large enough for cordwood, regardless of whether the stand is to be cut for cordwood or held for sew timber. As would be expected, the states east of the Great Plains contain most of the cordwood. areas, or about 85 per cent, due to the feet that a greater proportion of the virgin timber in the Ear.t has been cut over, this re- leasing the lands for second growth. The bulk of cordwood lands, or 44 per cent of the total, are located in the South. The Central States come next, with 21 "icr cent; followed by the Middle Atlantic and Lake States with 9 end 7 per cent, respective- ly. Few England has the least, approximately 4 per cent, and the other three regions possess approximately 5 per cent each. The relatively smal 1 cordwood area in the Pacific Coast States is due to the high per- centage of virgin saw timber on their total commercial forest area. Restocking are.-: - comprise lands that once supported a stand of tim- ber and which ere nor being rene"ed. The bulk of this new growth is smaller than cordwood size. Fair to satisfactory restocking areas, ac- cording to -ore sent standards, ma - be defined as lands 40 per cent or more Restocked rith commercial species, rhile areas \ ith a lower "restock" percentage are considered poor to non-restocking areas. Restocking lands constitute about 37 per cent of all commercial forest lands and, as is to be expected, they are found in those regions where the largest volume of lumber has been produced over a considerable period of time, namely, in the South snd the Lake States. The South contains over 80,000,000 acres of such area, or IS per cent of the total cormercial forest area, of the entire country. Of this amount nearly one- half is considered fair to satisfactory reproduction^ The Lake region contains restocking lands amounting to 8 per cent of the total commercial forest lands, with 67 per cent of them fair to satisfactory • The eastern regions contain nearly six times as much reproducing area as is found in the western regions, ano the proportion of fair to satisfactory restocking lands to total restocking lands is much greater. Reproducing areas are in the best condition in the Few England and Central regions, approximately 70 per cent containing fair to satisfactory re- production. The poorest reproduction is found in the South Stocky Moun- tain region, where only 9 per cent of the reproducing areas are fair to satisfactory. It is apparent that the commercial forest lands of the "kiited States are, generally speaking, so distributed as to produce future supplies of forest products "airly close to large population centers, and therefore to expected (demand. Possible exceptions are the New England and the Middle Atlantic regions, where the expo.nsion of forest industries to any- where near their former capacity might necessitate the drawing of partial future supplies from the South and ".'.'est. The comnercial forest lands in these two regions, however, if intel q igeritlv managed, ma' r be expected to produce forest products considerably in excess of their coi sumptive demands. Of course there may be a trend of future forest industries toward, regions of abundant supply, a movement which has characterized such industries in the "oast . 9813 -27- 2. Forest Stand From the standpoint of future generations, the forest area now available will furnish sufficient land for the graving of required forest crops. For the present and immediate future, the supply of timber nov/ standing, its location with resoect to the need for forest products, and its marketability are of prine concern. In 1928, through the kcSweenejMJclIary Act, Congress authorized a national survey of the timber resources of the United States. Its objects, for the survey is not - r et complete, are: (1) To make an inventory of the presBnt supply of timber and other forest oroducts, (2) to ascertain the rate of growth, (5) to determine the drain on the forests through indus- trial and other uses, and from fires, disease, etc., (4) to determine the "oresent and orobable future requirements for timber and other forest pro- ducts, and (5") to correlate the findings -'ita existing and anticipated economic conditions. Although the field work on over 150,000,000 acres has been completed and substantial progress made on the complicated office work of this national survey, no result" are yet available for a,mr one state or group of states. The area, stand, growth and partial drain figures in this re- port, therefore, have been largely taken from U. S. Forest Service sources. ( *) Preliminary and unofficial estim fces gained from the survey cited, above indicate that ?ome of the stasd and grorth figures token from the Forest Service reports are too low. It is believed, therefore, that the conditions described and. conclusions readied in this report are conserva- tive. a. Stand, on Total Area Products derived from the forests are of widely varying character, and their unit volume is expressed in a number of different ways. Thus, lumber and logs are expressed in feet, board, measure; fuel wood, pulp wood, distillation wood, and other cord wood, in cords; hewn ties, fence oosts, staves and. hoo'os, shingles, poles and piling, in nieces; roiuid. mine timbers, in cubic feet; end slack he; ding and tight heading co- operage, in sets. The onl" possible con. ion denominator of measurement is cubic feet. Chart II and Ta.ble II show the total stand, expressed in millions of cubic feet, of all forest products estimated, to be standing in tree form on the approximately 495,000,000 acres of commercial forest Irnd. Fif t Tr -six (56) per cent of the forest stand of the United States is in the West. The Pacific region, with 39 oar cent of the total, has the largest stand. The South is next, with 23 per cent, and the Lake region last, ""1th 4 per cent. (*) U. S. Forest Service. The Fo rest Si tuation in the United States; a special report to the Timber Conservation Board, January 30, 1932; and Senate Document #12, A i^ tional Plan for American Forestry , 1933. 9813 -23- Softwood comprises about 74 per cent of the total stead in the United States. In the eastern regions 40 per cent of the stand consists of soft- wood, and in the western regions practically 100 per cent is softwood. Hardwoods predominate in the New England, Middle Atlantic, Lake and Cen- tral regions. Only one region east of the Great Plains, the South, con- tains a greater volume of softwood than hardwood. b. Stand on Saw Timber Area The stand on the saw- timber area comprises 75 per cent of the total- United States stand, with hardwood predominating in the eastern region and softwood in the v7est. Eighty-one (31) per cent of the total stand on tie saw-timber area is softwood. The stand on the srw-timber area is further discussed in terms of boa re feet, under the caption "Saw Timber Stand. " c. Stand on Cordwood Area The stand on the cordwood area amounts to 20 per cent of the total stand of the United States. About 81 per cent of it is located east of the Great Plains. Thirty-eight (33) per cent of the Eastern total and 99 per cent of the western total is softwood. The South has the largest cordwood stand, i. e., 39 per cent of the total, of which 61 ;oer cent is softwood. In all of the Eastern regions, er:cept the South, hardwood greatly predominates in the cordwood area. d. Stand on Restocking Area The stand on the restocking area amounts to 4 per cent of the total stand in the United States. ( *) A breakdown of the restocking area into softwood and hardwood is impossible from existing data. Of the various regions, the South again leads in volume of stand on the restocking area, with 42 per cent of the tot 1 volume. The North Rocky Mountain region is next, with over 14 per cent, followed, bv the Pacific, Middle Atlantic and New England regions. The South !tocky Mountain region has practically no volume on the restocking area. e. Sa"" Timber Stand Prom the standpoint of both the lumber industry and the public, the amount of sa vr timber, its character, and its availability are forest management -oroblems of fundamental importance. Not only does the suppl v of sa T timber take care of current lumber and other important reauire- ments but it governs present and oossible future competitive conditions for the industry and forest products users. Chart III and Table III show the present saw timber stand of softwood and. hardwood e.nC the va.rious classes of ownership. The saw-timber stand in the United States is estimated to be 1,687,- 803,000,000 feet board measure. Of this 59 per cent is privately owned, and. the balance is owned or administered by the public in the form of (*) Omits data for Lake region, which are not available. 9813 29« national, Indian, state, county, and municipal forests. Of the privately owned timber 38 per cent is owned by land, lumber, pulp and paper, and. mining companies; naval stores operators; railroads; and. miscellaneous individuals and. agencies; and the balance by farmers. All of this supply is not immediately available because of poor lo- cation V3ith respect to transportation facilities, densitv of stand., com- position of stand, and other factors. Obviously its complete conversion into forest products is governed, by the willingness of the public to pay t .e cost of getting out the more inaccessible and. scattered timber. Availabilitjr in the "Test is illustrated, by the State of California. In a study of the timber situation in that state in 1914 the ouestion of accessibility was carefully considered.. (*) For purposes of the study, the state, outside of the redwood region, was divided up into three zones of accessibility, in which the logging costs were estimated, at $6.50 per M feet or less for Zone 1, $6.50 to $9.50 for Zone 2, and over $9.50 for Zone 3. It vfas found that 34 per cent of the total stand, both publicly and privately owned, -was available at $5.50 or less, 46 per cent at Zone 2 cost, and the balance at Zone 3 cost. In 1914 the average logging cost for 20 representative pine mills in California was $5.24 per M feet. In 1934, however, according to statistics furnished ~by the ",'estern Pine As- sociation, average logging cost in the nine region of California was $3.51 per LI feet, or still, within the Zone 2 cost limit of 1914. The average price received in 1914 by the 20 representative pine mills in California for their product f.o.b. shipping point was $16.03. Although average price figures for 1934 are not available, average prices by species f.o.b. shipping point are reported 'by the Western Pine Asso- ciation as varying from about 318 to about $43, with an estimated, average for all species in the nine region of California of approximately $25. Thus, the logging cost in 1914 was 32 per cent of the selling price, or substantially the same ratio as in 1934* This indicates that as logging costs increase due to relative inaccessibility, either selling prices increase or the product is sold below cost. Further discussions as to the effects of either of these courses will be found, in a later chapter. Another problem incident to forest management lies in the trend, away from lumber as' a primary forest product and toward material that can be converted, into pulp and then made into a variety o^ products. Timber difficult to get out in log form may be exploited in cordwood form, which is more suitable for pulp conversion, and. at a substantially lower cost than that reouired for the removal of saw logs. Of the total saw-timber supply 39 per cent is softwood and 11 per cent hardwood. About . 83 per cent of the total cut during the period 1929- 1934 was soft rr ood. It is thus seen that the relative demand, for softwood and hardwood, is in about the' same proportion as the supply of softwood and. hardwood sax timber. (**) (*) Smith, C. Stowell, Assistant District Forester, The Lumber Industry in California; an unpublished report of the U. S. Forest Service. (**) Table V (a) of this report. 9813 -30- Seventy-nine (79) per cent of saw timber is located west of the Great Plains. Of this practically all is softwood. 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 enough 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 lumber 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, however, less t.ian 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 TTest are found in- Oregon. The next largest stand of saw timber, approximately 12 per cent of the total, is in the South, with 61 :>er cent softwood 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 — practica.ll/ 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 Lake and Central regions is also preponderantly hardwood — 74 per cent and 91 per cent, respectively. B. THE PROBLEM 0? TIMBER 0T71TERSHIP AITD VALUE 1. Ownership of Entire Porest Area a. Industrial Ownership Over one-half of the total co.oinercial forest area is owned "ay 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 industrial lands of the entire United States. One- third of the total area under industrial ownership is classified as saw-timber area. Because of the large areas of softwood and hardwood forest which were originally culled of softwood alone on account of easjr river driv- ing, leaving an essentially unbroken old growth hardwood saw timber for- est, over 50 per cent of the New England region is classed as saw timber, In the Lake region less than 10 per cent is saw timber. Cordwood 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-restocking areas. The Eastern regions contain 74 per cent of the industrially owned saw timber, 93 per cent 'of the cordwood, and 90 per cent of the repro- ducing areas. Although the Western regions contain a relatively small percentage of industrial ownership, that ownership, especially in the Pacific Coast region,' is very important because it includes land that is potentially highly productive and a.lso because considerable areas possess virgin stands which are pressing for liquidation. Industrial ownership in the South 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 , Earm Wo o dlarid s ."'"'■ ' Approximately 26 per cent of the commercial forest area consistB of farm woodlands. Of this, 95 per cent is in the East, where it con- stitutes approximately one-third- of the Eastern commercial area. In the Central region it includes about one-half, and in the South and Middle Atlantic about one-third of the commercial acreage.- Earm wood- lands consist of 23 per cent saw timber, 34 per cent of cordwood, and 38 per cent of restocking lands. In the South, where the largest area of restocking farm lands is located, ■ slightly less than 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. Approximately 20 per cent of the commercial forest area is pub- licly 'owned. Of this amount about 90 per cent is owned or managed by the Eederal Government , 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 Western 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 area of publicly owned commercial forest land is in the Pacific Coast region, amounting to 34 per cent of the total. 9813 -32-. Sixty-three (63) per cent of the total publicly owned area consists of saw timber, 16 per cent cordwood, and 21 per cent restocking area. The greatest publicly owned saw-timber acreage is in the Pacific region, followed by the South Rocky and the North Rocky Mountain regions. The public owns a little over 10 per cent of the total cordwood areas and about the same per cent of the restocking area. 2. Ownership of Saw Timber Stand a. Industrial Ownership. (*) Generally 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: Hew 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 whole 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. Earm 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 Rocky 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 9813 -33- ■ d. Other Federally Owned or Managed Forests Approximately 5 per cent of the total saw-timber stand, largely Indian, is Federally owned or managed in addition to the national for- ests. It is almost entirely softwood and all hut 2 per cent is located in the West. Seventy-six (76) per cent is in the Pacific region, with the "balance scattered, New England does not nave this type of ownership. e. State, County and Municipal Ownership Approximately .3 per cent of the total saw timber is under state, county or municipal ownership. Of this amount, 97 per cent consists of softwood. Ninety- three (93) per cent of the saw timber so owned is located west of the Great plains — 62 per cent in the Pacific region; 27 per cent in the North Rocky Mountain region; about 3 per cent in each of the South Rocky Mountain and New England regions; and the balance scattered. 3. Average Stand of Sa w 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 lowest costs. Table IV 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 industrial ownership. In all classes of ownership the Pacific region likewise leads in density, with an average stand of 23,598 feet per acre; whereas the Central region ranks last, with 1,631 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 low 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 10,893 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 Growth 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 moolmnical qualities which have appealed to consumers, so long as they could "be secured at reasonable competitive prices. Future require- ments may call to a considerable extent for species which will produce the greatest volume of wood 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 below present estimates. 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 Sauth, 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, with over 12 per cent; the Lake region third, with 7 per cent; and the Middle Atlantic region fourth, 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 ranks 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, and the South Rocky Mountain region with 2 per cent. The South also leads in hardwood growth, followed by the Central region, the Middle Atlantic, and the Lake region. The comparatively low growth in the Pacific Coast region, consti- tuting a little less than 8 per cent of the total, is accounted for by the fact that the forests are largely mature 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 and releasing the land for reproduction can the potential growth 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 Lake region has the smallest annual saw-timber growth,, almost entirely hardwood. (*) Chart IX and Table IX (**) Table VII 9813 -35- Gr eat est hardwood saw-timber growth is in the South, or 54 per cent of the total hardwood growth. The Central region is next with 20 per cent, followed "by the Middle Atlantic region with approximately 12 per cent, and New England with nearly 9 per cent. b. Forest Drain In addition to the supply of available timber, the rate at which it is being removed end reproduced constitutes a major problem of forest management, and is of prime importance in the balancing of forest ac- counts. • This removal, or drain as it is commonly called, is brought about in many ways, chiefly ay cutting for commercial purposes, by fire, dis- ease, etc. For purposes of this report, the average annual drain for 1925-1929 has been used unless otherwise ' specif ied, because statistics on average drain for subsequent years are available only for lumber. Obviously, the use of only lumber 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 years 1925-1929 cover a period of generally expanding busi- ness, including the peak lumber production year of the past 24 years. Each of those five years showed a higher production than 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 competitive nature. The Lumber 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 forming as to' what products should be produced. For instance, clear boards are possibly no more valuable, and perhaps less valuable, than built-up plywood. Such substitution of plywood for clear boards would make presently available 'mature timber, suitable for veneers, 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. Further, large-dimension timbers can not now successfully compete with steel or reinforced concrete for many purposes. Clearly, new developments in the utilization of forest products have effected a decreased demand for tnose products which in the past have formed the bulk ox requirements, and at the same time these develop- ments are 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 of forest products will demand must be predicated upon present conditions rather than upon those of the past. Any dis- cussion of forest drain must take 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 current annual growth or potential growth. The first prao : ' q 931U -36- tice overlooks the fact that the production of any commodity is ordinar- ily governed, so far as financial exigencies will permit, by the amount of stock of raw material in inventory. The second assumes tnat the for- est is static, that it consists only of what can he seen end mecsured at the present time. In order, therefore, to give proper perspective to the problem of dram, a comparison of forest-products drain scad forest grov;tn in rela- tion to the available stand of timber is here presented. Thus the pos- sible life of our forest resources may he predicted with so le degree of accuracy. (*) The upper half of Table IX (a) shows forest products expectancy, assuming that the lumber drain, otuer 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; end 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. However, since the rate at which this reduction will proceed is unknown, past experience must neces- sarily be used. Considering the entire commercial forest area without 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 Unit.-d States as a whole. However, during this 65-year period, growth will increase as additional growing lands are released by the cutting of mature timber and 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 volume 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-years 1 supply of saw timber, accord- ing to current manufacturing practices, is available, varying from a 7-years' supply in the Central region to a perpetual supply in the South Rocky fountains. Allowing for increased growth as mature forests are removed, however, and applying the same assumptions 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 Fair Competition for tne Lumber and Timber Products Industries; Forest Practice Rules. 9813 ~37« Accepting ths above ass-amp tions of drain >nd growth, it is ap- parent that a shifting of lumber production from certain regions to others is indicated. This will automatical! j take place, as it has in the past, as available supplies of saw timber "become temporarily ex- hausted. On the other hand, the conversion of increasing quantities of trees too small for saw timber into products which directly compete with lumber, may occasion a shift to new wood-manufacturing enterprises in certain regions rather than a shift to new saw-timber fields. The data in the upper half of Table IX (a), based upon the 1925- 1929 average drain, is ordinarily taken as an indication of the maximum probable relationship of forest drain' and growth to the supply of stand- ing timber or to the inventory of raw materia! from which forest pro- ducts are derived. A much sounder analysis is possible from a consider- ation of the lower half of Table IS (a), in which the probable drain of forest products is estimated to be the average of the 1929-1934 period, with, the exception of the fire, insect and disease drain (1925-1929). The lower half of Table IS (a) snows that on the entire commercial forest area a volume of material equal to tne total volume of all forest drains will be annually available :f. or -over 700 years, even though no in- creased growth is taken into consideration. With anticipated increased growth, it appears that nearly twice the 1929-1934 drain can be perpet- ually maintained. On saw-timber areas only and consider ing no increased growth as mature timber is removed, -the saw-timber size trees will sustain the. 1929-1934 drain for an average of 73 years, with a minimum of .15 years in the Central region. With anticipated increased growth,, the supply of saw 'timber is expected to last 204 years in the United States. as a whole, varying from 19 years in the Central region to a perpetual supply in New England, the kiddle Atlantic section and the South Rocky Mountains. Before the expiration of 204 pears, and- if sound forest practice pro- visions such as were provided in the Code are carried out in the mean- time, it can be confidently expected that the forest ledger will be per- manently balanced with respect to. supply and demand.. In view of this prediction it might well be contended that the timber supply problems of forest areas and forest industries are en- tirely solved i nd require no further cooperation between the industries and the public. . The problems 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 might be ex- pected during the next few decades, or until the cut-over areas in cer- tain regions had had an opportunity to recuperate; • (1) A shortage in supply of certain of the most desirable species or grades and the necessity- of either substituting other species or grades, or other materials for tnem, or going without during the period of adjustment. ... (2) A continuation in certain forest regions of the cutting of immature timber during- the period of its greatest volume growth, there- by reducing the wood-producing capacity 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 costs 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 temporal 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 througn 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 knowledge of potential forest areas, stands and growth, it -/as 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 oro- 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 which 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 were 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 - -39- and other products whereby a greater amount of finished product may "be secured from the same volume of timber than if sawn into lumber. (*) Although, any prediction of future forest-products, requirements is largely speculative, sufficient facts are available to clearly indicate that a "timber famine" is improbable. This does not mean that reasonable care should not be taken of the present forests and commercial forest areas, both in the interest of the industry and the public, nor that local shortages in supply- are not likely to occur temporarily in certain regions 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 forested areas, including. adjustment of production of forest products between and within .th-.- various forest regions, so as to secure the best results from existing forest growing stock. The area now covered with commercial forests and likely to remain available for that purpose is more than: .sufficient to meet any predictable future de- mand. •-..;•! • . Aside from the prudent conversion of forests, to whicn the "timber famine" idea specif i call. r applies, there are other and important problems that must be taken into, consideration in any national conservation policy. These include the protection of watersheds where forests or other equally or more suitable cover' may exert important influences on absorption and run-off; recreation, and the protection of fish and game. Since, however, these values apply only indirectly to the industrial use of forests, and since the industrial forest user is interested in their maintenance no more than is the average good citizen, tney do not constitute a part of the present industrial picture. , . ■ 5. Value of Forests and Forest Land a. Privately Owned Lands The total estimated value of land on which the commercial privately owned forests of the United States are standing 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 and 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 and location; and cordwood at from $0.35 to $1 per cord. The average softwood value is estimated to be $3.36 per M feet; hardwood $6.34. (*) If consumption had continued at the 1906 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 -4C~ ;. Of the. tnt-o.1 land and timber value, 33-1/2 per cent applies to forests in the South* The pacific Coast region comes next with 31-1/2 per cent, the Central region next with, a little over 10 per cent, fol- lowed by Hew England with nearly 3 per cent, the Lake 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 picture. However, certain facts are known and from them a general idea may be obtained. Publicly-owned or controlled lands include an area of 98,659,000 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. (***) For the purpose of estimate, publicly-owned land values are figured at $2 per acre (****), softwood stumpage at $2.50 per M, hardwood stump- age at $5 per U 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 slightly 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 national Plan for American Forestry , (1933) , Senate Document No. 12, Table 9, p. 188. (****) Q n the basis of value for grazing. (*****) Table X -41- } During that period the total volume of sales reported amounted to 104,784,869,000 feet bpard measure, for which a total price of $392, 097,586, or $3.74 per 1.1 feet, was received. By regions, the highest average price was received in New England, namely, $6.64. The Middle Atlantic was 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 stumpage value during the past several years is quite marked. (*) During the period from 1928 to 1933 reports of total stumpage sales show that softwood stumpage 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 based, as they are, upon a large volume of sales throughout the timbered states, should be fairly reliable as they iron out the discrepancies appearing 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 sof twood and. hardwood stumpage sales within individual states and by individual years is subject to considerable criticism. In a few states, however, the number and volume 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 Ownershi p As a result of the U. S. Senate and House resolutions enquiring about tne high price of lumber and the possibility of combinations of lumber manufacturers and timber owners 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 was made about 25 years ago, it is believed that the principal consolidations of timber ownership had been (*) Table X (a) (**) Table X (b) (***) Bureau of Corporations, Department of Commerce and Labor, The Lumber Industry , Part I, issued January 20, 1913, and Parts II and III, July 13, 1914. 9813 -43- completed prior to that time. Certainly for the past several years, with decreasing 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 developed 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, ;.nd 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, were made in standing timber which could be retired only through eventual conversion. As the areas of virgin timber bega. 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 tota of all other delivered costs. Costs were also increased as the industry had to go farther and farther "back in rougher country to reach the timbe Thus the industry : 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 improved through careful grading and seasoning, which made it more desirable to the consumer. New, lowe cost system 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 wnich had been left behind in previous migrations. Up to about 1921 to 1923 lumber prices 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, stunpage values began to decline for the first time in hi tory. Thus, many units of the industry faced with steadily mounting c Tying 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 existing 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 down, until curtailed production and increased prices again permitted them to compete. 9813 ~43~ i AH of these factors have played a part in removing the incentive ; to large concentrations of ownership. 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 showing how mistaken the Lumber In-, dustry and the public may be in predicting future economic trends. The Bureau found that at the time of its investigation two rail- roads and their subsidiaries, through land grants, and one timber company, held nearly 11 per cent of the estimated total privately-owned timber in the United States- A large amount of the railroad timber has since come back into public control. It was estimated that the above holders, to- gether with five others, held over 15 per cent of the total private timber. In California, Oregon, Washington, Idaho, and Montana, it was esti- mated that 37 holders owned approximately one-naif of the privately-owned timber in that region. In the South it was estimated that 67 holders owned 39 per cent of the long leaf pine, 29 per cent of the cypress, 19 per cent* of the short leaf and loblolly pine, and 11 per cent of the hardwoods. In -the Lake States it was estimated that 215 holders owned 65 per cent 'of all the timber. No 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 now a material factor in the economic problems of the industry. . • • C THE PROBLEM OF HOLDING TIMBER LAND. The cost of holding timber land includes administration, interest on money borrowed to acquire the land, fire and other protection expend- itures, ;?■'■ I v,' .'z, No cata are available on administrative costs, and are ixico) ■;•'•* cl -. c i the balance. However,, it is possible to roughly ap« proT 1 : ■■.•'..- .L - 1 1. -.■ere-t.-ical annual burden on the forest products industries through their saw 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 pay the annual bills for all forest produc.ts industries. However, it produces approximately 50 per cent by volume of all forest products (*) of every kind. Moreover, it is corrmon 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. Therefor it seems safe to assume that it should stand at least 75 per cent of the ejcpj.tje of holding the "privately d' n^d -saw-timber area. On that "basis it a annual burden would be: Interest on indebtedness ,iJ47,342,126.25 Fire protection 1,905,043.36 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 i.i 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 interes on the money invested in it. I7ith 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 night 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 paid through conversion in th long run. Studies made in California and the Southeastern States in 1914 (***) show the following relationship of indebtedness to total investment: Region Uumber of Opera- Total tions ' Investment Total Bonded or Other Indebt- edness Per Cent of Indebtedness to Total Investment California Pxne 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. Porest Service, The Lumber Industry in California , and Timber Ownership and Lumber production in the Southern Pine Region; unpublished reports. 9813 — 4. 5— The above f igur'es , ' representing probably the largest and most im- portant operations in the regions studied, indicate that a substantial portion of the money invested in the enterprises in 1914 was "borrowed. A considerable portion of -this consisted of "bonded indebtedness incurred largely for the purpose of acquiring timber end to extend short term obligations over a period of years. Such bonds were sold with the provision for a -'sinking fund to retire them within the speci- fied period. Usually from' $2 to $3 per M feet cut (log scale) and to be laid aside for a sinking fand. 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 bore interest at 10 per cent or more. It is thus shown- that in 1914 the larger operators in the United States were carrying a debt varying from 33 to 47 per cent of their total investment. The condition of the small operators is unknown, but there is no reason to "believe that they were in a substantially different position except that their obligations werp generally short term and their interest rates correspondingly higher* Statistics of Income from the Bureau of Internal Revenue for 1933, covering 6,161 producers of forest products, show that bonded debt and mortgages amounted to only 17 per cent of the depreciated and depleted capital assets, ZJo data are available to show other possible liabili- ties against the capital assets, nor is there information on interest rates now prevailing on indebtedness., Accordingly, for the purpose of this discussion, certain assumptions are necessary. The first is that 35 per cent of the present total investment in saw-timber lands consists of indebtedness. The second is that this indebtedness bears at least 6 per cent interest. The third is that the. Lumber Industry pays the bill on 75 per cent of the saw-timber lands. On this basis the annual interest charge against the Lumber Industry would be $47,342,126.25 or $2.38 per 1.1 feet on the 1929-1934 production. 2* Fi re P rotection Costs 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. Accordingly, there has developed the cooperative system financed jointly "by -.both public and private in- terests, with the benefits spread over all lands included. In addition, 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. Frequently, in addition to cooperative expenditures, both public and private agencies spend substantial amounts in order to strengthen the protection of their own lands. Forests are not always found in solid blocks, but frequently include . grazing and other types of land, As fires are no respectors of boundary lines, for the purposes of this report the protection of such included lands is considered a necessary and proper part of the whole protective effort. 9813 -46-" The total annual expenditure for fire protection, both prevention and suppression, is approximately $16,400,000, (*) or one cent per M feet on the total stand of saw 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 "by the North Rocky Mountain region, with 22 per cent, and the Lake region with 14 per cent. Outside of these straight Federal expenditures for the protection of Federal lands, there is spent annually for cooperative fire protection approximately $6,000,000. Of this the Federal Government- contributes 32 per cent; the States 48 per cent, and private timber land owners the balance. This cooperative effort covers privates-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 lands, regardless of ownership, be safeguarded. Such cooperative effort is administered by the States. In addition, private owners spend approxi- mately $1,500,000 for the more intensive protection of their own lands, thus making available approximately $7,400,000 annually for the protection of private and State lands. Of this amount 31 per cent is s^ent in the Pacific region alone, 19 per cent in the Lake States, 15 per cent in the South, 11 per cent in the Middle Atlantic region, 11 per cent in the North Rocky Mountain region, and 8-1/2 per cent in the New England region. Less than 1 per cent is spent in the South Rocl:y. Mountain region. Charging the entire fire protection expense, outside of straight Federal expense, to the average lumber production of 1929-1934, gives an average annual charge per ;; feet of $0.57, varying from a maximum of $2.84 in the Middle Atlantic region to a minimum of $0.07 in the South Rocky 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. Nor is the fact that lumber constitutes only approximately 50 per cent of all forest oroducts 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 per cent would better represent the Lumber Industry's stake in the fire protection effort. On that "basis, the cost per M feet produced (average 1929-1934) would "be $0.23, varying from a maximum of $2.13 in the Middle Atlantic region to a minimum of $0.05 in the South Rocky Mountain region. If charged against the stand of saw timber industrially owned, the annual cost of the present fire protective effort (private and cooperative) would "be about 8 mills per M feet for the United States as a whole, vary- ing from 2 mills in the South Rocl:y Mountain region to $0,135 in the New England, If charged against the total saw timber stand privately owned, which includes industrial and farm ownership, the average per M feet for the United States would "be 7 mills, varying from 2 mills in the South Rocky Mountain region to $0,058 in New England. (*) Tahle XI. 9813 -47- Since the forest products industries annually pay $2,541,391.15 of the total private and cooperative expenditures of aporoximately $7, 400,000, and since the LumDer Yndasti-y's snare is assumed to be^ 75 -oer cent, its annual expenditure would amount bo $1,906,043.36, or $0,096 per M feet on the average 1929-1934 production. The U. S. Forest Service estimates that complete said adequate pro- tection for State and private forest area ./ill cost $13,381,100.. annual- ly. This vrould involve protection of 209,557,738 acres in addition to the 280,422,032 acres now protected. The proportion of protected to unprotected State and private for- est areas end 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, and the forest industries and the Federal and State agencies are spending approximately $641,453. 48 annually, or 81- per cent of the $792,000, estimated, to "be needed. However, in Massachusetts and PJnode Island more money is being spent for fire protection than is believed absolately necessary in comparison to the otner 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 coverage of about 84 per cent. The amount of private expenditure in this region is relatively small. In the Lak-i region as a whole, where all State and private forest areas are protected to some extent, expenditures are 82 per cent of the amount needed, although in TZisconsin slightly more than the required amount is being spent, whereas Minnesota is considerably short of its needs. In the Central region over 65 per cent of the Sta.te and private forest area is unprotected, and only 16 per cent of the 'amount needed is "being spent for fire protection. In the South, where 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, where fire risk is very great and where most of the State and private forest area is under protection, the an- nual expenditures for fire protection are estimated to be approximately $2,275,159.02, as against $2. 135,000. needed. Over 60 per cent of the total is paid by private agencies. In Oregon and Washington more than the estimated amount required is being s"oent. In the Horth Rocky Mountadn region, another region of high risk, where approximately 95 per cent of the State and private forest area needing protection is protected, private expendi tares are over one- half of the total expenditures for fire protection. Total expenditures are approximately 125 per cent of the amount estimated to "be needed. 9813 -48- In the South Hocky Mountain region, with only a nominal fire risk, about 80 per cent of the State <:nd private forest area is "being pro- tected. In this' region only $44,100. is considered necessary for ade- quate protection, or less than the amount required for most individual s-tates. About one-half of the required amount is being spent. 3. Taxation The annual burden of taxation on mature standing timber is one of the most important single factors in stimulating the sale or cutting of timber and proportionally influencing the manufacture of forest products without due regard to current market demand. Upon the solution of this problem substantially depends the present and future security of owner- ship of privately owned timber as well as the maintenance of reasonable balance between production and 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 was composed of 22 leading authorities on the subject, including foresters, economists, educators, conservationists and executives. To the question as to whether state and county taxation had become a sufficiently heavy burden in enough regions and instances to be an important factor in determining ownership end management plans for mature timber, all answers directly received were in the affirmative. To the question as to whether taxation had in ;ny important degree already hastened cutting undesirably, from an industrial or community viewpoint, the reolies were in the affirmative, although two members em- phasized the locrl rather then the national effect. In January, 1932, the National Lumber iaanufacturers Association addressed a questionnaire to prominent lumber producers throughout the United States for the purpose of determining the effect of taxation up- on lumber production. (**) The questions were: First: "Do you think taxation is in any important degree the cause of hastening timber cutting undesirably from an indus- trial or community viewpoint?" Seventy- three operators answered unqualifiedly in the affirmative. One answered "No", one "Not in this section", and one "Difficult to say." Second: "Have you put afl|r timber into v^roduction in order to carry taxes? " Forty-five operators answered "Yes", and 27 "No." Two operators answer- ing "No" stated that they owned no timber. (*) Timber Conservation Board; Taxation Questionnaire (1931) (**) Table XIII (a) 9813 Third: "How much capacity to produce have you added?" Of the replies received, 19 indicate! increased capacity and in several cases specified the amount. The above cross-section cf industry end public opinion is suffi- cient to indicate the seriousness of the existing tax system in its ef- fect upon the handling cf privately-owned timber iands. in addition to the current and known tax harden, the undertadnty of the future offers little encouragement fcr timber- .land owners. This is illustrated by Table XIII (b) and the following summary based upon reports from 32 lumber manufacturing companies owning timber and producing ludoer during each of the three years 1909, 1919 ana 1929. Faxes per ?er Cent Cent In- In- Per crease Per crease ... J. Urn from LI It. from 0~ned 1909 Cut 1909 $.019 $.417 .061 1.044 150 .091 379 1.192 186 Total Total Timber Production Year M ft. b.m. Li ft, "P.m. Gross 1909 44,504,507 2,051,169 $ 856,136.47 $.019 1919 37,313,134 2,177,278 2,273,312.31 .061 1929 30,719,042 2,348,737 2,799,205.80 .091 The ratio of increase since 1929 is not known. At any rate the owner of timber land faced witn a possible tax increase of from 200 to 400 per cent every 20 years is hardly justified in withholding such land from conversion indefinitely, particularly since stumpage has shown a consistent decline in value during the past several 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 cf $1,077 ,169, 000; saw timber amounting to 088, 289, 000, n feet board measure and 925,719,000 ccrds of cordwood, together valued at >4 , 758,493,540 ; cr a total for land and timber of $5,835,6.67,520. Land values, without timber, are estimated at an average of $2.72 per acre, varying frcm ~-2 to $4. Unit stumpage values (***) averaged. $3.40 per M for softwood and o6. r 5 for hammed. The timber of highest value is found in the Pacific region, namely, $1,771,472,580. The South is next with 51,397,661,450. and the South Rocky Mountain region last with 324,150,500. _ ______ (**) Table XII (***) Table X 9813 -50- The ratio of assessed to total value varies from a high of 96.6 per cent in Wisconsin to a low of 12.7 per cent in Iowa. The total estimated assessed value of $3,313,398,247. is based upon the total estimated land and timber value for each state multiplied by the ratio of assessed to total value for that state. The highest assessed value of land 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 Rocky Mountain region pays less than one per cent. The estimated current annual tax burden on commercial 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 Co,':st and the South pay approximately 70 per cent of the total tax bill on commercially-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 U feet produced (average 1929-1934). Assuming, however, the same relationsnip in obligation between the Lumber Industry and the other forest products industries a;; in the case of interest and fire protection costs, namely 75 per cent, its annual tax bill per V. feet produced would be: Based upon 1934 production 1 $1.96 Eased upon the average 1929-1934 production ...$1.53 D. F3B-C0DE EFFORTS aT CONSERVATION It is well to reiterate tnat both the public and the forest products industries have an important stake in conservation. The public wants a plentiful supply of various forest produots 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 supply of 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 employment, no r to the protection "[*) Table XIII 7" 9813 -51-* values other than tno.se affecting their immediate timber suprily. Such protection as- was given Was nsuplly confined to the time necessary to retire a specific forest investment. Forests were s.^ plentiful tnat the cutting nut of i given locality simply meant moving to a new one. Thus there develored the general idea that forest indu.btrieo were no more permanent turn mines, oil welds, cr other industries based u)on non- renewable products. Forest labor w s largely -Itinerant and seldom re- mained long at one operation, regardless of it's permanency. As tne forest indas tries -roved fartner nway frr.rn their markets and as costs of delivery correspondingly i^cr°as Q d, leaders in the industries began to realize that timber was possibly not inexhaustible s at least such timber as could be converted at a co-t low enough to assure its use in large volume in competition with, .its various substitutes. Tne public also developed increasing interest in the future, of its • wood supplies, as evidenced by the esoabli chment of forest schools and various public agencies for the purpose of studying the forest- problems and assisting in their solution. In this movement the Bureau of Forestry, U.S. Department cf Agriculture (n?w, designated Forest Service) assumed leadersnip. Probably ro other natural resources have received the same amount of consideration and the same amount of planning as to what should be done about it as have the forests. All of this study and discussion has resulted in a clearer understanding of tnepublic and industry problems involved and the development of a long-time program for solving them. : • ', » ■ Measures taken to meet 'the situation prior to the Code of' Fair. Com- petition for tne Lumber and Timber Products- Inuu.s-i;rles are as follows: 1 . • Pub li c ■'■•.:• The -first major development in forest crmsprva*:l^n in the United S^tates dates from 1891, in which year' Congress att-iht/'iiafed, the President to set apart as public reservations such of the publlb lands as contained timber or undergro "en. As a result of this au"bhor:tza-ti^n, together with later legislation, permit ting exchange and oiirchase, appro* iu.pt ely; 155,000,00.0 acres, of national forests have b's»est* •act' 'aside under manage- ment of the Forest Service, U. S. Department of . Agriculture. These lands are not reserved in the sense that the n?sour6e'e are- locked up. ' On the contrary the Government policy is to permit 'their v.~e, out' 'under such conditions that the ir ; . renewable resources, su'-^v a? t^ober aha forage, .will.. be increased in volume and quality to the' ru.ll .p'aoacrty of the land. In addition to the national forests, afopru'xinn^v.v 11,700,000 acres •f timber and wood land are found on Indian xe-sei-vatios under tne juris- diction of the Commissioner of Indian Aff air v sV tJapartmant of the Interior. Tn©«e lands, are handled in substantially, tue *>ai r ie- m^nii.jr as tne national JEBrestrS « — that is, to. .improve while wisely tiding tne. . ft^k?Urce-s . The National Park Sprvice, under the DeparSmenfc of tne Interior, also hat- jurisdiction over approximately 1 io .500 , 000 acres of public lands, of wnich Pligntly less than ,*>ne~half L&-t£rifo3T*$~ The timber resource*, on 9813 -52- pe! these lands are kept in as nearly a natural state as possible without regard to maximum growth. Tiiey 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 parks and other 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 Froducts Industry may be briefly summarized as follows: (a) A top-heavy investment in standing r a w material — approximately $6 , r '0 , 000 , 000 worth of land and timber and an unknown 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 domestic use of wood 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 would not be held liable under State and Federal anti-trust laws. The only assurance possible to get from Federal agencies has been that the legality or otherwise of a sug- gested course 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 consumption is illuminating. In 1906 the visible con- sumption was approximately 45,000,000,0^0 board feet, or over 500 feet 9813 re- ef fa CVf -53- per capita. In 1926 it had dropped to 38,000,000,000 "board feet, or a little over 300 feet per capita, and in 1932 it had dropped to 12,000,000,000 board feet, or 95 feet per capita. - In 1926 the number of wage earners engaged in primary conversion was approximately 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 without economic necessity for replacement. Only in close proximity to markets capable of using lumber 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 s t and s . 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. Most 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 lumber 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 :.'■*•" -54- In spite of the uncertainties in the long-time holding 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 survery conducted by a Committee of the Society of American Foresters in 1930 showed that 288 companies and individuals , 'each owning tracts of more than 1,000 acres, were making conscious efforts to grow timber • commercially 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 when the N.I.R.A. was approved and the Lumber and Timber Froducts Industries were invited; to submit to the Federal Government a plan,, 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 Lumber and- Timber Products Industries on July 1, 1933, the outline' for a- Code of Fair Competition 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 pointe 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 eitner complete or lasting which did not effectuate the protection' and maintenance of the forest resource itself. It was further stated that although the unsatisfactory forest situation might be largely due to past unwise land policies and present unwise state timber taxation- policies, which contributed largely to ex- isting destructive competition, the remedy was beyond the combined force3 of the Federal Government, the State Governments and the forest owners and industries. It was then suggested that the I" IRA afforded the forest products industries an opportunity, 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 of examination at the end of May, 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 indefinitely into the future by action of the Bo^rd of Directors, as committed to appermanent sustained yield policy. '■ ■' , • (2) Unwillingness to s to end the necessary money for technical ser- vices to make forest examination and prepare management plan. (3) Fear of impo sit ion : of higher locfl 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 limits. tiono»tiair/ manufactured stock and the effective demand for the -prior- ^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 made to the three major softwood divisions only, as these three divisions have -produced from 81 to 84 ner cent of all lumber consumed over a period of years. Reference- also has been made to the; Southern and Appalachian Hardwood Divisions, which two divisions have produced approximately 70 ner cent of the total hardwood consumption. The above quoted figures are particularly applicable 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 West Coast utilized about 70 per cent of its rated capacity, with the Appalachian and Southern Hardwood Divisions utilizing less than 25 per cent ef 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 particularly acute, and the actual utilization •; of the rate 1 capacity of the sawmills in those divisions, as indicated by the data, was almost negligible. In viewing these data it should also >e 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 'Test 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 usually 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 canacity than on those divisions in which the large mills predominate. These economic considerations would 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 two following very brief tabulations: Sawmills: Ratio of Rated Capacity for 1934 -to reported- Production in the Principal Lumber Producing Divisions Southern TTest Coast Western Appalachian Pine a/ Fir, etc. a/ Pine a/ & Southern Hardwoods b/ 1929 Production (million feet) 11,630 10,147 5,217 5,315 Year 1929 2,3 1.4 2.1 4.2 1930 3.6 1.8 2.7 3.8 1931 6.1 2.6 4.0 4.4 \9:-'2 1932 8.8' 4.4 6.0 5.7 1933 6.4 2.9 4.7 6.8 1934 5.8 3.2 4.1 6.6 1934 Production (million feet) 4,680 4,275 2,649 1,95< a/ These softwood producing Divisions reported 81 to 84 -->er cent of all lumber shipments originated therein. b/ This hardwood producing group shipped approximately 70 r»er cent of all hardwoods. 9813 -70- Sawmillsi Ratio of Hated Capacity for 1934 to reported Production in the minor Lumber Producing Divisions Northeastern Northern Northern Softwoods Hemlock Pine Redwood Cypress 1929 Production (million f 2£lL ^46 ---... ■ ■-48?U^ 357 590 381 1929 2.4 1.4 1.3 ' 1.3 '•■ •1.6- 1930 2.8 •1.8 2. 2, 1.6 1.6 Vvi 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 Produt :tion ^million feetY 290.9 . .110,3 84.4 350.5 im.3 In connection with this group of data relating to minor lumber t>ro- ducing divisions, it should "be considered that these various divisions an< the capacity arid the production listed ..represent, for the entire group, only from 10 to 15 per cent of all lumber used; so while the figures are informative arid are presented for comparison with similar data for the principal lumber producing divisions, this indicated excess of capacity would have no serious effect upon production in general. The above com- ments do not apply exactly to the Redwood Division, for in this particul type of operation the large mills and highly mechanized operations are again found, but the number of operators is very limited. It will be no that the data disclose the Redwood Division operated at near.ly-80..pjer_c e of its caoadity in the peak year of 1929; that in the low year of 1932 it was operating at less than 25 per cent of its rated capacity; arid tha in 1934 the mills were oy^erating at nearly 50 r>er cent of their rated capacity. As would naturally be supposed, with more than 17,000 sawmills lo- cated in -oractically 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 inttrmediate size sawmills, and the method and practices that are a necessary -cart of the operations of the large sawmill units. Aside from the size of these operating units there must also .be con- sidered the methods of manufacturing used by the different tyoes of saw- mills. Generally speaking, a considerable nart of the production 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. Anothel type of small savrmill is more prevalent in the Southern Pine Division. Here are several thousand mills that are engaged in the manufacture of sol 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 size or too far removed t6 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 product, all too often of a low grade, into the market and sold for anything that it might bring. Most of the equipment is of low efficiency and produces 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 o ther lumber or substitutes for lumber. Thesp boards do not 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 species. The lumber must ba 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 sized with other mills product np; the name L>r conipe i~ i fcive succies. 9813 -72- There is another type of mill and one which added a distinct factor to the general problem of production — those mills which are crodu- cing lumber from their ov:n trees, in their own mills, which is not ex- pected to and generally does not ever 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 operations, it would have a distinct competitive advantage over other box plants. Not only would such an integrated mill have the advantage of being able to use short length and low grade lumber from its actual lumber producing operations, but it also would be possible for it to transfer all 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 samnle 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 by 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 or.lv 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 any 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 prevailed also in con- nection with other small sawmill operations whether those sawmills were of the movable type or whether they were of reasonably permanent installation. In either event, with production not being forced upon the mills, the labor that would be emoloyed in those mills would or- dinarily be suo rle men ting 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 regularly. 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 therefore necessary for them to build a reservoir of labor upon which they could defend for the sustained hours 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 sawmill activities. These mills were dependent upon this labor and this labor was de- pendent upon them. The mills also, becaiise 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 investment and the properties were all stibject to taxation. In connection with this groups of large mills, economic pressure for continued operations would, in many casas, force these sawmills into production. even when there was no immediate demand for their products. With demand being reduced, prices would decrease under the pressure of the increasing supply and these sawmills found themselves compelled to operate at a direct loss. This necessarily caused the labor wa^e to he reduced. The wage of labor was'the most important factor of the out-of-pocket or actual money cost of production; it was the one which vi/ould be subjected to the most pressure for reduction and in most instances was the least fixed item of cost of any that had to be met currently "oy the mills if they were to continue in sxistence. After the adoption of the Code many hundreds of these small mills., faced with the necessity of paying, a minimum wage and supplying information relative to their operations, did not again resume saw- ing. The larger mills,- however, were not able to dispose of this problem so easily, but were actually faced with the necessity of continuing their manufacturing operations. They paid the minimum wage specified in the Code; they operated the maximum number of hours permitted; they produced their lumber and put it on the market expecting to find it moving in the usual channels of trade at the minimum prices set by the industry Code Authorities, only to be faced with i. volume of production from other similarly located mills that, in the aggregate, was more than the market was demanding. These mills were virtually forced to continue production and their products had to be disposed of in some manner and at some price so that additional money could be secured for continuing operations. 981; -74- B. PRODUCTION - VOLUME - USaSS Lumber production is largely a forced arid involuntary process. It is not similar to factory production -here specified materials are pro- cessed to make particular products. Articles produced in the usual factory may "be for orders already in hand, for replenishment of stocks, and in anticipation of results from a prearranged selling campaign. Usually tnese production processes may be brought to a stop at pny time and not leave any large stock of raw materials on hand to burden the cash re- sources with recurring fixed charges of interest and taxes. Merchantable standing timber is the raw material of the saw mills. It must be either owned or controlled in such quantities as to furnish saw logs at the mill for such a period as will be economic justification for the establishment of the converting units and at such a cost ?.s will permit the sale of the resulting lumber products at a Trice, under reasonable competitive conditions, that will return a profit. Standing timber must be converted into logs and other forest products under pressur 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 sizes and grades of lumber, whether those sizes and grades are wanted or needed. Thus it will be seen that in the rroduction of sawmill products, as a usual thing, there cannot be a particular choice of the raw material, and that the product will, to a very large extent, depend upon the size and qaality of saw lo^s, the efficiency and ability of the men, and on the type of mill equipment operated by them. This 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 eouipred and the standing timber had been acquired, all of which necessitated payment of the carrying charges for the investment which in turn forced the sawmills to operate without regard for the immediate value of the products. Other economic pressures required that quantities of standii.g timber be converted into saw~ill products. Land under lease must be cleared before the lease period expired. Standing timber purchased to be paid for out of progressive utilization demanded liquidation. Vast holdings of standing timber (*) acquired 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 Timber in the United States by Regions, States and Classes of Ownership. (**) Tables XII ; XIII, XIII (a), XIII (b) 9813 I -76- The downward trend of the volume of lumber production has been marked "by the well- re cognized turn or trend of population from the rural ;to the urban centers. (*) Then the density of city population required Uore and larger buildings, bringing about fire hazards and resulting in the adoption of stringent fire regulations restricting the use of wood for construction purposes in many of the larger cities* Coupled with this downward trend of lumber use and as one of its contributing causes was probably the development of the use of brick and the development iof the use of concrete a'~d construction materials which had come onto ithe market with the development of science and the arts. This influx of materials, new in fact or new 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 many of the products of this ■industry. With these increasing prices diminishing the price differen- tial between lumber products and these new building materials, there (Footnote continued) born population. The South Atlantic and the East South Central States lall lost population throughout this 60-year period. There was a gain in population in the West South Central States and in the Mountain and Pacific Region. The movement of population into the West North Central States reached its peak in the period 18S0 through 1900. The movement of population into the West South Central States, while continuous from 1870 to 1930, reached its peak from 1900 to 1920. Beginning in 1910 and continuing through 1930 the Pacific States absorbed population apparently from every other group of states, as those sections which were losing population registered heavier losses in the years from 1910 to 1930, and usually those sections gaining population gained at a lesser rate in this period than 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 Popula- tion. In this reprint, on page 9, are displayed data concerning urban and rural population. In Table III are published data from 1790 to 1930, and it is therein clearly shown 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 further shown that one very definite movement took place between 1880 end 1890, and that from 1900 to 1930, the movement to urban centers of 8,000 or more increased more than 17 per cert. It fs also shown in Table IV that the population concentrated in places ficin 2.500 v.pward increased from 3£ 4 per cent of the popula- tion in ]930 to 56,2 l-sr cent of the popuj -ition in 1930. It is also Interesting to i)2 J e ttab this same table shows that the greatest concen- tration zru.rease has beni in places of ore million or more, although all size gro'-vo:-; increc/sed i:.. population except that group of cities between 500,000 ana 1,000,000 er.cept for a slight decrease in the population centers of 100,000 to 250,000. 991 7 -75- - These conditions were particularly true of the larger virgin timber lards 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. From the earliest days lumber 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 bui up a capacity to produce that has always been a weight upon the industry - Ascending volume of lumber production marked the westward movement of population with the settling of new farms, and the opening up of towne 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 Froduction, by Regions - 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 consumption 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" (1932.) 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 New 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 -77- |?as a constantly increasing trend away from the use of lumber. (*) During this time when this latter movement was in progres and was E Contributing to tne decrease ill the effective demand for lumber products, he capacities of the mills had' been increasing largely through the es- , ablishment of new production centers in the Lake States, then in the Southern pine section of the country and' tnen in the West Coast region. (**) Apparently it was thought that with the increase in population of the United States there -would never cease to be a progressively increas- ing demand for lumber products which would drive to their approximate capacity the vast number of sawmills which had been put into operation in the United States. During the last' 50 years there has teen an enormous increase in the number of uses to which lumber has been put, hut in spite bf 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 of years except for the peak period of production In 1928 and 1929. 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 installed in the face of the constant decline in the use of iumber 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 other specific methods adopted to control production, it was practically impossible to appreciably 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 )f increased production but largely did result from the unforseen and un- 3redictable constant decrease in demand for liar bur products. Lumber dimply did not move. There was practically no demand 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 taken to place the Lumber Industry in a better economic position, it is found that as a result of tne overcapacity of the mills and the economic necessity {*) Table XXXIII, comparison between total construction and units shipped per $1,000 of construction for selected products during the years 1920-1934. (**) See Table IV - Fercentage of Distribution of Lumber Production, by Regions -1849-1934; the Evidence Study Series No. 22, "The Lumber and Timber Products Industry," W. E. Yost, Division of Review, NRA. (***) Table LI II - Stocks, shipments and production of Softwood Lumber 1923-1935. 3813 -.73-. for most of them to operate at least some of the time, and with 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 soundness 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 sawmills in the industry have been eliminated by the passage of time, which will make many of these mills ineffective, and until a con- dition of more liability in the industry has released many of the units from the economic necessity of producing lumber to raise money for carrying charges, there will still hand over the industry the constant threat of unrestrained production which 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. 0813 C. FINANCIAL STRUCTURE The capital or financial structure and the changes therein over a period of time naturally constitute a very important part of the problems of the industry. To properly 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 profit and loss data of the organizations or firms in the industry. There are not available any authoritative and reasonably complete data on these phases of this industry. There are a number of firms and organizations purporting to supply certain of these data, but each covers only a limited sector of the whole industry. The. Bureau of the Census conducts a 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 especially 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 volume "Statistics of Income," is the only dependable source giving the related balance sheet and the profit and loss data. Their, figures are presented only for corporations classified as forest product corporations which include, in addition to sawmills and planing mills, manufacturers of furniture and vehicles. The ..rubber of corporations so reporting to the Bureau of Internal Revenue ranged between 5,500 and 7,200 for the years from 1920 to 1933. The Bureau of the Census reports many additional organizations of comparable classification but, as' noted above, this group 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 secured 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 that can be secured and cover not only the financial factors but also the profit and loss results, 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 larger 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 do. 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 nearly 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 be a wide range of financial results secured by the differing types 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. While this industry is mostly one of manufacturing and the actual usable products are the result of one or more manufacturing -orocesses, the industry itself is based uoon a natural resource. It must provide a dependable source of the raw 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 carry 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 acouired an excessive supply of the raw material or standing timber. While it is true that a considerable portion of this duplication of manufacturing equipment and of the ownership of excessive quantities 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 quoted 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 products industry. The deficiencies principally to be noted are that there are no separa- tions cf 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 leans 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 1 -81- )elieved that a very considerable portion is and must "be in standing timber, and without definite data as to the extent of this -particular Investment one. especially interesting - view of the industry is either completely obscured or very materially foreshortened. Over the -oeriod of years represented by the statistics, the cornorations whose reports are tabulated in the yearly Statistics of (Income, Bureau of Internal Revenue, from 1926 to- 1933, inclusive, are classified by the Bureau a.s corporations reporting: , 1, Net income 2. }Jo net 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 depression, 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 iwhile the corporations actually reporting to the Bureau have ranged in number from 7,862 in .1926 up to 7,947 in 1928, and since that date continuously declined to 6,707 in 1932, with a slight 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 1933... 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 probably offer as complete a gauge of the actual trend in this industry' as any other possible factor. (*) • The corporations reporting a net income numbered 4,591 in the year 1926 and 4,195 in the year 1929, decreasing to 2,340 in 1930, to 1,525 in 1931, and to 541 cr just about nine per cent of the total number reporting in the year 1932a In 1933 profitable operations was reported by 1,638 out of 6,879 corporations. Except for the elimination of some 1,100 ccrporations between 1926 and 1932 this difference was naturally taken up by that class of corporation' which reported no net income. This group numbered 3,271 in 1926, increasing .slightly each of the years 1927 and 1928 and being practically the same in 1929 as in 1926. Be- ginning with 1930, however, the number of corporations reporting- no net income in the forest products group numbered 4,868, a 50 per cent in- crease over the -orevious year, and - this 1 group had increased to 5,929 in the year 1932 and decreased to 4,882 in 1933. (*) See Table XXIV 9813 This review of the results of "business 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 coroorations. While the very narked decrease in corporations reporting incomes and increase in number of corporations reT>orting no net income has been one of the inroortant 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 riayments 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 the industry as a whole had lost nearly 3110,000,000 in 1930, more than $177,000,000 in 1931, more than $202,000,000 in 1932, and 36(3,000,000 in 1933. Some corporations reported a net profit each year, but in no year were the reported earnings of the industry as a whole equal to the cas.A dividends paid out by all of the corporations reporting ti.e 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, this condition was not true in tl.is industry. The dollar value of gross sales of the industry was t..e highest in 1926, being slightly 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 slice t 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 than $2,549,000,000 or 36.6 ner cent. In tnis very material shrinkage of assets over this t)ericd of eight years the following items are of interest and should, in tnemselvcs, reflect information important to those interested in the industry. Cash and receivables, the principal elements of the current assets of this industry, reached their -peak 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. The other very important factor in the current assets position, that 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 capital assets of this industry were not segregated as to standing timber and plant facilities, so the shift in this class (*) See Table" XXXVIII (**) See Table XXXIV (***) See Table XXXIV 9813 «83- . f assets cannot- "be as accurately and "as completely analyzed as it should le to bring. out 'the true conditions. The group of capital assets, less lepreciation and depletion, shrank about $400,000,000 over the period of ieveb years from the high mark of $1,854,000,000" in 1926 to t he low of [ 1,448, 000, 000 in 1932.- If it were possible to segregate the capital Lsset group, into its principal factors of standing timber and of .plant md mill site and manufacturing facilities, it would doubtless be shown chat many of these larger corporations have divested themselves of considerable values previously invested in standing timber. While there ire 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 nachinery and in olants. Necessarily during those years when oroduction :vas quite high there was also a correspondingly high decrease through lepletion of the dollar value of the standing timber assets and de- preciation of the plant facilities. It is also believed that the ■forest products 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- ipreciation in mill site and equipment is on a basis of amortization with [the natural resource and not on a straight line basis, much of the equip- 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 of data, must include these two very differing types of assets. As the total assets employed by this industry had decreased 36.6 'per cent over the period of seven years and as ' the current, assets de- creased approximately 50 per "cent in that period of time, the changes in the current liability and bonded indebtedness nosition of this in- dustry also reflected a differing but understandable trend. The current liabilities did not r»ace downward with the current assets, the shrink here being 49.4 -oer cent instead of 52.5 per cent. The capital liabili- ties represented by bonded debts and mortgages were about $160', 000, 000 in 1926 when the capital assets were over $1,850,000,000. These capital liabilities had shown a constant yearly increase uo to $265,000,000 in 1931, decreasing to $231,300,000 in 1933. But during this time the capital assets unon which these capital liabilities were based had 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 would 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 1 interest is represented in the decrease of the surolus 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, tiiat all of this decrease in the stockholders' participation is not alone the 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. The cash dividends over this period of eight years amounted to $593,000,000, and stock dividends were declared amounting to $56,717,000. In consideration of the broader t>roblem of credit which is also connected with the financial -oroblem, the analysis of the balance sleet data of the corporations classified by the Bureau of Internal Revenue as members of the Lumber and Forest Products Industry show the 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 28.3 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. Miscellaneous 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 the 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 tiiat 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 as 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 equal 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 shrunk more than 36.6 per cent. In analyzing these data from the credit standpoint, consideration must be given to these 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 -co- at least two and one-half times the current liabilities "before a "business is considered to "be in a dUrrent borrowing state. Depending upon this formula, the generally accented element o^ current assets should be further analyzed. This comparison would not "be a fair one if consideration was not also given to the particular character of this industry. And this is particularly so when the inventory factor of the current asset s^rouo is considered. While the available figures and data do. not definitely disclose these facts, it is reasonably assumed that this industry must include as inventory in the usual cycle of manufacturing a very considerable quantity of so-called raw material, depending upon the practices of the individual manufacturer, " ranging from logs in the woods, down through transportation from woods and up to the so-called saw-deck and then through to the drying and the planing processes. In many instances and in several localities the cycle of production jxtends over a number of months in each production year. In some sections it is not possible to fall trees in the winter. In other sections it is not possible to transport logs from the woods to the saw-deck during all periods of the year. In other sections and with certain species of wood it is not conducive to good first quality products to cut logs in the woods if they can not be almost immediately sawn into rough lumber products. With these considera- tions in mind it is natural that this industry as a whole should carry an' inventory which in other manufacturing industries would be considered excessive. The comparison to be now given should be read with 'the above facts in mind. Based on the amount of inventory of the industry a f the close of each year it is found that in 1926 the gross sales were slightly less than four times the inventory and this condition prevailed, with gradually decreasing per- centage through the year 1°29. Beginning with 1930, however, 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 1 in 1932; and two'and eight-tenths times in 1933. The cost' of good?, sold of^rs.a. more reliable indicator of merchandise turnover, and using this as • the basic figure t6 be compared 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 pn hand to be 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^ computation (the per- centage of outstanding accounts to total sales applied to the days in the year), the average sale was not . collected until 75 days after invoice date. This condition had gradually grown worse even during the period up to 1929, at which time the average between invoice and collection was 84 days. Naturally during the depression period this condition was aggravated, and in 1932 there was an average of 150 days between the date of invoice and the date of payment, and this excessive number of days was almost a .50 per (Sent increase over the year 1931, when the average elapsed period between invoice and payment was 105 days. In 1933 this period between billing and collection had decreased to 117 days, but even this reduced period is very much in excess of the experience record of other industries not indulging in sales on the deferred or installment plan. 9813 -06- A compilation has "been made 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 reporting corporations in the forest products group earned a profit. This percentage was exceeded by only two other major groups - those of Faper pulp and Printing and Publishing, which had respectively 80 and 79 percent of their number reporting profits in that year. Even during 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 19c0 (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 caoital employed as the basis (**), again it is found that the Eorest products Industry was among the highest in 1920 and the lowest in 1932. Turing 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 being the Metal Industry in which only 16 percent of total assets employed were able to report profitable operati ons 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 tne assets employed. This information is included herein as Table XXXV. It will be noted that the corporations are grouped beginning 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,P00 each. It will be noted from the table that a very considerable number of the corporations in this industry fall within the first two groups, namely, corporations having total asoets 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. (*) See Table XXXVI (**) See Table XXVII 9813 -87- It is shown that there had been a gradual downward shifting of the corporations from the larger-asset classifications. This' is natural and normal in view of -previously discussed shrinkage in all classes of assets employed in the industry over the period covered by 'the statistics fur- nished by the Bureau of Internal Revenue, As the number of corporations in this industry reporting profits during 1933 was more then three times those reporting profits during 1932, j it would be natural to expect that this change from a loss status to a profit status would be relatively normal in the various classifications and this is borne out by detailed, figures with one or two notable exceptions. In the classification of $50,000 corporations 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 I classification was not prepared by the Bureau of Internal Revenue prior ! to the year 1931; 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 in connection with the sub-classification of "capital assets". ; ; neither 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 to 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 ye^ar 1933 the "capital assets" on [December 31, 1926, in the amount of $1, 853", 888 , 000.,- had been subjected to a write-down of $708,453,000. • This sum is made up of $454,061,000 of depreciation and $254,392,0^0 of depletion. Considering these amounts written against "capital assets" v it i's developed that as of December 31, 1933 there have been added, during the period, assets of the net value of more than $194,^00,000... There is no information upon which can be based any real computa- tion of the values added to the capital assets classification, but the figures do show that in the year 1927' more than $41,000,000 of net values were added; this addition 'in 1928 amounted to more than $173,000,000 and in 1929 to nearly $44,000,000, with a net addition in 1930 of more than $65,000,000. In 1931 there was a net reduction in "capital assets" of nearly $85,^00,000; about $500,000 reduction in the year 1932; and nearly $45,000,000 measures the decrease in the year 1933. These additions and deductions must be computed without any information as to the value of "capital assets" sold, upon which profits and losses were sustained by 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 profits 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 Bureau 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 ' ' ' ; : t * , 9813 and losses of $6,879,000; m 1931 profits of $6,504,000 and losses of $6,908,000; in 1952 profits of $2,332,000 and losses of $14,321,000; and in 1933 profits of $4,795,000 anc" losses of $9,894,000. These quoted figures can be only partial information, as tne actual new additions to plants and equipment and to standing timber can not be gauged without knowing the cost value of these assets v/hich had been sold during the period. In connection with the liabilities it would be informative to know the extent of the amount upon which interest would have to be paid and the rate of that interest. However, without complete information as to the character of these liabilities only an effective rate of interest upon the total oi all liabilities at the close of the year can be com- puted. T 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 this industry is the amount of taxes paid other than federal income tax. Again complete informa- tion is not available; hence it can only be stated that beginning with 1926 the reporting corporations paid almost $41, ^0";, COO in taxes, and these taxes were gradually reduced in amount to $30,000,000 in 1931. This latter amount is a reduction of nearly $5,300,000 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 tax 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. By 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 durina- this period of 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 Bureau of Internal Revenue very largely support 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 rignt ye?=rs of operation the industry charged out against cost ox goods sold, depreciation and depletion amounting to $643,731,000. The percentage of this charge remained fairly constant during the first four years when the industry had a reasonable amount of production. In 1926 this rate was 6 percent of the cost of goods sold, increased to 6,46 percent in 1928, and was 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 amounted to 7,27 percent in 1930, 7.46 percent in 1931, 9.17 percent in 1932, and- 9,18 percent in 1933, ■ ■■ ' ... With the vast area.s of timber land owned by the organizations making lup the Lumber and Timber Products Industry, and with shifting centers of I production as well ?s shifting centers of demand having caused- a duplica- i 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 -bureau of Internal -r-e venue (known to, not cover the entire indus- try), show that the capital structure of this hot inconsiderable group of corporations (having over $4,000,000,000 of actual assets in 1926) has a remarkably conservative division between that contributed by ox^ners' and • that contributed Dy creditors, especially those' creditors of the more formal class whose indeotedness is represented by bonds and mortgages. This industry is faced with 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 West Coast Division, with all the attendant carrying charges of a fixed nature such as interest and taxes. It must; 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 -90- D. FROTUCTION COSTS The cost of production in the Lumber and Timber Products Industry- is primarily concerned with costs of logging and of manufacturing, plus, of course, general overhead 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 yarding (moving of logs from where felled to loading center for transportation to mill), and the many and varied operations of establishing the logging camps 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 sawmill yard or log pond. Manufacturing is the conversion of the saw log into usable lumber products. The logging of stpnding timber is variously performed by casual workers in their own timber lot or on their own srapll forest holding, by groups of men especially engaged for that particular work either on the timber lot of one uwner or of several, as the crse may be, and by groups of men regularly employed by the organization actually owning the timber and sawmill. It can be seen that the costs of such widelv diversified operations will ue from the very sketchiest to the most definitely recorded figures. In connection with 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 tnere to the sav-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 . lotor truck, spur rail- roads or common carriers and waterways. With 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 to 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 sawmill can and necessarily must vary considerably as the conditions briefly sketched aoove will 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 tnoroughly discussed in a previous chapter, The cost of standing timber will naturally vary depending upon whether the organization has owned and has been paying the maintenance and carrying costs upon the timber 9613 -yi- f land lor a number of years, and upon whether the logger or the sawmill operator is ouying a particular stand of timber or is only buying so many thousand feet (log scale) of logs as and when actually removed from the forest stand. The cost will also vary 'for the same species 'in different localities of the same general timber rangp, and. also for I competing species in entirely different sections oi the United States. In considering the subject of milling or manufacturing costs it will be found that the variations in size and character of sawmill plant will have a very noticeable effect upon the total cost. The | number, location and capacity of the sawmills, . the c ir 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 j necessarily must include among their costs a great many items of expen- diture generally classed as administrative, and overhead, to which the I 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 i their costs of operation. VJith this review of the field, which necessarily can touch only the high spots cf the existing differences, it can be seen that the "cost of production" must be subjected to many differing treatments producing figures in many instances of the most .doubtful validity. The history of the industry, from the standpoint of its accounting and its general efforts at development of costs of production, has been altogether a history of relatively small groups of manufacturers in the same general field working together in sm-11 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. NRA 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 products of the systems in the form of definite costs. Certain associations of m»nuf acturei s of certain species have attempted to accumulate costs from their members and to gather these costs into averages for all of tnose participating in the cost gathering. Apparently there has been a disposition on the part of the member of the industrv not to participate in such an undertaking, and consecuently practically . 11 of the costs which have been developed are samples of only r part, and a , small part at that,, of the industry. The costs of logging and of sawmill operation have also been the subject of study by the U. S. Department of Agriculture, Forest Service, through the Forest Products Laboratory. These cost studies necessarily could be only samples and not actually representative of the entire industry. Costs concerning the Lumber Industry have been gatnered oy the U.S. Tarriff Commission. (*) (*) U.S. Tariff Commission Report to the President on Lumber - Report No. 32, Second Series (1931) 9813 -92- This report was issued in 1931 -Tid was cased apon a study covering the costs of the year 1929. The uasis oi this Cjst study was covered, as to the United States, by 178 mills located in: The Forthestern States: Maine', New Hampshire and Massachusetts. The Lake States: Minnesota and Wisconsin The Inland Empire: 'western Montana, Forthern Idaho, Eastern Washington, and Eastern and Central Oregon. The Pacific Forth'-est: T :estern Oregon and Western Washington The Southern States: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Forth Carolina, South Carolina, Texas and Virginia. It ^as sought to develop the costs based en average cost ner thousand feet board measure of dressed lumber, and it '"fi S accordingly necessary to develop first the cost of rough lumber anc then to add the cost per thousand feet of dressing the lumber. This; separation was necessary by reason of the fact that many 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 rou.-h dry lumber. In developing the costs for the production of lumber it v?s necessary to exclude certain costs that were not involved in the production of lumber anc. it -as also necessary to exclude sources of income and of lose other than tnose connected with production of lumber. The normal grouping of costs entering into production of lumber may be described briefly as follows: 1. EAW MATERIAL COSTS The logs are either produced as a part of the sawmill operation or are purchased from inde-oendent loggers or other sources. -hen so purchased the rav material costs are a kno^n and definite factor. ' i;en the logs are produced bv the mill the cost has to' be ascertained and these costs are: (a) Stumpage either as a charge covering depletion of timber holding ormed or ' Payment made on various contractual bases for the privilege ol cutting timber under either public or private o-^nersnip. 9813 -93- (b) Costs for woods operation, including direct labor, supplies, and expenses of felling the trees and catting the logs, pno oi other preparation of the logs for movement to the mill. These expenses may je either rctually paid out for the various services performed directly for the logger or sawmill operator, or may he paid in a lump sum on the basis of so much per thousand feet to some one who is superintending such opj.retj.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 -payments mp.de to others for the actual transportation. (d) There is also the element of general and ad- ministrative expenses which must be apportioned "between logging operations, sawmill operations, planing mill operations, and selling and delivery. 2. SAT. MIL L OR £0 7 J&H LUMPER CONVERSION COSTS The varying practices of the sa-mills, in the different sections of the United States as to inclusion or exclusion of certain factors in sawmill costs require some explanation anc some rearrangement of the data assembled. The conversion costs generally include direct labor, operating expenses and supplies for the sawmill proper, with "yard 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 saws and the handling of the lumcer after it is first away from the saws through the drying and refinishing processes to' the yard piles, and sometimes includes loading and handling for shipment. In the Douglas Fir Division a part of the "yard, costs" usually are charged to rough lumber and a part to dressed lumber. In the Southern Pine Division in the Inland Empire and in the Northestern Division "yard costs" are not commonly divided between rough lumber or sawmill operations and planing or dressing operations. Shipping or loading expenses consist of costs incurred in loading the lumber, either rough or dressed, for shipment. And again the method of treating these costs varies in different mills. Such variances range from total inclusion of such costs into and with "yard costs," to a partial segregation to rough lumber costs and a partial segregation and tabulation with selling expenses and with costs of dressing lumber. It is necessary also in developing costs to give consideration to and to uniformly treat various methods used tjy the sawmills in the same 9613 -94- divisions and between divisions in the handling of credits to the cost of production. These credits normally come from the sale of ™aste and of some by-products. Other credits, depending upon the specific operation, mf.ght come from the sale of electricity or power generated as a part of the sawmill operation. It is necessary also to consider credits for certain lumber products, especially lath and similar items, which in some divisions amounted to considerably more than in other divisions. 3. DRESSING OR PLANING COSTS These items of the cost of preparing 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 Physical property as distinguished from the depletion or exhaustion of the natural resource oi standing timber is commonly computed in this industry upon a oasis that "Hi "-rite down the value of the plant and other physical properties with the declining quantitv of ra^ material available. This is especially true when the sawmills own the timber, but where, as in the '..est Coast Division, many of the sawmills are operating on logs purchased from commercial loggers and own very little if any timuer, such depreciation is computed upon one of the accepted straight line bases. i In the development 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 tabulation of the cost data it is sourht, 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 Western Pine 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 in 'the folloi"ing sub-chapter. 5. HISTORY OE 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 least the 'out-of-pocket costs' of production of lumber?" 9613 •95- This ^as especially trouble soi/ie in the tree oi the known facts that: (a) the industry had been ooerating at a loss for a number of years, (b) stocks of luraoer in the hands of the manufac- turers were very lar 'e. (c) demand for lumber had been decreasing i or several years. (d) the construction industry, which annually ab- sorbs a considerable portion oi lumber, r?s at the absolute low point of its history. As a partial solution of this -problem it was mutually agreed that any of the additional charges incident to the Code could be as- sumed by industry only when such increased costs could concurrently be recovered by compensating adjustments in prices tor lumber and timber products. It was realized that this principle involved the application of minimum prices, and in recognition of the fact that there must be protection of the public against the abuse of the power to fix minimum prices. there must necessarily result a formula for determining cost of production. It was there! ore proposed that weighted average costs should be determined and that lumber and timber products should not be sold or offered for sale at prices which did not cover such costs. The record is clear that industry v;ps rot especially interested in determining pure costs of production, and. apparently the NRA also was not, at least in the beginning, especially concerned with this matter. It seemed to be the paramount consideration on the oart of both industry and ERA that. "cost protection" was the object and the aim rather than "cost of production. " Throughout the record, the recommendations and the reports in connection with the' Code of Fair 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 ".formula for cost protection" and the necessity of establishing a. "minimum price" that - ould permit the industry to maintain itself on the price which it could secure for its products. The record of negotiations leading up to the presentation of the Code also is replete with discussions concerning debatable items that must be in some manner included in any formula for the development of cost of production but which might or might not oe included in a formula for cost -protection. These debatable items were: 9813 -96- (a) value of stumpage. (b) depreciation. (c) cost of conserving and replacing as much timber as was harvested. Article IX of the Code was titled "Cost Protection" and gpwe the Code Authority the right to establish and revise minimum prices f.o.b. mill "to protect tne cost of production of lumber and timber products," when in its opinion it was 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 weighted averrge cost of production . . . . shall be established by uniform accounting practices," and then iollowed 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 were certain limitations, however, (a) selling costs should not include adver- tising or trade promotion (b) insurance should not incluoe insurance on standing timber. (c) taxes should not include amounts on standing timber in excess of a 12 vear supply. (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-divir. ionffl 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 logging 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 depreciation and the fair market value of standing timber that was to De determined bv the Administrator." 9813 -97- Thus it will be seen that there was erected under the Code, a jso-called formula for ascertaining cost of production when the ■actual and evoked purpose of the industry was to develop facts as ito costs and that as to each Division or Suo-civision or group of imembers of the industry tnese costs were to be developed on "the weighted average" of all in the particular group of manufacturers and that this weighted average cost of production was to be applied purely 'for the purpose of protecting the minimum prices that had been or were to be established by the Code Authority. All of this involved proceeding was to be carried out ov the Code Authority of an industry of which it was stated "adequate, uniform, and realistic accounting particularly among small establishments is not characteristic of this industry." Here was an industry composed, of at least 17,000 manufacturing units operating in practically every state of the union, that, most emphatically, was not cost conscious. It was not a new industry, and although the orincipa.l producing center's had shifted very materially, in general the manufacturing processes remained largely similar. It had successively passed through iany 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 been educated to the necessity of knowing their costs of production. It cannot be overlooked that the industry does offer s.ome con- siderable obstacles to exact costing. The products of the industry are numerous, and many of the variations between products are too often matters of expediency, rather than actual differences in character of product. Costs of production can and should be determined for the industry. Only with true and dependable costs as a background, c»n the industry hope to find its way out of tne difficulties in which it is no immersed, and to solve its many problems. t • The determination of direct costs is not unduly difficult. It is in the interpretation, analysis and cistrioution of indirect costs that the principal difficulty is usually encountered. 'ith the wide 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 Region, the task of determining true costs for this industry was most unlikely of successful accomplishment. The determination of "weighted average out-oi -pocket costs" with all of the indef initenesses comprehended in such an undertaking would be the accomplishment of a suoer-man. It is not deemed unfair either to the industry or to NBA to state in retrospect that had the industry and NBA sought to establish true costs of production for 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 Government have profited by this experience and it is safe- to state" that neither ■ wjuld-aga in eaoark-upon .such- an- indefinite project. 9813 -98- Doubtless, one of the fruits of the code experience has been a cooperation between manufacturers in a division and between divisions, and the consideration of problems common to them all. Under t.ie authority granted in Article IX oi the Lumoer and Timber Products Industries Code the Code Authority began the publication of price bulletins in October, 1953, and completed the issuance of this first edition in December, 1933. These minimum prices thus established, were cased upon data incomplete and 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 was plainly labeled "Cost Substantiation Data." Upon this information other price bulletins were issued. The accountants for the Lumber Code Authority, in discussing this cost substantiation data, raised many points as to its authenticity. It wps recognized that the costs that were to be secured were not upon the usual ac- counting basis but were purely upon an industry bssis as specified under the Code. 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- upon, the industry, acting upon advice of its Code Authority, developed a ne i; - cost Questionnaire which was issued to industry memoers in April, 1934, and requested submission of cost data for January, February, and March, 1934. This latter-mentioned cost data was much more definitely arranged than any of that previously submitted and, under reasonable conditions of compliance on the part of the sawmill operators, ^'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 mar.v 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 worth 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 end 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 Autnorities to prepare their calls for information in such a manner as would require the in- dividual operators to furnish the inventory material. (*) (*) L.C.A. 33-45, dated November 30, 1933 - C. Arthur Bruce, Executive Officer, Lumber Code Authority. 9813 -99- The cost data for the first three months of 1934 Were largely ill the hands of the Lumber Code Authority in .'Washington early in June, 1934. In reviewing these data many inconsistencies with established account- ing practice and even with the formula expressed 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 were necessary, ranging from the substitution of estimated for actual costs to the necessity for vir- tually a complete abandonment of the procedure outlined in Section IX of the Code which also involved the changing 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 stump age costs for actual stumpage costs (*"> (b) The arbitrary determination that all depreciation must be 'computed on 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) The computation of depreciation oh a straight-line basis and on present value of assets, when it had previously been computed on the diminishing supply basis, with production only a fractional part of the usual pre-de- 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, although 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, Ponderoso. 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 developed for prior periods. In most instances the cost for the production of combined species has generally "been considered the cost of the principal species. Thus we find in the West Coast Division (*) This was mandatory under the Code. (**) Mandatory under the Code. 9813 -100- where Douglas Fir, spruce and hemlock are intermingled, that the costs areB considered as representative of Douglas Fir. Similarly,^ in the Western Pine Division in which Ponderosa and Idaho white pine, with some Douglas Fir, are the major species, the costs that were developed, were considered as re- presentative of ponderosa pine production. Costs for southern pine for the years 1921 to 1930 shown in the ta- ble published by the Southern Pine Association (O in July 1931, present a very informative and interesting group of data as to costs of large mills, each producing more than six million feet 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 same set plan, but that the ."J. 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. Further analyzing those same figures it will be seen that one of the principal items of difference was the stumpage • cost which the Southern Pine Association showed as being $6. Oft per -M feet, and the U. S. Tariff Commission found to be only $5.23 per M feet. Other differences 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, principally in logging and mil- 1 ingh — - — * 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 Western 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, NRA, "Cost Protection Prices and Cost Substantiation Data, " dated May 6, 1935. 9813 -101- as follows: ... Operating Costs 1927 - Circular #3920, 3/21/28 " " 1929 - " #4446, 5/23/30 » 'I 1932 - " # 431, 3/25/33 1934 Production Costs in Circular #881, by the Western Pine Association. This information is presented in Table XXIX with data collected by the U. S. Tariff Commission (*") for 1929, and also cost data tabulated by the NRA (**). It will be noted that the arrangement of the costs as compiled and published by the Western pine Association varies somewhat from the detail of costs presented by the Southern Tine Association. This variation in presentation of costs by two groups of manufacturers in different sec- tions of the United States who produce 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 crystalized when, under the Code, it was imperative that the industry should, through its Code Authority, pre- sent cost data reasonably uniform in form and content. The Code of Pair Competition for the Lumber and Timber Products In- dustry did not provide that NBA 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 Lumber Code Authority and based upon such cost data. It is true that a representative of the Division of Research and Planning of NRA 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, "Cost Protection Prices and Cost Substantiation Data," dated May 6, 1935. 9813 -102- declaration of the emergency as finally promulgated, "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 hut 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 Lumber 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 Lumber Code Authority which had been in existence on March 31, 1934. The entire and voluminous 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 Limber 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 questior will long be mooted as to whether the industry and the National Recove- ry Administration, either, neither, or both had adequate concept of tt 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 "minimum 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. -103- E. PRICES AID MILL REALIZATION 1. Frices TiTliat is price? When, and where and for what steps in the move- ment of lumber products from the sawmill to the ultimate consumer should the price of that lumber oe considered? These are some of the questions that i.rast be answered before any general disexission of the price of lumber can be- intelli ;ently carriec on. Prices tnder the competitive system, is an expression of the meeting of the minds which represents a compromise between the ouysr and the seller. It is not what the buyer would like to secure nor is it exactly what the seller wishes to pay. Generally, a price is made in the open market and always is affected with a public interest. Pro- ducers are balanced against consumers as producers wish to sell at the highest possible price obtainable rnd consumers wish to buy at the cheapest price possible. Each is controlled, to a great extent, in the desire to drive the best oossiele bargain ma is prevented from overreaching himself by the rivrlry of other pro6-ucers who sell and of other consumers to buy. The price so determined cannot be an aoso- lute thing ^ut is always relative ano in the abstract the contractions of supply and uemand meet to make a price, which, after a fashion, represents liberty of contract between the buyer and the seller. Price in orthodox economics is generally considered to. be an expression of the marginal cost of production, but price and cost are in different realms. Price is a definite cum generally quoted in the market anc. always known to the buyer and seller. Cost, however, is seldom definitely known as it is usually derived from the ramifications of the industrial process by involved and technical calculations. what- ever may be the philosophy and the theory of prices rnd of costs, it is a. self-evident fact that over a reasonably extended period the price of a manv.facturerd article must be in excess of the cost of manufacturing and distributing, or those agencies which are involved in those processes will eventually fade out of the picture, usually through the bankruptcy courts, after all invested capital has been t exhausted c-nd all possible credit has been secured. A price, even though it may je based upon cost is relativ.e and not absolute in the majority of instances. A specific price may not return cost, but the price and the cost of the article may be related to the price and t". e cost of other articles manufactured-- in the same proces r es and these prices and costs all taken together merge into composites that are economically spund Prices of lumber products have been, rnd continue to be, aet largely on the basis of this principle. It is known that the cost of production of the various articles manufactured and of the various manufacturing plants woulc va.g,-- /'rely uul simply upon the basis of their cost structure and of the market for the articles manufactured. In the Lumber Industry, as in every other industry having a multiplicity of products, many of which are classed as major products and many others 9813 -104- oi which pre classed rs minor proc'ucts but all resulting from the same process of manuf--cture, it was onlj' natural thr.t m allocation of cost of u-oduction would be made lrrgely upon the basis of the price which these different articles would bring in the market based upon past exo o r i en c e . Every ioot of rough lumber produced by the saws from the same sr is :onsidered to have cost exactly the same in raw materi l»gs usually direct labor, rnd manufacturing overhead. But some of the lumber duced may be of the poorest ■ ;rade and sell rt the lower end of the price scale and some may be of the highest grade and sell at r corres- ponding hi hi 'rice. Actually, the low grade product must be sold at ?. heavy loss and the high grade iu.iber will return r relatively large profit if exact -nc. true costs .-re to be considered. It is common practice and in conformity with' the above principle to relate the costs to "the prices of the products so th t each product resulting from a common process will theoretically absorb its relative part of the cost and return its relative portion of the profit. './"hen rnd where are the prices to oe Considered? Is the price rt the mill to be taken as the criterion rand is th t price at the mill to be considered when mr.de to the wholesaler or when made to the mill directly to m industrial or construction consumer or to n retailer? It is a fret proven ~oy an extended survey of .-rices quoted in these dif- ferent fields of activity that exactly the same size, species and grade cf lumber woulc be quoted at r ret.-il irice but that the products would move in different quantities under that ret- il price anc 1 at every possible figure from that >ri- e downwrrd to an even below the quoted mill price for the same proc'uet. With the constant competition existi between the sawmills, the wholesalers, the commission ..en and the retailers for the con:. rket, the price of lumbei for . ears Iw s been largely dependent upon the energy of the buyer in exhausting the various channels through which his needs could be raet an< in pitti against one another each of these various supplying agencies. The competition between manufacturers anc distributors of lumb products for the market is not the only competition that the Lumber Industry has been compelled to meet. There has been the competition of articles readily substitutable for the lumber products. There has been the change in fashion and in type of building construction rnd there has been the barring from the market or large sections of the m; r : t of the lumber products hy the building restrictions or regulations of urban cei ters. The supply of an -rticle on the market, coupled with the aer..- for that article, must necessarily a-ve a very considerable effect upon the price at which the article can be sold, «'ith -11 of the economic factors as before mentioned pressing for the production of lumber rnd with very little, if any, cohesion oetween the manufacturers who were waging rn independent fight for individual existence, the price of lumber has not reacted to man;/ of the economic theories ( irinci but has been largely dependent upon the old natural law of the survi\ of the fittest. 931; -105- The price of lumber is a composite of these many elements and is not solely dependent upon, nor is it positively controlled by rny one of tli em. The Lumber Manufacturing Industry is quite generally spread throughout every St-te in the union. There are, of course, certain well-definec centers of production and it has been shown that the principal manufacturing center-; are now in the Southern States for Southern pine, in the West Co-st region for Louglas fir, nnd in the Western Pine Region for Ponuerosa pine. It has also been shown that the principal consuming centers are in the Central St-'tes with Chicago, Illinois, as the principal distributing center, and in the Northeastern Strtes with New York rs the principrl distributing center. Lumber in some of its multitudinous forms is con stained., in every vicinity of the United Strtes. With sawmill products ranging from rough preen lumber end timber to the highly finished, kiln dried, planed rnd polished cabinet woods for mill work and interior finish purposes, the iroducts to be , usee, for this discussion will be limited to the most common species, graces and sizes. After all, the commonly used species, grades and sizes make up the preponderant part of the products of the industry. The question of price then, will be considered from the standpoint of the sawmills (m- nuf -cturers) , the wholesalers and the retailers, and the ultimate consumers cf lumber products. With the progressive westward and southwestward movement of popu- lation, the production centers moved from the northeastern states to the Lake rnc. Centrrl States one then to the South p.nd last to the western region, La,sily accessible stands of commercial saw timber in close bror.imity to the demand, established and for many years maintained ruubei prices at sue,, s Level as to make it the cheapest and most favored building material, khen the softwood area of the Lake and Central States regions had been effectively eliminated from the ordi- nary softwood competition by high costs pnd changes in use of the lumber, leaving the So v. th era Pine Region as the principrl softwood producing center, the distance between producing and consuming centers involving high transportation costs began to register its effect upon the price of lumber to the consumer. The reaction of this increase in price was first to bring back into production some of the mills in the former production centers which could eke out r profit on some marginal production; another effect was to foster the small mills that could readily move- to small areas of timber that by reason of distance from established mills could not have been a&vantc _;eously worker, by them. Then as distance increased between production rnc consumption centers and as production of established mills becrrne more costly rs the result of increasing inaccessibility oi the standing timber, the West Coast region came into production. As has been discussed there were other reasons for this region to come into production, but after all the selling oricc of lumber dn consigning centers was the major consideration, 9813 -106- The southern Pine Region had cut away ell of its rer&ily accessible timber contiguous to waterways. Consequently, railroad transportation was necessary to get t..ie product to the eastern sear* board, to the southwest, ano to the middle west consuming centers. At this point prices began to regulrrly reach higher levels and about this tune also came the opening of the Panama Canal. Prior to the opening; of the Panama Canal the general competitive position of the regions producing softwood lumber was about as follows: The Eastern States, the Lake States and the Central States offered but very little competition to Southern pine for softwood lumber in construction nnd in most industrial uses, Prior to the o >enin j of the Canal, Douglas fir from the West Coast was . ra.ctically barred from e- stern seaboard markets, but with the opening of the Canal, this '.Test Coast he :ion, by rerson of low water transportation r,-tes, wrs enabled to deliver its products on the eastern seaboard and to brckhrul to many eastern territorial consumin^ Joints in direct competition with rail moved Southern pine Lumber. ' The transportation cost of lumber has always been • very considerable part of its cost to t. e consumer, and during the Code period when minimum prices at the mill were in effect for the manu- factured product and when the retail dealers, also under a bode, were required to limit their cost of hanulvii ; to certain definite per- centages of markup on their cost, reasonably comparable fi ures could be secured, Trbies LI me LII, in Appendix II, ;ivc comparisons of these costs at Chicago rnd at Hew h rk. fhe^.e costs are quite defi- nitely divided oetween manufacturin costs, freight, and the costs of the retriler, and all of the data as - lying to erch of the three principal softwood iroducm'- re ions were gathered under the s men, cooks, • -cutters, t fallers, filers, skidder firemen., foremen, assistant • : foremen, felling, crew foremen, section foremen, tea,mster foremen, track foremen, grab-jack men,, hookers, laborers, labor leaders, "laborers and hookers, -loader 'levermen, skidder leverraen, loadermen, 'log s towers,- riggers, roacmen, ropers,, sawyers, skidder yard sawyers, stumping tree sawyers, section hands , -. spikers, swampers, teamsters, tong hookers, top loaders ,, tractor operators, and wood cutters • By way of contrast, the following list of principal occupations in the logging camps of Oregon, published- by the same source, is of interest: ... Bakers, becmakers, blacksmiths, buckers, head buckers, bull cooks, log bunchers, caterpillar drivers, caterpillar greasers, chasers, choker setters, . climbers , cooks, crane operators, cruisers, dishwashers, donkey engineers, loader engineers, fallers, filers, firemen, donkey firemen, lo.ader firemen, fire wardens, flunkies, head flunkies, handymen, high' climbers , hookers, hook tenders, . knotters, laborers, linemen, loaders, head loaders, second loaders, •machinists, machinists' helpers, mechanics, pumpmen, camp repairmen, car repairmen, head car repairmen, caterpillar repairmen, donkey engine repairmen, camp' repairmen's helpers, caterpillar repairmen's helpers, riggers, head riggers, riggers' helpers, sawyers, scalers, swampers » teamsters', tong setters, watchmen, welders, whistle punks, and wood bucks, 3 • General Labor Conditions a. Hazards of Employment Records of the national Safety .Council indicate that the lumbering industry ranks among the most hazardous of industries. (*) The report of the Council for 1933 shows lumbering as twenty-ninth in frequency and twenty-seventh in severity of accidents among thirty major industrial classifications* (*) The accident, freauency.'.aao^seyerity. 'rates- for 1930. given in the above-mentioned report : are as follows: . J ■ . . (*) Children's Bureau, Department of Labor/ memorandum of January -17, • 1935, prepared for the Lumber anc Timber. products -Study Unit. (*) -Accidental Injury Hates in ' tke Woodwor; "lag and Lumbering Industries, 1933 - national Safety Coancil. 9813 .. -122- Frequency Rate Severity Rate All Industries 14.56 • 1.5S Woodworking 18.26 1.56 Lumbering 59.67 5*00 The need for exclusion of minors from industries as hazardous as this industry has for many years been recognized. In 1932 the Advisory! Committee on the Employment of Minors in. Hazardous Occupations, a technics committee of health, industrial, and insurance experts, after a study of dangerous occupations and accident experience, included in its reports a recommendation that minors under 18 should be prohibited from employment in lumber and logging operations, in saw and- planing mills, on the ooera- tion of power-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 Visconsin, 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 occupations, and 35 per 1,000 laborers. Boys in semi-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 1.0C0. For the laborers in these saw and planning mills the rates were lower, being 47 and 28, respectively, . In a later study of accidents to illegally enrol oyc-d minors in this same state (Wisconsin), made also by the U. S. Children's Bureau (***), woodworking machines ranked first among machines causing accidents. Three-fourths of these accidents occurred i n t he manufacture of lumber and allied products, saws and planers being resoonsible for a very large proportion of the woodworking accidents. Those injured by woodworking machines included a large -proportion -permanently disabled. In spite of the recognised 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 work up to the time the Lumber and Timber Products Code was approved, and the prohibition in that Code against the employment of those under 18, with a few specified exceptions, represented 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 Study Unit. (**) U. S. Children's Bureau, Industrial Accidents to Employed Minors in Wisconsin, Massachusetts, and ?; P P Jersey . Publication 152, p. 20 (***) The Illegally Employed Minor and the Compensation Act, Publication 214, Table 11, p. 108. (****) Statement of the U. S. Children's Bureau, Department of Labor, January 17, 1936, prepared for the Lumber and Timber Products Study Unit. 9813 -123- "b. General Labor Conditions on the West Coast 1. High Labor Turnover One of the signs of a contented labor force is a low labor turnover. If ien are hapry and contented with their work they will usoally stay with it; if they. are restless and discontented they will move on to another job.. In the West Coast Lumber Industry the labor turnover has usually been .very 'high, although like so many 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 during the three years 1919, 1920, and 1921 i the average number of separations was 703 per mill oer year, while the average working vforce per mill was 343, indicating a turnover of about 205 per cent. (*) Five Washington mil^s during the same oeriod had an average yearly turnover of 266 oer cent, (**.) and there probably was little labor trouble in these mills during this "oeriod. Had figures been available for the years 1917 and 1918 thejj 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 th^t the turnover during the period ran from 500 to 1,000 percent ps«- ojKiurrr(***) 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 relations 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"peeu«fc .- liar to this industry but inevitable in it. Ken 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 out. (*****) 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, and snow sometimes interferes with it, especially well up in the mountains. There is also a considerable amount of idle time due to breakdowns or necessary repairs. All of these causes result in increased labor turnover. t (*) Industrial Relations in the West Coast Lumber I nc* us try,!. Bui le 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 No. 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 No. 349, December, 1923. 9813 -124- 2 « &*ses of Labor Unrest. Sporadic strikes ^ „ - canros f thp m.^, d auil on activity in .->.«_ i chapter) thl Nort ^ost from 1 905 to 1923 ^df^ J*?" 6 and lumb ^ ^•i^^r; tnrew a Denpt^^v, "° discussed lat^r ir, *.vj ousting in suck £££* " f archli ^t on the bad conditi^ sity of WaqhirJ^ cac ? )s « Professor ffilliam «. n ? co "ctitions ^rest in tto 1 - , 0il Wr ° te ' in ^18, (*) thS ll ^ ° f thc U ^ver- «_.; ■'* lntnG industry worn. ti\ _ tnat.the chief causes nf -\ v sanitary camn«.. f i\ n v/ur e. [l; i ong hours- f*?V.n oau sos of labor life- (6) !Tl- ] la ' Cl: of ftunlly life ^ V ° V Wages ? (3) an-. ^ated Sat^t 1SfeCt °^ ^^ relati' iv ^ ° f c o<™ity t'arn. Hour f lab ^ mentio »od. These causes wtl ? T™ 6 ° rder " to e - ^ the ci-o e J °.V and WagGS Wil1 ^ treaty in ^z^ 3 ^^ la ■. warranted by !h e Let * T C@ - iven to th ^sevt-^' " d ° tail la t- *W on theses? C^st^V^ * Jrea " t «* *' °u of iT b ° liOVOd " eon and Washington, on' t," 130 * the ^ctl ^°L^ Bt *■ one-fourth of thp t ? _ basis of the tq*. ' ° St ates of Ore- duc ts» (Census cin-^ 1 mge ea ^ers in the ,r T T S ' accoun ted for t^ S e states accost ^ i "- ti0n) *^V£ ££? ^ *"*•* Pr °~ «» earners. 0Unt ° d — " -I^C SS^M^ *" 1933 re of the industry's almost from -;+ S l Vas tho standard wnriH«« .. the. S-hour dav ^ great strike «f ?w ^ ira Portant proW ,^at time. (**) '^,*£* " ~\^*i?*^*%** t0 8 JSg been fo« Aviations ?.f Ur ^ fi ^t went 2 ! Unrost a * 19 22, a survey f tv? from that norm on f! ■- * to offe ' c 't there of 7zlo ^ I ^ne cajTina cv,j . iWXXX1 on tne uo^t r^,. " tre 1 749 operations only if d raills °n the P/est r^f ? St# In April ±f lo were tannine overs 1 Ooaat sho ^d that . • W age rates kav. , + ^^ ( ***') ™-S S+~ «S ^S- C] -^ *- -es ,. VG Sequent j!**"^' a,,, feet ?'„° r ° n acc °™t of th. '" hlle this spreal wa' *^° ."?*» =Pread for i a k r ° tS m tho »« c™^' ~~^ kkl____^^°™Prent to Ptent! (..^ S U3Ual V ^eon (*) University of Vnsh ~~ ~ —— ________ (****) inn, tW" llet in, May, lop/ °^ y ' ^ecemblrT^q^r > ^° Ur L Balletla, fccla, ^ P. 1 9813 -125- Practically none of the camps on the West Coast is so arranged that the men can live at home and for most of them there is no alterna- tive to living in the camp crunk- house and eating at the camp cool: house. The "bad living conditions in the bunk houses furnished for loggers in the Pacific Northwest prior to 1917 are indicated in a mass of testi- mony on the subject given before the Industrial Relations Commission. Professor Ogburn reported that of the large number of camps he inspected in the Northwest daring the winter of 1917-1918, one-half | had wooden bunks, one-half had bed bugs, one-third had bad toilets, and only one-half had showers, while as a rule the camps had about one-half the requisite amount of air soace a.nd 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 hard 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. (**$ Some of the most careful students of labor unrest in the industry hold that the more fundamental causes lie below the surface even of the worker's thought, and that the chief of such causes have been the lack of family and community . life in the camp and the unsatisfactory relations between workmen and foremen* (?***) There was practically no provision for organized recreation at the camps except in the few places where the Y. M. C. A. has been established. In most cases men have been chosen for positions as foremen on the basis of their knowledge of machinery or technique rather than on the basis' of their ability to handle men. Accordingly, it has 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 what • .. ■• 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 tender ; hftf»' speeded up the work by example, and oy giving signals to the en- gineer to go ahead before the men we're entirely ready. Such a practice has greatly increased the hazard 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 Lumber Industry , hy Wm. F. Ogburn. (**) J. Rowan, The I. V, t Ti. in the Lumber Industry , pp. 9-10. (***) Carleton H. Parker, The I. W. W . , in "The Casual Laborer and other Sssays", p. 103 (1920) (****) Bureau of Labor Statistics; Industrial Relations in the West Coast Lumber Industry . Bulletin Ho. 349, December, 1923. 9813 -126- 3. Improvement in La"bor Conditions California was a pioneer in legislation designed to improve the it -r-,r.f rnnct The first labor camp conditions of the workers on the ^^^ ^" e0— effective sanitation lav; for the state was passed m l.^ aua , n „ fl/ , _ ith thc on August 10 of that year. (*) Its enforcement was P^f? ""£ ** State Board of Health out no" special funds were provided t o cany on the work. This same legislation created the Commission of Immi- gration and Housing,, which, among other powers, was given the right to inspect labor camps. The 1913 law set forth, in general terms, that the bunk houses and other sleeping quarters and the grounds about the camps .should be ke-ot clean. It also provided, in general terras, that there should be sufficient air space in the sleeping quarters and that the beds or bunks should be made of sanitary material, so constructed as to afford reasonable comfort to the occupants'. There wore no requirements for toilets or bathing facilities, nor for the disposal of garbage or other refuse which made many of the camps unfit for human habitation. In 1915 this act was completely revised and contained in its provisions many of the features which had been established ^oy rule and found to be practicable. The power to enforce this law was placed in the hands of a Commission of Immigration and Housing. (**) The act has since been further' amended until the present law, though not ideal, assures reasonable comfort to the occupants of these camps. To aid in the establishment of good camps the Commis- sion publishes an advisory pamphlet en 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 bunk. It has eliminated the wooden bunks filled with loose straw, which generally became vermin "infested. The Screening of windows and other openings in the kitchen and dining quarters has improved kitchen and dining services. Such practices and the proper .care of garbage have relieved the camps of many flies and improved living conditions of the workers. (****) (*) ■ Kearney, R. W., Chief, Division of Housing and Sanitation, Department of -Industrial Relations,- State of California, Ca 1 i f - ornia Sets Standards for Labor Camps ; national Safety Council, March, 1930. "'. . Ibid. Ibid. ' ' ' Ibid . •" 9813 -127- The major lumber companies, with few exceptions, are reported to have cooperated fully, and some of them have gone beyond the re- quirements of the act in furnishing hotel service, including the making of beds with sheets, for which a reasonable charge is made. The operators nf small mills have 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 housing is anything from a few cull boards thrown together, or tents, to automobiles converted into sleeping quarters. The small mill operator lias frequently disclaimed responsibility for the condition of the grounds, unscreened cookhouses, unsanitary toilets, etc. (*) While the foregoing refers only to the State of California, it is a matter of common knowledge that the improvement in living conditions of the workers in that state is reflected elsewhere in the west Coast area. While crowded bunkhouses, unsanitary conditions, lack of drying rooms, and absence of showers are still found in some of the camps, the most flagrant evils have 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 logging areas are more or less contiguous with argicultural 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 operations.- ?or this reason the lack of family and community life, which has been such a fertile source. of labor troubles on the West Coast, has not, in general, applied to the South. On the other hand, however, the South is confronted with the problem incident to the large numbers of negroes employed in the same camps and mills as the whites and often competing for the same jobs. The negro workers are more or less resigned to their station, seek whatever security they can gain from a low wage scale, from the un- complaining performance of disagreeable tasks, and frnm 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 camps, especially in those of the smaller companies. . The comparatively low wages paid in the South have been rendered 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 -128- ean snpply part of their food require^ and while on ttO* «. frequently furnished with oonpany-owned cottag-s « A survey n,ade by the Southern Pine ^oiaUon earing 103 mills in the. Southern ^»? *^- ^^f c ^ wore occuoiod fi 045 .louses owned by these mills, oo2 t o. a p~i ueuv, rent free in the first quarter of 1934, 216 hy white tenants and 3?6 "by negro tenants. (*) The same survey indicated that of 11,813 laborers employed by 127 companies in February, 1934, 64 P er cent were housed in companioned holdings. The average rents oi tnese company- owned houses, according to this survey, ranged from 50 to 60 cents ^ per week for two-room cottages, to $4.75 a weal: for certain six ana seven-room cottages. 4. Organizations and Disputes Labor organization activity in the industry has been largely confined to the West Coast, although there lias been 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 (May, 1935). These areas will he 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", about 1890. These workers were never very numerous, the group in any mill being small. 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 wage payment — by the piece — and the dependence of all the crew upon the pace set by the shingle sawyers, drew them' together. This group was well fitted, therefore, to take the lead in union activity. (**) About 1890 this group formed the West Coast Shingle Weavers' union, with six locals in the State of Washington. In January, 1903, the various 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 important 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 behalf of Southern Pine Industry submitted to the Nation- al Industrial Recovery Board by P. A. Bloomer, February 2, 1935. (**) Bureau of Labor Statistics; Industrial Relations in the West Coast Lumber Industry:, Bulletin Ho. 349, December, 1923. 9813 -129- The general strike of 1906 "began at Ballard on April 1 when the union there went on strike, ostensibly to obtain the union scale of wages which was being paid elsewhere. Since this meant only a small increase, it was- generally understood that the strike was for recognition of the union. This the owners refused. The strikers were supported by the International Union, while the mills were aided by those in other parts of the state. On July 27 the International Union called out all of its members on the West Coast, tying up about 60 per cent of the shingle production. About two weeks later the union called the strike off and the men went back to work wherever they could obtain jobs, the union being almost destroyed. (*) The Grays Harbor strike in 1911-1912 was the next one of importance. An organization campaign had b^en started at Grays Harbor, but on October 10, 1911, before the completion 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 in Hoquiam, where some disorder occured, and the strike dragged out until it merged into the I. W. W. strike of March 14, 1912. M st 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 that frequent attempts were made to withdraw the Shingle Weavers' Union from the American Federation of Labor and affiliate it with the I. W-. W., but that those efforts were all unsuccessful. (***) Many attempts were made before 1913 to organize the logging and sawmill workers on the West Coast, but few are worthy of men- tion. (****) in 1905 the International Brotherhood of Woodman and Sawmill Workers were granted a charter 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 half that number by 1911 and the union was • suspended by the Federation of Labor for failure to pay the per capita tax. (***^ After this suspension the (*) Washington Stat 3 Bureau of Labor, .Biennial Report, 1905-1906, pp. 194-196; Pacific Lumber Trade Journal, June, 1906, p. 9; July, 1906, p. 9, .33; ..August, 1906, p. 10; September, 1906, p. 9: Shingle Weavers Hews, February 8, 1913, p. 1 (**) Aberdeen World, Oct. 25, 1911, p. 4; Oct. 27, pp. 1,4; Shingle Weaver, Oct. 28, 1911, p. 1; Hov. .18, p. 1; Dec. 16, p. 1, Jan. 27, 1912 p. 2, et. seq; March 9, 1912, p. 1. (***) Industrial Worker, January 23, 1913, p. 1; The Sverett Massacre , by Walker C. Smith, Chicago, 1917, p. 29; Shingle Weaver, Feb. 1, 1913, p. 10. (****) The Timberma.n, June, 1901, p. 5; July, 1903, p. 16. (*****) American Federation of Labor; Proceedings of the Fortieth Annual Convention, 1920, p. 33 et. seq.; 1911, p. 87. 9813 -130- • American Federation of Labor extended the jurisdiction of the Shingle Weavers' Union to cover the entire lu ibe r Industry. (*) The nrme of the union was changed to "international Union of Shingle Weavers,. Sawmill Workers and Woodsmen" and the name. of its journal to the "Timber Worker". (**) About March, 1913, the union "grin chrnged its name to "International Union 01 Timber Workers". (***) In January, 1914, a convention of the union voted to demand -m 3-hour day in the ' Luriber Industry at the sane hourly rate as for the 10-hour day, ex.cent that the nininum drily '\age was set at (52.25, with tine and a. half for overtime. (.****) The employers, however, o^mosed the demands and launched an aggressive attack on the union. A strike^ which developed proved unsuccessful. During 1913 this union fought 55 lockouts, lost in nearly every case, rnd ~ r .s almost completely destroyed. Immediately follo-ii:j these disastrous strikes mid the failure of the Timber Workers Union to organize the Lumber Industry, the American Federation of Labor revoked the jurisdiction of the union over the sawmill rnd camp workers, thus Uniting it p.— in to the shingle weavers. (******) jhe shingle weavers' union was thereupon reorganized under its former name, "International Shingle Weavers' Union of" A "-.erica" . Logging and sawmill workers began' to form locals after they had been excluded from the jurisdiction of the International Timber Workers' Union. Finally these locals merged into a new International Union of Timber Workers, which did not include the shingle weavers, and in 1917 were granted c charter by the American Federation of Labor. (*-•** ; **) At this point it is appropriate to consider the International Workers of the World and their mart in the Labor organization and dis- on.tes on the West Coast. To this end it is well to recall the rnalysis of labor t^mes made earlier in tl d a chapter. ho hers of .the I.W.W. (*) Shingle Weaver, January 27, 1912, p. 10. (**) Shingle Weaver, February 1, 1913, p. 2; February 22, 1914, p. 2. (***) Timber-: Worker, March 31, 1914, p. 3. (****) Timber Worker, January 31, 1914, p. 12. Proceedings of T'-elfth Annual Convention, Resolution ho. 104. • (***** )American Federation of Labor. Proceedings of Thirty-fifth Annua] Convention, 1915, p. 28. . (******) Shingle Weaver, April 4, 1916; Seattle Union Record,' February 13 1916', p. 4. . . (*******) Washington State Federation of Labor, Proceedings of Sixteenth Annual Convention, 1917, p. 133; American Federation of Labor, Proceedings of Fortieth Annual Convention, 1920, p#\35; Shingle Weaver, January 20 and 27, 1917. 9813 -131- have been recruited almost exclusively from the migrator]' groups, who have had an important irrt in shaping the policies and t actios of this frankly revolutionary organisation. (*) Among the Principles of the I.".'."", are the following: (l) That the interests of the employe i' and the en )lo/ees have nothing in common; (2) that the wage system must be re laced "by an industrial society managed "by the workers themselves; (3) that labor organizations must be based on industrial rather than craft lines. (**) This socirl philosophy was not nopular with the employers and it rras not always clear whether their resistance to I.T7.T7. demands was due to this philosophy, its labor demands, or both. TTith reference to the demand for industrial, rather than craft, unions, it should be noted that the Lumber Industry, particularly the logging branch, does not readily lend itself to organization along craft lines. The logging car.no employs a large number of unskilled and semi-skilled workers and onl - /- a fe^ highly skilled men of many different crafts. These include engineers, machinists, carpenters, blacksmiths md many other crafts, but there are usually not more than t ,_ 'o or three men of any one craft in a given camp or plant. In the camps most of the men live together in the bunk houses and when not at work are very closely associated. The contact in the mills is not so close, but the' workers become well acquainted. These factors have militated against the craft union and favored the industrial type. (***) The organization and initial propaganda of the IiTV..'. on the TTest Const talces us back to 1905, when a number of locals were formed, but its most important lumber strike did not start until march, 1912, when members of a sawmill ere- at Hoquiam, Ifashington, -alked out and closed the mill. Ho demands were mad* he time, but it was generally under- stood that the strike was for better '-'ages. The mill was paying $2 for a 10-hour day. T7ithin the month the strike had spread, many mills had closed, and some violence had resulted. A citizens' committee at Grays Harbor finally proposed that the strike be settled on the basis a minimum wage of $2.25 per dry; that preference should be given to American labor; that no members of the I."V. T . should be employed; and that an otherwise open shop should be maintained* The mills accepted tnese proposals and although the strikers apparently did not formally accept the proposals or call off the strike, all mills were running with full crews about a month after the initial strike. (****) of The year r ; following 1912 were very unfavorable for the I.'.'.U. , with decli ning membership and strength, and it wa.s several years before this (*) Bureau of Labor Statistics; Industrial Relations in the Uest Coast Lumber Industry , Bulletin Ho. 349, December, 1923. ( J X U llLI (***) Ibid. (****) Aberdeen tforid, An". 3, 1912, pp. 1, 6; Apr. 5, 1912, pp, Apr. 8, 1912, p. 1; Apr. 17, 1 12, m. 1 1. 9813 -132- loss was recovered. Attempts to locate and remedy the faults in the organization led to the adoption of the "car) delegate system", whereby a camp delegate was placed on each job, his duty being to receive dues, hold meetings, look after the general interests of the men on the job and keep in touch with the nearest local. (*) This change in organiza- tion was accompanied by a considerable change in the attitude toward the job. The i.W.W. found that its own strength depended mon binding the members to their jobs — a discovery which tended to break down the propaganda for sabotage which was so evident in the files of its papers from 1912 to 1917. (**) In the meantime, however, (1916) the I.W.W. had become involved in trouble at Everett, State of Washington, growing out of the shingle weavers strike there. A free speech fight was con- ducted which culminated In bloodshed on both sides. (***) The strike -in the Lumber Industry in the Northwest during the summer of 1917 will be given special attention not only because it represents ■ . ''oy far the most extensive labor disturbance in the history of the industry, but also because of its important influence on future industrial problems. Extending to most of the west 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.W.W. and the American Federation of Labor felt that with the improved lumber market in the early part of 1917 the time had come for a determined stand for improved labor conditions. Demands drawn urn at en I.W.W. convention may be summarized as follows: Better living conditions in the camps, an 8-hour day, better wages, and union recognition. (****) The strike began in April, ' 1917, 'and. spread until , it is estimated, nearly 70,000 men throughout the Northwest -'ere idle. (*****) As -the strike developed all of the' demands except that for an 8-hour day drocoed into the background and the struggle centered on that question. The Federal Government was brought into the trouble through interference with the supply of lumber for the Army, and the Secretary of War and the Governor of Washington urged the employers to grant the 8-hour day, with time and a half for overtime. The employers refused to yield, however, claiming that the 8-hour day was economically impossible owing to the keen competition of other lumber regions "here camps and (*) Industrial Worker, Feb. 1, 1°12, p. 3; Solidarity (I.W.W. Organ) Jan. 3, 1914, p. 3; ITov. 21, 1914, p. 2 et sea; Nov. 28, 1914, p. 2. (**) 3ureau of Labor Statistics; Industrial Relations in the """est Coast Lumber Industry, Bulletin Ho. 349, December, 1923. (***)Coleman, IT. P., The I.W.W. and the Law; Everett; Sunset magazine, July, 1917, pp. 35, 58-70; Smith, Walker C. , The Everett Massacre. (****) West Coast Lumberman, April 1, 1917, p. 42. (*****) Bureau of Labor Statistics; Industrial Relations in the West Coast Lumber Industry ; Bulletin Wo. 349, December, 1923. 9813 -133- mills were on a 10-hour basis.. (*) With the resumption of operations on the part of the mills, in September, 1917, the Shingle Weavers' and Timber Workers' Unions dropped out of sight, and the remaining trouble was furnished by the I.W.W.'s strike on the job, or as then termed, "conscious withdrawal of efficiency*", (**) At this point a representative of the "J. S, War De-partnent held a conference of the leading employers of the "Jest Coast, out of which grew the Loyal Legion of Log ;ers and Lumbermen, an organization of employers and employees with the purpose of cooperating with the Government for a maximum output of lumber and suppression of seditious activity. Commissioned officers wore detailed to visit the lumber camps and enroll the men in the Loyrl Legion. The organization was at once a success and installed a complete system of col]ective dealing between employer and emoloyee. (***) There were numerous employers on the West Coast who believed that it was necessr r" to grant the 8-hour day to quiet the unrest, but a majority of them were convinced that this was an economic impossibility as long as other lumber regions with which they were com ieting had a longer day. A meeting of employers held in Portland on February 27, 191 j attempted to reach an agreement on this question, but without success. It was finally agreed, therefore, to leave the settlement of the matter to a representative of the War Department, Colonel 2rice P. Disque, who announced that on Ilarch 1, 1918 the Lumber Industry in the Horthwest would go on an 8-hour basis. Immediately thereafter this action was unanimously approved by the 4— L organization. Employers also accepted the conference method provided by the 4-L machinery, but con- tinued to oomose the closed shop, (****) The 4— L become the dominant organization for employer- employee negotiations, although after the war its membership shrank from j.25,000 in 1918 to 10',000in 1922. (*****) A few local unions ol sawmill workers and loggers remained, but the International Union of Timber Workers', affiliated with the American Federation of Labor, disbanded in 1922. The old I.W.W. organization, '■'hich had been active before the war, also declined into obscurity. (*) Washington State Bureau of Labor, biennial Report, 1917-1918, p. 67 et sen.; West Coast Lumberman,' August 15, 1917, p'« 19; U. 3. Congress, House of Representatives, Select Committee on Expendi- tures of the War Department, Subcommittee on Aviation Testimony, Vol. 2, pp. 1132-1192 (66th Congress, 2d Session). (**) Bureau of Labor Statistics; Industrial pLelations in the West Coast Lumber Industry , Bulletin No. 249, December, 1922, (**-*)perlman rnd Taft, His troy of Labor in the U. S. 189S-1952 . The ' ' 'Macliillan Co. (1925). • . . (****) Ibid. . . (*****) ibid. Monthly Labor Review^ Sept. 1925, U. S. Bureau of Labor Statistics. 9813 -134- " During the depression the Loyal Legion suffered loss in membership and influence in con: ion uith regular and company unions, some companies and their workers withdrawing altogether, while others maintained an in- different attachment. (*) - . ■ With the passage of the national Industrial Recovery Act in 1933 the 4-L's claimed collective bargaining control, hut the American Federation of Labor became very active in an organization program and is reported to have partially controlled ^0 per cent of the workers by August 1, 1935. (**) A. F. of L. federal locals of loggers, sawmill, plymill and shingle workers sprang up throughout Washington and Oregon. On April 1, 1935 these federal locals organized the Sawmill and Timber Workers' Union and became a -oart of the United Brotherhood of Carpenters and Joiners of America. (***) Discontent with low earnings and reduced employment had been growing among all lumber workers due in part to the fact that while the Code had increased their hourly wages, their hours had been so limited that there was no increase in weekly earnings. (****). The new Sawmill and Timber Workers ' Union voted to go on strike on May 5, 1935 if at that tine they had not been successful in negotiations with the various lumber operators.: Their )ro nosed agreement providing for a 30-hour week, 75 cents an hour minimum 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 peak, with practically all camps and mills tied up, involving 32,000 lumber workers. Shipping and other affiliated industries were seriously affected. (*****) The 4-L agreed upon a scale of wage increases amounting to 5 cents on the minimum rates from 45 to 50 cents, 6 cents on wages from 55 to 52-1/2 cents, and 7 cents on rates from 65 to 72-1/2 cents. The partial success of the 4-L, together with the Supreme Court decision oh the 1JRA on Kay 27, 1935, influenced many members of the union to moderate their demands. 'An interesting side-light on the situation is a.fforded by the following- excerpt from the 4-L Lumber Hews of June 16: "The production of the mills and camps now closed is not needed in the present condition of the national and foreign lumber markets .... Thu mills* no- down could remain closed for the rest of the year without affecting particularly the national lumber market, except to bring more prosperity' to the South and other regions. (******) (*) U. S. Bureau of Labor Statistics, Monthly Labor Review, Sept., 1935. (**) Department of Labor,. Piles of the Division of Conciliation. (***)U.S. Bureau of Labor Statistics, Monthly Labor Review, Sept., 1935.. (****)U. S. Department of Labor, Piles of the Division of Conciliation.. (***** )u. S. Bureau of Labor Statistics, '"onthly Labor Review, Sept. 1935*. (******)lbid. 9813 -135- Toward the last of June the Federal Lumber Kediation Bor.rd, appointed j "by the Secretary of Labor, began negotiations between the union and individual companies. A little later a number of companies began ooera.tions on a 50-cent minimum rate and -iO-hour oasis but without | written agreements, while some cornaies signed a union agreement pro- viding for this wage scale aid union recognition. By the middle of August practically all mills had reooened en the basis of individual ■ agreements, some written and some verbal, but all granting increases in wages and limited recognition of the union. In general this recog- nition consisted of no discrimination against union men but refusal to run a closed shop. (*) Opinions on the results of the strike vary* The 4-L was very emphatic in denouncing it ?s unnecessary, claiming that wage increases had been obtained through peaceful, negotiation. Union officials, however, maintained that the best possible settlements had been made and that trade unionism, for the first time since the war, was again a dominant factor in the llorthwest Lumber Industry. (**) b. South During 1910 an attempt was nade to organize the timber workers in Louisiana, Arkansas and Texas into the Brotherhood of Timber Workers, an independent organization inspired by followers of the I.T7.T7. In 1913 the Brotherhood was formally affiliated with the I.W.T7. Its headquarters were in Alexandria, Louisiana. (***) In July, 1911 t a convention of the compactly organized Sawmill Operators' Association in this region ordered the shut-down of mills with 3,000 employees and gave its executive committee' power over the closing of the 300 mills in Texas, Louisiana and Arkansas. A war on the Brotherhood of Timber Workers and the I.T7.I7. was on, but the organizing campaign made considerable headway. The chief obstacle was friction between whites and colored, which the workers claimed was en- couraged by the employers. The union leaders took the position that ... since the employers obviously had not objected to the nixing of races on the job,. the union had excellent precedent for inviting whites and colored to a joint consideration of their common job interest. The Brotherhood mapped out the following series of demands to be presented gradually to the lumber companies: A minimum wage of S2 for a 10-hour da.y; 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; improvement in the sanitary conditions of the lumber camps and towns; disarming and discharge of company guards; and the right of free speech and. free assemblage. (****) (*) Ibid (*) Department of Labor, Biles of the Division of Concilia.tion. (**) Ibid. (***) Perlman and Taft, History of Labor in the United States, 1893-1932; The Macmillan Co., Hew York, 1935. (****)lbid. 9813 -136- The demand chosen to "be pressed immediately was for a semi-monthly ' -pay day. Under the once-;, -month pay day it is reported that the em- ployees were frequently forced to ; r ■ ,].-' for advances in cornany scrip,., good at face value only at company stores --here, in some instances, prices '-'ere from 15 to 40 per cent above the outside prices, Nominally the employees had the option of taking ..their serin to the independent stores, hut at a discount which in some cases ranged from 25 to 40 per cent. The companies refused the demand and a strike followed. The strike was uneventful at first, hut soon violence arose, resulting in the death of three union men and one eompany man. The Coroner's jury chargeu. officers of the comma ny with murder,, hut the grand jury re- turned indictments for first degree murder agsint 58 union members, and did not indict the officers of the company. Nine defendants were brought to trial early in Octooer and a verdict of not guilty "was re- turned. The murder charges against the other defendants were dismissed. (*) Ten days after the verdict p strike involving 1,300 workers began at Merryville, Louisiana, for the reinstatement of the erroloyees of the American Lumber Company who had testified for the defense. State troops were sent but immediately withdrawn. The lumber ' companies are reported to have encouraged a Good Citizen League, made up on non-union workers and business men in the West. The strike lasted seven months and, together with the union, was suppressed, according to the strikers, "by the activity of vigilante committees. (**) c. T7est Virginia. About May, 1935, an organizer for the American Federation .of La,bor started a campaign to organize the timber and sawmill workers of the West Virginia hardwood field into locals of the Sawmill Workers' Union. (***) This organizer stated that by August, 1934, he had succeeded in organizing 5,000 workers and on August 6 called a general strike which affected 4,000 employees and 12 plants. The demrnds consisted of re- cognition of the Union, increased wages and si ;ned working contracts. From the date the strike was called until : T ovemjer 15, 1934 it was gradually settled on the oasis of individual contracts "ith each mill which generally contained a repetition of 7-A of the National Industrial Recovery Act and called for the return of all strikers without prejudice at three and one-half cents rn hour increa.se, ~nd signed agreements. There does not seoa to have been p.ny direct recog- nition of the union, since the individual contracts wore signed by a. committee representing employees rather than a committee representing the union. However, the Director of Conciliation, Department of La.bor, wrote the Secretary of one of the locals on October 18, 193^ that as bargaining "'"'"■ with the union officers, this night be considered as recognition. Possibly the employers did not understand their agreements to constitute recognition of the union, since in one mill the check-off system provided for in its agreement never operated. In two of the (*) Ibid. (**) Ibid. (***) Department of Labor, Files of the Director or" Conciliation. 9R1 3 -437- agreements there vzas no increase in uages, ''out those employees living in company houses nero allowed rent free. (*) After the 2IRA decision of the Su-jre.ie Court 01 May 27, 1935, sone of the operators endeavored to cancel their agreements by going back to a 43-hour vreel: and cutting the vages to the previous scale, hut these attempts appearted to he unsuccessful. The American Federation of Labor granted the Brotherhood of Carpenters and Joiners Jurisdiction over the locals, effective April 1, 1935. (**) (*) Ibid. (**) Ibid. 9813 -138- 5. TTages a. Sawmill and Millwork Combined, The serious effect of business depression on hourly wage rates in the Lumber Industry is seen in the following average hourly rates, in cents, which show the rapid downward spirrling of such rates since 1929. These data represent the combined computed rates for the census classi- fications "Lumber and Timber Products" and "Planing Mills", otherwise referred to as "Sawmills" and "Ilillwork" , respectively. 1939 1930 1 951 195 , Average Hourly 45.6 44.9 41,2 34.2 33.9 43,6 TTage (cents) Index (1929=100) 100.0 98.4 90.4 75.0 74.3 95.6 Source: Commuted by Code Industry Analysis unit, Division of Research and Planning, KSA, on following bases: IJ.I.C.B. times .792 from January, 1936, to December 1931; 3.L.S. from January, 1932, to 1934, combining "sawmills" and "millwork" by using estimated total man-hours as weights. It will be seen from the foregoing table that average hourly wages declined from 45.6 cents in 1929, the year 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 in severity during the years 1931 and 1932. The codal year 1934 witnessed a very substantial recovery in wages, raising the 1933 rate of 33.9 cents to 43.6 cents, thus representing a gain of nearly 29 per cent over the low oint of the depression. Inasmuch as the weekly wage, rather than the hourly wage rate, de- termines the earnings of the worker, it will be of interest to examine the following average weekly wages for the same industry classifications: 1929 1930 1931 1952 1953 1934 Average TTeolcly T7age (dollars) 21.14 20.21 16.78 12.41 12.50 14.43 Index (1929=100) 100.00 96.5 79.4 53.7 59.6 68.3 Source: Computed by Research and Planning Division, 1IRA, combining 3.L.S. statistics for sawmills rnd nillwork by using estimated number employed as weights. 9813 -139- It will "be seen- from a comparison f o the t™o preceding tables that average weekly wages declined much more drastically than average hourly wage rates, indicating the effect of reduced hours of employ- ment. The 1933 weeldly earnings of $12.60 reinresented less than 60 per cent of the 1929 earnings, whereas the hourly wage did not fall "below 74 per cent of the 1929 level. "b. Sawmills and Millwork Compared The following table compares average hourly wages in the sawmill (Census classification "Lumber and Timber Products") and millwork (Census classification "Planing Mills") "branches of the industry for the years 1932-1934, the only years for which this comparison is avail- able. Branch of Industry 1932 1953 1954 (Cents) (Cents) (Cents) Sawmills 33.0 33,0 43.5 MULwork 39.4 37.2 M.3 Source: U. S. Bureau of Labor Statistics Hhe 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 independent planing mill branch decreased steadily from 5.4 cents in 1952 to 4.2 cents in 1953 and 0.8 cents in 1934. This situation may be due to the reported increased competition which independent planing or millwork plants ex- perienced from such plants operated in conjunction with sawmills. Average hourly wages for 1934 have not as yet been computed by the Bureau of Labor Statistics, but figures for individual months, with the exemption of only the first three months, are well above the 1934 ... average. The 1955 hourly wages, by months, ranged from 42.5 cents in January to 47.2 cents in September for the sawmill branch, and from 44.0 cents in March to 46.0 cents in December for millwork. Because of the importance of average weekly wages ( the following comparison of euch wages for sawmills and millwork may be helpful. 9813 -140- 1929 (dol.) 1930 (dol.) 1931 (dol.) 1932 (dol.) 1933 (dol.) 193 (dol Sawmills a/ 20.52 19e63 16.00 11.77 12.33 14.3( Millwork b/ 23.56 22.59 19.58 15.08 13.90 15.2! Sawmill Index (1929 a 100) 100.00 95.4 77.6 57.1 59.8 69.4 Millwork Index (1929 z 100) 100.00 95.9 33.1 64.0 59.0 64.6 Source: U. S. Bureau of Labor Statistics a/ Census Classification "Lumber and Timber Products 11 b/ Census Classification "Planing Mills" _ Prom the foregoing table it appears that average weelcly wages in the sawmill branch of the industry declined from $2u.62 in 1929 to $11.77 in 193"', a money loss of 43 per cent, and that in millwork these wages de- clined from $23.56 in 1929 to $15.08 in 1932, p money loss of 36 per cent. In the latter branch, however, the loss continued into 1933, so that the average for that year was nearly 41 per cent below the 1929 level. The codal year 1934 showed considerable improvement in the weekly wages of both branches, the amounts of $14.30 for sawmills and $15.21 for millwork representing approximately 69 per cent and 65 per cent, respectively, of the 1929 wages. c. Area Comparisons Tho striking divergence between wages in the South and TTest is indi- cated in the following comparison of average hourly wage rates and weekly earnings in these areas: 9813 West West S outli Per Cerr b "West South P er Cent $0,270 49 .272 51 .275 49 $26.01 $14.44 56 .260 47 25.17 12.74 51 .170 44 14.34 7.11 50 .150 .41 15.40 6.80 51 .390 55 13.83 8.44 61 -141- AVERAGE FCUPLY ' : 'A^I RAT'S AND AVERAGE WEEKLY EARNINGS IF Tm LIMBER Ii^USTRY (SAWMILLS) IN TIE ~ r PST AND SOUTH a/ ' Average Hourly Rrtic of Average Weekly Patio 6f Wage Rates South to Earnings South to Year ^est 1923 June SO. 552 1925 February t° June 533 1928 557 1930 May t"' August 558 1932. 3^3 1933 July - Average 366 December - Average 5.^0 1934 Average fir?t ten months 548' .295 54 17.76 8.70 49 Source: Research and Planning l^ivisi^n, ERA, Report entitled "Hours, Wages and Emoloyrnent" , ore-oared fcr hearings on employment pro- visions of Codes, Ja.nua.ry, 1935, o. 58. a/ "West" includes Oregon and Washington. "Soutli" includes Ala- bama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Virginia, Arkansas, Louisiana and Teo'a.s. Since the orincipal oroduct of the Southern States is oine, which comoetes chiefly with the Douglas fir of the n est Corst„ the Southern States have been compared with the " r estern Stages where Douglas fir is -produced Figures for Pre-c^de years are weighted averages of State averages anoearing in the Wages and Kc*urs Bulletins for the Lumber Industry -published by the Bureau of Xabor Statistics. Figures for 193o and 1934 represent conditions ^Ln the Southern Pine and West Coast (Douglas Fir) Divisions, as re-ported to the Code Authority. This -preceding table indicates that average hourly w, age rates in the Southern states were a.-poroximately one-half of those in t'.he West Coast States of Washington and Oregon for the years 1923, 1925 ifend 1928 r the 1928 averages 9813 -142- being SO. 557 for the West and $0,275 for the South. It arrears also that "beginning in 1930 the excess of the Western average over that of the South increased until in July, 1933," just nrior to the Co^e, the latter was only 41 -per cent of the former. (*) The effect of the Code appears to be reflected in the fact that in December, 1933, the fourth month of operation of the codal wage pro- visions, the Western average was 53 cents as comnared with less than 37 cents in Jul ;/, 1933, and the Southern average was 29 cents as compared with only 15 cents in July. It is also seen that under the Code the Southern average hourly wage rate represented a larger proportion of the Western average than at any other -period covered by the table. These statistics show that until 1934 the ratio of average weekly earnings in the South to those in the West was greater than in the case of average hourly wage rates, due, doubtleps, to the longer average work- week in the South. In 1928 these Southern earnings averaged $14.44 as compared with $26.01 for the 'Teat. — a ratio of 56 per cent. Subsepuent reductions brought these earnings down tc $6.80 in the South rnd $13.40 in the West in July, 1933, re-ores enting a ratio of 51 -per cent. These tire-code earnings in the West were approximately 50 ner cent of the 1928 average and in the South were 47 per cent of the 1928 level. The codal month of December, 1933, showed 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 nericd 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 b^en 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 -ooint in pre-code hearings on the subject of territorial wage rate differentials. One ap-oroach has been to compare in the South and in the North the prices of a large o-uantity of goods needed by a family. The defect of this method is that the goods oriced are not used in both regions, rnd to this extent the comparisons are artificial. More corn bread, xor instance, is consumed in the South and more wheat bread in the West nd East. More rice is used in the South and les? coal. (**) Professor William F. Ogourn, of the University of Chicago, recently employed a different method of attack, using the oercentage 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 •'-• nd elsewhere. (***) (*) The President's Reemployment Agreement went into effect in July, 1933. (**) Ogburn, William F. , University of Chicago, Does it co st less to live in the Soutph? University of North Carolina Press, Social Forces, December (1935), pp. 211-214. (***)lbid. 9813 -143- Insufficient data have become available to enable definite conslusions i en this point to be presented in the present report, but it is believed that such observations as those of Professor Ogburn indicate the need of further research on this subject and its importance as one factor in determining or justifying territorial wage rate differentials. The following table conroares average earnings "oer hour per em- ployee and average full-time earnings per week -oer employee in logging camps and sawmills for three Southern states and three Northwestern states for the years 1928 and 1932. The data for these years afford a basis a.lso of comparing ore-depression and bottom-of -depression earnings. Percontage of Decline 1928 1932 from 1928 Logging Logging Logging- Camps Saw- Cantos Saw- Camps Sawmills mills m ills Average Earnings per Hour per Employee: 3 Southern States a/ $0,322 SO. 292 SO. 179 SO. 181 44.4 38,0 3 N. Western Statesb/ .663 . .556- .46.1 .393 30.5 29.3 Average Full-time. Earnings per Week per Employee: 3 Southern State-s a/ 19.42 17.37 10.76 10.72 44.6 38.3 3 N. Western Statesb/ 32.26 26.78 22.62 18.93 29.9 29.3 Source: Bureau of Labor Statistics, Bulletins No. 497 (1928) and No. 585 (1932), "WTges Wid Hours of Labor -in the Lumber Industry in the United States". a / Arkansas, Louisiana and Mississippi. b/ Oregon, Washington and Idaho. This table indicates that in 1928 average earnings -per hour per employee in logging camps and sawmills in the Southern states of Ark- ansas, Louisiana and Mississippi' were approximately half of the Corres- ponding earnings in the thr^e Northwestern states of Oregon, Washington and Idaho. It also appears 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 oer cent and. 38.0 per cent in the logging camps and sawmills, respectively, whereas in the Northwestern states these declines were 30.5 per cent and 29.3 per rent, 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 hour? worked in the South. It is interest- ing to note., however, that the declines in 1932 from the 1928 level were almost identical with those for hourly earnings. d. Payrolls The long-time trend of payrolls in sawmills (Census classification "Lumber and Timber Products"), as well as seasonal fluctuations in such payrolls, are shown in the following indices, which are b'-sed uoon the year 1929 as IOC. Index of Payrolls (1929 = 100) Sawmills _ 1_926 1927 1928 1929 1930 1931 1932 1933 1934 1935 Jan. 96.4 92.5 86.0 88.3 80.1 40.9 21.4 16.7 29.8 32.8 Feb. 101.5 94.3 8°. 6 91.5 78.7 40. 8 21.0 16.0 32.3 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 . 8 95.3 100.4 83 . 8 39.7 21.2 16 . 6 38.6 40.6 • May 109.0 100.7 99.5 105.8 82." 41.1 21.5 19.0 ■ 1 . 5 34.5 Jun. 111.9 101.5 100. 2 105.0 79.9 41.1 20.9 24.1 39.8 35." Jul. 107.0 97.3 97." 106.2 70.2 37.3 19.6 28.7 25.8 39.3 Aug. 110.0 100.3 99.9 105.6 64.. 7 36 . 3 19. 34.3 37.9 Sen. 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 93.2 54.7 29.3 21.0 37.4 36.5 Dec. 102.5 94.6 96.6. 93.2 49.3 25.5 18.7 34.3 34.3 Aver- age: 10G.1 98.1 96.9 100.0 71.0 36.9 f Labor Stat 20.7 istics 27.0 una d j 36. 6 as ted Source: Derived f rom Bureau c index (1926 = 100) by • ad jus ;ting t o Cens us with NRA me thod • * It will be seen from the foregoing that oayrolls in the sawmill branch of the industry declined from 1926 through 1928, rose slightly in 1929, and thereafter drooped sharoly until 1937 when, at the bottom of the degression, these -oayrolls r^nre? enter! ro-oroximately 21 oer cent of those in 1929, or a loss of 79 tier cent. It will be observed also that after 1932 there was a gradual increase in these oayrolls which continued into 1935. Trends in millwork or -olaning mill -oayrolls, shown in the follow- ing table, are somewhat similar to those in the wawmill branch, except that in millwork the decline which began in 1926 continued without break through the first half of 1933, so that the average oayrolls for 1933, despite some improvement during the latter half of th^t year, were only 22 oer cent of the 1929 level. 9813 1926 1927 ~k45~ Index of Payrolls (1929 = 100) Millvork 1928 1929 1930 1931 1932 1933 1934 1935 Jan. 122.0 107.1 92.2 95.3 77.1 53.1 34 . 3 17. 7 22.5 26.2 Feb. 126.5 107. 2 9 Q .l 98 . o 81.0 55.8 31.2 17,4 24.7 28.8 Ma r . 128.9 108.0 100.0 104.3 80.4 56.3 28.4 15.1 26.4 29.4 Ar>r. 124.7 110.7 104.2 105.3 81.0 56.3 27.3 17.6 28.1 31.6 May 125.3 112.8 107.1 106.5 83.1 57.3 27.1 19.9 28.8 33.2 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 50.3 22.5 27.2 26.4 Sen. 121.8 107.9 104. a 105 . 6 66.0 44.9 22.3 27.5 24.8 Oct. 124.2 107.6 105.2 100; 65.3 42. 2 22.4 26.8 27.5 Nov. 121.1 102.^ 102. 3 87.3 61.3 39.8 22.2 25.2 27.3 Dec. 117.0 101.3 100.4 83.0 60.0 39.1 20.1 25.0 78.0 Aver- age: 123.7 103.4 103.1 100.0 73.2 50.3 25.5 22.4 26.5 Source: Bureau of Labor Statistics Index shifted to 1929 base; NRA adjustment to 1933 Census. An indication of corroosite r>ayroll trends f n r both sawmills and millwork is afforded by the following table: Index of Payrolls (1929 = 100 ) Sawmills and Millwork 1926 1927 1923- 1929 1930 1951 1932 1953 1934 1935 Jan. 102.0 95.7 87.3 89.8 79.5 43.5 24 . 2 16.9 28.2 31.4 Feb. 106.9 97.1 90.7 92.9 79. 2 44 . P3 p 16 . 3 51.0 35.0 ' lf^T> 107.9 98.5 94.8 96.4 33.0 4^: . 22.4 15.6 33.5 36.4 Aor. 109.6 93.2 93.0 101.6 83.2 43. 3 22. 5 16.8 36.3 38.6 '•fey 112.5 103.3 101.1 105.0 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 53.8 39.2 Aug. 113.4 103.2 101.5 105.8 66.0 39.4 19.9 32.3 35.4 Set). 11°. 5 105.5 102.3 106 . 3 63.6 37.5 20.9 37.0 35.3 Oct. 113.2 103.3 103.2 103.5 61.8 34.3 22.1 37.1 36.4 Nov. 110.1 100.4 101.1 95. 8 56.1 37.0 21.3 34.8 34.5 Dec. 105.6 96.1 97.4 91.0 51.6 28.4 19.0 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 Statistics data shifted to 1929 base by the Division of Research and Planning, TRA. Estimated average weekly oayrolls for sawmills and millwork ov^r the period 1929 to 1934, inclusive, are shown in the following table: Estimated Average Weekly Payrolls (Thousands of Dollars) 1929 1930 1931 193? 1933 1934 Sawmills '■■'iillwork 8,107 5,754 2,9*R 1,675 2,178 3,044 2,239 1,638 1,127 571 • 501 . 594 Source: Commuted by Research r nd Planning Divisicn, ".IRA, allying ■oayroll index of Bureau of Labor Statistics, shifted to 1929 b? se, against Census payroll statistics for 1929. ft 6. Hours In 193'", which, in general, marked the bottom of the depression for the industry, the sawmill branch averaged 36.4 hours 'oer week, and the millwork branch 34.9 hours, according to data of the Bureau of Labor Statistics. Unfortunately no official or other comprehensive data covering hours actually worked throughout the country are available for earlier years. Average hours worked r>er week in the sawmill branch are ^resented by months for the years 1932 to 1935, inclusive: 9813 -147- AVFRA/v? HO'P.S '"OT'PD PER TFIEK SAWMILLS Month '1932 1933 1934 1935 January ' 33.6 33.1 31.3 .33.4 February 35.7 33.4 33.0 ■ 34.7 March 36.6 34.6 34.3 ■ 35.3 April 35.7 36.2 34.7 36.4 : May 37.3 40.4 34.3 . 33.2 June 35.6 43.0 34.1 37. 3 July 35.4 44. 1 3?. 3 36.3 Augus t 36.5 *fco. X 33.3 39.3 September 33.2 37.1 33.3 40.0 October 39.3 34.7 33.7 41.1 November 33.6 34.4 33.1 38.9 December 34.5 33.1 32.9 39.9 Average 36.4 37." 33.5 1/ Source: Compiled from data of the Bureau of Labor Statistics by the Division of Research and Planning, JTRA. !_/ Hot yet available. It will be seen from the foregoing table that the average of 37.3 hours worked in 1933 "'as slightly above the 1932 average, out that during the codal year 1934 the a.verage fell to 33.5 or nearly three hours below the depression lo" of 1932. An average for the year 1935 has not been officially conrouted, but it is evident from the monthly averages that hours worked in that year considerably exceeded those in 1934. The Code for the industry, which was terminated by the Supreme Court decision of May 27, 1935, stipulated a maximum work week of 40 hours with certain exceptions. It is interest- ing to note that in June, 1935, the first month following termination of the Code, the average work week was about four hours in excess of that for the ^receding month, and that for the balance of the year average hours continued to increase. The effect of the Code on hours of em- ployment will be discussed later in this chapter. 9813 -14-8- AVERAGE HOURS FORKED MILLWORK Pip flEEK Month - ' 193? 1933 1934 1935 January 36. 8 35.5 3?. 7 34.1 February 36.7 35.3 34 . 4 35.3 March 33.0 31.5 35.5 35. R A-oril 36.4 39.3 34.8 36.4 May 35.? 40.? 33.9 37.4 June 33.8 43.3 34.? 38.9 July 34.8 4^.7 33.? 39.1 Augus t 33.7 39.6 34.3 40.3 September 34.8 34.7 33.6 41.5 October 35.6 34.? 36.0 43. 1 November 34.1 34.2 34.9 40.9 December 34.4 34.5 35.6 42.? Average 34.9 37.3 34.4 1/ Source: Compiled from data of the Bureau of Labor Statistics by the Division of Research and Planning, FRA. l/ Hot yet available. A comparison of average hours worked -oer "reek in the Southern states, which -produce principally pine, with average hours in the " T est Coast states of Washington and Oregon, iT rhose Douglas fir competes with the Southern pine, may be helpful. The basis for such a comparison is af- forded by the following table, ^hich covers the sawmill branch of the industry. 9313 -149- AVERAGE EDITHS "'0~"ED ( PF1 -"TEE IN T^T LUM3E? INDUSTRY (SAWWILIS) -I J T"-^ '"^.'ST AND SOUT TT , 1923-1954 a/ "Ratio of South to r 'est Ye-r We?t South (Per Cent) 1928 ' 46.7 5?. 5 113 1930 May to August 45. 1 49. 109 1932 36.7 41.8 114 1933 July Average 36.6 45.3 125 December Average 26.1 29.1 111 1934 Average first 10 months 32 . 4 29 . 5 93 Source: Peoort entitled "Tours, Wages and Employment", prepared for hearings on employment provisions of Codes, January, 1935, "by the Research and Planning Division, i-TRA, p. 58. a/ "" r est" includes Oregon and Washington. "South" includes Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Virginia, Arkansas, Louisiana, and Texas. Since the principal product of the Southern states is -nine, which competes chiefly with the Douglas fir of the West Coast, the Southern states have "been compared" -with the Western states where Douglas fir is produced. Figures for r>re-code years are weighted aver- ages of state averages appearing in Wage and. Hour Bulletins for the Lumber Industry, of the Bureau of Labor Statistics. Figures for 1953 and 1934 represent conditions in the Southern Pine and West Coast (Douglas Fir) Divisions, as reported to the Code Authority. The foregoing table shows that average hours worked per week in the West declined from 46.7 hours in 1928 to 36.7 hours in 1932, the year which marked the depression low in production and employment, while in the South these hours declined from. 52.5 hours to 41.8 hours during the same neriod. It is noteworthy that the decline in hours in each area during this period was the same, namely, 21.4 per cent. In July, 1933, just prior to the approval o^ the Code, the hours worked averaged 36.6 in the West and 45..3 in the South, whereas for the codal month of December, 1953, the average had dropped to 26.1 hours for the West and 29.1 hours for the South, representing declines of nearly 29 and 36 per cent, respectively, from the ore-code average. Seasonality may have been a factor in this decline, but judging from the monthly averages given earlier in this report it is not believed that seasonality was an important factor. Probably the most striking feature of this table is the indication 9813 -150- that whereas in 1928 average hour? in the South were 12 p^r cent above those in the 1v est, and whereas in July, 1933, (*) just -nrior to the Code, this differential had increased tc 25 oer cent, this situation was re- versed during the first ten months of 193/ 1 ., under Code operation, when the average for the South dropped to a lev 3 ! 7 -oer cent "below thf t for the West. Full-time hours in the industry have varied considerably between the South and the Northwest. The following comparison, based on data of the Bureau of Labor Statistics for three Southern states and three Forth- western states, indicates that full-time hours in the South have consider- ably exceeded those in the Northwest. AVERAGE NUMBER OF FULL-TIME HOURS PER "TF. T " PER EMPLOYEE 1928 1932 Three Southern States a/ Three Northwestern States b/ Source: Bureau of Labor Statistics, Bulletins No. 497 (1929) and 586 (1932), l,T "ages and Fours of Labor in the Lumber Industry in the United Statps". Logging Logging Camps Sawmills Camps S- -mills 60.4 59.4 60.2 59.3 '48.7 48.2 49.0 48.1 a/ Arkansas, Louisiana, Mississippi. by Oregon, "r p shington and Idaho. 7. Productivity In 1929, the latest year for " r hich complete Census returns are available, the eleven principal Southern producing states had 203,324 wage earners in t.ie Census classification "Lumber and Timer Products", or 48 per cent of the total wage earners in this classification. The three leading lumber producing states of the pacific coast — California, Oregon, and Washington. — had 115,224 wage earners, or only 28 per cent of the total. Yet despite the fact that the Southern states employed 76 per cent more wage earners than the Pacific Coast states, production by the latter, on a 48-hour, single-shift week basis, aggregated 14,149, 301,000 feet board me- sure of lumber, as against 15,462,485,000 feet produced in the eleven Southern states on. a 60-h'our single-shift week basis. (**) (*) The President's Reemployment Agreement began to be effective in July, 1933. (**) Brief in behalf of the Southern Pine Industry, submitted to the National Industrial Recovery Board by P. A. Bloomer, February 2, 1935. 9813 -151- The production xier wage earner in the Southern states in 1929 was '76,048 feet, against 122,798 feet -oer wage earner in the throe Pacific states. Thus, the average Pacific Coast wage earner, working 48 hours la week, -produced 61 -oer cent more., lumber than did the average Southern ■wage earner working 60 hours a week. This is due mainly to the larger yield per log and ner acre of standing timber obtained on the Pacific Coast, to the absence of hardwoods in the Pacific Coast -oroduction, and to the highly mechanized operations comnon to that region. (*) A study of the productivity of labor in the Lumber Industry in the Pacific Coast states in 1929, made by the Bureau of Labor Statistics(**) , revealed the fact that efficiency, as measured by man-hour productivity, depended more upon the extent of mechanize tion, and nossibly wages naid, than uoon such factors as size of nlant. In fact, it was found that such efficiency decrer sed with the size of nlant as measured by number of wage earners employed, espeically for those mills which produced their own logs. It appeared that -productivity did not increase with the size of mill as measured by either number of wage earners employed, aggregate outout, or even aggregate horsepower, although for those mills which bought their logs there was some increase in -oroductivity with increase in size of mill as measured by total outnut. This study also revealed that for the Pacific Coast states those mills which naid the highest hourly wage sawed, on the average, about 40 -oer cent more lumber -oer man-hour than did the low-wage mills, but only about 30 -ner cent more ner w age 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 that the most reliable indicator of efficiency in this industry is horsepower ner w-ge earner, the increase in nroductivity with increase in horsepower per wage earner being annreci^ble. It apneared also that the wage cost ner thousand feet sawed was nerhans a little smaller in the case of those mills with much horsenower ner wage earner than in the case of those with little horsepower per wage earner. Probably the most reliable available basis for a study of relative nroductivity of labor in the industry is afforded by a snecial tabulation made by the Bureau of the Census for use in this renort. This tabulation shows lumber uroduction r>er man-hour in the year 1929 in 372 selected es- tablishments in the Census classification "Lumber and Timber Products" industry; by districts and states. These establishments were' selected from, and renresent, about one-fourth of those lumber producing estab- lishments which renorte r1 individually nrod.ucts valued in 1929 at $100,000 or more. They renresent, therefore, the larger establishments. All of (*) Ibid. (**) U. S. Bureau of Labor Statistics, Productivity of Labor, Monthly Labor Peview, October, 1932. 9813 -35 3- them produced lumber and most of then manufactured nlaning mill products also. In calculating the amount of limber produced -nor man-hour, the number of feet of rough lumber has been divided by the total number of man-hours worked ''in the establishment? covered by the table. Thus the dividend refers to rough lumber onl", whereas the divisor represents the labor employed both in producing rough lumber and in remanufacturing a part of it. The following table presents these -oroductivity data, summarized for the three grand divisions: North, South and ^est: ITumber of Wage Earners Lumber Produced Number of (average oer Man-hour Area Establishments for year) (Et.b.m. ) (Per Cent ) Total The North a/ The South b/ The '"est c/ 372 79,093 47 Avg. 100.0 Avg 74 11,675 24 51.1 130 20,177 29 59.6 168 47,241 62 131.9 a/ Maine, New Hampshire, Vermont, Massachusetts, Ne"* York, New Jersey, Pennsylvania, Michigan, Ohio, Indian-, Illinois, Wisconsin, Minne- sota, South Dakota, Iow ; - , Missouri, and Kansas. b/ Maryland, West Virginia, Virginia, North Carolina, Kentucky, Tenn- essee, South Carolina, Georgia, Florida, Alabama, Arkansas, Louis- iana, Mississippi, Oklahoma, and Tex°s. c_/ Montana, Idaho, Colorado, Ne 1 " Mexico, ^ishington, Oregon, and California. The foregoing data reve- 1 that the average man-hour -production of the 372 establishments covered vras 47 ft. b.m. This average is not re- presentative of man-hour production 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 ^est. The man-hour production in the North and South was 49 and 40 oer cent, respectively, below the average for all the establishments, vhereas the man-hour production in the ^est was 32 tier cent above the average. Limiting the convoarison to the South and '.Test, the main lumber t>ro- ducing areas, it is found that the average man-hour production of the 'Test reurefented an increase of more than 121 -per cent over the average man-hour production of the South. The variations among the several areas and states in the amount of lumber produced -per man-hour a^e due to a number of causes, the most important of which f re the degree of mechanization and amount of horse- power available per worker, the size of logs sawed, the average timber stand -per acre, the degree of softwood -production, and the size of the 9813 -153- jproduct. In all o^ these respects the West excelled. It is interesting, If or instance, to note that the State of *~ shington, "hose production per jnan-hour of 96 feet excelle-'' that of any etner state, had the greatest ! average st^nd per .« ere of industrially-owned saw timber, namely, 45,283 jfeet.C*) As in the case of the other factors just mentioned', however, ' the^e is no ccmolete correlation between average timber stand and product- ivity per man-hour,- owing to the. effect of other factors. It is interesting to note in connection with the foregoing com- parison that the average nuifber of wa ; ?e earners per establishment cov- ered was much greater in the V7 est than in the South and North, the averages being as follows: T " : est, 381; North, 158; and South, 155. This does not indicate that the samples in ouestion Pre not representative, but rather indicates that the ~verage Western establishment is larger than is found elsewhere. 8 . . Code Labor Provi s ions wnd Th eir Interpre tat ion The Code of Fair Competition for the Lumber and Timber Products Industries, which ^as- approved ''oy the President August 19, 1933, was adopted only after an active Period of code formulation during which strenuous efforts were made by the industry to harmonize its varied in- terests and at the same time satisfy reouirements of the National In- dustrial Recovery Administrg tion. In view> of the wide scope of the indtistrie,s covered by the e^d.e, from the standpoint of loc : tion, pro- ducts, markets, labor,, etc., it is not surprising that the proposed code, as finally approved, repra-sented a. consider p ble degree of comnromise. This is certainly true of the labor provisions of the code, which are covered in the following discussion. a. G-ene^al Labor Provisions The general labor provisions foand in Article V of the code con- tained the usual provisions r e q-ni rC cl by the National Industrial "Recovery Act, namely, assurance , of the right of the employees to organize and bargain collpctively through representatives of their own choosing; freedom from interference of employers in these respects; the right of employment free from reouirement to join a cemoa.ny union or to refrain from joining, organizing or assisting £ labor organization of their own choosing; a rd. the reouirement that each employer comoly with the stand- ards of wages and hours and other conditions of employment approved or prescribed by the President. An outstanding provision in view of the hazards of this industry was the prohibition of employment of any individual under 18 years of age, except beys 15 years and over who might be employed in the Wooden Package Division and in non-hazardous occupations during school vacations or in case tnere .were no wage earners of 18- years or over in their families. The Code contained no specific provision covering handicapped work- ers. However, this w as taken . care . of by Fxecutive Drder 6606-F, of (*) Table IV, Stand per Acre on Saw Timber Areas. 9815 -154- February 17, 1934, which permitted hand ics -oped workers to be employed at light work at wages below the codal minimum on condition that the employer obtain a certificate in each case from State authority desig- nated cy 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 minimum 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, shewing the extent of such employment. There were no apprentice or learner provisions in the Code. Other than handicapped workers, who were taken care of by Executive Order 6606-F (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 pruvisijns, made oy the Code Authority and its agencies, were very few in number. Likewise very few, if any, of these interpretations w ere opposed by the NRA. (*"*) 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 e^cepti^ns included executives and sucervisorv personnel, traveling sales force, and camo cooks for '"horn no hourly limitation was made; eraplovees such as "'atchraen, 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 cases time and a half must be paid for over- time, and temporary employment in cases of emergency. For none of these exceptions was there any limitation with respect to hours. To provide further flexibility it »'ps stipulated 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 48 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 operation in any calendar year did not exceed the standard schedule. (*) History of the Code of .eair Competition for the Lumber and Timber Products Industries, NRA, p. 307. (**) Ibid. (***) Ibid. p. 306.. 9813 -155- It was further provided that manufacturers of woolen packages for perishable fruits and vegetables might he authorized by the Administra- tive Agency of the Wooden Package Division to exceed the standard schedule' for a period not to exceed four weeks for any one crop, when required to furnish packages 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 which was fraught with administrative difficulties. A striking feature of these codal hourly provisions was the failure to restrict daily working hours in any way. In view of the extent of seasonal operations in this industry, the above provision foi permitting an excess of codal maximum hours per week 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, which prescribed maximum hours of labor in the industry, was interpreted, in general, (*) as not applying to an independent contractor owning his own truck and driving it himself. Article VI, Subsection A (2) a, which excepted certain personnel from the maximum hour provision, was interpreted by the Lumber Code Authority June 20, 1S34. (**) According to this interpretation, "Executive'' included executive officers and their personal secretaries, traffic managers, sales managers, auditors, legal advisors and other department heads, while " super visory" included all persons who plan for, direct, or super ivse the work of other employees. "Cooks" were inter- preted to include all employees who have to do with preparing and serving of meals. Article'VI, Subsection A (2) b permitted regular emplovraent for watchmen, firemen, repair crews, etc., beyond the 1 codal maximum where required by the. nature of their work, for not more than 10 percent of the employees in any operation, 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 who, by the nature of their work could not conveniently comply with the maximum hour limitation. A truck driver engaged in long distance hauling was stated to fall within the terms of this exception. (*) Lumber Code Authority, June 20, 1934. Code Authority Bulletin, Volume II, No. 51, August 3, 1934; P. 1 (**) Lumber Code Authority Bulletin, Vol. II, No. 51, August- 3, 1934, p. 1. (Supersedes rule N.C.C. of August 21, 1933) (***) Lumber Code Authority Bulletin, Vol, 1, No. 128, p. 2, May 28, 1934. 9813 -156- It was interpreted also that teamsters might come within the terras of this exception if a declaration to that effect were m ?de by the Division or Subdivision Agency under <"hose jurisdiction thev came. It was ruled also that employees ^hile actually engaged in inventory taking could be classified under this exception where such ^ork could not be done during regular hours. Article VI, Subsection A (?) c, which excepted from the maximum hours of the Code temporary employment in case of emergency, was inter- preted by the National Contrjl Committee October 10, 1933, (*) by way of limiting "emergency" to such events as fire, flood, tornado, accidents to eouipment 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. c. wage Provisions The Code, in Article VII, specified two sets of basic minimum wage rates; i.e., minima for various divisions and subdivisions ranging from 23 cents to 45 cents ver hour on territorial and population bases; and, where no such specific minim? applied, a general minimum of 40 cents per hour. For those receiving more than these codal minimum rates up to $30 per week, it was required that the existing wage differentials be maintained. It van further specified that the minimum compensation for workers employed on a piec-work or contract basis mast not be less than the codal minimum wage for the number of nours employed. Several general interpretations were made jf Article VII, which prescribed minimum '-ages. The .Resident Committee, on May 25, 1934, and the National Control Committee, on. July 2, 1934 (**), specified. that the time spent by an engineer in getting ready for the day's work prior to starting time need not be deducted from the hours of regular employ- ment nor compensated for, provided that the employee be not reauired to be on the premises for a period "longer than that for which he is compensated ". The National Control Committee, on July 2, 1934 (***), ruled that the use of company scrip where the employee was unwilling to accept it was a violation of this Article, but that the Authority did not feel it could validly ooject to the payment of . employees in company scrip, provided there was no state- law prohibiting its use, and provided the employee was willing to accept it. (*) Ibid. (**) Lumber Code Authority Bulletin, Vol. .II, No. 51, p. 1, Aug. 3, 1934. (***) Ibid, same page. • • , 9813 -157- Article VII, Subsection A (1), r hich required that the minimum ; compensation for workers employed on a piecework or contract "basis ' be not less than the codal minimum wage for the number of hours ' employed, was interpreted by 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 work done from pay day to pay- day could not be less- than tne minimum ra.te specified for the class of work performed. It was also interpreted (**) that 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 compliance. Article VII, Section A (2), prescribed that the existing amounts bv" which minimum wages in the higher paid classes, up to workers receiving $30 per week, exceeded minimum wages in the lowest -paid classes, must be maintained. This ""as interpreted by the National Control Committee on October 11, 1933 (***) as meaning that only two figures are necessary to determine the "existing amounts", these being the minimum wages under the Code, and the prevailing "minimum wages in the lowest paid classes" at the time tne Code was approved by the President. The difference between the two determined the amount by which wages in the higher -paid 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. i In the case of salaried employees, according to this interpretation, the weekly or monthly ^pge mast be reduced to an hourly wage by dividing the total wae;e by the average number of hours previously worked. The increase per hour was then to be added to the hourly m age and the new weekly or monthly '-age ascertained by multiplying by the number of hours permitted under the Code. It was interpreted that the Code imposed no reouirements with respect -to the maintenance of weekly 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 ap-plied to operators within a Division, Subdivision or group. It was interpreted, that the Code was not specific in this respect and was subject to either of these interpretations by the agency of the Code Authority. (*) Ibid. pp. 1 and 2. . i • (**) National Contro-l Committee's interpretation of December 22, 1933 in Lumber Code Authority Bulletin, Vol. I, No. 128, P. 2, May 29, 1934. (***) Lumber Code Authority Bulletin, Vol. I, No. 128, p. 3, May 29, 1934. 9813 -158- It was farther interpreted that "existing amounts" as used in this section referred to the differentials in cents per iiour between the lowest and . the higher paid classes at the time of the approval of the Code, August IS, 1933. It will be noted that such an interpretation is quite different in application from the maintenance of differentials on s percentage basis* With reference to Article VII, (a) 3, which prescribed- that charges to employees for rent, board, medical attendance, and other services ' must be fair, it was ruled (*) tnat until further regulations on this subject should be issued, e? en operation was recuired to advise the appropriate Division agency of any added charges, and of any advances in the charges iiacosed on employees for such services since the approval Of the Code, together with supporting 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 in spirit, the opr-rator wall to be recuired to amend such charges to comply with tne codal reouirement that they be "fair*! to employees. Vith reference to the question as to whether an employee could be required to live in a comparv-owned house, the Resident Committee ruled on May 25, 1934 ' (National Control Committee, July 2, 1934) (**) that the matter of bargaining as to ^aether or not an employee might be re- quired to live in such houses as r rre-reouisite to his employment was not covered by the Code, but that if rent ior those houses was excessive, such charges constituted a vi .la f ion of the Code. In response to the question as to whether deductions from wages might be made by employers for ooard and service if such services were furnished dv 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 collectirg their charges. Article VII (B) specified that minimum ■ -o could not be less than 40 cents per hour unless in any Division or Subdivision the prevailing hourly rate for the same class of employees on July 15, 1929 "as. less than 4-C cents per hour, for which cases -- schedule of rates was set forth. This provision was interpreted by the National Control Committee October 10, 1933 (****) as merely stating the principle applied by the Administrator in determining the minimum rates of "-ages specifically set forth in subsection D of the same Article, sne therefore not to be applied in determining wages to be paid - by any person und-,r tne juris- diction of the Code. (*) National Control Committee, October 11, 1933, Code Authority Bulletin Vol. I, No, 128, F. 3. (**) Lumber Code Authority . Aillt tin, Vol. II, No. '51, p. 2, Aug. 3, 1934. (***) Lumber Code Authority Bulletin, f Vol. II, No, 37, p.l, Nov. 16, 1934 (****) Lumber Code Authority Bulletin, Vol, I, No. 128, p.3, Kay 29, 1934. 9813 -159- 9 . Operation o f Code Labor P r o visi ons Child Labor Fr ^visions The need for the child labor restriction of the Code, mentioned previously in connection with general labor provisions, tos shown earlier in this chapter. It ras seen that in 1930 there were 20,761 persons ■■under 18 years of age employed as lumbermen, raftsmen, wood choppers and l in saw and planing mills, 4,?26 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 ^as emphasized 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 ^ith certain exceptions, was designed to meet the reed for the protection of minors. Between July 21, 1934 and May ?7, 1935 the Compliance Division received 28 allegations of violation of this provision of the Code, representing only 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 difficult to determine, owing to the numerous factors involved, which are principally the following: (1) the failure to provide any codal restriction of daily working hours; (2) the exceptions to the codal maximum .work week anr the provisions in certain cases for averaging '"•eekly hours over pn entire calendar year; and (3) production control under the Code, whicfe.pro viced for allotment of production on a general Da sis of 30 hours per ^eek, or 10 hoars below the general codal maximum work-week, Out permitted this allotment to be worked out on a quarterly basis, thus allo-ing mills to produce their entire allotment as rapidly as desired, subject only to the weekly restrictions of the Code, The influence of this last factor in reducing hours of employment below the level permitted by the Code would depend upon whether the individual operator found it advantageous to work out nis entire quarterly allotment in a short time at full codal hours, multiple shifts, or both, or on the other hand, whether he found it advantageous to spread his quota, more evenly over the entire quarter. Just how this worked out in actual practice can not be accurately determined at this time. The fact remains, however, that, according to statistics presented earlier in the chapter, average hours worked per week in the sawmill branch were above 40 hours for the months of 1933 just prior to' the effective date of the Code, being 40.4 hours in May, 43.0 hours in June, 44.1 hours in July, 43.1 hours in August' (the hour provision did not become effective until August 22\ whereas for the balance of the vear (*) History of the Code of Fair Competition for the Lumber and Timber Products Industries, NBA., pp. 306, 507. 9813 -160- these hours decreased and never again reached the 40-h-ur level until after the elimination of the Code in 1935. The records. of the Litigation Division showing the number of cases of Code violation being prepared, those in Court, and those closed, are of little or no help as an in> ication of the extent of compliance with the hourly -or ..•visions 01' t..o Code, inasmuch as violati of such provisions were lumped together with other violations and can not now be segregated. The following analysis of violations of hourly provisions of the Code, found in the files of a Deputy Administrator, can not' be checked by other data, but may be helpful principally as indicating the relative volume of complaints in principal producing ^rcas of the in- dustry. It is possible that these statistics Merely relate to violat charged, without any check as to the justification of such charges. Analysis of Violations of Hourly Provisions of the Code charged in Complaints July 1 to Decemoer 29, 1934 Number of Fercentage Producing Area Violptions Charged of Total Southern Fine 492 53.5 Southern and Appalachian 128 13.9 West Coast 59 6.4 V.estern Pine 116 12.8 All others 123 13.4 Total 920 100.0 • Source: Code Administration Study, Preliminary Report on Lumber and Timber Products Industr , Lterch.30, IS 5, p. 147. It will be seen from the foregoing table that more than half of the comrlrints concerned the Southern pine -area and only six percent related to the ..est Coast. Western Pine and the Soathern and Appalachian areas ranked close together with 13 and 14 nercent, respectively, of the total coraplpints. c. Wage Provisions The industry's compliance with the Code wage rates "as initially quite high. (*) In some Divisions and. Subdivisions, such as Hardwood (*) History of the Code of Hair Competition for the Lumber and Timber Products Industries, NRA, p. £94. 9813 -161- Dimension, Northern Hardwood, '.oodwork Division, i-est Coast, Western Pine and other Western divisions, voluntary compliance with these pro- j visions held up fairly veil, while in the large and influential | divisions of the lumber manufacturing branch in the South — such as ! the Southern Pine Division and the Southern Hardwood Subdivision — the degree of compliance declined steadily in the face of continued lack of effective action in the field of enforcement. This is a matter of record, in the correspondence liles of the of i ice of the Deputy Administrator in- charge of. the Code. As in the case of violations of hourly provisions of the Code, the following analysis of violations of the wage 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 j- Violations of Wage. Provisions of the Code charged in Complaints July 1 to December 29, 1^34 Number of Per dent age Froducing Areas Violations of Total Southern Pine £97 39.1 Southern and Appalachian 514 • 33.7 Wert Coast 113 7,4 Western Fine 52 3,4 All Others 251 16.4 Total 1,527 100,0 Source: Code Administration Study, Preliminary iieport on Lumber and Timber Products Industry Llarch 30, 1935, p. 147. The foregoing table indicates that the Southern Fine and Southern and Appalachian regions together accounted for nearly 73 percent of the violations of wage provisions charged in complaints, whereas the west Coast and Viestern Pine regions accounted in the aggregate for only 11 percent. The Code Authority's attitude toward these wage previsions was set forth in the following testimony by David T. Mason, Executive Officer of that body, before the Senate Finance Committee on .April 16, 1^35: "Lumber Code minimum wage rates for most oi Western United States are higher than those set in most other codes .... Frior to the approval of the Code, minimum wages in the South in our industries averaged slightly below 12 cents per hour. The Lumber Code when presented^to NBA by industry representatives on July 10, 1933, placed Southern minimum wage rates at 20 cents per hour. General Johnson stated thpt 20 cents was wholly unacceptable. 9813 —162- The industry then revit-.ed to 2?~l/r cents and so stated at the public hearing "beginning July 26, 1933. In the post-hearing conferences, under pressure from NitA., the Southern 'minimum was raised to 23 cents, or more than IOC per cent above the pre- viouslj, r prevailing average raini.oum . . . Since the approval of the Code many complaints have come in that the Code is oppressive and destructive of small enterprises in the South because, as is asserted, the minimum wage rate is too high. "Lack of efi ective enforcement of the minimum -"pge rate in the South is the most important cause contributing to the present crisis of the Lumber Code." With reference to the allegati m referred to auove, that tne Code was oppressive and destructive to small enterprises in the South, it should be noted that the s-me testimony stated that the federal Trade Commission made an investigation of the situation ir the South and on Uey 7, 1934 reported in effect, that the o^errtion of the Code "/as not discriminatory against small enterprises. This testimony also indicated that the Code represented an effort to restore 1929 minimum hourly '"age rntes, and that this standard was followed, excepting in certain parts of tne country wnere such 1920 rates were below 30 cents per hour, in which cases the Code rates vere estp lished at a level higher than in 1929. It was claimed that the result for the whole industry "as an average mini aim wage 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 dat , which "ere pre- sented in r more detailed table earlier in tne cnapter, may be helpful: Average Hourly stage Rates and Average Weekly Earnings in the Lumper Industry (Sawmills) in the west and South Average Hou rly \,p~e .iates Average Weekly ^arni r.' r s Period d V.est South d 'nest d S:uth 1933. July Average December Average $0,356 .530 $0,150 .290 $13.40 15.83 $6.80 8.44 1934 Average first 10 uonths .548' .295 17.76 8.70 Source: Research and Flanning Division, HRA, Report entitled "Hours, V.'ages and Employment", prepared for hearings on employment provisions of codes, January, 193;;, p. 58. 9813 -163« a/ Includes Oregon and Washington, b/ Includes Alabama, Florida, Georgia, Mississippi, North Carolina, South C arolina, Virginia, Arkansas, Louisiana and Texas, The preceding table indicates that average hourly wage rates during the first ten months of 1954, all under the Code, were $0,548 in the ^ : est and $0,295 in the South. These, rates represented increases over July, 1933, just prior to the Code, of approximately 18 cents in the 'Vest and 15 cents in the South, and in terms of percentage ^ere nearly 50 percent and 97 percent, respectively, above the pre-code level. The foregoing statistics also show that the average weekly earnings in July, 1933, were $13. 4'.- in the West and $6.b0 in the South, and that for the first ten months of 1934 these earnings increased to $17.76 and $8.70, respectively. In terms of money these gains were $4.36 and $1.90 for the¥esstand South, respectively, but in terms of percentage the increases were more nearly equal, being approximately 33 per cent for the West 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 (■•"■ -164- G. PRODUCTION CONTROL In previous sections sorr^e of the problems of timber supply liquida- tion have been discussed, and as a basic conclusion it was stated that both the public and the forest industries have an interest in seeing that; ample supplies of forest products are continually available at reasonable prices and that stability of employment through industry prosperity is maintained. The removal of all 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 improbable 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 between and within the various regions so as to secure the best results from existing forest growing stock In the begining the most available timber 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 and farther back in rougher couiitry to meet 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 and logging and milling methods were revised to produce at a lower cost. In spite of these efforts, the increasing cost of holding timber due to interest, taxes, and other carrying charges, necessitated such a high price for the prod -cts 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 same areas. Up to about 1921-1923 lumber 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 \1nit3 of the industry, faced with steadily mounting carrying charges found them- selves forced to a policy of liquidating their areas of standing timber almost without consideration of either the ability of the market to absorb the manufactured products or of its cost. Up to tne time that the Lumber Code became effective the industry in general, through pressure of various 9813 -165- leconomic forces, was virtually -compelled to adapt itself to this proce- dure. . • . There were many deviations from the above-cited long trend. For 'example, whenever a satisfactory -orice position was reached new manufac- turing facilities would enter the production field and existing ones would he increased in capacity. Overproduction would. then inevitably follow, with a resultant price drop, a.^ain forcing the high cost opera- tions to close down and stay down until curtailed nroduction and in- creased prices permitted them to again operate their Dlants. All of these factors have played a part in removing incentives to large concentrations of ownership and toward the breaking up of large tracts into a multitude of smaller ownership interests with decreased feeling of responsibility for eliminating excess mill capacity and over- production. . -.-..... The era prior to 1923 was also one of lessening of .virgin timber supply in the main producing region of Southern pine, which made it economically possible for the West Coast operations through expanding use of the Panama Canal, to enter the Eastern market and unload some of the products of the tremendous mill capacity which they. had developed. By 1929 they had wrested. the supremacy' of production from Southern pine, but the pressure exerted by their invasion had forced prices down from the former level and, it was claimed, below the cost of production. With the continued decline of price and surplus of unsold stocks of lumber accentuated by the depression, the demand for production control .and coincident' price control became insistent. This can be attributed to two major conditions: (l) the ownership of large tracts of virgin timber in the hands of people who were either unable to carry it, or to whom it was proving a burdensome problem, and who in innumerable cases were manufacturing the timber into a product which the' market did not demand, and consequently were sacrificing their investment without corresponding accrual of benefits. This was preva- lent over large areas and involved millions of acres of timber; (2) the premature cutting and destruction annually, of millions of acres of young tduber vhdch was not large enough to produce good lumber, having been held through the period of -the least volume growth and was being manu- factured instead of being allowed to 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 fsr 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 produce, and in order that the pressure of liquidation ' may not in the future cause the distress attendant on the overproduction of the' past, vith the corresponding decline in price, some sort of pro- duction control would seem necessary. In view of the multitude and diver-si ty of ownership interests, and types of operations engaged in the production of lumber and the difficulties of maintaining an ade- quately balanced supply it can be seen that it is a very difficult prob- lem to effectually protect. Qur forests from wasteful and premature cut- ting and destruction and provide for conservation of our National Resource. 9813 -166- The subject of control of production has been decreased by the industry for many years but the -oroblem did not attain sizeable Bropor- | tions until 1924, at which time the West Coast producing region with its tremendous supply of virgin timber and its extensive mill capacity, shipping through the Panama Canal, began to dominate the eastern market, and the lack of earnings of this industry, as corn-oared with others, be- came recognized and was largely attributed to overproduction. In Novem- ber, 1925, a movement to consolidate a considerable number of mill and timber owning companies was sponsored by a member of West Coast «pera- tors representing an estimated 30 r°r cent of the production of Douglas fir, backed by Baker, Fentress & Company, The Commercial Trust and Savings Bank of Chicago, and Dillon, Reed & Company, of New York. By the time the details of this merger became public, a number of other mergers were being proposed and discussed, but as a result of careful investigation it was found that profits in the industry were decreasing to such an extent that there would be no probability of servicing and retiring the securities necessary to finance any merger, and the plans were dropped* This subject was ngain brought up in 1931, with the same result. About this time the Oil and Coal industries, independent of each other, and of the Lumber Industry, were seeking production control of some sort both in the States and nationally and it may be that what they were doing had at least a suggestive effect upon the Lumber Indus- try. At any rate conversations in regard to control began, and continued, until early in 192o. Then came into being The Committee of Fifteen, the membership consisting of outstanding lumber-men from the West, South, and Lake States, to formulate plans for production control. Among the plans evolved was one for a Director General, as in organized baseball or in the Moving Picture Industry. The result of work of this Committee 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 <">f production as a natural resource, which overture was rejected by the Coal and Oil Industries. Other major plans were The Holding Company rian in 1928; The Hardwood Conservation Flan in 192^; The West Coast Advisory Plan in November, 1929; The Compton rian in 193C; 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. Timber Conservation Board report in 1930 c (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 promul- 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 operators ,N .7ho never cooperated" either objected or failed to assist and caused the abandonment of these plans. 9813 -167- In March, 1932, agitation beran among a number of industries, j including the Lumber Industry, for relief from the anti-trust act. In the Lumber Industry apparently 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 public, as well as to private lumber interests, that they began to feel certain that it would settle most of their -or obi eras and that the entire industry had concentrated on, and approved it. Luring this period at least two types of control were considered, one, a Commission to be appointed by the President J 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 lumber 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 NBA, 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" was 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- d\ice 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, Incorporated" 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, regula- tions, and interpretations, and impose upon persons subject to the jurisdiction of this Code such restrictions as may 9813 -158- ' ' "be necessary to effectuate the purposes and enforce the provisions of this Code. The Authority may delegate to said agencies all necessary power and authority for the administration of this Code within the Divisions and Sub divisions, including the adoption of Divisions and Subdivisions code provisions within the scope of the cower 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, periodically 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 "be cancelled or modified by the Administra- tor whenever he shall determine such action necessary to effectuate the provisions of Title I of the National Industrial Recovery Act. Any interested party shall have the right of complaint to the Authority and of prompt hearing and decision thereon, under sucn rules and regulations as it shall prescribe, in respect of any iecision, rule, regulation, order, or finding made by the Authority. It also provided for a maximum work day of eight hours and week of 40 hours with certain cxpections for all sections, whereas, it had been shown by testimony at public 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. Production control was provided for with certain specific rules, as were minimum prices. The major point which it is desired to emphasize is that of the comolote 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 NBA only, as contained in Article IV, 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 Administration 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 would 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 NBA Administration as to how the plan was working out in practice. 9313 -169- Judgment regarding the functioning of administrative machinery must be "based mainly on indirect evidence except for the few cases sub- sequently recited. There are no data available which would show in a (comprehensive way, on a quantitive basis, how production control af- fected the business of the individual operator. It has been impossible to accurately determine the volume, or character of ccmolaints against oroduction control, or the manner in which decisions were reached by local authorities except for the few cases which reached the NRA 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 problems in- volved in this undertaking by the Lumber Code Authority of control of oroduction. In view of the broad 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 by 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 KRA and industry created. There is no doubt that the difficulties surrounding 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 net 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 , orogressively to ■*"he Subdivision, Division, Authority, and then to the Administrator. In the early days of the Code all complaints and apoeals 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 NBA officially. 9813 -170- The foregoing "background is necessary to the discussion of Article VIII of the Code entitled "Production Control." The Assistant Administrator Dudley Cates in reporting on the Code, stated: "On the assumption that interindustry competitive equilibrium will be maintained, and increase in volume of sales permitting an increase of about 50 "oer cent over recent rates of production would be necessary to restore employment to as many -oersons as were occupied with lumber and timber products industries during 1920. About 65 -oer cent of the total lumber production is absorbed by the con- struction industry, therefore, sustained improvement in the lumber industry cannot be expected apart from revival of building construction." This revival of business activities did not materialize, thus making the problems of -oroduction control even more acute. "There are now some 20,000 sawmills in the United States of whi^.h 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 Bsr-e limitations as are applicable to those already in the market . '' The provisions for the granting of allotment to any person uoon request and evidence of ability to operate, and f he high levels of prices estab- lished hold out a promise of iazge profits resulting in the establishment of some 95 new large mills each with annual capacity of five million feet or over and a great numcc- jf small mills variously estimated as high as five thousand in Southern Pine territory alone. In order to prevent flooding the ma- 1 -?'" \hrrurr this potential production the Authority was forced to cut Cows *■[-■ quctn L .n each opera- tor for each succeeding ouarter 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 9 1934. Assistant Administrator Dudley Cates , who conducted the public hear- ing on this Code, reported fro the kdnlnislral .■-• isr.sons for the inclusion of this Article: (l) "i.ogging and . .. activities have con- tinued at a low level for fo protiacted a period, of firce, and capacity is so greatly in excess of even the enlarged operation of recent months, thet control of production is imperative if renewed. r- r j accentuated dei^r .•'• i. ;j ---i- .ion 'of the industry are to be avoided? n anu f ji) "the excess vox;-..- y? lumber produced witnout regard uo demrtnl ib responsible for the demoralized price and selling below cost. 11 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 capacity it would he extremely difficult to make such control effective. However, despite the latter argument, Article VIII, provided that each person known to "be in operation was entitled to an allotment for production, and that any person desiring to operate, uoon evidence of ability to so do, should he eligible to join the ranks of producers. It will he 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 e x-pected consumption including exports, of lumber and timber products of each Division and Subdivision; and based thereon it is em-powered 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, subject to the supervision of the Authority, by the agencies designated by it . Said auotas as between such Divi- sions, or Subdivisions shall be in pro-portion to the shipments of the Droducts of each during a repres-aatUyive nocant- 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 u-peration 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 o-perating 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 written notice of such desire ten days before the allotment date, supported by acceptible 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 determination of Division and Subdivision quotas and of individual allotments and any revisions thereof, all cuotas, all allotments, and all appeals therefrom and all decisions on ap-oeals shall be -published. Allotments from two or more Divisions or Subdivisions to the same person shall be se-parate 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) (2) of this Article, and shall 9813 -172- no-t "be transferable except as "between operations "under the same ownership within the same Division or Subdivision. Whenever in the case of any eligible nerson it shall be necessary in order to accent and execute orders for report, to have an addition to his regular 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 evasron and secure eaui table a-oulication 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 shovf, i determine expected consumption and, based thereon, establish quotas, [ftie application of this provision immediately resulted in trouble. If strico interpretation of this rule had been applied and production allotted or. the basis of expected demand, the allowable production would have been so snail 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 ch03G to take a very optimistic view of conditions and increased the Nationa'J uao'ca for the fourth --of 1933, to 26 per cent above the estimates Timber Conservation Ixard 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 materialise, a sharp increase in stocks resulted. This increase in aiready top- he -"vy stocks created an additional burden on the operators and exerted tremendous pressure 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 operators who would not have been enticed, by production control alone, to add to their already excessive visible supoly of sawmill t>roducts. 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 mandatory the transfer to any person qualifying. This right of transfer 9 of course, could only accrue to a large operator, owner of several plants, and the result was to permit one ulant of several, to operate much longer hours than could the under- sale ownershi-o slants. 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 Artirie was finally forced before the Administration for amendment, with the IJEA Advisors 9813 -173- maintaining that transfers of allotment redcm&ed to the "benefit of the large operators only and should hot "be allowed under any circumstances, and the Code Authority insisting that there '."'ere certain conditions where it should "be granted. The subject v/as finally compromised "by Amendment ITo • 53 which was approved by Administrative Order 9*-139, providing for the transfer of allotments if the Authority should find that non-transfer would cause undue hardship, and under certain limi- tations, and that notice of such action with a finding of facts should be immediately forwarded to the Administration. Certain Divisions con- tinued to transfer allotments and no reports were forthcoming to the Administrator, After a number of months of delay and repeated requests the Divisions began to send in reports as follows: "The Division upon a finding of facts has transferred, allotments as follows:" No details as to owners and amounts, or explanation of the reasons for these transfers were given. The failure to furnish the Adminis- tration with the required information, and the failure of 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 same ownership, permitting them to concentrate production and work full time, and the difficulty experienced "by the owners of only single mills who had geared up their production to two shifts and were forced, by the amount of their allocation, to reduce their operations to less than an economical single shift was shown in the case of the appeal of a lumber conro ny in Arkansas. (*) This company, in its appeal cited the case of another company, which had transferred to its operating mill the production quota of a mill which had not run since 1929, thus enabling them to oper.ate two shifts in the one mill, whereas, the appellant was allotted only sufficient production quota to run a single shift. However, their petition to operate longer hours was denied. The Division of Research and Planning, 1TBA, had for some time "been attempting to investigate the operation of this production control pro- cedure and had mo.de specific requests for information through the Deputies 1 offices, but certain efforts to obtain definite information from the Code Authority in regard to the methods in establishing quotas of production used by the divisions and the application thereof, met with refusal. However, the limited study which was made of this sub- ject, from published bulletins, leaves some doubt whether equal appli- cations of the provisions of the Code was accorded to all operators. Hot many protests were apparent in the first four months of operation of the Code, but from January 1834 on, there was evidence of greater di ssat i s f act i on • In the West Coast Division the very large capacity of the mills and the method of quota allocation caused great dissension and claims of preferential treatment until adjusted. At first the allotments were made on the basic of proportioning the Divisional quota among all operators according to the calculated or rated capacity of their plants, based on reported past perfor mances of their thr ee b est ye cars. (*) Tschudy Lumber Company, Weona, Arkansas'. Public Hearing 9813 July 3, 1934. -174- Because of the Division'? vast capacity so greatly exceeding the quota allotted it, and the preponderance of large mills whose past record gave then the most of the quota, some of the small operators received as little as 11 hours per week operating time, whereas, the large plants were hole to operate at least a part 'of their equipment to the maximum of 40 hour? allowed by tne Code. There was further objection by the small mills on the ground that, as provided "by the Code, all known operators received an allotment and were operating for the full time allowed even though they had formerly operated very intermittently, devoting the balance of their time to other business, and that this was not fair to those whose only business was lumbering. The objections v/ere partially met by - 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- portionately from those above the 33 hour level to equalize. There v/ere other protests from the West Coast Division regarding provision for export allotments. The beginning of this controversy dates bach to the formulation of the Code. Dudley C~tes, in reporting on the hearing to the Administrator, stated: "Certain West Coast operators urged that exports should be exempt from production control. The West Coast district chip over half of all lumber ". exportedo These exports corstituted about 16 per * cent of the entire production of the West Coast district in 1929, and -bout 18 per cent in 1932. At least 40 per cent of < 11 "."'est Coast mills share in this business." Again at the public hearing of January 9, 1934, persons vitally interested in export shipments appealed for relief from all control of production for export and a controversy ~s to whether or n?*" the control of production should apply to mills, manufacturing lumber for export was carried on during practically the entire year of 1934, It also .appeared that in the application of the formula provided in the Code, the West Coast Division, in order to arrive at the quota for mills which were shipping for export and for those which were shipping for export and domestic consumption, and for those shit ing for domestic consumption only, took the total Production quota allowed them by the Code Authority for domestic business, added thereto the expected "export, consumption, and divided this total pro rata among all mills in their Division irrespective of whether they had ever chipped for export or ever intended to,(*) They claimed that to allow an export shipping mill unlimited production for esrport and also allow them a domestic quota commensurate with their capacity would result in their operating longer hours than adjacent mills which did not compete for export business. (*) Mandatory under the Code 9813 -175- It mas claimed "by one of the appellants (*) that the application lof this rinciple resulted in that company being forced to turn down large orders for lumber to be exported. increase in the cost of raanuf .cture of lumber under the Code, due both zo the establishment of minimum wages and maximum hours and I the establishment of control of production which increased cost by 'cutting down volume, led to the adoption of cost protection prices which tect'ed the producer against a loss while selling in the domestic rlret. These minimum prices did not generally apply in the highly competitive export field where prices were generally lower. The tendency ■as therefore exhibited to export a smaller amount of lumber than had been shipped during pre-code days. To stimulate export sales, which would benefit the producer by lowering his cost per unit and benefit labor through increased employment, the Authority proposed in Amendment No. 54 a variety of devices which might be adopted by the division or subdivision agency to stimulate exports. These devices, in essence, called for a reduction in quota to mills who would list themselves as export mills with the compensatory feature that such mills might be enabled to produce more lumber ior errport than they would have if their quotas had not been reduced. Certain of the Advisoyy Boards felt that the proposal to establish, at the discretion of the administrative agency, one of several optional methods increasing exports, was contrary to NBA policy. The Lumber Code Authority took the position that due to the diverse nature of conditions f~ced by the various divisions and subdivisions, a certain option in method of treatment was necessary. Failure to agree on this question was responsible for non— approval of this amendment. There is evidence that in tne 'Vest Coast Division 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 106,302,300 board feet, but \lso additional time was accorded them on their plea that the bridges which served the timber to be cut were in such condition that they would have to be replaced in a short time and therefore the timber must be cut at once or the expense of production would be greatly increased. 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 Chairman of the Committee allowing this increased, allotment was an officer of the company. Protests were made to the Divisional Code Authority, and a committee which was appointed by them recommended as follows: "Without going into the merits of the case we find that tne West Coast Committee on Control of Pro- duction erred in granting the Crossett Western Company additional allocation which was to be returned, after (*) Coos Bay Lumber Comoany (**) Crossett Western Lumber Company 9813 -176- the expiration of the Industrial Recovery Act, j u ne 16, 1935. .We recommend to the West Coast Lumbermen's Association Trustees that they cancel the additional allocations as viven to the Crossett Western Company. M The following motion was adopted by the Eoard of Directors of the West Co-st Division: " That all special lumoer allocations nov given manufacturers which cannot "be deducted during the first and second quarters of 1955 he rescinded and that n^ further special lumber allocation be granted that would require deductions ifter June 16, 1935." This action was overruled by the Resident Committee of the Lumber Code Authority in Washington, which, it appears, had passed upon and confirmee the action of the Division- 1 Control Committee immediately after their action. As a result of the many difficulties encountered in the adminis- t rati on of production control by the industry, the West Coast Division, • shortly after the Schechter decision in LI y, 1935, went on record as being opposed to industry handling control under any new legislation, but stated that they v/ere still convinced that it was for the good of the industry and they would submit to Government administration only of this feature. The Red Ced~r Shingle Division came 'eat number of pro- tests by the various operators re/ rdin asis of allotment in their Division. Discrimination and unjust Hot' ere claimed* A check of the correspondence concer this Division tends to show th~t the production control provisions -.'/ere not adequately ' nd equitably adminis~ tered, and that certain operators v/ere \llottod production quotas much Larger than others <~>f like capacity, A ireliminary cneck of allocation in this Division was made by tnc Division of Research and Planning from the published bulletins, and the fol questions were raised: "Why were tnere such discrepancies in allotments to mills of the some size between the third and fourth quarters of 195d? ^re some mills granted up to 200 per cent more allocation for the fourth quarter of 1934, than in previous quarters? such large exceptions and additions granted to certain mills for lost production in past periods"" A check of the publications oi the Jorthem Pine Division brought out t] question as to why - producer should and did receive a fuota in quarter r< stc than past e:xperierxe records had she . to produce in \n eiixire year. There were a number of complaints about the application of the provisions of ' auction control in the Western Fine Division where the provisions covering seasonal operations had to be applied* It vrs provided, in general, that if the operating records of a mill showed inability chie to seasonal conditions, to operate less than nine mont. in a year, it should receive approval to work 48 hours per week, but if more than nine months of operation was shown then only 40 hours per 9813 -177- week would "be approved. In one cr.se which was investigated , where the operator furnished his records showing operating tine of less than nine months for a number of years, the petition for additional time was denied on the - ounds that the mill could have worked longer out did not because it was unprofit ible for them to o so. However, it was developed that another mill located, on the se-ne Lake was receiving the 48-hour allot- ment • In general, investigation of all the subject matter in regard to production control shows that r ctically every division was represented in the complaints. . .__ As previously stated, the machinery set up by the Code Authority for appeals provided that they must be made in the first instance in writing or by personal appearance to the Subdivision.'! agency, then to the Divisional agency, then to the National Code Authority, and finally to the National Recovery Administration. "do exa.ct record is available as to the number of complaints or appeals that were made to the Subdi visional or Divisional agencies nor as to the number of rules, regulations, or interpretations made by them in interpreting and applying the production control provisions of the Code, but in checking the records of the Code Authority reference is found to the fact that on the question of production control the administrative agencies of the Divisions issued 132 rules, regulations, .and interpretations, and received 53 appeals. The Lumber Code Author- ity received 39 appeals, and for tne period from August, 1933 to March, 1934, issued 15 major rules and interpretations on this subject. Un- doubtedly there were some operators who would not or did not, after discussion with the Authority, consider it worth. while to put their plea into writing or go to the expense oi carrying through their appeal will never be known. There were only dour appeals, under Article XVII, officially brought before the NBA against production quotas. The pre- viously mentioned case (Crossett Western Company) was the only appeal from a lumber division. The other were from the fabricating divisions. A veneer company (*) appealed from tne production quota, set for it on the grounds that the quantity allowed was insufficient to enable them tc take care of the orders they hac on hand, -It was developed that o.ieir trade was entirely that of cutting stock to order for other com- panies. It was held by the Code Authority that it was unfair to allow., this company to take more than its share of the available business and to operate longer hours than its competitors, as those competitors would gladly . take . care of the surplus orders of the a; fellant and thus spread employment and allow all plants to operate. In the Spring of 1935, a company(**). was cited for consistent violation of its production quota and appeared before the ICRA in an "un- official attempt to settle its differences with the Code Authority. (*) Lapeer Wood Products Conrnany (**) daxwell Brothers, Chicago, Illinois !813 -173- Thc company cl imed tli:t prior to th, Code it h-d done — proximately eight per cent of the totnl business of tru. Veneer division ur.d hich it v/-.s classified nd th-.t ry lesser -jncxat would cus, mi opcr-ting Iocs to which it would not \£rc. to be subjected. By this time the Ad- ministration rdmittcd the probnble illc;;-lity of production control features of the Code, Mid would not consent to prosecute the company. Then the Code Authority adjusted the production quot" of this company to the -laount demanded by it. A company which operated -. box f-.ctory (*) producing; boxes for its own use, -ppcnlcd on Jnu-.ry 10, 1934, fron the production quot- recorded it, cl-.iminc th\t it w\s not sufficient to t d:,. c-.rc of its requirements \nd th-.t if not llowcd to produce sufficient boxes for its own use, it would be compelled to buy ir the rpc/:. rrkct th V 1-rcc •required while its ovrn pl-.r.t stood idle for p-.rt of th time* It ' held th-.t there w -.s .n excessive cvp city in t ' ;try n. it would be unfair to \llow l-.bor in this plnit to worlt full time while l-.bor in other plants worked p .rt tine. Th.. petition \r.s denied. Lewir-; the field of specific c s - c. :b j. ctions, the "vttempta by the Code Authority to correct the nr.l-\djustmcnts of the Code should be shown, The following amendments to Article VIII »cd -nd it is worthy of note -s shown by the number of proposals th't sincere 'efforts i7crc"aindc to djust the pr-.ctic-.blc working of t] v •ICA Amen dment #11 1, 1TRA Amendm -Jz #8 A pprovod: Aj:r*l-13; 1934 Signed by: Hu^n S . Johns on , Admir.i s tr - 1 or This amendment provided th-.t in the application of Article VIII (c) (2) shipments might be used in pi cc of production. Th:', use of shipments r-.thcr thvn production \s \ b r dctc: notion quotas w\s to be discretionary with the divi^io, subdivision ", encic: The Lumber Code Authority in presenting this aendment s id th-.t it believed th-.t certain cscs showed the use of rrirmccts ,3 n l-.sc mi be more frir, because in certain C".scs the use of I reduction \s ". V-.sc might five undue weight to the firm who during th., n .rt yc"\rs pro— duccd rt full c~.p-.city regardless of rr. rlcct conditions. 1/ Trnnscript of he-xing, J-nu-.r y 22, 1934, pp. 1242-1245, Vol.11 on Amend. #8 (*) Dupont dc Nemours. Public He-.ring of J v.urvry 9, 1934 9813 -179- The company claimed that prior to the Code it had done approximately' eight per cent of the total "business of the Veneer Division under which it was classified and that any lesser amount would cause an operating loss to uhich.it would not agree to "be subjected, 3y this time the Administration admitted the probable illegality of production control features of the Code, and would not consent to prosecute the company. Then the Code Authority adjusted the production quota of this company to the amount demanded by it. A company which operated a bo:: factory (*), producing boxes for its own use, appealed on January 10, 1934, from the production quota accorded it, claiming that it was not sufficient to take care of its requirements and that if not allowed to produce sufficient boxes for its own use, it would be compelled to buy in the open market the balance required while its own plant stood idle for part of the time. It was held that there was an excessive capacity in the industry and that it would be unfair to allow labor in this plant to work full time while labor in other plants worked part time. The petition was denied. Leaving the field of specific cases and objections, the attempts by the Code Authority to correct the maladjustments of the Code should be shown. The following amendments to Article VIII were proposed and it is worthy of note as; shown by the number of proposals that sincere efforts were made to adjust the practicable working of the provisions, LCA Amendment #11 1/ IIRA Amendment #3 .... Approved: April 13, 1934 Signed by: Hugh S, Johnson, Administrator This amendment 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 Lumber Code Authority in presenting this amendment said that it believed that certain cases showed the use of shipments as a base might be more fair, because in certain case,s the use of past produc- tion as a base might give undue weight to the firm who during the past few 2 r ears produced at full capacity regardless of market conditions. (*) Dupont de Nemours. Public Hearing of January 9, 1934. 1/ Transcript of hearing, January 22, 1934, pp. 1242-1245, Vol, II on Amend, #8, >813 -130- LCA Amendment # 12 l/ Not -.-p'orovcd. Tliis -racr-dmcr.t hrd to do frith the tr -v.*. sf.cr of llotr.icr.tr . It rr.s vatl-idrauii "by the Lumber Code Authority -zid. resubmitted \s Amen - ment #53. 1/ Transcript of hearing, Jnuary 32, 13?4, pp. 1245-1255. LCA Amendment #15 l/ IiRA. Amendm ent #8 approved: " April 13, l?3d Signed "by: Hugh S. Johns oiri; Administrator This amendment provides tlv t quotas of imports or production es- tablished by the Mahogany Division, vr.d -.llotmcr.ts th rcof t o eligible pcrsors, m y bo node for Tiod ,;.r: vtcr than three months, my be based or. shipments, ■ ::■' sir 11 not preclude \.iy from m i:it -.ining an inventory cqu.l in footle, to his previous year's shipmc vts. The provision for regulation of phipme its of Li rts r -.thcr than regulation of s vd ., , is due to th f ct ': . t - 1:11. :o m I y is grove: in this country, ~om. p rsonr rtrrpctt th logs \C. cut them them— reives, while Dthcrs import - •- m hogany lumber. To establish off . ctlvc control, it was therefor- riccc'ss ry to placi th limit tier, on imports. The provision for the scttir.e up of quotes fo: riod of ■; re -etc r than three months is occ~.sior.cd "by th thod of production of r.r hog ay timber. Th timber, cut in tropical lands, is floated to the oce during flood time. Th tropical operators usually do not have enough money to finance their operations for a year's timo, 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 that production quotas be given for a period of ap- proximately one year. Another unusual feature of this industry is the fact that unusually large inventories are necessary. This is occasioned by the fact that many sizes and thicknesses of mahogany lumber must be carried in stock. In order that new members of the industry who did not have large inventories should riot be handicapped, the provision was written in providing for an inventory at least equal to the volume of "shipments for the preceding year. It is not possible to say how this provision worked in practice. A year's time was scarcely a sufficient test. It should be mentioned, however, that "vroduction control was being evaded by many importers who were bringing stocks in this country with impunity, and the mahogany Subdivision was, during the last few months of code activity, consider- ing various methods by which such importation could be stopped. 2/ 1/ Transcript of hearing, January 22, 1934, pp. 1253-1229, Vol.11 on Amend. #8, Code Record Section 2/ Piles if Ass't Dep. Adm. J. C. Wickliffe on Mahogany Division. 9813 -181- 1 LCA Amendment #16 \j HRA Amendment # 6 Approved: April 13, 1934 Signed "by: Hugh S. Johnson,, Administrator This amendment empowered the Executive Committee of the Philippine Mahogany Subdivision, with the approval of the Lumber Code Authority, to establish maximum _ import allotments on Philippine Mahogany. The amendment provides that only eligible persons, those who had registered with the subdivision agency the name of the Philippine mill from which exports were to be made, might import Philippine mahogany lumber. The quotas assigned were not .based upon past performances of the importer but were based upon the productive capacity of the mills from which they inton&ed 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 quota.s assigned to the various distribu- tors by the simple device of a distributor gaining for himself the right to sell the prod\icts of another Philippine mill. The limitation of imports of Philippine mahogany was necessary to prevent that wood from gaining ground at the expense of other hardwoods which were subject to production control. The provision also had the advantage of preventing an over supply of mahogany coming into this country with the demoralization of price which would be its consequence. 1/ Transcript of hearing, January 22, 1934, pp. 1147-1139, Vol.11 on Amend. #8, Code Record Section. LCA AMEND? :ENTS #17, 16, 19 and 2 1 l/ N5A Amendment #8 Approved: April 13, 1934 Signed by: Hugh S. Johnson, Administrator These amendments provided that in the Northern Hardwood Subdisision, the Northeastern Hardwood Subdivision, the Northern Hemlock Division, and the Northeastern Softwood Division, quotas of . production and allot- ments thereof to eligible persons might, in the discretion of the adminis- trative agency and with the approval of the Lumber Code Authority, be for periods of greater than three months* Amendment #17 also amended Article VIII (a) to permit the setting up of production quotas for longer than the three months period provided in the original code. These amendments were designed to take care of a difficulty arising in the above-named divisions and subdivisions due 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 practice to fell timber from early fall until heavy snow comes and then to transport the timber to the mill on sleds. The operations are usually some distance back in the woods. It is there- 9813 -182- fore necessary to set up a logging camp and furnish supplies and equip- ment for the season. The making of such arrangements was of course difficult as long as it was impossible to lenow what quota v/ould "be assigned to a given firm for the whole year. As a result of these amendments, quotas v/ere thereafter assigned over such a period as would permit the seasonal operator to know what he would 'be allowed to cut during the winter season, and to enable him to plan for his camp and operations without the necessity of making further changes, 1/ Transcript of hearing, January 22, 1934, pp. 1194-1207, Vol.11 on Amend. #8, Code Record Section. LC A Amendment #55 l/ Hot approved. This amendment concerning regulations for export allotments was withdrawn by the Lumber Code Authority and amendment #54 was submitted in its place. 1/ Files of Assistant Deputy Administrator H, I.', Moloney, on Amendment #35. LC A Amendment #50 1/ "Jot approved. This amendment wa? designed to giv< tl C Authority power to withhold production allotments from persona who violated Article iv of the code, either through failure to make reports ar to pay code fees. At the hearing a representative of 411 small southern sawmills protested strongly against this proposal, stating that these small mills w^rr unabl- to furnish th- reports asked for by the Lumber Code Authority and its agencies. The amendment was not approved, partly because of the feeling that it was not altogether fair to the small operator, and partly because, at that time, the Administration began approving amendments to codes providing for supposedly compulsory collection of code fees, 1/ Transport of hearing, March 27, 1934, ;op, 33-92, files of Assistant Deputy Administrator H, I . '. : loney, on Amendment #50, LCA Amendment #51 1/ Not approved. This amendment proposed to give power to the Lumber Code Authority in cases where a portion of the lumber under the jurisdiction of any division cr subdivision was imported, to fix production quotas, on. the basis of imports. This amendment was strongly endorsed by the north- eastern Lumber Manufacturers Association which stated that the effect of production control in their territory v/ith 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- measure would n^t "be unfair t~ importers f "r it w^uld -nly out them "n the same "basis as domestic producers. Eo °pt)"siti^n t' this amendment wo? shewn at the -nubile hearing but the Legal Division refused t: a"mrove it and r n August 21, the Lum- ber C^de Authority reouested that no further actin he taken r n it f^r the present. 2/ * l/ Transcript f herring, March 5 7, 1934, wo. 92-116 2 / Files "f Assistant Deouty Administrator H. M, ; eloney ^n Amendment #51. LCA Amendmen t ^ 52 l/ 5TRA Amendment -'-11 Approved: June 5, 1934 Signed by: Hugh S. Johnson, Administrator This amendment provides that the Lumber Cede Authority may, after having been reouested by a division r subdivision agency by vHe of 2/? of it c ambers, auth~rize the allotment of production therein ~n a basis Tf h'urs of operation. The idea f this amendment is s~und. In certain divisi~ns and sub- divisions, either due t n the fact that n~ strong trade associations were built up, or due tc the nature "f the operations, there were n°t avail- able records of oast performance sufficiently accurate to enable the allocation 'f or^ducti^n on oast performance. This was particularly true in divisions where there ^ere a oredrminant number of small operators. Also in certain cases the result "f application of the formulae originally contained in Article VII J would be t^ give certain persons such a small quota that it was hardly worth while running. The advantage of alloca- tion "n an allowable number of h urs basis is that it treats every ne alike and "rill, generally, give sufficient number of hours of or) er p-ti~n t" gi"ve X .b r fairly decent eraoloyment. l/ Transcript of hearing, March 27, 1934.PO. 116-126, Vol. II ■ n amend- ment #11, Code Record Secti m. LCA Amendment --"53 1/ HBA Amendment #23 Aoor-ved: October 6, 1934 Signed by: 0, A. Lynch, Administrative Officer Article VIII (g) of th( c de permitted the transfer :f allotments "between operations under the same "wnershio within the same division °r subdivision," Qualified only by the provisions of Section C which reauired "acceotable evidence "f ability t^ operate. " This provision f A r the transfer "i allotment auotas was taken advantage r f D y (i) purchasing of mills which w— aid probably never run again s' that their allotment quotas might be transferred, (?) transfer "f allotment auotas fr r m mills which load n available timber reso\irces and (?) by transfer of allotment tc an area where the minimum wage was lower. 9813 -134- In ^rder t' avid these difficulties, the amendment nron-srd by the Lumber Ode Authority stated in essence (l) that n" transfer sh-uld be allowed fr~m a mill which had n't been -derated in good faith f-r six months after its acouisitin, if such acquisition was after the effec- tive date -f the c~de; (?) n~> transfer could be made fr^m ^ne mill t^ another unless the snecies produced were ordinarily the same; ('■) no transfers c-uld be allowed t" any mill, the greater part "f wh-se product could, under the provisions of Article I* r (d) ~f the code be s-ld at less than minimum cost protection prices, and (4) n- transfer shuld be allowed unless it ap-ypeared that such transfer would make for greater efficiency and ec "n~my of • ooere ti^n. The Consumers' Advisory 3ca.ro recommended disapnr~val of this amend- ment because it felt the ability tn transfer allotments between t 1 - - mills under the same management gave an unfair advantage t^ the large o-oerat r over the small individual mill owner. The desirability of some method of check o£ transfers of allotments, however, caused favorable action n this amendment by the Administration. 1/ Transcriot -f hearing, March 27, 1934, pp, 126-144, Vol. II -n Amendment #23, Code P.ecoru Secti'n. LCA Amendment #54 1_/ Not approved. (Previously referred t' in this reu r rt' per- taining t^ Export C-rtr'l.) The increase in the est of manufacture "f lumber under tho Ode, due both to the establishment of minimum wages and maximum hurr and the establishment of control of producti"!! which increased c st by cut- ting down volume, led t° the adoption of c <~ s t pr I tion nrices which •protected the producer against a loss while selling in the domestic market. These minimum prices did n-t generally apnly in the highly com- petitive export field where prices were generally l~wer. The tendency was therefore exhibited to exrrrt B smaller anrunt A f lumber thon had been shirroed during -ore-code days. To stimulate sales, "'hich would benefit the producer by levering his c~st per unit and benefit lab-~r through increased employment, the Authority proposed in Amendment #54 a variety of devices which might be adopted by the division ~r subdivi- sion agency t n stimulate exp'rts. These devices, in essence, called fr a reduction in aueta t~ mills wh" w^uld list themselves as exr>o r t mills with the c muensatTy feature that such mills might be enabled to produce more lumber for export than they would have if their outas had n't been s^ reduced. Certain of the Advisory B^'tc's felt that tne pr^p~sal t - establish, at the discretion of the administrative agency, ne n f several ^nti^nal metbrds increasing exports, was c ntrary t' NPA policy. The Lumber Ode Authority t r ok the position that due to the diverse nature "f c nditi r ns faced by the vari'us divisions and subdivisions, a certain "oti~n in method of treatment was necessary. Failure to agree "n this ouesti n was, responsible for n"n-aTror n v"l of this amendment. 9813 -185- l/ Transcript of hearing, March 27, 1934, ot, 144-153. Files of As- sistant Deputy Administr* tor E. M, Meloney on Amendment #54. LCA Amendment #55 l/ Not approved. This amendment, declaring 1 that the productive edacity of the in- dustry was far larger than warranted by current needs, proposed that, until the Administrator found the t additional capacity was necessary, no new mills be created and no existing -oroductive facilities he en- larged. The Authority -pro-nosed this amendment for the following rea- sons: 1. That whereas in 1929, 69 per cent of the -productive capacity of the industry was "being utilized, in the first Quarter of 1933, this use of productive ca-oacity had shrunk to 19 ner cent. 2. Control of -production which made mandatory the granting of an allotment to every mill capable of -oroduction had resulted in the springing up of several thousand ne 1 " mills, -particularly in the South. These mills were granted ouotas with a conse- ouent reduction in the size of the ouotas given to already ex- isting mills. This -process being continued, would result in slicing thinner and thinner the amount of business which cculd be given to any mill during a given -oeriod with the result that costs '. v ould be highly increased and competitive products would take the place of lumber riroducts. The amendment nroposed that mills might be transferred from one site to another when their timber was cut out and also propose^ that the administrative agency might, in exceptional c«ses, authorize the build- ing of ne"' productive machinery when such building was necessary to cut mature timber which might otherwise be lost. The adoption of this amendment was strenuously "nrposed from many ouarters. The Administration felt that it not only granted too much discretion to the administrative agencies, but that, it was unconstitu- tional as constituting a deprivation of property without due process of law. 1/ Transcript of hearing, March 27, 1934, -n-n. 153-270. Files of As- sistant Deputy II. !•'. Meloney on Amendment #55. For a considerable number of ye. Q rs about 25 per cent of the red cedar shingles consumed in the United States had been imported from Canada. In 1932 the rate of exchange then existing caused the propor- 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 Ccfe period. In the administration of production control the Code Authority had to meet the problem of restricting domestic production of a product Hiere a portion of the supply was imported. Although the workers in the Canadian shingle industry r, a? endeavoring 9813 -rise- to advance wares and the industry to advance prices in line with ad- vances in the United States under the Cede, it *as agreed by represent- atives of the industry on both sides of the border that it would be im- possible to control production and trices for any length of time unless there was developed some control over the quantity of Canadian imports. Section 3 (e) of Title I of the National Industrial Recovery Act auth- orized the President, in case competitive goods were imported into the United States in substantial quanitites, or in increasing 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 investigation, to limit the quantity of such goods which might be imported into the United States, or otherwise determine the conditions undrr which entry would be permitted. In response to the President's direction, the Tariff Commission made an investigation of the red cedar shingle -nroblem and recommended that the ouantity of shingles which 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 manufacturers, aided by the Departments of State of the two countries, coming to a voluntary agreement on a P.5 npr cent limitation, so that it «?p not necessary for the American Govern- ment actually to exercise the authority given it un-er the National In- dustrial Recovery Act. As a means of allying necesr.- r; r control, the Canadian -producers had first formed an organization fey tfcif purpose* In 1935 the production program for the Red Cedar Shingle Industry was unset 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 quotas set up under the Lumber Code. In order to permit increased imoortation of Canadian shingles, both in absolute Quantities and in proportion to total consumption, the entire red ced-\r shingle ouota was Increased. As Am rican producers were unable to meet their quotas, this in effect increased the percent- age allotted to Canada. It was expected that the administrative machinery ret ut> under the Code for the Red Cedar Shingle Industry would disappear at the end of the Code period but it has not. The American producers have retained their organizations and apparently have some gentle:nan's agreement with Canadian producers, with the tacit support of the United States Dep^rt- ment of State. To determine exactly how matters have worked out since the Code r>eriod ended, field cont' cts ^ould be necessary which have not yet been possible. Although mahogany is not Produced in this country, imports of this wood vere- restricted* wader the" Code. Some firms that had im-oorted mahog- any irregularly, and had not im-oorted in the three years Prior to the codes which was the basis of determination of ouota, did not receive ouotas and could not make imports. The by-laws of the various associations, which" became administrative 9813 -187- agencies under the Code, were amended so that all members of the industry could gain easy entrance to association member ship, and to establish eouality in voting power. Three specific exceptions are noted in such by-laws. The first is that of the Northern Pine Division, whose by-laws t>rovided that voting was to be on the basis of one vote for each one million feet of "oroductive capacity or fraction thereof, with no one mem- ber receiving more than 15 votes. A preliminary check of the production ouotas established for this Division during the year 1934, showed that some producers received allotments for one quarter that were larger than their records had shown them able to produce in an entire year. The Mahogany Subdivision by-laws carried, a provision that voting should be on the basis of one vote for each $10 n dues oaid. No importer was limited to the amount of dues that he could pay, ^nd conseouently not limited to the number of votes he could receive. No check has been possible on the allocations of this Division, due to the difficulties mentioned above. The Philippine Mahogany Subdivision by-laws contained a clause ner- mitting votes on the basis of "each 100,000 feet of allotment." Due to the fact that there was a complainant who appealed to the Administration the Division of Research a.nd Planning was enabled to obtain the allot- ment records and found that six producers received allotment eouivalent to 51 per cent of the total for the Division. These six producers, ac- cording to the by-laws controlled all future ouotas and could keep them- selves in poiver as long as they wished or until amendment of the by-laws. In the case mentioned, arrangements were made to satisfy the appellant. It might be well to note that one of the results of production con- trol as administered under the Code was the encouragement of selective sawing — bringing out of the forest only the best part of the tree. With restrictions only on the Quantity of sawn lumber produced the aim of the manufacturer must be, of course, to get the highest return from this ouota. The production control provisions limited sawn lumber and not logging, and therefore increased waste in the forest by encouraging the practice of leaving on the ground, to decay all but the best logs from the trees. The National Industrial Pecovery Board recognized certain conditions as inevitable in any attempt at control of -nroduction, and in a publica- tion dated April 33, 1935, entitled "Administrative Policy," stated in part as follows: "A control of production is inevitable under any industrial system. A long experience has led us to leave that problem to the open market. In a few industries in which competition has proved unusually disorderly, it may 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 equation be- tween production and consumption as the market is supposed to effect. The strategy of policy must find expression in a multitude of decisions. But its 9813 -188- ' end is single — an economy, not of scarcity but of plenty. In other 'vords, means and end? must not be confused. Means should he flexible, reouiring the use of a miscellany of devices and -orocedures. Ob- jectives should be stable. The goal is the estab- lishment of conditions under which in a free and open market competition may determine a fair price." Production control will remain a -problem of this industry, anc- methods to solve it ..will continue to be offered rs long as the -presently existing tremendous potential capacity to -oroduce goes hand-in-hand with a much restricted consumer demand for lumber and timber -products. 9Bi; -189- CIIAPTER IV PROBLH.IS OF DISTRIBUTION The successful marketing of forest products is as important as the unquestioned need for aggressive and farsighted action in maintaining the growth and protection of timber stands. This axiom is well sub- stantiated "by the fact "that had the per capita lumber consumption from 1899 to 1909 continued, the 1929 gross consumption would 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 around (a) production, (b) price, (c) channels of distribution, (d) transportation, (e) increased satis- faction in the use of the products, (f) competitive practices and (g) integration of industry. Hot the least of these intimate factors is that having to do with the improvement of the products which may be accomplished in various ways, some of which are: 1. By controlling moisture content through better seasoning 2. By exercising greater care in selection and grading, and 3. By making decay-resistant lumber generally available. Sight should not be lost of the fact that low production cost, and not so incidentally. either a higher degree of satisfaction to the consumer, calls for radical changes in industry organization and in practices re forest holdings. While there are of course various disadvantages controlling the cost of lumber -(lumber is the principal forest product and presents the most difficult marketing problem), possibly the most dominant is the heavy transportation charge. Lessened transportation costs will depend on at least three conditions: (l) freight rate adjustment, (2) decreased cross-hauling, (3) putting those forest areas closest to consumers 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 are aware of the fact that an ever increasing quantity of wood is used in malting 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, rayon, cellophane, artificial leather, paper di shes, drinking cups, roof- 1*1 "A National Plan for American Forestry."" A report of the Forest Service (1933) p. 1365. -190- ing felt, and even conduit pipes, all made from wood. Then there are wood extracts, 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 he pushed against the increasingly keen competition of other mater- ials. 'There is important need, therefore, for strong promotional effort not only to maintain established outlets but to generate latent wants, all of which calls for distributor cooperation in a well coordinated sales policy to the end that the consumer may obtain material of the type and quality desired to meet his particular requirements. Turning 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 country. This may well be accounted for by the fact that the industry 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 discussion, therefore, this portion of the subject will only be touched on in a broad way. The entire distribution mechanism is governed by specific demand factors. While these factors are legion, if individual purchasers are considered, there are actually but few variant factors if purchasers are reduced to major consumer groups. The Construction Industry comprises by far the most important of these groups, followed by the Wooden Con- tainer Industry, and many other lesser industries - all discussed in some detail in subsequent pages. In order that the reader may 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 were 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 consumer in increased prices. The inevitable result was lessened demand. Goi^back a step further into the field of traduction, it is evident that these recurring shifts and consequent results generated a dilemma on the horns of which the industry was and still is securely caught. To 9813 ~] 91- make a profit it has always had to either 1 increase prices and face a diminishing demand, occasioned in part "by consumer demand for substitutes, or reduce cost in an effort to maintain and expand markets. Bearing in mind that the principal softwood producing regions are Southern pine in the Southeastern section of the United States: the Douglas Fir region comprised of most of the States of Washington and Oregon; and the Western Pine region comprised of the inter-mountain states, it can he readily seen with the principal consuming markets on the northeastern Seaboard, in the central west and in California, that there would he a Very considerable cross-haul of lumber and timber prod- ucts to effect the distribution of the manufactured products to the con" suming areas. This movement of lumber and timber.,, is very completely shown in Table XLtl- Appendix II, of this report which deals only with the softwoods, but as softwoods make up from 85 to 90 per cent of the total annual consutapt ion of lumber and timber products, this data is in- dicative of the whole field. Certain summary figures from this complete table are presented in tabulation on the f o lie wi eg p ago Wherever the manufacture of lumber has been a major undertaking the first mills were usually situated along waterways and the logs were rafted to them but as the timber adjacent to the water was depleted, the mills moved inland and resorted to rail and other transportation agencies to reach the consuming areas. About the only rafting now done of logs is along the Pacific Coast from the northwest to mills in that area and in California, '' When most of the production of lumber was confined to the northeast- ern states, a large amount of it moved through the various canals In 1872 a total of 1,467,865 tons of forest products moved into the Hudson River from the Erie and Champlain Canals, From this peak year, canal tonnage declined to 232,625 tons in 1907, (*) Lake and all-rail shipments, of lumber from Saginaw Fiver points in 1885 amounted to about 149, 000 ,.000 ft* by rail and slightly over 659,000,000 ffc, by water.;, Hail shipments increased steadily until in 1897 they amounted to 379,000,300 ft, as against slightly over 89,000,000 ft, by water-, Water shipments of lumber into Chicago reached' their peak in 138?, amounting to 1,850,000,000 feet, but have dropped to 175,000,000 by 1914. In 1871, 81 per cent of the lumber reaching Chicago came by -eater whereas in 1913, such movement was less than 9 per cent. As the areas of production shifted to the South, coastwise movement from the Scuth Atlantic ports ~oy sailing and steam vessels became of in- creasing impbrtar.ee* The annual report of the New York Chamber of Commerce for 1890-91 contains a table sharing that 1,301,358,762 ft, of lumber were' received at the port of Hew Yo.rk in 1390, Of this am ant, 304,823,000 "ft, 'were delivered by rail and 995,,534 f 762 ft, by water. In (*) Canal daeca laken from "Report on Transportation by water in the United States." by the Us S. Commissioner of Corporations, July 19, 1909, Part, 2. 9813 -193- f CVi *h l*" rH VJO O r- 1 ir rH it 1 rH i— 1 ro O CD d CD 3 f 1 rp ,—i CD O CD Ph Xf LT\ • r- 1 it r: CM 1 — rp --' 4J CD V ) cr 1< OJ U3 cr> l-H K" o •h i r o c r- < rH > _-d" rH r-l o 1- J- J- r— [v-x -=t O LP OJ CT^. ° & • ( f ftO OJ rH ro ^f- J- r- i P L, h- rp LO OJ J- cn (—1 .H E- V. £ z OJ Pc f-, -U O P C rH P O • » • • P Oj 1 rH pj OJ cr ,H CV 1 rH rO rH o P i j-" * C. 1— 1 r™ 1 O X! •H 09 f' 1 p [O LP o 01 rp o H o o \ OJ rH -M -H r 1-j ,"^ P CX- 1 rH w tvP rH rS O p rH >- <=f -" ,- LP p \— 1 • CO o p; P- o o r-l rp r— t—' OJ OJ LP. o >jp rH r— ,H f U3 C o a CO +3 4J p .-* CM •rH CT CD Ph O EH ■o 4^> fo O rH o r— rH LO. b i — C\J rH rH i 1 •H r > •H n o C CO 1— 1 CD n m * •r-i 1 o CD r-< C r^ 1 Ph •H = +-■> -d rH Ph 00 C 0' . r~- U' . ct\ •vD LT LP rr-, LP ^f r-l P, W CD .a - O ■H f"* p, (7* • r*~ u^ cr, r-< S^ Ph r. 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O Ph CO Ph 4J O n ' Vi P C X! O • '■•■ Ph CT • ro rp K - '. cr cr. rH a.' O LP Ol t-H o H l-H Ph rO CD +J B d P <* •H Eh r— 1 >h o OJ o. <\j rH ^ = XJ CD. -H r-H o g ID rH O r SI 'oi c • H • H cvj r — * r-J O o •H o r-<" OJ o b Ll > LP O OS r-< rO a Eh f rH -d rH o o 4--> = r V, C 00 rH rH = = 4^ fn O CD * § ? :) f^T -H 4J 4^ J} *HJ S H 1 •H -H 4^ co C rj +3 CD rH •rH 4-> s w rj rH (D 4J fl ■4-3 C? •H O r i' h, f> W -h £j H o 4^ o Eh rH rH 4^ CO CD H^> u CO n O o o CT o ' ' >' Ph *«1 •d x: CD rH 1) rr> 1) f | 0) l-H • H • H O , Ct Ph CD •H co Pi O •H rH ►J "l b ro O Ph d o tn qp- -193- 1907, 44-7,229,565 ft. of Southern Pine were received at Hew York "by water and of this amount 224,433,208 were discharged from sailing vessels, the remainder from steam vessels. Prior to 1900, and to an ever-decreasing extent following the turn of the century, a considerable amount 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. This water— borne 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 mills 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 manufactur- 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; Further, it could be back-hauled 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, particularly 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 buying direct from a mill at a cheaper price than a retailer exerts pressure 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 break 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 -194- -• wholesalers of lumber cooperated with this class of purchasers. During the Code period, the majority of retail lumber .dealers not wishing to increase their low stocks were nost desirous of buying in small quantitiei less than carload lots. This reason, together with the fact .that low stocks were replenished more rapidly by truck 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 also contributed to this method of distribution. With the expansion of the west, .particularly upon the completion of the transcontinental railroad, came considerable increase in farms. During this period there were approximately 60,000 farms established an- nually, each taking many thousands of feet of lumber. 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 lumber, the value of 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 which 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 tax problem For example, a study in northern Michigan shows that on 16 representative timber tracks, average annual taxes per acre increased from 14 cents in 1906 to 96 cents .between 1926 and 1930. .As with all 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. Hew mills were constructed at a ra;oid rate. From 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 pressure 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 1923 the generally increasing lumber prices were accepted by the public, then the competition of substitute materials 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 riounting costs and relentless 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 down until curtailed production and increased prices again permitted them to compete. As already stated, although lumber is but one of the many produc ' , of the forest, it is by far the' most important. Some graphic idea of the general demand factor of at least the major forest products may be 9813 . . ' P7 6 4, 4 4. 3 4, 1 1. 6 ll 6 1. 1 1. 1 1. 0, 9 -195- gained from the following table of forest products and the per cent of demand in terms of the total amount used annually from 1925 to 1929: FOREST PRODUCTS PER CE1JT OP TOTAL USED AMUALLY Lumber 50,8 Fuel-rood Hewed ties Pence posts Pulp wood Mine timber (round) Veneer logs Cooperage (slack) Logs and bolts in manufacture Cooperage (light) Shingles Miscellaneous (poles, piling, export, logs, distillation and extract wood, excelsior, etc.) 1.5 Source: Bureau of the Census,. 1925-1929. Through its years of development- and vicissitude, the industry has had to cope with a .sluffing away of t 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 required 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 1 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 1 s chief products. The consumption of lumber 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 fo'r railroad purposes 5, The export market' 9313 ^-196- It is difficult to obtain data as to the proportion of the total consumption going into each class enumerated above. The Department of Commerce, however, in conjunction with the United States Forest Service, made such a division, and found that in 1928 approximately 63 per cent of the total lumber used was for construction purposes, including the lumber that had been fabricated into construction parts, such as doors, sash, etc. This included all railroad lumber except that used for car construction, which v/as placed in the industrial classification. Ap- proximately 16 per cent rent to the Wooden Container Industry in 1928; and about 14,5 per cent to the lesser industrial uses; with 6,5 per cent to exports, (*) In 1933 the Construction Industry took about 66 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 pretty definitely wedded to the Construction Indus- try, for better or for worse, Correlatively, large centers of popula- tion furnished the most enticing consuming areas. The total lumber consumed in the early part of the 20th Century exceeded even that used during the building boom period of the late 20' s. This, to some extent, was due 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 t^ime since. The 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 plank 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 .'3UILDIITG CONSTRUCTION 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 (**) "PI See Table XXXI, Appendix to this Report (**) See "The Construction Industry and IJRA Construction Codes," Division 9813 of E - eviev7 » ^RA, March, 1936. -197- The use of lumber follows the general trend in construction as shown by the following index comparisons of building volume with total volume of lumber shipped: Year 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 Construction 50.5 45.2 65.1 71.5 79,0 98.8 100,0 89.0 100,5 89.0 62.0 39.5 17.3 16.4 20.7 Lumber Shipped 79,5 77.9 83.0 101,4 98.2 104.3 100,0 92.3 102.4 97.2 69.2 50.9 37.4 43.7 40.6 While it is apparent that the volume of lumber used during the boom years of the late 20 ! s as shown in Appendix II, of this report, Table XXXIII did not parallel the total increase in construction, there has been less disparity than is- generalise thought. The compari- son shous that for every $1,000 vorth 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 reached in 1933, rath 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 23,822,230,000 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 oy the Construction Industry in 1923, and for about 87 per cent in 1933, It is seen, therefore, that softwood consumption has lost somewhat to hardwood consumption, although the cause is not definitely discernible. Of the total lumber consumed by the Construction Industry in 1928, by far the largest amount, or more than 31 per cent of the soft- wood was taken by Hew York State. Illinois ranked next, taking nearly one-third as much as Hew York, followed ~"oj California, Pennsylvania, Michigan, and Ohio, in the order named. Considerably lesser amounts were taken by the remaining States. Hew York likewise took the largest proportion of the hardwood production 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 consumption of "both so ft rood and hardwood, "but the percent- age difference "between its take paid that of California, the next ranking consumer, tras slight. Her; York took 23 per cent of the total softwood production, whereas California took 21 per cent, New York, 23 per cent of hardwood production, and California, 21 per cent. Illinois, which held second place in both softwood end 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 years. CONSUMPTION OF LUMBER BY THE CONSTRUCT 1 01! INDUSTRY (1.1. Feet B. I.i.) TIP 033 AITD STATE 1928 1933 Softwood: Total 21,634,717 8,869,570 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 Penns: r lvania Michigan Ohio 2,187,513 1,293,091 691,451 302,596 246,161 35,637 135,516 274,782 131,295 70,473 120,466 23,870 119,657 42,465 It is noted fron the foregoing table that while New Yorl: consump- tion in 1928 was 31 per cent of the total, as against California's 6 per cent in 1933, New York took "but 23 per cent and California increased her take of 21 per cent of the total. Hot only that, California in- creased its softwood consumption in 1933 over 1928 about 46 per cent, and its hardwood consumption doubled. The 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 country when railroad building was at its height, but figures 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 was of course, decreased railroad building but 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 consumer of lumber after the Construc- tion Industry is the Wooden Package Industry, which takes about IS percent of the total production. There has been much complaint in the industry regarding numerous displacements of wooden containers by fibre and paper boxes. Undoubtedly this is true to a considerable extent but there is no statistical means of measuring this, due to lack of infor- mation on the Paper Container Industry at this tine. The only way is" to compare the index of industrial production with the total amount used for wooden containers. Table XXXI of this report indicates that in 1928 about 5,474,000,000 feet of lumber were used for this purpose. The Federal Reserve 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 vised for containers. The index of industrial production stood at 64 - a drop 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 Northwest and the fruit and vegetable pack- ing industry in California are still large users of wooden containers. In the Hast, the practice of using large veneer containers rather than the sawed wooden box containers so prevalent in the West, reduced the amount of lumber used for that purpose. Over 75 percent of the lumber taken by the Wooden Container Indus- try is softwood. In 1929 Washington ranked first in the amount con- sumed, talcing about 12 percent of the total, followed by Oregon, Michigan, Pennsylvania, Massachusetts, and Ohio, in the order named, each consum- ing more than 200,000,000 board feet annually. Pennsylvania takes the most hardwood for container, followed by California and Ohio in the order named. Considerably lesser amounts were taken ~oy the other States. In 1933 California too]: by far the largest amount of softwood for contain- ers, followed "by Oregon, although it ranked seventeenth in 1928, Washing- ton (first in 1928), Michigan, Pennsylvania, Massachusetts and New York in the order named. The Construction Industry and the Wooden Container Industry to- gether took approximately 80 }oercent of the 1928 lumber consumption, leaving about 14 percent for ether industrial uses and 6 percent to be exported. Practically the sane relationship prevailed in 1933. In 1928 the total lumber used for industrial purposes was 4,945,000,000 feet. This dropped in 1933 to 1,907^,000,000 feet— a de- cline of slightly 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 consumption of other industrial products. While 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 with the ^dvsnt of the steel body. Further, some displacement has been made by netax furniture and metal parts, which were formerly made of wood. While the Automobile Industry 9813 -200- is still using a considerable share of the Lumber production, its rapid substitution of metal for '.rood has now placed consumption of uood at approximately the level consumed by the carriage and buggy industry. While there are claims of a reversion to wooden parts for many things, this may be due in a large measure to special development in the indus- try itself; and the trend may be further increased by the price level of lumber as compared with the price level of metal products. It is worthy of note that whereas the great preponderance of lumber consumed by both the Construction Industry and the Wooden Con- tainer Industry was softwood, more hardwood than softwood is taken by other industrial users. Although Michigan ranked first in 1928 in its consumption of lum- ber for industrial uses other than for construction purposes and for wooden containers, and llorth Carolina was second, in 1933 North Carolina ranked first, and Michigan second. California, though prominent in its consumption of wood for construction purposes and for containers, ranked eleventh in its consumption of wood for other industrial uses in 1928, and even lower in 1933. The major hardwood consuming industries are shovm in the following table: LiAJOR HARDWOOD CONSUMING INDUSTRIES INDUSTRY Furniture Boxes and Crates Building and Construction Railroad Construction Railroad Car Construction Flooring Vehicles Caskets and Coffins Sash, Frames, Doors, Blinds, and General Kill Work Handles Miscellaneous Unaccounted for I.i. FT. PERCENT OF TOTAL CONSUMPTION 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. J813 -201- It -.Till be noted that the Furniture Industry take s the largest share of hardwood shipments. The Box and Crate Industry ranks second with demand areas scattered over the entire eastern section of the coun- try. This latter industry uses the low-grade product of the logs and as a rule the less expensive woods, such as gum, tupelo, and cottonwood. 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 transportation cost through the utilization of a lighter weight container has been an economic competitive factor that the manufacturer of the wooden box has had to meet. As early as 1626, the Colonists sent some lumber to Holland and from there it was re shipped to England. It is also worthy of note that for many years the timbers of the finest ships in the British Navy came from Hew England. Nor should it be forgotten that lunber, logs, masts, planks, stairs, tar, pitch, turpentine, and other forest products en- tered largely into that first nursery of foreign commerce. Trade with the West 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 West 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 1913, just prior to the World War these exports in- cluding wood manufacturers, amounted to $L34,190,000, or 5.5 percent of total exports. The table on the following page shows lumber exports for the years 1929 and 1932-1934. The a.bove 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 figures 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- try in relation to total production, the relatively collective unim- portance of lumber exports is evident. Aside from the fact that exports 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. 98i; -202- LUMBER EXPORTS (M. Bd. Ft.) First 9 months of Kind 1929 1932 1933 1934 1935 SOFTWOODS* Douglas Fir 1,450,115 . 495,708 574,504 591,402 398, 14C So. Pine 810,782 331,265 341,924 383,985 280, 78C Wes. Pine 41,482 14,353 17,358 28,409 24,941- Redwood 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 all Dimension Stock 5 , 337 65 TOTAE 2,620,603 898,156 982,240 1,055,759 741,719 HARDWOODS* Ash Gum Oak Popular Other nail Dimension Stock TOTAL )TAL - SOFT AND HARDWOODS 38,781 53,904 231,024 40,383 87,626 5,407 457,125 27 , 849 28,776 132,347 16,265 23,763 4,984 233,984 35 995 44,381 26 , S60 36 996 33,000 25 , 860 155 549 130 , 124 115,571 21 979 23,903 20,629 28 677 34,060 25,799 6,600 285,796 9,415 274,883 3,077,728 1,132,140 1,268,036 1,330,642 6,355 220 , 874 962,593 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 growing 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 — a >o •» Products competing with lumber and timber products 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 CONSUMPTION 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 16.8 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 unpublisned report of February 20, 1934, - entitled "Displacement of Lumber in 2uilding 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, lumber supplied by far the largest perr-sntpge of major 'building materials for the entire period 1919 to 1932.. Although somewhat irregular there was, however, a con- sistent dowi ward 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 until 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. FERCENTAG3 DISTRIBUTION OF MAJOR BUILDING MATERIALS BY CLASS OF 3UILDING Year Lumber Steel Cement Brick Stone Total Residential: 1919 92 6 2 . 100 1931 68 • 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- placement of Lumber in Building Construction." 9813 -205- The foregoing tables and broad generalities should not entice the reader into assuming that the lumber industry is, as a result of its market loss to vigorous competition, about to relinquish its preponderant I dominance of construction materials. The age-old use of wood, its com- iparatively easy fabrication into a multiplicity of products, and its I 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- came 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 below 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 competition, (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 Pine Region which includes all of the Southeastern States, also Arkansas and Texas. The second is the Western Fine Region embracing practically all of the mountain States and third, the West Coast Region.- This West 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 competition 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 between 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 softwood 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 Western 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 southern group of mid-western States, the Southwestern States and in tV.e Southeastern States, with Douglas fir and Western pine alter- nating for second and third places. This is natural for here Southern pin: has the competitive advantage because of the snorter haul from producing 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 ffom the other main softwood producing divisions. Aside from use in general construction the products of this division nre 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 manufacturers- of sashj doors, "blinds, and general millwork. The spruce, white pine and hemlock shipped from the Northeastern and Northern Divisions arc all competitive with Western pine, the West Coast woods and Southern pine, and when used in general con- struction work their territory ends where freight rates and other factors permit the products of the three major divisions to meet them on a competitive "basis. The geographical areas of competition for hardwood lumber are to a certain extent dictated by rail freight rates which each pro- ducing division has to- pay. Because of this, certain divisions furnished th^ majority of stock in certain areas. For example, the Northeastern Division furnished the North Atlantic area with 53.58 per cent of that area's total hardwood consumption in 1929. The New England States are farthest removed from other hardwood producing areas f It is therefore to be expected that this area would draw most of its hardwood from the Northeastern Division. The Southern and Appalachian Division competes for second place in use in the North Atlantic area. This may be because of the fact that while on the whole freight rates from the Appalachian Division are less than f -om the Southern Division, this advantage is, somewhat offset by o uthcrn hardwood being priced somewhat; lower than v> Appalachian hardwood. The raid-Atlantic area, comprised of New York, New Jersey, Pcnn- ' sylvania, Delaware, Maryland and the -District of Columbia., affords a better competitive opportunity to Southern and Appalachian hardwood than does the North Atlantic area. The large volume of lumber sup- plied the middle Atlantic area by the Northeastern Division, which almost equalled that supplied by Appalachian, is occasioned by the ■ fact that Pennsylvania and New .York, particularly the former, ^are large hardwood producing States. , ■ • '' The Southern Hardwood Division supplies the larger part of the hardwood requirements of the Southeastern area, with the Appalachian Division furnishing almost the balance, It £s the second largest ar^a of consumption for hardwood f Th^s is because cf the heavy conversion of lumber into fabricated products or finished parts within these states of production. There is a Xarge manufacture of flooring, fur- niture and automobile parts in these States, tfhis activity is an evidence of the tendency toward fabrication at the source of supply of the raw materials and of progressing integration of manufacture in the industry. / The Lake States area, comprising Ohio, Indiana, Illinois, Michigan, Wisconsin and Minnesota, is the largest hardwood consuming area in the country bepause of the many woodworking'plants located in that area. Michigan is the largest consuming state, with Illinois, Indiana and Ohio alternating fpr second place. The Northern Division supplies th; larger parti of the Lake States' consumption, with ^he Southern Ha dwood Division,, because of price, furnishing the next larger part- The Midwcs.tern Area, comprised of the States of Missouri, 9813 -2C3- . Kansas, I owa> Nebraska, South' Dakota' and North Dakota, draws the greater part of its hardwood requirements from the Southern Division "because of its cheaper priced -•■■. • ' ■ While the inter-mountain area, comprised of the. States of Montana, Idaho, Wyoming, Colorado, .Utah, .Nevada,- Arizona and New Mexico, ■drew 75 per cent of its total consumption in 1929 from the Southern Division, in 1932 it drew 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 competitive 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 cent of the hardwood consumption of this area. The Northern Division dropned back to a little over 8 per cent, and the Western Division went up to slightly ever 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, as 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 consumer of hardwood. . . . The Pacific- Coast area is one in which tho consumption 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 majority , of • their hardwood from the , Western Division-,'." California secures the. larger part of its require- ments from the Southern Division. In .1929 California was decidedly the heaviest consumer, the shi-oments into it being more than twice as much as into Washington and Oregon.. .... - California Consumes more redwood than any other State; it is shipped in lesser quantities ' to Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, Wisconsin. In fact some redwood goes to all States, except those in the cLeep South and the States in which the directly competitixre'wood', • cypress, ' is produced. Ri dwood is chiefly used in planing mill products, woodwork, tanks, silos, caskets and coffins. •" ']' ' ' v " ' ' ' Cypress -is widely distributed, throughout the South, the East and the Central States, and is shipped in fair quantities to practically every State east of the Rocky Mountains* It was for many years largely used in the production of doors, frames and sash, but within the last •two decades has lost much of its consumption to Western -nine and Douglas fir. , No- figures are available to show the destination of the imports of lumber or Of forest oroducts into the United States; however, the areas are well known in which. the . species -are used and it is a reasonable assumption that' the majority of the imports, are consumed in the areas which they enter. • ' .... [,'■■'•*. .- • - • In the year 1929 ,* 86, '994 M ft., of fir, -spruce or Western hemlock logs- were imported, all 'of which came from Canada. In 1929, 37,936 M ft. of lumber were 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 drooped from just under 87,000 M ft. to 58,933 M ft., all of which came from Canada. The imports of softwood lumber 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 were 50,185 M ft. of fir, all of which came from Canada. Hemlock lumper imported in 1932 was negligible, amounting to only 3,153 M ft.,' all from Canada. The importation of snruce lumber in 1932 totaled 125,698 M ft.,' of which 90,580 M ft. came from Canada, 31,410 M ft. from Russia, and the remainder in small quantities from Germany and other European countries. The total imports of pine lumber in 1 ,'32 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, suruce and Western hemlock logs Wire imported, all of which came from Canada. The volume of un- specified softwood lumber amounted to only 4,199 M ft., all from Canada. The volume of fir lumber imported in this year also dropped, the total being 22,729 M ft., most of it from Canada. The imports of hemlnck amounted to only 2,473 M ft,, all of which came from Canada. The imoorts of spruce increased, the total imoorts amounting to 176,000 M ft. The imports of pine lumber in 1933 increased in excess of 100 per cent, 104,066 M ft. being imported, of which 102,626 M ft. came from Canada, 1,400 M f t. from Mexico, and 26 M ft. from Trinidad and Tobago. ' " The importation of spruce; fir* orWestern hemlock logs decreased materially in 1934. In that year there were only 17,340 M'ft. imported, of which 17,338 M ft. came from Canada; the other 2 M ft. came from Kwantung. The imports of unspecified soitwood lumber in the year 1934 amounted to 5,237 M ft., all of which came from Canada. Imports of fir lumber amounted to 4,085 M ft., of which 4,076 M ft. came from Canada. Impo^t^ of hemlock were only 821 M ft., all of which came from Canada. The imports of. spruce amounted to 142,260 M ft., of which 124,038 M ft. came from Canada and 13,023 M ft. from Russia, the remainder coming from other European countries. The importation of nine declined to SI, 194 M ft. of which 86,959 M ft. came from Canada. Advanc data, subject to revision, of the Bureau of Foreign and Domestic Co amerce of the Department of Commerce, show that in the first eight montht cf 1935 there were imported 66,660 M ft. of fir, spruce, and Western hemlock logs, all of which came from Canada. In this same period 13,865 M ft. of unspecified softwoods were imported, also from Canada. The imoorts of fir lumber in the first nine months amounted to 53,255 M ft. from Canada; imoorts of hemlock 6,312 M ft., all from Canada; imoorts 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 M ft. of which 66,332 M ft. came from Canada. 9813 -210- The total imports of softwood lumber declined steadily from 1929 through 1934. In the latter' year the smallest amount was imported for any year since 1929, the .total footage being 243,597 M ft. of which approximately 233,000 M ft. were spruce and nine. • 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 imported — 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 inroorted during the first four months of the year. Approximately 2,400 M ft. entered the United States in May, the June, July, August and September imports increasing respectively to approximately 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 probably be attributed to two factors: (l) The strike on the West Coast which tied up many coastal mills, and (2) the fact that Canadian shippers 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 crse. 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 that time was *12 per M ft. The imports of spruce and pine lumber present a different picture from that of the West Coast ™oods. r hile fir and hemlock "'ere de- clining in volume during 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 that the imports in 1935 will equal and probably somewhat exceed those of 1934, but will not exceed the 1934 figures to the extent that the importations of fir and hemlock in 1935 exceeded those of 1934. The species of softwood lumber that are native to Northeastern 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 wojds produced in that territory, the competition becoming still more accentuated as tne 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 some of this imported softwood lumber 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 production cannot "be definitely established. It is known, however, that imports of fir and hemlock materially increased in the f irst nine months of 1935 over the year 1934, although there was' a combined duty and tax of $4.00 tier M feet in favor of the American wood. Competition within the Lumber 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 competitive 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 seme 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 fecus attention solely on their bearing upon competition.. These named may not be * complete catalog of the practices and conditions making up the complex competitive field within the industry itself but are sufficient ? or .the purpose indicated. Perhaps the most important competitive problem of the industry prior to the Cede was that having to do with the actual sale of the products. There was little cooperation between general sales plans and no clearly defined function for the various types of distributors. Small dealers were fast going into ba,nkruptcy. In 1933 sales by saw- mills were. only t m o 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 1926. Earnings for assets employed were the third highest of all industries in .1920, with 89 per cent' of assets 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. Before the Code the industry was not fully organized, 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 formulation and -code operation served to integrate the industry and to encourage a "more democratic approach to its distribution problems. Under the Code the industry attempted to define the channels of distribution. Just what was done and xhe re- sults therefrom are discussed in other sections cj this report. It has already been pointed out that changes in consumer demand are to be recognized and met, not combatted, if competitive markets are to be retained, much less expanded. One might well go a step further am urge that aggressiveness be the order of the day and not merely a la issez-fa.ire 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. Perhaps the way to greater heights for the industry is through closer cooperation among its widely-scattered and generally inarticulate membership, wise synchronization of the technological improvement with employment needs, increased research, and more unified and less ca-oricious distribution methods, to the end that the industry may 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 sawmills 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 major 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 orincipally to wholesalers, retailers and recognized wholesale trade, who maintains a sales organization for this purpose, 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 defined in Divisional Rules and Regulations shall also be classed as wholesalers." In addition to the functions nerf ormed by t he wholesaler as described, certain wholesalers likewise financed mills and retail yards. A wholesaler's organization will naturally vary with the tyoe and scope of his activities. Some maintain baying 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 was 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 orovided 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 purchasing units as small as a 9813 -213- I car at a time and carrying a relatively snail" stock, if any at all. Wholesalers of lumber are located in all parts of the country, the bulk, however, bei.og east of the Mississipui T r warehouse, kept open during business hours i with ;S"ioh handling facilities and sales service ay are .commensurate with the nature • f the busi- ness- and who carries a sufficient stock of lp'mber and build- ing materials, (for the purpose of selling at retail in small or large quantities- and not fp.r his irm consumption) to supply the general requirements of the community J 1 In the early days the retailer's position was much more definitely fixed and in a very much, broader field than at the present time. Up until recent years the retailer supplied practically all of the lumber requirements of those located in his trade area or vicinity, and the user of lumber in practically any quantity dealt with the retailer as the only source of his lumber supply* As competition .increased between mills and mill selling agencies or representatives, this repre- sentative position of the retailer .in most communities was destroyed and, generally, he is now the supplier of lumber in only small quantities, 9813 -216- A contractor, a builder, or .an individual owner contemplating the erection of even one structure that may use as little as n ne carload of lumber (approximately 20,000 feet) w-uld "be solicited to buy this lumber from other than the local retail lumber dealers. As quantities needed would increase, the prospective purchaser w^uld have other channels open t r 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 imoortant part in the industry. Practically every community, however small, has had some type of retail lumber supply offered t^ it even though this lumber supply 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 handle a great many materials other than lumber; however, the latter represents about 72 per cent °f their total business. In the retail lumber business consideration must be given t^ the different kinds of retailer and reto.il establishments, primarily from the standprint of the machinery of the c^ntr^l of such unit. It was recognized that a very considerable majority f these retail dealers were owned, cntr^lled and operated as independent economic units. It was als n realized that there were a considerable number of retail yards, especially in certain sections of the country, which are known as "line yards." These yards, ranging from two i n number upward, are operated under one management with buying and selling methods, credit policies, 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" gr'ups are purely re- tailer organizations with activity based primarily upon the buying and the selling of the products t" produce a profit f r r 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 "wn sawmill and manufacturing plants. 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 "utlets f or certain if not all of the products controlled by the particular wholesaler. In the field of retail distribution the cooperative groups have also grown up within the past few years. Lumber, as o ne ->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 cooperative movement has gained the most 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 -oroducts of the members and the purchasing of those articles of commerce most commonly used by them. 9813 -217- These various types of retail distribution 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 competition 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 those yards controlled by the manufacturers who would not need to calculate, in his final costs, at least one intermediary step. The competition 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 lumber yard in rural communities. Not 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 position to extend con- siderable credit and ie make deliveries "ver an extensive field. On the " ther hand, lumber yards located 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 to carry particularly large stacks. In many of 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 the more commonly used hardwoods, but the production, sale and use of the principal hard- woods differ so materially from the softwoods that a specialized service of distribution grew up for this particular 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 manufacturers or distributors of any products competing with lumber were anxious to have these competitive articles as widely distributed as possible. The retail trade is roughly divided into two classes. The first, commonly called "retail sales" or "wagon trade" constitutes the small transactions incident to 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, therefore, 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," or "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 'me 9813 -213- concern. It is obvious that this definition inherently contains regulatory measures respecting quotations and discounts. Under the Retail Lumber Code it was hoped that a "bottom could he placed under retail prices by the development -f industry c A st data and the determination of the s --called mode cf these c~sts in each of the 32 divisions r f the retail trade. In the early application of this principle it was printed out by the retail dealers that certain c-sts of handling lumber were rela- tively the same. 'This group of c^sts were generally classified as yard and delivery expenses, and the the r ry was that it cost the retail lumber dealer just as much per thousand feet tr unload, yard and deliver a grade and size lumber that c^st -^20 per thousand feet as it did a grade and size of lumber casting much more. The Administratis accepted the view of the retail dealers and sought to establish a composite m~dal mark-up consisting of a flat price for yard and delivery csts varying essentially r nly in accordance with the different minimum wage rates specified in the Code, and the additional c r sts were then tn 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 r r flo-r 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 could quote, which was increased by diffi- culties experienced by the Code Authority for the Lumber and Timber Products Industries in their attempt t" regulate and to establish the prices at which the retail dealers could purchase their supplies. There was the objection by strictly cash yards that they should not be compelled to include in their selling- price a percentahe cal- culated upon the c n st of dealers who were required to maintain ex- pensive bookkeeping and credit departments. These matters were again apparently satisfactorily adjusted by negotiations between NRA and the C r ,de Authority for the retail dealers. As the result of these various adjustments it was necessary to again establish a modal mark-up and t~ specify the application of its various factors in such manner as would work as few inequities as possible. This basis was established by order of the Administrator carrying forward 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 doubt 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 -rice that the mill and wholesaler could 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 transportation as distributers attempted t r regain lost ground and even to secure a larger margin of -orofit. Unfortunately there are n^ comprehensive statistics, either reliable or otherwise, available as to the quantities of lumber handled by wholesalers or retailers. According t^ a report of the Department of Agriculture the- increasing number of wholesalers in the middle west during the first decade of the 20th century caused a shrinkage of from 50 to 60 per cent in the average volume of lumber handled by each wholesaler. It is further pointed ^ut that the same over-expansion occurred in lumber retailing. "3y 1900 Nebraska had a retail yard for every 1,485 people; 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 tier cent although their population increased but 7 rier cent. " In view of the fact that the tier capita consumption of lumber reached its zenith in 1906 at 525 feet, and steadily decreased until 1929 when it amounted to only 275 feet, and plumbed 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 1926 through 1929, the price trend in the majority of items was downward; and while profits' retreated in both the wholesale and retail branches of the industry, enrol oyees of many companies broke 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 materially increased the competition in the various distribution channels. This trend was growing steadily in the early part of the rentury and continued to increase until probably 1930, when the economic pressure of the depression caused' many who had been engaged in lumber distribution t-~> seek ^ther vocations. The large manufacturers of lumber have shovn 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 -oro- duced, this figure cannot be substantiated for all producing areas. Direct selling by the large mills to the retailers has, forced many wholesalers t^ seek other outlets, and they have been selling increasing quantities of lumber to contractors, both 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 been this tendency of the large manufacturers to sell their -products through their n wn sales organizations, the part played by the retailers, wholesalers and commission salesmen of lumber in the distribution of lumber is a vitally important one for the industry, and the sales volume of the industry is dependent to a major -220- on extent on these outlets, for without the close contact rith the consumer that they afford, the latter would seek and -purchase, to an even greater extent than he does today, substitutes • for lumber products. Decreased volume of consumption and sale of lumoer would increase the per thousand feet costs and prices, and. thus pyramid the competitive disadvantage. T/hile many retfil^rs handle substitutes and materials that are competi- tive with lumber, the wholesaler and commission man almost invariably handles" lumber or timber -products alone, and his existence is based upon his ability to.dispose of these products. The tremendous increase in the facilities of the telegraph -and telephone companies, '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 a;s well as '"ith the ultimate con- sumer of lumoer and has permitted the purchaser to communicate direct with the seller without having to go through the medium of the whole- saler. All of these changes in the economic life of the nation have enormously increased tne competition between the various distributors of forest products. One of the earliest problems that the Lumber Code Authority had to solve was that of the position of the wholesaler in connection with tnis Code. With few exception's the general terms in the jurisdictional clause descrioing e^ch division under the Code did not include whole- salers or di tributors. The exceptions which included wholesalers and distributors were: The Hard-ooc Division; the Wholesale Distributers Tivision ( o' Millwork) ; the Sewed : ox, Shock, Drate and Tray suDdivisi of the Wooden Package Division; the Oak flooring Division; and the Veneer Division. v ith the exception of the definition of the wholesaler previously quoted which occurred in Section 1 (c) of Schedule 3, and reference in Section, 2 of Schedule 3 as follows, there is no iurtner reference to wholesalers: 11 Section 2. Vnolesalers. The Lumber wholesaler is an economic factor in the distribution of lumber and it is recognized that he is entitled to compensation for nis dis- tribution services. "(a) Each division and each subdivision through its designated agency shall establish for its members and file with the Authority a schedule of maximum discounts to .hole- salers for distribution services. Trade discounts when ap- proved, by the Authority shall remain in ei'i ect until changes are approved by it, "(b) As a condition of the grant of wholesale discounts, the wholesaler shall not rebate or allow any part of trade discount to any customer, or cell or offer to sell any item oi lumber or timber products under the minimum prices es- tablished 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. 9513 -221- And -under Section 5 are included certain discounts and terms of sale to govern transactions with wholesalers. 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 which inclxxded distributors under their jurisdiction. Shortly after the adoption of the Lumber and Timber Products Code is was conceded that the wholesalers were not bound by the rules and regulations established thereunder. The Retail Lumber 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 storm of protest arose from con- sumers and lumbermen alike that this article was stayed, and during the life of that Code although considerable discussion was had on this sub- ject, the stay was never lifted and, accordingly, jurisdiction over all mill sales of carload shipments of lumber remained tinder the Lumber and Timber Products Code. The definition of wholesale trade and jurisdiction over wholesalers continued to be a problem to the industry throughout the life of the Code. Por a great many years prior to the Code various committees 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 proposals bearing on this question as Amend- ment l v To. 68. A complete record of this proposal as submitted and the objections thereto is contained in the Transcript of Hearings in the NRA files, the text of which is too lengthly to discuss specifically in this chapter. It is sufficient to remark that they included complete definitions and jurisdictional delineations for the entire Lumber In- dustry, and would have effected a rigid system of distribution fiOffl the producer through the wholesaler to the retailer and then to the consumer, and wotild have eliminated any possibility of cutting unnecessary 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 Recovery Administration, but the principal objection was to the establishment of the rigid distribution system, which wotild have meant the elimination of wholesalers who had for many years past sold direct to consumers and contractors. As a result of a plea to the Ifetional Recovery Administration in July, 1934, by the Lumber Code Authority that conditions in regard to the distribution of lumber had become so involved that action must be taken on the distribution problem, the National Recovery Administration drew up a compromise solution with the provision that this would be ap- proved only if the wholesalers would agree to accept the plan and come under the Lumber and Timber Products Industries Code as a wholesale 9813 -222- division. The National American Wholesale Lumper Dealers Association, acting for the wholesalers, refused to accept this compromise and the attempt to settle the wbolssale question again failed. Having failed to obtain approval of this plan, on July 18, 1934 the Code Authority submitted amendments 75, 76, and 77, which proposed the establishment of a vrholesale division in the Lumber and Timber Pro- ducts Industries Code to make effective and hind the rrholesalers to the cost protection features of Article IX. Amendment 77 proposed a new definition of wholesale trade which was unsatisfactory to many wholesaler protestants at the public hearing. On April 3, 1935 the Code Authority submitted Amendment 78, again proposing a distribution r>lan which, with few minor exceptions was the same as that proposed in Amendment 68. The Code Authority finally 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 Recovery Administration and protestants could not be reconciled and the amendments were not approved. Matters 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 while acting as a shield for manufacturers who were violating the Code. This undoubted- ly played a large part in breaking down Code prices and the Code. 9813 -223- CHAPTER V FUTURE STUDIES . - The ourpose of this chapter is threefold; : First, to set out the more important sources of serial statistical data; second, to describe briefly and evaluate each source according to its research value; and third, to point out additional serial data that would contribute greatly to a "better understanding of the industry and its manifold "Troblems. This bibliography is not exhaustive because of the limited time alloted for its .completion .and must not be considered as other than a preliminary guide for future research. A. DESCRIPTION OP SOURCES OP SERIAL STATISTICAL DATA FOR THE LUMBER AND TIMBER PRODUCTS INDUSTRY Serial statistical data for the Lumber 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, taxes, prices, and grades. Series of data pertinent to each will be discussed in the above order and will be treated in as chronological a manner as the material will permit. In general, the available data covering many of the subjects are meager. In other instances ?n apparent abundance of information is only superficial as either the coverage is poor or the same basic sources have been used by several statistic-gathering agencies, each of whom revise the data according to his particular ideas or to suit special purposes for which the information is to be used. In the preceding chapters there has been explained the widespread geographical location of this industry with its multiplicity of small units. Because of the lack of adequate bookkeeping 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 relatively few in number. Ttfhile these units represent a large proportion of the total production, estimates based on an unknown shifting quantity, (the number of small mills operat- ing and their production) must bo made to obtain a total for the industry; or this small mill production disregarded. Either method makes the figures of doubtful value. All secondary sources have been eliminated in the references cited in this description and the accompanying charts, except in such cases as additional information has been added or a new form of presenta.tion had been used, 1. Standin g Timber . - . . . Statistical data concerning standing timber cannot be taken. currently and is not currently available, only one series having been found, The Forest Service, of .the U. S. Department of Agriculture, The Forest Service had published annual data since 1920, covering average log and stump age' prices for each of the more prominent species 9813 -224- and for each State, as well as summary tables* The "basis of these statistics is actual sturapage and log sales from all parts of the United States as reported to the Fore.st 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 comprrability of prices does not necessarily exist between different localities utilizing the same specie. 2. Number of Mills 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. The data gathered by the two sources are comparable, as in formation gathered in the Decennial Census has been made use of in the annual report. However, complete coverage was not obtained in the annual report as questionnaires were nailed only to known 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 over per year in the annual reports and $500 or . over t>er year in the Decennial rei)orts. These two sources give ex- cellent figures for actual o-oerating 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 of mills in its particular region. The coverage is good when viewed from the volume of product ion 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 ye^rs between census years until 1904, when a special census was taken. Since 1904 annual production reports have been issued by the Forest Service and the Bureau of the Census. In 1934, 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 reports have Included not only pro- duction data on lumber, lath and shingles, but also general labor 9813 ■ „ooc;_ data. In the even years under the title of "Lumber, Lath and Shingles," only production is reported. Al 1" annual ^lun "bo r production data are renorted "by State and snecies. These production figures do not represent 100 per cent. As no date are included for mills nroducting 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 he "between 5 and 10 per cent in most years. From 1904 to 1920 except for the decennial year the Forest Service comniled "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 larger mills of the country, a substantial portion of production could be accurately ac- counted for. In 1916, the National Lumber Manufacturers' Association began publishing a weekly lumber barometer based on data collected from several of the 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 nossible in these figures, as identical mills are not used for continuous neriods of time. From November 1922, to September, 1928, the National Lumber Bulletin, nub li shed by the National Lumber Manufacturers' Association, carried a monthly series on nroduction which annual total represent- ed approximately 40 ner cent of the nroduction 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 nublished from 1912 to 1918, containing monthly reports ~oy states and regions for 10 to 13 renorting trade associations. The Survey of Current Business has published a series of month- ly statistics since 1923, based on renorts 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 mark. Even then reported production varies from 40 to 90 per cent of capacity. (*) Total hardwood and softwood 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 renorting each month greatly influence the utility of the above two series as shown (*) Survey of Current Business, 1932 supplement, footnotes. 9813. -226- by 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, while the last two have carried stock and new and unfilled orders in addtition. The first two sources combined shipment 1 figures from all associations and * them as total, while the Survey of Current Business ouotes the figures on regional lines alone. The information given by these three sources is only partial and merely indicates trends on shipments and stock. It is question- able as to how accurate the represented monthly trends are, because of wide variations in the number of mills reoorting each month and the lesser variations in the representativeness of those mills which are included in the re-oorts. After the year 1900, the War 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 commerce carried on in the inland waterway systems. The value of War Department tonnage data is not great, as all re shipment 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 outbound shipment at any port in between where the ship may put into port for the discharge of other cargo. Thus the statistics reported by this cource are somewhat exaggerated. The United States Shipping Board has published a series on in- tercoastal distribution by water since 1923. 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 year. These date are comparable to production data ^ron the same source and for this reason have considerable value. 5. L abor Series of labor data did not appear until after 1910, when the Bureau of Laboi Statistics began publishing index numbers of em- ployment and payrolls.' Following 1S20, the series of employment and payroll data was published by the Monthly Labor Review. Both have been monthly series and serve only .as trends, rs the information does not cover identical mills and the number of mills reporting varies considerably. The Bureau of Labor Statistics has also corct>iled rather ex- tensive wage and hour data for selected years since 1920, covering sawmill workers in more than twenty stateso The date have been based on full time hours and average hours, Earnings, however, are given as to the hourly rate and the actual weekly earnings of several classes of ©orkerfi* The Bureau of the Census in its Biennial Reports of "Princinal Lumber Industries" publication gives very meager labor information for those establishments producing less than 200,000 ft« b,ri. per year, con- sisting of average number of wage earners per year and total wages paid. While this eliminates a large number of. establishments, its effeft uoon number of employees is not so great* as emaloyment in the \ very small establishments is seasonal and the same workers are prob- ably employed in other industries as well," whereas the "principal employment, is in the large plants and' is that reported by census. 6 . Distribution and Consumption Prior to 1900' the available dis trio tut ion data was that' ch.frj.ed by Foreign Commerce and navigation, relative to exports and imports of lumber. This source is undoubtedly one of the most accurate as the question of duties are involved. The Pa.cific Lumber Inspection Bureau began gathering cargo figures from the States of Washington and Oregon s arcund 1910. They quote monthly cargo movements both '^P domestic and foreign markets by points of origin and point's of destination, Due to the fact that most of the exporters in this territory make use of the services of this Bureau, its statistics are looked unon as being authoritative. In 1928 and 1933, the Forest Service in "Lumber Use.d in Man- ufacture" gave quantities of lumber used in the manufacturing in- dustries of the United States by species, by State of consumption, and for the even years beginning with 1926, the Forest Service has gathered valuable statistics of all lumber shipments according to States of origin and destination. This series indicates not only the interstate nature of lumber shroments but also the shift in consump- tive markets. 9813. . -228- The three large trade associations, Southern Pine, Western Pine, and the West Coast Lumbermen, and smaller associations, have published distribution data as to origin and destination. Although the information 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. "show IjO per cent lumber consumption and the distribution thereof. 7. Transportation. Transportation statistics (rates) ar>r>eared in the "Timbernan" shortly after 1900. This trnde magazine quotes water rates on lumber from Pacific Coast ports to both foreign and domestic ports of desti- nation. Another source of Pacific Coast vater 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 "cutlications of the Inter- state Commerce Commission. Although this body sets and regulates all rates it is more cf 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 rate, data are gathered at this one fountain of information. 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" does give some information relative to total assests, lia- bilities, and costs for reporting coroorations. 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 study. During the period from 1918 to 1931 the Southern Pine Associa- tion, the North Carolina Pine Association, the West Coast Lumbermen's Association, and the Hardwood Manufacturers' Institute published month- ly per thousand feet b.m. 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 small, some decree of compar- ability is attainable between different sections of the country. In order to aid comparison, stumpage costs were either left out or a uniform orice applied to all individual mill reports. 9. Taxes The only serial statistical data concerning taxes appears in the Internal Revenue' publication "Statistics of Income", These date back to the early part of the 1920' s and refer only to corporations. In spite of the fact that corporations have tremendous timber hold- ings-there is a considerable portion of the industry unrepresented in this series. The cheif objection to the above data is that the . amount of taxes paid is given in one lump sura which canbe segregated neither as to the particular levies under which 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 representing both an extended period of time and dif- ferent sections of the country. The Bureau of Labor Statistics has also been publishing a price indes for some time, but the items have been changed from time to time, so that the prices are of doubtful value. In the Census of Manufactures have been published yearly since 1906, an average realized price of f.o.b. mill (per thousand feet b.m. ) for each of the more prominent species of hardwoods and softwoods. These prices should not in any way be confusofl. with the trade publication data, as Census prices made no distinction be- tween grades or sizes*. Its information is indicative of only the average per thousand feet b.m. realization to mills. Also, private statistical agencies have published information. Among these are the -Davis Statistical Se -vice and the Southern Pine Lumber Ex- change. The former published monthly data from 19C4 to 1931 on Southern pine prices and West Coast Lumbei prices from 1913 to 1931. Since then the latter has assumed these duties for .Southern Pine. The basis of this data is individual mill sales reports of amount, grade, size, specie and price from which average prices are compiled. This type of data is valuable only in so far 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. Grade s Very little serial statistical data regarding volume grades produced can be found. The Southern Pine Association did, for a 9813. -250- . few years in the 192o's, quote quantities of each grade sold in its monthly sales re-oorts. NC recent published information can be found of Southern Pine Association authorship. Late in the 1920 f s the Western Pine Manufacturers Association "began publishing grade statistics compiled from sales re-oorts of their .membership. These data show the quantity of various sizes and grades sold and also the destinations of such sales. No information is available as to whether this is still in existence. The information apnears to be very good for the Western Pine, but other series covering all major species would be of great value. IP. General In sume cases, lumber statistics are inadequate, in others they are incomplete, and still others lacking in bases for camnarability. There are better data available»on some subjects than others. Pro- duction statistics are very good, 'although an abu.nda.nce of price sources indicate that this subject is well covered. Such is not the case, as grades and sizes are changed so frequently in the quota- tions of "orice that it is very hard and in most cases impossible to find a series of comparable trices covering a span of several years. Objection to present data is also "based on their representativeness. The labor data cover only a few classes of labor in some cases change the bases of the data so that comparability is im- In fch • se of shipments the coverage is small and the data can be compared only with production data in which identical mills have reported both production and shipments. The only distribution lata which are complete are information relative to imports and eroorts. Only in recent years have data been compiJed pertinent to distribution ^rom points of production to points c. : : co isumption. The more recent data have bacn gathered only for every ether year and as yet a considerable portion is estimated. Transportation data are reported partly in tonnage and partly in thousand feet b.m. Tne two are hard to reconcile, as species, grade, and size must be considered before a conversion figure can be detorm.'.ned for changing both to the same basis. No data are avails . ? the determination of an accurate figure of conversion. All o^her statistical data are of a very sketchy nature. 9813 -231- B. TIMBER OWNERSHIP STATISTICS (BUREAU OE INTERNAL REVENUE DATA) In preparing tho chapter on Capital and Credit in the Preliminary Report on the Economic Problems of the Lumber and Timber Products Indus- try, it was necessary for us to use "basic data relating to a consider- able group of corporations generally classed as "forest products cor- porations," when in fact the principal business of such corporations was other t v an sawmill and planing mill operations, ., This necessity grew out of our inability to officially establish the proper contacts with the Bureau of Internal Revenue to enable us to secure and break down tho information from their files and also because the Bureau of Internal Revenue did not extend the scope of its statistical analyses to include several of the factors which we considered necessary to a complete and exhaustive study of these particular factors of the Lumber and Timber Products Industries* The "othor wood products" corporations are classified as manufac- turers of carriages, wagons, furniture, baskets, etc. ^e are concerned with none of these except baskets, and so this group of "other wood products" corporations, consisting of more than 50 per cent of the total number of corporations classified by the Bureau of Internal Revenue, it is believed should be excluded from any study that has as its object the presentation of data in connection with sawmills, planing mills, and other wood fabricating plants integrated with sawmills. The actual data in the files of the Bureau of Internal Revenue re- lating to sawmills is quite extensive and appears entirely ©dequate if it were possible to secure the necessary breakdown into the segments 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- lection of information in connection with the investment of the industry in standing timber. You will recall that our information as to standing timber ownership at the present time is neither relatively complete nor thoroughly reliable. It shou"d be borne in mind in planning for such a study of informa- tion in the iles of the Bureau of Internal Revenue that such informa- tion from ilw financial standpoint is available only as to corporations definitely classifying themselves as. being in the sawmill business. Such corporations for 1032 numbered less than 3,000. In this connection it is well to remember that standing timber areas owned by corporations whose principal business is not sawmill ing would not be classified in this group, and it should be our purpose to quite thoroughly develop this particular type of information and to assemble it with the group already segregated. What has been said above as to ownership of timber lands also applies to the ownership and operation of sawmills. We also must consider that the specialized data in the files of the Bureau of Internal Revenue relating to standing timber is not confined to corpora- tions and that from this data we can secure leads to information. relating to sawmills operated by other than corporations. As the purpose of this investigation should be to develop informa- tion concerning sawmills and standing timber, efforts should be concen- trated at the beginning on an investigation of those corporations 9813 -232- defir.itely so classified and extend from that- field- our investigation into those otner organizations that form p part of this industry. We are particularly interested in the classification of "capital assets", especially the- division -between plant and equipment and standing timber. Concerning .the- latter we 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 hrs already been developed by the Bureau of Internal Revenue and is avail- able -for- analysis and re-analysis. The information concerning the standing timber ownership has not been classified except roughly into geographical areas, ... The re-analysis and the re-classification of the financial data wo^Jd be. a. project not particularly difficult, nor ^ould it be very costly,. . However.,- ■ the nroper classification after careful analysis of the data relative' to .the ownership of standing timber v-ould be a project, of considerable scope and would be quite costly. You will, also remember that, this Division has prepared a list of the. names- .and adca esses of 1,200. of the largest sawmill operators in the country, ,r 'hich we had expected to u?e in the first planned inves- tigation of the Bureau of Internal Revenue statistics. This list could .be. .subjected, to a special study and cl- ssiiication of data in- cluding .both the financial and the Btanding timber phases. As such a. study ,r 'Ould involve e coiurlete re-classification even of the finan- cial data, the project would be one of considerable size and it is believed would cost a considerable sum of ..ioney to properly conclude it. The. information is - - cle 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 th-t 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. transportation and cross- haul i ::g Very little has been done in this study with the subject of trans- portation and cross-hauling. The Chapter on "Distribution" has indirectly and briefly touched upon the volume aspect but only in so far as volume was related to specie movement and consuming centers of the more prominent species. Limited time and personnel j as well as insufficient data, prohibited an adecuate study of this important subject. As a study for future consideration the following ^ill 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 careful examination of the subject will also be analyzed in the later paragraphs. 9813 -233- It is apparent from a cursory examinationof available data that a major portion of lumber is consumed a great distance from the point of production. Considering the bulkiness of the merchandise in relation to its value, it necessarily follows that even by use oi the cheapest form of transportation, considerable expense is incurred in bridging such distances. Two broad uses exist from lumber, namely, construction and fabri- cation. Little, if anything ever can be accomplished toward decreasing distances between consumption and production centers of that lumber used in and for construction purposes. The lumber fabricating industries, which consume a considerable portion of lumber, were located, at. their inception, close to the source of their stocks. As the center of production shifted from the North-eastern and Lake regions to the South and far Vest, distances over which lumber 'must be shipped has increased tremendously. Fabricating plants were not moved nearer to production centers to anv great extent as large sums had been invested, the major portion of which would be lost in moving the factory. One notable exception in the migration of a consuming industry is that of the iurniture Industry. It has been gradually moving from Michigan to North 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 transportation. Transportation and cross-hauling has been suggested as a topic for future study in order to throw light upon tne increased costs of lumber due to the situation outlined, above. The study of lumber transportation resolves itself into two major aspects, namely, volume and cost. Certain investigations should be made relating to both., among which are: (a) the amount of traffic in lumber between states, (b) amount of traffic in lumber' within states, (c) competition oetween tyoes of carriers and the effects of such competition, and (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. much care mast be taken in distinguishing between the efiects of each upon the economic life of the lumber industry. Eather comprehensive 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 adeauate study will include statistics relative to the following: production, and production facilities in the various states; volume of lumber carried by rail, water and trucks, volume of lumber shipped from states to states as well as 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 can be obtained from existing sources. However, some will undoubtedly- require reworking and supplementing. 9813 -234- The chief sources from which the above data may oe obtained are: Bureau of the Census, Forest Service, Interstate Commerce Commission, -Bureau of Hallway Economics, United States Shipping Board, and the War Department. The -^ureau of the Census compiles annual production statistics by states and species within states* This iniormation is reliable and has the best coverage for state and species statistics in existence. Forest Service has two sets of data which would nrove to be of great value in a study of transportation. One entitled "Lumber Used In Manufacture" has been published for the years 1928 and 1933. These publicationa shonr the species and quantity oi lumber used in fabricating industries by industry and state. The other series is published under the title of "Lumber Distribution end Consumption." Although it is available for every other even year beginning with 1924, data for several of the years have not been published but can be obtained from the work sheets' at Forest Service. These data give shipments from states to states and within each state segregated eccording to hardwoods and softwoods. The Interstate Commerce Com .is. 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, 192b 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- bility cannot be obtained between data from previously cited sources nor is it likely that a state breakdown can be ootained without a great deal of work and expense. A second disadvantage exists in the fact that volume of transportation by rail is reported in tonnage rather than thousand feet b. m. The Interstate Commerce Commission can also provide necessary all rate data relating to railroad freight* The United States Shipping Board reports intcrcoast movements of lumber by water under the title of "United States Y/ater-Borne Intercoastal Traffic," which is available for several years to date. This source also quotes all volume in tonnage ar.d has an additional disadvantage in that lumber and all wood oroducts are included under a "logs ano. lumber" classification. Before an adequate evaluation of this source can be made the quantity of "rood products other than lumber, appearing under this title, will ha-e to be determined. The '«ar Department reports annually water-borne commerce statistics entitled, "Commercial Statistics, Water-Bome Commerce of the United States," v.hich is available both for fiscrl and calendar years. It will not be of great v^lue in its present form "out basic data are in the hands of Army Engineers which could be compiled to show origin and destination of all water-borne comm-jree in the United States. Lack of funds have prohibited the publication oi data in this form as ytt. 9813 - -235- Necessary data not covered by existing governmental statistical agencies are the data relating to- truck transportation. Other than truck back-hauls this problem is rutty much coniihed to the movement of Southern pine lumber frsm the Carolina, Georgia, pnd Virginia to "ashington, • D. C. , Baltimore and Philadelphia. However, it is becoming quite a factor in lumber transportation in this region. Also, data for rater rates mill have to be obtained from steamship companies, lumber trade associations, and other like sources. The need for additional data other than those suggested in the preceding paragraphs will undoubtedly not be determined at this time and which can arise after the study is under way. D. 'METHODOLOGY This report is designed to analyze the problems of the Lumber and Timber Products Industry, considering the industry as a whole and in the manner in "hich it operated under the Code. The problems are analyzed not for each particular part oi the industry but by dividing the problems into types on the basis of their origin, Triis method is applied to the industry as a whole except that hardwood lumber and softwood lumber are considered as representing the major portion of the industry. That part of the industry that has to do with the fabricating of lumber into other products, but ^hich under the Lumber and Timber Products Code was consid- ered part of the industry and thpt mart having to do with timber products which are products of the '"oods but not of the sawmill have both been disregarded to the extent that their contribution to the -problems, of all except standing timber have not been analyzed. Under the problems of forest management timber and forest lands have been treated as a "^hole because they contributed and were the genesis of the problems of the Lumber Industry proper, whereas in dealing with the problems of production only the Lumber Industry has been treated. The m^; txiod of approach has been to divide the timber problems as far as possible into regions, merely to show the differences between one region and another. However, not all of the timber problems of a particular region have been treated. In the Lumber Industry proper an attempt has been made chiefly to divide between hardwood and softwood, and these in turn between the major divisions of hardwood and softwood, with a mere reference to the minor divisions and their contribution to the problems. It may be seen that the industry has been treated at best only in its most outstanding aspects. A more detailed analysis is needed and should be made. Such an analysis should be on the basis of the lumber and timber products of each given area. The area should be a state, or part of a state, since various state la^s contribute to the operation of the industry and its problems within the state borders. The industry should be treated within that area all the way from forest management to and all inclusive of all primary and remaunfactured forest products within that area. Under such a stud?/- a more precise analysis could be made as to obstacles to expansion and the cause of any retrogression, particularly 9813 -Job- along the lines outlined in a research project proposed by the Harvard Bureau of Business Research and. the Hp.r-vp.ro. E'orest entitled "The Present Situation and Future of Timber-producing Regions as related to the Utilization of Non-virgin Timber." This project was proposed for the l*e^ England territory only. However, such a project might be designed and developed, with only slight changes, tj a.cply to each one of the regions as shown in Section "A" of Chapter II, or ?'here required for particular states within those regions. After such studies nave been comoleted it r/ould then be possible to make a more thorough analysis of the entire Lumber and Timber Products Industry, Attention should also be directed to a publication available in the files of 1JRA entitled "Scope And Status of Research In Forest Economics" (available through the courtesy of the Social Science Research Council) 9813 -237- APPENDIX I EFFORTS OF THE LUMBER IKDUSIST AT PRODUCTION CONTROL PRIOR TO II. R. A. A report prepared by A. C. Dixon, "based on personal knowledge and an examination of the files of the National Lumber Manufacturers Association You have asked me to make a study" of the production control efforts of the lumber 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 saw-milling "branch of the industry on the theory that the action taken "by these major divisions would furnish a satisfactory sample, and "because I know that most of what the smaller groups had done was "by way of following the programs of the larger ones. I have not paid any attention to the fabricating divisions although I know that some of them operated under the so-called Stenenson Plan and that perhaps some of the others attempted to practice types of production control. In going through the material available, I was impressed "by the fact that all of the efforts to control production which attained any sizable proportions occurred subsequent to 1924. Prior to that time, it is true, there were conversations and perhaps some correspondence relative to the future possibility of the need for control, "but nothing was done which could "oe called a serious effort. In searching for the reasons as to why the efforts were made during the period mentioned, I ran across the following facts which seem to me to "be worthy of note and as having a probable bearing on the chronology of the efforts that were made. 1. Transfer to The West of Production Supremacy. The United States Census of Manufacturers shows that up to and in- cluding 1869, the northeastern states were the largest producers of lumber, and that in the next census period, in 1879 and the following in 1839, the lake states predominated in production, and that thereafter and until 1919, the southern states 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 heave produced more lumber each year than any other area. 2. Influence Of The Panama Canal. The Pacific Lumber Inspection Bureau 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 "■/dud"" nip- statistical record. Its records show, prior to 1914, practically no ship- ments to the Atlantic Coast, the total amounting to less than fourteen million feet, which would only amount to three 1 arge cargoes measured "by 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 hut in 1921 they reached the tot; of two hundred and eleven million feet; in 1922 six hundred and sixty-five million feet; the next year nine hundred and twenty-five million feet; in 1924 one thousand and sixty-five million feet; in 1925 two thousand millior feet; in 1926 substantially the sane, and each year from 1925 to 1929, in- clusive, nineteen hundred million feet or more. Two thousand million feet is the equivalent of 80,000 carloads, or sufficient to "build 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 presr/ure put on the Atlantic seahoard markets by the influx of Uest Coast lumber, and while guaging this pressure, it right be well to remember that lumber delivered water to the Atlantic Coast ports was very often transferred to trucks or the railroads and hauled 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. Statistic of income furnished by the Bureau of Internal Revenue give net profit or deficit of all companies reporting, and the showing covering saw-mills, con- sidering the nearest million dollars, is as follows: 1919 - 137 profit 1920 - 179 profit 1921 - 38 deficit (this was a year of temporary degression in the construction industry. 1922 - 110 profit 1923 - 191 profit This was the high point from which the profits 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 1933 being equal to 32.24Ji of the gross income of the industry. I have noted with interest from the records, aided by my personal re- collection of what happened, that the universal desire for some type of production control developed at appro ximately the time when profits began to disappear. In 1925, 1926 and 1927, without having the benefit of a composite statement of the industry for any given year until the year was well past, the operators generally knew that the industry as a whole was either losing money or mailing only a nominal amount, while at the same time industry in other lines was reported to be j)i:^i.-n.n vast amounts in profit taxes and to be in a prosperous condition. The question was frequently put as to what was going to hapoen to the lumber industry when other industries started to lose money, in view of the fact that when other industries were making money the lumber industry was making none. 9813 -239- I Other Industry Activities Along Production Control Lines. About this same tine the oil and coal industries, independent of each other so far as I know, and independent of any action on the part of the ltimber industry, were seeking production control in one way or another, "both in the respective states and nationally, and it may he that what they were doing had at least a suggestive effect upon the lumber in- dustry. 5. Railroad Building In the West. Beginning soon after the war, there was a period of intense activity in railroad building in the far T7est, and the Southern Pacific, Great Northern, northern Pacific, Union Pacific, Chicago, Milwaukee and St, Paul, as well as the "Jestern Pacific, built many hundreds of miles of main lines, in some cases opening up vast areas of virgin timber either directly tributary to the main lines or easily made so by short branches, and on these now main lines and branches there were erected a number of new mills, some very large and, of course, adding to what was already considered a condition of overproduction. 6. Tax Intreases. There was a notable increo.se in taxes paid by timber owners as well as taxes generally in the western states between 1920 and 1930. This was an era of roaxL-building, btiilding of new school houses and other public buildings and more or less riotous state and municipal spending. In some heavily timbered counties, the total load increased while the timber available for taxation decreased, with the resultant multiplication of the tax load and neither could the other assessed valuation carry the balance. Some of the counties have had to go into a state of bankruptcy, ■ Some of the above numbered paragraphs may he considered as causes, some as effects, and some as merelv coincidences, but I think all are worthy of consideration as having some sort of a bearing on the variou.s 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 considerable material in the files of the National Lumber Manufacturers Association bulletins, news letters, releases, etc., but mostly in the nature of private correspondence between persons in the in- dustr]'-, relating to the various movements that were under way at different times, and giving, in many cases, their confidential views and beliefs which they did not expect to have broadcasted either to the industry or to the public. Consequently, I have refrained in the main from using the names of individuals, 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 various production control efforts in. chronological order. I have done so as nearl"" - as I can but could not be entirely accurate for the reason that the movements overlapped in a number of cases, in fact, in most cases, and one was not out of the way before another began. In the main, I have put them in the order indi- cated by the first definite worthwhile mention in the correspondence and data I have looked over. 9813 -24C- I. T7EST COAST UERGER. In ITovember 1925, there had "been enough thought and discussion on the proposal to merge sone lar^e T 7est Coast timber properties ro that a nan prominent in the industry was ashed by "West Coast people and bankers' to act as a leader in the movement, and late in that month a prominent firm of timber bond specialists and bankers in Chicago "rote a letter to an official n the industry stating that the;-, with o ne of the leading ITaJ York bond houses and one of the largest banks in Chicago, had been trying to work out a merger among fir operators in the West. The letter states that two conditions existed at that tine which had never existed before and which were favorable; first, "the government attitude toward mergers", second, that "money was available beyond any sums previously thought pos- sible." Tilth these conditions which they mentioned, they o>lso coupled 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 operators in the Pacific Coast." This group (Baker, Fentresc and Company, Commercial Trust and Savings Bank of Chicago, and Dillon Heed and Company of Mew York) spent some months of tine and a great deal o? money, and the lumbermen interested also spent much time and money, in working out the possibilities of the scheme. They secured the ten-year record of production, cost, sales, and net returns of a large number of companies on the Pacific Coast, estimated to have around 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 expected economies and benefits to come from the merger, could from the conversion or "net avails" service the various classes of securities which it was felt necessary to issue. The general plan o f this and other proposed mergers to be mentioned later, contemplated the issuance of three classes of securities. First, the operators would be paid in cash for their current assets, and first mortgage bonds would be sold to the public to provide this cash and provide working capital. Secondly, preferred stock would be issued to compensate the operators for transfer of title of their working facilities, such as sa v Ills, logging railroads, ships, docks, etc., and thirdly, common stock would be issued to the operators for their timber. There were, of course, variations in these plans as the bankers! f-roup and the industry group worked together and many different tentative schemes were drawn up on paper, some mi Jipo graph- ed and some printed, but running all through the discussions, conferences and planning, was the central thought that whatever basis the merger was formed on, the prospective income must in anv event be sufficient to retire the obligations. The first publicity as to this merger was given under a Chicago data line as ear 13^ as February 6, 1925, and the indications are that this was the first publicity that was given. About this same time, the national City Bank of ITew York came into the picture and: it was thought by some of the western operators that a better deal could be made with them than could be made with the first group mentioned, and accordingly committees were appointed to meet with representatives of this bank and tentative plans were developed approximately along the lines referred to above. 9813 -241- On February 24, 1S26, while the industry was very much interested , the West Coast prospects, an announcement was made in the eastern papers to the effect that a 40,000,000 merger "entirely distinct from the west Coast" was being organised end this and other minor mergers ere referred to in the press as constituting a "ways of consolidations." of 1926, mblic reference was made to a -,-10,000,000 merger being popojed in C-ray' s Harbor, Washington, end about this time one news- per, calling attention to the various proposed mergers, said that it [expects the Senate to be aroused to "demand that 'Attorney-General Sar- gent sharpen his ax. " The following quotation is given because it is from, r letter written c:j one of the most prominent memoers of the in- dustry, end one of the largest timber owners of .the country, in which he says in October 1927, and while these merger .plans, or some of them, were still in the air: "Everyone knows conditions have never been worse." This report could be filled with quotations of like kind and I am only interspersing them occasionally to show the governing thought from time to time. The two rjajor mergers referred to would have each represented capital investments in excess of '.100,000,000 and neither they nor any If the other mergers mentioned took place lor the reason that the result pi the most careful investigation rhowed that profits were declining, that there was no reason to expect any material betterment of conditions Iff ecting the industry, and that -in all probablility the necessary securities, if issued and sold, could not be serviced and retired. II. COkKITTFil GF FIFT23H. The Co:omittee of Fifteen came into being probably early in 1928. Its membership ,r- as repre entctive of the Pacific Coast woods — Douglas Fir, western pine ana. redwood; of the southern woods — southern pine, North Carolina pine, cypress; and of the northern pine and hemlock in the lake sta.tes, and each of the fifteen was an outstanding man in the industry. There are probably no c^cuments which show the method of appointment, some of the correspondence relative to the committee stating that so far as is known, it was "self-generative. " The idea of formin - ' the committee was in all probability born of the financial distress of some oi the larger operators who are on record as attributing their distress tn overproduction in the industry, ant. the probabilities are that two of these operators developed the idea and persuaded the other thirteen to join with them. Subsequent developments indicated that the majority of the committee, while wil- ling £t first to submit to the leadership of those responsible for the organisation of the group and being entirely sympathetic with the idea that something had to be found to help remedy the existing situation, were not thoroughly convinced that all of the plants put forth were sound and did not follow the leaders of the committee with any great degree of avidity. Among the announced purposes of this committee was one to c'nange the name of the National Association of Lumber kanufacturers so that the wore. "institute" would be usee, instead of association, and the corres- pondence covering the perioc indicates that there were quite a few people who through at that ti.:6 that regulation 03: production and other J813 factors of the industry could be had under the leadership of an instit** te which woulc not be furnished by an as; ociation. At the time the Co .imittee of Fifteen was holding meetings and attracting some attention, a syndicate service organisation, in Washington said in one of their, issues "private discussions": are (l) "that Congress include lumber in any legislation designed to preserve such resources, such as coal and oil", (2) "that a Federal Timber Conservation be orga- nized or that jurisdiction over timber be given to oil conservation", (3) "that a timber institute be organized with a 'czar* in control." The article goes on to state that "the old generation will not accept the plain fact" that with special , rivilege should come supervision or regulation, out says that the "j:c -ration will see "the point. " This gives r-n indication of what was the fact, i.e., that all sorts of ideas and plans for controling production were flitting through the minds of men in the industry and students outride the industry, and Publicists. After the proposals of the Committee of Fifteen, especially with regard to the lumber institute, had been given sorn blicity within the industry, an effort was made t h the authority of the committee to secure all oossible data from other industries as to the operation and effect on the industries of institutes as distinguished from associations^ or organizations caller b„ other names. This, as well as the results or lack of results of the work of the Committee of Fifteen, indicated a lack of investigation and research prior to the inauguration of the movement. On Devember 15, 1928, a call was issuec by the chairman of the Committee' of Fifteen for meeting in Tacoms en the nineteenth of the same month. In the call reference was made to a' recent meeting of the Committee in Chicago. While no minutes were kept : of these meetings, or if they were kept they are not available, it is known that the principal subject of the discussion at that meeting was "curtailment". Subsequently other meetings were called by this committee or bv its suggestion, at Del Monte, Portland, Seattle, Hot Springs, Arkansas, and possibly at other places, and there -'ere at times in attendance at these meetings the leaders in the industry from all parts of the United States* At all of them arrangements were made to set forth conditions of the industry from a statistical and financial viewpoint : rid to suggest and invite suggestions relative to methods of balancing supply and demand. Methods considered included the idea of shorter days and shorter weeks for operation in the South, and fewer shifts and fewer days per week . n the West, At this time substantially all of the West Coast operations were on an 8-hour day, except seasonal operations which, being forced to shut down from one to several months in the winter, ran more than eight hours per day during the operating period. d ere were no agreements made or attempted so far as there is anj evidence to show, but there were efforts to get the leader • i - erent sections of the country to return to their homes and impi n. tile operators there the necessity for doing something and then to whatever med most pratical and expec'ient. 9813 -243- ."■■as in existence, the thought was erpressed (probably not originating with the Committee, but ■art] them) that the industr;; should, have a. director-general, rnd ■frequent coima„risons were mad.e tp base. jail r>nd Judge Lendis; the movie and Will Hays; and the Rubber Institute 'end General Andrews. ov.estion if it is correct to say that no beneficial results accrue." fro., the work oi this committee. I think it can be said that there were no tangible recorded results in evidence arid, nothing that coulc be n.t on either side of the ledger in figures, but the movement did result, especiall. thiough the calling together of large groups of seriously interested operators, in e spread of knowledge as to the con- dition of the industry and must ).bmc compelled, many persons to take a more realistic view of the situation them they otherwise would have taken, m-. he probabilities are that the committee never formally disbanded, proposal to change the rational Lumber Manufacturers Association to r.ii institute was never carried out, there was no director-general secure*.., and- in time the members of the regional group's turned their attention to various other plans and schemes o.esigned to adjust production to demand. while the meetings of the larger /roups above referred to were being held, and. a.s men went home from these meetings carrying the message to their own associations and regions in some sections efforts were .-.cx.e to father statistics and find out more about facts With regard, to the industry, ana at one time later in 1928 the Southern Pine association had as man,;, as eighteen men in the field attempting to secure d.a.ta on the production of the small mills which did not regularly report to the a/ssociation. At the same time the North Carolina Pine people were doing some of the same work. It is difficult to relate these regional activities to any particular movement out I think indications are re? sonably clear that at least some of the scouting and investi- gating work that was done in 1928 and. early 1929 was the result of the thinki v. or some of those who attended the meetings of the Committee of Fifteen. III. ATTHZrTLD ALLIANCE WITH COAL Add OIL. In 1928 there came to the attention o ± the national Lumber Manu- facturers Association the fact that there was a movement on the part of coal and. oil interests to secure legislation resigned to have a bearing on the production of those natural resources. There was consi- derable correspondence back and forth between members of the industry and wi t" associations executives, and the industry became interested enough so that on December 6, 1928 the National humber Manufacturers elation passed a resolution calling attention to die fact that t. ere were similar end additional reasons why, if oil and coal had legislation providiiv for "controlling production under proper safeguards" of oil anc. coal, or both, the legislation should also permit controlled, production of lumber. When the activities of the lumbermen came 'to the attention of the oil people especially, they let it be known that they die. not want the lumber-tail ettfcheo. to their kite, and, whether or not the efforts of the lum oerrnen were quieten dewn b;, re- son of this objec- tion, the facts are that the throw hit was not >ursued to the point that legislation was had in behalf of lumber. 9813 -; - - The brief recital here of this th the amount of correspond industry brou ,vc into being to further this r se 'elat of publicity wa.s had. is not comaen3\ijrate v 'ith en :s red i: 05 the lumber ! during thrt time, but there vere no .: .ecirl . r .ioi 11 mount' •"OTZ: At this joint, in ~ r . veil 00 state t] at in all of th< corded here and given sufficient or cha ;ter, there wfs it ;al of ni I: standing in the profesrsi ideas rnd pirns promoted by ly employed regularly by the lar from tvo or three to q naif dose jointly tj iroducti advise their clients as tc 1 . on. At times .: . . f 1 for the- i rpose of Meeting rit vho co 1.. not travel to aeet t e ce s to the conclusions ariavei number of ..-:■ that later on Lti thi . tort it legal conferences or discussior : s viil v/ill tand that the industry the legality of eve.,-" -rocuctior. serious consider at i ~erc princi ;ry, usual avoii irequei t r petition, it uiry be s irt - in . rre r - rominence to " nuabertC. .. : part of attorm. on co cer. i.. t] legality of the v incustr; . Ihese attorne; in tl . i^st: r or ..ore 01 them re a -i.,ned to trol ideas rs they came • and to lity o. sal under co. t entirely 1 ccross the continent their principals or to meet attorneys :i. hriv written opinions are in exirten at and, t be expect' , .a cone .1 was readied. It is probrbly will ■- t ) refer to thnse t 1 or the sakeof brevity such :ce| eoient the general s1 its members took great care to chec" control plant to which thej jave 9813 -245- IV. DIRECTOR OF PRODUCTION. During this period someone, I do not 'enow who, evolved the idea that the industry should have a "director of production" to act in "behalf of all - firms v,-ho would sign a contract with him, and various tentative forms of contracts were -oro-oosed. One provided that the duties of the director should "be (l) "to survey stocVs, 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 "between supply and demand"; (3) "to instruct the manufacturing department accordingly." This form provided for a monthly salary for the director and, for the operator, oromised that all the departments of his business would comply with instructions from the director. About the same time various sales agency plans were written up and circulated and, if cai ried. into effect, theoretically would have had some control of production inasmuch as the operator hound himself to sell his entire output through the sales agency and to ahide "by the contract for a minimum .of one y°ar, and thereafter to ffiv-^ at least six months of inten- tion to cancel. It was evidently the thought of, some t.hat if enough operators would si^n 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. THE HOLDING COiviPANY IDEA;- In April 1928 there was some correspondence relative to the sugges- tion of a leader who was a member 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, witn the idea that this might' take the place of the merger, that it would involve less preliminary work in the way of ascer- tainment of values 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. Fossibly 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 CONSERVATION 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 plan use was raade of str.tenents riade by Preside?! t Hoover con- cerning the need for economic inquiry and /"rets, and what he said was quoted in part in circulars and letters which were sent out. The plan contemplated a division of the hardwood manufacturing are?. into ten geographical districts, to each of which -'ore to be assigned twelve field men whose principal ^or]* would he to gather production rnd stock da.ta. Each week there "as a barometer issued for each district and the statistics t^.ken from these barometers ,_, ere compiled and used in a master barometer shoring production, orders rnd shi rients for the entire industry. The theory as announced by members of the Indus tr r was that operators, knowing the er:act facts as to vital statistics of the industry, could and would produce for a mrobable demand rather t by guess or rumor, and instances ir ere cited of rumors relative to surolus or scarcity of stock in various arers and relative to possible ne-' demnnds or falling off in demand, ^hich rumors had been acted uoon . by members of the industry with disastrous results. I find no record giving the figures a3 to ho T ' this >lah worked out but no doubt some statistics could be gathered from officials of the Hardwood Manufacturers Institute, which has recentl; r ~one through a reorganization and will be in better shrne later on than it is no^ to furnish any information desired. However, in some correspondence in March 1930 relative to another matter then under consideration, the president of one of the lrr-;est concerns in the country, manufacturing both softwood and hardwood, said " organization of districts in hard- wood and meetings worked well until production dropmed belo rid and price came up a little; then the operators lost interest." In this same letter, the statement was .iade' that "Oak Flooring had a better method of reporting sales than any other r>nd in one year, ^ith demand 25;i less than in the previous two r ^r>rs, they sold their oro— duction at a profit. "In December a number of manufacturers reached the conclusion they could not sta.nd the strain on account o^ a selfish disposition of others and quit cooperating. . The industry then became demoralised." From this I think it will be seen the herawood conservation olan faded out of the pciture during the yerr 1930 and that is according to personal recollection of what occurred at the tine. VII. I7EST COAST ADVISORY PLAIT. On Hovember 23, 1929, Colonel U. B. Greeley, former Chief Forester of the United States, and at that time secretary- manager of the TTest Coast Lumberman's Association, wrote to. the United States Attorney General setting forth the reasons for this plan and what it was hoped to accomplish through the ;>lrn. Colonel Greeley referred, first, to the demoralized condition of the industry; second, gave some of the reasons for its over-develo'ricnt, such as .the abundance of available timber, heavy carrying charges on the properties and overly optimistic attitude on the ->art of the industry on the trend of national consumption. He then referred to a combined rewort of a considerable grou of large and small mills, covering tne previous ten 9813 -247- years especially. This report 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 public losses, such as loss in envoi oy me nt and lowered oayrolls due to the demoralized condition of the industry. He sooke of the timber waste and the necessity in the -cart of the employers to use only the cream of the forests and leave to burn and waste all timber not of the best..- He called attention to t<.e fact that 60 0/ ' of the remaining softwood was in the northwest region and that, therefore, • the public interest had to be considered and the suggestion was that this interest would be best served by bringing about a condition of reasonable balance between suooly and demand. Colonel Greeley said in conclusion that ".what w» desire is to stabil- ize the process £nd avoid the extreme fluctuations in both productions and prices which have lead to demoralized conditions". The plan itself was entitled "A Plan for Advisory Statistical and Merchandising Service to West Coast Lumber Manufacturers" and was patterned after the Stevenson Plan. Without going into detail the reader will, I think, set sufficient information as to the working of the plan from -this statement from the pamphlet, a copy of nhich was sent to the Attorney General: "The key to , the advisory plan is the limitation of sales by each company over a reason- able period to its percentage of the adjusted capacity of the industry. Such a pi 34i could not be carried out, however, without keeping production and stocks in sound balance with sales." The letter referred to was oresented in person and subsequently several , efforts were made to secure a reply which was not forthcoming until January 9, 1930, when the Attorney General's, office wrote refusing either to ap- prove or disapprove the plan or advise as to changes in the plan which .might be made to remove the question of its legality. In his letter he said that if the plan should be put into operation, "It seems not unlikely ; that the Department of Justice would find it necessary to test its legality in the courts." In view of the attitude of, the Attorney General, the West Coast Asso- J ciation decided in February 1930 not to give further consideration to "the i plan at that time. Comments were made by those of the industry who had [been in close touch with the negotiations with the Attorney General's j office to the effect that "it was- evident ■ the Attorney General's office '■ felt the previous Attorney General had made too many promises' and too many gestures in the direction of laxity of enforcement of anti-trust laws." VIII. UNITED STATES TIMBER CONSERVATION BOARD. 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 frroup 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 facts when put before the industry and public would have more weight and influence than if put out by private industry. Furthermore, that suggestions -arid advise from a 9813 -248- board of this character could probably be accepted by those who were so minded without the industry being charged with collusion or conspiracy to violate any statute, and that if the board 'found that among the difficulties of the industry was that of overproduction, they could so state end set forth the remedy in a much more authoritative way than could any other organization. In April 1930 the directors of the lumber association pj Proved the plan and in Way of the same year it was formally presented to President Hoover. In appointing the members of the board in ilovenber 1930, the President stated, among other things, that the purpose of the board was "to develop constructive methods for dealing with this problem", the problem being "consequences of overproduction in the forest industries." At first there '-fere various reactions to the findings and sugges- tions, of the board which, after it;; organization and as soon as the data could be assembled, issued statements indicating the necessity for a drastic reduction in inventories. Some -.embers of the industry a.nd some groups felt that the suggested reductions were too great, while apparently most of the industry felt that the data assembled was the best that could be secured and that the suggestions should be followed. Finally, I think it can be said that the industry almost unanimously accepted the findings of the board and to a very considerable erctent complied with its suggestions, and it is a. well-laiown fact that the industry inventory was cut very materially and approximately, from time to time, in line with the suggestions of the board. The Lumber Survey Committee of the Timber Conservation Board* which is the statistical and fact-f inding part of the organization, as originally, appointed on July 9, 1931, is still serving and the member- ship consists, of the following: Thomas S. Holden, vice-president of the P. ". Dodge Corporation, Hew York City; II. ';• Stark, economist of Chicago; Calvin Fentress, chairman of the Board of Baiter and Fentress and Company., Chicago; Phillips A. Hayward, Chief, Forest Products Division of the Department of Commerce; and TTilson Compton, secretary-manager of the National Lumber Manufacturers Association, 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 setting' forth expect- ed consumption for the current quarter with a record of reduction or additions to inventories for the ye~r to arte, or in the case of first quarter reports, for the past year. This release would indicate the relation of demand to supply and That correction, if any, was needed to bring these two factors into balance, and quite often ca.rried some suggestions as to trade promotion and r.esearch needed, and called atten- tion to new construction projects or ne. 1 " types of construction in accordance with what appeared to be the current opportunities for the lumber industry. The body of the report, addressed to the Secreta.r'- of Commerce, usually gives first the recommendations and conclusions in a more extended form than shown in the release, and then goes on to give a 9813 ~2&9- detailed analysis of consumption and stocks by regions and species. It is the common ractice of the regional associations to extract from the report the pertinent material applicable to their res lective problems and to circularize their membership suggesting the advisabil-, ity of compliance with the recommendations of the Board, the secretaries of the associations taking this op >ortunity to make their own market comments. Thus the recommendations , conclusions, suggestions, and detailed information promulgated b _r the. board qalcldLy massed through the various association offices and to the individual operator whom it is hoped -all see the necessity for doing his part toward adjusting production to demand. While this movement in its entirety perhaps should not be designat- ed as an industr; r movement because of its being sponsored by the government, still so far as is' laiown the industry, through the executives and directors of the national Lumber Kanufacturers Associa* tion, did work up the plan, had a very great deal to do with gathering statistics and material for the use of the board and had a great influence on the industry in setting forth the merits of the idea and urging acceptance of the suggestions. The Lumber Code Authority, in fixing the national, quotas of soft- wood and hardwood, used o.s a basis the figures provided by the Timber Conservation Board in their quarterly reports. For various reasons, (such as at times the necessity for providing employment) the Lumber Code Authority did not rigidly adhere to the Board's .estimates but in all ca.ses used them as a base from which to start. There were times when subsequent to the issuance of the re )ort and before a quota wa.s arrived at, changes in conditions made it seem to the Code Authority advisable to depart to some extent from the Board's estimates. IX. HEST COAST DISTRICT ' EETIiT.'-S. ' Throughout the material available there are more or less frequent 'references to efforts made on the West Coa.st in 1929 to lower produc- tion and a series of district meetings that were held at important producing points, such as Portland, Seattle, Gray's Harbor, Willamotte Valley and others, and to a plan which was advocated whereby operators with two mills running two shifts each would discontinue one shift, thus reducing their individual production 25$, while single-shift mills would run five days per week, cutting their production lo-2/3>. Refer- ence is m-^de to the dissatisfaction of labor at the single-shift mills having only five days of work per week while perhaps just across the river or on an adjoining operation on the Sound or Harbor mem wore working six days per week. The correspondence shows that some operators, in fact probably r majority, complied with this plan for adjustment of production but that a few large operators "who never co-operated" would not lend any help to the idea, which out the issue up to the others as to whether they wanted to '"hold the umbrella" over the others. I know from personal contact of these neetin ;s, having attended ©any of them, that there were no minutes kept and r. ly detail relative to the meetings and the results' would have to be secured from correspondence files or recollection of the participants f 9813 -250- . The attempt to secure voluntary cooperation looking toward the adjustment of production continued off and on, and while other ideas and plans were Toeing worked on, until we were well into the depression, ' and then production find other ^actors connected with the operation of the industry were regulated "by the necessities of the individuals more then "by anything else 'until the code period, X. THE COKPTdli PLAII Early in 1930 the attention of the industry was called to proposals made hy Dr, T7ilson Compton setting forth "A course of action for the lumber industry in the orderly control of lumber product ion and supply", and advance copies of the written proposal were circulated among a few members of the industry prior to its delivery by Dr. Coimton at a meeting of the board of directors of the National Lumber Hanuf acturers Association in Chicago on April 24, 1930. The promise was set forth in the statement that what is needed are (l) wider markets and uses for lumber and (2) better control of supply, and a proposal was made involving the ascertainment of facts relative to production and "ex- pected production" and indicating methods which might be used for the securing of facts and for aeMn : use of these facte. As to the latter, it was suggested that there be (l) regular monthly meetings in each important lumber manufacturing locality or wholesale conter; (2) the formation of logical regional groups for the collective consideration of "production quotas' 1 . 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, rdth arran - ments being made for regular meetings which T»ould be arranged for and handled as to all details by local -people with representatives of the national association in attendance, not tc lead in the program but to give those present the benefit of economic analysis that had been made of what was going on in the countr^ at large, and to bring in reports of the experience or the lack of it at other meetings of like character. This ad'.ress of Dr. Coroton also made direct mention of the method of securing orderly control of -oroduction through the employment of a director of production, which idea has heretofore been discussed. Subsequent to the meeting of Ilay 24, two large committees were appointed by the National Lumber Manufacturers Association directors, one to "suggest plans for securing orderly control of lumber -produc- tion and distribution" and. the other to "consider nays 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 f irmu in tkr} industry. Just prior to the meeting of April 24 referred to above, one of the Del Monte meetings was held on April 15 and an effort was made to bring up Dr. Compton's plan and discuss it at that meeting in lieu of any other progress, but matters did not work out that wa; r . The special committees appointed in April met in Chicago on June 11 9813 -Inl- and 12, 1930, and considerable effort was -mt forth in order to get the nen who were considered to "be leaders in the industry to attend the meeting. -One of the largest producers whose -oroserice at. the meeting was considered essential, indicated his willingness to attend it on any date which waso^en on his calendar, but he said beforehand that he thouyht the plan would not work, that when lumber, by reason of control of production or en other reason, was urn in orice, there would be an increase in the number of mills; '-hen it went down the new mills woxild become inactive again and that this wrocess would he repeated from time to tine* This can had every reason bo wish that some plan could be found \7hich, when put into operation, would improve the situation, but seemed to have a hopeless attitude and as a natter of fact, that sort of attitude pervaded the industry at. that tine and still does, as could be shown by a nu.iher of reans of corres -ondence. Another larwe open? tor a d one who had been a le; der in various industry movements, said at the conclusion of a lengthy letter, "It is going to be necessary for us to find some legal ra v to secure control of production and sales policies." This is only a. sample of any number of .extracts which could he taken from letters written oy industry members and this and similar quotations are only dropped into this narrative to show that the industry had its mind continual 1 .'/ on this wroblem. The resolution adopted at the special committee meetings on June 11 and 12 were equivalent almost to a complete endorsement of Dr. Comoton's plan and provided for, first, a system of reports and surveys related to supply and demand, lumber consumption and volume of production necessary for supwly and demand to balance. Second, regular monthly meetings at "perhaws forty to fifty designated convenient woints * *" , and further au^roved the appointment of a soeci-l committee to work out the mechancis. Some other resolutions were passed relative to sales agencies, and then a resolution that the president of the association should appoint a special committee to he authorized to secure counsel to make an intensive stud.; - of "the possibilities of reduction in the number of producing units * * * being a merger through holding corn- panes * * * in order to permit necessary economies in production, con- servation, etc." This committee -as authorised to report at a sub- sequent meeting. There was some conside rabble publicity given to this movement in newspapers of general circulation and more space given by trade papers. The Chicago Journal of Commerce of June 3, 1930, carried an article headed "Lumber Group To Discuss Supply and Demand Relations"; "The Development within this industry of- means of encouraging closer rsdjustnent of the sup Dly of lumber to the demand will be discussed by a soecial committee of directors of the National Lumber llanufacturers Association to be held June 11 and 12, etc." To sliow the fea.r in the minds of some as to anything that might have the color of a. violation of the anti- trust act, some of the lead- ing and most active men in the industry took exception to even this much publicity and one leader threatened to withdraw from any associa- tion activities. Apian for the gathering of -statistics and the holding of meetings 9813 -252« wacts are more clearly brought out, rnd it will be observed that in many cas^s large bodies of timber c^n be aporoached only from one direction ^nd, by reason of the typography and accessibility to transportation, there exist many key tracts which, if acquired by the government, would control very considerable areas which the government would not have to purchase. It is true that no one had advocated any attempt at entire control and it is realized that there will be bodies q«t7 -255- jof tinker scattered throughout the producing area that are not large enough or in other respects suitable 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 l that these people, one of whom controls in excess of 5$ 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 expected consumption. The small mills would he to some extent uncontrollable, but the volume of their production as shown by all the records, is relatively small and by reason of small volume and also because the small scattered operations do not produce the high grade of material, their influence on the markets, if not inconsequential, would be relatively unimportant. Estimates made by the government and private interests over the last five or six years indicate that in the ten forest regions into which the Forest Service has divised the timber holdings of the government , which regions comprise all of the timber areas of the United States, probably $250,000,000 to $500,000,000 would be required to complete a satisfactory acquisition program, and a period of from five to seven .years would be needed to properly select the tracts and complete the purchases. 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 movement now in force looking toward anything like a permanent solution of this problem, XIII. WISCONSIN STABILIZATION AGREEMENT. The first notice that I have found of this agreement was dated August 1931 and the plan was put into effect in that year and generally considered by the participants to have been successful. The Wisconsin 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 mimeographed 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 sake 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 survey 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 Z% of their capitalization in 1928, with a small 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 stagnation with severe depletion of capital assets and possibly almost total unemployment in the industry. During this period consideration 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 relief from state and Federal anti-trust laws, (the Wisconsin anti- trust law being more severe than the Federal law) and statements were made that the public as well as private .interests remanded that something be dene. There was a 'series of consultations and conferences with the State governor's industry advisers and the reports indicated a sympathetic attidute on the part of state officials. The plan or agreement when finally written provided, (1) the signing by the operators of an agreement to produce during the oeriod prior to July 1, 1932, at each of the pills, 23 £ of the average production for the years 1927, 1928 and 1929, and not produce ri ore or less than this figure except for gO"d reasons. The thought behind this arrangement was thn demand at the time was approximately 30,1 of normal for the three years used, that by producing not aicTe than 28$ there would be at least no in- crease in inventories, and it was desired that the operators produce at least 28^ for the Sake of ■employment. (2) A committee of seven manufacturers was to be chosen by the signers of the agreement and this committee would have the right to say whether eny individual operator had shown good reason why he should be allowed to vary from the agreed noon percentage of production* (3) The committee of seven w h tc collect statistics relative to production and if increase in deman< developed could increase- the per- cnetape above 28/;, or could end the agreement, (4) In order tc protect t'.ie public's interest and keep within reasonable limits from the public viewpoint, there was to be a public policy committee of five not connected with the industry. This committee was appointed by the governor and consisted of one banker, the dean of the Agriculture College of the University of Wisconsin, a. University exonomist, a man formerly president of the Retail Lumbermen! s Association (assumed to protect the customers' interests), ?nd one State official, the secretary of the State Industrial Accident Commission. The public policy committee was to meet with the com tittee of sev'pn and the State Department of Agriculture and LCarkets to offcer ~nd receive suggestions and to counsel with this department and had the aower to declare the agreement at an end and to withdraw state support whenever. the comaittpe thought public interest was not being promoted. (5) The powers of the committee of. seven- were qualified by a oro- vision that this comaittee could not increase or decrease the oercentage of industry production or end the arrcewent without the consent of the Public Policy Co nit tee. The record shows that the legal advisers of- the state officials said that the plan was not illegal, that it was reasonable, there was no penalty provided, that it' was constantly under the insp°ction of the State Department of Agriculture' and i.^rkets, and that the dean of the College of Agriculture would, protect the farmers' interests, -■nd that others on the committees would arotect •all public and private interests, ^n5. that because the Wisconsin and Michigan producers together were responsible for less than 5;b of the nation's -roducti'' n, they cnild .iOt be charged with being a monopoly, line Michigan producers did not sign the 7isconsin agreement but worhed along a less publicised line of their own which con- 9813 -257- template 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 committee of seven and in return were furnished statistics showing the results attained. The plan was enough in favor with the public and the legislators so that there was proposed a new chapter to the statutes of Wisconsin, being Chapter 10S, with s\iggested 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 was not enacted into law, losing by one vote. The statute would have exempted industries in the state from the state anti- trust lars under certain guarded conditions. Such reports as are available, which consist of correspondence be-» tween members of the industry,, and members 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 apnroxima-tely as anticipated, between 28fo and 29 fo of the average used, while in Michigan it wa.s 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 and studied in other production areas and in other states, and 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 173A 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 state anti-trust laws and of state and i nterstate compacts, and in this discussion study, which was not, however, confined to the lumber industry, the lumbermen had a considerable part at about that time. In other industries, 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 use of by the industry although some members thereof felt at times that something had to be found which could be made use of; XV. SOUTHERN PINE CURTAILMENT 'PLAN. Correspondence dated in September 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 lumber executives for September 18 and 19. The letter carries the statement that it is proposed that "manufacturers produce at least 10f less lumber than they ship in any three months' period in order to overcome surplus stocks," The letter further states that the writer feels this reduction is not drastic enough and from statements made deploring any "attempt at government control", it is 9813 -258- provable that the effort and the eeetings referred to may have "beer, con- nected with the desire of the Southern Pine Association to copperate with the plan of the Timber of the Conservation Board. T Jp until about this time the Southern Fine Association had been exceedingly careful to avoid any connection with any movement chesigned to control or affect production and the executive officers of the association frequently stated their attitude in this regard. At least 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 which roads "but none of said purposes shall be deemed or construed to hold any suggestion that control of the amount of pro- duction of lumber be in any way affected or attempted." A letter of July 31, 1931, from an association executive to a member of the industry states in connection with the expressed desire to assist the Timber Con- servation Board in its efforts that "it happens that the Southern Pine Association lias called a number cf district nestings among the small mills to discuss the situation which confronts them. From reports we have received, these smaller ooer^tors are about to become more active, and it is felt that they should be acquainted with nil facts concerning the present condition of the industry •'" .Essential features of the idea that w?s being carried out by the Southern Pine Association at that time had to do very largely, if not entirely, with control of inventories and it is entirely probable that the work that was done was not only in line with previously conceived ideas of the Southern Pine A-sociation oeople, but fitted in very sell with the plan of the Timber Conservation Board. The Southern Pine territory, for the purpose of gathering statistics, was divided by state lines into soven districts. The o aerators were individually asked to make an estimate of the amount of stock that each shall carry on the basis of a supposed normal demand, such as existed in 1923, the demand being the sales of the individual operator, and then to ascertain what percentage relationship existed between the normal, stock and the demand or sales of 1923 and to project this percenta-- into the current period, attempting to keep the stocks at the same percentage of current sed.es as they were to the sales of 1928. For illustration, the total known stocks as estimated by the ouerntors in 12S operations for 1928 were S83 million feet;; the total sales or demand for this same ueriod was 3,307 million fe=t, the budgeted normal stocks being, therefore, 20.66^ of the demand. The demand in 1231, of course, was very much less than in 1928, amounting to only 1,785 million feet, and the desire was to bring the inventories down to 20.66/b of that a.iount. The plan apparently worked out with varving degrer s of success and, by those who cooperated end put into effect, was .nd still is considered sound. Reports late in 1332 showed in the previous four months a decline in stocks of 31^ of uppers, and 52$ of lower grades, which developed shortages in some items and the estimate was made that the plan had worked so well unsold stocks were then at 10$ below normal, total re- duction among the mills reporting of 433 million feet between January 1 and October 1, 1932 was indicated. The plan was in effoct up until the beginning of the agitation for an ERA code. 9813 •259- XVI. ECONOMIC TRUCE. In March 1932, there began to "be agitation among a number of in- dustries, including machinery, textile, food, lumber, and others, for relief from the anti-trust acts. In the lumber industry the motivating .force was the desire to control production and the idea seemed to many lumbermen, as well as those in ether industries, to be so fair, so easy to put into effect, and so beneficial to the public as well as to private interests, it seemed as though the entire industry had concentrated on this idea. At least two types of control were thought of, one, a commission to be appointed ^oy the President, and the other a joint committee to consist of five members of the House of Representatives and five Senators. The discussions and conferences finally reached the point where a bill was introduced in the Senate, S. J. Resolution 87, by Senator Steiwer, This bill provided for a joint congressional committee of five members of the House of five members of the Senate "which shall investigate and report to the Congress its findings and recommendations whether amendments should be made to the ant i- trust laws", and provided in Section 2 thereof that "until said committee shall have reported its findings and recommendations to the Congress and Congress shall have acted thereon", nothing contained in the various anti- trust acts which exe enumerated "shall be construed to apply to agreements between com- petitors in the natural resource Industries for the purposes of regulatp ing production, conserving natural resources, and maintaining continuity and stability of employment * - * unless such agreements are contrary to the public interest." Natural 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 Commission. The resolution was never passed but later the substance of it was incorporated in on amendment to another bill, which amendment never became law. XVII. FIR STABILIZATION PLAN. The first mention I find of this proposed plan was early in 1932 when it had attained sufficient importance in the minds of industry and others so that Governor Meier of Oregon and Governor Hartley of Washing- ton joined in an effort to have the Attorney General or Congress approve a plan permitting an agreement among operators to not sell below a standard cost and 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 out 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 employment, and other factors. The plan provided for the forming of a corporation which would (l) establish minimum standard costs; (2) regulate prodiiction month by month to what the markets would absorb; (3) cooperate with the government to keep within all laws, A statement was made in the press that the Fresident stated that the government would cooperate in every possible way and one of the ways that cooperation was expected was through a test case. The 4-1 Lumber News of July 15, 1932, stated that the industry was desperate and a prominent operator heavily interested in the South and West said in the same month that "the time for quibbling ever legal technicalities has passed * *." This and similar industry expressions bears out the 9813 -260- theor]' of desperation referred to in the news item above. The form of organization required that subscribers to stock in the corporation subscribe in proportion to their relative production. The stock would not be delivered but was held in escrow, and failure to comply with the agreement as to not selling below standard cost might re-alt in a penalty' or fine which would be token from the funds deposited fc.r pay- ment of the stock. Industry members had deficulty in agreeing to the features to be incorporated in the plan, some good sized tariff fights having sorung up between members of the industry, industry attorneys rendered adverse legal opinions, and for these and ^erhapd other reasons the plan, was dropped without the corooration actually being formed. It may be noted that this plan with its attempt to fix a standard cost below which operators should not sell and the various other plans providing for certain oercent- ages of former production and the like, were very similar to the ideas incorporated in the Lumber Code covering -rices and production. XVIII, FIR MERGER. In the summer 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 banking fraternity, out beyond occupying the attention of a number of people in the industry for some few weeks or months, did not amount to anything. Recent news in various trade journals and other oublications, supplemented by the observations of an executive in the Forest Service who has recently made a two months' trip throughout the producing sections of the West, indicate that there is an increasing number of new s'-'a.ll mills, and mills both large and s r vll whioh have been shut 'down for. a number of years, now coming into production, quite a few of them by reason of loans from the Federal Reserve Bank and from the Reconstruction Finance Corooration, ranging in amounts up to several hundred thousand dollars. The 4-L Lumber News of October 1, 1935, says that for several weeks lumber production has been "creeping upon orders and shipments." It states also that employment in camps and mills in the best in a decade and adds that "it is hoped that uncontrolled production will not spoil this improved situation." Recent lumber statistics show in some weeks an e:;cess of production covering 'the entire United States of a mich 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 perhapd new methods of controlling production and whether or not, in the absence of the ability to find such methods, the industry will not again find itself in about the situation it was at the beginning of the code era. October 29, 1935. 9813 APPENDIX II •TABLES & EXHIBITS 9813# 262 Ttouaaud icra.) , L-UBSZO >r UflJIEHSMI P, AHD CHJL ACT'S ' J OROWTH. 1/ Total Saw Tlabar Iraaa 2/ Cord- iraaa 4/ BflhilT '-■!■ fair to Satla- r»;torj Poor to fotvra- atoddas Total ln*taa Saa Tfjabor iraaa 3/ rial Ownaj Iraaa 4/ aalo ^ Pair t. attlaa loa-ra- atookanc Total Saw Tlabar Iraaa 3/ raja foodl! Cord- iraaa 4/ BaJ Reatodrlcur Pobllo Owoara 8a* Oord Tlabar wood iraaa 3/ irwaa 4/ BWalocklar 1 mm* »•*• Palr to Satla- faotor7 P60r to loo-ra- atocklaa; Total Pair to Satla- POOl tr 1.552 209 889 547 157 895 125 501 197 74 600 78 540 126 56 67 8 48 25 8 aalaa lit, l>90 10.177 1.279 2.175 859 11.819 8,602 986 1,618 613 2.241 1,278 252 491 220 450 297 41 68 24 .Molra.t,. S.W 470 1.063 1.235 487 2.157 518 690 «55 516 863 "9 291 313 140 255 55 82 90 50 'law I^Atn 4.435 998 69» 1.967 776 2.876 642 552 1.565 517 1,072 "5 230 502 225 487 241 112 IX 34 •a* Liar.- 279 lit 70 140 55 145 7 57 75 28 122 6 30 59 27 12 1 3 6 2 Mprt 3.?'2 1.992 •M 281 111 1,684 1,142 275 195 74 1.504 SJ1 557 50 36 l|4 19 16 7 2 ktol 27.273 ".•f0 4.843 t .1*.; 2,435 19.576 10.554 2,841 4.279 1.622 6,402 2,427 1.7O0 1.571 704 1.295 599 502 294 100 AMI* itliatle 320 32 268 15 7 86 9 72 '5 2 234 25 196 11 4 Dalawar. fcffi— 2.168 500 1.595 176 97 863 196 545 72 50 1.275 296 550 108 41 50 s 20 1 1 ha Jaraap 1.975 29* SU 687 582 1.523 132 470 545 576 354 149 101 75 29 96 15 59 51 13 bht 9.553 4,t>7 2, 816 laJT* 764 5.805 2,918 1.590 770 550 3.718 1,708 1.217 574 219 67 11 9 54 15 '- *>•>- >\0S5 1.811 5."29 5.746 2.079 7.190 477 5.405 1.957 1.548 5.550 1.292 1,269 955 364 2.015 62 752 860 341 IMal 27.139 7.29U 10,518 5.998 5.329 15.470 5.752 6.OS5 5.347 2.506 9.461 5.468 5.613 1.723 657 2,208 94 820 926 368 1. "*- 19.000 1,7k) 2.550 9.877 4,823 12.947 1.209 1,363 6.915 5.460 5.760 450 1,085 1,524 701 2.295 91 102 1.455 667 KOB»-»r- 20,300 1.630 2.690 10,670 5.210 12,178 490 546 7.426 5.716 4.746 655 1.259 1,955 899 3.276 457 905 1.255 599 Itrtb Dakota 495 10 110 252 125 50 - 50 - - 430 10 60 247 "3 15 - . 10 5 fUcon.in 16,200 1.705 3.550 7.567 3.59« 9.617 93? 1.267 4,944 2.674 5.545 650 ■ 2.225 1.673 769 1,258 95 40 754 351 fbtel 55.595 5.095 8.880 28.166 15.754 54.792 2.631 5,226 15.285 9.650 111,281 1,795 4.607 5.599 2.482 6.622 671 1.047 5.452 1,622 ewmu 1 HUM.* 3.196 2,1*81 540 125 52 250 100 70 57 25 2.942 2.577 470 65 30 4 4 - . . Irflut 3. 455 i t a; 1.090 574 159 810 192 266 252 100 2.615 1.620 514 124 57 13 3 10 - - i-m 2.555 1.755 581 15 7 1*2 120 52 - - 2.206 1.655 549 15 7 5/ a/ - - - leotucky 10,296 2.767 6.441 2.169 919 5.141 1.790 1.905 I.0J5 411 5.156 971 2.526 1,123 514 19 6 8 5 2 B««fi 16.500 1.165 6.755 4.636 1.96* 9.J76 1.889 5.850 2,551 1.026 7.076 1.269 2,836 2.040 935 46 7 19 14 6 auo 4.651 2.736 1.519 278 118 1,656 916 611 114 45 2.894 1.774 867 160 75 71 46 21 3 1 I«Wt)M 14.041 5.067 7.170 1.267 537 7.642 3.005 5.936 502 199 6.071 1.55S 3.115 755 545 528 204 121 2 1 lest nrginla 9.769 1.45s 5.516 3.382 1.433 6,262 751 2.216 2,544 931 ',216 654 1.255 911 416 291 35 "5 145 65 fatal 611.7U9 21.224 2S592 12.244 5.189 31.519 8.765 12.936 6,885 2.735 52.155 12.158 12.452 5.193 2.175 772 303 224 167 78 tae AUlMM a.6eo 7.W7 4,1*07 4.™ 5.50s 14,791 4.950 3.O06 5.054 3.801 6.52? 2,281 1,'48 1.456 1.457 367 196 55 67 * tikuui 22.000 7.700 7.000 3.565 3.535 15,051 5, 515 3.«57 2.386 2.990 5.951 890 1.14! 042 956 1,016 992 - 15 11 florid* 23.600 6.050 6.921 4.908 5.741 20.759 5.525 5.930 4.121 5.163 2,266 265 901 546 554 595 240 90 151 114 CwOTf A 22,872 6.900 7.566 5.874 4.552 13.657 4.172 4.547 2.153 2.735 8.966 2,557 2.967 1.70S l,7'li 269 171 52 26 20 I>oclil*a« 17.922 7.583 2.459 5.724 4. '56 14.851 6.157 2.032 2.957 5.705 2.999 l.SM 401 685 695 72 8 26 22 16 Mississippi 16.295 5.067 2.646 4.969 5.811 12.007 5.282 1.531 3.195 4.001 6.264 1,778 914 1.775 1,799 22 7 1 6 6 ■Jo-th Caroline 20,216 4.192 7.890 3.7»9 6. '85 10.077 2.560 1.782 1.747 2.188 9.759 1,659 5.997 2,026 2.057 400 173 ill 66 50 >u- 4,279 1.800 784 7m 914 5.754 1,668 446 715 896 490 152 529 14 15 55 - - 31 24 South Cnroll 3a 12,415 3-757 3.947 2.171 2.540 7.979 2.811 2.325 1.262 1,581 4.395 917 1.613 925 9'8 43 29 9 3 2 («*, 12.621. 6,150 3.700 2.200 '2.57« 9.618 5.260 2.340 1,754 2,236 5.000 565 1.56O 375 360 6 5 - 1 - Tirglala 14.557 2.859 5.5«2 2.957 5.459 6.914 1,488 2,419 1.555 1.672 7.296 1.147 2,816 1.691 1.6TJ 647 224 547 43 35 fetal 190, 75« 57.265 52.702 '7.216 43.555 129.398 41,491 32,726 24.717 30.966 57.566 15.729 19.789 12,084 12.264 5,494 2.045 689 !»35 327 fneiflc poast California 17.555 12.587 506 1.815 2.832 8.754 5,654 250 1.077 1.813 60 - - 26 52 6,724 6,953 76 655 1,040 Oregon 28.838 19.675 3.815 2.087 '.261 10,581 7.674 815 779 1.313 5.140 1.057 567 684 802 15.117 10,916 2.455 654 1,086 Wu;i™ 20.309 11,878 2.562 2.290 5.579 8,603 3.«59 1.125 l.'lts 2,271 1.599 655 561 407 478 9.507 7.3*6 1,076 527 838 Total 66.685 64.140 6.683 6.190 9.672 27.93« 17.167 2.170 5.204 5. '97 5.099 1.740 928 1,119 1,512 55.645 25.233 3.585 1,566 2.964 ■orta Hocky Mou»tai:i 17.464 9.9611 1,964 3,422 2.114 3.350 1.550 544 534 652 807 266 50 259 212 15.277 8.128 1.570 2.299 1,260 ,^ Montana lit, 865 7.062 5.740 2.511 1,558 2.545 l,64n 572 299 234 606 76 259 148 121 11.714 5. 54 1 ' 3.109 2.094 1.167 Total 32.329 17.026 5.704 5.935 5.666 5.925 5.190 716 1.133 886 1.415 564 509 407 553 24.991 13. , '72 4.679 4.593 2,447 South Bnckj Mountain 3.651 3.616 . 5 54 62 42 . . . „ . _ . . 5.609 3.572 . 5 32 «.«. Colorado 12,516 7.839 5.651 88 9'8 2.579 985 1.247 6 341 - - - - 9.957 6.854 2,1*01. 62 597 Israda 377 201 95 7 74 177 97 77 - 3 - - - - - 200 104 U 9 69 ■*• Kazlco 3.806 3.710 - 8 88 1.092 1.018 - 1 75 - - - - - 2.714 2.692 - 3 19 South Dakota l,28u 675 556 2 21 310 140 165 - 5 - - - - - 974 535 421 2 16 Otth sow 2,432 378 46 492 510 1*6 35 4 227 45 54 5 5 1 2.995 2.352 3»*2 37 264 fr»-o« 5.588 4.270 1.249 6 63 588 416 161 - 11 - - - - - 5.000 3.854 1.080 7 51 Total 50.570 22,741 5.959 160 1,710 5,098 2,7** 1.65J 11 660 45 34 5 5 1 25.429 19.963 4.2T3 145 1.045 btam DM16B. 565.514 104.738 102.555 89.789 68,252 250.555 07.451 ■ 57.512 58.*n5 47.279 120.168 33.575 42,141 25.970 18,482 14.591 3.712 3*082 5,502 2.495 l*i'.,ro Sewjoaa 129.5811 85.907 18.546 12.283 15.048 58.961 23.101 4.569 4.545 6.945 6.555 ?.1'8 1,240 1.531 1,646 84,065 58.668 12.537 6,404 6,459 111 Bm Win ElOU 494,698 188,645 120,881 102,072 83.300 269.516 90.552 61,881 b2,861 54,222 126,725 35.713 43.351 27.501 20,128 95.659 62, '80 IS 619 11,706 8,954 •3d Stat* Total Saa Tlabar at«. y cord- trau 4/ Pair to Satla- .^r" Total Saa Tla6ar Area* 3/ Cord- wood iraaa 4/ Pair to Satia- faotor? Poor to • toctlox Total Saa Tlabar Iraaa J/ Cord- 1 wood traaa 4/ ) ■air to ,tla- ACtorr Poor to atoddnx Total Saw Tlabar iraaa \ Cord- Fair to Poor to ■ tocldox fiaataddoa Boato drtna- Reato: Ha* R, tt CC la« All Claaaei of Oanarahlp lodttat laj Ownara bip 2/ Pa. -m ffoodlam 1 1 Put lie Cwnarah P_ , \} Plgnrai taken free 7, 3, Tor-i» S*nlc-> relaaic entitled ■Ccnnerelal Forest Area of toe 0, 6. 07 Reglona, Statea, Claeeei of Chrnerihlp, and Character of Orovth, 1 wltb the exception of the State brent. ■* im of 'Pfotoclrtag* areaa Into 'Iftlr to Satisfactory* and *pcor to Hon," Thle *t-e done by applying the regional percentage relationship of fair to satisfactory and poor to noo-reetocklng In Table III, pag* 1J1 of a l national Tim for •■erlcan forestry,* to the totals of restocking and non- re stocking areaa for Indlvldmnl States as given In forest Service release entitled "Ccumerclsl Forest Area of tbe U. S. by Regions, States, Claaaes of Otm»rshlp, and Character of (irostb. 1 This table Includes land capabli of producing cosnerclal tlaber of cowarelal iruatlty and quality, and available for contaerelal use, at the close of 1930. the figures are not thortmgbly reliable; they, howevm , •nbrace the best available data, checked by the judttvieot of wsll-lnf ormod men. 2/ Owned by land, lumber, pulp and papor, and mining companies, noval stores operators, railroads and nlscellanaous Individuals and agencies. l/ Characterised by trses large enough for saw logs regardless of their actual use. 5/ Characterised by trees too small for aa* logs but large enough for cordaood use, ragardlei 5/ Less than 500 acres. 9813 of whether tbe stand Is cut for cordwood or held for saw timber. 263 fiau *> total stajt is ■.■tinr sr.rts o* sit Tness.coRirnop um asnam akeas. 1/ (Million Cubic toot) Total irwa 9m Ttabcr Arc .2/ ' 'fl. at t.'-n J/.. tortttdkiai ju-.a Area ul! State Mai ■» i .-■ 1 v Earl.j 1 -•' To..' 5/ So'twood 6/ o^rdoo^d §J fa 1 .1 5/ - rtw. ■' y Bordwood 8/ Total 9/ ■n Bwlaad U 1.399 (a) 968 (3) sn (•) Kb (5) 105 to 199 17) 9>6 (8) 11*1* (9) 692 (10) 99 mala* 1M99 '.718 5.137 7. I'D 1.172 306 866 1,160 fc.*d«.««. 1.609 580 1.029 560 220 "6 9* 21'? 6S0 1-^3 «— *aapri>lr» 2, MO 1,03« l,5o? 1.7-7 705 1.062 59" 233 661 219 Bvd. !i!ud 55 1 5» a 8 13 57 15 .2 7 Tsr-aont U.1S8 1.900 2.658 2.71U 1, It'- 1,610 l.l?7 29't 8" 717 fe*flimnl Total MS. 16. 1*2 1M»- 10.910 5,112 l."0 1.77' 1.925 - .mtlc ■■■■■■■ 366 65 301 1*5 ll 3» 285 36 2'? 33 ■U-Tlud 1.993 '-- I.638 1IA 019 1.21*9 IJS 1.091* 151 lew ItlMg 97* 17" 802 309 79 230 579 7? 507 88 IV- T>.-* 10.11! L.TO 8.315 5,960. 1.521 tl.ol*! 1.737 Wl ?.53« 917 ?iniV lv-mli 9.196 1.637 7.53 2. oil 615 '.05' 7'*0 5,33 833 te*ion*i Total &,as i.,j-i 15.615 9,191 '.-; 6.971 ll.JOS 1,1*06 9.900 2.052 ■ tialgan 8."9« 1.C3 7.075 ».580 1.081 j, 0,9 .,3M '.,'11 7.0O7 12/ SlllaMiU 5.63* 2.9)0 l.o* 2.990 611 '.Ooi* 925 ?.H9 12/ forth Dakota, 95 - 95 17 - 17 75 - 75 a/ flsconatn 6.923 l r ui*7 J.SS7 7<9 3.666 1.113 ",953 JO/ atCloaal Total a. 550 5.«0 15.7"0 10.IAN 2.061 7.981 11,106 '.31*9 7.757 IB/ Control n iiaoi* IJ33 m 1.802 1.596 105 1.091 219 15 20U 118 Indiana ■ wo 1.'7* 1,096 72 1.020 255 20 268 90 IN. -,<-« ts 520 HOI 26 m in 9 112 3» lentoeky J.JM 268 3. 6*7 1.707 113 1,990 2.007 100 1.867 2U1 linwri 5.305 y*> ».9»5 1.7'a 115 IrM '.239 225 l.oiu 325 Ale 3.08b 209 2.875 ?,l?o 100 1,9681 771 53 718 189 taMM 8.*36 599 8.237 0.061 268 3.793 0.215 295 7,900 500 feat Tlrginie 5.5" 375 5.136 1.986 131 1.5" 1,188 222 2,966 337 Regional Total ■ 2.080 - 28.576 10.7IU 97' n.701* 10,068 979 l'.0.89 1.87» Strata 11 aims, a X0.1T9 5.810 2.1a 1.-96 825 705 iruiui iu.?26 s.i?i 6.105 I.OJ o.7M 0,070 U.021 ?.70? 1.7'! 9S5 florid* -...- 5.775 5.'«9 '.21' 1,9(3 1.750 61*0 teerfi* 15.08 - -- 8.610 3.790 7,05! u.u? '.7»7 1.0U5 Loolelean 18.093 5.190 S.J5! 0,505 1,551 850 ■i 1 * 537 ■1..1..41-1 1.51* 7.1*1*0 6,012 '.265 7.717 1.007 570 563 555 forth CM"llw uon s.«a s.i»o 2.9* 7.578 >.9=? 1.077 i .*.►. » ?.0O5 1,10*1 861 1.O07 76. 6I.3 1*59 281 175 139 SciU. Carol Ids lO.Utt 5.955 ».«75 6r*7 3,2* 2.767 7.66. 2.238 l,o?f 72? T«*= L8JI ".357 1.-76 Ii.9'i9 ,687 2,262 1.716 539 529 Virginia 9.9?1 5.663 o.?6S >o 2.210 1.5^ «.16<; 7.15' 2,010 657 R' clonal Total m.m ■ W.S08 b7,?y 36.512 30.726 '8,692 27.677 IS.O« 7.581 •iK.mc ;«ilf*rnl« 50,076 50,076 - 103.091 09.U9I - 11 11 " 57" Oregon o.kas 81.110 319 76,648 277 '.775 72 93" teaaiogton b0.??7 59.990 • 37 56,118 20o '.01' '.988 2 C 692 Regional total 19LT32 191.176 556 182.220 1*51 6.831 6.770 57 2,200 forth iocW ItaaMala 25.390 . . 2.682 2,682 . 1.1*1*7 BUba **— " , ■ c .7'7 -.77? . 1.287 j - Arliona 3.64* . - 3.625 1.625 - - - - 1 Colorado 12.U51 12.1*27 a n.2 r -o 11,?«0 - 1,19. 1.165 20 9 land* zao 220 - IB? 182 - '7 77 - 1 lew ■nlfUl 2.921 2.921 - 2.919 2.919 - - - " 2 Souta Dakota 91? 912 - 719 719 - 192 192 " 1 Utah 2.3*0 2.330 - 2.235 2.235 - V 9' - ' typing 10,863 10.863 - 9.719 9.719 - 1,136 1.116 - 8 Baglonal total 13.323 33.299 2U 30.6U9 to.6l*9 " 2.650 2,626 21* ft latter*. C. S. Total 213.896 55.982 127. 9U» 119.880 U9.576 70.30U 50."'* '0.705 "9.579 17.732 festers 0. S. Total 272. 8?3 272. *3 580 208.970 2I18.08O >I81 lS.SU 18. 89* '5 ".958 0«.i *»J Stataa Total W.719 158.225 128. "9" 368,850 298.065 70.785 99.17,' "9.521 09.658 18.690 (1) (2) IS) '») (5) (6) (7) (8) (9) (10) Ares and Stat* Total U/ Softwood W Hardwood W Tot J 5/ Softwood 6/ Hardwood 6/ Totol 5/ Softwood 11 Hordwoo. ?7 Total 9/ „ , fe^VW.. x^r 4 « Tlabor oroo 2/ Cordwood Arwo 3/ •o.todaw um 1/ Ta« U. S. foroat Sarrlo b-.t a»all*bl» data, eh. 2/ St. Tlab«r daootaa ara- ]J Cordvood d*aoti or hald for aV Bagloiial totala Id coluaaa ; Stata total* In coloau 1 ax< *r* aadad to ■: nrr- t T .--'ii'U 'V; ■glonkl I erltad 07 ti 9> t labor. la for tbe ban; figure* naed. < of .ell-lnfomed men of tha dll sea 1.7ir--a entniflb for taw log p>< or . .^ud i to 3' IwluilTa, are takeb rjlrrc arrlTad at ai follova: Stato tc ■gloaal total* of coIubd ?. Tbe caltrglata 1 of columfi ,0 of the ..j , onge lrp. I are ad<.ed ' of ra^oet! ' Ajanrleaa roraatr?. • totals to th< role (a). Coif u., "I in "A latlonal plai a of Colonn 7. *)agloii*l • vn of correrpooding regional totala la aTollad U (Conn.) at>U (b) Colramn U (Beortonal t-toU 18.193 7 (Conn.) ^ 9^6 Colton 7 (Bee Toreat Serrlee report* no hvdtrood on aae tletber and ro«tnrk.Dg urso- 1& that atate. 5/ Taken **on the l^at t»o colnan* of an unputll^iad tnble fiin.' »*•"* by the O. «. »f?,re»t S"i*Tlfe, entitled "C o-mercl al Tore and T-tal Stand W Zo* Timber and Cordwood ir-»a. by State* and ftogicna* < rid hereinafter referred to a* the *lU*ter Tabic. 6/ Saelonal total* equel tha mm of rogloncl total* nnder the flret fonr »alt. headlne* in table 6. oa^e lSU (",' latloBal Plan for Jaerlcan Toreatry*). *taa»ple (la- England)! s.- timber 5.183, Small traaa 1,082, Top* and limb* 73«, Other 260: rffl'ruJ total for to* England (coltnm 5) T.?M. Stat* total arrived at by th* amae method a* mmployed for eolnmna 2 and 1. 2J Bagloni'l totals are arrlrad at by deducting regional totala In column k from corresponding totala In ■: -lcain 1; deducting roflonnl total* in coIobb 5 '-"°* voadlng total* In column 2; aac artalmag. tha ratio of the teeond difference to tha first and applying this ratio to tha corresponding regional total In c 1/ ngnj-ea of column 7 alau ^orraapondlng figures In column 8. 2/ Regional totals equal the tttm of corresponding total* of the colunn headed *C°rd*ood and Bestoeklng Arena" Id table 6, page 16-4 ("A Ketlonal Plan for Mis forestry*) alnui tha stands for ratpaetlve region* en "Cordwood Areas' ibown lo the Haater Table. State total* are arrin. at by deducting the sum of CO ponding totals In coluone U and 7 Tr4 [BID 0» IAI TDSZH II TO OTITIS STARS IT BMIOIS, «ATM. AID CLASSD Of 0TIISSBI7 1/ (KUllM foot hoard mmw*. l«l-«r tally) ALL "' ■"*■ or .■■■■*ui» mi Tin imaL.TTT 0HSD 05 4111AD Stin-COTBTT US WuTlCIIaX a«ioa Mi m*< ladmatrtal 2/ T»™ Taadlaad Tola Satlooal roraat OtaW Total fenaood liriM total total Ssrt«o>. a»ri» > 3 Total Softaood] Bardvood Total 1 softvood Hartm '- A Total Boftvoad Hardwood Total J Bortaood Bajrdaaod H ^MlMi 1 ' ImmUmI 730 79 651 702 "3« 46 (* 272 30 242 28 3 25 Mm 39.750 24.732 13.01s 38.657 14.719 21.601 13,118 3.938 2.490 1,488 52 52 33 19 - - - 1,041 648 393 feMidnNtli 2.042 1.473 569 1.898 1.379 99< w. 519 37" 145 144 10" "0 Sm taf*U>« 6.956 ».397 2.599 5.831 ".895 '.09" 1,801 936 592 Jbll 1.067 1.067 67" 393 - - - 5« 37 21 ated* Illlftl ■ 29 62 at "9 16 33 39 U 27 3 1 2 VMaoat 8.306 2,101 6.205 8.217 5.9*9 1.505 »,w* 2.268 573 1.695 - - - - - - - 89 23 66 fetal 57.875 £.811 25.06" 55.393 •7.4a 27.257 20.16" 7.972 4.031 3.941 1.119 1,119 707 412 - - - 1.363 816 5"7 aflddla At lap U; Mrr- 10J 36 71 107 2° 10 19 78 26 52 - - - - - - - - - - aaryiand 1.274 205 1.069 1,25" 501 81 "20 753 121 632 20 3 17 B*> ;.fMj •57 323 53" «23 30, 11.3W 115 190 518 195 323 3" 13 21 |M I:rt 1« .015 6.535 11. "80 17.95» ".107 7.213 0,636 2.407 4.229 4 - - - 4 1 3 55 20 35 yMnaylvanla 5.897 1.1*6 ".751 5.691 1.M6 326 1.350 ",015 780 3.235 9" 94 IB 76 - - - 112 22 90 Total 26.150 8.245 17.905 25.831 11.811 ".639 9.192 12,000 3.529 8.471 98 94 18 76 4 1 3 221 58 163 hte Hiehl«u 16. "JO 3.450 12.980 16.3"5 12.928 2.500 2.715 10.213 3. "17 718 2.699 85 85 18 67 - - - - - - KlffiMMt* S.5«0 3>3» 5.146 6.492 1.000 1.900 3.992 1.597 2.395 1.219 1.104 442 662 115 V 69 869 348 521 lorti Dakota 53 - 53 53 - - - 53 -' 53 - " " - - - - - - - flacoaala 10.824 2.309 8.515 9.8"3 6.»"3 WSJ ".9"« 3.900 7"7 2.753 9S0 11 2 9 969 207 762 1 V 1 fetal 35.s«7 9.193 26,69" 32.733 21 .771 5.068 16,703 10,962 3.062 7.900 2,284 1,200 462 73< 1.084 253 831 870 348 522 pantm! Xlllaola 3.13» 111 3.117 3.12" 121 1 120 3.003 13 2.990 5 - - - 5 3/ ' 2 3/ 2 MUM 2.182 17 2.165 2.181 108 1 107 2.073 16 2.057 - - - - - - - 1 il 1 fern 1.107 - 1.107 1.107 77 - 77 1.030 • 1.030 y - - - 3/ - - - - - tutvck7 5.57" 734 ».8"0 5.562 J.765 "96 3.269 1.797 836 1.561 - - - - - - - 12 2 10 1M«1 3.699 289 3. "00 3.683 2.537 199 2.338 1,100 90 1,056 - - - - - - - 6 3/ 6 Oblo 4,194 51 ",1"3 ".135 1.220 •5 1.205 2.915 35 2,880 -■ - - - - - 59 1 58 hCMIIM 9.683 l,lA 8.519 9.290 5.rjn 701 5.U1 3."56 415 3.041 369 369 45 3* - - 24 3 21 !•■'. Ttrgiaia 5.062 631 "."31 ".98" 2,951 369 2.582 2.033 253 1.780 75 75 9 66 - - - 3 3/ 3 total 3",622 2.900 31.722 >».ow> 16,613 1.782 14.BJ1 17."53 1.058 16.395 44; 444 5" 390 5 3/ 5 107 6 101 ■wtt IUhm 21.176 . 16.799 ".377 20,666 1»,157 11.230 2.927 ".509 5,164 1.345 27" 254 202 52 20 16 4 236 187 "9 MMM 2k. 170 11.3"3 12.827 22.728 20.2"" 9.501 10.7"3 2,48" 1.165 1.319 1,442 1,442 677 765 - - - - - Florid* 15.312 13.169 2,1"3 15,1"1 1","30 12,^10 2,020 711 612 99 171 171 1"7 24 - - - - - - feWfU 20.870 1",S17 6.053 20."72 12.79" 9.083 3.711 7,678 5.451 2.227 798 398 283 "5 - - - - - - teoialasa 28.590 12.88)1 15.706 28.579 23.915 ».n6 13.139 4.664 2.103 2.561 5 5 2 3 - - - 6 3 3 ttlaalaalppl 20,481 12.960 7.521 20,"66 12."77 7.870 4,5*7 8.029 5.081 2.948 - - . - - - 15 9 6 forth C*relln* 19.4*3 11.073 8.370 18.7"5 11.591 . ".950 7.15" 3.080 69s 503 28, 216 195 ill 84 - - - IrlahTa 3.542 2.459 1.083 3.542 3.362 2.3'" 1.028 180 125 55 South Carolina 13,462 9.357 9.105 18.359 1",692 7. ""7 7.*! 3.667 1.858 4.809 103 103 52 51 - ■ - - - - feama 16,16; 11.759 "."06 16,l"9 13.065 9.50" 3.561 3.084 2.2"3 841 - - - - - 16 12 " fetfaU 11,086 ".829 6.257 10,270 6.I63 2.68" ".107 1.789 2.318 777 777 339 438 - - 39 17 22 fetal 199.297 121,449 77.8"8 195.117 146.850 89 ."40 57.410 W.267 29.665 18,602 3.868 3.653 1.989 1.664 215 127 88 312 228 8" Pacific California 282.460 282,460 - 177.051 177.051 177.051 - - - - 105.169 102.251 102.251 " 2.918 2.918 • 240 240 - OncBB 437.852 "35.53" 2.318 233.601 ?16.3?6 215.7"7 1,140 16.705 16,617 88 203,668 152.638 151.830 808 51.030 50.760 270 583 580 3 tanMntrtot. 3a, 316 320.915 "01 183.250 17".7"9 17».532 217 8.501 8,490 11 112,734 102.509 102.181 128 10.425 10,412 13 25.332 25.300 32 fetal 1.041,628 1.038.909 2.719 593.902 568.696 567.330 1.366 25.206 25.107 99 "3,571 357.198 356.262 536 64.373 64,090 283 26,155 26.120 35 fertt Be** Mt. Idaho 96,592 96.592 - 28.020 26,917 26.917 - 1.103 1.103 - 59.621 58.275 58.275 . 1.346 1.346 S.951 8.951 - aoataaa "9.796 "9.796 - 13.711 13.306 13.306 - 405 405 - '3.509 30.565 30.565 " 2. 9"4 2,944 2.576 2.576 - Total W6.388 1"6,3SS - "1.731 40,223 "0.223 - 1.508 1,508 - 93.130 88.840 88.840 4.290 4,290 - 11.527 11.527 - South Se-eky Mt. irtttta 19.827 19.827 - 120 120 120 - - - - 19.597 14.059 14.059 - 5.538 5.538 - 110 110 - Colorado "7.379 "7.378 1 2. "15 2. "15 2, "15 3/ - - - 44.727 38.251 3».251 V 6,476 6.476 i/ 237 237 V h* 778 778 - 448 448 U"8 - - - - 330 228 228 - 102 102 - - - - la» Halloa 1".389 1".3»9 - ".296 ".296 ".296 - - - - 9.562 9.028 9.028 - 534 534 - 531 531 - Booth Dakota 3.208 3.208 - . 228 228 228 - - - - 2.965 2.910 2.910 - 55 55 • 15 15 - DM 7.791 7.791 - 265 201 201 - 64 64 - 7.474 7.283 7.283 - 191 191 - 52 52 - mine 32.58" 32.5«" - 1,7* 1.7"" 1.7"" - - - - 30.328 28.158 28,158 - 2.170 2.170 - 512 512 - Ml 125.95? 125.955 1 9.516 9. "52 9. "52 3/ 64 5U - 114.983 99.917 99.917 V 15,066 15.066 3/ 1.457 1.457 1/ ha 353.831 17".598 179.233 *3.l"o 2"6,"<6 128.186 118,300 96.65" "1.345 55.309 7.818 6.510 3.230 3.280 1.308 381 927 2.871 1.456 1.417 i..» 1.313.972 1,311.252 2.720 b"5.l"9 618,371 617.005 1.366 26.778 26.679 99 629,684 545.955 545.019 936 83.7a 83.446 283 39.139 39.10" 35 Ul Bwlau 1,667.803 1. "85,850 181.953 988,289 86", 857 745. W 119,666 123.»32 68,024 55."08 637.502 552.465 548.249 4.216 85,037 83.827 1,210 42,012 40.560 1.452 Tot4l Softaood Eardaood Total Total SoftlOOrt Bardvood Total Softaood Eardaool Total Total S-j t'.n 1 aartaood Total Softaood Eu-dvood Total Baftnod Eardvood W15B and 8ttU *u a .ASS1S 37 01 iubshtp loJaatrlal 2/ »,M 10041 and I tlToaJ Tor at Othor man 4onri 1 ro mniciyii rfiiun 7DXB1LLT OTTOS OR HA810XD 1/ Plcor** takan fra» 0. 1. 7ort§t ferric* r«l««,«* int.tltd 'SttUKl Of tav Ttabar Id tie Unit #4 LrUtaa by Ratflona, Statu, and Cltaaaa of Ovaoranlp,* tUb the axoaptlon of tio braakOon Into •loftwota 1 aaA *X>ra>»ouid Kl acallaaaona IndlrldBala aad a**nclo 1 bHIIod faat B.H. far Colorado, abicb |a not olaaaiflad aeoonUng to typ* af owaerablp. 0613 .12 it.. •as* 1 3 u • • HMIS 5 'i! ! *!'! 5 ?«•§*?** s sssReeiips i sss i $s g gl&iM e Bgf£~e | i8ft»^ s sfsie a fief * Kg £ IIrsISI °c R E" Sf $ ^*R~ R 2SSS S |!c SI 3 771 •3 Si all 1 r, s ?§££&$ £ i&FSS i 8£g£ 3 ElflsaiS * BSs?5«a*$FR S iSs S Es 3 5l = 31* RrSUS"* £ ^CCSS 8 3»^S S 8SScSs 13S5.8SSS IB l£R £ 23 III!! I ..31 Si t IS* -csr& F «Hp I f£ s 3 £ kS ££«£»§ 5 8!££s5£SssS £ i?£ £ £S f *sss§s p. s*ae« s s§ * & sssssEgs s p.aiigp.sp. b Mb s *s i bssh? ? a.. as* *£££*! S *££&£ B ££1* £ tjfff Hii .St.. hi at- 1 "I & If 3 I Sit $2s 3 s& E ^s'SSSS i&Z *h ~£6G B E] R 2SC8iRS' S *5"^« C £52£s:rfcf. % ^?5^^«f =f £ Jtas •aS* 23a SI5E-K « ^ISH 8 £3*2 I FS ££*§«£ 8 &IS£kIS8SI'S 8 $£* g c£ $ 3 s K si s 1 -, 8 6". *R3,krk k **ss« R "~.^* 3. S".*!".??* ? ssEgcassaee 3 sies k ss- k sf teiesS si: •3 si g a 11 ill •as* f. 5 e s-93 So • 1 ► £ 3 s Jf2- * 5 Eltli alls ;. ft I 3 i a i 3 I ■a ! D813 i 1 j « i i « 3 a a » c o (. ^ S H _ -J 966 ■ n -tj ■■■ r.irts | 2»r 1925 l*wnc • it 6««4 ■■■■ill ■*». •* kfU« f±M* •OBI 19*5 »* r 11*7 112* 1529 1925 , 1926 | 1927 \V% .929 : », 1 "" 1927 15** 1929 aa Thj hn 10. W7 ii.«9* n.-.n 9.m 9.9U 12.25* 31.»r3 20.239 29.«*2 •1^)0 •7 .3*7 55.5*» 35.35* 30457 •2.096 ■fclaa >oi.«J2 307.O9 231.223 2».5*9 233.297 *l.*-t M.271 33.07* 1 32.595 25.95* 26.613 ».*» 3*o.*93 2EJ.O* 2*6.523 257.9M 2T-. a*3 ■ ■»■■»* 75.417 57.515 60.092 71.5*3 53.B5 ^.•>06 36.001 2».6J3 j 2>.2O0 1*6*1 2».S*5 109^25 •646* n.29< 112.299 71.2*3 13.651 tokMC* B5.570 nag 190.670 Bl. 190 165.066 15«.<6> •S3" 32.9«2 1 25.2« 21 .071 31.«»« 260.4*3 2*3.007 215.912 239.261 191.703 2J0.U3 Mil :c*mi MM 2.902 2.360 l.ns 2.966 2.1? l.T*» 2.926 «.*55 2.107 3.56* 3.6*6 5.*2« 6.05 -.'X 6.5U 5.W3 to« M.m 51.250 M.90* 55.527 60.05" 56.6S* ••.362 52.3M 53.IJI 59.52* 5».»" 111.63* 90. an 111.622 111.1*5 •Ml 667.239 6*9.0*7 =52.325 515.5** 5».9H 997.6r< 2».95» «5.»»2 169.6k7 169.«55 155.229 176.62* rn.ir «3».*95 m.672 765.U.9 •77.7*9 7T*.}»7 BHi* ''Jl'ii )^M.1 m •419 IMS 10.926 7.3m «.«• 2.629 2.235 2.3* 2.^" 7.92* 9.*33 i6.c» 13.161 9.**1 11.27* MrM 37427 1.3*6 1.5*5 29.533 31.52» 31.*3 51.736 39J9« 35.956 ■.5*3 a.**6 67.5*1 51.729 9».*70 67.909 fei;«n^ •2-2 2.310 132 m 1.520 ».t>3 ».2*9 6.60* 5*6 6J53 3.220 15.576 :..r. •to* Tuk s».*r- *3.7*9 •».«n 32.166 2».3«6 1.521 131.205 197.63* 170.963 1*2.505 130.10* 151.591 14.. 16. f^1 Mil 126.924 120.755 •9.261 ».U5 92.3*9 102.732 203.996 >9«.0Jf l»«.»53 221. an 330^=2 3H.797 277.722 23«.«5 Sl».23» tn«2 •*f,p*l "».H5 172.9J4 156.912 160.2S7 116.606 396.«5« 370^07 3J6.TOO >»7.91S 353,661 57».550 505.636 *M.*31 553.52* •9.5U ■«#> 231.765 172.tai 131.075 1M.7J7 122.079 KM*] •90.656 •30.272 «*I.93» •75.137 *63.3»» 572.059 571.07 63«4r97 ■■mm 512.7*7 •31 .6*7 jn.jK 359.611 305.7W 396.237 65.916 39^63 25.525 5W.793 *ri.090 396.W «2.5*3 JT.UO »*3.2*1 kru a**sw - Rmmu *36.7*i J9*.*** 330.3*1 BCJM 35».09« 377.652 mjm W9.U6 •66.302 *««.7ii 5U.O0 l.o6*4U 912.52* 09.907 01.(50 »J.«l« •J*. *61 Ml 1.201.320 1**.179 •394* •55.953 7C.965 max i.tnMi 95».« 9*9.299 9»J^»f • .-•:'.?- 2.**».5e5 2JM.S** ..- .Ml 1.S03.252 1.771 411 1.972.151 niiMn \m 2.W7 «*■ 1.165 ?■••. J5J70 27 J«! 29 .139 57.062 31.5*3 29.*S« mjto 294*5 374*1 Mm »i •5 ■ ■ B 120 17»465 139.3«7 l^.»6» ■•.■:' 126.750 1*9.170 152.*57 laMft. IHMM. 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OOs r--os fsVO H o cu j-h; mvoso H W H hj- H; in mso mso Hstst mco HH w W H mw 50 w mmtn mosO osH; OsKsr<>vo to Hino ^f ino\o\ 3 -* H r-os inm moo oin VOTO W H vonr nm. w H rnvo H w O in inn to iF nr H5p«o f-inTOTOin stst h nm h-W H w H w VOpfO WON VO HKNH h mmw O to m H sow st mvo wsoh w r-mvo h in=* mo r- osor-wTO mso W HTO w m=* r- TO VO CU & r- 3 > L. cy cy r- r-o k\ f^rtO inso o soosin 50 st rH o o » SO rH rH rH so mvo Q W rH rH SO ^O in-min o\so~f\w"o Hf so in inm vOosO f-r-cu OSW SO in K-. w h-osw w 50 r~-OsO H f-OHr osin j-t st worn CMst Ov-T-H h; mnj- HSO ino r-*H,- to OTO osmr^v mmo in h> ixsHj-vom wvo in r-Hr i^nw w r-m to r-Hf mr- h w oh- m O O TO ON so O w r-NHO\vp r-o vo r-vo st st m=*OTOVO in in so .=* OS KN vo" H hvo winn HVO lOHt r*-H H Hs0O\50 r-H H; rH O HON W h w r-w h h m H h in TO Os so w Ovod- HTO OTO HOSVO w msoin mvo mos os mr-r-mr-H W H H st* h O a H QJ 6- 50 o in cy rH cy wvo w cu voo osr-o Hinr- in cy in o o ;* H O mr— w inos Q w g^^-o^ -Jhow^ sOSOrHf* ,r^ Osrnw OsO CVt H/ rr-s so cu f • inr^-w 80SOH OSH 50 cy C\j ininKMnw OS sO OHr- SQHf QsHuo h-voo m50 3- vomr-r- mw os ovo H H OsO Os r^vTOTO O w O w inw w j* osmosH st to w mr- Osinm'O w hovosoh- hvo wso3- HHTOVOOS mKNSO OS KNTO w h r-w h r- WTOr-kS*- cy*j ON h- VO m so* OS Oso_t inos NCAHOwt inos w H;" soos6om-H wso h-Hin H/SOSO rHCy m h ON ww w in VO H O ON SO VOHH m h osino m st H50H so w w H O TO O 0NO\ w wr-mm inw mos w* m r-wHh mr- inminw h w so mo h H*m h w o o * ■p in o DO ft Ks Os H mO W sow in inrHBO stt<\XQ 3-r-n in j* o BO IO rH o h" OVOOsOO r-OSW O rH mr-50 cj vo osinr^w r- d- Wrl J- Hr -mo o soin-r^s oscy sO* in st in OMnmso50 inmw mso HVOSOH; f^ vow w r-o HO Ov 50 ON mosso invo H; OONTOTO vo mo if in st oitTOH r-wHr inm TO H HON m minr-o m mvor-m-r- r-so mw Ks r^st wmw r-HONinvor- vo st w mmm mmosTOirTO TO in m in m r— w H o o ec t> f> osin 3- St H 50f>H-r*-H mvoso w r- VO H inrH HTO TO m h m H H nr mo o\r-s Osso m m w* Hmsonr vo mvo H H w m vommr-mfo W W h- r^NWH WO H m t- os cy w h- o gsso WON OsO in mosm so KN so Si 50 r*Mntno os w winin SOSOS003- mKs ino rn os w sO50-Hr in in mn sO* H K\ r— IAHOB3 H W H W->- HO H WOs KN50 KN0NVO so to o r— w I"— 50 50 st H so OTO mn j* mosvovo osWHr cy in k\w w mm O H W 50 VO mr-o\r-H minr— tovo r-ONH- rncy KNTOVO OTO osHr Hr-r-w to r-WHr mnr so r-H w r-o\ m TO TO* Ov W h" H r-soosr-50 r-os h in wr-mo ifs st mvH H w VO H ON onto m to to m st VOstst W Osf^W w w" ONOsmmr- TO w m>o w in VO ON H W KNO h inos mr-H w Ks i' ■■ o. r—w m Hrvoso OS rH in mw in so ino st w O r- m O to SO inw mso r^s 50 ^f ri inr-- o3- o rH in Os w r*so cy rr\ OH; VOO H r-o W H 3 w SOO Hj-H) t^ w hso eg r— inossosor- inHOsoso W50 m St H; KNHVO 50 m.50 50 K\H WOO -T— O O rlr^vOH r*v*ey h Hr h H O Hr ONTO mo f-tQ m OHr-rf- r- TO HOV* J r- h o« w Hr nr m VO r-0NS0 if\r-so r- W J* H voo\m m H vo r— mo\ r-vo Hin so mo mso st r-nr ir\i* mn w in w m VO HVO HOSH r-J* osomw voinr-dFr-TO wh-ht knuno w-o mwmw VO K\ sO TO* H 3) H wino Q50 OS «OH rH in 50 W 50 if , SO m m so r-" in Os ino tno\r^» 3- rH r-r-so i^SrH OsO r^s 50 r— rH W Q 8^ Os so in w so mvoso st to mmos mmr*~vw st V\CUClistst KNmH m VO H OO50HTB0 W W O O O st UNO O W r-mn; Hrco vovo r-Hin VO H H O h-H50 W O TO H W W HNO r- st to inw r- inn h it vo w mn- on mvo3- H cvst r-m osr—Q H voni* vo w st Ost mH- ON st mVO KN mTOOONSO ovo mr-in h w mo m in r-osin=* intr r-sosoinmr-f w knw r-mm r-r-d-r-owo wo ov* mn WW H m H in ON H m TO m H 9 SOI^-J- 50 OS 60 HJ-sO minos inosvo rH in ■a a. »-. rH rH h; «o?o r—Hr \o mininvo inw r^sosin st r-H; gsw in O r^v 50 so Os 50 O r*-in oT rn 50 r-mmn w nr— so Ht osit osmcy won mso o Hi--r-50 r~- r-O H50 OS r^sHr mosO 50 mTOTO W W HTO W TO W WTO-H-VO osvo mw h w r<-sHr r-\o H-H-r^HVQ 3-vO WTOO r-Hr invom VO OS 50 WW H H OTO O O KN HSOmWVOH SO TO r- w* w m H w Hr r— h mw h mo wso O w H h-mr-5ovo O LTsW H OS r-t >-i <-i CJ SO W Wso in st w m H H sO to inw m it fNtn HVO m sO OS VOTOVO wmr-so m to r-w h sow in st oso, wmw tvi-t w in os W-HrsO O 0SVO h- in rH os st cy so r-w r-HW rH n H is C\J o f"S50 rH W OS d-HOWKS r^iOs Km* to rH osr^so OS r- wso OH H H Hj- OSH r<-\H cy r— so 50 w o H wvor^H; m K\r^\os W H voo wmw r-60 mn r^s w H mmin St w H* on 50 mmso r~-60 0N50vo o r--H m-vo w m=f r-to w o r— mso nmn m w vo h-r-voHr SO 50 SOTO W ov5 cy mw m TOTO ON vo st w m H H OS r-osHr osvo ON OS OS vo st r-H h moN mw w w r-r- os h r— H mTOTO w NWHOW to h mn r-H unto in r-so hto TO H H H w os r-o w w os r-o mos w OONf-OsOsO on* Ost m V04 r-w mw 3- WHKN r— m st m m H TO OS W 0)*3 -H ffi b e > a) ai it E* '.l scoot; 3 o c v. ,o n t, CD 03 A O QTrH t, 4> It -h U) O C « f, [h H C H O O O O 0> H 4> 0006,6 m a! 03 3,0 ecS •" fl-HH oItj oHTj ft q •d h c o 3 H H H M o -h 3 o 3 m oj H 05 •P H C >, (0 0> O a) OS d a. C4)HH aJ o © (h « M»o O B 0> O U a b h» 3 Q (H X t-o 3 W^H^H^ * s » ► u D a, oj ai O assr3£; ll > B B HW C >» n o to a> a) coed •hh C- C C O H ^ OH a cdjs -p a r- {-, « B CD O V «H CC 4.' -H t>> >>t*frfrft= 3 368 tinilr fr) - tarmac an iuotood itokji fbootctici it suns ra 1929 10 193* (1 f-t 1. a.) k«» ul Jtata •« lapulr. •tab Iilal 1X.563 169,910 52.727 130.767 65.763 137. 79» 6,021 152.W99 M.512 111,505 2.5>*5 33.*TO 3*7.552 8.5H2 17.0W 11,215 19.262 l.«93 32.293 90.2W. alidla ltla»tlc BaUaaro HarrlaM I" J»rt9j In Tork Total 5.109 30.9«6 8.759 79.W6 159.718 2H4.288 3.516 15.902 380 17.03H H6.776 83.608 1.893 15.0814 8,379 62,382 112.9W 200,680 Us Klctilg&n UkmnU lortb Dakota 300.129 KI6.105 1401.821 SU8.055 71, l42k 111,51414 170.869 353.837 228.705 5».561 230.952 ■4914,21s Caatral Illlaola loaa 1/ Ianeuckj klaaoorl -JUo Tomaaaea foot Tlrglala Total 18JU9 75.728 9.5* li»3.it50 101.133 81. M5 339.656 J0U.9S0 1,0714,707 20 37 11,782 19.179 32» bl.80l4 59.071 152.U96 18.U70 75,708 9.U89 131. 668 81, 95* 81.161 277.852 2115.909 922,211 Florida aaorgla Lotdalaaa ■laalaalppl lortb Carollaa South Carol las Tlrflala Total 1,015. Ma 090,670 637,081 635. U12 1.160.998 1,202.622 66U.253 120,073 557.080 77lt. 3* W1.H73 7.869. »50 865.372 1450.037 582. U3 550.566 766,077 9146,1492 532.538 108.265 1420,018 659.9145 276,302 6.157.925 150.032 2140.633 5I4.76S 8I4.8I46 39U.921 256.130 131.715 11,808 137.062 1111,1439 135.171 1.711.525 1.169.188 2.8SU.280 44.l9O.5Hl 8,21414,009 1,169,001 2.869,2511 U.175.H63 8.213.718 187 15,026 15.078 30.291 lortk Boofcr Homtali Tola! 565.173 208.655 773.828 56H.976 208.613 773.589 197 »2 239 ioata teak, Kraatala arlaaaa Caloraaa la. Ian o. ftmtt Dakota. Mali "r«4vf Total 96,102 W.50I4 102,097 38.027 6.810 19.682 312,222 96,102 149,1401 102.097 J8.027 6.657 19.946 311.930 153 36 892 1».«**.*7 16.3»4,6» 3.-*».7«* aayloa ud Stat. Iaolaaat Kaaaaa aai laftraaka Iaal.4.. Irak aeia 269 TABLE VI ASNUAL DRAIW OF FOREST PRODUCTS (OTHER THAU UMBER) AVERAOE 1955-1929^ Region A State Www England Total M. Ou. Ft. (1) Softwoods M. Cu. Ft. (2) (3) U. Cu. Ft." (4) tal W. Ft. B.M. (5) Saw Tlnber Site Trees Softwoods M. Ou. Ft. M Ft. B.M. (6) (7) Hardwoods M. Cu. Ft. II. F"t. B.M". (8) (9) Cordwood Site Treee -M. T oTFt. riTr.. -ip^fe (10) (11) (12) Connecticut 26, "78 3,533 22,945 10,543 48,824 3,159 1",772 7,38* 34.052 15.935 37" 15.561 Main. 176.361 72,650 103.7U 72.780 339,617 64,412 301,021 8,368 38,596 103.581 8,238 95,3»3 . Massachusetts 50, 488 17.913 32.575 21,273 99,159 15,853 7",1"1 5, "20 25,018 29,215 2,060 27.155 lew Rampehlre 131.609 5", "59 77.150 5", 587 254,756 48,280 225 , 666 6,307 29,090 77,022 6,179 70,843 Rhode Island 4,414 661 3,753 1,758 8,136 661 3.122 1,097 5,064 2,656 _ 2,656 Termont 63,649 16,432 47,217 26.466 122,978 14,560 68,062 11,906 54,916 37.183 1.872 35,311 Total 452,999 165,648 287,351 187,407 873.520 146,925 686,784 40,482 186, 736 265,592 18,723 246,869 Middle Atlantic Delaware 11.220 4,126 7,094 3.218 14,941 1,07" 5,042 2,144 9,699 8,002 3,052 4,950 Maryland 62.258 15,982 46,276 17,538 81,282 5,036 23,621 12,502 57.661 44,720 10,946 33.77" lew Jersey 63,360 6,016 57.3"" 5.0"5 23.320 526 2, "73 ",519 20,847 58,315 5,490 52,825 ■•• lork 281.551 39,814 2"1.737 40,144 186,761 21,526 100,922 18,618 85.839 241,407 18,288 223.119 Penneylvanla 233.465 25.925 ' 207,540 45,814 211, 7"3 6, "7" 30,336 39,3"0 181,407 187.651 19,451 168,200 Total 651,85' 91,863 559,991 111,759 518,047 - 162,394 77,123 355,653 540,095 57,227 482,868 Ut Michigan 253,199 43,810 209 , 389 50.947 223,143 1",175 63.572 36,772 159,571 202,252 29,635 172,617 Minnesota 213,043 117,569 95, "7" "3. "13 193,981 39,123 175.352 4,290 18,629 169,630 78,446 91 , 184 north Dakota - - - - 41 - 1 . 40 _ _ Wisconsin 353.082 99,064 254,018 72,540 319,483 32,820 147,100 39,720 172,383 280, 542 66,244 214,298 Total 819,324 260,443 558,881 166,900 736,648 86,118 386,025 80,782 350,623 652,424 174,325 478,099 Cantral Illinois 79,763 177 79,586 37,428 163,316 177 865 37,251 162,451 "2.335 _ 42,335 Indiana 127,970 68 127,902 60,233 262,453 68 355 60,165 262,098 67,737 . 67,737 Iowa • 113,119 5.550 107,569 53.849 237,748 4,181 21,128 49,668 216,620 59,270 1,369 57,901 Kentucky 262,258 47. 506 214,752 126,784 577,863 35,640 180.373 91,144 397,490 135, "7" 11,866 123,608 Missouri 228,237 9,187 219,050 109,698 482,647 6,905 34,952 102,793 447,695 118,539 2,262 116,257 Ohio 127,508 54 127,45" 59.771 260,685 54 307 59,717 260,378 67.737 - 67,737 Tennessee 456,944 92 , 471 364,473 219,865 1.006,648 69,196 350,152 150,669 656.496 237,079 23.275 813, . 1 feet Virginia 227,152 26,811 200,341 108,613 487.256 19,965 101,054 88,648 386,202 118.539 6,846 111,693 Total 1,622,951 181,824 1,441,127 776,241 3,478,616 136,186 689 , 186 640,055 2,789,430 846,710 "5,638 801,072 South Alabasta 328,126 183,690 144,736 209,73, 98", 582 106,386 550,306 103.351 434, 276 118,689 77,304 "1.385 Arkaneae 393.177 191,615 201,562 250,750 1,164.367 114,311 591,332 136,439 573,035 142,427 77,304 65,123 Florida 121,626 106,848 1".77« 74,151 370.291 60,466 312,933 13,685 57,358 "7, "75 46,382 1,093 Georgia 339,519 257,057 82, "62 220,820 1,072,182 148,832 769,608 71,998 302,574 118,689 108,225 10.46" Louisiana 301,467 162,60? 138,860 19",6"7 908,201 93.033 481,206 101,614 426,995 106,820 69,574 37,246 Mississippi 368,861 219,343 1"9,518 238.303 1,124,458 126,578 654,749 111,725 469,709 130,558 92,765 37,793 Worth Carolina "59,861 281 , ISO 178,681 293.697 1,394,714 165,224 854,653 128,473 540,061 166,164 115,956 50,208 Oklahona 96.548 19,345 77,203 60,941 267,204 11 , 615 59,966 49,326 207,238 35,607 7.730 27.877 South Carolina 227,109 164,886 62,223 144,027 697 , 446 95,313 492,742 48,714 204,70" 83,082 69,573 13,509 Texae 354,665 117,812 236.853 224,107 1,010,408 71.430 369,310 152.677 641,098 130,558 46,382 84,176 Virginia 302,450 154,225 148.225 195,630 911,734 92,382 477,922 103,248 433.812 106,820 61,843 4",977 Total 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 1,186,889 773,038 "13,851 Pacific Coast California •* 62,205 56.198 6,007 48,951 280,078 "8,951 280,078 - - 13,25" 7,247 6,007 Oregon 152,927 149,462 3,465 145,620 829,735 142,676 815, "03 2,944 l",332 7,307 6,786 521 Washington 2*5,383 282,518 2,865 27", 957 1,567,663 272,360 1,555,025 2,597 12,63s 10, "26 10,158 268 Total 500,515 488 , 178 12,337 469,528 2. 677, "76 463,987 2,650,506 5.541 26,970 30,987 24,191 6,796 Mo. Rockr Mt. Idaho 46,090 46,089 1 38,628 163,745 38,627 163 , 7"2 1 3 7,462 7, "62 - Montana 14,530 14.530 - 8,290 35,155 8,290 35,155 - - 6,24o 6,240 - Total 60,620 60,619 1 46,918 198,900 46,917 198,897 1 3 13,702 13.702 - So. Rookv Mt. Arltona 11.394 11.394 - 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 - Wevada •* - - - - - - - - - - - - He* Mexico 11,373 11.373 - 5,848 28,277 5,848 28,277 - - 5,525 5,525 - South Dakota 3.732 3,719 13 1,891 9.134 1,878 9,076 13 58 1,841 1,841 - Utah 778 422 356 443 2,091 220 1,068 223 1.023 335 202 133 Wyoolng 1,982 1,982 - 978 ".730 978 ",730 - - 1,00" 1,00" - Total 34,466 33.977 489 17,725 85,626 17,369 83,993 356 1.633 16,741 16,608 133 ALL REGIONS 7,436,438 3,141,160 4,295,278 3.883,298 18, "7", "20 2,017,708 10, "72, 512 1,865,590 8.001,908 3.553,140 1,123,452 2,"29,688 M. Cu. Ft. M. Ou. Ft. M. Cu. Ft. M. Cu. Ft. M. Ft. B.V. M. Ou. Ft. 1 M, Ft. B.M. M. Cu. Ft. i. Ft. B.M. M. Ou. Ft. M. Ou. Ft. I. Cu. Ft. Region A State Total Softwoods Hardwoods Total Soft woods Hard! ode Total Softwoods Hardwoods Saw Tl»o er Site Treee Cordwood Site Trees the state and region*! totals, softwood and hardwood saw Regional totals ■The Forest Sltuatlo the United States Includes Kansas and Nebraska. California and Nevada Columns 5, 1 and 9 ware secured by subtracting tbs awarags lumber cut for the rears 1925 to 1929 incluslwe (0. 9. Census) , ft timber drain on Table gel entitled "Average Saw Timber Cut by States, 1925-1929.' Regional totals for oolunns 11 and 12 taken from Tabls 2o K\ 5 I— vp m ^* "O IA i 1^ lf\ H r<~\ cvj a o» ■o 1 a j-i b -p e v. NO IT. CVJ BO iH ^* ^O O r^ m to lf\ KS N r- Q a c> r«- n© ov cu *o j- i-l o 3 ■ C 3 (\J o in cvj no in in k\ in in o «p in in On k*\ SO iH (K m « IT. OJ ■» ft 1^ 4 c +j 3 *- 3 • 3 cu in .=*- vo no r^- r«\ m k\ no in no i*-\ bq in in k\ o\ *o vo in cvj kn m cu w cu g e 4 * K\ 5 3 K\ Qv rH BO « I JP 3 kn rn in i<\. no & £ r- cv cvj bo in CM C\J K\ no in no no m NO iH a k\ r*- cu cy on r^ bo i*\ in in nO in On ^ 6 ct, CM CO * O* tfi rl -2 85 I 3 ' 3i 1 >> O M)*> tf J *-t TJ rt < +3 °5 £ ^ t. a -.■3^0 i H SJ "J *3 °a ia n o a to 27i ?sJ8«Ss 2 H c : S £ t * * S ■* a ~ -' * 2" » a" a" a" a S S * S f 8 S i S 8 1 r St S ! 5 I S i «i * in" id * jj g a' 2 p 2 !; 1 2 ^ J jj » J s * j " S s a S ? i H U"H I s H. i 5 I H S S S f i ? i £ o> * 8 SJ 3 £ 5 S»r«* ~ » * 8 3 S sT-s S3 ~5S2£*s g I 8 I S S I S « S & I I 8 5 S £ a I S g S g s " = 8 3 £ 5 2 »■ S » * « « s c s a |" *" s * "" S lis ■I s Us iss E ft S. 5 £ I - S I g B I I s 8 £ S 8 I S f £ | E X 3 S I 5 S E 8. 5 S S 3 I 8. | e ? I a S 8. rs 5s" H 3 5 SISsr £ 8 8 E & I 3L ~ 5 » 5SS „• «• .- J „- ^ h >: «- .• -• B - ji R - 8 - j a - s * 3 i $ - a - - g . ^ a - g ~ j- ^ . « s .• .- 8 - a - ,,• 9 a" •= a" a" a ° ~ * ~ " a" J 6 3 i * S 8 * 1 I 5 3 S 2 5 * 8 S S 8, 8 S S 1 * 8 I s s • S H i 8 B £ S 5 S 8 $ 8 ? S 8 3 3*832388. 888 S"5!JS *S ft I 2 ' 8 3 I 8 S S £ 3 8 I 5 St 3 JHsHFiJ J 8 I 8 S I ' S S 3 E £ 2 1 1 8 S 12 8 3 3*83238 ' -* ou * M •-< la h N ■ ir. a r> r-- ir> ftj »' o>" o V fu r^ 1-* u-" ' oj * n (u «h — j 8 5 « 5 s 8 S S3f6Sf ? 8 2 g 8 S S 8 11 11 e 2 saiija sesiss « s 8 s sis s s & s a s s s i i : t i : s s j c s s s • s )' s j 53s» 3*s " 8 '""SB 1 1 961.S! 1 3 1 1 1 1 1 1 1 1 ! 1 1 1 1 1 1 1 1 1 1 is i i j]mi! I ! 1 a i i 3 1 i I i I , i 1 1 i i 1 1 !, i i i a; "-5 I!! 272 iiklx 7i: i TOTiL iimm rears? qejji. bisb op 1925 - 1929 inuei (k. eaic nrr) lut- up T.U1 1/ '— * . ■"■- -. J ll» U«! *.>»5 >.*e I.M» «.JJ5 V.5U ».<05 ir.** u.5bi 1.703 ".U5 M.OT ».!«, 550 Tl< a? 10. n* 5.l*» S1TJ 57.« O.065 «.JtT 1.U7 n« JS ».nt ?.ou <.ie> 1.1*5 ■ i.w? u.5n ».o» <.»» V.V> •.'« r.*» • *.»i 15.W5 >7.5» 55.«5» n.ooT «.» n.*> i5.»»j >.«• - - - W.ZM ■ V.690 l*.Mi 55.*5« n.ru '."• X ).3M ».«» 1 1*.»3 I.M . l.-t n.tn i.ni f.Wf 7T.16M 3.»5> n.m U.T» K U.ll? tf.ia l!.Of) *■*■ •».»» T.»IS M.511 «P5.*» r.«» iTi.m i".m UT.M K>7» BTJ.T* «.»! v.j- Vi.-M *.»« «.»>' I 5».«5 B.TJ i>. « Jf.MO «.ns in.«o 1W.HJ u.m ix. T5 M.W5 v.o*a &."*> lo.oo) ».»y ■■.575 >a,5U ».in •I.W.1 y.f» n.m l.w».W? t»7.»00 «5.*rj IB.OR l«3.0»> 9 V?.U? *U. TO !.** »«.515 «°.5>( l.WJ I.l«t.«l t.ijMfi ».53» I».M1 rk.w? ■ n.m n.w n VX.J* Wt.Ul 55 15.>J7 15.1J7 - w.?y 10, n? ■ ».9T* ».57S - 4.5*3 ».5» 1 i.m Mil v %•* •••* ».p> n.rto s 3.W5.7* l.<7«.H« M5.M L <«i (15) (Itl fatal 1/ kfaali 1/ t«-* y 1/ Ea^cional lot*!* 1b eolvnt 1. 2 aad 3 »r. *«aaJ ih- m of rar^cUra atata t;'.»U. 2/ ?h« ra of cslwu 'ud«. V SUfico-i **•*• •« o»i*i»ad *T «Mw*lN **• •- of •"••?•«"" r*elo»aJ Mtal. S™»9« w»-^Lc- tTo»Tlo,»a7 M«h f.r tb. 1-MdlM. f»t«r. ud *b- 1?V. 4«1» -*7_b. »r. I> Um -ltt fWmr. 1 J/ 520.000 aMc fMt of aeftvoad dnli I* * COMl S-tloa, 3/ 1,000 eoMe f««t of budvood ln»b«r drtln l dlrldad b#tTj. »).■ •raft TCbtrmelad fr» tta flO" tymlat tu>d oMiaot tbar«fora b* atatr1Wt«d bj si*!* ties (C ■ Cam) 1» 19J* Mir U* itinp l»Wr er*«Mtl>« U »9^ - »W. 1M mu fcds? MUli **clea tjd lwavAM *l»b Um fl««r«i f»r teUf«nl> •»« ttkta t»t«J« Id Ml . I i*i 7. Aral* of »ttor f«r**t «r«* I ik* ractftc , LvluUd la tba roclMftl totai*. 9813 873 lis 111 In. I f I s E S .» I t « n i f i s j s h b «' t ! I 5 E 1 f 5 8 fi< HiHIHH 5 isiiiiiiii i * 5 5 3 E I S I 9. 8 S : ii j t £ t ! ; : 2 J ? s 5 5 5 c I 5 t H I 5 ! s 2 S S ESS sii ES c * s s" s s - » ll ll> 5 S & 1 i S S * I S s s s s a s « 2 • s K S S $ 5 5 J f I 5" IT 5 1 1 E ^ ? 2 S t i j s s «' * •' Ha 5a : 3 S E« : H 5 t 8 « s * a i x £■ * £ V 3 5 s 5 £ E 55 > s i e i i i a a ■ *" *' P-i 1' 8I8JHHU *' "' - • » 3 » ' -' • { ; H 3 ! c s £ J «' »' s s i a i i i i ? J E H S 6 E t I 5a 5a SEH83UU J E 5 5 5 E S ? E t E 5 ? -S 8 2 5 ! f * a s I «' i t $ i i s lie 1*1 Hi if ill i 1 H E 8 S H E f I J ! S s } s i i t J 5EJK2 i i i i i s i ****** a s -' 9 SEt&sSSSEJe IHSJEHfE s a $ i i £ i s a i SJE585SKES a 274 tabu n • pebsebt ctoottt astoal osottb or itsabls uatbsial oi cowixrclal torest abbas or thb u. s. 1/ (Bxolu.lT. of Alankn) CaOOlD SAB TIKBEa ABS COBPffOro CBOBTg MU rtfls tm M.H. tub!; IV' U.K. cubic f..t M.W. cuMc f..t 11.11. cubic f..t BUT TIMBER OflOfTH Softwood U.U. f..t B.B. «x_im ul. Sao Tlab.r and Cordnood Aran. U tor-. I Ooanoctlcut In EMpitkln Shod. Inland Y.rmont Total Mlldlo Atlantic Doln.nr* Maryland lev .'9rt«T B«o Tork ponnorlTaaln ToUl MlcMjaa MinaO.Ot. north Dakota El.conaln Total Contml Illlnol. Indiana Xontucky Mlnouri Ohio T.aa. i.e. le.t Tlrclnia total South AiaDau Arkaana. Florida Oeorgla Loul.lnnn Ul..l.ilppl nOrth Carolina Sooth Carolina Toxa. Tl retain Total Pacific Coaat Caltforala Oregon Waihlagton Total north Bocky Mountain Idaho Montana Total tooth RockT Mountain Art lo on Colorado Rorada Boo Maxlco Sooth Dakota nab Iraalag total TOTAL ALL STUBS 261 55 39 2 65 •27 68 32 265 258 63U 198 199 6 73 70 56 It* 239 515 610 56" 629 U28 327 526 112 335 JH 367 1.781 173 311 193 suu 26 9 19 3« 199 8,912 (1) I. cohio Mil 99 13 15 25 162 63 167 353 391 268 230 2.991 171 312 192 675 19 38 199 1,810 (2) 15 162 265 9 56 26 217 1*7 117 5 178 177 68 65 52 161 221 95 273 235 160 123 197 12 125 127 137 1.790 M.M. cubic fei U.102 (3) coble foot Bnrdoood COMBIHED SAW TIMBER ABO COKIlWijOD OBOTTB . 25 163 98 262 25 3" 15 12 17 162 156 193 170 190 130 99 159 31 79 115 89 313 2.685 (1) M.M. cubic foot lo'fA (5) "3 126 86 65 105 22 67 68 73 956 7» 113 71 61 135 >5 79 1.709 (5) 16. 6 7 1 9 1 5 15 37 15 36 36 88 8 73 8 73 236 53 65 57 61 11 31 51 12 31 35 38 190 976 (6) 15 168 63 69 3 116 761 M.M. cubic foot Hardwood 231 575 17 15 36 112 151 66 190 732 910 801 891 609 161 717 160 176 185 521 b.799 153 825 507 1.7«5 301 275 576 19 157 1 50 17 38 71 389 11.731 <7> ►51 31 37 9 72 70 172 SAB TOfaBB GBOtTH M. foot B.U. ■iTThA 532 661 583 651 W 33S 5U1 116 316 353 '79 1,916 118 816 501 1.765 301 275 576 19 157 1 50 17 3« 71 389 8.311 (8) 217 29 32 1 51 351 7 13 20 169 161 I03 32 32 1 39 101 13 31 106 115 62 179 73 213 166 126 203 11 130 132 112 1.853 5 9 11.11. foot B.U. SQftoood 3,120 (9) M.M. foot B.U. _ BfaB jatl 2S (10) 1.098 H.I56 1.5J1 1.693 81 2.839 18,701 299 l.»95 905 7.153 7,260 17,812 1.300 1.320 "9 5.235 13.971 3.021 2.907 2.336 7,210 9.902 1.256 12,238 1.953 16.826 11,832 11.703 12,951 11,161 9.812 7.511 12.085 . 2.5«1 7.69« 7.852 8,137 109,959 12.891 23.190 11.139 50.823 11,929 10,801 22,730 3.613 11.189 296 3.711 1,260 2,810 5.519 28,696 309.526 (10) (M. oaroa) Saw Tltabor and Coloan 10 •quoit the fiat of eolomno 2 and 3 on Tablo 1 ontltlod. 1/ agonal total. In column 1, 2. 3. 7. 8 •■»» 9 takon fro. Tobl. 17, pajo 221. In "A Batloaal Plaa for Jaartoan PoroatrY. 1 .- of^hTsoitld Bt.ta. • Mat. total. In colon. 1. 2. 3. 7. 8 and 9 oaour.d by aoltlplrlaj too rojlonal totu. by tbo p.rconta«o that tbo ttato. boar to th. roslounl total. In coluon 10. .Lomotil! il colon. 1 a.cur.0 by n4l«Jl»l« tti roiloanl toul. In colonn 7 by w. porcntag. that th. regional total. In coluna 1 ox. to th. rojlonnl total. In eolojra 5 of Tablo 6 «>>ltlo.. -annual Drjlu 5*1.™. roouct: "*Z uJa^b.rK^LmiT.o^.nf r.lfoar«otlr. 1. coltmu , \Z. ..cur.d fr« th. roglonnl total. In ool-a. 6 onn 7 of th. „. tab), Colo- 6 1. th. dlff.r.n.0 b.«0«, 0.1«n. 1 and 5. Stat, total, in column. 1 oad 5 ..curod bj ejultlplylns tbo r.rtonal total, »7 tbo porcolr*. that o.a.o ar. to rational total. U oolooma 7 a«a 8 roopootlTolp. c J8i;> ill t T3I iiaiifii -. t - a i . ill ■i-i-i 2S^| S) ;, S lt - • : : ! ill- in i a I "i ii -I , EC - ...■ ;..:., - - 1 --- , % ; | Lass si ^ ' i i g-iai ; ■ A'lii 'i J IS i 5; *.»3KSE | I i J SI s; i»» 3 r» a I ^....^ | *jjri SJSSii ?> . Ill" : •' s ■ - - - J s° •' 3 * !l — § I I ■ .-;g§g 1! t j ^ .' jjjji fssjbSss s ;i s I ii s||| »fj E - Hf| its: .i j 3 I 5 HHfI 1 si still s al'Jal . f--Ih| t " ". :?s=-H; -555S ts^sst; SS"* 1 . !??"= 5s9ce is&s| l * s ....?! fuaffl .___« :•?**? ....f*.|i<.j. sszaSwtsaw '■'"'^i ^fitt^sa 276 TABLI X -8WKPA0S PRICES EY STATES ATD REGIONS 1/ 3tete A Re^l^n ?9tel 3i=~tlty Sold M. Ft. b.i: Totel Price Received Average Price Received P«r K. Ft. 5.". ». -ntlty Sold :■. Ft. b.::. Softwoods Total Price Received Average Price Received Per 'J. rt. 9.11. Total Qu.ntlty Sold H. Ft. 3.U. „ .Hardwood* Total Prltw Received Averege Price Received Per !£. Ft. B.n. SoBTmrtlOHt H-9 }2* 1 296,1118 t 6.05 1.911 | 72,851 % 6.69 24,893 8 144,385 t 5-62 ->ine ■05 53^ 5,648 O33 7.00 720 .0 ; 6 5,?50,159 7.29 17.759 192,076 1.02 l.»*e*cn jp»tt? lto,s>3 979,061 6.95 71,S;6 579.251 7-73 8,587 57,753 6.11 763.5^1 6.69 'i:,5;: 1,759,290 7.16 13,099 70,705 5.40 -. - : a l ■ ■ - £/ il il il il 1/ V 11 il ttawmt -7g,^7U 3,500,116 6.07 ?5.89o 199 . 282 5- c 5 771.65' 1,857 016 00 T^t-l 1.937.171 I2.»>7.5r* 5.64 1,081,118:6 7,820,836 7.2' 163,991 2. '°' ; . : '37 1.78 Uli-.l^ Atler>*.lc D-lew?re 6,056 r-.i>i 6.76 1.726 7.19 1.659 1? .768 6.70 snd 93,36? 606.720 6.11 19,669 310,399 6.85 37,50? 171,919 5.22 »*■ J"ere«j 2/ 8/ il il il il il il il ftnft 3*6. &1 6.15 I?.: 1 ? 112,719 6.14 111,108 1,055,557 7-32 Pen-.evlvanl* 469 ,"95 S 3,119,10? : ~ 37,097 2811,752 7.6a ; --.-■' 2,043,111 6.67 total M3.5S7 5,917,208 5-55 109,021 301.880 - 36 185,607 3.28 ,355 6.77 Michigan i,y*?, 109 9,161.053 6-35 798,123 1,62', 201 4.08 696,900 5,335.611 7.66 Klnneeo** 91?, ?30 5.900,000 6.17 817, *te 5.701,958 6. 95 72,214 118,137 1.61 ftgrtfe D»>->t« £/ V il il il il il il il Fleonslr. 1,084,057 6.762.219 6.21 78,172 722,211 1.12 90,085 -'-"■--,;£' 7.S6 Totel '.UJS, 1*96 21.825,272 6." 1,294,137 7,650,103 5.91 5r-,i99 6,161,931 7-17 C-'tril niinot* 11,712 212, S'l 11.17 il il il 12,362 201,621 16.55 Indlena 1*6.383 2, '97, 098 16.38 il il il 89,588 1,412,393 15.77 Iowa il il V - - - il il il 'entity 207,090 1,039,360 5.02 2,201 8,211 3-7* 197,593 988,027 ^.00 U'.eeourl 2J0.502 1,136,160 1.97 72,852 750,077 1.81 66,802 361,132 5.25 Ohio 210, 109 2,167,167 10.31 19; 1,310 6.91 206,801 2,159,547 10. '1 Tennessee 650,291 3.137,517 5.29 17,026 191,110 4.13 197,107 1.317,390 6.81 West Virginia 1,22;, -.61 6,090,601 1.98 8,570 25,571 2.96 480,726 1.978,51; 1.1? Total 2.6o2,J51 16,180.727 6.11 130,815 579,348 4.42 1.251,279 6,421,621 6.7) South Alabama 2.073,466 *, 650, 615 1.27 1,218,111 1,802,181 3.91 80,874 367, 3H 1.51 Aiiuuiias 2,3111,113 12,990,601 5.62 831,881 1.350,683 5.23 287,291 1.803,733 6.37 Florida 2.782.5*: I5.JM.J95 5.53 2. 705.101 15.128. 7»7S 5.59 21. 322 _A «•'" - 2.55 it. 02 C-e^rglp. 957,629 3,766,552 7.89 629,703 2,226,933 3.51* 22,664 91,096 Louisiana 2,630,424 17,235,613 6.09 1,159,810 6,925,318 5-97 469,181 2,659.028 5.84 Mississippi 2, 60S, 566 12.519,507 1.81 l.se^.ioi 9.107,097 1.66 137,140 657,604 4.78 t!orth Carolina 1,244,355 5,519,800 1.11 719 , 202 3,478,378 4.61 166,549 845,743 4.19 Oklahoma 775,390 2.^01,550 2.97 577,861 1,558,887 2.69 42,35; 112,095 2.65 South C-rollna 1,372,893 6.306,195 1.59 568,776 2,812,211 5.00 95.395 317,473 3-33 Texas ?,6'2,374 2*. '•?-. "72 6.85 1.933.095 15.607,507 6.07 150,994 729,4*6 4.33 Vlrgl:.*a 981 , 397 5,076,931 5-13 350,627 1,711,022 4.96 119,116 695,550 4.66 Total a.5»3.2l9 rt», 6*7.537. 5.J2 12.589,101 k7.755.OOJ - 5.3* 1. Mi.m ••$•*■ >55 . 5J3 Pacific California 11,485,464 H, 198, 302 3-07 44, 198, 016 '.07 1/ u V Oregon 28,71*2,465 77,935,167 2.71 28,716,652 77,877,391 2.71 23.663 54.551 2.31 Washington 27.766,464 66,162,060 3.1s 27.735 911 88,140,474 3. 18 7,679 16.179 2.31 Totnl . 10, 2-97 70,957,917 ?10, c l5,s<:3 2.97 31,5112 ? ,7"0 2.31 SSs Hoofcy Mt. Idaho 2,133.991 7,867,117 ?.o9 2,1?7,925!V 7, 653, 105i 3.69 ".■_v tana 1,151.081 1,865, 6ai» 1.62 1,151,016 1.865,521 1.62 65 103 1.58 Mtal 3,285,072 9,73! .~ J 1 2.96 1,278,911 9,718,626 2.96 65 103 1.58 So. Rooty lit. Arltona il J il il il il il il il Colorado il *y \ il il il il il il il Hevsda il il j V il il il il il il V K il if il il H il il South Dakota il il 1 il il il il il V il Utah il il il il il V V Wyoming il - il il H il il V il Total TOTAL AlX STATZ3 il 1*».7»».»65 . il 352,097.586 il VI* Per urH.'^B.iiy Prloe Received Average il «M*2.IB ti. rt.^Brii. Sold Quantity Total il J».l45.97« Received Prloe Totel Softwoods i> Su- per H. Ft. B.M. Price Received Average il 4.755.678 2».«01.5J5 V Kag Stpte A Region sola fciantlty Total Price Total All Uoode u. Ft. B.tt. Sold Quantity Total Reoelved Price Total Harcwoode Per H. Ft. B.H. Price Received Average Stat* figures were furnished b/ trie 'J. 3. Forest Service to NRA In the spring of 1934 for the purpose of ealculetlng costs under the Code. The regional stumpage prices were srrlved at by totaling the quantity and walue of eelee by states for a retlon aid dividing the total value by the total quantity. Flat r^-te mlj-.ed sales uf softwor.de and hardwoodf have nit be'n listed In the table, but were tftfcen into consideration by the Forest Service In compiling the flguree here given far "All Woods". Ho figures were furnlebed by the Forest Service for the states In the South Pouiy Uountaln region beceuee of the small arount of c onme re lally owned timber lscotet- therein. Where no figures are given for other stetes *.-.• irolpplon Is for the same reeson. It should be noted that Dept. of A&-1 culture, lilf cellaneoue Publlcetlon ^?1«, (In press), entitled "Forest Taxation in the United States", calls attention to the fact that much etumpage Is purchased at less than the usual reported price, because, either due to lnaooesslblllty or to partial growth, it is not ready for conversion Into lumber. Conversely, those sales reported are usUall:' of full growth timber, eaelly evallable. The etumpage flguree given In the above publication were, therefore, compiled on the basis of a reduction of 25^ In the eajtem and central states except iialne. In Ualne, the Rocky M'unteln, and the Pacific states, a reduction of 4o£ was made, except for a 5C*> reduction in Oregon. The figures in thle table have not been so reduced. lot dwtvrB.li.vd, legllglblw. flat rata alzad softwoods not lacludsd. 9613 i j I! J » * a aaa aaa > ■» > 8 R E R R B S tt S S 8 | 3 8 S 13 1 R 8 t R S R B C a a iRRSRBRKe, 5 ! J||'3»t5t55i5|i 8 3 * R S 8 e a R e , , R 8. |SS.BR»eCR, K a , r e c e p | 3 !• j 3Ra.83*. 1 RCf 1 , , .8S3R83SR1E.3 .R,SKE|SR*8*E7 » 8 8 S i VSJ B B < ft a J a > 1 a * r 8 a R s b 8 ft c s b a a a a , RS-CS3SS'*8*848B*tlJ?RFiS4R8 • rf a j -• .- a -• ^ «- «• a * g - «• .»• ~ »■ ------ - a •i S ~ S w - «• -• ^ >i ! 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S gfg i is §$88888 S 2s-??3SE E c-9 ill EKSK EKKSKSrSS SSKSSKSKSCS SKS 33 (S3 ESS £ ?£"5 s: ^a; i f S £ . 111* r.il m liui p -=1£ 'ill a* I S82S8S * I8?S? f? 111? * lisSSISI I IS?I88£ISfK ? III 8 IS f §881888 8. ISII ?" gJS«M8i ^ 58" g "8iT~§8liFfrr 9888.88. 8 98888 8 88^8. 8 8.888.8.888 8 8.88.8888888^ ■ sig 9. ,»».«?? f ii^s = :-c^.e«;-3 = s c »rsVi-?::ir s -..ep s- . ^? y sac 5 aesss •! =i' : nun ^tfH. K >^ 3§!|J|9 8 sfsSJ J Ffcg^i t fSf^rfE? I SS£SiS^S8S a ? -o i *^ - SE ^-^ ? Jj;£? ff ^ c ^^Sf? p ?£^ : ? 8 i!5K|fss- a ss»3gg| s -i?gs J ^ss; ^ ^ a Bisefssse a ^\ nil j K 552 f s S '1555 c ?fj|S c --gis^sS ft Is.ssfssffSc 3 s?l c IE E SJlKist » 5 t?^ E *- ?5II2^ t f?3*cfic S6?B5Sifs 5 JIIISc!J5fS s ESI s II = §88I§§1 § I Is i ! 3 1 Q I J. J ~ 888.888 S 88888 8 8888. 8 88888888 R 8888.8888888 8 888 8 88 8 8.888888 8 K - JII555 £ SJESI S £&S£ s 2?SEt-8E5 E SsRItSsSSSs 2 sES I SS 5 ^SEsSS? s i ! 11^ ? Isilll 1 iiH 1 ^3 fi il 1 iIhIVj' « I I-* 3 f ■ ? iiiitf » 3 ? 11 1 II £ Is Iifl ml i !1 • -.IS! = 1 5 • * s-rs-j, :; ! ■jllt 3Ii :i s i |3!||; sill !|i:i ill! s - -33 m 's. : 1 ?33S 35:- n-s -"12 ills' Sill s5if n ; *t llfji ! r9« -.sii.si:- tig?|i|i| Jf.s Isls II" » ^ si I e.ls 5-6; 3 t r :t" l«!Ss s dfli-iia -ill? .if si I Kn«iii« m;ii. :es;tst 3S»l:t"fs s': s j; ; :t :: .1 .- S J::-3S: «:?sf 5 J. 3 .. ~ s i" : ; : tMXfi ;:: : !sJ' S::»ii3,-= >-;;} iitl>«i ,5:^-.^ 2 j5|.i,J; i;;?!?^ Ij^;;| 2 si s s2 s Js| ..-E|«: 35|r-- s ". ! t •■*:»!h|^s::-U:! -%-%-.: --i-.-.rJ Isle.lt^-JHSI-^-.iSi.S-s^Jrllll 5 :;;-:.,' jiiiniihliiiiilHfiiiiiluifilmf'ilH » Si >ClVl SlSlSiS SB aaa ^gea 284 TABLEmi ESTIMATED AMWJAL TAX 8URDEM OB COMMERCIAL PRIVATELX-OIBZD SAW TIMBER ARIAS, BI STATES AMD REOIOB8 (Based on 1529 Data Revised To Data) 1/ Privately Owned Saw Tlaber Land (Thousand Acres) Land Talus Per Aors Total Saw Timber Land 1 Talus (JlOOO) Saw Timber Poll Stuapsgs Value Total Esti- mated Saw Timber Value (Thousand $) Total Esti- mated Land and Saw Timber Value (Thouesnd i) Ratio of Assesses to Esti- mated Value Per Oant Aeeeesed Value of flaw Timber and Land (Thou Band $] PoTSSt Tax Burden (lfof Total Eetl- aatsd Value) Average Produc- tion 1929- 1931 (1. rt, B. M.i Tors st Tax Burden Per M. rt. B. 1. of Lumber Produoed State ml Region Softwoods (Million ft. B M.) Hardwoods (Million J rt. b.m.) Softwoods (Psr ■ Xt. B. M. ) Hardwoods (Per I Jtt. B. M.) lea Inula 1 (1) (2) ' (3> (4) (5) (6) (7) (8) (9) (10) (id (12) (13) (14) Connecticut 201 •3-00 603 75 627 16.69 »5-S2 1.151 4,75* 63-2 3,005 1 *7.5*o l».5«3 »3-2« ■aloe 9, WO 2.00 19,760 21,120 14.537 7.29 4.02 23I. 271 254,034 52.0 132,098 2,5*0,310 169.5*0 14.98 Massachusetts 437 3.00 1.311 1.368 530 7-73 6.11 13,829 15,110 77-5 11,73* 151,100 52.727 2.87 Bee Hampshire 757 3.00 2.271 3.822 2,009 7-16 5.40 31.392 36,663 76.2 27.937 366,630 130,767 2.60 Rhode leland 13 3.00 39 59 29 * y 571 610 80.0 188 6,100 4.438 1-37 Teraoot 1.973 3.00 5.919 2,079 6.138 5.55 5.00 12,228 48,147 55.O 26,481 481,470 65.763 7-32 Total 13,261 2.25 29.903 31.523 23.870 7.23 4.98 329,445 359,3*8 - 201.743 3.593,480 437.798 8.21 I'M" Atlantic Delawars 32 3.00 96 36 71 7.19 8. 30 848 914 77.5 752 9.440 5,*09 1-75 Maryland 492 3.00 1,176 204 1.050 6.85 5.22 6,878 8,354 61.0 j 5,3*7 83.5*0 30,986 2.70 lea Jersey 281 3.00 8*3 126 397 V y 5.823 6,666 63-2 1,213 66,660 8.759 7.61 ■a» lork 4,626 3.00 13.878 6.501 11.155 8.11 7-32 136,769 150,647 84.8 127,719 1,506,470 79,416 18.96 Pennsylvania 1,789 3.00 5,307 1,106 4,585 7.68 6.67 39,076 14,383 57-8 25,653 H3.S3O 159,718 2.78 Total 7,200 3.00 21.600 8,273 17,558 7-36 6-77 189.391 210,994 - 163,691 2,109,940 284,288 7.42 )*■ Michigan 1,659 2.00 3. 318 3.128 12,917 1.08 7.66 112,930 116,248 96.3 111,917 929,984 300,129 3.10 Minnesota 1,113 2.00 2,286 1,969 1.523 6.98 1.61 21,161 23,447 39.2 9.191 234,470 146,105 1.60 lorth Dakota 10 2.00 20 1/ 53 V y 117 •37 y y 4,370 y y Wleooneln 1,612 2.00 3.22* 1,836 8,007 1.12 7.86 70.199 73.723 96.6 71,216 737.230 401,821 1.83 Total 4,42* 2.00 s.sia 7,233 .25,500 5.91 7.17 205,007 213.855 - 192,351 1,906,054 848,055 2.25 Central Illinois 2,477 1.00 9,908 13 3,111 y 16.55 51,544 61,452 21.1 14,885 611.520^ 18.7*9 32.91 Indiana 1,812 1.00 7.2*8 17 2,161 y 15-77 34,201 41,449 80.2 33,242 414,490 75.728 5-17 Iowa 1.755 1.00 7,020 2/ 1,107 i/ y 7,539 14,559 12.7 1,819 145.590 9,535 15.27 Kentucky 2,761 3.00 8,283 732 1,830 3-7* 5.00 26,888 35,171 85.2 29,966 351.710 1*3,450 2.15 Missouri 3.15S 2.00 6,316 289 3.391 1.81 5.25 19,208 25.524 70.9 17,762 255.240 101,133 2.48 Ohio 2,690 1.00 10,760 50 1,085 6.91 10.31 42,586 53.316 70.2 37.379 533.I60 a 81,485 6-53 Tenneeeee 4,863 3.00 11,589 1,021 8,266 4.13 6.81 60,520 75.109 69.1 52.126 751-.O90' 339,656 2.21 feet Virginia 1,105 3.00 1,215 621 1,363 2.98 1.12 19,826 24,011 18.0 11,510 240.410 304,980 .79 Total 20,921 3-27 68,339 2,746 31,320 4.42 6.73 262,312 330,651 " 198,719 3.506.513 1,074,706 3-07 South Ala Dana 7,231 3.00 21,693 16,181 1,182 3.94 1.54 83.933 105,626 57-2 60,118 1,056,260 1,015,404 1.04 Arkansas 6,708 3.00 20,124 10,366 12.362 5-23 6.77 132,960 153,084 27.1 11,186 1.530,810 690,670 2.22 Florida 5.790 3.00 17,370 13,012 2,129 0.59 Ml ^5 '8.251 95_. 621 ■ 21.0 ~.«9 956.21 ,. 637,081 1.50 Georgia 6,7» 3.00 20,187 16,326 1.146 3.54 -... 94,648 15-5 13.065 946,480 635,412 1.49 Louisiana 7,375 3.00 22,125 12,871 15,705 5-97 5.84 168,575 190,700 82.7 157,709 1,907,000 1,160,998 1.64 Mississippi 5,060 3.00 15,180 12,951 7.515 4.88 4.78 99,122 114, 302 53.1 61,037 1,143,020 1,202,622 .95 Borth Carolina 1,019 3.00 12.057 10,675 8,070 1.6* 4.19 S5.766 97,823 83-7 81,878 782,580 664,253 1.18 Oklahoma 1,800 3.00 5,100 2,159 1.083 2.69 2-65 9,185 14,885 62.3 9.273 148,850 120,073 1.2* South Carolina 3,728 3.00 11,181 9,031 9,325 5.00 3.33 76,222 87,406 21.1 21.327 874,060 557,080 1.57 Texas 1,115 3.00 12.135 H.7I5 4.404 8.07 4.83 116.053 128,488 48.2 61,931 1,284,880 774,38* 1.66 Virginia 2.635 3.00 7.905 1,535 5,735 1.96 1.66 49,219 57.124 18.8 27,877 571,2*0 411,473 1-39 Total 55,220 3.00 165,660 120,461 74,656 5.45 5.68 1.139.707 - 5SS.950 11.201.120 7.869,150 1.12 Faclflc California 5.63* 2.00 11,268 177,051 V 3.07 y 543. 5*6 551,811 55.9 310,111 5,5*8,110 1.169,1*8 4-75 Oregon 8.761 2.00 17,522 232,341 1.260 2.71 2.31 632.555 650,077 63.3 111,198 6,500,770 2,881,280 2.25 Washington 1,512 2.00 9,021 182,885 365 3. 18 2.31 582,417 591,111 33-1 195.767 1.731.528 4,190,541 1.13 Total 18,907 2.00 37,81* 592,277 1,625 2.97 2.31 1,758,518 1.796,332 - 917,106 16,780,138 8,244,009 2.04 worth Roex-r Mountain Idaho 1,836 2.00 3,672 28,020 i/ 3.69 - 103,394 107,066 60.0 6»,239 1,070,660 565,173 1.89 Montana 1.718 2.00 3.136 13.711 il 1.62 1-58 22,212 25,648 34.1 8,623 256,180 208,655 1.23 Total 3.55* 2.00 7,108 41,731 2/ 2.96 1.58 125,606 132,71* " 73.06J • 1,327,140 773.628 1.72 Arli one 12 2.00 81 120 2/ V . 240 324 81.0 262 3.2lO 96,102 .03 Colorado 985 2.00 1,970 2,415 2/ y - 4,830 6,800 73-6 5,005 66,000 49,501 1.37 Berada 97 2.00 194 418 1/ y - 896 1,090 50.0 5*5 10,900 y y Bew Mexico 1,018 2.00 2,036 4,(96 1/ y - 8,592 10,628 13.0 1.570 106,280 102,097 1.04 South Dakota 110 2.00 280 228 V ^ 156 736 82.6 608 7.360 38,027 .19 Utah 80 2.00 160 265 2/ v " 530 690 61.1 424 6,900 6,810 1.01 Wyoming 116 2.00 832 1.741 2/ y _ 3,488 4,320 72.1 3,128 43.200 19,682 2.19 Total 2,778 2.00 5,556 9,516 2/ .' 2.00 - 19,032 24,588 - 14,542 215,880 312,222 • 79 i Total All states 126,265 12.73 344,828 813,760 174,529 »3-36 » 6.3* J.B»).3el 1 U.20S.1S9 - 2.350.5O0 I 1 »I40.470.S62 « 19.844,356 .2.04 Privately Owned Saw Tlaber Land (Thousand Acres) Land Talus Par Aore Total Saw Tlabar Land Value ( liooc) loftwoode (Million Pt. B. M.) Hard woods (Million rt. b. m) Softwoods (Per M rt. B. M.) Hardwoods (Par M..n B. M.) Total Esti- mated . Saw Timber Value (Th.ou.6IWd ♦) Total Esti- mated Land and Saw Tlobsr Valus (Thouaand t) Ratio of Aeaeeeed to Eetl- tmted Value Far Cut ASESSBSd Valus of Saw Timber end Land tWhni."nrt * Poreet Tax Burden (1* of Total Esti- mated 1 Talus) Aversgs Produc- tion 1929- 193* (m. rt. 1. M.I forest Tax Burden Per M. rt. B. M. of Lumber State and Real™ Saw Tin bar 1 Unit Stunom te Value , 1/ This table wae prepared In the same fashion as was BRA table "Estimated Annual Tax Burden on Commercial Privately Owned Poreete, by states and Regions 1 with the following sxosptlonsl Column 1 repwsente the total of privets saw timber land under the headlnge of 'Industrial Ownerahlt 1 and 'Para Woodland" In ERA table 'Comaerolal PoroBt Area of the United States, by Regions, States. Classes of Ownership, and Character of Growth; • Columns 13 and 14 comprlee new material, the former being taken from 8. Csnsus figures and the latter equaling Column 12 divided by Column 13; the reduotlon factors employed In the preceding table to llluetrate the method employed by R. Clifford Hall In estimating forest tax burden have not bean ueed In this table. 2/ Wegllglble V Dhlt stumpege value for region used V lot determined U813 282 jl ]! 1. § 5 • 1" 1 ' ' *• • *< I .1 * ess lis 5 o ** Slsi Is 1 U IL is,. 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Pt.) - 101 - 301 - 301 - 401 - 501 - 751 - 1,001 - 2,001 - 3,001 - 4,001 - 5,001 - 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 - 35,001 - 40,001 - 45,001 - 50,001 - 60,001 - 70,001 - -Total 100 200 300 400 500 750 1,000 2,000 3,000 4,000 5,000 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 45,000 50,000 60,000 70,000 Up 492 1,371 2,442 2,101 2,122 2,126 3,189 2,015 564 289 155 89 64 45 50 26 27 28 15 16 26 7 14 15 13 10 29 17 15 17 16 18 12 10 11 13 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 8our«o: Divisional Codo Authorities •Includes all codal divisions and subdivisions which saw lumber except Mahogany and Philippine Mahogany. t 9813 290 TABLE XIX RECAPITULATION BY STATES OF KNOWN LUMBER PRODUCERS* Number of Number of Total Producers Producers Number Whose Mill Whose Mill Total Hourly of Known Capacity Capacity Capacity Producers is Unknown is Known (In Bd. Pt.) Alabama 1,695 104 1,591 1,638,600 Alaska 6 6 27,800 Arizona 22 6 16 140,200 Arkansas 1,157 49 1,108 1,101,600 California 195 51 144 1,135,500 Colorado 102 29 73 79,100 Connecticut 67 16 51 42,300 Delaware 26 1 25 16,700 District of Columbia 2 1 1 3,000 Florida 537 4 533 770,500 Georgia 1,455 37 1,418 1,405,150 Idaho 207 68 139 700,400 Illinois 239 185 54 19,650 Indiana 400 166 234 111,300 Iowa 1 1 400 Kansas 3 3 4,30u Kentucky 601 2 599 367,000 Louisiana 394 394 986,100 Maine 231 52 179 250,900 Maryland 92 1 91 70,500 Massachusetts 120 29 91 129,450 Michigan 894 750 144 295,750 Minnesota 286 82 204 177,200 Mississippi 2,046 68 1,978 1,947,100 Missouri 551 8 543 287,400 Montana 131 44 87 372,700 Nerada 1 1 2,000 New Hampshire 201 39 162 219,300 New Jersey 6 1 5 3,700 New Mexico 52 12 40 184,650 New York 197 65 132 138,850 North Carolina 1,438 28 1,410 1,363,850 Ohio 570 297 273 117,250 Oklahoma 187 5 182 172,350 Oregon 517 55 462 2,998,100 Pennsylvania 271 111 160 129,850 Rhode Island 11 6 5 5,100 South Dakota 29 4 25 75,500 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 1,207,350 West Virginia 384 2 382 378,200 Washington 423 49 374 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: Divisional Code Authorities. 'Includes all codal divisions and subdivisions which saw lumber except Mahogany and QOj o Philippine Mahogany. O >, a 29i w . Hinosto ^ cm r*"\0 h>oo rAinf^wo r-"\«o o^ sorbin -\0\.=f o K\r--rHinin«g os^o r*-\o\mrH o^- 1^4 cm cm r^± OM^w^^Ncy r*-\so cm;* o <-h ) r-^d-.d- r*^=^ r^w inr- 1 © r CD AS O t. 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O o o as is i-i -p as O k -P £ o m -P o o CO a! c -o r< O o o Oh -p ■P 01 co a! a> o CD CO « c ■P Ti 3 0< o CO 9813 o in c«- cm" m o o o •=*■" m m 8 in m oo oo 8ooo oo o rH rH r^-CM OOOrH OO OO oo oo mo-O O VOO\CM^ vovor^-Q mmmij- o o o wf oo oo irMTiO UTN On SO lfM>- W50 00 On irvd-jd-vo O O OO o oco oo oo CM ISO .^ in cm in CM H *0 ONrH in oo o o o oo o oo o o no"o*no"o" so 0\O in o o oo o oo o o o o o mcMNO s± m*0 On NO to r-so o o in so NO On O O o o~ On CM 8 in m oooo oo o o oooo S0.=* mcM rH CM CM m OOOO OOOO r-rHjd- o CMONO^i- ij-NOO On 3-jd-ind- 8 m On CM OOOO o mo in oso KV50 l*Vt H H so so so on oooo oooo oooo ms0.rt On mminin mNOSO in OOOO OOOO OOOO minso on J& inrHNO ISO ONf^SO oooo oooo oooo soo-onso o r^-H in CM f\d-3- mmmm o 8 SO* rH o o o £ CM o o o o" m oooo oooo oooo no mh-CM CM CM rH ON oooo oooo -=)- mrH O i-HON.3- rH rH KMAH; mimnin o o o H m oooo oooo inino o no j- cm in sONOirvd- oo oo oooo c o o o -=f-~o*o no" rH inso rH mmmoj oooo c oo o oooo inm^i- h no on mo NO NO NO NO oooo oooo oooo NO KNQ O in CM NO On mCMONSO m r— r— no* o o o r*" On 8 in m oooo oooo oooo noWso m «o so r-i^- o o o o oooo r-Noo o o cm ir.cM in rH no m ininzj- J- o o o o~ r- CM oooo o o mo ino h-o KNH O On J--=l- J- m OOOO OOOO OOOO r-j- s^on O CM no 0\ so i^no in oooo oooo oooo no minso On J" mON oooo o o c o c oo o NO r-H r o OOOO o OOOO o OOOO NO CM ClrNITl CM rH 0.' CM O H t-ir-ir^r-i O OnOCMS) O OOHW O OVONO rH it On NO r»- CM r<-\ rH On I s - in t<^ r sor-No^s- ooo o oooo moo o ITNHNO WOOvO cm mcM m oooo oooo oooo no mrH in m.iso in=j- cm i<\=)- m oooo oc o o oooo minmto r^o^t- in mind- m VOOHO t<\^D rH O r4 rH r-i O r. u rl r. U r. « 4> a 0) 0) CD 4> P p P P +3 f(«t« fn= * = r.= = = «-.= = = a) as a! a! a! as 3 3 3 3 3 3 zr cr cr cr a* cr ON o H CM m J* CM .rH CMmd- K\ H CMKNd- m> rH CM l*V* m rH cm m=sr m H CMKVd" f^ rH CMI J- CM VOVO in o HI st so invo O^tSOVO O mCM rH n-n-no h OS) WN S0 SO O CM so r*>rH 1^,0 N- Ov^i-vOsO VO CMVO rH LTv irvvo irvd- r*\ mj- mcM m so N- r— so J- so c u c gj ^ c ■p «H o S3 o c o in KN o o o o in in in in CVI CM CM CVI CACACAO SO SO SO SO O OO OO C O O O O O inininin O O O OO O IfMAlTMrv ooo o ooo o in in in in o o o o o o o in in in in CM CM CM CM r«\ cooo m mo O O -=r N-O O N- in in in in in in in in LTv KvrVrMfi Ov CM CVI CMCM CO m HHHH Ov st CM CM CM CM st ON-ONO so h mm ur, vo 80 Ov m CM st rH St m ON H CM .. en ■ 5 • o 3|l §!! o • MP O as g~ o o o E* n ►J e u; IP < Sh io CD U/ /^ d> P U 3 r. O >, w o I a as to 3? o o o <- o -P rH U R ! o n; ' 3K | to : i c t5 ; •r: r_ o ' ■p a. n • h-P p ' c tfl -p S: « vh ' CO o ' u-> I I k o o o ■H -O r-; a> CO K o S- a> CD p n cr. .h a. pl, ■P tc a es cu o & o c f-, CD C ^! C J> -H 3 Ph O CD 9813 O O OO LTMTVir Lf> CM CJ CM CM O OOOO O LfMlvUrMTv O r--^-r--r^- O OOOO o Lr\ir\trvLr\ o r^r--r — r— ooo o oooo LiMrvirsLri OOOO O rH J- CMI-i-v LfMrvLfMrv h vor^soov | — r — I — I — r<~\ J-OVLfvCM Lf>ir .ir.irv OOvOvO O O C O O O c c OOOO Ov st st st st OOOO OOOO OOOO in vovo vovo CM O OOOO O OOOO O OOOO SO Ov OvOv Ov H CM CM CM CVJ m rH O OOOO o o OOOO o O OOOO o so so so so CM CM CM CM OOOO O Q OO OOOO H vo stst OO cvj cvmf<-N HI^-OvJ" itvhovo ini^-rcvo LTV c o c vo sf o c c <-o vo lf\ CM OS 0> SO o c o l>- rH CVI LfV o o o r-- st c o o o VO rH SO l*Vr"v ON SO O ON OO c c OOOO O mi">CM h invoj- vo O On SO vO in rc\ OOOO oooo r-1 I^NOVO CM r-i Lnr^N VOVO st st o o o c o O OOOO O *0 rv!W o iso o r^-m cm r^ K\=t CM CM st o o o o< o r~-cvi^- r~- O OO Q ~>o o ON I^NrH Ov r^ KMni^N OOOO OOOO vo r«-v5- r- VO in st SO On st SO VO CMOVrH t*- CM J- HON in soso stst CM CM st l^~ CM CM st On OOOO OOOO mmir-m O ONrH CMVO so o rH o in K\ r-< H H o OOOO O OOOO o mmmm So NO st ON r— t-r. O OOOO o mm mm o CM CM CM CM st 1-1 O OOOO O OOOO O OOOO 1^- st O SO fv r-K CM l"->CM KN H O rcNSpso so mrnif cm O OOOO CM O OOOO so O OOOO SO o cm mr^- ONO o on ov in in r-< I-* rH r-< vo vovo VO mo o o r--o mo vo inr^o mrrNCMso r«-\ir\=f m r-irAr-ir-{ OOOO OOOO OOOO st-mm CM o oooo Q OOOO 5 oooo r— inov von in o irvNH r*- mo, so^i- o oooo c oooo o oooo i>- mso m m VO ov o o o rn cvi vo st o NO OnOnONOv r<\ mmmm CM o O o mm in mo cm r~- CM rHNOVOSO st ovCMrCd- r— stst?> NO st rH O f^-lf V o o o o" rn o o o o oooo oooo p^no soov soj- OS0 CM CM OS0 r-t movin mvo cmvo so r — r — r — CD O C3 C3 OOOO oooo r<^so cm m o cm mso r--so r^-r~- o oooo o O OOOO Q o c o o o o irv cm o mso in m vo on r*- cm i^- VO SO r^st r-f CM so r^mcM r-~so h-in oooo o o o m ONr^-vD cm o mvo on so on so so oooo oooo oooo mso ovo r--o inn i«-\Onso in oooo oooo oooo so vo~=t-~r^ O st CM Ov CM O O Ov O o o o" c CM oooo oooo oooo o oooo o oooo o oooo inso on O O inovvo stst OO SO IAN04- vOSOJ-tr. vo J-mOsO r- t'ArrNC- 1 CM as u eS H ■p a •P V o ■p o ■P rH MB ■ ■ E-- u= = as cC 3 3 cr cr Ov O CVI H CM r<~vzj- m rH CM f<" ON ON rA rH o in h so m rn so m I^N H N- NO m H CM VO CM CM CM H VO SO vo N- ON m m On no m m in cm SO st SO vO fTN. O CM Ov in N- Ov sf so SO o m O r^v §i^n r<-N st in so o o o o" N- in i^v o o o so" in st in t<"\ CM st vo vO NO NO vo NO oC o ON at u al U as rl aj U 03 K ■p Eh cS~ Eh a! Eh Eh ctf Eh H ON ON a. ON <-{ rH rH rH VO 296 QUARTERLY TABLE XXV HARDWOOD PRODUCTION BY DIVISIONS 1929 - 1934 Appalachian and Southern Hardwoode U Ft. B.K. Northern Hardwoode M Ft. B.H. North- eastern Hardwoods II Ft. B.M. North Central H Ft. B.U. Walnut II Ft. B. W. Total 1929 5,315,000 939,000 521,000 381,250 71.500 7.227,750 1st 2nd 3rd 4th Quarter ■ n 1,286,000 1,251,000 1,457,000 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 19,400 1,838,300 1,773,600 1,898,500 1.717,350 1930 3,792,000 794,000 385,000 ?30,000 36,300 5,237,300 1st 2nd 3rd 4th Quarter ■ ■ 11 1,189,000 1,086,000 810,000 707,000 335,500 258,400 121,600 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 1,091,650 946,250 1931 2,245,000 .464,000 237,000 148,000 23,200 3,117,200 let 2nd 3rd 4th Quarter 1 11 11 664,000 646,000 476,000 459,000 205,500 144,800 62,200 51,500 59,250 59,250 59,250 59,250 37,000 37,000 37,000 37,ooo 4,500 7,100 5,000 6,600 970,250 894,150 639,450 613,350 1932 1,395,000 230,000 130,000 84,000 9,200 1,848,200 1st 2nd M 4th Quarter 11 1 ■ 408,000 425,000 289,000 273,000 134,100 52,000 19,S00 24,400 32,500 32.500 32,500 32.500 21,000 21,000 21,000 21,000 2,700 2,800 1,600 2,100 598,300 533,300 363,600 353,000 1933 2,090,000 240,000 140,000 109,800 22,000 2,601,800 1st 2nd 3rd 4th Quarter ■ 1 279,000 488,000 749,000 574,000 46,000 36,500 71,800 85,700 35,000 35.000 35,000 35,000 27,600 27,600 27,000 27,600 2,900 3,500 6,300 9,300 390,500 590,600 889,100 731,600 1934 1,950,000 281,075 144,676 150,752 16,962 2,543,465 1st 2nd 3rd 4th Quarter ■ ■ 1 566,000 603,000 458,000 323,000 112,420 80,326 46,076 42,253 56,000 54,223 18,160 16,293 W.352 46,500 31,600 24,300 4,624 4,154 3,329 7«7,627 788,673 557,990 409,175 Source : Lumber Code Authority Docket #5. 2nd Quarter, 1935. ysia 3] \m1 I ~ «tr» *-i OK\ ■H 5 85 *• 1 ■ « rH S RT C o * *«ON H «- O-l H 9813 -T h* « a o e o OVi » 04» h M Vc V O a 0. 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CD co fi CO H-> bfl d •H c iH rH O *H c H rH OCM •rt CD Pj* +J OJ .• m CO i-H ■H (H a>«» CJ CD CD T) ■d o U ■H +> a CO Eb Tl a o s^ o rt -1 co ■rt s§ CD CD tJ tH • T! o CO h •ai 3 a o CD pL( rH Oj O ffl Ti +» «: c ■H CD -d • * •H T) n a o Ph 1* CD CD at • CD d C IE +> CD OhH o o •rl •H ■H CO a> CO CO +> CO +* CO OJ CD fH ■H S "H E •H CD XJ CU a fl +» o « o o s o CO -d ft ft 9fl O o +» OJ en p, o pq o H a >•> rri • •H a h CD O P« E-> E-> CO -d 3 • a OJ CO d h M t». • • c! fl) P D O M > CD • • •d CD CD ID i CO CD e *««, CD O h o rH ■H I* o rH CMl rN CO o CO OD CO- Table XXIX ■•Btera Pine Ooati First Quarter Year 1934 Year 2 ■&__w Year Year Year Year 1926 Logging $ 6.93 $ 7.53 % 7.53 * 9.17 *9.73 $10.28 $10.02 Sawmill and yard 4.77 4,54 4.40 Pond to trimmer 1.77 2.27 2.41 2.41 Cbain to pile inclusive 1.54 1.40 1.78 1.63 Overhead h.. 70 4.35 2.44 1.53 3.46 1.91 1.77 Depreciation (Sawmill, etc.) .82 .86 .55 56 53 Cost in pile - 16.1+0 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 expense 1.54 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.S9 2.17 2.47 2.42 2.46 Operating costs and stumpage 23.44 26.24 21.54 21.99 23.07 24.36 23.42 Other costs .00 .00 .30 .77 .00 .87 1.05 Total - All costs 23.44 26.214- 21. 84 22.76 23.07 5/ 25.23 24.47 I 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. a C c 30* TABLE XXX LUMBEfii Costs and Realization. BASIS t Thousand Feet Board Measure Reported Costs Industry Data Under Code Jany-Feby-Mch . 1934 United States Tariff Com* Reported Realization mission Costs 1929 Southern Pines Large Mills 124.53 * 26.63 ♦ (1) Small Mills 20.1j2 22.24 (1) All Mills 24.04 26.O7 28.25 Southern Hardwood i 28.58 32.33 (1> Appalachian Hardwood 32.68 35.^2 (1) Western Pine (Ponderosa) 24.06 23. 18 23.07 West Coasts 22.96 Douglas Fir and Hemlock - Large Mills I8.5I 17.91 (1) Small Mills 12.31 14.66 (1) Sit.Va Spruce 22.83 22.19 (1) (1) Not separately tabulated by United States Tariff Commission, 9813 Compiled Bys D. N. Burnham, C.P.A. Review Division, N.R.A. Source si Industry Data from Industry Questionnaires Tariff Commission Data from Report to the President on Lumber Re- port No. 32, Seoond Series. 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D s r. $ It €> p KNOO o KN 3 o*i rH O o C L| aib. •0 WO 0J C ON ai i rH O C 5 • p KN 01 °5 KN A t CM U to O Ov Wl BS rH o - • ■ C 3 a p OTJ s & »H O P t. 3 . et a •H o > o *-i < » 3 O O 1 ■0 a> p C O 0/ § S ! »H O • r. £ & l < P B c to CD A S B r. OO . OV. », V . to of P «H ^3 o • 1 H t, t O CO ♦ GPP U 3 • 3 " t » 3 s a O c •• COB to V * O U O DO ■ •rt *H O « t •p «H o <0 co ^J rH O > as t- 3 4> 4) • E, P r. P r. 3 « co o. to 0. co a] C C e «h C E -H B ■rt r, 6 ?2 3 O O *-. 3 ^HlOj| K^^llf^ £ 305 SECT . II CHAPTER 2 TABU HXIT LUMBER AND TIMBER CORPORATIONS (FOREST PRODUCTS INDUSTRIES) CONDENSED BALANCE SHEET AND PROFIT AND LOSS DATA (000 omitted In all dollar amounts) 1926 1927 1928 1929 1930 1931 1932 1933 ASSETS Caeh Receivables Inventories Capital Aeeete - Less Deprec. and Deple. Securities - Not tax exempt ■ - Tax exempt Miscellaneous Assets Total Assets LIABILITIES CAPITAL Notes and Accounts Payable Other Liabilities Bonded Debt and Mortgagee Preferred Stock Common Stock Surplus Total Liabilities and Capital Interest BALANCE SHEET DATA A 142,403 609,463 770,014 1,853,888 76^071 571,519 B 124,880 558,985 740,276 1,766,315 62,355 540,893 C 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 F 82,978 369,319 447,462 1,511,880 292,381 38,403 150,155 a 77,100 326,705 337,690 1,448,283 327,220 44,417 143,010 68,823 297,506 356.613 1,339,762 291,591 38,059 156,379 ^,023,358 3,793,704 3,748,838 3,672,359 3,^3,793 2,892,578 2,704,425 2, 5*8, 733 692,017 461,580 159,972 285,434 1,377,612 1, 046,743 666,449 322,649 161,010 209,910 1,088,264 650,411 231,647 212,191 229,118 1,340,409 1,085,062 594, 746 231,049 237,848 217.177 1.278,737 1,112,802 530,086 203*07 259,567 215,671 1,266,844 968,218 380,349 181,010 265,498 197 ,469 1,190,320 677.032 366,171 177,804 253,441 183.035 1,224,870 499,104 350,652 168,590 231,307 175,894 1,159,225 463,065 *, 023, 358 3,793,704 3,748,838 3,672,359 3,443,793 2,892,578 2,704,425 2,5*18,733 PROFIT AND LOSS DATA Gross Sales Less Cost of Sales Qros6 Profit from Sales Other Income Net Profits Cash Dividends Paid Stock Dividends Paid Income Tax Paid 2,938,014 2, 25^,973 683 , 041 88,950 116,810 124,291 15,072 21,907 Number Reporting Net Inoome ^,591 Number Reporting No Net Income 3,271 Number Reporting Inaotlve 2/ Total Number Reporting 7,862 Number Reporting with Balance Sheets 7,244 2,694,795 2,730,761 2,684,104 2,072,926 2,088,316 642,445 114,004 2,050,193 621,869 633.911 111,934 112,979 43,379 81,958 78,018 108,586 112,558 102,973 9,672 11,643 12,418 15,61' 15,210 13,^37 NUMBER OF CORPORATIONS REPORTING 4,178 3,353 285 7,816 7,230 4,290 3,367 290 7,947 7,190 4,195 3,294 380 7,869 7,094 1,910,432 1,535,766 374,666 ?/ 78,843 2/ 109,576 68,962 4,528 3,591 2,34o 4,868 293 7,501 6,824 £/ 1,284,660 1,076,945 107,715 64,539 177,752 35,241 1,678 1.379 1,525 5,150 279 6,954 6,137 2/ 793,996 687,884 106,112 61,623 202,266 25,860 411 2,237 5*1 5,929 237 6,707 6,147 SJ 922,936 696,691 226,245 64[071 66,069 14,655 1,295 3,254 1,638 4,882 359 6,879 6,161 1/ Not segregated from Miscellaneous Assets In this year. 2/ Deficit or Net Lose. y Not tabulated. Prepared by: D. N. Buraham, C-P.A. Division of Review, HRA. Source: Statistics of Income, Bureau of Internal Revenue. 9813 306 SECT. II CHAPTER 2 TABLE ZDCT LUBBER AND TIMBER CORPORATIONS (FOREST PRODUCTS INDUSTRIES) NUMBER OF CORPORATIONS REPORTING- PROFIT AND NO PROFIT IN EACH OF THE CLASSIFIED OROUPS 1931 1932 1933 All Corporations Number Reporting Profit Number Reporting No Profit Total Number Reporting Corporations With Total Assets Under $50,000 Number Reporting Profit Number Reporting No Profit Total Number Reporting ♦50,000 - $100,000 Number Reporting Profit Number Reporting No Profit Total Number Reporting ♦100,000 - $250,000 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 1,35* *,783 6,137 480 1,572 2,052 262 818 1,080 321 1,078 1,399 126 570 696 3W *35 65 332 397 6 *3 19 23 26 520 5,627 6,1*7 210 2,157 2,367 92 960 1,052 102 1,187 1,289 5* 573 627 37 353 390 23 322 3*5 2 *9 25 25 1,58* *,577 6,161 *99 1,995 2,494 301 758 1,079 393 *3l 1,22* I 87 *35 622 101 26* 365 87 233 320 M 52 2 20 22 Prepared by: D . N . Burnham , C.P.A. Division of Review, NRA. Source: Statistics of Income Bureau of Internal Revenue. 9813 307 SECT. Ill CHAPTER 2 TABLE EOTI CORPORATION' RETURNS CLASSIFIED BT MAJOR INDUSTRY OROUPS PERCENTAGE OF CORPORATIONS REPORTING- PROFIT 1920 1921 1922 1923 1921* 1925 1926 1927 1928 1929 1930 1931 1932 All Corporatism AgTlOUlturS «e 36 1*1* 1*2 1*6 1*7 1*1* i*5 1*1* 1*2 32 23 11 Mines * quarrying i*o 25 36 28 27 29 31 28 28 29 27 22 17 Hanuf actio- lug-Total 63 1*6 59 63 59 61 59 57 57 57 1*3 33 16 Food Produoti 55 52 59 62 63 63 60 59 59 60 53 1*1* 21* Tobacco * 1/ y 1/ 1*9 1*6 y 58 59 51* 56 1*8 1*1 30 Textiles 55 1*9 61 65 56 61 57 59 56 55 39 33 17 Leather 57 "*5 58 57 55 58 57 57 56 51* 36 33 20 Rubber 1*2 31 1*8 1*5 51 55 50 51 1*8 1*9 37 32 18 Forest Products 73 1*1* 66 71 62 61 58 53 51* 53 31 22 08 Paper-Pulp 80 1*1* 61 68 61* 66 67 67 64 66 53 1*0 23 Printing-Publishing 79 61* 66 67 65 66 66 63 61* 63 52 39 18 Chealcale 52 1*2 57 55 55 57 56 55 56 51* 1*5 39 23 Btone, Clay, Glass 73 51* 63 69 63 62 60 55 55 53 38 26 10 lie tea 67 35 53 63 56 59 60 56 59 61 39 21* 10 lot Elsewhere Classified 60 1*1 55 60 5« 59 53 51 50 1*8 37 26 13 Construction 70 5« 62 65 66 63 60 57 57 52 1*1* 33 11 Transportation A Publlo Utilities 63 62 67 68 65 63 62 60 59 57 51 1*6 28 Trade 66 1*9 62 68 65 66 63 61 61 59 in* 3>* 15 Professional -Hotels Amusements 68 56 58 62 59 57 55 53 52 51 1*5 37 15 Banking, Ins. Real Estate Stocks I Bond s 70 65 61* 65 61* 63 59 57 55 53 1*7 39 IS 1/ lot available as separate item Prepared by: D. 'N. Burnham, C.P.A. Division of Review, NRA. Source: Statistics of Income Bureau of Internal Revenue. 9813 308 SECT. Ill CHAPTER 2 TABLE BOTH CORPORATE RETURNS CLASSIFIED BY MAJOR INDUSTRY GROUPS PERCENTAGE OF ASSET VALUES OF CORPORATIONS REPORTING PROFITS 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 Agriculture 71 55 68 78 70 72 71 77 77 77 54 44 36 Mining 4 Quarrying 87 44 64 55 53 75 71 59 70 75 54 33 32 Manufacturing- Total 67 63 80 87 84 87 85 79 85 83 66 48 40 Food 61 67 77 83 88 86 86 67 89 71 64 57 61 Tobaoco 1/ 1/ 1/ 96 95 1/ 97 98 98 96 93 92 94 Textiles 69 68 84 85 67 79 69 81 73 72 32 41 31 Leather 5« 58 79 72 69 78 74 82 77 72 53 49 44 Rubber 77 18 59 84 84 93 72 72 67 64 51 49 20 Foreet 89 58 84 91 78 80 76 69 72 71 36 33 11 Paper- Pulp 96 56 79 86 85 85 87 84 80 86 64 50 29 Printing 90 62 99 37 87 87 86 85 87 86 77 56 50 Chemical a 82 55 87 79 88 92 91 78 92 93 76 46 43 Stone Clay 94 77 87 92 88 90 90 85 84 84 73 46 28 Metal 89 62 77 92 88 80 90 85 89 53 74 40 16 Hot elsewhere 83 66 82 87 82 87 79 79 SI 76 58 46 32 Claeelf led Construction 84 72 74 79 81 S3 81 79 78 74 71 54 33 Traneportatlon 85 80 83 88 89 92 92 85 90 91 81 51 43 Trade 75 64 79 82 82 82 82 82 81 79 63 53 40 Service, Profeeelon- al, Amusements, Hotels 85 75 76 79 78 80 78 75 73 73 66 46 29 Finance 80 77 80 6^ 75 81 76 82 73 69 57 40 34 Hot available as separate Item. Prepared By: D. N. Burnham, C.P.A. Division of Review NRA. Source: Statistics of Income, Bureau of Internal Revenue. 9813 309 TABLE XXXVIII FOREST PRODUCTS CORPORATIONS HIT INCOME, OR LOSS, CASH DIVIDENDS AND FEDERAL INCOME TAXES PAID (,000 omitted in all dollar amounts) Tear Net Income or Net Loss Cash Dividends Federal Income Taxes Net Surplus Reduction 1926 $116,810 $124,291 $ 21,907 $ 29,388 1927 43, 379 108,586 15,612 80,819 1928 81,958 112,558 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 1/ $235, 498 $593,126 $76,627 $905,251 1/ Net Loss Prepared by D. N. Burnham, C.P.A. Division of Review, NBA. 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O; T* O O & oo ^ h p, f- cd (t, C -H T5 B CD ■H J3 Jd tO-H (C -H +> bD+J +> h h ^ co Ohri^OOSI «-H O O fUrHfH-H r > & m c5 u. -< s S3! c a a. # 5E 1 O QJ a>Lc i r.' cd to 1 D O 4) O it-item \ S i3 I O O I ffl j- xi ' « * I I K r-t N O Q> C « *< O fl) MO „ O -rl M Tj < 4->ja e o^: rt i oj OrH a) ►- Ofl rNO4>03l & E a c o ■H O «M CO v rH CU rt Cd too ,0 CO ^ o mi 312 TABU XLI DISTRIBUTION OF HARDWOOD LUMBER FROM PRODUCING REGIONS TO CONSUMING REGIOHS AND STATES 1934 (M Ft. Bd M.) Region from- State Appala- North North South- Appala- North North- North to: Southern chian Central Northern eastern Western Total ern chian Central ern eastern Wt.W, l.( North Atlantic 10,259 11,285 1,154 1,338 65,146 937 90,119 11.38 12.52 1.28 1.49 72.29 Main* 331 239 27 343 18 , 476 427 19,843 1.67 1.20 .14 1-73 93.ll 2.: New Hampshire 221 2«7 - 171 13,019 - 13,698 1.61 2.10 _ 1.25 95.04 Vermont. 110 143 - 10,654 - 10,907 31.794 1.01 1.31 _ 97. 68 Massachusetts 7,170 6,025 859 584 17,051 105 22. 55 18.95 2.70 l?S4 53 M 27.49 Rhode I eland 662 1,100 - 69 694 2,525 26.22 43.56 _ 2-73 '- Connecticut 1,765 3,491 268 171 5,252 405 11,352 15.55 30.75 2.36 I.51 46.26 3- ; Mld-Atlantlo 190,848 106,011 7.570 4,322 108,326 603 417,680 45.69 25-38 1.81 1.04 25.94 Hew York 63,322 45,284 2,255 1.543 38,641 352 151,397 41. ST 29.91 1.49 1.02 25.52 14.20 , New Jersey 17,320 8,129 201 69 4,258 29,977 57-78 39.49 27.12 • 67 •23 * PenneylTanla 76,339 45,235 4,510 2,504 64,714 - 193,302 23.40 2-33 1.30 33-48 Delaware 2,868 430 - - - - 3,298 86.96 13.04 - Maryland 30,227 6,503 604 137 713 251 38,435 78.64 16.92 1-57 •36 1.86 District of Columbia 772 430 - 69 - - 1,271 60. 74 33-83 - 5.43 - . Southeastern 411,040 220,197 2,174 823 2,194 56 636,484 64.58 34. 60 • 3* •13 •34 ,C West Virginia 2,648 55,850 67 2 1,669 _ 60,268 4.^9 92.67 .11 .06 2-77 Virginia 71,044 3,873 103 - - 75.020 94.70 5. 16 ■ .14 _ North 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 - 13.835 22,604 93-29 ■ 36 • 58 1.98 3-79 .. Florida 430 - - - . 98.10 1.90 m _ Alabaaa 20,409 669 - 34 - - 21,112 96.67 3-17 . .16 _ w Mississippi 44,347 48 - - - 44,395 99.89 .11 - _ _ _ Tennessee 93,327 19,416 107,398 13 240 - - 200,978 46.44 53-44 .01 .11 . .. Eentuoky 49,060 2,013 69 - 56 70,614 27-50 69.48 2.85 .10 - .( 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 .] Ohio 35,191 70,292 52,508 5,830 8,216 45 172,082 20.45 40.85 30.51 41.35 3-39 4-77 .£ Indiana Jej.toJ 10,079 37,703 6,071 900 22 91,190 39.92 11.06 6.66 99 Illinois 60,895 39,714 23,526 17,453 20,295 56,455 144,497 1,913 714 693 163,777 37-18 14.16 12.39 34.47 1.18 .» Michigan 8,040 i 210,793 18.84 8.28 3- 81 68.55 92.49 •34 .1 Wisconsin 2,758 2,391 1,302 83,138 56 89,889 3-07 2.66 1.44 • 07 .2 Minnesota 2,868 2,008 376 35,807 105 41,164 6.97 4.88 .91 86.99 .1 Mid- fee tern 70,603 9,324 2,846 3,738 113 535 87.159 81.00 10.70 3-27 4.29 • 13 .( Missouri 58,027 8,607 2,846 1,748 113 41 71,382 81.29 12.06 3.99 2.45 9.64 .16 .0 Kansas E; 744 191 - 617 - 296 6,399 82.75 2.98 - - 4.6 Ic*a 526 - 892 - 116 6,278 75-57 8.37 - 14.21 - 1.8 Neoraska 2.537 - - 309 - 41 2,887 87-88 - 10.70 - 1.4 South Dakota - - — 69 - 41 110 . - - 62.73 • 37-? North Dakota - - - 103 - - 103 - - - 100.00 - Southwestern 228,356 2,630 - 34 - 209 231,229 98.76 1.14 - .01 - .0 Arkansas 119,363 1,769 - _ - 209 121,341 98.37 1.46 _ _ . .1 Louisiana 59,571 47,216 765 - - - - 60,336 47,346 98.73 1.27 - - - - Texae 96 - 34 - - 99.73 .20 - ■07 . - Oklahoma 2,206 - - - - 2,206 100.00 - - - - I nt • r-Mou n t a 1 11 1,655 48 - 240 - 959 2,902 57-03 1.65 - 8.27 - 33-0 Montana . _ . 137 . 139 276 . _ _ 49.64 . 50.3 Idaho - - - - 112 112 m - - - - 100.0 Wyoming 221 - - - - ■ 221 100.00 - - - - - 1 Colorado 772 48 - - - 86 906 85.21 5-30 - - - 9.4 Utah 331 . - 103 - 112 546 60.62 - 18.86 - 20.5 Nerada - m - 510 510 _ - - - - 100.0 Arizona 331 - - - - 331 100.00 - - - - - New Mexico - " - - - - - - - - " Pacific Coast 12,576 2,917 255 686 - 32,698 49,132 25. 60 5.94 • 51 1.40 - 66.5 Washington 883 239 _ 137 - 12,964 14,223 6.21 1.68 _ .96 - 91.1 Oregon 221 96 - 103 - 16,402 16,822 1.11 63.43 • 57 - .61 - 9?. 5 18.4 California 11,472 2,582 255 446 - 3.332 18,087 14.27 1.41 2.47 - Grand Total l,103,16fti/ 478,171^ 134, 223^ 342,979^ 187,578^ 37,4S1±/ 2,283,60o2/ 48.31 20.94 5.88 15.02 8.21 1.6 Lumber Code Authority Docket #5, 2nd. quarter, 1935- "Lumber Distribution and Consumption,' Department of Agriculture, Forest Service the ye are 1928 and 1934.) ■World Lumber Press Information,* Department of Commerce, Foreign and Domestic Commerce, Issue #7, February 10, 1935, P- 3- 1934. (Aleo work sheets of similar daU for i/ L. C. A. hardwood shipment f lguree less hardwood exports and apportioned to each region of origin and the total of each of origin then apportioned to eaoh state on the basis of Foreet Service data. ZJ L. C. A. hardwood shipments lees hardwood exports. 9813 ?«: liJjBIIsllfesMliiilif | iiHi|fi#lHilli.iliii I a J 3 a t a T2 : ssj*ki s ec SS 3 SSBSSSSftJS i SSS** eSSfasaMI 9 1 l f l I S SSK88 SSgSgSS 3 65 ffSS»S»3 J Stt3B23 S tSSSJI; i s: SSE 3 SS»* 3 3! ■ ssssksc S9«"~5 :' - - '-- iiiii;?. i Missis ■ - '• ~ nxszisx? sfSKSs £iJ2;§s lis 7- o — — k 7- - Si-^, Jj * --"-"■.-■•-»• -■;■*" = : - r > 2 -■ S » r > '• ~ ;. ■-- £ ■." -." * 'i_ 1 - 8 3SIS Ei s set s §s5S Si o J Ik e Ji ;?. rscjiSi R3833S! KSSSBRB6SS - S3SS f. WSS 6 3SSKSSS E 8SC sj || |Koa sjaESM S E"SSSS ' ~ SS.-'s"""*" ' » G 8S8E3S S SSSSE! * """S * SiSSEKS'S J SSS S| I S SKKSCS £S3S:SSIS S !£«?:SWi >S»BS*S s CS.SSSS BS6S5 S SB X 8! « Si ; KKRgSS' R IC5 J »?S 3 3S8S s : 5sa s 8eat**s ^ I S i=?3B I SH5II s J ISM S«: is »: \ '•" iir££z£ i3-sji» Lj« »~*«*3 «SKS b; " f R»SES»»aC3 ?JJ-^ : . ISia? SgeSIS :.- «hi>«c' c 7 - -'-■ - ■- f - .- ■"■ - " i. ; ■ - " -1 ML ss 5"; : r — 5 ;■ - ' '_; v V --'._" ~ ^§ s *> * . I 3 u-t» ,rJj n, «-, J, •■ ■ f^3 •* . ■ -.? » v ^ . , i . k 4MOM n«Oiti«« !- i »-. c ?,SK8SaS RS,SS(CSJ ?j. ■^ o >gj£>«e a«jOj '- g -.0"%i^«a « f» -a i j .^ *mm ? sssass i ^;?rf^r :-". ^ ; -. .-■ - sg s ESEfiE 1 . ** S*S ^5?i:'^ J S ^^5 - Si?^'^ ? ", ? sf;;" 5RB5S -j.-Jr- Si »i f~*-C*^> ** lO^^sa »^ B O'^^O'^O O <>B 0-3 «"r- -■ — e. .% * » w i*^.— o O ft. O «fs 3 -"O 'w ' * ^"SSS B881S~it •5 . it ! i t!i . J > j ii I ss s s s?i =,::.,- t.ss s: B : . c sj e. ,35 |,| , 3 . ! i! ; s|:'j|! 2 ::I^J- i |tf ls||j|i tlf= 5 3 s * Jlllls ijfij S iifislfs 1*11 II 'l I ! - ! - I i • rs 51 a § "-3 6 S ~2£ a. "^ . S.-'S B t2g 1,1 g 3 : B H -o> a § fi Oj" c c d r-. a * 8 ■* I *> *> a .1 O s 6 €- g *»*& 1 5 °3 it « 5^^3 s 63 "S M BoC § •o5o a... .28 S3? B E ass &S" 1 SCU E - c i H b u o | Sf 1 9813 1t^ -as 3 s| fisl O C .H ell • U d I1 1 a g| i! *u Ik.J ill' ■385"^ i eh • n v o • *H ~> ,-t til 314 « rt R) to r^r— m (Move Ms o^^^o\(vi h jt r*"\mr« o~*w cvj «f ff"^© 0»*\£> OJ J- U". «■ r-. vD (T~ VO r-MTMT» fN KMfiVO ff> VOrtyj ff\ f— ON «0 m m l-~> Or^lOJ-J-Oi-t rt Q\ OnCU »-< K1 «H1 0T\,3- (T> wn H\C^ "-S K\J» CJ r« r-1 into © 8 £' to oh nhu)u u o o". f. ir-cu j- o io o to in^w OM-~ir m vqcvjcvo mj- r— tn H^f»^ ITiOH r*"\ m f^vo r— u (*1 t^-^-t O MD O UJ f f^i ,* r*"\ *0 i-» to ,3" in r* © ^*IT« J* VO W Qff\<^.*f-WK>1 l T. Hl^HVOHl^ r*- CZ> Q J? d *5> K fH Ki VO H KrH^tTirH r\i o ■•£' J- rn to i n (V -a- in t\j cj t^i J- rn r— *0 t^\ »r» vp r^ r-~ o e\j r^\o it\vd Si r-r-ti cu 60 J* «o w in in I I I \D in r-4 4 : us » § r a * a" 2 s M its A 15323 ■ llll I « 3 :* 4 a ■ a » ■ fo ■ a a ■ n ;1 - ■ ■ M ii 1 ill Hi. jf u I Z3 AS, 3 £ 315 I I to *o t-l o CM rH o in 9813 « 3 s i 316 TABLE XLV Softwood Exports: United States Share of World Market Per Cent Per Cent Per Cent Year United States of All other of World Total of Total Countries Total Total (M ft. b. m.) 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 1,664,77b 15.6 8,998,078 84.4 10,662,856 100 1932 1,066,100 10,8 6,801,326 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 Wasnington. See Table - World Imports and Exports 9813 31V. TABLE NO. XL VI RETAIL LUMBER DEALERS NUMBER OF DEALERS AND 1934 QUESTIONNAIRES RECEIVED Division - State # 1 - Alab-jna 2 - Callff-rnlB (North) 3 - North Carolina South Carolina Total for Dlvlsl-m 4 - Florida ^ - Georgia 6 - Illinois 7 - Indiana 8 - Kentucky 9 - Louisiana 10 - Michigan - South 11 - Delaware District of Columbia Maryland New Jersey - South Pennsylvania - East Total for Division 12 - Mississippi 13 - Colorado New Mexico Wyoming Total for Division 14 - Nebraska 15 - New Jersey - North 16 - New York City 17 - Connecticut Maine Massachusetts New Hampshire New York (excl. NYC) Pennsylvania - UcKean Cty. Rhode Island Vermont Total for Division •IS Minnesota North Dakota South Dakota Iowa Total for Division 19 • - Ohio 20 - Pennsylvania - West 21 - Arkansas Missouri Kansas Oklahoma Total for Division Number of Known Dealers 652 633 197 362 559 296 372 1,014 614 323 235 726 39 19 138 105 689 990 1*7 312 115 90 517 m *53 176 167 323 62 1,09* 29 67 61 1,979 401 159 ill 626 1,327 91^ 497 254 726 2,679 22 - Tennessee 398 7 - Texas 2,076 - Utah 115 25 - Virginia 1,091 26 - Idaho 229 Montana 309 Nevada 35 Oregon 375 Washington 582 Total for Division 1,530 27 - Wert Virginia 153 ?■>, - Michigan - North 60 Wisconsin 910 Total *or Division 970 29 - Illinois - Cook Cty. 190 JO - Missouri - St. Louis Cty. 105 u - Arizona 89 12 - California - South 580 TOTAL 23,531 Dealers Reporting 11 0.005 11 11.42 3-7,6 119 11.74 T3 2S.66 12.38 24 10.21 120 16.53 5 12.82 1 5-26 28 20.29 21 20.00 ns 17.13 173 17.47 s 5.44 96 30.77 18 15-65 17 18.89 131 25-3* 128 40 i m & 8.61 22-73 11 6.59 58 17-96 7 11.29 121 11.06 5 17.24 7 10.45 5 8.20 254 12.83 53 13-22 SO 50.31 35-46 50 126 20.13 309 23.29 241 26.37 96 19.32 8 3-15 173 22.32 127 174 13.7* 23-97 4S2 17.99 26 6.53 227 10.93 12 10.43 41 3.76 7 3. 06 50 16.18 3 8.57 17 4.53 10.14 59 136 8.89 14 9.15 4 6.67 253 27. 80 257 26.50 32 16.84 21 20.00 62 69.66 15* 26.55 554 15.10 In Division #18, North Dakota, the nuiiber of known dealers reporting Is shown as 80 or 50-31 P er cent. This high percentage of return for this state may be attributed to the report submitted by the Midwest Lumber Company at Mlnot, covering 53 yards, throughout the state. It Is very probable that this lumber company was recorded fs only one (l) known dealer by the Code Authority whereas we have Included It ae 5} separate reports. Counting this company's report as only 1 report, the number reporting In N. D. would be reduced to 2S or 17.6I per cent. Compiled By: D. N. Burnham, C.P.A., Division of Review, NRA, Retail Lumber Code Authority Industry Questionnaires. U813 318 K\ K\ W u c , to o> ti A. O is! J 4 ^ O ft d ft, o 5 « n ir\ K\ O rHJ rH in m r— bo cm no o\ in on rH CM no cm m j* r- fn j- in .=*■ 3 O f^ rH in i-h in no CM m w r*N 3 in cm »o j* in in <-t 3 rH 3 J* rH rH Q J* K\ O rH cm m cm o a 3 C\J iH rH in in no i-l i-l OJ CM f\ m m vO ^ r— r- o 3 «-f in cm in CVI m 0\ ° 3 in in OJ r- r4 r*^ CM rH cm in cm 3 a s s in on i*\ r- \o in On SO m CM 10 cm r*~ » r- bo «o no on no m Si € Q\ m no CM I*- rH j* m i-h O* m K\ in k\ r- »o r^ no no" *-\ CM f-i 8 CM m k\ cm m M rH BO CM VO CM tn CM K» (M m m .* r— o i*n in o S K\ IT CM CM m 10 O « CM ^ O 3 rn CM O OJ CM CM CM CM (M in rH cm m m kv cm cm CM C\, in CM f\ m cm 10 rH 3 ^ r- no r- Ov rH m rn f\ r-^ *o kn o j* in cm SO O O O O 10 SCM 3 O * O. «0 3 ITN W rH S 8 k\ r- 3^ no in « on r--\ r- w no Q in o\ r— w ■* cm 35 3 «o o in ■g o in r- 8 K in cm in in j* r- rH no 10 K> in r^ p^ ON rH CM CM K *4 r+ S 5 •H K\ CM K\ rH CAJCMCMCMCMCMrHCMCMCM CM CM CM CM CM PI 3 3 «n CM CM cm to o m o w inoN^f m3r^QrHOQOCM 0»^f3j-rH30rH s 5 8 cm m in no m rr\ no no o in NO CM NO J* rH r- CM rH o r— 10 10 rH CM Q rH .* O O f- K\ 10 CM (M m cm in * t- w * 2 no in m CM NO K\ f- in j- NO rH f- r"\ O Q O CM NO £ 8 CM CM m cm r- a- 1 5 S 3 cm in r— w k\ m cm 8 2 ■ K. CM CM iH NO m rH ON m *o m if rH KN K\ in m m m on in I) Al Q 4 N N rH f— CM Q t*. r*- if. cm in 3 - r- 8 O IT. s o U" m -J o OJ (o 0J C 2 OJ IT f . *o ON w CM iO p^> O F rr. o-. r- H -H 10 to S O N sO OJ i 8 a. E ?. k> cm m cm no in cu k\ m o k> ^ f> KS J* KN K 3 CM NO rH in r-* cm rn o -* mj* o\inr-- O" « <0 0>- rH 1^- J* r^OrHf. CMNOV CM O in O iT. it. -O r- in no k\ NO f- CM in in cm kn r- iO r-- in r- r^ o O io r*- o i*. r\ cm r^ r- o> r^- * CM rH rH CM cm no I-- r- r— V cm rH r^ in in in kn rH in « 3 «0 "rK rA 3 J* r- cm in 8o o rn r^. 8 £• as 5 s s ** o j* cMintor^^inirur^cMNOrncMtnNOCMOiQ-4 r«- rH ^ o 5 no cm on e*oc>CMOrHCMin»iQ^r^r^inaj*r^NbrHONrH»tl5f^3in6« rn \ W H N r* 8 a o' 5 5 E V 2 1 . 1 •H *1 M e I s 8 h i *> •» 1- 9813 3 I $ iiiiie.$z • t; TABLE HO. XLVIII RETAIL LUMBER DEALERS RECAPITULATION EXPENSES TO NET SALES DOLLAR YEAR 19"^4 KNOWN DEALERS 23,531 - ' DEALERS REPORTING 3,554 (See Exhibit "a") Percentage of Each to Net Sales Handling Selling Interest Total Sales Grose Rework Delivery Admin. Bad Debts Made Profit 000 Omitted Profit Mill Exp. Expense Expense Expense Expense Loss - Indi etry $ 166,763 27-7* •75 7-12 17.08 3-27 28.22 .48- Dlvlt Ion - State 1 - Alabama 1,109 35.01 3.86 8.04 17.17 3.20 32-27 2.84 2 - No. ca. If. 2,426 27-43 I.03 7-11 14.78 3.18 26.10 1-33 I - Carollnaa 107 37-58 5-90 7-82 20.52 1.18 35-42 2.16 - Florida 6,068 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 - Kentucky 1,843 31.08 ■ 75 6.99 19.48 3-15 30.37 •71 9 - Louisiana 1,630 27.18 .11 7-17 16.73 1-55 25-56 1.62 10 - So. Mich. 6,099 27.99 .69 7-97 16. 50 3.18 28.34 •35- 11 - Total 12.S83 28.04 .63 8.44 16.80 3.5s 29.45 1.4i- Delaware 548 28.87 - 7-27 14.98 1.24 23 .49 5-38 D. of C. 41 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 -74- 12 - Mississippi 551 30.78 .05 7.43 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 3,436 24.67 .12 5. 81 15-82 2.27 24.02 .65 New Mexico 813 824 25-96 .12 4.02 16.01 2.58 22-73 3-23 Wyoming 30. 81 - 4.74 is. 51 4.61 27.86 24.16 2.95 1A - Nebraska 3,785 23.28 .21 5-98 15.99 2.18 .88- 15 - No. N. J. 3,111 32-44 •39 9.95 21.23 3.64 35-21 2.97- 1.84- 16 - N. Y. City 3,915 31.64 ■65 11.13 19.00 2.70 33. *s 17 - Total 23,173 29.21 .98 8.60 17-5* 3.71 30-83 1.62- Conn. 4,986 29.40 • 05 8.97 5.64 15-85 4.38 29.25 • 15 Maine 661 30.26 2.51 16.16 2.67 26.98 3-28 Mass. 6,350 405 29.21 1.21 9.75 10.14 17.51 14.81 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'tlee. 183 884 3*. 59 31-49 8.63 5-97 10.00 30-27 43.OS 4.32 R. I. • 65 9.84 24.30 8.29 11.59- Vermont 35* 31.62 1.67 4.88 21.31 .98 28.84 2.78 ia - Total 8,657 24.27 - 6.01 14.24 2.02 22.27 2.00 Iowa 3,690 24.10 - 7.40 II.85 1.93 21.18 2.92 Minn. 2,538 24.87 6.86 13.50 2 :% 23-03 1.84 North Dai. 1,382 25.06 - 3.32 18.29 22-55 2-51 So. Dak. 1,048 22.37 - 2.59 19.09 2.23 23.91 1.54- 19 - Ohio 10,590 30.66 1.06 7.68 18.65 3-90 4.08 31.29 • 63- 20 - Penna. West. 4,269 29.62 .96 7-57 19.32 31-93 2.31- 21 - Total 13,575 25-89 .12 *.13 17.39 2.89 24.53 1.45 Arkansas 167 3,014 28.02 _ 8.63 14.44 *-53 27. 60 .42 Kansas 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 5,35* 25-23 3.31 17.13 3.27 23.71 1-52 22 - Tennessee 1.276 30.45 .89 6.20 20.20 3-23 30-52 • 07- s - Texas 6,914 27.59 .18 . 2.28 19-75 4.94 25.60 1.99 - Utah 551 24.52 .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 4-33 28.55 1.26 Idaho 281 27-06 _ 4.63 13.45 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 tm 2-53 29.22 2.83 Washington 1,917 30.10 .64 9.38 3-57 4.56 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 6.68 14.29 3.03 24.21 ■ 35 Mich. No. Pen. 211 26.16 _ 8.09 12.18 2.11 22.38 3-78 Wisconsin 8,932 24.52 .22 6.65 14.34 20.49 3.05 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 ■*4.94 3-87- 31 - Arizona 2,536 10,548 27-97 .01 7-7* 17.31 3-13 28.19 .22- 32 - So. Calif. 23-19 2.39 7-67 16. 33 3-56 29.95 6.76- Compiled By: D. N. Burnham, C.P.A., Division of Review, NRA, Industry ^estlonsalree. .T2U "7AIL cost de DEALERS R! (S^ = Table Kf s _Per- enj Each to Total Cost of Goods Sold Handling Selling 4 est Total Volume 000 7 Prol Rework delivery Expense Admlr . Expense Bad Debts Expense Made Expenee Profit Loss - Industry t I6t 38. 39 1.04 5.S5 23.64 4-53 39-06 .67- n - State 1 - Alabama 1,409 :3-S7 5-93 12-37 26.43 4.92 49.65 4.22 I 2 - No. Cellf 2,426 3 7-S0 T.80 20.38 4.-»6 35-97 56.74 1.83 1 J • Cirollnae 4 - Florida ic; 60.21 9.4= 1-.53 ^2.87 20.64 1.89 3.47 6,063 1-53 9.59 36.25 5-31 15- Georgia 1,7S£ 39.49 '-13 10.49 19.28 2.69 35-59 3.90 1 6 - Illinois 3,871 37-86 -17 9.89 23.29 4.43 7 7-7S .08 1 7 - Indiana 6,307 38-47 •73 9.22 24.42 4.65 39.02 44.07 1.04 8 - Kentucky l,fc"*2 45.11 1.09 10.14 •2S.27 4.57 t 9 - Louisiana 1,630 •15 9-84 22.97 2-13 35-09 2.23 ! 10 - So. Mich. 38.87 .96 11.06 22.93 4.41 39.36 .49- i 11 - Total i2,ssa 38.97 .88 11.72 23-35 4.97 40.92 1.95- Telarpre 40.5s - 10.21 21.06 1-75 33-02 7.56 Dlst. of 193 27.12 - 6.87 1C.95 1.63 19.45 7-67 Maryland 1,827 ^S.2^ 1.25 9.61 21.88 3.98 14.32 36.72 1.51 So. N. J. 1,282 38.91 1.16 11.79 3C65 23-04 40.34 19.01- E. P"nra. 9.030 83 .84 12. "<5 4.11 1.03- "lss. 551 .08 10-73 30.70 7-27 48.78 4.32- I 1 - Total 5,0,2 34.90 .14 7.22 21.97 3.64 32-97 1.93 Colo. 3,^35 32.74 .16 7-72 5.^3 20.99 7.02 31-89 .85 K. Iter.. 813 .16 21.63 3-4S 30.70 M-.35 Wyo. 823 3,781 - 6. 85 26.75 ' 6.66 40.26 4.28 '!eb. 30.35 48.01 .01 7-80 2.84 31.49 1.14- 1- - Ko. 11. J. 3,111 •57 l4.73 31.42 5-39 52.ll 49.00 4.10- ». Y. City 3,914 46.29 .96 16.29 27-80 3-95 2-71- Total 23,173 41.25 1.3« 12.15 24.78 5.24 43-55 Conn. 4,985 41.64 -07 12.71 22.45 6.20 41.43 .21 Maine 661 43.40 3. 60 S.09 23.18 3-82 4.46 3S.69 44.68 f 349 405 41.26 1-71 13.78 24-73 48.59 7-73 15-08 22.01 p. OS 49.90 2^45- bate 9,349 39.78 1.23 10.95 25.21 4.84 42.23 Penna. Part 183 52. SS 1^.19 9.12 16.82 46.27 6.61 R. I. S83 ft-5 -97 ■95 14.37 35-47 12.09 62.88 16.91- Vencont 353 46.24 2.45 7-13 31-17 l.*3 42.18 IS - Total 8,657 32.05 - 7-93 IS. SO 2.6S 29.41 Iowa 3,689 31-75 - 9.74 15.62 2-55 3. 84 Mlr.n. 2,538 33-11 - 9.14 17.96 24.40 3-55 30.65 2.46 No. Dak. 1,381 33-43 - 4.43 1.26 30.09 So. Dak. 1,047 28. SI - 3-33 24.59 2.S8 30. SO 45.ll 19 - Ohio 10,590 44.21 1-53 11.07 26.89 5.62 20 - W. Penna. 4,268 42.08 1-36 10.76 27-45 5. 80 45-37 21 - Total 13,574 34.94 .16 5-5« 23.46 3-91 33-11 1.83 Arte. 167 38.92 - 11.99 20.06 6.29 38.34 • 58 Kane. 3,013 mi 33-74 43-78 .01 = .=0 25-87 4.41 35-79 1-95 Ko. 5,039 ."*3 6.65 22-75 3.04 32-87 1.60 Okla. 5,354 4.42 22.91 31-70 43-87 2.04 22 - Tenn. 1,275 6,914 1.2S 8.91 29.04 .09- 23 - Texas 24 - Utah 38.10 •25 3-1* 27-27 4.69 35-35 33. i4 2-75 551 32.48 • 55 7.7S 18.27 6.54 .66- 2? - Va. 3,293 37.^0 2.97 9.69 20.93 3-78 37-37 .09 26 - Total 5,006 42.46 -5^ 10.66 23 -'i 6.16 40.67 1.79 Idaho 280 37-10 41. 4S - 6.35 18.44 13.64 38-43 1-33- Mont 2,078 .44 9-29 21.^9 6.93 •^8.25 3-23 Nevada 96 37.03 - 7-27 9.34 28.84 3.2S 39.39 43. 06 2.36- Oregon 633 47.38 •03 29.95 3-74 4.32 Wash. 1,917 43.06 .92 13.41 2-<.52 5-11 42.96 .10 27 - W. Va. 1,001 38.14 1.05 9-33 20.71 6.30 37-39 -75 28 " Total 9,142 32-56 35-43 .28 8.86 18.94 4.02 32.10 .46 Ho. Mich. 210 - 10.95 16.49 2.86 30.30 5-1? Wise. 8,931 32.49 42.15 .29 8.81 19.00 4.05 32-15 46.01 • 34 29 - Cook Cty, 111. 3,509 • 35 11.61 29.13 4.92 ■*.S6- 30 - St. Louis Cty. 1,855 45.07 38. S4 2.66 - a 31.19 3.02 ^.64 50. 68 5.61- 31 - Arizona 2,535 10,547 .01 1^.75 24.03 39.14 •30- 32 - So. Calif. 30.20 3.12 9. 98 21.26 39.00 8.20- Compiled By: D. N. Burnham, C.P.A. , Division of Review, NRA, Source: Industry Questionnaire^ . 981LI 32* TABLE HO. L RETAIL LUMBER DEALERS RECAPITULATION FOR INDUSTRY. OPERATION RESULTS 1934 KNO»N DEALERS 23,531 - DEALERS REPORTING 3,554 Lumber, building materials Direct car-lot shipments, lumber, and building materials Stock mlllwork Special manufaotured mlllwork Builders' supplies (see lumber code, art, II, Direct car-lot shipments builders' supplies Retail store Items and building specialties Coal and other fuels Feed, seed, grain, fertilizer par. 1) Other Items 10. 11. 12. Total ealee 13. Discounts and allowances made 14. let sales (12 minus 13) B. COST OF OOODS SOLD 15. Inventory - Beginning January 1, 1934, or earlier 16. Purchase of all Items 1 to 11 17. manufaotured special mlllwork (item Cl-41) 18. Total 15-I6-I7 19. Inrentory - Closing Dec. 31, 1934, or earlier 20. Cost of goods sold (18 minus 19* 21. Oross profit (item A-14 minus B-20 22. Total saw and planing mill expense (C2) 23. Total handling and delivery expense (D) 2*. Total selllng-admlnletratlTe expense (I) 25. Total other deductions (F) 26. Total mode expense (22 to 25) 27. Depreciation 28. Officers' life- Insurance premiums 29. Other expense not Included In other Items 30. Total (26 to 29) 31. Net profit (21 less 30) 32. Other Income 33- Interest and discount earned, lost accounts recovered, etc. 3*. Net profit for period per the books CI. lOLL FOR MANUFACTURE OF SPECIAL 1IILLW0RI Percentage 61.94 t 103,296,326 3.12 5,206,990 6,1*39,841 J.S6 3. 16 5,265,631 14, 724, 577 8.83 1.09 1,816,769 6.34 10,573,159 7-96 13,273,603 1-73 2,893,715 3-13 5,214,994 101.16 168", 705, 605 1.16 1.941.S33 100.00 166.763.772 Percentage to Salee t 62,075,916 114,792,607 3.190.864 180,059,^87 59.5W.677 72.26 120,503,710 27-74 46.260.062 • 75 1.247,347 7.12 11,873,841 17. 08 28,490,608 ]-27 28.22 ,7.454,156 47,065,952 1.80 3,001,339 •13 219,361 .37 622.262 30-52 50,908,914 - 2.79 4,648,852- 1,723.935 2,492,431 - .26 432,486- g 41. Superintendent and foreman wages Mill labor - direct and indirect Supplies Maintenance and repairs - mill only Heat, light, and power - mill only Hill expense, other - not Including taxes, Insurance, depreciation, and rent Total mill costs (Include as B-17) C2. SAW AND PLANING MILL (incidental remanufacture of lumber) 42. Labor 43. Supplies and incidental expense 44. Total saw and planing mill expense (transfer total to line 22) D. HANDLING AND DELIVER! EXPEN3E S: S: 49. 50. 51. 52. R 55- 56- 57- Iard labor lard maintenance and repairs lard supplies Demurrage Truck labor Truck and garage maintenance and repairs Truck gas and oil' Hired trucka Stable labor Stable-wagon maintenance and repairs Feed and supplies Other Items (specify) 5*. Total handling and delivery expense (transfer total to line 23) E. SILLING AND ADMINISTRATIVE EXPENSE g. 60. 61. 62. S: 65. 66. 67- 68. 69. 70. 71. 72. ]l: 75- 76. 77- 7a. 79. Salesmen's salaries, commission, and travel Advertising Officers' or partners' salaries Office wages Postage, stationery, and supplies Telegraph and telephone Heat, light and water (for yard and office) Accounting fees Legal fees Dues and subscriptions Collection expense Donations Travel and promotion other than E-59 Office maintenance and repairs Payments to Code Authority Insurance (all kinds except life) Taxes (except Federal Income tax) Rent Other (specify) Total (transfer to line 24) Percentage to Cost of Salee 3S-39 1.04 9.85 79- 3.190 ,864 1.91 1.87 * 953.751 ■ 57 ■ 5« 293.596 .18 2.45 1,247,347 •75 11.58 % 5,895,273 3-53 .75 380.467 • 23 •23 118,080 .07 4.97 2.532.595 1.52 1.97 1,002,582 .60 2.26 1,150,972 .69 .70 358,652 .22 .17 85,201 •05 .69 350,019 11,873, ,841 .21 23-32 JLM- 7-33 % 3,731,810 2.24 1.70 864,838 • 52 15.13 7,704,276 4.62 10.90 5,547,637 >-M 1.41 717,613 1.42 722,051 463,453 .43 .91 .28 .28 141,265 .08 .50 254,562 ■15 ■ 57 287,736 .17 • 32 161,928 .10 .19 99,147 287,084 .06 .56 .17 • 38 193,160 .12 .90 457.553 •27 3-49 1,775,039 1.06 5-52 2,808,969 1.68 2-55 1,298,309 .78 1.91 974,178 $ 28,490, 608 • 58 55-97 17.08 . OTHER DEDUCTIONS 80. Interest paid (not Interest on Investment) 81. Bad debts 82. Total other deductions (transfer to line 25) 3.43 7.28 10.71 t • 1,747,643 3.706.513 1.05 2.22 » 5,454,156 3.27 Compiled By: Source: D. N. Burnham, C.P.A. Division of Review, NRA, Industry Questionnaires. 9813 322 TABLE LI Lumber Cost at Chicago, Illinois Code Period January to March, 1934 Douglas Southern Western Oak Fir Pine Pine Shipping Weight per M Ft. 2,800* 3,000# 2,3000 4,300* Freight rate per 100 pounds $ .72 $ .38 $ .51 $ .295 Costs per M. B. M. Stump age $ 2.42 $ 4.31 $ 2.11 $ 6.31 Logging and Milling Labor Other Costs 5.11 6.58 7.58 6.13 6.35 7.77 9.27 6.91 Shipping and Selling Labor Other Costs 1.06 1.21 1.61 1.07 1.90 1.95 2.35 1.53 Overhead and Administrative Officers and Owners Pay Other Costs .62 1.80 1.05 3.50 .76) ) 2.60) 4.11 Total Mill Costs 1/ $18.80 $25.25 $23.44 $30.48 height 20.16 11.40 11.73 12.75 Cost to Retailer $38.96 $36.65 $35.17 $43.23 Retail Costs 2/ Labor 6.89 Officers & Owners Pay 2.71 Other Costs 8.13 6.48 2.55 7.65 6.22 2.44 7.34 7.64 3.01 9.03 Total Cost to Consumer $56.69 $53.33 $51.17 $62.91 RECAPITULATION Stumpage 2.42 Logging and Milling 11.69 Selling and Administrative 4.69 Freight 20.16 Retailers Costs 17.73 4.31 13.71 7.23 11.40 16.68 2.11 14.12 7.21 11.73 16.00 6.31 16.lt 7.99 12.75 19.68 Cost to Consumer $56.69 $53.33 $51.17 $62.91 1/ Total mill costs derived from Industry cost questionnaires. 98JLO 2/ Retail costs derived from Industry cost questionnaires 323 Shipping Weight per U Ft. freight Bate per 100 pounds Coats per M. B. M . Stump age Logging and Milling Labor Other Co at b ' Shipping and Selling Labor Other Costs Overhead and Administrative Officers and Owners Pay Other Costs Total Mill Cost 1/ Freight Cost to Retailer Retail Costs 2/ Labor Officers & Owners Pay Other Costs Total Cost to Consumer TABLE LI I Lumber Cost at Hew York, New York Code Period January to March 1934 Douglas Douglas Southern Western Oak Fir Fir Pine Pine Water 3,100* 2,800* 3,000* 2,300* 4,300* $ .87 $ .37 $ .73 $ .4l£ $ 2.42 2.42 4.31 2.11 6.31 5.11 6.58 5.11 6.58 7.58 6.13 6.35 7.77 9.27 6.91 1.06 1.21 1.06 1.21 1.61 1.07 1.90 1.95 2.35 1.53 .62 1.80 .62 1.80 1.05 3.50 .76) 2.60) 4.11 $18.80 $18.80 10.20 24.36 $25.25 11.10 $23.44 16.79 $30.48 17.75 $29.00 $43.16 $36.35 $40.23 $48.33 6.51 1.77 5.96 9.69 2.64 8.88 18.16 2.22 7.48 9.08 2.46 8.28 10.83 2.95 9.94 $43.24 $64.37 $54.21 $60.00 $71.95 RECAPITULATION Stumpage Logging and Milling Selling and Administrative Freight Retailers Costs Cost to Consumer Water Rate 83# of $12.00 1"25^ $ 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 23.72 $43.24 $64.37 $54.21 $60.00 $71.95 GQ-t Q ^ Total mill costs derived from Industry cost questionnaires. "oXO %l Retail costs derived from Industry cost questionnaires. Total Stocks , 33* TABLE LIII STOCKS, SHIPMENTS AND PRODUCTION OF SOFTWOOD UJHHB) 1923 - 19?5 Shl.-jmente and Production of Softwood Lumber In Millions of Feet and Elimination o* Show Secular (long time) Trend Seasonal Fluctuations to Stock on Hand At Beginning of Period Trend of Stocks Shipments During Period Trend of Shipments Production During Period Trend of Production 1923 1924 1925 1926 1927 1928 1929 let Quarter 2nd » 3rd 4th ■ 1930 1st Quarter 2nd " 3rd 4-th " 1931 1st Quarter 2nd ■ 3rd " 4th " 1932 let Quarter 2nd ■ 3rd " 4th " 1933 1st Quarter 2nd ■ 3rd ■ 4th " 1934 let Quarter 2nd ■ 3rd • 4th • 1935 1st Quarter 2nd " 3rd 4th ■ 6,600 •» 7,500 7,800 8,500 8,800 9,300 1.019 1.019 1.019 1.019 1.019 1.019 - 6,470 7,360 7,650 8,l4o 8,610 9,120 10,004 29,106 31,010 10,169 27,942 29,367 + 4 = 4 4 4 4 4 7.501 7,276 7,752 7,542 6,986 7,342 10,904 29,406 7 i,7io 10,469 28 , 442 28,345 ♦ 4 = 4 4 4 4 4 7,726 7,352 7,928 7,617 7,110 7,086 8,1*16 8,148 8,143 8,661 1.019 .992 .996 .993 8,259 8,214 8,176 8,722 7,107 8,121 7,450 6,248 .908 1.074 1.082 .936 7,627 7,561 6,885 6,67S .6,839 8,116 7,968 7,020 .863 1.088 1.087 .962 7,925 7,460 7,330 7,297 9,433 9,431 10,036 10,068 1.019 .992 .996 .993 9,257 9,509 10,070 10,139 5.586 5,791 S.092 4,333 .908 1.074 1.082 .936 6,152 5,192 4.706 4,629 5,586 6.388 5,130 4,227 .863 1.068 1.087 .962 6,472 5,871 4,719 4,394 9,962 9,410 9,148 9,036 1.019 .992 .996 .993 9,776 9,486 9,186 9,i00 4,067 4,100 3,921 2,879 .908 1.074 1.082 •936 4,479 4,004 3.624 3.076 1,51s 4,238 1,609 2,561 .861 1.088 1.087 .962 4,073 3.895 3,120 2,662 8,718 7,997 7,610 7,069 1.019 .992 .996 .993 8,5 r 5 8,061 7,641 7,119 2,701 2,720 2,848 2,516 .908 1.074 1.082 .936 2,975 2,533 2,632 2,688 1,980 2,1" 2,307 2,222 .863 1.088 1.087 .962 2,294 2,144 2,122 2,310 6,775 6,183 5,715 5,645 1.019 .992 .996 .993 6,649 6,414 5.738 5,685 2,216 i,4«0 3.997 3.133 .908 1.074 1.082 •936 2,441 1,212 1,694 3.3*7 1,824 2,782 3.927 3,176 .863 1.088 1.087 .962 2,114 2,557 3.613 3.301 5,688 5.895 6,218 6,071 1.019 .992 .996 .993 5,5«2 5,943 6,243 6,ll4 3,116 3,332 1,121 2,827 .908 1.074 1.082 ■936 3, "32 3,102 3,071 3,020 3,323 3,655 3,176 2,485 .863 1.088 1.087 .962 3.851 3.359 2,922 2,583 5,729 5,435 5,o46» 1.019 .992 .996 5,622 5.479 5,066 2,943 3,545* 3.679* 3,182* .908 1.074 1.082 • 936 3,241 1,100 i,4oo 3,4oo 2,649 3.156* .863 1.088 3.070 2,901 • Anticipated Note: Quarterly figures are not available prior to 1929. 9813 325 TABLE LIV Hours of Labor* Number of Establishments and Number of Wage Earners by Prevailing Hours of Labor per Week, 1929. Sawmills Per Cent of Total Millwork Per Cent of Total Sawmills and Millwork Per Cent of Total (Total Establishments 12,915 100.0 4,849 100.0 17,764 100.0 (Total Wage Earners 419,084 100.0 90,134 100.0 509,218 100.0 (Establishments with (hours not reported 6,323 49.0 560 11.6 6,893 38.6 (Number of wage earners 31,514 7.5 1,442 1.6 32,956 6.5 (40 hours and under (Number of establishments 350 2.7 300 6.2 650 3.6 (Number of wage earners 15,874- 3.8 4,787 5.3 20,661 4.1 (Over 40 nours out (under 45 hours (Number of establishments 75 0.6 1,098 22*6 1,173 6.6 (Number of wage earners 4,635 1.1 17,984 20.0 22,619 4.4 (45 hours to 48 hours (inclusive (Number of establishments 1,803 14.0 680 14*0 2,483 14.0 (Number of wage earners 95,068 22.7 16,637 18.5 111,705 21.9 (Over 48 hours but not (over 54 hours (Number of establishments 1,391 10.8 1,377 28.4 2,768 15.6 (Number of wage earners 48,125 11.5 27,980 31,0 76,105 14.9 (Over 54 hours (Number of establishments 2,963 22.9 834 17.2 3,797 21.4 (Number of Wage earners 223,868 53.4 21,304 23.6 245,172 48.2 Sourcet Census of Manufactures, 1929; Percentages, and sums for Sawmills and Millwork, computed from Census figures shown. 9813 326 INDEX NUMBERS AVERAGE OF ^OS.'lO.'lS.'ZO, '25,'30,'35- 100) 180 PRICE TREND SOUTHERN PINE ROOFERS Wx5fe\*4 BY YEARS, 1905-1935 170 160 150 140 130 120 110 100 925 1930 1935 SOURCE -"NEW YORK LUMBER TRADE JOURNAL' 9813 NRA DIVISION OF REVIEW STATISTICS SECTION NO. 495 If) i CD CVJ CD CO o e> LU cr >- CD >- cr » H C/) ,13 h- »- 2 UJ UJ U cr 5 CC CD 5 Ql UJ Ql 2 X 3 C/) _l Q O O £ u_ o if) >- _J cr LU CC < a ii O yi U zS 2 IS ec ID ro 51 O o LU cr CO cr 30 Q £ CD LU Q_ X CO Q O O % cr < x cr LU i- cr < a UJ O <-> o a D □ D. < v : ■ ■ ■ ti o 0> it. ■■ ■ ■■■ ; .BS a JW-mr Qi NJyi -jj ,L '-s ° <» o z g * O V, JO 05 329 >- 0> (NJ CO O O - £ CD 2 Q OS Z. a- < X 5 2 o CO Q O O O CO 9813 330 ro <£ i O CO z o UJ >- > £ CD ^ o z t: LJ • UJ * ? Q ° m Q O O cr < X ^L a. OL < t uj x i ? C/0 o o H 0) o o So "10 8* > P UJ o <" I ocS 8 Z. 2 o >- i 2 JO) > en 8 ? 9813 331 9 p o O O CC O 0) CO Ul - Q. 9813 332 w s > t- w u ."Si <»* a: i y 9813 333 EXHIBIT M I" AVERAGE LUMBER PRICE BREAKDOWN AT CHICAGO, ILLINOIS CODE PERIOD JANUARY TO MARCH, 1934 DOLLARS PER M. B.M. DOWLAS FIN SOUTHERN FINE WESTERN PINE OAK 95/3 SOURCE' LUMBER AND TIMBER PRODUCTS STUOY UNU. 0WISIOW OF REVIEW, N R. A N R A DIVISION OF REVIEW STATISTICS SECTION NO. SIN 334 EXEIBIT "J" AVERAGE LUMBER PRICE BREAKDOWN AT NEW YORK, N.Y. CODE PERIOD JANUARY TO MARCH, 1934 DOLLARS PER M.B.M. DOLLAR* PER MB. HI RETAIL COSTS-OTHER RETAIL COSTS-OFFICERS AND OWNERS PAY RETAIL COSTS- LABOR OVERHEAO, ETC. OFFICERS ANO OWNERS MY SHIPPlNfl ANO SELUNO-OTHER COST) WE S * ANO SELLING-LABOR LOOOWG HC WiLUNO-OTHER COSTS LOGGING ANO MILLING-LABOR 2000 00U9LAS FIR DOUSLAB FIR S0UTMCMI WW WtTTCMi PINE (WATER) SOURCE- LUMBER AND TIMBER PRODUCTS STUDY UNIT, DIVISION OF REVIEW, N.R.A. 9813 NR A DIVISION OF REVIEW STATISTIC SECTION NO. S7S 33o 9813 ~ o « •♦» O ■♦» M C V +> S3 M O 9« HfO epa> DH tU H O Ah > +> 3 o u o Tim 'q'O'j 007.14 a»T8B a*Ba»Ay a I ■ IV [SI 5 ill! : Pi! U I - Li £31 II 4 *s si si j: ill!! H'l 3i 1 I ■ ■ • a Si a |l] 8sf *»f st i! »*• ii li \n s J gill ill B I ?;; -- = 8 « 3 SlS 3 ■3SS ill il U i = i i!ii s =1 = B 33 cllijj 8 $ f. ill HIS 8 3 III 3 I G Eh !|| J I J is. la 3 icli S3 5 >::. I £B5 e 53 * e ■ ,1 Il , 8,3 :' E "2 jj -2 31 ,! : 3LS 5a ii {■a i. | n it 1 - L ill •5J5 3 3 si J i i £l3 ■ ?'J g|^ S ""' a '-. •* ss l O 3 jj . ef !| * s afi si i • si! a ci 1 in , i iiS <■■ - - |;l J T..J if. J y f a 3S. B i 1 1 s to ..- Ill a |fi* lis! 3 31 a >a tl J : a il B8- III J 1 SB 9 JSS|B" • As J laiiildii 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 the National Recovery Administration. The pertinent part of the Executive Order reads thus: The Division of Review 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, dui also in terms of the experiences 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 typewritten form. All told, approximately eight hundred and fifty (850) histories will be completed. This number includes all of the approved codes and some of the unapproved codes. (In W ork Material s ho 18, Conten ts of Code Histries. 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—1. -11- I 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 much offi- cial information relating to amendments, interpretations, exemptions, and other rulings. The materials mentioned in this paragraph v/ere of course not a part of the work of the Division of Review. ) THE WORK MATERIALS SERIES In the v/ork 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 r.;ade . These are listed below, grouped according to the char- acter of the material. (In Work Mat eri als No. 17, Tentative Outl ines and Summaries of Studies in Process , these materials are fully described). I ndustry 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 number 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, Employment and Payrolls in Industry, Agriculture and Railway 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 Scarf Industry, Financial and Labor Data on 9768—2 - Ill - Women's Apparel Industry, Some Aspects of the T rade Practic e Stu dies Commodities, Information 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 Problem 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 (1914-1936): 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, Exemptions 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. - IV - 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 Legislation Part A. Executive and Administrative Orders Part B. Labor Provisions in the Cedes Part C. Trade Practice Provisions in the Codes Part D. Administrative Previsions 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 Stud ies 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 Affect Interstate Commerce as to Bring them Under the Com- merce Clause, Cases on Legislative Possibilities of the State Constitutions Tost Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- tion? State Recovery Legislation in Aid of 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. - V - THE EVIDENCE STUDIES SERIES The Evidence Studies were originally undertaken to gather 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 dod Suit Industry Construction Industry Cotton Garment Industry Dress 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 - V Asphalt Shingle and Roofing Industry Business Furniture Candy Manufacturing Industry Carpet and Rug Industry Cement Industry Cleaning and Dyeing Trade Coffee Industry Copper and Brass Mill Products Industry Cotton Textile Industry Electrical Manufacturing Industry Fertilizer Industry Funeral Supply Industry Glass Container Industry Ice Manufacturing Industry Knitted Outerwear Industry Paint, Varnish, and Lacquer, Mfg. Industry Plumbing Fixtures Industry Rayon and Synthetic Yarn Producing Industry Salt Producing Industry THE COVERAGE The original, and approved, 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 ?.5% more studies than are listed above, 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. Economic problems of the lumbe main 338U585w no.79 3 12b2 D3MMb b051 )