Opening Address

Bl Presi.dent D. J. Cahill, I4/estern' Hardwood Lttmber Com!)an\,, Los Angeles, at tlt'e Third, Annual Conztention - of tlte Pacific Coast Hardze'ood Dealers Associatiott. ' San Diego, Januqr\, 29-30, 1926.

In order to refresh the minds of our old members, and acquaint our new members with the objects and ideals of the Pacific Coast Hardwood Dealers Association, I think it opportune at this time to read from our Constitution the purposes which brought this organization into being, and from our Code of Ethics, the ideals which we adopted for our guidance' oBJECTS

(a) To further and intensify a spirit of mutual respect, confidence and good-fellowship among its members.

(b) To encourage the adoption of a mode of ethics looking to the elimi4ation of unfair competitive practices among its members, and their respective salesmen.

(c) To exchange ideas regarding credit extensions and encourage the free interchange of credit information.

(d) To stimulate a dete'rminatio4 on the part of its members to ascertain accurately the cost of doing business in order to insure an adequate profit in all departments.

(e) To develop and carry out methods of advertisi4g t,he advantages of hardwoods for interior finish, thereby increasing their use in the building industry.

(f) To secure for iti members protection against the careless and unreliable shipper, and to insure in, return fair and equitable treatment of all shippers to the end that mutual confidence may be established and maintained.

(g) To work towards the pe,rmanent establishment on the Pacific Coast of an authorized inspection service.

(h) To co-operate in dealing in a friendly and reciprocal way with hardwood manufacturers who are found selling or soliciting the conpuming trade.

Our Code of Ethics is as follows:

"No. 1. To develop in our relations be'tween ourselves, our customers and our shippers, the spirit of the Golden Rule.

No. 2. To establish the spoken word on the basis of the written bond.

No. 3. To cultivate true friendship, therefore confidence between persons engaged in the Hardwood industry.

No. 4. In our dealings with our customers to give them one hundred percent value for every dollar spent with us.

No. 5. To conduct ourselves and our businesses so that we may render service to society.

No. 6. To recognize the square deal as the keynote of our business."

For the benefit of our new members, I will say that since the birth of this organization, we have arranged for the establishment of official National inspection on the Pacific Coast.

We have secured a modification of the rule denying reinspection of lumber shipped by water to the extent that reinspection is now permitted with the understanding that defects manifestly due to transportation conditions shall be disregarded.

We have made such an impression on the National Association that one of our members, Mr. C. H. White, our first president, has been placed on the Natio4al Board of Directors. This gives us at all times a direct official contact with the National organization, and secures for us prompt and sympathetic consideration of our problems.

We can all rejoice that this conflict of inspection jurisdicdiction has been settled, and that by consolidation of Hardwood Manufacturers Institute and National Association we now have but one organization, which is recognized by manufacturers, dealers and consumers generally.

Our application to the Trans-continental railroads for the extension of the 80c rate on hardwood lumber to certain territory East of the Mississippi River has been definitely denied.

We have submitted to the Grading Rules Committee of the National Hardwood Lumber Association, an application {or a change in the wording of the rule governing Figured Red Gum, to make it more descriptive of what should constitute figure, and the matter is being pressed by National Director White. Other incongruities in the rules or their interpretation have also been brought to the attention of the Grading Rules Committee.

We have endeavored thro'ugh the medium of a questionnaire to ascertain the average cost of handling lumber through our yards, so as to determine with some degree of accuracy, what should be added to the cost price in order to insure a reasonable profitin all departments. This activity, I believe, has possibilities of very beneficial results if each member will give the matte serious consideration and report the results of his investigatiorls for the benefit of the industry as a whole.

We owe it to ourselves to get an adequate, profit in each department of our business and we owe it to our customers to keep down to a minimum the cost of the service we render them.

The tendency of business today is toward co-operation, and the industry that attempts to function without cohesion, and with no spirit of sympathetic helpfulness among its units, is out of step with the times.

In this connection I suggest for consideration by this Convention the subject of uniform sales terms in the matters of cash discounts, and time allowed on trade acceptances and open accounts; also the question of drayage charges. Bearing on these problems, at the last meeting of the Millwork Institute of California, Managing Director, Mr. H. T. Didesch, made the following apt comments:

"Discount does not create business.

"Discount is not an overhead expense.

"Discount presupposes your willingness to carry the account.

"Discount comes outof your r\et profit.

"Discount reduces your bank account." and in relation to drayage:

"The horse has not been bred that does not run up a feed bill.

"The wagon has not been built that does not wear out.

"The auto truck, free from gas and oil consumption, tire troubles and depreciation, has not been invented.

"Thetruck driver, who drives yourtruck and handles your product for the love of exercise, just 'ain't.'

"Drayage or cartage is not an overhead-it.is properly a direct charge'to the customer for whom the work is performed. It places the charge on the right person."

We have a committee, appointed at our last convenlion, to formulate and present at this meeting suggestions for uniform terms and restrictions in purchase orders for domestic and foreign woods. I hope.the Committee has an acceptable plan to report.

One of the big problems confronting the hardwood industry on the Pacific Coast at the present time, is I believe, the case before the Federal Trade Commission known as the Philippine Mahogany Case.

The Philippine woods will continue to play an increasingly important part in the hardwood industry ol the United States, and the dealer on this Coast who ignores them will be as rare as the grocer who does not handle sugar.

You are no doubt all familiar with the fact that the Federal Trade Commission, presumably at the instigation of the Mahogany Manufacturers' Association has filed complaints against certain dealers in Philippine Mahogany directing them to appear and show cause why an order to cease and desist using the name Mahogany in connection with Philippine woods should not be issued. Hearings have already been held in New York, Boston, Jamestown, New York, Chicago, Sdt Lake City and Spokane, and one is scheduled for Seattle to-day, January 29th. Other hearings are to be held in Portland, Reno, Nevada; San Francisco, Los Angeles, San Diego, Omaha, Kansas City, and again in New York. A mass of evidence was taken at the Eastern hearings, all the witnesses being forthe Governlnent, but on the Pacific Coast both sides will be heard, and the principal evidence for the defense will be submitted, and cross examination of scientists who have already testified for the Government will take place at the final hearing in New York.

A number of complaints have been combined in the present hearings, and the burden of the defense is being carried by the Philippine Mahogany Association. This Association is composed of a cornparatively few members and it is hardly fair for others whose interests are involved to sit on the side lines watching the fight without sharing some of the responsibilities.

I believe all Pacific Coast dealers should contribute something to help pay the expense incurred in the defense of this case, and I suggest this as a subject for consideration by this convention.

These are a few of the matters which I believe deserve our earnest attention and I trust many other constructive plans may be suggested as our deliberations proceed.