The Rest Of The World Will Have A Fine Lumber Year-How About California?

By Jach. Dionne

After the most careful survcy of the national softwood lumber situation that I have ever been able to raakg and having acc€8s to the phygical facts surounding thc lumbcr industry from sourccs of the mo6t practical character, I have become absolutoly sold on the idca that l92E is going to be a splendid tumber year, considered frofir the producers'vrcwpoint.

Mo,re than that, it looks as thorrgh there were wondcrful peibititics for ore of the best years in lumbcr history. To my min{ all thc worth-whilo indicators point that way. This opinion is based on lgmber stocks in ttre hands of distributors, in the hands o{ the producers,-immediatc and p,rospective demand, and on the lqmber dclivccy sitution.

Rcmenrbcr, this iE co[ffiidered nationally, and not particularly with rcfercnce to California; but any Feat clnnge in the national lumber situation woutd of courso afrect California alaq a.nd should there' forc be intereeting to Caltfornia lumbcrmcn.

The contiaual speeding up of lumbcr shipmcnts from ttre mills during th€ past three years has brought about a vital change in lumbcring gcocrally. Thc millr thdoselvss rn I92I furnishcd car numbcrs in exactly 60 per cent of the timc they rcquired throe ycars bcforc. On top of that the railroads dclivcrcd the stock aftcr they got t$e carr on about one third thc time they uscd to ta&c. Result-in lE27 all lumber buying was done fo,r imncdiate delivery, scvice was givenn and the distributore of lumber cut down thcir ctockl on hand becausc they no lo'ngcr nccdcd thc stocks they qsed to havs to carry whcn delivcry ras sloc, and thcy had to anticipatc their necds far in advancc.

Theq the lumbcr markct in 1927 war very, vcry bad. It got worse riaht dong through the year. Mill ordcr files were low. A mill with only a woek'g orders ahead, gavc lightning shipment, and thus aidcd the buyers in theh hand-to-mouth buying.

In addition, thcre was no speculativc buying in 1927. There never is on a constantly weahening markel Eneryonc bortght lumbcr only fo,r their immcdiate nceds, but by reason of the rapid dcliverry, they gave their tnde fine servicc.

We wcnt into 1928 in most paculiar etrapc.

First, building will be greater in 192E tlran in 1927, according to F. W. Dodgc. Yet the distributors of lumber, retail and industriral, have far lees lumber on hand than they had the first of trast year, to mcet thc demand with. They supplied a large part of their 1927 sales out of thcir stocks, and in 192E they must buy for their necds.

The entire "cushion" between mill and retailer is gone. The dbtributors' stocks are as low as thcy can poeeibly get. Thcy can continue to serve ttreir trade only by continuing to receive the same lishtning service irr lumber delivery that they havc been Scttins.

But suppose that service slows up? Think what would imrnediately hap'pe,lrt And that service is slowing up right nowt Why? Because the oarly bunng of lurrber has already incrascd the ordcr files of the milla, and increased order files mean slower shipmeart. A mill with a month's orders on hand shipa much more slowly than with just a week's.

Figure it this way. We strip 110,000,fi)0 feet of lumber every day in this country. Slow up strip meng and you take 110,000,q)O feet of lumber a day out of the hands of distributors, and thosc distributors alrcady have ae low atocks ae thcy can do business with.

To mc, it look3 like a dynamitc loadcd situation. Lumber is always bought on a rising markeL Buying likc se had for the past three weeks will rapidly increasc the ordcr filc, and will slow ttp sttipmc{rtE. Thie will raise thc price. When the price starts up, ttre brryers start grabbing fo'r stock. And thern the balloon asccngion takcs place.

It may not happcrl but it looks to me like a ten to ono bet that we arc going to have a whalc of a lumber market, increased demand, increased prices, slackened delivery, etc., and that right soo,n.

We need it. The p,roducing end of the lumbcr business necds a good year, and needs it very badly. I believe they are going to have it.

It seerrs to me that evcry lumberrnan in Catilornia should know the facts concerning the national situatioq and watch his own stcp. California lumber industry also needs a good year. It has had sevcral lcan ones. And thcre is wery reason to have or-re this year, and every opportunity.

Don't ga.mble. Buy the stocks you need, Sell at a profit. Make money o,r don't do busincs* And don't be too certain that thc price of lumbcr won't go jumping upward in a single day. I belierre that it will. Normal stocks for evetryone, normal prices, normal pro6ts, etc., will mcan a big year for California, and if the national situation doos dwelop growinA pa.ins, it will only help down here.