Where Do We Go From Here?

An Address Given by J. D. Tennant, President of the West Coast Lumbermen's Association, at the Annual Meeting of the Association, held in Tacoma, on January 30, 1931.

The subject on which I wilt talk to you for a few minutes is iu the form of a question and one which no doubt all of you have asked yourselves and nrauy wish that they knew the answer. This question is. "WHERE DO WE GO FROM HERE?" A rather slangy phrase and yet quite expressive as it indicates we are going sonrewhere but just where? It implies we have reached a point where a decision must be rnade as to where we are to go and whether we are to go forward or backward, whether we are to go up or down or just what is going to happen to us. It seems to me that this is not a question that is confrontiug those of us within the lumber industry alone but likewise applies with equal force to most every line of manufacturing and transportation eudeavor that is beir-rg carried on throughout the world today. It is a question that can well be applied to the lumber irrdustry of the United States and Canada and particularty to those engaged within the lumber irldustry in the Pacific Coast States. 'It is, of course, easy enough to ask strch a question but to find the correct answer is another matter but one thing that we all know is that we must nlove our industry iuto a stronger position than that which it now occupies.

As I review the year 1930 I can not help regretting that we lumbermen have not prepared ourselves atrd our industry, both nationally and by regions, for the extraordinary slack period in the market which has been with us tlow for these mauy months. lt would, of course, be nonsensical for any of us to say that we foresaw the extent to which the demand for our product would decline during the late sumrner and fall of 1929 and the etrtire year of 1930 but ntany of us had the feeling that there lvere some pretty stormy timei ahead of us and as I see it the end is not yet. When we chart the movement of lumber for the past 18 nrotrths we see nothing but a series of retreats and it is only within the past 6 months that we have really dug in and brought the production any*here near itr keeping with the demaud, and this has only been accomplished.by our- industry producing less thau hatf of its uormal producir-rg capacity.

Like'the Americau people when they entered the \fo'orld War in 7917, we were unprepared, and perhaps we too have been too proud to fisht. Whether it has been pride or that feeling of hope that springs eternally in the breast of man, and particularly in.lumbermen,-which has led us as an industry into our present desperate situation, I do not knorv. But here we are and rvhat I want to know is. "WHERE

DO WE GO FROM HERE?"

It seems to me'that all of us should be convinced by now that if there is to be any salvation for us individually or as an industry it will come only as a result of our own efforts. The American people wasted billions of dollars getting ready for war that all could foresee and u'e as an industry have wasted billions of feet of timber and rnillions of dollars in getting ready to meet the conditions that are now upon us. This industry, composed of supposedly intelligent business men, has virtually thrown away more than $36,000,000.00 in the past 18 months. We as an industry that can not raise one-half million dollars a year for trade promotion can chuck out the window like a drunken sailor 72 tines that much in 18 months and not evett have had the fun of spending it.

We who can not spend lOc or 20c per thousand for the purpose of developing markets for our product can pass to the buyer three nice new $1.00 bills along with each 1,000 feet of our product that he takes from us. This is the per-ralty that we pay because we are not prepared to defend ourselves in this great war of building materials in the mad scrap to get our share of the American Dollar.

Many of us do not believe that there is a war of building materials going on, just as thousands of good Arnericans did not believe we wire going to be drawn into the World War. But the building material war is just as much a fact as was the World War and unless we get ready for a real fight we will be whipped before we start.

There-are a good many schools of thought on the changes that are taking place-in the business and industrial life of the world today and dire are the predictions of many, but a review of the past seems to indicate that the same kind of forecasts have been made during other business depressions and my only reason for referring to the past at this tinre is to learn, if we can, $'hat not to do in the future.

As we study events we find that the world in each instance has emerged from these depressions on a larger and sounder basis than ever before and, therefore, as we look back we see nothing but improvement from time to time and hence I feel we should not now become discouraged and think that everything has gone to pot, but rather profit by our mistakes in the past and get ready for a real scrap in the future. It would not do to make the statement I have just made without examining the facts and making a survey of the cause of the steady improvement in the past and the reason why we should expect steady inrprovement in the future if we will prepare ourselves for it.

As we visualize progress in the past wi see that what it really means is doing things differently and so to make progress in our industry we must do thirrgs differently. Just as the steam vessel displaced the one that depended on the wind and sail, just as the locomotive displaced the wagon train, so must new ideas in the rnanufacture and merchandising of lumber and lumber products displace the old idea of break it down arld ship it with the least possible effort. Gone are the days of the old cracker box and lard barrel, gone are the days when most of our food, as well as many other commodities, was sold from the bulk and likewise golle are the days when we can ruerchandise our product as we have ir-r the past. The nearelwe get to the individua[ package and prepare our product in the way that u'ill n.reet the consumer's requirements with the least possible effort on his part the nlore rapidly u'e will bring our product back into good repute.

Some of the things I arrr goittg to say nray sound somewhat radical and yet to me they are not as radicat as some of the charrges that have taken place in many other industries. To me it seems that the lumber manufacturers as a whole have beerr slow to adopt new ideas in the preparation and r.uerchandising of their product, rather being willing to follow the time-worn paths instead of striking out boldly as some of our so-called cornpetitors have done in the exploration of new fields. Almost without exception any new departure in the manufacturing and merchandising of lumber has come about either as the result of an effort to combat the encroachment of some of our so-called substitutes or in an effort to regain a market already lost to some other material that is now being used where once our product was used instead.

The outstanding example that comes to my mind at the moment is the effort that was made by both steel and concrete to find a substitute for the railroad tie nrade of wood. This defeat of the socalled substitute can not be credited to a lumberman or the lumber industry but rather to the so-called wood preservers. I refer to them as so-called wood preservers advisedly, as while great progress has been made in the preservation of wood against decay, yet nothing has yet been done, other than in a more or less experimental way, to protect wood against the ravages of the insect or its still more damaging enemy the much over-worked and over-played fire and conflagration hazard of which much capital has been made to the detriment of our product.

Next I would.refer to an outlet for our product that perhaps has lost to us a fJreater volume than any other single outlet except perhaps the building material line, and in this I refer to the heavy inroads that have been made in the use of lumber as a box material. Very few users of boxes but what still prefer to use a box made of wood, but what effort has been made to hold their trade? In the main none. Some individual company may have tried to solve the problem in connection with some particular custotner but even he has either not had resources or the time or inclination to follow through to a conclusion, while other forces or other materials, whose very existence depend on developing a satisfactory packing case, have pursued the problem until a satisfactory solution has been found and a chunk taken out of the outlet for our product.

Still another large and important outlet has been attacked by one of our most formidable competitors and I am now referring to the inroads made by steel as a substitute for wood by the oil industry. To my certain knowledge the oil industry has for more than 20 years past been at work developing a fabricated drilling derrick that could in large part be salvaged after the well was completed and a derrick that could be erected without the use of the high priced skilled labor necessary in the erection of standard drilling derrick made of wood. To see how well they have succeeded visit any recently developed oil field and there the question answers itself.

Still another outlet for our product on which our worthy competitor, the steel industry, has made great inroads; namely the manufacture of sash and frames. Twenty years ago practically all sash and frames manufactured in the United States were wood and today it is necessary for us to organize the entire forces of the West Coast Lumbermen's Association and the lumber industry of the Pacific Northwest in an efiort to get wood sash used in a couple of Federal buildings planned for erection during the coming year in the cit)' of Seattle. We are told by the Assistant Secretary of the Treasurl' in connection with one of these buildings that the modern preference is for metal sash and frames. Unfortunately, he is expressing the fact as he knows it. In l9l4 the Census of Manufacturers by the Government found 43 establishments making doors, shutters, window sash and frames of mefal while in 1927 the same authority found l17 establishments. In 1914 the value of the products made by these 43 units was $5,184,000. In 1927 the value oI the products manufactured by the 117 establishments had risen to $65,280,000, or 13 times the volume done 13 years before. While this increase in the productiorr of metal sash, doors and frames was rising in value 1300/o the number of planing mills in the United States decreased 22/o. You may reason that this is a snrall item and that the individual window does not amount to much as a user of lumber and without an attempt to bore you with details, let me bay that in the production of the average sash and frame the millwork plant uses approximately 42 f.eet of lumber. A review of the building records of the United States indicates that for the years 1927, 1928 and 1929 there were permits issued for more than 300,000 buildings each year and assurning that these buildings will average 50 windows each or 15 million lvindo*s altogether we then are thinking about something that is o,{ real importance to us as an industry. As you will readily note 15 million windows times 42 feet to the window means a volume in excess of 600 million feet of consumption through this one outlet alone. I might go on and cite instance after instance where our product is being displaced by so-called substitutes and yet what have we done or what are we doing to combat this encroachment on our markets? Spasmodic efforts have been made here and there within the industry to combat these encroachments but in the last analysis we can doubtless cover in a word what has been done and that word is "NOTHING," As I have said, these and many more equally as pointed and equally as serious illustrations might be brought to your notice but to do so would cause you to think that this is developing into a broadcast of the shortcomings of our industry and that is farthest from nry thought as my only reason for referrirrg to them at all is to bring to your notice what is taking place and to develop, if I can, a further thought. You may feel it is all rqell to call these and other well known facts before us but what are we to do about it and that is exactly' u'hat I want to know. Again I repeat.

..WHERE DO WE GO FROM HERE?''

I would have some hesitancy in asking this question were it t-tot for the fact that I believe that as we can answer in one word what we have done and that oue word being "NOTHING" that likewise we can answer in one word what it is now necessary for us to call into play and that one word is "RESEARCH." Research, rather a simple word and yet a word of tremendous possibilities and which we find specifically defined as having the following meaning, "Continued and diligent investigation; to investigate; to study" and which while a rather simple attd cotnmonplace definition yet leads us into many highways and by-u'ays.

Why do I say that research is the answer to the problems that are now and will in the future confront our industry? Because that has been the answer to similar problems that have confronted other industries. Research may transform an industry. In fact it has recently been said that research may translorm the steel industry and if this is true of the steel industry, think of what a transformation could be made of our industry.

I have been told that the steel industry is considered a physical industry as it is now constituted but that it is likely to one day become a chemical industry; that there are 200 possible b]'-products that are subject to development by the steel industry and if this is true of steel can it not be applied with equal force to our industry? Stop and think for a moment what research has meant already to the steel industry, the packing industry, the chemical industry and the electrical field and many others too numerous to mention.

It was research that enabled the wood preservers to successfully combat the steel and concrete railroad tie [ecause they found ways and means that would insure the tie of wocid against decay. Think what it would mean to our industry if we were tomorrow to be able to co to the world with a product as susceptible to various uses as is o.-ur product but concerning which we were able to say and prove was immune to the depredation of insect or the ravages of fire.