How Shall We Stabilize The West Coast Lumber Industry

(Continued from Page 37) would be subject to competition from those who did not' There is no satisfactory answer to this objection. We c.?n; 'not expect such a progiam to ever go over 100 pgl cgnt'.But if even a fair propordon of our mills adopted q IitT selling policy, adjusted iheir cut by total volume alq by items to mainiain it, and stayed witi it during the critical, period- of rvatchful r'vaiting by the buyers, the response of the market would largely and- in no great length of time accornplish the purpose we are seeking.

Conditions Favorable For Stabilizing The MarkEt

The present time is opportune for such a movement on the West Coast. The poiition of our industry is intrinsically stronger than any time during the last five years' The reduction in cut during the past year has demonstrated to the trade the capacity of tft" Weit Coast industry to. deal with its o*.t ptbbl"ms and to take a positive hand in its own future .ou.... The lumber trade is looking to the West Coast for a more aggressive policy in the future' Our stocks of lumber are subJlintially lowei than those usuallv existing at this season of the year. The opera-ting programs. of thi mills during the mid-winter period indicate a reduction in cut during November, December, January and February of at least 500,000,000 board feet below normal capacity, or probably 75 per cent more than the usual shutdowns during this season of the year.

The estimates ai hand indicate that the production of Southern Pine lumber during 1928 fell below that of the preceding year by not less thin 500,000,000 board feet; and that tTrere will-be at least this much further reduction in the cut of Southern pine during 1929.

During 1928,7he aggreglte orders lnd thlpments from all softrv*ood producing regions in the United States exceeded their production of lumber by three per cent- -On the West Coist, since the first of May, orders and shipments have exceeded the lumber cut by over four per cent. In other words, mill stocks of softwood lumber have been materially reduced in the country as a whole, as well as in our own producing territory.

Yard Stocks Low

In much of the country, furthermore, there has been a liquidation of yard stocks which has probably.brought them down to the lowest point existing at any time for m-any years. And, while building appears- to be declining slightly in so-e of the urban sections of the country, there is no ground for believing that the general consumption of lum6er for building, construction, and industrial purposes will not be at least as great in 1929 as in 1928'

In a word, we face a favorable year. The general market and economic conditions are ripe for a strong upward movement in our business.

I firmly believe that the West Coast lumber industry has the opportunity right now to cure its Tajgr troubles. We can db-it if we will. The way is to put the brakes upon our excessive plant capacity and our inherent tendency t-o tql full time and push the lumber on the market for what it will bring. The method is to adopt a firm policy, mill by mill, and hold to it, with such control of production, in total volume or by items, as is necessary to sustain it.

Program For the West Coast Industry Recommended

I lvould like to offer the following program for the West Coast industry:

First: Let iach mill set its house in order by a moderate production program during the first months of 1929, adjustid to its own Jtocks and order files and designed to meet the active buying period without the necessity of forcing lumber upon the market.

Second: Let each mill adopt and announce a firm price policy, based upon its own aialysis of operating costs.and iair profit, timber qualities and-use values, trade relations fair profit, qualities and use and iudsment of the market. This judgment does not involve price agr..-ents between mills. I am proposing independent action by each company in setting up a selling program ot Its own.

Third: The firm price policy of the individual mill would ordinarily take the form'of definite schedules of prices and terms of sale, covering all items except those necessarily reserved for special quotations, and issued for some definite period of time. It need not necessarily take this form. The essential point is a firm selling program' covering some stated period ,of time-even if n-o more than one month or one week-and held to strictly during that period.

Mw main concern is to e'et the method started a My main concern to get m .r tt7- , ^ as widely as possible throughout the West Coast industry and put it to the commercial test. The essential idea is to establish a schedule of prices now that will hold our markets to a fair profit level during the active buying period of 1929. Prices ihould as far as lracticable be Lstablished with a view of carrvins them thioueh the season of slack demand as well as the iasott of actiie demand, and with the definite purpose of adhering to them through both. Changes in pubiistted price schedules will, of coutse, be necessary from time to time and will work themselves out rationally once this method of dealing with our markets becomes established. The main point at this juncture is to get the-system started. We should make it known to the trade. I would like to publish in the Weekly Nerys Letter of the West Coast Aisociation the names of all of the firms in our industry who will advise us that they have adopted a firm. policy for l9D, as a definite indication of the extent to which the West Coast industry is taking this course.

Fourth: The price policy of each mill should include its terms of sale ai between the wholesaler, retailer or commission dealer, or any other channels of distribution through which each mill offers its business' Far too often, a prici is quoted to a wholesaler which rvill enable him to lsiquote at-a lower price than a.dir.ect salesman of the mill or a commlsston representative is allowed to quote; and far too often a commisiion broker is permitted to quote a price which will undersell a wholesaler who is buying for re-sale' This wobbling on prices as between different channels of distribution is-one of ttre worst features of the general effort

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LUMBEE? gO

SUGINE.ORE:

Gcocral Sder O6ce: Failing Bldg., Portland, Orc.