Chas. S. Keith Discusses Duty on Foreign Lumber

On the subject of duty on lumber imported into the United States rvhich will shortly be up before the House:

I wish your indulgence for a few minutes to permit nre to offer a few thoughts for your consideration. I have watched the Congressional Record in the Senate discussions and have been somewhat surprised by statements that have been made. To say the least, many of them were extremely misleading. I wish to present to you ,the facts as we see them, part of which can be confirmed by the Forest Service:

First, the industry is anything but an integrated one. There is a vast number of mills, and no possibility of production or market 'control. No one company actually produces or controls as much as 3 per cent of the national production of lumber. '

Second, the capacity of the mills in the industry is vastly in excess of the country's consumption. '

-Third, if the entire importation of all woods from foreign countries were excluded by embargo, it would not afford sufficient market toabsorb the present unused capacity of the industry to produce.

Fourth, in periods of depression it takes more acres of-timber to support production than in favorable times, for the reason that a substantial proportion of the timber harvested must be left in the woods, because the yield is not sufficient to cover the cost of recovery; i.e., manufacture and transportation.

_ Fifth, fifty-four per cent of the lumber produced in the United States is consumed throu-gh_ channels of exports, railroad uses, box manr.rfacture, building and shipping of automobiles, crating of other products shipped in export, lumber consumed in the manuJacture of :sash and doors, the construction of farm implements and manufacture of caskets. The balance of production is consumed in construc- tion and all other industries, including such as the-furniture industry wh_ich is a large user of wood, etc., and not heretofore enumerated.

-Sixth, only 4l per cent of construction in the United States in 1928 was done on the farms, and only l0 per cent of the construc- Ition in this country- in -the iwenty years fiom 1909 i; lgtd;-i;;d- sive, was done on the farms. Farm construction is constantly declining.

Seventh, in the South, in Southern Pine lumber production alone, approximately 43 per cent of the timber cottru-ed in manufact-uri of-such lumber comes _from farmers, timber or togs proiu".a-a"j 's-old- by -the farmers. This is also true to a more 6r i... extent oi the hardwood. lurnber production, including the sales ;i;"lr;';"; oaK rogs Dy the tarmers to the manufacturers of such lumber in the Middle W.est. Approximately two and one-half times i. ;;;h-iir": Der rs sold by the farmers for the manufacture of lumber as is con_ sumed by all the farmers gf the country in the form "i furnt...---

Ejsh_$,. _consumption of._lumber as repie sentea lv purctras;, ih;r._ of., in 1925, was_38,684 million feet; in'1929, 33,912 miftio" t..i.-""a the purchases of lumber for the first 12 weeks of 1930 declines 1356 million feet as against _the same period iast year. proArrciior,-oi lumber in 1925 w-"s 40.519 *lttior-f".i, "ri'ii., t9Z9 35,081 million feet. In the fir region, alone, there was four billion feet of capacity unused last year, and probably for the country as a whole the unused capacity amounted to six billio-n feet. If the present rate of decline in demand continues througfro'ut the year, the probabilities are that there will be less than 28 billion feet of consumption of lumber this year as against an undoubted capacity of 40 billion fdet, or, not over 66 per cent of capacity to produce. This has, and is resulting in a large amount of unemployment and under present conditions the unemploynent may increase.

It is our experience, because of short running time, that the payrolls, at our lumber mills, have declined something in excess of $15,- 000 per week. Our wage scales .have not declined and we do not believe it is advisable that any reductions therein should be made'; i.e., that nobody would be especially benefited. Men must live.

Should the lumber imported into the United States from Canada be excluded from this country, it wpuld give labor, employed in production of lumber in the country, an increase in payroll of $20,000,000 annually, but the volume of business would not be sufficiently great to absorb the unused production capacity of the mills in thb United States.

One statement was made that the lumber industry in the United States was prosperous, but only recently, i.e., under date of March 12, 1930, the "Business Week" published the following stafements:

'lEver since 1926 the largest number of failures has occurred in the lumber and woodworking industries. If you want a short business life if not a merry one, however, start a lumber mill, carpenter ,shop or a grocery or meat store. 'fhe chances are I to 5 that you will cash in (or out) within a year."

This would indicate that the condition of the lumber business has not been and is not prosperous.

There is no question as to the unemployment in the industry, nor the necessity for some means of protecting American lumber markets for American production employing American labor.

I hope that you can see your way clear to support a tariff on lum- ber. I only regret that the tariff involved does not amount to more than it doe.q. By reason of the exemptions of. rough lumber and lumber surfaced on one side, practically 70 per cent of the lumber now being imported into the United States from Canada and Mexico will continue to come in free.

I-n 4{ry event, with the, lumber industry's large capacity to produce, and with the consumptive demand of the country so substantially curtailed, competition of productive capacity for markets should assure the public of practically no increase in cost. At least. durinc the period of depression, with consumption declining rapidiy, as i-[ is, we should conserve our markets for the benefit-of our-people. If employments decline and payrolls become less the purihasjns power of the qeople contracts and the farmers suffer thiough cur-tailment of their markets of distribution.

Yours very truly,

CHAS. S. KEITH, President.

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