To Eliminate Destructive Competition and Waste in Natural Reso urce Industries

Washington, April 29.-Permission for reasonable curtailment of production would be granted and elimination of destructive and unfair competition in the natural resource industries would be made possible under the Nye Bill (S. 2626) carrying the Steirver amendment, hearings on which were held here March 31 before a sub-committee of the Senate Judiciary Committee.

The measure would permit such industries to hold Trade Practice Conferences for these purposes under supervision of the Federal Trade Commission, and for the first time places before Congress a reasonable, practical and widely supported measure designed to bring antiQuated law in line with economic necessities of the times. The hearings were well attended and demonstrated a united interest on the part of afiected industries, including coal, oil, mining and lumber, as well as support in both the executive and legislative branches of the government.

Senator Steiwer explained the purpose of the measrlre and emphasized the urgent need for the relief proposed. Secretary of Interior Wilbur testified. He voiced the approval of the Administration, after first explaining the need for such legislation and reviewing the conditions in the natural resource industries. They are neither bringing the returns they should, nor are they giving the public the benefits they should, he stated.'

Inquiry Shows Need

The follorving resolution of the U. S. Timber Conservation Board was inserted in the record:

"As an emergency aid to the rehabilitation of the natural resource industries, and the stabilization and security of their employments we recommend the early consideration by Cong?ess of such action as will apply io these industries, under the system and administration of the federal anti-trust laws-such restrictions as under existing law are applicable to agriculture.

"This may be done by the suspension, for the period of the present economic emergency and until further ordered by Congress, of the provisions of the anti-trust laws, in so far only as these laws relate to cooperation between competitors in the natural resource industries, for the purpose of (a) controlling production, (b) maintaining employment opportunities, and (c) conserving natural resources. The larger freedom of action rvhich would thus be permitted to the effort of these industries to remedy the disastrous consequences and correct the difficult causes of overproduction, should oI course be exercised under such supervision by a competent Federal agency as may be in the public interest."

Forest products interests were represented at the hearing by Wilson Compton, secretary and manager of the National Lumber I\{anufacturers Association. Others speaking for the several industries included : E. J. McVann for the bituminous coal industry, also W. M. Ritter; J.F. Callbreath ior the mining industries, Marvin Lee, a director of the Kansas Public Service Commission for the oil industry, and former Senator Hovi'ard Sutherland of West Virginia.

Committee Should be Advised write to their Senators, particularly to members of the fudiciary Committee, rvho in addition to those mentioned above.include: George W. Norris, Chairman, (Nebraska), William E. Borah (Idaho), Arthur R. Robinson (Indiana), John J. Blaine (Wisconsin), Charles-W. Waterman (Colorado), Felix Hebert (Rhode Island), Thomas D. Schall (Minnesota), Henry F. Ashurst (Arizona), Thomas J. Walsh (Montana), William H. King (Utah), Hubert D. Stephens (Mississippi), Clarence C. Dill (Washington), Hugo L. Black (Alabama), and Matthew M. Neely (West Virginia).

Members of the sub-committee are Senators Hastings (Delaware) Austin (Vermont) and Bratton (New Mexico).

Forest Industries Support 5,000,000

In his testinrony, Mr. Compton said in part:

"Ordinarily more than five million people in the United States depend for their livelihood on the timber, lumber and forest products industries. These industries today are impoverishid, stripped of working capital, depleted of credit and in chaos. For the most part the same persons are anxiously looking to them to work their way up and out of depression. The proposed amendment now before you, if enacted, will give these industries a chance to do this in the only way which is, or rvill be, effective: namely, by reasonable cooperation among competitors under competent federal supervision.

"The alternatives are merg'er or continued chaos. A declared purpose of this bill is to avoid the necessity of large merg'ers. On the other hand, the consequences of continuation of the present economic chaos in these industries are plain and inescapable: Further impoverishment and insecurity of employment; gradual devaluation of standing timber; and destruction of the incentives and opportunities for forest conservation and reforestation.

"These consequences are not necessary but they are inevitable unless competitors in these industries are permitted to enter into and carry out reasonable agreements to' adjust prodrrction to consumption.

"fn the effort to restore public confidence and credit the Congress and the Government have recently taken emergency action for which citizens everywhere are grateful. Billions of dollars of public funds have been appropriated for these purposes. But after all, the restoration of profitable industry and secure employ'ment depends primarily not on what the Government does for industry but on what the industries, if given opportunity, can do for themselves and for those dependent on them for employment.

"The proposed amendment involves no expenditure of public funds. But it has possibilities of great public benefits which cannot be secured by direct appropriation of public funds however large-henefits in terms of revived industry, secllre employment and conserved resources. For that reason the forest products industries earnestly urge prompt and a.ffirmative action.

"What you may ask is at stake in the timber industries?

Lumber Industry Ranks Second

"Of the trventy leading American industries, the lumber industry ranks second in the number of persons employed, third in the extent of its investments, and eighth in the value of its products. Lumber manufacture is a factor of appreciable commercial importance in 36 states; of substantial importance in 18; and of great importance in 9. The Census finds more than 2O,00O sawmills. There are 2,000 wholesale distributors and about 2O,W retail distributors. of lurpber. Timber ownership is widely decentralized. A fourth of the land area of the United States is in forest. a greater area than is in agriculture. A fifth of the standing timber is owned by the Federal Government, supposed to be worth a billion dollars, but under present conditions worth no one knows what. Nearly a third is owned by farmers-largely in woodlots. One-half is owned by individuals and b.v* timber and lumber companies.

"The national timber supply, not even including the new natural timber growth which is extensive and increasing, is sufficient to sustain for 5O years the average rate of cutting during the last few years. There is no national timber famine; and there rvill be none. There is on the contrary a vast 'shortage' of markets and uses of wood products. Great improvements in wood utilization, and the extensive substitution of other materials have greatly reduced the national use of forest Droducts. The more important public problem now is noi one of sufficient lumber supply but--as in the case of ordinary agriculture-of maintaining profitable industry, security of employment, and permanent productive use of forest lands.

Carrying Huge Reserves

"The serious problem for the lumber industry itself is that of carrying the huge reserves of timber now in private ownership, representing in the aggregate several billion dollars of capital investment, subject to constantly mounting anntral taxation and to the uncertain and uninsurable hazards of destruction by fire. For a decade timber values have been stagnant or declining. Timber properties are no longer 'carrying' themselves. Chronic overproduction has stimulated ruthless competition and has led to depression in lumber prices which in turn, over a period of time, has been reflected in further stagnation of timber values. This has accentuated the urge to 'liquida- tion'. Meanwhile taxes on timber have continued to increase both in total amount and in proportion to income.

Today, with the single exception of agriculture, the lumber industry pays in taxes a greater proportion of its income than cloes any other industry. This has aggravated the vicious circle of 'liquidation' and 'depression'.

"Supply and demand are rarely in exact balance in any industry. But overproduction in the lumber industry is not casual and transitorv. but fundamental and chronic. The lumber industry has- been in depression during much of the past decade. It did not proportionately share in the general industrial ad'i'ance oi 1922 to l9D. The present general business depression has merely accentuated an already adverse condition. More or less the same situation prevails in the natural resource industries generally; and largely for the same reasons."

Character of Lumber Industry

Describing the variant character of the widely distributed lumber industry, Mr. Compton said:

"The lumber industry is composed of a multitude of independent and widely scattered units producing a comparatively non-standardized commodity. The possibilities of lumber product standardization have been diligently explored and applied. But there are a hundred commercially different species of wood, varying in important physical characteristics, which severely limit the possibilities of standardization of product. Also there are great natural differences in timber and in operating conditions. These differences, apcl others, have so far effectively discouraged extensive consolidations such as have occurred in many other industries. As a consequence no single ownership produces, controls or sells as much as five per 'cent of the lumber product; and less than fifty are able to inaintain for themselves the sales facilities necessary to market their own products."

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