To Eliminate Destructive Competition and Waste

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Doubt was expressed, under the circumstances, of the possibilities of building up what would amount to unreasonable restraints of trade. On this score, Mr. Compton said:

"I personally doubt whether any plans for cooperation proposed for the lumber industry could, in fact and in any event be made to result in unreasonable restraints of trade. Competition ot other units not parties to agreements, and competition of other materials extensively and readily subsituted for lumber, would, I believe, nullify any substantial trade restraint, even were it attempted. Probably the most that could be accomplished through voluntary cooperation-should the necessary permission be grantedwould be a closer adjustment of prodrrction to consumption, more orderly distribution of lumber and a higher degree of price stabilization. Such a result would mean the.elimination of destructive and needlessly wasteful competition; trade extension, not trade restraint. It is frankly favored by producers, distributors and consumers alike.

"Jungle Competition"

"We in the forest products industries are operating today under conditions of 'jungle competition'. The pressrlre of overproduction prevents the thoughtful planning and measured action necessarv for stabilitv and continuitv of business policy, ancl enc6urages, in t'he distribution'and marketing of lumber, the very unfair methods of competition which it is the avowed purpose of this bill to discourage. 'We are now in practice denied the right of self-government which gives reasonable promise of eliminating at least the worst features of this condition. The point is fast being reached in the lumber business at which laws designed to protect the freedom of competition are in'fact destroying it.

"The Lumber Survey Committee of the U. S.'Timber Conservation Board in a public report last July made the following statement regarding the economic condition of the lumber industry:

"'It is obvious that the industry as a whole has been substantially depleted of working capital; and that the depletion is continuing. It is evident that to a substantial extent the industry's operations are being maintained not out of income but out of conversion or liquidation of capital assets at a loss. It appears from competent testimony submitted to the Timber Conservation Board that the capi- tal structure of the lumber industry as a whole will not without genelal financial disintegrition, long withstand this depletion of its capital assets, due to the consequences of the present unbalanced supply and demand.'

"It is these conditions that lead us to make an urgent plea for legislation which rvill permit cooperation in advancing plans which will enable us gradually to solve the causes and remedy the consequences of over-production."

In concluding, Mr. Compton said:

"It is our earnest belief that the greater freedom of cooperation and of self-regulation of industry proposed by Senator Steiwer's amendment should be not only p,ermitted but encouraged, particularly during this period of economic stress and national emergency; so that industrial stability may be measurably restored; sound business policy promoted and the destructive competition which iJ today dissipating national economic resources, may be averted. This obviously is in the interest of maintaining industry activity and security of employment."