"Oppression" or Depression-\Yhich?

Ad.ilress by Vilson Cotnpton, Presid.ent ol Atnerican Forest prod,ucts Inilustries and Member of the Lumber Coile Authoritv', betore the Annuat Meetins

If the country wants to see the demoralization of employment opportunities for a million men, in its largest industry group, the needless destruction of great natural resources and the break-down of a conservation program affecting the use of a larger area ol land than is used in annual agriculture, it can readily do so by weakening or destroying the NRA and the system of industrial codes,which it is administering. If NRA fails the forest products industries fail. So will many other industries.

We well understand the complexities of administration which are perplexing the NRA as well as the industries under codes. But they will be made no less complex by ignoring them or by weakening the means of gradually simplifying and controlling them. The NRA Codes represent a nerv system. A new system can be established not by writing a code but by faithfully administering it.

To talk about suddenly withdrawing the supports put under the various industries by the NRA Codes without expectation of destroying employment and opportunities for employment is nonsense. If this will be true a year hence when the present Recovery Act expires it is true now.

"Oppressive" Features Necessary

The Lumber and Timber Products Industries Code represents the largest industry aggregate of any Code. Under its Forest Conservation rules it affects the management of 400 million acres of land, over a fifth of the land area of the United States. The Lumber Code includes some of the most difficult, most controversial and most important features of the Recovery Codes. Before the Darrow Review Board so announces, we assert that it is an "oppres5ivs 66ds"-oppressive to small enterprises-and large enterprises, too. We so described it last year to the Administrator and a few week ago to the President. In fact, last summer we deliberately set out to establish an oppressive code.

How else, I ask you. can an industrv which wants to lift itself and its employees out of the mire of sweatshop wage and sweatshop price competition, meet the issue of 50 cents a day wages paid last year by hundreds of small mills, and a few larger ones, except by a code which is "oppressive"? If under such circumstances the lumber code were not oppressive it would be worthless; and I challenge the Revierv Board to suggest any way in rvhich the timber products industries could have established a respectable minimum wage without oppression o{ a numerically great class of enterprises usually operating small mills, using inferior timber, with mechanically inefficient plants and labor inept at mechanical employments. That it has at least not oppressed small entirpiises merely because they are small is evident in the fact that since the code became effective last fall over 3000 more small mills have been started; many hundreds of new small mills have been built and only one large mill.

Difficult for All

The lumber code also fixes minimum prices to prevent sales below cost; and the allotment of production to prevent excessive output which in the last decade has become a chronic affliction of the lumber industry. These provisions are difficult for the NRA. They are much moie difficult for the industry. Protections against sales belorv cost are almost incapable of enforcement because of the wide range of ingenious and almost undetectable methods of evasion open to unscrupulous competitors.

But again, I ask you, how else can a highly competitive industry, stripped of working capital and reduced to onethird of normal operations, with inventories already excessive, find the means-as the lumber industry has been compelled to find the means-of paying immediate wage increases, ranging in minimum rates from 50 per cent to 500 per cent and averaging almost 100 per cent ? The lumber industry would gladly rid itself of the detestable problem of administering a system of minimum cost protection prices; it accounts for nine-tenths of the important difficulties of administering the lumber code and of the sources of irritation in the NRA. But if it did you would again see 50 cents a day wages, a lG or ll-hour day and a resumption of the old cycle of destructive competition; or else bankruptcy.

Authorities to fix minimum prices, even though they fail fully even to recover costs, are dangerous powers to lodge in any industry group. They furnish the severest test of the spirit and purpose of industry and public trusteeship under the code system. Public supervision is a valuable and I think an indispensable safeguard.

Control Preferable to Chaos

But with its faults and its perils and the readiness with which without public supervision, it may be turned to arbitrary use, I challenge any critics of the NRA to justify a finding that such a system of enforceable cost protections and production controls is not preferable now in the forest industries at least, to the alternatives, either the resumption of the destructive wage and destructive price competition from which they are trying to escape, or the destruction of the industry -and of iis iorest resbu.ces, or both.

One week from today becomes effective the first and so far the only Conservation Code under the National Industrial Recovery Act. A year ago the President asked the forest products industries, in any codes of fair competition which they might submit, that they include some effective protection against what he termed "destructive forest exploitation." We have done so. In consultation with the interested public agencies we have developed a conservation plan which we and they believe to be practicable and which the President himself has generously described as one of the greatest accomplishments of the past year.

Continued Control Essential

But a forest conservation program undertaken merely as an "Emergency" action and limited to the present statutory period of the Recovery Act is an economic absurdity. Forest conservation and the development of sustained yield forest industry operations and of permanent in place of transitory, forest communities are dependent upon the continuance in its essential substance of the Dresent svstem of industry control uncler public sanctions and supervision. No debate between critics of NRA will change that fact.

The Lumber Code has obviously been diffrcult and perplexing to the NRA. It has been complained of by reluctant competitors, asserting that its wages are too high; by labor spokesmen, that they are too low; by producers, that they continue to lose money; and by consumers, that prices are too high. The Code has been variously described as courageous, daring. a "Model" for other industries; or as piratical or even "lousy."

Many Benefits Apparent

But at least this may be said: An industry which a year ago had seen its business shrink in volume to the lowest point in over sixty years and to a price level the lowest in more than a quarter century, its employments shrivel and its capital assets .crumble, with recorded losses in 1932 equal to half of its gross sales, has now seen an increase in its volume of 30 per cent; in its employments over 55 per cent ; in its prices over 6O per cent; in its minimum wages over 90 per cent; and in its total payrolls nearly 120 per cent. It has seen the establishment for the first time, in an industry of over 30,000 establishments, of the spirit of collective thinking and the means of collective action, and the substitution of a hopeful for a hopeless industry attitude. It finds a great industry heretofore transitory in viewpoint and in fact now deliberately setting itself under an NRA Forest Conservation Code toward permanent operations.

I am an economist. From some of the very men who are now seeking in official capacities to administer them, I have been taught both conventional and unconventional economic theories. To others I have taught them. I know we are dealing with a new brand of National economics, and I am much less concerned about finding where it is mentioned in the text books than how it can be made to work, in terms of revived industry and of enlarged and more secure employment,

Industry Trying to Do Its Part

The experience of an idustry which represents in ordinary times nearly 8 per cent of the total employment in all manufacturing industries, which has undertaken in increased minimum wages proportionately the greatest added cost burden of any great industry under code, and upon which largely depends the future use of an area greater than that used in agriculture may have added significance because of the current debates over National Recovery policies. I know the facts and the spirit of the forest industries. I know that within less than 24 hours after the

President last May 17 sent to Congfess the bill which later became the National Industrial Recovery Act, they took the first active steps toward a Code of Fair Competition, and that diligently and unceasingly since then they have tried-amateurishly perhaps and blundbringly, and at times perhaps exasperatingly, but nevertheless, tried-to "do their part."

Of the thousands of producers in these industries large and small alike, who in fact as well as in theory, want to pay decent wages, observe respectable hours, and play fair with their competitors, 98 per-cent are for the Code and for the NRA; and they speak for the pay envelopes, or the pay envelope hopes, of over a million men and the sources of livelihood of millions more. I believe the same fundamental situation to exist in the majority of the great basic industries. Any man, or group of men, in high places or low, assumes great moral and human responsibility who undertakes, cavalierly and without advancing a better alternative, to destroy public and industry faith in, and support for, the most effective plan yet devised lor combating industrial disintegration and establishing a base for industrial recovery.

Lookout Towers o[ New Design

Washington, D. C., May 28.-A possible market for about 1,000,000 board feet of lumber is indicated in the Department of Agriculture's request for bids on 162 forest lookout towers of various heights, which may be constructed of either wood or steel. Bids, which are to be opened June 5, are solicited for both f.o.b. mill and destination bases.

The approval of the use of wood in the construction of these towers is a comparatively recent development. Forest Service sanction was secured by the National Lumber Manufacturers Association last summer. Successful price competition with steel is made possible through the use of the revolutionary modern timber connectors, which, by adding rigidity and strength through distribution of the load, permit the use of smaller members and consequently reduce the total board footage required.

STRIKE CONDITIONS have tied up coastwise steamers, thereby creating a shortage of yard stocks.

I[e have on hand a wel]. assorted stock of TIMBERS, and solicit inquiries for quick delivery, either by truck or cars. Foot of 16th St. San Francisco MA*et 1811

East Bay Yard Broadway & Blanding Ste. Alameda Al',amella 3544

Through American Forest Products Industries, acting for the combined forest industry group, acceptable designs have been developed for the construction of these towers. These designs, with shop drawings and other detailed information, are offered to prospective bidders without charge.