The Grade Certificate and The Loan Association

An Address by C. W. Pinherton, President of the California Retail Lumbermenis Association, Before the State Building- Loa! League, May 27th. Following This Address, th-e teague Adopted the Resolution Appearing Below

C. W. Plnhtton

Herbert Hoover made an address before the National Manufacturers' Association in Chicago, in !922, and in that address he told the lumber dealers in a way that virtually meant that if the lumber manufacturers and dealers did not clean up their own business the Federal Government would do it for them. Follou;ing this the Southern pine Manufacturers' Association adopted the principle of grade markipS their lumber, and.put over a publicity campaign to sell the idea of grade marliing to the retaileri and ien"eral pub- lic. At first the retaileri did not. take kindl/to the 'idea but as their work became known and called m-ore to the attention of the public the retailers awoke to the fact that it lvas. a big step forrvard in progressive merchandising of material. -At the present time-better than 80 per cent of"the Southern Pine cut is grade marked at the mili. This move- ment has not yet reached the Pacific Coast to any great extent but the West Coast Manufacturers, Associatioi has just. recently bdopted the principle of grade marking their l1mb.er^11j19IpO.t gra_d-es.only. They are also expending a-boqt- $400,000 in a publicity campaign selling the public. the idea that lumber-is the inost draclical and" econ6mical ' construction material on the market at the present time. Thib question.was under discussion at the last'Annual Convention of the California Retail Lumbermen's Association, held at Fresno, October 30th and 31st, 1925. After quite a lengthy and heated discussion the question of Grade'Mark-

RESOLUTION PASSED BY STATE BUILDING. LOAN LEAGUE, MAY 27TH

WHEREAS: Horbert Hoover, Secietary of Commercef has asked all organizations to co-bperate on the elimination of waste -in their respective lines; and

WHEREAS: The California Retail Lumbermen's Association is co-operating with Mn Hoover in his campaign for the elimination of waste by advocating the supplying of building materials best juited for thE construction into which they ente1, and with that end ir1 yew-have-ado-pted a mCthod of certifying Grades o-f Lumber whereby the purchasers can bL aJsured of the value and qudity of the materlals purchased: and

WHEREAS: The California Building-Loan League is vitally interested in ascertaining tf,e qualitv ;nd value of materials entering into thE buildings -wt ictr thgy hola as security for moneys loaned, an? are vilrllv- interested in the buildin! of better homes in California; ing Lumber was referred to the Board of Directors. The Board of Directors in turn referred it to the regional .or- ganization for discussion and recommendation. lfowerrer, at our Annual Convention the retailers did go on record as endorsing- the idea of the retailer selling to the consumer material,that he would use a certificate &rtifying as to the grade and quality. This certificate, gentlemett] you no* have up for consideration. This certifiiate will prove to be just as valuable to the home owner as the certificate of title tq h-is lot, as it will be documentary evidence of the quality of the material that_the_building ii constructed. nilnt at this point is where the Buildinglnd Loan Associatiois are very vitally interested and become a party to this question. As I take it the Building and Loan oiganizations have two objects in view. First is, making thJ loan-the second is the value of the security that you hold for repayment of your money. With this certificate it would be I verv easv matter for the Building & Loan organization to hive an absolute check on the construction and quality of the material.entering into the building. If you'will bnly stop to consider for a moment, you will realize that a Uditaing or the improvement on the real estate is the larger paii of the security. For example, we will assume th-=at a' lot is y"lfgd at $100O. An applicant for a loan asks for g3000 to build a house on this lot. 'The total value of the property in that case will be $40@. Based on a conservative estimate the Building S.Loan Association would lend on that piece of property $24O0 or $2500. Remember, Eentlemen.^ vou have started with a piece of real estate thatls worth $1OOO, qonseqgently glzloo or 91500 is represented in the value of the building or_buildings that arebn the real estate, repre- senting 60 or 65 per cent of the security on your loan. Now do you mean to say that you will not be interested in a very vital way in the. quality of the material that this buildin!. ls constructed ot t

NOW, THEREFORE, BE IT RESOLVED: That the Cdifornia Building-Loan League does most earnestly recommend to its memberJ the method of purchasing materials under the Grade Certificate plan properly certified by the Retail Lumber Dealer from whorn materials are purchased* and that we further recommend that our members require this Grade Certificate in miking their loans.

The California Retail Lumbermen's Association own the trade mark and copyright on this certificate and they are only issuing permits to dealers for the use of this cirtificate who will sign an agreement with the association to use it honestly and fairly and in the way that it is intended to be used, and for the inis-use of the iertificate the dealer forfeits the right to use it, so that you would be perfectlv safe in accepting this certificate ceitified to by anv dealer that has the -right to issue the same. 'We, as -an organiza- tion, are asking the Building & Loan League of California to co-operate with us in this movement fol the purDose of securing_b_etter constructed homes and buildinls ior the public._ l[9- hav_e taken this matter up with qui-te a number of.Bu.ildi"S-_& Loan Association arid Finance organiza- tions individually and so far, without an exceptioi, they have endorsed the idea, some of them have goni so far ai to rnake the certificate one of the requirements of a loan.

Another interested party in this subiect is the realtor. Just stop and considei for a moment what it would mean to a realtor shorving a parly a home or building if he could ha.nd to the buyer a certificate certifying as to the qtralitv bf the material- that the building is ion-structed of. ' I bilieve that it will become almost as vital as a certificate of title to the real estate. Another angle on it is the question of insurance. It would go a long way toward proof of loss in case of fire. It would be some tangible evidence that the property owner could subrnit to the insurance company for a basis of valuation of loss. Going a step further, other interested parties would be the Building Inspectors of the various incorporated cities. What would it mean to' them if they could be assured that a building under course of construction had one of these certificates on the building just the same as the building permit. It would be a simple matter for the inspector to glance over the certificate; ind by the certification of the lumber dealer furnishing the material he could be assured that the material was as reP-

Visualize What You Have to Sell

By Floyd A Dernier, [Lumbermen's Service Association Los Angeles

resented. Another interested party would be the architects. Just think how much responsibility it would relieve the architect of to be able to insert in his specification that the material used in the construction of this building shall be certified materials. As it is now the architect has to depend to a very large extent on the honesty of the contractor.

Another thing, it would be a very great stumbling block and hindrance to the irresponsible contractor, who rvhen they secure the contract for the construction of a building will promise you the earth with a fence around it, but after securing the contract will go out and build a building of chips and whitstones.

Flogd A. Dqnla

Every retail material dealer who has adopted modern rnerchandising methods, who has equipped his business with a photographic plan service, who has prepared a suitable display room where the ladies will feel welcome and at ease to study the plans, and who consistently advertises; letting the public know that his place of business is headquarters for building information and that he is prepared to co-operate with them in all matters pertaining to construcions, has immediately be,come an enthusiast and does appreciate that the general public are not interested in his boards at so much a foot, or really know or care about the amount of materials necessary to .complete a certain buildi.rg. He has come to realize that those who have mo:rey to spend d'emand service; that his other trades-people -are employing the best of creative advertising and salesmanship to -ncourige the spending public to purchase their 'merchandise and among these, your greatest competitors are the automobile firms. Their business is always flourishing because they do not hesitate to spend money in order to create desires and make sales. They are on the job every day and they are reaching your customers, are encouraging automobile buying. People are exchanging their dollars every day for cars, the majority of them if properly approached, w6uld invest in homes. You can visualize bv means of your photographic plan service, can create desiies for more and better homes, can increase your sales; if you will attract the public to your offices. May we ask here-are you equipped to entertain customers, have you a suitable place in which to show your service, is it clean, neat and attractive and have you familiarized yourself with the different plans, that after talking to your prospect you can turn to a certain home and feel that particu'lar one will meet their requirements?

Go right after business and keep everlastingly after it, everybody loves and respects a live wire, and always remember, you are entitled to every bit of business you can create and every new home you furnish plans and materials for will stand as a monument, an everlasting piece of advertising for you.

MacDONALD & HARRLNGTON IN NE\;[I QUARTERS

Last month Cliff Bergstrom, Los Angeles, manager for MacDonald & Harrington, pulled up stakes and moved their offices over in the new Petroleum Securities Building, at 10th and Flower Streets.

This now makes four lumber outfits in this beautiful new office-building, MacDonald & Harrington, Hart-Wood, Coos Bay and L. A. Beckstrom.

No doubt others will follow suit and fos Angeles may have a Lumbermen's building yet.

Eurclra