FTC lssues Cease and Desist Order Against Six California Retail Lumber Groups

Washington, D. C., July 27, 1938-The Federal Trade Commission has ordered 6 associations of retail lumber dealers in California to cease and desist from certain unlawful trade practices and policies found to have constituted a combination and conspiracy to engage in and to further unfair methods ,of competition in the sale and distribution of lumber and building materials.

The order is directed against the officers and dealer members of California Lumbermen's Council, Fresno, and its affiliated units, Coast Counties Lumbermen's Club, Watson.ville; Central Valley Lumbermen's Club, Stockton; Northern Counties Lumbermen's Club, Sacramento; Peninsula Lumbermen's Club, Redwood City, and San Joaquin Lumbermen's Club, Fresno.

Affairs of the council, according to findings, are administered by executive officers and a board of 10 councilmen, 2 selected from each of the affiliated organizations. The respondent dealers, who purchase their requirements principally from manufacturers, producers and distributors in the States of Washington and Oregon, are said to constitute a group so large as to be able to substantially influence trade and commerce in lumber and building materials within and to the particular trading areas in which they operate and sell.

Findings are that the respondents' primary objective, which they actively cooperated in maintaining, was to control and confine retail distribution exclusively through the members of their dealer organizations and to prevent direct sales to all others who were non-members, including state and other political subdivisions. Other objectives, the Commission found, were tolimit sales and distribution by dealer members, to districts in which they have their places of business, and to prevent other dealers from selling in the trading area where a respondent dealer is located.

It was further found that Coast Counties Lumbermen's Club and Northern Counties Lumbermen's Club, through their officers or representatives, prepared lists of prices to be observed by their members in the respective territories of the two organizations, resulting in increased costs to consumers in those areas, while the former group fixed for its particular territory the quota of sales a manufacturer, producer or wholesaler could make monthly and determined the quota of business a deater member could do.

Prohibitions of the Order

The order directs that the respondents, in connection u'ith the sale of lumber and building materials, discontinue combining or conspiring'among themselves, or with others for the purpose of engaging in the following acts and practices :

(1) Preparing and publishing rosters containing the names of dealer members of the respondent organizations for the purpose of indicating that only the persons or concerns listed are entitled to buy direct from the manufacturers, producers and wholesalers to whom the rosters are distributed.

(2) Soliciting, accepting or acting upon information as to sales or proposed sales by manufacturers, producers and wholesalers to non-members of the respondent organizations or other purchasers for the purpose of preventing further dealing between such buyers and sellers.

(3) Using boycott or threats of boycott against sellers to persuade or compel them to stop selling to non-members of the respondent organizations, or to refrain from selling except on unfair, discriminatory or prohibitive terms fixed by the respondents.

(4) Representing that patronage would be withheld or withdrawn from sellers if they sold to dealers competing with the respondents or to others whose names were not on the rosters.

(5) Fixing uniform prices at which the respondents should sell in particular trading areas.

(6) Determining quotas of business which manufacturers, producers, wholesalers and dealer members may do in particular trading areas.

(7) Demanding or exacting penalties or commissions from those who sell to purchasers who are not members of the respondent organizations, and from dealer members who make sales in the territories where other dealer members operate.

The counties in which the members of the respondent organizations affiliated with California Lumbermen's Council have their places of business are as follows:

Coast Counties Lumbermen's Club: Santa Cruz, Monterey, Santa Clara, San Benito and San Luis Obispo Counties.

Central Valley Lumbermen's Club: Alpine, Amador, Calaveras, Contra Costa, Merced, Mono, San Joaquin, Stanislaus, Tuolumne Counties.

Peninsula Lumbermen's Club: San Mateo and Santa Clara Counties.

San Joaquin Lumbermen's Club: Merced, Fresno, Madera, Tulare, Kern, and Kings Counties.

Members of Northern Counties Lumbermen's Club have their places of business in various counties in northern California.

Calls On San Francisco Friends

W. F. Montgomery, retired lumberman, formerly of the firm of Montgomery & Mullin Lumber Company, Los Angeles, called on some of his old lumbermen friends in San Francisco recently on his way back to Southern California from spending several months in Honolulu. He admits that the title "Honolulu commuter" fits him exactly.

Rcdwood LoggingConference Postponed

Originally scheduled during the month of July, the 1938 Redwood Logging Conference has been postponed indefinitely. Unavoidable delays in setting the date brought the industry into the annual fire season, at a time when the attention of those who would have attended the conference would be required in the woods in actual protective work.

The conference was first delayed because of the severe injury suffered early in June by Professor Emanuel Fritz of the University of California school of forestry, who originated the plan and was to have been in charge of the program. Professor Fritz is now recovering from a double fracture of the right ankle but will be disabled for the entire summer.

Lumber companies in the redwood region have advanced far in conservation and fire control policies in the past five years. Through the annual logging conferences, superintendents, foremen and key workers are brought into close touch with forestry problems. Large expenditures have been made by the companies for fire fighting apparatus and all burning of slash areas is conducted now in cooperation with the state division of forestry.

Fire control plans will be continued this season as set up in 1937 on a cooperative basis between the California Redwood Association and State Forester M. B. Pratt.

Vactions On Monterey Peninsula

F. S. Harkins, executive in charge of the building materials division of Pioneer Division of The Flintkote Company, in Los Angeles, is vacationing on the Monterey Peninsula.

ForestConservationCommitteeMaps Program

Washington, July 22,-Nine members of the Forest Conservation Committee of the National Lumber Manufacturers Association met in Chicago, July 19 and 2O to consider the concurrent resolution adopted by the 75th Congress appointing a Congressional Joint Forestry Committee to study the Forestry problem. Meeting with the Committee members and the secretary-managers of six regional associations were James G. McNary, N.L.M.A. President; Wilson Compton, Secretary and Manager N.L.M.A.; I. N. Tate, Prisident, American Forest Products Industries; Clyde Martin, Forester, Western Pine Association; J. B. Woods, N.L.M.A. Forester and Committee Secretary.

The Committee said the lumber industry has a definite, and it believes entirely logical and workable, national forestry program to recommend to the Congressional Joint Committee. This program rests upon the evident fact that the United States is not threatened by timber famine, but rather with an increasing timber surplus.

The Forestry problem, said the Committee, should be regarded as one of land use, and a problem which is growing steadily as yearly forest growth increases.. It demands the same degree of public concern as the agricultural problem. Its solution lies in providing markets to absorb the annual increment of our living forests, so that there may be stable employment in woods and mill, steady contributions to local and national prosperity, and confidence in forest ownership and management as sound enterprise.

The Committee declared it was well aware that forest protection in some sections has lagged because people do not yet realize that forests must be protected. It also stated that it was alvare there are ignorant and unscrupulous forest operators who persist in destructive forest practices. However, it has mapped out a workable program for correcting these evils and will welcome the opportunity to appear before the Joint Committee and present facts affecting all forest regions in the country.

"The Committee hopes and expects," said Mr. McNary, "to cooperate with public agencies and other interested groups in making facts of the forestry problem clear to the Congressional Joint Committee and give it the basic elements for a sound legislative program that can be submitted to the next Congress."