Lumber Survey Committee lssues Preliminary Report

The preliminary report of the Lumber Survey Committee of the Timber Conservation Board was recentlv submitted to Secretary of Commerce Robert P. Lamont, Chairman of the Board. Such analysis of curr-ent lumber pro- duction and consumption, lumber stocks and prospective consumption for the period, July to December, inclusive, 1931, as the limited time would-permit, is covered in the report. The Conservation Board was appointed by President Hoover, on request of lumber industry representatives, to study certain problems of the industry and make recommendations for improving its situation. The committee, which has served voluntarily at the suggestion of the chairman of the board, consists of the following: Thomas S. Holden, economist, F. W. Dodge Company, New York; Dr. Frank M. Surface, assistant director, Bureau of Foreign and Domestic Commerce; M. W. Stark, lumber and coal economist, Columbus, Ohio; Calvin Fentress, president, Baker, Fentress & Co., investment analysts, Chicago; and Dr. Wilson Compton, secretary-manag'er, National Lumber Manufacturers Association.

'The recommendations of the committee are as follows:

First.-That the withdrawals, during the period Jdy to December, 1931, from stocks in possession of lumber manufacturers, should be not less than one-half of the indicated excess stocks of the industry of 4,500,000,000 feet.

Second.-That during this period, and until a reasonable equation between suppiy and demand shall have been established, production in all species should be limited to the minimum which financial and communitl' exigencies will permit.

Third.-That consideration be given by individual rnanufacturers to the timing of reduction or cessation of production in such manner as to involve minimum hardship upon clependent employes; and i4 general to maximum proportionate reductions in production during the months before Winter, especially in the North, the Northeast and the West.

Fourth.-That importers of lumber offered or to be offered for sale in competition with, or in substitution for, r,voods of dornestic manufacture should moderate their lumber imports in consideration of the present critical exigencies of the American lumber industry.

Fifth.-That consideration by appropriate private and public agencies be given to the practicability, through improved, extended, and better coordinated means of deferred financing and otherwise, of converting potential demand for building into active demand especially for farm, business building and small homes.

Sixth.-That 'consideration by the industry be given to the practicability, the possible economy, and the availability of means, of uniting the sales facilities and in effect combining the inventories of logical groups of companies in the samE, and in different regions or species; and, especially in the Pacific Northwest, to the gains in financial stability, in economy and flexibility of production and distribution, in diversification of raw materials utilization and in sustainedyield forest management, to be secured through regional consolidations of the ownership and operation of timber and lumber manufacturing properties.

Seventh.*That the U. S. Timber Conservation Board mak9, or cause to be made, at the end of the third quarter of 1931, a further survey and report on current "nd' p.os_ pective lumber supply and demand; and of recomm6nda_ tions based thereon.

Eighth.-That the Bureau of the Census in its further investigations of lumber stocks, seek and assemble the ne.cessary information in such form and manner as to per- mit the accurate segregation of softwoods and hardwoods and the classification of each by species or by customary species groups.

Following the recommendations, the report ,comprises 'a digest of supporting evid_ence including: - A. lumber pro- duction aryl _supp_ly; B. Lumber consumption by .p.cie, and uses; C. Lumber stocks; D. Stock impbrts and pfoductions in relation to anticipated consumptibn. For cbnvenien-ce and trevity the report is made laigely in the form of tables and charts.

In revierving conditions in the building field. thev reDort: .. "The largest single use of lumber is in building,-ord^inar- ily representing approximately 60 per ,cent of the-iggregate consumption of lumber. For their bearing upon early iirmber market prospects, five conditions in ltre Uuitaing nela are mentioned.

"First.-The need for additional farm business buildine and improved.farm housing is well-nigh universal through-- out the agricultural areas. But there is in the farm inco-me evidentll'available for such purposes no present prospect of such increase materializing appreciably during fhe list six tnonths of 1931.

"Second.-The substantial reductions in the prevailing costs of buil<ling materials have not been generally followea" b1' equal reductions in other building costs.

. "Third.-l3uilding propects show the last present promise in cornmercial and industrial building, on -"c.ounf of the surplus oflice and store space and of plant capacities.

"Fourth.-The least saturated major building 'type is residentiai construction. In most localities there are,-rinder present conditions of housing and demand, ample residential facilities. Evidently, however, there is no general surplus of small dwellings. The greatest present opporturtity for increased building activity lies largely in thiJ direction, the extent of its realization being in large measure depend- ent upon the character, extent and the reasonableness of terms of available financing. A moderate, irregular and interrupted advance in residential building contlacts has d.eveloped during the last few months in nearly every sec- tion, most noticeably in the Eastern and. Northeistern States.

"Fifth.-Until the present real estate mortgage situation shall have been improved, substantial financing of real eqtate developments is not expected. The prospect is of further curtailment of new buildings of the types brdinarily dependent for financing on bond issues.

"With the composite of these conditions confronting the building industry, on the activity of which the lumber markets are largely dependent, the Committee is of the opinion that an increase during the last half of 1931 in the aggregate demand for lumber for building purposes is not to be expected. The extent to which the obvious need for improved farm building and the potential demand for individual small homes, both of which types of construction use lumber in large volume, can be converted into actual demand, will depend in large part upon the extent to which economical and convenient financing is made available."

The committee has indicated a desirable reduction in stocks during the period July to December inclusive. 1931, equivalent to not less than one-half of the indicated excess, and the entire absorption of the excess of stocks as promptly as possible and in any event by June 30, 1932.

There are two principal ways of analyz'.ng lumber stocks, the report states: First, in relation to working capital provision; second, in relation to prevailing volunle of business.

In concluding the discussion on lumber conditions, the committee expresses the opinion:

"(1) That the adverse conditions of the luml>er industry as a whole have reached a degree of instability and insecurity sufficiently acute to justify extraordinary corrective measures on the oart of manufacturers and distributors of lumber;'

LAUAN (Red) TANGUILE APITONG

LAUAN (Lisht Red) LUMBAYAU GUIJO

These HARD\f OODS lor FINE CONSTRUCTION

"

(2) That as an aid to secure remedy of the economic consequences of overproduction in the lumber industrv, the most important measure is the prompt and substantial reduction of excess stocks;

"(3) That lumber manufacturers financiallv and otherwise so situated as to enable them to do so. should restrain their production even more than is inclicated in Table 12; and "

(4) That such restraint should be continued until the stocks shall have been reduced to a level reasonably commensurate with economy and convenience in marketing and distribution."

Winners in Alvan T. Simonds Annual Economic Contest Announced

For the first time since the contests u.ere establishecl in 1921, both the prizes of $1000 and $500 in the Ninth Alvan T. Simonds Annual Economic Contest (1930) are awarded outside of the United States. The subject was : Government Interference with the Free Pial' of Economic Forces.

C. E. R. Sherrington, M.C., M.A., Cantab, rvho rvins the first prize of $1000, was for a time instructor in economics at Cornell University. He is now lecturer in transport, London School of Economics and Political Science. Frederick Geidt, n'ho wins the seconcl prize of $500, is connected with Morton Brothers, stock and share brokers, 97 Gresham St., London.

The judges rvere Prof . Richard S. N{eriam, Harvarcl School of Business Administration, Cambridge, Mass., and John G. Thompson, assistant to the President, Simonds Saw and Steel Company, Fitchburg, Mass. In rvriting Mr. Simonds concerning the essays submitted to him. Prof. Richard S. X4eriam stated that the number of good essays submitted was a clear indication that the contest attracted the attention of able and thoughtful people.

ED. CULNAN ATTENDS ANNUAL ENCAMPMENT

Ed. Culnan, Chas. R. McCormick Lumber Co., I-os Angeles, left on August 8 to attend the annual encampment of the United States Army Reserve at the Presidio of Monterey. He is a captain in the field artillery. The encampment will extend from August 9 to August 22.

For interior finish, furniture and cabinets . . . for aeroplane and boat construction . . , for nearly every building purpos€ where the beauty of grain, adaptability to stains and finishing, plus dura ility, are lumber requirements. PHILIPPINE HARDWOODS will give unusual satisfaction.

Lumber dealers will find at Hammond's a definite form of Flardwood service. Besides Philippine woods, there are large stocks of domestic hardwoods as well as the more expensive from Central America. These stocks include over thirty-Gve varieties in a wide range of grades and sizes.

PHII.IPPIN E HARDWOODS are importad direct by Hammond's. AII stocb graded in strict accordance zctith the Grading Rules ol the National Hardzaood Lumber Associatron.