Leon Henderson Fixes Ceiling Price on Yellow Pine Ellective September Fi fth

Announcement came to the lumber industry on August 16, lg4l,that Leon Henderson had set a ceiling on the price of Yellow Pine siding, ceiling, flooring, finish, boards, shiplap, fencing, dimension, and small timbers' The prices become effective September 5, 1941. The announcement brought notice at the same time that he was about to do the same with Douglas Fir.

While the official announcement from Mr' Henderson stated that the ceiling prices were a reduction of $3 per thousand feet on the items affected, Yellow Pine manufacturers figure it is a great deal more than that, although they do not generally agree as to what the reduction is' For instance, N". 2 Shiplap, which has always been used as a measuring stick for Yellow Pine prices has a ceiling of $26.50, the market on that item is strong at $35'

The entire Yellow Pine industry is reported to be making strong protest, individually, of the ceiling' Throughout the Yeltow Pine producing states the lumber manufacturers and their friends are reported to be bombarding their representatives at Washington, and all other authorities there who might be interested, hoping to obtain u'hat they claim would be a more reasonable and equitable ceiling, if there must be one. They ask for postponement of the effective date in order to give them time to make better protest; they ask a ceiling more closely related to what they claim the present value of their lumber to be; they ask for a more tolerant administrator than Mr' Henderson in trying to handle the problem. One of the arguments frequently made is that if the proposed ceiling goes into effect it will curtail Yellow Pine production to a large extent at a time when production is greatly needed. The wholesalers of lumber are joining strongly in the protests and against the ceiling, claiming that it practically leaves them out on a limb, and without consideration of the fact that a tremendous amount of the Yellow Pine product is sold through wholesalers.

As this is written no concerted action with regard to the matter is reported. It will be noticed that the order affects all lumber sold AND SHIPPED after September 5, thus applying to any and all lumber that may be contracted for in the meantime, or that might have been contracted for at the time the order was written. Likewise, no differential is made between the product of the Long Leaf mills and of the other varieties of Yellow Pine.

The Yellor.v Pine ceiling order is titled "Schedule No. 19, Office of Price Administration and Civilian Supply." It was sent out of Mr. Henderson's office in Washington, together with the following announcement:

Office of EmergencY Management

Office of Price Administration and Civilian Supply

Prices of Southern pine lumber, which stands with Douglas fir at the top of the list of primary construction materials, are reduced roughly $3.00 per thousand board feet from recent high levels by Price Schedule No. 19 announced today by Leon Henderson, administrator, Office of Price Administration and Civilian Supply.

Simultaneously, Mr. Henderson disclosed that ceiling prices for Douglas fir lumber, which is generally competitive with Southern Pine, will be established in the near future. A meeting to discuss such a schedule with representatives of the Douglas fir lumber industry has been called by OPACS for August 20 in Portland, Oregon.

The Southern pine lumber schedule will go into effect as of September 5, 1941.

Preliminary to its determination of ceiling prices, OPACS consulted with representatives of the Southern pine lumber industry at a conference on August 6, and subsequently met with numerous individual members of the trade. Discussions similarly were had with Government agencies concerned, including the Procurement Services of the War and Navy Departments; Forest Service of the Department of Agriculture; Federal Works Administration; Department of Commerce; Division of Purchases of the Office of Production Management; Department of Justice, and the Procurement Division of the Treasury Department.

Mr. Henderson stated that lumber prices have been a matter of serious concern to him for almost a year and have occasioned several wp,rnings against unjustified increases. Such stability as these warnings achieved was dissipated in June of the current year, when a new succession of price increases began. Prices of No. 2 common boards advanced from $22.00 per thousand board feet in July,I94O, to g30.00 per thousand f.o.b. mill, in July 1941. Today the cost of this and other types of lumber to the general public and to the defense program is exorbitant.

OPACS ceiling action, applied to the present annual scale of lumber buying, means a saving to civilian consumers and the Government of more than $20,000,000 a year. At the same time the Southern pine lumber industry is accorded a schedule of prices adequate to permit continued profitable operations.

The price schedule applies only to sales from mills or concentration yards. Wholesale or retail yard prices, currently inflated, are expected to fall into line promptly.

"If this does not occur," Mr. Henderson said, "the ceiling will be extended to cover all wholesale and retail sales."

Costs of finishing and dressing, as well as expenses of distribution, are reflected in the schedule. Because of this latter factor, it is expected that mills, will continue wholesalers' margins and other discounts now prevailing. Thus, present industry practices need not be disturbed.

Southern pine, sometimes called yellow pine, includes longleaf, slash, shortleaf, loblolly and several other species of less importance. Southern pine lumber is employed in all kinds of building construction and has an important use in the defense program, particularly for cantonments and defense housing in the South and East.

About 95/o of. Southern pine is cut in ten States: Alabama, Texas, North Carolina, Mississippi, Arkansas, Louisiana, Georgia, Florida, South Carolina and Virginia ranking in importance in that order.

The price schedule recognizes no difference between longleaf and shortleaf pine in the grades and types covered. Long and large timbers, which are usually made of the longleaf variety are excluded, as are certain other sizes. It is expected that the prices of these sizes will fall into line with the prices for the kinds and grades of lumber included in the schedule. Should this not follow Mr. Henderson stated, the schedule will be extended to take them in.

Maximum prices are established for siding, ceiling, flooring, finish, boards, shiplap, fencing, dimension and small timbers.

Top prices that may be charged for siding range from $20.00 lor (' drop, plain end, to $47.00 for Grade B and better bevel-siding. Ceiling and flooring lumber, vertical grain, has a maximum price of $6O for Grade B and better, plain end, with a range downward on lower grades. Endmatched ceiling and flooring, vertical grain, is given a top price of $52.50 for Grade B or better with similar differentials on lower grades. Flat grain ceiling and flooring goes down from a top price of $43 on Grade B or better.

"Finish," a high grade Southern pine generally stocked by lumber yards for clear shelving, panelling, etc., has a price range for standard lengths in the schedule of $51 to $70 for Grade B and better, and 947 to 958 for Grade C. all in widths of 3" to l7'.

Boards, shiplap and fencing come in three base grades, known as 1,2 and 3 common. Maximum prices in l, x C,, 14' lengths, are 931 for No. I grade and $26.50 for No. 2 grade. The No. 3 grade, random lengths, has a price range of $16 to $21 based on width.

Ceiling prices on "dimension" lumber, using 2', x ('s as the most representative type, range from $28.50 for No. 1 grade down to $26 for No. 2 grad.e in 10,, 12, and 14, lengths. Random lengths in No. 3 grade have top prices of from $18.50 to $20.00.

Small and utility timbers are priced from $26.50 for 3,, x 4" No. 2 grade in 12' to I4t foot lengths up to $42.50 on No. 1 grade 8" x 8"s in 18' to 2O, lengths.

All prices quoted are for 1,000 board feet and are f.o.b. mill. (In the case of direct mill shipments, delivered prices must not exceed the ceiling price f.o.b. mill, plus actual transportation charges to the point of delivery.), In estimating such transportation charges, it is permitted to use the standard weights adopted !y the Southern Pine Inspection Bureau.

The ceiling prices established in the schedule apply on all sales and deliveries on and after the effective date, September 5, 1941, notwithstanding any then existing contracts or commitments.

Price Schedule No. 19

It is stated in this Schedule that the authority for the fixing of a Yellow Pine ceiling is "by Executive Order No. 8734." The following are verbatim excerpts from Schedule No. 19: l3l2.D Records and Reports. Every person who, during any calendar month shall sell 34,0m pounds or more of southern pine lumber for shipment originating at the mill shall keep for inspection by the Office of Price Administration and Civilian Supply, for a period of not less than one year, a complete and accurate record of every such sale made during such month, showing the date thereof, the name of the buyer, the prices, and the quantities and grades sold. l3I2.3O Enforcement. In the event of refusal or failure to abide by the price limitations and other provisions contained in this Schedule, or in the event of any evasion or attempt to evade the price limitations or other provisions contained in this Schedule, the Office of Price Administration and Civilian Supply will make every effort to assure

1312.26 Maximum Prices for Southern Pine Lumber. On and after September 5, 1941, regardless of the terms of any contract of sale of purchase, or other commitment, no person shall sell, offer to sell, deliver, or transfer, for domestic or export use, any southern pine lumber for shipment originating at the mill (rather than at a distribution yard),, at prices higher than the maximum prices set forth in Appendix A, incorporated herein as 1312.34.

1312.28 Evasion. The price limitations set forth in this Schedule shall not be evaded by unusual charges for ex. tending credit or for early delivery,by charges for delivery which exceed the actual cost of such delivery, by unnecessarily routing lumber through a distribution yard, or by other direct or indirect methods. The seller shall in all cases give the purchaser the option of making his own transportation arrangements.

Persons affected by this Schedule shall submit such reports to this Office as it may from time to time require.

(a) that the Congress and the public are fully informed thereof, (b) that the powers of the Government are fully exerted in order to protect the public interest and the interests of those persons who conform to this Schedule, and

(c) that the procurement services of the Government are requested to refrain from purchasing southern pine lumber from those persons who fail to conform to this Schedule. Persons who have evidence of the demand of prices above the limitations set forth, of any evasion or efiort to evade the provisions hereof, or of speculation, or manipulation of prices of southern pine lumber, or of the hoarding or accumulation of unnecessary inventories thereof, are urged to commugricate with the Office of Price Administration and Civilian Supply.