The Retail Lumber and Building Material Code

(Continued from Page 20) was taken from the manufacturing field and put over into the Distribution Division under Mr. Hecht, After hearing the secretaries shoot both barrels at him, Mr, Hecht seemed very willing to approach this matter of distribution. With the result that the following day a meeting was held with Mr. Dixon, Deputy Administrator for the Timber Products Code, a number of the officers from the Timber Products Code, and a numbir of retailers, including Mr. Ludwig, Carnahan and Ballinger.

It was agreed at this meetjng that it might be advisable to hold an informal hearing to discuss distribution with NRA. Mr. Hecht and Mr. Dixon were agreeable, so two days later this informal hearing was held before representatives of all the boards in NRA and presided over by Mr. Hecht. At this meeting amendment number 68 similar to the National Distribution Policy was presented and was immediately turned down by the various boards. We left this hearing in rather a quandary not knowing just what was the next step. In discussing this matter with Mr. Ludwig he and I decided that we did not have anything else to do in Washington so we might go down and take a crack at the consumers' board and see if we could find out just what was at the bottom of their objec- tion. A meeting was arranged within a few hours and upon our arrival we found that our chief opponent, a small group of Eastern Wholesalers and supported by the contractors' organization the A. G. C., had their attorney on the job. We found after joining the conference that he had been invited to sit in and hear the discussion. Naturally we did not feel very kindly toward the set-up but thought now was as good a time as any to bring the thing to a head and attempt to find the objections to the retailer remaining in business. After some five hours discussion and after reviewing a distribution plan written by the wholesalers represented by this Attorney they presented a distribution policy already prepared, but it did not leave much for the retailer. After much discussion we found that distribution in the minds of the Consumers Board all depended upon the definition of a carload quantity and if carload quantity coutd be defined we probably could make some progress. Mr. Ludwig and I thought we probably were making a little progress so we got busy on the telephone and arranged to have dinner.with all the members of the various boards along with our chief opponents' attorney and after dinner we re-convened for further discussion in the Code Authority office in Washington. About 1:30 in the morning we had presented to us a di3tribution plan written by Mr. Stone of Research and Planning which had the favorable approval of, we were led to believe, all the departments; including the attorney who was present representing his group oI wholesalers. Mr. Wiess of the Lumber Cbde Authority and Mr. Schupner representing the American Wholesale Associition were called^ in and- the plan" was presented to them by Mr. Stone. They would not commit themselves as to whether they were for or against the proposal. Naturally. Mr. Ludwig and I felt quite happy because we thought we had maoe some progress.

A meeting was called in Denver, August the 25th, for representa- tives of yards west of the Mississippi River and I had been selected ;by the Code Authority to attend this meeting so left Washington hr plane for Denver. When I arrived in Denver I received a Iong distance telephone call from Mr. Ludwis and he stated that oui definition of a carload had beeri chaneed-bv Mr. Yost of the Research and P.lanning, contrary to oui viewi and we learned later that it was done at the r€quest of our opponent's attorney who had set in at all of our meetings and had approved the proce-dure. His changes nullified all the work that we tlioueht we hah accomolished. resulting in Mr. Ludwig and I wiring atlthe different boafds and w-ithdrawing any assistance to the plan of distribution as changed by Mr. Yost and our opponents' attorney. This all happened dttite i was in Denver and the ablion taken -by the dealers-it the Denver meeting will be re-ported to you by Mr. Patten. Subsequent to the Denver meeting, Mr. Ludwig and Mr. Carnahan were- called into conference with Mr. Hecht, and Mr. Hecht stated that he was will- ing to go into this problem of distribution and start all over asain and see what coutd be worked out. A plan was drafted bv Mr. Ilud_ wig and Mr. Carnahan which was apiroved bv Code A-uthoritv of Division number two in its entirety. -Septembei 7. I was aqain -sent back to Washington to attend a mbetine of the Code AutEoritv as groxy fo-r our member, Mr. E. W. King. Distribution was a-gain discussed and a committee-was appointed-to draft a plan to b" "pi.sented to the Administration which was done and ihis plan, aiter considerable controversy, was approved by the National Coa.'euttr- ority and tlre Executiv6'Committee waJinsiructed to-usi-ihis-;lan of distribution as- approved as the starting point to see whethei or not a-nythlng could. be written in the Code covering distribution. As y-ou know the United States Supreme Court con"tends that a ouichaser has the,right to purchase-from where and whom he-chobses and that any-plan of-dist-ribution that would crystalize or freeze the channels of distribution is contrarv to law.

The point of distribution is wh6re our industrv is not in asree- ment. I contend that the onty distribution plan that can be pul-into successful operation must be handled as an association function. A dealer has a legal right to buy his material from whom he chooses and from firms who conduct themselves in accordance with general recognized trade ethics. Nevertheless, we never have and never will set up a policy in our industry which will be agreeable to all the members of the industry on account of the many varying methods of doing business and the various ramifications and problems alTecting this entire industry. What is 4 good policy here will' not work in the middle West. What is a good plan for the Atlantic Seaboard will not work in the South. With the result that distribution must be handled bv the various trade associations because this industry could not agrei on wlpt would be necessary to write in a Code to cover the entire countrv nor would the Government approve such a plan. My answer to ihis problem is the same answer that I would have made a year and a half ago, and that is that Codes to be properly administered must be flexible enough to set up rules and regulations covering the various regions or a supplementary Code for California must be designed to cope with Western problems.

In closing on the subject of distribution I again say to you gentlemen that the only answer to distribution is trade associations. Nevertheless, we will still have in our Code Article 3, which covers jurisdiction and I think that every efiort should be eitended by the National Code Authority to see that this order is removed and that we have written in our Code a proper definition of a carload sale which I believe that the report submitted by the Committee and approved by the National Code Authority is all that the lumbermen can expect written in the Code and that so far as California is concerned will greatly benefit the dealers and will permit us to secure compliance. I further make the staterAent that it is my opinion that the interpretation of a carload sale as*approved can be written in the Code providing that the retailers, the manufacturers and the wholesalers who claim to be in an agreement can agree upon this policy. This is no time to fold up our tents and this is no time for us to confuse this procedure with distribution. Our Nationat Code Authority should go to the Administration with the plan that was approved at their meeting last month and present his plan to the Administration and demand that a definition of carloads be written into our code to clarify Article 3 jurisdiction. I do not believe that anyone who understands the problems in Washington ever expects the National distribution plan written in our Code. What I mean by this is that they are holding out for the National Distribution Policy insisting that it be written in the Code and in the second breath most of them will admit that there are certain types of business, certain quantity orders that must be released from the Modal mark-up and no one at this time has presented the correct solution to take care of this complication. With the result that the Government has turned thumbs down and will continue to do so.' And as I said before, distribution is an association function and our job in front of us today is to exert every effort to have written in the Code some definition of carload business of which in my opinion the plan approved at the Code Authority meeting last month is the answer,

Reviewing the Code operation to date I think that we have made wonderful progress. We are attempting to correct all the evils of the Retail Lumber Industry by legislation and expect it to be done in a year's time. The fundamental principles of Codes is sound industry, must be self-governed and must have the sanction of the Goryern- ment and we certainly have an opportunity during this period to develop strong trade associations to work the Code ind Associations hand in hand together and by exerting a little efiort on the part of those in the industry we can make this Code work. I am not goins to talk about enforcement, Mr. Ash is here representing the State Compliance office and he can tell you what they expect to do. Nevertheless, I do want -to go on record at this meeting to express my sincere appreciation for the wonderful cooperation that our officl has received from Mr. Ash. We are disqualifying bids every day. His o$ce is holding he^arings trying to get recalcitiants to play bait. fire offices of the district attorneys are lll willine to coopeiati and manv retail lumber dealers have been cited before the vaiious district at-torneys and they have promised that thev would comptv and thev have com_pljed. I have set in at a number of these heirings and what the NRA wants is compliance of Codes.

Unless Codes are complied with there isn't a question of doubt in my mind that criminal action will be taken and that 10 oer cent referred to by the President will be not only considered as d menace to the industry but the taws of this state witl force them to comolv with all provisions of Codes. As you know, the new deal has b6eir criticized by politicians and potitical writers and it's practicallv impossible to get anything said favorably about NRA in the newspapers. People are peculiar. They do not know whal thev want. They have through the NRA program a machine permittiirs self- government and it will be a sorry day for Industry when the" great machine set up for self-government of industry ian no lonse-r be utilized to educate the consuming public that industry must-make a profit and the only way to make a profit is by cooperation and self-government and if this program should fail its failure will be brought about by those in the industry.

I'he newspapers are vigorously attacking price fixing all of which is political propaganda in rebuttal of the Recovery Program and I am going to quote here a statement by Mr. Richberg of which so much publicity was published in newspapers dealing with elimination of priCe fixing in the Codes. "Now it is my conviction that in the development of NRA we have been going through a process of education. Therefore, I think, not by a process of sweeping change but by process of working out gradually these problems, in industry by industry, it should be possible in the future of NRA to avoid a great many of the complications and difficulties which have been brought into the Administration up to date. There is no doubt of the necessity in some specific instances of preventing destructive price cutting. There is. no doubt of the necessity sometimes of putting some controls on production. But to apply any sweeping theory to business as a whole, that in some way through trade associations, they are going to control production and prices in such a way as to bring about wonderful results, is an irridescent dream. Freedom to cooperate for the protection of business interests depends upon giving adequate assurance that such freedom will not be abused. The way to avoid the rigid restraints of statutory laws or commission regulations is to organize for self-discipline and to welcome, not to oppose, a public inspection of methods and a public appraisal of results."

At the meeting held in Chicago last week by a majority vote the manufacturers agreed to maintain cost protection prices. In reporting this meeting, we find a small article hidden on the back sheet of the newspapers, whereas, if the vote had been to the contrary, you may be assured that the newspapers would have found space on the front page in large type. In conclusion I believe that Codes are here for a long time. You will have hours and wages. If an industry needs price protection and fair trade practices this can be secured through Codes and the successful operation from this point depends upon self-governnlent of those in the industry. If industry will arise to its responsibility and take advantage of this act and work just as hard to make the Code work as they criticize some of its inefficiencies this industry shoutd be able to make progress. Nevertheless, before we can see any great improvement the volume of business must be increased. 4 lot of our problems are brought on through the lack of sufficientlolume of business, and we hope that this new Housing Act is the answer to our prayers.

The present period of unrest is not new and this generation is not the first to experience the results of depression to undergo the hardships of rebuilding. It was a dark time in the history of the Children of Israel. The temple in Jerusalem had been pillaged; the walls of the city were in a state of woeful dis.repair; the remnant of Jews.in their holy city post discouraged. Depression hung as a d_ark pall over God's chosen people. Nehemiah was in Babylon. Word had come to him of the critical condition. Leave of abience was secured from the king. This man of God went to his native land, scouted. -the city and walls, then projected the program for r€covery. This was an NRA 445 B. C.- This includeh ribuilding the walls. Terrific opposition confronted him. Open antagonism was from without, jealousibs and criticism from within. Undaunted. he _rallied the ,people to support the work. Each family was given a_place to work. Each member of the family was given i task ti do. His_ people were unified. He made his orlanizat-ion complete. The walls were rebuilt-the work was accomplished. This was made possible because as he tells us in, "That we returned all of us to the wall, everyone unto his work."

_ As -the eagle holds in his talon three flashes of lightning, the sym- bol of power, so God has given us three supreme iesouries for the Sccomplishment of the work: mind, soul, and body. No man alone, but evcry man must be given to the task of reconstruction.

You are your brother's keeper.

B.y District Permits Up

San Francisco's building permits for the month of October totaled $1,863,525, as against $425,473 in September, and $474,035 in October of 1933.

Oakland's permits in October amounted to $190,457, compared with $153,932 in September, and $153,538 in October, 1933.

Biggest Month in Four Years

San Jose building permits for October totaled $419,615, the largest monthly figure in four years. Permits for remodeling homes were greater than in any month since May, 1926.

The Preservation Of Principal W'as Never More Important Than NOW

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