California Retailers' Annual Convention

The retail lumbermen of California met in annual convention at the Huntington Hotel in Pasadena, November 3, 4, and 5.

It was far and away the greatest, most notable, and most momentous meeting of lumbermen ever held in the state. A big and distinctive crowd was in constant attendance. From a flying start at noon on Thursday, when the ballroom of the hotel was filled to overflorving rvith lumbermen and ladies, to the final banquet on Friday evening, each and every part of the convention program enjoyed an overflorv attendance, Each of the business sessions saw the convention hall filled, and men standing in the back of the room. The attention rvas perfect at all times. All speakers had splendid audiences and attentive listeners.

The entertainment and business programs were skillfully handled. There were no flops, no oversights, no lagging at any time. Few lumber conventions in history in California, or anywhere else, ever heard so many interesting and attractive speakers and speeches. It seemed as though each one was a headliner in turn. The speakers came from far and near, and their topics were separate and distinct. Yet so well and thoughtfully had the program been built, that it seemed that each featured speaker in his turn was driving added spikes in the same direction, namely, the building of an inspirational future program for the retail lumber industry of California to follow for its own betterment. Step by step and speaker by sp,eaker and topic by topic they grouped together into a very, very remarkable school of building merchandising and building thinking, all pointing to a bigger and a better retail lumber industry in California.

The entertainment program was just as cleverly thought out, and staged, even to the installing in the Huntington Hotel of a public address system to aid the entertainers and the speakers throughout the program.

One man must have the credit for the success of this entire program. "Praise Ken Smith-he did it all," was the way George Lounsberry of Los Angeles, general chairman of the Preparations Committee, expressed it. Mr. Smith deserves all the praise that could possibly be showered u,pon him. He had the idea that, properly done, that convention might easily prove to be, not only a great lumber meeting, but it might be the actual turning point at a vital crossroads in the life of the retail lumber business in California. That was his vision, his intent, and his purpose, as he worked incessantly for many weeks with every feature of the program. "We can put on a convention so fine that it will mark the biggest milestone in California lumber history," said Ken Smith to the Publisher of The California Lumber Merchant away back in the middle of last summer. He did ! That convention memory will always stand as a monument to his great work. ft was in all ways a record-

Association's Greatest Meeting Intelligent

dnd Most Notable Sellins ls Theme oI Convention SpeokersRecord Attendance.

breaking convention, and every delegate carried home with him a tremendous load of inspiration, information, and suggestion pointing toward a better lumber industry for the future.

Thursday Morning

Registration in the lobby of the Huntington was in charge of Annette Clifford and A. D. Davis, of the Association's Los Angeles offrce stafi.

Thursday Noon

George Lounsberry, Lounsberry & Harris, Los Angeles, was chairman at the luncheon, rvhich lvas attended by more than 400, including the ladies.

Lathrop K. Leishman, chairman of the entertainment committee. welcomed the convention visitors to Pasadena.

Keynote Address

Mr. Lounsberry introduced Jack Dionne, publisher of The California Lumber Merchant, who delivered the keynote address, "The Retail Lumberman of the Future."

Faced by a marvelous audience, both as to quality and quantity, of men and women who came there for entertainment as well as to listen to a keynote address to start off the convention, Jack Dionne devoted 25. minutes to fun stories, and entertainment effort. and then ten minutes to a discussion of the retail lumberman of the future, his stewardship, his opportunity, his obligations. He declared that he could only rep'eat the message that he delivered to the retail lumbermen of the West when he first spoke to them at a great convention at Fresno, nearly twenty years ago, that the fundamental duty of the retail lumbermeu is "to translate our materials into the language of homes and other buildings which men and women will save and sacrifice to own."

His theme during his serious discussion was that there is not now, there never was, and there probably never will be-except in times of most unusual and always temporary conditions-a volume of business that automatically develops sufficient to furnish consistent prosperity for the industry. Doing all too little to help create a g'reater building reservoir on which to exist, the retail lumber industry is practically always fighting within itself-and principally with price as its chief weapon-for a living share of the too-little volume of business that shovvs up asking for bids. His advice was that the retail lumber industry turn rightabout-face and decide that its principal business is NOT just to try and get a price for what it sells, but to CREATE more and more building volume by the use of its brains and its energy, so that there will be more ahd more build:trgs and building materials sold, and therefore less and less of the pressure that so generally results in price cutting.

He said: "The Good Book says, ''What doth it profit a man if he gain the whole world and suffers the loss of his soul ?' and I say to you what doth it profit the lumber business to get a good price for what it sells if it does not sell enough, and does nothing to create the difference ? You MUST, of course, get a fair profit on rvhat you sell, because if you give your materials away, the more you sell the more you lose. But on top of a fair price for your goods you MUST help create a greater volume of business to be divided. I solemnlv warn everv one of vou that for a paid secretary-manager. He concluded by thanking the committees for their work in arranging the convention, and the wholesalers and manufacturers who supported the convention.

Carleton B. Tibbetts, president of the Los Angeles Steel Casting Company, and member of the California lJnemployment Reserves Commission, spoke on "Coming Changes in lJnemployment Reserves Laws." He told of his recent attendance at the Washington conference of Unemplovment Reserves Commissions from various states and

"","u Lumbermen's Aggociqtion a business to save itself from the curse of price cutting and then supinely submit to death from dry rot, won't felp the situation at all.

"Competition should never be stifled or abolished. We need competition in this country and in this industry. We need it to make men and business grow. Don't let any false prophet ever tell you that getting a price and then sitting back and waiting will solve your problems. What the lumber business vitally needs-and must have if it is to know prosperity-is building and still more building, a great deal more than that volume that will appear without 1'our constructive efforts. Only through an intelligent effort to CREATE business r'vill dependable prosperity ever come to you.t'

He closed by urging every individual lumberman to look upon his connection with the industry as a stewardship, and an obligation, and go out every day into the highways and by-ways and dig, talk, work, hustle-blast if necessary, to divert the public cash into building channels that would otherwise go elsewhere. That, he said, is the heritage, the birthright, the stewardship of each lumberman.

Thursday Afternoon

W. K. Kendrick presided at the first business session and called the convention to order at 2:15 p. m. The cash attendance prizes of $10.00 and $5.00 were won by Harry O. Zahn, E .K. Wood Lumber Co., Ontario, and Harry Graham, Pioneer Division, The Flintkote Co., Los Angeles. J. O. Handley, M. J. Murphy, Inc., Carmel, president of the Association, discussed the question "Do You Want a Stronger Association?" and recommended employment of

*oo "n.,.r3Hi5ti#Bo--lt" " stated that the California plan had been recommended to all the other states by the Social Security Board.

W. C. Bell, Seattle, manager of Lumber Promotion, Inc., ancl manager of the Western Retail Lumbermen's Association, addressed the convention on "How the Price Reporting and Cost Analysis Plan Operates," telling how and why he has so successfully operated this plan during the past seven years. A full explanation of the plan will be given in an early issue of this paper.

The forum discussion on "What is the Effect of 5/o' Cash Discount on Credits and Collections" was led by J. B. Hall, vice-president of Owens-Parks Lumber Company, Los Angeles. Those joining in the discussion included J. C. Jenkins, San Pedro Lumber Company, Los Angeles; Paul Hallingby, Hammond Lumber Company, Los Angeles; E. C. Parker, Patten-Blinn Lumber Company, Los Angeles; C. C. Ganahl, C. Ganahl Lumber Company, Los Angeles, and John W. Fisher, Fisher-Swartz Lumber Company, Santa Monica. The consensus was that the 5/o cash discount given in the Los Angeles area reduced the amount of outstanding accou.nts and credit losses and that every effort should be made to keep it.

Kenneth Smith announ,ced the appointment of the resolrrtions committee, John W. Fisher, Fisher-Swartz Lumber Co., Santa Monica, chairman; Bernard B. Barber, Secretary, San Joaquin Lumbermen's Club, Fresno, and Al Hansen, Chase Lumber Company, San Jose.

Thursday Evening

Convention visitors were entertained at the dinner hour by Ani Iona and his Islanders, and Laniala, Hawaiian dancer.

Friday Morning

Paul Hallingby, Hammond Lumber Company, Los Angeles, presided. The attendance 'prizes of $10.0O and $5.00 were won by Frank Fox, Fox-Woodsum Lumber Company, Glendale, and Norman Vincent, J. H. Baxter & Company, San Francisco.

The forum discussion of "Cement and the Fair Trade Act," and "Grade-Marked Lumber" .was led by Kenneth Smith, Lumber & Allied Products Institute, Los Angeles.

"Present Day Costs of Doing Business"

E. C. Parker, Patten-Blinn Lumber Company, Los Angeles, led the discussion on "Present Day Costs of Doing Business" with an address on this subject.

At the last three conventions this subject has been discussed, and has in other ways, by talks and papers, been stressed from time to time, but has not been effective due to the fact that the cost of doing business has gradually conti.nued to rise, Mr. Parker said.

He gave the following reasons for the increased costs:

1. The gradual development from the old-time lumber yard to the present-day lumber and building material yard. The change from the days when the lumber dealer stayed irr his office and the customer came to t,he dealer's office to place his order, today when salesmen call on the customers in n'idely separatecl districts catering to their every want.

2. From the practice of furnishing stock finish and mouldings, and stock sash and doors to the present-day method of manufacturing finish and moulding, tying it up rvith a satin ribbon, and manufacturing every type and variety of sash or door kno'rvn to the architectural min<l.

3. From the practice of insisting on proper no.tice of time for delivery to the practice of giving shot-gun deliverv service.

4. The development of the practice of taking off lists of Iumber, finish, and particularly sash and doors, from plans ancl giving the customer a figure instead of insisting that the customer make out his own list.

.5. The development of the free financing service r,vhere salesmen spend many days arranging the financing for a crrstomer's job.

Among other reasons for tl-re increased cost of doing business, Mr. Parker named the following:

1. Practically every item of expense going into general expense accounts has increased in the last few years.

2. The increased cost of office detail necessary to figure charge tickets and the rvork necessary to figure and to make proper re,cords and postings of cash discount, sales tax, cartage tax, etc.

3. The wage problern. Wages today ale cstimatecl at 21 per cent higher than a Z}-year average.

4. The cash discount of 5 per cent startecl on May 1. 1933, in Southern California and which adds about 3l per cent on sales to your expense. Cash discount has been a fine thing, but the expense of it is still there.

5. Taxation-that amount r,vhich dealers pay for ttie privilege of doing business.

Mr. Parker stated that City, County, State and Federal governments are still spending extraordinary amounts and that Californa's share, of which each of you has a part of the Federal and Local debt, is estimated at $3,6@,@0,000 or 53 per cent of the assessed value of all the land improvements and personal property in the State. Califorrrians paid $120,000,000 in taxes in 1915-16; $625,000,000 in 1935-36, and $851,000,000 in 1937-38.

Continuing his discussion on taxes he mentioned the various kinds: (1) City and county taxes-property taxesare gradually climbing higher and higher; (2) City licer-rses

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ale iucreasing city revenues from $25 to $100 aud up t() $500 per yard; (3) 4 per cent of net income for State Frauchise Tax; State Personal Income Tax ; I,Iotor Vel-ricle I-icense Tax of $1.75 per $l0O of valuation; ltaih-oad Corrrtnission Nuisance Tax of r/4 ol one per cent on gross truck receipts; Transporta'tion Tax of 3 per cerrt on all deliveries that go out of incorporatecl cities ; and the Sales Tax, which he stated, we are ir.r favor of retaining. although there is no tax so clifficult of al4rlication ancl rvhich makes so much aclrlitional office detail ar.rd exlte nse ; (4) Social SecuritrTax, State lJnemploymerrt Tax; (5)) Federal taxes such as Capital Stock Tax, Lrcorrre Tax. arrd Capital Gains Tax: (6) Inclirect arrd hiclden taxes.

NTr. Parker stated that, in his opiniorr, opelating expellses perr dollar of sales for the period 1935 to 1937 inclusir-e is 21.7 per cent higher tharr a tu.enty-year average.

Speaking of the rnark-up, u.hich in his oltinion. has not been raised in tu.enty )-ears or more, he saicl a neu' list mar. be issued, but the thing that counts is u'hether or not vorl sell by the price list.

In s,pite of the increase in general expense accourrts toclay over a tt'enty-year average; in spite of excessir-e office detail necessary to do business;in spite of a u.age scheclulc 24 per cent higher than a twenty-year average ; in spite of an allou'ance of 5 per cent cash discount ; he cleclar-ed the gross margin of profit today is within one a twenty-year average.

Mr. Parker mentioned the following as some sons why the I'umber business is a low gross per cent of of the reamargin of profit industry: l. The fact that some years ago the lumber dealer's business was 90 or 95 per cent lumber, while today about 55 per cent of the business is lumber and dealers must rely on other commodities to secure volume and they must bear their share of the expense

2. The "Don't Touch It Sales" at little or no profit.

3. Misconception on part of dealers generally that because a commodity has a large turnover a very lorv margin of profit can be taken, rvhereas you are dollars ahead to sell a commodity that bears 25 per cent gross profit ancl ttlrns once in a year than to sell a commodity that bears 121 per cent and turns 100 times.

4. Lumber dealers for the most part sell commodities rvith no individuality, especially is this true of lumber, and u,ith any such commodity the margin of profit tends to seek a low level.

5. The difficulty of knowing during the year whether you are making any money due to difficulty in estimating your stock of goods on hand without an inventory because oi the fact that goods are carried in a mass and cannot be carmarked.

6. The vol,ume of lumber and building business does not keep pace rvith the increased number of yards, and the increased facilities and equipment of all of them.

7. The lack of a method or plan rvhereby each dealer can secure that volume of business to which he is justly entitled by reason of the amount of investment, past record of sales, or any other criterion.

B. Because of disorderly distribution whereby manufacturers and brokers sell direct to consumers.

9. Disorderly distribution where a contractor feels he can save the lumbermen's profit by starting a yard himself for the sole purpose of building houses.

Concluding Mr. Parker stated, whatever the reasons, the fact remains that in the past twenty years the lumber- man's cost of doing the gross margin of

Session business has gradually increased but profit stays just the same.

"The Keystone of the Arch"

R. E. Sabersor.r, Trade Promotion Manager, Weyerlraeuser Sales Company, Saint Paul, lVlinn., was next on the program with an address on "The Keystone of the Arch." Mr. Saberson said in part:

"Better salesmanship intelligent and intensive selling is the keystone of the arch of the bridge