Lumber's Highett Hurdlc

Address Delivered bV l. N. Tate, Vice-President, \Ueyerhaeuser Sales Compony, at the Annual Convention of the Californio Retoil Lumbermen's Association, Santa Barbora, November 7 -B

It does not seem reasonable that I choose to talk to you about the difficulties of the lumber industry today rvhen a troubled world is facing the most difficult problems in history; when these world troubles are so immediate and so t"il that our natural desire is to solve them first and let our industry problems wait for a happier day. when they may be ta-ken up in turn and solved more easily with undivided attention.

Certainly there is no desire on the part of any of us to shirk our iesponsibilities on the world problems, but very largely they -are beyond our control right now and time must be given to working out the answers to each one ot them whdn that is possible. I do not believe there would be any great profii in our discussing them anyway, !e' cause'*e- are dbviously in agreement as to the cattse for them, and as to the cirre foi them. We know 19ry ry-e-lI what America must do to preserve the American Way. We believe in it; we have faith that right will ultimately prevail, that England and America cannot and will not be iorced in the end to give up those principles ancl ideals that have made our country gieat; that have clearly marked America as the land of opportunity. We do not believe the time has come when limits must be set on that opportunity, when the theory of scarcity must replace the theory of volume production, when initiative must- be-subjected to Federal iontrol, or business handicapped by Governmental competition. Our own industry is a complete refut:ttion of the -theorv that some would have us believe, that our American-economy has become static, that it is no longer in the dynamic stage.

Let ud not worry about opportunity so long as the American system of industry is-permitted to function,- so. long as th6re is a reasonable piofit incentive before business, or oerhaps onlv the hope of a profit. Business, you know, is rio longer operating under t6e "profit" system, it is now the "hope" system.

We risent-the implications that have been built around the word "business." It is not a thing apart, it is the heart of American life. We resent the practice of using familiar words in such a way that they become in effect indictments. Business is simply the making of things or the performing of services for pay. The doctor or the lawyer who is pa-id for his profesiional skill is merel,y -a -part of business. The farmer and the clerk are as definitely in business as the skilled mechanic or the president of a large corporation. Any general attack on business is an attick on- everyone who iarns a living, or whose savings help others to earn their living. It has been well said that industrv is iust America at work.

The important thing, if we are to preserve the'promise of American life, is that while we build up adequate defense against external aggression we at the same time fully m-aintain and improve our American way of life. So if we are in agreement as to those things that are essential for world progress and American progress, it wiil be more profitable io tilt< today about our iirdustrial problems. And perhaps with this national election out of the way, however well pleased each one of us may be with the result, we can settle down as "the tumult and shouting dies," and the radio gets back to its normal routine, and eggs are- once more used for the purposes for which they were originally intended, and talk about our lumber hurdles, rvhere, sirangely, we do not have so sure a knowledge of the facts or so definite an agreement as to how those facts shall be applied to produce happy results; or how to use_ to c.rpacity this great renewable natural resource, on which such a large-part of our population must depend if it is to live thtlifa that we still fondly hope is a part of our American heritage.

I speak of our problems as hurdles, and possibly thg reason I do that when I come to California is that my mind instinctively turns back to my college days and to the memory of how high the last two or three hurdles can look #hen one of -your long-legged California hurdlers is about two feet ahead of me and that gap has to be closed in the next three or four seconds. After a good many years, it is fortunate that I do not have to move that-fait today, and that we are going to have more time than that to git over some of these lumber hurdles.

Just the same, the problems are immediate, they are crving for solution, and the sooner we start dor','n this ciidei path the sooner we shall reach the tape, and- the happief we shall be in our accomplishment. Some of the eaii-est hurdles are such absurd ones that we have built up ourselves, and would be so easily gotten over if we could but see clearly the reason they are there. Fortunately, a mere statement of tlie facts usually suggests -an automatic solution, if we are wise enough and farseeing enough to attack the problem as a united industry, present to thi world a united-front and get it quickly solved.

One serious hurdle does not at first glance appea"r to be a hurdle at all. It is the fact that lumber is so rvell known, that it is such a commonplace commodity that rve just take it for granted and do not realize that we mu-st know more about it, must tell the world about it, and constantly develop nerv uses, new applications, new lrocesses that rvill hold our old markets and establish new ones. Certainly there is no other common product in daily use that the fublic knows less about than lunrber; perhaps because it iJ so commonplace and also because it is not itself a finished product. There is probably no material that is harder to advertise and.exploit than lumber. lfhe public is not interested in a piece of dimension or a board, and it should not be. The public is interested in the houie or the crate than can be made from that lumber. It is not interested in wood pulp. It is very much interested in the newspaper or book or container that can be made from that pulp. .It is not even interested in a piece of plywood, as interesting as the plywood development is. tf is interested orrly in th-e applicatlon of that piece of plywood in the manufacture of some useful commodity. It ii interested in wood fibre after that fibre has been moided into a nlastic or into a superla-tiv_e insulation material. And, incidentally, we have overlooked a tremendous sales argument when wi have failed to impress the public, as we Eave failed, with the astonishing insulating value that an inch of wood sheathing carries. Even we in the industry do not think of wood sheathing as insulation. Our minds immediately carry al-ong to some prepared insulation, even though we know, if we would stop to think of it, the insulating:value that is there.

And so I would give you as the first of these hurdles, and not the smallest, the fact that wood is such a commonplace commodity, the fact that it is too well known and too iittle known. The remedy there is obvious. There must come first a realization within the industry of the sterling quali- ties of this commodity that we casually call lumbir;- and there must be built an appreciation outjide of the industry of what wood has meant in the development of America; how much higher our _standards of living were during the pioneer days because lumber was readily available. TIow much it can mean today if this resouice is ftrlly appre9ja1ed and intelligently used for better homes anil trigner living standards.

Because I think it is so important that we get a proper appreciation of ^this lumber that we accept -so casuaily, and that most of us sell with so little appreciation, I wonder ifIT"I be -permitted to quote jus? trvo paiagraphs from a talk I made recently, emphasizing this p-oint: "Lumber has carried on and has its future -ahead of it rather than behind it because of the inherent value of this product of ours, because u'ood satisfies so many human needs at so low a cost. I wonder what wood's -,inherent value' means to each one of us. To me, after a life in lumber, it means that we have a great God-given, natural resource, the only renewable natural resource. It means that we have a wonderfully versatile material that warms and clothes and houses mankind; from which his earliest cradle and his last resting place are fashioned; the most easily worked and the eaiiest adapted building material; the one with the friendly touch; the one carrying greater strength per pound of weight of any natural buildiiig ma- terial, and the greatest insulating- qualities per inih of thickness; a beauty of grain that is increasingly imitated; the material that made possible the houses of t-h6 new Eng- land_pioneers, the development of happy farms in Iowa, thi small homes of the industrial workel-ioday; the source of cheap crating, at a time when crating was much more important to our industry and to all industries than it is to-day_; the- source of cheap newspapers and magazires and books, of rayon and plywood and plastics; and iuch. a long list of modern products that we cannot enumerate theri all. The definite, positive source of a standard of living in these United States from the earliest pioneer davs lhat could not have been attained without wood.

This is an impressive list of the accomplishments of this commonplace product that is so casually accepted, so universally used, 1o little known. But I believe'eveiv state. ment I have made about it is true. Let's do a little imag- ining. Let's imagine that no one had ever heard of woo-d, that it is a brand new discovery or invention, that it came out of some laboratory today with all of the qualities that it possesses, and has possessed through all ihese years. Can you imagine the many superlative terms in wtiich it would be described, the space it would command in our pape.rs and magazines and in the public thought ? Can you imagine the consternation that wbuld be creaied among the manufacturers of competitive materials ? Can you imag-ine how much more we ourselves would appreciate it? An-d yet we accep.t it with all the complacency with which we accept sunshine -and air and water, and stupidly ask ourselves whether it has.a future, whether the inaustrv can be-9avcd, or is worth,saving?"

Well, what is the next hur-dle ? I must choose mv hurdles rather_carefully or I shall talk too long. But ihere are several to which we just must pay oui respects. Let's talk for a moment about real estate taxes. -It has been statgd recently that real estate taxes are costing us more business -thal any other one cause. I would ndt attempt to list the deterrents to building in order of their importance, but certainly this is another high hurdle, so we had better take a look at it. During a Deiiod of ten recent years in which our total taxes increised,87, our real estate taxes increased l8/o, and it is evident that real estate is carrying more than its fair share of the tax load, that the assessment has in many places reached the point of diminishing returns, which is serious. It is creating problems, particularly in our larger cities, which musi -be faced p_r_omptly before our_ whole schedule of values is destroyed. We can use a lot of parking lots, but the process of t-ear- ing down perfectly good buildings becau3e they cannot earn the taxes must stop, or we shall not need any parking lots.

T*o encouraging features have recently appeared. One rs the move to base tax assessments on the earning power of the property, which is logical and reasonable. TEe other is. the move to set up uniform State laws which will establish. limits beyond which real taxes may not go. Perhaps a third movement should be noted, ritrictr ii the .ecog-

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Eleanor

(Continued from Page 21) nition we are reaching that real property should be reserved as the special tax province for State and Municipal support and is not a proper sphere for Federal taxes.

Ybur neighboring'Staie of Washington, with its forty mills limit, is an oulstanding example of what can be done profitably in limiting real estate taxes, and what such a iaw wilf do to enco-urage building and home ownership. Some of our Eastern cities are outstanding examples of what happens to real estate values when they are overtaxed.

Increase of home building outside the city limits cannot be ascribed entirely to the-iax situation. The automobile is responsible for much of it; but there is a tax situation here fhat is unwholesome. The Binghamton Press, New York, recently printed a five full-page listing of ^more than 6000 pieces oi property to be sold for taxes. One northeastein city shbwi a-ratio of tax asesssments to actual sales price-on houses of l5o/o, a,tax rate within the city of $62.00 compared with $26.00 in surrounding suburbsThere are easlern cities of approximately one hundred thousand population where only one or two new homes were built-within the city limits last year. One residence in a New Jersey city was valued by HOLC appraisers at $6200.00 on which they sought vainly to get an adjustme-nt from an assessed valuation of $2O,900.00. The examples can be extended indefinitely but they all point to the same conclusion, that our cities are being gradually abandoned and decentralization is going to be intensified unless we get relief from existing tax burdens. This is a matter 6f defitrite and direct concern to every citizen, but it is especially the direct business of every lumberman. Unfoitunat6ly, the situation cannot be fixed through- any one nation-wide law, it is everywhere a local issue that must be fixed locally, and the local material dealer should be leading the movement.

Whit is the next hurdle? One that I would like to discuss with you, but shall not today, for obvious reasons' is the brineing of indictments against the industry, both manufacturir ind distributor, by the Department of Justice, and the throwing of. hazatds in the way of Americ-an business in a manneithat still further discourages the investment of capital in productive enterprise at a time when the reduction of unemployment and the encouragement oI business are important to the end that our mounting tax burdens may be met. It does not seem reasonable o."*ire. There are abuses in every industry. They should be firmly dealt with. And certainly no one has a greater interest in the production of the most efficient small home that can be built for the least possible amount of money, than the lumber dealer.

We have such a wide-spread, loosely integrated industry, manufacturing so many Jpecies and. grades and sizes, that the orderly distribution of that product-is-of great importance to the American public. That orderly distribution is being jeopardized by these actions at the same time that the G5veinment talies an entirely opposite stand regardinq other natural resource industries, and prescribes their ptices and distribution methods to insure. that those-prices ;ill not be unduly depressed. It is all very. confusing, and certainly it is not building healthy American enterprise or coaiing out of its hiding places all of this scared money, like the-twenty-five billion dollars which this countrv his in savings accounts alone, that should be helping to build Americ-a. However, if I remember correctly, I said I was not going to discuss this hurdle, and I rm not, except to pay my respects in passinC a.nd to express the hope that dtiring the next four years American business may have a clearer chart to steer by. We need it' I have time for onlv two more hurdles, but I want to state them clearly belause they are important. I have said that ours is a sprawling industry, widely separated by geography, by species and by diverse interests. It is aisd trinaicapped by an almost complete failure on the part of the American public, and to a lesser degree within ihe industry itself, to lppreciate the basic problems of forestry. The forest is our raw material, and the story of foreitry has so changed in recent years that it is not strange that the publiJdoes not yet understand the modern story-or its implications. It is an interesting story,-dating back to the earliest settlers, when there was no thought but that our forests were inexhaustible, when they were a barrier to the progress of civilization, and they h-ad to be slashed and burned and gotten out of the way b1' every possible means, to make room for the farm lands that seemed then so much more necessary.

There was no considerable commercial sawmilling until about 1880, and no conception that there ever couid be a timber shortage until afte? the turn of the centu-ry, when Theodore Roosevelt was President and his chief forester convinced him that there would be no more trees in another 2O years. This idea was eloquently sold- to the American people, and I think it was j.ust as well that it was over-s6ld io them, because it brought us sharply to the point where public sentiment was built up to an appreiiation of the-forest problems. The public was told that it was a crime to cut a tree, and many, many people still believe that, not realizing the developments that have taken place since that gospel was preached in 1906. It encouriged the use of 6mpetitive materials, (I have never liked tfr'e idea of calling them lumber substitutes)' It reduced the consumption of lumber to the point that we felt that we were in a dying, or at least a diminishing industry, which held no fulure for our sons. We got the rather naive idea that we must save the standing trees, not realizing at all that those trees would mature and stop growing, and then decav and become valueless. But out of all of this ptopagatrda, which should not be called propaganda because tnai word had not then attained its present significance, came the very valuable' realization that TIMBER IS A

CSOI; just as definitely a crop as wheat or corn, but developing over a much longer tlme cycle; that it nust be cut when the crop.is ripe, not only because it stops growrng and rncreasing in value, but to clear the land altay and Slye a chance, for another young crop to grow wheie the old.crop st-oo-d. It is very 4finiiely eitablished by the exp.erience .of th.^ years that TIMBER IS A CROP, in just the simple, definite way that I have stated it. That iimberlands can be cropped, that there are timber farms where trees can be grown profitably so long as the orvner is financed to wait for his crop, so long as the fire hazard can be met and the tax gatherers can 6e made to understand that a continuing sequence of crops should be encouraged, and will be more profitable continuing on the tax roll ihan if the owner is forced by unreasonable ta*es to cut out and get out.

There is another factor in recent years that makes it more important that we shall raise trees on those lands best suited for this growing of trees. It is that we no l9-rg.r ne_ed -more land for_ the growing of other crops. The trend of recent years has been torvard the more intensive cultivation of the more fertile lands and the leavins of more acres, formerly devoted to agriculture, on whic[ trees should be grown., The Department of Agriculture now designates some five hundred million acrei of land as best suited for growing trees, where less than four hundred acres are devoted to the growiirg of all other crops. And you can see at once the tremendous propor- tion of our country, nearly. one-third of it, which' is'not going to prosper fully unless it produces trees, and unless those trees can be sold. That is the big catch in the entire story, the need to establish a commeicial value on trees that will justify the very little reforestation and the care that those trees will need., and that will bring a larger measure of .prosperity to that third of our country, tolts stores and its doctors and its lawyers; to its power companies :lnd its railroads; to every one of us, whether we are in the lumber business or not.

As a matter of fact, we are all in the lumber business because one-half of that area is in the public domain. We are stockholders with Uncle Sam in the enterprise of growing trees, and every citizen who encourages the use of those trees, and who uses those trees himself. is merelv protecting his own investment. 'We are very'close to 'a balance between production and consumptidn. If that area is to prosper we must find many more uses for many more trees. Surely when the public gets that picture it will no longer be a crime to cut a tree. We shall ho longer want- to _be saving our own forests and shipping in pulp and lumber from foreign countries, especially when_ wb realize that 50/o of the lumber dollai goes- directly to labor.

To accomplish the reforestation that is needed, the fire protection that we must have, we must recognize that a measure of Governmental regulation of our industry is needed. But it is tremendously important that this regula- tion shall be local, r,r'here local conditions are understood and local processes can be applied. That is of much importance, not only- for the timber owner, but for the good oj th9 public, -and it -is very important that this re[ula- tion shall not develop _into control. There is danger th"at it yill, Regulation as I see it imposes certain rEstrictions in the comrnon good. Tells us certain things that we shall not do because it is not in the public interist to do them. But when our Government begins telling us the things that we shall do, th_ey_ have pasled the stige of regrrlatiJn and we are under Federal control. We halve deseited the American system of free enterprise and have taken a long step toward working for a Totalitarian Government. The distinction between the two is important to every one of us, and the telling of this forest story is of trem-endous importance -to those in the industry and those out of the industry, if this great reneu'able resource is to continue to serve mankind. I am telling it over and over again, beca.use .I want -every_ one that I can reach to be iitpressed with the fact that TIMBER IS A CROP. And I want everv one of you to tell the story, until the public realizes that TIMBER IS A CROP, thtt the prosperity of so much of our _country hangs on the wise uie oi thit crop, that we need and must have markets for twice the number of trees that we have markets for today.

. We are_ not very good at broadcasting in this lumber industry, Iumber news does not make the front page, and yet what happens to this timber crop of ours is muc-h more important to business America than what happens to Belgium or France or Norway. Our adjustmehi to foreign conditions will be automatic and sure,-if painful; timbei's adjustment to domestic conditions will nbt be right and will not come until the public understands this st6ry and uses these trees in suffitient volume so that it piys to grow more trees.

So that is a hurdle of ,education, of telling the true story of forestry until as lumber or pulp or plast=ics or rayon o'. chemicals every one of these 1re-es can be grown -profitablv.

- Jur-t on€ more hurdle I have time to talk to you about, but that is the highest hurdle of all. It is reaily not another hurdle. Fundamentally it is the same hurdle that we have just been over. It is the hurdle of distribution. Ilowever much we may talk, the highest hurdle is always this hurdle of more markets for more trees. But I thi;k we can discuss it profitably from a little different angle if we shall call it the hurdle of salesmanshio.

-I suppose that I shall have to class myseli now as a manufacturer, although.I represent an organization operating many retail yards, but the reason, probably the only real son, that f am now in the lumber business ii because'when

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E. A. HOWARD & GO.

1855 Mission Street, Scn Francisco

UNderhill 6969

OIIer Their High Grqde