Policy Outlined for Settling Inter-Code Jurisdictional Questions

Hearing on Protests Against Distribution and Transit Car Clauses in Retail Lumber Code

Washington, D. C., November 15.-One single development which promises to outweight in far-reaching consequences the original Purposes of the Administration's hearittg o. the suspended portions of the Retail Lumber Code came when Wiison Compton, Counsellor of the Lumber Code Atrthority and manager of the National Lumber Manufacturers Association, stated that it was the declared policy of the Lumber Code Authority and the Retail Code Authority to settle contested questions of jurisdiction by mutual agreement after conference between the two bodies' To further this end and after consultation with the Retail Lumber Code Authority, he suggested to the Administration the following addition to Arti'cle VII of the Retail Lumber Code, which was then read into the record:

"The Code Authority shall be empowered, in consultation with the Lumber Code Authority, established under provisions of the C'ode of Fair Competition for the Lumber and Timber Products Industries, to exclude from jurisdiction hereunder any person or persons engaged in the production or wholesale distribution of lumber and timber products (such as hardwood distributing yards, and lumber manufacturer engaged incidentally in retail distribution of lumber in locality where sawmill is located) where and to the extent that the establishment of such jurisdiction is not necessary to the maintenance of fair competition in retail distribution of lumber and timber products or to the ac'complishment of the purposes declared in Article I hereof."

The protest against certain sections of the Retail Lumber Code, whi,ch caused the suspension of the Code's distributional features and transit-shipment provision pending the result of the hearing, simmered down to a tempest in a teapot. Of the twenty-two hundred wholesalers in the country but three attacked the distributional provisions'

The three wholesalers were supPorted by the Associated General Contractors, but this support was offset by stacks of telegrams received by the Retail Code Authority from small ,contractors all over the country expressing approval of the present Code language, which limits the right to sell to contractors and consumers.

The hearing was divided into two parts. Deputy Administrator Ralph Fogg, who presided, gave consideration, first, to the suspension of Article III and Se'ction 2 of Article II. B. L. Knowles, who represented the Associated General Contractors, read a brief which 'claimed that the average retailer is incapable of rendering the sort of service the large contractors must have; and that the systems of prices to be established under Section 8 of Arti'cle VIII of the Retail Code would force the contractors who bought in large quantities to pay retail prices.

W. Gerrity, a Boston, Mass., wholesaler, confirmed Knowles' statements and added that certain New Eng- land large-scale home building projects could not have been consummated had not the privilege of buying at wholesale prices been extended to the builders.

Harris H. Gillman, an attorney representing H. A. Lawrence & Company of Fitchburg, Mass', added the endorsement of his clients and declared that any provision of the Retail Lumber Code afiecting wholesalers constituted regulation without representation; he demanded that the jurisdi'ction of the Code be confined to those who made the application for its approval. Mr. Gilman deplored the fact that wholesalers were under no Code jurisdiction and expressed a wish they might soon be included under the Lumber and Timber Products Industries Code' M' G. Truman of the Marsh & Truman Lumber Company, Chicago, added his endorsement to the Gerrity statement. The claims of the General Contractors were further stressed by George W. Samson, purchasing agent of the H. Wales Line Company and George Hyatt of Wiley and Foss.

Deputy Administrator Fogg recessed the hearing and directed that the protestants 'confer with the Retail Code Authority in a hope that some compromise might be effected rvhich would meet the Administration's approval, but it was announced after the recess that a satisfactory compromise had not been reached.

Ilomer Ballinger, Chairman of the Executive Committee of the Retail Code Authority, stated that in an attempt to meet the views of the protestants it had been agreed to submit an amendment to Article III which would cause the Article to read as follows:

"All persons engaged in the business of selling lumber' lumber products, building materials, and building specialties to contractors or consumers shall be subject to the provision of this Code and of the approved rules and regulations issued thereunder and shall be compelled to adhere thereto under such penalties as may be prescribed by the law, except as to sales in carload quantities direct to the follolving:

"I. To and for the Departments of the United States Government, and for intra-state movement to and for departments of State Government;

"2, For shipyards, large dams, docks, and bridges;

"3. To and for Railroads;

"4. To large users of industrial lumber, including mines; except purchases for construction purposes."

In addition to this amendment the Retail Code Authority proposed to issue interpretations of Section 2 of. the Article, which would provide that in quoting on sales of lumber and other products in carload lots for direct shipment to contractors and others, the retailers must eliminate any element of yard or handling expense when figuring their prices, that no territorial restrictions should be made as to purchases and sales and that logs, poles and piling are not subject to the jurisdiction of the Retail Code. Another interpretation provided that the wood preserving industry be exempted from any distributional provision.

Mr. Ballinger read a brief in which he contested the statements of the protestants and stressed the point that if retailers were to be denied the privilege of handling business in large volume their overhead would have to bc applied in such a way as to unduly enhance the price of small retail sales.

The Deputy Administrator then turned to the question of transit shipments. J. W. Gerrity and Harris H. Gilman attacked Section 11 of Article VIII, claiming that the elimination of transit shipments gave the large retailer an advantage over the small, and claimed, further, that it would result in business being diverted to Canadian Spruce.

William S. Bennet of New York, Vice-President of the Edward Hines Lumber Company of Chicago, whi'ch he declared to be the largest firm of wholesalers in the world, then stated to the Administrator that the transit shipment was "the most destructive influen,ce" in the lumber business. He contended that present ,cost-protection prices established by the manufacturers under their Code did not reflect costs and that unless these manufa,cturers could sell for more than minimum prices they were on the road to bankruptcy. He then denounced the transit shipment as the only instrument which could prevent their selling at a higher price and asserted that the practice of putting unsold lumber in transit by water was just as vicious as shipping it by rail.

Frank Carnahan, Secretary of the Retail Lumber Code Authority, then submitted a brief which outlined the history of the transit shipment practice and gave statistics to show its ill effects upon the lumber business over a long period of years. The Carnahan brief was an exhaustive presentation, which 'covered every phase of the case.

Vernon M. Hawkins of Boston, de.clared that resumption of the transit shipment pra,ctice would tend to constitute a monopoly.

Deputy Administrator Fogg gave interested parties until noon of November 21 to submit additional briefs. He stated that all the material would be submitted to the various advisory boards, upon whose recommendations a decision should be predicated. Deputy Administrator Fogg was assisted by Deputy Administrator E. A. Selfridge and by Industry Advisor George W. Dudley, Jr.

The hearing began at 10 a.m., November 13 and was adjourned at 6 p.m., November 14.

Receiving Many Congratulations

Mr. and Mrs. Don R. Philips are receiving congratulations from their many friends on the arrival of a baby boy, Lawrence Philips, at the Cedars of Lebanon Hospital, Los Angeles, on November 15, 1933. Both Mrs. Philips and the new arrival are reported to be doing very nicely. Mr. Philips is a member of the firm of the Lawrence-Philips Lumber Company, well known Los Angeles wholesalers.

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