U. S. Timber Conseryation Board Recommends Reduction of Lumber Stocks

Washington, Nov. 9.-The United States Timber Conservation Board's lumber survey committee today recommended a further reduction in national lumber stocks of two billion feet. This recommendation appears to be at variance with the action of the Lumber Code Authority last week in publication of regional production quotas for the last quarter of 1933 which total about a billion feet larger than production in the corresponding period of 1932. The Timber Conservation Board is a public advisory body. The Lumber Code Authority represents the manufacturers who must take risks in the endeavor to comply with the spirit of the National Recovery Administration, especially in regard to maintaining maximum employment. The Lumber Code Authority anticipates a marked recovery o{ building next spring.

The Timber Conservation Board Committee points out that during the third quarter of 1933 lumber stocks increased. This is the first time since 1930 that a net quarterly increase has been shown. The advance was moderate, amounting to l7l million feet for softwoods and 62 million feet for all lumber. The Committee recommends net stocks reduction of over two billion feet as a means of strengthening the ability of the industry to continue operations under the conditions imposed by the Code of Fair Competition. Stocks accumulations, it finds, should not be encouraged. It calls attention, however, to the unbalanced condition of inventories in some regions, and to the continued need of exchanges of stocks by manufacturers to avoid unnecessary accumulations of items already in industry surplus.

National lumber consumption, the Committee finds, has increased during the third quarter but not so rapidly as shipments. It promises, the report says, to be of substantial volume during the fourth quarter for public works and projects but the relatively slow recovery of industry and of public purchasing power suggests the wisdom of conservative planning and output, at least until signs of a general building and industrial upturn are more impressi'i'e and dependable.

The report points out that the drastic advance of lumber prices during the last six months and especially since May (the Bureau of Labor Statistics lumber price index rising of 82.O in September from 59.6 in May) has resultecl in some regions and species in the depletion of many moderately priced items and in surplus in higher priced upper grades. Contrasted with the advance in lumber prices is the more moderate increase shown in prices of all building materials by the Labor Bureau from 71.4 in May to 82.7 in September. Lumber will find it increasingly difficult to compete with other materials under present advances. IJnder cost conditions imposed by the codes, in- cluding "cost protection minimum" prices expected to be published, and established, manufacturers will find it necessary to exercise every reasonable precaution with respect to costs and to increase efficiency in management and planning.

Committee recommends as an immediate pressing need an up-to.-date national survey of lumber consumption in construction and by the various wood-using industries, to be made with the cooperation of the U. S. Forest Service and Census Bureau.

In making comparative analysis of lumber consumption and stocks the report disclosed that while the first six months of 1933 showed new business in excess of production by 4O per cent, third quarter reports indicate a reverse relationship, or production in excess of orders by 16 per cent. In the third quarter, according to reports to the National Lumber Trade Barometer, orders fell 13 per cent and production rose 50 per cent as compared rvith the second quarter.

The report summarizes its findings as follows:

"Although the fourth quarter of the year is encouraging in its prospect of increased public works and other programs to accelerate purchasing power, and although the spring of 1934 is confidently expected to show revival in building and industry, the lumber industry should not encourage stocks accumulations. It should continue its effort to adjust its production and its stocks to current consumption and not to uncertain future prospects; to improve the manufacturing and marketirig of its products; and to promote and extend their uses."

The Lumber Survey Corrimittee was appointed on July 9, 1931, and consists of Wilson Compton, Secretary and Manager, National Lumber Manufacturers Association; Thomas S. Holden, Vice President, F. W. Dodge Company, New York; M. W. Stark, Economist, Chicago, Ill.; Calvin Fentress, Chairman of the Board, Baker, Fentress & Company, Chicago, Ill.; and Axel H. Oxholm, Chief. Lumber and Paper Division, Department of Commerce. This Committee serves voluntarily in cooperation with the work of the Timber Conservation Board in its study of the economic situation in the forest products industries.

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