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lN CHECKING with the lending inIstitutions it is difficult to find mortgage money at any rate. The variable mortgages, the co-op mortgages as well as the standard mortgages are all without funds to support them. S & L s and mortgage banks have had the largest withdrawals in their history. All caused by the feds paying high rates to borrow money to pay off the national debt.

It is not uncommon to hear retail dealers say that normally they would have paid off their loans by this time and would be working on a profit basis for the remainder of the year, but this year it appears that it may be August or September before the loans are paid off and profit begins to show on the books. Of course, by that time it will be past the busy season so profits will be lean.

A watch of the national chains shows an increase in advertising while the independents have slowed their advertising in an attempt to reduce costs. Reports are that the national chains are showing a profit; therefore, there must be some validity to the theory of boosting advertising budgets during a period of low sales. The few consumer dollars available should not be channeled into the national chains. We need to capture our share of the market.

Consumer dollars are going into high yield certificates which means they are saving even though not in the institutions that will provide funds to the housing market. When the time comes that T bills and CD's are no longer attractive, there will be a lot of money available for the housing market. Hopefully, the cost of materials will be within reason and the mortgage interest will stay below 1290.

Discussions with contractors indicate a new trend in housing will develop in the next couple of years. Since the costs will be high, emphasis will be on the construction of condos and town houses. Single family homes will be reduced in size with 1500 sq. ft. about maximum. Many changes in design to take advantage of passive solar are being prepared but building codes still requLire the primary heating system for home heat and hot water to be the furnace and either a gas or electric hot water heater. Housing costs could be reduced if building codes could be changed to permit gas and electric heating as a backup system, using smaller units.

There are so many new designs and concepts that the potential home builder becomes confused. There is also a lack of a track record on energy saving concepts which causes a lack of confidence in the new systems. None-the-less the new systems will be used. Do-it-yourself solar hot water systems are appearing in retail building material stores. (A natural product for our industry.)'These systems are easy to install and effective.

By the second quarter of 1982 the reduction in federal spending, changes in government regulations, and the consumer attitude will cause the economy to improve and we will be back on a progressive track.

It's here at Georgia-Pacifics Ft. Bragg mill that we've usable Redwood out of every log. We did it by upgrading our become the most advanced Redwood operation anywhere. So now we can actually offer more Redwood than before without putting additional strain on our timber resource. We have more upper grades,like clear all heart, clear and "8". Plus new rustic sidings and all the garden grades. So the Redwood you need comes from Ft.Bragg. And wjth G eorgia-Pac ifi c's commitme nt to increas ing productiv ity, i[-,ll be here for many many years to come. Because we've got what it takes Ilb'\re got $hat it

Chaos Of Contracts

(Continued from page 12) distribution alternatives-if it is large enough to handle the volume. The early beginnings of contracts in our industry indicate that many will be tied to specific volume. Does the shipper need a fleet management system to monitor contract compliance? This aspect of contract compliance will be exacerbated when specific volume contracts involve joint-line movement.

At this point in time, short term contracts are much more preferable than long term contracts . for both the carrier and the shipper. If you enter into a contract that is to your benefit, count on your competitors to attempt to find a contract that betters the one you have.

As time goes on, contracts proposed between shippers and carriers will become more complex. When this occurs, the shipper would be well advised to seek expert assistance. Some early contracts utilized the words, "Everything that is not covered specifically in this contract will result in the application of ICC rules." We don't believe that the "ICC rules" are finalized at this time, and Section 208 of the Staggers Act states clearly that contracts are to be outside ICC rules. A catch-22 situation.

It serves little purpose to be "pro" or "con" regarding contract rates. We are going to have to live with them regardless of their advantages or disadvantages. They will provide both opportunities and problems. It is quite possible that contract rate making will result in rail carriers becoming more service-oriented. That will be a plus for our industry.

wooD PRoDUCTS AT SEA

(Continued from page 17) ports in the Northwest cannot accommodate the large equipment needed to provide efficient service to Southern California.

Furthermore, most shippers, both large and small, do not want to tie up money in large inventories necessary to fill large barges. By tandem towing, Sause Bros. is able to provide barges which require only 3,300 mbf per load at rates comparable to those attainable for 6,600 mbf shipments.

Sause Bros.' fleet of barges is as varied as the cargoes. Some are open deck with stanchions; some are equipped with a large steel warehouse to haul dry cargo such as plywood, kiln-dried lumber and paper products to the Hawaiian Islands; others are purely for liquid materials; and a general utility barge is for heavy lift projects.

At the present time, the firm employs over 200 people, including 100 on their towboats. The balance are involved in loading, unloading or are land management personnel.

Paul Sause, company president, takes an optimistic view of the future:

"The Southern California lumber market has been, and will continue to be, the backbone of our business. Although 1980 and l98l volumes are well below previous years, we expect that the market will rebound. In the meantime, we are moving ahead with our barge building program at Coos Bay and intend to have our first barge completed this year, and a second well under way by year's end. This will assure our having an ample number of seaworthy barges designed specifically for the coastal lumber trade.

"We feel strongly that with the ever-increasing costs of energy, the lumber industry's need for an efficient form of transportation will become greater than ever. We intend to be ready to fulfill that need."