Industry Urges Budget Cuts

ESPONDINC to the ever Deploring the continued deficit spending over the years, industry spokesmen pledged their support of the Administration's economic program and urged further reductions in federal outlays to hold the 1982 budget below $42.5 billion and balance the budget by 1984.

tightening noose of inflation/high interest rates strangling the housing market, the forest industry has united in an appeal to President Reagan to ease the pressure by initiating immediate additional reductions in federal expenditures of $20-$30 billion for fiscal year 1982.

"While we are willing to share the burden for a return to prosperity, I must state frankly that a sizable portion of the lumber industry is approaching extinction," A. Milton Whiting, president of the National Forest Products Association, Washington, D.C., wrote in a recent letter to President Reagan.

Federal Reserve Board Chairman Paul A. Volcker is said to have responded by letter to NFPA exec. v.p. Ralph D. Hodges Jr., saying in part, "I think I have some understanding of what is happening to many lumber companies, and I am concerned about the possibility of a number of firms being forced to leave the industry." He added, "The only solution I see in the short run is further action to reduce the federal deficit."

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Joining NFPA to alert the Administration of the mill closures and curtailments as a result of high interest rates and the worsening condition of the home building industry aggravated by prohibitive money costs, the American Plywood Association pointed to the basic importance of residential construction as plywood's traditional No. I market. "The current housing recession has now extended with little relief for 24 months," they advised President Reagan. "During this period, 15 plywood mills with approximately 2,820 employees have closed permanently, and mills which have not permanently closed are also feeling the impact of continued market softness. "

The National Woodwork Manufacturers Association in a resolution sent to the President, Vice President Bush, and Rep. Thomas O'Neil urgently requested "that the President, the Senate, and House of Representatives take immediate action to achieve less restrictive mortgage rates and in every way speedily aid the recovery of the home building industry, consistent with the continuing emphasis on control of inflation."

The industry's push to inform the President of its plight included moves such as an ad sponsored by Lone Star Industries, Inc., urging the public to write their feelings about interest rates to their federal representatives. The slogan "Your voice counts. Make sure it is heard." appeared to echo the mood of the forest products and building supply industries.

L-P Chairman Confirms Housing Collapse lmpact

In a state of the industry and outlook presentation to the board and senior officers of the National Bank of Alaska in Anchorage, guest speaker, Louisiana-Pacific Chairman and President Harry A. Merlo, described his company's strict policy of matching product inventories and operating rates.

"Today it's a question of cash flow rather than profits in order to be financially able to capitalize on the recovery of the housing industry when the economy eventually improves, hopefully sometime in 1982," he said.

"Demand for many wood products is lower than any period since