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I2OI HARRISON STREET . SAN FRANCISCO TELEPHONE UNderhill l-8686

WAREHOUSE DISTRIBUTORS IUI}IBDR . P1YWOOD . MOIIIDIIIGS

SINCE 1863 IT STILL DOES

A Happy and Prosperous New Year to you, you friends of the lumber industry. Here's hoping that the close of 1948 finds you as prosperous as*you are at the start.

That's a pretty generous lvish, isn't it? For never in all the history of lumber has the industry in general and the lumber folks in particular enjoyed such spectacular prosperity as they are enjoying today.

Never before were prices as high, never before were profits as great, never before was there so apparently limitless a demand for wooden building material.

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How long will it last? What may be expected next? Nay, nay, dear lumber friends. I shall not be coaxed or cajoled into any attempt to prophesy what comes next. You who have been reading these columns have no doubt noticed that for the past year I have had littleto say about the lumber nlarket, and less to say about future prospects. I decided that here was a subject entirely too hot to handle, and that fooling with it could only get a fellow into trouble

It has been a great deprivation for me to go along issue after issue and not talk turkey about the weird and exciting things I have been seeing and hearing. But conditions have been such that only a fool or a genius would dare discuss them truthfully. In fact; most of the'interesting things I iould have written would have stepped on someone's corns. So I decided to lay off. And on this New Year's day I am glad of it. The pitfalls have been many. ***

It has been not only the-biggest and strongest but likewise the nuttiest lumber market and situation in all history. We have seen things happen on every hand day after , day for the past year that were truly "out of this world." To recite the history of the period would require all exclamation points and capital letters. When the demand for a material reaches a point where its possessors can get any price they see fit to ask, strange things are certain to'happen;'and they have.

A mill man phoned a wholesaler and offered him a car of lumber. Asked the price be quoted one hundred and fifty dollars and twenty-five cents a thousand. The wholesaler said "I'll take it, but what is the 25 cents for?" The mill man said: "One of my competitors sold a car of that item for one hundred and fifty dollars even, and I bet him I could sell one for more than that." And in this way, and in a thousand other ways just as peculiar, has the 'price of lumber been made. Every man you talk to can tell you the same sort,of stories.

Distribution has been as screwy as price making. A contractor went into a retail lrrmber yard and bought a carload of doors at the retail price, and shipped them twelve hundred miles to a construction job he was building, 1ocated within a very short distance of the place where the doors were made in the first place. The contractor needed doors and they were not to be had in the neighborhood of the job, and in the territort* *1"t" the doors originated.

Trading has played a prominent part in the distribution of lumber and other building materials all through the past year. Sit with a bunch of h,rmbermen and they can tell you by th6 hour the roundabout methods and routes that have been used to get lumber. This has been particularly true on the Pacific Coast urhere at times anybody from a butcher to a watch maker may be offering lumber, doors, or ply#ood for sale in large lots. But it has likewise prevailed to some extent throughout the lumber industry'

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I have seen wild markets before in my lumber experience, b'ut during the past year I have seen innumerable caSes where buyers go out on the road hunting lurnber, with definite instructions to offer and pay more than the seller is abking for the stu,ff. It takes a lot of explaining to make such things understandable, but nevertheless a world of that has been done. It is hard to blarne a man for raising lumber prices when he offers a car for a certain price and the buyer comes back with an offer of ten bucks a thousand more if he can get two cars instead of one. ***

Of course, all building costs have gone up, and some of them far more than lumber, even with such conditions prevailing as I have briefy mentioned above. At the close of the good year 1947 the cost of building a house was higher than at any previous time in history. A St. Iruis concern built a house on paper thirty years ago, and ffgured the cost, including the very smallest items, at that time. Every year since they have figured the cost of that same house again, and made a chart showing the ups and downs of the cost of that house. At the close of 1947 it cost considerably more to build it than ever before. ***

Of course, there was more money available to pay for that house thah thcre ever was before, and putti.ng lt in terms of available nionen there are more people in this country today capable of buying and paying for that house even at present prices than there ever were before. It's the old story of the fellow who, when he paid fifty cents a dozen for bananas, remarked that when he first started to work bananas were only ten cents a dozen. "Did you eat many bananas then?" he was asked. "No" he replied, "I didn't have the ten cents in those days." ft's that way with homes. rf*,f

What are the prospects for 1948? I shall venture just one prediction. At the close of 1948 the NEED for lumber and for buildings will be fully as great as it is today. There may not be the DEMAND at that time that therc is now, because the need for a thing and'the demand for it may be totally different. But we have not even started to supply the great national and world-wide NEED for lumber and the things lumber wiU build. And I very much doubt if we ever will. *O1U t do mearl EVER.

When you start predicting what the D,EMAND for lumber will be through the year, you are then invading the realm of economics. A man may be in dire need of a home, but if he can't or won't buy or build it, the need doesn't mean a thing. It is when he starts to buy or build that the need develops into demand. And if something happens to keep him from building, then the demand may rapidly disappear, leaving no change t_r,1" NEED.

Those who pred[ct and believe that ths present demand for lu,mber and for homes and other buildings will prevail for years to come, have firm foundations on which to stand. It certainly looks that way. The country is overflowing with money. If it were not you wouldn't see a buyer offering a seller more than his asking price. And as long as that supply of money lasts, there is going to be a terrific demand-as well as need-for building materials. At present the money supply seems good for a long time.

The greater danger to the future is the specter of infation. A good dose of that stuff they call infation would change the demand for building material into something much smaller and in a heck of a hurry. ft is reasonable to quppose that there IS an altitude limit, a height limit beyond which people cannot and will not buy. Thinking men generally concede that that is our chief danger, if prices continue to rise. On the other hand there. is a school oI highty intelligent men who think wc have entered upon ah era of high price, cost, and profit levels, and that it may continue indefinitely. You take your choice of these opin- ions' * * *

The large majority of experienced business men and in. dustrialists agree that we are still in need of more production, and greater efficiency along prodtrction lines. This in spite of the fact that our national production level is extremely high right now. The part that taxes, and government tomfoolery, andl sinful waste play in our present situation, are things enthusiastically discussed by our American wise men. There is wide difference of opinion on all subjects, which is a good American sign. One of my good friends and a very kindly gentleman writes me that we should drop all our atom bombs on Russia right this minute, put the world back on a peaceful basis again, and solve all our problems in*that nranner.

Congress is meeting to fight inflation and help Europe; two mammoth problems. While Russia gnashes her teeth at us and insults us on all occasions, we continue to sell and ship her priceless and scarce American materials" While the price of food continues to soar here at home, our government by purchase and subsidy refuses to allow the price of food to sag a penny. The government calls on Congress to solve the inflation problem created almost entirely by government. And thus we enter the New Year.

Al Jolson says that with Congress in session we will soon have a batch of new laws, when a lot of people haven't had time to break all the old ones yet.

Sacramento Hoo-Hoo Club Has Christmas Party

Sacramento Hoo-Hoo Club held its Christmas Party on Wednesday evening, December 17, at Wilson's Cafe.

John McBride, Davis Lumber Co., Davis Calif., president of the club, presided.

Ed Johnsou, California Manufacturing Co., Sacramento, was program chairman.

The party featured gift giving by the members, with one of them acting the part of Santa Claus.

Refreshment hosts for the evening were Davis Lumber Co. and the Western Building Review.