Co-operation Betw een \(/hofesafer and Retai ler

By Frank \(/. Trower

Trower Lumber Co., San Francisco, Calif.

Excerpts of an Address Delivered at the Annual Convention of the California Lumbermen's Council at san Francisco on March 16,1935

This is not the time for pollyanna platitudes, or Dr. Coue vain repetitions that rve are daily in every way grow_ ing better. Nor is it a time for a Cassandra's gtoorr.y prophecies. It is a day that calls for what Theodore Roose_ velt called "Practical Idealism.,' Co-operation cannot re_ peal natural and economic latvs. If there are roo many sawmills, the natural process u'ill put some of them oui, because mere dividing the business rvill make the gruel too thin to sustain life for any of thern. A tlr.o-yard town cannot by mere co-operation be made to properly support four or five lumber yards. As Walter Bali says, l,if " man eats too much, he must take his medicine. And this applies to stocks of lumber or inflated capital shares. Na_ ture just will have her way.,'

And yet, I do not believe in the old doctrine of ,,laissez faire," or in plain English ,,Let ,er slide.,' We don't do that in handling poverty or disease or epidemics. Selfhelp must be linked with the co-operative principle. I have no patent remedies for our economic ills_no isms of any sort. We must have open minds, yet not as open as an empty, wind-swept garret.

Dr. David Starr Jordan once saicl: ,,Wisdom consists in knowing what to do next; courag'e consists in doing it."

In solving our Lumber problems, f am sure lve have enough Knowledge of tvhat is needed for reasonable success. It is the Spirit and Purpose that are lacking. The machinerv of the Codes is generally .n,ell planned. It is the Human Spirit that has failed. Men are more important than the mere mechanics of a problem or its remedy. C)ur lumber association secretaries and their advisors and directors could soon devise needed solutions of our acute problems. But human selfishness stands in the rvay. When an ob_ scure Austrian paper-hanger becomes the Dictator_Leader of Germanv and an almost unknou,n editor becomes the Dominant Will of Italy, surely there is hope for the lumber industry if the only requisite is brains. What we must have is the Will to achieve the benefits of co-operation. Will Rogers uttered a great truth when l.re recently said: ,.There ain't no word wrong rvith any of us 'cept just selfishness.,'

Let me, without comment, toss a fer,v facts and figures into your mental hoppers. Building costs in Ner,v york City are estimated by the Dotv Service to have advancecl under the codes nearly one-third above the low point of the depression, and are over 8O per cent higher than be_ fore the war; and the efiects of these costs in blocking building recovery are demonstratecl in the 1934 totals of contract awards, as compiled by the Dodge Corporation for 37 Eastern states. Privately-financed construction again declined, and the total yearly gain rvas represented by the increase of slightly less than g30O million in public works. The figures, requiring no further discussion, are as follows: Publicly-financed jobs in 1932 were in round figures $767 mitlion, rising in 1934 to 9975 milrions. privi'tervfinanced jobs dropped from the 1932 total of $5g3 millions down t9 $567 millions in 1934. Thus, last, year the pri_ vately-financed jobs were only slightly more than one_ third the $1,543,000,000 total. The National Bureau of Economic Research shows that, taking July, 1929, as an index number of 100, prices received by farmers in October, 1934, rvere equal to 68. prices paid by farmers were g2. Building material costs in October, 1934, were 150 as to 100 pre-war. Building wages were 2O4 as to 100 pr€_war. This arbitrary holding up of nominal wages is an example of the wrong sort of co-operation. It is true that low volume of work has meant low.average monthly or yearly pay, but for each builder or prospect these high costs g"i"i" his job 10O per cent. The cost of all government in the U. S. in 1933 was 5Ol as to 100 pr.-*".l Taxes *.." SOg to 100 for the same period

Professor Lewis E. Haney of the Economics Department of New York University, and a noted columnist, said last week that the pitifully small private building activity is due to three chief reasons: l, high building costs; Z, i;gl, taxes; and 3, great money uncertainty.

And nor,v let's get down to the immediate problem of what the California Wholesale Lumber Associaiion can do in co-operation rvith the members of the California Lum_ bermen's Council to promote the mutual interests of whole_ saler and retailer in ihis great territory North of the T.e_ hachapi, and at the same time give the public the square deal it must have. C)ur rvholesalers association incfudes many interests-manufacturers, rvholesalers, shipowners and retailers. 'We cannot control them all l0O per cent, any more than you retailers can guarantee what your mem_ bers will do in this common co-operative effort io improve our condition. We must deal rvith realities. But we must also do all within our power to achieve the desired results. One great difficulty has been the absence of a proper defini_ tion of "wholesale trade." Amendment No. 6g of the Lum_ ber Code would have been a good compromise, but NRA would not permit us rdal self-government on that proposi_ tion. However, our California Wholesale Lumbei Association committee has worked out a tentative definition which is now before your Council and which should cover most of the sales, leaving the small remainder to clearance by the two organizations. Such an agreement, properly lived up to, should at one stroke remove most of the con_ troversies about trade jurisdiction. In line with this proposal may I submit four basic considerations.

1. As wholesalers we must ourselves recogriize and help to persuade others to recognize the Retailer as the proper distributor of lqmber. Eor if the retailer were not the total distributor of lumber at retail, the wholesaler would of necessity become a retailer; and he could not serve the consumer economically or satisfactorily.

2. We must recognize that industrial business for remanufacturing is not retail business, but the wholesaler should not sell construction lumber to industrial plants.

3. Outside of certain state business, the same principles should apply to sales to smaller governmental units. Most of it is naturally retail business and the balance should be cleared through some central office.

4. As wholesalers we must not help one dealer to compete with another dealer outside his own trade area, for this breaks down the stability of the market and reacts unfavorably on our own business.

These main principles of co-operation between our two groups may not be all that either of us may desire, but let u3 remember Edmund Burke's words: "All human acts are based on Compromise." He did not mean principles, but policies.

We must make common cause against unfair and unscrupulous dealers and wholesalers. This is no time for recrimination, but I may say that our Association has been looking into the matter of loyalty to these principles of cooperation and we have been greatly disappointed in what we have learned about some of your Council members giving business to known enemies of sound co-operation. This effort must not be one-sided. A retailer told me he could not afford tg overlook the lower price made him by one of the trade dynamiters. Yet, how he would have howled if we wholesalers had gone into his town and sold direct to his trade. The courts have uniformly thrown out onesided contracts. Even a promissory note reads "For Value Received, we promise, etc." The "Achilles heel" of the 'chiseler is his pocket nerve and there we must strike. As long as our Profit System lasts, no court or jury has a right to deny any of us a just return on our capital or labor.

I cannot here lay down a charted course for our two bodies. We have able secretaries. Let's back them up loyally. We wholesalers believe that Mr. Hauptman, our Manager, is not excelled in ability, sound judgment and knowledge of the lumber game by any lumber official anywhere. You can trust him. I have often remarked that, taken as a whole, lumbermen rank high in the attributes of decent, honest manhood. In over 4O years amongst them, I have seen but few scalawags; and they did not last long. Given a workable system of co-operation and a dogged purpose to weed out the trade pirates, we can go far in our common efforts to stabilize the lumber industry of California. It's a task worthy of the best that is in us.

I need not plead with this group for co-operation. The need for it cries louder than anything I can say. A radio announcer was criticised for his pronunciation of "inkum tax." Someone, probably a lumberman, suggested he might mean "red-inkum tax." The Pacific Coast is strewn with the financial wrecks of lumber mills and lumber concerns that tried to operate without a profit. The credit situation is appalling. Hardly'a week goes by but that some Credit Bureau or other calls on us for information about this man or that concern. It sometimes requires the wisdom of a Solomon, or the justness of an Aristides, or the honesty of a Diogenes to answer the man. But when the inquisitor occasionally asks some blamed fool question about our own concern, it takes the cornbined attributes of all those ancient worthies to kiss him off with a favorable impression.

When I look over the credit reports of many lumber concerns who used to proudly discount every bill promptly, I get a heart-breaking reminder of the devastation wrought by this demon Depression. For, behind the cold figures lurks grim tragedy for many a distracted employer and employee and their families. I challenge you to Do Your Part in helping to end this misery, in so far as reasonable Co-operation will help.

So as we build our new American Temple of Civilization in which shall live harmoniously the rights of each individual and the rights of our collective commonwealth, let its main pillars be Co-operation, Decency and Justice.

And as our lumber army emerg'es from its Valley Forge, may we not gird ourselves after our sufferings into a chastened and disciplined host that shall march on to the better davs that lie ahead !