Stabilization and Related Problems

Bv E. C. Parker President, Southern California Retail Lumber Association, And President, Patten-Blinn Lumber Co., Los Angeles

(Address delivered ot lhe Annuol Meeting of the Soulhern Colifornio Refoil Lumber Assocl:ofion ol lhe Hofel Sfofler, los Angeles, Colif ., on April 7-8-9, 1953.)

, Mr. Chairman, Fellorv , Lumbermen and Friends-

Your secretary has asked that I prepare a paper on the subject "Stabilization and Related Problems." I am sure your secretary vl'ill testify to the fact , that I struggled u-ith him re: garding the matter, and put up all the arguments I could think of to keep from doing it. But in his usual persistent way he insisted, and in order that he would not feel that I didn't u'ant to help him *-ith his program, I consented. So here I am again, trying to make a talk on a subject that could be handled much better by many of ]-ou.

Stabilization, as you all know', is a ditlicult subject. We have been u'orrying and talking about it f or many years, and it is quite surprising in vierv of this that so little has really been accomplished to make our industry more stable. The concern over stabilization on the part of lumbermen varies with different periods. There has been only about a quarter of the time in the last twelve years that lumbermen could be bothered concerning it 1949 should have brought concern, but in l95l and 1952 there has been a growing anxiety relative to it, and in the three months of 1953 interest in it has greatly increased. Lumber dealers in Southern California and this association are not interested in price agreements. In the first plac.e, they are illegal uirder the Federal laws, and in the second place, we all konw that there are so many companies with varied methods of operation that any agreement as to price would not work anyway. But lumber dealers do think that many of the abuses to which the industry is subject could be corrected and the lumber industry brought up on a higher plane.

There are a good many reasons for the unstable condition in which our industry finds itself. One of the important reasons is the increased cost of doing business to which everyone is subject, and the natural and normal. desire of the dealer to try to do something to counteract them. Some of the reasons for increased costs is the progressive trend of all businesses, including the lumber industry, to render fine service to its customers. It is worth-while, it is progressive, it should be done. but the records over thirty-five yqrrs will show that it costs money, and that our industry does not charge for it. For example, the gradual evolvement from the old time lumber yard to the present dal' lumber and building material store, with its sof t lights and pastel colored walls; the change from the days when the lumber dealer stayed at his offrce and the customer came to I'rim to place his order, to the present da1', when it is very rare that you see any of 1'our best customers in the office, but instead a multitude of salesmen or service men in bright, pretty, snappy cars burning up gasoline and tin.re going to see customers in rvidely separated distrrcts and catering to their every r'ant; from the practice of furnishing stock finish and mouldings and stock sash and doors to the present day mode of freshly manufactured finish and moulding run to special patterns for u,'hich probably no setup is charged, and a variety of sash and doors known only to the architectural mind; and from the practice of insisting on proper notice of time for delivery to the practice of today of giving shotgun delivery service rvith trucks and equipment that would do credit to the florist industrl'. Do not misunderstand me, I do not intend to imply that rve should not render these services, brrt I do intend to imply that we should charge for them.

Then too, there is the gradual evolvement of the practice of taking off lists of finish and sash and doors from plans and giving the customer a guaranteed list for a guaranteed price. I am also informed that some companies will take off a rough lumber bill from plans, but whether or not they guarantee the list I do not know. In 9n-28-D there n'as a gradual evolvement rvhich involved the participants in more real trpuble than anything the industry ever did, and that \r'as the free financing service *-hereby your salesman spent days lining up the financing for a customer's job, lvhich usualll. rround up that you could sell the materials on a $10,000.00 house job if you *'ould onl-r' carry, on a second or third trust deed about $2,00.00 that the customer was unable to finance. It is m1'hope that the industry learned its lesson in this regard. and that it rvill not be an added and very dangerous increased cost in the years ahead.

The foregoing are some of the reasons for the increased cost of doing business. Thel'have evolved rather gradually, sometimes diflicult to see, and more difficrrlt to do an1'thing about rvhen you do see them. But there is another set of reasons for increased costs which are not difficult to see but just as difficult to do anything about. You are all familiar u-ith them: )'ou see them by month, or at least each y.ear on )'our own trial balance or statemehts. These visible increased costs and the natural desire to offset theni is the reason for the pressure for volume on the part of each company rvhich has rendered our industry unstable. At the risk of being repetitious, and onll' stating self-evident facts, I rvill mention a ferv visible expenses and show how they have increased.

If you do any advertising in local nerl'spapers )'ou are acquainted u'ith the great increase in rates over the last ten 1'ears. \\te are all anxious to donate all le can to charitable organizations, but if you are just talking about costs, thel' are an increasing item of cost each year. You are constantl)' urged by the Chamber of Commerce and such organizations to take additional memberships so the)' can pay their increased expenses. It is unnecessary- for me to drvell on these kinds of expenses, you are all rvell acquainted concerning them. Stationery and office supplies have follou'ed the trend;6% x 8% charge machine tickets rvere $8.57 per M in l94l and $11.32 per M nos.: Elliott Fisher billins machine tickets s'ere $23.21 per M in l94l and norr' ..e $39.$ per l[. A Royal t1'perrriter in l94l u'as $117.82 and non'is $181.02; a ten column Comptometer sas $418.0O in l9l and is norr $6%.56. A Ford car'for your collector sas $I,fi)S.fi) in l94l and norr is $19{0.9. Why, even the Los Angeles Times rvas $1.30 per month in l94l and now is $2.25. Basic telephone rates are up only ?5% in ten )'ears, but local calls are doubled, and besides 1'ou have a 20lo excise tax. Yard paving repairs in 1941 for 5" thick were 13% cents a foot, now 25 cents a foot. Every manner of general expense items have increased greatly such as salesmen's expenses, auto allorvances, travel eipense, and a multitude of such things. Our compan-r* is contemplating opening up a new account-burglari' expense. \\'e have had at least t*'enty-five burglaries in the last trvelve months, in one of n'hich they took $7m.m worth of tools.

Alother item of exp€nse l'hich is assuming more and more importtance is insurance, including compensation and accident, public liability and property danrage, and fire insurance. Compensation and accident is costing us over doutle rvhat it did ten years ago. This is due partly to higher \\ages, partl)' to increased cost of medical and hospital treatment, and partl]' to a peculiar phobia on the part of some employees norvadays to take a good rest and receive a non-taxable sum each rveek. Hearing boards and juries are most generous too $.ith other people's money. \Iiscellaneous insurance is high. The insurance company paid $2b,250.m for us last lear in a case where a customer in some way fell off the rvalkrraf in one of our lumber sheds. Fire insurance is double u'hat it rvas ten ]'ears ago. With the same unit quantity of lrrmber and merchandise 1-our valuations for insurance purposes r*'ould be double rvhat it rr'as ten years ago. (For example 2x4's ex vessel averaged about $32.00 in l94l and $84.00 in l9-;2). Public liability and property damage on orrr trucks and automobiles cost us three times u'hat it did in 1941, due largely to high garage repairs in'accidents with

WHO'S THROWING PARTIES IN YOUR HO'i'IE?

Would you waDt to pay lor a PartY like thir? TeritEs can enioy them' relvee in your hom-at your erPense -unlesa you bar theb lor good with rot. and tetmite-prool Wolmanized* lumber,

The prerewative ralta inWolnanized pre88ut9-tr6.ted luubet are lorced d6ep irto th6 wood'..uot iust bruched on. This givee srtra value iD ptot6c' tio! th.t will uot dinirish with age.

Wbea you use Wolaanized luober i! the tstmite "Dauger Zone"-the lowat 20% ol your hous+You enioY pem.lEut prolection lor less than I I of the coet ol your bome. And Wol' maaized lumber is clean, odorless, piintable.

Ask your lumber dealEr to tell You all about Wolmanized pree!ur9-tt6atgd forourlree lolder, "When you Build or Recou-

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/r"H-:rE\ r..t tot thi. ho.t.n.*\..{9r/ I 'd..tif.r s..uin. "wothoni'd"

Amsrican furnber & Trealing Go.

lllt Wilrhlrc 8lvd, lcr Ane.l.. 17, Colllornlo

You'll do lhem o recl fovor when you coll their ottenlion fo Wolmonized* prei3ure.heoled lumber.

More lhon l90,0OO fomilies in the grect Soufhweslern morket reqd me33oge3 such d3 this in SUNSIT. fhey ore being odvised regulorly thqt lermite worries end when Wolmqnized pre33ure-treoled !umber is used in home con!lruclion.

They'll be dsking you obout Wolmonized lumber. Be certoin lhol you con tell them how ond where it con be used in lheir homes.