lrumber Industry Is One of "ffps and Dowrls"

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Richord A. Colgon, Jr., Executive Vice President National LumberManulocturersAssociation

Historically, the lumber industry is one of "ups and downs." Our "ups" go higher and our "downs" lower thar, almost any other American industry. In 1949 we experienced a little of each. Starting at a relatively low level, production and shipments picked up through the year, and the last severalmonthshave approached the near-record highs for this time last year.

The official figures tell only a part of the story because they include only the starts for which permits are requiredA short drive through the rural communities in any part of the country should convince us that farm building has kept pace with construction activities in the city. It has been estimated unofficially that more than a quarter million rural homes were built in 1949.

Richard A, Colgan, Jr.

Because of the slow start at the beginning of the year, total production will be several billion feet below the 36 billion feet figure of 1948. This slow start, lasting for seven months, rvas largely due to the dropping off in the building of new homes the last half of 1948 and the first few months of 1919.

During that time, the lumber market was influenced very largely by the overall weakness of business in general and the shrinkage in consumer buying. From the peak in August, 1948, prices of lumber decreased on an average of 15 per cent in twelve months, according to the Bureau of Labor Statistics. Lumber distributors feared further declines and most dealers placed their orders from day to day to take care of current requirements only. Inventories at the mill increased at an alarming rate and became more and more unbalanced.

First quarter production was also held down by one of the most severe winters on record. There was a general lack of confidence on the part of the industry, and a feeling cf uncertainty regarding what Congress was going to do about wage increases, public housing, and about the everincreased spending of the taxpayers' money. As a result, thousands of marginal mills discontinued operations, and many of the better-established mills shortened their hours or eliminated extra shifts. The lumber industry feared that it rvas due for one of its lowest "downs."

But in the third quarter the lumber industry made a quick reccvery. In August there was a general upswing in business throughout the country; and the volume of building continued to climb month by month, reaching its peak in September when 100,000 new non-farm dwelling units were started, according to Government figures. It now appears likely Ihat 1949 will prove to be a record-breaking year in the building of new homes.

No industry is more sensitive to the laws of supply and demand than that of the lumberman. The general improvement of business conditions and the continued upsurge of building we:e reflected in increased orders for lumber. While production during August, September, and October compared favorably u'ith last year's high levels, a more encouraging sign was evidenced by the continuing high rate cf orders received by the mills. From mid-July, the National Lumber Trade Barometer has consistently shown new orders to exceed production. The rapid increase in mill stocks was halted, and there was a healthier relationship between unfilled orders and inventories. A number of mills which had been unable to cope with the combination of decreased prices and the ever-increasing cost of production resumed operations.

In spite of a discouraging first two quarters, it is believed that total production in 1949 will reach the 31 billion foot mark.

Many of the uncertainties which kept the industry in a state of suspense during the year have been resolved, some of them unfavorably. The 75c minimum wage law has been passed by Congress and signed by the President, to be effective January 24, 1950. Industry now faces an extension cf the Wage and Hour Law to groups of its employees not formerly covered.

The existing problems are still unsolved and ner,v problems must be met. The upswing in building, while increasing the demand for lumber, introduces a new risk in the form of a greatly extended credit made available to homebuilders of less than substantial means through the facilities of the F.H.A. Obviously any substantial increase in general unemployment could seriously threaten those too dependent upon this type of risk.

On the other hand, it may be assumed that the public housing program, which will cost the taxpayers billions of dollars, will help hold the demand for construction lumber at fairly high levels during 1950, particularly in those large metropolitan areas where local housing authorities have already planned new developments. The Timber Engineering Company, an affiliate of the National Lumber Manufacturers Association, has distributed a list of housing proj- ects planned formilitary and naval bases (TECO release 74O).

The lumber industry should not be lulled into a sense of false security by the defeat of the Administration's attempts to repeal the Taft-Hartley Law. The continuous threat of new pro-labor legislation cannot be disregarded.

Another problem which faces industry is the depressed condition of lumber exports. At the time the Marshall Plan was put into effect in the spring of 1948, it was naturally expected the enormous amounts of money furnished the E.R.P. countries would result in increased purchases of American products. In the case of lumber, the reverse was true. Lumber exports to Europe, especially to the United Kingdom, are far below the 1947 levels, and much lower than during the depression days.

The full effect of the devaluation of the English pound and the reduction of our import tariffs will probably be made more clear to us in 1950. The minimum effect of the lowering of our tariff walls will be to increase competition for foreign goods. Certainly the devaluation of the pound will stifle the hopes of those expecting to reestablish the export of lumber on a prewar scale.

In looking ahead, the lumber industry will have need for its faith in the private enterprise system. We will need aggressiveness in salesmanship and in the customer service policies which have characterized the lumberman over the years. And most of all we have need of forgetting personal differences and sectional interests, to close our ranks in preparation for the most determined fight of which we are capable to preserve not only the lumber industry itself but to insure the right of every American business man to operate without fear of Government interference. coercion. or regulation.

Named Industrial Relctions Mancarer

Ukiah, Calif.-Bernhard M. Carlson has been selected as industrial relations manager for Masonite Corporation's wood fiber hardboard plant, which is under constructiou here.

E. T. F. Wohlenberg, Masonite's local general manager, said Mr. Carlson, whose appointment became effective Oct. l, has gone to the company's Laurel, Miss., plant where he will remain several weeks.

Prior to joining Masonite, Mr. Carlson had been for two years supervisor of industrial relations and industrial engineering for Pacific States Steel Corporation at Niles, Calif. Earlier he had been with the Columbia Steel Company at Pittsburg, Calif., for more than eight years.

Mr. Carlson is a licensed professional engineer in mechanical engineering in the state of California and a member of the American Society of Mechanical Engineers. He received a B. S. degree from the University of California in 7937.

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