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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (May 1, 1921)
The Commoner rMAY, 1921 m nmiiln.ftncr vmi Rhnulrt know hc- inrl flAiikt flirt nlttmnta nffnof nf Ecu a situation is price recession. r. Whftn conditions demon- Erated by the barometer show pro- action in a dangerous condition, wo fould apply the remedy individually, ithout consulting our neignoora anu Ithniif rUnmiHRfnir it with OUr Rends, trusting to their business mmen and good sense to do HKe- ?his appeal by the president of the ciation was published and circu- ffed in an official association pamph- entitled "Pino and Patriotism." this time there was outstanding Spublic appeal by the president of ie United States for the greatest issible production as a war meas- e. -There is also evidence herewith of ibsequdnt efforts by association iders to keep the membership kwake to the importance of restrict- Up their individual production pro- rtionately to any excess of the total duction over the total demand, as falcated by the barometer. In a let- ir of June 26, 1919, Mr. Cha3. S. feith, in discussing the general dis tribution of the barometers, stated tat when "the public might expect recession in values," the manu facturer "should quickly see the con- Ltion and apply the only corrective remedy, to wit, instead of normal roduction while the public is buy- ig less, the manufacturer should roduce less lumber." Mr. Keith ited that if this were done the buy- were welcome to the. information tfatained in the barometers, espe- illy since the mills had knowledge tne uarometer lniormauon luur ; five days in advance of the public. IAs shown bythe association baro- sters. the nroduction of southern ihe has been below "normal" evef Ince 1916, and with the exception of fx or seven scattered months the rders place"d during the same period lave also been below "normal." It rould seem to follow that the high rices obtained for southern pine lumber have not been the result of musual demand as such, but becausu the demand has almost constantly exceeded a less than normal supply. The continued shortage of produc tion as compared with the demand mas been reflected in prices and prof Sits. For the year 1918, 39 southern faine companies paid excess profits itaxes averaging 43,5 per cent on their fcombined sales, 13 of them paying Imore than 50 per cent each, as re sported by them to an official of their association. These profits were made brtiile an average price of $28.00 per k thousand feet or less was in effect, that figure being the government maximum price during the last six months of 1918. The excess profits taxes for 1919, when the average price realized was $35.00 per thou sand, and for 1920, wlien the average price at times reached rrom $5&,uu to $59.00 per thousand, , are not avail able to the commission. The documents show that besides regulating the production to the de mand, the Southern Pine association has been the medium for direct and concerted action on prices, both be- lt fore and since the war. The associa- 1 tion, however, has been less open in its dealing with the price question t than many of its sister associations. f. Several of its prominent members had been found guilty and heavily i fined by the Supreme Court of Miss ouri in 1914 for having consplrea among other things, for the purpose of curtailing production and fixing prices through the medium of the old Yellow Pine Manufacturers asso ciation, as reported in 26.0 Missouri Reports, page 212. As a result of this decision, the present association was formed In 1915, an d within a few months after its. formation its leaders were busily engaged in a movement not only to curtail production but to advance prices. As the result of a meeting on April 20, 1915, the southern pin manufacturers put advanced priced into effect and also began to curtail production. In September, 1916, Mr. Chas. S. Keith Invited four of bis principal competitors, who had con trol of the bulk of the stocks on hand, to raise their prices. This group had led in curtailing produc tion and had accumulated heavy stocks in an effort to hold the 'mar ket. Mr, Keith's invitation was ac cepted. In April, 1917, the same month war was declared, prices were ad vanced at a meeting hold in Memphis in connection with a meeting of the association directors as shown by correspondence of Mr, Edward Hinos, who was prominent in the delibera tions of this meeting and described the advances made in a telegram sent to his Minnesota mill, urging the Minnesota manufacturers to advance their prices correspondingly. In October, 1917, conferences were hold at Chicago and Memphis as a result of which prices wore advanced, a shown by letters, including those of Mr. Hines, "who was active in these conferences and described the results secured. In 1918 commercial orders were being favored by the manufacturers in preference to government orders because the commercial prices were higher. The government, for its own protection fixed maximum prices on southern pine, for commercial as well us government purposes. Th9 manu facturers took the position that the government maximum prices should be treated as a minimum and not in frequently exceeded the legal maxi mum. On November 22, 1918, fol lowing the Armistice, the manu facturers held a national conference in Chicago. In this the southern pine manufacturers were prominently represented. The manufacturers ex pressed themselves as a unit to the effect that the .government maximum price should be adhered to as a mini mum basis until government control expired on December 23d, 1918. A few days before the expiration of government price control, a meet ing of southern pine manufacturers was held at St. Louis Mo., under the auspices of the association's commit tee on sales and -distribution. As a result of this meeting, documents evidence that prices were radically over the government maximum ana that the "market was held firm at the advaticed figures in the face of a weak 'demand for several months. Government requests through the in dustrial board of the department of commerce for a reduction of prices in the spring of 1919 were refused by resolutions adopted at New Orleans, one ground given for the refusal being that concerted action to reduce prices would be a violation of the law. Yet by their concerted refusal, they ratified and confirmed their concerted action of several months previous in advancing prices. At the New Orleans meeting, Chas. S. Keith, gave notice of his right to sue for triple damages under the Sher man Law, those manufacturers who might join together to accede to the industrial board's request for a reduc tion in prices. During the same period the south ern pine manufacturers conducted a campaign to induce the fir manu facturers of the west coast to raise their prices so that the advanced prices on southern pine might he maintained and further advanced. The fir manufacturers conceitedly raised their prices in April, 1919, and the opportunity was thus given for southern pine to make further advances. This was followed by 'rapid advances in the price of fir and all other competitive woods. Abonfihls time the "build a hqrmo" campaign brought the public into the market, and prices went through a sky-rocketing procesfc, which put them, in the words ofva prominent lumberman, in a letter herewith submitted, "far boyond anything tho present genera tion over dreamed of." A review of tho conditions obtain ing in the manufacture and sale or southern pine since tho close of the commission's formal investigation in June, 1920, is of interest. When the market sbowod signs oi weakness last June and tho recession from the abnormally high prices then current bogan, the mills generally curtailed their production as shown by the association barometers issued since that time. That curtailmont has continued to .the present. It ap pears that the southern pine mills as a whole have lately been curtailing to the extent of nearly 50 per cent of their normal output, that tho downward price tendency has already been checked as the supply has been brought below the demand, and that prices have again started upward. While tho wholosale prices or southern pine receded materially from the unprecedented figures of last spring, tho average price ob tained by a representative manu facturer during December, 1920, was about $7 per thousand feet in excess of the government maximum of $28, under which the industry made largo profits. Item prices on substantial portions of the production are s:ill far in excess of those obtaining under the government maximum. An in creased demand would seem to be all that is lacking to bring about much higher prices. As indicated by current trade news, the southern pinQ. manufacturers are prominent in a campaign jiow be ing organized to Induce the public to believe that prices will not and cannot be further reduced owing to the costof production and that they should not further delay any contem plated building operations, In this connection, the cost of production has been enhanced by the continued oper ation of the mills far below their capacity and normal output. This campaign is being conducted under the ausrices of the National Lumber Manufacturers association, and special assessments have been and are boing voted by the various affiliated regional associations, to raise a large fund for tho expense of the campaign. Tho National Manu facturers association has also re quested tho retail lumber dealers of the country to contribute to this fund and to Join in this movement to stim ulate buying. A similar campaign was success fully carried out in 1919. Many thousands of dollars wero spent for advertising purposes and the retail lumber dealers and leaders of pub lic opinion in each community wero enlisted in the "build now" and "own our homo" movement. As a result, prices advanced so rapidly and radically that in a few months tirao tho retailers began to criticize the manufacturers. A representative of tho manufacturers reported the feel ing of the rotailors intfuno, 1919, in part as follows: "Very wise dealers said to mo, 'The mills got us to start these build ing campaigns, and they wore a groat mistake, because as soon as we got them well started tho prices began to Jump, and wo had to raise our prices every week, and now our cub tomors think wo got tho town lined up in a building campaign Just so that wo could raise the price. Tho townspeople don't know whether lumber has really gone up or noj;. They simply know that we lined them all up from school teachers and children to the preachers in their pulpits, and then Jumped tho prices on them.' " As Indicated by the documents sent to tho committee on January 10th, it appears that the manufact urers of every important kind oi lumber in the country are organized into associations for the purpose of compiling and distributing informa tion as to each element entering in to the supply and demand. This en ables the members to take advantage of all favorable market conditions either by concerted action or by New York World Three Times a Week and The Commoner Both One Year for $1.30 Think of it! 168 Papers in a yea for only $1.30. No other combination gives you the news so much and so often at so low a price. The New York World is one of the great newspapers of the country, and will keep you promptly and accurately Informed on current events. The Thrice-a-Week edition is practically as good as a daily. It prints only the choicest matter contained in the daily editions, eliminates all the non-essentials, and carries the ex clusive special correspondence and special articles of a notable list of staff writers stationed in the important political and economic centers of the world. By the terms of a special reduction offer, limited for a short time, effective January 10, 1921, and subject to withdrawal without notice, wo can send the Thrice-a-Week New York World and The Commoner "both one full year for $1.30. If at present a subscriber, you can take advantage of this offer and your present expiration date will be extended one year. Accept this offer at once. Make remittances payable to f. THE COMMONER, Lincoln, Neb. Cut Out and Mail This Coupon Today THE COMMONER, LINCOUJ, NEB. m Gentlemen: I enclose $1.30 for your special bargain offer The Com j -7 . -; morier and tho Thrice-aWeck New York- World both forpno. year, which you will kindly mail to ' - ' Name (V Address - x