White Bluffs spokesman. [volume] (White Bluffs, Wash.) 1907-1938, 1926-11-12
BY CHAs E. HUNT

CHIPPING MEN throughout the
y world who have been advised of
the proposed merger of 70 West Coast
/ lumber mills are confident that this
plan in it's completed stage will
steady lumber prices, elevate gross
margins TO all the mills and by
steadying the price ia. S. will make
more secure the dealings in all tom
mage matters from coastwise to off
shore.
The tendency Of American industry
is toward consolidation. Proof is not
lacking that widely scattered units,
insufficient business to reach round
and temptations to cut prices beyond
the point of profitable operations
eventually drives such industry, if
vast enough, into amalgamation.
Gradual drift back to the fundamen-
tails of good business that for so many
years characterized and made possible
the economic greatness of the United
States is observed, the last to respond
being the mills cutting timber in the
last Great West.
While only third of the annual
West Coast production of 10000 ,00O,-
600 feet per annum is expected to en-
ter the merger, this one-third is ample
to eliminate and make forever extinct
those occasional lean spots" that re-
cur through each year with distress
ing frequency. Business on land by
the rail routes has settled into re-
placement basis. Competition among
the railways for business has devel-
oped to such a service point that a
retail lumber dealer in Alliance, Neb.,
for instance, can order a carload to-
day and unload it in his own yards in
s to II days. The movement by rail
| takes SO per cent of the annual West
Coast lumber production.
Various attempts have been made
by lumber buyers in Japan and Aus
tralia, who make up the major con-
sumption of the foreign trade, to go
on something like a replacement
| basis, that is, to buy more as needed
than in a speculative way, which has
it's drawbacks. This work for two or
three years, conducted by the Douglas
Fir Exploitation e Export Co., has for
it's object the sale to Japan only on
the C. L. f. basis. There has been some
opposition in Japan, where many buy
ers believe that the C. i. f. plan carried
to it's logical conclusion would build
up a close held corporation that could
dictate prices. This plan names a
price from the shipper to the buyer
Of the f. "a. S., costs, insurance and
cognizance of world tonnage both cur
rent and future when booking it's
space. Generally operators not al
lied with the organized group prefer
to trade on the f. a. S. basis as at
times lumber prices are SO close that
they can make profit only on
freights, tramps, usually All this dis
order, viewed from the angle of the
steamship owner or operator, does not
clean up space offered, and constantly
ket to bearish attacks, with cancella-
tons and resales part of the daily
program. 1t has not infrequently hap
pened that, when orders for lumber
were not at hand when the ship ar
rives that the space owners plead for
release, and it is not uncommon for
the vessel operators to grant such
pleas, especially where the interests
asking the favor are good customers.
These are merely Incidents, but they
are undesirable circumstances that
can be eliminated when lumber pro-
duction runs parallel to the demand,
such as is possible under the merger
idea.
There has never been time over a
period of years when the demand fell
under 33 13 percent Of the volume of
lumber produced. Control OF this
amount will enable the big corpora
ton, at will, to close down certain
groups, such to remain out Of commits
sion until the demand Is hauled back
to normal absorption. This Is the
plan of other merged corporations
Lumber mills believe they can per-
form likewise in their own industry.
Most of the lumber mills are losing
money. 1t is established that they
will lose less by keeping In operation
than to shut down under the present
plan. Maintenance by the merged
group of sufficient production and no
automatically raise prices, invite con-