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I do like to go back to that point, however. We have not had the progression that we would normally have had. Do I make myself clear?

Mr. FOLGER. I noticed in some statement-I do not remember the name-where it said that there must have been two or three cities in which builders found that they had built houses priced at 20 or 25 thousand dollars and they could find no purchaser, and the prices were dropping somewhat. The question then arose: Where are the $6,000, $7,000 and $10,000 houses? Why were they not constructed? We know these veterans could not buy a $20,000 house. Nor can they rent an apartment that costs them $100 or $150.

Mr. FULLER. That is true. But, as Mr. Snyder brought out this morning, 13 percent were in the $3,500 class.

Mr. FOLGER. Yes, I recall that.

Mr. FULLER. I think private enterprise is doing a very outstanding job in this field. You can pick up any paper in any part of the country-and I have been all over the country in the past 90 daysand you see them filled with houses for sale. The market in Washington, D. C., itself is definitely lagging. It is not up to the point at which it was a year ago. Houses available in that price bracket are numerous. But the people who would normally be moving into those houses are staying put.

I was down in Memphis

Mr. MULTER. What happens to your theory of progression then? Mr. FULLER. Mr. Multer, people in industry generally are realizing a far greater return for their labor today-such as in an area of our industry where the minimum wage is $1.872 per hour-still reside in their houses, frozen under rent control, that in most cases cost $40 or $50 per month.

Mr. MULTER. Do they want anything better than that?

Mr. FULLER. It was quite all right before, but today they are in the market demanding other things-bigger automobiles, and all the rest. Mr. MULTER. What happens to your theory of progression?

Mr. FULLER. If the rental on that house had gone up proportionately, then he would either pay more or else the difference between that and new housing would be close enough so that he would take the new house. We have found that through our surveys. The normal amount that a man should pay for rent is between 20 and 25 percent of his income. Today that index is down to 12 or 13 percent; so there is a distortion there.

Mr. MULTER. He is not saving up money to buy that new house? Mr. FULLER. I think so.

Mr. MULTER. But he does not want to buy it.

Mr. FULLER. I do not see why he should at this time.

Mr. BROWN. Would your industry object to plywood coming in from Canada duty-free?

Mr. FULLER. I cannot very well answer that because it is a highly debatable problem within our industry. We represent 15 different regions throughout the country.

Mr. BROWN. I think outside of pig iron that is the only item in short supply now.

Mr. FULLER. That is correct according to Government reports.
The CHAIRMAN. Can you build a house without plywood?

Mr. FULLER. Yes.

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Mr. BROWN. What do you use for substitutes?

Mr. FULLER. There I would have to advertise certain things, and I would rather not do that. But there is a lot of very nice siding that you can buy.

Mr. BROWN. But what kind of wood is it made of?

Mr. FULLER. You can substitute Ponderosa pine; you can get Doug. las fir siding, if you like that; or you do have some plywood and siding in the South. Not very much, but there is some. Of course you can get maple and other woods, if you want plywood.

Mr. TALLE. Mr. Chairman.

The CHAIRMAN. Mr. Talle.

Mr. TALLE. I should like to refer again to the tariff issue raised in the letter from which I quoted earlier. Existing law empowers the President to lower that tariff, so it would not be a difficult thing to do, if he chose to do it.

Mr. FULLER. It is a matter for the State Department; yes, sir.

Mr. BUCHANAN. Has there been a decline of real estate this year? Mr. FULLER. I cannot answer that. I am not in the real-estate business.

Mr. BOGGS. Has there been a decline in the price of lumber?

Mr. FULLER. Lumber is a very interesting commodity in that respect, Mr. Boggs. It has a very definite reaction to supply and demand and the laws governing supply and demand. The price. this spring, very definitely declined. It declined last year-a year ago, in the spring. Unfortunately, just at the time when it was declining very nicely, as far as the consumer was concerned, the Government stepped in and did a tremendous amount of buying.

Mr. BOGGS. How does the price of lumber compare now with what it was in 1945?

Mr. FULLER. It has gone up appreciably, so I am informed by the Bureau of Labor Statistics.

Mr. BOGGS. How much, percentagewise?

Mr. FULLER. I would not attempt to say, definitely.

Mr. BOGGS. The testimony before the Joint Committee on Housing was that the price of lumber had gone up, in some areas, as much as 300 percent.

Mr. FULLER. That was not against 1945.

Mr. BOGGS. Well, against 1940.

Mr. FULLER. 1939.

Mr. BOGGS. And the testimony further showed that the cost of lumber had increased more than that of any other building material. Mr. FULLER. Very true.

Mr. BOGGS. What accounts for that?

Mr. FULLER. Well, you understand, as someone said this morning. about the farm, God also made the trees. And he put some near the mill, and he put some over the hill, and he put some in inaccessible places.

Mr. BOGGS. These prices were right in Little Rock, Ark., in the heart of the pine country.

Mr. FULLER. That is perfectly all right

Mr. BROWN. With the exception of the tree itself, the main cost of the production of lumber is the labor cost.

Mr. FULLER. That is very true. We have more in the cost of our finished product, more of labor than is the case of any other product in the building field. It will run in excess of 50 percent.

Mr. BOGGS. Has cost gone up more 100 percent?

Mr. FULLER. Since 1945?

Mr. Boggs. Labor cost.

Mr. FULLER. Our average minimum, out on the west coast, used to be about 60 cents. It is now $1.872. I am speaking of Douglas fir. And that is since 1939.

Mr. BOGGS. What about the South?

Mr. FULLER. It has gone up around 200 percent.

Mr. BOGGS. What was it?

Mr. FULLER. It was around 25 cents. It is now around 65.
Mr. BOGGS. It was 25 cents an hour?

Mr. FULLER. Yes; and it is now up to between 61 and 65 cents. An interesting thing about that, however, is that with your 60-cent labor versus your $1.872 labor on the west coast, the west coast people can make a thousand feet of lumber with less labor cost at $1.8712 than we can in the South at 60-cent labor.

Mr. BOGGS. The thing that interested me in this thing was that costs on the west coast, relatively speaking, had gone up much less than in the South, despite the fact that labor costs had gone up more on the

west coast.

Mr. FULLER. Well, we have been able to do things on the mechanical side of logging and lumber manufacture there which cannot be done in the South.

Mr. BOGGS. It seems difficult to understand why there should be a 300 percent increase, even granting that large increase in labor costs. And if there is a 300-percent increase in the cost of lumber, and a comparable increase in the cost of other building materials, I do not see how you can build any houses for $6,000.

Mr. FULLER. First of all, for the benefit of the record and those sitting here, the cost has not gone up 300 precent. There have been a lot of figures used. Two hundred and seventeen percent over the 1939 figure is the accepted figure.

Mr. BOGGS. Some of the figures were over 300 percent.

Mr. FULLER. That is right.

Mr. BOGGS. I do not know what the general average, but it is cer tainly close to 250 percent.

Mr. FULLER. The 1936-39 average is what the Bureau of Labor Statistics has used for that computation. However, it is a matter of supply and demand. If the demand for lumber is great enough——

Mr. BOGGS. You have probably a greater demand for some other products. For instance, steel products went up much less than 100 percent, and there is no demand greater than the demand for steel. Mr. FULLER. Mr. Boggs

Mr. BOGGS. And soil pipe was pointed out as probably the item in shortest supply, and the increase in price of soil pipe was much less. Mr. FULLER. If you want me to explain this I will be glad to do so. In your country, you great supply of finished lumber comes from the large mills, who, in turn, buy from the small, as we call them, peckerwood mills. Those people are going to operate and going to cut down trees, do their logging and do their rough cutting of lumber and bring

it in and sell it to the finishing mill. If the price is sufficient, they will come into business-and go out of business if the price is insufficient. I have heard it said that the average price of $55 for No. 2 Southern pine is the absolute low at which you can keep these thousands of small operators in business in the South. And it is literally true. They have to go into the swamps; they have to go over the hills. Their logging operations are very crude, but they are in that particular terrain and they operate in that area with small equipment because that is the only thing that will do the job.

When such things take place, and you still want 37,000,000,000 or 38,000,000,000 feet of lumber produced per year, then that finishing mill, in selling its end product, averages up its costs-because, after all, that must be done-and that is what he must base his price upon; and the price he gets for his lumber is dependent upon supply and demand, unlike steel mills, who have their source of supply from a single pit. Acceleration means merely putting more men on. Getting more logs to accelerate production is a more difficult and more costly job to do.

Mr. BROWN. There is more cost in cutting the small tree.

Mr. FULLER. I think you would be interested, Mr. Brown, in that respect, in the fact that the latest survey on the southern pine areas is that they are growing far more than they are cutting today. I think the South is doing a remarkable job of forestry. I think more people ought to know about that. With the mortality of fire, disease, and cutting, our growth is still exceeding that mortality figure substantially. I think that is a very interesting fact because I think the South is doing an outstanding job in that field.

Mr. BROWN. We cut too many small trees, and cannot make much money out of them.

Mr. FULLER. The lumber industry is going into that. I do not know how germane it is to this subject, but I think it is food for thought: The South is now doing a very good job of farming on trees, in the forests, and they are thinning out for the pulp mills-they are thinning out for posts and poles and are letting the larger trees have a chance to grow.

Mr. KUNKEL. Mr. Fuller, you said that the price of lumber went up, shortly after this spring, due to Government buying. What departments of Government were buying, and for what purpose did they buy that lumber? And was it in competition with the residential building program?

Mr. FULLER. There are a number of places where it is happening. I think the two outstanding places are the auctions which have been held at Memphis, as well as the buying by the Atomic Energy Commission, out on the west coast. They have been buying right through the winter, and where our market normally falls off in the winter they have sustained it far better than it normally would have been. They have been buying great quantities. It does not take too much, of course, to keep the market stable.

Mr. KUNKEL. Have the Government departments and agencies been buying the same type of lumber that would ordinarily go into construction of homes?

Mr. FULLER. Yes; they have. will be a shortage of lumber. needed.

However, we do not feel that there
We think we can produce what is

Mr. KUNKEL. Is the Government purchasing nearing an end, so that there might be a drop in the price of lumber?

Mr. FULLER. No; I would not say so. I would say that, if anything, the Government purchasing program is now being slightly accelerated. However, we do not feel that the price of lumber is too high.

Mr. BoGGs. The Army expansion bill which was recently passed should have an effect on it.

Mr. TALLE. How much lumber is included in the contemplated ECA shipments to Europe?

Mr. FULLER. At the moment they are only contemplating 800,000,000 feet. We exported approximately 1,400,000,000 feet last year. That is approximate. Of course they have not come to a definite determination of that figure, they tell us, because of the fact that there are many species, and there are many grades in these various species, such as in your area, Mr. Boggs.

The high-grade hardwoods are going begging in the market today. Mr. BOGGS. Well, how many feet did we import last year?

Mr. FULLER. It was almost a parity with exports.

Mr. BOGGS. That is right. I know we imported a tremendous amount of lumber through the port of New Orleans.

Mr. FULLER. That is right. Last year, in 1947, I think they were just about equal.

Mr. BOGGS. My impression is that we imported more than we exported.

Mr. FULLER. It could have been, Mr. Boggs, but it would be slightly more. I have not seen the final figures. I do not think we have the complete figures for 1947 as yet.

Mr. BROWN. We do not have any shortage of lumber, do we?

Mr. FULLER. No; we really do not have. Some of the problems we have had in lumber have been matters of distribution, such as shortage of freight cars, and so on.

Mr. BOGGS. This is not particularly germane to the legislation, but you mentioned conservation practices in the South. The pulp mills, much more so than the lumber mills, have been the offenders insofar as cutting small trees is concerned. Do you people try to work out a program?

Mr. FULLER. We have what is known as the American Forest Products Industry, and through that we are trying to educate, and in my estimation we are doing a good job. Our first program was in Alabama. And we are going through the South now.

Mr. BOGGS. Do the pulp mills buy their lumber from the peckerwood mills?

Mr. FULLER. No; they generally buy timber lands. A wood-lot farmer, a man with 160 acres, with a hundred acres of wood, can make a very substantial income and show a very nice profit if he will handle his forest properly. If he will do his thinning of cordwood for the pulp mill and poles, and give his larger trees a chance, he can go in and cut lumber every 5 years.

Mr. MULTER. Mr. Fuller, this couple which may be occupying a fiveroom house now, do you think they ought to move back to a two- or three-room house or apartment?

Mr. FULLER. I certainly do not think they ought to, unless you leave the free play of the American system of doing things come into being.

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