EXPORTS AND THE PRODIGAL AXE

How millions are being made by creating a market and giving it real service.

GUY MORTON June 1 1923

EXPORTS AND THE PRODIGAL AXE

How millions are being made by creating a market and giving it real service.

GUY MORTON June 1 1923

EXPORTS AND THE PRODIGAL AXE

How millions are being made by creating a market and giving it real service.

GUY MORTON

"DEBTS? Yes, Canada has debts. But we will pay them off, gentlemen. How? By increased exports. And it is your duty as an organization

The Public Pest was standing in front of a gathering of western lumbermen back in the after-the-war heat of trade expansion, and he was exhorting them. Fancy it; he was exhorting lumber exporters to increase their business, for the good of Canada.

Like nine-tenths of the public trumpeteers, his plea w as as superfluous as a supplication toa small, hungry boy to eat the food placed before him.

For long before the Public Pest caught that we-mustincrease-our-exports vision, the lumbermen of the Western Coast were in the thick of their own battle. It has been nothing less, that struggle of the British Columbia exporters for a place in the sun; and now that they are near enough to the sun to cast a long shadow, it may be interesting to note one of the recent phases through which the business had to pass before B. C. lumber came to be accepted on the marts of the world in anything like a generous way.

As to the growing shadow? Yes. This will show the length of it: Back in 1919 the export from British Columbia to Australia was 6,500,000 feet. By 1922 it was

35.000. 000 feet It is also registered in commercial history that ten years ago the

Douglas Fir exportation from the w estern province ran around

30.000. 000 or 40.000.000 feet, and that last year it was, roughly, 160.000.000. There are other stolid figures to show how the trade has climbed in recent years with China, Japan, India.

Egypt and other buying centers of the world: but. after all, figures are stodgy7, and it is the battle which counts.

The fight for a timber market was on as early as 1912; it may have been going on before that, but the date is picked merely to let the Public Pest know that his 1919 exhortations had nothing w hatever to do with the winning of this w ar.

In those days, the Columbia lumbermen caught in something of mire: or perhaps it was more nearly like a squirrel-cage, for they assuredly could look out through the bars of depression and see a remarkably fine business going on elsewhere. Now we will take one of those typical lumbermen from his cage and try to find the reason why. And we will call him -Jack Spruce, because that isn’t his name.

U. S. Wood Favored

\ rOU are now back in 1914, or almost any year for a 1 space in either direction, and you are looking at a sign which says that Jack Spruce is a lumber exporter. Through the office window you can see that his wharves are piled high with a great assortment of sawn timber; a fewloaded barges are tied up to the dock, but there is no sign of activity whatever.

Then in saunters the camp foreman, Henry Hemlock.

“For goodness' sake. Jack,” he says, “can’t you get rid of some of that junk piled out there on that dock? The men have been hanging around the camps for six weeks now, and we haven’t cut a stick.”

Spruce looks worried.

' I expected to get rid of a half boatload of it yesterday,” he apologizes. “The Free Rover of Seattle is taking Douglas Fir to Japan, and she promised to pick up half a cargo here: but last night I got a wire saying they had enough Washington lumber to fill up. They’ll call here next Fall and pick up some of ours for the next trip. I have sent wires to Seattle, Portland and Tacoma to see if there isn't some other ship to take part of a cargo.”

Hemlock sauntered out, like a man who knew that story by heart: and Jack Spruce sat there, with a sort of obstinate grip upon the arms of his chair.

“So that is why Canadian lumber export isn’t getting anywhere?” you ask; and Spruce nods sharply, and says something about those blankety-blank American bottoms which only come up to the British Columbia coast for

lumber when they can’t find enough at home to make up their cargoes.

Then that is the situation? British Columbia has the Douglas Fir, and she can cut all she likes of it; but when it comes to shipping that timber to export markets, it is a case of having to depend on the,vessels from some other country? Not entirely; but largely.

A problem; now7 let’s tackle it, Jack Spruce.

Still, it looks easy at first glance.

“Why, all you need, Jack, is a few ships of your own.”

Spruce nods somewhat sulkily.

“And how do you get them? Press a magic buttón somewhere?”

“Dig up the money, of course. Why, see that pile of lumber down on your dock. It is only a nibble out of the reserves which you have scattered over the province. Sell enough lumber to buy one ship; get business opened up; then in a fewmonths you can add another ship, then another, and another. It is only a case of getting going.”

Rosy prospects there. Jack Spruce must have been dreaming not to think of it. But Jack is stroking his.chin thoughtfully.

“Sell the lumber? Who to? The Free Rover couldn’t take it, though I have a contract with her owners. If I kick too much, all they have to do is break the contract. They don’t need my business, anyway; for any time they run short of lumber, all they have to do is run up here to Vancouver, or send a wire, and it will be ready for them twice over before they arrive. No, I tell you, the American ship-owners and lumber exporters have rather got us sewed up. They want our business, surely, as an auxiliary when their own shipments are none too brisk; so they carry some of our lumber, but not enough.”

Looking for Ships

THAT looked bad for Jack Spruce. Still, every squirrel-cage has one outlet, if you but search persistently enough.

“I have it, Jack! Interest some capitalists. Tell them the situation. Get them to build some ships. Then load them up and away you go for the Orient. That is where the big market is.”

Even a cheerful thing like that does not smooth the worried lines from the countenance of Jack Spruce.

“Capitalists don’t have to be told the situation,” he replies. “They know it. They won't build ships unless we can show the market “Well, you have it; your Fir is going to Japan,'' you pounce on Spruce triumphantly, only to be met with a smile which is filled with sorrow.

“The United States has it,” he corrects. “The Free Rover picks up timber in Vancouver or anywhere along the British Columbia coast, and lands it in Japan; but still it becomes an import from the United States, on an American bottom. The Japs buy it, and can you blame the American shipper if he doesn’t stop to say, ‘Now, in justice to Canada, I should point out to you that this is Canadian-raised timber which you are buying, and any time you want some in a hurry and we can't handle it, if you just send over to British Columbia they will be able to fill your orders’? No, business isn’t doné like that.... Before we could ggt capitalists sufficiently interested to build ships, we would have to show them that we have the market;. . .-.and the States has it.”

That did alter the appearance of things.

In other words, it amounted to this: Back in 1914, or thereabouts, British Columbia export lumber could not get a direct export market without ships; and it could not get ships without a guaranteed market. So there you have the endless circle revolving effectively, with the bulk of the lumbermen caught on the inside.

Looks bad for Jack Spruce, and you puzzle your brain to find a way out.

“Why not go to Japan yourself? Go to China, Egypt, India Australia, anywhere; canvass for the business. Force the markets; open a new one somewhere. Get the wedge in, and then keep on hammering. . . . ”

That seems logical, up to the point where you find Jack Spruce throwing up his hands in despair and looking at you in sorrowful protest.

“You don’t think I haven’t canvassed every market there is?” he asks, in a sort of hurt way. “I have worked them all, and while I get snatches of business here and there, enough to keep us going part of the year, I find that nobody wants to do business with a lumber exporter who cannot guarantee regular and prompt shipments. Those countries know they are buying British Columbia Fir shipped on United States boats, and they like it; but, when it comes to selling direct, the barriers are up. They want lumber when they want it.” So you leave Jack Spruce and his wail for ships behind you, knowing as you go that Jack is not everybody.

For back in 1914 there were some Canadian exporters who had proper boat services worked out for regular Oriental and other shipments; there were some who owned their boats; there were companies which made a business of carrying Canadian lumber to scattered points in the world; but the percentage was not great.

Those years were, on the whole, lean ones, for it will be recalled that around that period there was an overproduction of Douglas Fir, with the Washington and Oregon exporters keeping such a close eye on the markets that there was scarcely a loophole left for the British Columbia product. They tell you yet of those thin days, when B. C.’s share of the Pacific export dropped to seven or eight per cent., with prices sagging as low as eight dollars a thousand, and railway ties selling at ten. On the Canadian coact, there were only two or three exporters who could keep anything like a fair grip on the overseas trade, so that the bulk of the western lumber business had to be confined to the central provinces.

Guaranteeing Delivery

THOSE were bad days for B. C. lumber. They were so bad that many a person turned in to find the answer, and among others who worked in this direction was H. R. MacMillan, who, up to 1915, was Chief Forester in the employ of the British Columbia Government. MacMillan started to study the situation because the Federal Gov-

ernment, having become depressed by the wails of the Jack Spruces, asked him to; and he shortly discovered that the position of the B.C. lumber exporters was, to say the least, difficult. One thing he discovered was that from ninety to ninety six per cent, of Australia’s lumber was being shipped from the states of Washington and Oregon at a time when Douglas Fir of precisely the same quality was rotting in the lumber yards or in the forests of British Columbia.

Trade within the Empire? The slogan had already been shouted from the housetops, but that was the answer. Why?

A scene may tell the reason why:

Jack Spruce crosses the Pacific and drops into the office of Reddy Buier, in Sydney, Austra'ia, and he tells his story.

“Yes,” Reddy Buier nods his head,

“we are in the market, for British Columbia Douglas Fir. We have been getting it right along, through the American shippers of course, and for our purpose there is nothing better in the world. We need ten million feet in August and we want to do business with Canada. The deal is closed if you can guarantee prompt shipments.”

Jack Spruce recalls his experiences with the Free Rover and his courage sags. He tries to talk big, but in the end he has to admit:

“...'.we can’t be absolutely certain; but we have reasonable expectations that the Free Rover could get to you by the first of September at the latest. She is now in Japan, and we have been promised a shipment this Fall.”

That would end such a scene as Jack Spruce was putting up; and it accounted for the fact that out of the total shipments from the Pacific Coast, Canadian lumber had dropped as low as eight or nine per cent.

Explanation: not enough Canadian ships, and there simply had to be ships if the Canadian exporters were ever going to upset the established order of things. There had to be something out of the ordinary before the placid lumber merchants in Japan and China and India and all those other Oriental ports would turn aside from the wellworn grooves. For what had British Columbia to offer those merchants which they were not already getting? Nothing. It was the same lumber, cut from the same forests; and when a person buys lumber there are,roughly, but three considerations. They are quality, price and delivery. B. C. could not undercut price, and could not give delivery; the quality was the same.

Now how in the world were the Jack Spruces to work up business under conditions such as that? Ships, of course.

“What I cannot understand is why they didn’t get their ships before they let themselves be caught in such a hole,” a prominent individual remarked the Other day.

Well, answer these next questions, and you have answered the above at the same time.

How does it come about that so many remarkably fine mining propositions are lying idle in British Columbia? Why are the northern timber lands of B. C. practically untouched except by fire? Why is seventy-five per cent, of the halibut fishing along the northern coast in the hands of Americans? Why are so many of the lumber plants, pulp mills and operating mines in the hands of United States capital?

The answer is: Lack of western capital, and an over-sufficiency of eastern indifference.

BUT to get back to MacMillan. Fie is still young and energetic, and the discoveries he made on behalf of the Federal Government

did not discourage him at all. As a matter of fact, they spurred him on. Hé left the Government service and became a timber exporter. Now he is commonlyregarded as one of the biggest men in his line along the Pacific Coast. Fie got into the business two or three years ago;and when his partner went to Japan on his first Oriental tour, he took with him the magic key to open up the export situation. The partner called on a big Jap merchant who had become impressed with the American methods of speed and efficiency.

“For years we have wanted to do business with Canada,” said Mr. Kamiki, if that was his name. “But we never got anywhere. It was discouraging. Two or three times we tried, but the shipments were not prompt. We lost money on our contracts; so I am sorry, but. . . . ”

“But see here,” replied the B. C. man, “we can now guarantee prompt shipments.”

“Prompt shipments, from Canada?” Kamiki gasped—that is, if a Jap ever can be caught off his guard to such an extent—

“You mean to say you really have ships? You have started a new company? That is fine.”

“Well, you would hardly call it a new company,” the B. C. man explained carefully, “but it is a concern which guarantees

shipments just the same. I thought you had heard of it—the Canadian Government Merchant Marine. In June they are going to open up a once-a-month service to Japan, so any contracts you give will be promptly filled.”

That was back in the spring of 1921; and the MacMillan partner, after working around Japan for three months, came back to British Columbia with orders for $35,000,000 worth of lumber.

That summer marked the turning tide in the whole B. C. situation; and it accounts for the fact that the exports for 1921 v/ere 160,000,000 feet compared with 30,000,000 ten years before; and on top of that the exporters have the satisfaction of knowing that their product goes direct, without first passing through the hands of the dealers in the United States.

There have been some great changes in the past two or three years in British Columbia’s lumber situation, a change which is reflected in a more healthy financial condition all along the coast and far into the inland. It is a change, as well, which has put Vancouver on the same plane as Portland and Seattle when one thinks of lumber prestige.

Figures, stodgy as they are, sometimes tell a story which can be told in no other way, and they assuredly have painted some bright spots on the commercial history of the coast province.

For instance, from 1913 to 1916, British Columbia’s share of the Pacific lumber shipments to Australia ranged from two to four per cent; in 1921 it was fortyseven per cent. In 1911 B. C. had one per cent, of the business with China, and the States had the rest. Last year, the Canadian firms raised their share to thirty-two per cent. Ten years ago there was no Canadian lumber going to India; in 1920, owing to trade developed during the last six months of the year, the B.C. exporters captured fifty-nine per cent, and last year they raised it to seventyseven per cent. In 1911 Canada had eleven per cent, of the trade with New Zealand; last year is was fifty-nine per cent, and for South Africa it was sixty. As for Egypt, Canada captured the whole trade, sending the full cargo of 8,400,000 feet of railway ties to that newlv-opened market.

As to shingles alone: official figures indicate that exports increased ninety per cent, on water shipments in eighteen months, due to lower freight rates. And fancy the trip those B. C. shingles are taking to find a market; they circle around through the Panama Canal, and eventually big grists of them land up against the eastern coast of New England. The green shingles go by water, the dry by land; but those most closely in touch with the market for this particular commodity claim that the shingle future is wrapped up with other export products.

On the whole, that is a sharp turn in events, and if you ask the B.C. exporters how it all came about, they will be glad to tell you.

Ask H. R. MacMillan, who is pointed out as a man who knows; ask J. G. McConville, Secretary of the Associated Timber Exporters of B. C., an organization which embraces thirty-eight mills, or all but two on the tidewaters of the British Columbia coast; ask almost any big lumberman you see, and you will get the same answer.

“Why,” they all say, with monotonous regularity, “it is because there are now ships which put out to sea.”

And those ships are the Canadian Government Marine.