Building Something Special for 125 Years

By David Koenig, Building Products Digest

See the full article in the 2018 October BPD Magazine.

For 125 years, the North American Wholesale Lumber Association (NAWLA) has provided lumber wholesalers with services, camaraderie and a shared voice, one that resonates as strongly today as at any time in its history.

Certainly, the road has not always been a smooth one. But the need for an organization like NAWLA has been unmistakable. Through the 1880s, most state lumber dealers associations were comprised of both wholesalers and retailers, who saw their roles as wholly distinct. Mills would manufacture the product, sell it to regional wholesalers, who would place it with local retailers, who would re-sell it to the final end-users. But by 1890, the economy began to falter, and some retailers—desperate to cut their costs—started going around the wholesalers and approached mills to buy direct. At the same time, some wholesalers started going around retailers by selling direct to end-users. Once fraternal groups suddenly turned acrimonious, and both retailers and wholesalers began abandoning the associations en masse.

Retailers then formed their own retail-only state dealer associations. Wholesalers soon realized they, too, needed a collective voice. In April of 1893, 15 wholesalers gathered in the office of W.B. Millard, a New York distributor, to discuss forming a national wholesalers association “that knows no state boundaries.” Two weeks later, they convened again at the Imperial Hotel in New York, this time with 24 firms represented. They set forth aims for the group, adopted a preliminary constitution and bylaws, elected interim trustees, and set annual dues at $10 per company.

Over the next four weeks, they called on 50 prospective members in Maryland, Massachusetts, Michigan, New Jersey, New York, Pennsylvania and Rhode Island, inviting them to attend the first annual meeting of the National Wholesale Lumber Dealers Association one month later at the Imperial Hotel. During the inaugural meeting, attendees elected New Jersey wholesaler John Clark as NWLDA’s first president, Millard employee Henry M. Clarke as its first secretary, and established six committees. The most prominent of them, the Bureau of Information, would provide members with an unlimited number of credit reports for an annual fee of $25. The reports would also cover financial details, matters of ethics, trade practices, and terms of sale. Operated as an auxiliary of NWLDA, with secretary Clarke as superintendent, the Bureau was a smash success and—since the reports would available only to members—it became a magnet for convincing new companies to join NWLDA.

At the association’s second annual meeting, held in May of 1894 in Buffalo, the membership voted to make Clarke a full-time paid position as secretary, to establish a permanent office in New York City, to adopt a corporate seal, and to increase the board from 10 to 15 members, with five trustees elected each year for three-year terms. A new category of Associate Member was also added that year, because so many others, such as manufacturers of doors or shutters, desperately wanted to access the credit reports.

The hot topic at NWLDA’s fifth annual meeting in New York City in 1897 was the raging trade battle between the U.S. and Canada. Association members demanded the group take a position on a proposed higher duty on Canadian lumber imported into the U.S. for the manufacture of doors. The association, however, saw its own membership—even its own board—was bitterly divided on the issue. So it adopted the official policy: “We must avoid committing the association, as such, to any measure that is against the interest of any of its members. Such legislative matters are not the purposes for which this association was organized, and any vote on such controversial subjects would antagonize the resulting minority, to the detriment of the association as a whole.” (Nearly a century later, the association would be forced to again confront the issue and this time take on a more free trade-oriented stance.)

Of even greater concern to wholesalers was help in standardizing dealings with retailers. Accusations remained heated that the parties were acting unethical in buying or selling around the other. Problems also arose because seemingly every lumber company used different terms of sale. So at NWLDA’s seventh annual meeting in Boston in 1899, representatives from 12 state retail groups were invited to discuss their shared problems face to face and ideally agree on common terms of sale and binding arbitration.

Today, such negotiations might well be termed collusive. But back in 1899, the Sherman Antitrust Act had only recently been passed, and was more often not even a consideration among the legion of small local businessmen who made up emerging industries such as lumber wholesaling. Out of that meeting came a unanimous resolution for both wholesalers and retailers to list every company or individual involved in the lumber trade and classify each one as a legitimate wholesaler, a legitimate retailer, or an “impostor.” They would also compile a record of suppliers from whom retailers would not buy from, as well as a list of customers to whom NWLDA members would not sell.

Three years later, NWLDA established a Terms of Sale Committee, which at the 1903 convention introduced a proposal for standardized terms of sales. All delegates approved—except for one: Chicago lumberman Edward Hines. He predicted the new policy would not only be ineffectual but harmful. Indeed, most wholesalers would continue to use their own terms of sale, but because NWLDA had established a yardstick, complaints skyrocketed about members who disregarded the association’s terms.

Hines, whose company was renowned for its rigid terms of sale, was asked to make his case to the membership at large—that terms should be clearly and fairly defined, and based on ethics. It would take five more years, but his recommendations helped lead to a first American Lumber Trades Conference, aimed at achieving “ethical policies acceptable to all three segments of the industry.”

The Hardwood Inspection Committee was one of the six original committees formed in 1893. Back then, virtually every hardwood mill had its own grading rules, so disputes arose constantly between buyer and seller, often ending in court. NWLDA’s committee had two objectives: to persuade mills and customers to accept settlement by arbitration (which gradually gained approval) and to have the hardwood industry adopt a single set of grading standards, with an agency to back up those standards.

In 1901 NWLDA helped form a new wholesale group, the National Hardwood Lumber Association. NHLA established its own grading standards, which were adopted by several mills, reducing the number of claims filed. NHLA also had accredited inspectors in Baltimore, Buffalo, New York City, and Philadelphia. NWLDA and NHLA considered merging in 1906, but in the end they decided to remain separate since one group focused on marketing, the other on production. The same year, they collaborated in publishing “Hardwood Rules for Inspection.” It took until 1920 for NHLA’s single standard to be fully accepted industrywide, following a joint wartime edict that all lumber purchased by the British Ministry of Munitions and French High Commissioner be graded to NHLA rules.

Another original committee, the Railroad and Transportation Committee, led in 1901 to the formation of a Traffic Bureau Department, to service members’ freight claims.

In 1895, a Fire Insurance Committee was started as a sounding board for members. They were convinced the big insurance companies were gouging them or, in some cases, unfairly refusing to sell them any insurance at all. Within a few years, their complaints reached a fever pitch. So in 1899, committee chairman H.F. Henson of Philadelphia gathered groups of members in a number of states and worked with them to establish nine lumbermen’s mutual fire insurance companies. The introduction of insurance companies “operated by lumbermen and for lumbermen” resulted in drastically reduced premiums for members.

The years immediately following marked among the association’s most important, not just in how members would benefit, but in how the entire nation would, for generations on. In the early years of the century, the lumber industry was looking around and seeing that timberlands were being harvested at ever-increasing rates and not replanted. The lands were being logged and then left be (or sold and repurposed), in part because of heavy taxation on standing timber. As well, for every board foot of timber logged and sold, an equal number was lost due to forest fires.

In 1902, NWLDA adopted a resolution to become involved in the formation of a coherent U.S. forestry policy, aimed at preserving, prospering and prolonging of the lumber industry. They presented President Theodore Roosevelt and Gifford Pinchot, chief forester of the U.S., with a lengthy list of recommendations:

  • The federal government should take overriding responsibility for forestry.
  • State and county revenues must come from stumpage as cut. There must be no taxation of standing timber, other than a minimal charge to cover such items as fire protection.
  • The government must develop a national fire-fighting program.
  • Congress must pass an appropriations bill annually to acquire from private landowners as much timber as possible, with such timber to be incorporated into national forests.

Roosevelt responded enthusiastically, vowing to give his chief forester “every assistance to achieve his objective.” The President charged a permanent body, the American Forest Congress, with discussing forestry matters on a continuing basis. He also agreed to attend as guest of honor at NWLDA’s 1903 annual meeting in Washington, but had to back out at the last moment. Instead, he invited delegates and their wives to a reception at the White House, an invitation he repeated in subsequent years when the association’s convention returned to Washington.

NWLDA was presented with new challenges after the U.S. entered World War I, as the government instituted restrictions and price controls on lumber and other commodities. The association formed a War Industries Board to facilitate use of lumber for government needs.

During the war, the National Bureau of Wholesale Lumber Distributors was formed as a separate lobbying agency. But instead of disbanding after the war, the organization opted to become a competing lumber wholesaler’s association. They would be based in Chicago and produce a new quarterly publication, The Wholesale Lumberman. In 1922, NBWLD expanded by merging with another fledgling group, the Yellow Pine Wholesale Association, based in Columbus, Oh. Together, they formed the American Wholesale Lumber Association.

During the last two years, NAWLA forerunner NWLDA had also enjoyed healthy growth— from 482 members to 539—but it realized that, even after 30 years, the vast majority of members were still concentrated in the East. Although AWLA’s combined membership of 250 was less than half, it had much broader territorial coverage. Desiring full territorial coverage in the U.S. and Canada, NWLDA began talks about a possible merger.

They held joint annual meetings in 1923, during which both boards approved merging. A new name was simple enough; since the two groups were frequently referred to as “The National” and “The American,” the name became the National-American Wholesale Lumber Association Inc., or “NAWLA.” Combined, the group had 662 members from 40 of the 48 states, with the voids being in Iowa and a few isolated western states. It boasted full coverage from Manitoba eastward, but little in western Canada.

A year later, NAWLA filled in the gaps in the West by absorbing the Pacific Coast Shippers’ Association, which added more than 100 new members.

Although the economy continued bustling through the 1920s, NAWLA membership did not, after peaking at 807 in 1925. The collapse of the Florida land boom in 1926 bankrupted numerous members. NAWLA responded by issuing a special assessment of $25. Resignations followed. Then, after the stock market crashed in 1929, the pace of resignations intensified. By 1933, membership fell to an all-time low of 238.

For NAWLA, the 1930s consisted of dealing with one crisis after another, including the Great Depression, a continuing loss of membership, and the severe restrictions imposed by the National Recovery Act. Through the hardships, NAWLA became leaner and more efficient, notably by streamlining the complex, unwieldy Bureau of Information into a more effective Credit Department.

Dealing with restrictions became even more difficult with the advent of World War II. Demand was no longer a problem—consumption for the war effort appeared insatiable—but the government would set the price, get first dibs on whatever it needed, and monopolize transportation and labor. More difficult for NAWLA members, much of the lumber, by federal mandate, had to be purchased direct from mills, cutting out wholesalers and retailers.

New challenges arose after the war. The country was short on housing and starved for lumber. When the government lifted its controls in late 1946, forest product production increased and prices rose sharply.

“Many new mills, wholesalers and retailers were entering the scene and claims were rampant,” noted the late J. Ward Allen, in his book NAWLA: A Century of Friendship, Dedication & Vision. “NAWLA members were spending as much time tracing late shipments and settling claims as they were making sales.”

Inflation spiked after the start of the Korean War, which coincided with hikes in personal and corporate taxes. Lumber wholesalers were also subjected to the General Ceiling Price Regulations that applied to wholesalers of all commodities. Relief came in 1953 with the inauguration of President Dwight D. Eisnenhower. His Administration quickly lifted all controls and instituted tax reforms that stimulated economic growth.

Although most wholesalers prospered at the time, NAWLA membership again began shrinking. Then-current association leadership had come to power during the Depression. Consequently, they were firmly against raising dues or operating at a loss. Instead, they responded by paring back services, which led to even more members leaving. The top executives realized, reluctantly, it was time to make room for a next generation of leadership, most notably by installing 43-year-old wholesaler John J. Mulrooney as its new executive vice president on January 1, 1960.

At the top of his in-basket were the fresh results from a survey of NAWLA members. The report showed that, despite paying dues to the association, most members didn’t see themselves as an integral part of it. “The internal structure had withered to the point where there were no active committees,” Allen shared. “If one were needed for a specific purpose, the president would appoint an ad hoc committee from the board.”

Mulrooney’s first step was to form 18 committees. With just one exception, all were chaired not by directors but by men picked from the membership at large. They were given policy guidelines, then challenged to produce vibrant, constructive programs that would be of value to current members and could attract new ones. Sales training programs, regional meetings, and public relations campaigns were among the innovations. It took a few years to convince the industry of the value of all the new programs, but in 1965 NAWLA again began growing.

In 1972, the group changed its name (but not its acronym) to the North American Wholesale Lumber Association. Three years later, it relocated its main office from New York to the more affordable (and, for Mulrooney, much closer) confines of Clifton, N.J. Pete Niebling, head of publicity, worked from Portland, Or. After Mulrooney passed away in 1979, the two offices were consolidated near Chicago, under Niebling. And a John J. Mulrooney Memorial Award was established to honor individuals who had made outstanding contributions to the lumber industry, especially in the field of distribution.

Through the 1970s and 1980s, deregulation was the main topic of concern. In general, it proved a blessing for shippers, a disaster for small wholesalers, and a headache for NAWLA. In 1981, NAWLA held its first Wood Marketing Seminar, bringing 40 young wholesalers to complete a week of studies and field trips. It was an unqualified success that continues to this day.

A decade later, NAWLA was approached by the National Building Material Distributors Association. The two groups had a similar wholesale focus, though NAWLA’s was entirely lumber focused, NBMDA’s more general building products. They had similar sized staffs, budgets and services. And they were both battling shrinking membership and revenue. In March 1992, both associations’ boards met in Chicago and ratified a merger in principle. To be finalized, NAWLA members would have to approve it by a two-thirds majority. Two months later, the merger cast a massive shadow over NAWLA’s 100th annual meeting at the Broadmoor in Colorado Springs, Co. During an open forum on the topic, one member after another made clear that they realized NAWLA needed to become stronger, but thought such a merger would do the opposite. They were insistent that NAWLA retain its lumber-specific identity. After the last member weighed in, the next move was clear. Talk of any merger was shelved.

NAWLA immediately began looking for new ways to reinvigorate itself. That shot in the arm came in 1996, with the introduction of the NAWLA Traders Market. Designed as a no-frills event for getting buyers face to face with sellers, rather than just top executives, the event was an instant hit. It remains among the industry’s most valuable, cost effective networking opportunities.

“For over 20 years, the NAWLA Traders Market has been the preeminent trade show in the forest products industry,” said past NAWLA chairman Jim McGinnis, McGinnis Lumber Co., Meridian, Ms. “The unique formula of having manufacturers in the booths and their customers in the aisles has proven to produce an event that over 1,500 people agree simply can’t be missed each year. It is quite simply the best networking event in the industry.”

In 2014, the North American Wholesale Lumber Association transitioned management of the association to SmithBucklin, providing members with an even wider array of capabilities and programs, while maintaining the personal service that has been NAWLA’s hallmark for 125 years.

Manufacturers Reserve Supply, Irvington, N.J., has been a NAWLA member since 1965 and continues to be active within the association and at its events.

“Every NAWLA meeting is a great experience, whether we are learning from our suppliers or our friendly competitors,” said MRS chairman Steve Boyd. “Our industry historically has not been on the leading edge, so listening to competitors talk about best practices or better ways to run operations is always valuable.”

He added, “NAWLA is just like every association, in that you get out of it what you put into it.”

Join. Attend. Participate. Your business will profit, as history shows.

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