The builders blamed the wood products manufacturers, who blamed the National Forest Service, while the environmentalists blamed the Council on Wage and Price Stability. And everybody blamed "big government" for the high cost of construction materials.
The council's assistant director, Jack A. Meyer, opened two days of hearings into construction costs last week by observing that four materials - gypsum, lumber, cement and asphalt - have exhibited average annual price increases over the past decade that were substantially above the average of all industrial prices.
The rise has been particularly steep in the past two years. Gypsum products (wallboard) have increased by 24.3 percent in 12 months. Millwork for such items as kitchen cabinets and doors increased by by an annual rate of 29 percent in the past nine months.
Meyer complained that the price of materials has gone up more during this upturn in construction than in past upturns, without however having decreased during intervening construction lulls, as in the past.
Several industry witnesses testified that prices of lumber in particular were bound to go down soon as tight mortgage money cuts into building, but they could not agree when the slowdown would come or if it has already started.
Speaking for the National Association of Home Builders, Vondal Gravlee of Birmingham, Ala., declared that the rise in lumber prices could not be attributed wholly to shortages, but was also due to the pricing practices and concentration in the industry. As the result of acquisitions five companies now account for about 40 percent of the total production of plywood.
Gravlee called wallboard prices a consequence of aggressive pricing by the gypsum manufacturers and an unwillingness on their part to plow their profits back into expansion.
In the first half of 1973 profits for one of the large companies rose 171 percent, and 90 percent for the other, he said.
Gypsum manufacturers said they lost money in the early 1970s and said that despite recent price increases, they still were not making enough return on investment to expand to meet increasing demand.
Stanley S. Dennison of Portland, Ore., vice president of Georgia-Pacific Corp., pointed a finger at the quadrapling between 1970 and 1977 of the prices the federal government now charges for the timber it sells to plywood and lumber mills. He also accused the National Forest Service of creating shortages. More than half of the havestable softwood timber in this country is in the national forest.
For example, Dennison said, NFS statistics show that in 1975 10.8 billion board feet out of a potential harvest of 15.9 billion were actually sold. Two years later, when the potential for cutting was raised to 16.2 billion, the actual amount cut dropped to 9.9 billion board feet. During that time the demand for plywood increased 20 percent.
Poor management, several witnesses said, has resulted in a situation where mature trees cannot be harvested at an accelerated rate to make room for young trees.
Industry and council officials insisted that production could be temporarily raised and lowered to meet cyclical demands without permanent damage to future harvests.
The Natural Resources Defense Council said the Council on Wage and Price Stability's call for increased timber cutting on federal forestlands was based on an erroneous reading of a Forest Service report, that cutting on private lands will actually increase by 2 percent in the period of concern, 1960-1990.