Now the contract with Clancy Brothers, mentioned before, was peculiar. They logged and manufactured lumber, but not nearly all for which they had sale. They operated a system of selling yards in twenty towns. By the terms of an agreement made by his father, which had more than a year to run, Kent was bound to supply them with lumber as required to a stated maximum amount at a stated price according to quality; and they, on their part, were bound to order lumber to a stated minimum quantity.
But instead of the price being f.o.b. Falls City, as was usual, the Clancys had insisted on a delivery price at their central yard, thus striking an average and getting rid of trouble. Therefore the price of the lumber per thousand feet was based on a calculation in which the then existing freight rate was an important factor. Thus an unforeseen and substantial increase in the rate meant a corresponding loss to Kent, if the Clancys chose to hold him to the agreement. Joe looked at his manager in slowly, dawning comprehension.
“Why—why—hang it, Wright,” he said slowly, “it means a dead loss to us on every foot of boards we sell them!”
“Just that,” Wright agreed grimly. “And they’ll boost their price with the rest of the retail men and make a double profit.”
“Surely they won’t hold us up when we’re losing money and they’re making two kinds?” said Joe, from his utter inexperience.
“Won’t they?” snapped Wright. “They’ll hold us up for every foot the contract calls for.” He stopped suddenly. “And only a couple of weeks ago they wanted us to enter into a new contract for double the quantity at the same rates. Now I see it!”
“They had advance information of the change!” gasped Joe.
“Sure. After all, that car shortage was a good thing; otherwise we’d have closed with them. Now our only chance to get out even is to find a hole in the contract.”
Joe’s hope that the Clancys would not hold him to a losing agreement went glimmering, but he didn’t quite like Wright’s suggestion. “We made this contract with our eyes open,” he said. “At least my father did. Would it be square to back out now, even if we could?”
“Square?” exclaimed Wright. “Look at the dirty game they tried on us! Anything’s square with people like them. I’d rob their safe if I could. Didn’t they try to get a new contract that would kill us? Did you ever see them?”