How is wood varnish made?

'Peeler' Logs are debarked, then if they're hardwood logs, they're soaked in hot water until they get soft. Then, for the most common type of veneer - 'rotary veneer' - the log is mounted onto a large veneer lathe. The lathe is equipped with a knive carriage that includes a 'nose bar', which limits the depth of cut. The entire log is peeled in a large sheet - like unrolling toilet paper. For other types of veneer the concept is similar, except the log is mounted on a large machine that moves up and down, taking 'slices' of the log. This is called flitch cut, and results in a more natural looking veneer. Also, sequential cuts can make up a 'book' of veneers which, when matched in different ways, make symetrical patterns.