HD 9754. usr University Library

Timber depletion, lumber pric:

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U. S. DEPARTMENT OF AGRICULTURE

FOREST SERVICE
WILLIAM B. GREELEY, ForRESTER

 

TIMBER DEPLETION, LUMBER PRICES, LUMBER
EXPORTS, AND CONCENTRATION OF
TIMBER OWNERSHIP

REPORT ON SENATE RESOLUTION 311

By

THE FOREST SERVICE |
U_ S. DEPARTMENT OF AGRICULTURE

JUNE 1, 1920

 

WASHINGTON
GOVERNMENT PRINTING OFFICE
1920
TABLE OF CONTENTS.

Letters of transmittal Bie esoaeeee eee se Sse es eS,
Effects of scarcity and high prices of forest products upon rep-
resentative industries ___
General building and construction
Farming
The

 

railroads
furniture industry_—
veneer industry__
handle industry
vehicle and agricultural implement industries =
MGWSDAPETS! - 2 eae ee oe ee.
The situation summarized ~-----_____--_---_-_--__.------
Abnormal conditions in relation to present scarcity anj high
prices mes
sien progress of forest depletion_._=--_--.~---.~.-==-------
orest depletion and migration of the lumber industry—
Basis for data__
New England ~-__- :
The growth and decline of the lumber industry_-—-----

lea and remaining forests

rea

  
  

 

 

 
    
 
  
 

 

The annual drain upon the forest_
The annual growth___-_---___
Growth compared with cut-
The life of the industry... <a s pe ecmns
Present and future consumption
England
New York --
PUNE OD eon aes raeweice ea qavaunereeanen i lspci d
The: Lake States. 22-22-0250 232
Growth and decline of the lumber industry__
White pine =
Hemlock: = -- 8-8
The northern hardwoods—-__--_________
Original and remaining stand and rate of cut
Lower Peninsula of Michigan_-___-__-____.---___
Wisconsin and Upper Peninsula of Michigan
Minnesota
Condition of the remaining supplies
The annual drain upon the forest___-_-______
Lumber cut compared with total cut____
Deterioration of the forest.
The savuemal erowth 2. eee
Growth compared with cut
The lite of the MANSY ances c cee eee eee
ae and future consumption of lumber in the
tates
The southern yellow-pine region___--___________________
The growth and decline of the yellow-pine industry__-
The original and the present pine forests of the South__
Total merchantable stand

 

   
  

 

 

 

The annual growth
Cut and growth contrasted
Deterioration of the forest_____
Change to inferior species_____________
The lesson of the South Atlantic States
Life of the yellow-pine industry
Reduction of the output___-----__---________.___
Present and future consumption of lumber in the South_
Cypress regions
The Rocky Mountain region____-_-______________
Development of the lumber industry
Original and present stand
The annual drain upon the forests_
Annual growth ~-~--_---_-_-__
Cut compared with growth_
Local needs ..----<s55 es een wee.
The future of the lumber industry_
Pacifie: coast_.2—-=- = ==
Growth of the lumber industry_
Original and remaining forests__
Growth and depletion____--____
Life of the industry a
Southern Appalachian hardwoods_
Growth and decline of lumbering_-
The original forest
The remaining stand__-____-__
Lumber cut and total cut______-_
Deterioration of the forest__._.__..______
The duration of the cut of old growth______
Iiffect of depletion upon selected industries_
The annual growth_____-----____-______
Growth compared with cut__--_---_.--------.---__
Importance of the Southern Appalachians in the future
lumber supply of the country___---~-~-_----_-_-___
Hardwoods of the lower Mississippi Valley
Area and stand
Development of the lumber industry.
Growth and depletion
The future of the region

  
  
 

    
  
    
   
   
  

 

 

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Steady progress of forest depletion—Continued.
Newsprint supplies____---~----------------------------
The facts as to depletion___
Alaskan supplies of pulp woo
The movement of prices_-.-_---- -
Naval stores supplies___._--__--_- =
Development of the industry__
Remaining supplies_____-__--_
Methods of exploitation______
Depletion and prices___________---_------
Original and present forests of the United States
Original forest area _-.___-_______--_______
Present forest area
Saw-timber stands
Total stand
Location of requirements with reference to production and
supplies
Future trends in requirements
Depletion and growth
Present depletion and growth____.---___--_--_----_--
Possible growth____------___-________-___-- :
Forest depletion and lumber prices__-_______-_______-__
Price changes and regional depletion_____-________ ~

    
  
 

 

gions zs

Prices and costs of production and distribution
Mill prices and production costs
Pacifie coast-_____-____-_-_
Inland Empire ---__-
Southern pine States _- r=
Wholesale costs and profits -_--.-
Transportation

Retail prices and costs
The upward movement of pri
Distribution of price increase_
Retail profits =

Lumber prices unjustified by production and distribu-

tion costs
Price control
Some specific effects of regional depletion on prices
Summary of principal price conclusions_

Lumber exports and timber depletion_________
Lumber exports before and during the war_
Probable developments in lumber exports________
Effects of exports upon domestic timber supplies_
Imports of forest products.._-___._.__._-_________
Export trade policy

Concentration in timber ownership, manufacture, and marketing_
Concentration of timber ownership in 1910.
Timber ownership in the Northeast_________________
Ownership of softwood timber in the Southern States_.
Ownership of hardwood timber____-__--____________
Timber ownership in the Lake States
Timber ownership in Idaho =
Timber ownership in Washington and Oregon______ anes
Timber ownership in California
Changes in timber ownership from 1913 to 1918__________
A summary of the present situation as to timber owner-

ship wee
Coneererstinn tendencies in lumber manufacture and mar-
eting
The creation of large operating groups of affiliated
sawmills. i
Greater financial strength of the lumber industr:
Concentration of lumber marketing eee
Development of trade associations__
Effects of timber depletion upon concent

Forest depletion the fundamental problem
Cumulative effects of timber depletion.
Timber depletion and lumber prices___ oe
Idle forest land__---_______-_____ 2
A national forestry policy_____ S oe
The Federal legislation needed_________________

Seger vam with States in fire protection and forest
renewa

The extension and consolidation of Federal forest hold-

 
 
 
 
  
 
 
 

   

 

 

      
 

 

 

 

 

   
 
 
 
 
 

ings
The reforestation of denuded Federal lands
A study of forest taxation and insurance________
The survey and classification of forest resources__
Current appropriations for forest research

The State legislation needed =
Fire prevention and reforestation of private lands____
State and municipal forests
Taxation of forest lands

  
LETTERS OF TRANSMITTAL.

 

June 1, 1920.
The PRESIDENT OF THE UniTEep States SENATE.

Sir: I have the honor to submit herewith a report on forest depletion in the United States, prepared by the Forest Service in this
department pursuant to Senate resolution 311. :

This resolution requests information on:

_ lL. The depletion of timber in the United States.

2. The effects of timber depletion upon the high cost of materials.

3. The effects of lumber exports upon domestic industries.

4. The effects of depletion upon the concentration of timber ownership and manufacture and the relation of such concentration to
the public welfare. 7

The outstanding facts reported by the Forest Service are:

' (1) That three-fifths of the original timber of the United States is gone and that we are using timber four times as fast as we are growing
it. The forests remaining are so localized as greatly to reduce their national utility. The bulk of the population and manufacturing indus-
tries of the United States are dependent upon distant supplies of timber as the result of the depletion of the principal forest areas east
of the Great Plains.

(2) That the depletion of timber is not the sole cause of the recent high prices of forest products, but is an important contributing cause
whose effects will increase steadily as depletion continues.

(3) That the fundamental problem is to increase the production of timber by stopping forest devastation.

The virgin forests of the United States covered 822 million acres. They are now shrunk to one-sixth of that area. All classes of forest
land, including culled, burned, and cut-over areas, now aggregate 463 million acres, or a little more than one-half of our original forests.
Of the forest land remaining and not utilized for farming or any other purpose, approximately 81 million acres have been so severely cut
and burned as to become an unproductive waste. This area is equivalent to the combined forests of Germany, Denmark, Holland, Bel-
gium, France, Switzerland, Spain, and Portugal. Upon an enormous additional area the growth of timber is so smal] in amount or of such
inferior character that its economic value is negligible.

The merchantable new timber remaining in the United States is estimated roughly at 2,215 billion board feet, something less than
three-fourths of which is virgin stumpage. The rest is second growth of relatively inferior quality. About one-half of the timber left
is in the three Pacific Coast States, and over 61 per cent is west of the Great Plains. A little over one-fifth of the timber left in the country,
or 460 billion board feet, is hardwoods.

There is now consumed or destroyed annually in the United States 56 billion board feet of material of saw timber size. The total
yearly consumption of all classes of timber is about 26 billion cubic feet. Our depleted forests are growing less than one-fourth of this
amount. The United States is not only cutting heavily into its remaining virgin forests every year, but is also using up the smaller ma-
terial upon which our future supply of saw timber depends much more rapidly than it is being replaced.

The two striking effects of timber depletion already apparent are:

(1) The injury to large groups of wood users and to many communities resulting from the exhaustion of the nearby forest regions from
which they were formerly supplied; and

(2) The shortage of timber products of high quality.

Less than 5 per cent of the virgin forests of New England remain, and the total stand of saw timber in these States is not more than
one-eighth of the original stand. New York, once the leading State in lumber production, now manufactures only 30 board feet per capita
yearly, although the requirements of its own population are close to 300 board feet per capita. The present cut of lumber in Pennsylvania
is less than the amount consumed in the Pittsburgh district alone. The original pine forests of the Lake States, estimated at 350 billion
feet, are now reduced to less than 8 billion feet, and their yearly cut of timber is less than one-eighth of what it used to be. These four
densely populated regions, containing themselves very large areas of forest land, are now largely dependent upon timber grown and manu-
factured elsewhere and are becoming increasingly dependent upon timber which must be shipped the width of the continent.

The bulk of the building lumber and structural timbers used in the Eastern and Central States during the last 15 years was grown
in the pine forests of the South. The virgin pine forests of the South Atlantic and Gulf States have been reduced from about 650 billion
board feet to about 139 billion feet. The production of yellow-pine lumber is now falling off and within ten years will probably not exceed
the requirements of the Southern States themselves. :

The United States at one time contained the most extensive temperate zone hardwood forests in the world. One region after another
has been cut out. The production of hardwood products on the past scale can not be long continued. The scarcity of high-grade oak,
poplar, ash, hickory, walnut, and other standard woods is now placing many American industries in a critical condition.

The depletion of forest resources is not confined to saw timber. Since 1909, the country has ceased being self-supporting in newsprint.
paper and now imports two-thirds of the pulp, pulp wood, or newsprint which we require. This condition is due in part to timber deple-
tion, in part to failure of the paper industry to expand in our western forest regions as the lumber industry has expanded. In 1919 the
production of turpentine and rosin had fallen off 50 per cent. Within ten years the United States will lose its commanding position in the
world’s market for these products and may in time be unable to supply its domestic requirements.

The termination of the war found the lumber industry with depleted stocks. Production during the war had been much less than
normal on account of shortages of labor and equipment and embargoes on transportation. A large part of the lumber produced had been
taken by the Government for war purposes. During the same time, the normal construction of dwellingsand industrialstructuresand
the use of lumber in many manufacturing industries had been greatly curtailed. Following the war, these pent-up demands were released.

They caught the lumber industry not only with its stocks short and broken from war conditions but unable, on account of labor difficulties,

3
4 TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

lack of freight cars, and bad weather in important producing regions, to respond rapidly with increased production. Aside from the general
causes affecting prices of most commodities, the expansion of credit accompanied by currency inflation and the wave of speculation and
extravagance, an ‘“‘auction” lumber market would no doubt have resulted from the frenzied competition of buyers to obtain the limited
stocks available, wholly inadequate to satisfy current demands. : o .

Under the combined influence of the general conditions making for high prices and this situation in the lumber industry itself, prices
rose to unprecedented limits. In March, 1920, average mill prices in the South and West had increased 300 per cent and more over the
prices received in 1914, and average retail prices in the Middle West showed increases ranging from 150 to 200 per cent. In the case of
high quality hardwoods and other specialized products, the average advance in eastern wholesale markets was from 200 to 250 per cent,
and the demand at this advance was still unsatisfied. . 5

The timber market has been more unstable than ever before in our history. Many industries have been unable to secure their supplies
of timber at any price. The output of certain entire industries has been reduced as much as 50 per cent. Middlemen and manufacturers
of wooden commodities have been able to pass on to the consumer and even augment any price they might pay. N ecessities have fared
worse than luxuries. The ramifications of lumber shortages and high prices are limitless and have affected seriously practically our entire
population.

Obviously these lumber prices bear no relation to the cost of production and distribution. While the costs of production in the lumber
industry have at least doubled as compared with 1916, lumber prices have much more than doubled and have become wholly disproportionate
to operating costs. Excessive profits have been made by the industry. The division of these profits between manufacture and distri-
bution’ has varied in accordance with circumstances and the ability of the various elements in the industry to dominate the situation.
That prices have been too high is recognized by the best thought in the industry, and some manufacturers have sought to stabilize the
market.

The depletion of timber in the United States has not been the only cause of these excessive prices on forest products, but has been
an important contributing cause. It has led to the migration of both the softwood and hardwood lumber industries from region to region
and each is now cutting heavily into its last reserves. The exhaustion of timber in near-by forest regions has compelled many large lumber
consuming centers to import their supplies from greater and greater distances. The wholesale priges on upper grades of softwood lumber
in New York were from $20 to $25 per thousand prior to 1865 when mills in the same State supplied this market, from $35 to $45 between
1865 and 1917 when most of the supply came from the Lake States and the South, and are now entering a general level of $130 a thousand
feet with a large part of the material coming from the Pacific coast. In the Middle West, the building grades of white pine lumber cut
in Michigan, Wisconsin, and Minnesota, retailed at $15 to $20 per thousand feet prior to 1900. As lumber from the Lake States became
exhausted and southern pine took over this market, the retail prices rose to a level of $25 to $35 per thousand feet. The replacement of
southern pine by West Coast timbers now in progress is initiating a new price level of about $80 to $85 per thousand feet. The increased
cost of transportation is but one factor in these new price levels, but it isan important one. The freight bill on the average thousand feet
of lumber used in the United States is steadily increasing as the sawmills get farther and farther away from the bulk of the lumber users.

Much information is available to show the disadvantages of the lumber consumer in regions whose near-by forests have been exhausted
Retail prices in the Ohio Valley, for example, on certain grades exceed retail prices on the identical grades in Oregon in some instances
by as much as $50 per thousand board feet after allowing for all transportation costs. The curtailment of lumber output in the eastern
regions not only has compelled the average consumer to pay more for freight but has enhanced the effects of congestion in transportation
and of climatic and other factors limiting the production in regions which still support a large lumber industry. It has restricted oppor-
tunity for competition and thereby increased the opportunity of the lumber manufacturer or dealer to auction his stocks for higher prices.
In other words, the effects of forest depletion can not be measured in terms of the total quantity of timberremaining. Its injury is felt
particularly through the steady process of regional exhaustion. Our remaining timber is so localized that its availability to the average
user of wood is greatly reduced. Particularly does such a restricted location of the timber supplies assume a serious national aspect in the
face of transportation congestion and inadequate transportation facilities such as the United States is now experiencing. Had the forests
and forest industries of the Eastern States still existed, the opportunities for regional competition in supplying the lumber markets and
the wider distribution of lumber transport undoubtedly would have afforded a curb upon rising prices which did not exist in 1919.

The export trade in lumber does not have a serious bearing upon timber depletion from the standpoint of quantity, but does have
an important bearing upon the duration of our limited supply of high-grade timber, particularly of hardwoods. The exports of high-grade

oak, walnut, hickory, ash, and other woods essential to many industries in the United States which now seem probable will further
enhance the shortage of such products for the domestic market and the tendencies already evident toward sustained high prices. On tie
other hand, the United States imports from Canada about two-thirds of its total consumption of newsprint or newsprint materials. The
effects of our export trade in lumber should be considered from the standpoint of the specific timber grades or products whose depletion
is most imminent and threatening to American industries.

The concentration of timber ownership has not changed materially since the exhaustive report made upon this subject by the Bureau
of Corporations in 1910. One-half of the privately owned timber in the United States is held by approximately 250 large owners, the
ownership of the remaining timber being very widely distributed. The tendency toward the acquisition and speculative holding of timber
beyond operating requirements has been checked, and the present tendency is toward the manufacture of large timber holdings. At
the same time the lumber industry, particularly in the Western States, is going through a partial reorganization into larger operating and
marketing groups. In this there is a tendency for small mills to disappear and small timber holdings to be blocked into larger ones
adapted to extensive lumber manufacture. While there is still a large number of individual timber owners and of sawmills operating
as separate units, the larger interests are acquiring a more dominant place in lumber manufacture in the West. It is to be expected
that these large interests or groups will maintain, as time goes on, a fairly constant supply of timber for their manufacturing plants by
acquiring smaller holdings. No information is at hand which would justify a conclusion that monopolistic conditions on any general
scale have grown out of this situation. There are many instances to the contrary. On the other hand, the degree of control of the timber
remaining in the United States exercised by a comparatively small number of large interests will steadily increase as timber depletion
continues, approaching a natural monopoly in character, and this control will extend particularly to the diminishing supply of high-
grade material.

In 1918 our per capita consumption of lumber was about 300 board feet. The homes and industries of the United States require at
least 35 billion feet of lumber yearly, aside from enormous quantities of paper and other products of the forest. A reduction in the current
supply of lumber below this figure would seriously curtail our economic development. Appreciable increases in lumber imports are not
possible except at excessive prices. We can not afford to cut our per capita use of lumber to one-half or one-third the present amount—
TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 5

to the level of European countries where lumber is an imported luxury. We must produce the great bulk of the timber which we need
ourselves and we have the resources for doing so. =

The solution of the problem presented by forest depletion in the United States is a national policy of reforestation. Increased
and widely distributed production of wood is the most effective attack upon excessive prices and monopolistic tendencies. Depletion
has not resulted from the use of forests but from their devastation, from our failure, while drawing upon our reservoirs of virgin timber
to also use our timber-growing land. If our enormous areas of forest growing land, now idle or largely idle, which are not required for any
other economic use, can be restored to timber growth, a future supply of forest products adequate in the main to the needs of the country
will be assured.

I therefore most earnestly request your consideration of the practical measures proposed in the accompanying report for putting a stop
to forest devastation and restoring our idle land to timber production. I would emphasize especially the immediate urgency of legislation
(1) which will permit effective cooperation between the Federal Government and the several States in preventing forest fires and growing
timber on cut-over lands, and (2) which will greatly extend the National Forests. Enlargement of the National Forests offers immediate
relief. On these publicly administered areas high quality timber can be grown and utilized to the maximum advantage; regrowth will
follow cutting; and, under the regulations of the Forest Service, the disposal of timber will foster competitive conditions in the lumber
industry. These steps are the foundation of an effective national policy for insuring a permanent and adequate supply of timber.

Concurrently with these measures, a comprehensive survey of the forest resources of the United States should be made.

Respectfully yours
; E. T. Merepiru, Secretary.

JunE 1, 1920.

The honorable the SecRETARY OF AGRICULTURE.

Sir: I transmit herewith a report on forest depletion and related questions which has been prepared by the Forest Service in response
to Senate resolution 311. The existing quantities and current growth of a resource so great in extent and so widely distributed as wood
can not be stated in exact terms. To obtain strictly accurate and final data on these subjects would require an exhaustive field study
covering at least two years. In order, however, to present the situation as clearly and concretely as possible, I have felt it desirable to use
the best quantitative data available, recognizing that much of it is but tentative or approximate in character.

A large number of men in the Forest Service have participated in assembling and compilation; but the report is principally the work
of Assistant Forester Earle H. Clapp, in charge of the Branch of Research.

Respectfully, W. B. GReeEey, Forester.
TIMBER DEPLETION, LUMBER PRICES,

LUMBER EXPORTS, AND CONCENTRA-

TION OF TIMBER OWNERSHIP.

REPORT ON SENATE RESOLUTION 311.

‘The following report is submitted in compliance with Senate
resolution 311 (66th Cong., 2d sess.), introduced by Senator
Capper and considered and agreed to by the Senate on Febru-
ary 21, 1920. The resolution provides:

Whereas it has been reported that the forest resources of the
United States are being rapidly depleted, and that the situa-
tion is already serious and will soon become critical; and

Whereas these alleged facts are either largely unknown to the
public or are in dispute: Therefore be it
Resolved, That the Secretary of Agriculture be, and he is

hereby, directed to report to the Senate on or before June 1,

1920, on the following matters, using what information the For.

est Service now has available, or what may be obtained readily

with its existing organization:

1. The facts as to the depletion of timber, pulp wood, and
other forest resources in the United States.

2. Whether, and to what extent, this affects the present high

 

cost of materials.

3. Whether the export of lumber, especially of hardwoods,
jeopatdizes our domestic industries.

4. Whether this reported depletion tends to increase the con-
centration of ownership in timberlands and the manufacture of
lumber, and to what extent; and if such concentration exists,
how it affects or may affect the public welfare.

A comprehensive and fully adequate report on these matters
would require an exhaustive survey of the forest resources of
the country, their ownership, the industries dependent on them,
and the general related economic conditions. No such survey
has ever been made. Nevertheless, data already available or
secured throw much light on the subjects of inquiry.

Depletion and the effect of depletion on prices are so interre-
lated that sections 1 and 2 of the resolution are considered
together.

EFFECTS OF SCARCITY AND HIGH PRICES OF FOREST PRODUCTS UPON REPRESENTA-
TIVE INDUSTRIES.

To illustrate the general situation, the salient facts regard-
ing a few representative industries are first presented. They
are chosen because of the extent of their raw material demands,
their basic character industrially, and the way in which they
touch, directly or indirectly, the life of our entire population.
They are: General building and construction, farming, the
railroads, the furniture, veneer, handle, vehicle, and agricul-
tural implement industries, and the newspapers.

A shortage in housing accommodations that is almost world-
wide has brought home vividly the close relation of puilding
to the comfort, health, and general welfare of the public. When
for any reason construction falls below normal, overcrowding,
high rents, lowered standards of living, and other evils follow.
Therefore first place will be given to a discussion of conditions
in the general building and construction industry.

GENERAL BUILDING AND CONSTRUCTION.

More lumber is used in the United States for general building -
and construction than for any other purpose. In normal years
probably 28 billion board feet is used in this way out of an
average annual cut of 40 billion.

For the five years before the war, 1910-14, the average annual
building bill of the country shown by building permits was
approximately $670,000,000. After dropping to $445,549,493 in
1918, it rose in 1919 to $1,326,936,702; but with building costs
increased 100 per cent or more, actual construction did not
much, if any, exceed the prewar average. Apparently all con-
struction work in the United States is behind requirements, but
the deficit is greatest in dwelling houses.

The building permits issued in 21 cities of various sizes widely
distributed over the country show that, in values, housing con-
struction formed 36 per cent of all building in 1918, 21 per cent
in 1918, and 27 per cent in 1919. Housing construction in 1913
was exceeded in 1918 in only two of the 21 cities, and in 1919
in only 6, in spite of the “ build-a-home ” campaign. The falling
off in house construction generally appears to have been par-

.lumber prices.

 

ticularly marked since the latter part of 1919, when the greatest
upward movement of lumber prices began.

The United States Housing Corporation states that normally
80 per cent of the number of buildings constructed are dwellings ;
that in 1919 dwellings were only 15 per cent; that 1,000,000
families in the United States desired houses even before the
war; that the shortage has since increased very rapidly; that
there were but 70,000 houses built in 1919, when to have met the
requirements there should have been 500,000; and that in 1890
an average of 1103 families occupied 100 homes, but to-day 121
families occupy 100 homes. The construction of houses in 1918
was less than in 1919.

A part of the reason for delayed house construction, particu-
larly in the latter part of 1919 and in 1920, is abnormally high
The Pittsburgh home builder of 1913 paid $27
per thousand board feet for his No. 1 common dimension 2 by 4
framing $72 in 1920. Sheathing lumber, No. 2 common yel-
low pine, cost him $26 in 1913 and $80 in 1920. Yellow-pine
finishing lumber increased from $42 to $140. If he used plain
oak finish instead of southern pine, he paid $85 in 1913 and $260
in 1920. Yellow-pine siding rose from $36 to $120, B and better
flat-grain. flooring from $38 to $142. Plain oak flooring cost in
1913 $70 per thousand feet and in 1920 $290, and quartered
oak rose in the same period from $102 to $352.

The total cost of houses has increased proportionately. A
frame house built in Washington, D. C., in 1917 for $6,250 is
now being duplicated from original plans at a cost of $12,250.
A St. Paul architect reports that a house was built for $4,240
in 1915, not including plumbing, heating, and wiring, and that
a house built from the same plans in October, 1919, cost $7,724,
while for identical plans in February, 1920, the cost rose to
$11,820, or 179 per cent over the 1915 price. The lumber and
millwork costs in 1920 were $5,039, or $799 more than the total
cost of the house in 1915. All of the items increased in 1920
over 1915, but with the exception of an insignificant item for
a bond the percentage increases for lumber (304 per cent) and
millwork (222 per cent) were the highest, Ona six-room frame

7
8. TIMBER DEPLETION, PRICES,

house built in Washington, D. C., for $4,771.60 in 1918 bids on
identical plans in May, 1920, total $11,465.50.

The lumber for a ready-cut, one-story, five-room house which
was listed at $883 in 1915 had been raised to $3,272 in April,
1920, a total increase of 270 per cent. Another company dealing
in ready-cut. houses listed the material for a two-story seven-
room house at $1,995 in 1915 and now lists it at $5,606.90, an
increase of 181 per cent.

Lumber prices alone do not tell the whole story. The person
who builds a house faces a series of difficulties in securing his
materials; delays, many of which enter materially into increas-
ing costs; many of the grades desired, particularly the better
grades, can not be secured easily, sometimes not at all.- Very
often the lumber secured is not properly dried and compara-
tively inferior and unsatisfactory construction results. This
situation, combined with delays in securing materials, labor
difficulties, etc., makes the construction of a dwelling house a
highly uncertain and speculative venture, takes it entirely out
of the reach of large numbers of people, and leads to a gradual
lowering of standards of living. Classes of industrial construc-
tion which can go forward regardless of uncertainties and
costs are able to pay lumber prices which the ordinary home
builder can not afford and increase the element of specula-
tion in the business of building houses for sale or rental.

FARMING.

Farms consume a very large aggregate of construction lum-
ber. Cheap high-grade building material aided powerfully in
the rapid development of farm lands. The Middle West, for
example, was built up largely with the output of white pine
lumber from the Lake States. In the eighties first quality white
pine lumber such as can now hardly be found in any market
in the United States commonly retailed throughout the Middle
West for $15 to $20 per thousand feet. In February, 1920, the
farmer in Kansas paid $70 per thousand for yellow pine framing
and about the same for Douglas fir. For No. 2 common lumber
suitable for temporary sheds and rough construction, either fir
or southern pine, he paid $72.50. B and better yellow pine
finishing lumber for house construction cost $147.50. Silo
stock cost $185.

To ascertain the effect of present lumber prices and short-
ages upon the farming industry, questionnaires were sent to a
large number of agricultural county agents employed coopera-
tively by the Federal Government and the States in 33 States
lying east of the Rocky Mountains, and similar questionnaires
were also sent to a large number of retail lumber dealers sup-
plying country trade in seven Middle Western States. 5

County agents throughout practically this entire territory re-
port a marked suspension in new construction and even in farm
improvements and repairs requiring lumber. Out of some 250
counties in 32 States only about half a dozen agents reported
more building than in the past. New building is reported as
going on normally or in excess of normal in only 10 out of
every 100 counties, and this in regions of exceptional pros-
perity. In the Prairie States, from Illinois north and west, re-
pairs are reported by lumber dealers as deferred to an extent
of about 32 per cent, and new construction as somewhat less
than 50 per cent of normal. The average yearly amounts of
lumber sold per yard in farming districts of Nebraska and
Kansas were slightly more in 1919 than in 1917 or 1918, but be-
low the prewar average of 1910 to 1915. The widespread de-
ferment of building is almost uniformly laid to a combination
of high lumber prices and shortages of Jabor.

Lumber dealers for several of the Middle Western States
report Jumber stocks on hand as above normal. This is to
guard against delayed shipments, to be able to supply antici-
pated increase in demands, ete. Apparently throughout much
of the region covered supplies could usually be secured in the

 

EXPORTS, AND OWNERSHIP.

desired amount and quality if prices could be- -paid. Locally,
however, the pronounced changes in lumber distribution of the
past year have apparently made it difficult to secure desired
materials and qualities without delay. The difficulties were
greater with the better grades than with common lumber, and
they occurred even in the heart of the manufacturing district
in the South, because of excessive demands and competition for
this class of material.

An attempt was made also to get at normal and probable
future lumber requirements of the farming industry. The esti-
mates of county agents indicate an average annual utilization
per farm unit of about 2,000 board feet. For practically the
entire region covered an increased future demand for lumber
is predicted in order to take care of improvements looking
toward better equipment and improved living conditions, provi-
sion for increasing population, and the development of new
farm units. This is important, in the face of falling lumber
production in all parts of the country except the extreme West.

Righty per cent of the county agents report that the ex-
tremely high prices of lumber are placing a handicap on farm
development and the production of crops and live stock. The
most serious effect reported appears to prevail throughout the
sparsely timbered regions, where in cases of emergency the
farmer is not able to secure supplies from the farm woodland.
Livestock raising and dairying seem to be the hardest hit,
because of the large barn equipment and shelter necessary. It
is reported that heavy losses of implements and crops are re-

sulting from lack of proper storage facilities. In some of the
newer sections it is even reported that farmers who have not

yet reached a stable financial basis are leaving the land because
of the cost of new construction. It is reported from all parts
of the territory covered that present conditions are tending to
lower the standards of living and to make it more difficult to
hold on the farm the farmer’s own children and desirable
classes of labor.

THE RAILROADS.

The normal demand for railroad ties is somewhere between
100 million and 125 million annually. In 1918, however, pur-
chases were slightly under 77,500,000 and in 10 months of 1919
were slightly over 84,500,000. During the war and the period of
Government supervision of the railroads extensions could not
be made, and improvements were necessarily confined to those
of an urgent character. Lumber purchases were therefore at
a minimum. Even under such a policy of retrenchment rail-
road purchases of sawed materials, excluding hewn railroad
ties, telephone poles, etc., aggregated approximately 43 billion
feet, or 14 per cent of the total lumber cut of the country for
1918.

That there have been profound changes in the lumber dis-
tribution from different regions during the past year is shown
by the invasion of the Middle Western and Eastern States by
Douglas fir ties. These are regions which in the past have been
supplied with the standard oak tie cut immediately along the
rights of way or with southern pine ties from the South.
During 1919 orders amounting to nearly 100,000,000 board feet
were placed for Douglas fir ties for eastern roads because of
the uncertainty of securing adequate supplies along their rights
of way and because of the excessive costs of local ties. Doug-
las fir ties are now said to be costing eastern roads from $1.75
to $2 each at their treating plants or on their rights of way.
In other words, oak ties cut within a few miles of the right
of way and bearing practically no charge in freight and south-
ern pine ties are now being replaced by fir ties hauled overland
across the continent or shipped through the Panama Canal.

To supply their general lumber requirements the railroads
have obvious advantages in the purchase of lumber from mills
along their lines, and increases in prices have been far less
TIMBER DEPLETION, PRICES,

pronounced than for other industries. During the last four
years, however, the cost of lumber purchased has almost
doubled, while the amounts have been reduced. Under the
great financial burdens of readjustment and reconstruction
following the war added costs of any important material delay
even the most needed repairs and betterments and add to trans-
portation difficulties, which react upon all industries and con-
sumers. Uncertainty as to securing adequate supplies of de-
sired materials at the time wanted has made it necessary for
railroad companies in general to hold comparatively large sur-
pluses, a tendency which serves to accentuate shortage for all
purchasing industries. Railroads operating in the forest re-
gions ordinarily carried a few years ago but from one to two
weeks’ supplies, since stocks could be replenished quickly.
Other roads carried stocks sufficient to last several months.
The timber roads are now carrying from 6 to 10 weeks’ sup-
plies and other roads sufficient to last from 6 to 9 months.

THE FURNITURE INDUSTRY.

The furniture industry is one of a group of industries which
utilize mainly high-grade hardwoods and have had much the
same history. They began in the Northeast, where for many
years the local supplies were ample for their needs. The
waning of these supplies forced the industries westward, where
they rapidly expanded in the last quarter of the nineteenth
century, drawing mainly on the magnificent virgin hardwood
forests of the Middle West. Within the last 15 or 20 years
they have been forced to turn more and more from the depleted
and vanishing stands of the States along the Ohio to the timber
northward and southward. Their present sources of supply
are very largely the remoter and more inaccessible portions
of the Southern Appalachians and the lower Mississippi Valley.
When these forests are cut out the industries will have ex-
hausted practically their last large resources of old-growth
timber. ‘

Besides furniture the group includes the veneer, handle,
vehicle, and agricultural-implement industries. These all com-
pete among themselves for raw material.

Before the end of the summer of 1919 the demand for furni-

* ture had assumed such proportions that the normal production
of the large factories during the current season had been almost
wholly contracted for, with many retailers uncared for. The
immediate result was a corresponding demand for lumber on
the part of the furniture-manufacturing industry, which nor-
mally uses about 13 billion feet, and is the largest consumer of
high-grade hardwood timber in the United States. Hardwood
lumbgr stocks following the war were low and have since gone
to aS low as half the normal; production has fluctuated down-
ward to a minimum, in some districts of as low as 50 per cent
of normal, so that it has been the practically universal ex-
perience of furniture manufacturers that desired supplies of
raw material could be secured only with the greatest difficulty,
particularly during the past six months.

The veneer situation has been equally bad; orders for sawn
oak veneers are said to be 100 per cent greater than stocks,
and sliced and rotary veneer equally difficult to secure. For
this and other reasons production of furniture, in the face of
unprecedented demands, is from 15 to 25 per cent below
normal, and many factories face shut downs because of in-
ability to secure raw materials. Individual furniture manu-
facturers bid against each other for the inadequate supplies
of lumber and veneer available, while their industry competes
with the automobile, musical instrument, and other manufac-
turers similarly situated. The only factories which are not
having serious trouble in getting wood supplies seem to be the
small plants which can get local timber and which make com-
paratively low-grade furniture.

Difficulties have been aggravated by lack of facilities in both
the lumber and the furniture industries for artificial drying of

186212—20-_2

 

EXPORTS, AND OWNERSHIP. 9

wood. In prewar practice hardwood lumber was ordinarily
air seasoned for six to nine months before sale. Furniture
dealers are now purchasing material practically green from
the saw, involving heavy additional freight charges. While
the uncertainty as to securing material and the need for a long
drying period justify the carrying of larger stocks at the
factory, it is reported that furniture manufacturers have on
the average only about one-half of the stoeks carried before the
war. Supplies have been so limited and uncertain that lumber-
men have refused to take contracts for their output at any
specified price and have even refused to give buyers an option
on any stated amount of lumber at market prices on delivery.
Competition has become so keen that buyers have been ordered
to secure lumber almost regardless of price.

Naturally prices have jumped under such competition. While
there has been an increase during the past four years in prac-
tically every item entering into furniture production, the larg-
est increase has been in the cost of lumber. Roughly, lumber
costs increased about 200 per cent during the year 1919, and
a total of 300 per cent since before the war. Something like
75 or 80 per cent of the raw material for furniture manufacture
is lumber or plywood. Average prices paid by furniture fac-

‘tories on No. 1 common 4/4 red gum were in January, 1916,

approximately $27.50 per thousand Loard feet; in April, 1919,
$49.50; and in April, 1920, $170. No. 1 common 4/4 sap gum
rose from $24 in January, 1916, to $95 in April, 1920. No. 1
common 4/4 plain oak, another wood lgrgely used in furniture
making, during the same periods increased from $37.50 to $160.
Quartered oak, firsts and seconds, 4/4 increased from $90 in
January, 1916, to $310 in April, 1920; and No. 1 common 4/4
basswood, from $29.50 in January, 1916, to $125 in April, 1920.
Wholesale veneer prices have risen in proportion; between
January 1, 1916, and April 1, 1920, 4 inch gum increased from
$16 to $60, #5 inch and v inch gum, from $4 to $16; 3 inch
poplar, from $16 to §65; and quartered white oak on the ave.-
age, from $17 to $52 per thousand square feet.

Higher lumber prices are multiplied in retail prices of furni-
ture. This may be illustrated by a single example. The lum-
ber for a medium quality plain dresser cost $2.72 in March,
1919, while in February, 1920, the same material cost $7.65, an
increase of practically $5. Dealers are reported to add usually
from 75 to 100 per cent to the factory price to cover their
own selling costs and profit. An increase in lumber cost to the
furniture manufacturer of $5 adds from $9 to $10 to the re-
tail price, and the purchaser of the dresser actually pays for
the lumber which goes into it three or four times prewar prices.

Such conditions as have existed during the past year—and
the lumber situation has been a material factor in this—have
injected a very large speculative element into the furniture
industry. In many cases the furniture maker is not sure of
his lumber or what it will cost until the time of its delivery.
He can neither plan future output nor estimate future costs,
He safeguards his own interest through higher prices to the
retail dealer, who, in turn, can be certain neither of the filling
of orders nor of the cost of his stock until delivered. All of
this uncertainty and speculative character encourages, and
to some extent necessitates, increased prices all along the line,
including finally the price to the consumer, who pays not only
for increased costs but for business risks. Furthermore, pur-
chasers, since they must pay high prices, demand high-grade
furniture; and this, together with the widespread disappear-
ance of local timber supplies, makes more and more difficult
the position of the small factory producing comparatively low-
priced furniture, and tends to centralize manufacture in the
larger concerns. :

THE VENEER INDUSTRY.

Veneer manufacture isa rapidly growing industry which sup-
plies furniture makers, manufacturers of musical instruments,
10 TIMBER DEPLETION, PRICES,
the automobile industry, box makers, etc. For high-grade
veneer hardwoods are used almost’ exclusively. The industry
consumes annually the equivalent of about 780 million board
feet of high-grade material, the bulk of which can be secured
only from virgin stands. The demand among hardwoods is
chiefly for red gum and, second, for white oak. One section of
the industry, which uses such northern hardwoods as maple,
birch, and basswood, is located in the Lake States. As in the
case of many other hardwood-using industries, the veneer in-
dustry has for some years been centered mainly in the Middle
Western States. Supplies, at first local, are now largely in the
South, and the main demand has been transferred from oak
to gum.

The veneer situation is similar to that described for other
forest products—short supplies, abnormal demands, and com-
petition, in this case among such consumers as phonograph
makers, manufacturers of other musical instruments, the auto-
mobile industry, and furniture manufacturers. As indicated in
the preceding discussion on the furniture industry, wholesale
veneer prices have increased from three to four times between
January 1, 1916, and April 1, 1920.

Log prices have risen in proportion. Indiana white-oak logs,
20 inches and over in diameter, have increased during the
same period from $75 to $200, and flitches from $100 to $300
per thousand board feet.

In general, there is only one-fourth of the normal supply of
veneer flitches and logs in sight. Practically the only firms
not experiencing extreme difficulty in securing supplies seem
to be those factories which can still obtain local timber. In a
few agricultural regions reserve stocks in farmers’ wood lots
have been drawn out by the current high prices. The scarcity
of logs has compelled some factories to close down. Veneer
and ply-wood production, while nearly normal in September,
1918, had fallen approximately to 80 per cent between January
and March, 1919, to 60 per cent in November, to 50 per cent
in December, and is now estimated at not over 40 to 50 per
cent.

The veneer industry requires high-grade material. It takes
practically clear logs, generally 16 inches and more in diameter
at the small end. The industry must, for its higher-grade prod-
ucts, depend very largely upon the fine old timber found al-
most entirely in virgin stands. The general depletion of hard-
wood stands has made the industry, along with many others
which accept only high-grade material, primarily dependent
upon the only reserve of virgin hardwoods of any extent—the
southern Mississippi Valley. Here logging operations have been
seriously handicapped by adverse weather and other conditions,
and as a result log supplies for the industry as a whole have
fallen off 75 per cent. Veneer and ply-wood production have
fallen off 50 per cent, wholesale prices have gone up from
three to four times, and manufacturing concerns in the same
and competing industries are bidding frantically against each
other to secure the inadequate supplies of veneer stock avail-
able in order to meet their current demands. The consumer
pays the full bill of increased log and veneer prices, and
undoubtedly more, in the advancing prices charged for final

products.
THE HANDLE INDUSTRY.

For the high-grade hickory and ash required by the handle
industry no satisfactory substitute has yet been found, and
these two woods make up about two-thirds of the total used.
The supplies now come mainly from the South. Here the most
accessible timber has been taken. The few large concerns main-
tain large and expensive organizations, which literally comb
the country to secure material. More and more it is becoming
necessary to work into the districts remote from transportation
facilities. Practically the entire territory within which hickory

 

is found in commercial quantities is thus covered.

EXPORTS, AND OWNERSHIP.

In the case of ash the situation is said to be even more serious.
The industry has preferred the denser northern upland ash for
handles. The swamp-grown ash of the Mississippi bottom lands
has a smaller percentage of the dense material and has been
less sought up to the present time. This has greatly limited the
area from which the wood has been secured. Ash-in sufficient
quantities to support the handle and other competing industries
is practically gone, therefore, from the Middle Western States
north of the Ohio. It is predicted by one man thoroughly fa-
miliar with conditions that five years more will practically see
the finish of ash timber in any quantity in this section.

The demand for ash and hickory handles is so great that
manufacturers can not meet requirements. The export demand
is said to be even greater than before the war and American
handles are being shipped to all parts of the world. ;

Average prices of handle material are practically unobtain-
able because of the great variety in which such material is
purchased—logs, bolts, dimension sizes (split, hewn, and sawn),
fliteh, and plank. While prices quoted are from two to three
times those which obtained before the war, manufacturers state
that in practice they are paying any price necessary to get
supplies. They find themselves in active competition with other
industries requiring hickory and ash, and particularly with the
manufacturers of automobile wheels.

Average wholesale prices of standard size hickory handles 36
inches long have advanced from $1.20 per dozen in 1916 to
$2.50 per dozen in 1920. Retail prices, which were from 25 to
80 cents per handle in 1916, are now 50 cents.

One of the effects of the exhaustion of local timber is the
gradual elimination of the small handle factory. When timber
can no longer be secured locally, the only source of cheap sup-
plies, large organizations become essential in order to cover a
large territory. Without the necessary capital for this the
small concern must give way to the large manufacturer. There
is said to be a steady drift toward concentration of handle
manufacture by large concerns and the disappearance of local
industries.

THE VEHICLE AND AGRICULTURAL IMPLEMENT
INDUSTRIES. .

The vehicle and agricultural-implement industries compete
for hickory and ash with the handle industry, and in addition
use other hardwoods, such as oak, for which they must com-
pete with such industries as the furniture makers. They are
located mainly in the Middle West, but now derive most of
their wood supplies from the South. A number of far-sighted
organizations are said to have purchased more or less extensive
hardwood tracts some years ago, from which they are now able
to draw their wood supplies in part at least. For the re-
mainder they depend on outside purchases.

To secure hickory, which occurs scatteringly over large areas,
the vehicle and agricultural-implement industries ordinarily
maintain extensive buying, logging, and milling organizations
in the South. They draw upon every conceivable source—
farmers’ wood lots, small mills, large Sawmills, and even special-
ized operations designed to secure hickory alone,

These concerns in general carry in stock about a two years’
supply of special-dimension stock. Hardwood lumber prices
have now gone so high that a number of them are making pur-
chases in the open market only when prices do not exceed a
prescribed maximum, and amounts secured have fallen to
about one-quarter of their utilization. These industries have
found in the case of farm implements that it is impossible to
increase the prices of their products beyond a certain point
without a marked falling off in sales. The result is that the
material in the open market goes to the industries which are
able to pass increased costs on to the consumer. Another result

has been the withdrawal from the field of a number of pur-
chasing organizations,
TIMBER DEPLETION, PRICES,

Practically the only case in the vehicle and implement in-
dustries in which the scale of buying has not been reduced is
for automobile wheels and other automobile purposes. Here
demand absorbs all the supply, is constantly becoming greater,
and as yet there seems to bé no limitation as to price. Makers
of automobile wheels say that they can still get the material
required if they make sufficient effort and pay the price, but it
is necessary to go farther and farther away for it. A very
careful analysis of cost data by one concern shows that the
largest element in recent cost increases is securing special
stocks such as hickory from remote and inaccessible regions.

The preceding discussion applies particularly to the large con-
cerns. Small factories without large organization and outside
connections for securing supplies are laboring under more
serious difficulties, through the interruption of normal chan-
nels of distribution.

Material is secured practically green. Neither the lumber
nor the vehicle industry is adequately equipped with kilns or
the trained personnel to kiln-dry the refractory hardwoods in
the large sizes used. Excessive losses, in some cases running as
high as 40 per cent of the material and even higher, are re-
ported. This is merely another phase of the situation hardly
known outside of the industries most directly concerned, grow-
ing directly out of a shortage of supplies and aggravating the
shortage still more.

The many inquiries received by the Forest Service from
vehicle and implement makers asking for information on pos-
sible substitution for the woods used in vehicle making is merely
another indication of the difficulties in getting supplies at the
present time, and of uncertainty as to the future. Because of
the trouble and uncertainty of securing hickory and the rapidly
increasing prices, vehicle manufacturers are substituting steel
where possible, even though this involves still higher prices.

THE NEWSPAPERS.

High prices and serious difficulties as to supplies are by no
means confined to lumber. The newsprint situation has been
very much in the foreground, particularly since the middle of
1919. Practically the only newspapers in the United States,
from the large metropolitan dailies to the small country news-
papers published weekly, which have not experienced serious
difficulties are those having long-term contracts or those for-
tunate enough to produce their own newsprint.

Under prewar conditions newsprint paper was eontracted
for on a yearly term basis at $2 a hundred pounds or less.
Contract prices during and since the war have risen to $3.50, $5,
$6, and at the present time even to $7, and it has been reported
that 75 per cent of the existing contracts provide for a price
readjustment at the end of every three or six months. Pre-
war prices included freight; present prices do not. Few news-
papers are now able to contract for their entire requirements.
The smaller newspapers entirely and the larger papers to a very
material extent must now depend upon the spot market, in
which the full effects of competition for an inadequate supply
are felt. In such competition there is full opportunity for specu-
lation. Prewar spot market prices of about $2 have risen rap-
idly, particularly since January, 1920, until now sales reported
at $15 as a maximum, and even higher rates are predicted. At
$15 the paper alone for a 32-page newspaper would cost ve
eents. One eastern newspaper, with a consumption of 6,000
tons, has estimated that its 1920 paper bill will be $72,000 ue
excess of that for 1919. A western paper estimates that its
1920 paper bill will be $450,000 more than that for 1919.

The cost of newsprint is said to be from one-third to one-
half the total cost of the entire newspaper. To meet increased
costs publishers must increase revenues either by raising sub-
scription prices or advertising rates, or accepting more advertis-

 

ing. The acceptance of more advertising means either the use

EXPORTS, AND OWNERSHIP. ' il
of more paper or the elimination of reading matter. The ratio
of reading to advertising matter before the war is said to have
been about 60 to 40, and it is reported that this ratio is now
reversed. Some increases have been made in subscription rates,
but the chief source of larger returns has been through more
advertising and higher advertising rates. The newspapers which
have not been able to increase the amounts of advertising and
advertising rates have been hard hit. Advertising rates during
the past year have risen 35 per cent or more. Increased ad-
vertising costs, designed partly to pay increased operating
expenses and partly to reducé newsprint consumption, are passed
on to the consumer.

Newspapers have been driven to extraordinary measures.
Advertising has been refused. One New York paper is reported
to have refused six pages of advertising for a single issue.
Another New York paper is reported to have refused for a
single issue advertising which would have returned $14,000.
Attempts have been made to eliminate waste, and the size and
number of editions have been cut. Features have been cur-
tailed or eliminated, the proportion of advertising to reading
matter has been largely increased, and efforts to increase cir-
culation have been suspended.

Unfortunately the situation is generally regarded by the
public as a whole as one which can be easily remedied within
a few months, and it is not realized that the life of the pulp
and paper industry in the regions of its present development
is absolutely dependent upon rapidly failing timber supplies,
while little or no effort is being made toward their perpetuation.

THE SITUATION SUMMARIZED.

If the industries considered are representative of general
conditions, and there is every reason to believe that they are,
the lumber situation of the past few months has, for many
industries and many classes of consumers, been one of serious
shortages of supplies, of great demands, and of uncertainties
in securing satisfactory amounts of desired materials. Rapidly
rising prices have reached the highest points that have ever
been known for lumber and for practically every other forest
product consumed in the United States. Market conditions
have been unstable, and it has been impossible for many con-
sumers to plan with any certainty on cost of materials. The
output of industries which depend upon lumber and other wood
products has been very much reduced, and in an extreme case
has gone as low as 50 per cent of normal.

The entire nature of competition in the case of forest prod-
ucts has changed. Prior to the war the producers of lumber,
newsprint paper, and other forest products competed with
each other for business. Competition during the past few
months has been very largely among consumers for generally
inadequate supplies. Under any conditions such a reversal in
the fundamental situation would result in higher prices; but
the shortage and demands have been so extreme that whole-
some restraints as to prices which might safely be paid have

been removed, and in many cases it has been possible to pass

on to the consumer, and even to augment, almost any lumber
price increases. This has not been universally true. There
has been some difference between industries in the extent to
which they could go. Apparently limitations have been felt
more by industries producing the necessities than by those with
products which fall rather in the class of luxuries.

The furniture maker finds himself handicapped in competing
with the maker of musical instruments. The manufacturer of
agricultural implements withdraws his buying and manufac-
turing organizations from the field because he can no longer
compete with the manufacturer of automobile wheels. The
large and well-financed organizations, able to draw their sup-
plies from distant sources, have fared much better than the
small manufacturer with limited capital who must secure his
12

raw material locally. Unfortunately, in most cases it is the
local supplies which have been most depleted, and the existing
situation has tended to eliminate much more rapidly than in
normal times the small concern in the best position to supply
cheap products.

With uncertainty as to supplies, with equal or greater uncer-
tainty as to the costs, and with almost frantic bidding between
members of the same industry and between different industries
for materials, a larger speculative element than has ever before
been known has been introduced into the sale of lumber and its
further manufacture. This, again, has increased prices to the
ultimate consumer, and in extreme cases, such as dwelling
houses, has removed the possibility of purchase from large
classes. Many industries which were operated.on a compara-
tively stable basis under prewar conditions now find themselves
upon an uncertain and highly speculative basis.

Other changes which are much less known, but almost equally
bad, might be mentioned. One will suffice. The hardwood-
producing industry commonly held its stocks for several months
or a year for seasoning. Consuming industries commonly car-
ried in stock supplies sufficient to meet one or even two years’
requirements. When material was needed it was already sea-
soned for manufacture. Artificial methods ot drying were

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

largely unnecessary and neither equipment nor personnel was
provided. Growing out of the conditions described, a very great
increase in artificial drying has become necessary; and this
has been accompanied by difficulties in securing an adequate
number of kilns and great losses in initial kiln operating, some-
times reaching 40 per cent or even higher and aggravating the
shortage.

Enough examples have been given to show the almost. limit-
less ramifications through which shortages and high prices of
forest products reach the public. The building industry, agri-
culture, the railroads, the press, house furniture, tools—these
and their like concerr. our entire population. Shortages and
high prices, accordingly, seriously affect the whole Nation.

With a realization of the existing situation with respect to
representative industries and classes of consumers, the facts as
to depletion and prices acquire greater significance, and it is
possible to analyze to better advantage the factors which are
responsible. The discussion falls logically under two heads:

1. The abnormal conditions which have affected the forest
industries and their products along with all other industries and
commodities.

2. The cunulative effect of forest depletion, both in the coun-
try as a whole and in the more important timber regions.

ABNORMAL CONDITIONS IN RELATION TO PRESENT SCARCITY AND HIGH PRICES.

The principa! effect of the war upon the lumber industry was
to reduce the stocks available for ordinary purposes, through
curtailment of production and through the diversion of large
quantities of timber to special war uses. War requirements led
to the placing of large orders for unusual sizes and dimensions
for such products as Army wagons and wooden ships. Through
Government regulation of transportation, of the use of capital,
of new construction, and even of extensions and repairs, ordi-
nary distribution was practically discontinued before the sign-
ing of the armistice. The lumber cut of the country fell from
a prewar average of around 40 billion feet to a reported cut of
only a little more than 38 billion feet in 1917, and of less than
30 billion feet in 1918. A very considerable proportion of this
material, as previously indicated, was utilized for essential
war purposes.

Surplus woods and mill labor, skilled and unskilled alike,
was rapidly drawn into other industries or into the fighting
forces. In addition the lumber industry found itself in com-
petition for labor with other industries producing war essen-
tials. By the time of the cessation of hostilities a very con-
siderable percentage of the labor ordinarily employed in lumber
production had been diverted and scattered. Lumber stocks at
the mills and those in the wholesale and retail yards of the
country were very short and badly broken. The industry, there-
fore, came out of the war more or less disorganized as to labor,
production, stocks, and markets.

Following a period of great uncertainty on the part of
the public, as well as of the industry, as to possible develop-
ments, the demand for lumber began and rapidly grew far be-
yond any anticipation. The shortage of houses was already
serious in the United States at the beginning of the war. Dur-
ing the war it became very much worse. Without any stimulus
whatever the demand for dwelling houses would have absorbed
large quantities of lumber. The “ build-a-home ” movement was
fostered by the Federal Government itself.

Industrial construction had during the war also fallen far
behind the growing demands of the country. Railroad purchase
for repairs had necessarily been held to a minimum and exten-
sions had practically been eliminated. The growing freight
requirements of the country necessitated large-scale betterments
and material extension. Similar demands had piled up during
the war in practically all of the industries which use lumber.

 

This accumulated demand soon absorbed the short stock avail-
able, and lumber manufacturers were overwhelmed with orders.

The lumber industry found itself unable to increase produc-
tion rapidly. The output in 1919 was below normal in all the
principal lumber regions of the country, with the possible
exception of the South. In many of the former regions of large
lumber output, the Lake States, New England, New York, Penn-
sylvania, and the Southern Appalachians, the timber is so
largely gone that there was little opportunity for material ex-
pansion in cut to meet abnormal demands. In regions with
timber reserves other factors have held the cut down.

In the southern pine region bad weather hampered logging
operations during the latter part of 1919. Precipitation was
far above the average. This reduced the log production, and
even caused shortages which compelled many mills to run on
part time. During the first 11 months of the year 185 sub-
scribing mills reported to the Southern Pine Association a
total loss of 80,213 hours, or approximately 60 working days
each, 41,878 hours or 31 working days each, being due to a
shortage of logs. On the basis of normal production this loss
represented a decrease in production for the 135 mills of nearly
600,000,000 feet.

In the southern hardwood region weather conditions have
been unfavorable since the fall of 1918. In the fall of 1919
the conditions, already very bad, became much worse, and
effective logging or in some cases any logging has become
practically impossible through repeated rains and floods. WNor-
mal log deliveries for one group of hardwood mills in October
and November, 1919, were but one-third of the quantities deliv-
ered during the same months in 1916.

Some of the labor drawn away from the lumber industry
during the war preferred other employment and remained in
the towns and cities or in other sections of the country. It
is estimated that southern pine operators were confronted
with an average labor shortage of 20 per cent, and in many
other lumber-producing regions operators found themselves un-
able to secure and hold full crews. : -

The industry has been obliged to pay higher wages and grant
shorter hours, and has possibly suffered from decreased effici-
ency. In the case of one operation in the South it required 23
man hours in July. 1914, to produce 1,000 board feet of lumber,
while in July, 1919, it required 874 man hours. Again, in July,
TIMBER DEPLETION, PRICES,

1914, it required 134 men on the payroll to maintain a full crew
of 100 men per day, while in July, 1919, 153 men were carried
to maintain the same sized crew. Many operators in the
Appalachian hardwood region say that they hardly know from
day to day whether or not their mills will run. Illustrations of
this character could be multiplied almost indefinitely for all
parts of the country, but those already given sufficiently indi-
cate the general situation. The unstable character of the lum-
ber industry has been in no small degree responsible for its
inability to secure and hold a desirable class of labor, particu-
larly in logging.

Dependence upon the South and the Northwest for timber
has placed a greater burden upon the railroads of the country
than they could carry under the disorganization following the
war. The car shortage is estimated by various authorities at
from 200,000 up. It is reported from the southern hardwood
territory that only 60 to 65 per cent of the cars required for
logs and lumber can be obtained. The secretary of the Cali-
fornia Sugar & White Pine Co., a sales organization which
served 35 mills in 1919, reports materially curtailed shipments
in September, October, and November, due to a car shortage of
65 per cent. While the railroads do not altogether agree as to
the extent.of the shortage, it is certain that difficulties in secur-
ing cars, freight congestion, and embargoes have all served to
accentuate difficulties in securing lumber supplies. Lumber, as
one of the most bulky commodities, is always one of the first to
suffer in case of freight congestion.

A disorganized industry, short stocks, abnormal demands,
and reduced production have all contributed to high prices for
lumber. Even though it had still been possible to produce
lumber in quantity in each of the regions from which it has
been so largely depleted—New England, New York, Pennsyl-
vania, the Lake States, and the Southern Appalachians—lumber
prices would still have risen in response to other conditions
which have grown out of the war. Price increases for other
commodities are significant in this connection. As shown by
the Department of Labor statistics, the prices for all commodi-
ties had, considering the year 1890 as 100 per cent, risen to

STEADY PROGRESS OF

FOREST DEPLETION AND MIGRATION OF THE
LUMBER INDUSTRY.

 

Each successive chapter in the history of the lumber industry
in the United States has been a story of depletion and migra-
tion. In softwoods it is a history of regional industries, each
developing in its turn, dominating the consuming markets of
the country, and declining at last so far as to be unable to meet
the local requirements of its region. Each has had the same
essential features of beginning, rise, and fall from light culling
operations to clean cutting of good timber and poor alike and
of the shifting of cut from the more to the less desirable species.
The story of each region will be taken up in detail, but the main
outlines should first be made clear.

In New England lumbering early became a leading industry,
supporting local needs, furnishing the basis for the early ship-
building industry, and providing exports. The industry ex-
panded very slowly, and owing to the shifting of the cut from
one section to another, from one species to another, and finally
from virgin stands to second growth, partly on deserted farm
lands, production did not reach the maximum until as late as
1907. Since then it has been falling rapidly.

New York followed New England as the center of softwood
lumber producton and was the leading lumber State in the
country in 1850, although the greatest volume production was
reached from 10 to 20 years earlier. Pennsylvania followed
New York, and led all the States in 1860, but has now declined

 

EXPORTS, AND OWNERSHIP. 18
250 per cent in January, 1919, and to 293 per cent in December,
1919, with an average for the year of 263 per cent. Using 1918
as 100 per cent, prices for January, 1919, had risen to 208 per
cent, and in December, 1919, to 238° per cent. Regardless of
every other conceivable condition, a very substantial rise in
lumber prices would have been inevitable from such causes as
the enormous credit expansion growing out of the war and the
accompanying currency inflation, causes which are responsible
for large price increases in all other commodities. It is un-
necessary to dwell upon these general causes, but they must
be taken fully into account in any attempt to analyze the
extent to which timber depletion is responsible for price in-
creases.

Abnormal conditions affecting forest products have not ob-
tained alone in the case of the lumber industry. One further
example, that of newsprint, will be given. Because of war re-
quirements, newsprint paper production suffered less than
lumber. The industry was less disorganized and the response
to increased demand was much more prompt. The Federal
Trade Commission reports that newsprint production during
the fiscal year 1919 exceeded that of 1918 by 8 per cent. Pre-
war production had reached 1,313,284 tons in 1914. During the
20-year period preceding the war the demand for newsprint
had increased practically without a break by 200 per cent. Inci-
dental to the increase in demand which might have been ex-
pected normally there grew out of reconstruction the most
extensive use of advertising which the United States or possibly
any country has ever seen. Within the year national advertis-
ing increased greatly. Advertising as a whole in 1919, as shown
by nearly 100 newspapers in a little less than 20 of our largest
cities, increased over that of 1918 by approximately 40 per cent.
During the first two or three months of 1920 the amount of
advertising exceeded that for a similar period in 1918 by some-
thing over 50 per cent. This demand created, in spite of the
restriction of reading matter by the average newspaper, an
abnormal demand for paper and was a powerful factor in the
unprecedented rise in newsprint prices which has already been
discussed.

FOREST DEPLETION.

until one city district consumes more than the total lumber cut
of the State.

White-pine operations in the Lake States began with a sin-
gle sawmill in 1832; eastern shipments were being made three
or four years later; and the culmination was reached in 1892
with a cut of nearly 9 billion feet. Dreary wastes, dismantled
sawmills, deserted towns, and an insignificant pine output of
a single billion feet in 1918 are depressing reminders of the
day when Lake States lumber supplied the markets of the
country from the Rockies to the Atlantic Ocean and from the
Ganadian boundary literally to the Gulf.

The great development of the southern industry began in the
seventies and increased rapidly to what was probably the
maximum, about 16 billion feet, in 1909. In its turn, southern
pine dominated the markets little if any less completely than
white pine; but the South is following the course of other
regions, and the remaining supplies of virgin pine are only
about one-fifth of the original stand. Within a single decade
southern pine production promises to exceed by little, if any,
the needs of the South.

A great start has been made in the last chapter of the history
of virgin softwood stands. Since 1894 Pacific coast and Rocky
Mountain timber has been forcing its way increasingly into
the middle western and eastern markets. Within the year it
has dominated those of the Lake States and has even entered
in appreciable quantities those of the South itself. To the West
only, of all our heritage of magnificent softwood forests, can
14 TIMBER DEPLETION, PRICES,

the country look to an increasing cut; but even here there are
already local evidences of depletion, warnings that the con-
clusion of the story will be the same as that of other regions
and in far less time than has been estimated.

Hardwood depletion and the migration of centers of pro-
duction has followed along much the same line, although
regional boundaries have been much less distinct. Cutting
began early in New England and along the Atlantic coast,
spread slowly to the westward through New York and Penn-
sylvania as local supplies were cut out, and became important
in Ohio and the Middle Atlantic States after water and rail
transportation was developed. From here it spread north into
the Lake States and south into Kentucky and Tennessee and
the southern Appalachian Mountains. The stands of these
various regions have been successively depleted. In New Eng-
land and New York, aside from second growth, largely in farm
wood lots, there remain only the stands of hardwoods in the
North. The commercial cut of the Middle Western States is
almost a thing of the past. That of the Lake States has fallen
off materially, as has also even that of the southern Appa-
lachians. The end of the cut in the Appalachian States is
pretty definitely in sight. The only reserve of importance is
the southern Mississippi Valley, and even here it is doubtful
if future production will for any length of time materially
exceed the average output of the last few years.

BASIS FOR DATA.

Before taking up the various timber regions* the basis for
the data used should be given. It should be recognized that
thoroughly reliable data on such subjects as the remaining
stand of timber, its quality, rate of growth, and extent of
depletion, and on the forest areas of different classes, can
be obtained only by a thoroughgoing timber survey requiring
two or more years. Nothing of this character has ever been
attempted in the United States.

More has been done in estimating the amount of saw timber
than on any other of the subjects mentioned. The most com-
prehensive data on timber stand were secured by the Bureau
of Corporations. A part of the country only was covered for
timbér of saw-timber size, and such questions as the volume of
material below saw-timber size, extent of depletion, rate of
growth, the requirements of our industries, etc., were not in-
cluded. Other available data have covered this and other

 

1Wigure 1 shows diagrammatically the more or less arbitrary State
groups which are used in part for statistical purposes only. It shows
also the principal saw timber sections of the United States. The
regions of the discussion do not follow either consistently, but the
areas included in each are indicated in the text. The State groups used
are made up as follows:

New England: Maine, New Hampshire,
Rhode Island, and Connecticut.

Middle Atlantic: New York, New. Jersey, Pennsylvania, Delaware,
and Maryland.

Lake: Michigan, Wisconsin, and Minnesota.

Central: Ohio, Indiana, Illinois, West Virginia, Kentucky, Tennessee,
Iowa, Missouri, eastern Kansas, and eastern Nebraska.

South Atlantic and Hast Gulf: Virginia, North Carolina, South Caro-
lina, Georgia, Florida, and Alabama.

Lower Mississippi: Mississippi, Arkansas, Louisiana, eastern Texas,
and eastern Oklahoma.

Rocky Mountains: Idaho, Montana, Wyoming, Colorado, western
South Dakota (Black Hills), New Mexico, Arizona, Utah, and Nevada.

Pacific coast: California, Oregon, and Washington.

That part of the Kaniksu Naticnal Forest in Washington is in-
cluded in the Rocky Mountain region, while those parts of the El-
dorado, Inyo, Mono, and Tahoe National Forests in Nevada are in-
cluded in the Pacific coast region.

The comparatively small area of rather open woodland, chiefly on
farms lying in the Great Plains between the ninety-seventh meridian
and the Rocky Mountains, is not considered in the report. Some
100,000,000 to 150,000,000 acres of low-grade woodland and scrub, such
as open juniper and pinon of the West, scrubby mountain stands, and
chaparral, are also omitted,

Vermont, Massachusetts,

 

EXPORTS, AND OWNERSHIP.

phases of timber supply only for parts of States or regions.
Some of the timber remaining in the United States has never
been cruised under any method. That cruised has been esti-
mated by different methods and by different men, and also at
different times when widely varying standards of utilization.
were in effect. For the State of Washington, for example, a
large percentage of the estimates date back to 1890 and 1895,
when “red fir” and hemlock were considered inferior species
and given little attention.

Possibly the estimates secured for the southern pine region
are as satisfactory as any. Here it was possible to obtain the
results of a recent survey which brought together the best
estimates available from a large percentage of timber owners.
For some regions it was possible to do little more than revise
the Bureau of Corporations’ estimates by subtracting the cut and
depletion as offset by estimated growth. The Bureau of Cor-
porations’ estimates form, in part, the basis for the data used
in the southern Mississippi Valley hardwood region and the
Pacific Coast States. In all cases, however, such data were
supplemented by additional estimates, wherever obtainable,
from such sources as later and more reliable cruises of indi-
vidual holdings and county tax estimates.

For hardwood stands in particular the available estimates
are not satisfactory. The Bureau of Corporations’ study covered
only the hardwoods of the southern Mississippi Valley, which
were at that time regarded as having comparatively little value,
and satisfactory estimates could not be secured. Many of the
industries which are now dependent for their raw materials
upon the hardwoods are in great need of accurate information as
to the extent of existing stands and what they can count on for
the future. The data available show, however, that the future
is very uncertain.

For New York results are based on a questionnaire to private
owners in 1918 which covered the territory only in part. Simi-
lar data were available for parts of New England. Only a
part of the estimdtes for National Forest timber is based on
thoroughgoing cruises.

The report embodies the first attempt to cover for the entire
country the total ‘volume of material below saw-timber size in
cubic feet. It can only be an approximation.

The data on forest areas have been compiled from a great
variety of sources secured for different purposes by different
organizations with varying degrees of accuracy. For several
of the classifications, such as productive and unproductive areas,
the data are fragmentary.

The estimates of growth are based on a limited number of
studies of growth made at various times during the past 20
years. While representing somewhat more detailed data than
were ever before available, they are still very inadequate and
no claim is made that the figures given are more than an
approximation.

In response to the request of the Senate, the Forest Service
has endeavored to describe the situation in fairly specific
terms, using the best information available. It recognizes that
much of the data used lacks scientific accuracy and is tenta-
tive rather than final in character. An attempt has been made
to utilize every available source of information and to check
the figures by the judgment of well-informed men in the differ-
ent regions.

While an exhaustive and detailed survey of the forest re-
sources of the United States is necessary to establish these
figures with finality, there can be no question as to the broad
facts of depletion which they indicate.

NEW ENGLAND.
THE GROWTH AND DECLINE OF THE LUMBER INDUSTRY.

New England has passed through every stage of forest ex-
ploitation from the days when only the best white pines and
oaks were merchantable to present dependence upon outside
TIMBER DEPLETION, PRICES,

lumber and pulp wood. Early cutting was for local consump-
tion, shipbuilding, and export. The homesteads of the first few
generations were built of the best virgin timber. Shipbuilding
early became one of the chief industries, for which the white
pine and oak forests furnished the timber and pitch pine the
naval stores. The heavy cutting of early days, particularly
for fuel, produced a shortage of wood as early as 1840 in many
sections of New England. With the introduction of coal the
industrial centers grew, and the movement to the cities and to
the new lands of the West resulted in wholesale discontinuance
of cultivation. Much of the second growth timber cut to-day
dates from this period.

From the Revolution to about 1840 white pine made up almost

 

the entire softwood cut in New England; but soon after that

 

EXPORTS, AND OWNERSHIP. 15
land rose steadily until it reached a maximum of 3,170 mil-
lion feet in 1907. This period of increased production was
due to the introduction of portable sawmills, which made small
scattered lots available, to the higher prices of low-grade lumber
owing to growing scarcity throughout the country of the better
grades, and to the large amount of second growth on deserted
farms.

The lumber cut in 1907 was about 7 per cent of the total for
the country; in 1918 it had dropped to 1,400 million feet, or
about 44 per cent, and in actual amount it was less than half
as much as in 1907. Particularly marked is the decline in
softwoods. While in 1907 the cut of softwood in New England
formed 7.6 per cent of all the softwoods cut in the country, in
1918 it had dropped to 4.8 per cent.

 

 
 

MAINLY

PLAINS OR

(NOT INCLUDED

 

FOREST REGIONS BY STATE GROUPS AND
PRINCIPAL SAW-TIMBER SECTIONS

NON-FORESTED

OPEN WOODLAND

 
   

    
  
  
  
 

  

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\N TABLES ) Vi, bop
a - g;
| 3 i;
J Up;
° Le LY es 4
UY ~ LMA Tt SOY
pone TO SY
p $Y > EASA iy Yi
[7 Vii
Yi,
1 SZ
Xj “iy
AREA AND STAND BY REGIONS es Uf
REGIONS TOTALFOREST ARE) oT TIMBER \
(MILLION ACRES) |(a1LUON 80.FT) LEGEND
I _-NEW ENGLAND 24.7 49.8 PRINCIPAL SAW-TIMBER SECTIONS
Sal Maace AFCATTE sao rer INDICATED BY SHADEO AREAS
I -LAKE 571 110.1 Sy TEASE
IV - CENTRAL 56.7 1441 e OU EAN APPALACHIAN HAPOWOODS
- : 221.7 OUTHERN PINE _
SOUT AAT CANONS HOUR: eae SLOWER MISSISSIPPL HARDWOODS AND CYPRESS
VI -LOWER MISSISSIPPI 78.9 280.2 6 FOCKK MOUNTAIN
VI - ROCKY MOUNTAIN 60.8 2231 7 INLAND EMPIRE
VII- PACIFIC COAST 57.6 14g 0 9 CILIFORMD PINE.
TOTAL 463.5 22149 10 REDWOOD
Fie. 1.

spruce operations began. By 1870 the original white pine was
practically cut except for scattered trees in northern Maine;
and by 1880 the second growth pine forests were yielding an
annual cut of 200 to 300 million board- feet. With the extensive
use of low-grade pine for boxes and matches, this later increased
to 600 million feet.

Soon after it became known that wood pulp was a cheap
substitute for rags in paper making, mills were built in north-
ern New England as well as New York and the chief develop-
ment of forest industries during the past 30 years has been in
paper manufacture. Spruce alone was used at first, but now
large quantities of balsam and hemlock are taken. For book
paper poplar is used chiefly. Probably four-fifths of the pulp
wood still comes from the old-growth forests, but an ever-in-
creasing proportion must come from second-growth stands.

 

Although the lumber business of southern and central Maine
reached its peak about 1850, the total lumber cut of New Eng-

ORIGINAL AND REMAINING FORESTS.

Area.—With the exception of a few small areas, New England
in 1620 was a virgin forest, comprising some 39 million acres.
In 1920 not more than 5 per cent of this virgin forest remains.
The present forest area is nearly 25 million acres. Of this
about 8 per cent, or 2 million acres, is virgin forest, chiefly in
Maine, with scattered areas in New Hampshire and Vermont.
The last remnant of virgin forest in Connecticut was cut within
the past decade. Of the 24,700,000 acres now classed as forest
land 44 per cent, or 10,760,000, is in saw timber or pulp wood.
while 34 per cent, or 8,870,000 acres, contains nothing but fuel
wood, and 22 per cent, or 5,570,000 acres, is nonproductive.
With nearly three-fourths of the saw timber and pulp-wood area
in Maine, the poor condition of the remaining New England
forests is apparent.

Stand.—The original stand of New England was probably in
the neighborhood of 400 billion board feet, not including
16 TIMBER DEPLETION, PRICES,
small timber fit only for posts and fuel wood. The present
stand of similar material is close to 50 billion board feet,
or about one-eighth of the original stand. The total stand of
wood in New England is estimated to be 21 billion cubic
feet? (equivalent to about 70 billion board feet), Of this
40 per cent is saw timber or pulp wood and 60 per cent is fit
only for fuel. The average stand of all the wooded lands is
103 cords per acre. The present stand of saw timber and pulp
wood is summarized by species in the following table:

Million board feet,
lumber scale.

 

 

 

Spruce and fir____ 2. S222 eae _-. 23,971
White pine _--_________ at 9, 816
COO AP 226 Sia ae eS Se he 2, 789
Hem CE 2 Ss Jeet Sooo bce Soak eo eee cae eeee: 1, 804
ACOLLOW? DING aes te ae soe een Sh ea et 2, 983
ANTE TD Ut a pe ae ha en a ee Ds a 2, 897
PRC CGH ee snc tae ey ee So A 1, 635
(Nees ak Ss oS oats te Sc afte a ee 1, 510
(CCS UN Seg a a eo ee 960
Papel DIGG iets soe a RIS at tn 678
BE TAS saa i ahaa alate ehceet s o aee De 3874
AES Mis oe i en a a a Se eld 215
Ritelt. PIN@s 22222256 oe eee bee ee eee owes 100
Other hardwoods _____.____-__-_-_--__-______-_ 117

OTS Oi A ast dt ha a nS, Die et a tw 49, 799
DOLGWOOU S280 ato 8) ew See oo ee eG oe 38, 480
Hardwoods sos a2 osha sci bes ea ee eee eS 11, 319

Of this total stand about three-quarters is softwood and one-
quarter hardwood, About one-half is of pulp-wood species—
spruce, fir, hemlock, and poplar.

THE ANNUAL DRAIN UPON THE FOREST.

In 1918 there were cut in New England 1,412,100,000 board
feet of lumber and 1,446,000 cords of pulp wood. The total
annual cut amounts to about 650 million cubic feet,’ of which
65 per cent is lumber, pulp wood, ties, etc., and 35 per cent fuel
wood and fence posts. In addition there is a loss of about 20
million cubic feet, due to disease, insects, and fire. The total
annual drain, therefore, is about 670 million cubic feet.’

THE ANNUAL GROWTH.

The annual growth of the New England forests is estimated
in round figures at 610 million board feet of saw timber. Of
this, about 434 million feet is softwoods and 176 million feet
hardwoods. In addition, there is a growth of 341 million cubic
feet not suitable for lumber. The total growth is 475 million

cubic feet.°
GROWTH COMPARED WITH CUT.

The annual drain upon the saw timber of about 2 billion
board feet is nearly three and one-half times the annual growth
of 610 million board feet. The annual drain upon the fuel wood
of 285 million cubic feet is less by 106 million cubic feet than
the growth of._341 million cubic feet a year. It is apparent,
therefore, that the growth of low-grade material is somewhat
in excess of the actual demands. In regard to lumber, pulp, and
other high-grade material, however, the situation is anything
but encouraging.

THE LIFE OF THE INDUSTRY.

About half of the entire present stand of saw and pulp
timber in New England is in commercial tracts; the remainder
is in farm wood lots. It is particularly from the larger com-

 

* Throughout the report board feet of lumber are converted to cubic
feet of standing limber, and vice versa, on the basis of 219 cubic feet
to 1,000 board feet for saw timber and of 500 cubic feet to 1,000 board
feet for cordwood.

* Equivalent to about 2,300 million board feet.

4Equivaient to about 2,375 million board feet.

5 Hquivalent to about 1,300 million board feet,

*

 

EXPORTS, AND OWNERSHIP.

mercial tracts that the cut of most of the, higher-grade mate-
rial comes at present. Few of even the larger timber owners
have more than a 20 years’ supply. Most of the pulp mills will
be cut out in 20 years. Not over four or five companies own
stumpage enough to last for a longer period. Unless Canadian
wood is imported on an increasingly larger scale or effective
forestry measures are introduced immediately, the pulp indus-
try of New England will be largely a thing of the past within
80 years. Within the next 10 years the lumber cut will prob-
ably drop to about 1 billion board feet; within 20 years most of
the timber areas containing high-grade lumber will be cut off
and the remaining timber will be either on farm wood lots or
on a few remaining large tracts and will be made up of second
growth or of trees which were left as worthless at the time of
the first cutting. The White Mountain National Forest and the
State forests may be counted upon to furnish a continuous
supply of saw timber, but -unless their areas are materially
increased their share will be very small.

PRESENT AND FUTURE CONSUMPTION OF LUMBER IN NEW
ENGLAND.

Up to 30 or 40 years ago New England was not only self-
supporting in timber but exported large quantities. Within
the past 30 years it has become an importing region, and it is
estimated that fully 30 per cent of all the lumber used now
comes from outside the region. This is in addition to the im-
portations of large quantities of pulp wood. Within the next
few years New England will have to import more than half the
material it uses. This is of vital interest to a region that
has about $300,000,000 invested in wood and forest industries
and employs in this connection over 90,000 wage earners.

NEW YORK.

Practically the entire State of New York was originally
covered with a magnificent forest of white pine, spruce, hem-
lock, and hardwoods. The lumber industry was one of the first
to be developed. It reached its highest volume between 1830
and 1840 and was already declining at the time of the Civil
War. In 1850 New York ranked first among the States in
amount of lumber cut and contributed 20 per cent of the total
cut of the entire country. Since then it has been steadily de-
clining in relative importance until to-day it stands in twenty-
fifth place and contributes only 1 per cent of the total cut. Its
actual cut has decreased from ‘over 1,300 million feet prior to
1850 to less than 350 million,

As early as 1856 New York ceased to be an important ex-
porter of lumber and began to draw on Michigan for the upper
grades of pine. Pennsylvania hemlock, southern pine, and
cypress were used in large quantities from 1880 on, and West
Coast woods in upper grades and special sizes began to come in
about 1900. To-day Douglas fir from the Pacitic northwest is
a very considerable factor in ‘the lumber market of the State.
The steadily decreasing supply of native woods as compared
with the increase in population is illustrated by the fact that
New York’s per capita production of lumber had fallen from
300 board feet in 1869 to about 30 board feet in 1918.

With the gradual settlement of the State the area of forest
land steadily decreased until to-day it forms about 41 per cent
of the total area. The stand of timber is estimated at approxi-
mately 26 billion board feet, of which white pine, spruce, and
hemlock comprise about 10 per cent each, and birch, beech, and
maple a total of 55 per cent. Spruce and hemlock suitable for
pulp wood but not lumber comprise some 13,400,000 cords, while
material of all species suitable only for fuel and acid wood adds
another 107,000,000 cords. This gives a total stand for the
State of approximately 17,132 million cubic feet.*

In quality, the present stand is decidedly inferior to that of
earlier days. White pine, of the large size and high quality

° Equivalent to about 49 billion board feet.
TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

for which the State was once famous, now furnishes little but
the poorer grades. Of the total forest area 62 per cent con-
tains material which is suitable neither for lumber-nor pulp and
furnishes only fuel or acid wood. While the area of lands com-
pletely denuded is comparatively small, the original forests
are being followed by stands of decidedly inferior quality, both
as to species and grades. The damage by fire is being steadily
reduced by systematic fire protection, but the methods of cutting
in private lands are such that an increasingly large area is left
partially or wholly devastated.

PENNSYLVANIA.

The forest history of Pennsylvania has been similar to that of
New York. Once practically covered with a heavy timber stand,
Pennsylvania for many years exported large quantities of lum-
ber. In 1860 it stood first among the States in lumber produc-

.tion. As early as 1870, however, the stand of white pine, the
most valuable species in the State and formerly one of its prin-
cipal export woods, had diminished to such an extent that im-
ports from Michigan began. The depletion of the white pine was
followed by an increasing cut of hemlock and later of hard-
woods, and the State reached its maximum lumber production
of 2,440 million board feet in 1889. To-day it occupies twentieth
place in lumber production, and its annual cut of 530 million
board feet constitutes less than 2 per cent of the cut of the
eountry.

The present forest area of Pennsylvania is estimated at ap-
proximately 12,000,000 acres, with a stand of 11 billion board
feet of timber. Of this 70 per cent is hardwoods, chiefly oak,
chestnut, and northern hardwoods, and 30 per cent softwoods,
one-half hemlock. In addition to the stand of material suitable
for the manufacture of lumber, it is estimated that there are
880;000,000 cubic feet of wood suitable for railroad ties and
mine props. The total stand, including fuel wood, is 5,200
million cubic feet.”

Depletion in Pennsylvania has already progressed so far

that ‘the complete cessation of large-scale logging operations,
of which only a few are now left, may be anticipated within
a decade. It has reached a point where the annual lumber
production is only 60 board feet per capita, or about one-fifth
of the average per capita consumption for the United States.

The Pittsburgh district alone uses more lumber than is cut in

the whole State. Williamsport, which once had an annual
output of 300,000,000 board feet of lumber, now has. not a
single sawmill. In those parts of the State where the forest
constituted the sole resource the trail of the lumber industry
is marked by abandoned mills and practically deserted vil-
lages. 3

The steady decrease in tle amount of standing timber has
been accompanied by a deterioration in quality. Virgin stands
are practically gone, old-growth white pine, for example, being
reduced to some 10,000 acres, practically all in a single tract
which will be cut out in the next five years. Only about 50
per cent of the total volume of wood now standing is suitable
for manufacture either as lumber, pulp wood, ties, or props.
The average area burned over annually is 500,000 acres, and
much of this has been burned over again and again. In addi-
tion to the damage from reckless cutting and fires the State
has suffered severely from the chestnut bark disease. Nearly
one-seventh of the entire State, once richly wooded, is said
to be practically barren. Several counties that were once rich
in forest and prosperous are now almost bankrupt because
the timber is gone.

THE LAKE STATES.
GROWTH AND DECLINE OF THE LUMBER INDUSTRY.

White pime—The history of lumbering in the Lake States
during the greater part of the past century is substantially the
history of white-pine exploitation. Lumbering began in Michi-

 

17

gan and Wisconsin about 1835. Pine in enormous quantities
drew lumbermen from the East, and before 1870 these States
captured: the lead in lumber production. They held it until
superseded by the southern pine region, between 1900 and 1910.
The peak of production was passed in 1892, when the reported
output was a little more than 8,900,000,000 board feet—largely
white pine. This was an increase of 123 per cent over the cut
of 1878. In 1899 Wisconsin, Michigan, and Minnesota, in the
order named, were still the leading three States, with a total
production of 8,700,000,000 feet, two-thirds pine; but in 1918
they had fallen to eighth, thirteenth, and eleventh, respectively,
and their total output had fallen to 8,220,000,000 board feet,
of which only 35 per cent was white pine—mostly. from Minne-
sota. Wisconsin now produces less than the second-growth cut
of either Maine or New Hampshire, and Michigan, from lead-
ing the country from 1870 to 1895, now actually cuts less than
half as much as Massachusetts.

As the Lake States forests dwindled, white-pine lumber went
down, both in quantity and quality, and Norway and jack pines
and even tamarack were admitted as lower grades of “ northern
pine lumber.” ‘The fine quality timber which gave white pine
its reputation is now nearly all gone. In Minnesota two-thirds
or more of the cut is box lumber. Only small, scattered rem-
nants of the old-growth white-pine forests remain in Wisconsin
and upper Michigan, and in lower Michigan the most widely
known tract covers about 100 acres.

Hemlock.—As the higher grades of pine grew scarce and ex-
pensive, hemlock, once left in the woods as worthless, began to
compete with the successively lower grades of pine introduced.
Hemlock production reached its peak—1,600,000,000 feet—about
1906. In 1914 the cut had fallen to little more than a billion,
and in 1918 to 800,000,000. This does not, however, include the
cut for pulp, which would increase the total volume by about
one-third. By affording a market for cordwood, pulp manufac-
ture is taking the small hemlock timber along with the large
and thus delaying or preventing the renewal of the supply of
large timber. fs

The northern hardwoods.—Maple, birch, beech, basswood, and
elm form at least 85 per cent of the total stand of hardwoods
and furnish over 92 per cent of the total hardwood cut in the
Lake States. As with hemlock, the logging of hardwoods began
as an aftermath of the white-pine logging. Hardwood produc-
tion progressed gradually from culling operations taking only
the best trees of the preferred species to cuttings such as those
made at present for chemical distillation and charcoal, in which
even tops, limbs, and saplings are utilized. Beech was one of
the latest species to come into commercial demand; less than
two decades ago it was a common practice to leave all the
beech, which fires later destroyed. Now, the hardwood-using
industries absorb not merely the upper grades but anything

‘which will make lumber, and in some cases even cordwood.

The veneer industry makes a constant demand for high-
grade logs. Such logs supply also the bulk of the upper grades
of lumber. There has been a constantly growing demand for
both veneer and high-grade hardwood lumber, expressed in the
pronounced growth of such industries as the musical instru-
ment and toy trades. For a considerable part of this demand
lower grades ought to be acceptable; but so long as the demand
for upper grades exists manufacturers will attempt to fill it,
and the stand will dwindle the more rapidly.

ORIGINAL AND REMAINING STAND AND RATE OF CUT.

The original forests occupied practically all the land area
of Michigan, Wisconsin, and the part of Minnesota not natural
prairie—a total forested area of approximately 112 million acres,
Lumbering and the clearing of land for cultivation have re-
duced the merchantable forest cover to little, if any, more than
24,000,000 acres, about 58 per cent in farm woodlots of relatively
small timber, commonly second growth, and 42 per cent in com-
18

mercial timber tracts, in many cases already culled of their
choicest trees. A very large part of the once heavily timbered
land, about 20,000,000 acres, is now fire-swept and devastated
sand plain and swamp, much of it with little or no promise of
reproduction.

The original white pine stand of the Lake States has been
estimated by Dr. B. E. Fernow at not less than 350,000,000,000
board feet. After less than a century of lumbering, fire, and
settlement, only about 8,000,000,000 feet of white and Norway
pine remain, largely in Minnesota. In 1918 the reported cut
of white pine in the Lake States exceeded a billion feet. An-
other decade will see the practical exhaustion of their com-
mercial supplies of white pine.

Lower Peninsula of Michigan.—The- depletion of commercial
timber has proceeded furthest in the Lower Peninsula of Michi-
gan, where less than a million (probably not much over half a
million) acres of hardwoods and hemlock remain. The hun-
dreds of large sawmills that once operated had fallen off in
1918 to about 45 that cut more than 1,000,000 board feet
apiece. The number is rapidly becoming smaller, and within
five years there will hardly be a half dozen large mills left.
The exhaustion of the remaining old-growth stands will mark
the end, among other valuable species, of the highly prized
“Lower Michigan hard maple,’ long reputed to be the best
in the Lake States. From then on whatever lumber is cut will
come mainly from farm woodlots, in small amounts and sizes,
and of poorer grade.

Wisconsin and the Upper Peninsula of Michigan.—In the
adjacent forest areas of Wisconsin and the Upper Peninsula
of Michigan the case is better. In 1908 the Bureau of Corpo-
rations estimated the timberland at about 10,329,000 acres,
with a stand of 65 billion feet. During the last 12 years
probably 30 billion board feet in lumber has been removed.
This would leave only 85 billion, enough at the present rate
of cutting to last 15 years. There can be no doubt, however,
that there is much more timber than this. The 1908 esti-
mates were too conservative. There is reason to believe that
the timberland still amounts to 4 million acres in upper Michi-
gan and 2 million in Wisconsin, and that the total merchant-
able stand is at least 48 billion feet. This would insure a con-
tinued supply, at the present rate of cut, for about 20 years.
This rate will not, of course, continue, but will decrease as
successive mills saw out. The rate of cut is considerably
heavier in Wisconsin than in the Upper Peninsula. The larger
number of Wisconsin mills and the considerably smaller stand
of timber indicate a much quicker falling off in the cut and
an earlier termination of the supply there than in upper
Michigan,

In Wisconsin, assuming a diminishing rate of depletion, the
annual lumber cut will be likely to fall off within 10 years to
75 per cent, in 15 years to 40 per cent, and in 20 years to 16
per cent of the present cut, and in 25 years the timber will be
practically gone. Cutting for other purposes than lumber will
add appreciably to the amount of timber taken out. Further-
more the pressure of an increasing demand, by stimulating
the rate of cut both at the big mills and at numerous smaller
mills, which will probably operate, as at present, in small
patches of timber, will very likely hasten the final exhaustion
of the timber. All things considered, it is doubtful if there
will be any appreciable amount of timber left in commercial
holdings in Wisconsin at the end of 20 years. Growth does
not enter into the computation at all, unless a radical change
is made in the direction of efficient fire protection and the
application of forestry.

In upper Michigan the stand will last considerably longer.
Here 60 per cent aS many mills operate in twice the timber—
enough, in fact, to last 40 years at the present rate of cutting
for lumber only. Some new operations are already contem-

.

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

plated, however, and the cut for lumber and other products
will doubtless increase within the next few years. One prin-
cipal holder is reported to have estimated the life of the stand
at 25 or 30 years. ;

Minnesota——Timber conditions in Minnesota differ widely
from those in Wisconsin and Michigan. The Wisconsin lumber
cut for 1918 was 85 per cent hardwoods and hemlock, while that
of Minnesota was 91 per cent white pine (which includes also a
considerable amount of Norway pine and other species in the
lower grades). Less than 5 per cent of the reported cut was of
hardwoods.

The timbered area of Minnesota was estimated by the Bureau
of Corporations in 1908 at about 5,651,000 acres, and the stand
at 23,200,000,000 board feet, 81 per cent of which was softwoods.
A recent estimate by the Minnesota State forester places the
softwood stand at 11,450,000,000 board feet, of which 41 per cent
is white and Norway pine, 17.5 per cent jack pine, 24 per cent
spruce, balsam, and cedar, and 17.5 per cent tamarack. The
tamarack, which has been the greatest hewed-tie resource of
the region, has practically all been killed by the larch sawfly,
and must be salvaged soon if at all.

The pine forests of Minnesota have been thoroughly culled
of their best material, and production now runs heavily to box
lumber,

The number of mills operating in this region is being re-
duced rapidly. Within the last three or four years at least
four of the large mills have burned, and these will probably
not be replaced. Five have recently cut out, and two have
only a year’s supply. This means a decrease of 30 per cent
in the total cut of the State and of 33 per cent in the cut
of the big pine mills. The annual cut of the remaining mills
will aggregate at least 600,000,000 feet. These mills depend for
the great bulk of their cut upon white and Norway pine, the
remaining supplies of which are estimated by the Minnesota
State forester at 4,700,000,000 board feet. This will not last
much more than seven years at the present rate of cutting. If
the estimate of supply is increased by one-third, the period of
operation would be 10 years at the present rate. As the mills
exhaust their supplies, however, the rate of cutting will diminish.

Condition of the remaining supplies—The stands considered
above are those which are being or could be logged on a large
scale to large mills—mills of 10 million board feet or more
annual capacity. Such mills now supply about 90 per cent
of the lumber produced in the Lake States. Their holdings,
even though culled, are almost wholly of old-growth timber of
superior quality as compared with second growth.

These concentrated commercial stands, aggregating about
63 billion board feet, contain about 57 per cent of the total
stand of timber in the Lake States, which amounts to prob-
ably 110 billion board feet. Of this total about 30 per cent
(33% billion feet) is widely scattered in farm wood lots, while
13 per cent (about 144 billion feet) is in the swamps, jack
pine and scrub hardwood plains, aspen and birch stands, and
cut-over lands in the North. The timber in these stands is
far below that of the commercial stands in quality. The
greater part is second growth. It is smaller, more limby, and
much of it has been badly damaged by fire. Furthermore, it
is largely in small, scattered tracts unsuited for efficient large-
scale operations. In addition, about 19 million acres bear a
cordwood stand of about 118 million cords below saw-timber
size. If the lumber stand also is reduced to cords, the total
stand in the Lake States is 680 million cords, or 50,584 million

cubic feet.
THE ANNUAL DRAIN UPON THE FOREST.

Lumber cut compared with total cut.—The normal lumber
cut of about 34 billion board feet forms less than half of the
total volume of wood cut annually in the Lake States for all
purposes. The lumber cut is the equivalent of about 770
TIMBER DEPLETION, PRICES,

million cubic feet of standing timber. The total output of
wood in all forms is close to 1,600 million cubic feet. The
classes of output not covered in the lumber-cut statistics in-
clude pulp wood, fuel, and distillate wood, hewed ties, posts
and poles, and logs and bolts used for veneer and other pur-
poses. Of these, pulp wood and distillate wood make up prob-

ably 130 million and fuel wood 600 million cubic feet. The
remaining 100 million cubic feet consists of veneer, cooperage,

excelsior stock, ties, posts, poles, aud other products.

Deterioration of the forest—In addition to the cut there is
a constant loss to standing timber from fire, wind, insects, dis-
ease, etc., probably amounting to an annual average of from
one-fourth to one-half of 1 per cent of the stand. This is
equal to one-half billion board feet, or 110,000,000 cubic feet,
of standing timber. It includes such losses as that of tam-
arack, of which, as previously shown, about 2 billion board
feet has been killed by the sawfly in Minnesota alone. There
is also considerable loss from decay following injuries, such
as frost cracks and ice breakage. In most of the commercial
stands damage from these sources is not made up by growth,
, Since these forests are generally much beyond the age of active
growth.

THE ANNUAL GROWTH.

Growth compared with cut.—The estimated annual growth in
the Lake States is much less than the cut.

 

 

; Growth
Estimated Rees in per
annual cut. growth. cant of
Lumber, feet board measure... seeeseseee-| 3,500,000,000 | 988,000,000 28°
All products including lumber:
DIC TCO ssvexsesesasxnneasonsevaxene 11,600, 000,000 | 1 468, 000,000 29
COGS ca akwana in decla ee Renan salience nom 20,000, 000 5,850, 000

 

 

 

 

T
1In terms of lumber, the aggregate annual cut of all products would be about
5, 160,000,000 board feet, and the annual growth about 1,490,000,000 board feet.

These figures indicate that the total rate of cutting is more
than three times the total rate of growth, and that the stand
suitable for lumber is being cut more than three times as
rapidly as it is growing. Furthermore, the larger part.of the
cut is from old-growth stands in the North, while nearly all the
growth is in widely scattered second-growth stands. The cut
is relatively concentrated, while the growth is widely distributed
and without reference to the commercial advantages of loca-
tion. This is a consideration of great significance for the future
of the wood-using industries. The concentrated supplies are
steadily waning. Their disappearance will mean the death of
industries unable to adapt their production to a supply limited
by the rate of growth or to import.

Fire renders millions of acres of cut-over forest Jand in the
Lake States unproductive. If fires could be kept out, the
growth on these repeatedly burned lands would probably even-
tually increase 50 per cent, and could be increased still further
by intensive management.

The life of the industry—At a diminishing rate of depletion
due to the cutting out of one holding after another, it is es-
timated that the lumber cut of the Lake States at the end of
the next 5 and 10 years will be about as follows:

 

Estimated cut, 1925_----------+--------------- 2, 400, 000, 000.
Present annual cut 8, 500, 000, 000
Estimated cut, 1980_-_--.--------------------- 1, 800, 000, 000

This represents only the production from commercial tracts.
As the commercial stands dwindle the production of lumber and
other products from farm ‘wood lots and from second growth in
swamps and cut-over areas may be expected to increase con-
siderably in proportion to the total cut, though not in actual
amvuunt, Such lumber will be much inferior in quality to that

 

19

PRESENT AND FUTURE CONSUMPTION OF LUMBER IN THE.
LAKE STATES.

The average annual per capita consumption of lumber in the
Lake States is probably not far from the average for the whole
country—800 board feet. Assuming a 12 per cent increase in
population since 1910 (the increase for the previous decade was
at the rate of 14.06 per cent), the present population of the
Lake States is about 8,000,000. The total annual consumption
of lumber in the three States is thus about 2,426,000,000 board
feet, or 70 per cent of the lumber produced.

Comparison with the estimates of future cut above given
indicates that by 1925 the local consumption will be equal ta
the local production, assuming no increase in population and
the same per capita rate of consumption. At the end of a
decade, allowing for a 10 per cent increase in population, con-
sumption will exceed cut by nearly 50 per cent. In other
words, the per capita consumption must either fall from 300 to
nearly 200 board feet per year or the Lake States must import
nearly one-third of the lumber needed for home use. With each
succeeding year the discrepancy between consumption and local
supply will become greater: Much western fir and pine lumber
is already being consumed in the Lake States, and as the local
cut decreases they will depend more and more upon the far West.
While an actual lumber shortage may not, therefore, be antici-
pated as long as the western stands hold out, the lack of a
local supply will be felt in increased prices.

THE SOUTHERN YELLOW-PINE REGION.
THE GROWTH AND DECLINE OF THE YELLOW-PINE INDUSTRY.

EXPORTS, AND OWNERSHIP.

The pine forests of the Southeastern United States, begin-
ning along the Atlantic coast, have been exploited for naval
stores and other forest products from the time of the first
settlements. No extensive development of the lumber industry,
however, took place until the seventies of the last century.
Before the Civil War a limited amount of southern pine
lumber was shipped to Baltimore and Philadelphia in schoon-
ers by sawmills on the eastern shore of Maryland and near
tidewater in Virginia. After the Civil War the industry
spread to Georgia, Mississippi, and the other Gulf States.
The markets north of the Ohio River made their first demands
for southern pine about 1875. By that time.the Northeastern
States had lost their leadership in lumber production, and the
Lake States were coming to the front with about 35 per cent
of the country’s cut. The great development of the southern
pine industry began in the early nineties. About 1892 yellow
pine from the Gulf States and Arkansas began to crowd white
pine in the markets north of the Ohio River. Vast quantities
were used in the construction of the World’s Fair buildings in
Chicago. An extensive demand was created by the low prices
in the early nineties. This demand spread into the Lake
States, the Prairie States, and the Eastern States. At the end
of -the nineties southern yellow pine was leading the country
in the cut of softwoods. In 1909 its production reached the
peak, with nearly half of the entire country’s cut of softwoods,
and from then on began to decline.

Southern yellow pine is still the most important single factor
in the lumber production of the United States, furnishing
about 41 per cent of the cut of softwood lumber and 35 per cent
of the entire lumber cut. It will remain an important factor
for at least the next 10 or 15 years. Within the next 8 or 10
years, however, it is certain to undergo profound changes.
THE ORIGINAL AND THE PRESENT PINE FORESTS OF THE SOUTH.

The original pine forests of the South Atlantic and Gulf
States covered from 125 to 180 million acres and had a stand
of timber close to 650 billion feet. Of this about two-thirds
was longleaf pine and one-third shortleaf pine.*

 

8Under “longleaf pine” are included longleaf and slash pines;
under “shortleaf pine’ are included shortleaf, loblolly, scrub, and
20

To-day the area of virgin yellow-pine forests is about 234
million acres, or a little less than one-fifth of the original
acreage. (See Table 1.) The stand of virgin timber is about
139 billion board feet, or a little over one-fifth of the original
stand.

TaBLe 1.—Southern yellow-pine region—Classification of pine
land by character of growth.

 

 

 

  
  
 

 

 

Cut-over lands.
State. Total net | Area old

pine area. | growth. Restocking | Restocking Not
saw timber.) cordwood. | restocking.

2 ; cres. Acres. cres, Acres Acres.
Virginia............- 4,000,000 }............ 1,500, 000 200, 300, 000
North Carolina....... 10,700, 000 500,000 | 3,600,000 | 5,400,000 | 1,200,000
South Carolina......- 8,000, 000 600,000 | 2,500,000 | 3,000,000 1,900, 000

Georgia.........2... 15,500, 000 700,000 | 3,800,000 | 6,000,000 | 5,000,
Florida. .... ---| 18,000,000 | 11,000,000 700, 1,000, 000 5,300,000
Alabama....... 15,500,000 | 1,500, 0 3,500,000 | 4,000,000 | 6,500,000
Mississippi... 12,000,000 | 3,000,000 | 5,000,000 | 1,000,000 | 3,000,000

Louisiana . 11,740,000 | 2,510,000 | 4,500,000 | 1,200,000} 3,530,
Arkansas , 500, 0 1,150,000 | 2,000,000 | 5,500,000 850,000
Texas..... 7,424,000 | 2,000,000 ) 1,700,000 | 1,000,500 | 2,723, 500
Oklahoma 2,000, 000 500,000 560, 000 580, 000 450,000
Missouri 320, 000 30,000 110, 000 80,000 100, 000
Total.......-.- 114, 684,000 | 23,490,000 | 29,410,000 | 30,930,500 | 30,853,500

 

 

 

 

 

 

Four-fifths of the original yellow-pine forests has been cut
since 1870. ;

Out of the more than 100 million acres of yellow-pine land
that has been cut over about 29 million acres now supports
second growth of merchantable sizes and nearly 31 million
acres cut over recently second growth not merchantable. About
31 million acres of cut-over land has not come back to pine.
although much of it is more suitable for timber growth than
for agriculture. As the nonrestocking areas do not produce
any new growth and growth in virgin timber is offset by de-
terioration, the total area on which yellow pine is now grow-
ing is about 60 million acres.

The largest areas of old timber are chiefly in the Gulf States—
Texas, Louisiana, Mississippi, Alabama, and Florida. Areas
of second growth are most extensive in the older South Atlantic
States—Virginia, North Carolina, South Carolina, and Georgia.

Total merchantable stand.—The total stand of merchantable
yellow pine, both virgin and second growth, has recently been
estimated at about 258 billion feet, of which 189 billion, or
54 per cent, is old timber, and 119 billion feet, or 46 per cent,
is second growth.

By States the merchantable pine stand is distributed as
follows:

M feet. M feet.

Louisiana_______ 47, 348,400 | North Carolina__ 15, 300, 800
Mississippi__-__ — 40,476,200 | Virginia_________ 8, 698, 000
Florida___----_.- 36, 429, 300 | Oklahoma______._ 4, 791, 400
Texas_____------ 27, 524, 700 | Missouri_______.._ 364,700
Alabama_-_-_---.- 25, 316, 400

Georgia__-_---_.- 21, 807, 600 Total (lum-
Arkansas___----~— 15, 743, 700 ber scale)_ 257, 691, 000
South Carolina... 13, 889, 800

The present stand is about equally divided between longleaf
and shortleaf pine, with probably a slight preponderance of
shortleaf pine over longleaf, the shortleaf pine being more
abundant in the South Atlantic States and the longleaf in the
Gulf States.

be ANNUAL DRAIN UPON THE FORESTS.

The cut of yellow-pine lumber in 1918—an abnormally low
year—was in the neighborhood of 10 billion feet. Lumbermen
estimate a cut for 1919 in excess of 15 billion feet. The aver-
age cut for the five-year period before the war, 1911-1915, was
about 144 billion feet, to which must be added at least 14 bil-
lion feet of hewn ties, poles, and posts, in all a cut of about

*

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

16 billion feet of saw timber. There is also being cut in the
pine area of the South about 12,250,000 cords of fuel wood.

In addition to the cut there is every year a considerable loss
of mature saw timber due to. windfall, turpentining, insects,
fires, and diseases. This loss may be conservatively placed at
from one-fourth to one-half of 1 per cent of the entire merchant-
able stand, or at present from 650,000,000 to 1,300,000,000 board
feet per year. In all, the annual drain upon the forests is
nearly 4$ billion cubic feet of wood.

THE ANNUAL GROWTH.

The annual growth is estimated at about 3 billion feet board
measure on the merchantable second-growth areas and 1 billion
cubic feet® on the area of unmerchantable second growth, or
in all in the neighborhood of 1,660 million cubic feet” a year,
or nearly 30 cubic feet per acre for the entire growing area.
(See Table 2.)

TaBLE 2.—Southern yellow-pine region—Annual growth of saw
timber and cordwood by States.

 

 

 

 

 
 
 
  
 
 
  

 

Cordwood.
Saw
Peake ‘aE teet” M cubic

b. m. feet. Cords.
Virginia. 225, 000 88, 000 978, 000
North Carolina. 360, 000 162,000 , 800,
South Carolina. 250, 000 120,000 | 1,333,000
Georgia......... 380, 000 240,000 | 2,667,000
Florida.. 52,500 0, 000 333, 000
AMADA asp a.puinaeectaroaidntearattsisiogiesaiacine debauet 350, 000 160,000 | 1,778; 000
MississipDlee2czacexecsesenvveevcnuseedienccicies's 500, 000 5 444,000
DOUISIANd 635 ss 0sn exceanasaweeeeseexaaeeneeeew 450, 000 48,000 533, 000
Arkansas. .. 200, 000 165,000 | 1,833, 000
Texas... 170, 000 5, 000 389, 000
Oklahoma 37,500 11,000 122, 000
Missouri. 8, 000 1, 600 18,000

otal sp casiataiaeniadesemioaaieceenee or 2,983,000 | 1,100,600 | 12,228,000

 

 

 

 

CUT AND GROWTH CONTRASTED.

The amount of yellow pine that is cut is thus about three
times the annual growth. In saw timber the disparity is even
greater. The annual growth upon the areas of merchantable
timber is in the neighborhood of 8 billion feet, while the cut of
saw timber is 16 billion feet. In other words, the present cut
of saw timber is more than five times the present annual pro-
duction.

If the present merchantable second growth were not cut into
for the next 10 or 15 years, but were allowed to grow at its
present rate, and the unmerchantable second growth were
allowed to reach merchantable size without being prematurely
turpentined, the annual growth of saw timber would be con-
siderably increased. This merchantable second growth, how-
ever, is now also being cut and its area decreased at a rate of
not less than 1} million acres a year. About a quarter of the
present yellow pine cut comes from second growth. Within the
next 20 or 25 years the entire area of the present merchantable
second growth may be completely cut over, and large areas will
not come back to pine unless there is a decided change in the
present procedure in regard to protecting the cut-over land
from fire and hogs.

DETERIORATION OF THE FOREST.

It is doubtful if the South will ever again grow timber to
the sizes which we find in the virgin stands. The second
growth now cut for saw timber is inferior in quality, to the
old stands. While trees in the virgin longleaf-pine stands yield
on an average from three to four logs which run six or seven
logs to a thousand feet, trees in the second-growth stands

 

 

® Equivalent to about 2 billion board feet.
0 Equivalent to about 5 billion board feet.
TIMBER DEPLETION, PRICES,

average at most two or two and a half logs per tree, and the
logs run fifteen to the thousand. The amount of upper grades
that is sawed from second growth is much smaller than from
virgin timber. For instance, a mill tally on a certain operation
showed that virgin timber sawéd out on the average about 55
per cent of the high grades, while second growth barely yielded
19 per cent. An inferior forest is therefore succeeding the virgin
timber and the highest grades are not being replaced at all.

Change to inferior species.—Deterioration is taking place not
only in grades but also in species. The most valuable timber
trees of the southern pines are longleaf and slash pines, both for
their timber qualities and as a source of naval stores. The
longleaf pine, particularly throughout the Gulf States, as a rule
does not come in on cut-over land, because of sparse seed pro-
duction and the grazing of hogs. Unless cut-over longleaf-pine
land is protected by hog-proof fences or by stock laws the areas
of longleaf pine will be greatly diminished. The original -pro-
portion of longleaf in the southern pine forests has already
been reduced for the remaining merchantable timber from two-
thirds to a little less than half. North Carolina, which once
had large areas of longleaf pine and was famous as the “ Long-
leaf Pine State,” can boast now of hardly 50,000 acres of
second-growth longleaf pine widely scattered in small areas.
A large part of the remaining virgin longleaf area will, after
logging, either become nonproductive or be restocked to a con-
siderable extent with shortleaf pine.

THE LESSON OF THE SOUTH ATLANTIC STATES.

Large areas of second growth now found in the older South
Atlantic States and a fairly permanent cut of timber by small
mills are often taken to indicate what the future of the Gulf
States is to be after the larger sawmills have completed their
logging operations. There are vital differences, however, in
the handling of the timber in the two regions. The virgin for-
ests in the South Atlantic States were cut over very lightly—
often for local consumption only—and the logging was done by
animals. This left many young trees which soon formed a new
merchantable stand and provided ample seed for young growth.
The present-day steam logging in the Gulf States amounts to
clear cutting over large areas, and even inferior trees are fre-
quently brought to the mill.

The virgin forests of the South Atlantic States contained
less longleaf pine than the Gulf States. In Virginia, for in-
stance, there was practically none. In the Gulf States long-
leaf forms the bulk of the stand, and it is the longleaf repro-
duction which is most affected by the free ranging of hogs.
Furthermore, the turpentine operators are now tapping more
and more young trees, and by excessive turpentining prevent
many from reaching maturity.

It is certain, therefore, that under present practice the Gulf
States will not have as much second growth after the virgin
forests are cut out as the older South Atlantic States now have.

LIFE OF THE YELLOW PINE INDUSTRY.

A recent survey covering 5,400 mills, owning or controlling
practically the entire remaining virgin stand in the South, indi-
cates that 4,419 mills, or nearly 82 per cent of all those re-
ported, will cut out in 5 years or less, and the output of virgin
timber will be reduced by nearly 50 per cent; that 5,254 mills,
or over 97 per cent, will cut out their timber in 10 years or less,
with a corresponding reduction in the output of 78 per cent;
that in 20 years all the mills, except 12, will have cut out their
timber, and their production will have been reduced to only 3
per cent of the present output. This does not mean, however,
that the total lumber production will be reduced at this rate.
As the larger sawmills cut out small mills will take their place
and will work in the second growth and on the small scattered
tracts which under present conditions can not be economically

logged in large-scale operations.

 

EXPORTS, AND OWNERSHIP. 21

Although in five years over 19 per cent of the present virgin
timber will be cut out, only about 11 per cent of the entire
merchantable stand will be used up. In 10 years 52 per cent
of the entire virgin timber will be gone, but only 30 per cent
of the entire present merchantable timber. In 20 years nearly
90 per cent of all the virgin timber will be exhausted and over
50 per cent of the entire merchantable timber. As the virgin
timber dwindles, the second growth will contribute more and
more to the production of yellow-pine lumber. In 10 or 12
years second growth will probably contribute two-thirds of the
entire cut. ;

Although the exhaustion of the virgin timber does not mean
entire exhaustion of the yellow-pine industry in the South, the
life of the industry as now constituted is largely the life of the
present large sawmills. When the larger mills cut out at the
present locations, they will cease to figure in the industry; for
it is now almost impossible for an operation of any magnitude
to secure a location which commands enough timber to justify
logging operations. The South will undoubtedly continue, as
New England, to be a lumber-producing region. It will cease,
however, to be a national factor; and from a general utility
wood, the high-grade yellow pine, as the white pine, will be-
come a specialty wood, while the second growth will furnish
inferior grades for industrial purposes and for local use. In
about 10 years the yellow-pine region promises to take second
place as a national lumber-producing center.

REDUCTION OF THE OUTPUT.

Lumber production of yellow pine in 1930, allowing for new
sawmills to take the place of the larger sawmills which will
be cut out, it is estimated will be about 9} billion feet, a re-
duction of nearly 6 billion feet, or 38 per cent, from the esti-
mated production of 1919. This means a yearly decrease in the
output of about 550 million feet, or a little over 3% per cent.
If, however, to the sawed lumber is added the yearly cut of saw-
log material for hewn ties, poles, and posts, and the loss of
merchantable timber from windfall, turpentining, fires, insects,
and diseases, the reduction is likely to be at the average rate
of 700 million feet, instead of 550 million feet. This does not
mean that every year the output will be actually diminished
by 700 million feet. If the present high prices for yellow-pine
lumber continue, production may be stimulated and the output
may hold up during the next few years instead of declining.
Should, however, such an increased production take place, the
decline in the output will be so much the more rapid toward
the end of the life of. the industry.

PRESENT AND FUTURE CONSUMPTION OF LUMBER IN THE
SOUTH.

The Southern States consume locally about one-third of their
total pine cut, or 5 billion feet. By some good authorities home
consumption is placed even at 50 per cent.

The South has passed the threshold of a great agricultural
and industriat development. At the same time the South is
underbuilt. The average value of its buildings per farm is less
than in any other section of the country. With agricultural
and industrial development the standards of rural and urban
life will become higher; and better and larger houses will be
built. This will require more lumber.

The annual consumption of lumber is expected therefore to
increase until in 10 to 12 years it may amount to 9 billion feet.

‘By that time the output of yellow pine will probably shrink to

9 billion feet. Thus by 1930 the South may cease to be an ex-
porting region, and may produce barely enough lumber for its
own needs. This does not mean that no southern yellow-pine
lumber will be shipped out of the Southern States, but it does
mean that the exports and imports of lumber will balance. After
1931 the South will become more and more an importing region.
In 15 years the South will become dependent for its own needs
upon large importations of lumber from the Pacitic coast.
22

CYPRESS REGIONS.

Cypress has probably passed its maximum production, and
but a short time remains during which it can occupy a place of
importance in the lumber industry.

The value of cypress for house building and fencing was early
recognized by settlers in the South. Under the colonial rule of
the Spanish and French traffic in shingles and cypress lumber
with the West Indies was of great importance. Great quanti-
ties were used for the hogsheads and barrels of the sugar and
molasses trade. After the opening of the southern pine forests
the general use of cypress as the principal material for house
construction, except for shingles, fell off, and the recent de-
mands from distant markets date from the falling off of the
white pine supply of the North.

Until recent years only the largest and best trees nearest to
streams and shallow canals in which they could be floated were
cut. Utilization was therefore very incomplete. With the in-
troduction of the pull boat in the nineties and finally the expen-
sive steam skidder systems, and a better understanding of the
value of the wood, no stands remained inaccessible.

The cypress cut reached 495 million board feet in 1900; by
1909 it was 955 million; and in 1913 it exceeded 1 billion feet.
It has fallen off since, with a reported cut in 1918 of only 578
million. Lumbering is followed by practically no second growth,
so that with the completion of present operations the cypress
industry ends.

In 1909 the Bureau of Corporations estimated the total stand
of cypress at 40 billion feet. The best available figures to-day
place the total at 22,921 million feet, and the totals for Lou-
isiana and Florida, which furnish the bulk of the cut, at ap-
proximately 11,000 million. If the annual cut during the next
few years be placed at approximately 700 million feet, with
the additional large and unknown amount used annually in the
rough for piling, poles, and the like, it is evident that without
growth in the remaining stands and on cut-over lands the supply
in sight in the present producing centers, Louisiana and Florida,
can not last more than 15 years. A largely diminished yearly
production will be experienced much sooner. Well-informed
lumbermen place the duration of the important commercial cut
at no longer than 10 years.

THE ROCKY MOUNTAIN REGION. ai

The Rocky Mountain region includes Montana, Idaho, Wyo-
ming, Colorado, Utah, Nevada, Arizona, New Mexico, and
western South Dakota." It isa region with wide differences in
character and density of timber growth, in production and con-
sumption of lumber, and in the probable future development and
life of the lumber industry. Thus western Montana and Idaho,
because of the heavy stands of white pine, larch, and yellow
pine, might properly be considered part of the Pacific coast
region; while Utah and Nevada, with their open forests, have
entirely different economic problems to meet as far as the
timber supply is concerned. Similarly, Arizona and New
Mexico are practically an economic unit by themselves; Colo-
rado and Wyoming form another economic unit, and South
Dakota still another. Therefore in considering the present
timber situation and the future outlook for the mountain
region as a whole, the different sections of the region should
be kept in mind.

DEVELOPMENT OF THE LUMBER INDUSTRY.

The development of the lumber industry began in the early
fifties, chiefly to supply the mines. Even now mining is the
heaviest consumer of wood in several sections. After 1900 the

 

uThat part of the Kaniksu National Forest in Washington is in-
cluded in the Rocky Mountain region, while those parts of the Eldorado,
Inyo, Mono, and Tahoe National Forests in Nevada are included in the
Pacific coast region.

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

lumber industry assumed more than a local character and began

-to ship lumber to the Mississippi Valley and eastern markets.
The region is still short of the development which it will reach
in lumber manufacture. It has shown a steady increase for the
last 20 years, and the present cut amounts to about 5 per cent
of the entire production of lumber in the country.

Western Montana and Idaho, because of the heavy stand of
western white pine, larch, cedar, and yellow pine, is the most
important section from the standpoint of timber supplies.
Within these two States is 75 per cent of the entire stand of
the highly prized western white pine. Wyoming, with its dense
and extensive stands of lodgepole pine, is an important source
of material for railroad ties. Colorado, more than half of
whose timber is Engelmann spruce and which has also extensive
lodgepole pine stands, is an important tie and lumber-producing
center for the central Rockies. Western South Dakota, with
its valuable yellow pine stands, is the center of lumber produc-
tion for the State and the adjoining treeless region. Northern
Arizona and New Mexico, with large open yellow pine forests,
supply much of the lumber used in the Southwest and ship
some to the North and East.

ORIGINAL AND PRESENT STAND.

The original forest area of about 64 million acres has now
been reduced by about 8 million acres. This reduction is chiefly
in Montana and Idaho, where much of the early logging was
on agricultural lands. The present stand of saw timber is
about 223 billion feet, or 10 per cent of the entire stand in
the country. Practically all of it is softwoods. The stand is
very unevenly distributed. Nearly 60 per cent, or 130 billion
feet, is in Montana and Idaho; 18 per cent, or 39 billion feet,
is in Arizona and New Mexico; 11 per cent, or over 25 billion
feet, is in Colorado; and the remainder is distributed in smaller
quantities among the other States of the region.

THE ANNUAL DRAIN UPON THE FOREST.

The annual cut of saw timber is about 14 billion board feet,
besides at least half a billion feet for ties, posts, poles, and
fuel wood, making the total annual cut about 2 billion feet.
This, also, is unevenly distributed. Montana and Idaho to-
gether have an annual lumber cut of over 1 billion feet; Colo-
rado, Wyoming, and South Dakota together produce not over
150 million feet; and some 170 million feet is cut in Arizona
and New Mexico. Besides the cut there is a loss of saw timber
through fire, insects, and disease. In Idaho and Montana,
where fires are most destructive, the annual loss from fire has
recently averaged about 1,100 million board feet. The annual
loss due to insects and diseases in these two States is estimated
at about 100 million feet. For the entire region the loss from
fire, insects, and disease ig at least 1} billion feet. The total
annual drain upon the forests is about 34 billion feet, two-.
thirds of which falls upon Montana and Idaho.

ANNUAL GROWTH.

The annual growth in the Rocky Mountains is estimated at
461 million board feet of saw timber and 264 million cubic feet
in the form of immature stands (equivalent to about 528 million
board feet), which makes a total of nearly 365 million cubic
feet (equivalent to about 989 million board feet), or 21.5 cubic
feet per acre per year on the growing area. Most of the growth
is in Montana and Idaho.

CUT COMPARED WITH GROWTH.

Considering saw timber alone, the annual drain is about
seven times the growth. If we compare the cut of all forest
products with the entire growth in cubic feet, the cut and

 

devastation is two and one-half times the growth.
TIMBER DEPLETION, PRICES,

LOCAL NEEDS.

In Montana and Idaho the present cut of saw timber is in
excess of the local needs, which are about 850 million board
feet. Arizona and New Mexico are not self-sustaining. In
1914 about 350 million board feet of timber was used and only
132 million feet was produced. Wyoming, although it produces
more than 600,000 railroad ties and a large number of poles,
posts, props, and mine ties, manufactures only about 15 million
feet of lumber, less than enough for its population. Colorado,
although it produces 550,000 railroad ties and large quantities
of posts, poles, props, and mine ties, manufactures less than
100 million feet of lumber, and is not self-sustaining.

THE FUTURE OF THE LUMBER INDUSTRY.

Of the Rocky Mountain States, only western Montana and
Idaho now produce lumber above their needs and can increase
their output in the near future. It would seem that the forests
of Montana and Idaho, with some 180 billion feet of saw timber
and a present cut of only 1 billion ; Colorado, with over 25 billion
feet and a cut of 100 million; Arizona and New Mexico, with
39 billion feet and a cut of only 132 million, are capable of sus-
taining a larger lumber industry for a considerable ‘time.

It should be remembered, however, that the region is still
underdeveloped and that its requirements for lumber may also
be expected to increase with its rapidly growing population.
Furthermore, within the next 12 years over 95 per cent of the
existing sawmills in the southern yellow-pine region will cut
out. The Pacific coast and western Montana and Idaho will
have to assume the main burden of supplying saw timber to the
entire country. This means more rapid cutting of the remain-
ing stands and a big increase in the existing deficit in annual
growth. A large amount of the standing timber is relatively
inaccessible. The future supplies of accessible timber are
therefore much more limited than is indicated by the estimates
of the total standing timber. The privately owned timber in
the territory tributary to Spokane will be cut out in 25 or 30
years if the present .rate of cutting continues; and the cut,
which now amounts to approximately 550 million feet of logs,
will drop to 100 or 125 million feet, which the local National
Forests can produce annually on a continuous basis. The lum-
ber industry will then move to other timbered regions. probably
to the Clearwater territory, which is tributary to Lewiston,
Idaho. Even if the rate of consumption should not increase
above the present figure, if appears that the bulk of Idaho’s
privately owned timber, including 75 per cent of the remaining
white pine in the United States, will be gone in about 40 years.

The western red cedar is now being cut extensively in Mon-
tana and Idaho for poles, piling, posts, and shingles. The pres-
ent average annual shipments of poles, piling, and posts from
Montana and Idaho amount to 216,360 poles and piling and
8,789,000 posts. The regions which are now being exploited
will probably be exhausted within the next 20 years and opera-
tions will be transferred to more remote areas. The present
cedar lumber prices have diverted into lumber a large portion
of the material ordinarily manufactured into posts and shin-
gles. Continuation of this demand might easily exhaust the
entire available supplies of post and pole material in 20 years.

The future of the lumber industry in western Montana and
Idaho will not be unlike that of the Pacific Northwest. There
is this difference, however, that the supplies in western Mon-
tana and Idaho are much smaller than those in Washington
and Oregon, and comprise three-fourths of the remaining sup-
ply of one of the most valuable softwood timber trees of the
country—western white pine. Now that the eastern white pine
is practically exhausted, the demand upon the western species
will tend to increase. The other States of the Rocky Mountain
group will not be important factors in the lumber production
for the general market.

 

EXPORTS, AND OWNERSHIP. 23
PACIFIC COAST.
GROWTH OF THE LUMBER INDUSTRY.

The development of the lumber industry on the Pacific coast,
our last great ¢oniferous timber reserve, has already progressed
far. The first sawmill in the Northwest began operations on
Puget Sound in 1845. Within a decade lumbering became, and
still is, the chief industry in western Washington. The cut for
a good many years was used locally or shipped into California
or exported. Not very much timber was cut until after the
completion of the Northern Pacific Railway in 1882, and then for
a number of years only in special grades. Twelve years later
lower freight rates were made on eastern lumber shipments and
the pronounced development of the west coast industry began.

Very little lumber was cut in California prior to the begin-
ning of gold mining in 1849. Lumbering in the redwood belt
began about 1860 and grew steadily. In 1899 Washington,
Oregon, and California cut a little more than 2,900,000,000
board feet. Production increased slowly until in 1918 the total
was slightly in excess of 8,590,000,000 board feet. Washington
became the leading State in lumber production in 1905 and has
since held this place, except only in 1914, when it fell slightly
below Louisiana. The present cut is about 4,500,000,000 board
feet annually. Oregon at present is the third State, with a lum-
ber cut for 1918 of a little more than 2,700,000,000 board feet.
That for California has never exceeded 1,500,000,000 feet. '

In the 12 years between 1906 and 1918 the cut of the West
Coast increased only about 14 billion feet, largely because of
the inability of the product to displace southern pine,in the
eastern and middle western markets under the handicap of
higher freight rates. Within the last year, however, shipments
have increased and yellow-pine markets up to the very boun-

_daries of the producing territory have been invaded..

ORIGINAL AND REMAINING FORESTS.

The commercial forest area of the Pacific Coast States has
been reduced to approximately 57,586,000 acres. <A large per-
centage of this, about 39,370,000 acres, is in virgin stands, not
all, however, of accessible high-grade timber, for there is @
large percentage of relatively inferior and inaccessible areas.
This is an important factor which is usually overlooked in the
consideration of the western timber supply. Second growth of
saw-timber size covers about 5,292,000 acres and smaller second
growth 6,425,000 acres, while nonrestocking areas cover
6,500,000 acres.

Of the volume of the original forest no satisfactory statis-
tics are available. The present stand, however, is about 1,141,-
031 million board feet, or practically half of the remaining
saw timber in the United States. Oregon leads with a total
stand of 493,700 million feet ; that of Washington is 334 billion;
and that of California, 313,331 million. Six hundred and eighty-
six billion, or more than half of the total, occurs in the Doug-
las fir belt of western Oregon and Washington.

Douglas fir comprises 558,571 million feet, and of this 505
billion, or nearly one-fourth of the remaining stand of saw
timber in the United States, is in Washington and Oregon.

Estimates by species are as follows:
Board feet, lumber
scale.

558, 571, 000, 000
183, 453, 000, 000

94, 000, 000, 000
82, 479, 000, 000
72, 208, 000, 000

88, 485, 000, 000

Douglas fir
Western yellow pine and Jeffrey pine______
Western hemlock (largely in western Wash-

ington and Oregon)_-___-_______________
True firs ___ ass
Redwood (California)
Sugar pine and western white pine (largely

sugar pine in California) ___._____________
Western red cedar (western Washington and

 

 

 

 

Oregon) 49, 000, 000, 000
Spruce (Washington and Oregon)_~_-______ 18, 355, 000, 000
Lodgepole pine_-____-__---__--_____--__---__ P 4, 566, 000, 000
Others ews 44, 914, 000, 000

CRO Geil 22 oh ats 2a Be et 1, 141, 031, 000, 000
24 TIMBER DEPLETION, PRICES,

GROWTH AND DEPLETION.

The total area cut over is approximately 6,125,000 acres, of
which two-thirds is in Washington and Oregon, and a very
large percentage west of the Cascades in the Douglas fir belt.
As already indicated, the total nonrestocking area of the Pacific
Coast States is estimated at 6,500,000 acres, but this is only
a part of the sum total of depletion, since there has been great
and needless loss from the destruction of virgin stands by fire
and other causes on a part of the 6,425,000 acres now support-
ing second growth. The area burned over annually in these
three States is shown by Forest Service data to amount to
450,000 acres, and the loss in timber to about 600,000,000 board
feet.

The average annual cut, largely lumber but including rela-
tively small amounts of other materials, is about 10 billion board
feet. To this it is probably safe to add 14 billion feet lost by
fire and other causes. It is also probably safe to assume that
11 billion feet out of the total represent the drain upon saw
timber. Annual growth is estimated at 1,262,000,000 board feet.
There is in addition growth of approximately 430,000,000 cubic
feet in stands of unmerchantable size. Total growth in cubic
feet amounts to 706,000,000.% One reason for these compara-
tively low figures is, of course, the fact that so much of the
territory is occupied by virgin stands. Total depletion in cubic
feet amounts to 2,500,000,000. Depletion is therefore approxi-
mately three and one-half times the growth. The depletion in
timber of saw timber size is approximately nine times the
growth of the same class of material.

LIFE OF THE INDUSTRY.

The timber stand in California is estimated at 3138,331,000,000
board feet. This is being reduced by cutting at the rate of
about 1,500,000,000 feet annually. These figures should not be
taken alone, however, for there are other important aspects of
the situation. Increased demands from the East will almost
certainly result in an increased rate of cut for California.
Practically all of the cut up to the present has been in the most
accessible stands, whereas a considerable part of the remain-.
ing timber is comparatively inaccessible.

Logging operations are now removing annually a little less
than 2 per cent of western Washington’s timber and less than 1
per cent of western Oregon’s timber. Yet the reasonably ac-
cessible timber and that in private ownership is going very
much faster, and with decreasing southern pine production
enormous pressure to increase the cut may be expected.

A study of the local timber supply indicates that in certain
localities a large proportion has been cut off and that log-
ging operations are being pushed back to the less accessible
timber in the rougher mountainous regions. The exhaustion
of local supplies is a vital matter to local prosperity and de-
velopment. It means the cessation of a local industry, the
abandonment of improvements, rapid depreciation of invest-
ment, and other losses which the industry, the community, and
the consumer must shoulder. One authority estimates that only
a third of the original privately owned timber tributary to
Puget Sound remains. The situation in Grays Harbor County
illustrates the rapid exploitation which in a surprisingly short
time is to end the industry locally. About 20 years ago there
were in this county 750,000 acres of timber and only about
75,000 acres of cuttings. Now there are 355,000 acres of stumps.
One-sixteenth of the county’s private timberland is being cut
over annually. In 25 years the supply of privately owned virgin
timber will be gone.

King and Snohomish Counties, Wash., the scene of the earli-
est lumbering operations in the Northwest, also illustrate local
exhaustion of virgin timber in the not very remote future.
Forty billion of the original 80 billion feet of commercial timber

 

12 Equivalent to about 2,100,000,000 board feet.

 

EXPORTS, AND OWNERSHIP.

has been cut. Thirty billion of the remainder is in private
ownership, and is now being felled at the rate of 800,000,000
feet annually. Indications are that this private timber will be
gone in about 35 years.

One authority on the lumber supplies of Washington has
studied the rate of exhaustion from the annually decreasing
acreages of private land assessed as “ timberland.” He found
that from 1909 to 1919 there was a decrease in the acreage of
timberland in western Washington of about 850,000 acres, or
85,000 acres annually, and in eastern Washington of about
390,000, or 39,000 acres annually. On the basis of 3,585,686
acres assessed as timberland in 1919 in western Washington,
privately owned old-growth timber would last 42 years at the
present rate of cutting. Similarly, in eastern Washington, for
the 1,128,666 acres of private timberland in 1919, the present
rate of cutting would exhaust the virgin timber in 26 years,
Adjusting these statistics to provide for additional land which
was classified as timberland in 1919 but not in 1909, he believes
that an even faster rate of cutting of the private stumpage is
indicated, and that, disregarding increment in second-growth
stands and without allowing for the expected increased cut, the
private virgin timber will last only 35 years in western Wash-
ington and 20 years in eastern Washington. Allowing for the
almost certain increased rate of cutting, he expects the privately
owned virgin timber supply of Washington to be virtually gone
in 20 years unless forest policies are changed.

Bend, Oreg., is the center of one of the most extensive and
famous of Oregon’s yellow-pine belts. A few years ago an
unbroken forest; of virgin yellow pine extended to the very
edges of the city. At present cutting has left a practically
unbroken waste for 6 or 7 miles to the west and south. The
operating territory surrounding Bend has a radius of from
20 to 30 miles and occupies an area of 382,000 acres of mer-
chantable forest, carrying 5% billion feet of commercial timber.
Of this about 231,000 acres, carrying 8% billion feet, is pri-
vately owned. The present rate of cutting, which is likely to
continue and may be augmented, will exhaust the privately
owned stumpage in 25 to 80 years.

Depletion in Washington has gone much further than in
Oregon, and while an expansion of the industry in Washington
under increased demands from eastern markets may reason-
ably be expected, by far the greater part of the expansion may
be looked for in Oregon. The reason for the slower develop-
ment in Oregon lies in the greater inaccessibility of its Douglas
fir stands. Many operations now being seriously considered
for Oregon will require transportation and other investments
running into the millions of dollars before any timber can be
taken out.

The factor of local consumption must also be considered.
California is an example. Its industry is large and promises
to grow. From the earliest days California has been an im-
portant source of export material. Large quantities are still
exported to the East and to foreign countries; but’ up to the
present time the State’s population and agricultural and indus-
trial development have more than kept pace with the output
of lumber, so that it is doubtful whether production has ex-
ceeded consumption since about 1875. From the beginning of
lumbering on Puget Sound California has imported large
amounts of fir, The per capita lumber cut of the State has
been approximately equal to or slightly’ in excess of the
average per capita consumption of the United States since
between 1869 and 1879, while the average consumption of the
State is probably somewhat greater than for the country as
a whole. In 1919 southern California alone used the equivalent
of about half the total cut of the State, a per capita con-
sumption of at least twice that of the whole United States.
Beet Ha sera a Pacific Coast States as a whole will

y materially during the next 10 years.
TIMBER DEPLETION, PRICES,

‘Local demands will also increase, but not in proportion to the
cut. Large additional amounts will be available for the eastern
markets. A gradual rise in logging costs is inevitable as the
more accessible stands are cut out and it becomes more and
more necessary to extend operations to the rougher mountainous
logging chances, with lighter and more broken stands and
larger percentages of the less desirable species. The timber
resources of the Pacific Coast States are very large, but it
would be very unwise to overestimate them, for much less than
the total stand is readily available. Existing transportation
facilities to the East are already overburdened with present
traffic, and they will have to be very materially increased to
meet the probable reduction in the eastern and southern lumber
cut during the next 10 years.

THE SOUTHERN APPALACHIAN HARDWOODS.
GROWTH AND DECLINE OF LUMBERING.

For the purpose of this report the southern Appalachian
hardwood region includes the hardwood forests of Maryland,
West Virginia, Virginia, North Carolina, South Carolina,
Georgia, Alabama, Kentucky, and Tennessee.

Large-scale logging operations shifted to this territory from
Pennsylvania, Ohio, and Indiana. Operations in West Vir-
ginia on a large scale did not begin until after the Civil War.
Before 1900 central Kentucky and Tennessee were well cut
over. The cut for the entire region was at about the maximum
in 1909, with an output in hardwood lumber of approximately
4 billion board feet. Following this there was a pronounced
decline, and in 1918 the cut had decreased to 1,700,000,000 feet.
While this heavy falling off in cut was, of course, very largely
due to war conditions, there has been a decrease in proportion
to the total hardwood cut of the country, for which the deple-
tion of supplies appears primarily responsible. The proportion
of the aggregate hardwood lumber production which was sup-
plied by the Appalachian States had risen gradually from 32
per cent in 1899 to 41 per cent in 1914, but by 1918 it had
fallen to 34 per cent. West Virginia, which held the lead in
hardwood production from 1910 to 1917, lost it to Arkansas in
1918; while North Carolina, which cut approximately 400
million feet in 1909, dropped to less than 200 million in 1918.

The cut has declined in quality as well as quantity, and this
is perhaps the more serious aspect. The early lumbering con-
sisted of cullings in which only such trees as walnut, cherry,
and the finest of oak and yellow poplar situated along the driv-
able streams were removed. ‘The introduction of logging
railroads extended operations into nearly all parts of the re-
gion, until now there is comparatively little virgin timber left,
most of it remote and difficult to log. The present logging
operations are largely working over previously-culled stands,
removing practically every saw log and a large part of the
smaller material. The quality of the lumber produced is con-
sequently much poorer than formerly.

THE ORIGINAL FOREST.

The virgin forests which once covered practically the entire
land .area of this region contained a wealth of hardwood tim-
ber unsurpassed in the Northern Hemisphere. Oak, chestnut,
and yellow poplar of large size and high quality filled the
coves and valleys, mixed with walnut, cherry, hickory, bass-
wood, cucumber, and other valuable hardwoods, and softwoods
such as white pine and hemlock. Over an area exceeding 60
million acres the original hardwood stand may be estimated at
more than 325 billion feet.

THE REMAINING STAND.

Lumbering and settlement gradually restricted the area of
commercial timber to the mountains. This part of the region,
about 35 million acres, now contains practically all of the re-
maining tracts of old-growth hardwood timber, and the extent

EXPORTS, AND OWNERSHIP. 25
of these has been reduced to about one-third of the total area,
the remaining two-thirds being either in recently cut-over land,
usually badly burned, or in farmers’ woodlands. So far as can
be learned from the available sources, the stand is in the
neighborhood of 80 billion board feet, of which 60 billion is
old-growth timber occupying about 12 million acres. Most of
this has been culled of its best trees, and the virgin tract«
which remain are few, relatively small, and remote. About 12
per cent of the stand is spruce, hemlock, and various pines.
The oaks are the principal hardwoods and probably comprise
about 35 per cent of the stand, while chestnut is the most
abundant single species and is estimated at 25 per cent.

For all the States within which the southern Appalachian
Mountains lie, the total stand of hardwoods is estimated at
147 billion board feet, about 58 per cent of the total stand of
both softwoods and hardwoods. Outside of the mountain re-
gion the stand is practically all second growth in farm wood-
lands. The total area bearing hardwood stands is about 55 mil-
lion acres.

LUMBER CUT AND TOTAL CUT.

During the two years preceding our entrance into the war
the annual hardwood lumber cut of the southern Appalachian
States fell from about 3} to about 2} billion board feet. In
1918 there was a further reduction to less than 2 billion board
feet. Under normal conditions it is likely that the cut of lum-
ber would still be proceeding at close to 3 billion board feet per
year. The lumber cut, however, is probably only about 35 per
cent of the total drain upon the forests. An immense amount
of material is taken out in the form of tanning-extract wood
and bark, poles, ties, cooperage stock, fuel, and other products.
Expressed in terms of cubic volume, the “normal” annual lum-
ber cut is the equivalent of 657 million cubic feet of standing
timber, while other products consume an additional 1,220 mil-
lion cubic feet, making a total annual production of about 1,877
million cubic feet. Much of this output is, of course, from
second-growth timber. Of the lumber output, however, fully 75
per cent is from the remaining old-growth stands. After the
exhaustion of the old growth the entire supply of lumber must
come from the second growth, and since very little of this will
yield lumber of a better quality than No. 1 common, the effect
upon the furniture and other industries largely dependent
upon high-grade lumber will be very serious.

DETERIORATION OF THE FOREST.

The chestnut blight has entered the mountain region, and in
the opinion of pathologists is almost certain to sweep through
the hardwood forests, eliminating chestnut. Besides depriving
the tanning and other industries of one of their chief sources of
supply, this disease will throw the burden of the lumber cut
upon other species, thus hastening the process of depletion. It
is impossible to forecast the rate of this depletion. ©

A further loss which can not be measured satisfactorily in
amount of material or money value is that from forest fires.
Much of the mountain forest has been repeatedly burned, and
while not much timber has been actually killed the fires are
responsible for a great deal of deterioration in the timber.

THE DURATION OF THE CUT OF OLD GROWTH.

Much uncertainty exists in the minds of even the best-in-
formed men in the lumber industry as to the duration of the
cut in the remaining old-growth stands. In West Virginia,
which has been one of the leading hardwood producing States,
the statement was made by one of the best-informed men in the
industry that the length of cut on a large scale would not ex-
ceed five years. The manager of one large company reports
that most of the mills of the State will cut out within five to
eight years. A responsible official in “another company states

 

~that very few concerns in his section of the State have: over
26 TIMBER DEPLETION, PRICES,
five years’ cut. In North Carolina the State forester estimates
that the supply of old-growth hardwood timber will last 17
years. One of the best-informed lumbermen in western North
Carolina estimates that the cut from old-growth timber in
north Georgia and southwestern North Carolina will last 20
years, but that this cut will come increasingly from small
operations.

In Kentucky and Tennessee the duration of the cut of old-
growth hardwoods is believed by the manager of one lumber
company to be 20 years, while another well-informed man sees
15 years ahead for the Kentucky hardwoods. A future cut of
15 years is predicted for old-growth timber in the southern Ap-
palachians by another representative of the industry, while still
another estimates that the supply will last 25 years.

The consensus of opinion among the best-informed men in
the industry seems to be that if present conditions continue the
southern Appalachians will have ceased to function as an
important source of high-grade hardwood lumber within 20
years and that within 25 years the old-growth timber will be
practically gone.

EFFECT OF DEPLETION UPON SELECTED INDUSTRIES.

Further light is thrown on the extent of the depletion of the
southern Appalachian old-growth hardwoods by a questionnaire
to the wood-using industries of North Carolina by the State
forester. Referring to local supplies at the present time in
comparison with conditions existing during the past 10 or 20
years, 98 per cent of the furniture makers, 91 per cent of the
vehicle makers, and 100 per cent of the chair makers reported
that supplies had been greatly reduced. In referring to pros-
pective local supplies on the basis of a 10-year outlook, 12 per
cent of the furniture, 22 per cent of the vehicle, and 48 per cent
of the chair factories reported that supplies would be ex-
hausted. Highty-eight per cent of the furniture, 67 per cent of
the vehicle, and 57 per cent of the chair makers reported that
supplies would be gradually reduced. Of all of these only 11
per cent of the vehicle factories reported an outlook for suffi-
cient material.

The replies received from the furniture manufacturers indi-
cate a marked decrease in the use of oak and poplar as com-
pared with gum. In 1909 the lumber used was 74 per cent oak,
13 per cent poplar, and 1 per cent gum, while in 1919 the per-
centages of oak and poplar used had been reduced to 60 and 6
per cent, respectively, while gum had increased to 21 per cent.
The manufacturers indicate that the present year will see a
still larger proportion of gum used.

THE ANNUAL GROWTH.

There are about 223 million acres of second-growth hardwoods
of saw-timber size in the southern Appalachian States, which
are estimated to be producing about 13 billion board feet per
year, equal to about 325 million cubic feet of standing timber.
In addition there are approximately 22? million acres which are
producing hardwood material of only cordwood size. The
annual growth on this area is about 570 million cubic feet. The
total growth is thus about 900 million cubic feet.

GROWTH COMPARED WITH CUT.

Growth is about one-half the “normal” rate of cut:

 

 

Estimated Estimated Growth in
annual cut annual per cent
(“normal’’). growth. of cut.
Lumber, board feet.........------.---| 3,000,000,000 } 1, 490, 400, 000 50
All products, including lumber, cubic =
TObt .... .nnadasswereneadew sy o<csenmss 11,877,000, 000 1895, 000, 000 48

 

 

1 In terms of lumber, this corresponds to an annual cut of about 5,440,000,000
board feet and an annual growth of about 2,630,000,000 board feet.

 

EXPORTS, AND OWNERSHIP.

In contrasting these figures, however, it should be remem-
bered that much the greater part of the cut is being taken
from the relatively concentrated old-growth timber, while the
growth is taking place in the widely distributed stands of
second growth. The cut is from large timber yielding high-
grade lumber; the growth is nearly all low grade because of
the small size of the trees. Great damage is constantly being
done by forest fires, while the second growth itself is being
drawn upun more and more for a wide variety of small wood
products.

IMPORTANCE OF THE SOUTHERN APPALACHIANS IN THE

FUTURE LUMBER SUPPLY OF THE COUNTRY.

The future production of the Appalachian hardwood region
is of far more than purely local importance. The hardwood
forest lands of Ohio, Indiana, and Illinois, which supplied 25
per cent of the total hardwood lumber cut as late as 1899,
have been converted into farms almost as fast as the land
has been cleared, and small isolated tracts, as farm wood lots,
will furnish the only future timber production. Hardwood
lumber production is now centered in the lower Mississippi
Valley, and the cut is almost entirely from rich agricultural
lands from which timber production can not be expected in
the future. Farm woods will continue to contribute, but if
there is to be any permanent supply of large-sized, high-grade,
hardwood saw timber it must come very largely from moun-
tainous, rough, or otherwise nonagricultural lands like those
in the southern mountains. Aside from relatively small areas
in the Lake States and in New England, the entire country
must look to the southern Appalachians.

HARDWOODS OF THE LOWER MISSISSIPPI VALLEY.

AREA AND STAND.

The lower Mississippi Valley, including the States of Arkan-
sas, Mississippi, Louisiana, eastern Texas, and eastern Okla-
homa, constitutes the last great reservoir of hardwoods in the
country. Of the hardwood area of 36,000,000 acres in this
region, 60 per cent, including the heaviest stands and most
valuable species, is located on the alluvial bottoms of the Mis-
sissippi Delta. Most of this is unusually fertile and will even-
tually be cleared for agriculture. The remaining 40 per cent, of
upland stands, is of less importance from a lumber standpoint,
both because of the smaller trees and great mixture of
species and because much of it is broken up by farms and pine
stands.

Altogether the region is estimated to contain nearly 133
billion board feet of saw timber, or more than twice as much
as the present stands of old-growth hardwoods in either the
Lake States or the southern Appalachians. With the exhaus-
tion of the hardwood supplies in these regions, the lower Mis-
sissippi Valley is being drawn on more and more heavily to

furnish the raw material for the hardwood-using industries
of the entire country.

DEVELOPMENT OF THE LUMBER INDUSTRY.

During the period from 1900 to 1906 the cut of hardwoods in
Ohio, Indiana and Illinois, which had previously contributed
large quantities to the vehicle, furniture, railroad-car, and other
hardwood-consuming industries, fell off by nearly 50 per cent.
By 1906 the center of hardwood production had shifted to
the Appalachian States, which furnished nearly half of the
country’s hardwood consumption, while nearly one-fifth came
from the Lake States. Now these regions in turn are declining
in production, and there is a corresponding increase in the
cut of the lower Mississippi Valley. The exploitation of hard-
woods in this region has progressed steadily since 1900, its
contribution to the total hardwood cut increasing from 14 per
cent to approximately 25 per cent. To-day the hardwood
TIMBER DEPLETION, PRICES,

products from this region are being used to supply the factories
of the Carolinas, the Ohio Valley, and the Lake States, which
were formerly independent of imported material.

The last of the great hardwood regions is thus well on its way
toward complete exploitation. Already the exhaustion of the
original supplies in the northern part of the region centering
around Memphis has reached the point where it is profitable
to return to cut-over areas for trees that were formerly re-
garded as too small to log and for less valuable species, such as
tupelo and water gum, which at the time of the first cutting were
unmerchantable but which now command a ready sale. The
present practice in this part of the region is to remove all species.
Wood distillation plants have been installed for using cord-
wood and there is a steadily increasing interest in the utiliza-
tion of smaller sizes, inferior trees and logs, and species
formerly rejected. The day of the small mill and wood-prod-
ucts plant has arrived. More and more the large mills are
finding themselves forced either to buy logs in order to con-
tinue operation or to move down river into southern Mississippi
and Louisiana where new plants can be erected with reasonable
prospect of a 20 to 25 years’ supply of material.

In the southern part of the territory, in southern Mississippi,
Louisiana, and eastern Texas a much larger proportion of the
original forest is left. Here large mills are still the rule and
-are increasing in number and in rate of exploitation. It is
therefore likely that increased production in this part of the
region will lead to an increase of the present annual cut of ap-
proximately a billion and a half board feet of hardwoods for
the region as a whole. How long it will last can not, however,
be definitely predicted. The one thing certain is that eventually
the southern part of the region will repeat the history of the
northern part and that the virgin stands and large mills of
to-day will be replaced to a large extent by portable mills
operating culled and second-growth stands.

GROWTH AND DEPLETION.

Since the region-is largely agricultural in its future possi-
bilities, comparatively little in the way of timber growth can
be looked for. The extent to which it is drawing on its forest
capital is of great importance, because it is the source of our
largest remaining hardwood supply. A net growth is taking
place on only some 6.5 million acres carrying hardwoods of saw-
limber size. The annual growth on this area is estimated at
approximately 395 million board feet, or but little more than
one-fourth of the normal annual lumber cut of 1,500 million
board feet. In addition there is an annual growth of 3801
million cubic feet (about G02 million board feet) on the 15
million acres with stands below saw-timber size, making a
total growth for the region of 387 million cubic feet (about
997 million board feet). ‘

In addition to the depletion in quantity of material there is
a depreciation in the quality of the remaining stand. Of the
36 million acres of hardwood lands in the region, approxi-_
mately 22 million acres are contained in the alluvial bottom
lands of the Mississippi Delta. It is on these alluvial soils
that the heaviest and finest stands of hardwoods remain, par-
ticularly oak, red gum, ash, and cottonwood, which in 1918
made up more than 50 per cent of the reported cut of hard-
woods for the entire country. Oak and red gum are now being
logged most heavily and in 1918 made up more than two-thirds
of the total hardwood cut in the region. These species, because
of the demand for them in the veneer industry, are two of
the most highly prized hardwoods of the South, but they are
valuable for veneer only when cut from virgin stands and in |
large sizes, With the rapid depletion of the present virgin
stands there will therefore be a corresponding quality short-
age, which will result in a relatively larger proportion of the
future cut being made up of such secondary species as syca-

 

EXPORTS, AND OWNERSHIP. 27

more and tupelo and of poorer specimens of the more valuable

| species, such as oak and gum.

THE FUTURE OF THE REGION.

This steady depletion of the hardwoods in the lower Missis-
sippi Valley is accentuated by the fact that the bulk of the
bottom-land stands are on some of the most fertile farm soils
in the country. With the removal of the timber they will, for
the most part, be devoted to agriculture. Drainage and clearing
of the cut-over lands has been going on for more than a decade
at a rate which indicates that not over 10 per cent, and probably
less, of the area once under hardwoods will be allowed to come
up to second growth. This change in the use of the land, which
is of course in accordance with its highest utilization, means
that the cut in the bottom-land region of the lower Mississippi
Valley can not be maintained from second growth to the same
extent as has been the case in the Northeastern and Central
States. Once the present stand of timber on these bottom lands
is gone, the hardwood supply of the country will be permanently
reduced, and the future cut of hardwoods must come from sec-
ond-growth stands of relatively inferior quality in other parts
of the country.

NEWSPRINT SUPPLIES.
THE FACTS AS TO DEPLETION.

Newsprint paper is one of the leading products of the pulp
and paper industry, which in its modern development depends
upon the forest for its raw material. The present newsprint
shortage goes back fundamentally to our dependence for news-
print production upon the forests of the Northeast and the Lake
States, where timber supplies have already been seriously de-
pleted, and where, considering the remaining stands, the pulp
and paper industry is already seriously overdeveloped.

Until the abnormal demands, short supplies, and resulting
prices cf the past few months led to increased newsprint pro-
duction through the utilization of plants designed for and for-
merly used in making other kinds of paper, there had been no
expansion in the newsprint industry in the United States since
1909. The demands for newsprint paper had, however, been
increasing by leaps and bounds. In 1899 our consumption
amounted to 569,000 tons. In 1918 it had reached 1,760,000 tons,
an increase of approximately 200 per cent. Per capita consump-
tion. of 3 pounds per person in the United States in 1880 had
increased to 83 pounds per person in 1919. With an increase
of 11 times in 40 years, rapidly increasing requirements between

1909 and 1919, and very little increase in production, imports
were obviously necessary.

Before taking up the extent to which the United States is
supplying its domestic requirements, the importance of the coun-
try’s being on an independent basis so far as newsprint pro-
duction and the necessary raw materials are concerned should
be briefly considered. Dependence upon foreign sources for
pulp wood or pulp newsprint exposes the American consumer to
the danger of price control. He must also reckon with the pos-
sibility of embargo, which even ncw is far from being a theo-
retical menace. All exports. of pulp wood are prohibited from
the colony of Newfoundland. The Canadian Provinces have pro-
hibited the export of pulp wood from crown lands, which form
a very considerable extent of the timberlands both in eastern
and western Canada. For a year or more American manufac-
turers have been apprehensive concerning the possibility of em-
bargo on all pulp-wood exports from Canada. It would unques-
tionably be desirable to make the United States as nearly self-
supporting as possible.

In lumber the United States is still an exporting country,
but in pulp wood, pulp, and newsprint we have become large
importers. From being self-supporting in newsprint production
as late as 1909 the United States had, in 1919, 10 years later,
28 TIMBER DEPLETION, PRICES,

become dependent upon foreign sources for approximately two-
thirds of our newsprint or its raw material.

The factors which have held our newsprint industry prac-
tically at a standstill in the face of rapidly growing domestic
requirements are pertinent in a study of timber depletion. The
various requirements of paper making have restricted the num-
ber of species which have gone into newsprint paper, and inci-
dentally into all kinds of pulp and paper, very largely to four,
of which spruce supplied 55 per cent of the total pulp manu-
factured in 1917, hemlock 16, balsam 7, and poplar 6, a total of
84 per cent from four species. The overcentralization of the
industry in the Northeast and Lake States and the consequently
serious overcutting of the timber in these regions is due in no
small degree to this restricted use and the occurrence of these
species chiefly in New England and the Lake States.

The lumber industry has followed the timber, but a much
smaller investment per unit of output is required in the lumber
mill than in the pulp and paper plant. On a prewar basis an
investment of approximately $1,500 per thousand board feet of
daily product is required in lumber manufacture, whereas pulp
and paper establishments require approximately $50,000 per
thousand feet of daily consumption. Large investments have
therefore tended to hold the pulp and paper industry in the
regions in which it was first established, and timber has been
hauled increasing distances to the mills. A rail and water
transport exceeding 500 miles is now not uncommon.

When overdevelopment of the American industry in the
Northeast and the Lake States, as compared with timber sup-
plies within our own borders, prevented further development,
and when Canada began to take measures to withhold pulp wood
for the upbuilding of a home industry, new construction to meet
growing demands shifted to the other side of the international
boundary, where it was welcomed by the Canadian and the
various provincial governments. Since 1909, the year which
marked the suspension in American development, Canadian
production has increased from 150,000 tons to 800,000 tons, or
approximately 433 per cent.

The depletion of supplies in the Lake States is clearly indi-
cated in the rapidly increasing distances from which the pulp and
paper mills find it necessary to secure their material. A repre-
sentative of one of the purchasing companies which supplies
a large number of the Wisconsin mills reports that in 1904 sup-
plies were largely obtained within the State. Five years ago it
had become necessary to go far north into Minnesota, but it
was rarely necessary to ship material from points more than
50 miles north of Duluth. At the present time, however, a very
material part of the supply is secured from the extreme north-
ern part of the State. Spruce from Minnesota is now being
hauled from 700 to 750 miles by railroad to the Wisconsin mills,
and from Canada up to distances of 1,000 and 1,200 miles. The
situation has become so critical that the Wisconsin mills are
seriously considering the possibility of securing their raw mate-
rials from the Rocky Mountain region of Montana. For hem-
lock the paper industry must compete with the lumber industry
for logs of saw timber size, and, unfortunately, from the stand-
point of future supplies, the cut now includes a very consider-
able amount of material obtained from trees under saw
timber diameters.

It is reported from New York, where nearly 50 per cent of our
domestic newsprint production is now centered, that 60 per cent
of the pulp and paper mills have absolutely no timber supplies
of their own. For these mills there seems to be little ahead
except closing in a comparatively few years. At least 60 per
cent of the remaining spruce pulp wood in New York is in the
State preserves, on which no cutting is allowed.

In New Hampshire the coniferous pulp wood has been cut
very heavily, and 10 or 12 years will probably see the end of
the supply. Aside from the State preserve in New York, the
bulk of the remaining coniferous pulp wood of the East is

 

EXPORTS, AND OWNERSHIP.

located in Maine. One of the best supplied pulp and paper
companies in the State has holdings which at the present rate
of cutting various estimates give a life of from 40 to 60
years. Holdings of another large company are estimated at
about 20 years; of still another at 15 or 16 years. There are
about 15 mills which have no lands of their own and which
will probably have difficulty in purchasing material within 10
years.

The pulp and paper mills of the Northeast in general are be-
coming more and more dependent upon Canadian wood. So
far as known, no company in the Northeast has sufficient hold-
ings under present methods of management to guarantee any-
thing approaching a continuous supply. Probably not over six
companies control or own timberlands with supplies for more
than 20 years.

The drain upon the forests for newsprint is very heavy.
One large daily, for example, which consumes 20,000 tons a
year, requires for that brief period the product of a century’s
growth on 7,500 acres of eastern spruce forest.

The present situation from the standpoint of timber supplies
in the eastern United States for the newsprint industry is
therefore very unfavorable, and the future holds no particular
promise. The supplies already limited are being rapidly cut;
many mills are already without timber of their own; the stands
in eastern Canada have apparently been very much overesti-
mated in the past; and little concerted effort has yet been
made to increase the production of pulp woods in the North-
east, where the industry is at present centered. Only such
effort, together with the development of the industry in the
West and in Alaska, where there are still large stands of timber
suitable for newsprint paper, can assure production in the
United States which will even approximate domestic require-
ments. The situation as to other classes of paper is somewhat
similar, although it may not yet be so serious, and is usually
of less importance from the standpoint of public welfare.

ALASKAN SUPPLIES OF PULPWOOD.

Alaskan timber is so important from a national pulp-wood
standpoint that it can not be allowed to pass without special
comment. The timber, which is of particular interest, is on
the Tongass National Forest in southeast Alaska.

While much of this timber is of saw-timber size and will in
the future become increasingly valuable for lumber, it is be-
lieved that its real future is for pulp and paper. The stands
are largely western hemlock and Sitka spruce, species now in
use on the Pacific coast for newsprint and other paper manu-
facture. It is estimated that there are in the Tongass Na-
tional Forest in the neighborhood of 70 billion feet board
measure, in a comparatively narrow belt along the 12,000 miles
or more of coast line. Water power is available, as is also deep-
water transportation from numerous mill sites. This timber is
for sale under practical and favorable terms and in amounts
sufficiently large to justify the installation of plants. Since it is
in a National Forest it will be cut under methods which will
insure permanence of production.

It is estimated that the cut from this region alone will
insure a perpetual supply large enough to meet one-half of the
present newsprint requirements of the United States. There
seems to be no reason why southeastern Alaska, situated in
practically the same latitude as Norway and Sweden, should not
become the center of a large pulp and paper industry which
will be a source of local prosperity and of great national im-
portance in the light of our present dependence upon foreign
pulp and paper production. Alaska, in other words, is one of
the centers to which the newsprint industry of the United
States should look for a large future development. The same is
true of other centers in the West, where immense sources of
pulp wood supply are now almost wholly undeveloped. Much of
this timber is in the National Forests.
TIMBER DEPLETION, PRICES,

THE MOVEMENT OF PRICES.

Figure 2 shows the trend of pulp-wood prices in New England
and contract newsprint prices and consumption in the United
States since 1899. Spot market prices are shown for 1919 and
1920. Competition among American mills and between the
American and Canadian product kept down the contract price
of newsprint until 1916, in spite of the increasing cost of pulp
wood. Another factor in keeping prices of newsprint down
was the introduction of cheaper methods of manufacture, the
effect of which was, in part, at least, to help to reduce prices
between 1900 and 1909.

The general contract price level as represented by 100 per
cent is $2 per hundred pounds. This price level obtained until
in 1916 the increased demand for newsprint outstripped pro-
duction, and competition among purchasers for inadequate sup-
plies succeeded that among producers to dispose of their pro-
duct. Increasing demands and growing competition among
newspapers forced contract prices up to $4.50 in 1920. The

PERCENT

         

/900 _ WO «ONS.

Fig. 2.-—Rise of consumption and selling prices of newsprint in
the United States and of the price of pulpwood in New England,
1899-1920.

curve as it stands does not take one important factor into ac-
count. Prior to the war the contract price was f. o. b. point
of consumption, but during the war contract prices were
changed to f. o. b. paper mill.

Spot market prices are shown only during 1919 and 1920,
because prior to that time they are rot available as separate
quotations. In general, however, spot market prices before the
war followed contract prices closely, and at times were even
below them.

Prior to the war a relatively small percentage of the total
newsprint consumption was handled on the spot-market basis.
The larger newspapers particularly secured all, or practically
all, of their supplies under contract. During the last year the
larger newspapers have found it increasingly difficult to secure
all of their supplies under contract, and have been forced to
secure the remainder in the open market. It is in the open
market that the full effect of competition for inadequate sup-

 

plies is shown, and this is reflected in the much higher prices.

EXPORTS, AND OWNERSHIP. 29
It is here that the speculative element in the handling of a
necessary commodity at a time of shortage is fully brought into
play. Unfortunately it is upon the spot market that the smaller
newspapers, least able to increase returns by increasing adver-
tising material and raising their advertising rates, must depend.

The depletion of timber supplies is first shown in competi-
tion for pulp wood and steadily increasing prices. Competition
among producers for the sale of their product resulted for a
considerably longer period in keeping newsprint prices at a
fairly constant level. Only when .the available timber sup-
plies of the regions in which the newsprint industry had been
developed became so short as fo prevent normal additions to
plant capacity and demand for newsprint exceeded its pro-
duction did newsprint prices advance. Depletion has resulted
since 1899 in a large increase in both pulp-wood and newsprint
prices. It is merely the time when and rate at which the
increase took place that has varied.

“ NAVAL STORES SUPPLIES.

DEVELOPMENT OF THE INDUSTRY.

So pronounced is depletion of the timber upon which our
naval-stores industry depends for its supplies that it is com-
monly regarded as a dying industry in the United States. In
colonial days, when the wooden shipbuilding industry of New
England was of great importance, naval stores for domestic
consumption, as well as for export, were secured from the pitch
pine from Maine to New Jersey. The present-day naval-stores
industry dates back also to early colonial times, but uses the
longleaf and slash pines of the South.

The very name of the industry is no longer appropriate, since
the bulk of its products—spirits of turpentine and rosin—are
largely used for purposes having no connection with shipping.
They are important constituents in such products as soap, paint
and varnish, paper sizing, printing ink, greases, oils and belt
dressing, soldering flux, shoe polishes, roofing and linoleum, fly
paper, sealing wax, electrical supplies, matches, and various
articles in the drug trade. The annual products of the industry
exceed $40,000,000 in value, more than half of which comes
fronr exports. Since the Civil War it has held a place among
the industries of the South inferior only to agriculture and
lumbering. Since 1820, or in fact since statistics of any value
are available, American production has led the world, and even
ut the present time is approximately 80 per cent of the total
world production.

For the South as a whole, production has been falling off for
a number of years. From slightly less than 34,000,000 gallons
of turpentine in 1899, the first year of satisfactory statistics,
it declined to approximately 17,000,000 gallons in 1918, a de-
crease of 50 per cent. Rosin production during the same period
fell a proportionate amount. J

The average production of the last six years has been 25,000,-
000 gallons of spirits of turpentine and 834,000,000 pounds of
rosin, a production which has been easily absorbed by the
world’s industries.

REMAINING SUPPLIES.

A study of the opinions and estimates of a number of the best-
informed men in the industry, men representing every part of
the territory and having more than ordinary means of informa-
tion, indicates that there are not more than 381,000 crops of
turpentine timber available and uncupped in the naval stores
territory to-day. From this amount of timber it is estimated
that not more than 166,000,000 gallons of turpentine and 5,000,-
000,000 pounds of rosin can be produced. In addition to the
uncupped supply of timber, that which has been or is now
being worked will probably yield 60,000,000 gallons of spirits
of turpentine and 1,900,000,000 pounds of rosin, making the
total available supply 226,000,000 gallons of spirits of tur-
30 TIMBER DEPLETION, PRICES,

pentine and 6,900,000,000 pounds of rosin. Our own markets
and export demands will, it is believed, absorb 25,000,000 gallons
of spirits and 825,000,000 pounds of rosin annually. At this
rate the supply of timber now in sight would be exhausted in
less than 10 years. It will actually be extended beyond this
period by the production of wood turpentine and rosin and also
by the gradual falling off in the rate of production as the re-
maining timber supplies become exhausted. The indications
are, however, that the production of gum naval stores in the
southern pine belt will within 10 years have been reduced to
such an extent that export markets and even our own must look
elsewhere for their main supplies.

The naval stores industry of the South has migrated from
State to State, following the timber. North Carolina, where
now production is negligible, was for many years the leading
State. South Carolina has been practically abandoned by the
industry for more than 20 years. Rising prices have induced
a few operators to go back over the territory to work scattered
second-growth stands and isolated patches of virgin timber, but
it seems probable that these supplies will be exhausted within
four years. Well-informed men in the industry believe that in
from four to six years under present demands Georgia will
take its place with North and South Carolina as an insignificant
factor in production.

Florida has been the mainstay of naval stores production
during the last 10 years, but the end of its supply is definitely
in sight. Of late the value of its product has been more than
twice as much as that of any other State, and nearly half the
value of the naval stores produced in all Southern States.
Fairly accurate data on the resources of Florida have been
compiled by some of the large naval stores interests. This in-
formation, checked by estimates of well-informed operators in
various parts of the State, indicates that at the current rate of
production Florida can not hold its own for more than eight
years. That the State will soon be brought to the position of
North and South Carolina and Georgia is improbable, since a
very considerable portion of the remaining timber is held by
strong corporations in large, well-blocked bodies, and it is to be
expected that exploitation will be more conservative and less
wasteful and hurried. It is the opinion of the well-informed
men in the Florida industry that not more than 5,000 crops of
uncupped timber available for operation remain in the State.

Much of the longleaf and slash pine of Alabama has already
been worked, and the greater portion of the remaining stand
of uncupped timber is in the hands of large lumber companies.
Turpentine operators, judging from the present rate of lumber-
ing, foresee a possible increase in production for the next three
years, followed by a very rapid reduction. They believe that
the State will be practically eliminated as a large producer of
naval stores within five years. General opinion places remain-
ing stands at not more than 1,000 crops, including all second
growth now merchantable.

Well-informed observers believe that Mississippi will show
an increase in production during the next four or five years.
The timber, however. both here and in Louisiana and Texas, is
largely owned by lumbermen who will force a rapid exploita-
tion for naval stores in order that the lumbering may not be
delayed. Five thousand crops of uncupped timber are esti-
mated. It is predicted that the crest of production will have
been passed within five years, and that this will he followed by
a rapid decline. Within eight years Mississippi will not be a
leading State in naval-stores production.

The industry is comparatively new in Louisiana. The timber
is largely held by lumbermen who excluded naval-stores opera-
tions very generally until four or five years ago. Much of the
timber has been and some of it is still being cut unturpentined.
The average turpentine lease on many of these large holdings

 

does not exceed two years in length. Of the 27 billion feet of

EXPORTS, AND OWNERSHIP.

longleaf pine in Louisiana the removal of 20 billion feet for
lumber is predicted during the next 10 years. A yield of not to
exceed 13,500 crops is anticipated. Operators familiar with the
situation agree that 10 years will probably see the beginning of
a very rapid decline in production from Louisiana, and 15
years the end of the present supply.

Sawmills will probably remove 7,500 million feet of the il
billion feet of longleaf pine in Texas during the next 10 years,
and Texas is the last stand of the turpentine industry in the
South. Naval-stores production in Texas will be increased rap-
idly as the Hastern States are exhausted, but operations will
be seriously curtailed by the desire of timber owners to exploit
the stands for lumber. The naval-stores industry estimates
that there are not more than 4,600 crops in Texas and predicts
practical exhaustion within 10 years.

METHODS OF EXPLOITATION.

While the rate of depletion of the supply of naval-stores tim-
ber has been greatly accelerated during the last few years by
the rapid cutting of timber controlled by lumber interests, the
naval-stores operators themselves are responsible for the fact
that what was once the largest and finest naval-stores forest in
existence is about to become a matter of history. The method
of exploitation commonly followed during the last hundred
years is crude, wasteful, destructive, and sadly shortsighted.
Under the driving urge of maximum financial returns in a mini-
mum of time, regardless of after effects, turpentine orchards
even to-day are operated so destructively that the trees are ex-
hausted in from four to six years and turned over to the saw-
mill man showing a loss due to turpentining of from 20 to 50
per cent.

That quick exhaustion of the turpentine productivity of the
tree, and, in many cases, its early destruction, is not a necessity
in the production of naval stores is shown by the French naval-
stores industry. For the last 80 years a system of operation
has been followed in France that permits an orchard to be
worked for turpentine for from 80 to 50 years, practically with-
out loss of timber. Coupled with this admirable system of opera-
tion is a plan of management under which a crop of new timber
is continually growing into maturity to fill the gap left by the
harvesting of mature timber. As a result of such foresight the
French supply of naval stores is increasing yearly, both in value
and in amount.

Conservative methods of turpentining in southern pine forests
have been developed by the Forest Service and are now in com-
mercial use on the Florida National Forest, and on private
holdings of some of the more progressive operators. Inertia,
not financial obstacles, must be regarded as the chief reason
why these conservative methods have not been more generally
employed. They make entirely possible, when combined with
intelligent forest management, a permanent as against a self-
destroying industry.

DEPLETION AND PRICES.

As in the case of lumber and newsprint, the superficial cause
of abnormal prices is a combination of abnormal demand and
shortage of the manufactured product. The stocks of turpen-
tine and rosin at the chief points of concentration were lower
at the end of the last naval-stores season than has been the
case in many years. At the same time the demand, both
foreign and domestic. has been stronger than at any other
ime during the past five years. The natural result has been
keen competition for supplies on hand and consequent rise in
price. As in the case of lumber and other industries, there
have been increased costs. It has been difficult to secure ade-
quate supplies of skilled labor. Credit inflation alone would
have increased prices, but the fundamental difficulty has been
the depletion of the timber supplies from which naval stores
TIMBER DEPLETION, PRICES, EXPORTS, ‘AND OWNERSHIP.

can be secured and the great limitation of the producing regions
already discussed. The price of spirits of turpentine, which
for very many years fluctuated slightly above and below 50
cents a gallon, had risen nearly five times to a price of $2.30
early in 1920, and similar increases occurred in prices for
various grades of rosin.

With a prospective reduction in domestic production, the
United States is facing in the near future rapidly decreasing
ability to export naval-stores products, and even within a few
years to meet home demands from the southern pine territory.
There are possibilities of development of the industry with
other species in the West, but under much more adverse con-
ditions as to accessibility, labor, etc. The only other possi-
bilities are imports or the use of substitutes.

ORIGINAL AND PRESENT FORESTS OF THE
UNITED STATES.
ORIGINAL FOREST AREA.

The original forest area of the country is estimated to have
been in the neighborhood of 822,000,000 acres. (See Table 8
and fig. 3.°) In the eastern United States a magnificent forest

 

18 Various terms found in these and other accompanying tables and
figures are used with the following meanings:
“ Saw-timber areas”? and “saw-timber stands” are stands of saw-

timber size in accordance with the prevailing logging and milling prac-

tice of the region concerned.

 

31

of old-growth timber, wonderfully rich in variety of species
and quality of material, stretched in an almost unbroken ex-
panse from the Atlantic Ocean to the prairies. Pines and other
softwoods predominated in the north and along the Atlantic
and Gulf coasts, while in the Appalachians and on the fertile
soils’ of the Central States and the lower Mississippi Valley

 

“ Cordwood areas” and “cordwood stands’ are stands not now of
sufficient size to produce saw timber under the prevailing local logging
and milling practice.

“Nonrestocking areas’’ comprise lands that oncé supported a stand
of timber, which is now gone, and which is not being renewed.

“Virgin areas” and “virgin stands’ comprise stands in which
there is no net growth, such growth as takes place being offset by loss
from decay and other causes, This excludes certain old-growth stands,
as, for example, in California, which have not been lumbered and are
ordinarily regarded as “ virgin” forests, but ih which a net growth is
now taking place as a result of the present protection of such stands
following their opening up by fire.

“Growing areas” and “growing stands” include all stands, irre-
spective of their size, in which current growth is in excess of current
loss; that is, in which there is a net growth.

“Saw timber’ comprises that portion of the stand on saw timber
areas of sufficient size for manufacture into lumber. Board feet esti-
mates of saw timber are given in terms of lumber tally rather than
log scale.

“Cordwood*’ comprises that portion of the stand on saw-timber
areas not of sufficient size for manufacture into lumber and the entire
stand on cordwood areas. It may thus include occasional trees of
saw-timber size which occur in cordwood stands but not in sufficient
quantity to be lumbered.

“Total stand’ includes both saw timber and cordwood.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  
 
 

 

 

 

 

 

 

New J WEB Origina/ Forest Area
Lnglan’d =a
(Ml Present Virgin Forest Area
Midd/e J
oo { [Remainder of present forest Area
Atiantc | ______ ee an
TAT J
Lake :
Central .
See TUTTE TT} J
Last Gulf
Lower ‘ UNANOAADGAUAGAAINN J
Miss/SS/ppl is
Pocky { TUTTE TTT |
Mountains
* Complete data for this region not aval/-
PaciTIC PUTED TECETTVTTEA LETTE ] able; present total forest. Area probably
Coast* some S million aera moe than Hat CRG
20 40 60 80 /00 /20 /40 /60

Million Acres

Fic, 3.—Original and present forest areas of the United States by regions.
32

oak, hickory, ash, chestnut, yellow poplar, and other valuable
hardwoods abounded. In the West practically all of the area

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

forest area of the United States by regions

TasBLE 4,—Present
and character of growth.

 

 

  

 

 

 

 

 

 

not too arid to support tree growth was also covered with a ote sins
forest of virgin timber interspersed with occasional patches of Total (thousand acres). ie restock-
younger, even-aged stands, as of Douglas fir and western white Region: (thou- | Per cent. ole itn
pine, following fire. Along the Pacific coast the heavy stands acres.) Virgin Grow- | acres), bce
of redwood, Douglas fir, western hemlock, and western red ing: 7
cedar formed one Of the finest forests in the world.
New England..........---+ 24, 708 5| 2,000] 8,761] 8,372] 5,575
PRESENT FOREST AREA. Middle Atlantic 28, 678 6| 1,896 | 9,559} 10,793] 6,430
Lake......-- 57, 100 12} 10,100] 13,930 2, an 20, 5a0
To-day of the original forest area there remains but little ra esc aetee re 56, 682 12| 7,150) 23,301 , » 220
* . ic an
more than half or approximately 463,000,000 acres, excluding | Stl, Atlante and Bast 99, 000 22| 18,300) 27,900 32,080 | 20,720
in both cases from 100 to 150 million acres of low-grade wood- | Hower Missistippt. ------7-" an aad i3| 37,746 | 3°313| 14533 | 5,250
land and scrub. (See Table 4 and fig. 4.) Furthermore, | Pacific coast} ........---.-- 57, 586 13 | 39,369] 5,292] 6,425] 6,500
so far has the utilization of the original forest progressed MGbalevedsemensoosecss 463, 461 100 | 137,396 | 112,256 ; 132,859 | 80,950
that of the total remaining area only 80 per cent, or 137

million acres, is virgin forest. The remainder includes 112
million acres of second-growth saw timber, 133 million acres
of second growth below saw-timber size, and 81 million acres
which are not restocking. Cutting has naturally been heaviest

 

 

1Complete data for this region not available; total forest area probably some
5,000,000 acres more than indicated.

TasBLe 5.—Stand of saw timber in the United States by regions.

 

 

 

 

 

 

 

 

 

in the most fertile and most densely populated sections of the Total saw timber.

country. Thus in the Central States the original forest has Saw-tim- pause ae
been reduced to one-third of its former extent, while in the Region. uaa Million | poy a en
Rocky Mountains 95 per cent of it still remains. More than sere) Doe | gent. feet). | feet).
half of the virgin forests of the country are in the Western

States, only 15 per cent of the virgin forest area being in- 10, 761 49, 799 2 38,480 | 11,319
cluded in the Northern and Central States. Over nearly a fifth als an date z seen oeiee
of the present forest area the original timber growth is not 30,451 | 144, 470 7 11,318 | 133) 152
being renewed. The lergest areas of nonrestocking land are oper igi eplce a 4088 380’ 908 1 Las? 308 139) 600
in northern New England, Pennsylvania, the northern Lake ee ee ret 1, taiosl a 11a Ost settee
States, the pine lands of the South Atlantic and Gulf States, and

parts of the Pacific coast States. Total........ 249,652 | 2,214, 893 100 | 1,755,218 | 459,675

Tas_e 3.—Original and present forest areas in the United States

 

 

   

 

 

 

 

 

 

 

 

by regions. SAW-TIMBER STANDS.
Present The original stand of saw timber has been estimated at not
Region. Original j less than 5,200 billion board feet. In the light of the cut that
‘ : eta Virgin has already been obtained, and of present standards of utiliza-
tion, it is probable that the actual stand was considerably
Ages Apex: donee. larger. Even taking the lower figure, however, less than half
New England ...-....-------+-+++++--++- 38,908,000 | 24, 708, 000 2,000,000 | of the original stand, or 2,216 billion board feet, still remains
i Atlantic. . 69,610,000 | 28,678, 000 1, 896, 000 i a2 P
Middle:iantie 103/6807000 | 577100;000| 10,100,000 | (see Table 5 and fig 5). Of this some 1,755 billion feet is
Tye ba 000 967 600° 00D 18300; 000 softwoods and 460 billion feet hardwoods. Approximately 70
128, 400, 000 8, 865, 000 20, 835, 000 y i i ie
83°720,000 | 60,842; 000 37’ 748, 000 per eeuk of ihe total stand, including the best and most acces
77,120,000 | 57,586,000 39,369,000 | Sible timber, is in private ownership, while about 498 billion
822, 238,000 | 463,461,000 | 137,396, 000 board feet, or 22 per cent, is included in the National Forests.
States and municipalities together hold only 59 billion board

 

 

 

   
 

New Lrg/and._-

 

 

S Es Saw rmber areas

 

 

 

 

    

Atiggle Atlantic...
IN Cordwood areas
Sate Sees ed een co
i ae aT rm Non -restocking areas
CL AANA
ee al Fs ee ea

South Atlantic F
and fas? Gu/t__&

     
  

Lower MISSISSipp! ——
Procky Mountain.

*
Pacific Coast.

 

eee ecco

 
     

 

 

 

 

 

 

/0

Million Acres.—O 20 30

4O

 

 

50 60 70 80. 90

% Complete data for this region not avai/able; total forest area
probably Some five million acres more than (hdrcated.

Fic. 4.—Forest areas of the United States by regions and character of growth,
TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

33

 

New England.......

  
  
 
  

Middle Atlantic...

Lake__._- Se awe cad

 

Lentral..._-..--..-

 

 

Lower Mississippi

Racky Mountain...

 

 

 

Pacifie Coast— ~

300 400 —

500°

SOFTWOODS
HARDWOODS

ial
Eo

 

 

 

 

 

 

  

 

 

600° 700 “600° 900 ‘1000°— H100: 1200

oe BILLION BOARD FEET
Fic. 5.—Stand of saw timber in the United States by regions.

feet, or less than 3 per cent of the total.
fig 6.)

The exhaustion of the eastern forests and the steady progress
of the lumber industry toward the West is well indicated by
the location of the remaining stands of sawtimber. Thus, New
England, the Middle Atlantic, Central, and Lake States, with
35 per cent of the total forest area, contain only 349 billion
board feet, or 16 per cent of the total; while the Pacific Coast

- States, with only 13 per cent of the forest area, contain 1,141
billion board feet, or nearly 52 per cent of the total. (See
fig 7.) Between these two extremes come the ,south At-
lantic, East Gulf, and Lower Mississippi States, with 89 per
cent of the forest area and 23 per cent of the sawtimber; and
the Rocky Mountain States, with 13 per cent of the forest
area and 10 per cent of the sawtimber. Altogether, 61 per
cent of the present stand of sawtimber lies west of the Great
Plains.

In other words, the depletion of our eastern forest resources
has now reached the point where the softwood stands in the
Northern and Central States can no longer contribute any large
proportion of the total softwood lumber consumption of the
country, -where the Southern States are losing the command-
ing position that they have held for the last 20 or 30 years,
and where the one great reservoir of softwood timber still left
lies on the Pacific coast, chiefly in the Pacific Northwest.
Douglas fir, with an estimated total stand of 596 billion board
feet, approximately 85 per cent of which is in the two States
of Washington and Oregon, is the principal species in the West.
(See Table 7 and fig. 8.) Western yellow pine is a fair
second, with a total stand of 250 billion board feet, 27 per cent
of which is in‘ the Rocky Mountains and 73 per cent on the
Pacific coast. Following these two species, which together com-

(See Table 6 and

Eastern U.S.
Rocky Mountains
Pacific Coast

° 50 100

Eastern Us.
Rocky Mountains
Pacific Coast

oO 100 * 200 300 400 500

 

: 150
AREA — MILLION ACRES

600

prise nearly half of the softwood sawtimber in the entire coun-
try, come western hemlock, the true firs, and redwood, with
stands of 95, 91, and 72 billion board feet, respectively.

TABLE 6.—Ownership of forest area and stand of sawtimber
in the United States by regions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AREA,
: Federal. Private.
State.
Region. Total. and
otal. | National |"pat”| Total. | wood
- | ‘Forest pal. ‘otal. | wo
‘ lots.
Thou- | Thou- | Thou- | Thou-| Thou. | Thou-
sand sand sand sand sand sand .
acres. acres. acres. acres. acres. acres.
Eastern United States....| 345,033 5,578 4,578 | 4,300 | 335,155 | 152,465
Rocky Mountains......... , 51,681 | 48,281 | 1,411 7,750 | (2
Pacific Coast.........0.00. 57,586 | 30,319] 26,876 | 1,475| 25,792] (1
Total....0-.csceeee- 463,461 | 87,578 79,735 | 7,186 | 368,697 |........
STAND.
Million | Million | Million | Million| Million | Million
oa wae ae poe pod ae
feet. eet. eet. eet. ‘eet. ‘eet.
Eastern United States....| 850,721 | “8,184 4,184 | 10,000 | 832,537 | 340,288
Rocky Mountains........ 223,141 | 157,618 | 145,449 | 9,791 | 55,732 1
Pacific Coast..........-... 1,141,031 | 434,300 | 348,000 | 39,000] 667,731 8
Total evpersecwesces 2,214, 893 | 600,102 | 497,633 | 58,791 |1, 556,000 |........

 

 

 

 

 

1 Not indicated because of lack of data.

In the Hast the only softwood with a stand comparabie to
any of these is southern yellow pine, with a total of 258 billion
board feet, or slightly more than western yellow pine. (See
Table 7 and fig 8.) Spruce and fir come next, with a stand

 

200 250 300 350

   

700 800 900 /000 00

1200

1300 1400

STAND —BILLION Bd. Fr.

. @ Netional Forest
FA Other Public

ED] Farm Woodlots in Eastern U.S.

(Not estimated for western US.)

0 other Frivate
34 TIMBER DEPLETION, PRICES

of 32 billion board feet, followed by hemlock, white and
Norway pine, and bald cypress. The stand of these six species
together is considerably less than half as much as the stand
of southern yellow pine, and is only 6 per cent of the total
stand of softwoods. The total saw-timber stand of white pine,
once regarded as “ inexhaustible,” is now less than the amount
estimated to have been manufactured into lumber in either the
Saginaw: Valley or at Muskegon, Mich., and less than one-fifth
of the total estimated cut from the State of Michigan.

Of the hardwoods the only large reservoirs of virgin timber
still left are in the Lake State, the Southern Appalachians, and
the lower Mississippi Valley. The first two of these contain,
respectively, about 32 and 53 billion feet of old growth. There
is also a considerable total stand of hardwoods, estimated at
approximately 133 billion board feet, in the Central States out-
side of the, Appalachians, but this is composed chiefly of second-
growth material in widely scattered wood lots, and can not be
counted on to contribute any large proportion of high-class
material to the hardwood industries. Oak is easily the lead-
ing hardwood of the country, with a total stand of 157 billion
board feet, followed by the three northern hardwoods—birch,
beech, and maple—having together 91 billion board feet. (See
Table 7 and fig. 8.) Three of the most valuable hardwoods—
hickory, ash, and yellow poplar—together have an estimated
stand of only 35, billion board feet, or less than 2 per cent of
the total stand. That the depletion of the hardwood supply
of the country has progressed ‘even further than that of the
softwoods is indicated by the fact that the hardwoods consti-
tute only about 20 per cent of the saw-timber stand, as against
nearly 30 per cent of the saw-timber cut. Moreover, the deple-
tion is particularly marked in the case of the more valuable
woods. :

TaBLe 7.—Stand of saw timber in the

, EXPORTS, AND OWNERSHIP.

While the cordwood forms more than one-third of the total
volume of standing timber, less than one-sixth of the total is on
the cordwood areas, which average only about 850 cubic feet to

 

 
 
   
   
 
 
   
 

New England. .}

Middle Atlantic

MM forest Area
Ml Sawtimber Stand
( T7ota/ Stand

Lakes ces 3

Central____.5

 

South Atlantic
and

Last Gulf _...-
Lower

Whississippl.\.- =

Frocky

Mountain .-..-

 

 

 

Facitie

 

 

 

 

 

30

Percent

Fic. 7.—Per cent of total forest area, total saw timber stand, and
total stand by regions.

40 50

 

United States by species and regions.

(Quantities in million board feet, lumber tally.]

 

 

 

  

 

 

 

 

 

 

 

 

  
  
 
 
 
 

  

| South
; New Middle Atlantic Lower Rocky Pacific
Species. Total. | England. | Atlantic. | Lake. | Central. and Kast |Mississippi.| Mountain. ) eoast.
ulf.
Eastern hardwoods. ......2.2.202eeeeeceeeeeeeeeeeeeeerees 459, 675 11,319 29,504 69,350 | 133,152 83,750} 132,600 |........2.0.fe eee ee eee
Qalisenjet aii. ieh ey saicaeantet Seeaadaeieeataunaes 157,372 1,510 5, 500 8,301 64, 712 27, 889 49, 460
Birch, beech, and maple 90, 784 8,143 16, 897 36, 076 20, 505 4,522 641
RSG BM Isms cnarct hence eta rerene A499) a veccrantectis 176 leecher 3, 728 13, 400 26,918
Ohestii itis, wercctuicenadnen tee nanaeres 19,319 960 BOMBA Gat ence 7, 989 6,616 |............
HICKORY’ 20j-:00:353,20 tee cieeas nese tee: 15, 784 40 412 187 6, 791 , 183 5,171
Cottonwood and aspen 10, 824 374 13 999 2,131 1,340 5, 967
Boo yoe: aseiait stcavenioes Seareoeee ae a 9, 988 215 513 1, 893 2,929 1) 256 3) 182
ViellOW POD AE <.o:.:o:c cuts nernciesigcisitrvapssouseng set eiaie 9,611 |...........- 126 7 5,193 4,020 265
QU CFS ore ose popctad Seer Gavstiarsiteey sister sie petlecenieeeG\eicteteersicie Sse 101,771 7 2,113 21, 887 19,174 21, 524 36, 996
Bastern soltwo0ds scccercocacaseavedcuntes teeeretesseas va 391, 046 38, 480 15, 353 40, 760 11,318 136, 827 148) 8085 | crs coe ee eee| eerroen epee
Southern yellow pine. ..-.....2. 2.222222 eee eee eee 200690. | eroicians es angarille sea snenyeratests | oeemaweavens 365 121, 442 TSS BRE | spc: es case ce at a ees
Hemlock........-----s-ss see eee eee 30, 896 1,804 5,036 18, 301 3, 910 ” 84 ease apse eee
Spruce and fir 31,572 23,971 » 2,948 id 22: | ightuenniarees s 9 ag 1
Cypress.........-..+- ALE mea cay nresiusiets Sra eite ee eevee fet BE ECL sire exteow nies anal pete red eostiecceisicied macainntinne anieed 11, 208
White and Norway pine................2----.-2-+206- 23,457 9, 816 4,037 8,000 515 _
Others: c<es: sp tticcesoonierecnees Seveeecteees weeees 24,509 2,889 13,332 10, 687 1 6, 528
WieStOET SOI WOCUS wees ice s.acicinssinseinin's a) cisinidinininis aib'nip Sel sieitietnin UFR OAS IE DZ MG tess sre yous | Lpcncsod ge sxeasESl| embed dudpateserw | cecesca men ieescterall eee Contents of Seeaell Meadancbdeard weave 223,141 1,141,031
Douglas fir 7 595,505 |... ;
Western yellow pine and Jeffrey pin ao ae ety aa
Western hemlock 1, 092 94° 000
8, 870 82,479
iietvainn << 72, 208
Western red cedar.....------------ le, ae rs io
Lodgepole pine - 39, 353 4) 566
eernce : 26, 467 13, 355
CTS .- 2. eens e ee eter et atte eee eee eee 21; 368 44,914

 

 

 

 

 

 

 

 

 

 

1 Includes small amounts

TOTAL STAND.

The total volume of standing timber in the country, includ-
ing both saw timber and cordsvood, is estimated roughly at 746
billion cubic feet. Of this. 485 billion cubic feet is saw timber
and 261 billion cubic feet cordwood, (See Table 8 and fig. 9.)

of various species of yellow pine.

the acre. This low average is in itself a striking indication of
failure to secure a satisfactory restocking of our cut and burned
over forest lands. This failure will have increasingly serious
consequences, as depletion of the old-growth forests makes us
more and more dependent on setond-growth timber.
TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP,

o /00 200 300 900 500 600 700 800 300 1/000

EASTERN (arowoons| | EASTERN SOFTWOODS | |
x LA__| Rodan i eal] fo:

Oouglas Fir]

Jourhern
Yellow Pine...

Western
Yellow Pine_._.

Pedwood.

Western White
Fine > Sugar Pine

fostern Wiute
Pine 9 Mornay Pirre|

 

 

Yetlaw Poplsar. |

 

 
   

BILLION BOARD FEET

35

«<0O 1400 4600
| |. WESTERN SOFTWOODS |
- | LA |

 

 

Fig. 8.—Saw-timber stands of some of the more important species in the United States.

Taste 8.—Total stand in cubic feet on saw-timber areas and
cordwood areas in the United States by regions.

 

 

 

 
 
 
 
     

 

 

 

 

 

 

 

 

Total stand. Stand on—

. Saw tim- |Cordwood

Region. Million ber areas| areas

cubie | Percent.| (million | (million

feet. cubic cukic

feet). feet).
Now England ...2:sa secs cai veewsinaessioes , 850 3 15, 492 5, 358
Middle Atlantic. ........-......... 24, 897 3 17,126 7,771
Li 50, 584 7 41,534 9,050
CONTA], oe cccnicteisjonis theca cteen 85,118 | ° 11 61,319 23,799
South Atlantic and East Gulf 96, 158 13 73,060 23, 098
Lower Mississippi. ......... 118, 364 16 95, 252 23, 112
Rocky Mountain. 61, 893 8 53,755 8,138
Pacific coast 287,724 39 | 274,874 12, 850
Totals cccctuscohesceepeenssepekeebes 745, 588 100 | 682,412 113,176
LOCATION OF REQUIREMENTS WITH REFERENCE

TO PRODUCTION AND SUPPLIES.

In the comparatively near future all of our eastern timber
“regions which do not already import more lumber than they
export will begin to do so.

The southern pine region as already shown is still a large
exporter, but within 10 years production promises to be little,

New England...,-----
Middle Atlanrtre..--

CENFTAL. 3) 2122222 ---+
Sour, AE alba and
Lower ANss1ssippl.----
Bocky Mountarr....-

Facifie Coash...--

   

25 50 100

Fig. 9.—Total stand in cubic feet on

 

7S
Billion Cubse -eer
saw-timber areas and cordwood areas in the United States by regions.

if any, in excess of local requirements. In New England total
consumption probably passed total output between 1880 and
1890, and within a few years this section will meet half of its
total requirements from outside sources. New York has not
produced lumber in excess of its own needs since a few years
before the Civil War. The Pittsburgh district alone probably
uses more lumber than is now cut in the entire State of Penn-
sylvania, and the State ceased to be an important exporter
shortly after 1890. The Lake States as a whole still produce
more lumber than they consume, but already Michigan and
Wisconsin are net importers and it is practically certain that
the Lake States as a whole will consume more lumber than
they produce within 10 years. Ohio, Indiana, and Illinois since
records have been kept have always imported more lumber
than they produced. West Virginia, Kentucky, and Tennessee
were probably net exporters for about 20 years after 1890, but
if thrown together ‘with Ohio, Indiana, and Illinois, they form
a group which has always used more lumber than it produced.

No lumber-producing region in the East can with certainty
be counted on to produce more lumber in 1930 than it will con-
sume. The southern Mississippi Valley and possibly the south-
ern Appalachian Mountains may produce more hardwood lumber
than is needed locally, but they also are likely to be net im-
porters if all classes of lumber are considered.

Eel Cubic foot eguivalent of actual lumber obrarnabse
on sawrimber areas (1000 board feer= 83$ Cubic feeH)

im Remainder of stand on sawtimber areas.

{—] Stand on cordwood areas

 
  

27,

300
36

A representative of the National Lumber Manufacturers’ As-
sociation “ has recently predicted a decline in the cut of south-
ern pine of 7 billion feet by 1930, and a further decline in other
regions in the East of 2 billion feet, making a total of 9 billion.
As further reducing the eastern output available for general
markets he estimates an increase in export demand by 1980 of
1 billion feet of southern pine and an increase in local require
ments in the South from 7} billion feet to 9 billion. He esti-
mates the total increased production necessary by 1930 from
other regions in the United States or from foreign sources at
113 billion feet.

From a prewar normal production of southern pine of 15 bil-
lion feet it is believed that a reduction to 9 billion by 1930 is
very conservative, and the falling off of an additional billion is
well within possibilites. The reported output of the southern
pine region in 1918 was only 11 billion feet. The prewar normal
of all other softwood and hardwood production in the East was
somewhat less than 15 billion, and here a reduction of 34 billion
feet in the cut by 1930 would be conservative, with possibly
more than half of this coming from hardwood production.
While no exact prediction can be made, it is certain that the
total decline in output will be very large.

For hardwoods we can turn only to the tropics for materially
increased supplies. For softwood lumber we still have large
reserves in the West. Of the more heavily timbered Western
States the least can be expected from Montana. Increased cuts
are predicted from Idaho, California, and Washington by men
in the industry most familiar with the situation. The main
increases, however, will have to come from Oregon. So far as
domestic production is concerned, the entire United States will
therefore be chiefly dependent for lumber in excess of local pro-
duction upon three or four States in the far West.

The part of the lumber traffic from the West which is not
handled by ocean shipments via the Panama Canal must move
east over the main lines of the transcontinental railroad sys-
tems. Even under conditions of the past 10 years there has
been a constant complaint from lumber manufacturers of in-
ability to secure cars. The situation has been at its worst dur-
ing the past year. Shipments for a very considerable part of
the western traffic during 1919 averaged slightly more than
26,000 feet to the car. At this rate every additional billion feet
of lumber shipped east would mean 40,000 additional carloads.
Five billion feet would make 200,000 carloads. In addition to
the difficulty in building and maintaining additional equipment
are the pbysical difficulties involved in moving such vast
amounts of freight.

Assuming an average freight rate of $15 per thousand on
shipments of lumber from the West and increased demands
upon that region of 10 billion feet in 1930, the annual freight
bill for moving this timber to the eastern and middle western
markets would be $150,000,000. This is about one-half more
than the present average transportation cost for the same
quantity of lumber, and will form a part of the annual price
of depletion. Prior to 1840 the entire lumber cut of the country
was used within a comparatively few miles of the sawmill at
which it was manufactured. Transportation costs from mill
to market, then varying from $1 to $3 per thousand feet, have
risen to 2 maximum of $20 at the present time.

Even more important than the mounting costs is the menace
involved in having the principal markets of the country so
entirely dependent upon distant regions for the supply of such
an important raw material as lumber. Some of the railroad
difficulties have already been discussed. Labor troubles are

 

4 Life of the Softwood Lumber Industry, by F. V. Dunham, field rep-
resentative of the National Lumber Manufacturers’ Association, South-
ern Lumberman, May 8, 1920. 2

TIMBER DEPLETION, PRICES,

 

EXPORTS, AND OWNERSHIP.

another possible contingency. How seriously bad weather con-
ditions of a season or two at the logging camps can affect many
industries and classes of consumers is now illustrated in the
hardwood lumber region of the lower Mississippi Valley. Any
one of many factors may disorganize the lumber markets and
supplies of nine-tenths of the country, and a combination of
these factors would be serious in proportion.

If we elect to depend upon imports instead of home-grown
timber, there is, first, the question of whether timber from
foreign countries will be actually available. It would have to
come from greater distances, and obstacles in the way of
securing it would be correspondingly greater. Transportation
and other distribution costs would be increased, and higher costs
are ordinarily represented in still higher prices to the consumer.
Finally, we should have to compete for any supplies available
with other countries which do not themselves produce all the
timber they need.

FUTURE TRENDS IN REQUIREMENTS.

Future trends in requirements will be considered in detail
only for lumber. Our requirements for pulp wood will expand
rapidly, but the volume required, as compared with lumber, is
small.

The per capita lumber consumption in the United States in
1850, the year of the first fairly complete lumber census, was
only 230 board feet, with a lumber production of 5.4 billion
board feet and a population of 23,192,000. It then increased
steadily until it reached its crest of 515 board feet in 1906,
with a total lumber cut of approximately 45 billion feet. From
1906 to 1913 the per capita consumption declined to 430 board
feet. The war curtailed production to 82 billion feet in 1918,
or 300 board feet per capita, of which part was for war pur-

 

 

 

{26.0 N_.cutand Destruction
Total....-n-- | casing ea pan A laameprsianeiinen OTT?
ee) —Cut and Destruction
Softwoods EI Growth
__Cut- and Destruction
Hardwoods -,Growth

Billions of cubic feet
Fig. 10.—Relation between forest depletion and forest growth.

poses. This restricted use resulted in the abnormal demands
and unprecedented prices of the past year.

The experience of industrial European countries gives some
indication of what American future requirements for lumber
will be. In England, for example, during the 60 years from
1851 to 1911 the consumption of lumber increased from 40
board feet to 120 board feet per capita, although 95 per cent
of her requirements must be met through imports at high cost.
Similarly, German home production at least doubled during
the 60 years between 1840 and 1900. Industrial development
made it’ necessary to import constantly increasing amounts of
timber, and in spite of the cost of imported material, the per
capita consumption at the outbreak of the war was about 150
board feet per annum.

The United States is still a new country. We still have large
areas of undeveloped agricultural land. In much of our terri-
tory first construction was of such a character that replacement
on a larger and better scale will be desirable if not absolutely
necessary. Our population is growing rapidly and there is no
reason to believe that it will not continue to grow. Industrial
development in many sections has hardly begun. How large the
TIMBER DEPLETION, PRICES,

per capita consumption in industrial centers is may be judged
from the fact that in St. Louis the per capita consumption is
over four times that for the entire country, in Pittsburgh three
times, and in Chicago at least double.
Even with large allowances for the substitution of other ma-
terials for timber, it seems hardly possible that our annual
‘demand for lumber for years to come will fall below 35 billion
feet. This is 5 billion less than the prewar average of approxi-
mately 40 billion board feet. Even this will require a gradually
reduced per capita consumption as population increases. For
many years we shall find ourselves unable to satisfy our re-
quirements with anything approaching: the per capita consump-
tion of either England or Germany. It follows that any future
lumber production falling below approximately 35 billion feet,

 

EXPORTS, AND OWNERSHIP. 37
cay. The other 16 billion board feet comes from growing
stands, but their growth is only 10 billion feet annually. In
other words, besides the very heavy drain on our rapidly
diminishing supply of virgin timber, we are cutting even the
second growth saw timber more than one and one-half times as
fast as it is being replaced.

Comparison of the rates of depletion and of growth of all
timber below saw-timber size discloses that even this material
is being used up three and one-half times as fast as it grows,
or at the rate of about 14 billion cubic feet, as compared with a
growth of only about 4 billion feet. (See fig. 12.) If this
serious situation continues it will reduce very materially the
volume of the material which can reach saw-timber size in the
future.

 

 

 

 

 

 

Cut ard
Tota/ 126 J West rtion
Growth
[ [Zo 7 Cut and desfrucrvion
MAVIL GTI STONIAS
Soffwoods ' Q Growth in virgin stands
ar -
Hardwoods Cutand destruction 117 growiig Sraras
L Growth tn growing stands
(z WA igi sande”

 

1 oO
Softwoods }'
Ce]
(es)
cr :

ee )—____
1 0
a
pe]

LBitliors of board eer

 

 

Hardwoods

 

Growth LUMIGT SFAMAS
Cut and destruction in growing stands

Growth tr growing staras

Cut and destructor 177 UITgiTy starnas
Growth 17 wrgits stands
Cut and destruction tn growing stands

Growth in growing starras

Fic. 11.—Relation between forest depletion and growth of saw timber.

unless we can make up the difference by imports, will result in
~hardship to many classes of consumers and to many industries,
‘like that experienced within the last year. Any such reduced
consumption will unquestionably be the result of economic pres-
sure from lumber shortages and high prices rather than of eco-
nomic convenience. We have our warning in the present situa-

tion.
, DEPLETION AND GROWTH.

PRESENT DEPLETION AND GROWTH.

The standing timber in the United States is being cut and
destroyed at the rate of 26 billion cubic feet per year, or more
than four times as fast as new timiber is growing. (See Tables
9 and 10 and fig. 10.) That of saw-timber size is being cut for
lumber and other uses and destroyed by fire, disease, and insects
at the rate of 56 billion board feet per year, more than five and
one-half times the growth of such material. (See fig. 11.)

Such data as are available (see Table 9) indicate that about
40 billion board feet is taken each year from our remaining
virgin stands, in which there is no net growth in excess of de-

 

This depletion of small timber is proceeding at an especially
rapid rate in the case of hardwoods, perhaps in part because
the supply of larger timber has been practically exhausted in
several regions. The cut of cordwood material in hardwoods
amounts to 83 billion cubic feet, five times the growth.

Cordwood cut and destroyed
Tota/

Cordwood grown

Cordwood cut and destroyed
Softwoods

Cordwood grown

Cordwood cut and destrayed
Hardwoods:

Gordwaod grown

BILLIONS OF CUBIC FEET

Fie. 12.—Relation between forest depletion and growth of cordwood.
38

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

TABLE 9.—Timber removed each year from the forests of the United States.

 

 

 

 
  

 

  
  
  

 
  
   

  
  
   
 
 
 

 

 

 

Equivalent in lumber which could have been Equivalent in standing timber.
sawed from the same trees.
Cut. Quantity.
Hardwood. Softwood. Total. Hardwood. Softwood. Total.
bic fect. |
Board feet. Board feet. Board feet. Cubic feet. Cubic feet. Cu
Lumber..........222.020000. 40,700, 0 M board feet...... 8, 700,000,000 } 32,000,000,000 { 40, 700,000, 000 1, 905, 300, 000 7,008, 000, ee 8, 0 a ow
Hewed ties...... 87, 500,00 0 ties... -| 2.100, 000, 000 525,000, 000 2.625, 000, 000 ” 840, 000, 000 210,000, 0 1, 4
Pulpwood.........-- -| 4,550,000 cords....._- 200,000,000 | — 1,400,000.000 | 1, 00, 000, 000 64,350, 000 468, 000, 7000 ee
Round mine timbers... 250,000,000 cubic feet 375,000,000 375, 000, 000 750, 000, 000 162, 500, 000 162;.500;0 800° 000°
Fencing.............2.-20--+ 900;000,000 posts. 165,000,000 460, 000, 000 825 , 000, 000 360, 000, 000 1,440; 000, oo 1, 800, 000, 000
Poles...... : 4 230, 060 poles. .... 55, 000, 000 200, 000, 000 255,000,000 11,700; 000 43,550, 0 , 250, 000
Shingles..........22..2...--- 000 M shingle ceases pate 890, 000, 000 890,000,000 |......2-.-2---2--+ 194, 700, 00 194, 700,020
Vehicle stock, dles, 80,0 O00 8 M board fee 850, 000, 000 20, 000, 000 870,000, 000 196, 500, 000 3, 190, 000 199, 690, 000
woodenware, furn.ture, ete.
Hegpore logs and hewn tim- | 200,000 M board feet......... 100, 000, 000 100,000,000 200, 000, 000 22, 500, 000 22, 500, 000 45,000, 000
ers.
Veneer logs..........2.-2.-5+ 650,000 M feet logs........... 660, 000, 000 120, 000, 000 730,000, 000 101,200,000 18, 400,000 119, 600, 000
Tight staves..........2...... 286,000,000 staves. - = 380, 000, 000 55.000, 000 435, 000, 000 83, 250, 000 11,990, 000 95, 240,000
Tight heading. .............. 21,000,000 sets..... 140,000;000 15, 000, 000 155,000,000 29' 250,000 3, 250, 000 32, 500, 000
Slack staves.....22......2... 1,010,600,000 staves. - 265,000, 000 40, 000; 000 305,000, 000 58, 080, 000 8, 580, 000 €6, 60, 000
Slack heading............... 61,000,000 sets. .... “ 120, 000, 000 105,000,000 225, 000, 000 26, 750,000 22,725, 000 49, 475, 000
TG O DStieee ss emma varaes arcs 333,000,000 hoops. . 4 907 000; 000 90,000, 000 19,650,000 |.........--.------ 19, 650, 000
Piling yscen cemanavarsen once 1 oh. 000 pieces... 20,000; 000 90, 000, 000 3,900, 000 15, 600, 000 19, 500, 000
TEU cree si csniscnatciens seimeiaile 2/375,000 lath. sPoceiocwia on tance nie) whine cacntucenivied nen lemeneeinin qaucieueiacie | oles sion ecarare amare | taletiueriace satets esters | alate shnyais ale nis caine
Distillation... 2202222222222 1,550,000 cords. . J 375, 000.000 |. 375, 000, 000 i63; 800, 000 17,550,000 191,350, 000
Tanning extract............. 1,250,000 cords. 135,000, 000 135,000, 000 146,250,000. |. .2cs..:unseatweee 146, 250, 000
Excelsior.......0:20-2s0c00e 260,000 cords... 60,000, 000 75,000, C00 18,720,000 4,680,000 23, 400,000
Fuel wood.......2.........-- TIOS000 000 COE Sy x soyere SeesercrelSecpadezanerevetm pone erence | getfecid nyamaienadsyaissiatel idiot Reorc zee erorriscerte 7,315, 000,000 3,135,000, 000 10, 450, 000, 000
Total pcs sesecvnaraeews seek eb eet MERE ES 14,790,000,000 | 36, 590,000,000 | 51,380,000,000 | 11,528,700,000 | 12,790, 215,000 24,318, 915, 000
Destroyed by—
WNC are airy che ciate nie cits sie aitclcea antl dadnineatnareeaesee 500, 000, 000 1,750,000, 000 2,250, 000, 000 330, 000, 000 750,000, 000 1, 080,000, 000
Insects, disease, et. .....|-. 202.2... c cece eee c eee ee eee 500, 000, 000 2,000, 000, 000 2,500,000, 000 125, 000, 000 525, 000.000 650,000, 000
MOtal sds ccsaaressaess| Maakceemeaaansteomemaansecead 15.790,000,000 | 40,340,000,000 | 56,130,000,000 | 11,983,700,000 | 14, 065, 215, 000 26, 048, 915, 000

 

 

 

 

 

 

 

 

Note.—Figures’on amounts used are in most cases the most recent data available.

5 war years).

TasBLe 10.—Annual growth of saw timber and cordwood in the
United States, by regions.

 

 

 

 

  
 

 

 

 

 

 

 

 

For Jumber the average total cut for the period 1909-1918 was taken (5 prewar and

For export logs 1913 figures were used. Fire loss is an estimated average including bad years, such as 1910 and 1919.

to a mere fraction of what it might be with proper handling.
To convert such stands into valuable producing forests .will in

many cases involve expenditures as great as though the lands
Annual growth. were devastated.
The area of devastated and partially devastated land is
Region. Sa Saw timber. rapidly increasing. Timberlands are cut over much more
Total. Ra Cordwood. | closely now than formerly, with the result that after fires
Board feat. | ber have killed out most of the young growth on logged-off lands
there is little or no chance for reproduction to start. At least
Acres. | Cubic feet. Cubic fet, | 5,500,000 acres of merchantable timber are cut over every year.
New England... .} 17,133,000 | 474,000, 000 8 | 609,000,000 | 28] 341,000,000 . i ; 7
Middle Atlant 207352, 499, 000° 000 8 | 7147000,000 | 31 | 342,000,000 Part of it restocks and part does not. During the period from
Lake. 26, 500,000 | 468, 000, 000 9 | 988,000,000 | 46} 251,000,000 | 1915 to 1918 an average of 9,400,000 acres of forest land was
Centra ~"| 47,312/.000 | 906,000,000 | 15 |1,458,000,000 | 35 | 587,000,000 é :
South Atlantic burned over each year, and in years like 1910 and 1919 the
and East Gulf. .| 59,980,000 |1,594,000,000 | 26 |2,428,000,000 | 33 |1, 062, 000, 000 . . :
Lower Mississippi| 44,275,000 | $83,000,000 16 |1’752'000/000 | 39 | ’ 600/000; 200 acreage was considerably larger. Some of this land restocks
Rocky Mountain .| 17,846,000 | 365, 000, 000 6 461, 000, ;000 | 28] 264,000,000 | and some becomes waste, while the productivity of practically
Pacific Coast.....- 11} 717,000 | 706,000,000 | 12 |1,263,000,000 | 39 | 430,000; 000 .
all is reduced.
Total... .../245, 115,000 [5,995,000,000 | 100 |9,672,000,000 | 35 |3, 877, 000, 000
POSSIBLE GROWTH.

 

 

With softwoods the depletion of saw timber is more striking,
although the cut of small timber is also considerably in excess
of its growth. Nearly three-fourths, or 40 billion board feet of
the saw timber used and destroyed, comes from softwood for-
ests, and about 382 billion feet of it from virgin stands. The
total depletion of softwood saw timber is more than 64 times
its annual growth of 6 billion feet.

The enormous excess of depletion over growth of timber is
not because of unduly large consumption of timber products.
It is due in part to needlessly large losses from fires and other
causes, which to a great extent can be controlled. But it is
due most of all to the wasteful methods of cutting and to
neglect of cut and burned over forest lands. There are now in
the United States about 81,000,000 acres of waste forest land,
devastated by cutting and by fires, on which nothing of value
is growing or likely to grow without a huge expenditure for
reforestation. This area is equal to the combined areas of the
forest lands of France, Germany, Belgium, Holland, Denmark,
Switzerland, Spain, and Portugal. Besides the waste land
there are in the United States approximately 245,000,000 acres
bearing second-growth forest. In a large part of this forest,
wasteful cutting or excessive grazing have reduced production

If all of this land had been cut over in the first place, with
due regard to securing a future stand, and had been protected
from fires or excessive grazing after cutting, it would now be
producing timber at least three times as fast as at present.
Judging from the experience of other conntries and from re
sults obtained where forests have been carefully treated in our
own country, it is believed entirely conservative to assume that
the 326 million acres could produce at an average rate of 60
cubic feet of wood per acre per annum, or, in terms of saw
timber, 150 board feet per annuny This would mean a total
annual growth on the present area of cut-over forest land, in-
cluding that now devastated, of 194 billion cubic feet of wood,
including 49 billion board feet of saw timber. At the same rate —
of production for the remaining 137 million acres of virgin
forest in which there is now no net increment, our total com-
mercial forest area is capable of producing annually, after the
virgin timber has been cut off, at least 27% billion cubic feet of
wood, including 70 billion board feet of.saw timber. This ex-
ceeds our present rate of use and destruction. With a rea-
sonable per capita consumption, it would be able to meet in-

definitely the needs of our growing population for wood and
other forest products.

 
FOREST DEPLETION AND LUMBER PRICES. ;

The course of lumber prices in the United States has been
very materially affected by the successive depletion of old and
development of new fields of lumber production. As one great
forest region after another has been opened up two counter-
acting influences have been brought to bear on prices. One
of these has been interregional competition. Exploitation has
begun in new regions well in advance of exhaustion of the
older sources of supply. The result has been to hold in check
the gradual rise in price which would normally take place as
competition relaxed with the diminution of supplies in the older
regions and as exploitation advanced from the most accessible
and easily logged timber to that involving higher costs of pro-
duction and transportation. On the other hand the cutting
,out of the older regions and the resulting necessity of draw-
ing lumber supplies from more distant fields has meant, of
course, the periodic addition of new transportation costs.

" PRICE CHANGES AND REGIONAL DEPLETION.

Thus prices have tended to rise at a step from one level to
another and then to hold pretty well on this level for a term
of years rather than to follow an ascending curve. This is most
marked with the softwoods.

EASTERN SOFTWOOD MARKETS.

Table 11 shows the lumber prices in eastern markets: at
five-year intervals from 1840 to 1910 and yearly from 1910 to
1920. The prices are computed throughout on a gold standard
to eliminate the distortion resulting from depreciated values
during the paper-currency period.

TabBLe 11.—Trend of average wholesale values (eastern

 

 

 

 

markets.)
Softwoods, 1-inch Hardwoods, 1-inch
stock. stock.
Year. ;
| First Average First Average
| quality quality quality quality
| per M feet. | per M feet. | per M feet. | per M feet.
|
| $20. 91 $10. 50
‘ 21. 46 10. 50 ]...-
24.35 10. 50
ad 26.15 11.00
e 24.45 11. 50
20.43 9. 25
41.32 14. 28
37.70 14.01
39. 93 13. 33
38.41 14. 00
41. 51 17.00
34. 48 16. 40
29. 39 16. 55
34. 06 21. 50
41. 93 21.20
42. 59 22. 06
43. 50 24. 60
45. 06 24. 52
44. 53 25. 29
44,92 27. 88
42. 76 25.19
41.89 24. 68
41. 53 26. 86
42. 60 29. 09
51. 45 39. 90 iS \.
61. 58 44.42 72. 62 55. 54
131. 55 73. 26 1178. 82 1 123. 80

 

 

 

 

 

 

1 Figures apply to first three months.

While a great variety of factors have influenced lumber prices,
a succession of price levels with sudden transitions correspond:
ing to important shiftings of the field of supply may be readily
discerned. ‘Chere has been much price fluctuation in the soft-

 

woods, but in every instance price declines have ultimately been
regained and new levels have been established. The  underly-
ing cause has been the widening distance between the sawmill
and the consumer of its product.

The trend of lumber prices in eastern markets since 1840 is
further illustrated in figure 18, which presents average whole-
sale values of upper grades of softwoods and hardwoods sepa-
rately in relation to the average price trend of all com-
modities. These values are expressed in percentages, with
1860 prices as the index basis, and on a gold standard through-
out. Hardwood prices will be discussed in a subsequent

“section.

Between 1840 and 1860 average prices of softwood lumber in
the eastern markets followed quite closely the average price
of all commodities. The lumber was principally white pine
from New York, New England, and Pennsylvania. The average
value of upper grades in the wholesale trade fluctuated between
$20 and $30, centering about $25 per thousand feet, while ma-
terial of average quality sold fairly uniformly at $10 to $11.
Transportation costs were about $1 per thousand. About 1850
white pine from the Lake States began to filter through to
the Atlantic seaboard, and by 1860 Chicago had replaced Al-
bany, N. Y., as the leading lumber distributing center in the
world. The increase in volume of the more distant Lake States
timber entering the eastern market from then on was accom-
panied by a price advance in upper grades from $24 in 1852
to $30 in 1858, and may be accounted for by a growing short-
age of eastern white pine. i

The Civil War greatly affected the price of lumber, in com-
mon with that of other. commodities, through inflation; but
calculated on a gold-standard basis softwood values did not
increase materially until after 1865. But between 1865 and
1870 softwoods parted company with general commodity values,
and with the exception of one brief period have so remained
until the present time.

The softwoods reached their new price level in 1866. From
that year onward lumber prices, except as indicated, remained
well above the average for all commodities.

The general level of softwood uppers from 1866 to 1890
was between $34 and $40 per thousand, and that of the lower
grades between $14 and $18, an increase over the prewar
levels of $10 to $15 and of $4 to $8 per thousand, respectively.
This was the period during which Lake States white pine was
entering the eastern market in increasing volume, at increased
transportation costs of about $5 per thousand. Undoubtedly
the increasing absorption of timber from the Lake States by
the Middle Western States, whose development was proceeding
rapidly, and the growing scarcity of local timber also exerted
a lifting influence on softwood prices. Large rafts of lumber
were passing down the Mississippi River to Memphis, Vicks-
burg, and even New Orleans.

The financial depression which began in 1873 caused a tem-
porary decline of lumber prices in common with all commodi-
ties. Following 1879 softwood lumber prices advanced steadily
until 1883, when the upward trend was checked by an increasing
inflow to the large eastern markets of yellow pine from the
forests of Virginia, North Carolina, South Carolina, pnd
Georgia, and the rapidly increasing cut in the Lake States.
Supplies were brought to New York, Philadelphia, Boston,
Baltimore, and other eastern centers by water transportation,

During the year 1887, for example, over 200 million feet of
southern pine was received at New York, an increase of nearly
30 per cent over 1886. Only a few years before there was but

39
.

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

40

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TIMBER DEPLETION, PRICES,

one yellow pine yard in New York, and the receipts were
insignificant.

The interregional competition which grew out of the rapid
expansion of the lumber industry in the Lake States and the
South during the eighties, together with the continued produc-
tion in New England and Pennsylvania, was unquestionably the
dominating factor in crowding softwood lumber prices down-
ward and holding them at temporarily low but fairly uniform
points for a decade following 1890. The average value of the
upper quality lumber centered about $30 per M feet. and that
of the lower quality between $16 and $17 per M feet. During
this period the lumber-price trend coincided very closely with
the ups and downs of the all-commodity price average.

By 1900 the Lake States white pine and the South Atlantic
yellow pine were waning factors in the New York market.
This was due not only to the decline in cuts in these regions
but also to the increasing absorption of lumber by expanding
markets west of New York. The bulk of the softwood lumber
in the eastern markets came more and more from the Gulf
States by rail and water, with increased transportation charges
totaling $6 to $9 per thousand. This‘resulted in prices again
moving steadily upward and the establishment of a new level.
The graph reflects between 1900 and 1906 an increasing di-
vergence of lumber above average commodity prices.

From 1903 to 1917, the period of greatest decline in the cut
of the Lake States, the level of softwood prices remained
fairly uniform. Upper grades averaged from $40 to $45 and
lower grades from $24 to $26 per thousand, an advance of
from $10 to $15 and from $5 to $10, respectively, over the
previous level. There were, of course, minor fluctuations, and
- Since 1907 an abnormal pressure downward on prices arising
from weak markets and overproduction in most, if not all, of
the producing regions. This is especially true of the years 1914
to 1916, a period of great regional competition in all large
softwood lumber markets.

In 1917, it will be noted, the curve for all commodity prices
advanced sharply beyond softwood lumber prices for the first
time since 1865, due, of course, to war conditions and the fixing
of prices by the Government for the more important softwood.
species, ;

With the close of the war came the opening of a new period.
Radical changes had taken place in the general situation. The
strain of overproduction and intense regional and interregional
competition was markedly relaxed. The cut of southern pine
had fallen off some 84 billion feet since 1915, and lumber pro-
duction in practically all regions excepting the West was below
normal. With the first development of sharp demand following
the middle of 1919, therefore, there was demonstrated as never
before in the history of lumber prices the effect of regional
reduction of lumber production and its consequent weakening
of the great leveling influence of interregional competition.

By March, 1920, average mill prices in both the South and the
West were more than double the average prices received in 1918
and more than three times those of 1914. These increases were
swiftly reflected in the large eastern markets. The average
value of upper softwood grades was $42 per thousand in 1914,
$51 in 1918, and $131 a thousand in March, 1920. Similarly,
lower grade material rose from $25 in 1914 to $40 in 1918 and
to $73 in 1920.

These phenomenal price advances, although precipitated by a,

variety of factors, unquestionably reflect in part a current
transition to another lumber price level, the measure of which is
clouded in present abnormal conditions of trade and finance,
supply and demand. The new level will be founded on perma-
nent increases in production costs and the increasing extent to

° which eastern markets will have to draw upon western lumber
at transportation costs of $15 to $20 per thousand feet.

 

EXPORTS, AND OWNERSHIP. 41

Softwood wholesale lumber prices since 1840 have therefore
passed through three main levels in eastern markets and are
now apparently in the initial stages of the fourth. The first
level, prior to 1861, was characterized by local supplies and up-
per grade prices of $20 to $25 per M. ‘The second extended
from 1865 to about 1900, with prices of from $35 to $40, and
supplies drawn from the Lake States, and the third level, from
1900 to 1918, with the Southern States as the main source of
supply, and with prices of $40 to $45. Prices for the fourth
level are not yet stable.

MIDDLE WESTERN MARKETS.

In the markets of the Middle West the effect upon lumber
prices of changes in sources of lumber supplies, with their
accompanying changes in transportation costs, lumber stocks,
and interregional competition, is even more strikingly shown.
These Middle Western markets have during the past 25 years
been dominated by first one species and then another. Each
change has grown out of cumulative forest exhaustion or
reductions of lumber cut in main forest regions tributary to
the markets.

Prior to 1900 lumber stocks in the retail markets of the Mid-
dle Western States were largely of white pine from the Lake
States, distributed at low transportation costs by water and
short rail hauls. Lumber production of the Lake States was

-at its peak. White pine moved in heavy volume by water to

Chicago, and in the form of logs down the Mississippi River.
Practically every river town of importance had one or more saw-
mills. Dubuque, Davenport, and Rock Island, all in the very
heart of the consuming region, had, for example, many mills
from which lumber was distributed locally and by rail to con-
suming markets. Transportation costs were relatively small,
lake rates to Chicago, for example, ranging from $1 to $2 per
thousand ‘feet.

Following 1900 the sharp decline in the production of north-
ern pine, due to the exhaustion of the more accessible forests,
was reflected in a gradual shrinkage of white-pine lumber
from the stocks of retailers farthest removed from the white-
pine region. Mills along the Mississippi River, unable longer
to get steady supplies of logs, began to close down. By 1905
most of the mills from La Crosse and Winona downward were
idle. Coincident with these movements wholesale and retail
lumber prices, even in the southern Minnesota region, began
to move upward. Wholesale prices of common grades of north-
ern pine increased $8 to $17 a thousand feet, while the retail
prices advanced $10 to $15 a thousand feet. This upward
movement of average retail prices from around $16 in 1895 to
$25 in 1905, in response to mill prices and the declining soft-
wood cut in the Lake States, is clearly reflected in figure 14.

During the same period yellow pine from the South was
moving northward in increasing volume, taking markets which
northern pine could not supply and exerting through inter-
regional competition a restraint upon increasing white-pine
prices. From a production in 1899 of less than 10 billion feet,

the cut of southern pine increased to more than 16 billion feet -

in 1909, carrying with it a gradual transition of lumber stocks
from white pine to southern pine throughout a large part of
the region. The southern forests were, however, less accessible
to the principal markets of the region, and in place of water
transportation in part or in whole, rail transportation: amount-
ing to from $4 to $6.50 per thousand feet was necessary. This
imposed an added cost to lumber and raised the general level
of lumber prices. Had not these great southern forests been
available to meet the rapidly increasing demands of the region
and to replace the declining cut of the Lake States, lumber
prices in the Middle West following 1905 would unquestionably
have reached and maintained a materially higher level than
has actually existed.
42

Following 1912 southern yellow pine was the predominant

species in the retail yards of Missouri, Kansas, Oklahoma, '

Nebraska, Iowa, Indiana, and Illinois. It dominated the retail
trade. In western Kansas and Nebraska and in North and
South Dakota Douglas fir from the coast’ and western pine
from the Inland Empire had largely replaced white pine, while
in Wisconsin hemlock formed the principal species in the lum-
ber yards. Only in Minnesota and immediately contiguous
localities was white pine the leading species in the retail trade.

It will be noted from figure 14 that from 1906 to 1917 the
level of retail lumber prices fluctuated around $30 per thousand
feet and mill prices around $15. This is explained by the de-
velopment of further interregional competition from the west-
ern forests.

Following 1900 the cut of the Pacific Coast States increased
rapidly from about 3 billion to more than 7 billion feet in 1910.
Surplus stocks soon began to move eastward, and Douglas fir
from the West Coast and western pine from the Inland Em-
pire became active factors in the northern-pine markets of the
Dakotas and Minnesota and in the southern-pine markets of
western Nebraska and Iowa. The period 1908 to 1916 was
one of periodic business depression and overproduction at the
mills. In order to move stocks of lumber in the South and in

 
  

TRENO OF AVERAGE RETAIL LUMBER PRICES
/N MINNESOTA ANO NEBGHASKA /N RELATION
TOSHIFTING SOURCES OF LUMBER SUPPLY

AND AVERAGE MILL PRICES
(PRICE CURVE FOR COUNTRY TRADE)

READ: LUMBER CUT IN BILLION BOARD FEET
SELLING PRICE IN.

4890
YEARS

Fig. 14.

the West, prices were often set at cost of production or less,
Southern pine and Douglas fir met in keen competition in the
Prairie States. This expanding movement in yellow pine and
Douglas fir competing for markets naturally exerted a leveling
pressure upon lumber prices. It was a buyers’ market. Buyers
whipsawed the price of one species against the other, and
thereby exerted further pressure downward on both wholesale
and retail prices.

From the standpoint of the public, or the lumber consumer, the
situation is illustrative of the great economic advantage of
having large available forests in different producing regions.
When the supply of lumber from the Lake States first began

«

TIMBER DEPLETION, PRICES,

 

EXPORTS, AND OWNERSHIP.

to decline radical price advances were unquestionably prevented
by the inflow of a great volume of lumber from the South. As
the southern pine lumber established itself in the markets of
the Middle West. the exhaustion of timber in the Lake States
reached a point where northern pine and hemlock ceased to be-
come effective competitive factors, except in very limited re-
gions, but further advances in lumber prices were checked by
the great inflow of lumber from the West.

The increasing volume of western lumber in the middle west-
ern markets obviously increased the freight rates borne by lum-
ber. That these increases are not reflected by figure 14 is due
to the fact that during the period 1910 to 1916 they were largely
absorbed by the mills in lieu of profits in order to move surplus
stock. These conditions are shown graphically in figure 15.
They therefore have acted as springs, exerting pressure upward
and intensifying the responsiveness of prices to any release of
pressure from above. In the retail trade of southern Minnesota,
for example, the average transportation cost borne by lumber
in 1905 amounted to about $3 per 1,000 feet. In 1915 it had
increased to $8.50, and in 1919 to practically $12 per 1,000 feet.

Normal markets for lumber in the Middle West largely dis-
appeared during the war. The needs of the Nation in prose-
cuting the war, however, eventually absorbed available lumber
stocks. There was little active demand for lumber, but poten-
tial demands steadily accumulated. In the meantime lumber

| production in almost all regions declined. Restrictions on lum-

ber were lifted following the armistice, and the great pent-up
demand for lumber was released into normal channels of trade.
Prewar conditions of business depression and overproduction
at the lumber mills had passed. There developed, indeed, a
striking reversal of those conditions. Lumber was needed in
great volume to supply the shortage of homes and other build-
ings. Wood-using industries were short of lumber to resume
business on a prewar scale. Industries began to expand on the
abnormal increase of credit growing out of war financing,
Production of southern pine lumber had passed its peak. The
South was prosperous and in need of lumber. It absorbed the
cut of southern mills at high prices in greater volume than ever
before, while eastern markets likewise drew more heavily upon
the South. .

As a result of the foregoing conditions, the former dominating
und far-reaching competition of yellow pine was much con:
tracted, and the great markets of the Middle West were left
primarily dependent upon timber from the Pacific coast and the
Inland Empire. The greatly reduced cut of the Lake States’
forests was wholly ineffective as a competitive factor in exerting
a leveling influence upon prices, and the upward pressure of
increased transportation costs and lean profit years prior to
the war was set free to act. Within a year or 18 months
Douglas fir became the principal species throughout the greater
portion of the Middle West. To-day it forms 80 to 90 per cent
of the retail] stocks in Minneapolis, which has always been a
great white-pine market. It is found in Chicago in greater vol-
ume than any other species. In Kansas City, which is on the
very edge of the southern pine district, it forms more than
‘0 per cent of the lumber stocks.

In the fotegoing conditions may be found the underlying
causes for the chaotic price situation which developed in these
middle western markets during the latter part of 1919 and the
first months of 1920. Beginning with June, 1919, prices moved
steadily upward. It was the beginning of an intensified sellers’
market. Wholesale and retail lumber prices reached the highest
point in the history of the industry. As shown by figure 19,
the average sales values of retail stocks in country districts in
March were around $85 per 1,000 feet, while average wholesale
mill prices ranged from $45 to $60. The trade was plunged
into confusion, Buyers needed lumber and were willing to bid
for it. For several months prior to March, 1920, lumber prac-
tically lost uniformity of price in many markets,” Quotations in
‘PER CENT

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

COMPARISION OF [INCREASING TRANSPORTION CHARGE BORNE
Y

LUMBER IN CouNnTRy Rérait. TRADE IN SAMINNESOTA
: (Average freight cost per M reer)

Dorears PERM Fr.
DOL.ars PER M FT.

TREND of AvERAGE RETAIL, LUMBER PRICES PER M FT.
ANO
OrmmerR ESSENTIAL FACTORS OF Cost
Country RETAIL, TRADE MINNESOTA

Average

DoLLars PER M FEET

Value of

Dotears PER M FEET

 

ILLUSTRATION OF CHANGING SPECIES In RETAIL LUMBER STOCKS

iN

CounTrry Yaros in MINNESOTA
C33 Ar Cerr Northern Pine f
GB “er Cenr Douglosfir & Western Pine
Per Cenr Wise temlock

OM) Per Cenr So Yellow Fine

Per Cewr

 

 

Averace LumMBeEr aaa Perr Yaro

/In_ M
Basis -Total poeta Sales
Nebraska- 6/ Million Ft
Minnesota-5'5Million AA

Ca

 

 

 

600

FEEr

 

500

 

7 ll S

 

THOUSAND FEET

ns

Q

o
THOUSAND

Ln Yar.
+1

 

 

 

 

 

 

 

 

 

 

 

 

 

Peer.

 

 

 

 

 

S3cO 500

1905 1906 1007 1908 /909 700 “9M 19/2 IHS 19 IDS 19/6 10/7 19/8 19/9

Fie. 15.
44

the same market varied from $2 to as much as $50 per thousand
feet on the same grade. The tables of 1914 and 1915 were
turned. Sellers whipsawed buyer against buyer. Lumber was
auctioned to the highest bidder, with prices continually going
higher. On some of the upper grades, especially among the
hardwoods, sellers refused to make quotations or to grant op-
tions on expected material. Through the use of the transit-car
privilege dealers often held cars for big prices, paying demur-
rage charges and gambling on further price advancements.
Instances were cited where transit cars changed hands six and
eight times standing on the sidetracks.

The movement of lumber prices and lumber stocks in the
Middle West reflect what occurred in varying degree in prac-
tically all other large consuming markets dependent upon lum-
ber from distant regions. As in the Hast, the effects of forest
depletion are clearly discernible. Because of interregional com-
petition these effects are manifested in the form of successive
price levels, the first prior to 1900, with retail price averaging
around $16 and the Lake States as the source of supplies; after
a period of transition a second, beginning about 1906 and last-
ing through 1916, with prices centering around $30 for southern
Jumber. The rapid advance and chaotic prices of recent months
are symptomatic of a transition to a third and permanently
higher level than that which has prevailed during the period in
which southern pine has dominated the situation.

It is true that lumber prices were bound to rise with pro-
ducing costs and in common with other commodities. It is
true also that their sudden skyrocketing was unquestionably
precipitated by a combination of many conditions, including
unfavorable logging weather in the South, reduced stocks at
the mills, car shortage, etc. The relation of producing and
distributing costs to prices will be discussed in a subsequent
section and the underlying cause of the extraordinary and
unprecedented price movement since*the armistice is not found
in that relation. It is found in .the weakening of inter-
regional competition brought about: by a temporary shortage
of lumber, occasioned primarily by curtailed production re-
sulting from conditions growing out of and following the war.
Cumulative forest depletion in regions formerly supplying the
big lumber markets of the country has been an important con-
tributing factor. The great balance wheel of interregional
competition is unable to function effectively and without
interruption as the regional sources of timber supply are
exhausted and abnormal conditions, such as have characterized
the postwar period, are thus free to play a larger part in
violent and extreme changes in market conditions.

Had the Middle West been able to draw on ample forests of
northern as well as of southern pine to meet the demand of
an enlarged and insistent market the response would have
been far easier and the situation far less acute. Had it not
been for the fact that timber from the far West was partially
available to lessen the strain of a demand far beyond the
supply the pressure would have been still more extreme. It
is safe to say that Douglas fir will not permanently lose the
place which it has now obtained in the markets of the East
and the Middle West, but on the contrary, as the output of
southern pine declines it will more and more dominate those
markets. The freight tolls upon it are being incorporated in
the new price level. And the crisis which has brought about
its extensive introduction serves to illustrate what may be
expected with increasing frequency and intensity as forest
depletion proceeds and no steps are taken to make cut-over
lands productive.

EASTERN HARDWOOD MARKETS.
Wholesale prices in the eastern markets for upper grade hard-

woods are shown in. figure 13 between 1855 and 1920, and also
with material of average quality for somewhat shorter periods

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

in Table 11. The hardwood price curve follows closely that for
all commodities until 1860, since when they have been separat-
ing gradually except for a short period following the Civil War.

The curve of hardwood prices in figure 13 indicates a much
sharper and more consistent increase in hardwood than in soft-
wood~prices. The leveling effect of interregional competition is
less apparent, due in part to the more general distribution of
hardwood forests and the relatively smaller consumption of
hardwood lumber. Four rather distinct price levels are ap-
parent, however. Between 1865 and 1875 there was a rapid rise
to almost double the prewar level, followed by a steady increase
until between 1900 and 1905, when another abrupt rise marked
a new general level of hardwood prices. Again in 1918 a still
higher level is indicated by an increase of more than $10 a
thousand over 1917, and during 1919 and the early months of
1920 a very much greater increase, which carried the average
price to almost $125 in excess of that shown for 1917.

In the early days, when transportation systems in the United
States were undeveloped, commerce in hardwood lumber was
limited, owing to the difficulty of rafting. Its consumption was
mainly by local markets immediately tributary to the source of
supply. Between 1850 and 1860 hardwoods were cut near the
consuming centers. Prices were low and the quantity consumed
was comparatively small. First-quality white oak sold in the
eastern markets in 1855 for $10 per 1,000 feet wholesale, poplar
for $11.50, and ash for $10.50. i

Following the Civil War the commerce in hardwood lumber
expanded rapidly with the development of railroads. By 1870
hardwood lumber from Ohio and Indiana was being shipped by
rail to the eastern markets, and the local cut was no longer
sufficient to meet their needs. Prices had risen to about $26
per thousand for oak and $25 for ash and poplar. With the
development of the wood-using industries and the increasing
use of hardwoods for special purposes, the industry began ex-

‘panding into the highlands of West Virginia and the southern

Appalachian Mountains with increased logging and transporta-
tion costs. By 1890 the price of ash and oak had increased to
$35 and poplar to $30 per thousand, and in the 10 years follow-
ing 1890 oak increased to $43, ash to $45, and poplar to $36 per
thousand.

Between 1900 and 1909 the total hardwood cut in the United
States gradually increased. During the decade following 1910,
however, the hardwood cut of the country steadily declined
from ten and a half to between 6 and 7 billion feet in 1918.
This decline is reflected in all hardwood regions excepting the
lower Mississippi Valley, which has increased from a produc-
tion slightly less than 800 million in 1900 to almost a billion
and a half feet in 1917.

The growing dependency of wood-using industries and other
hardwood consumers upon. the hardwood cut from the lower
Mississippi Valley serves to emphasize the growing exhaustion
of the hardwood forests in the central, eastern, and northern
hardwood regions. The South is the last large hardwood reserve,
and its reduced cut during the past two years, because of bad
flood conditions, labor shortage, and other temporary factors
which have curtailed both log and lumber output has been a large
factor in bringing about an acute shortage of hardwood lumber
in practically all markets.

The general condition of the hardwood industry following
the war became even more unsettled than that of the softwood
lumber industry. Hardwood lumber used for war purposes was
confined largely to oak, hickory, walnut, yellow poplar, bass-
wood, and ash, the stocks of which were well exhausted by the
close of the war. The production of other hardwood species
was curtailed on account of Government restrictions. The wood-
using industries were short of dry stock to meet the demand
for furniture, finish for homes, and other hardwood products.
TIMBER DEPLETION, PRICES,

The result was that hardwood lumber was bid up to unprece-
dented prices. The market became extremely erratic and un-

stable. Several species such as ash practically disappeared
from the market. Quotations often did not hold good over-
night. It was not uncommon for cars of hardwood lumber to

net the owners profits of $50 to $100 and over per 1,000 feet.-

As an example, a jobber who had bought a car of quarter-sawed
oak from a small mill operator for less than $100 per thou-
sand immediately sold it for $400 per 1,000 feet.

Wholesale and retail prices in 1920 of a number of the more
important hardwoods in relation to prices prevailing in previous
years are shown in Table 12. The growing scarcity and high
prices of oak are probably of greatest concern, because it is
used by such. a great variety of industries and consumers.
The cut of oak reached its peak with the decade between 1899
and 1909. For the two years mentioned the cut was identical
and amounted to nearly 4% billion feet. Since 1909 there has
been a general falling off in production, and in 1917 the cut
had dropped to a total of 2 billion and was only 44 per cent
of the cut in 1909.

The lower Mississippi Valley holds the last large reserves of
oak timber in the United States. The cut in these States de-
creased from about 715 million feet in 1909 to about 470 million
feet in 1917. In 1913 the wholesale price of F A S quartered
white oak, used generally by the furniture and musical instru-
ment manufacturers, was about $80 per thousand. In February,
1920, it had risen to about $300, and was difficult to procure at
that price. To manufacture quartered oak first quality, large
sized, straight-grained logs are required, which are obtained only
from old growth or virgin timber. Quality depletion of timber
is important in this case.

TaBLE 12.—Wholesale and retail prices of hardwood lumber at
various points throughout the United States.

WHOLESALE PRICES (DOLLARS PER 1,000 FEET).

 

 

  

 

 

 

 

February, | February, February,
1914. 1919. - 1920.
OAK.
Firsts and seconds 1-inch plain boards:
Philadelphia 1 60.00 80. 00 200. 00
New York City. 60. 00 82. 50 200. 00
Pittsburgh 2 62. 00 75.00 225.00
Cincinnati 55.00 75.00 200.00
‘0. 2 common 1-inch plain boards:
Philadelphia. ..........-0eccccecsaccevens 130.00 46.00 95.00
New York Cit 29. 00 41.00 95.00
234.00 40. 00 112. 00
24.00 27. 50 87.00
88. 127.00 310.00
2 80. 00 95.00 300.00
78.50 85.00 300. 00
156.00 90. 00 185. 00
55.00 83.00 190.00
innati “74.00 78.00 200. 00
mam: inch boards:
ne: 2 como ia a cease a diaanenweleeinciesesietiaye 124,00 45.00 75. 00
New York City 27.00 41.00 98. 00
Oineinnatl c casscnanwewwenn seco ooccceianans 27.00 28,00 80. 00
YELLOW POPLAR.
-inch boards:
aor rae : on cate aii ences enoen ee PERE 62. 00 80. 00 190. 00
Philadel puis... 0 ncadeansnwasexeneseerereve 60. 00 106. 00 180. 00
-inch boards:
as Philadelph cc. ne ing ofnantigainielal seciba dein De 123.00 48. 00 93. 00
. Pittsburgh ‘ 2 27.00 42. 50 67.00
ineinnatl. .. 0 .nnn-mdgaeinsaanwer dan sree 23. 00 29. 00 75.00
RED GUM.
i 1-inch plain boards:
Fists a ee aity. a ‘ = ais Storage oral RinsGiare ater 37.00 58. 00 195. 00
MAHOGANY.
Firsts and secon ia, Maxton and Honduran
- Ss?
mR OB Ek City : a saiatate biel ctecnsimate stuletecwee's 155. 00 270.00 330. 00

 

 

1 February, 1915. 2 February, 1913.

 

 

EXPORTS, AND OWNERSHIP. 45

Tasre 12.—Wholesale and retail prices of hardwood lumber at
various points throughout the United States—Continued.

RETAIL PRICES (DOLLARS PER 1,000 FEET).

 

 

 
 
 

February, | February, | February,
1914 1919. 1920.
OAK.
Firsts and seconds 1-inch plain boards:
Philadelphia swan sceas axe cscieieuusecisastnae| one rsresav aii lace messesriaial velco aleaisioas
New York City... ee 88. 00 132. 00 252. 50
Pittsburgh........ ~ 1 83.00 100. 00 260. 00
Cincinnati.......-... “ 72. 50 100. 00 265. 00
No. 2 common 1-inch plain boards
Philadelphia.............-..2.- siaisid| Sisataieis sass | sipietais xiv atecee, | staintoniy siaeaters
New York Hy a aatate DS.O0: liicteawciasion ciel erate bie vice se
Pittsburgh . . sae. 45.00 1 54. 00 150. 00
OU NOG oa eka ann nad mapas noreeaic® 31.00 46. 50 116. 00
Firsts and seconds 1-inch quartered boards:
New York City 115. 00 192. 00 400. 00
Pittsburgh.............. 198. 00 126. 00 385. 00
CnC Math 5. casos sicverernmsseraiets ciaverseoeasons ameistemoe 106. 00 115. 00 385. 00

 

ASH.

Firsts and reas 1-inch boards:

 

No. 2 common 1-inch boards:

 

Philadelphia
New York tity 45.00 60. 00 140. 00
Cincinnati. . 36. 00 37. 50 105. 00

 
 

YELLOW POPLAR.

ie and seconds 1-inch boards:

No. 2 common 1-inch board:
Philadelphia
Pittsburgh.
Cincinnati. .

 

*RED GUM.

Firsts and seconds 1-inch plain boards:
INOW MOP Clty oye xecarswemiac xieecatencsina del Saruwaueinten

MAHOGANY.

102. 00 247. 50

Firsts and seconds Mexican and Honduran
mabOeany 1-inch boards: ,

Now York Citys. .0cccssmasasessssvececs 175. 00 330. 00 400. 00

 

 

 

 

1February, 1913.

Red gum, which 20 years ago was considered a weed tree
and little cut for lumber, commands a wholesale price of $200
per thousand for F A § figured and $180 for F A § plain.
Plain oak flooring in 1918 in Ohio cities retailed for about $75
per 1,000 feet. In March, 1920, the same material brought
$300 per 1,000 feet. White ash trim F A S in 1918 retailed
for $72 per 1,000 feet To-day it is very difficult to procure
and quotations are not generally available; however, sales
have been made at $265 and over per 1,000 feet. Maple floor-
ing in 1918 retailed for $60 and in March, 1920, for $240.
Yellow poplar F A § in 1913 retailed for $70 and in February,
1920, for $225.

Wholesale prices for hardwoods in the eastern markets are
therefore characterized by more continuously rising prices and
much less pronounced price levels than for softwoods. This is
the logical result of the distribution of hardwoods, the larger
bodies of which merge into each other and are less distinct than
the principal softwood regions. The center of hardwood produc-
tion has theréfore moved gradually away from the center of con-
sumption. The $10 wholesale price for first quality white oak
of 1855 had, by the early months of~-1920, reached $230, and the
prices of other species had increased proportionately. Without
minimizing other factors that have affected prices, the effect of
depletion is not less clear or pronounced than in the case of the
softwoods.

PLENTIFUL AND DEPLETED SPECIES.

The foregoing increases illustrate the effect of growing
scarcity and regional forest exhaustion upon the price move-
ments of species of general and special use. This is further
brought out graphically in figure 16, which shows the price
trend of walnut, a species of limited quantity and special use,
46 TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5260 %

200
130
180
/70
160 TREND OF AVERAGE. PRICES OF UPPER.

GRADES OF WALNUT AND EASTERN WHITE

PINE,/IN RELATION TO UPPER GRADES OF
150 SOUTHERN YELLOW PINE.

WHOLESALE PRICES FER M. FEET /N

jes EASTERN MARKETS

 

 

 

 

 

 

 

 

 

 

/30 : ere
%
&
(20%
~
x
Ob to F YF fF fF fF ek acarceaated et
110 RQ ‘ ‘
I ‘ od H
‘ ane
100 Hey fi ed pe
s a No quotation on
getertttapeoheaeay We Walhut after 19/8
an a et
Q Y
¥ f
ne x
: ay’ [
70 .

 

 

;
/
/
/
4-5!
‘
;
£2
ets
;
60 3
;
:

50

40 4 .
; / \ * 1
EN ner

ae Tah -
yh ba La

 

 

ne

ello ae ze

 

 

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

‘

 

 

olL—
1840. 1845 1850 1855 1860 1865 1870 1875 1880 1885 1890 1895 1900 1905 1910 1915 1920

YEARS
Fie. 16,
TIMBER DEPLETION, PRICES,

and of the upper grades of white pine, a species formerly avail-
able in large quantities and of general utility, but now near-
ing exhaustion, in relation to upper grades of southern pine,
a wood of present large-quantity production. The curve for
walnut, it will be noted, shows a rise in price from $25 in 1865
to $112 in 1905, without a single drop. This was undoubtedly
due to the comparatively small original stand of walnut. At
present firms handling walnut in quantity have scouts in the
field searching out and buying single trees to supply their needs.

In contrast to walnut prices, the prices of white pine were
only slightly higher in 1895 than in 1866. During this period
white pine was the general utility wood. It was available in
large quantities in pure stands first in southern New England,
then in New York and Pennsylvania, and later in the Lake
States. To-day it is largely a specialty wood. The transition
from a general utility to a specialty wood following 1900 is
strikingly illustrated by the marked divergence of the white-
pine curve from the southern-pine curve. The difference in
price in 1900 of approximately $20 per thousand had reached
$70 in 1915 and $130 in 1920.

PRICES IN DEPLETED OR NONFORESTED VERSUS FORESTED

REGIONS.

Retail prices collected indicate that in normal times and
much more during periods of shortage and extreme prices,
such as the present communities close to large lumber-producing
regions, benefit very materially in lumber prices. Retail lum-
ber sales in producing regions of the South and the West are
often made at rates which check closely with wholesale prices
in the respective regions. This is an advantage which formerly
forested regions, such as the Lake States, Pennsylvania, New
York, and New England have now lost. Lumber dealers in
producing territories are able to handle lumber on a smaller
margin than retailers at distant points, primarily because
they are near the source of supply and are not required to carry
large stocks or to buy lumber far in advance in anticipation
of delayed shipments and traffic breakdowns. Present differ-
ences, however, far exceed prewar margins.

Furthermore, many mills retail lumber locally at whole-
sale prices. Instances were found, in fact, where special prices
below the going wholesale price were made by mills in order
to stimulate local building and community development. Red-
wood bevel siding sold in February, 1920, at a producing city
in California for $40.90 wholesale and $43 retail. During the
same month in Washington, D. C., and at Dayton, Ohio, the
quoted prices on the same material varied from $110 to $130.
The freight rate from California to these points was approxi-
mately $8.50. /

The three tables which follow indicate retail selling prices
in towns and cities in lumber-producing regions in contrast
to prices prevailing in markets far removed from forest
regions. In some instances, sale prices and price quotations
from different dealers varied considerably, and in these cases
an average of the prices obtained is used.

TasBLE 13.—Comparison of retail prices per thousand feet of

North Carolina pine lumber at points in producing and in con-
suming regions.

 

 

 

February, 1914. | February, 1919. | February, 1920.
North Carolina pine. Wil- | 4 Wil- Wil-
- ming: | Yong | ming | one | mine | York
wea. | City. | wig. | City. | wg. | City.
looriny inches, No.
eee eet cet ees $25.00} $38.00 | $45.00 | $62.50 | $98.50 | $150.00
i i ii widths, |
SD te ee 27.50 | 45.00] 50.50] 64.50 | 101.00] 150.00
i i all widths, No.
ant ane cdeeeneee ees 13.00 | 27.50) 32.00] 55.00] 46.00] 91.50

 

 

 

 

 

 

 

 

ight rate from Wilmington, N. C., to New York City amounted to approxi-
mately 328 per 1,000 feet in 1914 and to $4 per 1,000 feet in 1919 and 1920.

47

TABLE 14.—Comparison of retail prices of southern yellow pine
lumber in South with prices in consuming region.

EXPORTS, AND OWNERSHIP.

 

 

 

 
  

 

  

  

 

February, 1920.

Average JA Verage
Southern yellow pine. | Points in producing | SEllNS | Points in consuming | “Stee
region. per M region. per M

feet. feet.
Mobile, Ala..-...... $115.00 | Kansas City, Mo....| $133.55
Flooring,1 by 4 inches,|| Montgomery, -| 115.00 | Lincoln, Nebr.....-. 125.00
B and better, flat |; Meridian, Miss. 110.00 | Country town,Kans.} 140.00
BRI a cccesanyeawen Bogalusa, La. 110.00 | Dayton, Ohio....... 150.00
Pensacola, Fl: 110.00 | Pittsburgh, Pa...... 142.00
: Mobile, Ala.........| 54.00 | Kansas City, Mo....) 66.45
Dimensions, 2 by 4 ||Montgomery, Ala..-| 50.60 | Chicago, Ill.......... 65.15
inches, 16 feet S. & |, Meridian, Miss. -...-. 55.00 | Country town, Kans.| 70.00
E, No. 1, common. .|| Bogalusa, La... af}, COB 00! Ils axevsse wesarecciierersieias were siermiersee ste
Pensacola, Fla. alt GD00 4. sac cc cee meat aeanerslasaese ee
aes Ala. ee He i os City, ge ares oe a

ontgomery, Ala...} 51. ountry town, Kans. .
Common boards, LbY | Meridian, Miss...... 61.50 | Chicago, Ill..........| 66.80
Be eae -||Bogalusa, La... 57.00 | Dayton, Ohio....... 80.00
Pensacola, Fla. -| 60.00 | Pittsburgh, Pa.....-. 80.00
Maint xis | ki | Ques Me |

Finish, B and better, ontgomery, Ala...| 120. ee Oh epee tees i
tn Meridian, Miss...... 114.00 | Lincoln, Nebr....-.. 135.00
1 by 6 inches, 8 feet../) pensacola, Fla......| 112.50 | Country town,Kans.| 145.00
Bogalusa, La........ 115.00 | Dayton, Ohio....... 175.00

 

 

 

 

 

The freight rates per 1,000 feet from southern yellow pine mill points to Kansas
City, Mo., Lincom, Nebr., and to Chicago, Ill., Dayton, Ohio, Pittsburgh, Pa.,
amounted to approximately $7.25, $7.90, $6.50, and $7.50, respectively.

TABLE 15.—Comparison of retail prices of Douglas fir on West
Coast with prices in consuming region.

 

 

 

 

February, 1920.
Aver- Aver-
i er F are eee ; age
Douglas fir. Points in producing | selling | Points in consuming | selling
region. price region. price
per M per M
feet. feet.
Lincoln, Nebr $112. 50
Country town, Kans.| 125.00
Kansas City, Mo.

Flooring, No. 2 clear, |(Portland, Oreg......
vertical grain, 1 by |; Eugene, Oreg......-
4 inches. Bellingham, Wash. .

  

Common boards, No. |{Portland, Oreg...... 40.00 ||Country town, Kans.
1, 1 by 8 inches, 16 |; Eugene, Oreg....... ~ 48.00 |, Kansas City, Mo....| 66.65
feet, S18. Bellingham, Wash..} 39.00 ||Chicago, Ill.........] 65.00
Minneapolis, Minn..| 65.00
‘ Lincoln, Nebr.....-. 62. 50
Dimension, 2 i 4 |(Portland, Oreg...... 40.00 ||Country town, Kans,| 67.50
inches, 16 feet, S1S- Eugene Oreg......- 49.00 |) Kansas City, Mo....] 66.45
1E. Belling! , Wash..| 39.00 ||Chicago, Il......... 65. 65
Minneapolis, Minn..| 63.00

 

 

 

 

 

The freight rates per 1,000 feet from the West Coast to Lincoln, Nebr.,
and Kansas City, Mo., Minneapolis, Chicago, Pittsburgh, and New York
City amounted to approximately $13.75, $12.50, $15, $18.60, and $20.
respectively.

Differences shown in the foregoing tables are in most cases
very striking. No. 2 and better flooring of North Carolina pine,
for example, was retailing at around $150 in New York in
February, 1920, but was retailing in Wilmington, N. C., at about
$100 per 1,000 feet, although the freight rate to New York
amounts to only $4 or $5 a thousand. Siniilarly, No. 2 southern
pine common boards 1 by 8 inches were being bought in south-
ern cities at from $50 to $60 a thousand feet, but were costing
$80‘a thousand in Dayton, Ohio, and Pittsburgh, Pa., despite
freight rates equivalent to only about $6.50 and $7.50, respec-
tively. In the case of Pacific coast Douglas fir flooring No. 2,
clear vertical grain, 1 by 4 inches, average retail prices were as
low as $85 in some western cities and as high as $140 in some
eastern, with freight rates of $20 or less. In some cases thr
difference between present retail prices in producing regions
plus freight and retail prices in consuming regions exceeds the
total prewar prices in the consuming region.

Twenty years ago sawmills in Minneapolis were cutting more
than 500 million feet of lumber annually. As tributary forests
became exhausted these mills were forced one by one to close
down. The last remaining mill closed a year ago, and one of
the larger cities of the country, as well as the rich agricultural
48

region surrounding it, is to-day forced to obtain from 80 to 90
per cent of the lumber from Pacific coast forests some 2,000
miles distant. Douglas fir, common dimension, 2 by 4, from
western Oregon and Washington, for example, cost at retail in
Minneapolis in February, 1920, $60 to $65, whereas in 1900 2
by 4 dimension of white pine could be purchased for $15 to $20.
The growing scarcity of white pine has constantly tended to en-
hance its value. During January and February of this year it
is said that the relatively few remaining northern pine mills
could obtain almost any price desired for their lumber cut.
Price lists recently issued by two groups of mills, for example,
quoted prices varying $15 or more on the same grades. Figure
17 reflects wholesale prices of three grades of northern pine in
Minneapolis at intervals of five years from 1900.

Even in normal times lumber purchasers in nonforested and
depleted regions are at a distinct disadvantage over purchasers
in regions of lumber production. This disadvantage becomes
much more pronounced in times of scarcity and unsettled con-
ditions such as the present, when the excess in retail prices,
deducting all transportation costs, may even exceed the total
price of the same grades under normal conditions.

PRICES AND COSTS OF PRODUCTION AND
DISTRIBUTION.

Figures indicative of the increasing costs which have en-
tered into lumber manufacture and distribution will be given
separately for (1) production, (2) transportation, and (8) re-
tailing. Along with these figures showing the increase in costs
are given also figures as to increases in selling prices and the
ratio of transportation charges to retail prices.

MILL PRICES AND PRODUCTION COSTS.

Figure 18 shows in graph (@) the trend of average selling
prices of Douglas fir, southern pine, and Inland Empire species,
separately by years, for periods from 1905 to 1919; graph (b)
these prices expressed graphically on a percentage basis, with
1914 as the index year; graph (c) the average mill price re-
ceived by a typical Douglas fir mill plotted in relation to operat-
ing cost.

Pacific coast—Table 16 shows mill prices for Douglas fir
lumber produced on the Pacific coast in Oregon and Washington
incorporated in graphs (@) and (c), and adds the average
selling prices in December, 1919, and January and February,
1920, as determined from index grades of a large volume of
lumber sold by a number of mills.

TABLE 16.—Average price per thousand feet lumber tally.

 

 

   

 

Number | Single
‘Weals. of mills. | mill.
W912 sia a tesisineacecmncwee Se SMe SMR RISE oURee Meee hee ewes $11.30 $15. 98
TQS cardie:nis:eaivis 11.44 16. 09
1914 10.58 13. 46
1915. 9. 80 12.78
1916. 11. 63 15.55
1917. 16. 93 19. 88
LOLS a sista an sterpioamraraiiiciaigciovacrarana Gist ale dictain tors ciate ARS eNom ER 21.21 28. 22
WONG roronr eee ceenaaseoeaiag sensei as eclasiesioctis vig Mociccteeips 25. 83 31. 42
December, 1919 (orders) .. 37.58 |..........
January, 1920 (orders). 42,04 ]..........
March, .1920:( Orders) sc20,.e..ccscsaesmereaece nner eceeys 45.72 |....-.----

 

 

The average prices shown above for a number of mills do not
include underweights and sales of special stock and by-products,
which would tend to increase them slightly. The two sets of
prices as given above are believed to be representative of high
and low average mill prices.

Compilations prepared by the West Coast Lumbermen’s Asso-
ciation show that manufacturers west of the Cascades received
in 1919 an average of $25.70 per 1,000 feet for all species. The
association’s figures are based upon data from 50 mills, and the
average prices received by the different mills, including returns
from lath, wood. and sawdust, range from $20.50 to $35.50, a
variation of $15. It is fair to assume, therefore, that the
average mill price of Douglas fir during 1919 was between $25
and $30 per 1,000 feet,

TIMBER DEPLETION, PRICES,

 

EXPORTS, AND OWNERSHIP.

The average mill prices given for the months of December,
1919, and January and March, 1920, are based on sales reported
to the West Coast Lumbermen’s Association, and represents a
large volume of business. It will be noted that the average
price for March (based on orders taken) amounted to over
four and a half times the average price received in 1915, and is
$20 higher than the average price shown for 1919. ;

A comparison of 1919 production costs in this region with
costs in 1918, 1914, and 1915 indicates that the cost of produc-
ing lumber has a little more than doubled. On the basis of
information collected and compiled by an accountant employed
by the West Coast Lumbermen’s Association, the average cost
of logging Douglas fir by manufacturers in Oregon and Wash-
ington during 1919 amounted to $10.89, this figure being an
average of an output of about 1 billion feet. Costs of manu-
facture show similar increases. In 1915 the average manu-
facturing costs of 30 mills in Oregon and Washington was $5.53
per 1,000 feet, while in 1919 the average manufacturing cost,
as determined by the West Coast Lumbermen’s Association,
amounted to $10.21 per 1,000 feet, or, with shipping and selling
included, $11.83.

 

 
     
  
 
 
 
  
 
 

No 2 Common DIMENSION
2x4-16 SISIE

 

 

No. 4 Common BoaROs
AW&GAL SIS

 

a
oa
>
8
S

 

 

No/ Common Boarps
/x10-2 $25

 

Jon lWF

 

Jan/920

 

Lollars

 

 

 

 

Fic. 17,—Wholesale prices at Minneapolis of northern pine lumber.

The total cost of producing lumber in the region west of the
Cascades, in Washington and Oregon, in 1919, based on informa-
tion collected and compiled by the West Coast Lumbermen’s
Association, but presented below in a little different form, and
compared with other data showing average costs and mill price
for 1918, is as follows:

 

 

 
 

 

 

Lumber tally per
1,000 feet.
Associa- | Service
tion data,| data,
1919. 1913.

Logging (no stumpage)........2.220 20222 e cece cece 4,"
MarnifaCpUrin gs oss acce-apaa siete dias ain:cje nie creierernie evaratiessvaerourivnsommreeocn 0. 2 * FH
Shipping expense. "90 140
Selling expense....._. 738 730

Total f. 0. b. mi... eee

Ce ee | a a
24,15 12. 20
25, 83 12.50

 

 

 

 
 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JAN. $52.21
FEB. £ S794
is MAR: $ 61.60
AVERAGE MILL PRICES PER M FEET ;
: | . FOR
C SOU ‘N YELLOW PINE, DOUGLAS FIR, AND INLAND EMPIRE SOF TWOODS
N
> ale
& FIR (3 MILL CUTTING HIGH QUALITY MATERIAL )
¢ YELLOW PINE
g INLAND EMPIRE, SOFTW
s Se eee —s
3
®: | DOUGLAS FIR (AVERAGE OF NUMBER OF MILLS.
4905 1906 (907 /908 909 (910 39/1 “Ye [HB (W419! HB VAT = [HB HG
4
/60 T T T —T
; DOUGLAS FIR-MAR,-1920- 332 %—y
YELLOW FINE MAR- ET
| /
140 | PERCENTAGES OF INCREASE AND. DECREASE. INTHE | ~ /
AVERAGE MILL PRICES PER M FEET y
jas FOR ‘SOUTHERN YELLOW PINE, DOUGLAS FIR. AND INLAND EMPIFE,. SOF TWOODS
| GRAPH ts) a
100 ra
80
8 60
3
S J te FIR erred files CUTTING HIGH QUALITY MATERIAL]
1 be L SOU THERN YELLOW PINE
Z| foe EMPIRE SOFTWOODS
f z s "KN".
ZO = : ; oa NA
/ Ne \ ) | \N LE
ear oA Lt
oY a | i oe Ts (1s Z|
-F \ See Leo — 4 7G _-=--
re DOUGLAS FIR (AVERAGE OF NUMBER OF MILLS)
°C 905° 7906 1907 1908 1909 19/0 191) 1912 19/3 (3/¢ 19s 1916 13/7 7918 199
‘ |
8 TREND OF MILL PRICES ANDO ESSENTIAL COST FACTORS |
Gi . AT A TYPICAL DOUGLAS FIP CARGO AND FRAVL MILL LL
GRAPH (cy |. ~ : ;
t (SELLING PRICE PER M FEET F.O.B MILL :
y2o - ———> — + t :
5 > WEF PROFIT:
‘ LE COST OF MILLING AND SELLING a | rezzeaatz 724 LB Yi}
/OF = :
N 7 PTA TOT IOTI TINT TTT) i
8 Yy 5 COST-OF STUMPAGE AND 1 EY YY, Yy 4
1905 /906 907 1908 309 1WO =H HWE 19/3 (4 (HS (HS (HF [98 199

Fia. 18.
50

The association’s compilation shows that it cost $24.95 per
1,000 feet to produce lumber in 1919, as against $24.15 shown
by the above figures. The difference is due to the fact that the
figures of the association include log-buying mills. Average
costs at individual mills range from about $18 to $32 per 1,000
feet, with a figure close to $25 representing the average for
1919. Production costs of April, 1920, are estimated to average
at least $26 per 1,000 feet. As previously indicated selling
prices on the basis of orders averaged $45.72 for March, 1920.

The increasing cost of producing lumber is due to a variety
of factors, among which may be mentioned increases in wages
in both woods and mill; reduction in hours of labor; more in-
accessible stumpage; decrease in efficiency of workmen; loss
in feeding men; higher stumpage costs; increasing cost for
equipment, supplies, and repairs; increases in freight and tow-
ing rates on logs; and higher cost of fire insurance.

Inland Empire—Throughout the Inland Empire mill prices
and logging and manufacturing costs for 1919 show similar
large increases over prewar years. The trend of average mill
prices is shown in figure 18, graph (a), and these average
yearly prices, together with costs and profits, are stated specifi-
cally in the table below. The figures used are based on data
collected from a large number of mills throughout the Inland
Empire.

During the years immediately preceding the war the mills
in the region show small net profits. During the six-year
period ending 1914 the largest and best-managed companies in
the region, representing 59 per cent of the cut in the Inland
Empire, earned only 1.06 per cent on all capital in use, bor-
rowed or unborrowed, exclusive of their profits on stumpage
investments. Beginning with the year 1917 much more sub-
stantial profits are shown.

Production costs and average mill prices in 1914 and 1919
were:

 

 

 

| 1914 1919
Cost of production per 1,000 feet (stumpage included).......... $14.54 $28. 40
Average mill price received per 1,000 feet...........-.--.-...-.- 14.81 30. 92

 

In the table below is given a statement of production costs
and average mill prices, with profit and loss, for operations in
the region.

TaBLE 17.—-Costs of production and average selling prices of
softwood lumber per M feet cut in the Inland Empire.

 

 

 

Production Profit and loss.
Year. Stump- costs, Average
. age. including ing
price. <
stumpage. Loss. Gain.
$0. 94
1.06
1.15
1.59
3.22
3.00
2.91
2.67
2,21
2.32
1.50
1.70
1.80
1.90
2.00

 

 

 

 

 

 

 

 

The figures given for 1919 do not reflect prices during the
latter months of the year, when they were much in excess of
the average of $30.92. They have since continued at higher
points.

Southern pine States.—The trend of average mill prices for
southern yellow pine is shown in graph (@), figure 18. As
with Douglas fir, 1915 was the year of lowest prices. Taking
1914 as a more nearly average prewar year, the selling price
was $13.68, as against $33.94 for 1919, an increase of approxi-

*

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

mately 150 per cent. The average mill prices from 1914 to date
are indicated below:

Average selling price f. 0. 0b. mill per 1,000 feet.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year:
1914___ = $13. 68
195 22 pseeess as 13. 02
rr 16, 12
10V 7228+ 25 ee eee 21.18
TOTS 2222s ee SS eee es 26. 45
1919 = = ---. 83.94
September, 1919__- 39. 37
October, 1919 44, 60
November, 1919 42. 06
December, 1919 ------ = 45, 41
January, 1920. 52. 21
February, 1920. ase 57. 94
March, 1920 - 61.60

 

The price for the vears 1914 to 1919 are based on reports made
to the Forest Service from operators throughout the southern
pine belt. Those for the years preceding 1914, as shown in
graph (a), were taken from the books of manufacturers without
attempt at auditing. The monthly prices given for 1919 and
1920 were obtained from the reports of a lumbermen’s organiza-
tion and were based on a weighted average of all sales reported,
exclusive of exports.

In 1914 the average cost of production for 108 southern pine
operations was determined as $12.79, with stumpage at $2.36 .
carried forward from 1905 at 1 per cent to cover taxes and
current expenditures. With stumpage included at the prices
then current, the average cost of production was determined as
$14.54. In contrast with these production costs the following
figures for the latter part of 1919 and the first two months of
1920 are taken from cost statements of the Southern Pine As-
sociation :

 

 

  
 

 

a yernen a
operating verage
Month. Stumpage. cost, selling
stumpage | price.
included.
September, 1919.............0scccnccecccecccenncs $5. 24 $26. 56 $39. 37
October, 1919... 5.31 27. 04 44.60
December, 1919. 5.41 31.75 45.41
January, 1920. . 5.52 29.14 52.51
February, 1920. 5.44 28. 54 57. 94

 

It will be noted that in 1914 the margin between selling price
and production cost f. o. b. mill was 89 cents per thousand
feet, with stumpage figured at the 1905 cost plus carrying
charges, and that with stumpage carried at its current value

‘a net loss of 86 cents per thousand was incurred. In the latter

months of 1919 and the first two months of 1920 the margin of
net profit ranged from $13 to $29 per thousand feet, exclusive
of whatever profit may have been made on stumpage.

In the six or eight years prior to the war, returns in lumber
manufacture in the principal softwood regions, on the average,
were yielding very low: profits on the investments. While
profits were greater during the war, the price of lumber during
the war years did not increase in proportion to prices of other
commodities. As shown in figure 13, the average of com-
modity prices rose in 1917 considerable in excess of the average
of softwood lumber prices, which were partially restricted by
Government price fixing. The war-time restrictions not only
upon the price of lumber but upon its production and move-
ment for the supply of the normal trade were unquestionably
a large factor in the quick response of lumber prices to the
abnormal trade conditions which followed the armistice.

WHOLESALE COSTS AND PROFITS.

Owing to the complexity of the trade, time was not available
to determine average costs and profits representative of the
various types of wholesale business conducted by individuals
and organizations not attached to mill organizations. The
mill prices given are based on sales made by the larger mills
TIMBER DEPLETION, PRICES,

to retailérs, wholesale dealers, and wholesale consumers. While
a few of the larger mills do not sell to wholesale dealers, the
more general practice is to grant the wholesalers a discount on
the prices made to retailers and wholesale consumers. Whole-
salers, however, do a large business with small mills which
are usually not in as close touch with market prices and from
which they often obtain much lower prices than from the larger
and stronger mills. They are thus enabled to increase very
materially their portion of the margin between mill price and
the price paid by the consumer.

TRANSPORTATION.

The extent to which the growing distance between forests
and markets has steadily added to the cost of lumber in east-
ern markets and in the country retail trade of the Middle West
has been indicated in figures 18 and 15, respectively. In the
years before the more accessible forests were exhausted, trans-
portation imposed a charge equivalent to from $1 to $3 per
thousand feet. The cost to-day of importing lumber into New
York from the South is approximately $9 per thousand and
from the West Coast $20. An idea of the percentage of the pre-
war and postwar retail price absorbed by transportation costs
can be obtained from the following table. Freight charges are
computed on the basis of 2,500 pounds per 1,000 feet:

 

 

 

Tasre 18.
‘lori Percentage of retail
Retail prices per rice. “ADS
orbed b
thousand. Traeni cates: =
1914 1919 1920 1914 1919 1920
New York—Douglas fir flooring,
No. 2 clr. ver. grain............ $62 $86 $140 31 23 14
Pittsburgh—Southern pine
boards, No. 2com., 1X 8....... 32 36 80 28 25 11
Chicago—Douglas fir flooring,
No. 2clr. ver. grain........-...|-sseee-- 73 TD lewswaxes 20 13
Southern pine boards, No. 2 com..,|
VRB seis cic cine nditecectics sewed 22 49 66 35 16 12

 

 

 

 

 

 

 

Although transportation costs ‘have gradually increased, the
table shows strikingly how present prices have outstripped
freight increases made during and since the war, on specific
grades and species. The table below serves to Show the increas-
ing transportation charges on lumber into Chicago, from the

days when the forests were accessible to water transportation,
as all rail shipments became necessary with the cutting out of

the accessible forests. To-day the average freight charge on all
lumber going into Chicago is probably between $10 and $11 per
1,000 feet, due to the increasing volume of western lumber which
has entered the market during the past 12 or 18 months. On the
basis of the present average retail price this would be equivalent
to 12 to 18 per cent, as against about 20 per cent in 1912-1915.

TasLe 19.—Transportation* per M board feet on lumber to

 

 

Chicago.
By water from— By rail from—
Sagi- a
: Al | Manis-| 28% | Mem- | Annis-| 4 | Merid-| Port-
ea pena, | tee and Phis, | ton, Tune | ian, | land,
ich. | Mich. | ©2Y | Tenn. | Ala. + | Miss. | Oreg.
a Ala.
Mich.

 

 

   

     
 

 

 

 

$5.75 5
6.50 .
6.00 13.75
6.18 13.75
7.88 15.00

 

 

 

 

 

 

1 Transportation by water based on weekly rates published by the Northwest Lum-
berman; fail rates computed on basis 2,500 pounds per M feet.

 

EXPORTS, AND OWNERSHIP. 51

In southern Minnesota it was possible to determine quite
closely from the purchase records of a number of large line
yard companies the average transportation cost carried by the
lumber distributed through their retail yards. These steadily
increasing costs, shown in the table below, are primarily due to
the incréasing volume of western lumber which these companies
have had to import in order to supply the needs of their terri-
tory, which only a few years ago was immediately contiguous
to the greatest lumber-producing region in the country.

 

 

 

 

TABLE 20.
Portion of average
Average retail sell- | Average transporta-| retail selling price
ing price. tion cost. absorbed
Years. transportation.
Per Per cent Per Per cent Per cent
thousand.} increase. |thousand.| increase. Per cent. increase,
$3. 25 0.0 12.5 0.0
“4,25 30. 8 13.4 7.2
4.00 23.0 11.5 8.0
4.00 23.0 12.6 0.8
4, 50 38.5 14.7 17.6
4.75 46.0 15.0 20.0
4.75 46.0 15.2 21.6
5.75 77.0 18.7 49.6
6.75 107.8 20.9 67.2
8.00 146.0 25.1 100. 8
8.50 161.5 27.9 132.2
7.50 130. 5 23.9 91.2
8.00 146.0 20.8 66. 4
10. 75 231.0 23.1 84.8
11.75 262.0 21.6 72.8

 

 

 

 

 

 

 

 

It will be noted that the average selling price for 1919 shows
an increase over 1905 of 109 per cent, while the increase in
transportation in relation to selling price was only 72.8 per
cent. Although transportation’s portion of the selling price
has been steadily growing in dollars and cents, the price of
lumber during the past three years has been increasing faster.
The average selling price for March, 1920, was 230 per cent
over the average price of 1905, but transportation absorbed only
about 14 per cent, the smallest percentage since 1908.

In 1905 northern pine, shipped on freight rates of from $2.50
to $3 per 1,000 feet, formed 80 to 90 per cent of the retail stock
of these companies, while western timber amounted to less
than 20 per cent. In 1919 these percentages were almost re-
versed, western timber forming practically 80 per cent of the
stocks and northern pine less than 20 per cent. Owing to a
larger proportion of western lumber in these stocks this year,
it is estimated that the average freight cost represented by
each thousand feet of lumber distributed will be between $12
and $13, almost equivalent to the total average lumber price
of $16 in that region 25 years ago.

RETAIL PRICES AND COSTS.

The upward movement of prices—The movement of average
retail prices in country districts in the Middle West from
September, 1918, to March, 1920, is shown in figure 19. These
values are based on line-yard distribution in Kansas, Okla-
homa, Nebraska, and southern Minnesota, and represent aver-
age selling prices for lumber only, arrived at by dividing the
total sales in dollars by the total feetage of lumber sold. It
will be noted that the average prices in the above regions coin-
cide closely. From 1912 to 1915 the average retail price of
lumber in these regions was around $30 to $32 per thousand.
In September, 1918, average prices were between $40 and $50,
and moved upward to about $85 in March, 1920.

‘In the larger cities of the region, such as Chicago, Kansas
City, and Minneapolis, there was a similar upward movement
of retail prices. During the period 1912 to 1914 the average
selling price of lumber in Chicago, Kansas City, and Minne
apolis was close to $26 per 1,000 feet. There was little varia-
tion between the cities. The average selling price in 1919 in
Kansas City centered between $45 and $50 per thousand.
Average prices of March, 1920, were variously estimated by

.
52 TIMBER DEPLETION, PRICES,
retailers in Kansas City and Chicago to be from $75 to $80
per 1,000 feet, a few dollars less than the average shown for
country trade.

Prewar and postwar changes in wholesale and retail prices
of specific softwood grades and species at various points
throughout the country are indicated in Table 21. It should
be explained that the margins shown between wholesale and
retail values do not always accurately represent the actual
margins, since the material sold in any given month may have

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

490
a Basis Country Line Yards. A
80----Aansas end Oklahoma 7

x —— Nebraska 7 |
L 7of Southern Minnesota. a
cet /
s at FS
Sook aA Ae, ie |
Q ex | is ee
‘ “\
Seat Nov. Jan. Mar May, July Sept Nouv Jar Mar
9/8 919 /920

Fic. 19.—Comparison of trend of regional retail lumber values. (Based

on averages of monthly sales.)

been purchased months before. The margin varies with grades
and species, retailers figuring a lower gross profit margin in the
handling of common grades sold in large volume at a relatively
rapid rate of turnover than for higher grades and special woods.
The expense of handling hardwoods is, of course, much greater
than for softwood lumber. For softwoods the margin on upper
grades ranges from zero or a few dollars per thousand at or
near mill points to $45 or $50 in New York City, while for
hardwoods, especially the upper grades, spreads as high as
$80 are of record.

Table 22 compares average selling prices of lumber distrib-
uted through line yards in the Middle West, in-March, 1920,
with the selling prices in the period 1912 to 1915, and also
with the selling prices in April, 1919, when prices began to
ascend sharply.

TABLE 21—Wholesale and retail prices of Douglas fir and

southern yellow pine lumber at various points throughout the
United States.

 

 

 

  

 

 

Wholesale prices (dollars Retail prices (dollars
per M feet). per M feet).
Douglas fir.
Septem-] Febru- | Febru- | Septem-| Febru- | Febru-
ber, ary, ary, ber, ary, ary,
1918. 1919. 1920. 1918. 1919. 1920,
No. 1 common, dimension
oy 4 inches, 16 feet, S.
Portland, Oreg.......-- 19.50 18.50 40500: iscsreiaroteveresed eveneceuathi ae 40.00
Lincoln, Nebr... {| 32,25 30.50 55. 00 43, 33 47.66 62. 50
Chieieo, Hi vnocccnnewaca|aauges exis 31.50 50. 35 47.00 47.00 65. 65
Minneapolis, Minn......| 31.25 30. 00 50. 50 41.50 40.00] 63.00
Kansas City, Mo......-. 32.00 31.10 52. 80 42.00 43.00 66. 45
No. 1 common, boards, 1 by
8 inches, 16 feet, S.28.:
Portland, Oreg.......-- 19,50 18.50 40100 jecesasmen er ee)
Lifcoln, Nebr......---- 32. 60 31.50 56. 30 43. 33 47.66 62.50
Chicago, Ill......-------|----+-2--|------2-- 55. 00 49.00 49.00 65.00
Minneapolis, Minn. -| 28.50 27.50 50. 50 40.00 36. 00 65.00
Kansas City, Mo...-.-..| 38.00 39. 00 55. 00 48. 00 49. 00 66. 65
No. 2 clear_ vertical-grain
flooring, 1 by 4 inches:
Portland, Oreg......--- 120.00 43.00 86875: i aesicizieiasce| pereayemine 86.75
Lincoln, Nebr. ..--.2+-+ 51.00 49.50 | 103.60 68. 33 80.00 | 112.50
Chicago, Ill......-------|---22-2-+ 55.00 95.00 73.00 73.00 | 111.65
Minneapolis, Minn....-. 46.00 47.00 98. 00 56. 00 58.00} 117.00
Kansas City, Mo......- 49. 00 47.15 | 112.15 56. 60 58.50 | 128.35
New York City.......-- 150.00 57.00 | 111.50 62. 50 86.00 | 139.50

 

 

 

 

 

 

 

1 February, 1914,

 

EXPORTS, AND OWNERSHIP.

—Wholesale and retail prices of Douglas” fir and

ae pine lumber, ete—Continued.

southern yellow

 

 

 

    

 

 

 
 
  
 

 

 

 

 

 

 

 

nn
Wholesale prices (dollars Retail prices (dollars
per i feet). per M feet),
Southern yellow pine. Febru. | Febru- | Febru- | Febru- | Febru- | Febru.
a ary. ary ary, ary a
fois, | i919, | 1920 | told | a9is, | 19m,
No, 1 common, dimension 2
by 4 inches, 16 feet, S. &
E.:
‘Towns in southern yel-
low pine belt....-----]---------}---z<-3:- 47.00 |. 50.00
Kansas City, Mo .| 17.60 31.35 53.50 66.45,
Chicago, ll -.-| 17.60 33. 00 54, 75 65.15
No. 2common, boards, 1 b
8 inches, 16 eet 2 me
Towns in southern yel-
low pine belt........-|.--..----[---22-22+ 153/005 ini attenin'nie[ Sistesanse niare 60.00
Kansas City, Mo -| 16.60 33. 65 55.75 24. 00 43.00 66. 80
Chicago, Il...... , 34.15 57. 60 22.70 | 49.00} 66.35
Dayton, Ohio... 4 27.50 59.00 |...-..--. 50. 00 77.50
Pittsburgh, Pa........- 27.50 59.00 | 132.00! 36.50} 80.00
B and better, flat-grain
flooring, 1 by 4 eae i
Towns in southern yel-
low pine belt......-.-|.---+-2--|-+c-2-22+ 105500 Vis seisrcpics| acaeanas 114.00
Kansas City, Mo. --| 23.50 42,35 | 113.00 32.60 | 52.00] 133,55
Lincoln, Nebr... 2 40.65 42.85 | 108.35 | 261.66 | 68.33) 125.00
Chicago, Ill... . 23. 75 41.00 | 125.00 32.55 | 58.00 }........
Dayton, Ohil0es «xx0wree|aae ae eee> 43.25 | 110.00 }......... 54.00 | 150,00
Pittsburgh, Pav.s.«c.2- 1 29. 00 43.25 | 110.00] 138.00) 48.00) 142.00
1 February, 1913. 2 September, 1918,

TABLE 22.—Comparison of average retail prices per 1,000 feet
in various regions and times.

 

 

 

 

 

  
 

April, March, | Per cent
1919. 1920. | increase,
$48.75 $86. 76 78,0
49. 20 85. 86 74.5
50. 81 85. 65 68.5
Period
March, | Per cent
1ol2 to | “1920.” | increase,
Minnesotaie: auedata ww aauesacoecmstaraadancemierearead g31.24 | $88.76] “ 177.5
Nebraska. 31. 29 85. 86 174.5
Kansas and Oklal 29.73 85. 65 188.0

 

 

 

 

Changing values in country retail distribution are further
shown specifically in Tables 23 and 24, and graphically in
figures 20 and 21. A comparison of essential cost factors in
the average price of lumber in a large Middle Western city is
indicated in figure 22. The average buying prices shown in
Table 24 include freight.

~

TaBLe 23.—Comparison of costs and profits of retail lumber
distribution in 1912-1915 and 1919.

 

 

 

 

 

 

 

 

 

 

 

Country trade.
> i bs Net profit.
Rear: Gross profit. | Operating cost. Pp
age
selling
po | Per | Per | Per | Per | Per | Per
000 thou- | cent | thou- | cent | thou- | cent
feet, | Sand. jofsales.) sand. ofsales.| sand. | ofsales.
Missouri, Kansas, and
Oklahoma: ;
191221915 oo < execcioeee $29.73 | $7.07 | 23.79 | $4.99 | 16.77] $2.08 ed
1919... 2. eso INS <= eisizicss $56.00 | $14.86 | 26.54 | $9.05 | 16.16 | $5.81 10.
Per cent increase....| | 88.3] 110.1 ]........ BL: [scnenaee 179.2 Jaeeeeeer
Western Iowa and Ne-
raska:
1912-1915...2.2.0020. $31.29 | $7.17 | 22.91] $4.33 | 13.95] $284] % z
19.2.2. eneeeeenreid $57.30 | $13.88 | 24.92 | $7.33 | 12.79] $6.55; 1.
_ Percentincrease....| 83.2 OBB | occccieccs 69.2 |......-- “180.5 |..----0*
1913-19 ; orj{ 96
DID ss sieiserenae Seen $31.24 | $7.25 23.2 | $4.24 13.5 | $3. :
1919 sane ficcron $54.41 | $14.33] 26.4| $7.15 | 13.1) $7.18] 133
Per cent increase. . TAD OUT cc an'e 68.6 |....---- 188.5 |------+"

 

 

 
°

. Imately 30 per cent.

.

TIMBER DEPLETION, PRICES,

TABLE 24.—Costs and profits of retail lumber distribution by
years 1905-1919, country trade, Minnesota.

 

 

 

 

 

 

 

 

 

 

 

 

Average buyin Average sellin
mice, ying maine. 8g Gross profit.)
Years. i
Per 1,000| Per cent|Per 1,000|Per cent|Per 1,000| ©°" 294] Per cont
feet. |increase.2| feet. |increase.2|_ feet. is increase,
0.0 |. $26.03 0.0 $5.78 22.1 0.0
15.6 31.48 21.6 8.66 26.9 49.8
36.4 34. 64 33.0 7.60 21.7 31.5
27.1 81.85 22.3 6.98 21.2 20.8
19.5 30. 43 16.9 6.49 21.0 12.3
23.9 31.71 21.8 6.62 20. 8 14.5
23.0 31.17 19.6 6. 29 20.1 8.8
19.6 30. 75 18.1 6.97 22.2 20.6
30.8 32. 28 23.9 6.36 19.2 10.0
26.0 31. 83 22.2 6.79 20.8 17.5
19.5 30. 44 16.9 6.77 21.7 17.1
25.9 31.43 20.7 5.80 18.3 4
40.5 38.54 48.0 9.94 25.5 72.0
79.9 46.51 78.6 9. 88 21.2 71.0
96.8 54.42 109.0 14.33 26.4 148.0
Operating cost. Net profit.t
Years.
Per cent Per cent
Per 1,000 nol|rer cent|Per 1,000 -,|Per cent
} \of selling]; p jof selling];
feet. "price, - [increase feet. aries. £lin crease.
$3.08 11.8 0.0 $2.70 10.3 0.0
4.04 12.5 31.0 4.63 14.4 71.4
4.08 11.6 32.5 3.51 10.0 30.0
3.90 12.0 26.5 2.97 9.0 10.0
4.12 13.3 33.8 2.36 7.6 —12.6
3.74 11.8 21.4 2.74 8.6 1.5
3.94 12.6 28.0 2.22 71 —-17.8
3.66 11.8 18.8 3.10 9.9 14.7
3. 82 11.8 24.0 2.34 7.0 —13.3
3.82 12.0 24.0 2.74 8.4 1.5
3.65 12.0 18.5 3.04 9.8 12.5
3.78 12.0 22.7 2.01 6.3 —25.5
5.07 13.1 64.5 4,87 12.3 80.2
6.41 13.7 108.0 3.47 7.5 28.4
7.15 13.1 132.0 7.18 13.3 166.0

 

 

 

 

 

 

 

 

1The number of companies from whose records figures are taken
varies somewhat, so that the gross profit shown in the table is not in
all cases the exact difference between buying price and selling price,
Hor net profit the exact difference between gross profits and operating
costs,

2 Per cent increase figured on 1905 values as base.

2 Per 1,000-foot values.

Distribution of price increase—As has been pointed out,
the average retail price of lumber in 1919 in the country trade
of the Prairie States was about $25 higher than in the period
1912-1915. For the yards covered in Minnesota the exact in-
crease was $23.17. Of this increase the manufacturer and
wholesaler took $11.34, or approximately 50 per cent, the rail-
roads $4.75, or 20 per cent, and the retailers $7.08, or approxi-
Of the retailers’ portion, $2.91, or 12 per
cent of the total increase, was absorbed in increased cost of
retail distribution.

Retail profits—From Table 23 it will be noted that retail
operating expenses and net profits figured on percentage of
business done had not changed greatly over those shown for
the period 1912 to 1915. In that period the gross profit was
close to 283 per cent in the region covered, while in 1919 the
average gross profit centered around 25 per cent of sales. Com-
puted on a thousand-foot basis, however, there has been a very
decided change in margin of net profit and operating expenses.
In 1912 to 1915, for example, the average net profit shown by
country yards in Minnesota was $3.01 per 1,000 feet, and the
total operating cost was $4.24 per 1,000 feet. In 1919 the aver-
age net profit shown by over 100 yards in the same region
amounted to $7.18 and the operating costs to $7.15, or a margin
of gross profit of $14.33.

It should be borne in mind that the net profit shown includes
a certain percentage of book profit, or gain on inventory, due
to the rising prices during 1919. Actual cash profits are fur-
ther reduced by the income taxes, which are not figured in as
operating expenses. These taxes, of course, vary with the com-

 

EXPORTS, AND OWNERSHIP. 53
panies and profits shown. In the case of a representative com-
pany which operates a line of some 40 or 50 yards the net
profit, including gain on inventory after income taxes had been
paid, was about $4.75 per 1,000 feet. A portion of the manu-
facturers’ increase was likewise absorbed by increased costs of
production and operations.

As previously shown, average retail selling prices for the
Middle West, which were from $30 to $32 in 1912-1915, advanced
to about $56 in 1919 and to about $86 in March, 1920. Buying
prices averaged about $25 in 1912-1915, advanced to about $40 in
1919, and in March, 1920, were still higher. Retail operating
costs increased from about $4.50 in 1912-1915 to about $7.85 in
1919, and to about $8 in March, 1920.

LUMBER PRICES UNJUSTIFIED BY PRODUCTION AND DISTRIBU-
TION COSTS.

A study of prices and increased production and distribution
costs during the prewar and postwar ‘periods substantiates the
statements made by many lumbermen that prices during the
end of 1919 and the beginning of 1920 reached points unjus-
tified by production and distributing costs. While present.
prices are somewhat below the March level they are still in

| excess of prices justified by increased production costs and fair

profits. The following is believed to be a liberal approxima-
tion of costs entering into the average retail price of lumber
as determined for March, 1920, in the country trade in the
Middle West. The lumbermen’s figures on production costs,
which may be considered outside costs, are accepted as a basis.
The production cost is a weighted average computed from the
relative per cents of various species in the retail stocks handled.

TaBLe 25.—Approximate production and distributing cost,
March, 1920, per thousand feet of lumber.

Lumber production (stumpage and selling costs in-

 

 

 

cluded ) $26. 50
Transportation (mill to retail yards)_._-..--_____ 12. 00
Retail distribution 8. 00

Total __ 46. 50
Average retail selling price March, 1920_____... 86. 00
Margin of profit (includes interest on investment) ______ 39. 50

The margin of profit indicated exceeds by $8 to $10 the total
average retail selling price for the lumber sold in the same
region during the 1912-1915 period, which included all costs
and profits of manufacture and distribution. Irrespective of
the distribution of this excessive profit, which, by and large,
has unquestionably varied with relative advantages held and
with relative abilities to dominate situations, lumber prices
are excessive and yield profits bearing no reasonable relation
to increased costs of lumber production and distribution.

That prices went unreasonably and unfortunately high is
readily admitted by many of the more responsible and far-
seeing men in the trade, and is concretely evidenced by the
efforts of numerous large companies to stabilize prices during
December, 1919, and January and February of 1920, by action
on the part of retail lumber dealers calling upon manufacturers
to stabilize lumber prices, and by editorial comment in lumber
journals. The following is an extract from a published letter,
written by the secretary-manager of a large lumbermen’s asso-
ciation in response to a letter from the secretary of a retailers’
association, suggesting that prices be stabilized until July 1
at least:

I am not violating any confidence when I say to you that the situa-
tion has given the lumber manufacturers much concern, many having
expresséd themselves as deploring the fact that prices have been bid
up to present figures by the buyers themselves. It is a little too much

of a strain on human nature to expect that producers shall refuse
to accept the highest prices offered for their goods.
54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.
280
ee eee °
7 , z ' 60
26 Char?’ Showing Percentage /ncreases in : 42
i Transportation Charges, Cost_of Lumber Stocks to /
Retailers, Peta’! Operating Expenses, and Average )
Retail Lumber Prices. {logo
oe Dased on average values per M feet as. shown ||,
by country yards in Minnesota and Dakotas.) ‘
I
2 : 220
t
t
/
L 0
t
t
I
/
‘ ! y,
780k ; 80
I
t
. 4 !
/60 = AK ! /60
‘ G ra x H
ei \
§. " \ Ss
/40 ee Spt yO
Note- Percentage increase < / ef
IN Figured on 1905 valves / y AK
x as a base. KS fio
Y/20 wT t—V20
Q ey 4 Q
\ QO 4 ‘i | \
qo a * ; | “y
se /
if Z i JF
{+ 1 80
- 0 / /
X / /
& a f 1
60 ee 7 60
W ty
-@----- q / 7
go Ave. Qoarating Expexse a Ae t = JO
io [A A a 2 iL i
~ a — NX
ATS Pe sgn | ope SR | is
7 77 ae ge
f A Reta! Selling Price
y “Average Cost of L) mer) Stocks
/905 1906 /907 /308 /909 /9/0 wee THE WZ (HWA SWE 1916 1917 (HE (HY
- Years -
Fie. 20.

Several of the largest companies operating both mills and
retail yards, for example, sought to stabilize prices on their
own responsibility, and their efforts unquestionably had a far-
reaching effect in breaking the rising prices and bringing about
a slight decline, ranging from $1 to $10 per thousand, according
to grade. Many lumbermen admit that prices went so high that
demand was automatically checked. There is ample evidence
throughout the Middle West that lumber prices reached a point
which aroused public indignation in many communities, and
that this feeling, combined with a widely advertised announce-
ment of one of the largest producing and distributing com-
panies that it proposed to stabilize prices on the basis of its

January list, resulted in a sharp falling off in buying. An
extract from the announcement issued by this company late in
February reads as follows:

The interests comprising the group have come to recognize that this
condition of the lumber market is injurious to the public and to the
industry generally; that the uncertainty even more than the price level
is demoralizing and results in enhanced cost of building and discour-
ages construction, and that unless something is done to check the
Present tendency toward further and frequent and irregular advances
which have no relation to costs of Production the situation will become
still more deplorable. :

The intent of the company to stabilize prices was construed
by the public and the press as a cut in prices, and buyers quite
TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount Percent?
Dollars per M feet REMOTE OLedes
AvecageSelling Price a $28:
; os : ~<AterageCostPricle > | #2692
1908). Gross Pro/; PN f : £5.70 ory,
| QueratingExpense (il #570 /0.7/
Net Profit ¥ 260 \ 9.9%,
Yo- OX bn reported Wrestwent’ :
AverageSellingPrice | #5510
GrossProfit § t S77 17.93
19) Qverating Expense (ID B72 Pas
Ne? Profit F | ; # 2.05 6./8%
‘Bas\s 13 Yard's) %, Pge/wa lent fo & 20% on bepok ted|\investment i
Average Selling Price 50.20
joie GrossProfit § SS # 6/2 20.26
"| Qoeratinglxpense HU ow 3.76 (2:46
Net Profit (2 | | ; f+ | #2356 7.80%
(Basis 2/ Yarals) *E viveVer?\/o/0\0% bn reported. Wvestment 7
AverageSelling Frice oo WS 7IO
re oa pane “a AMerage Cos? Price —- a
| Gross Protit OWS F/2.57 21.94
4979 | Oxerating Aypense (IMT 276 19.59 -
Net Protrt (EEE ! 4.81 8.70%,
or 2¢ Yards) vax viva Vert \fo 15% Dh reported | investment 4
Dosiene OS 76 7535 BS 30 SS 9S FF 50 SEF OO

Fig. 21.—Comparative average selling prices, all classes of lumber sold, gross profits, to tal operating expenses, and net profits: for country
retail lumber yards in Nebraska, for years 1905, 1910, 1915, and 1920.

generally throughout the northern portion of the Middle West,
in which the company operates retail yards, deferred purchases
in order to buy on the company’s list or to await similar reduc-
tions throughout the trade.

A statement issued about the same time by the president of
another group of companies contained the following:

We regard the present prices of lath as detrimental to the best inter-
ests of all branches of the trade and not defensible either on the basis
of production and distribution cost or on the basis of a fair market
value.

PRICE CONTROL.

Neither time nor facilities were available to investigate the
extent, if any, to which prices since the armistice have been
subject to artificial control. It is believed, however, that the
data presented are fairly conclusive in indicating that during
the last half of 1919 and the first months of 1920 no control of
prices was necessary to lift prices.

SOME SPECIFIC EFFECTS OF REGIONAL DEPLETION
ON PRICES.

Regional forest exhaustion, with constantly increasing dis-
tance between forest and market, gives rise to many accessory
conditions vitally affecting the price of lumber to the con-
sumer. Among the more important are: .

Opportunities for speculation in lumber prices by both
producers and distributors tend to increase as the distance be-
tween forest and market becomes greater and as a species of
lumber becomes scarcer. During the 8 or 10 months preceding
March, 1920, much speculation entered the trade in markets far
removed from the producing regions. The common use of the
reconsignment privilege, for example, by which cars of lumber
are shipped prior to sale, the shipper or wholesaler, as the case

 

may be, relying upon favorable sale while the lumber is in
transit or when it reaches a consignment point, was a fruitful
source of speculation. These cars were often held for bid prices
and served to intensify the auction market and to lift prices.
During the past year demurrage charges on transit cars
amounting to $100 and $200 per car were not uncommon. The
records of transit cars at the Minnesota transfer alone show
that during the period October, 1919, to March, 1920, 3,000 cars

CITY TRADE!
Ave

of 3 Companies

Wholesale vice
ij

F:0.B. Mill)
Transportation 1912 To 1914
Inclusive
Operating Expense
let Profit

includes

 

Dollars Per M Ff.

A Representative Firm

Wholesale Price
(F:0.B. Mill)

Transportation
Operating

Net Profit
(Includes

 

0 10 50

20 30
Dollars Per M Ft.

Fig. 22.—Comparison of the essential cost factors in the retail
price of lumber, Kansas City.
56 TIMBER DEPLETION, PRICES,

were held without disposition for an aggregate period of 17,453
days—an average of 5.8 days per car—and incurred accrued
demurrage and penalty charges amounting to a total of. $76,529.

As growing distances between forests and market increase
opportunities for price speculation, more and more middlemen
are drawn into the trade. While the responsible wholesaler
is an essential factor of the trade, a surplus of middlemen is
an added burden of cost upon lumber distribution. It has been
estimated that lumber brokerage and wholesalers’ offices on
the Pacific coast increased 50 per cent during 1919 and 1920.
It is often the case that men drawn to the trade by its specu-
lative possibilities are of the less responsible type, whose
methods are not to the best interests of the trade and the public.

Speculation, with its accompanying sharp increases of lumber
prices, tends to bring upon the market lumber in inferior con-
dition. During the months following June, 1919, for example,
a general complaint throughout the Middle West was that
lumber was inadequately or improperly dried, due mainly to
the fact either that it was shipped before being properly
dried or that it was too rapidly seasoned in kilns. This, of
course, may be attributed to the desire of the manufacturer
to ship the lumber before high prices receded or at bid prices
offered by jobbers.

The load imposed upon the railroads in transporting lumber
to meet the country’s needs increases directly with the increase
in distance between forest and market. More cars and more
labor are required, and the chances of breakdown, delays, and
traffic tie-ups, which create lumber shortages and high prices
in markets affected, are multiplied. Markets farthest removed
are subjected to increasing hazards in obtaining a continuous
supply of lumber at stable prices.

Concentration of lumber production in one or two principal
regions accentuates the seriousness of reduced production aris-
ing from local labor troubles in woods or mills or from un-
favorable weather conditions.

The cutting out of timber in different regions carries with
it a change in the character of lumber stocks in dependent
regions both as to species and grades. This tends to confuse
the trade and upset industries dependent upon certain grades
and species of lumber as a raw product. At the present time
many large wood-using concerns which have developed their
factories and their products on the basis of special woods are
facing with great concern shortages in the market supply of
these woods, and in many instances have had to turn to other
species involving new problems of manufacture.

SUMMARY OF PRINCIPAL PRICE CONCLUSIONS.

During the latter half of 1919 and the early months of 1920,
lumber prices in the United States increased more sharply and

 

to far higher points than were ever known before. In March,

EXPORTS, AND OWNERSHIP.

1920, average mill prices.had increased 300 per cent and more
over 1914, and the average retail prices showed increases rang-
ing from 150 to 200 per cent.

While the costs of lumber manufacture and distribution like-
wise increased, the rise in lumber prices was wholly dispropor-
tionate to these increases. Present prices, although somewhat
lower than those reached in March, 1920, are still excessive and
yield profits unjustified by costs.

The “auction” market which characterized the trade was
precipitated by a sudden urgent demand for lumber, which de-
veloped in the spring of 1919, in the face of inadequate stocks of
lumber due to subnormal production. The situation was further
aggravated by a restricted movement of lumber caused by car
shortage. The result was a lessening of competition, which en-
abled the seller with stocks available to auction his lumber to
buyers who were in urgent need of material or who were
frightened by reports that lumber prices would go higher. In
January and February, 1920, prices became so excessive that
buying was automatically checked.

The history of lumber prices is that as forest regions acces-
sible to the larger consuming markets are cut out lumber
prices are pushed upward by increased costs of. production
and distribution incident to the exploitation of less accessible
or more distant forests and by altered competitive conditions
in the markets occasioned by changes in species and in main
sources of supply. In any given market prices are predomi-
nantly influenced by the species of greatest supply and general
utility. As that species becomes depleted and scarce it in-
creases in price and tends to draw the level of competing prices
with it. Regional forest depletign therefore restlts in weak-
ened interregional competition, which in the past has been
one of the most effective influences in restraint of lumber price
advances. ~

Timber depletion is therefore an important contributing fac-
tor in present high lumber prices but is not the only cause. Lum-
ber production has fallen off to a marked degree in many regions
as a result of the cutting out of the forest. Freight congestion,
climatic conditions, labor troubles, and other factors which have
reduced output in the regions still maintaining large industries
have, as a result, been greatly. emphasized and have been di-
rectly related to depletion in their effect on prices. Transporta-
tion charges have been increased to most of our largest consum-
ing centers. Competition among manufacturers has been re-
duced and a greater opportunity created for manufacturers and
dealers to auction their product at higher prices. All of these
factors have tended to increase lumber prices and have accentu-
ated depletion. If large-scale production had still been possible
in New England, New York, Pennsylvania, and the Lake States,
there can be little doubt concerning the beneficial effect upon
market stability and lumber prices.
LUMBER EXPORTS BEFORE AND DURING THE WAR.

Prior to the war, the United States exported annuahy about
3 billion board feet of lumber and saw logs, aside from con-
siderable quantities of railroad ties, staves, and other wood
products. The export trade absorbed about 84 per cent of the
lumber cut. Nearly half of the lumber shipped abroad was
southern yellow pine, and softwoods all told constituted about
79 per cent of the export trade. An important factor in the
foreign trade is the export of high-grade hardwoods. More than
10 per cent of the yearly cut of oak, or about 300 million board
feet (mostly white cak), was exported, in addition to 41 million
feet in the form of staves. Seven per cent of the annual cut of
yellow poplar, or 35 million feet, was exported, and nearly 50
per cent of the yearly cut of black walnut, or about 25 million
board feet. Considerable quantities of hickory, ash, and other
high-grade woods for vehicle parts, agricultural implements,
ete., were also exported.

In 1913, 37 per cent of the lumber exports were shipped to
Europe, 30 per cent to North America (chiefly Canada and
Mexico), and 16 per cent to South America. —

The foreign lumber trade fell off to a marked degree during
the war, particularly lumber exports to Europe. The total
exports in 1918 and 1919 were but one-third of the quantities of
lumber and logs exported in 1913. The foreign trade in hard-
woods has shown the least decline, the volume exported in
1918 being 88 per cent of that in 19138.
IN

PROBABLE DEVELOPMENTS LUMBER EXPORTS.

Following the suspension of hostilities, lumber exports have
been very slow in returning to their prewar volume, mainly
on account of exchange rates running against European
countries, high charter rates on shipping, and the unprecedented
demand and high prices for lumber in our domestic markets.
As more normal trade conditions with Europe are reestablished
there will undoubtedly be a marked increase in lumber exports.
The emergency needs of Europe for reconstruction and long-
delayed expansion in housing facilities, railroads, etc., have been
estimated at 7 billion feet of lumber annually for some time to
come over and above the consumption of normal times. Great
Britain, France, Italy, Germany, Belgium, and Holland are
lumber-importing nations now experiencing exceptional and
often acute shortages of wood as an aftermath of the war. For
the most urgent reconstruction and expansion, particularly of
railroads, these countries will presumably seek to obtain lum-
ber in large quantities from the United States as soon as ex-
change rates reach a stable and more satisfactory basis. In-
quiries for several million railroad ties from Great Britain and
France have, for example, been made of American manufac-
turers, and indications point to a relatively.steady demand from
Europe for this product.

It is, nevertheless, improbable that the United States will be
called upon for any considerable part of the ordinary grades of
building lumber required in the reconstruction of western
Europe. Europe itself contains large quantities of timber suit-
able for such purposes, particularly in Russia, Finland, Sweden,
Norway, and the new countries carved out of the Austro-

Hungarian Empire. Large lumber stocks accumulated in the

countries of the Baltic Sea during the war await marketing.

 

LUMBER EXPORTS AND TIMBER DEPLETION.

The pressure upon all European countries having extensive for-
est resources to exploit them and develop trade relations for
marketing their products as a means of industrial rehabilita-
tion will be very great. These countries, with their advantage
of proximity, better knowledge of trade customs and require-
ments, and the cheapness of their products, bid fair to supply
the bulk of the demands for lumber of general utility arising
from the war.

On the other hand, European demands for high-grade timber
products from the United States, such as large structural and
ship timbers, flooring, hardwood staves, and furniture, vehicle,
or implement stock will increase. High-grade woods suitable
for many of these purposes can not be had in large quantities
from any European sources now available for exploitation.
The recent improvement in the exchange rate with Great
Britain apparently has already brought a marked increase in
the British demand for hardwoods, which is a factor in fur-
ther reducing stocks and maintaining high prices on hardwood
lumber required by American furniture makers and other
manufacturers. Hickory and ash handies are now going to
Europe in considerable quantities, the foreign demand for
these products again being a factor which affects stocks and
prices in the domestic markets. ,

As previously indicated, the European trade forms less than
40 per cent of our lumber exports. The development of Cen-
tral and South America, parts of Africa, China, Australia, and
New Zealand will naturally result in a gradual increase in
lumber exports to those countries. Central and South America,
while containing large hardwood forests, are now dependent
upon imports from the United States, Canada, and Sweden for
the bulk of their softwoods, the chief staple in international
timber trade. Several of these regions may in time develop
forest industries sufficient to supply their own needs, and new
sources of .international lumber supply may be deyeloped in
regions like Siberia. Nevertheless, the United States must
anticipate a gradual but material increase in the demand for
its lumber products from these parts of-the world for some
time to come. This demand will comprise mainly lumber of
relatively high grade. It will, however, probably run to less
specialized and high quality products than the European trade
and will consist chiefly of the better grades of softwood build-
ing and construction lumber, with considerable quantities of
railroad ties. °

The exports to Canada and Mexico, on relatively short-rail
and coastwise shipments, will comprise an average run of
sawiill products corresponding to that taken by the domestic
trade.

EFFECTS OF EXPORTS UPON DOMESTIC TIMBER
SUPPLIES.

The depletion of the virgin forests of the United States is
making itself felt first through the growing scarcity of timber
of high quality—the products cut from large, clear logs repre-
senting the cream of our virgin forests. During the past 25
years such products have risen in price more rapidly than the
common grades of lumber. The most serious effect of the for-
eign trade will be to increase the shortage of high quality prod-
ucts, because it is exactly such products which are short the
world over and which lumber-importing nations will in the long
run most desire to obtain from the United States.

57
\

58

This effect will be most pronounced in the case of American
hardwoods. The foreign demand for such species not only
includes cabinet, furniture making, and finishing woods of
special beauty, like walnut or quartered oak, but also many
woods used in manufacturing essentials of commerce and in-
dustry, like oak and hickory wagon stock, hickory spokes, high-
grade car stock, ash and hickory handles, woods used in agricul-
tural implements, and the like. The supply of old-growth
hardwoods from which most of these products are obtained is
nearing its end. Our domestic industries are securing such
materials with increasing difficulty and cost. Except as substi-
tute woods or other materials may be found, the growing short-
age of these products must in any event seriously handicap
American industry and commerce.

The second important bearing of foreign shipments is upon
the remaining supply of high-grade southern yellow pine which,
up to the present time, has furnished about half of the total
lumber exports. The materials which the foreign consumer de
mands include a large proportion of high-grade flooring and
other forms of finish and large timbers for shipbuilding and
other structural purposes. The situation as to the supply of
these products is less serious, and quite unlike that which holds
true of the hardwoods. The total production of yellow-pine
lumber will probably decline steadily during the next 10 or 15
years; and the production of high-quality products from old
growth will drop off still more rapidly. Such high-grade prod-
ucts will, however, continue to be cut from particular localities
or holdings, theugh in diminished amounts, for 30 to 40 years,
and the substitution of western softwoods for both export and
domestic products now made of southern pine is entirely prac-
ticable.

In the third place, export demands will strike the large sup-
plies of high quality softwood timber in the Western States.
The Pacific coast carries on a gradually increasing trade with
the Orient, with Australia, with South America, and with
Europe. It will logically replace the exports of southern pine
as that timber is further depleted. Here, again, the foreign de-
mand will take mainly high-grade products, particularly large
structural timbers, shipbuilding materials, and the better grades
of clear flooring and other forms of finish. With this demand
for high-grade materials will probably be supplied varying
quantities of railroad ties and general utility lumber.

The large virgin forests of the West will sustain the maxi-
mum demand made upon them by the export trade for many
years without serious effect upon domestic markets. The do-
mestic demand for high-quality timber products from the West
will, it is true, increase with rapidity as their production in
the South falls off. And in the West, as in the South, the first
evidence of depletion will be a_scarcity of products of high qual-
ity. There is this marked difference, however, in the West,
that the existence of large National Forests where timber is
cut under careful restrictions affords a means for reserving rea-
sonable quantities of high-quality timber and for producing
stumpage of this grade.

It must therefore be recognized that a material increase in
the export lumber trade would accentuate the shortage of high-
quality products available to American consumers. The prob-
lem presented by lumber exports is not serious from the stand-
point of quantity. It may prove serious from the standpoint of
quality. Scarcity of high-quality products essential to our ship
and car building and many other industries is the first and one
of the most serious effects of timber depletion.

The eventual solution of the problem presented by an active
foreign trade is therefore identical with the remedy for deple-
tion through domestic consumption, namely, not to restrict the
use, but to increase the production of timber by getting all
forest-growing land at work.” It must be recognized, however,
that this remedy in itself will not entirely meet the need for
timber of high quality. With some exceptions, such material

 

TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

can not be grown in less than 150 years; and even if every acre
of denuded land in the United States were planted to-morrow,
a long time would elapse before the depletion of high-quality
stumpage which has been cut so freely from our virgin forests
could be made good. Furthermore, the private landowner can
seldom afford to carry timber crops during the long periods
necessary to produce material of high quality. The most.ef-
fective means of overcoming the shortage of high-grade timber
is the creation of public forests which can be utilized to the
extent necessary for the production of large timber or special
products.

The bulk of the high-quality timber produced in France and
other countries of Continental Europe is grown in public forests,
it being a recognized function of the Government to produce
on its forest lands the classes of material which will not be
grown in sufficient quantity on private lands because of the
time and cost involved- This policy has already been applied
to the hardwood forests acquired by the United States in the
southern Appalachians pursuant to the Weeks Act. As far as
practicable, these forests will be handled so as to produce high-
quality hardwoods rather than railroad ties and common lum-
ber, so that they may be at least a factor in meeting the short-
age of such products. But no adequate provision for the grow-
ing of high-grade eastern woods has yet been made. It can be
made only by largely extending the public forests in the
Eastern States.

IMPORTS OF FOREST PRODUCTS.

During the four years preceding the war the imports of
lumber and logs ranged from 1,100,000,000 to 1,800,000,000 board
feet, or about one-third the volume of exports during the same
period. Beginning with 1917, there was a marked increase in
wood imports. In 1918 imports exceeded exports by 100,000,000
board feet, and in 1919 the excess of imports was probably much
greater. Aside from the importation of 1,370,000 cords of pulp
wood from Canada in 1918, the United States imported 596,000
tons of wood pulp and 516,000 tons of paper, chiefly from the
same source.

Imports of timber and timber products fall into three classes:

(1) Cabinet woods, like mahogany and cigar-box cedar, and
other valuable woods, like South American greenheart, which
can not be obtained in the United States. The imports of cedar
amount to nearly 20,000,000 board feet annually, and the im-
ports of mahogany to 50,000,000 board feet.

(2) Saw logs and manufactured lumber from Canada, shipped
into the United States by the natural routes of commerce on
the Atlantic and Pacific coasts and by favorable railroad chan-
nels. Such imports aggregate about 1,000,000,000 feet per year,
aside from which Canada also ships close to a billion shingles
into the United States annually. These imports compete di-
rectly with similar products manufactured in the United States.
There is, indeed, approximately the same flow of lumber across
the Canadian boundary in each direction, determined by the
favorable location of consuming regions in one country. with
respect to lumber-producing centers in the other.

(3) Paper and materials for making paper. The imports
of pulp wood, pulp, and manufactured paper in 1918, prac-
tically all of which came from Canada, were approximately
2,071,000 tons. Imports of corresponding products were still
greater in 1919. They furnish about two-thirds of the news-
print paper consumed in the United States, a proportion which
will grow steadily unless the foreign trade policy adopted by
Canada prevents.

Other imports of forest products are at the present time of
negligible importance. Prior to the war the United States im-
ported considerable quantities of chemical pulp and high-grade
papers from Scandinavia, a trade whose partial resumption is
to be expected. A small quantity of lumber is shipped to our
west coast from Japan and Korea. The enormous timber re
TIMBER DEPLETION, PRICES,

soyrces in Siberia have not yet been developed sufficiently to
support a foreign lumber trade.

The two important classes of products for which the United
States now depends upon foreign countries are cabinet and
other extremely valuable woods from tropical countries and
paper or its raw materials. Our dependence upon Canada for
paper is an extremely important factor which must be reck-
oned with for many years to come. This results in part from
the depletion of pulp-making woods in the eastern United
States and in part from transport and manufacturing condi-
tions which have prevented the paper-making industry from
utilizing pulp timbers available in the Western States and
Alaska. Adequate development of our western pulp-wood re-
sources could make the United States independent of foreign
supplies of paper.

EXPORT TRADE POLICY.

It must be recognized that, unlike most articles of commerce,
the replacement of a considerable part of the raw material con-

 

EXPORTS, AND OWNERSHIP. 59
sumed in lumber exports will, under the best conditions, be a
slow and difficult process. Foreign trade in softwoods has
less serious effects than the export of hardwood products; a
foreign trade in such articles as softwood railroad ties and
common lumber is the least serious of all since such com-
modities can be produced with comparative rapidity in large
quantities once growth replaces devastation of our forest lands.
On the other hand, foreign demands for high-grade hardwoods
endanger certain of our “key” industries such as the manu-
facture of agricultural implements, vehicles, and handles»
Without any exports we face a serious shortage in their raw
materials. These facts should be considered in determining the
foreign-trade policy of the country and in weighing the ad-
vantages of reciprocity. Our fundamental national policy,
however, should be for timber growth rather than the regula-
tion of timber use. If the export trade in lumber is to be
regulated, such regulation should be discriminating and should
apply to the grades and products in which a shortage is most
imminent and most menacing to domestic industries.
CONCENTRATION IN TIMBER OWNERSHIP, MANUFACTURE, AND MARKETING.

CONCENTRATION OF TIMBER OWNERSHIP IN 1910.

A thorough investigation of timber ownership in the Lake
States, the southern pine region, and the Pacific Northwest was
made by the Bureau of Corporations in 1910. At that time
these three great forest regions contained about 80 per cent of
all the stunding timber in the United States. The two most
striking facts reported by the Bureau of Corporations, follow-
ing its investigation, were the concentration of control of stand-
ing timber in comparatively few large holdings and the vast
scale upon which the speculative purchase and holding of tim-
ber in advance of its use had been conducted. Both of these
conditions were attributed directly to the public-land policy of
the United States. The Bureau of Corporations found that 48
per cent of the standing timber privately owned in these three
regions, or 839.7 billion feet, was held or controlled by 195
owners. Three large corporations held between them 238 bil-
lion feet, or 11 per cent of all the privately owned timber in the
United States. The concentration of standing timber in large
holdings was most fully developed in the Lake States and the
Pacific Northwest.

The degree of concentration of standing timber in 1910 in the
States covered by the investigation of the Bureau of Corpora-
tions, and subsequent changes or tendencies in so far as it has
been possible to determine them, are summarized in the follow-
ing brief account of timber ownership in a number of the more
important forest regions: ;

TIMBER OWNERSHIP IN THE NORTHEAST.

The 1910 investigation did not cover this region. The only
timber holdings of large size in New England are located in its
northern softwood forests and have been consolidated primarily
to secure large supplies of pulp wood. Fifteen owners have
acquired something over 54 million acres in Maine, New Hamp-
shire, and Vermont, or nearly one-fourth of the forest area of
these three States. These 15 owners undoubtedly control at
least half of the supply of pulp wood in New England. The
process of timberland concentration is still going on to a con-
siderable degree, especially in Maine, where the large properties
of one of the paper companies were acquired and assembled dur-
ing the past three years. In New Hampshire the United States
itself has acquired a comparatively large timber holding through
the purchase of over 400,000 acres in the White Mountains under
the Weeks law.

The pulp-wood forests of New England are very largely held
on an operating rather than a speculative basis. The non-
operating owners in practically all cases are selling timber
to operating companies for current logging requirements, re-
taining the land.

In New York 17 pulp and paper companies have aggregate
holdings of nearly 800,000 acres. The largest of these owner-
ships exceeds 200,000 acres, and the second in size exceeds
150,000 acres. Practically all of the softwood stumpage in New
York is very strongly held, and there is little tendency toward
further concentration at the present time.

A significant fact in New York is that the State itself is the
largest owner of merchantable timber, having acquired 1,886,000
acres of forest land in the Adirondack and Catskill Preserves,
which contain 60 per cent of the pulp timber in the State. The
cutting of these lands is prohibited by the State constitution,
The situation in New York is thus in striking contrast to that

60 .

hands of relatively few owners.

 

in Maine, where almost the entire supply of pulp timber is in
private ownership.

OWNERSHIP OF SOFTWOOD TIMBER IN THE SOUTH-
ERN STATES.

The Bureau of Corporations reported in 1910 that 14 holders
controlled three-fifths of the cypress in Louisiana, and that 11
owners controlled one-half of the cypress in Florida. Tach of
these 25 owners had acquired more than 250 million feet of
cypress stumpage. There has been comparatively little change
in the ownership of cypress land since 1910. The limited supply
and high value of this timber and the large investments re-
quired for operating plants tend to keep the stumpage in the
The enlargement of the ex-
isting cypress holdings is becoming more and more difficult,
and the total quantities of timber held by the groups of large
owners are diminishing as cutting progresses.

The Bureau of Corporations reported that 29 holders in 1910
owned 22 per cent of the yellow-pine timber in the Southern
States, each of these owners having acquired over 2 billion
board feet. Sixty-seven owners held: 31 per cent of the south-
ern pine, but the ownership of 50 per cent was distributed
among 307 holdings.

_The concentration of southern pine in large holdings appears
to have practically stopped about 1909. The number of hold-
ing companies which are not operating is very limited, sales of
timber are very few, and practically all of the remaining stump-
age is definitely related to manufacturing plants.

The southern pine belt well illustrates the increasing degree
of concentration of timber of high quality as the depletion of
forest resources continues. The South contains to-day approxi-
mately 139 billion feet of virgin pine, controlled by 5,401 saw-
mills. It is estimated that in- 10 years the remaining stand of
old-growth pine will be in the hands of 147 mills, and that in
20 years the 30-odd billion feet of virgin pine timber left will
be held by 45 mills. The number of mills alone does not indi-
cate the degree of concentration, since a number of corporations
control and operate several mills.

The southern pine region also illustrates the replacement of
large sawmills by small operations, as the greater part of the
virgin stumpage is cut out and the industry passes over to the
cleaning up of odds and ends and the manufacture of second
growth. The number of small sawmills in the South is in-
creasing more rapidly than the number of large plants, which
are closing down. During 1919 from 800 to 1,000 small mills
were established in this region, a movement, of course, greatly -
stimulated by the high lumber prices.

OWNERSHIP OF HARDWOOD TIMBER.

In 1910 the Bureau of Corporations found that timber owner-
ship was less concentrated in the hardwood forests of the
South than in any other region investigated. The same is true
to-day. Hardwood forests lend themselves to concentration
much less readily than coniferous timber. The number of
species in the usual stand is great. Manufacture and market-
ing must be highly specialized, with diversified products de-
manded by a wide range of manufacturing industries and
other users. Costs of production run higher than in the case
of softwood forests. Hence the individual hardwood hold-
ings have averaged much smaller and the average hardwood
mill cuts much less timber than in the case of softwools,
TIMBER DEPLETION, PRICES,

The annual cut of 11 of the largest hardwood operators in
the southern Appalachians is about 400 million feet. This
represents 124 per cent of the cut of the region. The remain-
ing 874 per cent of the output is manufactured by companies
which produce less than 10 million board feet yearly in every
case. In the Mississippi or “ Delta” region less than 30 com-
panies reported a lumber cut of more than 10 million board
feet annually. In the whole hardwood region there are no
holdings comparable to the large operating groups in the soft-
wood forests of the West and South.

At least 10 million acres of hardwood forest in the Ap-
palachian Mountains are owned by coal, oil, gas, and other
mining corporations. One and one-half million acres have been
acquired by the Federal Government as National Forests under
the act of March 1, 1911. The remaining hardwood areas in
this region, and the same appears to be true of the “ Delta”
hardwood belt, are widely distributed and largely in the hands
of operating companies.

TIMBER OWNERSHIP IN THE LAKE STATES.

The Bureau of Corporations reported in 1910 a marked degree
of timber concentration in the Lake States, particularly in the
most valuable species. Six owners thus held 54 per cent of the
white and Norway pine in Minnesota, but only 2 per cent of
the hardwoods, then rated as of inferior value. Thirty-two
holdings in Minnesota, each exceeding 60 million board feet,
aggregated 77 per cent of the valuable pines and but 11 per
cent of the hardwoods. Ten holders had acquired 24 per cent
of all the timber in Wisconsin and 12 holders had acquired
28 per cent of the timber of Michigan.

Since 1910 a good many owners have disappeared from the
rolls in the Lake States through the exhaustion of their hold-
ings. The few nonoperating holders appear to be disposing of
their lands, and a very large proportion of the timber in the
region is now attached to going operators.

TIMBER OWNERSHIP IN IDAHO.

In 1910, 64 per cent of the privately owned timber in Idaho,
or 32.3 billion board feet, was held by 10 owners. Each of
these holdings comprised over half a billion feet. The three
largest owners jointly controlled 46.2 per cent of the private
timber in the State.

The concentration of timber ownership in Idaho appears to
have practically stopped about 1907. Since that time the
larger holdings have remained practically at a standstill, ex-
cept for depletion from cutting and exchanges between com-
panies to secure a better blocking of stumpage for operating
purposes. The stoppage of further timber purchases about
1907 appears to have been due to a full realization of the
cost of carrying stumpage for long periods in advance of oppor-
tunity for its manufacture and to the general period of lean
years which the lumber industry experienced, particularly
from 1913 to 1915. For the same reason a number of non-
operating companies have constructed sawmills and become
manufacturers.

“Timber concentration had, however, gone very far in Idaho,
particularly in the case of western white pine, the most valu-
able timber tree of the Northwest. Of the 20 billion feet of
white pine in this region, 5 billion feet is owned by the Federal
Government, chiefly in National Forests, the State of Idaho omais
3 billion feet, and 12 billion feet are privately owned. A single
group of affiliated companies controls one-half of the privately
owned white pine, or 6 billion feet. With the exception of the
Northern Pacific Railroad, one of the largest timber holding
companies in this territory, there is no tendency to break up
or decrease the size of the larger properties. The Northern
Pacific is disposing of its timber as opportunity affords. | The
State of Idaho has announced a policy of disposing of its timber

 

EXPORTS, AND OWNERSHIP. 61
lands. There is a marked tendency in Idaho, however, to put
timber holdings upon an operating basis and tu construct ad-
ditional sawmills in sufficient number to liquidate most of these
great properties within 25 or 30 years.

TIMBER OWNERSHIP IN WASHINGTON AND OREGON.

In these States, the Bureau of Corporations found in 1910
the most striking examples of timber concentration. Three
owners controlled 191.3 billion board feet of timber. There were
83 owners who had acquired over a billion board feet. Their
aggregate holdings were 411.7 billion feet, or 59.4 per cent
of the privately held stumpage in the two States.

Since 1910 the three largest holdings in this region have been
decreased. By decision of the Federal courts the land grant of
2,425,000 acres to the Southern Pacific Railroad Co. in Oregon
has reverted to the Government. The Weyerhaeuser Timber Co.
has sold approximately 250,000 acres, chiefly to operating com-
panies, and has itself become a large timber manufacturer.
The Northern Pacific Railroad Co. has sold 522,000 acres of
timberland in Washington, a considerable part of which has
gone to operating companies.

In the State of Washington individual holdings in excess of
25,000 acres, or approximately 1 billion feet of timber, had as
a group acquired 155,100 acres of additional timberland be-
tween 1910 and 1919 through the consolidation of small hold-
ings. On the other hand, this same group had during the same
period decreased its holdings by 970,630 acres through logging,
timber sales, failures, etc. The net area of timberland con-
trolled by this group of approximately 32 owners had decreased
in the nine years 815,530 acres.

In Oregon the holdings of the same size had, as a group,
dropped 959,930 acres between 1910 and 1919 and added
1,487,580 acres, a net increase of 477,650 acres. The increases
represent principally the consolidation of small properties.
Much of the timbered area of Oregon is still undeveloped and
inaccessible for lumber manufacture. Timber values in this
region are still low. The greater number of large holdings in
Oregon are in such localities. Several of them have changed
hands during the past 10 years, some tracts two or three times,
due to the inability of owners to carry taxes, interest, and pro-
tection costs any longer. The holdings previously carried more
or less as a speculation have in many eases passed into stronger
hands. :

There are still many thousand timberland claimants and
small owners in these less accessible regions who are anxious
to unload; and the low values at which they are willing to sell
their land has permitted the blocking of small holdings into
large properties at prices which have attracted strong investors.
In a considerable number of cases, companies preparing for
lumber manufacture have not only blocked up small properties
but have also purchased extensively from the larger holders
themselves. A process of concentrating small properties and
one of breaking down the very large properties are thus going
on at the same time. These two movements taken together
presage a change in timber ownership in Oregon from a specu-
lative to an operating basis and a large increase in its manu-
facture of lumber.

The individual holdings under 25,000 acres, or of less than
about one billion feet of stumpage, aggregate 17,000 in Oregon
and 7,000 in Washington. Many of these small holders have

retained their timber not from choice but from their inability

to sell in locations isolated from present manufacturing centers.
The smaller number of such holdings in Washington indicates
the much more rapid development of the lumber industry in
that State. .The enormous number of timber properties of small
or unimportant size in the two States on the northern Pacific
coast not only show that there is still a very wide’ distribution
of timber ownership in that region notwithstanding the concen-
62 TIMBER DEPLETION, PRICES,

tration which has taken place; but also that the process of con-
centration for timber holding as distinct from lumber manufac-
ture had been checked, as in Idaho.

TIMBER OWNERSHIP IN CALIFORNIA.

The timberlands of California illustrated, in 1910, the same
tendencies toward a partial concentration in enormous holdings
evident in Oregon and Washington. Nearly 75 per cent of the
privately owned timber in the State, or 178.2 billion feet, was in
39 holdings. The seven largest owners carried 100 billion feet
of stumpage; and one owner, the Southern Pacific Railroad, had
acquired 35 billion feet through its Federal land grant.

The commercial timber lands of California comprise two dis-
tinct belts, the redwood forests bordering the coast, and the
sugar and yellow-pine belt covering the eastern and northern
mountain ranges of the State. In the redwood region the prin-
cipal nonoperating owners are now 17 in number, with holdings
ranging from 200 million to 5 billion board feet of timber.
Eleven of these holdings comprise 1 billion feet or more; and
in the aggregate they comprise 29,056,000,000 feet. The prin-
cipal operators in the same region are 18 in number, with tim-
ber holdings ranging from 240 million to 3 billion feet. Six of
these companies have holdings of 1 billion feet or more; and
the aggregate ownership of the 18 is almost 20 billion feet. A
large part of the redwood stumpage that can be operated most
economically is now controlled by operating companies, who also
largely control strategic operating sites from the standpoint of
coastwise or other shipments. There is still a large percentage
of redwood timber in the ownership of nonoperating companies,
but the general tendency since 1910 appears to have been away
from further concentration. The number and aggregate hold-

 

EXPORTS, AND OWNERSHIP.

ks
ings of the group of companies controlling a billion feet or more,
for example, has decreased.

The principal holding companies in the pine region of Cali-
fornia are eight in number. Aside from the enormous property
of the Southern Pacific Railroad, these ownerships range from
600 million to 8 billion board feet. In addition, there are 14
large operating companies, one of which controls 15 billion
feet of stumpage, while the holdings of the rest range from 181
million to 2.8 billion board feet. All told, these operating com-
panies own over 29 billion feet of stumpage. There have been
several transfers of ownership since the investigation made by
the Bureau of Corporations in 1910; but no important change
as to the general concentration of timberlands. The present
tendency in the California pine region is toward the operation
of timber areas and the liquidation of the investments which
they represent wherever the location of the property permits.
In line with this tendency, in California as in Oregon, a rapid
increase in the installation of sawmills and volume of lumber
output is to be expected.

CHANGES IN TIMBER OWNERSHIP FROM 1913 TO
1918.

The accompanying table, No. 26, prepared by the Timber Sec-
tion of the Bureau of Internal Revenue, shows the increases and
decreases in timber ownership between 1913 and 1918 by 368
owners. These holdings are distributed by groups through 17
forest regions, representing practically all of the important
timber areas in the United States. The figures do not include
all of the large timber holdings in the regions represented, but
do, through showing what has happened in the case of a
sample group of large owners in each region, draw an excellent
picture of the tendencies in timber ownership the country over.

TaBLe 26.—Depletion of timber reserves and net changes in timber ownership of large timber owners in the important forest regions of the
United States.

[Data compiled from ‘general Forest Industries Questionnaires” on file in the Timber Section, Bureau of Internal Revenue—Bureau of Internal Revenue, May 22, 1920,
David T. Mason, Chief, Timber Section.)

 

 

 

 

 

 

  
 
   

   

 

 

 

 

 

 

 

 

 

 

 

Total area : , “ Per cent by
Number of ‘Aver- owned Timbered area owned Timber owned (mil- which pur-
owners. Least | age | (thousands of (thousands of acres). lions of board feet). Per | chases or
quan- | stand | acres). gent o sales dur-
fity of per 1a13 , ing period
un per | iacre | Ratio. Ratio, Ratio. | timber | °H8n¢¢
Forest regions, oe er 1, cnt quantity of
i. ,
1913, or | (thou- eon poate
Not | Dec. | sand Dec. Cut | p Cut perio Mar. 1
Total, oper. |81,2018; bd. st). Mat14 gh Malan] Ge | aly oo ee) aot
ating. d. ft.) 1918, period. 1918. period. 1918, - ‘00
(M+1) (G+F) (K+I) O+M : N-+O-—M)
. (0+M)) avemy| N+Se
A: BG D E F G H I J K L M N oO P Q R
|
New, Spee ian gis debac ince 40 2 60 3.8 | 5,675 | 6,519 | 1.15 | 5,386 | 797 | 5,365 | 1.00 | 20,522 | 3,255 | 19,885 | 0.97 16 13.0
New York. 0.02.00. .ee-eeceeee 11 1 60} 5.6] 853] 821 -96| 782] 136] 614 -78| 4,400] 755 | 3,620 82 17 — 5
Pennsylvania B laceeecs 60) 17.6] 550] 545] .99/ 166] 91] 83| :60] 2,927] 1,936] 13109; [38]. 66 4.0
ae et il 250 4.3 |o.e eel eee ee] eee eee 862; 415 | 564 -65 | 3,664 | 1,433) 2,375 65 39 4.0
T | soskaet 250} 3.9]. 361 | 592 -79 | 2,878 | 1,305 | 2,112 73 45 19.0
65 2) 250) 8a fll]. 1, 828 | 3, 854 +79 | 39, 419 |147 733 | 287 493 72 37 9.0
Cypne Fla., 8. C.), a : & TB |e leet fener eeeeeleeeeee feces 8,322 | 1,752 | 2,625 .79 53 32.0
A a, Fis hhardwoods....... 22 2 60 Bell Voc wens loamaianaliaely wed 657
maak a Va., N.C., Ky, 256) 601 91) 5,284 | 2,271 | 4,275 81 43 4.0
Appalachian softwoods......-. Bo] sacicnes 60 NOs 4) aintcctac larson eal ecietcnd
Fo eT a agne 354] 117] 235 -66 | 3,681 } 1,441 | 2,418 -66 39 5.0
Delta hardwoods 20 senses 60 5.6) 577) 737) 1.28) 524] 163] 545] 1.04] 2,948] 894] 2,801 98 30 28.0
Lake States: 69 7) 100) 7.2] 8,724 | 3,675 -99 | 2,496 | 1,094 | 1,634 +65 | 18,082 | 7,137 | 11,868 66 39 5.0
Idaho....-..,-----2--2-+5 +} 10} 2) 250] 17.5) 1,020] 1,052] 1.03] ois} 94] 902 aes 5.0
Washington (fr and pine) 40] 6} 250| 44°0 | 2490 | 2463} 90] 2,245 163 | 2,006 | 193 | ontcs | Yoee lave | cee] 8 —5.0
Oregon fir..........-+---- 17 | 250) 50.0 | 567 | 550) 97 | 503} 29) "462 | 92 | 257310 | 17760 | 21,726 | 86 7 —7.0
Oregon pine......-..--- 8 S| 250) 16.0) 674) 720) 1.07) 616} 31] 633] 1:03} 9/568 | "ane 1,00 3 3.0
California redwood... te] Bf} BOO] FBO) B09] 401) tor] 278) 31 | 250] 90 | 21617 | 2,513 | 19346 189 | 12 10
California pine............-..-- 15 5 | 500) 25.1 | 1,518 | 1,505 | 99 | 1,273 | 136 | 1,130 -89 | 31,972 | 2)760 | 28) 505 i) 9 —2.0
Potal es uotvereeweeewesy 376 | 42 |... 13.7 [18,047 {18,988 | 1.05 |22, 696 | 5,742 /19, 560 -86 |810, 469 |53, 357 |262, 482 85 17 2.0

 

 

 

 

 

 

 

 

 

*
TIMBER DEPLETION, PRICES,

The following notes on this table have been furnished by the
Timber Section of the Bureau of Internal Revenue:

“In New England the 16 per cent cut indicated in column Q
is believed to be too low to be fairly representative for all of
the owners in the region, for during this period many of the
larger operators, desiring to guard heavy investments in pulp
and paper manufacturing plants, secured their supplies of raw
material as far as possible from timberlands other than their
own. At the same time these owners gladly bought additional
timber to the extent of 13 per cent of their original holdings.

“In the case of New York the statement just made for New
England applies to column Q. In the case of column R, how-
ever, the owners did not increase their holdings through pur-
chase, but in fact diminished them by one-half of 1 per cent
through sales, owing to the fact that timberland at the begin-
ning of the period was for the most part already closely held
in New York and very little was changing hands.

“In Pennsylvania there are very few important timber hold-
ings left. These are being rapidly exhausted, as indicated by
the fact that 66 per cent of the timber on hand March 1, 1913,
was cut during the period, and by the further fact that the
owners were able to secure only 4 per cent more during the
period. In a region such as this, where cutting has materially
reduced the supply of virgin timber, the tendency is for an
operator to replenish his timber reserve, so far as he is able, by
the purchase of other available timber. For the same reason
this tendericy also obtains in the Atlantic pine, Florida, Gulf
pine, cypress, Appalachian hardwoods, Appalachian softwoods,
and Lake States regions.

“The Atlantic pine region shows about the same situation as
does Pennsylvania, excepting that the existing supply suitable
for large sawmill operations is not being exhausted as fast.

“In the case of Florida, while the rate of cutting was high,
there were still considerable tracts of timber to be obtained for
good-sized operations, as indicated by the 19 per cent excess of
purchases over sales. In the Gulf coast pine region the rate
of reduction of timber reserves was slightly slower than in the
Atlantic pine region; the opportunity to secure additional tim-
ber was better but not so good as in Florida.

“We now leave the regions of the United States in which the
timber supplies have been rather heavily-depleted and where
operators are inclined to acquire as extensively as practicable
additional supplies in order to prevent their reserves from
falling too rapidly. We reach the western United States, where
there are still enormous supplies of virgin timber. Here during
the period covered by the table there was little inclination to
buy additional timber because of the exceedingly heavy load of
timber already carried; in fact, many owners endeavored to
liquidate their timber as rapidly as possible both by cutting
and by selling. Those large owners who bought timber usually
acquired only that offered at bargain rates. In Idaho, for in-
stance, 10 per cent of the timber on hand at the beginning of
the period was cut and 5 per cent acquired; much more than 5
per cent could easily have been acquired, for the available sup-
plies are large, if the owners included in the group had been in
a buying mood. In Washington 8 per cent was cut, and an addi-
tional 5 per cent was sold. Similarly in Oregon fir, 7 per cent
was cut and an additional 7 per cent was sold. In.the case of
Oregon pine, California redwood, and California pine the condi-
tions were not far different from those just mentioned.”

Particular attention should be given to the ratio columns for
“Timbered area owned” and “ Timber owned.” In the case of
but one group—that of Oregon pine owners —does the total
quantity of timber owned in 1918 equal that owned in 1913. In
every other region the total group ownership dropped off dur-
ing these years. The ratio is close to 100 in most of the regions
still having large areas of virgin forest, reflecting, first, con-
tinued opportunity to acquire timber, and, second, the effort on

 

63

the part of the larger owners to maintain a constant but not
greatly increased supply of stumpage for their mills.

It is also notable that the quantity of stumpage held in 1918
by the New England group is very close to that held in 1913.
In several other regions low ratios, such as 38 per cent in Penn-
Sylvania, 65 per cent in the Middle Atlantic States, and 66 per
cent each in the softwood areas of the southern Appalachian
and in the Lake States, are evidences of timber depletion.

These data, compiled from the tax returns made to the Bureau
of Internal Revenue, confirm the general tendency, ascertained
by the Forest Service from study in the field, toward a decrease
in the larger timber holdings in many regions and putting tim-
ber ownership more largely upon an operating basis. These
facts, however, do not necessarily indicate a decrease in
the proportionate amount of timber controlled by large owners.

A SUMMARY OF THE PRESENT SITUATION AS TO
TIMBER OWNERSHIP.

In brief, the situation as to timber ownership has not changed
materially from that reported by the Bureau of Corporations in
1910. Half of the privately owned timber in the United States
is in the ownership or control of about 250 large companies.
About one-fifth of the total is owned by the Government. Sev-
eral of the Western States also rank as large holders. The
ownership of the remaining timber is very widely distributed.
There are 24,000 holdings of less than a billion feet in Oregon
and Washington alone. The great bulk of the hardwood timber
is distributed among many owners. It is roughly estimated
that the farm wood lots in the States east of the Great Plains,
aggregating 152,000,000 acres, contain two-fifths of the timber
in this portion of the country, or approximately 340 billion feet.

In nearly every forested region the group totals of the prin-
cipal owners have either practically remained stationary or
decreased. The tendency on the part of these groups to acquire
and maintain a relatively constant supply of standing timber
as cutting progresses is marked in regions where the remaining
resources permit. The decrease in the holdings of such groups
in several of the eastern forest regions is a clear indication of
timber depletion. In many individual cases, of course, a fur-
ther concentration of timberlands is in progress. This is par-
ticularly marked in the softwood forests of the Northeast,
spurred by the scarcity and high value of pulp woods.

A realization of the carrying charge on long-term timber in-
vestments, which may double the capital cost of stumpage-
every seven or eight years, has largely halted the movement for
building up enormous speculative timber properties which was
in full swing prior to 1910. The tendency of the present, with
some exceptions, is to put the timber holding on an operating
basis, adjusting its size. to a practicable scheme for under-
writing the cost of particular sawmills and logging improve-
ments rather than carry large surpluses beyond operating re-
quirements now clearly defined. A number of companies,
hitherto timber investors rather than lumber makers, are be-
coming operators through the necessity of obtaining a current
revenue to meet carrying charges, and also because of the op-
portunities for profit afforded by the existing lumber markets.
As a broad rule, therefore, particularly in the Northwest, tim-
ber lands are passing over from long-time speculations to blocks
of raw material connected with particular manufacturing
plants. As a phase of this process, the largest holdings are
being reduced rather than increased.

On the other hand, this regrouping of timberlands is bring-
ing new interests.into the Western States, chiefly as operators.
While often buying timberland from the larger owners there
before them or taking over going sawmills, these new interests
are also consolidating small holdings in order to block up de-
sirable operating units. They thus become large or compara-
tively large timber owners themselves; and their establishment
in the West tends to even off decreases in the holdings of the

EXPORTS, AND OWNERSHIP.
64 TIMBER DEPLETION, PRICES,

very large interests. By and large, the degree of concentration
indicated in the findings of the Bureau of Corporations in 1910
has not been appreciably changed; but no general tendency is
evident to extend control by increasing the larger holdings or
by withholding timber from the saw. Indeed, the opposite is
true in many regions.

Two factors make the effect of timber concentration greater
than it appears. The first is the ownership of key areas,
strategically located at the outlets of valleys or other points,
where they control to a considerable degree the operation of
the back-lying or adjoining timberland. There are many cases
where topography thus gives the owner of a key tract practical
control over an adjoining quantity of timber which he may
confidently expect to purchase more or less at his own terms
when he is ready to log, but which meantime must be carried
by others. Under the operation of the timber and stone act
and other land laws, many such tracts have been acquired
within or adjoining National Forests which in effect control
considerable quantities of publicly owned timber, and the samé
situation frequently exists as regards private lands.

A second aid to timber control is the fact that the holdings
of many, though not all, of the large owners comprise the most
accessible timber in their regions, the timber most cheaply
logged, and the timber of the best quality. A considerable
part of the western stumpage is so inaccessible and costly to
log that it will not be 4 competitive factor in the lumber market
for many years. This is true, particularly, of much timber in
the National Forests. Control of the more accessible and high-
grade timber will strengthen the position of many large inter-
ests aside from the actual volume of stumpage which they own.

CONCENTRATION TENDENCIES IN LUMBER MANU-
FACTURE AND MARKETING.

The most significant tendencies during the past five or six
years bearing upon the general question of timber concentra-
tion, however, are not in the ownership of stumpage, but con-
cern a more highly organized control of sawmills and lumber
marketing by groups of operations. During the same period the
industry has become more closely knit through the development
of regional associations and other cooperative measures. The
census of 1910 reported some 45,000 operating sawmills. The
study made by the Forest Service in 1914 indicated that the
lumber industry at that time was very individualistic in char-
acter. An enormous number of mills, large and small, operated
independently, and the vast majority of lumber-making estab-
lishments manufactured and marketed their products as compet-
ing units. The sawmill capacity of the country was much
greater than the volume of lumber which could be marketed.
The bonded indebtedness of the industry was large and, in gen-
eral, its financial structure was weak. The pressure of carry-
ing charges on timberlands and indebtedness and on investments
in manufacturing capacity too large for the market led to fre-
quent periods of overproduction and of financial distress to
many operators.

The change from these conditions which now appears to be in
progress may be compared to the changes in the iron and steel
industry during the period when the small foundries and steel
plants were disappearing or being consolidated in a compara-
tively few large groups; or to the changes in the transportation
industry during the period following 1870, when many small
railroads were absorbed into large trunk systems. These ten-
dencies in the lumber industry may be summarized as follows:

THE CREATION OF LARGE OPERATING GROUPS OF AFFILIATED
SAWMILLS.

The necessity of manufacturing.lumber in the vicinity of

standing timber prevents the geographical concentration of

plants to any degree comparable with most other manufactures.

 

Nevertheless, there is a distinct tendency, particularly in the
s

EXPORTS, AND OWNERSHIP.

Western States, toward concentration of production through
the central control of a considerable group of mills. Such con-
trol may be exercised through varying degrees of stock owner-
ship, bonding or other financial relations, or affiliations of one
form or another. These operating groups range from 2 or 8
sawmills to 12 or more, with a combined cut of from two to
three hundred million board feet yearly up to a billion feet.
In several instances the group includes mills in two or more
of the principal softwood regions—the South, the Lake States,
and the Northwest, and in some cases also embraces mills or
timber properties in British Columbia or Mexico.

The movement of southern lumber interests into the Western
States is one of the significant phases of this tendency in lum.
ber manufacture. Several of the large southern operators have
recently acquired mills or timber properties in the West. In
some cases this represents an expansion of existing lumber-
producing organizations; in others, the migration into new
territory of operating units which have exhausted their former
timber holdings.

With the development of such operating organizations there is
a certain elimination of sawmills and timber holdings which
hitherto have been unaffiliated. The tendency of the large
operating groups is to consolidate the holdings, large and small,
in their vicinity and thus acquire sufficient stumpage to supply
their manufacturing plants for at least 20 or 25 years. The
relation of the small mill to this general movement is a complex
one and, as will be indicated later, works in different ways in
different regions. But as regards the principal remaining
timber resources of the United States in the West the present
tendency is unquestionably toward a closer concentration of
lumber manufacture in large units than has existed hitherto.

This development toward more large and powerful operating
groups is but partial. The number of sawmills operating as
independent units is still very large and still manufactures
the greater part of the total lumber cut. Furthermore, as
far as present indications go, the entrance of new organizations
of large size into the lumber industry of the West has not
tended to restrict competition. The newcomers, usually well
organized, efficient, and well financed, have indeed in several
instances introduced a new competitive element in the regions
where they located. This tendency in the lumber industry
undoubtedly would make a process of “getting together”
between the larger interests easier than it has been before,
but it at least is not yet evident.

GREATER FINANCIAL STRENGTH OF THE LUMBER INDUSTRY.

The study of the lumber industry in 1914 indicated that its
financial structure was weak. Incomplete records of bonds
and other forms of indebtedness on timber lands and opera-
tions in the southern pine region and the West aggregated
$151,000,000. Stockholders’ loans, current bank loans, and
other forms of borrowing apparently had been carried often
beyond the point of safety. Interest and maturities on the
various forms of indebtedness formed a heavy charge upon the
average thousand feet of lumber manufactured, and notably
forced many sawmills to continue cutting during periods when
operation represented an actual loss and increased the over-
production which occasioned periodic demoralization of the
industry. -In the three years following 1912 there was a weed-
ing out of weaker operators as a result of these conditions, and
certain of the large timber holdings in the Northwest were
broken up and passed into other control owing to the attempt
to carry bonds and other forms of indebtedness beyond the
capacity of the business. ~

Within the last four years the financial strength of the
lumber industry had radically improved. A large volume of
timber bonds has been retired. The flow of eastern capital,
particularly from the Southern States, into western timber re-
gions has eliminated a certain number of weakly financed timber
TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP.

owners and sawmill operators and has strengthened the finan-
cial backing of other concerns where no change in ownership
was made. Higher profits in the manufacture of lumber dur-
ing the past few years have enabled the industry, by and large,
to wipe out much old indebtedness and greatly improve its
financial situation.

This change is cited because it is part of the general recon--
struction of the lumber business which is taking place, thus
making it a better organized industry, and which tends to elimi-
nate certain conditions which formerly made this industry one
of the most highly competitive in the country. The indebted-
ness of timber owners and lumber producers was formerly a
large factor in keeping up production with little reference to
demand, and in causing the scramble to market the lumber cut
at almost any price. To a considerable extent the lumber in-
dustry now appears to be passing out of a condition where ex-
cessive competition was forced upon a large portion of its mem-
bers by purely financial exigencies.

The fact remains that the nature of timber properties tends
to compel the operator to manufacture lumber steadily at the
full capacity of his plant and to dispose of his product cur-
rently as it is sawn. This results from the cost of carrying large
supplies of raw material. The “stumpage load” has forced
many timber owners in the West to become operators, and the
very necessity of liquidating timberland investments compels
continuous operations.

The carrying charges on timberland thus tend to keep the
lumber industry competitive. In 1914 they compelled many
mills to operate at a loss—for operation was still less costly
than idleness. The greater financial strength of the lumber in-
dustry will minimize the effect of this basic factor to some ex-
tent, but can not eliminate it. Once let lumber stocks equal or
exceed the demand and it would again become a powerful com-
petitive influence. Another safeguard against possible monopo-
listic tendencies in lumber manufacture is the public owner-
ship of a third of the timber in the Western States, in the Na-
tional Forests. The sale of public stumpage under the restric-
tions enforced will foster independent mills not affiliated with
the large interests.

CONCENTRATION OF LUMBER MARKETING.

Probably the most significant phase in the reorganization of
the lumber industry is the development of large marketing
units which handle the output of a considerable number of
plants, under central control. This has gone considerably be-
yond the concentration of production through the control of
groups of mills. A lumber sales company in the Northwest
markets approximately a billion board feet yearly, cut by 11
affiliated sawmills. An agency in New York sells the product
of 11 southern mills, amounting to some 200 million board feet
annually. The second of these examples is much more typical
than the first. There are many other groups of mills whose eut
is marketed jointly under management which may be identical
with the ownership or affiliation of the mills themselves or
which may, in the form of a selling agency, be largely or
wholly unconnected with the producing plants. One of the
most common is the type of selling agency which markets the
cut of 12 or 15 small mills on a commission basis, giving the
mills a more efficient selling department than they individually
could afford.

The “line-yard” system of retailing lumber, although fol-
lowed for a good many years, is an indication of the same
movement toward a closer organization of lumber marketing.
In many cases large sawmills or groups of sawmills under the
same financial control maintain their own lines of retail lumber
yards or are financially affiliated with companies operating
line-yard systems. The large wholesaler who contracts for the
entire cut of a number of mills, or the entire cut of certain

 

65

grades of lumber, is another factor. Many small mills, par-
ticularly in the Southern States, while seemingly independent
operating units, are in fact grouped into relatively large market-
ing units through a single wholesaler who handles their prod-
uct; and in many cases these small mills are partly or largely
financed by the wholesaler who markets their cut.

The movement in this direction, while only partially con-
nected with the ownership of timberlands, is undoubtedly the
most pronounced feature of concentration in the lumber in-
dustry from the standpoint of tendencies in its development and
their bearing upon the interests of consumers. Concentrating
the marketing of lumber into large units is still far from com-
plete. The 40,000-odd sawmills scattered all over the United
States do not lend themselves readily to such a _ process.
Furthermore, the number of distinct marketing units, even those
of large size, is still very considerable, and the proportion of
the lumber cut of the country handled by the largest of them
is relatively small in comparison with other industries. The
largest unit of this character, for example, markets about 3
per cent of the lumber cut of the country. In particular reg-
ions the proportionate control of lumber distribution by a
particular organization may be much greater, and the policy
of the organization as to local sales of the products handled
by it of corresponding importance to the interests of the con-
sumers.

In the general lumber trade the large selling organization
has often been a strong competitive factor. Reaching out for
more business, it has not infrequently brought effective com-
petition into regions where formerly it was lacking and given
better service to consumers in such ways as Stabilization of
lumber grades, offering new grades or dimensions especially
adapted to local requirements, or furnishing plans for the con-
struction of dwellings and farm improvements. In itself this
form of organization may be beneficial rather than harmful to
the public interests, particularly in. an industry like lumber
manufacture, which has been backward in the development and
adaptation of its products to the requirements of consumers.
The danger lies in the possibility of using large marketing
units as a medium for price control.

DEVELOPMENT OF TRADE ASSOCIATIONS.

Regional associations of lumber manufacturers have been
in existence for many years. They have discharged certain
functions of value both to producers and consumers of lumber,
particularly in the standardization of lumber grades enforced
by association inspectors and in correcting evils common in
the industry to which its product is particularly susceptible
through various practices of misgrading. The associations have
also largely handled the traffic interests of their members and
have been the media through which various forms of statistical
and other information are assembled and distributed to the
lumber producers comprising them.

The general reorganization of the lumber industry has in-
volved inevitably an expansion in the activities of such asso-
ciations and has given them greater influence upon both the
production and marketing of lumber. They have given em-
phasis, for example, to the formulation and adoption of uni-
form accounting systems, tending to unify the accounting prac-
tices of lumber manufacturers, which in former days were ex-
tremely diverse and often haphazard and inaccurate. They
have been the foremost promoters of the movement for guar-
anteeing the quality of lumber products. Another activity,
developed particularly during the last six or eight years, is
the assembling and distribution among members of the asso-
ciation or of a subsidiary organization of current reports on
the prices received in lumber sales. The purpose of this work
is to give the members of the association a common and up-to-
date understanding of the market which they are supplying.
66

Ignorance of current market values, particularly on the part
of small operators, has been one of the reasons for the very
unstable conditions often prevailing in the lumber industry. It
was evidenced and is still to some extent evidenced by the wide
range in prices at which the same grade of lumber is sold in
the same locality.

With lumber manufacture and marketing so widely dis-
tributed, the industry has lacked a central medium for re-
porting price changes from day to day, like the wheat or cotton
exchanges. No general and authoritative price data have been
available to it, like those assembled and published by the De-
partment of Agriculture on many agricultural products. The
function of the regional lumbermen’s association in assembling
and distributing the prices reported on current sales has
grown out of a real need on the part of many operators for
better information about their market. It is a development
common, in one form or another, to most of the large businesses
of the country.

Solely as a matter of information, the current distribution of
prices received by different members of the association tends
to unify the rates at which lumber is offered for sale and
to make increases or decreases in accordance with the fluctua-
tion in the market more nearly similar at all producing plants.
The same information would doubtless be of équal value to
buyers of lumber, particularly to the smaller buyers less able
to keep posted upon market fluctuations, if available to them.
The price reports of lumber associations appear to have been
made available to lumber buyers in some cases, in other cases
not.

The assembling and distribution of such information obvi-
ously forms a possible vehicle or medium for reaching more
or less definite agreements or understandings controlling the
prices at which lumber is offered. The extent to which it may
serve as such a medium depends upon the policy followed by
the particular association as to the degree of publicity given
to data of this character, upon the efforts which the association
may make to induce its members to price their product in con-
formity with the highest rates shown by current reports, and
upon the extent to which the individual. lumber producers or
selling organizations may use the data as a basis for price-
control agreements or informal understandings. Properly
employed, particularly with a large degree of publicity, such
information should serve to stabilize the lumber market to the
advantage of both producer and consumer.

EFFECTS OF TIMBER DEPLETION UPON
CONCENTRATION.

It should be pointed out that the public effects of the con-
centration of a large part of the virgin forests of the United
States in the hands of relatively few large interests will be-
come greater as forest depletion continues. It is to the interest
of large operators who have tade extensive investiments in
operating plants and in marketing organizations and who have
built up widespread trade connections to maintain a continuous
supply of stumpage for their mills. Carrying charges have
placed more or less definite limits upon the quantities of re-
served timber which can be carried economically. As these
quantities are reduced by cutting, however, it is to be expected,
and the data on hand indicate, that the large operators will
replenish them by purchasing available small holdings. As a
general rule, the small mills are tending to be eliminated in the
western regions, where the principal bodies of virgin timber
remain. This process may be cxpected to continue in such
regions for a considerable period, first, because in many in-
stances the small plants are less efficient in manufacturing
and marketing lumber and are the first to be eliminated dur-

‘ing periods of depression; secondly, because by and large

they will be the first mills to exhaust their timber holdings;
°

TIMBER DEPLETION, PRICES,

 

EXPORTS, AND OWNERSHIP.

and, thirdly, because the large interests will find it to their
advantage as time goes on to acquire the smaller tracts of
stumpage available to their plants. Financial strength;
strategic location, ownership of the most accessible timber, far-
reaching affiliations of one form or another, including in some
instances affiliations with transcontinental railroads—all of
these factors will tend to give the large interests in the North-
west a greater and greater degree of control of the situation.
This control will increase for a considerable period in about the
same ratio as forest depletion goes on, and to a corresponding
degree will involve the dangers to the public interest arising
from a natural monopoly. ,

One of the most important aspects of this control, as already
pointed out in the case of the virgin pine timber remaining in
the Southern States, is that it will extend particularly to the
timber of high quality still left in the steadily reduced areas of
old growth. An increasing concentration of high-quality tim-
ber, particularly in the softwood forests of the South and West,
may be expected.

On the other hand, a point is reached in every lumber-produc-
ing region, after the bulk of its virgin timber has been ex-
hausted, when the large plant and organization are no longer
the most efficient economically and when the large sawmill,
carried by its square miles of virgin stumpage, is.replaced by a
smaller and more portable operating unit. The small mills
follow large ones, picking up odds and ends of virgin timber,
cleaning up the less accessible, and ultimately operating on
second-growth stands, which produce ordinary grades of build-
ing lumber and other products of relatively low quality. This
process now appears to be taking place in the southern pine
States. During the next 10 years the closing down of large
sawmills in that region will be rapid. At the same time the
number of small mills is rapidly increasing. These small mills,
often operating but a few years at one point, are much less
adapted to centralized control and represent a tendency to break
up concentration. This tendency may be offset to a degree by
the common marketing of the products of a number of small
mills through a wholesaler or some form of selling agency and
through financial affiliations which may grow out of this mar-
keting relationship.

In other words, the lumber industry is distinctive in that the
concentration or possible concentration of its raw material is
necessarily limited in time. Under present methods of opera-
tion the physical conditions restrict the life, even of many large
plants, to 20 or 25 years. This broad rule has been true of the
dominance of the lumber markets of the United States by the
large softwood regions, each of which has held control of the
markets for a comparatively short time. The ultimate tendency
is for the industry to break up into small units under which the
possibility of concentration is greatly reduced.

The most significant factor in the present situation is that
with the exhaustion of virgin timber in most of the eastern
States and its impending exhaustion in the southern pine re-
gion, although certain large mills will be cutting virgin yellow
pine for 30 years to come, the danger of concentration of high-
grade timber is proportionately greater than ever before. The
greatest protection which the people of the United States have
against such concentration lies in national and other public for-
ests, where such timber can be grown or held in reserve and
which are so administered as to aid in maintaining competitive
conditions in the lumber business. One of the most effective
steps that can be taken to limit the effects of concentration is
not only to extend the National Forests by purchase but to in-
corporate in them all timberlands which the Federal Government
still owns or controls and not to permit a single additional acre
to pass into private ownership.

As to our requirements for lumber of general utility, the
danger of harmful concentration is more remote. It would be
dispelled by vigorous action to stop forest devastation and re-
TIMBER DEPLETION, PRICES,

stock denuded lands, leading to permanent forest industries
widely distributed over the country, and tending toward small
rather than large operating units.

No information has been obtained to justify a conclusion
that the tendencies toward a closer knit organization of the
lumber industry and various forms of concentration have led,
up to the present time, to actual monopolistic conditions of
general scope. It has been impossible in the limited time avail-
able for this investigation to make a study of that phase of the
situation. The particular facts which it is believed are clear
are that the lumber industry in the regions where the principal
supplies of timber remain is growing away from the loose, un-
organized, and highly competitive conditions which prevailed in

 

4914; that while during the past 10 years there has been no

EXPORTS, AND OWNERSHIP. 67
material change in the concentration of ownership of standing
timber, the effects of concentration will become more apparent
as time goes on, particularly in respect to products of high
quality; that the financial weaknesses which hitherto have
tended to keep the lumber manufacturing industry in a highly
competitive condition are to some extent disappearing; and
that the lumber industry in the regions of large forest resources
is in a process of partial reorganization into ‘larger units of
production and marketing. In other words, some of the factors
tending to make this industry highly competitive are changing
into conditions more favorable to closer control. The necessity
for the steady liquidation of timber investments and the stifl
enormous number of operating units are inherent factors un-
favorable to. close control.
FOREST DEPLETION THE FUNDAMENTAL PROBLEM.

CUMULATIVE EFFECTS OF TIMBER DEPLETION.

From the facts presented in this necessarily incomplete re-
port it is evident that the fundamental weakness in the supply
and cost of wood products in the United States is the cumula-
tive depletion of our forests. The extent and broad effects of
the steady wiping out of the original forest resources of the
country are readily grasped. ‘Three-fifths of our primeval for-
ests are gone. The timber remaining is being consumed four
times faster than it is being replaced. With the exhaustion of
several of our principal forest regions as large producers of
wood products, occurring successively in the Northeastern
States, the Alleghenies, the Lake States, and the Atlantic sea-
board, and the similar exhaustion of the Gulf State pineries
now imminent, the cost of transporting forest products to the
average consumer in steadily rising. Not only does the widen-
ing distance between the average sawmill and the average lum-
ber user, between the average tract of pulpwood and the aver-
age newspaper, impose an increasing charge for freight; by
eliminating former sources of supply and competition it ac-
centuates the evils of abnormal price and transport conditions
such as the country is now experiencing.

In other words, the effects of forest depletion are felt not
only, indeed not chiefly, in the diminution of the total quantity
of timber remaining. Its injury is felt particularly through
the process of regional exhaustion through a location of the
timber still remaining so restricted as greatly to reduce its
availability to the average user of wood. It involves all the
elements of higher freight costs, more restricted competition,
dependence upon the efficiency of transportation, dependence
upon climatic or labor conditions in restricted regions, and
innumerable difficulties in getting needed materials of the right
kind and at the right time. If all the timber in the United
States were cut and our needs supplied by imports from South
America and Siberia, the situation would differ from that
which we are now rapidly approaching only in degree. The
effect of regional timber exhaustion may be compared with
what would happen if the orchards and truck farms in the
Kastern and Central States disappeared and the housewife had
to obtain the daily necessities of her table from Florida and
California.

One of the first effects of the depletion of our virgin forests
is the scarcity of timber products of high quality. This has
already reached a serious stage in the United States, particu-
larly in respect to the high-grade hardwoods which were among
the most valuable and distinctive of our original forests. An
increasing shortage of such products as compared with their
normal consumption must be expected. Not only will their
prices be high but it will be increasingly difficult to obtain
many of then in the quantities required by American manufac-
turers at any price.

TIMBER DEPLETION AND LUMBER PRICES.

Timber depletion, while not the primary cause, is an im-
portant contributing cause of high prices. The large curtail-
ment in lumber production in many regions, due to the cutting
out of their forests, has not only made the consumer pay more
for his lumber in the form of freight but has enhanced the
effects of congestion in transportation and of climatic and other
factors causing temporary curtailment of output in the regions
which still support a large lumber industry. It has restricted

68 «

 

opportunity for competition and thereby increased the oppor-
tunity of the manufacturer or dealer to auction his lumber
stocks for higher prices. This is at least one reason why con-
sumers of lumber in Pittsburgh are in some instances paying
40 per cent more than consumers of the same material in Port-
land, Oreg., over and above the freight charge between those
points.

If the war had been fought 40 years ago and had brought
the same aftermath in all particulars, it can not be doubted
that the presence of a large lumber-producing industry at that
time in the Lake States, in the hardwood forests of the Central
States, in New York and the northern Alleghenies, and on the
Atlantic seaboard would by the very extent of regional compe-
tition and the better distribution of transportation have afforded
a curb on the upward movement of lumber prices which did not
exist in 1919. The continued depletion of our forests will con-
tribute to similar sharp increases in lumber prices in time of
transportation or other crises and will also lead to high price
levels under normal conditions.

Whatever the precise effects of timber depletion upon recent
prices, whatever the tendencies in the lumber industry, there
can be no question that the real solution is to grow and protect

forests.
. IDLE FOREST LAND.

The depletion of timber in the United States has not resulted
primarily from the use of our forests but from their devasta-
tion. The kernel of the problem lies in the enormous areas of
forest land which are not producing the timber crops that they
should. There are 326 million acres of cut-over timberlands in
the United States. Their condition ranges from complete devas-
tation, through various stages of partial restocking or restocking
with trees of inferior quality, to relatively limited areas which
are producing timber at or near their full capacity. On
81 million acres there is practically no forest growth. This is
the result of forest fires and of methods of cutting which de-
stroy or prevent new timber growth. There were 27,000 re-
corded forests fires in 1919, burning a total of 83 million acres.
During the preceding year, 25,000 fires burned over 103 million
acres of forest land. An additional large acreage was burned
each year, of which no record could be obtained.

The area of idle or largely idle land is being increased by
from 3 to 4 million acres annually as the cutting and burning
of forests continue. The enormous area of forest land in the
United States not required for any other economic use, esti-
mated at 463 million acres, would provide an ample supply of
wood if it was kept productive. Depletion has resulted, not
from using our timber resources but from failure to use our
timber-growing land.

Nor does this situation exist simply in the less developed and
thinly settled regions of the country. The State of Massachu-
setts, as a typical example, contains denuded forest lands
within a stone’s throw of her dense population and highly de-
veloped industries, which have been estimated at 1,000,000 acres

.and which are largely idle as far as growing wood of economic

value is concerned.
A NATIONAL FORESTRY POLICY.

A remedy for this appalling waste must be found in a con-
certed effort to stop the devastation of our remaining forests
and to put our idle forest lands at work growing timber. It is
inconceivable that the United States should forfeit the eco-
TIMBER DEPLETION, PRICES,

nomic advantage of its enormous timber-growing resources,
and that it should go on using up its forests with no provision
for growing more until wood products are priced on the basis
of imported luxuries and their use is restricted to the lowest
possible scale of civilized existence. The concerted action neces-
sary to put an end to forest devastation must enlist the Na-
tional Government, the respective States, and the landowner. It
is impracticable to nationalize all of the forest land in the
country, or even the major portion of it. On the other hand,
the results needed can not he attained if timber production is
left to the initiative of the private owner of land or is sought
solely through compulsory regulation of private lands. Not only
has the public very large interests at stake which justify an
assumption of part of the burden; certain fundamental causes
of forest devastation can be removed only by public action.
Chief among these are the fire hazard of forest properties, par-
ticularly of growing forests, and a property tax system which
discourages or may prevent the landowner from engaging in the
business of growing timber.

On the other hand, the public can not and should not do it
all. A measure of responsibility rests upon the land owner,
and should be recognized in equitable requirements in handling
his land. It is a case of the public and the private owner
alike doing their part. Our policy must aim toward timber
production on somewhat the same footing as in France or
Scandinavia—as an established national practice. This calls
for a core of public forests, public instruction and example,
public encouragement in protection and taxation, and a respon-
sibility recognized by forest owners to keep their lands pro-
ductive. This report would not be complete without indicating
the essential steps which should be taken to stop timber de-
pletion. The plan here outlined is built up on the belief that
the most rapid progress will be made by utilizing the recog-
nized police powers of the several States to stop forest fires
and bring about better handling of privately owned forest
land. The equitable adjustment of timberland taxes in such
ways as will promote timber production is a responsibility of
the individual States. At the same time the national im-
portance of stopping timber depletion calls for the taking of
an active part by the Central Government, particularly in
aiding the forest activities of the States, standardizing tech-
nical practice in fire protection and forest renewal, and largely
extending national acquisitions of forest land.

THE FEDERAL LEGISLATION NEEDED.

The Federal legislation needed may be summarized briefly
as follows:

COOPERATION WITH STATES IN FIRE PROTECTION AND FOREST
RENEWAL.

Legislation is needed, as an extension of section 2 of the act
of March 1, 1911 (Weeks law), which will enable the Forest
Service to assist the respective States in fire protection, methods
of cutting forests, reforestation, and the classification of lands
as between timber production and agriculture. It should carry
an initial annual appropriation of not less than $1,000,000, ex-
pendable in cooperation with the States, with a proviso that
the amount expended in any State during any year shall not
exceed the expenditures of the State for the same purposes.
The Secretary of Agriculture should be authorized, in making
such expenditures, to require reasonable standards in the dis-
posal of slashings, the protection of timbered and cut-over lands
from fire, and the enforcement of equitable requirements in
cutting or extracting forest products which he deems necessary
to prevent forest devastation in the region concerned, and to
withhold cooperation, in whole or in part, from States which
do not comply with these standards in their legislative or ad-
ministrative measures. Federal activities under this law should

 

not, be restricted to the watersheds of navigable streams but

EXPORTS, AND OWNERSHIP. 69

should embrace any class of forest lands in the cooperating
States.

This law greatly extending the very limited Federal aid now
given to the States in fire protection, will enable the Forest
Service to organize and carry forward a nation-wide drive
against the chief cause of devastation—forest fires—and to fol-
low fire protection with such other measures as may be needed
in particular forest regions to stop denudation. It will also aid
States and private owners in restocking lands already denuded,
where tree growth will not come back of itself.

THE EXTENSION AND CONSOLIDATION OF FEDERAL FOREST
HOLDINGS.

Legislation is needed, in part as an extension of section 1
of the act of March 1, 1911 (Weeks law), which will permit
the rapid enlargement of the National Forests and the consoli-
dation of existing forest units for more effective administration.
This legislation should:

(1) Continue the purchase of forest or cut-over lands, as ini-
tiated under the Weeks Act, with annual appropriations of at
least $2,000,000.

(2) Authorize the Secretary of Agriculture to exchange Na-
tional Forest land, timber, or transferable timber certificates for
private timbered or cut-over land within or adjoining existing
National Forests.

(3) Withhold from any form of alienation, except under the
mineral laws, all lands now in Government ownership or control
but not embraced in National Forests or National Parks, includ-
ing canceled patents or grants, unreserved public lands, and
Indian and military reservations, which are valuable chiefly
for the production of timber or protection of watersheds, and
all lands of similar character hereafter revested in or acquired
by the United States, and authorize the President, upon recom-
mendation of the National Forest Reservation Commission or
otherwise, to incorporate such lands in National Forests.

About a fifth of the forest land in the United States is
now publicly owned. One of the most direct and effective
means of arresting devastation and offsetting the dangers aris-
ing from concentration of timber in private ownership is the
extension of publicly owned forests. It is, under present con-
ditions, the only effective means for overcoming the depletion
of old-growth timber of high quality and for restocking many
denuded areas which require planting.

The public should own a half of the timber-growing land in
the United States, well distributed through all the principal
forest regions. Every encouragement should be given to the
States and to municipalities to acquire forest land, but the
Federal Government must take the lead. In all Federal acquisi-
tions there must be an equitable compensation to communities
for the tax returns of which they are deprived.

Appropriations for the purchase of forest lands should be
used, first, to complete the program laid out for the protec-
tion of the watersheds of navigable streams under the Weeks
Act, through acquiring about 1 million acres in New England
and about 5 million acres in the southern Appalachians, and,
second, to acquire cut-over land, not necessarily upon important
watersheds but distributed through all the principal forest
regions where areas suitable for Federal management can be
obtained. Much desirable timber-growing land in the vicinity
of existing National Forests .can be acquired by exchange from
National Forest timber or timber certificates, and the adminis-
tration of the National Forests will be improved and simplified
through such consolidation. As part of this policy it is of
the utmost importance that all timber-growing land and land
valuable chiefly for watershed protection which the Govern-
ment now owns or controls or in any manner may acquire
shall be withheld from other disposition, with a view to its
incorporation in National Forests. An effective administrative
agency for carrying out this policy and for determining the

ie
70

TIMBER DEPLETION, PRICES,

best means of liquidating existing equities in such lands, as
in the case of Indian reservations, now exists in the National
Forest Reservation Commission, representing three executive
departments and both Houses of Congress, which passes upon
purchases under the Weeks law.

THE REFORESTATION OF DENUDED FEDERAL LANDS.

The current appropriations of the Forest Service should ‘pro-
vide for the progressive reforestation of denuded lands in
National Forests, to be completed in not more than 20 years,
with a yearly sum beginning at $500,000 and increasing to
$1,000,000 as soon as the work can be organized on that scale.

The National Forests contain several million acres of forest
land so severely burned that it can not be restocked without
planting. To restore this land to timber production is an im-
mediate Federal responsibility. Tree planting is most urgent
on denuded watersheds from which water is obtained for power,
irrigation, or municipal use. The work already done by the
Forest Service has established methods, costs, and the limits
of successful reforestation by artificial methods. This project
can, therefore, be undertaken upon an assured basis of costs
and results.

A STUDY OF FOREST TAXATION AND INSURANCE.

Legislation carrying a moderate appropriation is needed
which will authorize the Secretary of Agriculture to study the
effects of the existing tax methods and practices upon forest
devastation, to devise model laws on forest taxation, and to
cooperate with State agencies in promoting their adoption. The
same law should authorize a study of forest tnsurance looking
to the assembling of authentic data on risks, practicable forms
of insurance, the distribution of losses, ete.

The annual property tax is not adapted to lands employed in
growing 50 or 75 year timber crops, and is an important cause
of forest devastation. While land taxes rest with the States,
the Federal Government can do much to further wise changes
by an authoritative investigation and the formulation of
equitable tax laws adapted to timber-growing land. While for-
est insurance must be developed largely by private initiative,
investigation will be of material help in promoting this impor-
tant aid to timber growing by private land owners.

THE SURVEY AND CLASSIFICATION OF FOREST RESOURCES.

Legislation is needed, with an appropriation of $3,000,000, to
be available for from two to four years, as the work may re-
quire, which will permit the Secretary of Agriculture to survey
the forest resources of the United States, determine the present
volume, together with the present and possible production of
each class of timber in every important forest region, and ascer-
tain the requirements as to quantity and character of timber
of each State and of every important wood-using industry.
This survey should mark out, by broad lines, timber-growing
land from land suited to farm crops to the end that the forest-
growing resources of the United States may be fairly estimated
and utilized in consideration of other land uses. Senate bill
8555, for the survey of pulpwoods, covers part of the compre-
hensive investigation necessary.

Exact information upon timber stands or growth and upon the
areas of forest as distinct from agricultural land is not to be
had. It is essential for developing a national forest policy de-
signed to supply timber of the kinds and in the quantities and
places needed by the country.

CURRENT APPROPRIATIONS FOR FOREST RESEARCH.

The current appropriations of the Forest Service should be
sufficient to maintain experiment stations in all the principal
forested regions of the United States.

Further research is not necessary to determine the urgency

 

of the action proposed. But a continuous study of the technical
e

EXPORTS, AND OWNERSHIP.

phases of reforestation in the principal timber regions, with
their tremendous diversity of forests and methods of forestry
practice, is essential to carry the national policy forward to
the best results. Recent cuts in congressional appropriations
will necessitate closing the four experiment stations hitherto
established in the Western States. Not only should those sta-
tions be restored, but provision should be made for additional
experiment stations covering the other important forest regions
of the country.

The survey of forest resources should be undertaken at once;
but the essential facts as to timber depletion and its causes
are so clear that no time should be lost in enacting the legisla-
tion recommended, particularly for cooperation with States and
the extension of National Forests. The first point of general
attack in arresting devastation is to stop forest fires. Hence a
law permitting effective Federal and State action in this matter,
as already outlined, is of the greatest urgency.

THE STATE LEGISLATION NEEDED.

The State legislation necessary to stop forest devastation will
necessarily vary in different regions. Certain essential features
of such laws, however, are common to all of the States contain-
ing large forest areas. The more important of them may be
stated briefly as follows:

FIRE PREVENTION AND REFORESTATION OF PRIVATE LANDS.

State laws should provide for the organized protection of all
forest lands in the State during periods of fire hazard, the pro-
tected areas to include all cutover and unimproved land, as
well as bodies of timber. The protective system should include
patrols during dry weather, lookout stations, fire breaks and
roads where effective, and organized fire-fighting forces. Every
forest owner, large or small, should bear his proportionate
share of its cost, about half of which may be properly borne by
the State itself with the aid of the Federal Government. Police
regulations for the control of fire during dry periods, in con-
nection with railroad or industrial operations near forest land,
land clearing or slash disposal, hunting, etc., and for the con-
trol of incendiarism, form an essential feature of the protective
system.

State laws should establish the responsibility of owners of
forest land for complying with such equitable requirements as
may be determined upon and promulgated by the proper State
agency, dealing with precautions against forest fires, the dis-
posal of slashings, methods of cutting timber or of extracting
particular forest products, such as naval stores or pulpwood,
and such other equitable requirements as the authorized State
agency shall determine upon as necessary to prevent devasta-
tion. All timbered and cutover land in State or private owner-
ship which is not now required for other uses than timber
growing should be classed as “forest land” and placed under
the control of the State forest organization as far as it deems
measures of control necessary to prevent devastation.

The agency in each State charged with the administration of
the laws dealing with forest fires and devastation preferably
should be a nonpartisan commission exercising wide latitude
under the general authority of the State in determining equi-
table regulations applicable to various classes of forest lands.
It should have authority, backed by penalties prescribed in the
law, to enforce its regulations, subject to appeal by landowners
to a judicial review. It should have authority to investigate
any questions concerning the forests and forest industries of
the State and to advise and assist forest owners in carrying
out the most effective technical methods on their land. It
should shave authority and funds for growing planting stock
and distributing it to local owners in the State at cost. It
should have charge of the acquisition and administration of
State forests and of the classification of receded tax lands to
TIMBER DEPLETION, PRICES,

segregate areas which should be incorporated in State forests.
It should unify in one body all forest activities of the State.
The make-up of this commission should represent the general
public, its forest owners, its wood-using industries, and other
interests or organizations concerned with timber production.

STATE AND MUNICIPAL FORESTS.

Effective progress in restoring the enormous areas of de-
nuded land to timber growth can be made only by largely in-
creasing public forests. Supplementing the policy of forest
acquisition by the Federal Government, every State, including
States in the prairie regions, should acquire forest lands or
lands adapted to tree growth, and provide systematically for
the planting of such areas as will not otherwise restock with
timber of valuable species. In the forest regions State acquisi-
tion should be concentrated largely upon cut-over lands not
needed for other purposes. As a part of this program, pro-
vision should be made for the classification of lands owned by
the State or acquired through nonpayment of taxes or other-
wise, and for the segregation as permanent State forests of
areas best suited for growing timber or protecting watersheds.

State laws should encourage the acquisition of forest lands

 

by municipalities, to the end that public-forest ownership may

EXPORTS, AND OWNERSHIP. 71
be extended by any agencies capable of undertaking it. Public-
forest ownership not only is the most effective direct attack
upon timber depletion; it serves other vital public interests,
particularly recreation, the protection of water sources, and
the conservation of wild life.

Furthermore, publicly owned and administered forests,
widely distributed and setting standards of technical prac-
tice, will be of the greatest educational value and stimulus
to the general adoption by private owners of methods which
will keep their lands productive.

TAXATION OF FOREST LANDS.

The adjustment of existing methods of taxation to the grow-

‘ing of timber crops is one of the most essential steps for ar-

resting devastation. Every State containing forest areas should
provide for an exhaustive study of the effects of existing
methods and local practices of taxation upon forest devastation,
to the end that needed revision of tax laws may be drafted
and considered by its legislature. The nation-wide study of
forest taxation proposed for the Federal Government would
serve to assist and correlate the consideration of this problem
in the respective States.

 

 

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