CANADIAN LUMBER COMPETITION 



139 



in times of stress. Admittedly their 

 business is demoralized. As in the case 

 of British Columbia there is an excess 

 of productive capacity which cannot 

 adjust itself to demand because of 

 small-unit production and the facility 

 with which supplies of raw material 

 may be obtained. On both sides of the 

 line the industry is in a helpless condi- 

 tion. Every thousand feet of lumber 

 unmarketable at home which can be 

 sold on the opposite side of the line is 

 sold at any price above the cost of the 

 labor applied in producing it because 

 such sales reduce the cost of the output 

 and add to the profits of the producer 

 by helping him meet his overhead. 

 Under the conditions which have pre- 

 vailed during the greater part of the 

 past seven years lumber manufacturers 

 have followed receding hope until many 

 are seeking the only direction of motion 

 their perspicacity reveals — the return 

 of their investments in stumpage 

 through the immediate agency of the 

 saw. Lumbering is a primitive in- 

 dustry in which countless men having 

 primitive ideas of business are able to 

 engage. It is undergoing enforced read- 

 justment because it has at last reached 

 the period when it must yield to the 

 demands of modem business. Neither 

 protective tariffs nor any other legiti- 

 mate forms of legislation can save it in 

 the absence of large control of raw 

 material, large scale production and 

 applied modem business principles. 



From the standpoint of national 

 economy there would be danger in 

 restoring a duty on limiber. The 

 immediate effect would be to attract 

 into a less profitable industry capital 

 that would have been invested in more 

 productive channels. As a result waste 

 would be further increased with corre- 

 sponding loss to communities and 

 countries. Temporary depression has 



reduced the Canadian demand for 

 British Columbia lumber and the United 

 States will be made a diunping ground 

 for the surplus of its mills at prices as 

 close to the cost of production as may 

 be necessary to sell their product, 

 until such time as the surplus of pro- 

 ductive capacity shall be forced out of 

 business or more profitable markets 

 can be found." 



British Columbia mills cannot com- 

 pete with American mills and earn a 

 profit; but so long as a market can be 

 found they will avail themselves of it 

 and be large factors in continuing the 

 present bootless condition. It is a 

 raw, primitive country engaged in 

 primitive industries. Its forests com- 

 prise its chief resource. It sends to us 

 its lumber, shingles and pulp in return 

 for our manufactured and agricultural 

 products. If free trade be continued 

 each country will tend to produce only 

 those things for which it is best adapted 

 and rely upon the other for the things 

 desired and in the production of which 

 it has a relative advantage. While 

 the United States produces an enormous 

 volume of raw materials it is destined 

 to be a great manufacturing nation. 

 Our markets for manufactured goods 

 must be found in countries like Canada. 

 During the fiscal year ending June 30, 

 1913, we sent to each individual in 

 Canada about $52 worth of exports 

 and took from each individual about $15 

 worth of imports. 



Unless we give we cannot receive. 

 The problem resolves itself into the 

 economic question of whether or not 

 those lumbermen of the United States 

 who are impoverished by their own 

 inability to apply fundamental prin- 

 ciples of efficiency should be protected 

 at the cost of other industries until an 

 enforced readjustment is complete. The 

 advantages of the contest are theirs. 



In these paragraphs the author has borrowed liberally from "Modern Business." 



