60 ANNUAL REPORTS OP DEPARTMENT OF AGRICULTURE, 



payment may not reasonably be expected; that if the home builder 

 buys for his own use, the Government should seek reimbursement of 

 expenses, not profit; but that otherwise the Government should obtain 

 the market value of the timber, and should seek to have that value 

 fixed by competition unless the amount involved is too inconsiderable 

 to make the procedure involved worth while. 



When National Forest timber is sold it is the duty of the Govern- 

 ment to protect the public against monopoly. To secure a monopoly 

 profit there must be such control of a particular market as will enable 

 those having the control to charge an unfair price. From the begin- 

 ning the Forest Service methods of selling timber have been devised 

 with a view to preventing timber monopoly by purchasers. A fair 

 operating profit to the purchaser in his investment is jDermitted, but 

 no more. Through stumpage appraisal a minimum price is fixed, 

 beloAv which the timber will not be sold. This price is based on a 

 close estimate of the cost of manufacture and the market price of 

 the product. The sale is then advertised, and competition is sought 

 through publicity. In advertising for bids the right is reserved to 

 reject any bids acceptance of which would tend to establish monopoly 

 conditions. Wlierever opportunity offers, sales are made to compet- 

 ing firms. If it appears that monopoly control might take place 

 through business affiliations of apparently independent operators, a 

 certified statement of the relation of an applicant or bidder to other 

 purchasers, or a certified statement of the membership of firms or 

 lists of stockholders in corporations, may be required. Bids from 

 lumber companies wdiich have large holdings of their own may be 

 rejected in order to give preference to companies not so supplied, and 

 companies wdiicli are operating under one sale may be refused an- 

 other sale until the first is completed. Thus by the exercise of admin- 

 istrative discretion in the acceptance of bids and in the location of 

 sales a regulative principle is applied to that part of the lumber 

 industry which utilizes National Forest supplies. 



The necessity for careful provision against monopoly has become 

 more conspicuous during the past year because of the larger bodies 

 of timber which are now^ being offered for sale, with proportionately 

 longer cutting periods. In my report for 1911 I made mention of 

 the fact that three sales had been advertised on terms which would 

 permit the cutting to extend over from 7 to 10 years. Such sales 

 offer the only means by which lumbering can be extended into many 

 districts where cutting should begin at once. Immense bodies of 

 mature timber which should be harvested to prevent deterioration 

 and to make room for new growth are unmarketable for lack of 

 means of transportation. Usually railroad development is the 

 recourse for lumbering them. Naturally no one will undertake to 

 build from 30 to 100 miles of railroad into a mountainous wilder- 



