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Till' iiiiiiual report of tlic Vnited States I'orcst Service, lor the 

 fiscal year emliii}; June '.W. J!)|;i. has lieeii imldishnl by Henry S. 

 Uraves, who is at the hca.l of the bureau. The report fills fifty-six 

 [irinteil i>ages, and enters minutely into the work already accom- 

 plished or planned for the future. A substantial increase in the 

 amount and value of timber cut from the national forests is .shown, 

 and a still greater increase in the amount and value of timber 

 sold, largely for future cutting. The gain in timber actually cut 

 was lo per cent over the preceding fiscal year; in sale receipts, 27 

 per cent; and in amount of timber sold, 167 per cent. 



In 1913 the total sales amounted to more than 2,000,000,000 board 

 feet with a stumpage value of nearly $4,.500,000, as against less than 

 S00.000.il00 board feet with a stumi)age value of $1,600,000 in 1912. 



The sales business of the year showed operations in eighteen 

 states, including Alaska, or in all states in which national forests 

 are situated, except Kansas, Nebraska, and North Dakota. The 

 largest sales were in California, followed in order by Oregon, 

 Montana, Washington, Arizona, Idaho, Colorado, Arkansas, Alaska, 

 and Utah. In actual cut of timber the order is somewhat changed 

 and the first ten states rank as follows: Montana, Idaho, Arizona, 

 California, Oregon, Colorado, Alaska. Washington, Arkansas, and 

 New Mexico. 



It is pointed out that a large part of the proceeds will come in 

 slowly, because extensive improvements must be constructed before 

 cutting can begin, and because operations extend over a term of 

 years. In most large sales one or two .vears are required for 

 preliminar.v construction. 



The increased sales were made up partl.v of relativeh" small 

 contracts for local uses, but many large contracts were let for 

 inaccessible areas whose product will be marketed in the principal 

 consuming regions of the United States. Twelve large contracts 

 were approved for an aggregate total of 1,-552,39S,000 board feet. 

 The most imj)ortant of these was a sale of 800,000,000 feet on the 

 Sierra national forest. California, consummated after two years 

 spent in estimates and negotiations. This sale well illustrates the 

 jiolicy pursued in developing inaccessible forest districts. Approxi- 

 mately seventy miles of railroad must be constructed into the 

 Sierra forest, together with a complete mill and logging plant. 

 Twenty-two .vears are allowed for the removal of the stumpage, 

 with provision for readjustment of the price at intervals of five 

 years. 



Sales under similar terms were approved for 345,000,000 feet on 

 two other national forests. 



The most significant of pending transactions are three proposed 

 sales of luiljiwood, two of which are in the Tongass national forest, 

 -Vlaska. The sale of 1.53,000,000 feet on the national forests of 

 South Dakota will e.xtend widely the local region supplied with 

 lumber from the national forests in the Black Hills. 



The main causes of increase in timber sales were: The partial 

 recovery of the lumber market from the depression of 1909-11; the 

 policy of making large sales which has encouraged substantial com- 

 jianies to seek locations in national forests; and the general 

 stimulus to business in the West, due to prosjiective transportation 

 b.v the Panama canal. 



First in demand is the white pine timber of northern Idaho, now 

 wiilely used to supplement the white pine forests of the Lake 

 States. Second only to this white pine is the demand for sugar 

 ]iine in California ami for western yellow pine in California and 

 eastern Oregon and Washington. 



The demand for Douglas fir on the northern Pacific coasi has 

 been less active on account of the enormous amount of private 

 .stumpage. There arc, however, increased sales in western Oregon 

 and Washington. The demand for western red cedar throughout 

 the Northwest, generally, is very active, both for poles and for 

 shingle stock. 



Small sales, however, still form the great bulk of the transac- 

 tions, indicating the continued local character of much of the 



business. As compared with 1912, the number of sales of a valua- 

 tion of $.500 and less increased 6.26 per cent. 



There were 1,333 different sales in Montana, the largest number 

 of sales in any one state, this number being due to more than 

 1,200 small sales. In number of sales, Colorado, Idaho, California, 

 Arizona, Utah, New Mexico, Nevada, Oregon, and Alaska follow in 

 order. 



In addition to the amount of timber sold there were given awav 

 121,750,000 board feet of timber, with a total value of about 

 .•(il92,000. This was disposed of under what are Known as "free 

 use permits," by which material is given free in limited quan- 

 tities to local residents, miners, and others engaged in developing; 

 homesteads or mining claims on the forests. Most of the timber 

 so given is dead, the proportion of dead timber being nearly three 

 times that of green. 



In making its timber sales the Uorest Service has to keep in 

 mind a number of different problems; its aim can not be simply to 

 sell timber. It niu.st prevent losses by fire; must utilize the ripe 

 timber which can be marketed, and cut such timber so as to insure 

 the restocking of the land and a continued forest production; it 

 must sell ripe timber at the appraised market value as required by 

 statute so as to give a proper return to the i)ublic which owns it; 

 must prevent speculative holding of government timber and its 

 monopolistic control, and use it as far as possible to maintain 

 competitive conditions in the lumber industry. 



Further, the national forests must provide for the requirements 

 of local communities and industries, including the free use of 

 timber and its sale at cost to settlers; make available for settlers 

 timbered lands of agricultural value and at the same time prevent 

 their speculative acquisition and encourage permanent and genuine 

 farming; and finalh', the forests should be made to return to the 

 government as soon as possible the entire cost of protection and 

 administration and to yield a revenue to the states which are 

 entitled by law to 25 per cent of all gi-oss receipts as an offset to 

 the loss of local taxes through government ownership. 



Most of these aims require no discussion; others still cause some 

 comment. 



For example: It has been urged that the government should, 

 through low stumpage rates, force timber upon the market and 

 thus reduce the price of manufactured lumber. The present policy, 

 however, can not be changed without a change in the law. No 

 such change is called for, sa,vs Mr. Graves. Sacrifice prices, unwar- 

 ranted by actual market conditions, would reduce the returns to 

 the public and to the states, but they would not reduce the price 

 of manufactured lumber to the consumer. In the United States 

 ninety-nine and one-half per cent of the timber cut comes from 

 private lands. Competition in production is exceedingly keen. 

 The mill capacity of the country is considerably greater than its 

 normal consumption of lumber. This creates a constant tendency 

 to produce more lumber than the market will take. During a period 

 of depression actual overproduction appears; stock on hand mounts 

 up; price concessions to attract purchasers fail to bring the hoped- 

 for acceleration of sales, and as returns fall below the cost of 

 proiluctiou curtailment is forced. From 1909 to 1911 many saw- 

 mills operated at un actual loss because carr,ving charges on their 

 indebtedness would not permit them to dose down. One hundred 

 and thirt.v mills in the two leading lumber-producing states were 

 altogether idle in 1909. So long as comjietitive conditions obtain 

 among manufacturers the lowering of national forest stumpage 

 rates would neither benefit the consumer nor appreciably affect the 

 supply of lumber on the market. One-half of one per cent of the 

 total cut is too small a fraction to have any influence on prices; 

 and although this fraction might be made several times as great 

 as it is by offering government timber at a merely nominal charge, 

 the effect wouhl be simply to throw money away to procure the 

 cutting of i)ublic timber in ))lace of private. 



Local demands are invariably given preference in the disposition 



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