July 10, 1913. 



^ TO^v;i^i;^^5^^;)^^aA;^;^^;)i ^SM^lTO;^^ 



'^^ Lumber Output and Prices Compared -^J 



The notion which prevails quite generally that as the cut of lumber 

 declines the price of that particular kind advances does not seem to be 

 justified by the facts. The commonly accepted law of trade, to the 

 effect that price is controlled by supply and demand, is not exactly 

 disproved, but its workings are shown to be somewliat doubtful in the 

 case of lumber. The matter is so complicated that it cannot be easily 

 reduced to a question of supply and demand; because, if the supply 

 of one kind of wood declines, that of another may increase, so that 

 the failing supply is apparent only. 



Be this as it may, an examination, species by species, of sawmill 

 output and millyard prices during a term of years brings out some 

 interesting comparisons. If the thirteen years, from 1899 to 1912, 

 both inclusive, are taken as the basis for an investigation, and all 

 woods for which complete statistics have been compiled during that 

 period are included, it is found that twelve have shown an increase in 

 output of lumber and nine have shown decrease. If the millyard 

 values during the same period are examined, it is found that every 

 one of the woods shows increase in value. This is shown separately 

 for each wood in tlie table which follows. The table is compiled from 

 government reports on this subject covering the whole of the thirteen 

 years period for every one of the species named. As far as the 

 figures are concerned, they are the most complete and accurate in 

 existence. It should be particularly noted in the table which follows 

 that all figures are percentages. 



THIRTEEN YEARS OF LUMBEB CUT AND VALUES 



Percentage of Percent 



increase or decrease Increase 



of lumber cut, In value, 

 Wood 1899-1912 1899-1912 

 Increase marked -f 

 Decrease marked — 



Larch 884+ 49 



Douglas flr 198+ 33 



Birch 192+ 39 



Hickory 187+ 24 



Chestnut 167+ 22 



Red gum 144+ 31 



Cypress 100+ 51 



Yellow pine 63+ 70 



Maple 61+ 32 



Cedar 41+ 32 



Redwood 39+ 39 



Western pine 29+ 40 



Basswood 4 — 50 



Ash 14- 27 



Spruce 15 — 51 



Oak ■.. 25- 42 



Hemlock 29- 37 



Elm 43— 47 



Yellow poplar 44 — 71 



Cottonwood 45— 97 



White pine 60— 51 



Average Increase 11.6 per cent 38 per cent 



If there is any marked tendency toward increase in the price of 

 lumber as the cut decreases, the foregoing table does not show it. The 

 millyard value of every wood increased. That happened whether the 

 cut of the wood increased or decreased. "Value did not rise in an 

 inverse ratio to the decline in output. For instance, the cut of bass- 

 wood fell off 4 per cent in thirteen years, and its value rose 50 per 

 cent; but ash declined 14 per cent in cut, and rose only 27 per cent 

 in value. The decline of white pine in output was 60 per cent, and 

 the advance in value only 51 per cent. It value rose approximately 

 the same as basswood, though the decline in output was 60 per cent 

 against only 4. 



These comparisons apparently indicate that there is no direct con- 

 nection between the supply of a particular wood and its value. If 

 such were the case, the value ought to rise as the cut faUs, but it does 

 not do it. 



The same conclusion is reached by handling the figures for those 

 woods which increased in both cut and price. If the supply becomes 

 larger, the value, according to the economic law above quoted, should 

 show a corresponding decline ; but it does not do it. For example, the 



millyard value of larch in 1899 was $8, when the cut was 42,394 feet; 

 and though the cut had grown to 407,064 feet in 1912, the value rose 

 also to $11.96. 



The output of California redwood increased 39 per cent, and the 

 value advanced by exactly the same per cent. Southern yellow pine, 

 which includes all four of the southern pines, rose 63 per cent in 

 ouput and 70 per cent in price. 



There is no question that a sudden and phenomenal advance in 

 price of any one of the woods in the table would result in a speedy 

 increase in the output. Suppose, for example, that a new use for 

 chestnut should be found, and the demand should be so great that 

 buyers would pay $50 for it in the yard, instead of $16.62 as in 1912. 

 The cut might reasonably be expected to double within a year; but 

 that would be an unusual case. Nothing of that kind has occurred 

 with any wood in recent years, for the greatest percentage of increase 

 has been 97 per cent, with Cottonwood, and that has not been suf- 

 ficient to increase the output. 



A few woods have advanced in price because they are scarce and 

 it takes a higher price to bring them to market. White pine and Cot- 

 tonwood are clearly in that class. But most of the woods are still 

 so plentiful that scarcity has had nothing to do with the advance in 

 their cost. Douglas fir, western pine, and redwood are in that class, 

 yet the first has advanced in value 33 per cent, the second 40, and 

 the third 39. The increase in their value, and in other woods similarly 

 situated, may have been influenced by a number of factors; but un- 

 questionably the chief one has been the increased cost of lumbering, 

 due principally to higher wages. As far as can be figured out, supply 

 and demand has had nothing to do with it— at any rate, supply has 

 not, for each of these three woods is sutficiently abundant to furnish 

 every market in the world for fifty years. 



Advance in Cost Moderate 



The advance in the price of lumber during the thirteen years under 

 consideration has been moderate. The talk of "doubling the price" 

 is not based on facts, as the foregoing table shows. It can be shown 

 with equal clearness that most other commodities entering into the 

 lives of the people have advanced in value as much as lumber, and in 

 many instances considerably more. Farm products are often taken 

 as a basis for comparison, and it is instructive to do this with regard 

 to lumber. The figures given below are not wholly comparable with 

 those for lumber, because the periods covered are not exactly the 

 same. The agricultural statistics of prices are compiled from the 

 census returns for 1899 to 1909, which are the latest, while figures for 

 lumber come down to 1912. With that explanation the following 

 figures will not be misleading. Remembering that lumber 's value since 

 1890 increased 38 iier cent, the figures for animals will be understood. 



Percent increase in value 



Poultry 53 



Sheep ^^ 



Hogs f^ 



Mules ■. ^^'^ 



Horses ^^^ 



The advance in value of grain and other products of the farm dur- 

 ing the specified ten-year period is here given: 



Percent increase in value 



Hay II 



Rye tt 



Barley »^ 



Orchard products "^ 



Wheat '^J 



Oats ''^ 



Corn ll 



Cotton •'^ 



Every one of these, except hay, showed a greater advance than 

 lumber. Wool's percentage of increase in value was 35, eggs 74. 

 During the same period fertilizers advanced 115 per cent, and farm 

 labor 83 per cent. The cost of boots and shoes advanced 38 during 

 the ten vears, just the same as lumber's advance in thirteen years. 

 In view of the showing thus made— which might be extended abnost 

 indefinitely— it appears that the increased cost of lumber has been 

 less than that of most commodities. 



21 



