238 JOURNAL OF FORESTRY 



amount to from about three to three and one-half billion dollars. Tak- 

 ing the smaller figure, the interest bill of the industry, at the present 

 rate of almost 7 per cent, must be in the neighborhood of $210,000,000 

 annually. With proper organization of forest-industry credit, interest 

 rates should shrink until comparable to the fates secured by other 

 industries with properly organized credit, although with often less 

 sound assets. Our railroads secure capital at 4 to 4^^ per cent, and 

 at this writing U. S. steel 5's are quoted at par. Forest industry 

 should not pay to exceed an average of 5 per cent, at which rate the 

 above interest bill would be reduced to $150,000,000 per annum — a 

 saving of $60,000,000 annually. This does not read large after 

 examining a report on sums squandered on airplane production ; but 

 we can better understand the magnitude of such a saving when we 

 reflect that it is twelve times the amount spent annually by the Forest 

 Service in managing the National Forests. It is also probably four 

 times the amount necessary to regenerate by natural inea)is, supple- 

 mented by some artificial aid, all commercial forest areas annually cut 

 over in the United States, and protect forests in commercial forest 

 regions from fire. Such a saving is therefore of the utmost importance 

 to forests and forestry. 



REASONS FOR PRESENT HIGH INTEREST RATES 



Before addressing ourselves to the method of making this saving, the 

 question arises as to why the interest rates are higher in forest industry 

 than other industries, often with less stable assets? High interest rates 

 arise in forest industry because of speculative reputation of industry, 

 high cost of investigating loans, small individual borrowings by unor- 

 ganized borrowers competing with each other for capital, and other 

 minor factors. The conditions are very nearly identical w'ith those 

 maintaining in farm borrowings. All these disabilities of forest indus- 

 try as a borrower can be removed in large measure by organizatiorl if 

 Americans will exercise some of that genius with which they freely 

 credit themselves. It is unlikely, however, that the industry possesses 

 entirely within its own ranks the requisite initiative and powers to 

 organize effectively for this purpose. It will need aid of an impartial 

 public agency, and, since the organization must be national, it must be a 

 national agency. Fortunately, there is ample precedent for such Fed- 

 eral organization, specifically, in the Farm Loan Board and. in a general 

 way, the Federal Reserve Board. 



