18 JOURNAL OF FORESTRY 



idea that the only permanent solution to this problem will inevitably be 

 one that includes keeping this forest resource continuously productive. 



2. An over-investment in mills and logging camps — i. e., in the forest 

 utilization end of forest industry. 



At the recent Forest Industry Conference in Portland, Oregon, 

 already cited, it was brought out that the ten-hour operating capacity 

 of sawmills capable of operating is at least 60 to 75 per cent greater 

 than the market requirements demand.^ 



What do these figures mean ? They mean that the average sawmill 

 -and logging camp in the United States cannot operate more than 

 two-thirds of the time. They mean that from the average investor's 

 standpoint, at least one-third of the capital put in sawmills and logging 

 camps has been wasted, and from the public standpoint that one-third 

 of the investment was unnecessary to supply needed product. Since 

 the capital invested in this field, according to the 1914 census, is over 

 $916,000,000, these figures mean that over $300,000,000 was invested 

 unnecessarily in this portion of the industry unless it be necessary to 

 maintain an excess of investment of this size in order to maintain the 

 time honored system of competition. These figures, in fact, represent 

 the cost of competition. 



An easy check on these figures can be had by considering how much 

 capital would be necessary to construct and equip camps and mills 

 sufficient to supply the entire present market, if all the present camps, 

 mills and equipment were wiped out. Considering the present annual 

 demand to be 40 billion feet b. m., and that there can be 300 days of 

 operation each year, it appears that about 134,000 M feet b. m. must 

 be manufactured daily to supply the market. No excess capacity is 

 needed to supply seasonal demand, because limiber can be easily stored 

 from season to season. In most regions, mills can operate throughout 

 the year, though in a few localities logging may have to shut down at 

 some seasons. Assuming that mills of efficient size are built, $3,500 is 

 considered an ample sum to construct and equip camp and mill capacity 

 sufficient to turn out each 1,000 feet b. m. daily. Hence, to turn out 

 134,000 M feet daily, 134,000 X $3,500 = $469,000,000, the amount 

 necessary. These figures assimie that the mills built shall be of the 

 most efficient, electrically operated type. The average existing type is 

 more cheaply built. By this method the over-investment indicated is 

 close to $450,000,000, but in order to be conservative I shall use the 



'West Coast Lumberman, November 1, 1916, p. 34. 



