20 JOURNAL OF FORESTRY 



American- people, including many in influential quarters, are, as yet, 

 enthusiastic supporters of the industrial system of building three or 

 four plants where two are needed. This system is called by its sup- 

 porters "healthy competition," but in my judgment the term is incor- 

 rectly applied. "Healthy competition" properly applied will upbuild 

 the forces of the individual, and improve industrial processes, but I 

 do not concede that such waste as is here indicated is a necessary 

 adjunct, provided we can apply collective intelligence to this problem. 

 The term "destructive competition" is more definitely descriptive. 



I do not question that competition was an acceptable process in the 

 days of very small-scale manufacture. Capital was then scarce and 

 would not be invested except on a good chance of getting returns. 

 Transportation of product to a great distance was rare, and the market 

 being of small scope was easily estimated in advance and over-invest- 

 ment seldom resulted. Moreover, the failure of a small plant produced 

 no greater social disturbance than does the failure of a farm, or small 

 retail establishment today. Only a few individuals were affected, 

 and the labor involved easily found employment in the same locality. 



The relative abundance of capital today, and its enormous out- 

 turn in product in the modern industrial plant, puts quite another face 

 on the problem. We must have a care here, or modern industry will 

 destroy as much capital as its enlarged facilities for production can 

 create. It seems probable that here is one of the important reasons 

 why, with the enlarged means of production and abundant resources 

 everywhere at hand, we have not been able to increase the general 

 standard of living as everyone agrees we should. Instead of using the 

 increased product of modern industry for consumption, we have put 

 it back into machines and plants we cannot use. Then, having saddled 

 these unnecessary plants on industry we must constantly spend addi- 

 tional capital in maintaining what we have created. The result is that 

 the human factors in production, both employer and employe, have 

 to spend so much time in maintaining the industrial establishment that 

 relatively little time is left in which to produce goods for consumption. 

 After goods have been produced the persons in other industries cannot 

 buy them because the lion's share of their effort must also go to maintain 

 their own industrial machine. 

 Effect of Over-Investment in Lumber Industry on Investors Concerned. 



The first effect of over-investment is, as has been seen, creation of 

 a manufacturing capacity beyond what the market will absorb, at 

 least at remunerative prices. Under competition surplus mill capacity 



