22 JOURNAL OF FORESTRY 



not only to the point of fair prices but to the point of high prices. These 

 are reflected in high earnings of such capital as remains in the industry. 

 But these high earnings cannot be continued under competition, because 

 over-investment will again certainly be induced and the cycle just described 

 again repeated. 



This alternative attraction and repulse of capital coincides with 

 periods of prosperity and depression in the industry. An industry 

 organized on the basis of extreme competition as the timber industry 

 is must continually go through these cycles. Alternate periods of 

 prosperity and depression are inevitable, because prosperity of the 

 industry leads directly to over-investment of capital and hence to a 

 condition where every dollar invested is ready to beat every other 

 dollar over the head. 



It is necessary to consider competition also from the standpoint of 

 continuous production from our forests. From the forestry standpoint, 

 continuous production means literally that each forest shall be made 

 to produce continuously from year to year. In order to take advantage 

 of favorable prices, the cutting may and should be speeded up in pros- 

 perous times, but this speeding up must be compensated for in dull 

 times. To go any further toward periodic yield renders the enterprise 

 financially impracticable to the average forest owner. These facts 

 being admitted, it is at once apparent that, from the forestry standpoint, 

 destructive competition begins when more mills are built in any forest 

 producing unit than the unit will support permanently. The competition 

 here results in the waste of capital put into the unnecessary^ mill and, 

 still worse, the destruction of the forest which formed the basis of the industry. 

 Why? Simply because when the forest or any other resource ceases to 

 yield revenue the owner loses interest in it. It is then left to the mercy 

 of the elements. Some resources can withstand this treatment, but we 

 know only too well what fire does to the forest. If we wish to keep the 

 forest resource in productive condition, then the standard amount of 

 mill construction for any given producing unit is that amount which 

 will utilize continuously the full product of the forests in that unit. 

 There are unimportant cases where small forest tracts will support a 

 mill for only a short time. Here the portable mill or temporary struc- 

 ture is indicated. As these types are so inefficient in operation a better 

 solution in most of these cases is to ship the logs to the more efficient 

 permanent plants. The practicability of this is proven by experience 

 of the Pacific Northwest, where logs are regularly transported 50 miles 

 and more by rail on common-carrier railroads. American forest 



