26 JOURNAL OF FORESTRY 



tion of proper species and the intelligent use of the ax. These two 

 agencies constantly improve the soil itself without the addition of 

 artificial fertilizers. It must also be remembered that our two other 

 great perpetually productive resources, the agricultural soil and water 

 powers, are at many points dependent on the forests. In the long 

 run there is little doubt that the steel industry, itself, would suffer most 

 seriously from discontinuance or serious damage to the Itmiber industry. 

 Although a competitor, the Itimber industry is at the same time a 

 great consumer of steel. 



The simple fact is that for every resource we leave unused we de- 

 crease the ability of our country to support population. We thus 

 fail to that extent to create a demand for the products of other indus- 

 tries, all of which suffer by the lack of demand for their products. The 

 forest resource already supports directly probably not less than 3,000,000 

 persons, including workers and their families directly dependent 

 on the Ivmiber industry. No one knows how many merchants and 

 middlemen and all sorts of trades are dependent on the industry. It 

 also supports, probably into the millions more, those engaged in puly) 

 and other forest industries. Yet wood is a product which can be grown 

 in larger quantity than we now use on land useful for little else. This 

 resource can be made to support a much larger population than it does 

 now and hence furnish a much larger market for other industries 

 than it does today. 



6. Excessive cost of capital. — W. B. Greeley, at the Portland con- 

 ference, showed that the industry is paying 63^2 per cent or more for 

 borrowed capital and that from 30 to 50 per cent of the capital is bor- 

 rowed. If 6^ per cent is the interest charge, the total cost, considering 

 underwriting fees and cost of appraisal, cannot be less than 7 per cent- 

 The per cent of capital borrowed is by no means excessive, providing 

 the industry can pay the interest rates. As it is, I beheve, well estab- 

 lished that the industry is earning less than 3 per cent, at least in many 

 regions, it is evident that the position of the business man who pays 

 7 per cent is untenable, unless his borrowings are very small, but this 

 latter is a condition we should not expect or desire. It is the function 

 of the business man to take the capital of those who are unable to take 

 direct part in the organization and management of industry and make 

 it productive. When this process ceases the community stagnates 

 and capital brings no return. The business man cannot be expected 

 to perform this function vuiless he can make a profit on the capital 

 borrowed. 



