THE PRESENT CONDITIONS IN THE LUMBER INDUSTRY 389 



billion feet to approximately 40 billion. General industrial conditions, 

 largely beyond the control of the lumberman, determine the demand 

 for lumber. Because of its bulk and weight the export business is 

 limited, and as yet has played but a relatively small part in tlie total 

 distribution of lumber. Substitute commodities since 1900 have dis- 

 placed the equivalent of nearly 8 billion feet of lumber annually and 

 the amount of such displacement appears to be increasing. The pros- 

 pect of a substantial net increase in the amount of timber that can 

 be profitably sold is a doubtful one. 



Under these conditions, which promise a long postponement of 

 the income from timber holdings, the amount of the reserve supply 

 of standing timber in private, ownership is indicative of the unwisdom 

 of many of the timber investments. In the Douglas fir region of 

 western Washington and Oregon there is in private holdings the 

 equivalent of 108 years' supply, or of 165 years' supply including the 

 publicly owned forests. In the Inland Empire region, eastern Wash- 

 ington and Oregon, Idaho and western Montana, there is a privately 

 owned supply, at the present rate of cutting, for 91 years ; in Cali- 

 fornia for 153 years ; in the southern pine region for 24 years. More 

 than one-third of the total timber in the West is owned by the Gov- 

 ernment. The addition of this would, of course, increase propor- 

 tionately the reserve timber supply. These figures moreover take no 

 account of regrowth, which is estimated by the Forest Service at 

 approximately 40 per cent of the present average cut. The cutting of 

 much of the virgin timber will probably be still further postponed 

 because of the increasing competition met from lumber cut from 

 second-growth timber. For instance, New England now produces 

 more white pine lumber than does the State of Michigan, famous for 

 its great pineries. In view of the increase in the prospective period of 

 waiting involved, it is probable that much of the timber, especially in 

 the Pacific Northwest, has been overcapitalized. 



Commercial Capitalisation of Timber ' 



The so-called "commercial valuation" of all the privately owned 

 timber in these five States of Washington, Oregon, California, Idaho, 

 and Montana is approximately $1,200,000,000. or more than $1 for 

 each 1,000 feet. Moreover, much of the capital invested in standing 

 timber has been borrowed on timber bonds, bearing from 6 to 8 per 

 cent interest. Likewise the taxes and the forest protection and ad- 



