95 



the cessation of this barge traffic, an increasing proportion of the supply 

 came from the South, which still furnishes over 50 per cent of the total. 

 Freight charges rose sharply. But already 25.85 per cent of shipments 

 come from the Rocky Mountain and Pacific Coast region, 18.58 per cent 

 coming from two states, Washington and Oregon, with an average 

 freight rate nearly twice that from the South. Within the next decade, 

 these percentages will be reversed and the proportion shipped from the 

 far west will inevitably rise to more than one half of the total, while 

 that from the South will be correspondingly reduced by depletion and 

 exhaustion of her virgin timber lands. 



Even the western timber is not unlimited. The area upon which it 

 grows is scarcely a tenth of that which bore the forests of southern yel- 

 low pine, and while the stand is heavier per acre, the demand of the 

 entire country will be concentrated upon it. Imports into far eastern 

 states are increasing rapidly and are successfully competing with south- 

 ern yellow pine. 



Freight rates advanced sharply during the war and will probably 

 never recede to their former levels. 



There is no question about the greater costs of logging nor the rela- 

 tive inaccessibility of much of the timber which is now being logged. 

 Operators are forced to cut the more accessible timber first, when prices 

 are low and margin for profit and stumpage is small. By the time these 

 easy chances are cut over, prices have usually risen sufficiently to permit 

 the logging of more remote stands. Finally, in a region of high prices 

 near to markets, the most difficult chances can be logged at a profit, 

 and the margin will bear the cost of long freight hauls to bring timber 

 from remote regions, and of expensive operations in those regions to 

 tap the reservoirs of timber in rough mountainous districts, by means 

 of logging railroads, flumes, or other costly improvements. 



With the exhaustion of the supply in any locality and the change 

 from an exporting to an importing region, the average local prices are 

 fixed by imports and based on cost of obtaining this imported lumber. 

 The residual local timber-supplies then advance rapidly in value, espe- 

 cially in stumpage value. It follows that those who hold such residual 

 stumpage profit largely by such holdings. This factor operates power- 

 fully to make the local production of timber i)rofitable, since such prod- 

 ucts get the advantage of the freight differential and can easily under- 

 sell the imported product if of ecjual quality, and still return large profits 

 to the owner or producer. But if through complete breakdown of sup- 



