HK/LGP Nov. 1, 1918, 



III 



FACTORS AFFEQTING TH5 FLUCTUATIONS OF LUMBER PRICES. (1) 



by 



Homer Hoyt 

 Bureau of Research, War Trade Board. 



1. The laajor Swings of Lumber Price s,16 73- 1918: 



The period from 1873 to 1898 was characterized by relatively low 

 lumber prices. The successive opening of new virgin forests prevent- 

 ed the rise in price which the rapid cutting of our timber would 

 otherwise have occasioned. When the White Pine of the Lake States 

 began to show signs of exhaustion, Southern Yellow Pine was ushered 

 in as a general construction wood, and when the flood of Southern Yel- 

 low Pine reached its erect, the stands of Douglas Fir from the Pacific 

 Coast tapped to supplant Yellow Pine in the markets of the West. 



Between 1890 and 1907 lumber prices increased 94 percent while 

 general prices advanced only 14.6 percent (2). Host of this increase 

 took place between 1898 and 1907. Probably the chief reason for this 

 rapid gain was the increasing distance between the timber stands and 

 the large centers of population, thereby greatly increasing freight 

 charges. Southern Yellow Pine is farther from the largo cities and 

 the centers of building activity than tho White Pine of Michigan, and 

 the Douglas Fir of the Pacific Coast must bear even a greater trans- 

 portation charge than Southern Yellow Pine. Increased labor cost, 



(1) The factors affecting lumber prices are very complex because 



of the number of species and grades of lumber, the great number of mills, 

 and the wide territorial distribution of the lumber industry. The author 

 does not pretend that this hastily written survey is an adequate or final 

 summary of the situation. The conclusions in regard to the histories 

 of particular species of lumber are to be regarded as only tentative. 

 The discussion of the general factors affecting lumber prices was main- 

 ly derived from lir. William B. Greeley's report - "Some Public and Economic 

 Aspects of the Lumber Industry." Department of Agriculture, Report Ko. 114, 

 1917, but, as 1'Ir. Greeley was not consulted in the preparation of this 

 report, he is not accountable for any errors that may appear. 



(2) Wilson Compton: "The Price Problem in the Lumber Industry," 



in The American Economic Review, September 1917. Vol. VII Ko. 3 Page 585. 



