A NATIONAL PLAN FOE AMERICAN FORESTRY 1153 



outlays in forest-land management. In the southern Rocky Moun- 

 tain region the smaller extent and wider distribution of ownerships 

 and their relation to other industrial uses has tended to minimize the 

 condition described. In Idaho, Montana, California, Oregon, and 

 Washington, the States now containing the largest proportion of 

 mature timber, the cycle is just now approaching its most acute stage, 

 creating a situation which constitutes a real threat to the economic 

 integrity of the lumber industry, to the States concerned, and to that 

 part of the national interest dependent upon assured sources of timber 

 supply and proper safeguarding of watersheds. While the timber is 

 situated in the five States mentioned, the consequences of its enforced 

 liquidation adversely affect all of the forest lands of the Nation. So 

 long as Douglas fir can be delivered on the Atlantic seaboard at sacri- 

 fice prices, it will be difficult profitably to practice forestry on the 

 white pine lands of New England or the short leaf pine lands of the 

 Southern States. Under prevailing conditions timber products 

 flow into any point of demand, and overproduction in any section 

 of the country adds to a reservoir of manufactured timber which 

 threatens to overflow economic safeguards. 



Existing mills and operating properties are more than adequate to 

 supply all current and immediately prospective timber needs. But 

 the nonoperating properties represent large investments of capital, 

 increased each year by current outlays for protection charges, taxes, 

 and other costs of ownership. ^ Furthermore, many of them are sub- 

 ject to outstanding bonded obligations representing large proportions 

 of their appraised values, and interest charges must be met or fore- 

 closure will result. In such circumstances the investment per unit 

 of stumpage increases with rather alarming rapidity, and threatens 

 within a relatively few years to exceed the probable realizable value 

 of the stumpage. Owners assume or think that prompt liquidation 

 is dictated. The historic and frequently only available method of 

 liquidation is the operation of the timber. This means new sawmills 

 added to already excessive mill capacity, new logging railroads in 

 territories already containing too many, new lumber production added 

 to a stream already overflowing all demand. 



To secure a share of the business the owners of such properties 

 must cut prices. In order to cut prices they also must cut costs. To 

 cut costs the common although wholly mistaken practice is to forget 

 all of the elements of good forest management and abandon all idea 

 of maintaining the productive power of the land. Faced with the 

 new competition other operators in the region similarly tend to cut 

 prices and costs with the same consequences to the future values of 

 the forest lands. Ultimately, the timber products of the new opera- 

 tion and its established local competitors, by reason of sacrifice prices, 

 cheap water-freight rates and other factors, overflow the markets of 

 remote sections, and immediately the timberland owners within or 

 tributary to those sections correspondingly tend to cut prices and 

 costs and to similarly abandon the idea of conserving the timber-pro- 

 ductive values of their properties or conducting their operations on 

 a sustained yield basis. The vicious cycle set in motion by the finan- 

 cial stress of new and economically unnecessary operations finally 

 influences the future destiny of a major part of all the forest lands of 

 the Nation. 



