14 REPORT OF THE No. 3 



miles. The significance of this lies in the fact that small mixed lumber and 

 pulpwood operators took advantage of the chance of securing moderately- 

 sized contracts extending over short periods and involving smaller overhead 

 expenses in the way of ground rent, fire charges, and collateral lodgements. 



The areas disposed of were well distributed throughout the Province 

 thus providing a general absorption, rather than a localized one, of labour. 



The heavy and continued snow falls throughout the logging areas seriously 

 impeded operations and resulted in a considerable number failing to fill their 

 contract quantities. The weather is a very important factor in conducting a 

 lumbering business and, when unfavourable weather conditions thwart progress 

 in the bush, the reflection on subsequent stages of the work is obvious. Not- 

 withstanding the uncertainties facing the industry, the optimism of the hardy 

 bush man is one of its redeeming features and the total output in sawlog 

 timber was, as hereinafter shown, considerably in excess of the previous year. 



Pressing demands upon the Government from different portions of the 

 northern part of the Province to bring into production large areas hitherto 

 held idle and to put back workers into gainful employment were fully faced. 



The Forest Resources Regulation Act enabled the Department to enter 

 into close negotiations with large holding companies respecting undeveloped 

 areas acquired years ago but merely held for book inventories and building up 

 alleged assets. The unemployment situation, while rapidly improving, 

 required attention and the slogan "get men to work" prompted the Govern- 

 ment to lay down a program for re-allocating certain extensive pulpwood 

 limits. This program is well under way, the desire of the Department being 

 to provide existing concerns with ample and at the same time the most accessible 

 timber to adequately meet their needs and at the same time to arrange for 

 reasonable supplies to meet requirements for new industries. 



Numerous conferences have been held between the Department and 

 representatives of the interests immediately concerned and tentative arrange- 

 ments have been made in a number of cases to accomplish the above stated 

 objective. Up to the fiscal year ending March 31, 1937, only two new 

 agreements have been entered into under the re-allocation measure, one with the 

 General Timber Company, and the other with the Pulpwood Supply Company. 

 Inasmuch however as both these agreements now form the subject matter of 

 important amendments, their printing and inclusion in this report is withheld, 

 it being considered advisable to have each agreement, when fully completed 

 covering all necessary modifications, printed and embodied in the annual 

 report for 1937-38. 



The completed agreements will provide for the construction and operation 

 of sulphite pulp mills within Ontario. A complete re-arrangement of certain 

 large pulp concessions and provision for new industries will, it is confidently 

 expected, be accomplished during the coming year. 



The revenue from timber sources was $2,809,980.47, as classified in 

 Appendix 9 to this report. It has increased over 13% over last year and is 

 50% more than in 1933-34. 



