capacity, it is easier to increase than to curtail production and periods of over- 

 production thus last linger than periods of underproduction. 



For the above reasons, lumber prices usually lag behind other prices in an 

 upward price movement, are the first to feel the effects of depression and suffer 

 rcore and longer than other prices. 



In addition to these main influences affecting lumber prices there are a 

 number of seasonal fluctuations. The price of building lumber is usually higher 

 in the spring at tlje peak of building activity when shipments exceed production 

 and stocks are running low. The state of building activity in part depends upon 

 the general business conditions already referred to and in part upon the weather. 

 A mild spring causes early building activity in the cities, but it stops build- 

 ing on the farms because of the opening of other farm work. The weather also 

 affects production. Floods or a severe winter in the South hinder the production 



logs and cause a shortage later in the year, These seasonal influences often 

 blend in a larger movement,, as when good weather brings good crops which lead 

 to a return of prosperity, etc. 



The actual fluctuations in lumber prices since 1907 shows the effect of 

 the ^fundamental factors that have checked advances in lumber prices. It was not 

 until 1912 that lumber prices had reached the level of 1907 and then because of 

 the slight business depression in 1914 aad 1915 prices again broke sharply. The 

 general upward trend of prices which began as early as the fall of 1915, did not 

 permanently influence lumber prices until the fall of 1916. The rise in lumber 

 that has taken place since has been greatly stimulated by government orders and 

 the enforced curtailment of production on account of the labor shortage. In . 

 spite of these aids, lumber prices have not risen quite so much as the average 

 prices of "all commodities 11 * 



2. The yellow Pine Market. Since 1914. 

 . 



Southern Yellow Pine is the leading species of American lumber; the 

 wide distribution of its production, and the large extent to which it enters 

 into building operations throughout the nation,- cause its price to correspond to 

 general influences affecting the prices of all commodities. Many .of the forces 

 controlling Yellow Pine prices have affected North Carolina Pine, and have had a 

 strong sympathetic influence upon the prices of Douglas Fir, Hemlock, Western 

 White Pine, and Western Yellow Pine, - the chief competitors of Southern Yellow 

 Pine for general building purposes * 



The general range of influences affecting all lumber used in building 

 will accordingly be discussed in connection with Yellow Pine prices. In sub- 

 sequent histories of the prices of other woods, only the special factors affect- 

 ing these other woods will be discussed* 



Yellow Pine prices reached a high level in 1912, and a general feeling 

 of optimism caused an expansion of production and an increase in stocks. A tone 

 of conservatism prevailing in most lines of business on account of the tariff and 



(WIB359-50) 



