THE COST OF GROWING TIMBER. 



INTRODUCTION. 



Four-fifths of the timber standing in the United States today is 

 privately owned. Only one-fifth of it is now in State and National Forests. 

 and it is not likely that for many years to come even as much as half of 

 the total stumpage of the country will be in public forests. In the future, 

 as in the past, we must depend on private forests for much of our wood 

 supply, and the manner in which private forests is handled is therefore of 

 great economic importance. 



Practically all of the lumber so far used in the United States has come 

 from natural, matured forests. Capital has found a profit, and sometimes 

 a great profit, in buying up virgin timber in advance of the demand and 

 holding it until it could be either manufactured or sold to manufacturers 

 at a 'heavy increase in price over that paid at the time of purchase; that is, 

 much of the profit made" in the lumber industry so far has been a speculative 

 profit. The exhaustion of the supply of virgin timber will lessen the 

 chances for speculation and more closely restrict profits to those which arise 

 from growing and manufacturing timber. 



The so-called "cost of production" now calculated by manufacturers is 

 merely a harvesting cost, not a cost which includes the expense of growing 

 the timber as well as that of logging and manufacturing it. The growing 

 of timber is analogous to the growing of wheat or corn, except that in the 

 latter case the crop is sown, grown, harvested, and marketed within a year, 

 while in the former case the same series of operations may require from 

 50 to 100 years. The elements of cost are the same in both. Capital will 

 seek investment in raising neither wheat nor timber unless there is a reason- 

 able chance for profit. We have abundant data upon the cost of producing 

 the great agricultural staples, but few data upon the cost of growing 

 timber. 



A permanent timber supply will not be maintained by private effort 

 at less than the cost of production. With sufficient knowledge of the cost 

 of land and stocking, growth and yield, we can estimate what the cost of 

 growing any kind of timber will be and compare it with the present 

 stumpage price. This comparison will show whether the stumpage price 

 may be expected to go up or down in the future and will indicate the 

 minimum amount we may have to pay for timber. Of course, we have no 

 assurance that timber will eventually sell at the bare cost of production, 

 for, if a great shortage results because of our general imprudence in failing 

 to grow timber, or because of unexpectedly heavy demands for it, the 

 selling price will go far above the cost of production. On the other hand, 

 if a certain species grows slowly and yields lightly, or if the soil which it 

 requires be too expensive, so that the cost becomes abnormally high, it may 

 be superseded by timber of other kinds, which may be grown more cheaply. 

 In this case, the price would never equal the cost of production. 



It is the purpose of this paper to present a method of analysis of the 



