198 TIMBER VALUATION 



trolled in the woods as they can under a factory roof. Labor is 

 necessarily nomadic under the present system because the men 

 cannot take their families into the woods with them. The pro- 

 fessional lumberjack is notoriously a drifter. It is a common 

 saying that a large operation needs three full sized crews, one 

 working, one going out and another coming in. In other words, 

 the difficulty of breaking in new men, common to most industries, 

 is magnified and accentuated in lumbering. Then, too, capital- 

 ists are commonly not so familiar with the technique of the busi- 

 ness as with that of the merchandising and manufacturing indus- 

 tries so that they are less willing to finance logging operations. 

 Added to their unfamiliarity with the methods of the business is 

 the long period frequently required to reaUze on the investment. 

 Where an expensive mill must first be erected and logging rail- 

 roads built the capital cannot be retired for 10, 20 or more years. 

 The combination of these factors makes the rate of return neces- 

 sarily higher than it is in industries with a quicker turn over, 

 better understood, more easily standardized and less hazardous. 

 While a gross margin of 10 per cent is ample in the wholesale 

 grocery business, or the manufacture of shoes, 25 per cent is 

 none too much in many lumbering operations. 



What the rate should be for any particular operation depends 

 upon several factors. The highest return is naturally demanded 

 in the more hazardous operations like the opening up of a new 

 region. An example of such an enterprise is the beginning which 

 has just been made in the exploitation of BraziKan timber. 

 Methods and markets must be develop>ed and the operation has 

 all the hazards of a pioneer enterprise and is accordingly entitled 

 to a high return to offset the extra costs and unforseeable losses. 

 On the other hand an operation in a region where the methods 

 are standardized does not require so great a return. An example 

 of this latter kind is a New England portable sawmill enterprise. 

 Intermediate between these two extremes are the medium sized 

 job in a region where logging is one of the principal industries and 

 large enterprises which open up new blocks of timber in sections 

 where markets are assured and the best methods have already 

 been worked out. 



