884 



AMERICAN FORESTRY 



country and to the resulting increased 

 interest rate. 



The rural sections of the farming 

 regions of the Middle West have not 

 felt the money stringency to as great a 

 degree as many other sections since 

 their farm products are in great demand 

 and prices for farm products are high. 

 The trade, therefore, in that section 

 does not show the fluctuation that is 

 evident in large centers, especially in 

 the East. 



The loss of foreign trade in lumber 

 has not been so vital to the lumber 

 industry, except in an indirect way, since 

 recent estimates show that only ap- 

 proximately eight per cent of the lumber 

 cut of 1913 was marketed abroad. 

 European trade in lumber almost ceased 

 during the early period of the war, due 

 both to the cessation of purchases 

 abroad and also to the withdrawal of 

 vast numbers of vessels from the cargo 

 carrying trade through fear of capture 

 by the navies of hostile nations. This 

 trade has been resumed only to a 

 limited extent, and it is doubtful if the 

 amount forwarded to the European 

 markets for some time to come will be 

 of sufficient importance to have any 

 appreciable effect on the industry in 

 this country. 



Lumber trade with South America 

 was reported unsatisfactory for a year 

 previous to the war, due to unfavorable 

 crop conditions especially in Argentina, 

 the largest South American consumer of 

 our lumber, but gave promise of marked 

 improvement about the time that the 

 war broke out, when it again became 

 depressed due to the disorganization of 

 the credit systems of the South Ameri- 

 can countries. 



We always have supplied a large part 

 of the lumber imported by South 

 American countries and will still con- 

 tinue to do so, but at the present time 

 their buying power has been greatly 

 curtailed by their inability to make 

 settlement for goods purchased. Our 

 imports of all commodities from South 

 America during the fiscal year 1913-14 

 were valued at approximately 223 

 million dollars, while our exports of all 

 kinds to that continent during the 

 same period were approximately 125 



million dollars. The balance of the 

 imports of South America amounting to 

 nearly 900 millions came largely from 

 Europe. We have had no direct bank- 

 ing facilities with our sister republics 

 and because they owe heavily in Lon- 

 don the trade accounts between the 

 two American continents have been 

 normally adjusted at that place. Under 

 existing conditions this is impracticable. 

 We are ready and willing to purchase 

 and pay for South American products, 

 but lumbermen, along with other mer- 

 chants, are reluctant to sell their com- 

 modities in countries which have de- 

 clared moratoria, as have several of 

 those in South America. 



The future holds promise for better 

 things since American banking firms 

 are now permitted to establish branches 

 in foreign countries and steps have 

 already been taken by at least one 

 banking firm to do this. However, it 

 will be some time before the situation 

 will be relieved to the extent that the 

 trade in lumber and other commodities 

 will again resume its normal course. 



Indirectly the loss of foreign trade 

 has been a hard blow to the lumber 

 industry. There are many sawmills 

 along the South Atlantic, the Gulf 

 Coast and the Pacific Coast, which 

 have been engaged to a large extent in 

 supplying lumber to foreign countries, 

 and with this field cut off they have 

 naturally turned to our domestic mar- 

 kets and have invaded the field previous- 

 ly occupied almost exclusively by in- 

 terior mills. 



The interior market, already in an 

 unsatisfactory condition, has been un- 

 able to assimilate this increased output 

 at a price which would yield a reason- 

 able profit to the producer, and, as a 

 consequence, many have been liquidat- 

 ing and still continue to liquidate on 

 their investment in stumpage at a loss. 



It may be asked why production does 

 not follow the law of demand and 

 adjust itself to market conditions. 

 There are many reasons why the 

 industry responds rather sluggishly to 

 the general trade barometer. The 

 lumber manufacturer has a large invest- 

 ment in plant and often in raw material, 

 on which he must pay interest or else 



