2o6 TIMBER VALUATION 



Milling has been slightly higher in the case of redwood because 

 some of it was planed but Sio was a safe figure for the total cost 

 of the finished lumber in CaKfornia or New England. Conse- 

 quently there would remain a margin of $20 — sale value of $30 

 less costs of $10 — to cover freight charges and stumpage price. 

 In the case of redwood even pre-war charges took fully three- 

 quarters of this margin of $20 while one-quarter was ample to 

 cover all freight costs in the case of second growth pine. Hence, 

 the stumpage price of redwood has never been over $5 per M while 

 that of second growth white pine has already gone over $10 per 

 M in the case of accessible tracts. 



The general rule that sale values, logging costs and manu- 

 facturing costs are relatively constant and that freight charges 

 fix stumpage holds for hardwoods as well as softwoods with a 

 few rare exceptions. These de\'iations from the rule are the 

 rarer cabinet woods like walnut, mahogany, etc., in which the 

 sale value is far above that of ordinary lumber. But even with 

 these the stumpage price of different stands of the same species 

 is fixed by the distance from mill to market. For example, wal- 

 nut near a furniture or gun factory in Ohio is worth two or three 

 times what the same or better quality of tree is valued at in the 

 mountains in Kentucky. 



Since then the general rule holds that stumpage prices depend 

 upon distance from market it follows that they must be approxi- 

 mately the same within a given region tributary to any one mar- 

 ket. Markets may be either local, special or general. The first 

 are the best in all cases because they reduce freight charges to a 

 minimum but unfortunately no local market is unlimited. Most 

 are, in fact, of small capacity in power to absorb such a common 

 product as lumber. The same apphes to special markets. They 

 can only take particular grades and those in limited quantities. 

 Hence it follows that the general markets are the great price 

 fixers in the forest product industries. Indirectly they also deter- 

 mine sale values in the local and special markets because no local 

 price can exceed for any length of time the general market level 

 plus the freight charges from the general market to the locahty in 

 question. 



