THE AMERICAN LUMBER MARKET 



211 



doubling of selling prices. Had they 

 not been told that in twenty or twenty- 

 five years the streams would run dry 

 amid the waste of denuded hills? 

 Conscious only of taxes and interest on 

 investments, and unmindful of the 

 hundreds of billions of feet of timber 

 remaining in the north and south, they 

 set in motion machinery to reduce the 

 forests of the west. Impatient for 

 realization, owners incapable of carrying 

 an investment which cannot be con- 

 verted at pleasure lost sight of the fact 

 that stumpage return is only the 

 difference between the cost of produc- 

 tion and distribution, and the selling 

 value of lumber. But few foresaw that 

 because of indifference on the part of 

 lumbermen to the trend of economic 

 conditions and because of the discovery 

 and exploitation of other materials of 

 merit, the demand for lumber would 

 fail. Lumbermen minded their mills 

 but neglected their markets. 



History should repeat itself as regards 

 stumpage values in the west but history 

 is chiefly a record of human action. 

 Owing to distance from present centers 

 of consumption, transportation will 

 take up some of the return that in the 

 north and south is a part of the profits. 

 In no forest region has stumpage 

 become valuable until the supply was 

 diminished; and today white pine stump- 

 age in the north is worth $15 per M 

 despite competition from the north, 

 south and west. Every day brings 

 that time nearer on the Pacific Slope. 

 Western forest history is young. 



The average timber buyer, however, 

 perhaps failed to consider some of the 

 important factors contributing to the 

 enhancement of stumpage values. The 

 lumber business of the north, for in- 

 stance, was largely fostered by the 

 wonderful agricultural and manufac- 

 turing development of the Mississippi 

 Valley, with its thirty million people 

 reached at low freight cost. Wages 

 were low. Competition of substitutes 

 and other woods had not disturbed the 

 market. Lumber was bought. But the 

 territory within a $3 freight haul of 

 the western forests is not so easily 

 developed. The product must be hauled 

 long distances to reach an extensive 

 market and the cost is heavy. Last 



year 70 per cent, of the Douglas fir 

 produced was shipped beyond an esti- 

 mated $3 freight zone. Moreover, the 

 eastern market, formerly reached with 

 northern lumber and latterly counted 

 upon as a market for Douglas fir, is 

 fast growing to be a country of cities 

 in which brick, stone or concrete 

 displaces wood. Manufacturers are just 

 awakening to the need for merchandis- 



ing. 



It may be said that stumpage bought 

 by the third owners since 1906 cannot 

 be sold today at an advance sufficient 

 to pay interest, taxes and fire patrol. 

 In 1907 came a reaction in the lumber 

 market and the price realized by the 

 manufacturer has since then continued 

 so low that many mills have, on an 

 average, sold lumber below the cost of 

 production, leaving cost of raw material 

 out of the calculation. This, however, 

 may not affect the ultimate value of 

 stumpage held until it is needed. 



The true value of stumpage has 

 never actually increased by speculation. 

 Advances have followed, not preceded, 

 the establishment of manufacturing 

 industries and they have been due 

 almost entirely to demand. The situa- 

 tion is the same in the case of every 

 primary commodity. In the end the 

 consumer must pay the bill ; but to meet 

 legitimate competition and produce a 

 fair return to capital and labor lumber 

 manufacturers must so change their 

 methods that economies will result 

 from closer utilization of the raw product 

 and cheaper distribution to the con- 

 sumer . Substitute materials will always 

 intervene against excessive prices for 

 lumber. In the western country the 

 cost of stumpage is still an unimportant 

 factor in the cost of lumber to its users. 

 Waste and costs added after the finished 

 product leaves the producer are more 

 important. Today practically all of the 

 timber in the United States and Canada 

 is under the ax and every community 

 is competing in an effort to force greater 

 consumption; not by improved business- 

 developing methods, but by profitless 

 destructive price-cutting which injures 

 both the community and the capital 

 invested in manufacturing. Stumpage 

 owners must wait until this strife 

 shall end. 



