580 



AMERICAN FORESTRY 



and, above all, helpful in establishing 

 a stable governmental forest policy. 



"the problem of the heavy load" 



Two fundamental influences affect 

 the American lumber market. One is 

 over-production, the other is over- 

 supply of capitalized raw material. 

 It is asserted by some that betterment 

 of market conditions by large-scale 

 production would induce increased over- 

 production, owing to a demand for 

 returns from capital invested in stump- 

 age. It has always been true that the 

 lumber manufacturing industry cannot 

 carry the burden of all of the raw mater- 

 ial supply if capitalized. It is the 

 experience of operators that a 20-year 

 supply of trees is as much as any 

 operating property can carry at any 

 period, if purchased at current market 

 value. 



Based upon a possible maximum cut 

 of forty-five billion per annum, 20 years 

 will be required to convert one-third of 

 our trees into lumber. Taking Douglas 

 fir stumpage at the valuation placed 

 upon it in the Government's report on 

 the lumber industry, and figuring out 

 the selling return necessary 20 years 

 hence to pay stumpage and interest, 

 without any conversion profit for the 

 operator, it is found that an increase of 

 about 40 per cent over the 1913 lumber 

 price must be realized. This calcula- 

 tion allows interest and other carrying 

 charges on 20 years' supply of timber, 

 depreciation of equipment and interest 

 on working capital. To achieve these 

 results, with an added conversion profit 

 for the operator, it is apparent that 

 all of the efficiency prescribed must be 

 applied, and that the selling return on 

 lumber must increase. An increase of 

 40 per cent over the normal average 

 price for Douglas fir 20 years hence 

 will not be necessary provided maximum 

 efficiency is applied, resulting in less pro- 

 ducing cost through improved methods 

 of logging, manufacturing and dis- 

 tributing, more complete utilization of 

 raw material and salvage of by-products. 



The contention of authorities is 

 positively correct, however, when they 

 insist that there must be a means 

 applied to withhold from the manufac- 



*Professor Van Hise, Wisconsin University. 



turing market the two-thirds of the 

 present timber supply which cannot be 

 utilized during the coming score of 

 years. One-fourth of the standing tim- 

 ber of the Nation is in National Forests. 



Of the surplus stumpage which cannot 

 be absorbed during the next 20 years, 

 the private owner holds 62 per cent 

 and the Government 38 per cent. The 

 latter must be withheld if private 

 owners are not to be compelled to 

 destroy a national resource, honestly 

 acquired, safe-guarded at private ex- 

 pense and necessary to the future 

 welfare of the country; for should it be 

 converted at this time its value would 

 fall below the cost of conversion, and 

 loss to labor and community would 

 result. The Government, having no 

 capital invested, no taxes to pay and no 

 carrying charges other than nominal 

 administration, can afford to hold their 

 timber until it is needed. Closer util- 

 ization in that period will pay the cost. 

 The first step toward cooperation and 

 the solution of "the problem of the 

 heavy load" should be to withhold 

 government timber from sale except 

 in localities which cannot be supplied 

 from other sources. Individual owners 

 of timber cannot look for early returns 

 on their investments. Such invest- 

 ments are fixed and cannot be with- 

 drawn at will. If not financially able 

 to hold it, owners should pool their 

 interests in stock companies to the end 

 that our remaining private timber shall 

 pass to organizations financially strong 

 enough to save it from destruction or 

 profitless exploitation . 



It has been urged* that a trade com- 

 mission be created with power to 

 authorize cooperation so far as it shall 

 not be inimical to the public welfare. 

 To this it may be added that when a 

 natural resource is jeopardized, such a 

 commission should require compulsory 

 cooperation to such a degree that it shall 

 not be destroyed without profit to the 

 community that produced it. 



The duty that lumbermen owe to 

 themselves, their communities and the 

 Nation at large has been neglected. A 

 great and vital industrv has suffered 

 because the brains and energy engaged 



