164 OUR VANISHING FORESTS 



times profits are often large, but every conservative 

 operator knows that he must put aside part of those 

 earnings to carry him over the slack periods when 

 most concerns can hardly make ends meet and 

 others are temporarily forced to shut down. Now 

 suppose that Lumber Company A adopts a policy 

 of scientific forest cutting, or sets aside a fund for 

 reforestation, either of which plans might easily 

 increase from fifty cents to a dollar or more the 

 cost of every thousand board feet of lumber it pro- 

 duces. Its competitors, however, decide to keep on 

 along the old lines. During good times, to be sure, 

 if the A Company suffers no heavy fire losses it is 

 gaining something for the distant future, but its 

 cash reserves are lowered, and its competitors can 

 easily under-sell it. In poor times the company finds 

 itself in a weakened condition, and competition 

 becomes so keen that the whole policy may be 

 abandoned. 



If any single state adopts compulsory regulation 

 of forest cutting, the cost of production within its 

 borders is increased above the level prevailing in 

 other states, and, unless all neighboring common- 

 wealths simultaneously pursue the same policy, the 

 industry of the most foresighted is temporarily 

 penalized. Such was indeed the case a short time 

 ago when Pennsylvania tried to regulate the coal 



