44 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



the same market varied from $2 to as much as $50 per thousand 

 feet on the same grade. The tables of 1914 and 1915 were 

 turned. Sellers whipsawed buyer against buyer. Lumber was 

 auctioned to the highest bidder, with prices continually going 

 higher. On some of the upper grades, especially among the 

 hardwoods, sellers refused to make quotations or to grant op- 

 tions on expected material. Through the use of tile transit-car 

 privilege dealers often held cars for big prices, paying demur- 

 rage charges and gambling on further price advancements. 

 Instances were cited where transit cars changed hands six and 

 eight times standing on the sidetracks. 



The movement of lumber prices and lumber stocks in the 

 Middle West reflect what occurred in varying degree in prac- 

 tically all other large consuming markets dependent upon lum- 

 ber from distant regions. As in the East, the effects of forest 

 depletion are clearly discernible. Because of interregional com- 

 petition these effects are manifested in the form of successive 

 price levels, the first prior to 1900, with retail price averaging 

 around $16 and the Lake States as the source of supplies ; after 

 a period of transition a second, beginning about 1906 and last- 

 ing through 1916, with prices centering around $30 for southern 

 lumber. The rapid advance and chaotic prices of recent months 

 are symptomatic of a transition to a third and permanently 

 higher level than that which has prevailed during the period in 

 which southern pine has dominated the situation. 



It is true that lumber prices were bound to rise with pro- 

 ducing costs and in commo,n with other commodities. It is 

 true also that their sudden skyrocketing was unquestionably 

 precipitated by a combination of many conditions, including 

 unfavorable logging weather in the South, reduced stocks at 

 the mills, car shortage, etc. The relation of producing and 

 distributing costs to prices will be discussed in a subsequent 

 section and the underlying cause of the extraordinary and 

 unprcedented price movement since the armistice is not found 

 in that relation. It is found in the weakening of inter- 

 regional competition brought about by a temporary shortage 

 of lumber, occasioned primarily by curtailed production re- 

 sulting from conditions growing out of and following the war. 

 Cumulative forest depletion in regions formerly supplying the 

 big lumber markets of the country has been an important con- 

 tributing factor. The great balance wheel of interregional 

 competition is unable to function effectively and without 

 interruption as the regional sources of timber supply are 

 exhausted and abnormal conditions, such as have characterized 

 the postwar period, are 'thus free to play a larger part in 

 violent and extreme changes in market conditions. 



Had the Middle West been able to draw on ample forests of 

 northern as well as of southern pine to meet the demand of 

 an enlarged and insistent market the response would have 

 been far easier and the situation far less acute. Had it not 

 been for the fact that timber from the far West was partially 

 available to lessen the strain of a demand far beyond the 

 supply the pressure would have been still more extreme. It 

 is safe to say that Douglas fir will not permanently lose the 

 place which it has now obtained in the markets of the East 

 and the Middle West, but on the contrary, as the output of 

 southern pine declines it will more and more dominate those 

 markets. The freight tolls upon it are being incorporated in 

 the new price level. And the crisis which has brought about 

 its extensive introduction serves to illustrate what may be 

 expected with increasing frequency and intensity as forest 

 depletion proceeds and no steps are taken to make cut-over, 

 lands productive. 



EASTERN HARDWOOD MARKETS. 



Wholesale prices in the eastern markets for upper grade hard- 

 woods are shown in figure 13 between 1855 and 1920, and also 

 with material of average quality for somewhat shorter periods 



in Table 11. The hardwood price curve follows closely that for 

 all commodities until 1860, since when they have been separat- 

 ing gradually except for a short period following the Civil War. 



The curve of hardwood prices in figure 13 indicates a much 

 sharper and more consistent increase in hardwood than in soft- 

 wood prices. The leveling effect of interregional competition is 

 less apparent, due in part to the more general distribution of 

 hardwood forests and the relatively smaller consumption of 

 hardwood lumber. Four rather distinct price levels are ap- 

 parent, however. Between 1865 and 1875 there was a rapid rise 

 to almost double the prewar level,, followed by a steady increase 

 until between 1900 and 1905, when another abrupt rise marked 

 a new general level of hardwood prices. Again -in 1918 a still 

 higher level is indicated by an increase of more than $10 a 

 thousand over 1917, and during 1919 and the early months of 

 1920 a very much greater increase, which carried the average 

 price to almost $125 in excess of that shown for 1917. 



In the early days, when transportation systems in the United 

 States were undeveloped, commerce in hardwood lumber was 

 limited, owing to the difficulty of rafting. Its consumption was 

 mainly by local markets immediately tributary to the source of 

 supply. Between 1850 and 1860 hardwoods were cut near the 

 consuming centers. Prices were low and the quantity consumed 

 was comparatively small. First-quality white oak sold in the 

 eastern markets in 1855 for $10 per 1,000 feet wholesale, poplar 

 for $11.50, and ash for $10.50. 



Following the Civil War the commerce in hardwood lumber 

 expanded rapidly with the development of railroads. By 1870 

 hardwood lumber from Ohio and Indiana was being shipped by 

 rail to the eastern markets, and the local cut was no longer 

 sufficient to meet their needs. Prices had risen to about $26 

 per thousand for oak and $25 for ash and poplar. With the 

 development of the wood-using industries and the increasing 

 use of hardwoods for special purposes, the industry began ex- 

 panding into the highlands of West Virginia and the southern 

 Appalachian Mountains with increased logging and transporta- 

 tion costs. By 1890 the price of ash and oak had increased to 

 $35 and poplar to $30 per thousand, and in the 10 years follow- 

 ing 1890 oak increased to $43, ash to $45, and poplar to $36 per 

 thousand. 



Between 1900 and 1909 the total hardwood cut in the United 

 States gradually increased. During the decade following 1910, 

 however, the hardwood cut of the country steadily declined 

 from ten and a half to between 6 and 7 billion feet in 1918. 

 This decline is reflected in all hardwood regions excepting the 

 lower Mississippi Valley, which has increased from a produc- 

 tion slightly less than 800 million in 1900 to almost a billion 

 and a half feet in 1917. 



The growing dependency of wood-using industries and other 

 hardwood consumers upon the hardwood cut from the lower 

 Mississippi Valley serves to emphasize the growing exhaustion 

 of the hardwood forests in the central, eastern, and northern 

 hardwood regions. The South is the last large hardwood reserve, 

 and its reduced cut during the past two years, because of bad 

 flood conditions, labor shortage, and other temporary factors 

 which have curtailed both log and lumber output has ben a large 

 factor in bringing about an acute shortage of hardwood lumber 

 in practically all markets. 



The general condition of the hardwood industry following 

 the war became even more unsettled than that of the softwood 

 lumber industry. Hardwood lumber used for war purposes was 

 confined largely to oak, hickory, walnut, yellow poplar, bass- 

 wood, and ash, the stocks of which were well exhausted by the 

 close of the war. The production of other hardwood species 

 was curtailed on account of Government restrictions. The wood- 

 using industries were short of dry stock to meet the demand 

 for furniture, finish for homes, and other hardwood products. 



