10 



TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



the automobile industry, box makers, etc. For high-grade 

 veneer hardwoods are used almost exclusively. The industry 

 consumes annually the equivalent of about 780 million board 

 feet of high-grade material, the bulk of which can be secured 

 only from virgin stands. The demand among hardwoods is 

 chiefly for red gum and, second, for white oak. One section of 

 the industry, which uses such northern hardwoods as maple, 

 birch, and basswood, is located in the Lake States. As in the 

 case of many other hardwood-using industries, the veneer in- 

 dustry has for some years been centered mainly in the Middle 

 Western States. Supplies, at first local, are now largely in the 

 South, and the main demand has been transferred from oak 

 to gum. 



The veneer situation is similar to that described for other 

 forest products short supplies, abnormal demands, and com- 

 petition, in this case among such consumers as phonograph 

 makers, manufacturers of other musical instruments, the auto- 

 mobile industry, and furniture manufacturers. As indicated in 

 the preceding discussion on the furniture industry, wholesale 

 veneer prices have increased from three to four times between 

 January 1, 1916, and April 1, 1920. 



Log prices have risen in proportion. Indiana white-oak logs, 

 20 inches and over in diameter, have increased during the 

 same period from $75 to $200, and flitches from $100 to $300 

 per thousand board feet. 



In general, there is only one-fourth of the normal supply of 

 veneer flitches and logs in sight. Practically the only firms" 

 not experiencing extreme difficulty in securing supplies seem 

 to be those factories which can still obtain local timber. In a 

 few agricultural regions reserve stocks in farmers' wood lots 

 have been drawn out by the current high prices. The scarcity 

 of logs has compelled some factories to close down. Veneer 

 and ply-wood production, while nearly normal in September, 

 1918, had fallen approximately to 80 per cent between January 

 and March, 1919, to 60 per cent in November, to 50 per cent 

 in December, and is now estimated at not over 40 to 50 per 

 cent. 



The veneer industry requires high-grade material. It takes 

 practically clear logs, generally 16 inches and more in diameter 

 at the small end. The industry must, for its higher-grade prod- 

 ucts, depend very largely upon the fine old timber found al- 

 most entirely in virgin stands. The general depletion of hard- 

 wood stands has made the industry, along with many others 

 which accept only high-grade material, primarily dependent 

 upon the only reserve of virgin hardwoods of any extent the 

 southern Mississippi Valley. Here logging operations have been 

 seriously handicapped by adverse weather and other conditions, 

 and as a result log supplies for the industry as a whole have 

 fallen off 75 per cent. Veneer and ply-wood production have 

 fallen off 50 per cent, wholesale prices have gone up from 

 three to four times, and manufacturing concerns in the same 

 and competing industries are bidding frantically against each 

 other to secure the inadequate supplies of veneer stock avail- 

 able in order to meet their current demands. The consumer 

 pays the full bill of increased log and veneer prices, and 

 undoubtedly more, in the advancing prices charged for final 

 products. 



THE HANDLE INDUSTRY. 



For the high-grade hickory and ash required by the handle 

 industry no satisfactory substitute has yet been found, and 

 these two woods make up about two-thirds of the total used. 

 The supplies now come mainly from the South. Here the most 

 accessible timber has been taken. The few large concerns main- 

 tain large and expensive organizations, which literally comb 

 the country to secure material. More, and more it is becoming 

 necessary to work into the districts remote from transportation 

 facilities. Practically the entire territory within which hickory 

 is found in commercial quantities is thus covered. 



In the case of ash the situation is said to be even more serious. 

 The industry has preferred the denser northern upland ash for 

 handles. The swamp-grown ash of the Mississippi bottom lands 

 has a smaller percentage of the dense material and has been 

 less sought up to the present time. This has greatly limited the 

 area from which the wood has been secured. Ash in sufficient 

 quantities to support the handle and other competing industries 

 is practically gone, therefore, from the Middle Western States 

 north of the Ohio. It is predicted by one man thoroughly fa- 

 miliar with conditions that five years more will practically see 

 the finish of ash timber in any quantity in this section. 



The demand for ash and hickory handles is so great that 

 manufacturers can not meet requirements. The export demand 

 is said to be even greater than before the war and American 

 handles are being shipped to all parts of the world. 



Average prices of handle material are practically unobtain- 

 able because of the great variety in which such material is 

 purchased logs, bolts, dimension sizes (split, hewn, and sawn), 

 flitch, and plank. While prices quoted are from two to three 

 times those which obtained before the war, manufacturers state 

 that in practice they are paying any price necessary to get 

 supplies. They find themselves in active competition with other 

 industries requiring hickory and ash, and particularly with the 

 manufacturers of automobile wheels. 



Average wholesale prices of standard size hickory handles 36 

 inches long have advanced from $1.20 per dozen in 1916 to 

 $2.50 per dozen in 1920. Retail prices, which were from 25 to 

 30 cents per handle in 1916, are now 50 cents. 



One of the effects of the exhaustion of local timber is the 

 gradual elimination of the small handle factory. When timber 

 can no longer be secured locally, the only source of cheap sup- 

 plies, large organizations become essential in order to cover a 

 large territory. Without the necessary capital for this the 

 small concern must give way to the large manufacturer. There 

 is said to be a steady drift toward concentration of handle 

 manufacture by large concerns and the disappearance of local 

 industries. 



THE VEHICLE AND AGRICULTURAL IMPLEMENT 

 INDUSTRIES. 



The vehicle and agricultural-implement industries compete 

 for hickory and ash with the handle industry, and in addition 

 use other hardwoods, such as oak, for which they must com- 

 pete with such industries as the furniture milkers. They are 

 located mainly in the Middle West, but now derive most of 

 their wood supplies from the South. A number of far-sighted 

 organizations are said to have purchased more or less extensive 

 hardwood tracts some years ago, from which they are now able 

 to draw their wood supplies in part at least. For the re- 

 mainder they depend on outside purchases. 



To secure hickory, which occurs scatteringly over large areas, 

 the vehicle and agricultural-implement industries ordinarily 

 maintain extensive buying, logging, and milling organizations 

 in the South. They draw upon every conceivable source 

 farmers' wood lots, small mills, large sawmills, and even special- 

 ized operations designed to secure hickory alone. 



These concerns in general carry in stock about a two years' 

 supply of special-dimension stock. Hardwood lumber prices 

 have now gone so high that a number of them are making pur- 

 chases in the open market only when prices do not exceed a 

 prescribed maximum, and amounts secured have fallen to 

 about one-quarter of their utilization. These industries have 

 found in the case of farm implements that it is impossible to 

 increase the prices of their products beyond a certain point 

 without a marked falling off in sales. The result is that the 

 material in the open market goes to the industries which are 

 able to pass increased costs on to the consumer. Another result 

 has been the withdrawal from the field of a number of pur- 

 chasing organizations. 



