TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



63 



The following notes on this table have been furnished by the 

 Timber Section of the Bureau of Internal Revenue: 



" In New England the 16 per cent cut indicated in column Q 

 is believed to he too low to be fairly representative for all of 

 the owners in the region, for during this period many of the 

 larger operators, desiring to guard heavy investments in pulp 

 and paper manufacturing plants, secured their supplies of raw 

 material as far as possible from timberlands other than their 

 own. At the same time these owners gladly bought additional 

 timber to the extent of 13 per cent of their original holdings. 



" In the case of New York the statement just made for New 

 England applies to column Q. In the case of column R, how- 

 ever, the owners did not increase their holdings through pur- 

 chase, but in fact diminished them by one-half of 1 per cent 

 through sales, owing to the fact that tirnberland at the begin- 

 ning of the period was for the most part already closely held 

 in New York and very little was changing hands. 



" In Pennsylvania there are very few important timber hold- 

 ings left. These are being rapidly exhausted, as indicated by 

 the fact that 66 per cent of the timber on hand March 1, 1913, 

 was cut during the period, and by the further fact that the 

 owners were able to secure only 4 per cent more during the 

 period. In a region such as this, where cutting has materially 

 reduced the supply of virgin timber, the tendency Is for an 

 operator to replenish his timber reserve, so far as he is able, by 

 the purchase of other available timber. For the same reason 

 this tendency also obtains in the Atlantic pine, Florida, Gulf 

 pine, cypress, Appalachian hardwoods, Appalachian softwoods, 

 and Lake States regions. 



" The Atlantic pine region shows about the same situation as 

 does Pennsylvania, excepting that the existing supply suitable 

 for large sawmill operations is not being exhausted as fast. 



" In the case of Florida, while the rate of cutting was high, 

 there were still considerable tracts of timber to be obtained for 

 good-sized operations, as indicated by the 19 per cent excess of 

 purchases over sales. In the Gulf coast pine region the rate 

 of reduction of timber reserves was slightly slower than in the 

 Atlantic pine region ; the opportunity to secure additional tim- 

 ber was better but not so good as in Florida. 



' We now leave the regions of the United States in which the 

 timber supplies have been rather heavily depleted and where 

 operators are inclined to acquire as extensively as practicable 

 additional supplies in order to prevent their reserves from 

 falling too rapidly. We reach the western United States, where 

 there are still enormous supplies of virgin timber. Here during 

 the period covered by the table there was little inclination to 

 buy additional timber because of the exceedingly heavy load of 

 timber already carried; in fact, many owners endeavored to 

 liquidate their timber as rapidly as possible both by cutting 

 and by selling. Those large owners who bought timber usually 

 acquired only that offered at bargain rates. In Idaho, for in- 

 stance, 10 per cent of the timber on hand at the beginning of 

 the period was cut and 5 per cent acquired ; much more than 5 

 per cent could easily have been acquired, for the available sup- 

 plies are large, if the owners included in the group had been in 

 a buying mood. In Washington 8 per cent was cut, and an addi- 

 tional 5 per cent was sold. Similarly in Oregon fir, 7 per cent 

 was cut and an additional 7 per cent was sold. In the case of 

 Oregon pine, California redwood, and California pine the condi- 

 tions were not far different from those just mentioned." 



Particular attention should be given to the ratio columns for 

 " Timbered area owned " and " Timber owned." In the case of 

 but one group that of Oregon pine owners does the total 

 quantity of timber owned in 1918 equal that owned in 1913. In 

 every other region the total group ownership dropped off dur- 

 ing those years. The ratio is close to 100 in most of the regions 

 still having large areas of virgin forest, reflecting, first, con- 

 tinued opportunity to acquire timber, and, second, the effort on 



the part of the larger owners to maintain a constant but not 

 greatly increased supply of stumpage for their mills. 



It is also notable that the quantity of stumpage held in ]918 

 by the New England group is very close to that held in 1913. 

 In several other regions low ratios, such as 38 per cent in Penn- 

 sylvania, 65 per cent in the Middle Atlantic States, and 66 per 

 cent each in the softwood areas of the southern Appalachian 

 and in the Lake States, are evidences of timber depletion. 



These data, compiled from the tax returns made to the Bureau 

 of Internal Revenue, confirm the general tendency, ascertained 

 by the Forest Service from study in the field, toward a decrease 

 in the larger timber holdings in many regions and putting tim- 

 ber ownership more largely upon an operating basis. These 

 facts, however, do not necessarily indicate a decrease in 

 the proportionate amount of timber controlled by large owners. 



A SUMMARY OF THE PRESENT SITUATION AS TO 

 TIMBER OWNERSHIP. 



In brief, the situation as to timber ownership has not changed 

 materially from that reported by the Bureau of Corporations in 

 1910. Half of the privately owned timber in the United States 

 is in the ownership or control of about 250 large companies. 

 About one-fifth of the total is owned by the Government. Sev- 

 eral of the Western States also rank as large holders. The 

 ownership of the remaining timber is very widely distributed. 

 There are 24,000 holdings of less than a billion feet in Oregon 

 and Washington alone. The great bulk of the hardwood timber 

 is distributed among many owners. It is roughly estimated 

 that the farm wood lots in the States east of the Great Plains, 

 aggregating 152,000,000 acres, contain two-fifths of the timber 

 in this portion of the country, or approximately 340 billion feet. 



In nearly every forested region the group totals of the prin- 

 cipal owners have either practically remained stationary or 

 decreased. The tendency on the part of these groups to acquire 

 and maintain a relatively constant supply of standing timber 

 as cutting progresses is marked in regions where the remaining 

 resources permit. The decrease in the holdings of such groups 

 in several of the eastern forest regions is a clear indication of 

 timber depletion. In many individual cases, of course, a fur- 

 ther concentration of timberlands is in progress. This is par- 

 ticularly marked in the softwood forests of the Northeast, 

 spurred by the scarcity and high value of pulp woods. 



A realization of the carrying charge on long-term timber in- 

 vestments, which may double the capital cost of stumpage 

 every seven or eight years, has largely, halted the movement for 

 building up enormous speculative timber properties which was 

 in full swing prior to 1910. The tendency of the present, with 

 some exceptions, is to put the timber holding on an operating 

 basis, adjusting its size to a practicable scheme for under- 

 writing the cost of particular sawmills and logging improve- 

 ments rather than carry large surpluses beyond operating re- 

 quirements now clearly defined. A number of companies, 

 hitherto timber investors rather than lumber makers, are be- 

 coming operators through the necessity of obtaining a current 

 revenue to meet carrying charges, and also because of the op- 

 portunities for profit afforded by the existing lumber markets. 

 As a broad rule, therefore, particularly in the Northwest, tim- 

 ber lands are passing over from long-time speculations to blocks 

 of raw material connected with particular manufacturing 

 plants. As a phase of this process, the largest holdings are 

 being reduced rather than increased. 



On the other hand, this regrouping of timberlands is bring- 

 ing new interests into the Western States, chiefly as operators. 

 While often buying timberland from the larger owners there 

 before them or taking over going sawmills, these new interests 

 are also consolidating small holdings in order to block up de- 

 sirable operating units. They thus become large or compara- 

 tively large timber owners themselves ; and their establishment 

 in the West tends to even off decreases in the holdings of the 



