1046 Canadian Forestry Journal, April, 1917 



♦ — — • — — — '— — ■ — — "— " " ._„_,,_„._.„_. — ._... 



Conditions In The Lumber Industry 



Excerpts from the U.S. Government Report by William B. Greeley of the U.S. 



Forest Service 



The industry seems to have been built up beyond the needs of its market, 

 for at least a third of its saws are idle. It is carrying an installed mill ca- 

 pacity of approximately 117 billion feet as against an estimated cut in 1914 

 of 40.5 billion. 



The interest and taxes paid out on timberlands held over long periods 

 may mortgage liberal advances in future worth. 



Market values of stumpage have stood still for eight or nine years and 

 even declined. Western timberlands have been overcapitalized more or less 

 and can hardly earn in the long run the profits expected of them. The large 

 speculative gains in buying stumpage which have tided lumbermen over 

 many tight places are mostly over. 



The industry is approaching the point where its early stumpage costs 

 will equal the market or operating value of the timber. It becomes doubt- 

 ful whether the interest rates upon which much of its capital has been bor- 

 rowed and its financial structure built up can, as economic conditions are 

 now crystallizing, be returned by forest lands during long periods. Future 

 returns must be realized from efficient lumber manufacturing and merchan- 

 dising. 



Unsuited by nature to this form of wealth, it (the general property tax) 

 tends toward heavier taxes than a sound forest industry can bear. Uncer- 

 tainty as to the future extent of this burden is a menace to the stability of 

 timber ownership. Moderate, and particularly stable, taxes will aid power- 

 fully in securing the right kind of forest ownership. 



There are two ways of carrying the surplus timber. A more stable type 

 of private ownership may grow out of present conditions. A second solu- 

 tion is the enlargement of the public forest holdings. Stable forest owner- 

 ship might be secured also by administering public and private lands as a 

 single holding, publicly controlled as to rate and methods of cutting. 



Broadly viewed, the returns in lumber distribution appear to average 

 higher and be more stable than those in lumber manufacture. 



A fifth or more of the cost of lumber to consumers is eaten up in railroad 

 freights, retailers take about the same amount, and manufacturers, on the 

 average, little more than one-half. 



The rise in lumber prices, though very marked during the 10 years be- 

 fore 1908, has not been greatly different from that of most commodities; 

 since 1907 lumber has fallen behind. 



Lumbermen have frequently overcut their markets. Less than living 

 prices and waste of raw material are the evidence. 



With local exceptions, lumber production is competitive. Added diffi- 

 culties in the way of a general lumber trust are the competition of substitute 



