POSSIBLE REMEDIES FOR MONOPOLISTIC CONDITIONS 21 



ing should if possible be carried on by the same organization. 



Now while the most efficient sawmall is not a very large 

 unit in itself, if with it are included the various other items 

 which may be effectively combined, a rather large initial in- 

 vestment is indicated, in some regions an investment of mil- 

 lions of dollars. The purchase of several thousand acres of 

 valuable timberland, enough to guarantee a timber supply 

 for the reasonable life of an efficient mill, in itself involves a 

 very heavy outlay ; and in some regions, as for instance in the 

 cypress fields, logging equipment represents a large expense. 

 The cost of drying kilns, the capital tied up in drying woods, 

 and the advances to loggers and mill hands amount to consid- 

 erable sums. 



It may be stated at this point, however, that it has not been 

 the policy of the Government to attack such integrated organ- 

 izations as have been suggested. The Government has made no 

 objection to the combination of timber ownership, lumber man- 

 ufacturing and all other processes under one management, but 

 has merely tried to prevent the combination of a number of 

 these large units into one association for the purpose of manip- 

 ulating prices. It is clear that this latter sort of combination, 

 the combination of similar units performing similar functions, 

 the so-called " horizontal' ' combination, is an entirely different 

 proposition. It not only represents vastly more power, but it 

 certainly does not effect the same economies. 



Some economies there may easily be, however, even in this 

 latter type of combination. Doubtless it may secure cheaper 

 distribution of the product, through a reduction in advertis- 

 ing and selling expenses, and a saving in cross freights. Per- 

 haps it may prevent some needless duplication of plants, an 

 important consideration in the lumber industry where there is 

 always a considerable amount of capital tied up in useless 

 milling and logging equipment. It might even permit some 

 specialization among the various mills, although this is not cer- 

 tain. Experience has already shown that combination can do 

 much in adjusting the supply of lumber to the demand, thus 

 securing more stable conditions in the industry. This is a con- 

 sideration of great importance because of the fact that the lum- 

 ber industry is peculiarly sensitive to changes in the general 



