172 The Forest Products Laboratory 



reason that the profits were such as did not permit of more. The early, 

 successful lumberman was a student of economics in his own way, and 

 those who were not failed. The successful ones interpreted the term, 

 "merchantable" — that which could be harvested at a profit — accu- 

 rately, and there are many instances of financial disaster of those who 

 failed to comprehend. 



The term "lumber king" and "lumber baron" were earned only 

 by those who deserved it, and came only to those with foresight, wis- 

 dom, and above all, with the ability to discern the economics of the 

 problem. 



The term, "merchantable", is a variable one in the classification 

 of either timber or its products. It differs at this date from that of 

 thirty years ago ; it differs today as to localities ; for instance, low qual- 

 ity timber classed as mecliantable in the state of Xew York would likely 

 be classed as being below that term in the states of Texas or California, 

 namely, unprofitable to harvest. Therefore, care must be taken in 

 discussing problems of our industry, as they are purely problems of 

 economics. 



Other industries possess the same and similar problems. Gold 

 mining in the West was no exception. Witness the tailing piles of 

 these early mines being worked by Chinamen. The famous Black Hill 

 gold mining district of the Dakotas, a low valued ore for years, wasted 

 a value of eighty cents per ton in tailing, when their raw material was 

 presumed to carry but some $2.30, as it was more economical to return 

 to the raw material supply than attempt too great an extraction. The 

 sugar producer permits a waste of two to four per cent of sucrose and 

 replenishes with raw material. 



I retired from the lumber business and for some years engaged in 

 the production of sugar. In one employment I had a preceptor, a gen- 

 tleman trained in the Eiu-opean school of economics, a most competent 

 sugar man. One day in discussing our problems, he stated, "Gilchrist, 

 I was 15 years in learning American methods of sugar manufacture". 

 The explanation M'as based upon low Eiuropean wages and high cost 

 of raw material compared to high American wages and low cost of raw 

 material. It is a simple problem in economics. 



A number of years ago. when this wonderful Forest Service was 

 organized, young men representing this institution appeared before 

 us lumbermen at our conventions. These young men upon all occa- 



