LUMBER CUT OF UNITED STATES, 1870-1920. 7 



cent less than in 1896. In 1920 for his reduced yearly quota he paid 

 in doUars three times as much as he did in 1890. Small wonder that 

 he hesitates about building a house, even though average incomes 

 have greatly increased. Even measuring the cost in terms of other 

 commodities, he paid the manufacturer in 1920 more than he did 30 

 years before for a supply which was nearly one-sixth larger. 



Other things being equal, production is in large measure regulated 

 by demand, upon which high prices exert a strong restrictive influ- 

 ence. Extremely high prices may extinguish demand. But the cost 

 of production is the fundamental basis upon which prices rest, and 

 one of the main factors determining cost is the accessibility of the raw 

 material. As the forests shrink and retreat before the mills to more 

 distant, swampy, or mountainous regions, the cost of production or 



