FOREST DEPLETION AND LUMBER PRICES. 



The course of lumber prices In the United States has been 

 very materially affected by the successive depletion of old and 

 development of new fields of lumber production. As one great 

 forest region after another has been opened up two counter- 

 acting influences have been brought to bear on prices. One 

 of these has been interregional competition. Exploitation has 

 begun in new regions well in advance of exhaustion of the 

 older sources of supply. The result has been to hold in check 

 the gradual rise in price which would normally take place as 

 competition relaxed with the diminution of supplies in the older 

 regions and as exploitation advanced from the most accessible 

 and easily logged timber to that involving higher costs of pro- 

 duction and transportation. On the other hand the cutting 

 , Out of the older regions and the resulting necessity of draw- 

 ing lumber supplies from more distant fields has meant, of 

 course, the periodic addition of new transportation costs. 



■ PRICE CHANGES AND REGIONAL DEPLETION. 



Thus prices have tended to rise at a step from one level to 

 another and then to hold pretty well on this level for a term 

 of years rather than to follow an ascending curve. This is most 

 marked with the softwoods. 



EASTERN SOFTWOOD MARKETS. 



Table 11 shows the lumber prices in eastern markets- at 

 five-year intervals from 1840 to 1910 and yearly from 1910 to 

 1920. The prices are computed throughout on a gold standard 

 to eliminate the distortion resulting from depreciated values 

 during the paper-currency period. 



Table 11.- 



-Trend of average wholesale values {eastern 

 markets.) 



1 Figures apply to first three months. 



While a great variety of factors have influenced lumber prices, 

 a succession of price levels with sudden transitions correspond- 

 ing to important shiftings of the fleld of supply may be readily 

 discerned. There has been much price fluctuation in the soft- 



woods, but in every instance price declines have ultimately been 

 regained and new levels have been established. The' underly- 

 ing cause has been the widening distance between the sawmill 

 and the consumer of its product. 



The trend of lumber prices in eastern markets since 1840 is 

 further illustrated in figure 13, which presents average whole- 

 sale values of upper grades of softwoods and hardwoods sepa- 

 rately in relation to the average price trend of aU com- 

 modities. These values are expressed in jfercentages, with 

 1860 prices as the index basis, and on a gold standard through- 

 out. Hardwood prices will be discussed in a subseqtient 

 section. 



Between 1840 and 1860 average prices of softwood lumber in 

 the eastern markets followed quite closely the average price 

 of all commodities. The lumber was principally white pine 

 from New York, New England, and Pennsylvania. The average 

 value oC upper grades in the wholesale trade fluctuated between 

 $20 and $30, centering about $25 per thousand feet, while ma- 

 terial of average quality sold fairly uniformly at $10 to $11. 

 Transportation costs were about $1 per thousand. About 1850 

 white pine from the Lake States began to filter through to 

 the Atlantic seaboard, and by 1860 Chicago had replaced Al- 

 bany, N. Y., as the leading lumber distributing center in the 

 world. The increase in volume of the more distant Lake States 

 timber entering the eastern market from then on was accom- 

 panied by a price advance in upper grades from $24 in 1852 

 to $30 in 1S5S, and may be accounted for by a growing short- 

 age of eastern white pine. 



The Civil War greatly affected the price of lumber, in com- 

 mon with that of other, commodities, through inflation ; but 

 calculated on a gold-standard basis softwood values did not 

 increase materially until after 1865. But between 1865 and 

 1870 softwoods parted company with general commodity values, 

 and with the exception of one brief period have so remained 

 until the present time. 



The softwoods reached their new price level in 1866. From 

 that year onward lumber prices, except as indicated, remained 

 well above the average for all commodities. 



The general level of softwood uppers from 1866 to 1890 

 was between $34 and $40 per thousand, and that of the lower 

 grades between $14 and $18, an increase over the prewar 

 levels of $10 to $15 and of $4 to $8 per thousand, respectively. 

 This was the period during which Lake States white pine was 

 entering the eastern market in increasing volume, at increased 

 transportation costs of about $5 per thousand. Undoubtedly 

 the increasing absorption of timber from the Lake States by 

 the Middle Western States, whose development was proceeding 

 rapidly^ and the growing scarcity of local timber also exerted 

 a lifting influence on softwood prices. Large rafts of lumber 

 were passing down the Mississippi River to Memphis, Vicks- 

 burg, and even New Orleans. 



The financial depression which began in 1873 caused a tem- 

 porary decline of lumber prices in common with all commodi- 

 ties. Following 1879 softwood lumber prices advanced steadily 

 until 1883, when the upward trehd was checked by an increasing 

 inflow to the large eastern markets of yellow pine from the 

 forests of Virginia, North Carolina, South Carolina, land 

 Georgia, and the rapidly increasing cut in the Lake States. 

 Supplies were brought to New York, Philadelphia, Boston, 

 Baltimore, and other eastern centers by water transportation. 



During the year 1887, for example, over 200 million feet of 

 southern pine was received at New York, an increase of nearly 

 80 per cent over 1886. Only a few years before there was but 



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