TIMBEE DEPLETION, PEIOES, EXPOBTS, AND OWNERSHIP. 



51 



to retailers, wholesale dealers, and wholesale consumers. While 

 a few of the larger mills do not sell to wholesale dealers, the 

 more general practice is to grant the wholesalers a discount on 

 the prices made to retailers and wholesale consumers. Whole- 

 salers, however, do a large business with small mills which 

 are usually not in as close touch with market prices and from 

 which they often obtain much lower prices than from the larger 

 and stronger mills. They are thus enabled to increase very 

 materially their portion of the margin between mill price and 

 the price paid by the consumer. 



TRANSPORTATION. 



The extent to which the growing distance between forests 

 and markets has steadily added to the cost of lum'ber in east- 

 ern markets and in the country retail trade of the Middle West 

 has been indicated in figures 13 and 15, respectively. In the 

 years before the more accessible forests were exhausted, trans- 

 portation imposed a charge equivalent to from $1 to $3 per 

 thousand feet. The cost to-day of importing lumber into New 

 York from the South is approximately $9 per thousand and 

 from the West Coast $20. An idea of the percentage of the pre- 

 war and postwar retail price absorbed by transportation costs 

 can be obtained from the following table. Freight charges are 

 computed on the basis of 2,500 pounds per 1,000 feet : 



Tabub 18. 



Although transportation costs 'have gradually increased, the 

 table shows strikingly how present prices have outstripped 

 freight increases made during and since the war, on specific 

 grades and species. The table below serves to show the increas- 

 ing transportation charges on lumber into Chicago, from the 

 days when the forests were accessible to water transportation, 

 as all rail shipments became necessary with the cutting out of 

 the accessible forests. To-day the average freight charge on all 

 lumber going into Chicago is probably between $10 and $11 per 

 1,000 feet, due to the increasing volume of western lumber which 

 has entered the market during the past 12 or 18 months. On the 

 basis of the present average retail price this would be equivalent 

 to 12 to 13 per cent, as against about 20 per cent in 1912-1915. 



Table 19. — Transportation ' per M board feet on lum'ber to 

 Chicago. 



Years. 



1877.... 

 1880.... 

 1882.... 

 1885.... 

 1888.... 



1890 



1891.... 

 1897.... 



1900 



1905.... 

 1910.... 

 1915.... 

 1918-20. 



By water from— 



Al- 

 pena, 

 Mich. 



SI. 31 

 2.22 

 1.92 

 1.64 

 1.90 

 1.74 

 1.61 

 1.18 



Manis- 

 tee, 

 Mich. 



SI. 27 

 2.12 

 1.78 

 1.46 

 1.49 

 1.58 

 1.46 

 1.13 



Byrailfrom- 



uaw 

 and 

 Bay 

 City, 

 Mich. 



12.00 

 2.50 

 2.50 

 2.50 

 2.50 

 2.50 



Mem- 

 phis, 

 Tenn. 



$4.50 

 4.00 

 4.00 

 4.25 

 4.25 



Annis- 

 ton, 

 Ala. 



$5.75 

 5.00 

 5.25 

 5.50 

 5.50 



Bir- 

 ming- 

 ham, 



Ala. 



$6.00 

 5.60 

 5.63 

 7.38 



Merid- 

 ian, 

 Miss. 



$5.75 

 6.50 

 6.00 

 6.13 



7.88 



Port- 

 land, 

 Greg. 



$12.50 

 12.60 

 13.75 

 13.75 

 13.75 

 15.00 



' Transportation by water based on weekly rates pubhshed by the Northwest Lum- 

 berman; rail rates computed on basis 2,500 pounds per M feet. 



In southern Minnesota it was possible to determine quite 

 closely frofn the purchase records of a number of large line 

 yard companies the average transportation cost carried by the 

 lumber distributed through their retail yards. These steadily 

 increasing costs, shown in the table below, are primarily due to 

 the increasing volume of western lumber which these companies 

 have had to import in order to supply the needs of their terri- 

 tory, which only a few years ago was immediately contiguous 

 to the greatest lumber-producing region in the country. 



Table 20. 



It will be noted that the average selling price for 1919 shows 

 an increase over 1905 of 109 per cent, while the increase in 

 transportation in relation to selling price was only 72.8 per 

 cent. Although transportation's portion of the selling price 

 has been steadily growing in dollars and cents, the price of 

 lumber during the past three years has been increasing faster. 

 The average selling price for March, 1920, was 230 per cent 

 over the average price of 1905, but transportation absorbed only 

 about 14 per cent, the smallest percentage since 1908. 



In 1905 northern pine, shipped on freight rates of from $2.50 

 to $3 per 1,000 feet, formed 80 to 90 per cent of the retail stock 

 of these companies, while western timber amounted to less 

 than 20 per cent. In 1919 these percentages were almost re- 

 versed, western timber forming practically 80 per cent of the 

 stocks and northern pine less than 20 per cent. Owing to a 

 larger proportion of western lumber in these stocks this year, 

 it is estimated that the average freight cost represented by 

 each thousand feet of lumber distributed will be between $12 

 and $13, almost equivalent to the total average lumber price 

 of $16 in that region 25 years ago. 



RETAIL PRICES AND COSTS. 



The upward movement of prices. — ^The movement of average 

 retail prices in country districts in the Middle West from 

 September, 1918, to March, 1920, is shown in figure 19. These 

 values are based on line-yard distribution in Kansas, Okla- 

 homa, Nebraska, and southern Minnesota, and represent aver- 

 age selling prices for lumber only, arrived at by dividing the 

 total sales in dollars by the total feetage of lumber sold. It 

 will be noted that the average prices in the above regions coin- 

 cide closely. From 1912 to 1915 the average retail price of 

 lumber in these regions was around $30 to $32 per thousand. 

 In September, 1918, average prices were between $40 and $50, 

 and moved upward to about $85 in March, 1920. 



.In the larger cities of the region, such as Chicago, Kansas 

 City, and Minneapolis, there was a similar upward movement 

 of retail prices. During the period 1912 to 1914 the average 

 selling price of lumber in Chicago, Kansas City, and Minne- 

 apolis was close to $26 per 1,000 feet. There was little varia- 

 tion between the cities. The average selling price in 1919 in 

 Kansas City centered between $45 and $50 per thousand. 

 Average prices of March, 1920, were variously estimated by 



