TIMBER DEPLETION, PRICES, EXPORTS, AND OWNERSHIP. 



29 



THE MOVEMENT OF PRICES. 



Figure 2 shows the trend of pulp-wood prices in New England 

 and contract newsprint prices and consumption in the United 

 States since 1899. Spot market prices are shown for 1919 and 

 1920. Competition among American mills and between the 

 American and Canadian product kept down the contract price 

 of newsprint until 1916, in spite of the increasing cost of pulp 

 wood. Another factor in keeping prices of newsprint down 

 was the introduction of cheaper method's of manufacture, the 

 effect of which was, in part, at least, to help to reduce prices 

 between 1900 and 1909. 



The general contract price level as represented by 100 per 

 cent is $2 per hundred pounds. This price level obtained until 

 in 1916 the increased demand for newsprint outstripped pro- 

 duction, and competition among purchasers for inadequate sup- 

 plies succeeded that among producers to dispose of their pro- 

 duct. Increasing demands and growing competition among 

 newspapers forced contract prices up to $4.50 in 1920. The 



^X)S 



1310 



tSIS 



ISiO 



Fig. 2. — Riise of consumption and selling prices of newsprint In 

 the United States and of the price of pulpwood in New England, 

 1899-1920. 



curve as it stands does not take one important factor into ac- 

 count. Prior to the war the contract price was f. o. b. point 

 of consumption, but during the war contract prices were 

 changed to f. o. b. paper mill. 



Spot market prices are shown only during 1919 and 1920, 

 because prior to that time they are rot available as separate 

 quotations. In general, however, spot market prices before the 

 war followed contract prices closely, and at times were even 

 below them. 



Prior to the war a relatively small percentage of the total 

 newsprint consumption was handled on the spot-market basis. 

 The larger newspapers particularly secured all, or practically 

 all, of their supplies under contract. During the last year the 

 larger newspapers have found it increasingly difficult to secure 

 all of their supplies under contract, and have been forced to 

 secure the remainder in the open market. It is in the open 

 market that the full effect of competition for inadequate sup- 

 plies is shown, and this is reflected in the much higher prices. 



It is here that the speculative element in the handling of a 

 necessary commodity at a time of shortage is fully brought into 

 play. Unfortunately it is upon the spot market that the smaller 

 newspapers, least able to increase returns by increasing adver- 

 tising material and raising their advertising rates, must depend. 

 The depletion of timber supplies is first shown in competi- 

 tion for pulp wood and steadily increasing prices. Competition 

 among producers for the sale of their product resulted for a 

 considerably longer period in keeping newsprint prices at a 

 fairly constant level. Only when J;he available timber sup- 

 plies of the regions in which the newsprint industry had been 

 developed became so short as fo prevent normal additions to 

 plant capacity and demand for newsprint exceeded its pro- 

 duction did newsprint prices advance. Depletion has resulted 

 since 1899 in a large increase in both pulp-wood and newsprint 

 prices. It is merely the time when and rate at which the 

 increase took place that has varied. 



NAVAL STORES SUPPLIES. 



DEVELOPMENT OP THE INDUSTRY. 



So pronounced is depletion of the timber upon which our 

 naval-stores Industry depends for Its supplies that It is com- 

 monly regarded as a dying Industry In the United States. In 

 colonial days, when the wooden shipbuilding Industry of New 

 England was of great importance, naval stores for domestic 

 consumption, as well as for export, were secured from the pitch 

 pine from Maine to New Jersey. The present-day naval-stores 

 industry dates back also to early colonial times, but uses the 

 longleaf and slash pines of the South. 



The very name of the Industry Is no longer appropriate, since 

 the bulk of its products — spirits of turpentine and rosin— are 

 largely used for purposes having no connection with shipping. 

 They are important constituents in such products as soap, paint 

 and varnish, paper sizing, printing ink, greases, oils and belt 

 dressing, soldering flux, shoe polishes, roofing and linoleum, fly 

 paper, sealing wax, electrical supplies, matches, and various 

 articles in the drug trade. The annual products of the industry 

 exceed $40,000,000 in value, more than half of which comes 

 from' exports. Since the Civil War it has held a place among 

 the indust^-Ies of the South Inferior only to agriculture and 

 lumbering. Since 1820, or In fact since statistics of any value 

 are available, American production has led the world, and even 

 at the present time is approximately 80 per cent of the total 

 world production. 



For the South as a whole, production has been falling off for 

 a number of years. From slightly less than 34,000,000 gallons 

 of turpentine in 1899, the first year of satisfactory statistics, 

 It declined to approximately 17,000,000 gallons in 1918, a de- 

 crease of 50 per cent. Rosin production during the same_ period 

 fell a proportionate amount. 



The average production of the last six years has been 25,000,- 

 000 gallons of spirits of turpentine and 834,000,000 pounds of 

 rosin, a production which has been easily absorbed by the 

 world's industries. 



REMAINING SUPPLIES. 



A study of the opinions and estimates of a number of the best- 

 informed men in the industry, men representing every part of 

 the territory and having more than ordinary means of informa- 

 tion, indicates that there are not more than 31,000 crops of 

 turpentine timber available and uncupped in the naval stores 

 territory to-day. From this amount of timber It is estimated 

 that not more than 166,000,000 gallons of turpentine and 5,000,- 

 000,000 pounds of rosin can be produced. In addition to the 

 unculjped supply of timber, that which has been or is now 

 being worked will probably yield 60,000,000 gallons of spirits 

 of turpentine and 1,900,000,000 pounds of r&sin, making the 

 total available supply 226,000,000 gallons of spirits of tur- 



