FIFTH NATIONAI. CONSilRVATION CONGRESS 345 



reasons, were its stumpage price sharply lowered, the difference would go to 

 profit the dealer and transporter, since they would still be able to demand of 

 the consumer the price of lumber determined by other factors. This would be 

 equally true of any effect in lowering private stumpage or mill prices of lumber. 

 The disadvantage to the lumberman would not mean corresponding advantage 

 to consumers, except perhaps local purchasers at the mill, for it would be 

 absorbed in the same way. The western lumberman no more fixes prices for 

 his product than does the farmer who takes a load of vegetables to town. 

 Either must sell at market quotations, in the determination of which he has 

 nothing to say. In short, so far from there being any trust regulation of stumpage 

 or manufacturers prices, the keenest possible competition exists. Large and 

 small owners of timber and mills are alike confronted by the necessity of revenue 

 with which to carry on aggregate investment which is far greater than can be 

 realized upon with the present demand. They are selling all they possibly can, at 

 any price, in order to carry the rest, and obviously those at the greatest distance 

 from the main markets must accept a price which when added to very high 

 freights makes no more than their nearer competitors can get added to immensely 

 cheaper freights. This exceedingly important point should be borne in mind 

 throughout. 



On the other hand, this condition will not always continue. The diminution 

 of private supply, particularly that nearest the seat of demand in the central, 

 southern and eastern States, will tend to raise prices to a point where the trans- 

 portation factor is less governing and a government reserve can be made most 

 useful as a curb on extortionate speculation. 



As a matter of fact, the profits in timber speculation to date have been 

 much exaggerated. While it is true that stumpage once secured for a song is 

 now valuable, this value is largely an expectation value, seldom realizable at 

 greater profit today than is expected in any commercial use of money. Timber 

 sufficient for the present lumber demand can be had for less than it is really 

 worth, as has been previously said, and its price usually represents a succession 

 of transfers at small profits above accumulated carrying charges. It is highly 

 important to bear in mind here also that the extensive marketing of government 

 timber now will have its chief immediate effect not in cheapening lumber, but 

 in cheapening stumpage, or, in other words, delaying the early profits of present 

 private holders but increasing their opportunity for further acquirement and 

 also affording opportunity for a new crop of speculators. It will not increase 

 the amount of lumber used, but transfer the drain to the public forests and leave 

 a correspondingly greater private supply untouched for speculation. Such specu- 

 lation will be furthered by removal of the government reserve which would 

 otherwise be available to break monopoly. 



Another .exceedingly important point commonly overlooked is that, so far 

 from being in a strong strategic position to increase prices by the holding process, 

 the private speculator is in a very weak position to do so at present. Diminution 

 of supply will tend eventually to give him such an advantage but because of 

 reasons previously mentioned, doubtless assisted by the increasing use of sub- 



