374 REPORT OF THE FORESTRY COMMITTEE 



ers, who must naturally operate so as to give the highest returns on the capital 

 invested and who also desire to be good citizens and do what they can towards 

 conserving the forest resources of the country, are confronted by at least two dis- 

 tinct sets of conditions. The first is the one involving the broad economic condi- 

 tions of market, transportation, competition, taxation and finance; the other, the 

 inside details of logging, milling, labor and fire protection. While it is true that 

 men engaged in other industries are confronted with these same problems, the 

 lumber biisiness in many ways is on a less stable basis than other manufacturing 

 industries and capable of less refinement. 



Among the broad economic considerations, transportation plays an important 

 part. The distance and freight rates from the point of production to the market 

 are determining factors ; while in addition the lumber manufacturer must provide 

 his own transportation facilities from where the timber stands to the mill, and not 

 infrequently from the mill to the railroad line. He caters also to a fickle market 

 and one which may demand all or only part of his products. Moreover, the manu- 

 facturer is unable to dictate the sizes and grades he produces, but must meet to a 

 large extent the arbitrary requirements of the consumer. With many manufac- 

 tured articles this is comparatively easy ; but since trees grow as Nature provided, 

 and not always as man desires, the lumberman must take his trees as he finds them 

 and do the best he can towards making them meet the requirements of a market 

 which does not consider these fundamental facts. 



Competition is to be expected, and between the larger concerns it is no more 

 serious than in other industries. The small lumber producer, however, with his 

 vest-pocket sawmill, often creates a form of competition which it is difficult to 

 meet. The small mill is often a family affair, and in any event represents mainly 

 the labor involved, against which the large operator must figure his heavy overhead 

 charges and expensive equipment. Financing lumber operations offers no unusual 

 difficulties except that the capital invested in private timberlands must usually be 

 tied up for a long period, and until within comparatively recent years there was no 

 systematic basis for issuing timber bonds. 



THE TAXATION QUESTION. 



The taxation of timberland deserves a separate article and it is only necessary 

 to say that it has actually been true in some cases that the imposition of the general 

 property tax on timber has forced rapid cutting even under conditions which made 

 a large output profitable ; while some of the new tax theories advocated, by giving 

 no consideration to forests, might prove even worse than present systems. 



Most of the broad economic problems which confront the lumbermen are not 

 more serious or more difficult of solution than in other industries, if the lumber- 

 men merely lumber without regard to conservation. It is true, however, that the 

 present economic influences are not favorable to intensive forest crop production. 

 The margin between manufacturing costs and selling price of ordinary grades 

 of lumber is too narrow to permit of any radical change of methods, nor will it 

 permit keeping heavy investments of capital too long tied up in one operation. 

 The carrying charges as represented by interest and taxation are not fully offset 



