ing is usually inadequate and there is a high pro- 
portion of business failure. Most of these small 
mills do not own timberland, but purchase stump- 
age from hand to mouth. They seldom use good 
forest cutting practices. Usually transient, and 
having no interest in future cuts from a given area, 
they attempt to get all they can from each tract. 
This ordinarily results in clear-cutting, leaving the 
land unproductive for many years. 
The distribution and size of sawmills reflect to 
a considerable degree the course of timber deple- 
tion. Failing to organize a permanent raw-material 
supply and feeding upon a shrinking resource, the 
lumber industry, as previously outlined, rose and 
fell in one region after another in a wave of big- 
mill operations. 
A wave of big mills is now at its crest in the 
West. ‘Thirty percent of the lumber output in 
1942 came from 183 western mills each cutting more 
than 25 million board feet per year (table 21). 
There were only 30 mills of this size in the North 
and South together, and the number is growing 
smaller each year. 
The South is in an intermediate position. The 
era of virgin timber and big sawmills is nearly at 
an end, but this section of the country has more 
than half of all the mills cutting between 5 and 25 
million board feet per year. Furthermore, it has 
18,500 mills cutting less than 5 million board feet 
each—80 percent of them cut less than 1 million— 
and together these small mills produce nearly as 
much as the large mills of the West. 
In the North, timber depletion is much further 
advanced and mill output averages much less. AlI- 
though the total number of mills in 1942 was only 
about 10 percent less than in the South, their out- 
put was only about one-third as much. 
Excess capacity has been a source of instability 
and economic weakness of the timber industry. 
In each region the era of big mills has been marked 
by expansion far beyond the permanent productive 
capacity of the land. Mill capacity has also been 
chronically in excess of market demand. But the 
larger mills were generally under other pressures 
to operate at capacity and this tended to keep 
prices and profits down. As a result the financial 
record of the lumber industry before the war was 
less favorable than that of other manufacturing in-" 
dustries. 
Under such circumstances there was little in- 
centive to conserve the basic resource or to plan 
for permanent operation. Marginal operations 
Forests and National Prosperity 
are as a rule wasteful of timber, taking only the 
best in hard times and, when profits are high, cut- 
ting too fast and taking small timber which should 
be held as growing stock. 
Tas_E 21.—Number of mills and percent of 
lumber cut, by size of mill,t 1942 
MILLs 
Mill : United 
5 if 
oe North South West Stntes 
Number Number Number Number 
Salle eas 17,031 18,529 2,331 37,891 
Medium __... 78 419 294 791 
Warge: esses 5 25 183 213 
Total 17,114 18,973 2,808 38,895 
LUMBER CUT 
ee ee UU UU EET SIE SS SEES 
Percent Percent Percent Percent 
Smallaee 11.6 28.9 45.3 
Medium ........ 2.0 12.1 Bi3ia 2 22.4 
harveyi ere: 4 2.0 29.9 32.3 
Total 14.0 43.0 43.0 100.0 
1$mall: Cutting less than 5 million board feet per year. 
Medium: Cutting between 5 and 25 million board feet 
per year. Large: Cutting more than 25 million board feet 
per year. 
Within the limits of timber supply and available 
labor and equipment, excess mill capacity allows 
quick expansion of output in time of need or when 
markets are good. However, lumber output was 
only 76 percent of the 48 billion board feet of esti- 
mated practical capacity in 1942, the peak year of 
war production. It dropped to 59 percent of capa- 
city in 1945 when labor and equipment were short. 
But in 1947, with lumber prices far above those 
of other building materials, output surpassed that 
of 1942. Nevertheless, it is increasingly clear that 
shortage of suitable available timber has held 
output back in many localities. 
dhe excess capacity would appear much greater 
if estimates were based on a full working year of 
300 shifts for all active mills rather than on prac- 
tical capacity. Such a theoretical capacity in 1942 
would have been 77 billion rather than 48 billion 
board feet. Normally, however, many small mills 
operate only part of the year. In some regions this 
is desirable because employment in these mills sup- 
plements farm employment. 
Operators who have a good supply of timber are 
now in a favorable financial position. ‘There is 
every indication of a sustained demand that will 
53 
