LUMBER CUT OF UNITED STATES, 1870-1920. 
7 
cent less than in 1896. In 1920 for his reduced yearly quota he paid 
in dollars three times as much as he did in 1890. Small wonder that 
he hesitates about building a house, even though average incomes 
have greatly increased. Even measuring the cost in terms of other 
commodities, he paid the manufacturer in 1920 more than he did 30 
years before for a supply which was nearly one-sixth larger. 
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Other things being ecmal, production is in large measui-e regulated 
by demand, upon which high prices exert a strong restrictive inllu- 
ence. Extremely high prices may extinguish demand. But the cost 
of production is the fundamental basis upon which prices rest, and 
one of the main factors determining cost is the accessibiUty of the raw 
ruaterial. As the forests shrink and retreat before the mills to more 
distant, swampy, or mountainous regions, the cost of production or 
