HOW UNCLE SAM IS SELLING HIS TIMBER
Graves, Chief Forester Henry S.
How Uncle Sam Is Selling His Timber An Answer to the Criticism That National Forest Timber Should Be Sold Cheaper and Faster; and a Statement of the Policy of the Forest Service By Chief Forester...
...The manufacturers who cut this insignificant fraction of the country's total lumber cut would have sold their lumber at the market price, pocketing the $1 or $2 or $3 per thousand less than the market price of stumpage with which the government had presented them...
...They are accepted by business men and are attracting large investments...
...Private timber would be concentrated in fewer hands...
...It sold during the last fiscal year the equivalent of about 800 million board feet of timber in all forms—for lumber, mine props, fuel, posts, and many other uses...
...It seeks purchasers by every means in its power...
...Then the consumer would pay the score—with usury...
...When that point is reached he prefers to hold, not manufacture, his timber...
...The Forest Service spent thousands of dollars advertising its timber...
...The value of stumpage would decline...
...It could easily have given the timber to speculators to hold for rising prices...
...In point of fact, it could not have done this by giving the timber away...
...This would inevitably accentuate the condition known to the lumber trade as "overproduction...
...It is advertising commercial opportunities on the Forests widely and successfully...
...Ten years ago it could not have given away what it is selling to-day...
...It would have had to pay lumbermen to come and get it With lumber prices where they are now the government can get from 50 cents to $5 per thousand for its stumpage, under competitive bids, the price depending on the location and kind of timber sold...
...At any given price level, there is a certain amount of timber that will pay the cost of cutting...
...They saw to that when they got it...
...after the first selection at the musicale, "I have had some exciting experiences...
...The rest is not on the market because to cut and manufacture it would cost more than it would sell for...
...The Consumer Pays the Market Price WHO would have benefited if the timber actually sold last year had been sold at half the market price, or given away...
...But where the capital and organization of the big operator are needed to develop inaccessible areas, large sales are made...
...Though there is still plenty of timber left it is less accessible and more expensive to get on the market...
...CRAVES THE CRUCIAL TEST of public ownership and management of forests in the United States will be the power to resist an unintelligent demand for the government to sell timber cheap, on the supposition that this will enable the public to buy lumber cheap...
...If the government cuts its stumpage price in half, more mills will be located on the Forests, BUT FEWER OPERATE OUTSIDE...
...of the capacity of the mills...
...Public timber would have diminished...
...The small manufacturer is sought wherever he is equipped to utilize the timber...
...The annual growth on a number of Forests which are within reach of markets is now fully used...
...The country's total supply is being cut three times as fast as it grows...
...It would be the inducement held out to secure the reversal of the order dictated by business conditions...
...It is also prohibited by law from selling or offering for sale any timber until after it has been appraised, or for less than the appraised value...
...Many operators are looking to the Forests for new locations...
...In point of fact it is doing just the reverse...
...But if they had sold to the wholesaler for less, would he have handed the present on to the retailer...
...They also have, as a rule, the timber that would naturally be first to come into demand...
...It is charged with virtually aiding private timber monopolies to gouge the public...
...Not that is, as stumpage...
...Would the general market price have been less to the purchaser from the retail dealer...
...To Materially Lower the Retail Price by Increasing the Cat the Government Would Have to Overcut it Forests BUT suppose the government had, by giving timber away to all applicants, raised the National Forest cut to one-fifth of the entire cut of the country...
...The present National Forest stand forms one-fifth of the country's total supply of saw-timber...
...Sales of Government Timber for Less Than...
...Also, it could and would prepare the way for a timber monopoly later that would be a monopoly with a vengeance...
...In effect, the government would pay a bounty to induce operators to cut its trees instead of their own...
...And the big, rude man in the pink neck-tie gazed out of the window...
...It would not restore the cheap lumber prices of a few years ago...
...If one-fifth of the annual lumber cut were drawn from the forests and at the same time they continued to supply the timber in other forms demanded by western mining, agriculture, and other industries, the forests would be cut oft faster than the country's total supply...
...Incidentally, it would promote wanton and great waste of valuable timber, both on and off the National Forests, by operators who would merely skim the cream, and ft would permit the extra cost of bad management to be saddled on the public...
...I don't blame the sea," he muttered.—Ex...
...To permit of timber being sold for less than its market value, the law would hava to be changed...
...The strong ones would seize the opportunity to add to their holdings...
...As transportation facilities are extended, this will be brought about on every Forest * * * No Wonder "Ah yes," murmured Miss Screech-er...
...Would It Pay...
...The use of National Forest timber on a sound and stable basis is increasing rapidly...
...But not all could...
...Its Market Value Would Directly Promote Monopolistic Control of Timber Supplies YEARS before the National Forests were set aside speculators were busy securing the best timberlands of the public domain...
...Since July 1, 1912, oper 1 1/2 billion feet has been sold...
...and a Statement of the Policy of the Forest Service By Chief Forester HENRYS...
...Its sale contracts are framed to meet practical business and logging conditions...
...Men who find it to their advantage to buy National Forest timiber at the present prices would make more money...
...To the extent that the cut from government land took the place of the cut from private holdings, the bounty would represent the cost of bringing about this substitution...
...The output in 1912 in the West was only about 60 per cent...
...Not one cent...
...If they could all do this, the consumer would not be benefited at all...
...If the demand is sustained, the yearly sales will soon reach 3 billion feet...
...It is making every effort consistent with sound business to dispose of the overripe stumpage on the Forests and bring the annual cut up to a fair portion of the yield...
...Yet in all contracts, holding timber for speculation is prohibited and the payment of the proper value is assured by frequent adjustments of price...
...THE government is now being criticised for not selling National Forest timber cheaper and faster...
...The owner will not go beyond a certain point...
...The chance for monopoly profits and artificial control of the market would have been made materially greater...
...They have incurred business obligations which they must meet The weak ones would be shaken out...
...The government could not materially lower the cost of lumber to the average consumer if it were to reduce by half the price charged for timber cut on the National Forests...
...But it could enable many lumbermen to grow rich fast...
...But, at a given price level, there is always a limit to the amount of timber that is on the market...
...And if the retailer had got any part of it, would he have given it to the consumer...
...The consumer thinks there is not production enough, because lumber costs him more than it did ten years ago...
...Those operators who are now breaking even or running at a loss or with curtailed output would of course, IF THEY COULD, withdraw from the market and let the cut from government lands take the place of the cut from their holdings...
...Should it be changed...
...This is what the lumber trade knows as "overproduction...
...After lumber prices fell in 1907 many lumber mills operated at a loss rather than shut down altogether...
...The cut from government land will take the place of part of the cut from private holdings...
...This policy is succeeding...
...If the government gave timber away and the consumer got the full benefit the $2 per thousand gain to him would be but a trifling part of the retail price...
...The field for speculative buying of timberlands would be wide open again...
...To enable the consumer to benefit by a stumpage price less than purchasers of stumpage stand ready to pay, the government would have to manufacture, transport, and market the lumber, selling directly to the consumer from its own retail lumber yards...
...Twice as much western timber is in private as in public ownership...
...Gradually a condition of equilibrium would be restored...
...The surplus of stumpage artificially created would be absorbed, partly by cutting, partly by speculative acquisition and withdrawal...
...Private owners are therefore under pressure to sell and extinguish these charges...
...How Timber Is Sold THE average price at which National Forest timber was sold on the stump by the government last year was $2 per thousand...
...The owners had miscalculated the demand, but having set up their mills could not shut down altogether without incurring greater losses than those involved in running...
...Part of this bounty would be a pure gift to the operators...
...Privately-owned timber involves carrying charges to the owners—interest on capital tied up, taxes, and cost of protection or fire risk...
...Coming over here from New York a terrible storm arose, and I had to sing to quiet the passengers You should have seen the heavy sea running...
...But the forests that supplied him ten years ago are gone...
...The cut, for lumber alone, of the entire United States was between 40 and 45 billion feet All sales of over $100 worth of timber were made after advertisement for competitive bids...
...The Forest Service is prohibited by law from selling in any other way...
...Policy of the Forest Service THE FOREST Service is selling timber as fast as this can be done without sacrificing the interests of the public...
Vol. 5 • March 1913 • No. 9
