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Historic, archived document

Do not assume content reflects current scientific knowledge, policies, or practices.

| : UNITED STATES DEPARTMENT OF AGRICULTURE ; BULLETIN No. 638 | :

Contribution from the Forest Service : E HENRY S. GRAVES, Forester -B

ASR Cat BER oes

Washington, D. C. a April 8, 1918

FORESTRY AND COMMUNITY DEVELOPMENT oan

; By : i SAMUEL T. DANA, Assistant Chief of \ Forest Investigations

CONTENTS

Page Page § Too Little Attention Paid to Some Effects Neglected Evils, ete.—Continued.

of Forest Devastation . . . 2... > 2 Abandoned Railroads. . . » + - » 19 Why Our Forests Have Been Devastated. 2 | | ALowerStandardof Population. - . 20 Neglected Evils of Destructive Lum- awe for a Rational Timberland 21

G e ° e s eo ee e e e e 2 eo e@

= cg oe ala ge Tate yee oe s Need fer & Different System of Han- A Roving LumberIndustry. . . .. 3 dling Forest Lands . . »« » » » » 22 Abandoned Towns. - 202 -+>-+ 4 Land Classification . . + ss + 28 Deserted Farms. . . « 6 1 0 2» « 6 Continuous Forest Production . . ». 23 Local Shortagesof Timber. . .-. 8 Siability of Policy . . » © © » 2 » 28 Speculation . ....s 5.222 10 Public Controiand Ownership . . » 30 Community Development Interrupted 16 Community Benefits . . » ». >» » s 82

_ WASHINGTON =|

GOVERNMENT PRINTING OFFICE 1918

FOREST SERVICE.

HENRY 8S. GRAVES, Forester. ALBERT F. POTTER, Associate Forester.

BRANCH OF RESEARCH.

Earre H. Cuapp, Assistant Forester in charge.

’ Forest INVESTIGATIONS.

RAPHAEL Zon, Chief. 8. T. Dana, Assistant Chief.

UNITED STATES DEPARTMENT OF AGRICULTURE

BULLETIN No. 638 (3

Contribution from the Forest Service HENRY S&S. GRAVES, Forester

Washington, D.C. vy April 8, 1918

FORESTRY AND COMMUNITY DEVELOPMENT.

By SAMUEL T. Dana, Assistant Chief of Forest Investigations.

CONTENTS. Page. Page. Too little attention paid to seme eficcis of Neglected evils, ete.—Continved. FOLCSUGSVASTALION she eee 2 i 1 A lower standard oft population......-... 2 Why our forests have been devastated...._.. 2 Suggestions for a rational timberland policy... Zh Neglected evils of destructive lumbering... _. 3 Need for a different system of handiing Acrovane lumber Imadusiry =. .22 22052220. 3 hoOvestilamdS 2a sae ees sep temic eee era 21 Euan GORE bOW NS eas Sze. Poss. ke 4 Mandiclassiilcationeees jee e sta. eee 23 MESCHLCUMAnIMIS ie ee ee ea 6 Continuous forest production............ 2a _ Lecal shortages of timber..............-- g SwabilitycOtip OM Gy ssa se He ee 28 STOO ar a Ee eT en ae ee te 10 Public control and ownership...........- 20 Community development interrupted... 16 CommiumityapeneitSzcs- 200k os. a ee 32 Apanconed rauvoads. 7. 2.622.252. 0.c 19

TOO LITTLE ATTENTION PAID TO SOME EFFECTS OF FOREST DEVASTATION.

Nowadays the mere obvicus results of forest devastation, such as fires, increase in soil erosion, and irregularity of stream flow, are pretty generally recognized. But so far comparatively little atten- tion has been paid to certain economic and social effects of forest devastation, perhaps less apparent but scarcely less harmful. ‘These are at once an indictment of the system that has made them possible and a challenge to devise a better one.

‘In a very literal sense our civilization has been built on wood. From the forests that once stretched almost unbroken from Maine to Florida, from the immense timber stands of the Lake States, and from thoge of the Rocky Mountains and Pacific coast has come, in turn, the material needed for the development of farms and the building of homes as settlement pushed ever westward. Unquestion-

ably, the remarkable progress of agriculture has been made possible

in large measure by an easily accessible supply of timber.

And along with the material for agricultural development the for- ests have given us also one of the greatest of our basic manufacturing industries. Of the 14 groups of industries recognized by the last census, the lumber industry stands third in number of wage earners and fourth in value of product. In its allied branches of logging, milling, and manufacture it empleys 907,000 persons, or 13.7 per cent of all the wage earners in the country. The value of its annual

1€946°—Bull. €385—1s——1

4 BULLETIN 638, U. S. DEPARTMENT OF AGRICULTURE.

output of lumber and remanufactured products amounts to $1,582,- 000,000. From the crude mills and moderate cuts of early days has come the modern mill of encrmous capacity and elaborate equipment. ‘To-day the lumber industry produces an annual cut of some hundred billion board feet of wood, furnishes a means of support for several millions of people, and in hundreds of ways is closely interwoven in the fabric of our economic life.

But there is another side to the picture. Too often has forest utili- zation been synonymous with forest destruction. Our forests, for the most part, have been used not as a crop, a renewable resource, but as a mine, which could yieid its wealth but once and then must be aban- doned. In many places when the forest “mine” became exhausted, the civilization and prosperity that forest expicitation brought about declined and disappeared. Other evils, inseparable from the system, aiso have followed in the wake of destructive lumbering. To point out some of the harmful economic and social effects and to suggest a remedy Is the object of this bulletin. Befcre doing so, however, the reason for the destructiveness of ordinary lumbering operations in the United States will be touched upon briefly, since this offers a clue to the solution of the problem.

WHY OUR FORESTS HAVE BEEN DEVASTATED.

The chief reason why forest destruction rather than forest conser- vation has held sway in the United States is clearly the individu- alistic economic system under which the natural resources of the country bave been utilized. The theory has been that individual ini- tiative and self-interest, stimulated by the desire for pecuniary gain, could be trusted to secure the quickest and most nearly complete utilization of these resources, and that in the long run private owner- ship and development would result in the greatest good to the entire community. In line with this idea both the Federal and State Governments, until a comparatively few years ago, almost uniformly followed the policy of disposing of their forest lands as rapidly as possible. Enormous areas were sold, generally for a fraction of their real value, given away as railroad, highway, or other grants, and acquired—often for “ homestead ” purposes—uuder the various pub- lic-land laws. Within the last century several hundred million acres of forest lands in the United States have passed from public to private ownership.

Complete control over the bulk of the forests in the country has been turned over to thousands of private owners, each of whom has followed his own individual interest in handling his property. There has been no uniformity either in point of view or in practice. Some owners have cut conservatively, others recklessly, and still

—

FORESTRY AND COMMUNITY DEVELOPMENT. 3

others not at all. Probably the one idea which most owners have had in common was to adopt whatever course appeared to be the most profitable financially. Ordinarily, under the prevailing eco- nomic conditions, this meant cutting with entire disregard for the future. Enormous stands of appai tau inexhaustible virgin timber were available, stumpage prices were low, and competition was keen. As a result the average lumberman was forced to conduct his busi- ness in the cheapest possible manner and very naturally felt no inclination to mcur the additional expense necessary to secure closer utilization of timber, to provide for reforestation, or even to insure fire pegs This dees not mean that the lumberman had less regard than other men for the needs of the future and for the rights of generations yet unborn, but merely that he was acting, in accord- ance with the necessities imposed by the accepted system, as his individual interests dictated.

The net result has been that in the handling of our forest re- sources forestry has been conspicuous by its absence. Little attempt has been made to keep forest land productive, and still less to secure a continuous yield of wood. Speculation in timber has been rife almost from the very beginning. Stumpage has. been acquired for little or nothing, and profits in the lumber industry have been de- rived very generally from this source rather than from the te ae and milling end of the business. Comparatively little thought 1 been given to the future, which has been left to take care of itself.

In the discussion that follows there is no desire to minimize the role that the lumber industry has played in opening up undeveloped regions and creating national wealth. It is not lumbering, but de- structive lumbering, that calls for a remedy. And the responsi- bility for destructive lumbering rests not with any individual or group of individuals, but with an economic system that tends to hinder rather than to help permanent community development.

oa

NEGLECTED EVILS OF DESTRUCTIVE LUMBERING.

A ROVING LUMBER INDUSTRY.

One of the most obvious economic effects of treating the forest as a mine rather than as a crop has been to make lumbering in the United States a roving industry, moving from one region to another as the timber resources of each in turn have been depleted. Not only have the States consisting chiefly of agricultural land, such as Ohio and Indiana, been largely cut out, but also those with large areas of land primarily valuable for forest production. New York State, for example, which in 1850 stood first in the amount of lumber produced, is now twenty-fourth. Pennsylvania, which was first in 1860, now stands eighteenth. Michigan, which held first place from

# BULLETIN 638, U. §. DEPARTMENT OF AGRICULTURE.

1870 to 1890, is now thirteenth. Wisconsin, ae headed the list from 1900 to 1904, has now dropped to tenth plac And so the lumber industry has migrated fea one region to an-

other as the center of production has Swed from the Norden: to the Lake States and then to the South, and is now shifting to the Pacific Northwest. This movement has been due in part to the nor- mal clearing of land for agriculture and to the opening up and development of hitherto comparatively unsettled and inaccessible regions richly endowed with timber resources, but in part also to the fact that on most of the cut-over areas no steps were taken to secure a second crop to form the basis of another cut, and still jess te pro- vide for continuous forest production. The land to a large extent has been rendered unproductive, towns and farms have been aban- dened, timber supplies have been depleted, transportation facilities have been crippled, and the community generally has been rendered poorer and less independent.

From a social standpoint one of the most significant phases of this lack of permanence in the lumber industry has been the influence that it has exerted on the movement of population and en the pros- perity of cities and towns. Only in those regions where agricultural lands strongly predominate have cities criginally built up by the lumber industry succeeded in maintaining an uninterrupted growth and prosperity as the lumber was cut out. Many cities less Sey situated with respect to agricultural lands have also succeeded in maintaining their existence as the timber has gone by the introduc- tion of other industries, but often only after a more or less prolonged period of depression, and in any event with less prospect of attaining the development that would have been possible if the forest land tributary to them had been kept productive.

ABANDGNED TOWNS.

But the effects of forest devastation on community development are seen most clearly in the smaller towns in the regions primarily adapted to timber production. Here deserted villages are signposts that too often mark the trail of lumbering operations. As in the mining regions of the West, towns spring up almost overnight, flourish for a few years until the adjacent timber is cut out, and then sink rapidiy te inactivity or even complete extinction. Unlike min- ng towns, however, there is not the same necessity for their dis- appearance. Timber is a renewable resource, which can be so handled as to insure continuity of cut and therefore of industry.

In the mountain counties of Pennsylvania, particularly in the northern part of the State, one comes upon town after town that has declined with the passing of the forest. Run down and deserted houses still standing give an idea of the towns’ former prosperity.

FORESTRY AND COMMUNITY DEVELOPMENT. Shy

Six and eight room frame houses with up to half an acre of land ean be bought for from $200 to $400.

]

i

in the hills of southeastern Potter County. In the fall of 1893, before lumbering operations started, perhaps five or six families were living on the site where two years later stood a busy town. For some 14 years Cross Fork led a feverish existence while the forest wealth was stripped from the surrounding hills. The life ef the town was, of course, the big sawmill, which had a daily eapacity of 230,000 board feet and was up to date in every respect. In 1897 a stave mill was established also, and various other minor wood-using industries existed at different times. In its prime Cross Fork had a population of 2,000 or more and was generally known as one of the liveliest, most hustling places in the State. A branch line of the Buffalo and Susquehanna Railroad was built to the town. Stores of all kinds flourished. There were seven hotels, four ehurches, a Y. M. C. A. with baths and gymnasium, a large, up-to- date high school, two systems of waterworks, and two electric hight systems.

But the prosperity of the town was as short-lived as the timber supply. In the spring of 1909 the big sawmill shut down for good. From then on the population dwindled rapidly. Fires became so frequent that the insurance companies canceled their policies. Five- room trame houses with bath were offered for sale for from $25 to $35 without finding a buyer. In the winter of 1912-13 the stave mill also ceased operations, and the next fall railread service, which for sometime had been limited to three trains a week, stopped altogether. To-day the total population consists of but 60 persons. It it had not been ior the State, which bought up the cut-over lands and has under- taken in earnest the work of reconstruction, the town. would be as desolate as the surrounding hills. As itis, Cross Fork is now a quiet little hamlet, the merest shadow of its former self and without hope for an industrial and useful future until the timber grows again.

The cut-over lands of the Lake States tell the same story of tem- porary prosperity characterized by the rise and fall of mushroom towns. Immense tracts of little value for anything except timber production have been left dotted with deserted villages as the lumber industry devasted them and swept on. Meredith, for example, was once a prosperous town in the northeastern corner or Clare County, Mich., for which one looks in vain on any-modern map. To-day its hotels are in ruins, the town hall has been moved elsewhere, the rail- road which connected it with the outside world has been torn up, and 7s population has dwindled from 500 to 3.

6 BULLETIN 638, U. 5. DEPARTMENT OF AGRICULTURE.

In Oscoda County, Mich., the town of McKinley has met a similar fate. Unlke many other woods towns it never had a large sawmill, but was rather a distributing center for the surrounding region. It had railroad and machine shops, a smail sawmill and a shingle mill cutting material for local use, and served as headquarters for ad- jacent lumbering operations. The usual assortment of schools, churches, stores, hotels, and saloons met the needs of the 500 or more people in the town itself, to say nothing of the 2,500 lumberjacks in the surrounding woods. To-day the town is nothing but a memory. A few deserted houses, the foundations of the old shops, and a popu- lation of three, one of whom is a county pauper, are all that is left of its former activity. Its prosperity departed with the forests that gave it birth.

Farther west, in Wisconsin, the same trail of deserted villages has been left in the wake of the lumber industry. If it were not for the summer tourists who, in spite of the desolation of the cut-over lands, are attracted to the region by the beauty of its lakes the decline of many of the towns would be still more marked. Throughout the region desolation and decay have-followed the prosperity that lasted only as long as the timber.

DESERTED FARMS.

In some regions the practice of timber “mining” has actually tended to cause the abandonment of farms as well as of towns. Nearly everywhere the fullest use of the natural resources of the country demands that both forestry and agriculture be practiced, each in its appropriate place, since most regions contain both farm land and forest land, although of course in widely varying propor- tions. Even in the best farming districts there are usually certain afeas that should be devoted to woodlots, and patches suitable for cultivation are found in regions composed mainly of absolute forest land. Where the cultivable land is rather scattered, of only medium quality, or at some distance from a satisfactory market, it is often necessary for the region to have some other industry in order to make farming practicable. Profitable returns can not be secured from the farm alone. In such regions permanent wood-using industries afford additional opportunities for the farmer to secure employment. They not only help to tide him over the difficult period when he is clearing his land and getting a start, but they also furnish an extra source of income after he has become well established. Moreover, the presence of a population permanently employed in the wood-using industries creates a strong local market for farm products. This often enables the farmer to dispose profitably of material that could not be shipped to a more distant market. Additional industries also help to secure

FORESTRY AND COMMUNITY DEVELOPMENT. q

better transportation facilities. Not infrequently ese various fac- tors, either singly or in combination, are just enough to make the Uigieroncs between success and failure for the edad farmer. Certain it is that where large areas of forest lands are interspersed with smaller areas potentially valuable for agriculture, the manage- ment of the forest lands on the basis of a sustained ania yield may be absolutely necessary for the development of the agricultural lands, and in any event will make their utilization more profitable.

Unfortunately, forest exploitation in the past has been such as to make this ideal conspicuous by its absence. Under the individualis- tic economic system of the past there has been an irresistible pres- sure on the majority of private owners to cut clear and then abandon their land. The result has been lack of permanence not only in wood-using industries but in many regions in farming also. How- ever desirable the clearing of the forest may have been in regions chiefly valuable for cultivation, in regions where forest lands pre- dominate it has in the long run hindered rather than helped agri- culture.

In Pennsylvania, for example, during the decade from 1900 to 1910, a period of rising prices for farm products, the number of farms decreased nearly 5,000. At the same time the area of land in farms decreased more than 780,000 acres, and the area of improved land in farms more than 530,000 acres. While the total population of the State was increasing 21.6 per cent, the number of farms decreased 9.2 per cent and the acreage of total farm land 4.1 per cent. The lure of the city and the development of better lands elsewhere may pa tially explain these facts. It is significant, however, that deserts ted farms are a common sight in the once Peed mounteing, and that their abandonment has oflowed the departure of the fare indus- try. With the passing of the local market and the opportunities for outside employment, their owners found farming a precarious busi- ness.

Tt is entirely possible, furthermore, to go to an extreme in the deforestation of all lands that are suitable for agriculture and that eventually should be cleared and cultivated. There is no advantage in removing the forests and abandoning such lands before they actu- ally can be put to use. Under present conditions, however, this course is by no means uncommon. In Wisconsin, for instance, the State Agricultural College estimates that there are now 10,000,000 acres of cut-ever lands, of which three-fourths may be agricultural. At the present rate of improvement, however—50,000 acres annu- ally—it will be 150 years before this entire area is brought under cultivation. In other words, if the land had been maintained in forest it would be possible to raise from one to three timber crops. on

—— oF ET SSF Ce -

ee BULLETIN 638, U. 8. DEPARTMENT OF AGRICULTURE.

it before it could be utilized fully for agriculture. If forestry had been practiced on only three-fourths of this 10,000,000 acres, and if the annual growth had been only 300 board feet per acre, there would be an annual production of 24 billion board feet annually. This is almost exactly twice the present lumber cut of the State. The pro- duction of this amount of material would support a good-sized pop- ulation, stimulate business, provide a market for local agricultural products, and offer employment to the settler during slack times on the farm. Clearly nothing has been gained and much has been lost by abandoning forest production on the land before the time fer its cultivation was ripe.

There are large areas that once were used for farms, justifiably perhaps, but that under present conditions should be used fer the production of timber crops. In New England and New York, for example, thousands of acres that were cultivated before the opening up of the more fertile lands farther west are now properly being allowed to revert to forest. This conversion is being permitted for the most part to take place in a haphazard fashion, and consequently is proceeding all too slowly and irregularly. Proper care of these areas would help greatly to increase their productiveness.

A somewhat similar situation exists in northern Georgia, where approximately 10 per cent of the mountainous land now being acquired by the Government for National Forest purposes consists of abandoned farm lands. Practically the entire farming commu- nity that had settled there moved out in a bedy te raise cotton on the level, sandy lands of the coastal plain. In nearly all parts of the country are tracts that formerly were settled, cultivated for a while, and then abandoned either because the land was inherently unsuitable for permanent farming or because more valuable lands elsewhere became available for settlement. As a general rule, there is more danger that attempts will be made to cultivate land better suited for timber crops than that really good agricultural land will be retained in forest.

LOCAL SHORTAGES OF TIMBER.

Thanks to the successive opening up of fresh sources of supply as the lumber industry has moved south and west, the United States has not yet experienced a general shortage of timber. Sufficient wood still is cut each year to meet the needs of the country. This is being done, however, at the expense of the forest capital, and is possible only because the country has been so fortunate as to have available for immediate use the accumulation of many centuries of forest growth. The best available estimates indicate that for many years the annual cut of wood products of all kinds has greatly

Bul. 638, U. S. Dept. of Agriculture.

ees Pci x6

ema ca Oe cate Seite si P00 GOEL RIC ate,

F—23139A

A VIRGIN FOREST OF HEMLOCK AND WHITE PINE IN WESTERN PENNSYLVANIA

-swept area

fire

lace are denuded,

their p

in

kind are now rare and i

1S

tands of th

s

Bul. 638, U. S. Dept. of Agriculture. PLATE II.

F—23134A Fic. 1.—CUT-OVER AND BURNED-OVER LAND IN NORTHERN PENNSYLVANIA.

This area was formerly covered with a heavy stand of conifers similar to that shown in Plate I. Forests of this sort were the source of busy, prosperous communities while the timber was being cut. The region is now practically deserted and the area covered with worthless fire cherry, aspen, and sweet fern.

F-—23156A

FiG. 2.—HOW PENNSYLVANIA IS BUILDING UP FOREST COMMUNITIES.

Many of the devastated lands are now the property of the State, which is attempting to reforest them and to build up permanent forest communities. At Pine Grove Furnace, in the heart of one of the State forests, all of the buildings in the town as well as the surrounding forest lands are owned by the State. The building shown in the picture has been repaired and improved, and is now rented for use as a hotel.

| ; | | | |

Bul. 638, U. S. Dept. of Agriculture. PLATE III.

F—24319A

Fic. 1.—AN AREA CLEAR CUT FOR CHARCOAL FOR THE LEADVILLE, COLO., MINES,

Note high stumps, lack of reproduction, and erosion in right foreground.

F—23149A

Fic. 2.—A HILLSIDE CLEAR CUT FOR ACID WoobD IN NORTHERN PENNSYLVANIA.

Theruts down which the logs are dragged afford excellent opportunity for the starting of erosion.

Bul. 638, U. S. Dept. of Agriculture. PLATE IV

F—23119A

Fic. 1.—GENERAL VIEW OF A PENNSYLVANIA TOWN, THE POPULATION OF WHICH FOR MANY YEARS WAS AsouT 600, BUT Is NOW ONLY 40.

The tannery, on which the prosperity of the town depended, is shown at the right of the picture.

F—23117A

Fig. 2.—ANOTHER VIEW OF THE TANNERY, SHOWING MORE CLEARLY THE NUMBER OF DWELLINGS BY WHICH IT WAS SURROUNDED.

All of these buildings, like many others in the town, are now abandoned. Property values have depreciated materially with the departure of the forests.

EORESERY AND COMMUNITY DEVELOPMENT. 9

exceeded the annual growth. Obviously, such a pregram can not be continued indefinitely. A few more decades will probably wit- mess the exhaustion of the bulk of the virgin forests of the country except in the more inaccessible porticns of the western States.

In the meantime in many parts of the country local shortages in standing timber have already occurred, with the consequent neces- sity of importing lumber from a distance and at correspondingly higher prices. Many regions which once were blessed with “inex- haustible” forest resources and from which vast quantities of lumber have been shipped now have to depend on other parts of the country for the bulk of their timber. Muskegon, Mich., formerly one of the largest sawmill towns in the world, offers a good example of this. In 1887 the sawmills of the town had a cut of more than 665,000,000 feet of lumber and 520,000,000 shingles; and it is estimated that the entire eutput of the forests tributary to the Muskegon River has exceeded 25 bilhon board feet. To-day lumbering operations have practically ceased. One small mill cuts some 3 or 4 million feet a year of in- ferior material picked up here and there along the shore of the lake. What lumber is used comes mainly from the South and from Wis- eonsin and Minnesota.

Depletion of local supplies has resulted very naturally in more or less marked increases in the prices of wood products in general.

In spite of the fact that cheap stumpage has been available in other

parts of the country, transportation charges have added materially to the cost of the lumber at the point cf consumption. In the Middle West, for example, 20 per cent or more of the present retail price of lumber represents freight charges. Western lumber paying treights of from $10 to $18 per thousand board feet is a considerable factor in the supply of the East. Obviously, if the center of lumber production is to be located thousands of miles from the center of population, retail prices are bound to rise and the consumer must either pay the bill or go without.

The possibility of supplementing our cwn depleted forest re- sources from abroad has often been suggested optimistically but all too vaguely. Careful studies of foreign sources of supply seem to indicate that too much reliance should not be placed on this hope. Surplus supplies of timber still exist in Russia, Finland, and Swe- den, but the growing demands of other European countries are almost certain to render comparatively httle of this available for use in the United States. The forest resources of Central and South America are still to a large extent unknown, but it 1s very doubtful whether they can be counted on to supply us with any considerable amount of timber suitable for ordinary construction purposes. Canada still has a surplus, but this, too, is being rapidly depleted, and it 1s reason- 16940 °—Bull. 68S—is——2

10 BULLETIN 638, U. S. DEPARTMENT OF AGRICULTURE.

able to suppose that in the not distant future practically the entire production of its forests will be needed for home consumption by the constantly increasing population. Importations from any of these sources, moreover, involve considerable charges for transportation, with a corresponding increase in price to the consumer.

It seems certain that in the long run the United States must rely on its own resources to supply its needs for lumber, ties, paper, and other wood products, as well as for naval stores and wood distilla- tion products. It is equally certain, furthermore, that these supplies should be produced as near the point of consumption as possible through the full use of forest land wherever it occurs. Too little attention has so far been paid to these fundamental truths. As a result, lumber prices have increased in the cut-over regions, and the pinch of inadequate supplies has already been felt in many localities.

SPECULATION. IN STANDING TIMBER.

Speculation, both in standing timber and in cut-over lands, is another serious evil that has attended the exploitation of the forests. The subject is so big a one, however, as to make it impossible in a bulletin such as this to do more than touch briefly on a few of its more important aspects.

Large bodies of mature timber have been acquired with no inten- tion of utilizing them immediately, but with the idea of trading them off as soon as possible at a substantial profit or of holding them for arise in price. As transportation facilities have been developed and the country built up, there naturally has been a rapid rise in stump- age values, particularly in the newer sections. In parts of the Northwest, for example, the original price at which timber was acquired from the Government has been multiplied in subsequent transfers anywhere from ten to twenty times within the short space of ten or fifteen years. Millions of acres of the finest timberlands in the country passed every year from public to private ownership; hundreds of fortunes were made merely by buying and selling stump- age; and the entire tendency was to promote timber speculation at the expense of timber production. In a general way, although per- haps not in such acute form, this has been the history of timber ownership throughout the country. In fact, so rapidly have forest properties, originally acquired at little or no expense, increased in value that the lumber industry as a whole has looked for its profits to timber ownership rather than to logging and milling—that is, to the speculative rather than to the operative end of the business. Only too frequently have speculative returns concealed actual losses resulting from inefficiency of operation. :

ac isola

FORESTRY AND GOMMUNITY DEVELOPMENT. 11

It has often been claimed that the incentive to make money by speculation has been one of the important factors in bringing about the development of many parts of the country, and particularly of the Western States. To what extent this is true depends on whether speculation is defined as a business venture involving considerable risk and therefore demanding a high interest return, or merely as an investment entailing no productive operations and depending for its profit on an expected increase in value. In the former sense, specula- tion undoubtedly has done much to open up previously unsettled portions of the country. In the latter sense, this may also be true of speculation in standing timber so far as such speculation has led to actual production as a means of realizing on the investment. Furthermore, it is obvious that the taxes paid by private owners of timberland, whether speculators or not, have aided materially in supporting local community improvements and governments. On the other hand, it may be open to question whether the development stimulated in these ways was always a normal and healthy one.

In many parts of the country, but particularly in the South and West, timber owners to-day find themselves in the position of having an overload of stumpage. Urged on by the belief that stumpage values were bound to rise indefinitely and that speculative profits are an inevitable consequence of timber ownership, they acquired enor- mous areas of forest lands, far in excess of the present needs of the industry. Contrary to expectation, these now have become a burden instead of an asset. Carrying charges, such as interest on the invest- ment, taxation, and fire protection, in many cases are mounting up faster than the stumpage is increasing in value.

In California and the Pacific Northwest, for example, the capital- ized value of privately owned timberlands is estimated at approxi- mately $1,100,000,000. Much of this is bonded, and on all of it carry- ing charges are heavy, while in recent years stumpage values have risen little or not at all. Consequently, all except the strongest owners have been forced to cut, irrespective of the demand, in order to meet current expenses and to retire their investment. In times of depressed market conditions the natural result of this has been to bring about a greater cut than the market can absorb at prevailing prices, with con- sequent failure of the weaker owners and general instability of the lumber industry.

From the standpoint of the manufacturer, overproduction begins when lumber prices do not return the cost of production plus a living profit. Curiously enough, this condition sometimes has accompanied a decrease in the total lumber cut. The explanation of this paradox lies in the fact that a decreasing demand for lumber, which is of course particularly marked in periods of general depression, means lower prices. In other words, the decreased demand that always ac-

12 BULLETIN 638, U: S. DEPARTMENT OF AGRICULTURE.

companies poor markets may be more than sufficient to offset even a considerable decrease in supply. This was the case in western Wash- ington in 1915, when overproduction was very marked in spite of a lumber production approximately 13 per cent less than that of 1913. In addition to the losses to manufacturers brought about by such a condition, this reduced cut probably meant a decrease of from $7,000,000 to $8,000,000 in wages paid to laborers, to say nothing of correspondingly decreased expenditures for supplies and equipment. Moreover, logging at such times is accompanied by a waste of much material in the woods, since depressed market conditions make it unprofitable to harvest the lower grades and inferior species. From the standpoint of the public, overproduction caused by timber specu- lation means the premature and wasteful exploitation of an essential resource, decreased opportunities for the employment of labor and investment of capital, and hard times generally for individuals and industries dependent on lumbering.

IN CUT-OVER LANDS.

Tying up agricultural lands.—Perhaps even more important from a social standpoint than the holding of mature timber is speculation in cut-over lands. This does not mean that such speculation has been universal. On the contrary, many owners, actuated by real public spirit, have attempted to secure the settlement of their cut- ever lands under the right conditions or to hold them for future forest production. In spite of such instances, however, speculation in cut-over lands has been much too frequent, and has acted in two opposite directions: to prevent the development of good agricultural lands, and to encourage the settlement of nonagricultural lands. Whether such lands are put on or kept off the market depends en- tirely on the speculator, who naturally follows whichever course ap- parently will be most profitable for him, irrespective of its effect on the individual settler or on the community.

In the case of lands which are really suitable for agriculture, the tendency is for the speculator to hold them out of use in order to-secure the benefit of the rise in land values that is sure to follow imerease of population. This is done more often by offering the lands for sale at a price in excess of their true present value than by re- fusal to sell at any price. Examples of this practice, which generally is looked upon as “ good business,” are so common as scarcely to ex- cite comment. <A single illustration of how it works out in actual practice will therefore suffice.

In western Washington some 700,000 acres were eliminated from the Olympic National Forest in 1900 and in 1901 for the ostensible reason that the area was good agricultural land and that its reten-

een

FORESTRY. AND COMMUNITY DEVELOPMENT. 13

tion under public ownership blocked development. The usual course of events then tock place. The bulk of the land, which was for the most part heavily timbered, was at once taken up under the different land iaws by “ homesteaders,” who immediately proceeded to dispose oi it to various timber companies. Considerable areas were cut over by these companies, while other portions were held for speculation. Most Hh the cut-ever lands have passed into the hands of land com- mDanies; a very smal! portion mto the hands of bona fide settlers. K a apliees and over per acre is asked for tracts that will require t least $150 more per acre to clear. Fifteen years after the elimina- tion of the area from the National Forest only some 600 acres out of the 700,000 had been put under cultivation. Timberland worth £30.000.000 has passed from public to private ownership, and the development of the bulk of the area that is fitted for agriculture has been postp oned indefinitely. It is estimated that on the west coast of Washington and Oregon there are now some 4,000,000 acres of cut-over Douglas fir lands, and that this area is being added to at the rate of aoa 150,000 acres a ¥y a Although a large part cf this area consists of good agricultural coil, only a comparatively small portion of it has been put under cul-

| Gos and the agricultural development of the region is proceed-

ing much more slowly than its resources warrant. This is due in part to the high cost of clearing the land of stumps and logging «ébris, to lack of transportation facilities, and to distance from mar- ket. But all these difficulties are intensified by the speculative value placed upon the land, which often adds just enough burden to make its cultivation unprofitable and so to keep it out of use.

Selling sand barrens and swamps for farms.—tin the case of non- agricultural cut-over lands there is hitle or no promise of a specula- tive rise in value, and the speculator usually disposes of them as rapidly as possible. Misrepresentation very often plays an impor- tant part in this. Drearv, sterile sand barrens and water-soaked swamps are pictured as fertile, wonderfully productive farm lands, as extraordinarily fine grazing grounds, or as the most delightful locations for summer resorts. Naturally, it is those who know least about such things who are ensnared most easily. Clerks, stenog- raphers, mil] hands, day laborers, and others from the city, who would have difficulty in making a hving off the most fertile farm in the country, not infrequently invest all they have in the hope of being able to establish themselves independently on a piece of land of their Mery own. In such cases it is only a few years before inevitable fail- ure forces them to abandon the land and return to their tasks with just a little less confidence in themselves, a little less hope for the future, and a great deal less faith in the honesty of their fellow man.

14 BULLETIN 638, U. S. DEPARTMENT OF AGRICULTURE.

The sand plains of Michigan and Wisconsin are dotted with de- caying dwellings and abandoned fields that tell the tale of the spee- ulator in cut-over lands and his victims. Practically all these areas, which originaly were covered with timber, were at one time the prop- erty of the State. Gradually, however, the bulk of them passed into the hands of private owners who proceeded to strip them of their tim- ber. The cut-over lands were then sold to the so-called development companies or allowed to revert to the State for taxes. Large areas of these delinquent tax lands also fell into the hands of speculators through subsequent sale by the State. What happened to them can best be made clear by citing a few instances.

In Michigan, for example, until a few years ago the practice was for the State to sell, at an average price of approximately $1 an aere, lands that had reverted to it through the nonpayment of taxes. A large proportion of these lands was acquired by speculators, many of whom were not even residents of the State, and who proceeded to use them as a means for exploiting the more credulous portion of the general public. It has been estimated officially that less than 5 per cent of the lands disposed of in this way were sold to actual settlers.

The land sharks naturally proceeded to realize on their investment as soon and as handsomely as possible. One lot of lands purchased from the State for an average of 86 cents an acre was sold for $12 per acre, a profit of about 1,300 per cent. Still greater profits some- times were made by the shrewd scheme of dividing the land into summer-resort lots consisting of from one-tenth to one-fourth acre, and selling these for from $10 to $15 a lot. Practially all these sales were made through. misrepresentation. Full-page advertise- ments in the Chicago and Detroit papers and attractively illustrated pamphlets contained such statements as the following:

We have a glorious climate, the best water on earth, and easily

cleared land which produces aS much money per acre as any in the United States or Canada. Come-and be one of us.

Roscommon County will grow more and better wheat, oats, rye, speltz, timothy hay, clover seed, beans, field peas, potatoes, cabbages, sugar beets, turnips, and