Freight Rates Should be Predicated on Timber as a Crop, Says Compton

Washington, January 9,-Forest industries are essentially agricultural enterprises and should be so considered in setting rail freight rates, said Wilson Compton, secretary and manager of the National Lumber Manufacturers Association, when he appeared as a witness, January 5, before the Interstate Commerce Commission.

The Railway Board was sitting in St. Louis to consider the petition of the railroads for increased rates, fares, and charges. "For many years,,, Mr. Compton continued, "the railroads have been wrestling with the problem of increasing revenues to meet continuing increasing costs. Generallv, their anslver has been to propose increased rates. In so far as the revenues derived from lumber and timber products are concerned, rate increases have not been the answer; and if the clearest evidence available is to be given weight, further increases will not permanently provide the answer. It appears in fact from all the evi_ dence that lumber rail rates generally have reached a level of diminishing returns.

"Lumber and timber products are no longer migratory industries. Gradually forests are becomirrg tre.-farms. Forestry is a part of agriculture. Trees are crops. Forest industries are becoming permanent enterprises and im_ portant potential sources of permanent local emplovment.

"Neither the public nor the carriers, nor perhaps the Commission-nor, for that matter, the forest indlstries themselves-have yet become accustomed to this concep_ tion of forest industry as essentiaily an agricultural enter- prise. But all will become so accustomed; and railroad transportation policies as well as logging and manufac_ turing practices wilr have to be linked to this fundamental conception of forest industry enterprise.

"There are, according to the U. S. Forest Service, over 600 million acres of forest land of which nearly ihr.._ fourths is classified as commerciar. of this, zz/o i's stilr in virgin timber; 25/o in second growth sarv timber ; 3g% in fair condition of reproduction; and IS/o in poor condition. Of the privately owned forest lands 40 per cent is in farm woodlands; 4O per cent more is in ownerships not exceeding 5000 acres. The annual timber grolith and the annual timber use are approaching a national balance -a balance which, if wise public and industry policies prevail, should be reached within the present decade.

"Traffic in lumber and timber products accordingly has taken on many of the characteristics of agriculture-wideIy scattered origins, decentralization of production, generally small ownerships gradually becoming smaller, with in_ creasing hundreds of forest owners seeking to establish permanent local industries. To the extent that they succeed in so doing they are also establishing permanent potential sources of rail traffic in lumber and timber products. We urge, therefore, that the carriers, with what we hope may be the assent of the Commission, join with the forest in_ dustries in a reorientation.of policy based on the concep_ tion of forests as a crop-not a mine-of forest industry as a continuing and not a migratory enterprise; and of forest products not as temporary but as potentially permanent sources of important traffic and important freight revenue.

"The National Lumber Manufacturers Association. while asserting that increasing the rates is not ordinarily the way to increased revenues from rail traffic in lumber and timber products, does not oppose the authorizationby the Commission of such temporary increases in rates as the Commission may find necessary.

"This position of the National Lumber Manufacturers Association is predicated on the belief that the carriers, while on the one hand seeking the co-operation of lumber shippers toward meeting the added costs of the transpor- tation service, will on the other hand co-operate with the efforts of the lumber industry to provide permanent timber crops and permanent sources ofrail traffic in forest products."