Forest Industries In The Economic Structure Of The Northwest

An Address delivered by Col.

W. B. Greeley, SecretaryrManager

of the West'Coast

Lumbermen's

Association Seattle, Washington

Before the Pacific Northwest Advisory Board, in the Olympic flotel, Seattle, on June 8

What corn means to fowa or oil to Oklahoma, lumber means to Oregon and Washington. The value of the yeatly production of lumber in these two western states exceeds $280,000,000 and the value of all their forest products exceeds $355,000,000. At least one dollar out of every three paid for the products of the Pacific Northwest, in their farflung consuming markets, is paid for wood in one form or another.

The banks, the railroads and the people of Washington and Oregon are in the lumber business. The growihg and manufacture of forest products is the most basic industry of these two states. Two-thirds of their entire payroll is derived from forest products. Sixty per cent of the railroad traffic originating in them is lumber and other products of the tree. The rail shipments of forest-grown materials aggregate 200,000 carloads annually; and an even larger volume is moved by water. As the prosperity of the South rises and falls with the health of King Cotton, so the prosperity of the Pacific Northwest is largely in the keeping of King Timber

Furthermore, one-half of the land of Washington and Oregon is in the lumber business. As we look into the industrial future of these states, that fact becomes even more important than the enormous volume of stumpage still remaining in their forests. Oregon and Washington contain over 46,m0 acres of forest land; and it seems probable that by far the greater part of it will find its employment only in grorving timber. We cannot afford to leave this vital factor out of our picture of the future economic structure of the Pacific Northwest.

The forest industries of the Pacific Coast ha.ve fascinated the whole through their sheer energ"y, pioneer vigor, and physical power. They have furnished an outstanding example of the conversion of natural resources and con(uest of natural obstacles, backed by tremendous courag'e. From the Maine lumberman who brought the first sawmill around Cape Horn and started logging with bull teams, to the modern logging railroad and high-powered steam or electric machinery, there has been no more inspiring example of our racial energy and resourcefuless in converting natural resources to use and profit.

In the economic history of most of the nations of the world, there has always 'been a time and place for this pioneer stage of industiial development. Its hriving power is-production, and still more production. But often sheer energy and momentum carry this stage of industrial development too far. The urge for new development and increased production has carried American agriculture too far. It has carried our coal industry too far. It threatens to carryr our oil industry too far. same reasons, it has carried the Pacific Northwest too far.

And for essentially the lumber industry of-Jhe

The law of supply and demand never sleeps. The competition against .whjch products of any character must be marketed never remains the same for long. The law of bvolution governs industrial development just as it does plants and animals. Most industries must, from time to time, re-shape themselves to meet the changed conditions which control their success. The lumber industry of the Pacific Northwest has ottt-grown the pion,eer days. It is dealing with a new competitive and merchandising era. It has need of re-aligning its conceptions and methods to meet the changed conditions of the present, with less Lrowding of production and more emphasis on merchandising.

Washington and Oregon,are toda.v the two leading states of the Union in lumber production. To a surprising degree, within the last ten years, the lumber of the Pacific Northwest has dominated the softwood markets of the United States. It has done this through mass production and price competition. It has attained its dominating position at the cost of returns so low as to seriously threaten the stability of the industry.

During this period, northwestern lumber, like nearly all lumber, has encountered competition from new sources. The aggressive development and marketing of other structural materials of many kinds have changed the rules of the game. The perfection of our transportation system, reacting upon methods of distribution, has made the merchandising of lumber a different process from that of a dozen years ag'o.

Our lumber industry is now in a process of re-alignment to adapt itself to the present day conditions of competitive merchandising, which control its own destinies and, in a large measure, the industrial destinies of the Pacific Northwest. To the vigorous pioneer of its past, the timber cruiser, the railroad builder and the logging superintendent, must be added to the industrial engineer, the merchandising expert, the business economist and the forester.

The chart of the future course of the Northwest lumber industry, as I see it, is not a matter for discouragement. It has the finest resources in softwood timber, adapted to an enormous range of construction and industrial requirements, to be found anywhere in the world. The intrinsic requirements of modern civilization for wood, while changing somewhat in character are still enormous in volumq While lumber may lose ground in some competitive fields, there are others where it is gaining ground; and there are many fields of competition where its position can be greatly strengthened through the adaptation of manufacture ind merchan-dising to the more exacting and specialized requirements of the present time.

The lumber industry needs a closer and more exact knowledge of its markets. To the extent it is possible to change the conception of capacity production as the key to profit in the lumber business to that of more orderly and restrained manufacture in' relation to the actual requirements of the market, we will be on the road to greater industrial stability.

Another promising development ahead of the West Coast lumber industry is the more painstaking merchandising oi its products, based not primarily on price but on their quality, their place in specific uses, and their service to the consumer. This is part of the trend away from mass production and mass marketing, towards manufacture which takes more complete advantage of the qualities of the raw material and is more closely adapted to specific merchandising opportunities.

Take Douglas fir constrttction timbers as an example. What the consumer is buying is strength for his building. He may buy a general grade, containing wood of a wide range in its actual strength, at a low price largely controlled by the poorest pieces in the grade. Or he may buy a selected grade, meeting exact requirements as to rate of growth, density of wood structure, and straightness of grain, at a much higher price because the actual strength which he is buying is proportionately greater. It is this very type of structural timber, meeting speci'fic qualifications. that has enabled the West Coast Lumber Trade Extension Bureau to introduce Douglas fir in the most exacting building codes of our eastern cities on a parity with the best of other woods.

There is a tremendous range of wood qualities in the lumber products of our northwestern mills. Some grades and woods are particularly durable; some grades and woods are particularly resistant to sttrface wear; some -woods and grades are particularly strong, some are specially adapted to machining and refabrication, etc. While the production of a considerable proportion of every-day common lumber will necessarily always be an'important factor in the utilization of our timber, there are, I believe, large opportunities for extending the merchandising of special products on their quality for specific purposes, with correspondingly higher returns to the industry. This requires expert market study and trade promotion to fit the various species and grades of West Coast lumber into their most profitable uses in the whole consuming field' The more,the industry can direct its efforts toward this form of merchandising and ease off the pressure on mass production and price competition alone, the greater will be its opportunity to obtain an adequate return for the material which it produces. This is the day of the certified product. Gasoline is not sold simply as so much gas; but on standardized tests of actual fuel value. Cement is not sold simply as so much building material; but as a product of certified

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