Evening star., 1928-05-19
i. S. LUMBER MEN
REPLACING TIMBER
Reforestation Now Practice,
Not Theory-Mergers Help
in Big Move.
BY J. c. ROYLE.

Special Dispatch TO The Star.
NEW YORK. May 19-The oldest
industry In the United States is now
taking steps to balance items Of depre-
citation and depletion with items of
accretion. 1t became known today that
some of the most important investment
banking houses in the United States
are actively supporting this move. 1t
is probable that 1t will be accomplished
through means already forecast in these
olumns-namely, through extensive
consultations.
A number of consultations Of large
lumber companies now are pending.
One under consideration, which has
behind 1t one of the chief EGy York
banks. would, If completed, represent
approximately one-fifteenth OF the pro-
ductive capacity of the American lum-
Der mills.
Several consultations already have
been effected involving corporations in
the Pacific Northwest with capitaliZa-
tions of from $5,000000 to $2O.0OO00O.
Perpetuating Industry.
The primary policy behind these con-
solidationS is not only the reduction OF
costs of production and distribution,
but perpetuatinE Of the lumber In
dustry through the maintenance OF
forests by sustained yield methods OF
administration.
The lumbev industry and the bankers
affiliated with 1t have become convinced
that 1t is frequently possible to assure
a supply Of timber sufficient TO insure
continuity Of operations from old for
estS to new.
Heretofore the lumber industry gen.
orally has been a depicting industry
Lumber companies have been financed
with the expectations that III certain
period d-approximately 80 yearS-their
capital, which in reality is represented
by their forests, would be exhausted
and that their plants for the manu-
facture Of lumber would be ObSolescent
Consequently, the conduct of the
companies was based on the theory that
within this span of life they must plan
TO liquidate their complete capital and
harvest their profits. Their dividends,
therefore, usually represented the re-
turn of capital as we'll as earnings.
Exploitation as a form of industry
has ceased to appeal to the modern
purveyor of capital, and so far as can
be determined all the bankers now con-
sidering the financing of lumber con-
solidations are investigating the posSi-
bility OF making the industry perpetual.
They maintain that lumber is one OF the
few natural resource industries which
can be made permanent, since trees can
be grown again and again on the same
land.
Trend Generally Accepted.
This trend has become generally ac-
cepted outside of o few companies.
Lumber manufacturing companies OF
great magnitude have become interest
ed in reforestation with view to per-
petuating the business and a conse-
ouent improvement of financing facill-
ties. One company now operating ex-
iensively on the Pacific Coast began
reforestation on great tracts OF land in
southwestern Washington the very dag
1t began to cut the timber on those
tracts.
These new methods of financing and
new policies OF operation have tended
to make possible the utilization OF many
products formerly regarded as waste.
Only one-third OF tree leaves the saw
mill in the form Of lumber Now the
modernly operated mills are turning
tIYeSr. attention to the manufacture pf
paper. wailboard, wood -four, charcoal
hriuuets and other minor products from
the other two-thirdS
This trend is not confined to the
Northwest by any means, 1t was re-
emphasized today by A. s. BoiSfontaine.
assistant secretary Of the Southern Pine
Associationaof New Orleans. He pointed
out that 28 per cent OF all the people
In the South gained their livelihood from
the lumber and timber business. and
added: The forest is eternally renew
able There Is no reason why so or so
wears from now we should not be grow
ing timber as fast as we use 1t.