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OCCASIONAL PAPER No. 66

August 9, 1937

FOREST EXPERIMENT STATION

SOUTHERN

L« Demmon, Director

FOREST INDUSTRIAL EXPANSION IN SOUTHEAST TEXAS

POSSIBILITIES AND DANGERS

Robert K. Winters, Forester

This paper releases data gathered in current investigations at the South-
ern Forest Experiment Station, and is subject to correction or modification
following further investigation.

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FOREST INDUSTRIAL EXPANSION IN SOUTHMST TEXAS
POSSIBILITIES AND DANGERS ^

By Robert K. Winters, Forester,
Southern Forest Experiment Station*

We see a great deal in the press these days about the conservation of
natural resources* Oil, gas, coal, sulphur, forests, and game are frequent-
ly spoken of in the same breath without distinction. As a matter of fact,
these natural resources fall into two distinct classes - nonreplaceable re-
sources and renewable resources. Oil, gas, coal, and sulphur are examples
of the former; forests and game are examples of the latter. These two
classes of resources differ in that the renewable resources can be propa-
gated by man within a comparatively short period, whereas the nonreplaceable
resources require geologic ages for their formation.

Wise use of any renewable resource involves the consumption each year
of only the annual accretion, leaving the growing capital intact. For exam-
ple, no producer of beef cattle who expected to continue in business would
consider selling all, or even 90 percent, of his herd. Rather, he maintains
a herd of nearly constant size by selling practically all of his 2-year-olds
and only the oldest of his breeding cows.

The forest resource is the raw material for certain industries supply-
ing essential needs of men in the form of manufactured products and of income
to both employers and employees. The ability of the forest resource in any
locality to meet the continuous needs of the industrial plants drawing from
it should be a very important factor in determining the location of new plants.
Serious mislocation of plants with respect to continuing timber supplies is
not only wasteful of capital, but because it results in migratory populations
is also unsatisfactory from the standpoint of community development.

I have shown in the chart (fig. 1) the location of the existing and
definitely projected pulp mills in the South, In all, 44 plants are shown.

Of these, 11 are either still under construction or have been operating less
than 18 months. After study of this chart, you may ask, "Were these new
plants located after careful consideration of the ability of the forest to
meet the needs of the proposed plants in addition to the already established
forest industries?" I think the answer is, "No," As a matter of fact. For-
est Survey data for southeast Georgia indicate that there is a serious threat
of overcutting the forest after all the pulp mills now proposed swing into
full production. This means that eventually some of the forest industrial
plants will have to cease operation on account of lack of wood, and employees
of these plants will have to seek employment elsewhere.

\/ Address delivered at Beaumont, Texas, before the Texas Academy of Science,
June 26, 1937,

I hear that several locations in eastern Texas are being actively pro-
moted as desirable sites for new pulp mills. What is the permanent produc-
ing power of your forests? And what is the nature and size of the existing
industrial structure depending upon these forests for basic raw materials?

The answer to these two key questions will go far toward determining the ex-
tent and the kind of safe forest-industrial expansion.

For the remainder of my discussion I shall confine myself to the area
in southeast Texas bounded by the heavy black line (see fig. 1). This area
comprises nearly 10 million acres. Approximately two-thirds is forested,
and 13 percent is actually under cultivation. The timber volume on this
forest area by the International J-inch log rule, which closely approximates
green lumber tally, is 19j billion board feet, equivalent to nearly 85 per-
cent of the total cut of lumber in the entire United States in 1936. This
volume is in pine and cypress trees 9.0 inches and larger in diameter and in
hardwood trees 13 inches and larger in diameter. The total volume on this
forest area, expressed in cubic measure is 7^ billion cubic feet. This cu-
bic volume is in sound trees 5.0 inches and larger in diameter and includes
the upper stems of pines and the upper stems and limbs of hardwoods to a
4-inch minimum limit. This timber volume, more than half pine, corresponds
to the "herd” of the stock-raiser. It includes the calves, the 2-year-olds
about to the sold, and the breeding stock. Safe industrial development will
use only the accretion, maintaining the forest capital intact just as the
stock-raiser markets only the increase in his herd.

To return to the first of our two key questions mentioned above; "What
is the yearly accretion on this forest grov/ing stock?" Or 'in other words,

"How much can be cut each year without reducing its volume?" Figure 2 shows
graphically for 1935 the total board-foot and cubic-foot forest increment
classified as pine and hardwood and the corresponding forest drain. The
pine increment was approximately 1 billion board feet or 272 million cubic feet,
while pine drain against the forest was 6l8 million board feet or 128 mil^
lion cubic feet. The hardwood increment was 264 million board feet or 121
million cubic feet, while the hardwood drain was 196 million board feet or
64 million cubic feet. Thus in 1935 the growth is seen to have been consid-
erably in excess of the drain in both board feet and cubic feet. It is
estimated that the 1936 drain was 18 percent greater than 1935? and the 1937
drain may possibly be 10 to 12 percent greater than the 1936 drain.

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Figure^ 1

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COMPARISON OF FOREST INCREMENT &
DRAIN -SOUTHEAST TEXAS

Figure 2

And now to the second of our key questions; "What is the nature of the
forest industry that was responsible for the cutting of this timber?" In
figure 3 is shown the approximate location of the larger forest industrial
plants in southeast Texas. In all, 63 of the larger sawmills are shown
(there being 112 additional small ones not shown), 4 veneer plants, 4 creo-
soting plants, 1 stave mill, 2 pulp mills, and 10 other miscellaneous wood-
using plants.

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In the light of the answers to these two key questions there is plainly
an opportunity for expanding the forest industries in southeast Texas without
risk of materially reducing the forest capital or growing stock. Even though
the present forest industries increase production in 1937 as much as 30 per-
cent over their 1935 production and hold this level for the next few years,
there still would be sufficient timber growth to justify some expansion in
wood-using industries. The question naturally arises, from the point of view
of the long-time welfare of the people and communities of this area, "Should
more pulp mills be built, more new sawmills be constructed, or should the
timber consumption of other kinds of forest industrial plants be increased?"

A sound answer to this question hinges on a consideration of the fol-
lowing three points:

1. The comparative stumpage value per unit of wood volume
of pulpwood, sawtimber, poles, veneer blocks, etc.

Making this comparison is an aid in measuring the rela-
tive economic advantage in growing wood for pulpmills,
sawmills, poles, veneer, etc,

2. The amount of labor required to manufacture a unit
volume of wood into paper, lumber, veneer, etc. Indus-
tries requiring a large expenditure of labor per unit
of volume of product are, other things being equal,
more valuable as community builders,

3. The value added through manufacture of a unit volume
of wood into paper as compared with the value of an
equal volume of wood when made into lumber or other pro-
ducts, In general the greater the value added through
manufacture, the greater will be the sum of money dis-
tributed in wages, purchase of supplies, plant mainte-
nance, interest on investment, and dividends,

I shall develop each of these in turn, comparing items for lumber and
paper production.

Present stumpage prices for pulpwood if purchased by the cord are
usually quoted at 50 to 75?^ per standard cord in this area. (The U, S. For-
est Service is asking $1,00 per cord for pulpwood from the National Forests
in the South.) On the basis of 77 cubic feet of solid peeled wood per cord
this v;ood is worth about 2/3 to 1^ per cubic foot of peeled wood. Comparable
stiimpage prices for good pine sawtimber at $5.85 per M board feet is 3^^ per
cubic foot. Accordingly, wood marketed for pulp sells for only l/5 to l/3 as
much per unit of volume as when grown to a size and quality suitable for the
manufacture of the better grades of lumber. Furthermore, most pulpwood is
cut from trees less than 13 inches d.b.h. and at a stage in their development
when they are probably making their most rapid growth. Thus pulpwood opera-
tors, cutting chiefly young timber, are removing trees at a time when they
are about to make rapid growth and when their value per unit of volume under
present conditions is relatively low. From the point of view of the average
timberland owner, therefore, the growing of wood for pulp manufacture alone
does not yield the maximum possible money return per unit of volume grown.

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rigure 3

In the South, it is estimated that for an average mill approximately
three 10-hour man-days are required to manufacture 1,000 board feet of
standard, dressed, pine lumber. This labor requirement includes the employ-
ment necessary in cutting the logs in the woods, transporting them to the
mill, sawing them into lumber, and drying and surfacing the lumber. Express-
ing this in terms of cubic contents, we find that the lumbermill labor re-
quirement is 13.5 man-hours per standard cord (4 x 4 x 8 ft.) of wood with
bark, containing 77 cubic feet of peeled wood. In contrast, the correspond-
ing labor requirement of the southern pulp industry is estimated at 17 man-
hours per standard cord. This includes the cutting and transporting of the
billets to the pulp mill and the manufacturing of the pulp and kraft paper or
paper board. It is apparent, therefore, that the wood-pulp industry uses
more labor per unit of wood consumed than does the pine-lumber industry.

The current market price of southern pine lumber (average of all grades)
is in the neighborhood of $32 per M board feet. If we assume that average
second-growth pine stumpage sells at $3 per M board feet, this leaves $29 as
the value added through manufacture. Converting this to standard cords, this
is approximately $13 per cord. Assuming a stumpage price of 50^ a standard
cord for wood and an average current price for southern kraft paper of $95 per
short ton (f.o.b. mill) and further assuming 1.5 standard cords of wood and
bark per ton of kraft paper, the value added to a standard cord of wood by
converting it into this type of paper is $62.83. Thus we see that the value
added to the cost of wood in the manufacturing of kraft paper is about five
times as great as the value added in the manufacture of pine lumber. This
money is spent for wages, improvements in plants, interest on invested money,
and dividends. Some part of it is spent locally, contributing to the support
of grocers, clothiers, carpenters, and others; probably a smaller percentage
is spent locally than in the case of the sawmill operation under consideration.

Comparing only the wood pulp and the lumber enterprises w@ find that for
the same unit of volume the value of high-grade savmiill stumpage is greater
than that of pulpwood stumpage, although paper manufacture requires a greater
expenditure of labor and adds a greater value through manufacture. It is
apparent, therefore, that each has advantages and that each can play an impor-
tant part in the industrial life of a community. The question might be raised,
”Are they hostile industries, competing in the same market for the same kind
of wood?” The answer is: "Ordinarily they are not, but under pressure of need,
pulp mills can cut the trees over a large area before they reach a size that
makes them attractive to the lumber mill and thus force lumber mills out of
the territory." There is a way, however, that each can be made to further the
best interest of the other and to work together for the good of all.

The production of clear lumber requires that young timber stands be
dense. Fastest growth on the trees that are ultimately to be harvested for
lumber can be obtained only by thinning these dense young stands at proper
intervals. Four or five of these thinnings may be made to yield pulpwood dur-
ing the time that the final crop of sawlog-size trees is maturing. Cuttings
of this kind in Europe indicate that the volume produced in periodic thinnings
needed to grow a stand of pine trees to an averagts d.b.h. of 15 inches is
about equal to the volume removed in the final harvest of sawlog-size trees.
This means, for example, that if a stand in the South treated after this fash-
ion yields 12,000 board feet per acre at the end of 50 years, it probably
would have yielded during this period 25-30 cords of pulpwood per acre in
thinnings .

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Furthermore, in all stands there are defective, crooked, and partially
rotten trees that ought to be cut and be replaced by good, thrifty seedlings.
As a rule these defectives can be used as pulpwood with resxilting improvement
to the growing condition of the stand. In addition, generally some part of
the tops of trees cut for sawlogs can be utilized for pulpwood.

Thus we see that it is definitely possible to integrate the pulp and
paper industry with the industries already existing. On the other hand,
there is the very real possibility that some pulp mills will cut chiefly
thrifty, rapid-growing, young timber when it is about to enter its most pro-
ductive stage, thus preventing the development of the high-grade raw material
upon which other industries must depend.

These are the two extremes of pulpwood utilization possible throughout
the southern pinelands. The successful handling of the situation requires,
it seems to me, the organized effort of such groups as the Texas Academy of
Science. This effort should follow two channels: (l) educating landowners,
both large and small^in better ways to handle their woodlands in order to
secure maximum growth and income through producing sawtimber, poles, piles,
naval stores, and other forest products, along with their pulpwood; and (2)
arousing public opinion to the point where it will insist that the establish-
ment of pulp and other forest industrial plants be based on the ability of
the forest to support them continuously. The Southern Forest Experiment Sta-
tion will publish in the near future a comprehensive report on southeast
Texas shov/ing in detail the timber-growth possibilities of this area and the
requirements of present industries. This report will be invaluable in plan-
ning wisely for the full and longtime use of the forest resources of the
region.

Today, the outlook for forest industries in southeast Texas is indeed
bright, You have a splendid, fast-growing, pine forest with a fairly well-
balanced industry drawing upon it. A few more well-located pulp mills, prop-
erly utilizing the forest thinnings and tops of sawlog-size trees should im-
-prove the present industrial structure. On the other hand, too many pulp
mills improperly placed and cutting young timber indiscriminately could go
far toward destroying the valuable forest resource upon which some of your
most important industries depend. In the end, it will be your problem, as
East Texans, to determine what you wall do. Will you handle your resources
so that your industrial development will bring you permanent forest indus-
tries with all the privileges and values that accompany a stable community,
or will your industries be merely temporary ones that will operate for a fev/
years, deplete your forests, and then move 'to virgin territory, leaving be-
hind as a public liability a stranded and destitute population with insuffi-
cient opportunity for employment and no hopeful outlook for the future?

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