"Trees in Your Lift"

"' (Editor's Note: This zuas the last formal speech deliztered by .the late, great I.P. Weyerhaeuser, fr., then' president of ,|4/eyerhaeuser Timber Compeny, zthose unti,rnely d'eath last December in his prime shocked, the entire ind,ustry. It utas deIiaered, to tke American Institute of Accountants, meeting at the Olymltic hotel in Seattle.)

By J. P. WEYERHAEUSER, Jr.

When you were traveling to this meeting a day or two ago, i:, /ou had an introduction to my subject. There before you, if lyou did any window gazing, was the magnificent panorama that held Lewis and Clark'spellbound 150 years ago. They saw, just as you saw, a range of high mountains topped by snowcapped peaks. And rambling to the shores of the Pacific th'ey viewed the tree-blanketed hills and valleys pertinent to the Subject of my talk.

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But Lewis and Clark were a full centurv too earlv to see ia:l how man was to develop and make use of this remarkable natural resource. What they saw was a static forest of little economic value. Forests were losing as much volume to insects, disease and lightning fires, as they were growing. But today, while much of these static forests remain, other millions of acres have been harvested and, under man's careful management, they are now growing vigorous new tree crops.

To you as individuals this is an important fact. The theme cf my talk, Trees'in Your Life, reflects my desire to emphasize the important part that trees and wood play in your daily life.

You are familiar enough with the general uses of wood. You recognize lumber and plywood and shingles as products manufactured from trees. But trees touch our lives in hundreds of other ways every day. Everywhere we turn in our dt, homes, our work, our play, our clothing, and even in our food . a product of the forest is present.

In your profession, you use the second great form of forest product paper. From the fine writing bonds and countless business forms on which you keep your records, to the coarse wrapping papers and containers, wood is the raw material. Overall paper and paperboard consumption amounted to more than 400 pounds for each American in 1955.

These important major uses.constitute only a part of our entire list of forest products. There is far more magic in the tiny fibers of a tree than is generally realized. This magic takes form in the test tubes of our research scientists and engineers.

Out of this research new products evolve which expand our uses of wood and the industry producing these new products expands, also. Let's take a look at this industrial growth.

Expansion in this vibrant forest products industry has been especially rapid in products other than lumber. Pulp, paper, plywood, hardboard, insulation board-all are in the throes of a surge of added capacity. Some additions are on hand, others on order, and some just announced. The growth of markets promises to justify these expansions sometime in the future.

The key question, of course, is how soon will they be justi. fied ? Increasing capacity beyond what the going market can -' absorb can only result in greater competitive pressure on prices l:,r and profit margins. This pressure can be a disaster for the f' high-cost producer, as against a temporary injury to the mqre efficient plant.

The obvious case in point right now is the plywood business. It has shown an amazing growth, with capacity, production

Ring Our rhe Old

A scientist who counts tree rings reports he has found a group of scrubby little pine trees in California that are the oldest living things in the world. Dr. Edmund Schulman, head of the tree-ring research laboratory at the University of Arizona, estimates the age of three bristlecone pines 20 miles northeast of Bishop, Cal., at 4,000 years. Thus the little pine-it grows only 15 to 30 feet tall-has uprooted the giant sequoias of California as the world-record-holder for long life. The re'dwoods, which are believed to be the world's largest gror.ving things, are about 3,000 years old. i and sales for 1955 all double their 1950 levels, despite a smaller number df housing starts. Early last year, however, the roof fell in. The continued addition of new plants (11 in 1955 and four more so far in 1956), resulted in an expansion of production in the early months of 1956 at the same time that reduced home-building activity and inventory accumulations in trade channels were shrinking the market, The result has been several months of declining prices and lower-ir disappearing-profit margins. A number of mills went on a short work week, and others closed down completely until the outlook brightened.

In plywood, as in the other products I have just mentioned, the prospects for long-term market growth are excellent. The problem of timing capacity additions to meet this market growth is, however, becoming more and more acute throughout the whole field of forest products.

In many ways we are experiencing the growing pains of a relatively new industry. Both the scientific management of forests for continuous crops and the complete utilization of the tree at integrated industrial sites are comparatively new practices.

The forest products industry is progressing through research. Other industries are finding many new uses for wood products, fibers and chemicals as raw materials. Cellulose and lighin are sparking the imagination of our scientists. More material is being taken out of each individual tree than ever before. Smaller logs, broken pieces, and formerly unmarketable species are now used for wood pulp ahd fiber products.

Suppose that I were to announce a new material, light as aluminum, in many ways stronger and cheaper than steel, and more workable than any currently known substance such as metal, plastic, and so on.

I would list its attributes this way: It can be grown in 100 different commercial. species in nearly every state. As a construction material, it can be sawed, split, planed, nailed, screwed, molded, sandwiched, finished ina number of ways, made waterproof, rotproof, and fire resistant.

By cooking and bleaching this material chemically, it can be reduced into cellulose fibers which, in turn, can be made into paper, paperboard, packing cellophane, explosives, film, paint, fabrics, and even an ingredient of ice cream. Through defibration, it can be taken apart, reassembled with additives and turned into strong sheets or plastic molded products which retain the original advantages of the raw- material and add new ones. By still other chemical actions it can be converted into fabrics, alcohol and industrial chemicals.

In addition, I could say, this particular material can be grown as a crop that, properly managed, renews itself and will never be depleted.

This is the material we in the forest products indus- try work with every day-wood. The longer we deal with the technology of wood, the more amazed we are at its remarkable composition, its utility, and its versatility.

There has been, from time to time over the past fifty years, considerable furore over predictions that someday w'e r,vould run out of wood in this country. Frankly, I clon't brlieve it. These clismal prophecies have been based o11 somc highly dubious assun-rptions, and the assur.nptions of the earlier forecasts have been prctty n'ell clisproved by the actual facts r,l.ith the passage of time.

A published analysis by ar-r independent autl.rority has already dernonstrated that this "scare talk" of a timber fan.rine by tl-re year 2000 is basecl on n-rishanclling of certain clata. An alternative use of the same <lata, lvhich seer.r-rs to many of us rnore reasonable and straightforu'ard, shorvs no prospective farnine.

The facts, as presented in 1955 by the U. S. Forest Service in the prelirninary draft of its "Timbcr Resource Revielv," show that for thc first time in our history the r.ration is growing each ycar as much timber as it crrts. To be sure, we still have a consiclerrable exccss of harcln'ood grolvth ancl a cleficit in softwoocls, but the Forest Service points ont that softwood grou'tl'r in the West r,vil1 incrcase substantiallv as old-growth forests are converted to 1'oung grorving star"r<is. The report also prrdicts increase<l grou,'th for Eastern softu.oods.

For tl.re next 20 vears, to 197.5, ther F'orest Service projected an increasing rate of tirnber grorvth and an expanding inventory of grou.'ing stock for both hardwoods and softrvoocls, after rreeting all the recluirements of population growth and t:conomic expansion. The area of clisagreement colrcerns developments after 1975. I feel completelv safe in predicting that the prospects for tl're year 2000 as u'e should see thcm in 1975, lvill be very tlilTerent from anything \\'e can see now. Past experience has repeatedly disprovecl gloorly preclictions of timber farnine, and the revolution nr.rn' in procrss in forest managernent lvill, I arn sure, disprovc any gloomy forecasts macle nou'.

It is our policy to insure thc continuccl productivity of our lands and to convert the raw matcrial they yield to proclucts which will produce the greatest econon-ric return cor.rsistent with the public interest. You will find tl-rroughout the Northwest that millions of acres of lanil are rrorc: suitable for growing trees than any othcr crop we ll'ro'uv of today.

Our job is threefold. First, lr,e insure that the lan<l from rvhich lve harvt'st trees is prornptly reforcsted. Second, u'c constantly seek to improve the utilization of cach tree harvested. And, third, through modern manufacturing techniclues, u'e mal<e a wicle variety of pro<lucts at the lor,l'est possible cost.

Presiclent Eisenhower rnade the statement, "Our policies are right today only as tl.rey arc desigr.recl to stand the test of tornorrolv." \\re believe in this prernise as it applies to our inclustry. But for us, tomorro\\' is a long u'ay off. The lifer of a mature Douglas fir tree spans the lifetinre of several gencrations of hunrans. It takes from 80 to 100 years for a Douglas fir to reach the minimurn con-ttnercial sawr.r'rill size. This is u'hy long-range planning by tl-re forest industry mauagerlcnt today lays the econor.r.ric founclation for thc next 100 years.

As I have previously saicl, it is necessary to rvait 80 to 100 years for a tree crop to m:rttlre. Dr.rring this period the ou'ner must carry the costs of local taxation, fire protection antl forestry u'ork. In addition, he uust asstlrre the risk of loss from natural carlses snch as fire and instcts. There is also the possibility that in this scientific age technological changes u'ill malie

'Grqleful' for The Merchqnf

Mr. Jack Dionne

The California Lumber Merchant

Just want you to.know how grateful we are for the California Lumber Merchant. Because of its rvorth and value to us for lumber information. names of dependable suppliers, etc., our men at the office read it from cover to cover.

Your editorials are of such high character that I read many of them to our grandsons. The one on "the stout family to know," published May 15, Page 4, is really a classic which should be forged in metal with divine fire and Vulcanean force, then placed upon the lintels of every school entranc,e in America.

So thank you again for thoughts that quicken and elevate our minds'

-N. J. patterson

Patterson Lumber Co.. Inc.

Detroit 27, Michigan his prorluct obsolete.

Tl'rese circumstances makc it clearly inequitable to tax the value of tl-re crop as orclir-rary incor.ne in the year that it is harvested. This ineqrrity has alu,'ays been recognizecl rvith respect to the rnan rvl-ro solcl standing tirlber, for l-re reccivecl capital gain treatrrrent. Ity contrast, the owner u.ho cut tin.rber for his own use was regardcd as receiving ordinary irrcorne.

In 1944, to rreet the problem creatccl by thc unusual long growing period, and to eliminate the penalty for l-rarvesting one's o\\'n timber, Congress adoptecl Section 117(k) of the Internal Revenue Co<le. This has becorne Sectior.r 631 of the 1954 Codc. Ur.rder tl.ris section, a timber owner receives capital gain treatrnent whether he sclls his timber to another or uses it in his ou.n plants. If he uses it in his own plants, the gain is measnrccl by the excess of fair market value over his cost.

The need to provide an incentive for intensive forestrl' and more cor-npletc u'ood utilization \\'as o11e of the important reasons urgecl upon Congress for adopting this treatment. History has more than vin<licated the assur:lnces of the proponents of this tax provision. During tl-re past clecacle, forestry practices and wood utilization practices havc advanced at a rate th:rt, in rry opinion, is unsurpasse<l in any inclustry. \\Ihile factors other than taxes have contributed to these arlvances, none is as irnportant as the tax inducernents.

The necessity for r,l''aiting 80 years to recover one's investr.nent in a timber crop makes ours a risky business. The decision to commit oneself to this program takes a high degree of optirr.rism. The prospect of having to pay orclinary inconte tax rates on the incrcrnent in valuc of timber accruing over an 8O-year cycle worrld be a serious deterrent to long-range forestry programs. The elimination of the t:rx incentive r,vould be ar.r effective r.l'ay of making predictions of a tir.nber far.nine corne true.

To stave off any possible rlepletion of our forest resources, thousancls of forrvarcl-looking o\uners of forest lancls have joinecl together in the Arnerican Tree Farm system. Today thrre are rnore than 8,500 certified tree farms in 44 states with ovcr 40 rnillion acres under the program.

To you and all Americans, trce farms are national insurance. They hold the pror.nise tl.rat througl.r gooci land rlanagrrnent and nrodern forestry practices, lve u,ill perpetuate this great natural resotlrcc and have trees in our livrs forever.