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History of the Lumber Industry of America
Chapter XIII. Ontario and the United States


The great expansion which characterized the Ontario lumber trade' beginning about the middle of the Nineteenth Century was due mainly to the increasing demands of the United States for Canadian lumber. Active lumbering operations were still being carried on in the central and eastern states, and the industry was just beginning in the Saginaw Valley and other points in the West. The adoption of the reciprocity treaty in 1854, securing the free exchange of natural products between the United States and Canada, including “timber and lumber of all kinds, round, hewed and sawed, manufactured in whole or in part,” stimulated considerably the growing demand for the forest products of Canada.

In proportion as the market for sawn lumber developed, the cutting of square timber, long the leading branch of the industry, declined in importance and became less essential to the prosperity of the lumbering interest. From being the principal factor in the export trade it speedily fell to a subordinate position, as its disadvantages, especially in the matter of its wastefulness and the greater danger of forest fires from the amount of litter its prosecution left in the woods, began to attract attention. The extension of the market and the rapidly changing conditions of the trade were attended by some fluctuations and vicissitudes, and inflations and depressions naturally followed because of the abundance of the supply of raw material available. The price of waney and' square white pine would sometimes fall in the Quebec market as low as ten cents a cubic foot and suddenly rise to twenty-five cents, and the variations of the Albany market, then an important center of the trade were extensive, and imparted a speculative character to the business.

The American Civil War, and the lavish expenditures which resulted, created a great demand for Canadian lumber at high prices, though the trade received a setback in 1866 by the abrogation of the reciprocity treaty. This led to the reimposition by Ontario of export duties on unmanufactured logs.

A few figures may be given to show the altered character of the trade during the decade immediately preceding this event, and the. growing importance to Canadian lumbermen of the American, as compared with the British, market.

The total exports of forest products from Old Canada (the present Provinces of Ontario and Quebec) to Great Britain for the three-year period 1854-6, at about the time of the adoption of the reciprocity treaty, amounted in value to $18,288,702, while the aggregate shipments to the United States were valued at $8,894,218. The total shipments of lumber and timber for the fiscal year 1867 amounted to $13,948,648. The proportions consigned to Great Britain and the United States were nearly equal, being valued at $6,889,783 and $6,831,252 respectively. The increase in the American export trade was almost entirely in sawn lumber. While “planks and boards” were exported to the United States in 1854 to the value of $1,866,712, the same item figures in the returns for 1867 to the amount of $5,043,367. The development of this feature of the trade, while to a certain extent fostered by the favorable conditions of the reciprocity treaty, was in the main due to the rapid growth of population in the eastern states, coincident with a gradual diminution of their home sources of supply, rendering it necessary for them to look abroad for their requirements.

It was during this period that many of the firms now prominent in connection with the lumbering and allied industries of the Ottawa Valley first established themselves. John R. Booth, one of the oldest and best known representatives of the trade, began business in 1858. Like those of most of the more extensive employers, his interests embrace a number of subsidiary interests, including a large pulp mill and railroad operations on a large scale. E. B. Eddy, head of the E. B. Eddy Company, began the manufacture of matches in 1854. In addition to this branch of the business and extensive lumbering operations, the company is engaged in the manufacture of woodenware and paper. The firm of Bronsons & Weston dates back to 1853, and was one of the first to establish a sawmill on a large scale at the Chaudiere. Other firms which flourished about this period or somewhat later, some of which are still extant or have been reorganized as incorporated companies, are A. H. Baldwin, established in 1853; Perley & Puttee, who commenced business at the Chaudiere in 1857; Gilmour & Co., who had extensive mills at Chelsea on the south bank of the Gatineau; Wright, Batson & Currier, and Hamilton & Co., proprietors of the large Hawkesbury mills near the Grenville Rapids, sixty miles from Ottawa down the Ottawa River.

In 1867 the confederation of the British North American provinces was accomplished, the old union between Upper and Lower Canada being dissolved. The former became the Province of Ontario and the latter the Province of Quebec. By the terms of the British North America Act, under which the Dominion of Canada was constituted, the control of public lands and forests was relegated to the several provinces. By that time considerable headway had been made in the understanding of how best to handle timber lands, but in the agitation over the question of union and in the multiplicity of large political issues which Canadians had to deal with in building up this confederation and opening transportation systems from ocean to ocean, the question of forestry was largely lost sight of for the time.

MANAGEMENT OF CROWN LANDS.

With confederation accomplished and with the knowledge that Crown lands would be henceforth one of the principal sources of provincial revenue (the customs, excise, etc., having gone to the Federal Parliament as a basis of its revenue), the leaders in Ontario turned their attention to the forests, and Honorable Stephen Richards, first Commissioner of Crown Lands for Ontario, rather patted himself on the back on his first reporting to the legislature that a bonus of $519 a square mile, the largest price ever paid, had just been received at a timber sale for an eighteen-mile berth. Contrasted with the price of $31,500 a mile paid in the sale of December, 1903, this seems insignificant, but it showed that the people were beginning to realize the value of this great asset. His first report, covering the year 1868, showed that the revenue from timber dues, ground rents and bonuses amounted to $190,237. The change resulted in increased stringency in the management of the public domain. New regulations were issued, the dues being raised 50 percent of the previous rates and a uniform rate of ground rent fixed.

For some years the volume of exportation steadily increased, and the timber revenue went up by leaps and bounds. In 1868 the dues and ground rents amounted to $190,237; and in 1869, owing to the 50 percent increase in the dues, increased business and more careful supervision, they went up to $508,561. New regulations were adopted in 1869 which increased the ground rent to $2 a square mile, and the dues to the following: Black walnut and oak, per cubic foot, 3 cents; elm, ash, tamarack, and maple, 2 cents ; red pine and white pine, birch, basswood, cedar, buttonwood, cottonwood and all boom timber, 1 % cents; all other woods, 1 cent; red pine, white pine, basswood, buttonwood and cottonwood sawlogs, per standard of 200 feet board measure, 15 cents; walnut, oak and maple sawlogs, 25 cents; hemlock, spruce and other woods, 10 cents; pipe staves, per thousand, $7; hemlock tanbark, per cord, 30 cents. The duties were to be collected upon exact measurement; but, where this could not be obtained, each stick was to be estimated as containing the following cubic feet: White pine, 70; red pine, 38; oak, 50; elm, 45, and all other woods, 34.

In 1870 the Dominion Parliament passed an act compelling lumber- • men to mark their timber to be floated down stream and provided for a registry of such marks; and in 1873 the throwing of sawdust, slabs, . edgings, bark, or refuse into any part of a navigable stream was prohibited.

About 1870 the industry was mainly centered in the Ottawa Vdlley and on the upper waters of the Trent River and waters tributary to the Georgian Bay. Production in the latter region had before that time been limited to a few mills, the output of which was principally consumed in the locality. But, with the advance of settlement, the shipment of lumber from this now important source of production began to increase as the country was opened up.

The beginning of lumbering operations in the Georgian Bay district on a comprehensive scale practically dates from the year 1872, when an extensive sale of timber limits, covering 5,301 square miles on the north shore of Lake Huron, was held, from which the Government realized $602,665 in bonuses and ground rents. The territory included in this sale was largely unfit for agricultural settlement, and, large areas being uninhabited, the timber was exposed to depredations, as every facility existed for its being towed across the frontier. Among the principal purchasers of limits at this sale were McArthur Bros., Toronto; Rathbun & Son, of Mill Point, now Deseronto; Cook Bros., Toronto; James Eagan, Ottawa; Henry Kirk, Toronto; Geo. Green, Brampton; Isaac Cockburn, Toronto; W. H. Gibbs, Oshawa, and Hugh Macdonald, Toronto, some of which names are well known in the business world today. .

This period of prosperity reached its climax in 1873, and was the time of the rise of the great lumbering industry of Michigan, Wisconsin and Minnesota, which production reached a volume far surpassing the Canadian output and forming the most considerable source of supply for the great West. The yield of sawn pine lumber of these great pine-producing states reached the figure of 3,999,780,000 feet in 1873. Falling off during the protracted period of worldwide depression which followed, it increased again in 1880 and developed by leaps and bounds with the increased demand caused by immigration and settlement in the western states, until the high-water mark was reached in 1892 with the enormous total for that year of 8,594,222,802 feet.1 From that time the output declined, owing partly to the exhaustion of sources of timber supply and partly to the exploitation of the southern forests and the substitution of other construction materials for pine.

RELATIONS WITH THE UNITED STATES.

The change in the lumbering situation in the neighboring states had an important bearing upon the trade in Canada. With the depletion of the pine forests in Michigan the dependence of the American consumer upon Canada for a portion of the lumber supply increased. It became the interest of the American manufacturer to secure this supply as far as possible in the form of raw material to be worked up in the American sawmills in those localities where the domestic forests no longer remained within access. It was equally the interest of the Canadians to export their forest product in as highly manufactured a form as possible.

A committee was appointed by the Federal house in the session of 1874 to look into the question of the export duty on sawlogs, etc., imposed in 1868. It reported that, reduced to an ad valorem rate, it^ averaged: On stave bolts, 40 percent; oak logs, 30percent; pine logs,"' 20 percent; spruce logs, 25 percent, and shingle bolts, 25 percent. The committee reported that, while this enabled sawmill owners to buy cheaper logs, it hurt the settler and timber owner and at the same time did not result in the establishment of more mills.

The duty on oak logs and stave bolts was abolished in 1875. Things remained in this state until 1886, when the export duty on shingle bolts was fixed at $1.50 a cord; on spruce logs, $1 a thousand feet, and on pine logs, $2. In November of the same year, by order in council, the export duty on sawlogs was increased from $2 to $3 a thousand feet; but July 5, 1889, in view of a probable understanding with the United States in regard to duties on Canadian manufactured lumber, the old rate was restored. The negotiations carried on while the McKinley bill was under consideration were successful, and in October, 1890, Sir John Macdonald, after negotiating with the United States Secretary of State, James G. Blaine, removed the export duty on spruce and pine logs in consideration of the United States Congress reducing the import duty on sawn lumber from $2 to $1 a thousand.

When the Democrats came into power the duty on sawn lumber was removed under the Wilson bill and free trade on logs and lumber between Canada and the United States followed. While this was satisfactory to Canadian lumbermen, market conditions were such that it did them very little good, and lumber exports were less in 1892 than in 1889. The depression of 1893 was accompanied by low prices of lumber which lasted until 1898 and low prices in the United States were attributed to Canadian competition. As the outcome of this feeling, when the Dingley bill was passed in 1897 the old duty of $2 on lumber • was restored. —

Large quantities of sawlogs were being exported to feed Michigan mills and the Michigan men, being naturally anxious to keep up the supply, adopted the expedient of a clause in the Dingley bill providing that if any country or dependency imposed an export duty the amount of such duty would be added to the import duty. This, if successful, would have transferred the bulk of the Georgian Bay trade to Michigan, because, if that state could get free logs while sawn lumber was charged a stiff duty, nothing could be sawn on the Georgian Bay for the United States market; and, if an export duty was imposed by Canada, then the duty on sawn lumber entering the United States would be prohibitory. The authors of the measure overlooked the fact that the Ontario government does not sell land and timber in fee simple as is done in the United States, but only sells a license to cut timber over a given area subject to the payment of Crown dues, retaining the ownership of the land. .

The Georgian Bay lumbermen applied to the Dominion Parliament for an export duty, but the Government, fearing the imposition of retaliatory duties on sawn lumber by the United States, declined to act. The lumbermen then sought relief from the Ontario Provincial legislature. In the session of 1898 the legislature passed an act requiring that v all logs cut on government land be manufactured in the Province. Since this was not a duty but the regulation of a landholder respecting its own property, the United States could not impose a retaliatory duty; but the Michigan holders of Ontario timber limits claimed that it was a breach of contract, in that by payment of the bonus they acquired the limit and the right to cut pine thereon and to dispose of it as they saw fit.

The Government replied that the licenses were for one year only, and that to obtain a renewal of the license the next year they must submit to such regulations as the Government saw fit to impose. The Dominion Parliament refused to interfere and the courts decided in favor of the Provincial government. The effect of this has been to cause the removal of a large number of American lumbermen to Ontario to do a sawmill business there, and it seems to be taken for granted that the exportation of sawlogs from the Province will never again be permitted.

IMPORTANCE OF GEORGIAN BAY DISTRICT.

Michigan lumbermen are largely interested in lumbering operations and timber properties in the Georgian Bay district of Ontario. About 1890 lumbermen in the Saginaw district began making investments in Canadian pine, and increasingly large quantities of Canadian logs were rafted to eastern Michigan mills—80,000,000 feet in 1891, 300,000,000 in 1894 and 238,843,024 in 1898. In April, 1898, the act of the Ontario Legislature requiring logs cut on Crown lands in Canada to be manufactured in that country became effective and this was the death blow to the log rafting industry. At once Michigan men who had made investments in Canadian timber began preparations to manufacture their product in Canada, and now Holland & Graves, Eddy Bros. & Co., S. O. Fisher, The Moulthrop Lumber Company, The William Peter Estate, McArthur Bros. Company, McEwen & Dolson, Huron Lumber Company, Saginaw Lumber & Salt Company, Cleveland-Sarnia Sawmills Company, Loveland & Stone, George L. Burtis and a number of other concerns—with a few exceptions all hailing from Michigan— are operating in the Georgian Bay district.

The lumber industry in this district is the most important in Ontario, as, with the single exception of the Ottawa River district, which embraces a portion of Quebec Province and should not, therefore, be considered here, this district produces by far the largest amount of lumber of any portion of the Province. The condition of the lumber market of the United States is a great factor in determining prices in the Canadian lumber market. Shipments by water from the Georgian Bay ports have increased materially since the abolition of tolls on the Canadian canals. Birch and ash are manufactured and exported quite extensively to the United States. Hemlock, oak, elm and red pine are all used locally. Pickets, pine, cedar shingles, staves and lath are exported.


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