British Columbia in the Making
By: John Bensley Thornhill
How the Timbered Forest of Vancouver Island were sold off!
Quite an eye ️ opener!
Opportunity of a lifetime where else could you get a return for your investments at over 200% annually!
With the huge profits going to so few and the toil and hard times for those who made a pittance in return.
For perspective of the values of the BC Forest products, all value and funding/purchasing were in GBP
1900 English currency values:
1 £ value was $5.00/USD
1£ has 20(s) shillings
1(s) Shilling has 12(d) pencel (pennies)
By John Bensley Thornhill
from Chapter 5
I do not think that European capitalists should investigate any timber outside Vancouver Island, a few of the Chain of Islands, and the fringe of mainland south of latitude 54° (roughly the mouth of the Skeena) . Timber here, as elsewhere in British Columbia, is held under very varying conditions. In some of the older Crown grants the timber is the property of who ever owns the land in few simple.
In later Crown grants Government has a claim for 2(s) a thousand on all timber cut. Timber leases, which are now no longer granted, were mostly for twenty-one years, and apparently many are by the terms of the Act renewable in perpetuity at their original rental and royalty, which in some places will come to less than 2(s). an acre, and no stumpage charges. By far the greater part of the timber land and timber of British Columbia is held under various sorts of hcences. The discussion of these licences is hardly necessary in a book of this type.
The amount of timber alienated by the eight or nine different ways of holding it is roughly one-sixth of the timber held under special licence. It was the ahenation of the timber that brought the Government of British Columbia from a state of bankruptcy to comparative affluence. By the Act of 1905, timber could be obtained under hcence from the Government in blocks of a square mile at a rental of Is. an acre per annum. Most of the licences are for twenty-one years, and are subject to a taxation of 2 per cent, ad valorem, and a royalty of 2(s). a thousand on all timber cut. Further, the timber must be manufactured in British Columbia, when, as the area is cut off, the owner of the lease may, if he desires to do so, surrender it to the Crown, or keep on the lease as long as he pays his annual rent of Is. an acre. Apparently, these licences are in perpetuity, although the Government has the power, at the expiration of the original term of the licence, to raise the royalty to what price they think fit.
A thousand of timber is 83 .1 linear feet of planks, 1 inch thick and 1 foot wide, and in estimating the cubic contents of standing timber, only the actual portion that can be cut into planks in the mill is considered. Estimating timber in the raw has more or less become a profession in British Columbia, and so highly are some of this profession thought of, that a report signed by a recognized man is good for an overdraft in the bank. Most timber cruisers under-estimate instead of over-estimate, and as the forest is continually growing, timber land always contains more timber than the amount estimated by the cruiser.
Timber, hke real estate, is worth what it will fetch. The lowest price I heard quoted was just under Is. 6(d). a thousand for timber held under licence. For Crowngranted timber, including the land as well, as much as 18s. a thousand was asked.
It costs 8(s). a thousand, more or less, according to the accessibility of the timber, to fell it, cut it into suitable lengths, get it into the sea, tow it to the mills, and haul it up to them. The cost of manufacturing lumber in the rough is 8(s). a thousand, and to this must be added 2(s). a thousand for overhead expenses and depreciation of machinery. The actual expenses of turning a thousand feet of standing timber into rough boards or railway sleepers — ties, as they call them in Canada — under the present extravagant methods should not exceed in any case £1 a thousand. The local market price for rough lumber is 56s. a thousand, and the prairie and world's markets considerably higher.
Compared with the standard prices in the American national forests in the States of Washington and Oregon, British Columbia timber is decidedly cheap. The general prices for standing timber in the States on the Pacific seaboard are roughly as under : —
Douglas fir. 10(s). a thousand
" Cedar " .. 12(s). „
Hemlock .9(s). ,, ,,
Spruce. 12(s). „
On an average stand of 60,000 to the acre, the capitalised charge for licence-rent and taxes, is less than 6(d). a thousand, add to this the 2(s). a thousand stumpage, and the reader will see that timber which is now offering at ls. 6d. a thousand, comes to 4(s). a thousand in all, as against the United States prices of 12(s). to 14(s). a thousand, and I think it would well repay London capitalists to buy big blocks of timber.
The advantages of London handling the timber are several. In the first place, London, being the exchange of the world, can sell lumber wholesale in Austraha, South Africa, India and China, quicker and to better advantage than can be done from the coast. In the second place, London is never frightened of prime cost, and to run a timber proposition efficiently, very big sums are needed.
So far, the mills have been in the big cities, partly on account of the local market, and partly to enable their owners to keep up the price of real estate, by having a large number of men on the pay roll, whose wages are spent in the immediate vicinity of the mills. It is evident that to work the timber business on an economic basis, the mills must go to ports in the heart of the timber country. The comparatively small cost of building wharves and making any one of the hundred and one small fjords and bays into harbours fit for ocean-going steamers is nothing compared to what a big mill, cutting 1,000,000 feet a day, wastes in towing, etc. — £400 a day and over, or capitalised £10,000,000, Some of the figures for starting in the timber business on a big scale I give below : —
Five hundred acres of land and a good port could be bought for under £20,000. A first-class mill could be erected for another £20,000. Thirty to forty square miles of timber running from 20,000 to 400,000 could, if held under hcence-rent, be bought for less than £100,000 spot cash. A logging railway costs about £4,000 a mile, and perhaps ten miles would have to be built, and another £20,000 should buy engines, trucks, " donkeys " and all the necessary plant. On these figures, with a capital expenditure of £200,000, the profits should not be less than 250 per cent, per annum.

