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CHANGE— FOREST FARMING CHALLENGE Remarks of M. M o n r o e Kimbrel, C h a i r m a n of the Board, F i r s t N a t i o n a l Bank, Thomson, Georgia, b e f o r e the S o u t h e r n F o r e s t r y C o n f e r e n c e of the F o r e s t Farmers Association, Grove P a r k Inn, Asheville, N o r t h Carolina, T h u r s d a y Morning, M a y 7, 1964. T y p ical of the p r o g r e s s i v e t h i nking a s s o c i a t e d w i t h indus t r y is the theme of y o u r conference, I am h a p p y to h a v e this o p p o r t u n i t y the forest "Forest F a r m i n g for a N e w Era." to v i s i t today w i t h a g r oup d e m o n s t r a ting such v i s i o n — and m a k i n g such s i g n i f i c a n t c o n t r i b u t i o n s to the e c o nomy of our nation. The n a t i o n ' s b a n k e r s growth. are h a r d p r e s s e d to k e e p p a c e w i t h y o u r L e g i s l a t i o n n o w b e i n g c o n s i d e r e d by the C o n gress c o uld v ery wel l p r o v i d e la t i t u d e for this e x p a n d e d service. Some of yo u are aware that last fall on b e h a l f of the A m e r i c a n Bankers A s sociation, Committee I appeared before the H o use B a n king and C u r r e n c y in s u p p o r t of the forest tract bill, tion as p r o p o s e d h a s as its p u r p o s e or o u t m o d e d l i m i t a t i o n s a p p l i c a b l e H. R. 8230. This legisla the e l i m i n a t i o n of o v e r l y - r e s t r i c t i v e to n a t i o n a l banks; restrictions which eith e r do n o t apply or h a v e a l ready b e e n l i b e r a l i z e d w i t h r e s p e c t to S t a t e - c h a r t e r e d b a nks tract loans, loans in m a n y of our states. Thus, in the case of timber it is clear that e x i s t i n g r e q u i r e m e n t s — w h i c h limit such to 40 p e r c e n t of m a r k e t a b l e d e p e n d i n g on w h e t h e r or n o t timber, at terms of ten or two years, the loan is a m o r t i z e d — are o v erly r e s t r ictive and impede d e v e l o p m e n t of the timber industry. 2 In o r d e r to enc o u r a g e soundly p l a n n e d fore s t development, l o n g e r - t e r m c r e d i t is needed. This is p a r t i c u l a r l y s i t i o n and m a n a g e m e n t of y o ung stands of timber. true in the a c q u i The terms of the loan shou l d n o t r e q uire r e p a y m e n t through l i q u i d a t i o n of the timber p l e d g e d as security b u t s h ould be such as to enc o u r a g e m a n a g e m e n t of timber resources. ing of forest p r o d u c t s b e f o r e time w h e n p r i c e s the s u s t a i n e d y i e l d S h o r t e r - t e r m c r e d i t m a y lead to h a r v e s t they h a v e r e a c h e d full m a t u r i t y or at a are at a low ebb, thereby c a u s i n g e c o nomic loss to our nation. With the e x c e p t i o n of o v e r m a t u r e d trees, a p p r e c i a t i n g asset. The supply of m e r c h a n t a b l e g r ade is d e c l i n i n g and the p r o s p e c t i v e is expanding. timber. timber of the b e t t e r l o n g - t e r m uses of timber p r o d u c t s There is a stable m a r k e t for timber p r o d u c t s and s t a nding Thus it w o u l d a p pear that lenders on timber h a v e rea s o n a b l e ass u r a n c e n o t o nly of l o n g - t e r m increases timber p r o d u c t s u n d e r l y i n g their loans, It is the g e n eral year but not until passed st a n d i n g timber is an in the v a lue of timber and b u t of liq u i d i t y in timber loans. feeling that this b i l l w i l l be en a c t e d this the civil rights fight is completed. the H o u s e and h e a r i n g s h a v e b e e n h e l d by H. R. 8230 has the Senate B a n king and C u r r e n c y Committee. There w a s some h o p e that there m i g h t be a s h o r t - c u t m e t h o d u s e d to r e p o r t the b i l l w i t h o u t w a i t i n g rights fight. the c o n c l u s i o n of the civil Subsequent developments now make this a r a t h e r d i m prospect. 3 S c i e n t i f i c developments, n e w techniques, cultural practices and m o d e r n think i n g m a k e loans on timber tracts d e s i r a b l e T h ese are o b v i o u s l y s p e c i a l i z e d loans investments. and g i v e n p r o p e r a t t e n t i o n p r o v i d e g o o d d i v e r s i f i c a t i o n for the loan p o r t f o l i o of banks. In o ur c h a n g i n g e c o n o m y and o ur i n c r e a s i n g l y c o m p e t i t i v e society, "you c a n ' t do today's tomorrow." job w i t h y e s t e r d a y ' s m e t h o d s and be in b u s i n e s s There is n o t h i n g so c o n s t a n t as chan g e and this is p a r t i c u larly true of the A m e r i c a n forest industry. It isn't new s w h e n I tell you that some of the timber land o w n e r s — large and s m a l l — across now. But I h o p e land owners the country, a r en't doing so w e l l just it isn't news w h e n I tell you there are o t h e r timber in the v e r y same areas w h o are n o t ye t y e l l i n g disaster. There is no r e a s o n to a p o l ogize for the job w h i c h h as b e e n done. C o n t r a r y to p u b l i c opinion, t h ough the sale p r i c e the fo r e s t r y i n d ustry is n o t sic k — for some of the p r o d u c t s is at times p r e t t y puny. In terms of p r o d u c t i v e e f f i c i e n c y you h a v e done a s p l e n d i d job. production, d i s t r i b u t i o n and m a r k e t i n g Modern t e c h niques h a v e p r o v i d e d the A m e r i c a n p e o p l e w i t h a q u a l i t y of p r o d u c t and a q u a n t i t y u n p a r a l l e l e d in history. Actually this job h a s b e e n so e f f e c t i v e that p r o g r e s s itself is our m o s t i m p o r t a n t problem. It is n o t u n u s u a l industry. to h e a r a r e f e r e n c e to the d e c l i n i n g forest No one talks of a d e c l i n i n g a v i a t i o n i n d ustry y e t just a decade ago it w o u l d re q u i r e 20 or 25 p e o p l e the b e t t e r p a r t of a day w i t h f rom N e w Y o r k to the W e s t Coast. several stops to m o v e T o d a y 110 p e o p l e b o a r d 4 a plush jetliner and cross the country in a matter of hours without stop Our p r o b l e m therefore b e c o m e s one of i n t e l l i g e n t analysis and d i r e c t i o n of the f u t u r e — n o t c o w e r i n g fear of it. Never before now. in h i s t o r y h as the future b e e n so n e a r to us as R e s e a r c h and e d u c a t i o n are s h o r t e n i n g the time span of progress. We shall o c c u p y rin g s i d e seats in s c i e n t i f i c and t e c h n o l o g i c a l d e v e l o p m e n t s d u r i n g the n e x t 10 years e q u i v a l e n t to c h anges w h i c h our fathers took a g e n e r a t i o n to accomplish. This p r o s p e c t w a s p r e t t y w e l l driver. s u mmed up by a W a s h i n g t o n taxi As h e d r ove d o w n P e n n s y l v a n i a A v e n u e h is p a s s e n g e r rea d aloud the i n s c r i p t i o n o n the face of the N a t i o n a l A r c h i v e s B u i l d i n g , "What is p a s t is p r o l o g u e . " Le a n i n g o u t the w i n d o w h e read aloud once m o r e and then i n q u i r e d of the cab d r i v e r w h a t that meant. Back came the reply, "That m e a n s y o u a i n ' t seen n o t h i n g yet." So it w i l l be w i t h the f o rest farmers and the A m e r i c a n b a n k e r in the n e x t decade. T e c h n o l o g i c a l changes of the k i n d and r a p i d i t y we e n v i s i o n h e r e c an o n l y m e a n an a c c e l e r a t e d rate of social and economic adjustment. This w i l l be n e i t h e r easy n o r p a i nless. The b e s t l e a d e r ship among yo u w i l l be c h a l l e n g e d to g u ide these a d j u s t m e n t s along c o n s t r u c t i v e and b e n e f i c i a l pathways. Some w h o w o r s h i p at the shrine of "status quo" w i l l seek to t h wart a d j u s t m e n t s w h i c h are ine v i t a b l e in a dy n a m i c and g r o w i n g society The y w i l l impede p r o g r e s s and sometimes w i l l m a k e p a i n f u l w h e n it does b e c o m e inevitable. the a d j u s t m e n t m o r e Others w i t h l i m ited v i s i o n 5 will follow the adjustments blindly. They will neither help nor hinder. A w a r e n e s s of the i n t e r d e p e n d e n c e of a g r i c u l t u r e and industry is g r o w i n g generally. The p r e s e n t - d a y f o rest farm e r c o u l d n o t e x ist w i t h o u t the p r o d u c t s of industry. It is also true that industry c o u l d n o t p r o s p e r w i t h o u t the p r o d u c t s of the f o rest farmer and strong outlets among its f arm customers. W h i l e i n c r e a s i n g c o m m e r c i a l i z a t i o n h a s at times b r o u g h t m o r e p r o s p e r i t y to the farmer/ for h i m to go b r o k e m u c h faster. a farmer to go b r o k e — w h i l e it h a s Before 1930 also m a d e it p o s s i b l e it took 8 or 9 y e ars for today the job c an be done in a f r a ction of that time. The late C h arles F. K e t t e r i n g m a d e famous no such thing as the g o o d old days. scientist, forest farmer these days m u s t be a c o m b i n e d and it s h o u l d come early. He m u s t h a v e e x p e r t training The p r o g r e s s i v e n e s s of a g r i c u l t u r e in each today c an r e a dily be m e a s u r e d b y the t r a ining boy s g i rls h a v e b e e n r e c e i v i n g in a g r i c u l t u r a l c o urses Clubs is the 'em— a f r a i d of change." e n g i n e e r and astute busin e s s m a n . of our states "Ain't The o n l y thing that counts g o o d n e w d a y s - - a n d p e o p l e are a f r a i d of A successful the saying, and and through their 4 - H and F u t u r e F a r m e r chapters. Bankers k n o w that it takes a lot of m o n e y to a c q uire p l a n t the trees, provide the land, fire p r o t e c t i o n and d i s e a s e co n t r o l and op e r a t e s u f f i c i e n t l y s u c c e s s f u l to h a v e a r e turn on the i n v e s t m e n t of the forest farmer today. these problems. Sophisticated bankers are b e c o m i n g b e t t e r in f o r m e d about 6 It m a y be true that in some areas of the c o u n t r y b a n k s h a v e b e e n a little slo w to m o v e a s s i s t forest farmers in w i t h v e n t u r e capital to de v e l o p n e w areas. o t h e r b a n k e r s w h o h a v e m o v e d into this to e n c o u r a g e and A t the same time we do h ave field ver y s u c c e s s f u l l y — and w ith a s t o n i s h i n g l y goo d results. A g a i n I speak of "change." For the c o u n t r y as a w h o l e the tendency o v e r a p e r i o d of years ha s b e e n toward the c o n s o l i d a t i o n of small f o r e s t farms and to larger tracts. r e a c t i o n or p e r s o n a l views that tendency w i l l c o n t i n u e if we are to h a v e the g r e a t e s t e c o n o m i c p roduction. r e s u l t of p r o g r e s s Rega r d l e s s of any emotional Let us r e c o g n i z e this as a normal and as a p e r f e c t l y n a t u r a l o u t g r o w t h of our c h a n g i n g times. This does n o t m e a n we are g o ing tract— over which so m a n y i n f o r m e d b l e e d i n g hearts. w i l l be a n e w type. a bigger, tears h a v e b e e n shed b y p r o f e s s i o n a l H o w e v e r the family fore s t tracts of the future b e t t e r financed, than it h a s b e e n in the past. h a v e come f rom this As better managed such it can survive. type operation. It w i l l these I am for g i v i n g it a chance as a find its n a t u r a l and A n y e f f o r t to p r e s e r v e a r b i t r a r i l y the o l d time family f o rest tract is d e f i n i t e l y a g a i n s t true progress. The family forest still p r o v i d e us w i t h free i n d e p e n d e n t e n t e r p r i s e w h e r e ability w i l l impossible. farm tract The b e s t m e n and w o m e n the w o r l d h a s ever seen m e n and w o m e n — if we give it a chance. a b u n d a n t reward. and b a dly In m o s t p a r t s of the c o u n t r y it is n o w eme r g i n g as b e t t e r equipped, tract is invaluable. to lose the family forest It is b o t h u n w i s e and 7 I am n o t ar g u i n g for large forests as such. for m o s t of o u r t i m b e r l a n d owners continue to e x p a n d until in the U n i t e d States N e vertheless, tracts w ill they h a v e r e a c h e d the size that w i l l be economic. You folks k n o w that I am n o t in p o l i t i c s be. I am m e r e l y saying and n e v e r e x pect to there are some items w h i c h c o n t i n u e to c o n c e r n m e and I f r a n k l y find some a n x iety a b o u t the p a t t e r n that h as b e e n o u t l i n e d for the future. The p a t t e r n seems to leave little doubt. There is a strong d e t e r m i n a t i o n to c o m p l e t e l y soc i a l i z e a g r i c u l t u r e in all its phases. Unfortunately most Americans trying to shape their future for them. human values upon which our democratic are still u n a w a r e of the evil forces Some are l o sing sight of the s o c i e t y is based. E f f i c i e n c y in o ur f o r e s t far m o p e r a t i o n s w i l l m e a n little to us if w e fail to p r e s e r v e liberty, p r o v i d e o p p o r t u n i t y and c o n t i n u e a d e s i r a b l e society. This is w h y our w h o l e c i t i z e n s h i p n e e d s i n t e l l i g e n t e n l i g h t e n e d unders t a n d i n g . times. national W e m u s t read the signs of the W e m u s t r ead them c o r r e c t l y and wisely. c l e a r unders t a n d i n g , security. h a p p e n h e re." today as n e v e r b e f o r e W i t h o u t this w i s d o m and we m a y b a r t e r away ou r b i r t h r i g h t and d e s t r o y our We have too m a n y of ou r g o o d p e o p l e H i s t o r y tells us that it can h a p p e n here. saying "it c a n ' t I w o u l d invite you to take a look at w h a t is h a p p e n i n g all o v e r the w o r l d — and for that matter, h e r e at h o m e too. W h e n w i l l w e w a k e up to the fact that w e are n o w e n g a g e d in a W o r l d W a r — c o m m u n i s t style. A study of a g r i c u l t u r a l p r o d u c t i o n t h r o u g h o u t the w o r l d shows that only in those co u n t r i e s w h e r e m e n are free to o w n the land they 8 w o r k is there e n o u g h food to feed their p e o p l e it is i m p e r a t i v e adequately. Therefore, that w e s a f e g u a r d the i n d e p e n d e n t i n d i v i d u a l l a n d o w n i n g s y s t e m that h a s m a d e our A m e r i c a n a g r i c u l t u r e the m o s t p r o d u c t i v e in the world. Free and e asy g o v e r n m e n t m o n e y is t i g h t e n i n g the n o o s e around ou r necks. money, E v e r y time we h o l d o u t o ur h a n d s for this free and easy we p u l l the rope tighter and b r i n g c l o s e r to s t r a n g u l a t i o n the p r i v a t e e n t e r p r i s e s y stem w h i c h h as m a d e this c o u n t r y great. W h e n the farm e r is told h o w m u c h acreage h e m u s t plant, the la b o r i n g m a n is told he m u s t join the u n i o n to work, when w h e n the m e r c h a n t t or m a n u f a c t u r e r is told h o w m u c h he can c h a r g e for his products, are d a n g e r o u s l y close then we to a c o n t r o l l e d economy. W h e n the p o w e r to tax is u s e d to r e d i s t r i b u t e ou r wealth, we then are d a n g e r o u s l y close to socialism. A b r a h a m L i n c o l n said, thrift. "You c a n n o t b r i n g p r o s p e r i t y b y d i s c o u r a g i n g You c a n n o t s t r e n g t h e n the w e a k by w e a k e n i n g the strong. You c a n n o t h e l p the w a g e e a r n e r by p u l l i n g dow n the w a g e payer. You cann o t f u r ther the b r o t h e r h o o d of m e n b y e n c o u r a g i n g class hatred. You c a n n o t h e l p m e n p e r m a n e n t l y by d o i n g for t hem w h a t they c o u l d and s h o u l d do for t h e m s e l v e s ." M o r e than 100 years ago a g r e a t F r e n c h liberal p o l i t i c i a n and w r i t e r w r o t e in h i s "Democracy in America": "I s o u g h t for the greatness and genius of A m e r i c a in h e r c o m m o d i o u s h a r b o r s it w as n o t there. w as n o t there. and h e r ample rivers and In h e r fertile fields and b o u n d l e s s p r a i r i e s In h e r rich m i n e s and it and h e r v a s t w o r l d c o m m e r c e and it was 9 n o t there,, pulpits g e nius Not until I w e n t into the chu r c h e s of A m e r i c a and h e a r d h e r aflame w i t h r i g h t e o u s n e s s did I u n d e r s t a n d the s e c r e t of h e r and h e r p o w er." "America is great," de T o c q u e v i l l e concluded, g o o d and if A m e r i c a ceases to b e good, A m e r i c a w i l l cease It is n o t enou g h to h a v e conviction, to d e f e n d those convictions. r e a l l y counts "because she is to be great." one m u s t h a v e The c o u r a g e o u s person, the courage the p e r s o n w ho for A m e r i c a w h e n c o n v i n c e d of the r i g h t e n o u s n e s s of a cause, stands firm no m a t t e r w h a t the cost. people with hardy moral We m u s t be a n a t i o n of tough m i n d e d fiber that w i l l n o t give an inch to the p r o v o c a tions of i n t e r n a t i o n a l gangsterism. We m u s t r e c o g n i z e and a c k n o w l e d g e that the m o r a l purpose/?of our s o c iety are n o t m a n m a d e b u t come from G od w h o go o d n e s s and the final Let us is the sole source of judge of o ur perfo r m a n c e . then as g o o d c i t izens r e c o g n i z e the cha l l e n g e b e f o r e us. Let us as C h r i s t i a n b u s i n e s s m e n and s t a t e s m e n p r o v e to all the w o r l d that the soul of A m e r i c a is goo d b e c a u s e there is so m a n y g o o d Americans. S u m m i n g up then w e m i g h t ask just h o w m u c h do ou r forest p r o b l e m s mean to each of us as i n d i viduals or as b a n k e r s h e r e today. Or w h a t do they m e a n to the m a n b e h i n d an a s s e m b l y line in an auto factory? m a n b e h i n d the d e s k in a N e w Y o r k s kyscraper? To the Or the sa l e s m a n b e h i n d the c o u n t e r in the C a l i f o r n i a d e p a r t m e n t store? N o t m u c h — onl y the b r e a t h of ec o n o m i c as w e l l o n l y the d i f f e r e n c e b e t w e e n h u n g e r and plenty, as p h y s i c a l life, o n l y the d i f f e r e n c e b e t w e e n 10 success and f a i l u r e — that m u c h and n o t h i n g less. I am c o n f i d e n t that the leaders of A m e r i c a n b a n k i n g and the timber land o w ners of this c o u n t r y w i l l h a v e the b r e a t h of i m a g i n a t i o n and the c l a r i t y of v i s i o n to d i r e c t o ur m o d e r n t e c h n o l o g i c a l r e v o l u t i o n dow n the p a t h w a y of a p r o g r e s s i v e and p r o s p e r o u s dynamic, and free America. With this c o n v i c t i o n , I h a v e p l e a s u r e in b e i n g a r o u n d to o b s e r v e these ex c i t i n g days in d u s t r y in a growing, # ahead.