Property Rights, Nineteenth-Century Federal Timber Policy, and the Conservation Movement

In campaigning for the establishment of the National Forests in the late nineteenth century, conservationists pointed to fraud and timber theft in the Pacific Northwest. In this paper we argue that the conservationists were misdirected; that it was a costly Federal land policy that encouraged fraud and theft. In the face of restrictive land laws, fraud was necessary if lumber companies were to acquire large tracts of land to take advantage of economies of scale in logging. Since fraud used real resources, it raised the actual cost of acquiring land and thus delayed the establishment of property rights. Such delays led to theft. The paper examines the public land laws, explains their selection by claimants, and calculates the added transaction costs or rent dissipation that resulted from circumventing the law.“Government control of cutting on all timberland, private as well as public, is still today, as it was then, the one most indispensable step toward assuring a supply of forest products for the future in the United States.”