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10 Trees and Timber: Part II

You buy land with trees on it.
You sell land with trees on it for a higher price than you paid.
You send the surplus monies to an aspiring university.

What more do I need to know.

It turns out nothing - unless I want to understand the brilliance of Ezra Cornell's investment in Northwestern Wisconsin pineland.

First: Cornell could have bought prairie land in Kansas (he did – about 1% of the land grant). Instead he purchased land that increased in value because of the demand for the resources on the land - in this case trees. Call it the Morrill Tree Grant Act.

Second: Ezra focused not on any tree but the pine: "because of its desirable characteristics, could be brought a considerable distance and still compete successfully with more easily available hardwoods. Pine is a softwood, straight-grained, light but strong for its weight, easily worked with a handsaw, maintains its dimensions when properly seasoned, and resists rot."

Third: The pineland of northern Wisconsin, specifically the Chippewa River watershed contained one-sixth of all the pines west of the Adirondack Mountains. Imagine land covering an area from the middle of New York State, across the Midwest to Minnesota and into Canada. The river valley that Ezra focused on contained the most concentrated range of this valuable pine to be found.

Fourth: Location, location, location. The state's western rivers emptied into the Mississippi and served as the primary source supplying the high lumber demands of the late 1800s prairie expansion in Iowa, Illinois, Nebraska, and Kansas. Imagine being the only Lowe's or Home Depot serving four states.

Fifth: Ezra (and later, Henry Sage) convinced the University to hold onto the land, to wait for the anticipated appreciation. While many states sold their allotment immediately – bringing up the rear was Brown University, the land grant designate for Rhode Island, selling their Kansas land in 1865 on credit, with no interest, for $50,000 or 42 cents an acre – Cornell held on to average close to $15 an acre (and a top price of $82/acre!).

Perfect wood. Perfect location. Perfect timing. A timber trifecta.

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