Question
Here in North West Arkansas I have noticed many trees (Black Walnut, Oak,
etc.) with a silken web like sack about one foot or so in diameter attached to
tree limbs. Inside are many small caterpillar worms which eat the tree foilage.

What are they? I have heard some call them "bag worms". But they are not the
bag worms with which I am familiar that create a small pine cone like cocoon
on junipers and the like.

Left unchecked will they kill the tree? Other than removing the silken sack
(some are to high in the tree), how can they be treated?

Answer
These are an insect called Fall webworm.
The fall webworm, Hyphantria cunea (Drury), is most often discovered when the unsightly, light gray, silken webs on the trees in late summer and early fall are observed. Webworms enclose leaves and small branches in their nests, unlike the tent caterpillars which make a smaller nest in the crotch of branches.

This pest is native to North America and is common from Canada into Mexico. It is one of the few American insect pests that has been introduced into Europe and Asia.
Fall webworm larvae have been known to feed on over 85 species of trees in the United States. Pecan, walnut, American elm, hickory, fruit trees and some maples are preferred hosts.

This pest usually eats leaves late in the season and the nests are generally concentrated to limited areas. Because of this, little real damage is done to most trees. However, the nests can look very unsightly and multiple generations in long summers can lead to significant defoliation.

The large silk webs enclosing tips of branches are sure signs of fall webworms. The caterpillars remain inside the webbing, and if food runs out new foliage is encased. The caterpillars are covered with long white to yellowish tan hairs.

Though the webs are very unsightly, damage to most trees is considered to be insignificant. However, in southern states where several generations of attack can severely defoliate trees, control measures are needed. This pest tends to go through periodic population explosions. Outbreaks every four to seven years may last for two to three years and then natural control agents greatly reduce the activity.

Biological Control - Apply Bacillus thuringiensis (Bt) - The bacterial insecticide, Bt, is quite effective against fall webworms if it is applied when the larvae are small. Use formulations with UV protectants and thoroughly cover leaves next to nests. As these leaves are incorporated into the nest and eaten, the Bt will be ingested.

In small trees, the tents may be removed by hand, or cut out and destroyed. A forked stick or a stick with a nail in it may be inserted into larger webs and by twisting it the loose webs may be twisted off from the trees. Thorough spraying with pesticides labeled for use against tent caterpillars, which include carbaryl, diazinon**, or acephate as soon as the small webs and caterpillars are seen will arrest the growth of the caterpillars and their nests.
It is difficult to get the spray up into some of the web that are in the top of large trees.
Overall this insect makes the tree look bad but since it feeds on the leaves late in the summer it really does not cause much health problems for the tree.