EDITORIAL 



Taxation the Primary Issue 



THE discussion of state regulation of 

 timber cutting at the annual meet- 

 ing of the American Forestry Associa- 

 tion brought out some interesting 

 points. Not the least of these was the 

 conclusion, reached by both Mr. Gary 

 and Mr. Hollis, whose papers are pub- 

 lished in our pages this month, and 

 agreed to by several who took part in 

 the general discussion, that state regu- 

 lation would be unjust, impracticable, 

 and unconstitutional, unless preceded by 

 a reform in methods of taxing forest 

 lands. The argument, made from dif- 

 ferent angles of approach, seems unan- 

 swerable, that for the state to place a 

 cumulative tax on growing timber and 

 then to undertake to restrict and regu- 

 late its use may and often would 

 amount to practical confiscation. 



An equitable adjustment of taxation 

 must, therefore, precede any legislation 

 looking to state regulation of the man- 

 agement of timber crops. 



Mr. Hollis, who in his paper pre- 

 sented the subject from a lawyer's 

 viewpoint, added an illuminating ap- 

 pendix in the discussion that followed, 

 when he argued on somewhat broader 

 grounds. After explaining that in his 

 paper he undertook "to define the con- 

 dition of the question as it stands on 

 the authorities to-day," he said that his 

 "conclusion as a citizen would be that 

 whatever regulation of forest cutting 

 is necessary and useful for the protec- 

 tion of the public welfare ought to be 

 introduced now or before a great 

 while," even if it required constitutional 

 changes. Turning, then, to taxation, 

 Mr. Hollis made the further points that 

 taxation on potential values, after the 

 German method, is impracticable in this 

 country because forest production is 

 not sufficiently systematized. The tax- 

 ation system must be made attractive 

 to private owners. The low market 

 value of timber, until recently, and the 

 moderation of boards of assessors are 



the reasons why the baneful effects of 

 the present scheme of taxation have not 

 been' more keenly felt hitherto ; but the 

 study of forest taxation in New Hamp- 

 shire by Mr. Foster, of the United 

 States Forest Service, showed that in 

 that state, which is not exceptional in 

 this regard, timberlands were taxed at 

 from three to 150 per cent of their 

 actual market value, a condition very 

 satisfactory to the three per cent 

 owners, but far from that to the owners 

 at the other extreme. 



The system proposed by Mr. Hollis 

 was generally stated at follows : "Tax 

 the land merely what it is worth un- 

 der all circumstances, varying as it 

 will by climate, location, soil, and the 

 like * * * when we come to tax the 

 timber itself * * * taking a share of 

 the gross income which will represent 

 the same share of the gross income 

 from other property." While he re- 

 garded this due proportion as not 

 clearly worked out, Mr. Hollis person- 

 ally estimated it at about twenty per 

 cent. 



Mr. George H. Maxwell declared 

 his belief "that the establishment in 

 every state of a right system of forest 

 taxation would do more than anything 

 else to develop rapidly the creation of 

 new forest plantations and the better 

 care of those already existing that have 

 not already grown to maturity." Mr. 

 Maxwell divided forest property into 

 three classes — the land, the growing 

 timber, and the matured timber. The 

 land value is easily ascertained, the 

 growing trees that have nof reached 

 their maximum value should not be 

 taxed, but the matured trees should 

 be taxed. In reply to a question by 

 Mr. Ayres as to who will determine 

 when the timber is mature, Mr. Max- 

 well said there is no other way except 

 by state or local tax collectors or com- 

 missions. We must simply do the best 

 we can, as we do with other assess- 

 ments. Mr. Maxwell took the same 



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