KK\-Ii:\V OF LUMP.KR IXDISTRV AFFAIR^ 255 



i somewhat gLMieral practice for large operators to carry tlieir cut-over 

 lands as nominal assets upon their books, in some cases the land values 

 being charged off completely, the stumpage being considered the sole 

 asset. The Reclamation Service, in working out the "Lane scheme," 

 has been soliciting the listing of cut-over lands having agricultural 

 possibilities, such listing amounting more or less to an option upon the 

 lands. Now, "the war has produced larger sales opportunities for these 

 big acreages, directly or indirectly consequent on the demand for sol- 

 dier-settlement land ; but coincidentally, income and excess-profit taxes 

 present themselves." . . . 



Since the Federal tax starts "on a low valuation and climbs toward the con- 

 fiscation point in a sales transaction of several hundred thousand dollars or 

 more, it is entirely human that there should be more or less hesitation in offering 

 large acreages for sale. . . . The graduated income tax, so eft'ectively em- 

 ployed in foreign parts (Denmark) for breaking up vast estates and company 

 holdings of land, is discussed as the preferred weapon of the would-be land re- 

 formers. . . . There can be no doubt as to the seriousness of the outlook in 

 this regard." 



PROFITEERING IX LUMHER 



The last week in Jime a report upon profiteering was made to the 

 Senate by the Federal Trade Commission. The report states that "no 

 excessive profits" have been made by lumber producers on the West 

 Coast, "although it is understood that producers of airplane spruce in 

 that region have taken advantage of the allied governments." How- 

 ever, "information in the Commission's possession does indicate unusu- 

 ally and imnecessarily large profits on the part of southern pine pro- 

 ducers. Forty-eight southern pine producers, producing 2,615,000.000 

 feet of lumber in 191 7, made an average profit on their nivestment of 

 17 per cent." That this is unusually large for the industry is indicated 

 by the fact that the average profit in 1.9 16 was only 5.2 per cent. The 

 range of profit in 1917 was from a small loss to 121 per cent on the 

 net investment. "The margin of profit per thousand feet in 191 7 was 

 nearly double that in previous years, being $4.83 as compared with 

 $2.11 in 1916. A fair margin per thousand feet in the ]mst has been 

 recognized as being $3" {American Lnmbcnnau, July 6, 1918). 



A statement by the president of the Southern Pine Association calls 

 the charges of the Federal Trade Commission "unfair and misleading." 

 He states that a recent investigation shows an investment per thousand 

 feet of annual capacity ranging from Si 0.75 to $144.96, with an aver- 

 age of $60.81. The net average profit per thousand feet given by the 



