EDITORIAL COMMEXT 595 



Considerable attention was paid by Dr. Compton and Gen. Boyle 

 to the tax situation under the new revenue law. Gen. Boyle pointed 

 out that the efforts of the association had saved three million dollars to 

 the industry by securing the amendment of the bill as it came from the 

 House so as to provide for depreciation or depletion as applied to 

 the lumber industry. Previously, the depreciation had been based on 

 waste and wear, while now lumbermen will be privileged to depreciate 

 their mill plant currently as the stumpage diminishes, so that at the 

 end of the cut the mill capital will have been returned to the investment. 

 In other words, the mill plant is regarded as becoming worthless when 

 the timber tributary to it has been exhausted, irrespective of the way 

 in which the timber has been cut. This means that the lumber industry 

 has, in effect, secured legal recognition of the fact that the forest is a 

 mine and not a crop ; for. if the forest is treated as a crop, it is possible 

 to keep the land continuously productive, and by proper regulation of 

 the cut to continue lumbering and milling operations indefinitely. The 

 same principle as applied to standing timber means that the investment 

 is reduced to zero by the time the last stumpage is cut; while, if for- 

 estry were practiced, the constant renewal of the forest would mean the 

 maintenance indefinitely of a considerable part, at least, of the original 

 investment. The present wording of the law^ is unquestionably a victory 

 for the lumbermen, who have consistently maintained, through the 

 utterances of their counsel and others, that timber is an exhaustible re- 

 source which can be harvested but once. Are foresters willing to let 

 this view stand unchallenged? 



The association was unsuccessful in its effort to secure amendment 

 of the provision that the valuation of forest properties must be based 

 on their purchase price and not on their market value on [March i, 

 191 3. They were, however, successful in securing the insertion of a 

 so-called "relief section," giving discretion to the Commissioner of 

 Internal Revenue to modify the application of this provision where 

 peculiar conditions exist in any industry, so as to prevent it from 

 bearing an excessive or disproportionate burden. This is regarded as 

 accomplishing substantially the end sought by representatives of the 

 industry, since they appear to have no question but that they can estab- 

 lish the right of the present' owners to the unearned increment that has 

 accrued in the value of the timber since its acquisition. As Dr. Comp- 

 ton puts it: 'Tf the lumber industry will make it possible for the Na- 

 tional Association to place the basic economic facts of the industrv in 

 the hands of the Treasury Department, intelligent and equitable admin- 

 istration of the revenue law may be confidently expected." 



