824 JOURNAL <)K I'OKKSTKV 



he cannot determine it until that time has passed, nor can a purchaser 

 sell all of his product at any one time. The true selling value will be 

 the combined receipts from all of the sales, made at different times and 

 at varying prices, as a result of the operation, and the only possible 

 time for its correct determination will be after the completion of the 

 project. 



Figures collected by the Western Pine Manufacturers' Association 

 show that from the close of the last quarter of 1916 to the close of the 

 last quarter of 1917 the selling price of the mill run of several species 

 in the Spokane district varied from $17.49 to $26.92 per thousand, an 

 advance of about 54 per cent, and during this period cost of production 

 on a typical operation advanced only about 20 per cent. It is entirely 

 conceivable that such a change in selling prices and costs may take 

 place in any similar period, and that such a condition may continue for 

 an indefinite length of time, that it may operate in either direction, that 

 it may be nearly or quite independent of local cost of production, and 

 that it may be wholly out of the control of either party to a National 

 Forest timber-sale contract. 



That such fluctuations do occur is known to all who through actual 

 contact are familiar wdth the industry. A striking graphic illustration 

 of unrelated fluctuations of this kind was published on page 34 of 

 American Lumbennan for March 9, 1918. 



If these premises are sound, it is at once apparent that any appraisal 

 based on a future selling value, determined from the history of the 

 trade for the past year or period of years, may at any time become 

 invalidated for a portion or all of the life of any given contract. 



A remedy for this weakness in the appraisal would seem to lie in 

 making the sale on the basis of current prices or average prices for a 

 relatively short period, and requiring a bond in sufficient amount to 

 cover any probable change in stumpage value that might occur from 

 any or all causes during the life of the operation. The final and actual 

 determination of the selling value might then be left until the close of 

 the contract, with a refund of such portion of the bond and, if neces- 

 sary, of the appraised price paid for stumpage as results actually war- 

 ranted. 



Of scarcely, if any, less weight in causing fluctuations in stumpage 

 values is the cost of production. Like the preceding factor, this ele- 

 ment can be determined with reasonable accuracy for a given operation 

 at any particular time, but, as in the preceding case, the values may 

 fluctuate with a wide range in a given locality during a brief period of 

 time. In this factor, also, the fluctuations may be independent of any 



