830 JOURNAL '>1' i'!)Ki:srm' 



It is agreed that the stumpage shall be readjusted at the end of each four-year 

 period. If the average price of any species prevailing during any four-year 

 period shows an increase over the prices of the same species as agreed upon at 

 the date of execution of the contract of $2 per thousand feet board measure or 

 less, no increase shall be made in the stumpage rate specified in the contract. 

 If the increase in the average price of any species is greater than $2 per thousand 

 feet board measure during the four-year period, not more than 75 per cent of 

 the amount of such increase in excess of $2 will be added to the stumpage rate 

 fixed in the contract. 



Tt is further agreed that, if the average price of any species prevailing during 

 any readjustment period declines $2 per thousand feet board measure or less, 

 no reduction will be made in the stumpage value as specified in the agreement. 

 Tf, however, the average price of any species during any readjustment period is 

 more than $2 per thousand feet board measure less than the price specified in 

 the contract, not more than 75 per cent of the amount of such decrease in excess 

 of $2 per thousand feet board measure will be subtracted from the stumpage 

 rate fixed in the contract. 



I am somewhat .skeptical about the advisabiht}- of ba.sin^^ tlic read- 

 justment of stumpage values upon a considei-ation of the wage scale 

 ])revailing during the readjustment period without the Government de- 

 lermining what the wage scale should be, because this would place the 

 lumberman in a position where he could overbid all other industries for 

 labor at the expense of the Forest Service. 



IMr. Flint further states that the fundamental principle on which the 

 value of National Forest stumpage is fixed is correct, as set forth in 

 the Instructions for Making Stumpage Appraisals. It is true that the 

 appraisal manual provides that "stumpage will be regarded as worth 

 the selling value of its product, less all costs of producing it, and a fair 

 margin for profit to the operator." I do not believe that this statement 

 should be in the appraisal mamtal in its present form, because it is luis- 

 leading and it is not the principle upon which stumpage values are 

 based. Stumpage values in large sales are based upon the history of 

 tlie selling value of the finished product for a i)eriod of three to five 

 vears. as the case may be. Of course, the quality of the timber for 

 sale is considered and the average selling value over a given period is 

 increased or decreased accordingly as the quality of the timber under 

 consideration may justify. We take the history of the lumber business 

 over a period of from three to five years and say to the prospective 

 purchaser : This is the basis upon which we are willing to sell ; are you 

 willing to purchase on this basis ? It may be that the amoitnt of money 

 represented by the stttmpage varies from 50 cents to $3.50 per thou- 

 sand, with an average of $2 per thousand. It seems to me that if the 

 ]>urchaser is willing to invest from $12 to $15 per thousand in addition 



