COMMENTS OK THE SNELL BILL 



485 



2Jtf 



210 



190^ 

 'dOQ 



ISO "> 



110 

 lOO"^ 



<0 



10 Q 



O « <J 12 ig so iir ZS 32 J6 W *^ W SS S6 60 6^ 68 72 



YEARS 



EXPLANATION OF ABOVE CURVES. 



A. Timber Value Curve. This curve is based on the amount of white pine 

 timber which can be grown on third quality land ; and that white pine will be 

 worth at least $20 per thousand board feet on the stump at the time of cutting. 



1. The amount of white pine timber which can be produced on third quality- 

 land is taken from foresters' tables prepared from actual measurements. It is 

 certain that a considerable part of the land which will be bought will be either 

 first or second quality for timber growth and will produce from 30 per cent to 

 50 per cent more in 50 years than the curve shows. 



2. The estimated value of $20 per thousand board feet at the time of harvest 

 is considered ultra-conservative because in some sections white pine stumpage is 

 bringing from $15 to $1S per thousand board feet today. It is the opinion of 

 some lumbermen that in 50 years the price of white pine stumpage will be more 

 than double this estimate. 



B. Total Cost Curve. This curve shows the total cost of the project up to 

 any time during the period of production and includes the outstanding bonds 

 which cover the cost of land and planting with compound interest at 5 per cent, 

 plus the total cost of maintenance at 70 cents per acre per year with interest at 5 

 per cent compounded annually. To determine the cost for any year follow the 

 vertical line from that year to the curve and from that point on the curve follow 

 the horizontal line to the dollars column at the right. 



C. Outstandbig Bonds Curve. This curve represents the total amount of 

 bonds outstanding at any time during the period of production, for the expense 

 of the land and the planting, estim.ated at $25 per acre, with interest on that sum 

 at 5 per cent compounded annually. 



It will be noted that the Timber Value Curve and Total Cost Curve diverge 

 after the twenty-seventh year up to about the fifty-third year, and after that time 

 they again approach each other. This means that up to that time, the timber 

 value is increasing faster than the cost including compound interest, but after 

 that time the compound interest increases more ranidly than the value of the 

 timber growth. Therefore, the m.ost profitable time to harvest the crop, is when 

 these curves are farthest apart, which is between fifty-three and fifty-four years, 

 according to our premise. This is technically known as the financial rotation. 



