316 JOURNAL OF FORi:,STRY 



standing under continuous production will be little less than now. 

 The return from "unearned increment" then to be added to the current 

 return exceeds ]0 per cent, making the total investment return in 

 excess of 13 per cent. This is an exceptionally favorable tract. After 

 the 20-year period has elapsed unearned increment will cease to play 

 an important part and capitalization will have to be a^nost solely on 

 the basis of the current return. The same will be true of other re- 

 sources, so forest investments will be as favorably situated as others 

 in that respect. In the Eastern forests the net returns will be typically 

 less on account of their ruined condition in some cases. In others that 

 have mature timber the capitalization for exploitation is too large to 

 permit the net return to give a favorable interest rate. Since continu- 

 ous production must hereafter be the standard method of management, 

 capitalization must conform to it. Capitalization on this basis can 

 often be harmonized with capitalization on the existing basis of ex- 

 ploitation, by the methods of cutting in the next few years. High 

 capitalization can be reduced by removing first the valuable individuals, 

 leaving the volume to be cut in future equal to that now but of poorer 

 individuals except where growth can replace the values before cutting 

 occurs. 



3. Taxation. Complaint concerning taxation is loud and long. As 

 a matter of fact under the general property tax timber owners in 

 effect fix the amount of taxes by the valuation they themselves place 

 on stumpage through buying and selling. In Washington taxation has 

 been recently about 1^ per cent on actual value. With stumpage buy- 

 ing and selling according to the opinion of stumpage values held by 

 operators at about $2 per thousand feet board measure, taxes would 

 be about 3 cents per thousand feet annually. Stumpage is now rapidly 

 advancing in price while the tax rate, it is certain, will not decrease. 

 How can the timber owner consistently object to being taxed at the 

 values he and his brother owners have themselves established by sale 

 and purchase? 



Considering the organized continuous production forest consensus 

 of opinion as to value will again fix the valuation, and hence the taxes. 

 How can objection be made to this? On what grounds should forest 

 industry be favored in taxation over others? 



Again, in the continuous production forest, there is annual revenue 

 to meet the annual taxes. Providing taxation is equally just in each 

 case there is then no difference between the general property tax and 



