222 JOURNAI, OF FORESTRY 



mental questions raised at the beginning of this article. Graves sug- 

 gests mandatory regulation of privately owned forest land. If the 

 public decides that it is not going to dictate to any one class of men 

 where they shall invest their capital, that this generation is going to 

 hand on to the next a forest as free from the burden of an accumula- 

 tion of capital expenses as the one it inherited from its ancestors, and 

 at the same time requires the owner to practice forestry — a modifi- 

 cation of this method must be used. This modification will consist 

 in so controlling competition that the income from the sale of lumber 

 will be sufficient to pay the stockholders a full dividend and at the 

 same time defray the expenses of forming the new forest. The original 

 capital will be accumulated in the depreciation funds and can be 

 returned to the stockholders. No dividends will be withheld from the 

 stockholders. The consumer of the forest products will pay for the 

 formation of the new forest. The writer does not see any other way 

 in which a capitalized business concern can produce a so-called "non- 

 capitalized" forest, if indeed such a thing is possible. This is the 

 method the writer referred to in his previous article as the "replace- 

 ment method." As has been shown in the above discussion, all other 

 methods by which the production of the new forest can be financed 

 requires the investment of new capital, the reinvestment of old capital, 

 or the withholding of dividends. Therefore, they cannot be used if 

 the mandatory principle is carried into effect without controlling the 

 investment of capital. 



Some of the forest financing practices of our State and Federal 

 governments are also questionable. 



The Federal government is doing considerable planting and is en- 

 forcing silvicultural regulations on National Forests. The planting 

 costs are paid for out of appropriations, while the cost of the silvicul- 

 tural operations are deducted from the stumpage receipts which are 

 turned back into the United States Treasury, and no accounts are kept 

 which result in the costs being charged against these forests as capital 

 liabilities. 



The State of New York is doing considerable planting and is pur- 

 chasing a great deal of timberland. The cost of the former is paid 

 directly out of appropriations. The money for the land purchase 

 is raised by a bond issue, but since these bonds are retired through an 

 annual appropriation, the result is the same except that the cost is 

 spread out over a little longer period. 



