22-1 JOURNAL OF FORESTRY 



be met from future income. Apparently, these lands were not charged 

 with the original cost nor credited with the income received from them 

 when sold to individuals. The demand on the part of the public to 

 settle the West as fast as possible, and the desire on the part of 

 special interests to get possession of as much of the valuable timber 

 and other resources as possible, reulted in laws which turned vast 

 areas over to private interests at nominal prices. Since these lands 

 had no capital liabilities charged up against them, the receipts from 

 them held no relation to their cost. Furthermore, they were put onto 

 the market at such low values before there was a real economic demand 

 for them, that land values in the East were forced down much below 

 cost. In fact, this unsound development of the West caused a great 

 deal of loss to land owners in the East who had invested in good faith. 

 Mindful of this lesson, one effect of the present method of financing 

 the growing of forests is to deter private capital from investing therein. 

 If in the future our governments are proportionally large holders of 

 stumpage and this stumpage has no responsibility to discharge capital. 

 liabilities which are charged against it, the timber which has been 

 raised as an investment by private capital is liable to have to be sold 

 at a sacrifice. The history of the public domain, the selling of Gov- 

 ernment machinery left over from the war at less than private capital 

 can manufacture it, and numerous other cases of unfair competition 

 of the Government with private business, in response to a popular 

 cry, all show this to be a real danger. If prices were extremely high, 

 due to great shortage, there would be considerable pressure exerted 

 to have the Government timber put on the market in order to force 

 the price down. On the other hand, if there was an overload of stump- 

 age, a condition we do not expect, the Government could apparently sell 

 cheaper than the private timberland owner who had raised timber as 

 an investment. This condition existed in the West for several years 

 preceding the war. The Forest Service has been selling stumpage 

 into a market which was already flooded with private timber. Knowing 

 these facts, private capital is going to be slow in investing in the 

 growing of timber as long as our Government forests are not charged 

 with capital liabilities and while its officials are advocating a policy 

 of mandatory regulation of private forest land which, as pointed out 

 above, must result in private forests which do not have capital liabilities 

 charged against them. 



