REPORT OF the; subcommittee 273 



even a group of States in one general forest region, makes too small 

 a unit. In the second place, to be effective, it must be possible to insure 

 the full value of any forest property involved, no matter how large 

 it may be. No private organization could do this at the start, or until 

 it had grown to a very large size. Third, it seems extremely desirable 

 that the agency which insures the property should work in very close 

 co-ordination with that which protects it against fire, since effective 

 control of the fire protective organization will have a very decided 

 influence on the cost of insurance. Fourth, it is essential that in a busi- 

 ness like forestry, which in many cases may operate on a rather narrow 

 margin of profit, all costs, including insurance, be kept at the lowest 

 possible figures. Forest owners can hardly afiford to pay to a private 

 insurance company a profit above the cost of doing business, and in 

 some cases they may even need for a time assistance from the public 

 in carrying the actual cost of insurance. Fifth, any private forest 

 fire insurance organization would necessarily be subject to rather close 

 public regulation as to rates and conduct of its business, just as is the 

 case with other insurance companies today. 



Taking all these things into consideration, it appears that the ad- 

 vantages inherent in a system of forest insurance under public auspices, 

 national rather than by States, will far outweigh any possible dis- 

 advantages. An organization sponsored by the Federal Government 

 would be nation-wide in scope ; it could v/rite insurance on the largest 

 private holding without danger of bankruptcy ; it could exercise very 

 close co-operation and, if need be, control over the agencies engaged 

 in fire protection. As the object of forest insurance is not to afiford an 

 easy way of converting forests into cash, by burning them up, but is 

 rather to perpetuate our forest resources, it would be entirely propel 

 to require that in case of destruction, so much of the indemnity as 

 might be necessary should be used to restock the burned-over area. 

 This could be required by a Government insurance company, which 

 might do the reforestation itself, where it probably could not be re- 

 quired by a private company. 



Finally, the public, regardless of State lines, has a very urgent in- 

 terest in the perpetuation of our forest resources — more than in the 

 perpetuation of most other forms of property, because forests, once 

 destroyed, can only be replaced after many years. Moreover, many 

 public interests in the forests, such as influence on climate, stream 

 flow, recreational advantages, and the like, cannot be assigned to the 



