^0 JOURNAL OF FORESTRY 



to consume. By this standard it is doubtful whether the market for 

 any important product has been 50 per cent developed. 



7. Depletion charge on the forest resource itself. If our 2,200 billion 

 feet of timber in private ownership continues to be worked on a mine 

 basis it will last, asstuning that timber of a character for lumber manu- 

 facture is all used for that purpose, at the present rate of about 40 bilHon 

 feet per anniun, in the neighborhood of 50 to 60 years. If we assume 

 that some of our nimierous wood products are taken from saw timber 

 forests they would be exhausted quicker. But,. in order to make a 

 conservative estimate let us take 55 years as the time. This means 

 that 1/55 of the present mature timber is cut and removed annually. 

 If forests were worked under continuous yield they would stand this 

 annual cut indefinitely. That is, the capital would remain intact; 

 but as they are worked like a mine, they are being depleted by this 

 amount each year. That is to say, the percentage rate of depletion is 

 in the neighborhood of 1.8 per cent as far as volume goes. Up to date, 

 the increases in sttunpage value have in money values overcome this 

 depletion. Eventually, however, the entire capital will be removed 

 from the forest by these methods. On the average approximately the 

 depletion rate of 1.8 per cent of the values today must be applied to the 

 forest investment, just as certain depreciation rates must be appHed 

 to the mill and logging camp investment. 



One and eight-tenths per cent of $6,000,000,000, the Department of 

 Commerce estimate of privately owned timber value, gives $108,000,000 

 as the annual depletion charge. This can nearly all be saved by placing 

 these lands under continuous forest production. This latter step costs 

 money, though not the great sums sometimes stated. On the basis of 

 figures for the Pacific Northwest, a safe estimate seems to be that for 

 the nation the total annual cost of regenerating mainly by natural 

 means, protecting and administering all lands annually cut over would 

 not exceed $2,000,000, the first year (if this policy were appHed every- 

 where at once) and even in 20 years wotdd not have mounted to annual 

 cost of over $7,000,000, really insignificant in comparison with the 

 annual cost of competition or the cost of speculative capital and a mere 

 nothing beside the depletion charge itself. 



Under present poHcies timber owning companies are too often paying 

 dividends (if any) out of capital (the wood capital) . A policy of forestry 

 for continuous production would put an immediate stop to this bad 

 business practice. The dividends would be temporarily lower but the 

 capital would be conserved. This problem is somewhat complicated. 



