CONTINUOUS FOREST PRODUCTION ' 37 



the small areas cut over does not amount to over 10 per cent per M 

 feet cut for the first 10 years of the forestry operations. (See Table 2, 

 column 23.) The remaining 40 per cent of the stumpage price wiU be 

 more than stifficient for carrying the old timber when the valuation, and 

 hence the taxes, are so low. Later on as the cut over and reforested 

 lands increase in amoimt the expenses per M feet of the cut increase 

 gradually until eventually when all the old timber has been cut at the 

 end of some 60 years they amount to about $1.25 per each M 

 feet cut, under our present tax system. Forestry will, then, eventually 

 yield no net return unless stumpage is over $1.25 per M but we have 

 already everywhere surpassed this point. 



Too much emphasis cannot be placed at this point of the fact that 

 as in the case of the farm, this annual net return from forestry is only 

 one of the returns from the property. The other return on which the lumber- 

 man has so far solely depended for his timberholding profit is the increase 

 in value of the whole property. But this increase in value of the whole 

 property takes place just as readily when forestry is practiced as it 

 does when the timber is worked as a mine, perhaps more so. Indeed, 

 as has been shown, forestry removes the depletion charge from the 

 property. It has been shown by Roth that the per cent on the invest- 

 ment yielded at any time varies little with prices of forest products. 

 This follows both from the general principle of capitalization of net 

 money yields and also the special fact in forestry that the capital re- 

 maining in the forest is wood of the same nature as the product and 

 valued at similar prices. The percentic relation between product and 

 capital cannot then vary greatly, aside from the presence of a surplus 

 or deficiency in the stock of standing timber on hand. 



This condition is the same as the case of the farm : if the net income 

 rises, the value of the land rises, leaving the interest rate yielded 

 the same. The most profitable time for forest investment is, then, 

 when in addition to the current yield the annual increase in value 

 is fastest. This increase in value in any year expressed as a percentage 

 on the value of the preceding year is greatest while the values are still 

 low (see Table 1), unless the total increase becomes greater year by 

 year, which is not to be expected. When, then, is the most profitable 

 time to begin the practice of forestry, assuming that it is started with the 

 forest while plenty of matiire timber is still on hand, which as I have 

 said is the only practicable time for the private forest owner at least ? 

 The most profitable time is while the stumpage is still cheap. This 

 time is past for the Lake States, Pennsylvania, and New England so far 



