554 Forestry Quarterly 



a financial fallacy. When the timber becomes cut off, the mill and 

 railroad may have no further value. Consequently, while these 

 properties will undoubtedly increase the value of the stumpage 

 for the purpose of operation, nevertheless, conditions may be 

 such that a very heavy depreciation should be provided to take 

 care of their final charge off. 



No matter how excellent the timber may be, its accessibility 

 for milling and market purposes is even more important. For in- 

 stance, of what value would be the best electric light plant in the 

 world located in the midst of the Desert of Sahara? Upon the 

 other hand, a more or less run down property may have great 

 potential value in the center of a thickly populated area where its 

 earnings will not only provide revenues for satisfactory dividends, 

 but a surplus for the proper rehabilitation of the property itself. 



Thus a good milling site, rail or water transportation facilities, 

 and all such conditions as enable one to economically and scienti- 

 fically harvest and mill the product, and furnish an outlet for 

 profitable conversion into money, are imperative. 



For fear of omitting a possible asset from the standpoint of 

 the bondholder, I will mention the value of the land itself after 

 the timber has been stripped. It is undoubtedly true that some 

 lumber companies have marketed cut-over land for more than the 

 original cost of both land and timber, but that will be hardly a 

 fair statement as based upon present conditions, or, at least, it 

 will be a misleading statement, because the values which would 

 now be placed upon timber properties for loaning purposes are 

 quite different from the cost of such properties when acquired, 

 perhaps, many years ago, at prices immensely below present 

 values. It is to such as those that the rare occasion of selling the 

 land at greater than the original cost of the whole property must 

 apply. Then the character of the soil beneath the timber is im- 

 portant if this factor is to be counted as an asset at all — whether 

 such land would be adapted to agricultural purposes, its location 

 as regards marketing agricultural products, and the like. At 

 times, mineral values have been found underlying the timber, but 

 such exceptions must be classed along with the usual chances of 

 mining. 



It would be useless to attempt the discussion, in a limited paper, 

 of the hundred and one features to be considered in the drawing 



