THE COSTS AND VALUES OF FOREST PROTECTION 



By p. S. LovEjoY^ 



The analogies between the costs of protection in forests and 

 the operations of commercial fire insurance are rather close, but 

 tend to be misleading. An insured property must pay a certain 

 premium each year. In the case of damage, the owner is reim- 

 bursed for his losses. The charges depend on the value of the 

 property and the likelihood of its being damaged by fire or other 

 agencies. The theory of insurance involves the assumptions 

 that there will be fires, that the fires will cause damage, and that 

 the number of fires and the resulting damages can be statistically 

 foretold so that the premiums can be adjusted to the losses and 

 the cost of doing business. But such insurance for the forest 

 cannot be purchased in America. 



In the forest, fires are expected, and the ratio of fire to damage 

 is fairly well understood. The problems of salvage are similar 

 to those of other kinds of property. With the accumulation of 

 dependable statistics the forester will be able to forecast with 

 large accuracy, the source, location, and number of fires, and 

 their normal damage. As in insurance, there are annual charges 

 to be paid, and the amount of such charges should bear a rela- 

 tion to the value of the property and the likelihood of its being 

 damaged. But in insurance the annual charge buys indemnifi- 

 cation in case of damage ; in the forest it supports merely the 

 protective organization. Save in a special business sense, insur- 

 ance does not buy protection ; it buys only reimbursement for 

 losses. Expenditures for forest protection pay for the protection 

 only and, in case of losses, the owner is not reimbursed and his 

 sole object is to prevent or minimize losses. Save in that there 

 are annual charges to be met, and that the charges are in definite 

 relation to the values of the property and the likelihood of its 

 suffering damage, there is little identity between the problems of 

 insurance and of forest protection. The objects of each are quite 

 dififerent. 



The cost of insurance is not the only expense to which the 

 ordinary business is put on account of the likelihood of damage 



I Assistant Professor of Forestry, University of Michigan . 

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