690 Forestry Quarterly. 



E — Forest Service formula; construction cost, operator's profit, 

 and stumpage distributed on value basis. 



F — Hunter's formula, construction cost, depreciation on equip- 

 ment, operator's profit, and stumpage on value basis. 



It is seen that although in the case of black oak lumber there 

 is a difference of $1 per M between f. o. b. mill value and operat- 

 ing costs to be divided between railroad construction, operator's 

 profit, and stumpage, this product is given a zero or negative 

 stumpage value in columns A, B, and D. This is because A gives 

 too large a share to railroad construction; D, too large a share 

 to the operator's profit; and B too large a share to both. In 

 column B the extract wood is also given a negative value although 

 there is a margin of $1 per cord to be divided between railroad 

 construction, operator's profit, and stumpage. It is seen that the 

 difference between the value of low and high grade products is 

 exaggerated in A, B, and D. It is believed that columns C. E. 

 and F show the most logical stumpage values, and the most equit- 

 able distribution between the different species and products. 

 Column E, based on the modified Forest Service formula, gives 

 more to stumpage and less to operator's profit than column C, 

 which is based on the direct percentage formula. By changing 

 the percentages used, columns C and E could be made almost 

 identical. The fact that all fixed charges are pro-rated on a value 

 basis in arriving at the values in column F accounts for the de- 

 creased difference between species. 



The question of the proper formula for the determination of 

 stumpage values is a very broad one, and involves many considera- 

 tions that have not been touched upon. It is the purpose of this 

 article merely to call attention to the plan of distributing fixed 

 costs and operator's profit between the different species and 

 products involved in a logging operation on a~ value basis. 



