18 Prolonging the Cut of Southern Pine 



With land valued at $5 per acre and stumpage at $5 per thou- 

 sand, this investment should, after paying all expenses, yield 5 

 per cent compound interest at the end of ten years. Assuming 

 an initial cost of marking of 10 cents per acre, and allowing 5 

 cents per 1,000 feet b.m. for lopping and burning the tops, an 

 average stand of 8,000 feet b.m. gives an expense of 50 cents 

 per acre. Tops can be piled and burned for from 25 to 50 cents 

 per 1,000 feet b.m., and without piling, the expense is greatly 

 reduced. The following is a summary of the initial investment: 



2,630 feet b.m. @ $5 $13. 15 



Land 5 . 00 



Marking and brush disposal .50 



Total initial investment $18.65 per acre. 



Assuming there is a tax of 1 per cent on this valuation gives 

 18 cents per year. Fire protection if undertaken should not cost 

 over 2 cents per acre, making a total of 20 cents per year for 

 taxes and protection. Capitalizing at 5 per cent, this would mean 

 an investment of $4 per acre. This makes a total investment of 

 $22.65, which at 5 per cent compound interest amounts to $36.89 

 in ten years. At that time if the land is still valued at $5 and the 

 $4 capital used to supply the 20 cents annual charge is credited, 

 the net cost of the timber in ten years at 5 per cent compound 

 interest is $27.89. 



At this time the stand will contain 4,466 feet b.m. per acre. 

 If it is worth $27.89, it has paid 5 per cent, which is equivalent 

 to a stumpage value of $6.25 per thousand. It is fair to assume 

 that this increase in price will occur in the ten-year period. 



If the lands cut over are not left in a productive condition, they 

 will lie idle until sold. No interest on the investment will be 

 earned during this time, but taxes will continue and the total loss 

 should be gauged by the compound interest on the money invested 

 in non-productive lands. The price of land may rise, in which 

 case the increased value will tend to offset this loss of interest. 

 This would occur whether or not the land were cut over. 



If the lands are not cut over, the original uneven-aged growth 

 will probably increase in value, but at half or less than half the 

 rate per cent on the investment that it would if culled of dead or 

 unproductive capital. In either of the above cases, these lands 

 as a whole, with growth balancing decay, are carried by the com- 

 pany at much greater relative cost than if put into condition for 

 growth. 



