MICHIGAN ROADS AND FORESTS. 



will all be gone in a dozen years at the present 

 rate of cutting but it must needs make it more 

 impossible to preserve any part of this tract 

 as a permanent forestry proposition by levying 

 taxes at a maximum of valuation upon every 

 tree it contains. 



Now let us consider for a moment what 

 would have been the result had these lands 

 been placed under a system of forestry super- 

 vision similar to that prevailing in Germany, 

 where private forestry preserves pay $4 per 

 acre net annual income from products _ cut 

 therefrom, and the forest acres are retained 

 permanently, as such, the income therefore not 

 impairing the quality or quantity of the re- 

 maining timber. 



Suppose that instead of cutting away this 

 large quantity of timber, the owners of this 

 estate had selected 80,000 acres of it most suit- 

 able for a permanent forest and entered into a 

 contract with the state to pay an annual tax 

 of 5 cents per acre, and a specific tax upon 

 the lumber and other products as they were 

 cut and sold. Then suppose there should have 

 been cut from said land sufficient timber to net 

 its owners $4 per acre per annum on the en- 

 tire tract, or the same as the known annual in- 

 come from the German forests of today. 



Again suppose that the owners of this land 

 had been required to replace the timber cut by 

 planting young trees as a quid pro quo for a 

 certain measure of relief from taxation. Let 

 us now consider how the state itself would 

 have fared as as to its tax receiving: 

 80,000 acres at 5 cents per 



acre would produce $4,000 per annum 



A tax of zy 2 per cent on the 



net annual income of 



$320,000 $8,000 



Or a total of $12,000 per annum income as 

 taxes. 



They Should Be Replanted. 



The requirement to replant your trees in 

 sufficient quantities to eventually replace by 

 growth the matured trees cut, would establish 

 a permanent forest for all time that would pay 

 a permanent annual return in taxes to the 

 state, not always $12,000 per year to be sure, 

 for in some periods of depression less timber 

 would be cut, and during the first years a 

 considerable portion of these trees would 

 need to be remitted in the way of pro- 

 viding adequate fire protection and in policing 

 the lands, but on the other hand, in some 

 years much larger cuttings would be made, re- 

 sulting in larger payment of taxes to the state. 



The taxes this estate now pays to the state 

 of Michigan amounts to about $23,000 per an- 

 num. These taxes must now grow less each 

 year as the tax commission has exhausted its 

 excuses for levying higher taxes, and the an- 

 nual cutting of 50,000,000 to 60,000,000 feet of 

 timber is rapidly reducing the taxable property. 

 Suppose an a*nnual tax of $15,000 per year is 

 collected for twelve years, remaining as the 

 probable life of this forest, this would net 

 $180,000 to the state and result in the total ex- 

 tinction of the forest. 



As a contrast to this deplorable result, 80,000 

 acres of this woodland tract managed as a for- 

 est reserve under the plan before outlined 

 would pay into the state treasury during the 

 first 100 years of its operation not less than 

 $1,200,000 in taxes, the income tax rate in 

 timber cut being reckoned at V/ 2 per cent, and 

 could be made to continue to do this as long 

 as the Silhwald of Zurich has provided timber 

 for the inhabitants of that city, viz., 600 years. 



Now there is this fundamental difference in 

 this method of taxing forest lands from the 

 method now in use, which I desire to make 

 clear to you all. 



By the method now in use you penalize or 

 fine the timber owner for preserving his 

 timber. 



By the method proposed you penalize or fine 

 the owner for destroying his timber, and re- 

 quire him to make good a percentage of the 

 value destroyed by maintaining young trees in 

 sufficient quantity to eventually replace by 



growth that which was cut away, and therefore 

 insure a permanent income bearing forest. 



By your present method your timber owner 

 gets relief from burdensome taxation by de- 

 stroying his timber. By the new method he 

 would incur increased burdens of taxation by 

 cutting his timber. 



By your present method the entire forest 

 tract will be destroyed in a few more than ten 

 years. By the new method it would remain a 

 permanent forest, or a source of income to the 

 state and to its owners for hundreds of years. 



It was an old resident of Saginaw who used 

 to say "any fool can find fault but it takes a 

 wise man to find a remedy." 



Now, gentlemen, you will admit that I have 

 filled the office of fault-finder to some extent, 

 and with your permission I will suggest a plan 

 that might be tried as an inducement to those 

 now owning forests to seek to preserve and 

 maintain them as permanent woodlands, as 

 well as to induce the investment of private 

 capital in the reforestation of your cut-over and 

 waste lands. 



Mr. Ward's Plan. 



First Provide by law whereby any owner 

 of a piece of forest land, of either small or 

 large area, *be he timberman or farmer, may 

 elect to place his land under state forestry 

 supervision. 



Second Provide reasonable rules for cut- 

 ting timber under the chief forester's super- 

 vision from all such lands as may be declared 

 as forest preserves; these rules to embody a 

 provision requiring the owner to maintain 

 young forest trees in sufficient quantity to 

 finally make good the mature trees cut, and 

 the proper care and protection of the young 

 stock. 



Third Upon all lands declared as forest 

 preserves assess a uniform annual tax of 5 

 cents per acre, or a tax upon the land values 

 without the timber, and in addition thereto 

 assess a specific tax of either a certain amount 

 per thousand feet or other unit of measure 

 upon all forest products cut from such lands 

 as are declared forest preserves, or a certain 

 percentage unon the net income derived from 

 the timber cut, at the time the timber is cut 

 and sold, exempting perhaps from such specific 

 tax such wood as may be used solely for the 

 domestic use of owners of small wood lots. 



Fourth -Provide suitable assistance and en- 

 couragement to induce private capital to be in- 

 vested in your wild lands, -for reforestation 

 purposes, by exempting such lands so commit- 

 ted as forest lands and effectively maintained 

 as such, from all but an annual tax of 5 cents 

 per acre, deferring further taxation until the 

 first crop of timber is ready for cutting, and 

 then levying a certain percentage on the net 

 income produced, or a specific tax upon some 

 unit of measure upon timber actually cut at 

 the time it is manufactured and sold. 



Fifth Provide that the tax collected on the 

 land values alone shall be paid into the county 

 treasurer, but also provide that at least three- 

 fourths of the specific or income tax collected 

 on the timber as cut be paid into a state for- 

 estry fund, and provide that this fund shall be 

 used solely for the purposes of forestry pro- 

 tection, supervising, encouragement and de- 

 velopment. 



Sixth Provide and enforce effective protec- 

 tion laws and proper and effective forestry 

 supervision. 



That forests may be made permanent in- 

 come bearing property is no pipe dream, as I 

 am informed there exists in Swenden today a 

 forest estate that for three hundred years has 

 been conducted as a permanent sawmill propo- 

 sition, its owners planting a certain quantity of 

 young trees annually, and thereby maintaining 

 a permanent and constant supply for their 

 mills. 



eOO-Year-Old Forest Preserve. 



The Sihwald, a forest belonging to the city 

 of Zurich, Switzerland, has been maintained as 

 a forest preserve since the year 1314, and for 



nearly six hundred years has yielded a regular 

 annual crop of timber and is in better condi- 

 tion today than at any previous period of its 

 history. 



Germany installed its forestry system about 

 eighty years ago and now has some fifty thous- 

 and square miles, or about one-fourth of its 

 entire area, devoted to private and public for- 

 est reserves. In Saxony alone the government 

 forests have turned upwards of $2,000,000 per 

 annum in net profits into the government 

 treasury for the past ten years, and private 

 forest reserves have netted the government 

 treasury a large amount in addition. 



The immense sum of $60,000,000 in value of 

 forest products is now annually cut from the 

 forest lands in Germany, all of which, private 

 as well as public, are managed as permanent 

 forest reserves, and the area of Germany is 

 but five times that of the area of Michigan. 



Now, gentlemen, this plan needs much 

 thought, as it is a radical change from past 

 methods in dealing with taxation, and it may 

 be' trenching upon your constitution, but if the 

 constitution would not now admit of putting 

 some such plan into effect, the state of Michi- 

 gan would be the gainer in the end if the con- 

 stitution should be changed to admit of it. 



In closing, I will quote a bit from the writ- 

 ings of the forest warden of your state, Prof. 

 Roth, who has said: "To leave millions of 

 acres in waste land condition is a waste of 

 money which no state should be guilty of." 

 To this I would add: "That no state should be 

 guilty of preserving a system of taxation that 

 has been proven to operate as a producer of 

 such waste lands." 



Again Prof. Roth has said: "The state 

 should go ahead with a good example. Millions 

 of acres of private land await the right care 

 which can and will come, but can come only 

 when the state goes ahead and establishes a 

 proper and efficient system of protection and 

 developes a just method of taxation for these 

 lands." To this I would only add: "Gentle- 

 men, do not let your state wait too long. To- 

 day, under a sane and equitable method of tax- 

 ation, I should not hesitate to invest a con- 

 siderable sum in a Michigan reforestation pro- 

 ject, and I know of a number of others who 

 bear opinions similar to mine and who would 

 also willingly invest capital in such a project 

 under proper conditions. Ten years hence 

 many who would consider such an enterprise 

 might not be able or willing to begin such 

 projects, and every year now deferred means 

 a longer period of timber famine to our de- 

 scendants; therefore I repeat, do not let your 

 state wait too long. 



MR. LOUD'S VIEW. 



Au Sable Lumberman Not Opposed to Rea- 

 sonable Taxation of Forests. 



H. N. Loud, of Au Sable, said: "My thoughts 

 on taxation corresponds very closely with the 

 sentiments and opinions of the president. I 

 want to say first, and l^st, that I think a forest 

 owner should be taxed; and I wish in no way 

 to be understood to be willing to offer any 

 proposition that he should not be taxed. I 

 have studied hard the paper written by Dr. 

 Gaskell as to how the forest should be taxed. 

 I could follow all of his arguments except the 

 one where he argued for a high inheritance 

 tax, which in the instance referred to would 

 mean a tax of $400,000. I think any investor 

 would hesitate a long time before he passed 

 on to his descendants property with a lien for 

 $400,000 on it. It certainly would not appeal 

 to me as an investment proposition for my 

 children's children. 



"Speaking of taxes, I am not kicking on the 

 taxes at all. The taxes that will affect me I 

 am willing to pay at the present time. It is 

 the future that is of interest. Here are two 

 tax receipts (exhibiting papers). One of them 

 reads 'the south half of the southwest quarter, 

 valuation $510; state tax, $2.07; county tax, 

 $11.28; town tax, $8.39; road tax, $2.65; school 

 tax, $18.92; statute labor, $2.55; total, $45.96; 



