A NATIONAL PLAN FOR AMERICAN FORESTRY 1597 



industry that operates like a confused scattering of feudal barons, 

 each man for himself, is fighting against tremendous odds. 



COSTS AND RETURNS 



It is estimated, to bring the Nation's forest production power up 

 where it can satisfy the 16)2 billion cubic feet of possible normal 

 requirements, that 40 million acres of privately owned forests must be 

 put under intensive management and 150 million acres under extensive 

 management. The cost of handling forests under intensive measures 

 of protection, timber culture, and regulation, including taxes but not 

 interest on investment, will vary from as little as 37 cents per acre 

 per annum in the southern pine region to as much as $1.13 per acre 

 annually in the Northeast. Extensive management will cost less. 



The possible gross returns from intensive management, including 

 timber commodities only, will range from $1 per acre per annum in 

 the southern Rocky Mountain forests to as high as $3 per acre per 

 annum in the South. The returns from extensive forest management 

 may vary from about 37 cents per acre per annum in the southern 

 Rocky Mountain region to $1.20 in the South. 



When the program is completed to the extent that 40 million acres 

 of privately owned forests are under intensive management and 150 

 million acres are being given extensive management, the gross value 

 on a stumpage basis of the production may approximate $440,000,000 

 per annum, for timber products alone. The cost of taxes and cul- 

 tural and protective operations is not likely to exceed $100,000,000 

 annually, thus leaving private owners $340,000,000 annually as a 

 margin for interest on their investments. 



FINANCING THE PRIVATE OWNER 



If and when the program has been developed to the point shown 

 above there will be no question as to the ability of the private forest 

 owner to finance his operations. It is during this period of develop- 

 ment that the subject of financing needs examination. 



So far as the industrial forest operator is concerned, the enterprise 

 is and will continue to be a strictly business one, subject to well 

 established laws of accounting and financing. The farm woodlot 

 owner will manage his forest in conjunction with his agricultural 

 operations wherein the woodlot becomes one of several diversified 

 crops. With him the question of financing is more than likely to be 

 absorbed in the larger field of agricultural finance. 



In the section " Federal Aid in Organizing Forest Credit Facilities/' 

 it is brought out that the present probable total borrowed capital in 

 forest industries approaches $1,000,000,000 but that this borrowing 

 has been for manufacturing purposes rather than for care and per- 

 petuation of forest productivity, and that the latter purpose is not 

 adequately provided for in the present scheme ^ of things. The 

 problem ahead for industrial forest owners is to gain access to suffi- 

 cient capital at interest rates and at terms suitable for their purposes. 

 Capital will be needed for the measures designed to improve the pro- 

 ductivity of original forest units, including timber cultural and stand 

 reinforcement operations; to assist in the orderly marketing of 

 timber already mature; to allow the purchase and assembly of tracts 

 for organized forestry units; to construct necessary transportation 

 facilities; and to construct required manufacturing plants. 



