49 



Is there then still a problem of taxation connected with timber? There 

 is. The admitted fact that annual taxes on standing timber hastens the 

 cutting and makes holding unprofitable, tending to increase the cost of 

 lumber, acts with equal force to discourage the production of new crops. 

 Owners and operators come to believe that if taxes on standing timber 

 are a heavy burden, it would be a still greater burden on land devoted 

 to forest production, when extended over the long period required to grow 

 a crop. And they are right. 



While necessary as a present day measure of revenue production, on 

 timber purchased as an investment, the principle of taxing property values 

 instead of income creates this undue burden of taxation just so long as it 

 is impossible to realize the income with which to meet this tax. This 

 results from two factors. First, the total tax or sum of taxes paid on 

 such non-productive property continually increases with the period of 

 holding which explains the difficulties of large speculative holdings. 

 Second, it is not the same thing to pay out a given sum at the time the 

 revenue is realized from this property and to pay this same total amount 

 at periods anywhere from one to forty years in advance of this income. In 

 the latter case mathematicians compute the total equity at compound 

 interest and for periods of twenty years or more, even the most reason- 

 able rates of interest will give a total cost of from three to ten times the 

 actual cash outlay. 



These facts are well known to investors and while the purchaser or 

 owner of mature timber has the opportunity or choice of cutting, no 

 such choice is presented to the owner of land and growing timber who, 

 in order to get revenue would have to go out of business; namely, sell 

 the land itself. It is therefore perfectly fair to state that unless a differ- 

 ent system of taxation is applied in the future to property represented by 

 growing timber, few will have the courage to attempt the undertaking or 

 to cut their mature timber in a manner so as to secure reproduction by 

 leaving a part of the stand, the younger trees, as an investment in for- 

 estry. 



Accepting past and present conditions as a necessity, does not mean 

 that we can ignore future conditions. If we wish to continue to have 

 timber it will be necessary to grow it. Nature unaided will not produce 

 the goods. There is not time to discuss this at length, but the statement 

 is based on wide and close observation of the conditions in which cut-over 

 land is left after logging with no thought for the future. 



It is therefore the absolute duty of states to provide a different and 

 equitable system of taxation for timber. This need has been almost 

 universally recognized and nearly every eastern, northern and prairie 

 state has legislation of some kind intended to encourage the growing and 

 planting of trees. Yet up to this time not one of these laws has solved 

 the problem nor do any existing laws even promise to accomplish the 

 needed reform. 



Why have these laws failed in practice? The answer in every case 

 is that they have sought to create special conditions or exceptions in the 

 nature of privileges, to such owners of forest lands as agree to carry 

 out special measures ; namely, practice forestry, and have never attempted 



