Forest Management 19 



yarns, alcohol, sugar and food stuffs; the fact that the forest stores 

 its own products away, free of charge, until it may please the owner 

 to place them on the market; the rapid advance in the value of soil, 

 etc. 



According to the location of the forest and in a higher degree, ac- 

 cording to species of trees and age of trees, the disadvantages con- 

 nected with forest investments vary from case to case. They seem 

 to weigh heavily on a second growth which yields no dividend what- 

 ever, is seriously endangered by fire, contains assets of prospective 

 value only and offers no chance at extraordinary results. There exist 

 in- the United States enormous areas covered with second growth for- 

 ests: What sense can there be, consequently, in investments tending 

 to produce still more second growth? 



It is obvious that the chances of first growth to be remunerative 

 are, generally speaking, very good. This first growth does not in- 

 crease in volume, the death rate of timber offsetting the birth rate; its 

 increase in value, however, is certain; heavy logs are getting scarce, 

 and they alone furnish lumber commanding the highest price; the de- 

 gree to which the trees are utilized without waste increases from year 

 to year; the difficulties of transportation are declining continuously. 

 Is it to be wondered at, then, that many investors and notably all 

 lumbermen are eager to invest in first growth whilst utterly unwilling 

 to stake their money on second growth? 



The question might be asked: Why are the owners reluctant to 

 practice "conservative lumbering," a modus of logging which tends to 

 secure the maximum sum total formed of net present returns and pro- 

 spective values left? To take an illustration from the South: Why 

 does the owner insist on cutting every pine making a log of over 6 

 inches at the small end? Why does he refuse to leave all trees having 

 a diameter under 20 inches and yielding over 7 per cent, of latent an- 

 nual interest? 



The explanation lies in the following points: 



i. No seer can actually foretell the latent annual interest which 

 trees of various diameters will yield in the immediate and in the more 

 distant future. The forest dividend consists largely of price increment; 

 the price increment of big trees is (veneer business!) particularly good. 

 There is little financial advantage in the utilization of big trees (if they 

 are sound), as long as an annual price increment of 10 per cent, and 

 more can be counted upon. A big tree having a stumpage value of 

 $12.00 per 1,000 feet b. m. is not mature per se. The fine poplars, oaks 

 and chestnuts of the Southland must be considered immature, since 

 their value is absolutely sure to increase at an annual rate of over 10 

 per cent. 



The assumption of the principle is wrong, it seems, that conserva- 

 tive lumbering should leave the smaller trees and remove the big trees; 

 or that maturity can be determined by diameter limits. 



