gree of risk was lower by reason of a sale "being made in 

 connection with a going operation, or one which require!?, 

 comparative 17 small initial investment, the percentage of 

 profit should "be lowered "below this standard to possibly 15 

 per cent. 



The adoption of this principle immediately made two 

 tilings imperative. First, a much closer examination into 

 the legitimate costs of operating any given "block of timber- 

 She costs of course, are to "be figured on an operation of 

 standard efficiency, and not necessarily on the number of 

 dollars per thousand it will cost any given operator to put 

 his timber on the market. Second, it is necessary to Icnow 

 with a reasonable decree of certainty the average mill run 

 value of the lumber of each species in any given market unit* 

 The market units are determined largely by the geographical 

 location with reference to points of differentiation in the 

 railroad freight rates; thus, while Yellow Pine in the Keno 

 marmot might be worth E when figured bad: to a mill on the 

 middle fork of the leather River, the same kind of lumber 

 in the same market would be worth only 18 when figured 

 bad-: to a mill in the San Joaquin Valley. 



How it is at once clear that if this principle were 

 followed out literally under any and all conditions certain 

 blocks of inaccessible timber would figure out with a minus 



stuinTJage value. A minus stunnage value, or an exceptionally 



818*" 



