TABLE I. 



Estimated average costs per acre and per M. feet B. M. of growing 

 Douglas fir on Quality I, or best quality forest soil, under a 60 year rotation, 

 computed for interest rates securable by various classes of owners. 



Estimated interest rate 

 for various classes of 

 owners 3% 4% 4V 2 % 5% 6% 7% 



'Compound interest on 



$10.00 soil value, 60 



years f 48.91 $95.19 $130.27 $176.79 $319.88 $ 569.48 



Cost of stocking land 



with young trees .... 5.00 5.00 5.00 5.00 5.00 5.00 



Compound interest on 



cost of stocking 24.46 47.59 65.14 88.40 159.94 284.74 



Sum of annual charges 



for administration 



and protection (20c 



per year for 60 



years) 12.00 12.00 12.00 12.00 12.00 12.00 



**Interest on all amounts 



spent on administra- 

 tion and protection 



from time incurred to 



time of cutting 20.61 35.60 45.90 58.71 94.62 150.71 



Taxes under general 



property tax when 



owner subject to 



them 43.00 43.00 43.00 



Interest on taxes from 



time planted to time 



of cutting timber ***52.04 77.40 114.42 



Yield tax of 25% on final 



product f36.99 f65.13 f86.10 



Total per acre $147 . 97 $260.51 $344.41 $435.94 $711.84 $1,179.35 



Cost per M. when product 

 is 44 M. per acre. The 

 probable yield as 

 shown by U. S. F. S. 

 yield tables $ 3.37 $ 5.92 $ 7.83 $ 9.91 $ 16.17 $ 26.80 



*See interest table in Schenck's Forest Finance, Column IV. 



**See interest table in Schenck's Forest Finance, Column V. 



**There are at least two methods of computing compound interest on the 

 taxes. The simplest method for purposes of this discussion is to analyze as 

 follows, using the 5 per cent column in Table I. Consider that from the 1st 

 to the 60th year, lOc per annum is paid for taxes. Referring to an interest 

 table, we find that compounded for 60 years this accumulates to $35.36, includ- 

 ing principal and interest. Beginning with the 20th year, an additional lOc 

 per acre is paid for the remiander of the rotation, or 40 years. This amounts 

 to $12.08 during the 40 years. Beginning with the 30th year, another lOc is 

 added to taxes for the remainder of the rotation. This accumulates to $6.64 in 

 the remaining 30 years. Beginning with the 40th year, 40c is added to taxes 

 for the remainder of the rotation. This accumulates to $13.24 in the 20 years. 

 Finally in the 50th year $2.20 more is added to the taxes, which in the 10 

 years remaining accumulates to $27.72. The total taxes and interest thereon 

 for the rotation amount to $35.36 plus $12.08 plus $6,64 plus $13.24 plus $27.72 

 equals $95.04, the total accumulated taxes, both principal and interest. Take 

 therefrom $43.00, the principal sums paid, and there remains $52.04, the accu- 

 mulated interest on the taxes. 



fThis figure represents the cost to the owner of a 25% yield tax when the 

 various items of cost of production are as shown in the same columns. Since a 

 25 per cent yield tax takes 25 per cent of the product, it is evident that the 

 cost of the the tax to the owner would be one-fourth of the total cost of 

 production, including taxes. All the costs aside from the yield tax would then 

 amount to three-fourths of the total cost and the yield tax would be one-third 

 of the other costs. It is thus that the cost of the yield tax is computed in 

 these tables, that is to say, one-third of the costs aside from taxes is the cost 

 of the 25 per cent yield tax in each case. In case stumpage sells at more than 

 the cost of production all the profits on 25 per cent of the yield go to the state 



