515 



AMERICAN FORESTRY 



capital is always worth something, whether used by 

 public or private interests. If the government did not 

 use the money for forestry it could use it for some- 

 thing else. If it did not need the money it could de- 

 crease taxes and leave it for the people to use. This is 

 clearly true of the expenses involved, but how about 

 the land? Will the government have an investment on 

 which to pay interest? 



The government can acquire forest land in three 

 ways by purchase, by forfeiture and by reversion. 

 Under purchase there is no doubt about the invest- 

 ment and interest must be calculated from the begin- 

 ning, and unless it is desirable or advantageous to dis- 

 courage private forestry, 

 the rate of interest for the 

 government must be the 

 same. Land acquired 

 through reversion or for- 

 feiture, if it can be used 

 for forest growing, has a 

 value for that purpose, and 

 interest must be allowed on 

 that value. If it is worth- 

 less for that purpose it has 

 no value as forest land, 

 hence does not come within 

 the pervieu of this discus- 

 sion. 



Forest land reserved by 

 the U. S. Government has 

 the same value it would 

 have had if not reserved 

 The government simply 

 takes the place of a private 

 owner, which makes no 

 difference in the use or 

 value of the land. Hence 

 interest must accrue on 

 that value which it would 

 have had under private 

 ownership. 



The government cannot 

 escape interest on invest- 

 ment because it will al- 

 ways be using land with 

 held from the people, or 



money taken from the people by taxation, for forest 

 production. And there is no reason why the rate of 

 interest should not be the same, unless private forestry 

 is to be discouraged. 



While the government, national or state, cannot es- 

 cape interest as going into the st-umpage value of grown 

 timber to be paid eventually by the consumers, it can 

 escape taxation by simply refusing to pay. Unlike a 

 private owner, it cannot be compelled to do so. With 

 all other financial considerations almost equal, it is 

 clear that such discrimination in taxation will operate 

 to prevent forestry by private interests. The margin 

 between profitable and unprofitable forestry, in all but 

 especially favorable sections, is so narrow that exemp- 



NATURAL 



REFORESTATION OF 

 CALIFORNIA 



Costs of taxes, interest, protection, etc., must go on every year 

 until the crop of timber is harvested, and must finally be paid by 

 those who use that crop. 



tion from taxation will be fatal to the interests not ex- 

 empt. 



This brings up the question again, whether it is 

 desirable or iK)t to encourage private forestry. If there 

 is a certain area of forest land in a taxation unit, all 

 privately owned and taxed at a certain amount per 

 acre, and the government, state or national, acquires 

 half of it, then the taxes on that remaining in private 

 ownership will be doubled. In this way the government 

 can cause the forfeiture of much privately owned forest 

 land and almost prevent the practice of private forestry. 

 On the other hand, if the government will pay its just 

 and equitable share of the annual taxes it will encourage 



the practice of private for- 

 estry. In other words, if 

 both private and public 

 forestry are to go along 

 hand in hand, the burden 

 of taxation must be shared 

 as nearly equally as possi- 

 ble. In order to secure 

 this it might be claimed 

 that all growing timber and 

 the land on which it stands 

 should be exempt from an- 

 nual taxation, but subject 

 to a yield tax at the tmie 

 the timber is cut. This 

 must be considered, how- 

 ever, from the standpoint 

 of the taxation unit in 

 which the forest-growing 

 land is situated. That tax- 

 ation unit, be it state, coun 

 ty, parish, district or mu 

 nicipality, must have an- 

 nual revenue and that rev- 

 enue must be certain. A 

 yield tax alone will not 

 supply certain annual reve- 

 nue. If in a taxation unit 

 there is an area of timber- 

 land subject to a yield tax 

 md another area subject tc 

 m annual tax, the former 

 can exist only because the 

 The latter carries practically 



PINE TIMBER IN 



latter is taxed every year, 

 the whole burden. 



Now, if it were all placed under a yield tax then the 

 burden of annual taxation on the other taxable property 

 in the taxation unit would be correspondingly increased, 

 which would be more inequitable and unjust than if 

 only a part of the forest-growing land had been exempt 

 from annual taxation under the yield tax. 



It comes back to the proposition that all forest-grow- 

 ing land, whether publicly or privately owned must pay 

 a certain annual revenue to the taxation unit in which 

 it is located. In no other way can the carrying of an 

 unfair share of the expense of supplying forests for the 

 future by local taxation units be avoided. Of course 



