INVESTMENTS AND COSTS IN FOREST PRODUCTION 73 



97. Permanent Improvements and Equipment. On any prop- 

 erty managed exclusively for forest production, and of sufficient 

 size to demand continuous care and administration, buildings 

 must be provided for the permanent force, both officers and 

 laborers, especially since these tracts are not often conveniently 

 near towns. Special telephone construction is often required. 

 These are legitimately classed as capital expenditures. Stables, 

 draft animals and tools come in this category, but proper allow- 

 ance for depreciation must be made. 



In cost accounts for individual stands, it is proper to dis- 

 tribute these overhead charges over the entire territory which 

 they cover, pro-rating them on a per acre basis. The initial 

 cost for these items may be included with the cost of land and 

 timber. The annual charge for upkeep, or its equivalent in 

 depreciation, must be entered as a current annual expense on 

 the same acreage basis. 



98. Roads and Transportation Systems. Lack of perma- 

 nent roads or other means of transportation is characteristic of 

 American forest conditions. To yield a steady income, a forest 

 must produce wood annually for market, which requires the 

 transportation system to be in continual repair. 



In inaccessible regions, timber must exist in sufficiently large 

 bodies to justify construction of a system of transportation for 

 its removal. The cost of transportation contains two elements: 

 first, cost of construction; second, cost of transport. Con- 

 struction cost, no matter how cheapened, cannot be reduced 

 below a certain limit. Cost of transport is lessened by improv- 

 ing the means of transportation. When railroads, roads or 

 flumes are built for merely temporary use, the entire cost of 

 construction, as well as transport, falls on the timber removed 

 at the time, and is pro-rated for each unit of product as, for 

 instance, per thousand feet of lumber. 



Since transportation is a feature belonging strictly to logging, 

 it affects forest production through its influence on the value of 

 stumpage. It is the universal practice hi America to allow the 

 cost of construction, as well as transport, to fall upon the logger, 

 who takes it out of the price of stumpage. 



