86 FOREST VALUATION 



its growth or stand of timber, is the property to be valued. 

 Second, this land, by producing timber, and the timber, by grow- 

 ing, yields saleable products whose final sale produces income. 

 Third, the income, expressed in money, has an appraised value. 

 As the final step, the value of the income is discounted to deter- 

 mine the value of the physical capital which will produce it. 



This process cannot be short-circuited. The sale value of 

 forest land or timber does not represent any quality inherent 

 in the land or timber except the capacity to produce income, 

 and the value of the property must first be based on the valua- 

 tion of the income. 



The income from forests is principally the value of timber 

 sold on the stump, or the proportion of profits from logging 

 which is due to the owner of stumpage. Secondary income is 

 obtained from thinnings or advance cuttings, and from pastur- 

 age, or hunting and fishing rights. Other sources of income are 

 by-products, such as naval stores, or tree seeds, nuts, bark, 

 sugar, shrubs, herbs and litter. 



The present value of the forest is the sum of the present or 

 discounted values of all items of income expected in the future, 

 less the present value of all items of anticipated expense ( 62). 



Sale value bears the same relation to capital or expectation 

 value for forests as for any other form of property ( 59). But 

 since sale values are the expression of average general opinion, 

 the sale value of forest land and young timber will be apt to 

 depart widely from the capital or expectation value of such 

 property in regions where the business of forest production is 

 not recognized, and lands are abandoned after logging or de- 

 voted to agriculture and grazing. 



112. Value of Forest Property for Destructive Lumbering. 

 When the owner intends to remove the timber and devote the 

 land to other uses, his income will consist of: 



Yield of timber; 



Value of land for other purposes after timber is removed. 



As long as the timber remains, the land cannot be utilized 

 fully for anything but the timber crop. Grazing is only a sec- 

 ondary source of revenue. When cleared, its value is considered 



