STUMPAGE VALUES 171 



logs, this fact would not justify an appraisal of stumpage based 

 on higher log prices, unobtainable in practice, although it might 

 justify holding rather than selling the timber. 



But in the majority of cases, the business of logging is either 

 conducted by the same firms which manufacture the timber, 

 or the manufacturer purchases the stumpage, contracts the log- 

 ging and thus bases the price which he can pay for the stumpage 

 on the price of lumber at the mill. Stumpage appraisals must 

 thus conform strictly to the prevalent economic conditions, and 

 must be based on the value of the product put forth by the 

 operator who purchases the timber, provided he conforms to 

 general customs in the locality. 



Mill prices for lumber fluctuate not only with the season 

 and condition of the market, but are affected by freight charges. 

 In certain localities, prices at large central markets for lumber 

 may be taken as standard, and the proper discounts made for 

 local freight rates. 



The main source of variation in mill prices lies in the variety 

 of products, and of grades of the same product, into which the 

 timber is manufactured. This difference exists originally in 

 the quality of the trees or logs, and is increased by the methods 

 of handling the raw material or logs by the millman. One mill 

 may, from the same material,* produce a much greater per cent 

 of the more valuable grades than another, whose principal out- 

 put may be dimension lumber. 



These differences in the quality of the grades produced vitally 

 affect stumpage value and give to old timber a value at present 

 prices which second growth timber may never obtain hi the 

 future because of inferior quality. 



Two plans may be used in obtaining a price basis for the 

 appraisal of a given body of stumpage. The first, advocated 

 by the U. S. Forest Service in Washington and Oregon, is based 

 on grade prices at a central market, discounted for freight 

 rates to the required locality. 



The first step is to estimate in the field the per cent of each 

 of certain standard grades which will probably be yielded by 

 the body of timber to be appraised. The average price of each 



