STUMPAGE VALUES 187 



This amount would be taken as the basis for computing the 

 per cent of annual profit to be allowed. 



179. Overrun. When the amount and per cent of profit 

 have been determined, the remainder, or stumpage value, is a 

 definite proportion or per cent of the sale value of the manu- 

 factured products, and equals a stated price per thousand 

 board feet. Should stumpage appraisal indicate a value equal- 

 ling 20 per cent of the wholesale price or mill price of lumber 

 worth $20 per thousand, the price of stumpage will be $4 per 

 thousand feet of sawed lumber. 



But this does not indicate that the true price of stumpage 

 is $4. It is probably considerably more. The contents of 

 logs, and not the measured products, is the basis of payment, 

 not only when the timber is bought on the stump, but when it 

 is paid for after being felled and measured. 



Only in case the logs are measured by a rule which will give 

 the actual sawed contents, will the appraised stumpage value 

 per thousand feet be the same when measured by log scale 

 and by sawed contents. All log scales in extensive commercial 

 use give less than the contents ordinarily sawed from logs, and 

 this discrepancy increases as utilization becomes closer. The 

 excess of manufactured lumber over the contents measured by 

 the log scale is termed overrun. 



With certain log rules, notably the Doyle and Doyle-Scribner, 

 this excess amounts to 25 per cent and over, and increases with 

 small timber. 



Should the overrun be 25 per cent, it indicates that for timber 

 worth $4 per thousand, each thousand feet log scale produces 

 1.25 thousand feet of lumber. The value of the stumpage is 

 therefore 1.25 X $4, or $5 per thousand. 

 If 



Y m = stumpage value per thousand feet of sawed lumber, 

 s = per cent of overrun per thousand feet of log scale, 

 F = resulting stumpage value per thousand feet log scale, 



then 



F - Y m X i.o5. 



