1906 



FORESTRY AND IRRIGATION 



501 



SALE BY PUBLIC AUCTION. 



The principle of valuing stumpage 

 for sale purposes by offering it at 

 public auction has long found favor in 

 the older provinces, and I note that 

 British Columbia has recently taken 

 legislation providing for its adoption. 

 There can be no doubt that public auc- 

 tion after ample advertisement and op- 

 portunity for inspection is by far the 

 simplest, most equitable and, above 

 all, the most satisfactory method of de- 

 termining the market value of standing 

 timber. 



This sale by public auction may take 

 either one of two forms : ( I ) The 

 stumpage dues (i. e., the price to be 

 paid per thousand feet when the tim- 

 ber is cut) may be fixed in advance of 

 the sale, and bids may be asked for a 

 lump sum or "bonus," which will rep- 

 resent the estimated value of the 

 stumpage over and above the fixed 

 stumpage dues, or (2) bids may be 

 asked on the amount of stumpage dues 

 to be paid per thousand feet board 

 measure when the timber is cut. 



the; bonus system of auction. 



The first method, which may for 

 short be termed the bonus system, has 

 found general acceptance almost to the 

 exclusion of the second. The advant- 

 ages claimed for it are : 



(1) That it yields at once a large 

 revenue to the provincial treasury ; 

 and 



(2) That it gives the purchaser of 

 the stumpage a larger interest in pro- 

 tecting the forest from fire. 



ADVANCE PAYMENT OE FOREST 

 REVENUE. 



The payment in advance in the form 

 of a bonus of a portion of the esti- 

 mated value of the stumpage to be 

 cut during a period of years is in 

 reality a discounting of the future 

 revenue-producing capacity of the for- 

 est. This method of realizing a large 

 present return from what is a per- 

 manent provincial asset capable of 

 yielding a regular annual income can, 

 it seems to me, be justified only as a 

 means of meeting a financial emer- 



gency of the gravest character. It is 

 worthy of remark in this connection 

 that even the stress of war has never 

 led the forest-owning countries of Eu- 

 rope to resort to this method of tem- 

 porary relief for their depleted treas- 

 uries. 



FIRE PROTECTION. 



It is evident that the payment in ad- 

 vance of a portion of the value of the 

 timber must give the lumberman a 

 larger interest in the protection of the 

 timber purchased from fire. The ad- 

 vantage to the forest of the interest 

 thus created is, however, more ap- 

 parent than real. The interest created 

 centers naturally in the protection of 

 such timber as is avaiable for the ax 

 under the terms of his purchase. The 

 greatest danger from fire is not, how- 

 ever, on areas bearing mature or semi- 

 mature timber, but on cut-over lands 

 and such as bear quite young conifer- 

 ous stands. It is evident that the mo- 

 tive for protecting an area from fire, 

 created by an advance payment of 

 stumpage, disappears as soon as an 

 operator removes all the timber in 

 which he has a financial interest. It 

 might be added that it is a mistake to 

 suppose that in determining the 

 amount of "bonus" which he is pre- 

 pared to bid on a proposition, the lum- 

 berman or pulp manufacturer does not 

 discount for the danger of subsequent 

 loss by fire and the expense involved 

 in future fire ranging. 



It will bear emphasis in this connec- 

 tion that a province's ultimate financial 

 interest in young coniferous stands 

 and cut-over lands may be quite as 

 great as in areas at present bearing 

 mature timber; and also that any di- 

 vision of interest or responsibility in 

 so vital a matter as forest fire protec- 

 tion is attended with the gravest 

 dangers. 



DISADVANTAGES OF THE BONUS SYSTEM. 



The disadvantages of the bonus sys- 

 tem may be discussed (1) from the 

 standpoint of the operator and (2) 

 from that of the province. 



1. From the operator's standpoint: 

 ( 1 ) Capital Tied Up The payment 



