



"It must be apparent to any reasonable minded person that the 

 whole proposition is one in which the investor, in this case the state, 

 must be willing to make considerable financial outlay and forego im- 

 mediate returns for future profits. It is therefore a foregone conclu- 

 sion that, starting with practically nothing, the expenditures accumu- 

 lated during the first 60-year period, will be vastly in excess of the 

 meager receipts that may be expected in the meantime. Such invest- 

 ments must be made in order to create and build up the working capi- 

 tal of the forest, and theoretically at least not until 1978, the first year 

 of the second period of rotation, will a substantial output be realized 

 and the investment begin to return interest From that time forward, 

 'however, the returns will continue in perpetuity and in the same 

 amount, so long as the forest working capital is not impaired." 



REAL PROFIT BEGINS EARLY. 



Mr. Schaaf was here dating his reckoning from 1917 and looking 

 forward to the. first harvest of completely matured timber at the end 

 of 60 years. Sixty, years would be a long time for the average citizen 

 to look for returns on the tax money he is asked to put into a state 

 forest industry. But the case isn't really quite as bad as that. 



A recent special report of the forester carries tabular statements 

 showing estimated outlay and estimated accretions of timber values, 

 year by year, for the 60-year period and beyond. It becomes perfectly 

 apparent to the layman studying these figures that this important fact 

 lies buried in fhem. 



The increment of value in the forest catches up with the total of 

 increasing investment long before the 60 years expire. The 60 years 

 mark the first harvest period the first collection date, and when the 

 harvest is realized it pays much more than the cost of production. 

 Back in the years before that date lies the point where value repre- 

 sented in t'he still growing tree overlaps the cost of growing it. It is 

 not harvested then, of course, because by not cutting it, it then begins 

 to leave cost farther and fart'her behind in the race between cost and 

 profit. 



The rotation-periods in a sense harvesting periods for forests are 

 the same for all forests of similar tree population. The time element 

 is fixed, but when it comes to the matter of actual dollars invested in 

 a forest, the forest area has to come into the reckoning. 



me state forester, in his calculations in 'his report, worked with 

 a definite area in mind. This was 4,500 acres for each year. That is 

 the planting plan of the Michigan Public Domain Commission, that 

 many new acres of new planting to be added to the replanted areas 

 in the state forests every 12 months. The performance has been less 

 than 2,000 acres a year. 



Two causes have operated to keep the planting operations down to a 

 limit of less than "half of what the commission wants to do, is able 

 to do with the product of its Higgins Lake nursery as it is equipped 

 today. These causes have been, first, lack of money, and, second, 

 lack of men in some cases even when they had money for wages and 

 to buy tools and equipment. 



The program calls for opening two new forests each year. That 

 has not been done. None were opened during the war period, and 

 but one since the war ended. There has been labor available, in some 

 districts where forests might have been opened, but not-enough money 

 for the purpose. The $55,000 a year undoubtedly i not enough to carry 



-35 



