Woodland Taxation. 161 



be amended. Timber-land owners in other states and provinces 

 have not always fared so well. The State of Michigan furnishes 

 a particularly instructive object lesson of the results of placing 

 a heavy burden of taxation on standing timber. There on six 

 million acres of non-agricultural lands, which thirty years ago 

 carried one of the finest forests in the whole world, and which 

 to-day are lying almost wholly waste, is to be seen the logical 

 conclusion of the policy of assessing woodlands at a higher rate 

 than that indicated by the capacity of the soil to produce wood 

 crops. 



The high taxation made but one kind of lumbering possible 

 — to wit, the cutting clean of whatever was merchantable at the 

 time as fast as it could be marketed, followed by the abandon- 

 ment of the ruined tracts to the state for taxes. This policy 

 was forced on the lumbermen landowners greatly to their regret 

 and financial loss by the authorities who were responsible for 

 the tax, but who failed to see that they were killing the goose 

 that laid the golden egg. The net result was the transformation 

 of a magnificent pine forest to a wilderness at a cost to the lum- 

 bermen of tens of millions of dollars, because of the forced haste 

 in harvesting, but at far greater cost to the state as a whole in 

 the total destruction of the forests on lands wholly unsuited for 

 agriculture, to which must be added the loss of a lumbering 

 industry which, had it been conducted on conservative principles, 

 could have been a source of wealth to its citizens in perpetuity. 

 Wisdom in this matter of taxation has not yet been fully learned, 

 and the destruction of the remnants of Michigan's forests pro- 

 ceeds apace. 



//. — The Rate Basis. 



In discussing the fundamental, difference between the levjang 

 of an annual tax on properties capable of producing an annual 

 income, and the levying of an annual tax on properties capable 

 of producing an income at long intervals only, it is well to bear 

 clearly in mind that this is purely a question of mathematics 

 It can, however, best be understood by studying a concrete case. 

 To make this case as simple as possible the following conditions 

 will be assumed: 



I . That the properties to be compared be two plots of land 

 of equal producing capacity, and at present without any crop 

 whatever. By equal producing capacity is meant that each plot 

 shall be capable of producing during the next sixty years a net 

 annual yield at the time of harvest of, say, $io per year, whether 

 devoted to the production of field crops or wood. If devoted to 

 field crops the $io would be realized annually, but if devoted to 

 wood production the annual growth of wood must remain in 

 place till the end of the sixty years when the total will be worth 

 $600 net. 



