STUMPAGE SITUATION IN PACIFIC NORTHWEST 23 



ing per capita consumption of lumber and an increasing percent- 

 age of utilization, the western forests could be quite easily 

 perpetually maintained under good forestry management. 



Investors in western timberland are largely from the Lake 

 States and eastward. They witnessed the tremendous fortunes de- 

 rived from the lumber business in the east and sought to dupli- 

 cate these achievements in the undeveloped west. Great tracts of 

 stumpage were purchased in the early days at low prices. As 

 timber became scarcer prices rose and finally, in 1906, under 

 keen competition, stumpage in certain regions reached a figure 

 almost equalling its real value. 



The true worth of standing timber is determined by the average 

 mill run selling price of the product manufactured from it. The 

 price is fixed by the most valuable product made from the species 

 in question. It may be lumber, or staves or shingle bolts or any 

 one of a hundred other commodities made of wood. From the 

 average mill run selling prices are deducted the operating costs 

 logging, milling, and overhead charges involved in transform- 

 ing the standing tree into the finished product on board the car 

 ready for shipment. A certain percentage is allowed on the 

 costs of the operation and on the stumpage as profit. The re- 

 mainder represents as nearly as can be determined the true stump- 

 age value of the timber. 



Outside the Forest Service, however, a totally different prac- 

 tice is followed in determining stumpage values. The. basis of 

 this system is the first cost of the standing timber. To this is 

 added each year the carrying charges, consisting of taxes, protec- 

 tion costs, and administration expenses. A reasonable net annual 

 return on the money invested is also expected. The nature 

 of the investment makes it imperative that interest rates be 

 higher than those obtaining for loans on property where the risk 

 of destruction is not so great. The net annual return charged 

 against stumpage is about 7 per cent. At this rate compounded 

 semi-annually, stumpage doubles in price every 8 years. 



Pacific coast forests are hardly maintaining themselves. The 

 timber is mostly over-mature, and the loss from decay is not 

 replaced by the added growth of the live trees. In certain regions, 

 as the Wind River country in Washington, and on the Umpqua 

 Forest in central Oregon, the trees are very largely dead or 

 defective, and the annual loss by death and decay exceeds the 

 growth many times over. The white pine forests of northern 

 Idaho are just about holding their own. The growth in the 

 younger merchantable stands which is normally quite large is 

 kept down by the ravages of the white pine bark beetle 

 (Dendroctenus monticola), until probably the destruction ex- 

 ceeds the growth. The older stands are deteriorating more rapidly 

 from this and other causes. On the whole, owners of stump- 

 age in the Pacific Northwest cannot expect any increase in value 



