VI. VALUE OF STUMPAGE 



Under present conditions in the United States timber is gen- 

 erally bought and sold as standing timber or on the stump, and 

 usually goes with the land, so that in most cases it is really a sale 

 of the forest, i. e., land together with the entire growing stock and 

 not merely a sale of the timber. 



In these ordinary sales of timber or forest, the price paid is 

 determined merely by the value of the merchantable timber and the 

 rest of the growing stock as well as the land is left out of consid- 

 eration, thrown into the bargain. Of late, especially on the national 

 forests larger sales have been made where the value of the merchant- 

 able timber alone was concerned. 



In some cases, timber, whether forest or timber alone, is bought 

 for immediate use or cutting, in other cases the timber is bought 

 years ahead with a view of supplying a regular lumber or timber 

 business, or else just for speculation, when it has to be held for 

 years before any return is secured from the money invested. In this 

 way a great variety of cases arise, each having its own peculiar con- 

 ditions as to time, location, market, cost of exploitation, etc. 



But all of these cases have a few fundamental conditions in 

 common and these only can here be considered. 



Timber, here only merchantable timber, like other property has 

 three forms of value : cost, sale, and expectation value. 



A. Cost value of stumpage. 



1. Where timber is raised the cost value of the merchantable 

 timber can be determined in the ways before described. But gen- 

 erally the time between planting and harvest is so long, that this 

 cost value is rarely considered, and mature timber even in central 

 Europe is estimated by sale, rather than cost value. But it is well 

 to keep in mind that with present prices of timber from twelve to 

 twenty dollars per M. feet b.m. and cut into logs for spruce and 

 pine, the per cent made in the forest business is generally three per 

 cent or less, so that present prices may be regarded as cost prices 

 with three per cent and no profit, in spite of the fact that forestry 

 pays a larger net rent per acre than farming. 



2. Where timber is bought for immediate use, as is much of 

 the timber purchased on national forests, etc., the price paid is the 

 cost value. 



