F0EESTBY AND COMMUNITY DEVELOPMENT. 29 



From a financial standpoint also, stability of policy is necessary; 

 in order to make timber production a profitable business. Like other 

 long-time investments, forestry can not be expected to yield a high. 

 rate of interest. In most parts of the country it will not return a. 

 profit greater than 5 per cent. This points directly to the necessity 

 for cheap money, which is to be had only in businesses firmly estab- 

 lished on a sound and stable foundation. Up to this time the lumber 

 industry has subsisted chiefly on speculative capital, which has 

 seldom cost less than 6 per cent and usually more. Whether this 

 was necessary in the early development of the industry is perhaps 

 debatable, but it is also immaterial so far as present conditions are 

 concerned. The important point is that a stage has now been reached 

 where the industry can not continue to yield the speculative returns 

 that it has in the past. Carrying charges in most parts of the coun- 

 try have now become so heavy that they are mounting up as fast or 

 faster than stumpage is increasing in value. In other words, timber 

 holding, pure and simple, is becoming unremunerative and must be 

 supplemented by timber growing. But timber growing, from the 

 very nature of the product, will not pay a high rate of interest, and 

 the only way in which money can be obtained at low rates is by 

 putting the business on a stable, nonspeculative basis. 



There is no good reason why forestry, the business of continuous 

 timber production, should not be put on such a basis. We already 

 know enough about our forest trees to keep the land productive and 

 to make the annual cut approximately equal to the annual growth. 

 Stumpage prices are now sufficiently high to yield a moderate return 

 if forest management is started before the trees are cut off. Euro- 

 pean experience has proved that with adequate care and protection 

 the business of timber growing is one of the safest and most conserva- 

 tive forms of investment. 



How to secure a clear-cut and stable forest policy is one of the 

 chief problems to be solved in placing the management of our forests 

 on a sound and permanent basis. Taking the country as a whole, 

 private ownership has so far failed to do this. It is true that in 

 many parts of the Northeast the prevailing uneven-aged forest, lim- 

 ited fire hazard, and favorable markets have resulted in the practice 

 of a crude sort of forestry. Because of the character of the forest, 

 clear cutting has been the exception rather than the rule, and forest 

 production has been more nearly continuous here than in other parts 

 of the country. But these good effects, like the bad effects elsewhere, 

 have been mainly accidental and not the result of any far-sighted 

 policy. With comparatively few exceptions private ownership so 

 far has been content to let the future take care of itself. Neverthe- 

 less, it is possible that under the changed conditions that now exist 

 many private owners may find it to their advantage to adopt a stable 



