24 BULLETIN 950, IT. S. DEPARTMENT OF AGRICULTURE. 



ing the second five-year period. The possible maximum prices for 

 the second five-year period are ordinarily double the rates fixed for 

 the initial period. The purpose of this provision is to fix a maximum 

 liability for the cost of timber during the first 10 years of operation 

 of the enterprise. After the first and most critical 10 years in the 

 life of a new enterprise of this character, reappraisals are to be 

 without this special limitation, but must be within the average cur- 

 rent price obtained for corresponding timber in southeastern Alaska. 

 (3) The reappraised rates in pulpwood contracts are based upon 

 the current value of corresponding timber in southeastern Alaska, 

 full recognition being given in reappraisal to the quality and accessi- 

 bility of the timber included in the particular contract and to any 

 other physical condition affecting the operations of the purchaser. 



STUMPAGE PRICES AND READJUSTMENTS. 



Minimum stumpage prices for each sale are on the basis of ap- 

 praisals worked out under standard methods which are applied to 

 each unit of timber before advertisement by the Forest Service. A 

 tract of pulpwood has recently been advertised and sale awarded on 

 the Tongass Forest near Port Snettisham at rates of $1 per thousand 

 for spruce, cedar, and cypress, and 50 cents per thousand for hemlock 

 and cottonwood. 



The stumpage prices in Alaska have varied recently from 50 cents 

 to $3 per thousand feet, board measure, depending on the species, 

 quality, and condition of the timber, its accessibility to tidewater, 

 the cost of logging, etc. The appraisals are made on the basis of im- 

 mediate operation, and provision is made, as hereafter explained, for 

 reappraisal of timber under long-term contracts. 



The sample contract, a copy of which is included in this bulletin, 

 provides for a readjustment of stumpage prices after the first five 

 years of operation following the two-year period of construction, and 

 at five-year intervals thereafter during the life of the sale. In addi- 

 tion to fixing the price for the first five years, a scale of prices is 

 named which will in no event be exceeded in the reappraisal covering 

 the second five-year period. The readjusted rates will in no event 

 exceed the arithmetical average price received for stumpage in the 

 National Forest sales during the preceding 12 months from the Na- 

 tional Forests of Alaska. The reappraisals will be based, according 

 to contractual obligations, on the price of logs of similar species in 

 southeastern Alaska, on the current operating costs in southeastern 

 Alaska, and on a reasonable margin for profit and risk in the business 

 of logging. 



The general principle of the redetermination of stumpage prices 

 during the life of long-term timber sales has been in effect on all 



