18 REPORT O? THE FORESTRY COMMITTEE 



The four topics listed are covered under separate chapters or sections in the 

 report. 



If there is any doubt anywhere existing as to the urgency and importance 

 of reform in forest taxation it should be dissipated by reading the following 

 introductory paragraphs in Section II : "Next perhaps to war, taxation is the 

 most powerful instrument of government, capable, if unwisely used, of destroying 

 individuals, communities and industries. Few government functions are less 

 studied by the average citizen. Probably none of its branches is less understood 

 than forest taxation. * * * It is everywhere recognized by foresters, tax 

 experts and political economists that the general property tax applied to forests 

 in the United States is unscientific and discouraging to conservative management." 



Forest taxation has too long been considered purely academic and theoretical, 

 whereas it really is a problem which vitally affects the capital invested in timber, 

 the price of lumber to the consumer, and' the prosperity of States. The report 

 states that * * * "There are two distinct influences upon the rise of timber 

 prices. One is a true rise of intrinsic value, due to diminution of supply and 

 growth of consumption. This alone affords any basis of profitable investment. 

 The other is the accumulation and compounding of carrying costs which, without 

 investment profit, must be continually added to the selling price to prevent actual 

 loss * * * The general property tax upon timber, then, has an alarming 

 tendency to become excessive and it is exceedingly difficult to meet because it is 

 imposed annually while revenue with which to meet it is deferred. * * ♦ 

 From the community standpoint it threatens rapid wasteful cutting of mature 

 timber, penalizes the growing of new timber, and for both these reasons hastens, 

 the cessation of all revenue from forest taxation and the consequent imposition of 

 the entire burden upon other forms of property." 



The basic principles of wise forest taxation are considered under the two 

 separate heads of Taxing New Forest Crops and Taxing Mature Forests, and 

 lead up to definite suggestions for legislation. The report is exhaustive in its 

 treatment and specific in its recommendations, and could well be used as a working 

 basis for legislative action in any State. In fact, there is now available for the 

 first time, a compendium to which any State interested in the subject can turn 

 for sound adoptable recommendations. 



An important chapter discusses "The Danger in New Tax Theories" "the 

 adoption of new systems framed without forestry in mind," of which conspicuous 

 examples are "the diametrically opposed income tax and single tax." 



Owing to the pressure of other duties Mr. Gifford Pinchot was unable to 

 direct the details involved in the compilation of the report, and Mr. E. T. Allen 

 served as acting chairman. 



Committee 5. 



FOREST FIRES 



Chairman, C. S. Chapman Secretary-Manager, Oregon Forest Fire 



Association, Portland, Ore. 



D. P. Simons Manager, Sound Timber Company, Seattle, 



Wash. 



