ECONOMIC FACTORS IN PRIVATE FORESTRY WORK 



By E. a. Steri^ing^ Forest and Timber Engineer. 



PRIVATE forestry in its full commercial application is essentially the pro- 

 duction of successive forest crops from the same land, through the 

 employment of private capital. If private capital seriously engages in 

 forestry it will apply the scientific and business principles most effective in afford- 

 ing safety and profit, the same as in any other industrial enterprise. 



Forest crops, writh no exceptions, require longer to mature than any 

 other living, growing product of the soil. They are, however, as much 

 a crop as wheat or corn, and in older countries are grown in systematic rotation 

 like other crops. Failure to realize this fundamental fact is no doubt responsible 

 for much of the misconception as to what scientific forest management involves. 

 Moreover, the existence of so much mature forest growth has established a 

 conception of forests as a mine rather than as a crop. Even when the principles 

 of forest economics are fully comprehended and the necessary procedure and 

 ultimate profits carefully figured out, a sober, long-time investment in growing 

 timber crops proves less attractive to American capital than the more speculative 

 exploitation of existing forests. A story illustrative of this point was told in the 

 forest schools ten years ago of two German capitalists who came to this country 

 to invest in timber. The American lumbermen who acted as hosts showed them 

 various properties and operations where profits of 15 or 20% a year were 

 assured, but the visitors refused them all, on the ground that they wanted a safe 

 timber investment paying not over 5%. This was before the day of timber bonds, 

 and the Americans had no investments of this kind to offer, so the Germans, since 

 they wouldn't take the high speculative profits, went home with their money. 

 Neither understands the other's point of view to this day. 



The conditions described will probably hold until most of the old virgin 

 forests, which have been our sole source of supply, are cut-over. When this time 

 comes and original forest growth is no longer obtainable at less than the cost of 

 production, which has always been the case with even the highest priced 

 stumpage, systematic production of forests as such will be accepted as a business 

 proposition. Fortunately, there is an intermediate period when the old forests 

 will still constitute the main source of supply, but new fields will not be available, 

 thus creating a tendency to perpetuate the supply on large holdings by producing 

 new growth on the cut-over areas. This necessitates large operations and ample 

 capital, and emphasizes Dr. Schenk's truism that : "Forest conservation has never 

 been practiced by the small holder of timberland. We must have either public or 

 private corporations — lumber barons — engaged in it." 



FORESTRY AS A BUSINESS. 



Forestry as a recreation or experiment is quite different from forestry as a 

 straight business enterprise, which must earn fair profits. The former has con- 



