34 THE COMMISSION OF INQUIRY, 



The following is the form of constitutional amendment recommended : 

 Forest growth upon cut-over, denuded or waste lands in process of 

 reforestation may, for the purpose of taxation, be separately classified, 

 and be assessed and taxed in such manner as the legislature shall deem 

 fitted to promote reforestation by individuals of cut-over, denuded or 

 waste lands ; and the legislature may pass such laws as the public and 

 domestic welfare may demand for the encouragement of farm forestry, 

 and, for this purpose, may exempt from taxation the forest growth upon 

 farm woodlots. 



TAXATION OP PRESENT STANDING TIMBER. 



The conserving of standing timber in such manner as will be for sub- 

 stantial public beneftt necessarily involves the conversion of the property 

 into a forest property to be handled according to the principles of busi- 

 ness forestry, i. e., for periodic returns by the cutting off from time to 

 time of no more than the natural growth upon the tract during the 

 interval between cuttings. Anything which induces present owners of 

 standing timber to merely delay the time of cutting, is at best only a 

 temporary relief, helping to tide over the coming period of increased 

 scarcity — a result of some, but not fundamental, importance. 



Whether any modification of the system of taxation, or even the total 

 removal of taxes, would operate generally to induce the owners of the 

 mature timber tracts now standing to convert the same into forest prop- 

 erties as aforesaid, is a matter which admits of some doubt. The timber 

 was generally bought under conditions based on the intention, and in- 

 volving the necessity, of early cutting. The capital invested, the busi- 

 ness organized by lumbering it and handling its product, all look to a 

 yearly cutting commensurate with the capacity of the plant constructed 

 for the purpose ; and the making of a profit in many cases, and its extent 

 in all cases, are directly dependent upon the plant being kept in opera- 

 tion to its capacity. When prices are high, the pressure to realize as 

 fast as possible the quick profit which was the original inducement of 

 going into the venture, is difficult to withstand. Lumbermen and most 

 owners of standing timber are not generally simple investors of surplus 

 funds looking for fair annual interest returns. The money embarked 

 is often borrowed, interest must be paid, expenses must be met, and divi- 

 dends are expected. The ownership of timber land is usually acquired 

 as a commercial venture, entered into for the purpose of securing large 

 returns quickly. All is based fundamentally on the expectation and the 

 necessity of quickly cutting off the standing timber. Taxes and interest 

 have the same relation to this matter : the lowering of either makes It 

 easier to carry the investment and therefore tends to prolong a little the 

 time of waiting ; but neither is the controlling thing. The basic thought 

 of the. venture is an early profit. To expect the conversion of the tracts 

 of timber now standing, into properties to be indefinitely held as forest 

 property for periodic returns, is to expect such a change generally in 

 the attitude and policy of owners of such property as amounts to a 

 revolution, completely overturning the whole basis on which their busi- 

 ness was entered into and is maintained. 



It is, however, true that there are, even under present adverse condi- 

 tions as to fire and taxation, some owners of large areas of standing 



