98 THE COMMISSION OF INQUIRY, 



burden; that is, if one piece of property pays less, all the rest must pay 

 a higher rate to make up the deficiency. In no case is an exemption 

 justified, unless everyone who shares the burden of it, is correspondingly 

 benefited. « * * 



A state can not properly declare that its forest reserve shall be un- 

 taxed, because such action robs the counties of the revenue that they 

 need. New York, which holds the largest state reserve, recognizes this 

 principle and pays local taxes on its land. Under a new law, enacted 

 in 1905, Pennsylvania pays to the counties in lieu of taxes five cents a 

 year for each acre of state land. The Austrian state forests pay taxes 

 on land and income. 



(2) A forest is a form of property whose value is potential or pro- 

 spective most of the time; only when the trees are market ripe can an 

 income be derived from it. 



(3) In consequence of yielding periodic returns, the greater part of 

 the tax to be paid upon a forest should fall due when the timber is sold, 

 and not made a burden upon the other property of the owner through 

 many years. 



(4) The deferred tax should bear a fair relation to the net yield of 

 the property; that is, it should not exceed a sum that will leave the 

 owner the equivalent of a fair annual return on his investment. 



(5) Forests occupying land of the kind here considered grow too 

 slowly in most situations to yield by their annual increment a rate of 

 interest comparable with that commonly expected from ordinary busi- 

 ness enterprises, though they may easily produce wood at a rate that 

 will compare favorably with the interest derived from State or national 

 obligations. 



(6) Forests are exposed to unusual risks from fire and depredation, 

 owing to their very general use by the public. 



EXTRACTS FROM AN ADDRESS DELIVERED BEFORE THE MICHIGAN FORESTRY 

 ASSOCIATION BY DR. B. E. FERNOW, NOV. 1907. 



Will equitable taxation, or tax reduction or exemption secure the ap- 

 plication of forestry practice to timber lands? 



The first thing to recognize is that very widely differing kinds- of 

 property, of widely different value, are liable to be taxed as woodland. 



There are at least three classes of woodland, the virgin, uncut, mar- 

 ketable timber; the cut-over lands with promising growth of value; the 

 stump lands without value, unless through special effort. And a fourth 

 class may be added, as yet little developed, namely, artificial planta- 

 tions, on which this effort has already been spent. 



The uncut timber land is property of high value, inimediately avail- 

 able by mere exploitation — by destructive lumbering. It is also capable 

 of being made a continuous revenue producer, by conservative lumbering. 



The argument that the timber land owner, the lumberman has in 

 view merely exploitation and the removal of values which he has not 

 created — ^this argument, at least in a pioneering community, very natur- 

 ally and properly weighs with the tax assessor in this attitude towards 

 his property that distinguishes settler and lumberman, and that 'seems 

 to explain and to justify a seemingly unjust distribution of the burdens 

 of taxation. If it could be shown that the timber land owner had the 



