FOREST TAXATION IN THE UNITED STATES 5) 
sought, not through the exemption of forest property, but by an 
adjustment of the manner of taxing it in keeping with the time 
required to mature its products. 
The results of the optional yield tax laws which had been enacted 
in the preceding 12 years were described by the committee as incon- 
clusive. The proposal to make the tax on forest lands a land tax 
only was mentioned. Constitutional limitations were cited as 
obstacles to forest-tax reform in many States. The committee 
arrived at the following conclusions with respect to taxation of forest 
lands: 
Probably the second development of general importance in encouraging private 
production of timber is an adjustment of the methods of taxing forest-growing 
lands so as to avoid an undue burden of current taxation. Obviously, as to State 
and local taxation, such reforms can be effected only by State legislation. The 
subject is, however, of such wide importance in all of the forest regions of the 
United States and has such a universal bearing upon the success of a national 
policy which seeks to promote timber growth that the committee believes it 
should be covered by a comprehensive Federal investigation. The purpose of 
this study should be to disclose the present methods and practices in the taxation 
of timber and forest-growing land and their actual effect upon the use of land 
for the growth of timber. The investigation should be conducted, as far as 
practicable, in cooperation with the States and other suitable local agencies; 
and the Federal representatives should be authorized to collaborate with the 
States in devisirg tax legislation adapted to particular situations which will give 
reasonable encouragement to reforestation. 
Immediate results from a project of this nature cannot be anticipated, but in 
the long run it should prove an important factor in eliminating obstacles which 
now stand in the way of private timber growing. Reforms in forest taxation 
can only be brought about by an extended process of public education, first, as 
to the present facts and their effect upon timber growth and, second, as to 
equitable means of modifying the existing conditions. The importance of the 
subject is so great that the Federal Government may wisely take the lead in an 
inquiry of this nature. 
THE CLARKE-McNARY LAW 
The Clarke-McNary Act became law on June 7, 1924 (43 Stat. 653), 
Its title is: ‘‘An act to provide for the protection of forest lands, for 
the reforestation of denuded areas, for the extension of national 
forests, and for other purposes, in order to promote the continuous 
production of timber on lands chiefly suitable therefor.”’ It contains 
the following provisions relating to taxation: 
Src. 3. That the Secretary of Agriculture shall expend such portions of the 
appropriations authorized herein as he deems advisable to study the effects of 
tax laws, methods, and practices upon forest perpetuation, to cooperate with 
appropriate officials of the various States or other suitable agencies in such 
investigations and in devising tax laws designed to encourage the conservation 
and growing of timber. 
THE FOREST TAXATION INQUIRY 
Pursuant to the provisions of this act the Forest Service established 
the Forest Taxation Inquiry and imposed upon it the duty of conduct- 
ing the study of forest taxation required by the law. The Inquiry 
may be said to have come formally into existence in April 1926, 
although little beyond the work of building up the staff, organizing 
the office, and making preliminary plans was attempted before mid- 
summer of that year. General headquarters were established and 
have been maintained throughout the course of the study in New 
Haven, Conn. 
