FOREST TAXATION IN THE UNITED STATES 265 
ing statements in support of this point of view are quoted from an- 
swers to questionnaires prepared for the Timber Conservation Board 
in December 1931: 
We can say that in connection with the Douglas fir region, with which we are 
more or less familiar, the annual bill for taxes has for many years been a con- 
siderable factor in cutting of timber. One of the main reasons is that the price of 
stumpage has not increased sufficiently to cover carrying charges, and any timber 
owner that has had an opportunity to market his holdings, or a part of them, has 
been eager to do so, in order that the tax bill could be cared for from the product 
of the property. Taxes have been so heavy for the last 10 to 15 years, and with- 
out any reward in sight for taking money from other income to carry timber, that 
nearly all private owners are intensely interested in operating available stumpage 
[George L. McPherson of the George L. & J. A. McPherson Corporation, Port- 
land, Oreg.]. 
The average lumber operator has had his trouble climaxed in the last few years. 
He has been unprogressive and has lacked foresight. He has been a good citizen, 
acknowledged his debt to society and has accepted the idea he should pay taxes 
and has done so without complaint. He has been optimistic, in a blind way, and 
expected the recurrence of periods of prosperity he had enjoyed, which would 
permit him to carry on [C. Arthur Bruce of the E. L. Bruce Co., Memphis, Tenn.]. 
In recent correspondence, Mr. Bruce has pointed out that his 
present opinion is that since the time of the observation quoted the 
lumber operator has received a great deal in the way of education and 
has developed the ability of analysis and much greater foresight. 
Present prevailing conditions in the industry have tended to develop, in the 
minds of a good many operators, a loss of confidence in future values of timber and 
the opinion is quite prevalent that the remedy is several years hence. Under such 
conditions, we can expect many operators to liquidate their stumpage and get 
what they can out of it, rather than to carry the tax burden for an indefinite 
number of years in the hope that increase in possible conversion returns at some 
future date will more than offset the carrying charge incurred meanwhile [J. L. 
Bridge of the Sound Timber Co., Seattle, Wash.]. 
The past history has shown that log prices are not mounting fast enough to 
take care of the investment [C. S. Polson of the Polson Lumber & Shingle Co., 
Hoquiam, Wash.]. 
W.R. Morley of the Saginaw Timber Co., Aberdeen, Wash., in an 
address delivered before the annual forest management conference of 
the Western Forestry and Conservation Association in February 
1932, and subsequently published in the West Coast Lumberman of 
May 1932 (p. 19), stated: 
In the past the annual timber tax was largely offset by an enhanced value of the 
timber itself. Stumpage values, however, ceased to grow 6 or 7 years ago, they 
became stationary and recently have tended steadily downward. The average 
opinion in this region seems to be that future increases in timber value will not be 
enough to cover the steadily accumulating carrying charges, the largest by far 
being property taxes. ; 
The failure of stumpage prices to increase as rapidly as expected is 
undoubtedly the underlying cause of overproduction in the lumber 
industry. The property tax plays its part as one of many items in the 
total carrying charges. But itis not the most important of the carry- 
ing charges, and carrying charges altogether are often less important 
than future stumpage prices in influencing cutting. 
Those who have expressed exaggerated opinions as to the effect of 
taxation upon overproduction of timber have been inclined to forget 
the greater importance of interest—on the realizable value of forest 
properties—and have sometimes failed to realize that, if forest values 
do not give promise of an increase at a rate at least equal to the 
interest rate, taxation cannot be the cause of cutting, since under such 
