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FOREST TAXATION IN THE UNITED STATES 363 
urged the adoption of a special constitutional amendment solely to 
authorize suitable forest taxation. Such an amendment was there- 
upon prepared and approved by that and the succeeding legislature 
(S. L. 1911, pp. 1106-1107; S. L. 1912, ch. 115 of the Resolves, p. 919), 
and was then ratified by popular vote at the general election in No- 
vember 1912. 
Thereupon the 1913 legislature, by chapter 131 of the Resolves of 
1913 (S. L. pp. 1180 and 1181), provided for a commission to recom- 
mend the kind of legislation that should be adopted. The report of 
this commission (201, p. 12) found— 
that the proper method of forest taxation has been the subject of much investiga- 
tion in the United States, and that fortunately there is complete agreement con- 
cerning the principles that should govern such taxation— 
citing in this connection a considerable number of reports of State and 
Federal investigations, all of which, except the Massachusetts report 
of 1906, advocated the yield tax. 
The unique feature of this 1914 report and the bill that was drafted 
and later enacted by the legislature was the so-called ‘‘commutation 
tax.” This was a property tax to be paid annually in addition to the 
tax on the bare land in those cases where a forest had been established 
on the land and was already large enough to be subject to taxation 
at the time of classification under the yield-tax law. Its purpose was 
to prevent, as a result of the change in tax system, a reduction in the 
current revenue of the local community up to the time when such forest 
would ordinarily be cut. On the other hand, it aimed also to protect 
the forest owner from having the assessments on such forest increased 
from time to time while it was growing to maturity, as would other- 
wise be the case under the property tax. In compensation for the 
payment of such commutation tax, the rate of yield tax finally to be 
levied on such forest when cut was to be correspondingly less than 
that which applied on the cut from property which never had been 
subject to the commutation tax. In this manner it was intended to 
equalize the total tax burden on the two classes of forest property. 
Although New Hampshire even now is without a yield-tax law, it is 
of historical interest to note that in few if any States have the forestry 
interests made more persistent and long-continued efforts than in New 
Hampshire to obtain a constitutional amendment releasing forest 
property from the rigid application of the proportional requirement 
of ad valorem property taxation. Forest ta :ation first came up for 
detailed discussion in 1906 in the report of a general study by Lyford 
and Margolin of the Forest Service (197, pp. 204-208). This was 
promptly followed by a study of the forest-tax situation by J. H. 
Foster, then of the United States Forest Service, in 1907, in which the 
adoption of a yield tax was recommended (186). The proposal and 
bill for carrying it into effect, having failed to receive the approval 
of the legislature, was laid before the consitutional convention held 
in 1912, and the convention’s approval of an amendment of the con- 
stitution was obtained (207). This amendment provided not only 
for forest taxation but for the classification of money at interest and 
the levy of a tax on incomes received from stocks of foreign corpora- 
tions and money at interest, except money on deposit in savings banks. 
It, however, failed of ratification by scarcely 700 of the required two- 
thirds of the popular vote, although getting a majority vote (207, 
p. 584). 
