484 MISC. PUBLICATION 218, U.S. DEPT. OF AGRICULTURE 
external affairs, the army, railways, and postal service and exercises a 
degree of control over public works, education, and forest administra- 
tion, partly through the power to grant or withhold subsidies. 
The Federal Government normally obtains its revenue entirely 
from indirect taxes, such as stamp taxes on various business docu- 
ments, customs duties, and taxes on distilled liquors. The only direct 
federal taxes on property and income are extraordinary levies of a 
temporary character, such as the war tax, made necessary by the very 
heavy expenditures incurred through the mobilization of the army dur- 
ing the World War, and, more recently, the depression tax to meet the 
needs of the current crisis. The federal war tax was a combination 
property and income tax on individuals, with an excess-profits tax 
on corporations, and the depression tax is of a similar character. 
Individual fortunes are taxed on the basis of their net value deter- 
mined by comparing assets and liabilities. The rates of the tax are 
sharply progressive. Net income is also taxed at progressive rates, 
but the taxpayer is allowed to deduct from taxable income 5 percent 
of the capital invested in a given enterprise. The exemptions are so 
high that only a small minority of the citizens is affected by this tax. 
Corporations are taxed at various rates depending on the ratio of net 
profits to paid-up capital and reserves. 
Each Canton or State is divided into local districts known as com- 
munes or Gemeinden. ‘The support of governmental functions is 
divided in various ways between the Canton and its communes. 
For example, in some Cantons education is supported largely by the 
communes, while in others this burden is divided between the com- 
munes and the Canton. 
The financial systems of the various Cantons exhibit great variety. 
In general the mainstay of public revenues is a property tax supple- 
mented by an income tax. These taxes are imposed by the Canton, 
and the communes are usually authorized to make additional levies 
on the basis of the cantonal tax. The other taxes most commonly 
used are corporation taxes, based either on profits or capital stock, 
transfer taxes, inheritance taxes, motor-vehicle, amusement, and 
various license taxes. In certain Cantons there is a tax on the value 
increment realized on occasion of the transfer of real property. 
THE ECONOMIC IMPORTANCE OF FORESTS 
The forests of Switzerland occupy nearly one-quarter (23.6 percent) 
of the total area of about 16,000 square miles. Since the productive 
area is only about three- -quarters of the total, the forests cover nearly 
one-third of the productive land (275, pp. 33-34). These forests are 
of the utmost importance in the national economy of Switzerland. 
They are essential to the protection of mountain slopes and to the pres- 
ervation of scenic values. They regulate the flow of the waters that 
supply reservoirs and power plants. Their annual yield in wood 
products is a substantial contribution to the national income. The 
timber-cutting and sawmill industries alone, according to a census 
taken in 1929, employ about 65,000 out of a total population of 4,000,- 
000, while many more are occupied in the culture and protection of the 
forests (269, p.128). 
In Switzerland only a little more than one-fourth (27.9 percent) 
of the forest area is privately owned. The great bulk of the public . 
