536 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
In this connection it should also be recognized that the owner in 
financial straits is more powerfully influenced by demands which 
must be paid, such as interest on bonds and other debts and taxes, 
than by calculated interest which might be earned on his own capital. 
The owner, in desperation to meet the demands of his creditors and 
the tax collector and so to save his property, may for the time have 
little thought to give to the loss of interest on the realizable value of 
his timber. The present may be a state of extreme depression. The 
future may be uncertain, but yet hold out some hope of better things. 
The owner might be will: ng to hang on a while longer, if he could only 
meet current charges. To such a one, taxation may be the chief con- 
sideration. The psychological effect of having to provide substantial 
payments every year may give taxes greater weight 1 In influencing the 
decisions of timber owners than strictly economic considerations 
would warrant. An adequate return on the investor’s own capital 
may be lost because appreciation in timber value does not keep pace 
with interest, but it is the additional money that must be put in each 
year to hold timber property that demands attention, and usually 
more than half of this additional sum is required for taxes. In times 
of economic depression taxation may thus come to exert on certain 
owners a very substantial influence toward cutting. 
Summing up the foregoing analysis, it is clear that taxation is one 
of the important carrying charges which in the aggregate, in conjunc- 
tion with present and expected | future realizable values, determine the 
time of cutting of mature timber. In some border-line cases, where 
the expected increase of value is greater than the sum of all carrying 
charges other than taxation but less than the carrying charges with 
taxes included, taxation may be the controlling cause of cutting. In 
prosperous times for the lumber industry, such as existed during most 
of the period 1917 to 1923, when values are rising rap dly and are 
expected so to continue, taxation is not cenerally. a controlling n- 
fluence, since it is easily offset, along with all the other carrying 
charges, by the increase in values. If, at other times, values are 
generally not increasing fast enough to cover even the interest, then 
again taxation has no compelling influence, since it would then be 
advantageous to cut even if there were no taxes at all. With the 
exceptions which have been noted, taxation cannot be the chief factor 
in the decision to cut, since it is usually superseded in magnitude by 
interest on the present realizable value. 
The conclusions thus reached through theoretical analysis are 
confirmed by the judgment of representative timber operators and 
owners, the evidence in regard to which is presented at length in 
part seven of this report. Statements of such judgment were ascer- 
tained in 1931 on behalf of the Timber Conservation Board by 
means of a questionnaire which was circulated among timber owners 
and operators with the cooperation of the regional associations of the 
umber industry throughout the United States. Out of the 124 
returns to the general questionnaire, 31 made no answer to the ques- 
tion ‘‘What are the principal causes of overproduction?” Of the 93 
who answered this question, only 17 mentioned taxation. Of the 17 
who mentioned taxation, 2 gave no other cause, 9 put it first among 
various causes, and 6 gave it a place following other causes. 
Evidence leading to this same conclusion was obtained in an earlier 
study made in 1909 by the Forest Service. In answer to a question 
