FOREST TAXATION IN THE UNITED STATES 5ST 
as to the influence of taxation on the cutting of timber, only 125 
timber operators out of about 500 admitted that taxation had any 
appreciable effect on cutting. This included a number of doubtful 
cases. The number that clearly testified to an undoubted influence 
was only about 100. Over 200 operators stated absolutely that 
taxation had no influence, or very little (101, p. 607). 
That timber values have since 1923 failed to come up to the expec- 
tations of many who made purchases prior to that time is so well- 
known that it 1s unnecessary to rehearse the evidence here. Espe- 
cially during the last few years has distress fallen upon the lumber 
industry, with heavy losses and threat of bankruptcy in many cases 
on account of failure of timber values to increase as was anticipated. 
There is an overwhelming mass of evidence indicating that, whereas 
in the past the increase in stumpage prices was usually sufficient to 
cover the carrying charges involved in holding of mature timber, 
that condition no longer prevails. At the present time in the virgin- 
timber region, timber values, when not actually declining, are com- 
monly offering no promise of increase in the near future at a rate 
sufficient to meet the carrying charges involved in holding mature 
timber. This condition fits perfectly with the preceding theoretical 
analysis and indicates that while there may be certain border-line 
cases in which taxation is the controlling cause of cutting, the major 
cause almost everywhere predominant is the failure of values to rise 
fast enough to meet the total of carrying charges, among which inter- 
est far exceeds all others. 
In the light of general principles and all the evidence, it appears 
that, although taxation may in certain cases have been the chief 
cause of cutting, taxation has not up to the present time had any 
widespread controlling effect upon the time and rate of cutting of 
the American forests or upon the overproduction of lumber. As to 
conversion of old-growth forests to annual sustained yield, where 
this may be accomplished without deferment of income, there is no 
inherent disadvantage in the property tax; although uncertainty as 
to the amount of future tax charges may be a factor in the hesitancy 
to adopt this type of management. 
SECOND-GROWTH FORESTS 
Without doubt the most serious part of the problem of forest taxa- 
tion concerns the future of the immature forests and the cut-over 
forest lands of the United States. There is here involved not only 
the management of existing cut-over land, but also the treatment of 
mature stands, since the prospect of profit in second-growth timber is 
an important incentive to cease destructive cutting of old growth. 
Sufficient theory and evidence have been presented in earlier parts 
of this report (especially pts. 3 and 7) to show that the American 
property tax discriminates against young forests and cut-over forest 
lands and thus tends to discourage investment in forest growing and 
the holding of immature timber. 
Even more serious than its inherent discrimination is the uncer- 
tainty as to future tax obligations which results from the nature of 
the property tax and the character of its administration. It is this 
uncertainty that more than anything else makes the property tax a 
menace to forestry. The fact that past taxation has generally not 
