610 Misc. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
timber in such forest would not be justified. This would be at the 
extreme in the case of an annual sustained-yield forest. 
The circumstances under which this plan would be properly 
applicable are seldom encountered and are always temporary. The 
plan would generally give forest owners a greater tax advantage 
than is their due. 
This tax advantage would obviously be excessive when the develop- 
ment of forestry had advanced to the point of annual sustained-yield 
management. In a sustained-yield forest most of the value resides 
in a fixed investment in growing stock—the immature timber of 
different age classes up to, but exclusive of, a very small quantity of 
timber approaching maturity and comprising the oldest age class, 
due to be cut during the current year. The land usually amounts 
to no more than from 15 to 20 percent of the total value of the forest. 
Assume, for example, that the forest is worth $10,000 and is producing 
an annual income of $400. The value of the land, assuming a maxi- 
mum of 20 percent of the total value, would, then, be $2,000. <A tax 
at the relatively high rate of 2 percent on this value amounts to only 
$40. A tax of $40 on a property worth $10,000 and yielding an income 
of $400, indicating a tax ratio of only 10 percent as compared with 
40 percent for other property yielding an annual income, would rightly 
appear to most people to be a rank discrimination in favor of one 
property over others. 
The above example serves to demonstrate the theoretical weakness 
of the plan of exempting immature timber. As soon as forestry 
develops beyond the most primitive stage wherein young growth 
has little or no value (and it has already emerged from that stage 
in many parts of the United States), this plan would certainly have 
to be replaced by a more comprehensive plan. 
In addition to its theoretical weakness, the plan of exempting 
immature timber presents other difficulties. Most important of these is 
that it requires the fixing of a date of maturity—a point at which the 
trees become taxable. Maturity may be either physical or financial. 
Physical maturity in a forest, by analogy from animals, may be said 
to occur when the losses in the forest begin to exceed or equal growth; 
financial maturity occurs when the costs of holding begin to exceed 
or equal value increment. These definitions are by no means gen- 
erally accepted. Sometimes maturity is considered synonymous 
with merchantability, sometimes it is taken as describing that portion 
of the life of a forest during which growth begins to fall off, and some- 
times it simply designates “‘big trees.’’ None of these definitions 
is practical for use in a tax law unless some board is established for 
the interpretation and application of the definition to individual 
cases. Each individual case presents a problem in itself, as the 
factors affecting maturity are quite variable. The board would be 
deluged with work and in the end would probably have to adopt 
rule-of-thumb methods, involving considerable injustice. 
The plan of exempting immature timber has certain advantages; 
it is simple and readily adaptable to a universal application. How- 
ever, it imposes a fair tax burden only if its application is limited to 
forests being grown without cost on land that was cut-over land at 
the time the plan went into operation. To limit the plan to such 
forests, besides being impracticable, would be unjust to the vast 
majority of forests, which would be left without any tax relief what- 
