loans to processing cooperatives with power to com- 
promise and adjust the terms as circumstances may 
require, and (b) under special conditions, as where 
a new process is involved, the erection or installa- 
tion of processing facilities and the leasing of these 
to the cooperatives. 
7. Advisory service should be made available to 
State and local governments to aid in the improve- 
ment of forest tax laws and their administration. 
Although the adverse effects of the property tax, 
as well as other taxes upon forestry, are often 
exaggerated, there is still a strong need for im- 
provement in the forest tax situation through: (a) 
Reduction in the property tax where this does not 
curtail essential services; (b) improved tax admini- 
stration; and (c) special adjustment of the property 
tax to deferred-yield forestry. 
Forest taxation as a feature of the property tax 
is under the jurisdiction of the State and local gov- 
ernments, and the responsibility for improvement 
is theirs. Although more than half of the States 
have authorized some special form of tax treatment 
for certain classes of land, less than 5 percent of the 
private commercial forest land is covered by these 
special provisions. Further efforts are needed to 
improve forest tax laws, and to improve property 
tax assessment and administration on all lands. 
The Forest Service has in past years made signifi- 
‘cant studies of forest taxation and has proposed 
needed improvements therein. It is important that 
the Forest Service continue to investigate problems 
of forest taxation and upon request to make avail- 
able advice and assistance to State and local gov- 
ernments as a means of aiding in the development 
of improved tax measures and tax administration. 
Also needed are certain investigations in the 
field of Federal taxation relating to forestry, such 
as the effects of an amendment to the Revenue Act 
of 1943 providing for the taxation as a capital gain 
of income from stumpage sold under certain condi- 
tions, and the bearing of State taxes on forest own- 
ership and management. 
8. Cooperative fire protection on private and 
State-owned forest lands should be extended and 
intensified. 
Organized fire protection, a major public respon- 
sibility, is basic to successful long-range forest man- 
agement. On private and State-owned forest lands 
it is administered under the well-established co- 
operative pattern of the Clarke-McNary Act, where- 
by the State Forester administers the activity with 
Federal financial aid up to 50 percent of the total 
806034°—49—2 
Forests and National Prosperity 
cost. The program is deficient in two important 
respects: 
(a) Protection had not been established (in 
1946) on 120 million acres.? It was in effect on 
319 million acres. During that calendar year ap- 
proximately 15 percent of the unprotected area 
burned as compared with less than 1 percent of 
the area under protection. Seventy percent of the 
unprotected area was in the South, one of our most 
important forest regions. 
(b) With the exception of a few States, and por- 
tions of others, the protection needs to be intensi- 
fied where it is already established. 
The present annual Federal authorization of 9 
million dollars is based on the estimate of 1834 
million dollars as the 1938 cost of adequate protec- 
tion, For 1948 the corresponding cost would be 
more than double. This increase is due to the 
decreased purchasing power of the dollar, the higher 
cost of personal service attributable to other fac- 
tors, an increase in the acreage in need of protec- 
tion, and higher standards of adequate protection. 
9. Cooperative protection against forest insects 
and diseases should be strengthened by providing 
for more prompt and adequate action to discover 
and suppress incipient epidemics and control those 
which “escape.” 
Chestnut, one of the most valuable hardwoods, 
was wiped out by blight. Blister rust, a foreign in- 
vader, threatens the valuable white and sugar pines. 
During the 20-year period ending in 1940, the west- 
ern pine beetle destroyed, in California, Oregon, 
and Washington, approximately 25 billion board 
feet of ponderosa pine, having a stumpage value 
of approximately $100,000,000. The 1943-47 out- 
break of the spruce bark beetle in Colorado killed 
more than 4 billion board feet of spruce, with a 
stumpage value of possibly $12,000,000. Many 
other illustrations could also be given which indi- 
cate that in the aggregate timber losses from forest 
pests exceed those from fire. 
The Forest Service carries out control measures 
within the national forests and against losses threat- 
ening them. Other Federal agencies carry out 
control work with respect to land under their juris- 
diction, largely on the basis of technical informa- 
tion assembled by the Bureau of Entomology and 
Plant Quarantine. Direct cooperative action with- 
out respect to ownership has been taken by the 
Bureau of Entomology and Plant Quarantine under 
2In 1947 this was reduced to 111 million acres. 
