merchantable timber to permit the establishment of a 

 sustained forest business. Only in the Clearwater district 

 (Latah and Clearwater Counties) is this possible on a 

 district-wide basis, the liquidation having proceeded too 

 far elsewhere. 



The Owner With Cut-Over Forest Land 



In considering the question ot forest ownership the 

 individual will ask himself two questions: "How much 

 will my investment return?" and "How long must I wait 

 for it?" In other words, will the revenue produced at the 

 end of the rotation yield a profit over taxes and protection 

 costs when these are carried forward at even a low rate of 

 interest? Will the owner be able to retain possession ot the 

 stands for the long period which must elapse before the 

 yoimg stand will produce revenue? He may find a favor- 

 able answer to these questions in the possibility of one or 

 more partial cuttings designed to bring quicker and more 

 frequent returns as well as increase the total income. 



Another class of private purchaser is the one who buys 

 partially grown western white pine for immediate opera- 

 tion. In certain areas stands 60 to 70 years old are being 

 bought cheaply on tax title, because at this age a few of the 

 faster-growing trees have reached sawlog size. Generally 

 all salable timber is soon removed. This practice has 

 proved more or less profitable to the individual, but it will 

 ordinarily result in a long-run loss to the community, as 

 this timber is being liquidated at the beginning of the 

 period when the maximum saw-timber growth takes place. 



It should be remembered that the present opportunity 

 for investment in immature western white pine stands is 

 .relatively limited. Extensive areas of young stands do 

 not contain western white pine; from these there is no 

 present prospect of revenue. Secondly, there is a shortage 

 of the 61-to-80-year age class. As the forest-land seekers 

 at the beginning of the century were interested only in saw 

 timber, 64 percent of the present western white pine stand 

 61-80 years of age is owned by the State, County, and 

 Pederal Governments. That there is even 36 percent ot 

 the area of this age class in private lands is largely because 

 the Northern Pacific land grant was made in alternate 

 sections rather than with regarii to stand quality. 



The Owner with Sujficietil Saw 'Timber for Sn.fttiinet/ Pro- 

 duction 



The effect of taxes upon the forest owner has been 

 discussed. In the following examples the other costs arc 

 aiided to the taxes to complete the picture. 



In a very complete analysis ot the financial aspects of 

 growing timber in the western white pine type in northern 

 Klaho, Davis '" has calculated fire-control expeniiiturcs, 

 taxes, and other costs on a realistic basis for a !i\po- 

 thetical forest property. One item ot expense is his 



'" See tootnote \i. 



charge for the stand improvement essential to permanent 

 operation on a western white pine basis. The present 

 western white pine stands were principally established 

 following fires which removed the competition of other 

 species. To establish comparable stands after Ifjgging, 

 it is usually necessary to open up the relatively dense 

 canopy of the secondary species generally found in mix- 

 ture with the mature western white pine. 



Davis has examined two systems of management. 

 One, which he has called the 1-cut system, consists of 

 cutting each acre every 130 years. The other, termed the 

 4-cut plan, involves four cuttings on each acre during the 

 rotation — at 90, 110, 130, and 150 years. The 4-cut plan 

 is actually on a 130-year rotation also, as the cut at 150 

 years consists of a few scattered trees left to acquire greater 

 diameter and assure a seed source. At the time these 

 trees are cut the timber of the next rotation growing 

 underneath will be 20 years old. 



Financial calculations for each system were made under 

 •^wo assumptions: (1) That western white pine alone will 

 be salable. The values were then recalculated (2) on 

 the basis of the secondary species yielding an additional 

 but small stumpage return. For present purposes the 

 gross annual return in each case as calculated by Davis 

 has been reduced by 6 percent to allow tor fire losses, and 

 it has been assumed that the Federal Government will 

 bear the blister rust control cost, as will probably be the 

 case. The following tabulation shows the present value 

 of the property per loggable acre in each case, or the present 

 value of all future net incomes discounted at 3 percent: 



Utilizing western nhite pine only: 



One-cut plan 



I'cur-cut plan 

 Utilizing all .species: 



One-cut plan . 



t'our cut plan 



These figures indicate that it is possible to increase ma- 

 terially the value of the property by partial logging. The 

 total cut of western white pine from each acre over the 

 rotation is under the 4-cut phui .V> M board feet, but only 

 24 M feet under a 1-cut system. 



When dollars are the main consideration, however. 

 even the 4-cut plan cannot compete with a quick liquida- 

 tion. It the owner were tt> liquidate the pine alone over 

 a 10-year period and let the residue go back to the county, 

 present value ot the property would be some 70 percent 

 greater than under the 4-ciit plan cutting all sjxvies. The 

 present value ot ail species in this case would Inf ?41.(>6 per 

 loggable acre. Liquidation is not the best forestry 

 certainly not the best for the comnuuiity — bvit who can 

 say it is not the best financial arrangement for the present 

 owner, evcKiding, ot course, any social responsibility which 

 mav iie\olve on him or anv ilesire he may have to star 

 in the timber business. 



?8.5.-! 



ir.8.» 



1.^97 



:4.r. 



51 



