The War Years 



forest-management techniques, 

 including protection from fire and 

 pests, as well as the prestige afforded 

 by the certificate and prominently 

 displayed tree farm sign. Currently, 

 the tree farm program in the South is 

 cosponsored by the State forestry 

 associations, together with forest 

 industry and State tree farm 

 committees. 



At the onset of World War II, 

 association activities in the South, and 

 to a certain extent nationally, went 

 into a period of near dormancy with 

 certain important exceptions. In 

 response to a serious tax 

 development, aggravated by the war 

 and the increased demand for timber, 

 lumber interests together with pulp 

 and paper representatives established 

 the Forest Industries Committee on 

 Timber Valuation and Taxation 

 (FICTVT) in 1942. These owners felt 

 that taxes on timber owned and 

 harvested by themselves were both 

 discriminatory and confiscatory. 



In 1944, with encouragement and 

 support from the National Lumber 

 Manufacturers Association, Forest 

 Farmers Association, and other 

 concerned groups, Congress amended 

 the Internal Revenue Code to extend 

 capital gains treatment to profits 

 earned by timber owners and 

 operators. Prior to enactment of the 

 amendment, then Section 117(k), 

 owners selling standing timber 

 outright or in a lump sum sale could 

 treat their profit as capital gain. 

 However, owners harvesting their 

 timber themselves or selling it little 

 by little over a period of years not 

 only were taxed at higher rates but 

 also were subject to wartime excess 

 profit taxes in the case of a 

 corporation. The result: owners were 

 encouraged to liquidate their timber, 

 and efforts toward long-term 

 scientific forest management were 

 strongly discouraged. The 1944 

 amendment changed the law so that 

 the increased value of timber held for 

 6 months or more would be treated 



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