TIMBER, RESOURCES OP THE NATIONAL FORESTS. 35 



Forest officers designated by the supervisor, and the whole transaction 

 need occupy only a short time. Application is made by the prospec- 

 tive purchaser to the officer in charge of that portion of the Forest 

 from which it is wished to secure timber. This officer selects the 

 area from which timber may be cut, marks the trees to be removed, 

 and permits cutting to begin as soon as he is assured that payment 

 for the timber has been forwarded to the designated United States 

 depository. Sales of timber between $50 and $100 in value are made 

 in the same simple manner, except that the supervisor only may 

 approve the purchase. 



From a business standpoint, large operations in National Forest 

 timber offer certain distinct advantages over those in private timber- 

 lands acquired by purchase. In cutting National Forest timber there 

 are no taxes to be borne, nor is there required a large initial invest- 

 ment, on which interest must be earned from the beginning. Instead, 

 the purchaser makes payments periodically in advance of cutting. On 

 a privately owned area the land, of course, remains as an asset after the 

 timber is cut, but its value would seldom if ever go far to counter- 

 balance the interest and taxes eliminated in National Forest sales. 

 Moreover, in such sales the fire risk is carried by the Government. 



On the other side of the ledger are certain items of expenditure 

 peculiar to National Forest operations. These are the piling of brush 

 after cutting, the cost of which varies from 15 cents to 40 cents per 

 1,000 board feet, and the additional cost of logging brought about 

 by leaving seed trees and protecting reproduction and young growth 

 against injury in logging on the lumbered area. The total of these 

 items does not usually add more than from 50 cents to 75 cents per 

 thousand to the cost of logging. In fixing stumpage rates these 

 additional operating expenses are determined as accurately as possi- 

 ble and the rate charged is lowered accordingly. In fact, care is 

 exercised to see that the stumpage rate bears such a relation to the 

 total cost of production as to insure a fair margin of profit on the 

 operation. 



To insure that a purchaser of National Forest timber whose contract 

 covers a number of years shall receive a fair proportion of any increase 

 in lumber values during the period of the sale, it is proposed to 

 readjust stumpage rates at five-year intervals throughout the life of 

 a sale contract, increasing the original stumpage rate each time by 

 75 per cent of the difference between the f. o. b. mill selling price for 

 each species when the sale was initiated and that on the date the 

 readjustment is made. This guarantees to the United States a fair 

 stumpage rate throughout the entire life of the transaction and to the 

 purchaser a fair profit. 



