

Figure 35. — Destructive harvesting practice. This forest has been stripped of virtually all merchantable timber. (Tenn. Conservation Dept. photo.) 



Poor cutting practices in Tennessee, particularly in 

 the small ownership class, is sometimes associated 

 with a lack of suitable forest credit facilities — i. e., 

 long-term loans at low interest rates using land under 

 management for continuous production of timber 

 crops as collateral security. A sound system of forest 

 credit would enable landowners to avoid premature 

 liquidation and consequent reduction in the earning 

 capacity of the forest. A forest credit system might 

 also foster the consolidation of small holdings into 

 units of more economic size, and stimulate the flow of 

 investment capital into forest enterprises. 



Tennessee's Timber Economy 



Recent legislation permits national banks to make 

 real estate loans on forest tracts under good manage- 

 ment; loans may run for 10 years if provision is made 

 for amortization, or for 2 years without such provision. 

 Certain life insurance companies are now making 

 long-term loans on larger managed properties. For 

 most owners, however, adequate long-term forest 

 credit facilities are not available. 



Forest insurance may also encourage investment in 

 timber growing by making invested capital more se- 

 cure, and thus help promote better forest manage- 

 ment and fire protection. 



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