36 WORKING PLAN, FOREST LANDS IN ALABAMA, 
As a basis for the calculation of the returns from forests as an 
investment it has been assumed that cut-over land is worth $1 per | 
acre. The value of the timber obtainable from all trees 12 inches and — 
over in diameter breasthigh left standing has been calcwlated at $2.25 
per thousand board feet. The annual cost of taxes and protection 
from fire and trespass has been estimated at 5 cents per acre. All 
calculations have been made at 3 per cent compound interest. 
Table XIV shows that after Block I is cut over to a diameter limit 
of 15 inches, 570 board feet per acre will be left standing, and that at 
the end of 30 years the yield will be 2,634 feet. At the present stump- 
age rate of $2.25 per thousand feet these 2,634 feet will be worth 
$5.93, a net return on the original investment of 24 per cent. If the 
stumpage rate should rise to $5, this second crop will be worth $13.17, 
a net return of 54 per cent. 
Table XV shows that on the remainder of the tract a present cut- 
ting lower than 16 inches will not produce a second crop sufficiently 
large to be profitable, but that by cutting to 16 inches a second crop 
of 3,016 board feet can be had after 30 years; by cutting to 18 inches, 
2,890 feet will be produced in 20 years, and under the same diameter 
limit 4,022 feet will be had in 30 years. By cutting to 16 inches, 779 
board feet of merchantable timber will be left standing per acre. The 
second crop at the end of 30 years, valued at $2.25 per thousand feet, 
will be worth $6.79, a return on the original investment of 25 per cent 
compound interest, and valued at $5 per thousand feet will be worth 
$15.08, a return of 54 per cent. 
By cutting to an 18-inch diameter, 1,376 feet of merchantable tim- 
ber will be left standing as part of the investment. The second crop 
at the end of 20 years, valued at $2.25 per thousand feet, will be worth 
$6.50, a return on the investment of 2 per cent, and valued at $5 per 
thousand feet will be worth $14.45, a return of 6 per cent. At the 
end of 30 years the second crop at $2.25 per thousand feet will be 
worth $9.05, a return of 24 per cent, and at $5 per thousand feet will 
be worth $20.11, a return of 5 per cent compound interest. A sum- 
mary of these financial returns is given in Table XVI. 
If the stumpage value of longleaf pine should remain stationary at 
$2.25 per thousand board feet for the next 30 years, it would not pay the 
lumber company to hold its lands for a second crop. If, however, it 
is assumed that a stand of longleaf pine which will yield at least 2,500 
board feet per acre at the end of 20 years if cut to a limit of 12 inches 
in diameter breasthigh will be worth $5 per thousand feet on the 
stump, then it will be a good investment for the company to hold its 
lands for a second crop. The rise in stumpage values in the past, the 
rapid rate at which the existing supply of longleaf pine is being con- 
sumed, and the steadily increasing demand for it have led some of the 
