58 BULLETIN 149 7, U. S. DEPARTMENT OE AGRICULTURE 
PRIVATE PLANTING FOR SUSTAINED YIELD 
The large company with a long life is in a more favorable position. 
Water companies, for example, necessarily own considerable areas 
of land around their reservoirs or watersheds to insure the purity of 
the water supply. These lands, to afford the greatest protection, 
should be forested. Planting of open areas is desirable both for 
water protection and for the future profit from the timber crop ; and 
the long-term investment is not a deterrent. (PL 6, B.) Pulp and 
paper, mining and railroad companies use timber products in large 
quantities and many of them own large areas of land. They require 
a supply of timber as raw material as long as the industry lasts. For 
their own interests they are or should be in the forest-producing 
business on a sustained-yield basis. 
It is questionable whether the costs of planting by companies of 
this character should be carried forward at compound interest until 
the planted timber matures They are cutting timber each year from 
their own lands, and there is no reason why a part of the value of 
the timber that is cut should not be put back into the forest-producing 
part of the business, to cover the costs of planting an area, which in 
time will provide a substantial return. In this way the timber that 
is cut from one-sixtieth of the timber-producing area is replaced 
each year by the annual growth which has occurred on the whole 
sixty-sixtieths of the area, and any costs, such as planting, taxes, 
and protection should logically be paid out of the returns from the 
cutting. 
Once this stage in forest production is reached, and the business 
organized accordingly, compound interest is done away with, and the 
profit from growing the timber crop is large and attractive. The 
company that plants trees on a large scale for timber production 
and thus places its business on a permanent or sustained-yield basis 
is not going to stop growing timber after the 40 or 60 years necessary 
to mature the first crop from bare land. With the matured planta- 
tions yielding gross returns (at present values) of $100 to $250 an 
acre, timber growing becomes a highly profitable part of the business. 
Since this is so, no good reason remains why this permanently 
operating company should charge all the costs of preliminary estab- 
lishment at compound interest to the period of the first crop, for 
a part can and should be charged to subsequent periods. It requires 
only a few years after the timber crops begin to be marketed for 
the excess of net income over current expenses to wipe out the appar- 
ent losses involved in the considerable outlay necessary to build up 
the productive forest capital. The cost of planting on any specific 
area need be incurred only once ; when the plantation matures, refor- 
esting the area can be effected more economically by proper methods 
of cutting and natural seeding than by planting. Reduction or com- 
pensation of the compound interest charges in this way permits a 
much more favorable showing of the profitableness of planting and 
growing timber. 
If the costs and current expenses of planting and growing a timber 
crop are not charged at compound interest, the money returns are 
high. Under the conditions previously outlined, they will be from 
$72 to $78 an acre for jack pine, from $105 to $131 an acre for white 
