56 
after year at compound interest. The case is exactly the same as 
rent and taxes on a store. Xecessar}' current costs for doing business 
are always wiped off the books annually. Xo storekeeper could 
possibly justify continuing in business if each year he entered his 
protection and administration expenses and compounded interest 
on them. The yearly net operating profit is the sole criterion of 
the success of the business. 
In the thirtieth year of the operation, when the last of the virgin 
timber is cut, there still exists the same necessity as in the first year 
for certain current expenses to protect the operation as a whole, 
and this has been true in every year. Unless the operator had 
made profit year by year, or at least more frequently than he lost, 
he would not have continued in business. In other words, expenses 
on his cutover lands, which now make up 100 per cent of his hold- 
ings, have been met currently, and it is clear that these lands have 
no accumulated compound interest on them. The current expenses 
incurred have been necessary to continue in business and have been 
wiped out currently. 
Xow, with the virgin timber gone, the condition of the cut-over 
lands determines the future of the owner's business. Unless they 
have been kept productive the operator must forthwith go out of 
business. If they have been carefully handled, the operation can 
start all over again and go through a second cutting cycle. 
The financial loss to the owner of dismantling a going business 
is too little considered; no possible argument can demonstrate that 
the forest owner who must go out of business is as well off as one 
who can continue his operation on second growth. 
AVith existing forest conditions in the California pine region, and 
under the partial cutting plan to be discussed as necessar}^ to obtain 
full timber crops, a second cut on any site can be made within 30 
to 50 5^ears after logging the virgin forest, although it takes 75 to 
100 years to grow merchantable trees from seed. This is possible 
because of the presence of young growth and small thrifty trees of 
merchantable size, which are reserved at the time of the first cut 
and grow rapidly thereafter. 
The number of years before a second cut can be made will nat- 
uralh' vary. On the best quality lands, where trees grow rapidly 
and where considerable young growth can be left at the time of the 
first cut, 30 years will be ample. On poorer sites, and where fewer 
thrifty young trees are available to leave, the period between cuts 
may be as high as 50 years. 
Occasionally areas will be found where so few thrifty trees are 
available that clear cutting is the only recourse, leaving onh^ enough 
trees for seeding. AVhere this is necessary, the second cut will ob- 
viously be light ; but fortunately forests with a dearth of thrifty 
trees are usually mixed in with more extensive, well supplied areas. 
A few clear cuttings will not therefore prevent an early second cut 
on the operation as a whole. 
PREREQUISITE CONDITIONS 
Essentially, measures that insure full timber crops will be part and 
parcel of a going operation and must be carried out at the time of 
logging. The forest owner in the California pine region who com- 
mands a reserve of virgin stumpage sufficient to run his mill for 30 
