Chapter XI: Appendix: Tax Reform to Permit Reforestation

LOSS IN IDLE LAND

It is of the very highest importance to have that part of our constantly increasing area of cut and burned over forest land which is not more valuable for agriculture put to its only useful purpose--the growing of another forest crop. If this is done it will continue to be a source of tax revenue, to employ labor and support industry, to supply our forest needs, to bring revenue into the state, and to protect our streams. Otherwise it will become a desert, non-taxable, non-productive, a fire menace, and in every way worse than a dead loss to the state in which it exists and to the country at large. In the one way it will be of use to every citizen, whatever his occupation; in the other it will be a burden upon every citizen.

The realness and directness of this problem in the Pacific Northwest is seldom realized. Our deforested areas are great and growing, but of even more peculiar significance is our unparalleled opportunity for making them quickly profitable to the community. Forest growth is more rapid and certain than elsewhere. A heavy crop may be had again in from 40 to 60 years. It will hardly be of the quality of that now being cut, but considering the shortage then to prevail should bring fully as much wealth into the state from its manufacture, the majority to be circulated as payment for supplies and labor. Since, therefore, our denuded land should in 60 years or less bring in again as much as it has already, its idleness costs us each year a sixtieth or more of that immense sum, amounting to a great many millions of dollars annually. To this loss is added the loss of tax revenue which the new crop would yield, with countless indirect injuries.

THE OWNER'S COMPULSORY ATTITUDE

For this situation our system of taxation is chiefly responsible. The owner may or may not hold the land for a time under the present system, in the hope of selling it or of tax reform, but he will seldom if ever take any steps to insure reforesting, because to do so is too likely to be at an actual loss. Whether he has made money on the original crop has no bearing; nor has his being rich or poor, resident or alien. His cut-over land presents a distinct problem to him.

In the first place, its sale value represents an investment. He may sell and reinvest the money in any business which looks inviting--perhaps in standing timber. Presumably he can get ordinary business returns, 6 per cent or more, and continue to reinvest these returns. Therefore if he leaves this money in forest land for 50 years without return, for every dollar so tied up he must get $18.42 at the end of that period if he is to make 6 per cent on the investment. And this applies not only to the present value of the land, but also to any added expense he incurs in modifying his cutting methods, or in replanting, in order to insure reforestation. If both together amount to $5 an acre, he must net $92.10 at the end of his 50 years in order to make 6 per cent.

So far no complaint can be made. But if the land is to produce a second crop it cannot be left to take care of itself, as it might were it being held for speculative purposes only. It must be protected from fire and trespass. And since the interest and principal invested will amount to so much for so long a period and be totally lost in case of destruction, the protection must be adequate, practically amounting to insurance. The annual cost will vary greatly according to locality, class of timber, and the enforcement of fire laws, but will be from 1 cent at the minimum to 15 cents at the maximum in bad seasons. If all cost of protection and administration is placed at only 5 cents annually, for the sake of illustration, this represents another investment constantly increasing and compounding, which, at the end of 50 years at 6 per cent, will amount to $14.51 an acre. Consequently, adding that to his original investment which will have become $92.10, he must net $106.61 to make his 6 per cent.

HOW TAXES ENTER THE PROBLEM

Let us now consider the influence of taxation. We have assumed the land to be valuable for forest growing only, and in calling his investment $5 an acre included some cost of insuring reforestation. Place this at $2 and leave a land value of $3, to be fully taxed at 30 mills for both state and county purposes, which is perhaps a fair average. This represents the third form of his investment, or 9 cents an acre invested annually and left unavailable for 50 years, and will amount at the end of that time, at 6 per cent, to $26.13. He has now to clear $132.74 an acre, besides being always in danger of total or partial loss from fire, _and during all this time has to have the money, made in some other way, to meet all the annual payments._ But no injustice appears, for he has been taxed on an equal basis with other producers. If his acre yields 20,000 feet (the maximum to expect), worth $7 a thousand, he has made his 6 per cent, the community has gained a resource, and everyone is satisfied. His land has been taxed fairly and as he now has a crop to sell he can afford to pay a tax on it also. If it is taxed at 3 per cent, or $4.20 an acre, county and state will altogether have received from him the same tax revenue they collect from other forms of property and industry of like value and profit, and received also the other benefits of forest production and of his expenditure of wages for protection.

But this is just what cannot legally be done under our present tax system. _By failure to recognize that the growth produced is a crop, distinct from the land, grown at the owner's effort and expense, and returning no revenue until ripe, the law now compels the repeated annual taxation of the owner's effort to an extent very likely to amount to confiscation._ It has been seen that even under the fair system outlined in the preceding paragraph, forest growing is not more than ordinarily inviting and involves considerable risk and capital. Yet it assumed only a fair annual tax on the land. Under our present system, logically carried out, here is what would happen:

The first year the tax would be the same. The second year a fiftieth of the total fifty-year crop, which we have assumed worth about $140, or $2.80, would be added to the land; therefore not $3, but $5.80, will bear the 30-mill levy, and not 9 cents, but 17 cents, actual tax will be paid. The third year the tax will be 25 cents an acre; at the twenty-fifth year it will be over $2 an acre. We have seen that even a 9-cent tax amounted to an investment of over $26 an acre in order to produce the crop. The continual increase of this according to growth would make the investment run into many hundreds of dollars if the same interest is calculated, and in any case would make reforestation _financially impossible_.

In actual practice, the increased valuation would probably not be made by the assessor in the manner just described. Instead of determining the rate of growth scientifically and applying it annually, he now makes an ocular reappraisement at considerable intervals. In most cases there is no increased value, for the land does not reforest but is continually reburned. Where it accidentally does reforest, he makes a rough calculation of the value of the second growth, based upon no particular system and seldom alike in different counties. But the principle remains the same and the result differs only in degree. With the most lenient valuation at 10 or 15-year intervals, the addition of material which makes growing forests so different from our stationary mature forests of today is bound, under our present system, to have confiscatory effect. The land owner, so far from being encouraged to establish and protect a new forest, is actually penalized, for he must assume that its expectation value will be taxed annually, perhaps on an exorbitant basis, as soon as it becomes apparent.

If only the value _added each year_, $2.80 in our illustration, were taxed annually, there would be no injustice. The tax would then, in the case cited, be 9 cents the first year and 17 cents every year thereafter. But this cannot be calculated with sufficient accuracy upon our present knowledge of forest growth and under conditions varying with every trace or acre. Our example, with its several arbitrary factors of growth, tax rate, interest rate, and future stumpage price, was merely for the purpose of illustration. Furthermore, such a solution would still be illegal under our present laws.

REQUIREMENTS REFORM MUST MEET

These facts are recognized by all students of forestry and taxation. In all countries where forests are grown the general property tax has been abandoned. Disinterested authorities of every class, approaching the subject only from the public's point of view and holding no brief for the timberland owner, unite in saying emphatically that its application to growing forests will retard or prevent forestry in our country. These authorities include statesmen like Roosevelt and our most prominent governors and senators; expert authorities on taxation generally, like state, national, and international tax conferences and professors of economics in the leading universities; forestry authorities like Graves, Pinchot and State foresters; and all the many associations and congresses devoted to such subjects.

These authorities all agree that the forest crop should not be taxed till harvested, but differ somewhat as to the degree to which the public need of reforestation warrants deferring part or all of the land tax also. This Association, after careful study of the subject, including European methods, the experiments made by several of our States, and the plans proposed by many others, believes the following objects should be sought:

1. Greater permanent revenue to state and country than is possible under the present system of destroying the taxable source.

2. Sustention of present revenue to the highest degree compatible with permanence.

3. Assurance that the owner will do his fair part to make the land productive.

4. Assurance to the owner in return that future action by the community will not confiscate all profit resulting from his effort.

5. Division of risk, so both owner and community will seek highest production and safety from fire.

6. Demonstrable justice to all concerned, rather than subsidy which, while doubtless warrantable to secure the public good, affords less precise basis of legislation at the present time.

7. Simplicity in adoption and operation.

A SUGGESTED SOLUTION

These requirements can be met by legislation, following constitutional amendment where necessary, providing that where the owner of cut or burned-over land will contract with the State to insure reforestation and protection for a specified term of years, the State shall notify the county assessor that the land is separated for taxation purposes from any forest growth thereon. The land may continue to pay a fair dependable tax, but the crop shall not be taxed until harvested. To the end that cutting of standing timber shall be conducted so as to place the land in the best condition for reforesting, uncut forest land should be subject to examination and similar contract, and the separate classification for taxation should take effect within a year after the timber is removed in compliance with the contract.

This would mean that when the owner of deforested land chiefly valuable to the community for forest production agrees to make it produce, he shall be taxed not on his effort but upon the results of his effort, and then exactly as other producers are taxed upon their results. He may pay tax upon his land, as other land owners do, upon its actual value, but without this value being enhanced for taxation purposes by reason of any crop thereon.

COMPARISON WITH PRESENT SYSTEM IN RESULTS

The community would get no less tax revenue, but presumably more, than it does under the present system. In either case the owner will really pay annually only upon the land value, not upon the growth; the only difference being that under the proposed system he would not be asked to, while under the present system _either there will be no growth to tax, or, if there is, he cannot afford to pay and the land will revert_. It must be borne in mind that while cut-over land is actually being held under the present system, it has seldom grown anything yet. No expense has been incurred to establish a crop, accidental growth is almost always destroyed by fire because it does not pay to protect it, and if it is not so destroyed it has not yet been accorded the expectation value which the assessor will be obliged to recognize in the early future if he really observes the present law. The inevitable tendency of the present system is continuance to pay on the land with speculative value for purposes other than forestry but _abandonment of land valuable only for forestry, with destruction of the forest growth in either case_, by purpose or negligence, because it means added cost of holding with no possibility of profit. Since the owner cannot be compelled to grow timber to be taxed at his net loss, no timber tax at all will be received by the community and its annual land tax will be confined to land worth holding without timber for purposes other than timber growing. Under the proposed system, the latter class would pay the same annual tax, the annual tax revenue from strictly forest land would be greater, and in addition to both would be the future yield tax upon the crop.

AN OBJECTION MET

A possible superficial criticism may be that, leaving the land out of consideration, the proposed yield tax at a personal property valuation of the crop means that but one year's tax is to be paid upon the timber. The fallacy of this, however, will be seen when it is remembered that it is a crop, having been produced from nothing by the owner, since his acquisition of the land and while he was paying taxes upon his land upon its value for productive purposes throughout the entire period just as any other crop grower loes. _It is not unearned speculative increment._ To tax it annually is exactly equivalent to taxing an agricultural crop 50 times during its growing period. The proposed plan does tax the annual production fully, although not until the crop is produced, for taxing its full value when grown is the same as taxing each year the increment added since the preceding year. If it is worth $150 an acre, after 50 years from seed, a 3 per cent yield tax would be $4.50. Each year since the first must have produced a fiftieth of the ultimate value, or $3, and had this been taxed at 3 per cent, or 9 cents, the same aggregate revenue of $4.50 would have resulted. To also tax annually the value of proceeding years' production, like taxing a wheat crop twice a week, is exactly the confiscatory prohibition of forest growing which we should seek to avoid.

When the essential difference of the two systems Is grasped--that the _crop is distinct from the land and the latter is still fully taxed_--it will be seen that but one tax upon the crop, at the rate other property pays, is all that is just and all that can possibly be paid in a competitive commercial business. The case is not analogous with our present system of taxing mature timber, in which land and timber together are assumed to constitute inseparable realty, _stationary in production_ and increasing only speculatively in value, therefore the comparison with one year's taxation under our present system has no weight.

FROM THE OWNER'S STANDPOINT

Nor does the proposed system by any means either subsidize the forest grower or assure him a profit. It merely puts on a basis similar to that of other enterprises a business more greatly handicapped by long-deferred returns, risk of loss, uncertainty of future prices, and continued current expense without current revenue. Only escape from fire and high future stumpage prices will permit profit at best. Otherwise, since the tax is definite and not upon income, the forest grower will pay the community for the honor of providing it a resource at his own expense.

It is believed, however, that a more fortunate outcome is sufficiently promised in this region of rapid growth if we remove the single fatal handicap of uncertain confiscatory taxation.

VIEWS OF EXPERT AUTHORITIES

THEODORE ROOSEVELT: Second only in importance to good fire laws well enforced is the enactment of tax laws which will permit the perpetuation of existing forests by use.

GIFFORD PINCHOT: Land bearing forests should be taxed annually on the land value alone, and the timber crop should be taxed when cut, so private forestry may be encouraged.

NORTH AMERICAN CONSERVATION CONFERENCE, Washington, D. C.: Believing that excessive taxation on standing timber privately owned is a potent cause of forest destruction by increasing the cost of maintaining growing forests, we agree in the wisdom and justice of separating the taxation of timber land from the taxation of timber growing upon it, and adjusting both in such manner as to encourage forest conservation and forest growing.

The private owners of land unsuited to agriculture, once forested and now impoverished or denuded, should be encouraged by practical instruction, adjustment of taxation, and in other proper ways, to undertake the reforesting thereof.

GIFFORD PINCHOT,
ROBERT BACON,
JAMES R. GARFIELD,
Commissioners representing the United States.
SYDNEY FISHER,
CLIFFORD SIFTON,
HENRI S. BOLAND,
Commissioners representing the Dominion of Canada.
ROMULU ESCOBAR,
MIGUEL A. DE QUEVEDO,
CARLOS SELLERIER,
Commissioners representing the Republic of Mexico.
E. H. OUTERBRIDGE,
Commissioner representing the Colony of Newfoundland.

FRED. R. FAIRCHILD, Professor of Economics, Yale University, member International Tax Conference: Probably nothing more effectually discourages investment than uncertainty as to future costs. And whatever may be said of the present system of taxation, there can be no question of its arbitrariness and uncertainty. If to all the other risks of forestry we add uncertainty as to what the taxes are going to be, we cannot blame investors for some hesitation in embarking on an enterprise which may have to pay taxes fifty years before the returns come in. And more than this; the investor cannot safely base his calculations on the continuance of the present lenient administration of the property tax. As has been shown, the tendency today is toward a stricter enforcement of the law and a heavier burden of taxation.

State constitutions stand today in the way of many plans for reform in State and local taxation. The movement toward their amendment is growing as part of the general programme of tax reform.

The real problem of forest taxation is in connection with the future of our timber lands rather than with their past. The preservation of the forests is a matter of the utmost importance. So far our forests have been exploited with little or no regard for the future. But the present methods cannot last much longer. Forestry must come some time, and its early coming is a thing greatly to be desired. And whenever we are ready to seriously undertake it we will find our present methods of taxation a severe handicap. Strictly enforced, according to the letter of the law, the annual tax on the full value of the land and standing timber is almost sure to result in excessive taxation, and the timber owner cannot count on the continuance of the present lenient enforcement of the law. Even if the tax might not be excessive, its uncertainty would be a serious obstacle to investment. We can hardly hope to see the general practice of forestry as long as the present methods of taxation continue.

To be equitable, taxation of timber lands like taxation of anything else should be based on income or earning power.

With regard to its effect on revenue, there is little to be feared from the tax on yield. Eventually, revenue will be increased by a method of taxation which does not prevent the development of forestry. Forests paying a moderate tax are better than waste lands abandoned and paying no tax at all.

The tax on yield has many decided advantages. It avoids the evils of the general property tax. It is equitable and certain. It is in harmony with the peculiarities of the business of forestry, and will be a distinct encouragement to the practice of forestry. Its adoption by the States would remove one obstacle to the perpetuation of the nation's forest resources.

NATIONAL CONSERVATION COMMISSION, appointed by the President of the United States: It is far better that forest land should pay a moderate tax permanently than that it should pay an excessive revenue temporarily and then cease to pay at all.

We tax our forests under the general property tax, a method of taxation abandoned long ago by every other great nation. In some regions of great importance for timber supply, and in individual cases in all regions, the taxation of forest lands has been excessive and has led to waste by forcing the destructive logging of mature forests, as well as through the abandonment of cut-over lands for taxes. That this has not been even more general is due to under-assessment, to lax administration of the law, but to no virtue in the law itself. Already taxes upon forest lands are being increased by the strict enforcement of the tax laws. Even where this has not yet been done, the fear that it will be done is a bar to the practice of forestry.

We should so adjust taxation that cut-over lands can be held for a second crop. We should recognize that it costs to grow timber as well as to log and saw it.

From now on the relation of taxation to the permanent usefulness of the forest will be vital. Present tax laws prevent reforestation on cut-over lands and the perpetuation of existing forests by use.

UNITED STATES FOREST SERVICE: It is evident that the old method of taxing forest property, as well as other property, at its supposedly full value will, as the value of timber increases and is recognized, put a premium on premature and reckless cutting, and will hinder any effort to reforest cut-over lands. No business man will engage in an undertaking where the returns are so long deferred and the risks are uninsurable unless he can estimate the probable expenses and a reasonably large profit. That the forests themselves, irrespective of their ability to stand taxation, are of great value to the communities in which they are located, for water protection, lumber supply, and scenery in resort regions is undoubted.

The fundamental difficulty is that the tax should be in proportion to yield or income and not in proportion to the market value of the land and standing timber. Economists are substantially agreed that this principle is applicable to the taxation of all kinds of property with certain exceptions. Where there is a reasonably certain annual yield or income the market value is theoretically dependent upon it. A woodlot or forest, however, usually in this country has no annual yield. It is unjust to require the owner to carry the full annual burden of taxes, risk and protection in every year for the chance of a yield once in fifty years, and it is impossible for the owner to do it, for the taxes with compound interest would confiscate his entire capital.

INTERNATIONAL TAX CONFERENCE, held at Toronto: _Resolved_, That it is within the legitimate province of tax laws to encourage the growth of forests in order to protect watersheds and insure a future supply of timber; and legislation, or constitution amendment where necessary, is recommended for these purposes.

AMERICAN FOREST CONGRESS, Washington, D. C.: _Resolved_, That we earnestly commend to all state authorities... reducing the burden of taxation on lands held for forest reproduction in order that persons and corporations may be induced to put in practice the principles of forest conservation.

PENNSYLVANIA DEPARTMENT OF FORESTRY: Tax assessors have differing ideas of value and their assessments vary widely. The only remedy for the forest owner is to appeal from the assessment to the county commissioners, and, if here unsuccessful, to the county court, a matter involving both time and expense and frequently more costly than the differences in taxes to be gained; _but at the same time_ the fact is well recognized that forested land is both unequally and unfairly taxed.

H. S. GRAVES, Chief Forester for the United States: The forest areas now owned chiefly by lumber companies will cease to be devastated as soon as fires are stopped. They will not, however, be handled to any large extent with a view of future production until the taxes are placed on a fair basis.

FILIBERT ROTH, Professor of Forestry, University of Michigan, State Fire Warden of Michigan (speaking of frequent local attitude toward non-resident owner):

Though, in truth, these resident people often make their living from the tax money of the non-resident, and though the latter contributes toward every rod of road and every schoolhouse built, and other improvement, yet he is treated as if he were a wrongdoer, is taxed unmercifully, and, in addition, a trespass on his land or forest is excused and it is almost impossible in many places to get conviction.

If the State and local people had treated the owners of timber honestly and had spent a reasonable part of the taxes in giving the protection which the owner had a right to expect under the Constitution, there would still be more than half of our pinery lands covered by forest.

Forestry is no "sugar trust baby," as so many are trying to make it out. Forests can pay taxes as well as any other property. Forestry is like any other honest business, it cannot stand confiscation.

Suppose you have a twenty-acre lot of sugar beets and the assessor would hang around until the beets are ripe and then figure: "The land is good; I assess it at $75 per acre, and the crop is worth $75 more, so that this property will stand at $150." What would you say? But the assessor who assesses the timber as part of the real estate and assesses the same crop of timber year after year does precisely this thing. He assesses land and crop for the owner of a woodlot and forest, while for all other farmers he assesses only the land.

Let the State pass a few simple laws; provide for the protection of forest property as we provide for other property; prevent confiscation under the guise of taxation; stop forcing its poor tax lands on the market, and go ahead with a good example on its own lands, and instead of holding them in a waste land condition protect them and grow timber.

A. T. HADLEY, President Yale University: We have it in our power to make intelligent forestry by individuals more profitable. The margin between business that succeeds and business that fails is a narrow one, and by just covering that margin by _differences in tax laws_, by differences in protective laws, by laws for the prevention of fires, we can make profitable an industry which the public needs, but which today is unprofitable.

JAMES O. DAVIDSON, Governor of Wisconsin: It is to be hoped that laws will be passed encouraging owners to cut timber conservatively under forestry regulations, rather than oblige them to cut as quickly as possible to escape the injustice of taxation.

PROFESSOR F. G. MILLER, University of Washington: Next to fire the most serious handicap to the progress of forestry is our unjust method of forest taxation. Laying as we do a yearly tax on both the growing crop and the land, the burden of taxation makes the holding of land for a second crop prohibitive as far as the private owner is concerned.

The farmer pays a yearly tax on his land, and a tax on his crop each time he harvests one. This is usually annually. However, if through drought, insect invasion or other misfortune he loses his crop, he is not called upon to pay a tax upon it.

SENATOR REED SMOOT, of Utah, Chairman Section of Forests, National Conservation Commission: One of the urgent tasks before the States is the immediate passage of tax laws which will enable the private owner to protect and keep productive under forest those lands suitable only for forest growth. In our discussion in committee meeting there was a question raised by a member present as to this recommendation, claiming that it would encourage great monopolies in securing larger holdings of timber, if an annual tax was not required on the timber itself. I have studied this question in foreign lands, particularly in Germany and Switzerland, and I find that the result has been exactly the opposite. It is a short-sighted policy which invites, through excessive taxation, the destruction of the only crop which steep mountain lands will produce profitably. Taxes on forest land should be levied on the crop when cut, not on the basis of a general property tax--that unsound method of taxation long abandoned by every other great nation.

GOVERNOR NEWTON C. BLANCHARD, of Louisiana: Under the present tax laws of many of the States large assessments are put on timber lands, and this is forcing timber holders--the owners of the sawmills--to cut off that timber too rapidly. At least it is having much effect that way. Give them the encouragement to hold back and not force their product upon the markets, and then exempt, by a system of wise tax laws, cut-over lands devoted to purposes of reforestation.

MARYLAND STATE BOARD OF FORESTRY: The present method is to assess woodlands under the general property tax, making the assessment high where the timber is valuable and placing it low where the timber has been cut off. There is in the operation of this system a tendency to cut off the timber before it reaches maturity to avoid the high rate of taxation. A premium is placed on forest destruction and a penalty on forest conservation.

The growth of timber is slow and under present stumpage prices and rates of taxation there are comparatively few cases where the sale value of the crop equals the cost of growing it, if a fair rental for the land is considered. It is true that most of the forests are on lands that could not be used for anything else, but it is not fair to expect the landowner to produce timber which is a public necessity, the use of which is only less universal than food crops, at a financial sacrifice. Increasing prices and better forest management are relieving the situation to some extent, but the most effective, as well as the most equitable way, is through a change or modification of present tax laws.

PROFESSOR EDWIN R. A. SELIGMAN, Columbia University: The general property tax as actually administered is beyond all doubt one of the worst taxes known in the civilized world. Because of its attempt to tax intangible as well as tangible things, it sins against the cardinal rules of uniformity, of equality, and of universality of taxation.

PROFESSOR ALFRED AKERMAN, Georgia University: One reason why it (the general property tax) is so outrageous in practice is that it is wrong in theory. The mere possession of property may or may not be an index to the ability of the owner to pay tax. It all depends on whether the property brings income.

ALLEN HOLLIS, Secretary Society for Protection of New Hampshire Forests: Taxation today, in my opinion, is the greatest menace to forest preservation.

One principle is absolutely sound--we all know it, and what we have to do is to make everybody else know it--and that is, that the annual taxation on a crop which is constantly increasing in value each year means confiscation of that property.

It is submitted here that no single factor bears so definitely upon the future of our forests as this constitutional requirement of equality in taxation. As a business proposition, no one can afford to hold woodlands and pay annually 2 per cent upon their actual value, increased each year by growth and advancing prices, during the fifty to one hundred years necessary for maturing the crop.

CHARLES LATHROP PACK, Director American Forestry Association: While the nation and the State are working to devise ways and means of conserving our forest resources, we are at the same time, in a real sense, taxing our timber to death.

Our present tax laws prevent reforestation on cut-over lands and the perpetuation of existing forests by proper use and economic cutting.

STATE OF MICHIGAN FORESTRY COMMISSION (extracts from report to governor): The system of taxation should be modified so as to stimulate timber production instead of repressing it.

There is no logical, moral or political reason why a crop of growing trees should be included in the assessment, in addition to the actual value of the land, that does not apply with equal force and reason to farm lands which are continuously cropped with grains, root crops or hay. The uncertainty of realizing upon a tree crop is very much like the uncertainty of a given farm's producing its crop in full. The only difference is that the forest crop is subjected to the vicissitudes and chances of a long series of years, while the farm crops are subject only to the vicissitudes of about one year. Many of the crops are only subject to the accidents of five or six months.

In the present stage of forestry in this country, what is most imperatively required is such a treatment of the subject of taxation of forested lands as will induce private owners to retain their forests until ripe to the harvest and to reforest denuded lands. This would apply to those having lands suitable for such purpose, or others who might purchase lands suitable therefor, who, under the present diverse, and oftentimes inequitable, practice of assessments, cannot be induced to make investments of that character.

REPORT OF SOCIETY FOR PROTECTION OF NEW HAMPSHIRE FORESTS, EX-GOVERNOR FRANK W. ROLLINS, President: The law of New Hampshire requires that all property shall be taxed equally, according to its value, a law constantly and necessarily violated by assessors of forest property throughout the State. Its strict application even for a short period would go far to rid the State of its standing timber. The reason for this is that timber is a growing crop--the only crop taxed more than once, and if taxed annually at its full value the cost to the owner of holding the property would be so excessive as to require its hasty disposal. Assessors everywhere feel instinctively the inherent injustice of taxing a growing crop at a high annual rate, and violate the law and their oaths of office with impunity. The result is there are as many systems of forest taxation in the State as there are assessors, and glaring inequalities exist, not only between neighboring towns, but also in some instances between different parts of the same town.

The unequally high rate placed upon the timber of non-residents is wholly iniquitous.

NEW HAMPSHIRE STATE GRANGE, Committee on Agriculture: Many of the towns in our State invite the misuse of forests by overtaxation. This should be guarded against. By reasonable thrift we can produce a constant wood and timber supply beyond our own need, and with it conserve the usefulness of our streams for water supply, navigation and power, and at the same time increase the value of our farms.

E. M. GRIFFITH, State Forester of Wisconsin: The present method of taxing timberlands is hostile to the forestry interests of the State, as a single timber crop is taxed heavily and repeatedly, and the owners are forced by our present laws to cut their mature timber in order to escape inequitable taxation, to sacrifice their young growth, and to disregard conservative methods of forest management.

Taxes are unfortunately a very valid reason in many sections of the State for not practicing forestry. Many town assessors seem to feel that they must tax the timberland owner, especially the non-resident owner, as heavily as possible, and naturally in self-defense the owner is forced to cut his timber and so reduce the taxes to a reasonable amount. Then, when it is too late, the towns find that they have "killed the goose that laid the golden egg." However, the loss of the taxes on the timber is but a drop in the bucket compared to the irreparable damage to many communities from losing the industries which depended upon the forests for their raw material. To appreciate this one only needs to visit towns in which the sawmills have shut down on account of lack of timber.

Of late years the end of the timber has been largely hastened on account of the excessive taxes placed upon it. The whole system of forest taxation in this country is wrong, for it puts a premium on forest destruction.

RALPH C. HAWLEY, Instructor in Forestry, Yale University: A system of taxation which discriminates against timber, one of the chief natural resources of the commonwealth, is to be condemned.

KENTUCKY STATE DEPARTMENT OF AGRICULTURE REPORT: When a rise in the valuation of other than forest property becomes necessary because of the greater development of the resources of the region, the valuation of forest property should be increased with great caution in order that the forest lands may be held to advantage for the production of future timber crops. A timber crop is marketed only after the young growing timber has been held for a long term of years, during which time the forest has been yielding only a very slight revenue, if any, to the owner. If the valuation of the forest or its rates of taxation goes beyond a comparatively low limit, the holding of forest land for a second crop of timber is impracticable or nearly prohibitive. This condition has prevailed in many other States where now the problem of taxation is a difficult one to solve.

ALFRED GASKILL, State Forester for New Jersey: The present practices favor and encourage the untimely or wasteful use of standing forests, discourage the propagation of others, and tend to hasten the time when the country shall be forced to face a wood famine.

It would be impossible to apply the European system here with anything like the exactness that attaches to it in the old countries, because we have not the means of knowing the true worth of forest soil or of forest crops, but the principle is applicable anywhere. Even in the hands of non-expert assessors it gives a fairer basis of valuation than our present method, and in the long run will insure larger returns.

J. E. FROST, Tax Commissioner of Washington: The State's system of taxation is obsolete, and only 13 civilized communities in the world have such an out-of-date system. The State is confined by the constitution to property tax, well known as a primitive system, utterly incapable of coping with modern business. It can be remedied only by recognizing the different classes of taxable property.

DR. FRANCIS L. MCVEY, University President and Tax Expert: Under the old plan of valuing annually the property it was difficult to secure an appraisement that was satisfactory to anybody and, what was more, as the years went by the local governments found their assessed values decreasing and the burden of government materially increasing with the decline in amount of standing timber. The annual taxation of the land upon which the timber stands meets this difficulty, while the taxation of the product at the time of harvesting provides a plan that is fair both to the local government and to the owner of timber.

COLORADO CONSERVATION COMMISSION: _Resolved_, That it is the sense of the Colorado Conservation Commission that the governor and legislators should submit to the people at as early a date as possible an amendment to the constitution, exempting from taxation lands devoted solely to the growth and culture of new timber, and if such amendment is adopted, the same to be followed by suitable legislation.

OREGON STATE CONSERVATION COMMISSION: Constitutional amendment and legislation should be invoked to permit a low fixed tax on cut-over land during the period of no return to the owner, the State to be compensated by a tax on the crop when cut. Obviously this inducement should be offered only to those holders of cut-over land who will reciprocate by furthering the object sought. The result of such a system would be not only perpetuation of the forest and its attendant industries and payroll, but also a far greater tax return than the present one of encouraging potential forest land to become worthless and non-taxable.

LEGISLATURE OF MINNESOTA: "Sec. 17 a. Laws may be enacted exempting lands from taxation for the purpose of encouraging and promoting the planting, cultivation and protection of useful forest trees thereon." This is the text of an act amending the Minnesota constitution passed by the legislature.

WASHINGTON CONSERVATION ASSOCIATION, Walla, Walla: _Whereas_, The question of holding cut-over forest land for a second crop is of paramount importance to the State, and

_Whereas_, This is made impossible on the part of private owners by our present method of forest taxation, whereby the owner is obliged to pay an annual tax on the land as well as an annually repeated tax on the same growing crop, therefore be it

_Resolved_, That this convention favors such remedial legislation as will encourage reforestation of privately owned lands, and be it further

_Resolved_, That it is the sense of this convention that as applied to reforestation such remedial legislation can be secured by a plan which will levy an annual tax on the land and an income tax on the forest crop only when the crop is harvested.

FIRST NATIONAL CONSERVATION CONGRESS, Seattle: Resolved, That we urge the adoption of a system of taxation under which woodlands will pay a moderate annual land tax and the timber will be taxed only when cut.

THE WESTERN FORESTRY AND CONSERVATION ASSOCIATION

The Western Forestry and Conservation Association has no individual membership, but consists of and represents all organized agencies for forest protection in the States of Montana, Idaho, Washington, Oregon and California. Following is Article IV of its constitution:

"Any association formed for the purpose of organized effort in the protection of forests from fire and for the reforestation and conservation of the forest resources of the States represented shall be eligible for membership. Any organization admitted to membership shall be entitled to two votes in the meetings of this Association. The chief forest officer of each of the five States embraced, and of each district of the United States Forest Service embraced, shall be honorary members."

The allied organizations are at present fifteen in number: The Oregon Forest Fire, Oregon Conservation, North Willamette Forest Fire, Coos County Fire Patrol, Northwest Oregon Forest Fire, Klamath Lake Counties Forest Fire, Polk-Yamhill Forest Fire, Lincoln-Benton Forest Fire, North Idaho Forestry, Washington Forest Fire, Washington Conservation, Inland Forest Fire, Potlatch Timber Protective, Clearwater Timber Protective, Pend d'Oreille Timber Protective, Coeur d'Alene Timber Protective and Northern Montana Forestry Association.

The purpose of the Western Forestry & Conservation Association is to promote forest fire prevention, conservative forest management, reforesting of cut-over lands not more valuable for agriculture, improvement in taxation systems, preservation of stream flow, and all other things comprehended by forest conservation.

Its meetings enable representatives of the allied associations and of State and government to exchange ideas and devise ways and means for carrying on these movements in harmony along practical and effective lines. It also affords means of collecting and distributing information from these several sources.

It believes in the use of every legitimate means of publicity and education to interest lumbermen, legislators and public, not only in paving the way for future advance, but also in such actual, workable, conservation measures as can be put into practice immediately.

To this end, believing action speaks louder than words, it practices what it preaches. While fully recognizing the great value and necessity of associations devoted entirely to propaganda, it sees also a need of reducing theory to a sound business basis. Either as associations or through their members the forest protective associations it represents spent about $700,000 in 1910 for patrol and fire fighting to protect the forests of the West. They safeguarded millions of acres of timber, put out many thousand fires, and saved forest resources worth billions of dollars to the community. As a result of their effort the losses in Idaho, Washington and Oregon were kept down to about a quarter of 1 per cent of the privately-owned timber in these States, and this notwithstanding that it was one of the worst fire years in American history.

While they unite in the Western Forestry and Conservation Association, and levy a special assessment to support its work, the local organizations are wholly independent in their actual forest fire work. Their systems vary slightly, but the majority follow the general plan outlined on pages 100-103 of this booklet.

One of the primary objects and ambitions of the Association is to extend this effort until all the timber owners in the five States do their part and every acre of private forest land is brought under a highly trained and organized service. If the States themselves lend aid and backing this can be made the most efficient fire service in existence, as the most magnificent body of standing timber in the world deserves.

The Association also employs a trained forester to assist its members who control timber to install and maintain improved methods of protection, cutting and reforestation. In this way it not only helps those who will to really accomplish the end in view, but by publishing such material as is contained in this booklet makes the experiments serve as object lessons to others.

Perhaps the most unique function of the Association is to furnish the only common meeting ground and clearing house for the many public and private agencies for forest protection. At its meetings Federal and State officials, representatives of public conservation associations and timber owners join on equal footing, without controversy over rights or authority, in discussing practical details of how to accomplish the best results together under conditions as they exist. Every man present is there because he wants to do his part, with his own hands or money, to preserve the forests of the West. He knows what he is talking about and the others are glad to hear him. The result is a mutual understanding and coöperation along practical lines which is of immense benefit to the public whose welfare depends largely upon these agencies that really control its forest resources.