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protect the second crop, but will merely continue the course of least expense in the hope that a new forest will establish itself, with little to lose if it fails. Before he will receive the encouragement he deserves, he must prove his good faith. The surest way to do this is to begin actual work now, where he can without certainty of failure. Unfortunately, this is often impossible, but he can at least study and experiment so he can argue convincingly that mutual success will follow reasonable encouragement.

      CIRCUMSTANCES DETERMINE PROFIT

      Let us assume, then, that it is best for the lumberman to start the practice of forestry for the purpose of strengthening his position and getting the most favorable conditions possible for its general adoption and continuance. How much does he depend upon success in this? Obviously, early public favor will hasten and add to the security of forest growing as a business, but is it absolutely essential? Do existing conditions and inevitable future conditions, regardless of public intelligence, furnish premises upon which we can calculate certain profit in some degree?

      This depends upon the circumstances of the individual investor. Without an expectation of more favorable fire and tax influences, reforestation cannot be universally recommended as a business proposition. Many timber owners are not warranted in undertaking it. Not enough are warranted in doing so to insure the future timber supply upon which public welfare depends. Nevertheless, there are conditions under which it is a good investment. It is even probable that for those who are well situated, the very obstacles which deter others will be advantageous through reducing competition. This fact is of peculiar significance to the public, for if the latter fails to stimulate reforestation generally it will play directly into the hands of the few who are independent of encouragement.

      It is customary, in speculating upon the profits of a second timber crop, to attempt to reduce it to a financial calculation based upon estimated yield, estimated future values and estimated carrying charges. These considerations are important, but their importance is largely in proportion to the financial weakness of the prospective timber grower. We revert again to the practical certainty that unless reforestation is general, the exhaustion of virgin timber will be followed by a shortage, and that the man who has a second crop at that time can obtain a price which will reimburse his carrying charges be they high or low. The cost of overcoming present obstacles will be shifted to the consumer. The possibility of such an investment is determined largely by ability to maintain a protective system with economy and to bear the expense of this and of heavy taxation during the period of no return.

      In short, the weakness of the ordinary financial calculation upon existing conditions is that it attempts to estimate future stumpage values without knowledge of the true factor which will determine them. This factor is not the probable rise of existing stumpage while it continues to exist, but is the extent of the new-grown supply which will follow it provided existing conditions remain unchanged. It is inconsistent to figure the cost upon almost prohibitive present conditions without also recognizing that such conditions, if continued, will completely change the influences which now determine the market.

      WHO CAN AFFORD TO REFOREST NOW

      On the other hand, timber owners have by no means equal opportunity to take advantage of this fact. The productive capacity of their land varies, their taxes vary, the extent and location of their holdings affects the expense of protection against fire, and they have not the same facilities for financing a long term investment. It is the balance of these factors that determine their opportunity. Assuming rate of timber growth to be equal, present fire and tax conditions classify them in relative advantage about as follows:

      1. Owners of large holdings of virgin timber who can meet carrying charges by occasional sales at a profit over their purchase price, but will not sell much more than is necessary because all they can afford to hold is advancing in value. Such owners have more or less land deforested by fire or their own milling operations, and will incline to sell only stumpage without land. This land is not easily realized upon at present, and for the speculative reason stated, they will continue in business long enough to grow a new crop on it. The larger their holdings, the greater the certainty of this and the cheaper, relatively, the cost of protection. Moreover, concerns dealing with large and long term investments can consider a lower interest rate.

      2. Owners with less facility for making an actual profit through growing timber, but desiring to maintain a milling business. Even if the cost of growing approaches or equals the value of the crop, they will be able to count on continued manufacturing profit.

      (Both of the above classes face a possibility of so heavy a tax on their virgin timber in some instances that they will be obliged to cut it and go out of business. This is unlikely to occur generally, however, for tax reform is almost inevitable, and it would have a compensatory effect of enhancing the value of the second crop.)

      3. Owners whose holdings are not large enough to keep them in business until a second crop matures but are advantageously located. Second growth need not be mature to have a value. As the present supply diminishes, available coming supply will gain a high expectation value which can be realized upon. The profit it offers will be largely determined by its proximity to market and especially by its proximity to established mills which see their own supply running short and have failed, through inability or lack of foresight, to engage in reforestation themselves. It will also be affected by tax and fire charges, and the latter, especially, will be largely a matter of location.

      4. The owner with no peculiar advantages, who can only set the general certainty of a market for second growth against his ability to carry a costly and uncertain investment for an indeterminate time.

      Of course a first consideration in most cases is the comparative profits of other possible investments or, in other words, the exact interest demanded as satisfactory. Individuals are in by no means the same position in this respect by either inclination, opportunity or talent. Where one might be safer with his money in timber, another could make more by manufacturing. Generally speaking, however, conservative judgment leads to the conclusion that the present attitude of the public warrants the first of the above four classes of owners in undertaking inexpensive reforestation where the land has little sale value for other purposes and where the growth and fire factors are reasonably favorable. The second class can also undertake it to advantage on much the same basis, but having less capacity for meeting the carrying charge, requires still more favorable conditions. The third class must have the maximum advantage of every kind. It must calculate closely on the factors of cost and profit indicated by present conditions. In most cases the risk will be too great for prudence, and in nearly all financial ability will be lacking. The fourth class cannot even consider it until the public's attitude changes.

      BETTER DAY FOR ALL IS NEAR

      On the other hand, it is reasonable to suppose that publicly-imposed obstacles will decrease. It will become apparent that their persistence is bad economy. Fires will grow fewer and the state will aid in patrol. Reforestation in itself is a method of fire prevention when it places a green young growth on a fire-inviting tract of sun-dried litter and weeds. Taxation will be deferred. As the country develops interest rates will fall; making it easier to carry forest investments and harder to gain more through other investments. The state itself will engage more and more in forestry, with the result of making its principles understood and endorsed. Stumpage values will increase. Immature timber will have a sale value, lessening the term of investment. Gradually the business will get on a sound production basis, better for the consumer, better for the state supported by a forest income, and more profitable for the grower. Instead of capitalizing bad management and the sacrifice of the consumer, which in effect it does now by forcing the prospective grower to calculate on covering unnecessary cost in the price received, it will capitalize the earning power of forest land.

      While final adjustment on this basis is still in the future, it is by no means entirely dependent upon popular foresight. The process is going on constantly, whether we know it or not. The sun is still behind the horizon, but the day is sure. Many Western timber owners are still in too dim a light to make their footsteps certain; others have a high vantage ground where dawn already lights the path.

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