The Birmingham age-herald., 1912-05-21
COST OF GROWING
 TIMBER COMPILE Be Used in Prosecution of
 Lumber Trust
NOW UNSATISFACTORY
Cost of Production Merely Cost of Harvesting Virgin Timber-Do- nestle Grown Lumber Forced
 Out of Market

Washington. May oo-(Special)-one of
 the interesting papers recently complied
 by the department of agriculture will be
 of considerable importance in the trial
 of the lumber barons by the department
 of justice. It is pamphlet on the cost
 of growing timber. The book was writ
 ten by several experts of the forestry
 division of the department of agriculture
 anc represents an investigation of six
 years over nearly all of the timber grow
 ing sections of the United States.
 l + will be used against the lumber ba- rons in suits recently filed by the de-
 partment of justice in New York, Den
 yer. Minneapolis and St. Louis.
 Four-fifths of the timber in the Uni- ted States, it has been ascertained, Is
 privately owned. Only one-fifth of it is
 now in state and national forests. Prac-
 tically all of the timber, so far used in
 the United States has come from natural,
 natured forests. Capital has found a
 profit in buying up virgin timber in ad- vance of the demand, and holding it un- ! tii It could be either manufactured or l sold to manufacturers at a heavy increase | in price over that paid at the time of purchase. The exhaustion of the supply o, virgin timber will closely restrict prof.
 it's to those which arise from growing and manufacturing timber.
 The so-called cost of production, now calculated by manufacturers Is merely
 harvesting cost not cost which in cltces the expense of growing the timber well that of lORpiOp and featuring it. The growing of timber Is analogous to the growing of wheat or | corn except that in the latter case the | crop is sown, grown, harvested and mar keted within year, while In the former | case the same series of operations may | require from 90 to 100 years. The ee | ments of cost are the same in both Capi- | tai will seek investment in raising neither wheat nor timber unless there is req scnable chance for profit.
 With sufficient knowledge of the cost of land and stocking growing and yield, an estimate can be made of the cost of growing timber. Such an occupation con- sists of four elements of cost. They are: First, that value of land: second, the stocking of it with young trees third, the protection of the growing timber; fourth, the taxes and the rate of interest.
 The profit or loss at the end of a given
 period will be determined by the rela-
 tions between the combined amounts of
 these investments at the proper rate Of
 interest, and the value of the resulting
 stand of timber at prices obtainable.
 Thus, the total amount of the invest
 nents at compound interest. divided by
 the total yield, will give the absolute cost of production per unit yield
 The land for timber growing is valued
 at $3 per acre. Assuming that the land
 must be fully planted with young trees. | n oba of taar ie oil
 results obtained by the state of New York and other extensive planters indicate that | this amount should be sufficient in plant | ing operations of considerable magnitude. | Of course. If cut over land Is restricted, naturally with young trees, 1t is worth more than the bare lands. but the in creased cost of the land should be ap- proximately equal to the amount that
 would have to be spent tor planting. | The cost of administration and protec- ton will vary with local conditions and the size of operation. In these calcula tons they are combined and conserva- lively estimated at cents per acre an- nually. Protection means chiefly the keeping out of fires and on large tracts the necessary labor force can be so man aged as to make the amount of this item
 comparatively small.
 Iumbermen maintain, and often justly SO that at present conditions are too hazardous to warrant the long time in- vestment required to produce timber. It is assumed here, however, that the forest
 owner has the benefit of more eff cient state and local measures for
 fire protection than now prevail. Until he
 has he is not likely to look favorably on timber growing on large scale as legi- innate commercial enterprise. The risk from fire wind and insects cannot be closely predicted any more than can the
 future price of lumber f l Taxes as now levied are extremely variable, but they average about 1 per | cen. of the actual value Of the property. | Consequently the taxes are assumed to be about 10 cents per acre up to the date when 1t is possible to make the first cutting. Thereafter they are placed at | 1 per cent of the actual stumpage value | of the timber plus the original land value
 s3 per acre with reassessmerts at the
 periods for which yields are given. With
 the exception of loblolly pine this Is
 every ten pears.
 | Rates of interest depend largely on the
 degree of confidence in the investment
 or the risk involved and also upon the 1 case with which the money invested can
 be recovered. Thus, government bonds | net about ? or per cent. well secured | bonds of established corporations or 5 | per cent real estate mortgages from 1 | to per cent industrial stocks from 3 | to per cent. Forest land is usually the poorest land in the region. Often it could