problem, namely what the financial issue of the business is in the 90th year, if a return of 4 per cent. is to be made, a compound interest calculation is required, debiting all expenditures with compound interest, as well as crediting all incomes similarly.

We will find then that 90 years hence:

The purchase price of $2,250,000 has grown to $76,770,000 The annual planting cost of $80,000 to $64,598,000 The annual administration cost of $300,000 to $248,400,000

The annual incomes from the wooded portion to $53,682,000 The periodical incomes from thinnings to $119,500,000 'The 15 annual final harvests of $11,250,000 to $225,000,000 $408,182,000

In other words, in 90 years every penny of expenditure with 4 per cent. interest will have been paid off and a property remains which yields an annual income of $12,000,000.

If the stumpage price had only advanced to $20 per M, so that the final annual cut were | reduced to $7,500,000, the redemption of all expenditures would only be deferred 8 years, and the property would then be worth around $200,000,000, figured on its yield.

I do not invite you to invest upon the basis of this calculation. It is purely academic, leaving out mishaps and losses and other practical considerations which require further detail discussion. But the figuring serves the purpose of showing the relationships of different parts of expenditures and incomes, and especially in accentuating that persistent systematic procedure and expenditures eventually make returns tenfold.

It is especially interesting to note that the plant ing cost is the smallest item and may be covered from the assumed income from the wooded portion or almost twice from the thinnings alone.

If we were to finance the enterprise by bond issues as they become necessary from time to time, we will have to provide for the annual expenditures of administration and planting, as well as the interest on these and the interest on interest, diminished, however, by annual incomes as they occur. The original cost, having already been met by appropriation, need not be considered.

We start in the first year with an issue of $332,700. By the 30th year, when the first larger income from thinnings begins to make itself felt, the issue will have accumulated to $16,480,000.

For the next 10 years an annual income of $184,375 diminishes the needed issue for expense account to $158,375, but the interest on the bond issue, namely $653, 100, must be added so that by the 40th year the whole bond issue will have grown to around $26,000,000.

By the 50th year, with an annual income for the decade of $284,000, the annual expense requirement is reduced to $48,coo, but over $1,000,000 for interest charges must be provided. In this way, due to accumulating interest charges, by the 75th year not very far from $100,000,000 will have to have been issued in bonds.

With the 75th year, when the final fellings begin, the income which is now around $12,000,000, pays not only the expense and interest on bonds, but leaves around $7,600,000 for redemption o bonds, thus reducing the annual interest requirements, and in about 12 years the whole bond issue, interest and all, will be wiped off the slate.

If we rely upon annual appropriations, leaving out the interest account, but applying incomes to reduction of expenses, by the 75th year $24,000,000 will have been spent, which the incomes from harvest will have returned in two or three years, leaving a property worth by its income between $200,000,000 to $300,000,000.

That such results are not entirely imaginary, but have been actually realized is, perhaps, best illustrated by the experience of France in the last century, where over 2,500,000 acres of waste land were reforested at an expenditure of some $18,000,000, and the properties are now valued at $140,000,000.

A few detailed references to these enterprises may be of interest. Between 1800 and 1865, the State reforested 200,000 acres of worthless sand dunes at an expense of around $2,000,000. The State then sold 75,000 acres-the sale more than reimbursing the entire cost-and the 125,000 acres remaining, free of cost, are valued at $10,000,000, based on the yield.

The celebrated plantations in the Landes, a country once of shifting sands and marshes, some 2,000,000 acres, were made at a cost of around $10,000,000, and, based on a 75-year rotation, were lately estimated to be worth $100,000,000.

In the Sologne, a sandy, poorly drained plain, with impenetrable calcareous subsoil, which 50. years ago could hardly be sold at $4 per acre, by an expenditure of $5 for planting, brings now an annual revenue of $3 per acre.

Some 200,000 acres of arid limestone waste in Champagne, south of Rheims, were recovered by coniferous plantations at a cost of nearly $25 per acre, had its stumpage value estimated before the war at from $50 to $100, based on an annual revenue of $2.

The object of bringing forward these financial calculations is not so much to show that forestry is or can be made a profitable business even when it is begun on waste lands, but that it is a big business, that it requires persistency for a long

time to accomplish results, and therefore, needs careful planning; it requires large expenditures, without returns for a long time, but also promises eventual large revenues, if systematically and persistently pursued.

In your State eventually some 6 to 8 times more acreage than is now in State holdings will have to become State forest, and hence from 6 to 8 times the amounts figured for the first million acre unit will at least be required to put this acreage in shape. We have lately learned to think and talk in billion dollars for war purposes; will we learn to think and talk in billions for the works of peace? At least a half-billion dollars bond issue would be involved eventually to put the State of Pennsylvania to rights with her forestry business. To do this will probably require constitutional provisions, and especially if bond issues are to be resorted to, since probably bonds running for such a long time have never been issued.

The realization of the bigness of the undertaking may very well stagger those whose duty it is to look after the finances of the State. It may, however, be possible to engage the Federal government's interest as a proper conservation measure in helping out with its superior credit. It is quite thinkable to devise a plan by which the Federal government may stand behind the bonding scheme, the State appropriating merely the interest charges, which would be lower than the State would be required to pay on its own bonds, the redemption beginning when the harvests begin. Government co-operation-the co-operation of the Federal government with State governmentshas lately become the order of the day. The Weeks' law extending financial assistance in providing protection against forest fires, is suggestive of extension of such co-operation.

In this connection I should refer to the Cutover Lands Conference of the South, lately held in New Orleans, where co operation of the Federal government with private owners in reclaiming the cut-over lands in private possession was foreshadowed.

The magnitude of the enterprise will be realized from the statements made at this conference, that in the Southern States alone not less than 76,000,000 acres are in cut-over condition, and the acreage would eventually be increased to 250,000,000 acres, from 40 to 50 million of which will be fit only for timber growing.

It is evident that a comprehensive scheme for reforestation is called for, in which Federal and State governments must co-operate with private

owners.

To be sure, it is not timely to even think of such a plan in detail until times have changed.

Meanwhile, if you can continue to keep the State authorities and legislature in the right direction, and keep alive the organization and work of the Department of Forestry as at present conducted, you will have done well in these perilous times. My suggestions are for future consideration. B. E. FERNOW.

What Can Be Done to Help Western Pennsylvania Secure Forest Area?

IN

(Read at the Pittsburgh Forestry Conference.)

N presenting to this Body, the especial claim to a larger share of State forest lands, for what is called Western Pennsylvania, namely, that part of the State which lies on the watersheds of the Allegheny and the Monongahela Rivers, I am not actuated by any selfish sectional feeling, but by the realization that unless something is done to give this portion of our Commonwealth especial consideration, the result is likely to be injurious to forestry work all over the State.

While we realize here in the West that there have been factors which militated against the extension of State forest areas, in Western Pennsylvania, yet, at the same time, the fact that we have less than 9,000 acres of forest lands out of a total of more than 1,000,000, has, to say the least, been productive of a feeling of discontent with the policies of the State Forestry Commission and of a decided lack of interest in forestry matters among our people.

There is no section of Pennsylvania in which the present opportunity for the extension of State forest areas is so attractive, both from an economic standpoint and from a standpoint of recreation, as in Western Pennsylvania, and we believe the time has come when the claims of this section of the State to a fair share of State forest lands should command a greater consideration than they have been given in the past.

Our people and industries are properly insistent that the needs of this section should be recognized to a far greater extent than they have been heretofore. It should be remembered that what we call Western Pennsylvania represents two fifths of the area of the Commonwealth; it should be remembered, also, that three-fifths of the revenue of the Commonwealth are drawn from this part of the State, but in the face of these things we have only about 4/5 of 1 per cent. of the State forest lands, which no one can say is a fair share. In order to place us in an equitable position with regard to the benefits of the work of the State Forestry Commission, it will be necessary for the

State to at once increase the value of its holdings in Western Pennsylvania six thousand per cent.

It is not only on the basis of equity that we are appealing to the members of this Body to use their influence for the establishment of a policy which will bring about a greater forestry development in our end of the State, but it is because we need these things more than any other section in Pennsylvania. There is no part of the State where the natural loss from floods, which can be prevented only by reforestation and forest preservation, is so great; there is no section of the State where the necessity for the conservation and increase of a pure water supply is so pressing as in Western Pennsylvania; and there are no people of the State so needful of the recreation facilities offered by State forest lands as those in this great industrial district, centering about the city in which we are meeting.

We of Western Pennsylvania realize that in the past there have been obstacles in the way of this extension. We realize that mineral values, or suspected mineral values, placed millions of acres of our wild lands beyond the reach of the State Forestry Commission in the matter of price; but when we came to realize this we went to the Legislature and secured the remedy which was needed by law, namely, an increase in the limit price which the Commission might pay for lands.

We knew well that in many cases there were outstanding leases for mineral reservations, which, to all intents and purposes, were impossible of acquisition by the State, so again we went to the Legislature, and again we secured the remedy in the shape of an act which permits the State Forestry Commission to purchase lands with the mineral rights reserved.

By these two Acts of the Legislature, the way has been opened to a proper and a fair extension of State forest areas on the watersheds of the Monongahela and Allegheny Rivers. The objections which in the past were raised to a program of forest land purchase in Western Pennsylvania have been removed. The way is open to the State Forestry Commission to so shape its policies that the State may acquire these immense areas of forested surface that lie on the western slopes of the Alleghenies.

In the counties of Warren, McKean, Venango, Forest, part of Elk, Clarion, Jefferson, Indiana, Clearfield, Blair, Cambria, Westmoreland, Somerset, Fayette and Greene, there are millions of acres which can now be acquired at a reasonable price.

Where the mineral rights can be secured at a fair value they should be secured; where the mineral rights cannot be secured at a fair price, the

surface should be secured, and the State should own the forest lands on the Alleghenies, the Laurel Ridge and the Chestnut Ridge, from the New York State line to the Maryland line.

We cannot subscribe to the doctrine that the State should not invest at a fair rate in mineral values. In support of this position, we would point to the statement of our Commissioner of Forestry that a large proportion of the present revenue is coming from the development of mineral resources under State auspices. We believe that the State of Pennsylvania should buy every acre of forest land it can get, whether within the legal price limit, or whether the mineral values have increased the price beyond what it would be otherwise or not. The time is coming when our deep lying coal veins and our undeveloped oil and gas sands will be tapped, and when this time arrives if the Commonwealth of Pennsylvania is the owner of these vast deposits the result will be a revenue for the Commonwealth which staggers the imagination.

We submit that investigation will show there is no part of Pennsylvania, taken as a whole, which has the forestry opportunities that are offered on the slopes of the Alleghenies, the Laurel and Chestnut Ridges. In our minds, we compare the forest areas on these ridges with those in Cameron, Clinton and other counties, and say to you that if you will here and now decide to support a proper policy the State will save millions of dollars by extending its holdings in Western Pennsylvania, because our lands have not been swept by fire, and nature herself has planted our mountain slopes with a thriving second-growth of valuable timber. We have no barrens, we have no great areas of fire swept and soil destroyed mountains, we have no great call for the huge expense of planting forest trees. Take what we have, guard it against future fires, and in a generation the slopes of these ridges will be furnishing the timber supply for the Commonwealth of Pennsylvania, while the handplanted points on the barren hills of Cameron and Clinton counties are still struggling for an existence. We who have traveled over these hills know the facts and want to bring them home to you. We want you to realize that it is far better and more economical for the State of Pennsylvania to buy even the surface, which is reforested and already putting forth a thriving second-growth of native forest trees, at $10.00 an acre, if necessary, than to pay $2.00 an acre for fire swept barren land which must be planted in trees by the hand of man—a tedious and a costly process.

In conclusion, I want to say to you who are interested in the development of forestry in our State and in our Nation and on our Continent,