tage of the operator. This work is of outstanding importance because there exists in this great forest region the most destructive over-liquidation of private forests and over-production of lumber, without any plan for perpetuating the privately owned resources, and with a depressing effect on private forestry and forest industries throughout the United States. Although still in its early stages, the spectacular success promised from this work indicates the importance of its continuation, and extension as funds permit, to other forest regions where corresponding possibilities for accomplishment exist. The Washington (D.C.) staff made a study of public regulation of private forest lands including the analysis of legal aspects, the varying experience of many foreign countries, and the practical advantages and disadvantages, which enabled the formulation of principles of public regulation for American conditions. This has been valuable in formulating plans for public regulation of cutting under the N.R.A. codes. Financial aspects of private forestry. This is the first comprehensive study designed to show how much it costs to grow forests and the returns which may be obtained by private owners, and under different sets of conditions and methods of treatment. It is being conducted by the Southern Forest Experiment Station. Forest land constitutes 64 percent of the land area of the South. This is nearly 40 percent of the forest land of the United States. The South produces between 40 and 50 percent of the total lumber cut of the Nation and all of the nava! stores. Not only is the South nationally important as a source of lumber, naval stores, and other forest products, but the forests products industries and activities are a very large factor in the economy of the region. The economic and social future of the South is dependent to a very large degree to the productivity of its forests. The information being secured by this study is fundamental to the development of private forestry, to the coordination of forestry, agricultural and other major land uses, and to the correlation of public and private land ownership, all of which are of momentous immediate concern. The first phase, consisting of studies of forest conditions, present practices, methods of utilization, costs and markets in carefully selected sample counties, is well on towards completion. Reports from 6 out of 11 counties have been issued. These bear especially upon farm woodlands. The second phase, consisting of intensive studies of selected individual large private forest operating enterprises, has commenced. Two such "case" studies have been made. This work will be continued during 1935, and eventually the results of these and the county studies will be correlated and presented to show constructively the possibilities for forestry in both farm woodland and industrially owned lands, and to aid in classifying land as to its adaptability to forestry and other major uses, and as to private and public ownership, It has already been found that forestry measures and conservative management would enable net annual returns per acre of $3.03 as contrasted with little or no returns under present practice for typical conditions in the naval-stores belt; that, based on 1929 conditions, conservative management would have permitted net annual returns of $5.08 per acre as contrasted with $2.17 under heavy cutting and nothing under clear cutting in a typical short-leaf loblolly operation in Arkansas; and that in general there are large possibilities for financially profitable private forest land management in lieu of present destructive practices. The work has received important cooperation from State foresters, extension foresters, many county officials, and from private operators. New public domain. This is an investigation of the basic causes of reversion to public ownership, usually through tax delinquency, of increasingly large areas of cut-over forest lands; of the trends of reversion and the economic factors influencing them; and of the measures necessary to obtain sound economic use of such arcas, either under restored private ownership or by public ownership and management. The study is aimed at the solution of a rapidly expanding problem of forest-land abandonment which in several regions is causing severe economic and social disturbances, accelerated by the present economic depression, but of much longer standing. The study is obtaining information fundamentally necessary to the development of State and county land use policies and plans, to county zoning, to the conversion of land from agriculture to forest use, and to programs of public land acquisition. The work is being conducted by the regional forest experiment stations in the Lake States, the Pacific Northwest, and the southern regions-in all of which the problem is of grave importance. Indications are that 21,000,000 acres of forest land already are tax delinquent within the Lake States and that in 10 years half of the 56,000,000 acres of forest land will pass into involuntary public ownership. The work completed for the 16 northern counties of Minnesota has been used in a State-wide study of taxation and is aiding in the preparation of a comprehensive land-use report by a special land-use committee appointed by the Governor. Work similar to that in northern Minnesota is being initiated in the northern peninsula of Michigan where the situation is equally bad. The Federal study is being conducted in cooperation with State agencies and supplements and strengthens the local effort. In the South, the Southern Forest Experiment Station and the Arkansas Agricultural College have completed a study for five sample counties in Arkansas. The specific information thus obtained has enabled the application of remedial measures, some of which have been enacted into law. The work has lead to a proposed bill to empower the State Forestry Commission to acquire reverted public land, and through exchange, private lands for State forests, and for other public purposes. This work in Arkansas and preliminary surveys elsewhere in the South have indicated the critical tax delinquency situation in most of the Southern States. Studies along the lines of the Arkansas study will next be made in Mississippi, Florida, and Louisiana. The Pacific Northwest Forest Experiment Station has completed the field work and 25 percent of the office work in a survey of tax delinquency in the forested areas of the 18 Douglas fir counties. The study has revealed excessive land abandonment and tax delinquency, destruction of the tax base, critical breakdown in the public-school system, disorganization of local government, default in public-bond payments, and a great disturbance in the industrial home life of the people. Many of the causes and some of the remedies for this distress have been determined. The results of the findings to date, though incomplete, have been in great demand by the Governor of Oregon, the two State tax commissions, by bankers, chambers of commerce, and county authorities, and a host of quasipublic and private agencies. Intelligent plans are being instituted for the use of lands, the location and maintenance of roads and schools, local government administration, the protection of public and private credit, and the preservation of a desirable social order. The work will continue along the lines already under way. GENERAL STATEMENT OF ACTIVITIES Mr. CLAPP. That item, Mr. Sandlin, deals with the studies and investigations which we are making of economic problems of forest lands and forest industries, and so forth. One of these has had to do with the problem of tax delinquency of forest-land owners and even early in the depression, tax delinquency of forest lands had become so large that it was said, with a good deal of justice, that they were constituting, in effect, a new public domain, and that, while the United States had on its hands, an old public domain in the form of Federal lands which have not gone outside of public ownership, a new public domain of great magnitude was coming back into the hands of the public, of the counties and States, through tax reversion. Part of the work has been done in the Lake States, Michigan, Wisconsin, and Minnesota, and taking into account what has already happened and the indications as they exist, members of our staff feel that half of the 60,000,000 acres of forest lands in those three States would be in involuntary public ownership within a period of 10 years. They are coming back so fast that States like Michigan hardly know what to do with them. Part of the lands which have come back to the State have been transferred from the State to the Federal Government. Mr. HART. If we proceeded under our tax laws in Michigan I think we would own 50 percent of the farm lands. Mr. SINCLAIR. The State would? Mr. HART. Yes; saying nothing about the submarginal lands that have been coming to the State for years, and a lot of that land is now being claimed because of the oil that has been found. Mr. SILCOX. The State of Florida has 13 million acres in various processes of tax delinquency. The process used to be to pass them back into the sinking fund, and then when something of value was found on them, they would go back and pay a small fund for their recapture. Mr. HART. We have oil wells up there, if they would allow them to run, which would yield 5,000 barrels of oil a day. Mr. CLAPP. Of course, the purposes of this work are to try to formulate constructive measures for a solution of the problem. Mr. THURSTON. The national forest policy would mean that whenever the States acquired large tracts of land, it would have them created into national parks, and turn the ownership back to the Federal Government? Mr. SILCOX. We are wrestling with that problem now. We have States, a great many of which object very seriously to the Federal Government having possession of any land and with this big tax delinquency on their hands, the proposals have been made that the Federal Government take over a lot of those lands. This is one of the serious problems, as far as management is concerned. It runs into tremendous areas. We do not know yet what the policy should be, but as a matter of general public policy, those lands should be furnished protection from fires; fires run over them and there is nobody there to discover them. You have a situation of tremendous importance. Mr. HART. We have a conservation department in Michigan looking after fires. Our tourist income is something like $50,000,000. Mr. CLAPP. Michigan is one of the very few States in the country which have laws which permit a thoroughly effective handling of forest lands which become tax delinquent. I think there are only four other states which have satisfactory laws to meet that problem. Mr. HART. All along the roads those wild lands are posted, every one is posted, with reference to fires, the cutting of shrubbery, and the whole business is under a free park system. Their fishing and game laws are rigidly enforced; I think, insofar as our lands are concerned, the recreation end of it probably is paying their way; that is what I feel about this proposition. Mr. THURSTON. Has your Bureau made any survey into the possi bility of this situation: To put large tracts of land that are coming back under the Federal Government? Mr. CLAPP. In Wisconsin, for example, this study of tax delinquency has contributed along with other things to the formulation of a plan for the entire area of forest land, and that includes lands which ought to go into county ownership or ought to be retained in county ownership, those retained by the State; those which should go to the Federal Government, and so forth; this has led to such things as the zoning of some of the counties to prevent scattered settlements and the actual removal of settlers from remote regions where the cost of Government is exorbitant. Mr. HART. You mean the cost of schools, and so forth? Mr. CLAPP. Yes; that sort of thing. It has contributed to the same sort of plan for Minnesota, and work is now being done of a somewhat similar sort for the Upper Peninsular of Michigan. In Arkansas work has led to the passage of some State laws already, which will help to meet the situation, and others have been approved for the consideration of the next session of the legislature. Mr. SANDLIN. Did not your Bureau in cooperation with the Bureau of Agricultural Economics engage in a study of this situation? Mr. CLAPP. Yes, sir. Mr. SANDLIN. Their appropriation was cut out for that work was it not? Mr. CLAPP. I do not know. FOREST-FIRE COOPERATION Mr. SANDLIN. The next item is for forest-fire cooperation, as follows: For cooperation with the various States or other appropriate agencies in forestfire prevention and suppression and the protection of timbered and cut-over lands in accordance with the provisions of sections 1, 2, and 3 of the act entitled "An act to provide for the protection of forest lands, for the reforestation of denuded areas, for the extension of national forests, and for other purposes, in order to promote continuous production of timber on lands chiefly valuable therefor", approved June 7, 1924 (U.S.C., title 16, secs. 564-570), as amended, including also the study of the effect of tax laws and the investigation of timber insurance as provided in section 3 of said act, $1,198,619, of which $23,859 shall be available for departmental personal services in the District of Columbia and not to exceed $1,500 for the purchase of supplies and equipment required for the purposes of said act in the District of Columbia. Mr. SILCOX. The following statement is submitted in explanation of this appropriation: 7, 984 Increase, Budget, 1935, compared with estimated obligations, 1934__ Impoundment of 6% percent of 15 percent pay cut- Increase in 1935 working funds for payments to States 5 percent salary restoration..... -$6.683. -390, 195 1 +14, 259 2 - 11, 288 +5, 013 -388, 894 1 The increase of $14,259 will be systematically distributed to the various State allotments for the em ployment of State fire-control organizations. The decrease of $11,288 is due to the elimination of the forest insurance studies at the Pacific Northwest Forest Experiment Station, located at Portland, Oreg., and curtailment of the taxation inquiry. WORK DONE UNDER THIS APPROPRIATION Investigations of forest taxation and forest insurance. The purpose of investigations in forest taxation is to establish the fundamental principles upon which forest taxation should be based and to cooperate with States in working out legislation which will conform to these principles, and at the same time be adapted to the varying conditions in the several States. As a basis for conclusions it has been necessary to collect, analyze, and interpret a wealth of data on such subjects as: The economic and legal background of the entire system of taxation in individual States; the financial structure and existing tax system of States, counties, and minor political subdivisions; expenditures for roads, schools, and other governmetal functions; the practical operation of the taxation system in general, including its effect on different classes of property, assessment practices, etc.; existing State forest tax legislation; the actual effect of existing laws on the use of land for growing timber; methods and results of forest tax legislation in European countries where forestry is well established. A comprehensive formal report, bringing together the fundamental researches of the inquiry to date and presenting conclusions and recommendations, will be completed for printing this year. In order to stimulate progress in forest tax reform by the several States, and to facilitate the application of remedies recommended by the inquiry, it will be necessary to supplement the work already done with localized application studies in cooperation with the interested States. Recognition of the seriousness of the obstacle to private forestry presented by taxation of forests under the unmodified property tax, and of the difficulty of formulating satisfactory systems lead Congress to authorize this study. The importance of it has been further emphasized, first by the economic depression with the acceleration of tax delinquency and instability in forest land ownership generally, and now by the application of the quid pro quo principle of the conservation commitments of the N.R.A. lumber code. The industry is urging comprehensive public measures to improve forest taxation as an outstanding essential to the widespread application of private forestry contemplated by the code. This is an added reason for the application studies mentioned, although they would be a necessary and integral part of the forset taxation project under normal circumstances. The purpose of the forest insurance investigation now being conducted is to determine under what conditions privately financed fire insurance on growing forests and mature timber is feasible and to work out a satisfactory basis and form for such insurance. The importance of reasonably priced fire insurance facilities is being given added emphasis by the sweeping expansion of private forestry contemplated under the forest products industries' codes. The work has included the collection of a mass of statistics on forest fires, weather conditions, forest cover, etc., and appraisal of damage caused by fire under different conditions and ratios of log values as a basis for rating schedules. The project, conducted by the Pacific Northwest Forest Experiment Station, was initiated in and is practically completed for the douglas fir section of Washington and Oregon. Field work has been completed for the pine forests in these States and California and for the pine-fir type in California. ~ Analysis of the data thus obtained is to be completed this year. Cooperation with States in forest fire prevention and suppression. In the fiscal year 1934 the Federal Government is assisting 39 States, including Hawaii, in the protection from fire of about 225 million acres of privately owned and Stateowned forest land. The fact that there are still over 190 million acres in great need of similar protection, but receiving none, indicates the urgency of Federal support of this work. Administration of this activity is handled in each State by the State forestry department; the Federal Government provides a portion of the necessary funds and brings to the aid of the States the composite experience and knowledge gained through Nation-wide contact with the forest-fire problem. Plans and budgets are submitted to the Forest Service by the cooperating States which must have joint approval of the Federal Government and the States before they are put into effect. Expenditures reported by the States are the basis for the receipt by the States of their share of the Federal appropriation. The aggregate amount of State and private money budgeted for this work in the fiscal year 1934 is very nearly four times the sum of Federal money budgeted for these projects. During the calendar year 1932 forest fires burned over 1.08 percent of the 223,000,000 acres of private and State forest land which was cooperatively protected. The corresponding percentage of the nearly 200,000,000 acres which received no protection is estimated at 20 percent. The number of fires reported for the protected area was 55,575, while on the unprotected area nearly twice that number was estimated, or 105,899. The total damage from fire on protected areas was estimated as $6,900,000 as against a total of $45,580,000 on the unprotected area. The maintenance of the protection effort of the public is essential if the protec tion improvements of the Civilian Conservation Corps are to be adequately maintained and utilized. Progress in cooperative forest fire protection is roughly indicated by the follow ing expenditures and budget figures: |