tax on timber products was to have been devoted to "the promotion of the cause of reforestation," and a like share of the mineral products tax to "completing and publishing a geological survey of the mineral resources of Arkansas." The law, however, was not enacted until 1923 (Act No. 118) and now produces all-told about $1,000,000 per annum, not a dollar of which is devoted to conservation. Five-sixths of the entire net yield goes to the common school fund and one-sixth to public highways.

IV

The severance tax in essence, if not in name, exists in a dozen or more States of the Union, and has been found to be a thoroughly workable and constitutional mode of raising revenue.

Some idea of the significance of these production taxes is conveyed by the subjoined partial list, with approximate recent annual yields:

From a legal standpoint, this revenue instrumentality is classified as a privilege rather than a property tax. In perhaps every State the validity of the privilege or license tax is already judicially established.

The privilege tax indeed offers an appropriate form of tax for the support of the cause of forestry, since in its economic and legal essence it constitutes a special exaction for the privilege of engaging in a special business. Such a tax might be levied at a specified rate upon the operation of manufacturing forest products, and in order to obtain a wider distribution, it could logically be extended to all those business operations which depend upon the products of the forest. Conspicuous among these are the publishing and printing business, that of dealing in newspapers, magazines, books, and all printed liter

ature, the transportation of wood materials, their utilization in construction operations, etc.

V

All forms of taxation are traditionally odious. But recent experience has shown that a tax against which there is a minimum of protest is that upon the use of gasoline and oil in motor vehicles used upon the public roads.

The motor fuel tax is rapidly becoming the backbone of the enormous revenue demands for construction and maintenance of the highways of this country.

Can we not trace the reason for the almost universal acceptance of the gasoline tax to the obvious fact that it is a most appropriate source from which to secure funds for good roads?

In like manner it should readily be recognized that a privilege tax, applicable not merely to those who sever or remove forest resources from the soil but to those as well who engage in the business of manufacturing, selling and distributing such products would rest upon as reasonable basis as does the gasoline tax.

By these remarks, I do not mean to say that forestry should be supported by this tax alone; but such a tax should be a dominant ingredient of the financial substructure upon which the forestry of the future must be fashioned. There are other plans, of course, equally as sound from a legal standpoint which are proving effectual in solving the revenue problem.

VI

In the time at my disposal only a few typical State financial schemes can be noted, and that very briefly :

The Maine Forest Service is supported by a system of taxation within the "forestry district," which embraces all wild townships and plantations. The land in the district, while subject to the regular State and county general tax, also bears the district special tax of 24 mills.

For the New Hampshire Forestry Department the legislature appropriates out of the general treasury $75,000 annually. In addition to this the department has available other funds including, of course, the Federal Government allotment amounting to $8,500. The towns bear half the expense of fighting fires; also,

the railroads spend annually $38,000, and the Timber Land Owners Association tax themselves on an acreage basis for $10,000, for patrol work in coöperation with the State. Pennsylvania's expenditure through her Forestry Department in 1923 was nearly $900,000, as a direct appropriation from the general revenue fund.

In the representative Western State of Oregon the 13th annual report of the State Forester (1923) discloses an interesting statement of the sources of "funds for protection" as follows:

Timber owners and logging operators
Weeks law appropriation (Federal)

Revested O. & C. R. R. grant lands appropriation...... 30,000.00
State legislative apropriation
Counties

..$269,375.82 75%

16,877.24

13%

39,135.90

11%

3,400.00

1%

A total of $98,767.22 of these funds was expended for fire fighting and the balance of the available resources was spent "for patrol, improvement, law enforcement and administration."

The Alabama Commission of Forestry, launched in 1923, is financed by the simple expedient of diverting to the forestry fund a definite share of the general revenue derived from the long stablished system of State license. The portion so appropriated consists of all taxes collected from forestry industries, which amounts to $30,000.

The Louisiana financial expedient-one-sixth of the severance tax proceeds derived from exploitation of forest products and amounts to $60,000 per year-has already been noted.

In Arkansas the severance tax derived last year from products of the forest at the statutory rate of 7 cents per thousand was $132,000, and if one-sixth of that yield, as in Louisiana, had been applied to forestry, that worthy cause could have enjoyed a net revenue of $22,000.

If forestry's share had been one-fourth, as stipulated in the original Arkansas proposal, the net would have been $33,000.

But it required a cut of 1,871,300,000 cubic feet of timber in Arkansas to produce at 7 cents the actual total of $132,000; whereas, in Louisiana the same amount of exploitation at 2 per cent ad valorem, the rate there applicable, produces at least $180,000.

Other auxiliary financial devices have been seriously considered; e.g., camp-fire permits in California; and a direct State bond issue in Pennsylvania and North Carolina.

VII

Finally, in this brief paper, I have refrained from any estimate of the amount of funds actually required for forestry operations.

The needs of the States vary because of varying conditions and extent of forest wealth and potentialities. The experts and technicians present can throw light upon this phase of the subject with far greater insight and ability than is at my command.

It has not been my purpose to point out, even if I could, a Northwest Passage to easy finance in the frontier field of forestry, but I have tried to show that your fiscal problem is not more baffling than that presented by any other public project, since it can be solved through at least five practical expedients: (a) The general treasury, as in Pennsylvania.

(b) Special benefit taxation, as in Maine.

(c) A severance tax on raw material, as in Louisiana. (d) A privilege tax, as in Alabama, on businesses utilizing finished and unfinished products of the forest.

(e) A special tax.

PROPOSED FORESTRY LAW FOR ARKANSAS By DR. A. C. MILLAR

SECRETARY, ARKANSAS HONORARY FORESTRY COMMISSION

On May 13, 1924, Governor Thomas C. McRae appointed the following citizens as an Honorary Arkansas Forestry Commission: J. R. Hamlen, chairman; A. C. Millar, secretary; Adam Trieschmann, F. W. Scott, C. A. Buchner, C. J. Mansfield, B. A. Cannon, W. N. Bemis, R. E. L. Wilson, O. O. Axley, D. B. Dierks, T. W. Rosborough, A. B. Cook, Seth C. Reynolds, V. C. Kays, Chas. A. Overstreet, J. T. Bucholz, G. W. Donaghey, H. C. Couch, W. R. Stuck, H. G. Stephens, E. B. Kinsworthy, T. S. Buzbee, G. C. Hardin, J. H. McIlroy, Carl Hollis, J. J. Hughes, P. C. Ewan, D. T. Gray, Hugh Critz, Frank Horsfall, Moorhead Wright, and A. B. Hill.

In his letter of appointment Governor McRae stated his purpose as follows: "For the purpose of studying, formulating and submitting a plan for the protection, preservation and perpetuation of the forests of Arkansas, I hereby appoint an Honorary Arkansas Forestry Commission."

On May 28 the Commission met and organized by electing J. R. Hamlen president, A. C. Millar secretary, and Moorhead Wright treasurer, and authorized its executive committee to prepare for a later meeting by securing all necessary information and creating public interest in the proposed measure.

On December 12 the Commission again met, and after consideration of laws of other states and the tentative draft of a measure, agreed that the bill which follows should be offered to the legislature for adoption.

As the chief object of the Commission is to secure an organization charged with the responsibility of initiating a forestry policy, the bill was made to cover only necessary items, leaving to the next legislature the task of completing legislation after the conditions are fully understood. The simplicity and directness of the measure should recommend it to all friends of conservation. The expense of inaugurating this policy will be small, but the financial returns to the State will be large.

A BILL

For an Act to be entitled: "An Act to create and establish a State Forestry Commission; and to prescribe its powers and duties; and to provide for the creation of a State Forestry Fund; and for other purposes."

Be it Enacted by the General Assembly of the State of Arkansas:

Section 1. There is hereby created and established a State Forestry Commission, hereinafter called the Commission, composed of seven members as follows: The Commissioner of Agriculture, the Dean of the College of Agriculture of the University of Arkansas, and five citizens of the State to be appointed by the Governor, of whom at least three shall be owners of timber land or interested in the manufacture and sale of forest products. The terms of the five appointive members shall expire on December 31, of 1925, 1926, 1927, 1928, and 1929, the term of each to be designated by the Governor.