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The Pamphlet Collection of Sir Robert Stout: Volume 43

New Zealand State Forests: A Mode of Transaction (modus operandi) Combining their Conservation and Improvement with Financial Advantages

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New Zealand State Forests.

I. The Forest Legislation.

Public attention was recently called to the very important question of the Conservation and Management of the New Zealand State Forests, when it was remarked that the evils arising from past and present reckless waste and destruction of timber demonstrate and urge the necessity for new legislation in the matter.

It may be approximately calculated that the consumption of timber, together with its reckless waste and destruction, is now approaching the round figure of 200,000,000 of superficial feet yearly. The out-turn of the saw-mills for the year 1876 amounted to about 150,000,000 super-ficial feet of sawn timber, to which quantity should be added the destruction by bush-fires, etc., etc. Should such consumption and destruction be on the increase at the same rate as the population, and should the present far niente in the matter continue, the timbered State Forests of the colony could hardly last more than fifty years.

Although it is obvious that a new, fundamental, and permanent forest legislation should be of considerable interest here, at the same time it does not appear that the question has attained sufficient maturity to be tabled in page 6 Parliament, there being no immediate danger—no periculum in domo requiring hasty measures. Moreover, the measures to be taken at present are entirely pertinent to the adminstration.

The question of the State Forests in New Zealand is a broad one, bearing as much on considerations of political economy as on technical forestry; and the statesman who will have the honor to attach his name to it will feel the necessity of showing that extensive and immediate advantages are to be derived from his proposals when submitting them to Parliament.

It must be admitted that people are generally but imperfectly acquainted with matters of State Forestry; still, those people who, by their energy., and industry, are the founders of the prosperity of the colony, have their representatives in Parliament whose duty it is to study such questions as involve the welfare of the public property.

II. Beneficial Effects of Forests, and Danger of their Indiscriminate Clearing.

Forests have not only the beneficial effect of affording a produce of high importance, as well as climatic and financial advantages, they also afford a protective influence to lands situated on hill-sides and at the base of hills and mountains. At the time of the melting of snow or of heavy rains, they are an obstacle to the sudden irruption of immense volumes of water into valleys, by breaking and page 7 dispersing the torrent, so allowing the water to come down by degrees, and not with the destructive force of one single and unopposed mass.

Events which have taken place in France demonstrate the importance of such natural protection against floods, and the danger arising from its neglect or destruction.

When the French nation began to suffer from the disastrous effects arising from the destruction of some of their State Forests in the mountainous districts, they seat their foresters to Germany to study the forest law and institutions of that country; and the reports of those agents have been the basis on which rested the radical reforms then introduced in the French Forest Law and its administration. It was in the year 1827 that the new French Forest Law was established, when the Legislature, compelled by circumstances, and acting for public good and security, found it necessary to infringe on the secular principles and rights of private property. Not only the clearing of forests belonging to the State was prohibited, but likewise private property of the same nature was included in the prohibition, and further was made subject to certain rules of conservancy under the control of the State Forest Department.

However, too late the French legislators set to work in order to prevent the recurrence of inundations, which have been increasing in magnitude since 1827.

Some thirty years ago, the inundations from the Loire river extended the disaster a distance of more than 400 miles from the locality whence it originated—that is to say, page 8 from the denuded hills and mountains. All along the river fertile valleys were ruined by the flood-waters.

More recently, in 1875, in another part of France, the inundations from the Garonne river caused a loss of life to the extent of 4,000 persons, and the destruction of property has been calculated to amount to £4,000,000.

Do not such facts sufficiently prove the danger of indiscriminate clearing of forests in mountainous and hilly countries,—and do they not call for the serious attention of the colonists ?

III. Expenditure of Forest Departments in Europe. A Serious Omission in Parliamentary Debates in New Zealand.

In the House of Representatives here, in 1874, the original Forest Bill introduced by Sir Julius vogel had to be withdrawn on the ground that the conservation of natural forests would not pay, judging from the results obtained in Germany, etc. It had been stated that the expenditure of the Forest Department in Prussia amounted to about 50 per cent. of the annual revenue.

Such a large amount of expenditure ought to have been explained, and the French Forest Department, which stands so high in the opinion of foresters all over Europe, might have been mentioned and compared with that of Prussia. It seems desirable the omission should not be overlooked.

The total area of the State Forests in France is now about 3,000,000 acres, the annual revenue of which is about page 9 £1,400,000. The expenditure of the department per annum is about £68,000 (rather less than 5 per cent).

The Communal Forests in France represent an area more than double that of the State Forests. They are managed under the direction and supervision of the State Forest Department, and the Communes have only to pay for the salary of their own forest guards.

Private forest property in the same country exceeds the area of the above. The owners are compelled by law to reserve a certain quantity of growing timber, even where they cultivate coppice wood; and they are not allowed any clearings of their forests without special authority.

Had the administration of the Forest Department of France been known here, the organization of the Forest Department of this Colony might have been practically settled by this time.

A fact well worth the attention of Statesmen and Economists is that in France, where the management of the State Forests may be considered as a model system, those forests may be assimilated to a capital invested at 30 per cent interest. In that country, landed property under cultivation, and forest included, is estimated as affording a nett revenue of 8 per cent. So, a property bringing in an annual revenue of 8,000 francs will be considered as representing a capital or money value of 100,000 francs.

The area of the State Timbered Forests of France under systematic treatment, is about 1,000,000 of hectares representing (as money and by assimilation to actual page 10 value of private property of same nature and quality) a capital of 100,000,000 of francs (£4,000,000), bringing in annually, a nett revenue of £1,332,000.

Although that revenue may be assimilated to the interest of a capital, it is, in fact, nothing else than a portion of the inexhaustible and self-reproducing capital (forest) that falls in every year. Why should not the same advantageous management be applied to private forest property ? The reason of it is that those timber forests are worked by rotation, the period being generally 150 years for oak forests. Therefore, a system of forestry where trees are to be felled at the age of 150 years can only apply to immense areas, etc., etc.

In Prance, private property in wood consists principally of coppice-wood, (taillis) which can afford seven crops within the period of rotation of a timber forest, each crop bringing in high financial returns on account of the bark and firewood they afford. Coppice-wood for bark is available from the age of 15 to 20 years,—older, the quality of the bark would be less. The felling takes place in the spring when the sap is ascending,—which facilitates the skinning of the wood. Bark should become here one of the most important articles of export to Europe.

IV. Financial Resources obtainable from Natural Forests.

Besides climatic and other advantages which State Forests can afford, they present also a financial aspect, as yielding a regular annual revenue when systematically treated.

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State Forests, even where no systematic treatment had ever existed, have likewise proved to be an important financial resource to Governments when proper measures were taken to prove their actual value, as will be seen in the following case:—

When the Ottoman Government, some twenty-two years ago, felt the necessity of improving their finance department, they were told they had immense wealth and resources in the shape of forests, which until then had been given up to waste and depredation without any profit to the State. Then the Turkish Administration thought of applying to the French Forest Department, for the purpose of obtaining the assistance of some of their best officers, which was granted.

The eminent French forester, Monsieur Tassy (Conservator) was appointed Director-General of the French Mission in Turkey. He was assisted by M. Simon (Inspector) and two other officers.

The first steps taken by the French foresters were the organization, or rather the framing, of a Forest Department, and at the same time the establishment of a School of Forestry at constantinople., The pupils attended the lectures of the French foresters during the winter, and followed them in forest explorations in the fine season, when then special education was practically continued.

Two years had not elapsed before the reports and estimates of the French foresters, relating to several forests of the Turkish empire, were ready, and served as a basis for page 12 sales and important leases granted to foreign companies, all those transactions being thus carried out with great success.

V. Modus operandi. A Lease for Ninety-nine Years: its Conditions and Effects.

In the matter of the New Zealand Forests, the problem to be solved is this:—

How to obtain from a large portion or portions of those forests (the land excluded from disposal) an amount of money equal to the present commercial value of the forest, and to secure at the same time its conservation and improvement.

Should a sale be contemplated, of course a very extensive area of forest would be required to bring in a large amount of purchase-money. Now, the working of such a large area would require many years, and most probably the buyer, having no interest in the conservation of the forest, might treat it indiscriminately, for the prevention of which an expensive supervision would be necessary.

Opposed to such a view, it may be said that the State, having still in hand about 11,000,000 of acres of forest lands, can well afford to sell 1,000,000 of acres to speculators, and that the clearing of such an area could not cause any injury to the country, etc., etc.

To such argument it may be answered that offering such a large area of forest for sale would prove an urgent want of financial resources on the part of the vendor, and page 13 that the buyer, taking advantage of circumstances, would require the absolute sale of the land as well as that of the timber on it, and most likely would not pay more than current prices for it.

Granting the same area of forest on a lease of long duration, and subject to by-laws and supervision of the State, would be considered good management of the public property, and would afford greater financial advantages than in the case of a sale, as hereafter explained.

Now, let us suppose that a large area of forest—say one million of acres (to be formed of several blocks taken in different parts of the colony, as may be advisable),—would be leased for ninety-nine years to an European Company.

The forest to be divided into one hundred sections. One-fourth (or thereabout) of the growing timber, as selected by the State foresters, to be reserved on sections for systematic treatment.

Plantations to be made on sections immediately after the clearing of the felled timber, at the expense of the lessee, and under the directions of the State foresters (allowance being made for that expense as hereafter indicated).

Of course conditions respecting the working of the forest, the interference and supervision of the State foresters (which interference would be of benefit to both parties), should be embodied in the lease.

It must be observed that in the case of a lease of such duration a double object is in view, viz.:—

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First, that in such a period two fellings (crops) could be obtained from the same section, consequently enhancing the value of the whole transaction.

Secondly, that the lessee should be bound by his own interest to the proper management of the forest on account of the second fellings, which will include not only the old reserved fourth of timber trees but also plantations made by him which have attained sufficient dimensions for market requiremens—less, however, one reserved fourth of these plantations.

The result of the transaction would be that, beside immediate and subsequent financial advantages, the State, at the expiration of the lease, would come into possession of a well-regulated forest yielding a considerable annual revenue.

Another advantage would be, that such a transaction would form a starting-point for developing the Forest Department, which in this country should bring in the largest amount of revenue.

VI. Approximate Estimates: Present Commercial Value of New Zealand State Forests (exclusive of Kauri Forests, for which Special Terms should be made).

What may be the present commercial value of one million of acres of New Zealand State Forests (for the forest alone, the land being reserved) ?

It is obvious that no strictly correct estimate can be made at present. Official statistics and information are page 15 wanted. The method of averaging, so often leading to error, cannot even he applied to the present case as regards quantity for each species of wood, there being so many different species often mixed together in the same block of forest. However, an average commercial value may be taken from market prices, and from such calculation, imperfect as it may be, an idea of the financial value of those forests can be formed, and may lead to the official investigation Hereafter Suggested.

Many portions of the State Forests have been explored and worked in all parts of the colony by saw-millers, who, from their practical knowledge, can afford valuable information. Still, it may be remarked that they have no interest to over-estimate the wood they buy from the State.

The saw-millers' state that the average out-turn of indigenous New Zealand forests does not exceed 15,000 superficial feet of timber per acre.

Captain Campbell Walker and Mr. Kirk have estimated the proper out-turn of timber in a portion of the Seaward Bush, Invercargill, at close on 31,000 superficial feet per acre.

The latter estimate, affording information perfectly corrects, but limited to one single locality, cannot be taken as the rule for the general out-turn of the State Forests of the colony. The average between the two estimates might be taken, and it would give an out-turn of 23,000 feet per acre. Still, through fear of exaggeration in the present computations, the lower estimates may be adopted, so in the following calculations the averages out-turn in timber of those forests is to be reckoned as 15,000 superficial feet per acre.

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Now, the average price of timber, for all New Zealand markets, and for all species of wood, cannot be calculated under 13s. for 100 superficial feet.

From inquiries, it is found that 100 superficial feet having to be obtained from the growing timber, represent a value equal to one-half of the selling price of the timber at the market. Thus the value of the growing timber to produce the same quantity should be 6s. 6d. Let the latter estimate be reduced to 4s., and such considered as the actual value of the growing timber, thereby leaving a margin sufficient for the cost of felling, sawing, transportation, and other expenses, as well as affording a nett profit of say 20 per cent.*

Therefore, by quoting the out-turn in timber at 15,000 superficial feet per acre, and the value of the growing timber at 4s. per 100 feet, the value of the forest for the timber alone would be £30 per acre, and £30,000,000 would be the present value for 1,000,000 acres.

* These estimates apply to enterprises undertaken on a large scale, and not to individual labour.

VII. Approximate Returns from the Forest within the period of the Lease.

What may he the returns to be obtained from the forest in the case of a lease for 99 years?

Besides the present value of the forest, calculated at £30 per acre, it is obvious that on a lease for such duration there will be an increased value arising not only from the natural page 17 growth of trees during the period of the lease, but much more on account of the enhanced value of timber resulting from augmentation of the population in the colony, diminution of the produce, and from markets to be found abroad, etc.

Details as to the working of the forest need not be entered into at present; and it may suffice to say that the lessee would have to fell the entire indigenous forest within the period of the lease, coming back on sections for the old reserved fourth as soon as the plantations did not require any longer the protection of the old trees.

Respecting the fellings of the planted forest and natural reproduction, time and experience will tell at what age they may be available

From the fertility of the soil and favourable climate of New Zealand, it may be thought that several species of trees may attain valuable dimensions before or at the age of fifty or sixty years.* In such a case there would be nearly two fellings of the new forest within the period of the lease.

However, it may be prudent to calculate on a period of seventy-five years for the fellings of the new forest, in which case they could not be affected on more than one-half of the area within the duration of the lease on account of the reserved fourth, and of plantations on the last- page 18 worked sections not being of age to be felled before the expiration of the lease. Delay for clearing his own wood may be granted to the lessee without affecting the duration of the lease, and plantations not to be available to him should be made at the expense of the State.

Again, the value of the new forest when it shall have attained sufficient growth, say in 75 years from date of the lease, will be fully double the value of the indigenous forest at the present time, for the reasons previously stated, so that one-half of the total area in planted forest would afford returns equal in value to those of the entire old forest.

Within the period of the lease the lessee would have received—

From the indigenous forest:
By actual value £30,000,000
By increased value (and including minor produce of the forest, firewood, bark, etc.) 30,000,000
By profit at 20 per cent. on £60,000,000 12,000.000
Returns from the old forest £72,000,000
Returns from the new forest 72,000,000
Total £144,000,000
Less allowance for plantations on one-half of the area, etc. 4,000,000
Remains £140,000,000

* Captain Campbell Walker strongly recommends the introduction of the Eucalyptus in the forests of the colony. Trees of that species planted here some fifteen years ago are now measuring two feet in diameter.

VIII. Value of the Lease.

The rough sketch given of the returns to be afforded to the lessee could hardly be taken as a basis for fixing the page 19 value of the lease. Evidently the Colonial Government must be prepared to allow considerable profit in order to induce capitalists to enter into an affair of such magnitude, and it rests with them to fix that value. However, it might not be considered as too far intruding into the matter to submit that the grant of such a lease could be made on terms to approach the present value of the forest, calculated above at thirty millions sterling. For instance: that a considerable sum of money should be paid to the lessor as may be arranged, besides which a royalty, averaging for all species of timber say 3s. on every 100 superficial feet (ready for the market) obtained from the forest, should be paid; the said royalty to remain at the average amount of 8s., notwithstanding any increased value of the timber.

The out-turn as put down at 15,000 superficial feet per acre, and the royalty being fixed at 3s. per 100 feet, would return an amount of £22 10s. per acre, and £22,500,000 for the total area. Should the out-turn in timber be more or less than 15,000 feet per acre, the lessor would benefit or lose accordingly.

The system of a royalty instead of an annual fixed rent is equitable, and would facilitate the intended transaction, as affording at the head-quarters of a Company a most efficacious control over the operations of their agents in the colony.

IX. The required Official Estimates.—A School of Forestry to be established.

A mode of transaction in the matter of New Zealand State forests, through which financial returns and a good page 20 forest management can be combined, has been indicated; it might be adopted as a rule for the treatment of most of the State Forests, and only applied to a certain number of blocks to begin with.

State Forests, and especially natural forests of great extent, require to be treated on a large scale; that is to say, with such means as Governments or Companies alone can afford.

Should the Colonial Government decide to move in view of any transaction of importance respecting the State Forests, it may be submitted that some preliminary measures would have to be taken.

In the first instance, a Committee of official agents should be appointed for the following purposes:—
(1.)To select blocks of forest in different parts of the colony well suited for commercial enterprise.
(2.)To estimate the out-turn in timber of one acre of the forest, operating at the rate of one acre for an area of about 10,000 acres, the estimated one acre areas to be at about equal distances from each other.
(3.)To give the number and species of timber trees of the area where the estimate is made; the name of the nearest timber market, and current prices there for the principal species of timber; the distance of the market from the block; and likewise all information respecting transportation and the nature of the undergrowth of the forest; the general aspect of the forest, especially as to the species it may contain as far as can be judged.
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The Colonial Government has not yet a staff of foresters at hand to go through those forest operations; but surely scientific and trained foresters are not an absolute necessity in such a case. There is here a Survey Department, most remarkable for its good organization and efficiency, in which department men of high scientific and administrative qualifications are to be found, and to whom the direction of those operations can be entrusted. Therefore all those preliminary operations could be made by the Survey Department—they do not exceed the competency of its officers.

Vendor and buyer, lessor and lessee, all require sufficient official information, and no transaction of importance can be entertained without it.

Another measure of great urgency here is the practical organization of a Forest Department. Such an undertaking requires, time, and the first steps to be taken towards it should be the establishment of a School of Forestry, which, in the course of two years, could issue a staff of foresters sufficient to begin with. There are in the colony scientific men to whom the direction of the school and likewise special scientific tuition may be intrusted, and they should be assisted by two Professors of Technical Forestry, to be obtained from the French or German Forest Departments, those officers to be of a superior grade in their own country. Here, besides their lectures at the school, they could act as advisers at the head-quarters of the department; and moreover the verification of some of the survey officers' estimates should be made by them, to the effect that they may be parties to the official report and page 22 estimates to be made by the Committee, ad hoc. Their names and qualifications would add to the importance of that document, in case it might be used as a basis on which the promoters of a Company in Europe should be able to build.

The question of extent, as to the total area of blocks of forest to be leased, should not be decided at present. Let the Committee of Forest Estimates proceed with its work, and it would remain for the promoters of a Company in Europe to judge what can be done in the case as to the extent of forest to be leased.

There is no reason why some of the estimated areas should not be leased to colonial enterprise, but the general conditions of all leases should be homogenous, only prices and royalties varying according to localities, species, etc.

Such measures would have the effect of enhancing the value of the growing timber all over the colony. Private property would benefit by them in a high proportion, and so likewise would the treasury, in the way of laud taxes being made proportional to the value of the property.

The price of timber at market should not be affected by such events. Operations on a large scale can afford moderate prices, and competition would keep down exaggeration in the case. The increase of population, the diminution of produce, and the outlets abroad, will be at a future and distant period the cause of advanced prices for timber.

X. Industries actually connected with the Forest not affected by the indicated measure.

The industries immediately connected with the forest produce concern a large fraction of the population of this page 28 colony; for that reason, and likewise because those people supply the market with an article of absolute necessity, a special consideration must be given to the effects which the above-mentioned measures may have on their welfare.

If the information given be correct, only a very small minority of the saw-millers have been successful in their trade. Such a result might be ascribed to the following cause:—

Having before them a large field of operation—that is to say, a quantity of growing timber apparently inexhaustible, and which they can now get at a nominal price—saw-millers have thought of taking advantage of actual circumstances for increasing their business, and therefore had to strain their means in the expenditure of a more extensive enterprise. Then, they had to contend with all commercial eventualities—competition, high price of labor, etc.

In Europe, where large forest business is carried out, the saw-miller attends only to his own special industry. He saws logs brought to the mill by the forest contractor, and his trade does not extend beyond that.

The forest contractor applies his attention to all the various produce which can be obtained from the forest; and, if the market is dull for firewood or timber for building purposes, bark or wood for cabinet-work, coopers'-work, etc., etc., may at the same time reach high prices, which will make up for the other depressed articles.

Commerce and industry, as a rule, ought not to be managed as a single mixed-up business. Many of the saw- page 24 millers here will feel and understand that, and would prefer having then mills well supplied, by a forest contractor than to rest on their present depressed business, which depression cannot be ended unless a better system of working the forests be adopted.

The New Zealand Forests represent an immense wealth, and, to be turned to profit, these forests must be worked within certain limits and regulations. They must be worked principally in view of exports to Europe, where a ready market is sure to be found for most of their produce.

At all events, the above-indicated measures could not affect the interests of the saw-millers, who at present are doing neither good for themselves nor good to the Treasury, and are only performing a work of destruction in the forest for the sole benefit of the market, when otherwise the same supply to the market could be as well afforded by the working of the forest under a proper system of conservation. Any increase of price on the growing timber would not affect the commercial parties concerned in the matter; they would have only to increase their selling price, the only difficulty being in the actual disproportion between the supply and the demand. The requirements in wood and other forest produce of the European markets (so little known here beyond the English market) would soon fill up the deficiency on the side of the demand.

decorative feature

Lyon and Blair, Steam Printers, Wellington, New Zealand.