of Canada.
ROMULU ESCOBAR,
MIGUEL A. DE QUEVEDO,
CARLOS SELLERIER,
Commissioners representing the Republic of Mexico.
E. H. OUTERBRIDGE,
Commissioner representing the Colony of Newfoundland.

FRED. R. FAIRCHILD, Professor of Economics, Yale University, member
International Tax Conference: Probably nothing more effectually
discourages investment than uncertainty as to future costs. And
whatever may be said of the present system of taxation, there can
be no question of its arbitrariness and uncertainty. If to all the
other risks of forestry we add uncertainty as to what the taxes
are going to be, we cannot blame investors for some hesitation in
embarking on an enterprise which may have to pay taxes fifty years
before the returns come in. And more than this; the investor cannot
safely base his calculations on the continuance of the present
lenient administration of the property tax. As has been shown, the
tendency today is toward a stricter enforcement of the law and a
heavier burden of taxation.

State constitutions stand today in the way of many plans for reform
in State and local taxation. The movement toward their amendment
is growing as part of the general programme of tax reform.

The real problem of forest taxation is in connection with the future
of our timber lands rather than with their past. The preservation
of the forests is a matter of the utmost importance. So far our
forests have been exploited with little or no regard for the future.
But the present methods cannot last much longer. Forestry must come
some time, and its early coming is a thing greatly to be desired.
And whenever we are ready to seriously undertake it we will find our
present methods of taxation a severe handicap. Strictly enforced,
according to the letter of the law, the annual tax on the full
value of the land and standing timber is almost sure to result
in excessive taxation, and the timber owner cannot count on the
continuance of the present lenient enforcement of the law. Even if
the tax might not be excessive, its uncertainty would be a serious
obstacle to investment. We can hardly hope to see the general practice
of forestry as long as the present methods of taxation continue.

To be equitable, taxation of timber lands like taxation of anything
else should be based on income or earning power.

With regard to its effect on revenue, there is little to be feared
from the tax on yield. Eventually, revenue will