. ¥-.' . 4, -- HEW” u.‘ r! a z-w “ :35: .113 ‘ ‘32:»; ' €73? NWT; 1 .L .1? 4:733“ v...- - my. :~- . -.:'... M”... 4 :41. 2 ‘ i‘ .7, “.1 .. 7L .;-~ ,,<.~_n,,..t:s *r.j;:7.' 'v-w {an '- I‘ ,. .. .11.. 325%.... uwv” 4 , v 4'! $51.11”... ‘1»... .4; «J . . . 1 ‘ ._ , 7v _:x_;! Ex. .71... . ‘1 .2 1.2.rr‘Li-1 4.1 VSX‘4‘..-. . 4:7» :l‘ ‘17:, 23:37 1‘“ r-w‘fi! " . .,xi§ .-.. nun l‘f 4. “,rni «U. . .7- ... .F..‘51-4:. ...‘..,.- . - H4, ' {5.2313 .- 171...; ".1 u .. 4-4 a; .44 N ‘ ', 1 h J.‘ '?4>.1-:0~h{~ ' '7 ”M 1 UT"! 2:2.” 44:. 1-1 7:444: ‘1’! INN“ ' 1‘ . . “NRA“: .. 5L ..,. . . .. Tryst. ), '1 g?! L»: $41}: ‘1“ 1‘ ‘12:..7u1-1‘: '4 .1. MN . . . . 2.- 3:25.". 1‘ 3.: 3:11 44V ‘34:; "w- ":21. x 4g_ ‘ ' 5:} .. .‘ . . fan»... ‘1 '\ , '1‘“ w" m L- v 1 {34,443 5455““. .,‘\ .uuuhdfit‘ .{ .a \ 1.. i '21:." .235"? 5:31.“.."1'1‘w . LL'IL ‘ um- z,._ -v:~::-“'. - ‘" 7-: ‘ R) ". H“:§4.. .. +311“? ‘1' ”31» . 43%;]:- ".7" 11‘ " ‘- M! un‘y .. . 3,. ‘ ~ , 4 .1. . P" u- “ N..- 9...” ..._.._..-.~ mg“... 3.. . .~ 1... ‘~ . “it". "annoy” “L" 7 "‘32. a $11.“?! .7: :‘LL . 1.4 3.3, 445... ‘.. 1: v a . 335;; «713.3 "I ’1??? . . X .4. 0...“ 4.1.3.3 gilt! .7 “394 4 0.34“.“ 4...... .7 an ‘1.\.£{“.1 1,4“ ”C“ ..... 11‘1‘114111 :- 4w ‘\;’fi:1' .... .. I... ,35‘ ~. :1“, lat-(1:143: ”11”.“. “'4 2 ?‘ 414%,51-‘1411443744 jig4fl,v“::,i. ‘ -. -w t (“wt“(“v LL...— qr. NM”? , » V \‘l . . "‘. 2‘".- ;..‘,".'[‘.x . .1.“ L . " ‘ _‘1l";!|3:‘ "‘1“ . 43‘. , ,, ”7: ~‘42:) l'nfifixfh THESIS ll gum»; lflzllfllfllw w my): 1111» lfl! 1qu I]; an This is to certify that the thesis entitled An Economic Appraisal of the State Forests of Michigan presented by Frank W. Kearns has been accepted towards fulfillment of the requirements for Ph .1). degree in Pores-try Mafia/professor Date June 12, 1961 0-169 LIBRARY Michigan State University AN ECONOKIC APPRAISAL OF THE STATE FORESTS OF MICHIGAN By Frank N. ao seepage; one mo osmeo soaummaemwso--.m .wam mwoumowom nomwumaa w wuoummuom nonhuman AH muoumoMOL uoanumao AH Amaownacmm umzoq wmv AmHSmcHsom umSoq wzv Amadmdwsom Hoaazv HHH eoawma HH schema H sesame \ .\ \ ”n \ mooemmmcmz umouom m>flumumdooo Amv mHOmH>HOQdm Hocowmmm \ \ \ \ mumouom cowumnuchHEo< \ HoOHGSOOH o a muHSSEEou pom Hoosom umowom oumum mmocamsm mmflhmmhsz ummuom \ \ \ \ x \ AN Monro usmummmm< \ moaeo coama>aa 56 ’f‘ MmHmAN g DEPARTMENT OF CONSERVATION “ / FORESIEY- BIVISION “A rrrrrrn STATE F0 R EST DISTRICTS a 0 \ P‘“ so R K E l 4 R ’ 0 L, K! suPE DOMINION OF CANADA (karat; LEGEND — DISTRICT 0 NURSERIES DIs'rRIC'rs I 70 II ARE IN DISTRICTS Ia- TO 22 ARE IN -' CANADA DISTRICTS as T0 so ARE IN ./“ L 4x: 52/: Pig. 3. -- Location of boundaries of State Forest Districts, 1960. 57 administration of the forests involves close coordination in reaching the first two Objectives so that they in turn might help accomplish the third. Methods of Land Acquisition There have been three principal means by which the lands comprising the state forests in Michigan today have been acquired. In order of their importance they are: (1) tax reversions, (2) purchase and gifts, (3) exchange. nggreversion It was indicated earlier in this chapter that there was a land boom generated in the cut-over lands in Michigan by land boomers and speculators starting in the 1870's. Their enthusiasm kept land prices booming for years, but the collapse Of their highly artificial market in cut- over land was certain to come sooner or later. The big break did come in the early 1920's with the slumping off of farm land values throughout the country. This break was further widened by the agricultural depression follow- ing WOrld War I and the gradual loss of local markets caused by the shrinking importance of the lumber business. As a result, lumber companies and others who held large areas of cut-over land in anticipation of selling them for farms began to allow them to go tax delinquent. By the late twenties and early thirties, there was a veri- table flood Of tax delinquencies. 58 The basis for much of this tax delinquency problem can be traced to such factors as high land valuation and low income, but the heart of the problem lay in the high cost of local government in the cut-over counties in re- 1 The over- lation to the limited nature of their tax base. Optimism which led to the presumption that the north coun- try would be soon a well-pOpulated area of thriving farms, caused systems of local governments and service to be set up which involved higher costs than the local taxing rates were able to pay.2 The general property tax law (Act 206 PA 1893) was the act which vested absolute title of tax delinquent des- criptions to the state, and in amended form it still provides the basis for tax reversion machinery in Michigan. Table 1 indicates that considerable use was made of this legis- lation from post World War I decade through 1932, and although a tax moratorium was allowed from 1933-1938, by 1941 the state had come into possession of approximately 4.5 million acres of tax reverted lands in the northern counties. Existing state forest boundaries were eXpanded during the period to include a large percentage of this land as is shown in Table 2. lBarlowe, Raleigh, Administration of Tax-Reverted _Lands in thekgke States, (Michigan Xgricuiturai Ex eri- Inent Station Teéhnical Bulletin 225, December, 1951 , p. 6. 2Ibid., p. 8. 59 TABLE 1 AREA OF TAX REVERTED LANDS TURNED OVER TO MICHIGAN DEPARTMENT OF CONSERVATION, 1921 - 1958a Year Acres of Reverted Lands Platted Lotsb 1921-22 42,932 9,389 1923-24 85,351 7,650 1925-26 79,906 5,167 1927-28 349,198 21,075 1929-30 498,436 6,687 1931-32 748,899 22,190 1933-38 No tax reversions 1939 2,208,975 95,000 1940 147,502 6,028 1941 154,881 10,744 1942 58,002 2,811 1943 41,531 2,347 1944 22,199 2,280 1945 19,001 1,145 1946 6,286 630 1947 2,383 709 1948 2,142 608 1949 3,807 2,936 1950 4,435 4,109 1951 2,673 3,824 1952 3,554 3,952 1953 1,306 2,857 1954 380 3,778 1955 973 2,204 1956 452 2,246 1957 427 3,280 1958 428 13,174 Total area 4,486,069 235,850 aMichigan Department of Conservation, Biennial b Platted lots and small parcels of propert are counted as separate units and do not enter into t e acre- age tabulations. 6O TABLE 2 INCREASE IN AREA OF STATE FORESTS 1930-1958 anr Acres 1930 604,475 1932 787,381 1934 888,263 1936 957,975 1938 1,049,042 1940 1,139,803 1942 1,851,320 1944 1,959,064 1946 2,020,972 1948 3,640,1273 1950 3,662,519 1952 3,726,899 1954 3,757,867 1950 3,751,738 1958 3,760,369 Source: Lands Division, Michigan Department of Conser- vation. aNorthern Fichigan Game Areas added to state for- ests in 1946. In 1946, 1.411 million acres of Northern Game Area lands were transferred to the Forestry Division creating 10 new state forests. By this time, land values were in- creasing, and tax reversions were greatly reduced; only about 6,000 acres were deeded to the state in 1946. With demands for wild land as recreational sites further in- creasing land values, tax reversion has practically ceased today. As of June 30, 1958, the total net area of Michigan 61 state forests was 3,780,1691 and of that total 3,170,500 acres, or some 83 percent, are tax reverted lands. Land.purchases Prior to 1931, there were very few purchases of land by the state. The Game Division had purchased approximately 115,000 acres of game refuge lands at prices little higher than taxes due on them. However, the Game Protection Fund which consisted of receipts from license sales, was in- creasing each year and being accumulated in surpluses. Act 325 PA 1931, which created the Game Protection Fund, pro- vided that 1.50 dollars of the fee received from the sale of deer hunter licenses should be used exclusively for the acquisition, protection, development and maintenance of game refuges and public hunting grounds. Therefore, these funds could be used in acquiring state forest lands because the state forests are open for public recreational use. Primarily, the land purchased within state forest boundaries from 1931 to 1949 was from the 1.50 dollar deer license fund, and was purchased by the Game Division. Ac- tually, the majority of the purchases were in the Upper Peninsula. The lands aggregated were administered as state game areas until 1946 when they were made state forests. Table 3 shows that purchases decreased considerably after 1946. In 1949, the legislature removed the earmarking of 1I-Eot included are some 5,000 acres of undedicated lands outSide of state forest boundaries. 62 TABLE 3 STATE FOREST LAND PURCHASED BY THE $1.50 DEER LICENSE FUND 1931-49, AND THE GAME AND FISH PROTECTION FUND, 1950-588 . Land Purchased Purchase Price Blennium (acres) (dollars) 1921-19303 115,032 460,800 1931-1936 43,380 104,941 1936-38 95,846 205,190 1939-40 65,672 142,234 1941-42 74,666 105,159 1943-44 47,285 114,858 1945-46 87,264 309,265 1947-48 13,311 50,502 1949-50 8,613 44,216 1951-52 17,069 144,654 1953-54 6,466 61,539 1955-56 8,937 121,672 1957-58 6,299 103,512 Total 589,840 1,968,542 aDerived from Michigan Department of Conservation, Biennial Reports, 1941-195 . bThese items are the consolidation of the early years of the program before extensive land acquisition began. the 1.50 dollar deer license fund and purchases made since that time have been made by the appropriation of funds from the Game and Fish Protection Fund. Total purchased lands of the state forests as of June 30, 1958 including fishing sites as well as game lands, were 589,840 acres, or approximately 17 percent of the to- tal acreage. 63 Land exchanges Act 193 PA 1911, authorized the exchange of state- owned lands for lands owned by individuals and by the Uni- ted States Government. This provided a means by which the state forests and other conservation project areas were con- solidated and blocked in. Most land exchanges have been with the U.S. Forest Service. In 1936, the total acreage of state tax reverted land within national forest boundaries was about 350,000 acres. In 1958, by process of exchanges with the federal government, it was down to about 77,000 acres. There were also many exchanges made with private landowners under which privately-owned lands were acquired within the boundaries of state forests in exchange for scattered, tax reverted state lands lying outside of state forest areas. In more recent years, because of the low rate at which tax reverted lands have been coming into state ownership, most of the exchanges involve lands with- in administered units. These exchanges requiring mutual agreement between the parties involved, are made where there is advantage to both the private landowner and the state. In some instances, these exchanges are initiated by the Forestry Division, while others are applied for by private owners. In some cases, exchanges are made for bet- ter patterns of ownership between the private owner and the state; other cases involve lands having agricultural pos- sibilities which are conveyed to adjoining farmers in 64 exchange for lands better suited for forestry or other con- servation use. In general, exchanges are made where there is a demonstrated need for an exchange. In some exchanges, small high value acreage is ac- quired for larger acreages of low value land, but in all cases, the exchanges are made on an equal value basis under statutory requirements. Present state forest acreage includes 410,884 acres which were acquired by exchange with both private land- owners and the United States. PRESENT CONDITION OF THE FORESTS The state forests are located primarily in the so- called "north woods" area of the state. This includes all of the Upper Peninsula and the northern half of the Lower Peninsula. (See Figure 4 for map of locations within counties.) The general topography of these regions varies con- siderably. In the western half of the Upper Peninsula are found the rocky uplands constituting the major mountain ranges of the state. The eastern part of the Upper Penin- sula and the northern half of the Lower Peninsula tend to be flat to gently rolling country with a considerable num- ber of lakes and swampy area present. The soils of the region where state forests are located are of the podzolic type. Great local soil vari- ations occur since there is considerable variability in the texture, fabric and mineralogical composition of the materials left by the glaciers which repeatedly covered the state in the geologic past. The soils of the state forests are predominantly light and sandy with Rubicon and Ogemaw the principal series. 65 PRESENT CONDITION OF THE FORESTS The state forests are located primarily in the so- called "north woods" area of the state. This includes all of the Upper Peninsula and the northern half of the Lower Peninsula. (See Figure 4 for map of locations within counties.) The general topography of these regions varies con- siderably. In the western half of the Upper Peninsula are found the rocky uplands constituting the major mountain ranges of the state. The eastern part of the Upper Penin- sula and the northern half of the Lower Peninsula tend to be flat to gently rolling country with a considerable num- ber of lakes and swampy area present. The soils of the region where state forests are located are of the podzolic type. Great local soil vari- ations occur since there is considerable variability in the texture, fabric and mineralogical composition of the materials left by the glaciers which repeatedly covered the state in the geologic past. The soils of the state forests are predominantly light and sandy with Rubicon and Ogemaw the principal series. 65 - - '-—-'_ I/Illll'll < 0F : n- MINNESOTA MICHIGAN DEPARTMENT OF CONSERVAWON LEGEND E NATIONAL FORESTS. PARKS 8. REFUGES MI] STATE FORESTS % STATE GAME AREAS I STATE PARK 8. RECREATIONAL AREAS I EXPERIMENT STATIONS r-n'n IA-rIELD ADMINISTRATION G-GAME .. FISH HATCHERIES a. REARINC STATIONS GAME DIVISION N l- REGIONAL BOUNDARIES DISTRICT BOUNDARIES \ In REGIONAL HEADQUARTERS 0 DISTRICT HEADQUARTERS \ STATE GAME ARES 1. Backus Creek 11, 21. 51_ Miskegon 41. Pomnnn 2, Berry 2. Fennville 22. Iild 32. Oak Grove 42. Rogue Rive 3, Lu: River 13. Flu Ib'ver 23, LinIZm Hegver Islands 33. 43 Sinronvil ’ _ 4, Cannonsburg Fulmn 24. Inwe1134, Paxtvaler River 44 Shiunssee River "" 5, Olelsen 5, Gourdn ck 5. Munistre River 35 Pere Mar etce 45 Spring Cr ck I I ' 6. Crane Pond 15 Grand Oven 25 Maple Hiver 35Peterslx1r Stanton. . I 7. CmIsInnd~ 7 Gratint-Sap'naw 27 Martin)‘ 1m. 31 Purchase 47. mm Rue I , ._ I: a. Dansvme 18. egory 2a. Mlddleville 53. Piusford 45. Tables Mm.» I I J A C K‘s 0 F 9. Deford 19. Haymnrsh Lake 29. Minden Cuy 39. Poince Mauillce 49. Tue ___VAN BU R E N ' , WASHT EN AW II). Eamon 20. languton 30. Murphy Lake 40. Purl. Huron so. Vnssm “ H AMAZOO C A L H D U N ‘ . Sanctuary ‘Um: ur Chippewa River Smu- Forest a l I a l 43* . I‘ I 15 ”W I ____________ STATE WILDLIFE AREAS STATE WILDLIFE EXPERINBIT STATIONS STATE GAME FARM | 45* - .1 3,33 I . I 51. Fish Poi St.ui1- nm 57. Gisino 51, Mason I R 0 E 52. Nny.nqnsng Point 55. Unndiu. 58. HoughtouLnlu; C A 56 BRANCH I HILLfiALEI LENAWEE -MON 53. 01. nnicussee Wildfowl any 59. Ron lake TJ OS I I I 3 50. Sum Creek I ‘52“ ‘ Il , as I l _ lI_ CONS. 2I93 I N D J A N A all; a 9 a m ”I 0 e a r-JH " U» (egflf-K \deku ONTARIO i > < z M t—n Fig. 4,—- Loss tion of State Norests of Michigan, 1960 99 67 Timber Inventory data in this chapter are derived from the Michigan State Forests' Continuous Forest Inventory, a system of periodically remeasured permanent sample plots begun in 1950. Area The present inventory of the timber resource of Nichigan state forests indicates a rapid recovery from their denuded condition at the turn of the century. Today, some 2.8 million acres, or 76.7 percent of the total area Of the state forests, are considered to be commercial for- ests. Almost two thirds of the forests are in hardwood types--mainly aspen, birch and northern hardwood (Table 4). Jack pine and swamp conifers--spruce, balsam fir,cedar and tamarack--dominate the softwood types. Stand size distribution is still far from satisfac- tory, however, and reflects, in part, the generally young, second growth condition of the forests. Only 12 percent of the commercial forest is Of saw timber size, while 46 percent is in pole-timber and 19 percent is in seedling or sapling or unstocked stands (Table 5). Much of the forest is of types that will not grow into sawtimber stands. Nev- ertheless, the forest types which can be brought to sawtimber are weighted too heavily to small stand sizes. They do not have the distribution from seedling to sawtimber stages H.o ¢.HNN N.q m.¢m o.w o.od~ Swans psmHBOA 0.N H.0x 0.N x.am 0.0 0.0a 00:60 000nm: N.0H 0.00m 0.HH 0.00m 0.0 n.00a 0000 n.0x m.axn.m H.0A N.0H0.H 0.0a m.0mm.a Anson 0.00 0.000 0.R 0.00s 0.0“ 0.000 0000000 aensm H.m «.moa 0.0 m.a0 0.0 0.00 0050 00H 080 mange n.0a 5.x00 0.0a R.H0N 0.R 0.00s 00am 8000 N.N o.ow N.H o.mm o.m o.w mpoozpuwc demsm 0.4a m.~a0 0.05 N.H05 0.NH H.Hmm 000030000 00000002 «.0 0.00a n.0a 0.R0H 0.0 A.R x00 0.xN m.000.n m.~m 0.0xm 0.0N 0.0N0 conam . gonna mwhom mmhow wGHUQ unmoumm pnmmsosfi unmouom psmmsosa unmouom pGOmSOfiH mummuom HH¢ mannaacom H0304 OHchHzom Home: wmhu ummhom momma m8 mach mwde Zm3nw01mu£wah pad mpmom o. m.HN m.o ~.m m.o m.oH umuw3 consummOEIsoz m.m N.¢NH o.H H.mH m.m H.00H wmxmae paw £8082 monum 00060 menus unmoumm pcmmaoca unwoumm pawmzocw scoonom pammsoca mama umwuom wumouom Hfld madmsanom 00304 OHSmQHnOm home: QMDZHHZOO O mqde 7O .nmma ma NHSwnwcmm 0000: How mumom .mump muounm>ca coamw>fin mhummuom .coaum>uwmnoo mo ucoeuummoa Gwmanuaz "wousom 0.000 0.000.m 0.000 0.00R.0 0.000 0.000.0 0000000 0000 000 0.0 0.00 0.0 0.00 0.0 0.00 000000300 00000 0.0 0.000 0.0 0.000 0.00 0.000 000000300 00000 0.00 0.000.0 0.00 0.000 0.00 0.000 00000 0.00 0.000 0.00 0.050 0.00 0.000 00000000 000 000000000 0.00 0.000 0.00 0.000 0.00 0.000 0000000000z mun—ow mouom mMHUm unwoumm pnwmfiosH unmoumm 00005059 undoumm 02005059 0000000 swam 0000000 004 «Hamaanmm 00300 masmsanmm 0000: momoa mHmmMOh mH20 £0000>0Q mpumouom .50000>0mmsoo mo ummfiuummwn nowHSUHZ "condom 0.000.0 0.000.00 0.000.0 0.000.0 0.000.0 0.000.0 00000 000 0.000 0.000.0 0.000 0.000.0 0.000 0.000.0 0000000 00030 0.000 0.000 0.000 0.00 0.000 0.000 0000 000 000 00003 0.000 0.000.0 0.000 0.000 0.00 0.000 0000 0000 0.000 0.000 0.000 0.000 0.00 0.000 000030000 08030 0.000 0.000.0 0.000 0.000.0 0.000 0.000.0 000030000 00000000 0.000 0.000.0 0.000 0.000 0.0 0.00 000 0.000 0.000.0 0.000 0.000.0 0.000 0.000.0 00000 - 00000 .00 .00 00000 .00 .00 00000 .00 .00 00000 :000002 psmmsosa £00000: pGQmSOLH 200000; ozmmsosa 0000000 000 masmuaaew 00300 maamc0zem Homes camp ammuom mmme Hmmmom % 00000 0000000 00<00 0000:000 000 o mqm<9 MUOHm OZHZOMU m0 m5100> mm mo ZOHHDmHmHmHQ 73 and mortality on state forests alone. However, based on a percentage of the total forests of Nichigan as given in the Timber Resource Review, annual mortality from fire, insects, disease, windfall, and other destructive agents for the state forests is about 42 million board feet in sawtimber and 25 million cubic feet in growing stock. Net annual growth can be calculated on the same bas- is at 4.8 percent of the sawtimber inventory or 148 million board feet, and 4.4 percent of the growing stock inventory or 79 million cubic feet. Timber drain, which refers to the volume removed from inventory in the course of logging, is now much less than growth: Sawtimber Growing Stock (Nillion bd. ft.) (Million cu. ft.) Growth 148 79 Drain 15 30 This is one of the most cheering asPects of the timber resource situation on the state forests. Current net growth in total growing stock is 2.6 times greater than drain, but in sawtimber growth is almost 10 times as great as drain. Changing Forest Inventory The continuous inventory plots on nine state forests have recorded in dramatic fashion the recent changes tak- 74 ing place in Michigan state forests. Between 1953 and 1959 there has been a net increase of 22 percent in the number of trees five inches and larger in diameter (measured at breast height). In the same short period, cubic-foot fol- ume has increased 38 percent. Stand sizes on these nine state forests have also moved upward sharply: seedling and sapling stands reduced from 532,000 to 276,000 acres despite the movement of 63,000 acres from non-forest condi- tion to seedling and sapling; pole timber stands, up from 765,000 to 957,000 acres; small sawtimber stands, up from 78,000 to 164,000 acres; and large sawtimber stands, up from 10,000 to 21,000 acres. Recreation There is a wide variety of opportunities available for outdoor recreation on state forest lands. The state ownership of these lands allows free public access to some 3.8 million acres of forest land which contain at least 1,100 lakes and 3,600 miles of stream within state forest borders.1 The Forestry Division of the Conservation Department has recognized the growing demand for the use of the state forests as recreational areas and has implemented several 1These figures for number of lakes and miles of stream are estimates based on a percentage of the total of 11,037 lakes and 36,350 miles of stream within the state from C.J.D. Brown "Michigan Lakes and Streams," Michigan Conservation Department, Fish Division Pamphlet No. 2 . 1957. pp. 7. 75 programs of development to attempt to satisfy the need. The campground system on state forests is one of the most important of the programs. From the first campground built in 1929, the number constructed and in use by the summer of 1959 was an even 100, containing a rated total of 934 campsites. Twenty-seven campgrounds were located in the Upper reninsula and 73 in the Lower leninsula. These camping areas are located on lakes (70) or rivers or streams (30) and are generally off the beaten path, away from stores, towns, electricity, and other conveniences. They are provided with the barest of necessities for out- door living--tables, stoves, drinking water and pit toilets. For the most part they are small, laid out to accommodate 5 to 15 camping parties. Only 3 of the campgrounds nor- mally accommodate over 30 camp parties, and these are on large lakes which get extra heavy use. Camping on state forest campgrounds is a free privilege, with a minimum of regulations. However, continuous camping at one campground is limited to 20 days. While camping is provided for specifically at the campground areas, it is permitted any place on the state forests not posted against such use. Swimming is a popular sport on many lakes and rivers of the state forests. Of the 70 lakes on which campgrounds are located, 25 are rated as good swimming (firm, sandy bottom) and 22 as fair. At least three campgrounds are provided with bathhouses. Picnicking is allowed anywhere on the state forests, 76 but only at the campgrounds are any facilities provided. At three of the lake campgrounds where local use of pic- nicking, boating, and swimming is heavy (Ely, Clear, and Bear lakes) picnic grounds are provided separately from the camping areas. Boating is allowed on most lakes where there is public access. In addition, at least 100 public fishing sites furnish access for boats on lakes and rivers in the state forests. It is obvious that the free access of state forest lands offers almost unlimited opportunity for hiking. This Opportunity has been enhanced by the establishment of a foot trail system as an integral part of development of certain campgrounds. The trails range in length from one to six miles and are simply marked with a minimum of clear- ing or construction work. Equally as unlimited as the hiking opportunities are the opportunities for enjoying the scenery of the state forests from forest roads and highways. Every state for- est is liberally crisscrossed with roads, from super high- ways to two-rut logging roads. Two Specially marked forest scenic drives have been completed as part of a rec- reation plan of the Forestry Division. These are located on back road forest areas where the traveler may enjoy peace and scenery, and learn something of forest uses and management. At the same time, he has the comfort of know- ing he will not get lost. 77 To provide for that segment of the outdoor recre- ationists who are seekers of solitude, and for the student or scientist who wishes to study areas relatively untouched by man at least one "natural area” has been set aside in the state forests, with others to be definitely included in long range plans of recreational development. Wildlife The state of hichigan has an abundant supply of game and fish in its forests and streams as indicated by the fact that more people hunt and fish in Nichigan than any other state. However, the task of making a specific in- ventory of the numbers of the game animals and birds and fish is a difficult one and even more unsurmountable would be the allocations of those numbers located specifically in the state forests. About all one can do is use the judgments of those in the best position to know. This dis- cussion of the present condition of the Michigan state forests as to its wildlife is based upon oral information and printed materials from the Game and Fish Divisions of the Conservation Department. The total estimated deer herd of northern Michigan (above Town line 16) is about 750,000.1 A further rough estimate indicates that perhaps 200,000 of that total would be located on state forests. 1From Game Division estimate based on fecal pellet- group surveys of 1959. 78 The total drain on the deer herd for the 1958 sea- son was calculated at 170,500. Of that total 101,400 were legally harvested and 69,100 were found dead in the woods (either starved, or illegally killed during the season). Other big game animals found in Michigan state for- ests are bear and elk. The bear are quite common in the Upper Peninsula with a take of about 500 annually. The elk were planted in the state forests in 1918 and their numbers have increased from 24 to about 1,200. However, there has never been an open season on them as legal big game. The numbers of small game availableame even more difficult to estimate than big game. The Game Division has conducted "post card" surveys which have reported the esti- mated kill as given in Table 7 for the various kinds of small game animals and fowl. The allocation for the state forests is estimated at about one fourth of the total for the two northern Michigan zones in which the state forests are found. The Game Division is carrying on an extensive pro- gram to aid wildlife population on state and private lands. In northern Michigan forest lands a new Pittman-Robertson Project was set up in 1957 for special wildlife habitat de- velopment work. This project covers such work as planting shrubs, herbaceous seeding, herbicide spraying, controlled burning, disking, mechanical cutting, and small water im- provements. In addition, deeryard cuttings of timber are arranged to supply supplemental feed during the critical 79 TABLE 7 ESTIMATED SMALL GAME KILL FOR NORTHERN MICHIGAN AND FOR STATE FORESTS, 1958 Species Northern Michigan8 State ForestsB Pheasants 101,520 25,000 Ruffled Grouse 336,050 85,000 Ducks 210,020 55,000 Geese 12,400 3,500 Woodcock 44,070 12,000 Cottontails 279,800 70,000 Snowshoe hares 303,120 75,000 Squirrels 255,240 65,000 Raccoon 80,330 22,000 Source: Game Division, bichigan Department of Conservation 1959. aIncludes those counties north of Town line 16 in the Lower Peninsula and all of the Upper Peninsula. bApproximately 25 percent of the kill for northern Michigan. 80 winter and early Spring seasons. All of the estimated 1,100 lakes and 3,600 hundred miles of stream in state forests are available for fishing where access is available. It must be understood that much of the lake and stream frontage was not tax delinquent land; hence, it did not pass into state ownership. However, all lakes and streams can be fished if access to them is pro- vided. To furnish this access, the Fish Division has instituted a program of purchasing lands on streams and lakes to provide access for fishing and boating. Through 1957, 696 sites embracing approximately 49,000 acres with 225 miles of water frontage were acquired through purchase, exchange, and by gifts. These are developed and maintained with revenue from the sale of fishing licenses. These de- veloped sites also serve as additional areas where camping can be enjoyed. Of the 696 sites purchased, about 140 of them are located within state forests and are administered by the Forestry Division. The Fish Division conducts an extensive lake and stream improvement program to help improve fishing condi- tions on state waters. Such improvements for lakes include: experimental projects to manipulate fish populations to increase production of desirable game fish by such means as the use of rotenone and large seines; impounding of marsh areas or warm water lakes to improve Spawning areas for northern pike; installation of fish shelters to concen- trate fish in clear water lakes; the construction of barrier C0 1 dams; and the experimental control of aquatic plants. Stream improvements are made primarily on trout streams and include measures to improve the stream chan- nels, the construction of structures to provide pools and cover for trout, and the planting of vegetation to help stabilize erosion of stream banks. ECONOMIC CONTRIBUTIONS OF THE STATE FORESTS A first approximation of values from the state for- ests is in the cash receipts obtained directly by the state for various goods and services. These receipts represent direct income to the state and are of particular interest to state fiscal agents since the funds flow into the gen- eral fund and help to meet the general costs of state government operations. Cash receipts for fiscal year 1957 are summarized in Table 8. Cash receipts are obtained from a number of sources, but two general sources of receipts--timber and nursery stock and oil and gas-~stand out. Not only are timber sales the chief source of receipts, but their pro- portion of the total, 63 percent, has been increasing rapidly. Receipts from oil and gas leases and royalties have been declining both relatively and absolutely. Cash receipts represent only a small portion of the economic contribution of the state forests to Michigan. Some of the more conSpicuous services of the forests have no immediate sale or market value. Moreover, the products of the state forests represent only a first stage of value. They generate large flows of goods and services which mul- tiply the contributions of the forests before their products 82 83 TABLE 8 CASH RECEIPTS sacs MICHIGAN STATE FORESTS, 1957 Source Receipts (d611arS) Timber sales 815,410 Sale of nursery stock 150,041 Use permits 758 Grazing permits 1,592 Special permits 535 Mineral permits 3,737 Oil and gas leases 72,000a Oil and gas royalties 250,0008 Total 1,294,073 Source: Michi an Department of Conservation. Nineteenth Biennia Report, 1957-58, Lansing. aLands Division estimates, based on assumption that 55 percent of total oil and gas leases and royalties came from state forest lands. reach ultimate consumers. In this chapter, the economic contributions of the state forests will be examined for three major classes-- timber, recreation and wildlife. Cash receipts will be considered, but the chief emphasis will be placed on the economic activity generated at the final stages of con- sumption of the products of state forests. 84 Timber In offering timber to the market, the Division of 1?::ivate sales, allowing for differences in quality, volume, za.<:cessibi1ity, and other influences on the value of stump- aigge. In pursuance of this policy, the Division of Forestry aiclvertises and requires competitive bidding on all sales j.rrvolving more than 1,000 dollars. Lidding can take two .ECDInnsz a sealed bid, or public auction. The auction is Elite older established form of sale. however, since sealed LDins are thought to provide more Opportunity to small pro- <fli1<2ers, they are being used more and more. In either case, the procedure is similar. The Div- ision of Forestry sets a base price (a conservative esti- Tnéitze of stumpage value) per unit of volume for each species CHEiEered for sale. The largest bonus offered by an accept- ai>l.e timber operator determines the winning bid. Two other methods are used with competitive bidding, lbklt neither is used widely. In one, the cash bonus is eliminated; the sale contract goes to the bidder offering tile highest stumpage price per unit of volume. In the other, tile base price per unit of volume is eliminated; the win- 85 ning bid is determined by the largest lump sum cash payment offered. The great number of small negotiated sales (where the values involved are less than 1,000 dollars) may appear to reflect an inefficient method of handling timber sales. However, it demonstrates a policy of fostering a competi- t: ive market and of providing timber locally for small independent producers, not a desire to maximize the rev- enues obtained from timber sales. In 1957, some 2,100 (more t:lnan 90 percent of the total) negotiated sales were made. They accounted for more than half of the total volume of wood sold from state forests. Timber Sales Prior to 1938, only a negligible amount of timber was sold from the state forests. Little merchantable tim- be:- was available on the overly eXploited lands which had only recently come under the administration of the Divis- ion of Forestry. 0f necessity, the foremost objective of administration was to protect the state forests and grad- ually to rebuild the timber-growing stock. The early sales from 1938 to 1941 were minor; they c"Onsisted mostly of salvage material from windstorms and E'«Lre. However, with the advent of World War II in 1941, the number of timber sales, the volume of timber cut, and c=ash receipts from sales all moved up on a fast-rising curve. Changes came with greatly increased timber demand, 86 zadditional technical help to administer sales, improved tzimber inventories, and public acceptance of forest man- a gement . The record of timber sales from 1941 to 1960 is shown in Table 9. EXpansion has come at a strikingly ra- TABLE 9 TIMBER SALES FROM MICHIGAN STATE FORESTS, 1941-1960 ‘ a. Number Timber Cash artear of Sales Volume Cutb Receipts M'bd, ft. ddIlars 1.9941 291 2,784 6,850 1942 447 10,790 25,860 1943 285 7,103 13,041 1944 757 16,222 54,748 1945 539 13,795 51,811 1946 856 28,955 72,121 1947 1,329 39,759 135,779 1948 1,394 42,814 155,684 1949 1,442 38,423 159,767 1950 1,530 33,991 149,215 1951 1,531 47,180 205,675 19 52 1,439 57,934 296,466 1953 1,561 44,576 302,894 1954 2,267 69,657 474,199 1955 2,091 88,012 591,158 1956 2,267 98,748 672,181 1957 2,316 131,111 815,410 1958 1,775 113,657 709,761 1959 2,057 104,896 654,034 1960 2,223 135,802 795,816 8Fiscal year ending June 30 of year stated. b All units of measure converted to board feet. 87 pid rate. Comparing the last five years with the first five years, number of sales has multiplied 4.5 times; volume of timber cut, 10.6 times; and cash receipts, near- ].y 23 times. In Table 10, the product makeup of the timber output TABLE 10 OUTPUT OF RAW TIMBER PRODUCTS FROM MICHIGAN STATE FORESTS AND FROM ALL MICHIGAN FORESTS 1957 Unit of Output From Output From Product Measure State Forests All Forests Pu 1pwood Thousand cords 200 980 Sawlogs Million bd. ft. 14 365 Veneer logs Million bd. ft. 2 30 Mi sc. timber IJsed in man- quacturing Thousand cu.ft. * 1,883 1§)<<:elsior wood Thousand cords * 32 Chemical and «charcoal wood Thousand cords 76 210 Ft—lel wood Thousand cords l 800 Fence posts Thousand pieces 225 6,739 MZLrIe timbers Thousand cu. ft. 383 3,728 P<3 les and piling Thousand pieces 2 32 Hewn ties Thousand pieces 16 41 <31'1‘r'istmas trees Thousand trees 5 1,820 Christmas greens Thousand lbs. 874 2,372 aple syrup Thousand gal. 0 70 \ aDerived from Michigan Department of Conservation Ejggeteenth Biennial Reporg, 1957-1958, Lansing. ' DTaken from Lee M. James, "Farm Woodlands and the timber Economy of Michigan," Quart. Bul. 42(3): 563-83, Michigan Agricultural EXperiment Station, East Lansing, February, 1960. 7': Not segregated in state forests records. C' ’3 kl from the state forests is detailed for a recent year, 1957. A great diversity of products is evident, although the ma- jor output is still in small timber and relatively low- quality products. Twenty percent of the pulpwood, and 36 percent of the chemical and charcoal wood produced in Mich- igan comes from the state forests. In contrast, the state forests turn out only four percent of the sawlogs, six per- cent of the veneer logs, and six percent of the poles and piling. Despite the impressive trend of increase in the vol- ume and value of timber sales from the state forests, the peak year output in 1957 (equivalent to 3.5 In board feet or 7 cords per 100 acres) represents only a small part of time output that is feasible within the limits set by man- agement. The development of a program to place timber on the market in accordance with the dictates of technical management plans has grown slowly, and the Division of For- eStry has not yet reached the point where it can offer the entire allowable cut1 for sale. A more serious brake on Output is the limited market for some species and some ‘1 lAllowable cut is a concept used to indicate the V0 lume that may be removed during a given period while uilding up or maintaining sufficient growing stock to meet _Specified growth goals. It is a tenuous concept in that it ls based only partly on growth estimates; it takes into ac- count a number of factors such as forest types, species composition, stand size classes, and the economic feasibil- ity of logging operations. Under Michigan conditions, it is set well below actual growth to permit the building up Of forest inventories to levels considered desirable by foresters. 8) aireas. Time can be eXpected to remedy this situation, but ffor the present, many timber offerings are simply unattrac- t;ive to would-be buyers. In 1953 and 1954, for example, t:he Division of Forestry offered for sale about 80 percent calf the allowable cut of aspen in its Lower leninsula for- ca sts, but only a third was actually sold. Consumer Expenditures The end of reduction in our societ is the satis- P y ffaiction of the wants of individuals. For this reason, to nneaeasure the value of timber products, it is desirable to t:éilf breaking down timber product sales from such a Census ther raw materials are excluded as well as supplies, con- tzainers, fuel, purchased electric energy and contract work. Nevertheless, for the purpose intended of approach- i.ng consumer expenditures for timber products so that these eavxpenditures can be added to expenditures for other prod- LJ.CCS of the forest measured more conveniently at the czxonsumer level, the method used is considered satisfactory. 'Iln propo‘tionate terms, the omission is probably not large. Iin any case, the method eliminates only those portions of \ralue which do not strictly belong to timber. Value of raw timber products The first step in the approximation of consumer ex- ‘peenditures is the calculation of the value of raw timber products.1 In 1957, the state forests yielded raw timber prod- uszts worth 7.8 million dollars, about 11 percent of the tc>tal value of raw products from all forests in Nichigan (liable ll). Pulpwood is the dominant item, representing 70 Peircent of the value of raw products from the state forests. {Hiemical and charcoal wood ranks next, accounting for 13 Fflarcent of the total. The raw products of relatively high \Jnit value--veneer logs, sawlogs, and poles and piling--ac- Count for only 13 percent of the total. These relationships -‘ 1Raw timber products refer to whole or slightly modified logs and bolts. Their value is calculated at the point of processing or consumption, but before manufacture. .1) [\4 [ABLE 11 VALUE OF RAJ TlthR PRODUCTé PROV h CHIGAJ STATE FORESTS AKD FROM ALL MICHIGAN 50.13313 1937 Product Value From L Value From State F rests \ All Forests thousand thousand dollars dollars Fulpwood 5,500 26,950 Sawlogs 770 20,075 Veneer loes 240 3,600 Lise. timber used in manufacturing * 518 dxcelsior wood * 512 Chemical and charcoal wood 988 2,730 Fuel wood 5 12,000 Fence posts 79 2,020 Kine timbers 115 1,113 Poles and piling 11 176 Hewn ties 32 70 Christmas trees 7 2,565 Shristnas greens 35 94 Total 7,792 72,012 aOutput statistics for state forests from Table ll multiplied by unit values of wood products delivered to processing plants or to wood concentrators if products are not processed further. Tnit values were those used by James in calculating the value of raw timber products from all Dichigan forests. bTaken from Lee 3. James, ”Farm woodlands and the Timber Economy of Michigan," luart. Bul. 42(3): 563-83, hicnigan Arricultural Experiment Station, East Lansing, February, 1960. if: Not available from state forest records. emphasize the predominantly small size and low quality of the timber resource currently available for harvest on the state forests. 93 Value added thrpueh processing and manufacture Value added through processing and manufacture is ta- ken to be the sum of two components reported by the U.S. l and, Bureau of the Census: (1) value added by manufacture (2) eXpenditures for new plant and equipment. A third pos- sible component--net investment of government-~has been omitted from consideration because it is small and cannot be readily determined for timber production alone. Value added in major timber industry groups for the whole state of Iichigan was obtained from the 1957 Annual Survey of Manufactures, with group totals broken down ac- cording to the value relationships among component timber industries shown by the detailed 1954 Zensus of banufac- tures. Each industry group covered and the correSponding value added for 1357 is as follows: lumber and products (except furniture), 57.9 million dollars; pulp and paper products, 325 million dollars; wood furniture (except up- holstered), 37.7 million dollars; and miscellaneous wood products, 14.6 million dollars. One industry group of consequence to this analysis which is not listed separately by the Census is "wood chemicals and charcoal." Value added for this group was estimated to be approximately four times the value of the 1Value added by manufacture is calculated by sub- tracting the costs of materials, supplies, and containers, fuel, purchased electric energy, and contract work from the total value of the shipments. 94 raw wood product.1 This relationship indicates a 1957 value added for wood chemicals and charcoal of 10.2 million dol- lars in Michigan. Again, as in the calculation of the value of raw wood products, the method used tends to underestimate the true value. In lumber, for example, there is a question as to whether the Census has sampled fully the production of numerous, elusive, portable sawmills. In furniture, a large but unspecified amount of wood is used for products not designated by the Census as wood furniture. Such omissions as have occurred are not important in the overall framework of this analysis, but they need to be recognized to point up the conservatism in the values calculated. To reduce value added for lichigan to that portion of value added which rests on the timber output of the state forests, the preferred steps in procedure are as follows: (1) to determine the fraction of value added for Fichigan which is dependent on wood produced in the state and, (2) claim for the state forests a portion of the value calcula- ted in step (1) based on the ratio of the raw wood output from the state forests to the raw wood output from all for— ests in Michigan. A study by John Hanson2 makes it possible to follow lRelationship obtained from members of the industry by correSpondence. 2John Hanson, "Wood-Using Industries of the Lower Peninsula," Michigan Conservation, Vol. XX, pp. 13, 14, 27-29, January to FEbruary, 1931. 95 step (1) in the procedure above for major industry groups other than pulp and paper. Hanson found that, on the aver- age, 40 percent of the raw timber used by the timber industries of the Lower Peninsula came from Michigan for- ests. On this basis, 40 percent of the value added within the state could be considered dependent on hichigan raw timber output. This would indicate that 44 million dollars of value added in the lumber and products, wood furniture and miscellaneous wood products groups can be counted as originating in the forests of Ficnigan. For wood chemicals, and charcoal, an industry tied closely to lichigan sources of wood supply, the corresponding figure for value added which rests on timber produced in the state is some 10 mil- lion dollars. Further reduction of value added to that portion which is dependent on state forests is based on the ratio of raw wood output from state forests to the raw wood out- put from all forests in hichigan. These ratios are 4 percent for sawlogs and veneer logs, 36 percent for chem- ical and charcoal wood. hence, the value added from state forest timber can be calculated at 1.8 million dollars for the lumber and products, wood furniture, and miscellaneous wood products industry groups, and 3.6 million dollars for the wood chemicals and charcoal group. To calculate value added from state forest timber in the Michigan pulp and paper industry, a different procedure is necessary. Hanson's estimate of the proportion of raw timber supplied from within the state can no longer be considered reliable because of the profound changes which have taken place in the pulp and paper industry in the past decade. The approach taken for the pulp and paper industry was to determine the "value added per cord of wood base" and multiply by the number of cords of pulpwood produced from the state forests. Ihe hey item here is “value added per cord of vxxml ease.“ Lénar; the East nortinxhwitral Region (the Census designation for the five states of Nisconsin, Lichiean, indiana, Illinois, and Ohio) to minimize the in- fluence of cross-boundary flows in pulpwood and pulp and paper, consumption of pulpwood in l)57 (plus the pulpwood equivalent of net imports of pulp and paperl) was divided into value added for the pulp and paper industry in the sane reiion. The result,;4£ dollars per cord of pulpwood, was multiplied by the 200,000 cord yield of pulpwood from the state forests, indicating the appropriate value added figure for the state forests to be 60.t million dollars. In srmmary, the value added through processing and manufacture of timber products in Lichigan was 446.1 million dollars in 1&57, of which 17 percent (or 75.2 million dol- lars) was based on the timber products yield of the state 1The pulpwood equivalent of net imports of pulp and paper was published for the lnited States in Timber de- sources for America's Future (op. cit., p. 425). Over the period 1§4541955, the pulpwood equivalent averaged 26 percent of the volume of pulpwood consumption. 97 forests. ,yglue added beyond manufacture The third and last stage in the process of deriving consumer eXpenditures for timber products is the calculation of value added beyond manufacture. This is an important level of measurement, taking in the considerable economic functions of transportation, wholesaling and retailing. Local data applicable to the timber products indus- tries are not available, but an approximation can be approached through suitable modifications of national data. The Forest Service reported data in Ilmber Resources for America's Future showing that wholesaling and retailing of timber products added 22 percent and transportation ad- ded 18 percent to national income arising from the produc- tion and manufacture of timber products.1 The total of 40 percent is too large for application to Michigan since transportation does not play the proportionate role with- in the state that it plays on the national scene. Reducing the allowance for transportation from 18 to 8 percent in- dicates a total income addition for wholesaling, retailing and transportation of timber products in Michigan amounting to 30 percent. There may be a slight error in this modi- fication, but the chances are that the error is in under- stating the values inherent in transportation, wholesaling and retailing. This is in accord with the procedures ad- 102, cit., p. 368. 98 Opted throughout the method of approximating consumer ex- penditures for timber products Wherein such errors as have been introduced are those leading to understatement rather than overstatement of the values involved. Income is not the same as value added, but there is a close and fairly direct relationship which will be brought out subsequently in the discussion of income from timber products. If income from the transportation, wholesaling and retailing of timber products can be said to add 30 per- cent to the income from the production and manufacture of timber products, then value added beyond manufacture of tim- ber products will add approximately the same percentage to value determined at the point of manufacture. Following the reasoning above, value added beyond manufacture for timber products from the state forests is calculated for the year 1957 at 24.9 million dollars. Summary of consumer expenditures It was pointed out earlier that consumer expendi- tures for timber products could be approached through the ' value summation of three components of the "commodity flow:' or raw timber products, value added through processing and manufacture, and value added beyond manufacturing. The re- sulting total tends to be an underestimate,but it is close enough to indicate the general magnitude of consumer expendi- tures. Consumer expenditures for timber products originating in the state forests and in all forests in Hichigan, 99 determined by the "commodity flow" method, are summarized in Table 12. EXpenditures for products originating in TABLE 12 CONSUMER EXPENDITURES FOR TIMBER PRODUCTS FROM MICHIGAN STATE FORESTS AND FROM ALL FORESTS IN MICHIGAN BY COMMODITY FLOW COMPONENTS 1957 Timber From Timber From Component State Forests All Michigan Forests million million dollars EEIars Value of raw products 7.8 72.8 Value added through proces- sing and manufacture 75.2 446.1 Value added beyond manu facture 24.9 155.7 Total 107.9 674.6 the state forests totaled 108 million dollars in 1957, some 18 percent of the consumer eXpenditures for timber products originating in all Michigan forests. Examined in terms of the "commodity flow," the great multiplication in values from standing timber to consumer is most striking. Timber sales from the state forests in 1957 aggregating 815,000 dollars in cash receipts for stumpage yielded raw products (7.8 million dollars) worth nearly 10 times as much, and final products (107.9 million dollars) worth 132 times as much. Stated more simply, each 100 dollar's worth of timber sold from the state forests re- sulted in 132 dollars' worth of eXpenditures by final con- sumers. Income The estimate of consumer expenditures just discussed is a gross measure of the contribution of timber products to the economy. It was built up by a series of calculations following the commodity flow approach used by the U.S. De- partment of Commerce in its estimates of gross national product (GNP). Some omissions, minor in importance, were involved; but the end result can be viewed as roughly equiv- alent to the portion of GNP which is assignable to timber products in Michigan. National income is a related measure of economic value commonly used by the Department of Commerce. It is that portion of GNP which represents the returns to the factors of production: wages and salaries and other com- pensation supplements, income of unincorporated enterprises, net income of persons from rental of prOperty, corporate profits (with adjustments for inventory valuations), and 1 To derive national income from GNP, non- net interest. factor payments in GNP must be excluded. These exclusions are capital consumption allowances (depreciation, capital outlays charged to current expense, and accidental damage 1U.S. Office of Business Economics. U 3 Income and Output, Department of Commerce (Washington, D.C., I958). 100 dollar's worth of timber sold from the state forests re- sulted in 132 dollars' worth of expenditures by final con- sumers. Income The estimate of consumer expenditures just discussed is a gross measure of the contribution of timber products to the economy. It was built up by a series of calculations following the commodity flow approach used by the U.S. De- partment of Commerce in its estimates of gross national product (GNP). Some omissions, minor in importance, were involved; but the end result can be viewed as roughly equiv- alent to the portion of GNP which is assignable to timber products in Michigan. National income is a related measure of economic value commonly used by the Department of Commerce. It is that portion of GNP which represents the returns to the factors of production: wages and salaries and other com- pensation supplements, income of unincorporated enterprises, net income of persons from rental of property, corporate profits (with adjustments for inventory valuations), and 1 To derive national income from GNP, non- net interest. factor payments in GNP must be excluded. These exclusions are capital consumption allowances (depreciation, capital outlays charged to current expense, and accidental damage 1U.S. Office of Business Economics. U S Income and Output, Department of Commerce (Washington, D.C., I938). 101 to fixed capital), indirect business taxes (taxes chargeable as business expenses, mainly excise and business property taxes), and business transfer payments (payments which are not in return for a corresponding productive service, il- lustrated by gifts to non-profit institutions and consumer bad debts). It would be difficult to argue that national income is superior to GNP as a measure of economic importance. Both measures are close to the consumer level, and for this reason, both are highly satisfactory measures for the pur- poses of this study. The position taken here is simply that national income, as a measure of the returns to the factors of production, is a simpler and more readily com- jprehended concept that GNP which adds various non-factor payments to national income. In subsequent analysis, where- :Ln.the costs of the state forests will be compared with the laenefits derived, benefits will be carried to the level of national income. At this point, to derive national income from the GNP generated in Michigan by timber products, it is neces- sary to establish the quantitative relationships between the two measures. 0n the basis of the overall economy, the relation- ship between GNP and national income is notably constant. Over a 20-year period, national income comprised from 83 l to 85 percent of GNP in almost all years. Only a few dev~ ¥ 1U S Income and Out ut, op, cit. p. 8. 102 iations occurred, and these were extremely minor. The average relationship, 84 percent, is considered appropriate for reducing two levels of the timber "commodity flow"-- value of raw products and value added beyond manufacture-- to income. The major component of the "commodity flow"--value added by manufacture--requires a more drastic reduction for conversion to income. The magnitude of the reduction can be determined specifically for the forest-products in- dustries by comparing the Census estimates of value added with the Department of Commerce estimates of "national in- come originating" for the forest products industries. In 1952, national income originating was 80 percent of the 1 Since value added by manufacture in the forest industries. then, the percentage has been dropping, probably mainly be- cause of the greater relative weight of the item of depreciation in the pulp and paper industry which looms larger in the total forest products industry picture. The percentage dropped to 78 in 1954 and 76 in 1956. Using the appropriate current ratios-~84 percent for value of raw products and value added beyond manufacture, and 76 percent for value added by manufacture--gross prod- 1Although their study was based on 1950 data rather than 1952, James and Yoho "Income From Timber Products in the United States," Journal of Forestr 51(2): 83-87, February 1953) arrive at t e same percent figure by adding up the payments to the factors of production in the timber products industries and comparing the total with value added by manufacture. 103 not (consumer expenditures) has been refined to national income in Michigan originating in timber produced from the state forests and, for comparative purposes, from all for- ests in the state (Table 13). Income for products TABLE 13 INCOME PAYMENTS ORIGINATION IN TIMBER PRODUCTS FROM MICHIGAN STATE FORESTS AND FROM ALL FORESTS IN MICHIGAN BY COMMODITY FLOW COMPONENTS 1957 Timber From Timber From Component State Forests All Michigan Forests million million aoIIars aoIIars Income from raw products 6.6 61.2 Income from processing and manufacture 57.2 339.0 Income added beyond manu- facture 21.5 130.8 Total 84.3 531.0 originating in the state forests totaled 84 million dollars in 1957, 16 percent of the 531 million dollars of income for timber products originating in all Michigan forests. Recreation Forest recreation has been recognized as a source of wealth and as a form of land use in Michigan for some 30 104 years.1 The desire for forest recreation has increased under the impact of expanding population, increased leisure, and greater economic well-being. At the same time, the psychic need for recreation as an antidote to the stresses and strains of modern living has been increasing. The result of the various pressures has been to great- ly stimulate public participation in all forms of outdoor recreation. Michigan's state forests, extensive in area and broadly distributed, have shared in the great upsurge of outdoor recreational use. They lend themselves admir- ably to such diverse forms of recreation as hunting and fishing,2 hiking, motoring, picnicking, camping, winter sports, boating, swimming, nature study, scientific re— search, and meditation. Unfortunately, a full evaluation of the economic contributions of the state forests in terms of recreation is not possible from the data at hand. The analysis here is limited to recreation based on campground use. Obvi- ously, much state forest recreational use is extended to lands beyond the established campgrounds, since camping and other recreational use is permitted throughout the state forests and not merely on designated areas. Consequently, 1An early reference is K.C. McMurry, "Use of Land for Recreation," Annuals of the Association of American Geographers, XX (I930), 7-25. 2For the purposes of this study, hunting and fishing will be considered separately from other forms of forest recreation. They will be discussed in another section of this chapter. 105 the data presented relating to campground use greatly understate the full value attributable to state forest recreational use. A system of forest campgrounds has been established by the Division of Forestry in order to accommodate the large numbers of recreationists who visit the state forests on outings or vacations. In the development of these areas, it has been the policy of the Division to retain as much of the natural aspect of sites as possible. As a result, the majority of the campgrounds are in secluded spots, pro- viding bare necessities for outdoor enjoyment-~tables, stoves, drinking water and outdoor toilets. All campgrounds are located on lakes or streams with fishing or bathing usually available. The campgrounds are usually small, vary- ing from 1 to 20 acres in size and accommodating generally from 5 to 15 families. Since the first campground was established in 1929, 100 campgrounds have been established (Table 14). Corres- pondingly, the volume of use has eXpanded, but it is impossible to determine the actual numbers of users in past years. Table 14 also lists the number of registered cam- pers by bienniums, but these figures are presented merely to indicate the general trend to campground use, not the actual volume of use. Campground registrations are volun- tary; they account for only a portion of the actual numbers of users, as will be demonstrated shortly, and the relation between registrations and users in any year may be highly 105 the data presented relating to campground use greatly understate the full value attributable to state forest recreational use. A system of forest campgrounds has been established by the Division of Forestry in order to accommodate the large numbers of recreationists who visit the state forests on outings or vacations. In the development of these areas, it has been the policy of the Division to retain as much of the natural aspect of sites as possible. As a result, the majority of the campgrounds are in secluded spots, pro- viding bare necessities for outdoor enjoyment--tables, stoves, drinking water and outdoor toilets. All campgrounds are located on lakes or streams with fishing or bathing usually available. The campgrounds are usually small, vary- ing from 1 to 20 acres in size and accommodating generally from 5 to 15 families. Since the first campground was established in 1929, 100 campgrounds have been established (Table 14). Corres- pondingly, the volume of use has eXpanded, but it is impossible to determine the actual numbers of users in past years. Table 14 also lists the number of registered cam- pers by bienniums, but these figures are presented merely to indicate the general trend to campground use, not the actual volume of use. Campground registrations are volun- tary; they account for only a portion of the actual numbers of users, as will be demonstrated shortly, and the relation between registrations and users in any year may be highly 106 TABLE 14 NUMBER OF STATE FOREST CAMPGROUNDS AND REGISTERED CAMPERS, 1929 TO 1958 Number of Number of Biennium Campgrounds Registered Campers 1929-30 5 * 1931-32 5 5,000 1933-34 9 * 1935-36 17 11,000 1937-38 20 * 1939-40 40 27,374 1941-42 42 79,424 1943-44 42 35,700 1945-56 42 57,909 1947-48 75 150,274 1949-50 76 139,736 1951-52 86 70,000 1953-54 85 86,000 15955-56 85 153,000 1957-58 100 105,000 Source: Files of Division of Forestry, Michigan Depart- variabl ment of Conservation. * Not available. 8. Volume of Use To obtain a current, reliable estimate of the volume of campground use in state forests, an on-the-ground study was undertaken by the writer in the summer of 1959. August From a stratified grouping based on the July and registration figures for 1958 for 93 of the camp- grounds, 4 randomized samples of 30 campgrounds each were 107 chosen, and each sample visited over a week's time.1 The study began on July 1, and was continued through a two-month period with four samples taken on alternate weeks. Every camping party with a tent or trailer was interviewed. Data were collected which would give among other things: (1) the percentage of persons registering at ampgrounds; (2) the average size of camping parties and, (3) the average length of stay. The study is described in detail in the appendix. Briefly, the method used to calculate camper use was to consider the study as four weekly checks and to compute the average use per week, weighted as to number of campgrounds checked each day. By this method, a total of 232,780 cam- per-days use was calculated for the nine-week period of July and August (excepting the Allegan State Forest). The recorded registration figures of the Department of Conser- vation for the past 10 years indicated that the months of July and August represented 60 percent of the total year's usage, and on this basis, campground use for 1959 (again excepting the Allegan State Forest) would be approximately 388,000 camper-days. Camping use of the five campgrounds in the Allegan Forest-~17,000 camper-days--was calculated on the basis of actual counts of tents and trailers made through July and August by the maintenance crew multiplied 1The five campgrounds in Allegan Forest and the two campgrounds on Beaver and Bois Blanc Islands were not in- cluded in the grouping. 108 by the average size of camping party. In total, campground use of the state forests of Michigan amounted to 405,000 camper-days in 1959. Since the average stay was eight days, the number of campers is estimated at 50,000. The state forest campgrounds are used extensively for forms of outdoor recreation other than camping; for example, picnicking, hiking, bathing, boating, and water- skiing. Some of the non-camper daytime users, specifically picnickera, bathers and water-skiers, were counted in the 1959 summer study. The tabulations indicated 45,000 user- days of picnicking, and 41,000 user-days of bathing and water-skiing. No attempt has been made in this phase of the study to cover recreational uses of the state forests independent of established campgrounds. Such uses could prove to be more significant than campground uses. For example, in com- piling data for the President's Outdoor Recreational Resour- ces Review Commission, the Forestry Division found that 1959 registrations at six winter sports areas retained in state forest ownership accounted for 44,000 user-days. Again, an actual count of canoes in 1959 on the AuSable and Man- istee rivers (primarily within one state forest) indicated 25,000 user-days of canoeing on these two rivers. Uses such as berry and mushroom picking and hiking were esti- mated to involve 77,000 users. As for sight-seeing motor- ists, the most numerous of all forest recreationists, a 109 realistic estimate cannot be made at this time. Consumer Expenditures The volume of recreational use of state forest camp- grounds reflects one aspect of importance which can be measured relatively easily, but in itself it does not ex- press value. For the latter purpose, consumer expenditures is the commonly accepted measure used in most studies of outdoor recreation. As was pointed out in the section on Timber,national income may be a preferable index of value, but consumer eXpenditures is a satisfactory measure which is closely related to national income. So far as forest recreation is concerned, the approach to measuring the value in terms of national income must be preceded by the meas- urement of consumer expenditures. Camper use of campgrounds To develop an appropriate estimate of expenditures by campground users, a formal questionnaire was sent to a random selection of 320 campers who had previously been interviewed at campgrounds in the 1959 summer study of campground use. See appendix for copy of questionnaire.) Some 65 percent of the mailing (206 questionnaires) was returned in completed, usable form. Direct and equipment expenditures per camper-day by users of state forest campgrounds are averaged in Tables 15 and 16. The expenditures summarized are those associ- 110 TABLE 15 AVERAGE DIRECT EXPENDITURES PER CAMPER DAY BY USERS OF STATE FOREST CAMPGROUNDS SUMMER 1959 Spent in Item Spent at Michigan Total Direct Home8 Travel or Expenditure at Camp dollars dollars dollars percent Groceries and beverages 0.35 1.06 1.41 48 Gasoline and oil, car services and repairs 0.14 0.66 0.80 27 Restaurant meals 0.19 0.19 7 Sundries--paper plates, ice, first aid sup- plies, insect repellent etc. 0.03 0.12 0.15 5 Cooking fuel and boat fuel 0.03 0.10 0.13 4 Boat rental and bait 0.02 0.07 0.09 3 Commercial entertainment 0.05 0.05 2 Miscellaneous expendable items 0.02 0.08 0.10 3 Total 0.59 2.33 2.92 99 aExpenditures at home by Michigan residents only, in preparation for state forest camping. bTotal less than 100 percent due to rounding. 111 TABLE 16 AVERAGE EQUIPMENT EXPENDITURES PER CAMPER USER OF STATE FOREST CAMPGROUNDS, 1959 Spent in Item Spent at Michigan Total Direct Home8 Travel or Expenditure atCmm dollars dollars dollars percent Tents, trailers, and sleeping equipment 10.70 1.53 12.23 57 Boats, boat trailers, motors, etc. 5.80 0.09 5.89 28 Fishing equipment, waders, tackle, etc. 0.59 0.29 0.88 4 Stoves, coolers, and cooking utensils 0.68 0.18 0.86 4 Clothing 0.46 0.28 0.74 3 Lanterns, axes, other accessories and tools 0.35 0.07 0.42 2 Miscellaneous items 0.28 0.17 0.45 2 Total 18.86 2.61 21.47 100 aExpenditures at home by Michigan residents only, in preparation for state forest camping. ated with the camping eXperience, including purchases made at home in preparation for camping trips as well as those made in travel or at campground areas. 1 Expenditures made by non-residents before entering Michigan have been elim- inated. 1Non-residents accounted for 13 percent of all cam- per visits to Michigan State Forest campgrounds in 1959. 112 Direct expenditures, 75 percent of which were for food and travel, averaged 2.92 dollars per camper-day. Equipment expenditures for a full year averaged 21.47 dol- 1ars per camper. In Table 17, total expenditures in Michigan by cam- TABLE 17 TOTAL EXPENDITURES BY CAMPER USERS OF STATE FORESTS CAMPGROUNDS 1959 Direct Equipment All Expenditures EXpenditures Expenditures thousand thousand thousand doIIars dollars HEIIars Spent at home3 940 135 1,075 Spent in Michigan travel or in camp area 212 833 1,045 Total 1,152 968 2,120 aExpenditures at home by Michigan residents only, in preparation for state forest camping. Michigan res- idents accounted for 87 percent of all camping visits. per users of the state forest campgrounds have been summar- ized for the year 1959. The figures shown need interpret- ation and modification for the purposes of this analysis, but on a gross basis, some 1.1 million dollars was spent on items of direct consumption and 1.0 million dollars on the more durable equipment items. Not all of the camping expenditures recorded above can properly be used as a measure of value originating in 113 the state forests. The food bill, for example, insofar as it duplicates the food bill that would have been incurred had the campers remained at home, cannot be credited to forest recreation. Other purchases, including a portion of the clothing, fall similarly into the category of transferred payments; that is, they are merely transferred from one por- tion of the state (home) to another portion of the state (the scene of recreation activity). These transfers would be quite important in a study of local economic benefits, but in a statewide study, they have little application. To determine in detail what portion of campers' ex- penditures represents duplication of ordinary home expenditures, and what portion represents additional ex- penditure chargeable to state forest recreation is a complex problem. For our purposes, a broad simplification should be appropriate. Only groceries and beverages will be de- ducted from the reported camping bill. This may be an excessive deduction for food, but an error here would easily be compensated for by overlooking the possibilities of trans- ferred expenditures in other items. Adopting the procedure above, the initial estimate of 2.120 million dollars for consumer expenditures in Mich- igan based on camper use of state forest campgrounds in 1959 will be reduced to 1.565 million dollars. Non-camper use of campgrounds Expenditures by users of state forest campgrounds 114 for forms of recreation other than camping were not deter- mined directly by questionnaire. An indirect method of calculation of expenditures for non-camper users has been employed based on claiming a portion of the appropriate ex- penditures per user-day made by campers. The assumption was made that direct expenditures per user-day would be the same for non-campers as for campers with respect to restaurant meals, sundries, and miscella- neous expendable items. TranSportation of relatively short distances was assumed to be a daily need by non-campers; the expenditure was estimated at 70 cents per user-day. Other direct camper expenditures have been ignored as being largely inapplicable to day-users of campgrounds. Equipment expenditures applicable to non-campers is a more troublesome estimate, mainly because of the diffi- culty of relating the number of user-days to users. 0f equipment expenditures by campers, the item of tents, trail- ers, and sleeping equipment does not apply to non-campers, and no more than half of the expenditures for other items could be assumed to be applicable. On this basis, the equip- ment expenditure per non-camper would be merely 10.75 dollars. Translating this figure into expenditure per user- day, an estimate of 1.35 dollars was arrived at. There may be considerable error in the latter estimate, but its pos- sible influence on the total state forest recreational value is slight. Consumer expenditures in Michigan based in picnick- 115 ing, bathing and water-skiing at state forest campgrounds in 1959 can now be summarized as follows: Direct expenditures per user-day $1.15 Equipment expenditures per user-day 1.35 Total $2.50 Total expenditures per user-day x 86,000 user-days = $215,000 Non-campground uses There is no sound basis for the calculation of non- campground recreational use of the state forests either in terms of volume of use or in terms of consumer expenditures. A partial count of canoes indicated 25,000 user-days of canoeing in 1959. Registrations showed 44,000 user-days in 1959 in six winter sports areas, but the estimate of 77,000 berry pickers, mushroom pickers, and hikers cannot be pre- sumed to be complete, and the number of motoring sight- seers cannot even be guessed. Moreover, we have no sound basis available for estimating unit expenditures for any of these groups of recreational users. We can only emphasize that the estimates of consumer expenditures for state forest recreation are limited to campground users. Expenditures by non-campground users might be greater, but since no sound basis for appraisal is available, these expenditures are overlooked in this summary. This is in keeping with the conservative approach taken throughout this chapter in placing dollar values on 116 the products and services of the state forests. Income To reduce consumer expenditures for campground use of the state forests to terms of income payments to the factors of production within Michigan is a somewhat more complex problem than was the case for timber products from state forests. In the case of timber, value of product was determined at each level of the commodity flow and value could be reduced to income payments on the basis of easily recognized general relationships between gross product and income. In the case of recreation, the product is reflect- ed in a mixture of goods and services. The purchase of services generates an income flow which can be claimed for Michigan, but the purchase of goods for recreation (the greater part of the total expenditure) generates income payments which flow in all directions, much of it outside of Michigan.1 The special problem to be faced is not how to reduce consumer eXpenditures to income payments, but how to reduce consumer expenditures for a great variety of goods and ser- vices to income payments within Michigan. Any attempt at precision in the solution of this problem would involve a 1For example, the purchase of gasoline in Michigan for recreational travel generates some income flows with- in the state, but a large part of the total income payments will move out to centers of refining (usually out of the state) and to sources of the raw material (again, usually out of the state). 117 major project in itself, both as to technique formulation and the collection of pertinent data. Such refinement is not necessary here. The magnitude of the income payments to be allocated to Michigan and elsewhere is of modest proportions. Thus, a fairly large error is tolerable; it would not greatly affect the appraisal of overall economic benefits from the state forests, nor would it greatly af- fect the relationship between costs and benefits. In the latest published Census of Business which pre- sents a detailed breakdown of retail sales and value added by manufacture (1954), retail sales in Michigan for the principal categories of items purchased by campers was 2.9 billion dollars in comparison with 600 million dollars of value added by manufacture within the state of these same categories of items. This suggests that the value added within Michigan from manufacturing the goods used by state forest campers is about 21 percent of the retail sales value of these goods. Converted into terms of income, the 21-per- cent figure is reduced to 18 percent.1 At another level of the commodity flow (value added beyond manufacture), Palley2 has shown that income payments derived from wholesaling and retailing services beyond man- ufacture represent about 20 percent of the final sales value. 1Based on the average relationship previously dis- cussed between GNP and national income for the whole 3 conomy o 2Palley, op, cit., p. 99. 118 It can be assumed, then, that the income payments generated in Michigan by consumer expenditures of state forest camp- ground users for wholesaling and retailing services represent about 20 percent of final sales value (consumer expenditures). The first level of the commodity flow--income from raw products--and transportation (which was omitted from the level of income added beyond manufacture) remain to be considered. There is no ready means for accurately meas- uring either of these missing components of the commodity flow, but guided by relationships established in the analy- sis of income payments generated by timber products, it may be assumed the missing components would add to the in- come total about 12 percent of consumer expenditures. Consumer expenditures by campground users of Michi- gan state forests may now be refined to income payments by using a reduction factor of 50 percent. Consumer expendi- tures by camper-users which can be credited to state forests totaled 1.565 million dollars in 1959 and non-camper users of the campgrounds spent an estimated 215,000 dollars. The combined expenditure of 1.78 million dollars reduces to 890,000 dollars in income payments within Michigan. Wildlife The economic importance of wildlife, of animals ex- isting in the wild state, covers a greater range than the economic importance of wildlife in its recreational aspects. 119 An inclusive list of values would contain such items as the return to trappers from the sale of pelts and the income derived from commercial fishing and from fur and game farm- ing. Also included might be such items as insect and rodent control furnished gratuitously by wild creatures and the pollination of fruit trees and field crOps. No broadly inclusive concept of wildlife will be at- tempted in this analysis of the economic contributions of wildlife on the state forests of Michigan. The concern here is limited to the hunting of game animals and sport fishing. The measures of importance used are the same as were used in the appraisal of the recreation--volume of use, consumer expenditures, and income payments. Volume of Use In itself, volume of use does not reveal economic importance, but it is a useful indicator and serves as a necessary first step in the calculation of consumer expend- itures. Big game hunting Michigan has some of the heaviest big game hunting pressures of any state in the nation. The sale of deer licenses has increased from somewhat over 150,000 in 1937 to about 500,000 (including bow and arrow licenses) in 1958. The estimate of the number of deer hunters on state forests was developed by the Division of Forestry in con- 120 sultation with biologists in the Department of Conserva- tion's Game Division. The number of deer hunters in each county was allocated to private and public lands on the basis of hunter-area ratios in different localities. The number of public-land hunters was then allocated to federal and state lands on the basis of federal-state acreages in each county. Estimates for the various counties were to- taled, indicating that some 190,000 deer hunters (38 percent of the total) hunted on state forests--26,000 in the Upper Peninsula, 164,000 in the Lower Peninsula. Small game huntipg Small game in Michigan is pursued even more exten- sively than big game. The number of small game licenses totaled some 704,000 in 1958, considerably larger total than deer licenses. A laborious method was used by the Division of For- estry to get at the number of small game hunters on state forests. Beginning with reports on the species of small game hunted and the land cover types associated with each Species, the Division made allowances for hunter movements from places of license issue to areas hunted and allocated to state forests numbers of hunters of each game species on the basis of the percentage of the relevant land cover types found within state forest boundaries. Use of this method indicated, for example, that virtually no pheasant hunting took place on the state forests. In total, the 121 method indicated that 42,000 small game hunters (six per- cent of all small game hunters) hunted on state lands. Spprt fishing Fishing is even more popular than hunting in Mich- igan. The inland waters of approximately 11,000 lakes and 36,000 miles of streams, to say nothing of the hundreds of miles of shoreline on the Great Lakes, attract many thou- sands of fishermen each year. With license sales as a measure, there were 956,000 fishermen in Michigan in 1958; the total would be 1,074 million (including 207,000 trout fishermen) if 98,000 temporary lS-day permits were included. There are no methods available for estimating ac- curately how many fishermen use waters within the state forests. It would be difficult to even design a valid sam- pling method to obtain such an estimate since there are many streams and lakes within the boundaries of state forests which are completely surrounded by state-owned lands except for the immediate water frontage. About one sixth of Mich- igan's streams are located within state forest boundaries. Access is the critical factor. Fishermen have the legal right to fish all waters as long as they remain in a boat or in the stream-bed, and it is by furnishing public access that the state forests greatly increase the fishing waters available to the public. A useful guide to the estimate of the volume of sport fishing in the state forests is provided by the known fish- 122 ing intensities of three fishing research areas located in state forests. On these areas, fishermen averaged 346 per mile of stream and 249 per lake in 1958. This is about twice the fishing intensity that applied to the waters of the whole state. It indicates that the state forests are visited by 20 percent of the state's fishermen-~a much larger percentage of the state's fishermen than would be suggested by merely comparing state forest area with total land area. Nevertheless, it is the opinion of Fish and Fisher- ies Division biologists that the intensity of fishing in the state forests is less than is indicated by the fishing re- search areas. To conform with this appraisal, the 20-per- cent figure will be scaled down to 15 percent. Using the 15-percent figure, the number of fishermen in 1958 on waters within the state forests is calculated at 160,000. Consumer Expenditures With estimates of the numbers of hunters and fisher- men on state forests available for 1958, it is necessary only to multiply by apprOpriate estimates of annual ex- penditures per sportsman to derive consumer expenditures attributable to the state forests. No suitable study of Sportsmen's expenditures is available for Michigan, but the U.S. Fish and Wildlife Ser- vice's intensive study, National Survey of Hunting and Fishin , can be adapted to the purposes of this analysis. 123 The expenditure items listed in the National Survey of Hunting and Fishing (cited in Review of Literature), require modification before they can be applied to hunting on the state forests. The"other trip expenditures" was eliminated because it contained expenditures for entrance fees, pack trip fees, and guide fees; these fees are not ordinarily encountered in hunting on Michigan state forests. The item "leases and privileges" was omitted; state forests offer free ac- cess and hunting privileges. The item "other eXpenditures" was overlooked because it was made up of elements such as club dues, magazine subscriptions, and purchase of dogs; these eXpenditures are not necessarily involved in the hunting experience. With the exceptions noted above, all items listed in the National Survey were accepted as being applicable to hunting on Michigan state forests. Even "food" was retained as a legitimate item of expense (it had not been counted under Recreation) because the National Survey included only that portion of food costs which was in excess of food costs at home. Using the adjusted expenditure figures from thelflp- tional Survey of Hunting and Fishing and applying them to the estimates of numbers of hunters on state forests in 1958, consumer eXpenditures for hunting on the state forests may be calculated as follows: 124 Big Game Direct expenditures per hunter $17.85 Equipment expenditures per hunter 42.90 Total $60.75 Total expenditure per hunter x 190,000 hunters = $11,542,500 Small Camp Direct eXpenditures per hunter $ 9.05 Equipment expenditures per hunter 23.66 Total $32.71 Total expenditure per hunter x 42,000 hunters = $ 1,373,820 Total expenditures for big and small game = $12,916,320 Fishing Expenditure items listed in the National Survey for fresh-water fishermen were accepted whenever they appeared applicable to fishing in Michigan state forests. The same categories of items which were eliminated in the analysis of Hunting--"other trip expenditures," "leases and privil- eges," and "other expenditures"--have been eliminated here for similar reasons. All other items listed in the Nation- al Survey were accepted as being applicable to fishing in Michigan state forests. Using the adjusted expenditure figures from the Na- 125 tional Survey and applying them to the estimate of fisher- men in state forests in 1958 previously made, consumer expenditures for fishing on the state forests may be cal- culated as follows: Direct expenditures per fisherman $21.74 Equipment expenditures per fisherman 29.76 Total $51.50 Total expenditure per fisherman x 160,000 fishermen = $8,240,000 Income The reduction of consumer expenditures for hunting and Sport fishing to income payments to the factors of production in Michigan can be done simply. Many of the eXpenditures made by sportsmen in pursuit of their sport resemble those made by recreationists using state forest campgrounds. Since the reduction factor which applied to campground recreation was 50 percent, a similar reduction factor can be presumed to apply to hunting and sport fish- ing on the state forests. Applying a 50-percent reduction to consumer expend- itures by Sportsmen, income payments generated within Michigan by hunting and fishing activities on the state forests may be calculated as follows: 126 Big game expenditures of $11,542,500 x 50% = $ 5,771,250 Small game expenditures of $ 1,373,820 x 50% = 686,910 Fishing expenditures of $ 8,240,000 x 50% = 4,120,000 Total income payments $10,578,160 Miscellaneous Products Cash receipts are obtained by the state of Michigan for a number of products other than timber from the state forests. These receipts were detailed for the year 1957 in Table 8. They included some 322,000 dollars in oil and gas leases and royalties, 150,000 dollars for sales of nursery stock, and 6,600 dollars for a miscellany of Special grazing use and mineral permits. These are items of di- rect income to the state which flow into the general fund. Consumer Expenditures Although a number of the miscellaneous products gen- erate considerably greater values at higher stages of consumption, it is not likely that the result justifies the complexities of the calculations involved. The one excep- tion is the item of oil and gas, with an immediate sale value of 250,000 dollars as a product of state forest land and a considerably expanded value when it reaches ultimate consumers. Oil and gas production from the state forests in 1957 included 631,000 barrels of crude petroleum, 45.5 million cubic feet of gas, and 26,000 gallons of liquid petroleum 127 gas. The raw product was worth 1.9 million dollars, and value added by manufacture was 2.4 million dollars. Value added beyond manufacture could not be computed from Census data; but assuming the same mark-up in value from point of manufacture to retail that was derived for timber products-- 30 percent--value added beyond manufacture would be set at 1.3 million dollars. Values at the three levels of the commodity flow may now be added up to approximate consumer eXpenditures in Michigan as follows: Million dollars Value of raw products 1.9 Value added by manufacture 2.4 Value added beyond manufacture 1.3 Total :6— The total, 5.6 million dollars is a gross measure of the value of oil and gas products from the state forests to the economy of Michigan. Income Refining the estimate above of consumer expenditures for oil and gas products from state forests into terms of income payments can only be done on a crude basis. It will be assumed that the reduction from gross product to income will parallel the relationship which exists for the nation- al economy between GNP and national income. On this basis, 128 income payments in Michigan originating in oil and gas products of the state forests totaled 4.7 million dollars in 1957. All Products In summary, the state forests of Michigan yield a large volume of products which bring some revenues into the state treasury, but whose economic contribution to the state is best measured at the later stages of consumption. Timber sales represent only a minute fraction of the values created at the points of final consumption. Recreation and wildlife values, important as they are when measured at ultimate points of consumption, have no immediate sale or market value as products of the state forests. Volume of Use Timber sales in 1957, including principally 200,000 cords of pulpwood and 76,000 cords of chemical and charcoal wood, aggregated a combined wood volume equivalent of 131 million board feet. Cash receipts from these sales totaled some 815,000 dollars. Cash receipts to the state treasury from the sale of nursery stock, oil and gas leases and royalties, and a miscellany of special grazing use and mineral permits amounted to 479,000 dollars. In total, all cash receipts from products of the state forests reached 1.294 million dollars in 1957. 129 Campground use of the state forests of Michigan amounted to 405,000 camper-days in 1959. Other uses of the campgrounds included 45,000 user-days of picnicking, and 41,000 user-days of bathing and water-skiing. The volume of non-campground use included in 1959 some 44,000 user-days in six winter sports areas and 25,000 user-days of canoeing on two rivers largely within state forests; but the estimate of 77,000 berry-pickers, mush- room pickers and hikers may be low, and the number of motoring sight-seers cannot even be guessed. The number of deer hunters on the state forests in 1958 was estimated to be 190,000. Small game hunters were estimated at 42,000. Fishermen on publicly accessible wa- ters within the state forests were estimated at 160,000 in 1958. Consumer Expenditures Consumer expenditures for products from Michigan state forests have been estimated on an annual basis as follows: Million dollars Timber 107.9 Campground use 1.8 Hunting 12.9 Fishing 8.2 011 and gas 5.6 Total 136.4 130 For practical purposes, the estimates above may be dated 1957. Actually, campground use applies to the year 1959, and hunting and fishing apply to the year 1958. I For all cases, the estimates tend to be conservative. In particular, the recreation estimate based on campground use is low since it has been confined to recreation on the limited campground areas and excludes both camping and the more extensive forms of recreation over the bulk of the state forest areas. Income Annual consumer expenditures for products of the state forests have been reduced to terms of income payments to the factors of production within Michigan as follows: Million dollars Timber 84.3 Campground use 0.9 Hunting 6.5 Fishing 4.1 Oil and gas 4.7 Total TOUT;- The same observations about conservatism in esti- mates apply here as to the estimates of consumer eXpendi- tures. It should be emphasized that the reduction from consumer expenditures to income is of greater magnitude than would be indicated by Department of Commerce general 131 relationships between national product and income. Howe ever, a special effort has been made in this analysis to eliminate from the estimates income flows to factors of production beyond the boundaries of Michigan. Our concern is limited to measuring the economic importance of the state forests to the people of Michigan. COSTS OF THE STATE FORESTS Costs play an extremely important role in our so- ciety in directing many of the decisions concerning the ownership and use of land resources. Along with the pros- pects of benefits, cost considerations help to dictate the purposes for which land resources will be developed and the timing of these developments. Land costs fall into two major categories--the op- erating costs that arise in the day to day use of already developed resources and the various investment costs as- sociated with the development of land resources for particular uses.l Investment Costs Land purchase Since the state forest acreage is made up predomin- antly of lands which reverted to the state through tax delinquency on the part of the former owners, acquisition costs for land have not been high. As was discussed in the second chapter, most lands of the state forests which have been purchased were former game reserves which were made 1Raleigh Barlowe, Land Resource Economics, Englewood Cliffs: Prentice Hall, Inc., (I958), p. 219-20. 132 133 state forests in 1946. They were purchased with earmarked funds from 1.50 dollar Deer License Fund created in 1931, and the majority of the purchases were made in the period 1931 to 1946. Since 1950, the few land purchases which have been made have been from the Game and Fish Protection Fund. Total land purchases incorporated into the state forest system aggregated 589,840 acres from 1921 to 1958. The total cost was 1,968,542 dollars; average cost was 3.33 dollars per acre. Purchases dropped rapidly after 1950, although per acre costs rose sharply: Decade Purchase cost Land purchases o are (EcreS) 1921 - 30 460,800 115,032 1931 - 40 452,365 204,898 1941 - 50 624,000 231,139 1951 - 58 431,377 38,771 11968 , 542 589 , 840 Other investment Ideally, these investment costs would be broken down to show all capital outlays made on the state forests. However, an examination of the Department of Conservation fiscal records shows that this would be an almost impossible task. First of all, there are 10 divisions within the De- partment, and at least 8 of them work directly or indirectly on projects involving state forest lands. Many of the in- vestment costs become joint costs between several divisions. For instance, the district office building may house di- 134 vision offices of the Forestry, Field Administration, Game, and Fish divisions. If all divisions spent all their time working on projects involving state forests, then there would be no problem. However, this is not the case, and the problem of allocating costs to the various divisions remains. In Table 18, investment costs on the state forests since the beginning of the state forest system are tabula- ted by programs (as estimated by the various divisions of the Department of Conservation). The total of 7.0 million dollars includes land purchase costs of about 2.0 million dollars and other investment costs of 5.0 million dollars. Other investment costs of 5.0 million dollars are broken down again into 1.4 million dollars of regular disburse- ments and 3.6 million dollars of construction value created by the Civilian Conservation Corps. The high concentration of investment other than the acquisition under the C.C.C. program is notable. Estab- lished by the federal government in 1933 as one of a number of challenging programs designed to combat the Great De- pression, the C.C.C. was intended primarily to relieve the acute national condition of widespread distress and un- employment, but it had a corollary objective "to provide for the restoration of the country's depleted natural re- sources and the advancement of an orderly program of useful public works." The C.C.C. program reached a peak in 1935; it tapered 135 TABLE 18 TOTAL DISBURSEMENTS FOR PROGRAMS OF THE MICHIGAN CONSERVATION DEPARTMENT WHICH CAN BE CHARGED TO THE STATE FORESTS, 1921 TO 1958 Program Operating Costsa Investment Costsa thousand dollars thousand dollars Forestry 5,442 547 Reforestation 1,536 153 Game 2,780 589 Game refuge 1,452 1,591 Fish 3,248 158 Law enforcement 5,105 18 Field administration 6,395 288 Education 271 - Lands 376 36 Administration 765 - General Operations 1,249 - Predator control 292 - Training school 118 - C.C.C. programb 1,600 3,600 Total 30,629 6,980 aThese figures represent only that tal Conservation Department expenditures w properly be allocated to state forests. portion of to- ich can bBased on private contract rates for similar work of investment and operations. 136 off as economic conditions improved, and it was finally liquidated in 1943, during Whrld War II. The program was concentrated on federal and state lands, but it was extend- ed to county, municipal, and private lands also. In Michigan, as many as 42 camps were constructed, each with a working force of about 200 men. The C.C.C. contributed greatly to improving Michigan's forests and parks. Its cap- ital improvements in Michigan included the following: (1) construction of 221 buildings, 41 fire lookouts, 5,600 miles of truck trails and forest roads, 1,350 miles of fire lines, and 1,094 miles of telephone lines; (2) construction of 123 fish-rearing ponds and improvements on 1,209 miles of stream; and (3) construction of 42 state forest campgrounds and improvements on some 30 state parks. Estimated costs of C.C.C. construction (3.6 million dollars) and operations (1.6 million dollars) on Michigan state forests represent normal costs if the same activities had been undertaken as a part of regular state forest op- erations. Actual costs were considerably larger. They involved social programs beyond strictly conservation ob- jectives and could not fairly be charged to state forest investments and operations. Investment costs other than land purchases made on the state forests were very small up until the time of the C.C.C. program. The C.C.C. construction costs represent the peak of the investments, with a marked decline at the close of this program and during the war years. In the 137 past decade, investment costs made on state forests have risen sharply as the various programs of the Conservation Department have greatly expanded their operations: Decade Investment costs other than lapd_purchase (dollars) 1921 - 30 100,000 1931 - 40 3,800,000 1941 - 50 300,000 1951 - 58 800,000 5,000,000 OperatingiCosts Operating costs are all those costs which are in- curred annually in the administration of the state forests (including the activities of all branches of the Department of Conservation). These costs include such major items as wages and salaries for personnel, supplies, materials, con- tractual services, equipment and structure depreciation, and repairs. Estimates of operating costs incurred for the com- plete span of years of state forest operation, 1921 to 1958, are also shown in Table 18. (As with the investment costs, this tabulation is based upon estimates by the various di- visions of the Department of Conservation.) The total bill for operating costs of 30.6 million dollars averages out to slightly more than 800,000 dollars 138 per year. Of course, annual costs have not been constant; they have risen from an average of about 265,000 dollars during the decade of the 1920's to an average of 1,850,000 dollars during the 1950's. Currently, for fiscal year 1957, operating costs for the state forests of Michigan are estimated at 2.6 million dollars (See Table 19). TABLE 19 TOTAL DISBURSEMENTS FOR PROGRAMS OF THE MICHIGAN CONSERVATION DEPARTMENT CHARGED AS OPERATING COSTS TO THE STATE FORESTS, 1957 Program Operating Costs ‘(Thousand dollars) Forestry 506 Reforestation 290 Game 146 Fish 187 Law enforcement 388 Field administration 380 Lands 26 Administration 217 Predator control 3 Training school 15 In lieu tax paymentsa 451 Total 2,609 3Added in the breakdown of operating costs, al- though treated separately in the discussion of this chapter. 139 It is interesting to note that even at the 1957 leva e1 of operating costs of 2.6 million dollars, this still amounts to an annual cost of only about 70 cents per acre of state forest lands. Payments to Counties in Lieu of Taxes State owned lands are not subject to assessment by local taxing units on their regular ad valorem assessment rolls. Inasmuch as local units of government operate from returns in the form of taxes received on lands located in their units, the Michigan Legislature provided a means whereby the Department of Conservation would make payments in lieu of taxes on state lands which came under its juriSo diction. Under Act 116, PA 1917, provision was made for the payment of 10 cents per acre each year on all lands under the jurisdiction of the Department except on certain state park lands and lands purchased by this Department since 1933 lying south of Town line 16. By Act 151, PA 1956, this annual payment was increased to 15 cents per acre.1 For those lands purchased south of Town line 16, Act 182, PA 1954, provides for assessment by the Tax Com- mission, with payments in lieu of taxes based on the equalized tax rate of each municipal unit. No payment is made for special assessments, nor are buildings on the prop- 119th Biennial Report, op, cit., p. 205. 139 It is interesting to note that even at the 1957 lev- el of operating costs of 2.6 million dollars, this still amounts to an annual cost of only about 70 cents per acre of state forest lands. Payments to Counties inpgeu of Taxes State owned lands are not subject to assessment by local taxing units on their regular ad valorem assessment rolls. Inasmuch as local units of government operate from returns in the form of taxes received on lands located in their units, the Michigan Legislature provided a means whereby the Department of Conservation would make payments in lieu of taxes on state lands which came under its juris- diction. Under Act 116, PA 1917, provision was made for the payment of 10 cents per acre each year on all lands under the jurisdiction of the Department except on certain state park lands and lands purchased by this Department since 1933 lying south of Town line 16. By Act 151, PA 1956, this annual payment was increased to 15 cents per acre.1 For those lands purchased south of Town line 16, Act 182, PA 1954, provides for assessment by the Tax Com- mission, with payments in lieu of taxes based on the equalized tax rate of each municipal unit. No payment is made for special assessments, nor are buildings on the prop- _—-—~— 119th Biennial Report, op, cit., p. 205. 140 erty subject to assessment.1 No state forest lands fall in this category. The Allegan State Forest is located south of Town line 16, but since it was not purchased but obtained by lease from the U.S. Forest Service, it is included un- der Act 116, PA 1917. An additional payment in lieu of taxes is made to counties under provisions of Act 155, PA 1927. This Act provides that one payment of 25 cents per acre be made on tax reverted lands which are withdrawn from sale and re- served for conservation purposes. This arrangement would allow the state to extinguish any tax equities that the lo- cal units had in the lands with this one blanket payment. Budget allotments for this purpose have been limited; con- sequently, these payments have been confined to payments on tax reverted lands disposed of through exchanges for lands acquired by the Department and dedicated to public conservation purposes. The total amount of the payments made to counties in lieu of taxes for the state forests has been calculated by multiplying the net acreage of the state forests in each year by the per acre payment as follows: Ibid. 141 Thousand dollars Payments under Act 116, PA 1917 1917 - 1926 at 5c per acre = 154 1927 - 1955 at 10¢ per acre = 7,578 Payments under Act 151, PA 1956 at 15¢ per acre = 1,691 Payments under Act 155, PA 1927 at 25¢ per acre = 246 Total 9,669 This total figure of almost 10 million dollars is quite a sizeable one. It can be justified in the sense that it has in some measure compensated for the so-called "social costs" of dedicating lands into public ownership for conservation purposes. These social costs are often a result of land de- velopment. They represent the social returns and satisfaction foregone because of the development processes, and are more subtle than operation or investment outlays, because they must be measured in terms of individual and group sacrifices.1 In the case of the state forests, the social costs were borne by the people of the local government units who suffered from a restricted tax base when the state lands were withdrawn from the tax rolls. As a consequence, the legislature saw fit to provide the system of 10 cents per _.v 1Barlowe,, Op, cit., p. 225. 142 acre payments to local governments to help make up for the deficiency in tax receipts. There is some question as to whether there was a deficiency in tax receipts of local governments at all when the state forests were withdrawn, because almost 90 percent of the lands involved were not producing any revenue at the time of their withdrawal and had not produced any for some years previously. The 10 cents per acre was an arbitrary amount deci- ded on by the legislature, but a comparison made with actual tax payments on private land of a similar character in counties with a high percentage of state forest land indi- cated that the 10 cents per acre was not far below the actual taxes levied.1 The average tax on the lands sampled was 17.08 cents per acre, but the median tax was only 12.50 cents per acre. Since the sample reflected the value of improvements and the state lands have no taxable improve- ments on them, a comparison corrected for the effects of improvements would show an even closer relationship between the two figures. A common type of payment made in lieu of taxes by various other states and the federal government for public property consists of paying the local government unit a certain percentage of the gross receipts obtained from the 1John H. Eichstedt, "Payments in Lieu of Taxes on Public Lands Under the Jurisdiction of the Michigan Depart- ment of Conservation," (Papers in Public Administration No. 16, University of Michigan, 1956), p. 14. 143 sale of products from the public land within that unit. This is a means of taking into consideration the productiv- ity of the areas in determining the size of the in-lieu payment. This practice is followed in lands controlled by the U.S. Forest Service which returns 25 percent of the gross receipts to local units of government.1 If 25 percent of the gross state forest receipts had been the basis for payments to local government, the returns would have been far less than the 10 cents per acre paid. There wouldn't have been any payments until about 1942, and even as late as fiscal year 1953, payments would have amounted to only about 1.75 cents per acre.2 However, in 1957, such an arrangement would have returned about 8.5 cents per acre, and it appears likely that the rapidly in- creasing gross receipts of the state forests would soon raise this payment considerably. It appears that local governments have been amply compensated in the past for the withdrawal of lands from their tax rolls for dedication to state forests. 1Clawson & Held, The Fedggal Lands, p. 261. 2Eichstedt, o cit., p. 20. COMPARISON OF COSTS AND BENEFITS Economic contributions of the state forests and costs of investment and operations have been described in earlier chapters. In this chapter, comparisons will be made between costs and benefits. Investment Versus Capital Value Total investment in the state forest system has been held to the strikingly low figure of 7.0 million dol- lars. Because most land acquisition was accidental and such land as was purchased was acquired at prices that ap- pear very low today, the total acquisition bill amounts to 2.0 million dollars. All other investments total 5.0 mil- lion dollars. In terms of present value, the investment is negli- gible. No attempt will be made to appraise the sale value of the state forests, but it is an interesting exercise to calculate the value of the timber growing-stock which has developed as a result of protection and management. The present timber values which have accumulated on the state forests are values which can be credited to state forest management. These accumulated values can be calcu- lated by applying current unit prices to total volumes 144 145 present on state forests. 0f the 23.7 billion board feet of sawtimber (11 inches plus) and 86.5 million cords of pole sized timber (5 to 11 inches) found in the commercial forests of Michigan, the state forests contain the following: Softwoods Hardwood Sawlogs - (Million bd. £:)1 1156.1 1954.8 Pulpwood - (Million cords)1 5.3 8.7 The average unit stumpage prices for these volumes were applied to arrive at the total value of standing mer- chantable timber (five inches or over) on dedicated state forest lands as follows: Class of Timber 2 State Forest ‘ngt Values Volumes Total Value Softwood sawlogs $18.64 per M bd.ft. 1156 MM bd.ft. $20,548,000 Hardwood sawlogs 34.58 per M bd.ft. 1955 MM bd.ft. 67,604,000 Softwood cordwood 3.98 per cord 5300 M cords 26,394,000 Hardwood cordwood 1.55 per cord 8700 M cords 13,485,000 Total value for dedicated state forest - land $128,031,000 To the 128 million dollars worth of standing timber 1Volumes from Michigan Department of Conservation, Forestry Division inventory data. 2Unit values based on actual state forest sales data for year 1957. 146 on the 3,760 million acres of dedicated state forest lands can be added (by similar calculation) 2 million dollars' worth of timber of the 77,000 acres of undedicated state lands. This huge timber capital value of 130 million dol- lars alone is nearly 19 times greater than Michigan's investment in state forest land and timber. It is about two and one-half times as large as Michigan's total expendi- tures-oinvestment, operating costs and payments to local units of government in lieu of taxes--for the state forests since the beginning of the state forest system. Receipts Versus Operating Costs The state forests are not comparable to a private business, so that the same kind of financial appraisal is not appropriate. Benefits go far beyond receipts for the sale of products from the land, as was demonstrated in an earlier chapter; nevertheless, it is pertinent to note how receipts, which represent direct income to the state, off- set the operating costs of the state forest system. Total receipts and total Operating Cpsts Total operating costs go back in time to 1903, al- though they did not become significant before the estab- lishment of the Department of Conservation in 1921. Budget costs of 31.2 million dollars plus 9.7 million dollars in payments in lieu of taxes (which will be considered as op- 147 crating cost for our purposes) make a total outlay of 40.9 million dollars from 1903 to 1958. Cash receipts have a much shorter history; they were negligible before 1940. Their cumulative total reached 16.6 million dollars in 1958, broken down as follows: Source of receipts Thousand dollppp Sale of timber (stumpage) 5,263 Sale of nursery stock 936 Sand and gravel 52 Use permits 50 Old buildings and equipment 62 Gas and oil-~1ease and royalties 10,275 Total 16,638 Total cash receipts from state forest operations extending from 1903 to 1958 represent 40 percent of total Operating costs over the same period. Annual receipts and operating costs Annual operating costs (including, preferably, pay- ments in lieu of taxes) are still substantially larger than cash receipts, but receipts have been gaining stead- ily in recent years. Whereas the ratio of operating costs to cash receipts was 1 to 2.5 in 1946, the ratio had dropped to 1 to 2 in 1957. Oil and gas revenues accounted for most of the re- ceipts in earlier years, but timber sales have now come 148 into the foreground. Oil and gas revenues peaked in 1952; the subsequent decline has been more than offset by the in- crease in receipts from timber sales. By 1957, timber sales accounted for 815,000 dollars of revenue, 63 percent of all cash receipts. If the trends in annual operating costs and cash re- ceipts are projected, the two curves will cross in the year 1985 (Figure 5). Beyond 1985, we can expect that cash re- ceipts will become increasingly greater than the operating costs of the state forests. Current_;pcome Payments Versus Costs In public forest accounting, cash receipts represent only a small portion of the benefits to be recorded. Some of the more conspicuous services of the forest have no im- mediate sale or market value, and both tangible products and services generate large income flows before they reach ultimate consumers. The significant economic comparison is between the income payments to the factors of production in Michigan and the costs to the state. Income payments in 1957 from the sale of state forest products and the recreational uses made of the state forests have been conservatively calculated at 100 million dollars. In contrast, 1957 operating costs of the state forests (in- cluding payments in lieu of taxes) were 2.6 million dollars. Benefits, in this instance, are about 40 times greater 149 .OHSuam ecu coca noauoonoua nuns .nmmaumooa .mumouom cumum nmwasoaz Eonw mudamoou fimsnnm paw mumoo wnaumuoao Hounds ca monouhuu.n .mam sumo» EbH mmmH ommHlnsmH oemH mmoH E mpofinooom nllW All. mpmoo wmfipmpomo a gag m. o.H m.H o.N m.~ o.n n.m o.¢ 9191100 “OTITIN 150 than costs. Moreover, this extremely favorable ratio is rapidly becoming larger. Benefits dwarf costs in yet another perSpective. Total costs of the state forest system--investment, Oper- ations, and payments in lieu of taxes--from 1903 to 1958 aggregated some 48 million dollars. Income payments gen- erated in 1957 alone were more than twice as large as the aggregate cost figure for all years. Benefits prond Income If all the benefits derived from the state forests could be counted, the benefit-cost ratio would be far more favorable than it has been shown. There is a wealth of ad- ditional values stemming from the three product categories discussed--timber, recreation, and wildlife--which cannot be measured in terms of market value expressed in dollars. There are purely aesthetic values of a stand of timber far beyond any set stumpage prices. No realistic dollar value can be placed in the water retention powers of a well-stocked stand. A well-managed state forest not only produces high quality wood products, but high quality water as well. What is the price of stabilized soil and regular stream flow? Outdoor recreation, including hunting and fishing, offer far more than the secondary benefits of total ex- penditures made in the pursuit of such recreation. 151 Brockman1 suggests some of the intangible benefits derived from the recreational use of wild lands: (1) Improved efficiency of the individual in his daily tasks, through provision of opportunities for periodic release from daily routine, result- in in increased national productivity and wealth. (2 Increased national productivity resulting from the development in individuals of new or latent skills, broader interests, greater knowa ledge, and deeper perceptions, through education- al and inepirational values of outdoor recreation. (3) Stimulated use of public recreational fa- cilities and maximum dispersion of benefits noted above by provision of a wide variety of recre- ational opportunities at the lowest possible per capita cost. This is of articular importance to low income groups. (4 Reduced need or low- er expenditures for extensive law-enforcement program, correctional institutions of various kinds, mental hospitals, and the like. All of these benefits listed are latent in the op- portunities available in recreation on state forest lands. Such recreation lands offer people the opportunity to re- lease physical and mental energy, foster broader interests and knowledge, develop better citizenship and individual responsibility, and relieve themselves of the stress and strain of modern life. Ideally, as a result of a more con- tented, energetic and forward-looking outlook developed in our citizens, the benefits of such lands are reflected in the state's economy through increased production. The degree of their effect, however, in dollars and cents, is impossible to evaluate. 1Brockman, Recreation Uses of Wild Lands, p. 181. OUTLOOK FOR MICHIGAN STATE FORESTS An economic appraisal of the state forests would be incomplete without a look ahead to the future. The benefits that have been appraised are of recent origin; they have been expanding at an increasing rate; they rep- resent only a small portion of the benefits that may accrue under fuller management and utilization. Ideally, the look ahead should include both costs and benefits. However, the appraisal will be confined to benefits. Costs may rise at the same rate, at a higher rate, or at a lower rate. This is a relatively unimpor- tant matter for our purposes. The disparity between costs and benefits is so vast at present that any increase in costs that might be visualized as necessary to achieve an- ticipated benefits would be dwarfed. Actually, benefits have been rising more rapidly than costs, and the indica- tions are that this situation will continue for a long time. The appraisal of benefits will be carried to the year 2000. There are two phases to this appraisal: (1) the demand for goods and services that may develop, and (2) the ability of the state forests to meet the visual- ized demand for goods and services. The appraisal of future demand could take several 152 153 forms. One form of future appraisal is to forecast, to make a judgment in qualitative terms of what is most like- ly to happen. Another approach is by means of projection. Starting from given or assumed levels, and proceeding on the basis of assumed future events, the future course of the item under study is projected. A third approach to the future, less intuitive than a forecast and less rigid and dogmatic than projections, might be called an approximate projection, or simply an 1 This will be the choice of approaches used in esthmate. this chapter in considering the future outlook for Michi- gan state forests. Projections will be made based on certain factors, and reasonable assumptions will be chosen to give an indication of future production and developments. Yet, it is preferable to modify these projections and as- sumptions with a large amount of "judgment," to keep them in the realm of reasonableness. Pppulation Estimates Basic to any Specific estimates of the future are data on the probable or eXpected populations in the areas involved. It is common knowledge that the population of this country has grown greatly and regularly, from the time of the first white settlers to the present, and it 1This is the approach used by Marion Clawson, Bur- nell Held and Charles H. Stoddard, Land for the Future, (Baltimore: John Hopkins' Press, 1 , p. . 154 is generally assumed that there will be a continued high rate of population expansion in the future. Accurately forecasting the magnitude of such increases, however, is a very hazardous undertaking, and most of the best pro- jections and predictions of the past quarter century have been seriously in error. Such key factors as the birth rate, the mortality rate, and immigration and emigration certainly have a pro- found influence on any population projections. Since these factors are primarily psychological and sociological phe- nomena in the United States, their complexity is a challenge for the population predictors. There have been several predictions made of a long- range population increase. It might be useful to our study to consider at least three of the more important ones. A study by the Stanford Research Institute1 projects popu- lation on only one set of assumptions and carried it only as far as 1975. Population was projected on the assumption of a gradual decline in birth rate to the 1946 level. As a result, the projected total population for 1975 was 212 million. A more detailed study was undertaken by the Forest Service in 1955.2 In order to keep the analysis within 1Stanford Research Institute, America's Demand for ‘flgod 1929-1975, a report to the Weyerhauser Timber Company, Tacoma, WaShington, 1954. 2Timber Resources for America's Future, op. cit. 155 reasonable limits of work and Space, three major sets of assumptions were chosen for their projections. These as- sumptions gave rise to "Lower," "Medium," and "Upper" levels of projections for a variety of items including pop- ulation, gross national product and income. For the popu- lation increase, the "Lower" level is based upon the Bureau of Census Series B projections for 1975, and the population for 2000 is estimated by the extension of those projections. These results give a projected population total for 1975 of 215 million and 275 million for 2000. The "Medium" lev- el uses the same estimates of population as the "Lower," but the "Upper" level employs the Census AA projection which yields a total population of 228 million in 1975 and of 360 million in 2000. In a recent study of land use in the future for Re- sources for the Future, estimates were made for the pOpu- lation in 1980 and 2000 which are somewhat of a compromise between the "Upper" and the "Medium" levels of the Forest Service.1 The RFF projections Show 240 million people for 1980 and 310 million for the year 2000. Now, all three studies indicate that there will be a substantial increase in population. Since the "Medium" level of projection is to be used for considering the mag- nitude of the future demand for timber, its population projections will also be accepted in this study. This 1Clawson, Held, and Stoddard, op, cit., p. 11. 156 means that we can look for total population of the United States to increase from about 180 million in 1960 to 215 million in 1975 (a 20-percent increase) and 275 million in 2000 (a 50-percent increase). The North Central region, which includes Michigan, is eXpected to increase by about 30 percent by 1975 and by 58 percent from 1960 to 2000.1 Let us consider how this estimated population in- crease along with other basic assumptions of other pertinent factors should affect the future outlook of the state forests. Timber Timber is the product of the greatest economic im- portance that is produced on the state forests at present. What is the outlook for its future production on these lands? Future Demand for Wood Many factors enter the estimate of the future de- mand for forest products. There is, first of all, the matter of the total population and its various components. Since one major use for wood is dwelling construction, per- haps the most important population factor is the rate at which new households are being formed. The size of the gross national product and of per- 1 —— Timber Resource for America's Future, op. cit., p. 12. 157 sonal disposable income also affects the demand for wood. Except for firewood, there seems to be no forest product whose consumption declines as income rises. With higher incomes and larger industrial output, more forest products will be consumed if supplies are adequate and the relative prices are unchanged. Lastly, and perhaps most important of all, what will be the role of wood and its products compared with the role of its substitutes? The future competitive relations among wood and its known substitutes and perhaps new products may be critical to the demand for wood fiber. The Forest Service has made careful projections of future demand for timber products under various assumptions.1 The projections of the three major sets of assumptions are shown in Table 20. Cross national product is estimated on the basis of certain assumptions as to size of working force, hours of work per week, and real output per man hour. In general, for the "Lower" and'"Medium" projections, this means a slightly slower rate of increase in gross national product per capita in the future than in the past. The crucial assumption in the "Medium" level which makes it different from the "Lower" level, is that there will be "no change in relative prices; trends in future price of timber products will, in general, parallel price trends of 1Timber Resources for America's Future, op. cit., p. 369. 158 .oHomHHm>m uoz J. .mooaud omnmmoa um oaommmsousd mamwuoume manuosuum Hmoamzsa muowum> mo moauaunmfloo mam OHQOOQ SOHHHHE mum no momma mmma HON uHEHH nomad am pm: ooa>uom umouom OLE .unmoauadwam powwowmcoo on on HHmEm oob mm3 .oumEHumo Spence arm on pound quo .noaudESwnoo seesaw cw consummmao ssh use .uosooua Hmnoaum: mmouw noaaaao meow nouofiauammv OHDqu man How puma n .om wanmh .Aooma .mmmum wcflxdo: anon .pumppoum mam .pHo: .s0m3mao Eouw pm>auoom N.oN e.NN m.aa N.oa N.ee m.me .oe.oo roanaeo oooz Home engenders whoopoua HOLEHu HH< man can oo we no e.mm nonoo someone nooseese o.oo o.ak w.en n.mm o.Ae m.ae .oe.oo nooueeo rooted not owoesom "mo :OHOQESmGoo oauonon A.oa N.NH N.NH m.m m.w m.m noes: coHHHao onaoanoums capo nosuum Hmoammne mo udenH s a a a a m.mm mumHHOp :OHHHHQ nonpuflpcomxo commoduumdoo Soz one.e ooN.H oo~.e omo one 0mm eneauoo commune ooooone Hoeonoe: noose com new new new mom and neonnoe commune nonsenseoe Hoooe nmoaa: esflpoz umBoq Epawoz umBOA Nmoa wasp EmuH ooom coaooomonn whoa SOHDUOFOHm omousmmm ammeom use an moneezamme msueezemeae amaze ooom oze mama .meosooee someon eon ozezuo omeomeomm ON mqmde 159 competing materials."1 Sawlogs for lumber All three levels of the Forest Service study indi- cate there will be a higher level of lumber consumption in 1975 than in 1952, and much higher consumption in 2000. The "Medium" level projects a 34-percent increase for 1975 and a 90-percent increase for the year 2000. These increases do not assume constant per capita consumption of timber products to the year 2000. Even with constant price rela- tionships, some differences in consumption appear probable. If present per capita uses of timber products were contin- ued until 2000, total wood demand in that year would be considerably above those projected. To meet the long-range demand levels assumed under its "Medium" projections, the Forest Service has set a goal for itself of a threefold increase in sawtimber cut from the national forests.2 This goal combines projected nation- al needs with an estimation of what the national forests can reasonably be eXpected to yield under intensified manage- ment. The assumption is made that if an overall increase of 90-percent in sawtimber production is needed, a larger increase will be necessary on dedicated timber-growing lands such as national forests to compensate for the eXpected llbid., p. 371. 2U.S. Forest Service, Pro ram for the National For- ests, (Washington: Miscellaneous PuEIIcatIon No. 795, 1959), P. 90 160 failure of extensive small private holdings to achieve any increase in yield. The same reasoning can be applied to Michigan's state forests. If Michigan as a whole is to double its output of sawlogs in 2000 to meet the demand levels pro- jected to that date, the state forests, like the national forests, will have to point for a tripling of sawlog out- put. Michigan's state forests will need to yield annually about 32 million board feet by 1975 and about 46 million board feet by 2000. Pulpwood Future demand for pulpwood is largely dependent upon future demand for paper, paperboard, and various non-paper products of woodpulp. If viewed from the past, then we should expect vastly increased consumption in the future, for surely the past rise in consumption of pulpwood in the United States has been phenomenal. Pulpwood consumption (including wood equivalent of imported pulp and paper) has increased from about 2 million cords in 1900 to 35 million cords in 1952 and to about 42 million cords in 1955, al- most a 2000-percent increase. In view of this extraordinary rapid increase of pulp- wood production in the past, the Forest Service has indi- cated a much larger rise in future pulpwood consumption than for sawlogs. The "Medium" level increase for 1975 is eibout 100 percent of the consumption in 1952, and by 2000 161 the increase is almost 200 percent of the 1952 quantity used. 1 However, this estimate was made in 1955, and since then at least two later estimates of future pulpwood consump- tion have been made which differ sharply from the Forest Service estimates. The Business and Defense Services Administration (B.D.S.A.) of the 0.8. Department of Com- merce, in 1959, projected the requirements for pulpwood t) 134 million in the year 2000 and Resources for the Fu- ture (R.F.F.) indicated the requirements would be as high as 240 million cords by 2000. These estimates represent increases of 362 and 610 percent, reapectively. Assuming that these latest estimates are fairly sound, then it be- comes obvious that the Forest Service "Medium" level estimate for pulpwood requirements is too conservative. For this study, we will consider that the magnitude of the increase for 2000 over the 1952 level of consumption is .about 400 percent. Assuming that the public lands' share of increase vvill have to be at least one-fourth larger than the average fior all forest lands in the United States (as was done for sawlogs), it is not unreasonable to estimate that the pres- <2t1t pulpwood production of 200,000 cords on the state ifcarests of Michigan will have to increase at least five tliames by the end of the next four decades in order to meet 'tiie estimated demand. AS large as this increase may seem, \ l Timber Resources for America's Future, op, cit., D. 422. F 162 the projection for future production is still at a slower rate than in the past. The future rate of increase is about 4 percent per year, whereas the rate of increase from 1946 to 1957 has been 15 percent per year. Supply The estimates presented of increased wood demand in the future suggest a a greatly expanded role for the .state forests in supplying wood products. By the year 22000, the demands visualized will call for increased out- pnat for the state forests of 200 percent in sawlogs, 400 percent in pulpwood, and 100 percent in miscellaneous wood products. The question arises, will the state forests be able t2c> sustain such greatly eXpanded output? The answer is yes, for at least three important rea- sons. First of all, production could be increased substan- t izally within the present limits set by management, since clues actual cut of many species is far below the estimated allowable cut. This is primarily due to a lack of local demand for particular species and products in many local- ities. Secondly, the Division of Forestry is following a PNDJaicy of building up timber growing stocks which will in- crease the volume of growth in the future markedly. Very 11Jails cutting of green timber was allowed prior to 1940 and even at present, the allowable cut is still calculated 163 to be no more than about 25 percent of the net annual growth. This policy has permitted a phenomenal building up of grows ing stock in the past, and the trends are continuing, perhaps even more rapidly. For instance, recent continuous inventory plot remeasurements for nine state forests in the Lower Peninsula showed a net increase over a six-year per- iod (1953 to 1959) of 24 percent in stocking of trees over five inches in diameter, and a 42 percent net gain in vol- Lune. Finally, as cultural operations of management are satepped up on the state forests, yields will inevitably eXpand. Two studies made in Michigan have supported this eXpectation. Well managed stands on average sites were found to grow much more timber than the usual run of stands-~about twice as much in total growing stock, and three or four times as much in sawlog volume. In the light of these observations on the potential ft>zr eXpanding production on the state forests, there is IJLt:tle doubt that the market demands anticipated in the Year 2000 can be met and sustained. h 1John L. Arend, et al. "Growth of Unmanaged Oak - Hil-Czkory Wood Lots in Southern Michigan," U.S. Forest Ser- Vice, Lake State Forest Experiment Station - Technical Note No. 327, (1950). William M. Zillgitt, "Stocking in Northern Hard- W0<>Litdoor recreation areas into three broad groups: (1) Izaser-oriented areas, (2) resource-based recreational areas Eir1d.(3) intermediate areas. The essential characteristics of the user-oriented areas is that they be located close to their users; the Physical characteristics of the resources are secondary to tthe location factor, although good physical characteristics are important here, as well as elsewhere. Examples of this Class of areas are children's playgrounds, playing fields ‘ 1Frederic Dewhurst et al., America's Needs and Re- W, (New York: Twentieth Century un an ct! e e tors of Fortune, The Chan in American Market, (Gar- en City, New York. Hanover House, I955}. 2Clawson, Held, and Stoddard, cg, cit., pp. 184-193. 166 for games of all kinds, swimming pools, local parks, and the like as well as zoos, museums and other similar im- provements. At the other extreme are the resource-based recreation areas whose essential characteristic is their superior natural features. The activities enjoyed there are quite different from the activities of a more organized lcind enjoyed in the user-oriented areas. For the most Inert, the resource-based recreational area is included in a: federal landholding such as a national park or national forest, or is in private ownership, such as an ocean beach or major lake. Between these two extremes is a type of recreational area which may be termed "intermediate." The intermediate aatrea must be within reasonable distance--perhaps one or two llcrurs' travel timeo-of most of its users, and it is inter- tncediate in that its physical characteristics are important I>Lit not dominant. Typically, a recreation area of this kind is a state park, possibly a large municipal park; ideally, it contains attractive forests and waters and is used for somewhat more extensive recreational undertakings than are the city parks and playgrounds. Clawson compared the use made of these three types ci'f'r'ecreational areas in 1956 to projected use in 2000: 167 Type 9f recreation .;229 £999 (million visits) (million visits) User-oriented1 1,000 plus 3,750 plus Intermediate2 312 5,000 Resource-based3 116 5,000 The user-oriented potential recreation demand in the year 2000 was based on the assumption that there will be 310 million people living in the United States at that time, and that 250 million of them will live in cities. He further assumes that the average urban person will use a municipal park 15 times or more during the year. The estimate of use of resource-based areas extends present trends (about 10 percent annual growth rate) but it is arbitrarily reduced to about half of what a mere trend extension would produce. It was assumed that the publicly owed areas of this type would not be much larger than at r>1resent; not only is there fairly strong sentiment against further major extension of federal ownership of land, but more basically, there is little land physically suitable for some of these categories that is not federally owned. A greater probability is that a larger part of the total area of federal lands will be used primarily for recreation * 1Using city and county parks as an index of this tyDe. 2Using state parks and federal reservoir as a measure 0 f this type. 3Using the national park system, national forests, and federal wildlife refuges as a measure of this type. 168 in the future. The potential recreation demand in intermediate- type areas is built upon the assumption of 15 or more visits per capita annually. This is far less than an extension of past trends would indicate. To meet the increased use, eightfold eXpansion of areas is needed, and even then the assumed use per acre in 2000 would be about double the present per acre use. The state forests, by definition, would be considered :in.the category of Clawson's "intermediate" type of recre- aitional area, although they are not entirely comparable vaith.state parks and federal reservoirs which he includes :111 this category. Certainly, the intensity of use meas- iazred in visits per acre is in no way comparable to the state parks and reservoir areas. They average about 35 \r1.sits per acre while the state forests probably have no more than about 13 visits per 100 acres. What is the potential of the state forests in sup- pi1371ng_additional campground facilities for a projected increase in intensity of use 16 times that of the present? Certainly, it would appear that the potential is great and that there should be no physical limitations in sup- Pl-Ying these needs. At present, there are about 100 state fGreat campgrounds having an aggregate area of not more tfuarl 1,000 acres. Compare this with the 3.8 million acres of State forests. It is true that each acre of forest is “0': a potential campground site, but certainly there is 169 more than an adequate number of desirable locations to fur- nish at least the eightfold increase in area which Clawson estimates as desirable by the year 2000. It is noteworthy that the Forestry Division plans to double the number of state forest campgrounds within the next three or four years. These are being supplemented by 'marked hiking trails and scenic drives to add further to the recreational enjoyment of these publicly owned lands. Hunting and Fishing Hunting and fishing use are usually measured in therms of licenses rather than "visits," which make it dif- ficult to compare them on the same basis as other areecreational uses. We do not know how many visits the t:)rpical license holder makes during the year, but according t:<> the National Survey of Huntinggand Fishing in 1955, the typical (median) fisherman fished on nine and one-half days (flirting the year, and the typical (median) hunter hunted on eight and one-half days during the year. While hunting and fishing have gained in popularity, titer increase in numbers of licenses issued is at a far lower rate than the increase in use of recreation areas. 011 the national scene, the average annual percentage in- crease in the post war years for hunting and fishing has been only 2.7 and 4.5 compared to an average percentage increase of about 10.0 for other forms of outdoor recre- 170 ation.1 In Michigan during this period, the annual percent- age increase in hunting licenses sold has been about 3.0 or slightly above the national average, while the percent- age increase for fishing licenses sold during the post war years has been only about 2.0 compared to the 4.5 average over the whole nation. However, Michigan has a higher ra- tio of both hunting and fishing license holders per 100 persons of pepulation than the national average. In Mich- igan, in 1957, 14.4 out of every 100 persons bought a fishing license, and 15.1 bought hunting licenses (both small and big game combined). This compared with the na- tional average ratio of 11 and 8.5 for fishing and hunting, respectively. The ratios of hunting and fishing license holders to total population of Michigan has held quite stable over the past 12 years. If we can assume that it will continue to do so for the next 40 years, then we can estimate that the demand for hunting and fishing will be tied quite closely to the population increase. A 58-percent increase in population in Michigan from the present to the year 2000 would also mean a similar increase in the number of hunters and fishermen. However, since public lands are likely to attract a larger share of the total hunting and fishing population due to increased posting of private lands, it is 1Clawson, Held, and Stoddard, op, cit., p. 150. 171 reasonable to assume that the increase of hunting and fish- ing use on state forest lands by 2000 will be in the order of 75 percent. The outlook for the state forests to absorb this in- crease in hunting and fishing use is good. No doubt it will mean a shifting of pressures from the area closest to the population centers to more distant points, but this will be profitable both to the hunter and fisherman and to the fish and game population. When game numbers are not reduced or controlled by hunting pressures, the populations tend to increase beyond the capacity of their critical win- ter food supply. Extensive programs of game and fish management are being carried out on the state forests of Michigan for the express purpose of maintaining an adequate supply of fish and game for future harvest. Even the timber harvests are planned with the idea of supplementing those management programs. The cut-over areas create openings beneficial to game, and the logging roads provide increased access for the Sportsmen into the forests. 'ggojected Benefits If the state forests keep pace with the projected national economic development and the attendant needs for timber, recreation and wildlife of the projected population for the year 2000, benefits will rise accordingly. If the output of timber products from Michigan state 172 forests expands along the lines of the foregoing estimates, the value of pulpwood output will increase five times; sawlog output, three times; and other wood products, two times. Timber sales in the year 2000 will amount to some 3.6 million dollars at 1957 prices. This is a highly con- servative estimate of stumpage sales' values, since stumpage values have risen far more rapidly than general prices over the past 40 years, and there is no reason to as- sume that they will not continue to diverge upward from general prices over the next 40 years. Value of raw timber products from the state forests will rise from 7.8 million dollars in 1957 to 32.8 million in 2000 based on 1957 prices. Value added by manufacture again based on 1957 relationships will reach 362 million dollars in 2000. Value added beyond manufacture is cal- culated at 118 million dollars. Thus, gross product (con- sumer expenditures) for timber products of the state forests, calculated by summation of three components of the "commodity flow," will total 513 million dollars in the year 2000. Using apprOpriate current ratios-~84 percent for value of raw products and value added beyond manufac- ture, and 76 percent for value added by manufacture-~con- sumer expenditures can be refined to national income in Michigan originating in timber produced from the state forests; the estimate comes to 402 million dollars. The 16-fold increase visualized in recreational use of the state forests by the year 2000 will mean a corres- 173 pondingly large increase in expenditures and income gen- erated. Campground use in 1959, which included 405,000 camper-days of use and 86,000 user-days of picnicking, bathing, and water-skiing based on campgrounds, will expand in the year 2000 to a prospective 6,480,000 camper-days of use and 1,376,000 user-days of picnicking, bathing, and water-skiing. These estimates do not touch on the con- siderable recreational uses of state forests independent of established campgrounds. Consumer eXpenditures of 1.8 million dollars in 1957 by camper-users, and non-camper users of state forest camp- grounds will rise by the year 2000 to a prospective 28.5 million dollars. These expenditures, in turn, will repre- sent some 14.2 million dollars of income payments in Michigan. An expansion in hunting and fishing activity on the state forests by the year 2000 is expected to be about 75 percent greater than in 1958. This will mean 332,000 deer hunters, 73,000 small game hunters, and 160,000 fishermen in the state forests. Hunting expenditures will increase to 22.6 million dollars, and fishing eXpenditures will in- crease to 14.4 million dollars. In terms of income payments within Michigan, consumer expenditures will reduce to 11.3 million dollars for hunting and 7.2 million dollars for fishing. Other sources of income from the state forestso-oil and gas leases and royalties, sale of nursery stock, and 174 special grazing use and mineral permits--are not projected because of the lack of an adequate basis for such projec- tions. Nevertheless, even with the omission of these miscellaneous items and large omissions within the recre- ational category, the economic activity dependent on the use of the state forests in the year 2000 reaches an im- posing total--575 million dollars of consumer expenditures and 435 million dollars of income to the people of Michi- gan (Table 21). TABLE 21 ESTIMATED CONSUMER EXPENDITURES AND INCOME PAYMENTS GENERATED IN MICHIGAN FROM PRODUCTS AND SERVICES OF THE STATE FORESTS IN THE YEAR 2000 Item Exgzgggififes P:;::$:s were Wmilliig Timber 519 402 Campground use 28.5 14.2 Hunting 22.6 11.3 Fishing 14.4 7.2 Total 578.5 434.7 The estimated increase in income payments from some 100 million dollars in 1957 to 435 million dollars in 2000 represents an increase at a rate of some four percent com- pounded annually. 175 as mds.dao.m mak.mdm.a deduce downsides NA 0mm.aom Nuo.osw sd>aa sodwpsum omcfixomz .mBoaaaro he mmc.oqm mwo.oHH mcoomdnsz “mand .muudsssmz am oak.uom ams.sau mesdmaaonz spade .ddcnsoadz om owa.sdm wam.mmu «seasons: pawns .duuda .uusuoaoosom an oas.emN oak.msa sd>aa ascendandz dsmddaau .dosu .odnaaomz HA was.sme mo~.oom amassed: mzmeaano .modq no www.mmm Nmm.dmm HoHHmQSm mama unnamed .couH so owm.Naa wea.xa swede couH udduoaoonom .sdwaa as Odo.aum Hom.~om madam undue wowa< .muumsoumz mo oem.wem som.moa um>am moonwomm mmmumm .aomm: nouco .noucwsom .Bmcmmaox me 0mm.mom mws.Hma mwwumm H coawmm moho< mauve sense adasdsssom sarong daemudzso muoanumao Ga mmaussoo mumum mmu< mmOho wumum uoz unmuwom uoauumao umduoa wudum «upmz zmm mead: anon .om mzne zdasdno no moo.ox~ sso.kka um>aa commas commxmnz .owhm3mz .mnmouo .aommz .oxmq mm oom.Hoa mw5.om muuovamz whom ham .aasomao .Smaowo .oman< no omw.wnm doo.NwH Bdemwo sumac .dossoomom .mdxsdsdaz as omk.mmm dmo.s~m mama souawsom ddmxossdno .udsam No aNN.som mms.mma sooasumx enamxms .moumanmz .omuo>muH ensue .dauadm .ddadaooa as ems.ks~ das.mwu dads dune oceans: .maawn -de .dusoomz .daododo mm ous.naa mdk.oo po>aa saddened onH .msemmum .nwwmonoro mu ome.ooa mwm.oea oxen xomHm masseuse .suousmuu an oom.mdd mde.om~ «Hammad «noose .oomoH .mawdu< Ho om~.HNH mad.ss nausea HH sesame mowo< mauve edsso madamessom sands: danmuocso muoauumao as moaundoo oumum mend macho wumuw uoz uflmouom unsuudao unmaom madam 4.5m ZH 75m 4538 QmDZHHZOU d XHmzmmm< 177 No Nam.mmo.o oom.oea.m deduce undue spasm .sswdaad as osa.kd de.mm adwdaad HHH cosmos as doa.dma.d doo.dmw.H asses mooomo .%o:wuoEu:oz no oeq.wmm mee.mwa ww>am hem wmoansa mmuo< mmuo< omazo woaumvasom assuaz easmuwc3o muoauumao as mmaundoo mumum mend wmouo eunum umz nonhuman umouom mumum unwouom dADmZHzmm MMEOA QmDZHHZOU < xHQmem< APPENDIX B Source of Data on Income and Product United States Govgrnment Publications United States Bureau of the Census Census of Population and Housing, 1950 (Decennial) Census of Agriculture, 1955 (Quinquennial) Census of Manufactures, 1954 (Periodic) Census of Business, 1954 (Periodic) Annual Survey of Manufactures, 1957 (Annual) County and City Data Book, 1958 (Periodic) County Business Patterns (Quarterly, jointly with U.S. Bureau of Old-Age and Survivors Insurance) U.S. Department of Commerce, Office of Business Economics National Income, 1954 (Periodic) book length sup- plement to the Survey of Current Business Survey of Current Business: National Income Number, July 1957 (Annual) Personal Income by States, September, 1957 (Annual) 178 APPENDIX C Michigan State Forest Campground Survey 1959 Selection of Campground Sample The pOpulation of campgrounds to be sampled was considered to be 93 of the 100 in the state forests. The five campgrounds in the Allegan State Forest and two camp- grounds located on Bois Blanc and Beaver islands were not included because of their isolation from the rest of the group. The 93 campgrounds ranged in size from a high of 80 rated campsites to a low of only 2 campsites. This made some stratification necessary before selection was made. However, since the rated size of the campground did not always correlate directly with its use, stratification was made according to the registered visits recorded in July and August of 1958. A randomized selection was made of 4 sets of 30 campgrounds with each set containing 10 campgrounds which had received fewer than 200 visits the summer before, and 20 campgrounds which received more than 200 visits during the previous summer. Using this type of random selection, 71 of the to- 179 180 tal population of 93 campgrounds were chosen to be visited at least once. Since a total of 120 campgrounds was vis- ited many were visited twice and some even three times. The 22 campgrounds which were missed completely were all of small capacity with comparatively light use. Method of Sampling The sampling was made on alternate weeks starting July 1 through August 21, 1959. A set of 30 campgrounds was visited in the course of a six-day period as generally one day was allowed for traveling from Lansing to the Nor- thern part of the state. Every camping party with a tent, trailer, station wagon or other means of overnight camping was interviewed using the questionnaire form as shown in Sample 1. A sum- mary of the camping information for each campground was recorded on a summary sheet (Sample 2). Analysis of Data Representatives from a total of 726 camps were in- terviewed in the 120 campgrounds over the 4 alternate week visits. An additional 112 camps were unattended when vis- ited. The study indicated that only about 15 percent of the overnight campers in state forest campgrounds volun- tarily sign the register sheet. The 726 camps represented a total population of 3,625 SAMPLE 1 Date Name of Campground Address of User: City State Did you register? yes__ no__ For how many Total in party fifi W_ ___ Length of stay in campground Is this your destin- ation? yes__ no__ If "no," where? Primary individual interest: Camping Fishing Bathing ___Boat ing__Overnite___Other__ Equipment: Trailer Tent Boat Stove Do you use campground stove for: Cooking Campfire Have you stayed at this campground before? yes no Have you stayed at other state forest campgrounds? yes no Do you feel the facilities are adequate? yes no If no, indicate: Tables ___ Garbage Disposal__ Toilets __ Water supply .__ Stoves Other Remarks: 181 SAMPLE 2 Date Time Campground Total Camping Parties Total Registered Total Campers Day Use: Picnicking Fishing Bathing Boating Other Total camp - day use Campground Checklist (Condition, adequacy, etc.) Cleanliness: Toilets: Garbage: Register Box: Stoves: Tables: Wood Supply: Signs: Hazards: Remarks: 182 183 people with a weighted average of just slightly under 5 persons per camping party. The average length of stay of each party was deter- mined to be eight days. Total camper-day use was calculated by the following procedures: 1. A tabulation was made for each of the four trips of the number of campgrounds visited on each day of the week, and the number of camps they con- tained. 2. From this tabulation, the average number of camps for each day of the week was calculated. 3. This average number of camps for each week day calculated for the sample was expanded to a statewide pOpulation on the basis of the ratio of the average number campgrounds included in sample for each day to total campgrounds within state forests. 4. These eXpanded daily averages when added together totaled an average use per week of 5,173 camps. 5. Since each camp had an average of five persons, the total camper-day use became: 5 x 5,173 or 25,865. 6. The total camper-day use for the nine-week per- iod of July and August would then amount to: 9 x 25,865 or 232,780 camper-days. APPENDIX D Camper Expenditure Survey Sample 3 is the type of questionnaire sent to a random selection of 320 campers who had previously been interviewed at campgrounds in the 1959 summer study of campground use, in order totdevelop an appropriate esti- mate of expenditures by campground users. 184 185 ll 1 l HI HHH adamauoov Gownzoaz as Hw>mwa SH Ho memo um uaoam HIIH Hill! xxxxxxm xxmxmxx Amwmaaoov mEom um ucmnm Ou meazuoao .oum .oaxomu .muoomz u undamasom wnASmam .oum .mwOuoE e mumaamww umom .mumom .oum .mmxw .mnwoucmH u wHooe e moHHOmmmoo< waamnoua wcsxooo o mwmaooo .mopoum ucmseasom mafiamoam 6 .mwoawmwh .mucce wwco one“ as mdhduaoaeexm ufidflflMflliwcHeEmo Amado“ umaav u memos osnmonoexm mpoocmaamomaz .ouo .maonm .uamn .Hmuamu anon .mxoon .mosmw u unmenflwuumuam .ouw .ooa .meoo uommca .oumme suoou .zoauoa Gum .oam umuam .mmumaa peace a mwwwonsm mumom e wnaxooo w0m Adam wmwmwm>om @ wwauooowo ado memo: muwmeom e oofl>umm new .HHo e onwaommo Eowm eawu wsom MOM mmwnuaonwexm uomwao Ilondouwaswo mmowood mamz m mdmzmuu moHaS_Hmuoa «monsonmaewo ummuom mumum unwanoax :4 ocean oHoB memo maamawo mmmnu mo mame:3om Nmmma waawso wcaafiwo ocean no» can when mama 30m 0: no» emnamamo rues nouoosaoo uoa mmawu wow new: upon mH on Ilse» «wnaafimo £uH3 ocuooncoo uo: mmahu wnaswam How noun unwanwswo wzasmam mH AmEmuH umHHv I msomnmaamomaz BIBLIOGRAPHY American Automobile Association. 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