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CHAPTEK vm.—EXTRACTION AND COMMERCIAL DEVELOPMENT. Section A.—State Forest Block Sales and Permits. 62. The year's operations disclose a decrease both in number of appraisals and the quantity of timber cruised. The number of appraisals has decreased from 178 for 1939-40 to 156 for 1940-41, the quantity of timber involved falling from. 156,920,000 board feet to 134,200,000 board feet, of which 25,633,000 board feet in 13 appraisals was for other Departments. Check appraisals were carried out on representative areas of 23 blocks involving the sale of 36,548,000 board feet. In sympathy with the increased demand for sawn timber, State Forest block sales showed an increase of 16,750,000 board feet, rising from 77,374,000 board feet to 94,124,000 board feet (vide Appendix VIII). Only a slight increase, however, was shown in the quantity of sawn timber actually produced from State forest and Warden areas, the total recorded cut being 112,512,000 board feet, as compared with 112,000,000 board feet for 1939-40. Permits to cut indigenous firewood, fencingmaterial, poles, railway-sleepers, and mining timbers were in good demand, the timber sold comprising 270 cords of firewood, 287,661 posts and stakes, 11,714 strainers, 144,881 battens, 6,445 poles, 3,094 sleepers, 5,114 house blocks, and 113,680 pieces of mining timber. The forest-produce cut under permit from exotic forests included 30,131 posts and stakes, 50 strainers, 4,665 battens, 2,285 rails, 466 poles, 3,118 cords of firewood, and 13,667 pieces of mining timber. Section B.—State Forest Log Sales. 63. Under pressure of the war emergency, log sales from both indigenous and exotic forests have increased. In Auckland, kauri logs containing 10,424 cubic feet and podocarps containing 122,994 cubic feet were sold at a total price of £5,253 3s. 3d. In Rotorua Conservancy log sales from Te Whaiti State Forest comprised 383,153 cubic feet of kahikatca, 87,746 cubic feet of matai, 448,809 cubic feet of rimu, and 10,685 cubic feet of totara, making a total of 930,393 cubic feet, valued at £21,865 Bs. Bd. for the manufacture of cheese-crate scale boards, 19,611 cubic feet of white-pine peeler logs were sold to an Auckland firm, at a price of £1,362 Bs. Bd. In Wellington Conservancy log sales comprised only 400 cubic feet of rimu, 2,500 cubic feet of kahikatea, and 100 cubic feet of totara, a total of 3,000 cubic feet, valued at £45. In Nelson Conservancy silvicultural treatment of beech regeneration areas was continued, 740 pieces of mining timber with a volume of 993 cubic feet being extracted and sold for £29. From exotic forests logs aggregating 189,737 cubic feet, together with fencingmaterial and mining timber obtained from thinnings and windthrows, were sold for £6,248. In Rotorua 27,515 cubic feet of logs, 88,568 posts, 3,720 stays, 5,975 rails, 25 house blocks, and 134,018 pieces of mining timber were sold for £3,866. At Balmoral (Canterbury) sales of thinnings and windthrows totalled 23,372 cubic feet, valued at £146 ; and in Southland at Conical Hill and Dusky Forests, sales from thinnings and windthrows amounted to 138,850 cubic feet, with a value of £2,236. Section C—Production and Sale op Manufactured Forest Products. 64. As in European countries with a strongly developed forest economy, State mills are operating primarily as control and demonstration units to establish adequate values for State-owned timber, and are managed accordingly as integral parts of the milling industry, subject to the fundamental tests of profit and of consumer satisfaction. Their operation likewise is made to conform to the general policy agreed upon by the Government and the industry that supply and consumption shall be kept in balance as far as practicable by control of the amount of standing timber on State forests offered for sale from time to time. Unless the immediate future demand for timber at any particular period warrants the disposal of State timber, it is reserved for later use.

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