Saved By A Tree

Posted by Rural Missourian on Mar 7th, 2009

In the frantic world of financial woes, thinking long-term when one has a chance to make good money in the immediate is a rare quality. We see the short-term today with landowners that are quick to clear cut their forests to make a quick buck, rather than steward them to develop healthy forests that yield premium lumber on a sustainable basis for the generations to come. I want to share an amazing story about one tree and a farmer that, though it has a bittersweet ending, exemplifies the long-term vision that is lacking today. During the Great Depression Lloyd Hayes lived in Williams County, Ohio, where he farmed and like so many in the Midwest had a woodlot with walnut trees. There was one tree in particular, a beautiful black walnut with a flawless trunk that was straight as an arrow, for which someone offered him $300 in the early days of the 1930’s. In 2009 dollars that was $4,625, which was a fortune back then when thousands lost their farms and many stood in long soup lines just to eat. Even though it was a tempting sum of money during a time when it would have made a huge difference, Lloyd decided to let the tree grow, a living asset that could be cashed in later after it matured.

After he died in 1972, Mr. Hay’s family was hit with sizable inheritance taxes, which put them in a real quandary if they wanted to keep the family farm intact. They were forced to sell some of its land or sell some trees. As the tree next to the black gold tree had been recently struck by lightning, they decided to sell the mature giant before it was next. In 1976 they sold a total of 18 black walnut trees for $80,000, which included the black gold tree. In 2009 dollars that is a whopping $296,860!

[On a side note — This only testifies to the appalling decrease in the purchasing power of the dollar since the Federal Reserve began to debase it in 1913. You might be shocked to realize that the dollar has lost 95% of its value since 1913. To check this out for yourself go to the Inflation Calculator on the web, which keeps track of the purchasing power of the dollar since 1913. We are close to its total collapse where it will become worthless (as all fiat currencies have in history) along with “paper investments” denominated in it such as pensions, 401k’s, etc. This is why I keep hammering the point that you should get out of paper now, even if it means taking a hit on taxes or penalties, and put it into land and a means of production. I remember vividly walking the streets of Mira Flores, an affluent suburb of Lima, Peru, during its economic meltdown of the early 1990’s and seeing money blowing about, as inflation destroyed it daily. My father-in-law, who worked hard his whole life and put aside a decent retirement nestegg, saw it devalue into a pittance. Yes, the principle was still intact along with its accrued interest, but it barely paid the electric bill when it was finally needed.]

What is remarkable is that the one black gold tree that was allowed to mature sold for $30,000, which in 2009 dollars is $111,300 . . . not a bad return on a living asset. This tree yielded a 57 foot, grade A veneer log (defect free) that measured 38.50 inches in diameter at breast height (4.5 ft off the ground), which would have rendered more than 2,300 board feet (Doyle scale). Now that’s a tangible asset . . . true wealth. What a bittersweet story that this asset that Lloyd Hays so wisely allowed to mature had to be used to pay inheritance taxes to save the family farm, but they did have it, which is the point.