This is a children’s book that was read to us in class during the mid-1970s, and I think it was more contemporary. It was humorous tales of mountain life. I believe it was from the perspective of a young boy. It is a collection of humorous short stories. In one of them, one of the characters gets his toe gets lopped off by an axe. The toe is buried in a tobacco tin. The amputee is tormented by burning sensation where the toe used to be. He believes it is burning because the tobacco is irritating the severed toe, so the boy has to find the tin, rinse the tobacco off. They do, and coincidentally (?) his pain is relieved.
Stump the Bookseller
New format, same book stumper solving.
This website suggests that the story is an old Yukon legend. The book itself was published too recently to be your book, but maybe this will give you something more to go on.
http://www.publishersweekly.com/978-0-7613-1493-6
I realize that the query here was posted over ten years ago, but I could have written an almost identical question. I was read the exact same book by a teacher sometime in my grade school years, but in my case it would have been in the late 1960s or early 70s. Certainly before 1972; perhaps that might help narrow this (likely long dormant) search.