A FORESTRY ENABLING LAW 501 



will be cut in 50 years, that it will cost $4 per acre to set out the trees 

 and that one-fifth of the plantations will be destroyed before maturity, 

 and also that 4 per cent payable yearly is the current rate of interest 

 on Government bonds at the time they will be issued. For each acre 

 set out then, the Government would issue a $34.59 bond payable in 55 

 years and would receive a mortgage on tha.t acre for $43.23 payable 

 when the Government gave its consent for the cutting of the crop. The 

 $34.59 is $4 compounded annually at 4 per cent for 55 years (allowing 

 the bond to run for 5 years longer than the growing of the crop) 

 and the $43.23 is $5 (25 per cent more than the $4 to allow for 20 

 per cent of the plantations being destroyed before maturity) com- 

 pounded annually at 4 per cent for 55 years. Of course, if the crop 

 was cut earlier, say at the end of 50 years, the mortgage would be 

 satisfied by the payment of $5 compounded annually for 50 years which 

 would be only $35.54. Then the Government would invest this amount 

 of $35.54 at 4 per cent which would make $43.23 in 5 years more. 



It may be objected to that there would not be a sufficient market for 

 bonds of such a deferred character as to the payment of the interest, 

 in the United States. This objection probably would not be sustained 

 by experience for these reasons. There are now a very large number 

 of very wealthy people in the United States and many of them are 

 primarily interested in maintaining the family fortune. Also many of 

 them distrust the ability of their children to keep the property but 

 prefer to tie it up until their grandchildren are mature men. As- 

 suming such a man with $12,500,000; he could invest $2,500,000 in 

 ordinary stocks and bonds paying current dividends and interest, and 

 then invest the other $10,000,000 in the Government's 55-year 4 per 

 cent bonds payable as to both principal and interest at the end of 55 

 years. At the end of that time his heirs would receive $86,463,669, 

 and of course so far as security of investment is concerned he could 

 get nothing better in the world. It would appear that the whole 

 acreage that might be planted under the system of financing outlined 

 could be taken care of through a market for such bonds among people 

 of whom the above is an illustration. 



Of course, the shorter the term of the bond the better, but that 

 feature of the bond would depend on the probable yield in thousand 

 board feet at a given date as determined by the Government foresters 

 who in determining this might allow a margin of 5 or 10 years in their 



