182 JOURNAL OF FORESTRY 



ing up the stand, while if he has managed well and the forest has ac- 

 cumulated a profit, he is certainly entitled to recover such profit in 

 addition to what the stand has cost. The use of soil expectation value 

 instead of soil cost or sale value in the formula for cost of production 

 does allow for this profit or loss. The value thus obtained, however, is 

 the value of the stand as a product, without considering its value as 

 part of the producing capital. Soil expectation value means not the 

 value for the most advantageous use after removal of the present stand, 

 as stated by Stoetzer,-" but the value for the present actual use. 



Expectation value has been most generally favored as the correct 

 basis for valuing young stands, although many writers, as noted above, 

 have favored cost value for very young stands and for artificially estab- 

 lished stands. The expectation value of a stand means simply the pres- 

 ent value of its net return at maturity, less the present values of the 

 cost of production from the given year to the year of maturity. It is 

 expressed in its simplest form (disregarding intermediate returns) :^^ 



Y— (S + E) (i.Op°-°^ — I) 

 I .Op°-°' 



in which S is apparently sale or cost value, or expectation value in case 

 of normal stands ; 



Y-(S. + E) (i.Op"-m_i) 

 I .Op°-°i 



which uses cost value of soil ;-- 



Y-f S.. + E _ _ Y-(S. + E) (i.Op°-°'-i) 



I .Op'^-'" '^^v-t-^' I .Op"-"" 



in which S^ is expectation value of the soil ;-' 



A) n_m ^^ ^^ proposed by Riecke,-* Konig,-^ and Wirt.^** 



The use of soil cost and .Op interest rate has the same defect as 

 actual cost value — that is, it overlooks the element of profit or loss 

 already accrued. If both expectation and cost formulae as given by 

 Roth are correct. 



' Waldwertrechnung und forstliche Statik, p. 124. 



Heyer : Anleitung zur Waldwertrechnung-Leipzig, 1892, p. 82. 



Schlich : Manual, Vol. Ill, 191 1. 

 ■ Roth : Forest Valuation, p. 64. 

 ' Chapman : Forest Valuation, p. 98. 



' iJber die Berechnung des Geldwerthes der Waldungen, 1829, p. 

 [ Forst mathematik-3d ed., 1846, Sec. 492-493. 

 ' Report Penna. Dept. Forestry, 1901-2. 



