CONTINUOUS FOREST PRODUCTION 33 



invested in the forest consisting as it does mostly of standing timber of 

 the same nattire as the annual product and similarly valued (except 

 by difference in maturity), to the product, prevent its yielding more. 

 Therefore, we must again conclude that cheap capital is an absolute 

 essential to put the forest owner in a position to practice forestry per- 

 manently. Occasionally forestry may yield more when increase in 

 value of the whole investment is added to the current return. 



Four problems must then be solved: First, there must be consolida- 

 tion of the ownership of forest lands into efficient producing units. 

 Second, there comes their physical organization to provide for annual 

 returns form each unit. Foresters have been known to scoff at this 

 matter of organization for annual returns, but the financier will see 

 at once that without it financing will be impracticable. The third 

 problem has to do with the business organization of the enterprise. 

 Forestry requires stable poHcies of management over long periods of 

 years, such as frequent changes of individual ownership can never 

 provide. Outside the farm woodlot the large corporation is the only 

 form which gives any promise of successful private forestry. Proper 

 physical organization of the forest under corporate ownership should 

 give the corporate securities a safe annual return. They will differ, 

 then, not at all from the railroad investment so far as income goes 

 providing of course their ability and right to earn adequate dividends 

 is recognized. Under these conditions the securities become marketable 

 and may change hands from time to time without disturbance of the 

 management of the enterprise. But to realize this consummation the 

 fourth requirement of cheap capital must again be emphasized. 



Will the Forest Yield More Financially under Private Ownership when 

 Handled as a Timber Mine or when Handled for Continuous 

 Yield? 

 The mine can yield its store of mineral but once, so that it can 

 only return the capital invested in it plus or minus any increase or 

 decrease which has taken place in the value of the capital. When 

 timber is handled by the mine policy, it is subject to the same condi- 

 tions as a mineral resource. It is unnecessary to handle the forest 

 in this manner, however, for it is capable of giving three main kinds 

 of increase in value, viz : 



Increase in price (due to increase in demand as related to the supply). 

 Increase in volume)/ , . ,• i _,i,\ 



Increase in quaHty/^^^^ ^° ^"^^^^ S^^^^)- 



