Plan to Meet Needs for Wood and Timber. 313 



have risen at the average rate per year of one and one-half per 

 cent — that is to say, they have more than doubled. In our own 

 country stumpage of white pine in the last thirty years has 

 quintupled, and in the last ten years doubled, and, indeed, has 

 reached the figure at which it will cover cost of production and 

 leave a profit. And as everyone knows, all wood products have 

 for the last two decades risen speedily, as the knowledge of 

 limited supplies has become realized. While for most species the 

 stumpage values are still far from what it would cost to pro- 

 duce them (they are mostly in the neighborhood of $5), it can 

 be safely asserted that the time when this will be the case and 

 when the price level of European markets will be reached will 

 be here before any plantations now made will be ready for harvest. 



Hence, we will be justified in assuming for long-time calcula- 

 tions the present European prices as reasonable and very safe 

 expectations. 



The interest rate at which European foresters figure their busi- 

 ness rarely exceeds 3 per cent; but this does not mean that the 

 business pays that rate on the originally invested capital or invest- 

 ment value, which is not at all known. It means merely that the 

 sale value of the wood and soil capital yield a 3 per cent revenue, 

 but as wood prices change so does the value of the capital. If 

 we take the value of the forest capital at any given time in the 

 past as the investment value and compare it with the present net 

 revenue the relation is entirely different. For instance, 10 million 

 acres of State forests in 1900 were valued from their net revenue 

 with a 3 per cent rate as at that time worth $700,000,000 or $70 

 per acre. In 19 10, these same acres brought a net income of 

 $2.78 per acre or somewhat over 4 per cent on the valuation of 

 1900, but if still earlier valuations are taken the actual earnings 

 would show at much greater rates. For instance, Prussia in 1880 

 had 6.5 million acres bringing a net income of just about 6 

 million dollars, which capitalized at 3 per cent would make the 

 forest value $200,000,000, or only $30 per acre. On this valua- 

 tion the net income of 1910 of $2.78 per acre would represent 

 over 7.5 per cent dividend. 



If we can therefore manage as well as Prussia — and there is 

 no reason why we could not — we are justified in figuring our 



