FOREST PLANTING IN NEW ENGLAND AS AN 

 INVESTMENT.* 



By J. W. TouMEY. 



The desirability of an investment increases with the inter- 

 est returns, the increase in the value of the property and the 

 diminution of the risk of impairment of the capital. A govern- 

 ment bond fetches a low rate of interest, but the capital is not 

 diminished and the risk of impairment is very slight. On the 

 other hand an unseasoned industrial bond may return nearly twice 

 the income but the risk to capital is correspondingly increased. 

 The greater the risk the higher should be the return in interest, 

 the less the risk the lower the return. In Europe, forest property 

 is classed with government bonds and other high grade se- 

 curities which involve but little risk of impairment of capital. 

 One reason for this is, forest soil or the land itself without the 

 growing timber is gradually increasing in value the world over. 



The last two or three decades in New England have seen forest 

 soil increase to from two to four times its former value. If 

 we start therefore with a piece of denuded forest land having 

 a present sale value of one to five dollars an acre, and plant 

 it with timber, at the end of the rotation when the trees are 

 cut and the land again denuded it ought to be worth two or 

 three times its former value. 



In the discussion of planting in New England as an invest- 

 ment we are inclined to turn to Europe and argue that since 

 with their lower cost for labor, higher wood values and less 

 danger from fires they cannot secure higher interest returns than 

 2 to 4%, but we hope in this country that forest plantations will 

 earn even this low rate of interest. 



This argument, however, does not hold, because interest returns 

 depend almost entirely upon the soil value upon which it is figured. 

 It is the custom in Europe to increase soil value with increased 

 earnings from the forest so that necessarily the interest on the 



*Read at the Annual Meeting of the Society for the Protection of New 

 Hampshire Forests. 

 538 



