256 Forestry Quarterly 



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according to Dr. Thompson of the United States Department of 

 Agriculture (see article on Rural Credit, in Saturday Evening 

 Post, April 15, 1916), is from 10 to 15 per cent on personal se- 

 curities, and from 8 to 10 per cent on mortgages over a large 

 part of the United States.^ Setting this current rate then, would 

 make farming appear as a losing business, and in place of an 

 actual profit the farm produces a loss of 200 per cent of the 

 actual net income. It is evident that the money lender does, or 

 must, take an interest entirely out of proportion to what the 

 farms makes. And to use the money lenders' rate as a measure 

 of successful farming simply misleads and can have no real value. 



In forest valuation, the business rate, the assumed p of all the 

 formulae, meets us at every step. If the value of a 20-year-old 

 stand of pine is to be determined, and if it cost $10 per acre to 

 plant, then this $10 has been out at interest for 20 years, and none 

 of this interest has been paid by the stand. At what rate should 

 it be figured? Should this rate be 3, 5 or 10 per cent; should a 

 uniform rate be adopted for all these calculations, and for all 

 parts of the country ? These questions are not new ; they have 

 been debated a great deal abroad; and even today Dr. Frey 

 accuses Endres and others of using a "rate to suit the forest" 

 (waldfreundlich) , and incidentally one which suits their pet 

 notions on forest statics. 



That the management rate for any business, whether farming 

 or forestry, can serve as a useful measure — and that is its chief 

 function — only when it truthfully represents such business, 

 would seem to follow from what was said concerning the effect 

 of current rates on the farm business. If a well managed forest, 

 satisfactorily regulated and with most of its stands in satisfactory 

 condition of stocking and thrift, i.e., a fairly normal forest, if 

 this forest makes a growth of only 3 per cent on the actual sale 

 value of growing stock and land, then it is evident that 3 per 

 cent is all that we should expect, and that any well stocked forest 

 making 3 per cent must be considered as well taken care of. In 

 this case, then, the 3 per cent rate becomes a fair and useful mea- 

 sure, and any forest making less may need investigation and a 

 change of forester or plans. 



But what does the forest actually make? The following fig- 



'This seems an extravagant statement, as those owning or owing mort- 

 gages in the Eastern half of the Continent will testify. — Ed. 



