1 8 TRANSACTIONS OF ROYAL SCOTTISH ARBORICULTURAL SOCIETY. 



the annual net return on the initial outlay, it being presumed 

 that the payment of annual outgoings is equivalent to the 

 various sums of money received from time to time from the 

 sale of thinnings. 



Or, again, the gross annual return on capital invested is 

 assumed to be the value of the average annual production of 

 timber, including that removed as thinnings, and from such a 

 sum a deduction of perhaps 2S. to 5s. is made on account 

 of rates and other annual outgoings, and the amount remaining 

 is stated to be the net annual return on the invested capital. 



To take an example, let it be supposed that land which can 

 be bought for ;£io an acre is to be planted with a mixed crop 

 of trees. It is estimated that the cost of planting, fencing, 

 cleaning for the first three or four years and replacing deaths 

 will be ;^8 an acre ; that when 30 years old the thinnings 

 will yield los. an acre; at 40 years, ^2, ids. an acre; 

 at 50 years, ;!^4 ; at 60 years, ;^5 ; at 70 years, ^6, 5s.; and 

 that, when 80 years old, there will be a final crop of 3450 

 cubic feet over 6-inch quarter-girth measure, which at an 

 average price of yd. a foot will yield ^100, 12s. At the end of 

 the rotation the value of the land is presumed to remain unaltered. 

 The total number of cubic feet (down to 3 inches top diameter) 

 which will be produced is estimated at 5050 cubic feet, which 

 gives an average annual production of 63 cubic feet. And the 

 average annual outgoings over and above any sum received as a 

 sporting rent or by the sale of faggots are estimated at 2s per acre. 



Now, by adopting the first method which has been instanced, 

 it would appear that the initial outlay of ;£iS would yield a 

 net annual return of approximately ^i, 5s., 



value of final crop - 



number of years in rotation ^"^ ' ^ '' 

 or apparently nearly 7 per cent, interest. 



And by the second method, the average annual production 

 of 63 cubic feet would be worth, at yd. a cubic foot, ^1, i6s. 9d. 

 From this gross annual value is deducted 2s. for annual out- 

 goings, and the net return that should be realised on the 

 invested capital is stated to be j£i, 14s. gd. per annum. 



Both these methods of expressing the financial result of the 

 operation are absolutely fallacious, but unfortunately they are 

 of very common occurrence. They savour of the finances of 

 some progressive County Council. A moment's consideration 



