116 PRELIMINARY MATTERS. 



is carried on, in other words the interest yielded by 

 Government securities (called Consols in England). 

 It follows that the general rate of interest applicable to the 

 forest industry is not a fixed quantity, but that it changes with 

 the locality, time, and a variety of other circumstances. 



The question then arises, what rate of interest is applicable 

 to the forest industry under a given set of conditions ? In 

 attempting to answer this question, the following points must 

 be taken into consideration : 



(1) The safety of capital invested in forests. The soil 



offers (apart from changes in prices) almost absolute 

 security. The growing stock is subject to damage 

 by men, insects, fungi, wind, snow, rime, and above 

 all, by fire. The degree of danger differs much 

 according to species, method of treatment, length of 

 rotation, climate, etc. ; in temperate climates the 

 damage keeps within narrow limits. 



(2) The price of forest produce is, on the whole, subject to 



less sudden fluctuations than the value of money. 



(3) Investment in forest property possesses the great conve- 



nience of yielding a steady income. 



(4) Forests cannot easily be let on lease, as inroads on the 



growing stock are difficult to control ; for the same 

 reason forests, beyond the value of the land, are not 

 well suited as security for loans. 



(5) Compared with the cultivation of field crops it must be 



noted that : 



(a) A forest once placed under systematic manage- 



ment yields annually equal returns, or nearly 

 so, while those of fields differ much accord- 

 ing to the seasons. 



(b) Forests require much less labour, and the 



management is comparatively simple. 



(c) Temporary high prices can be fully utilized by 



cutting more than the normal yield for a 

 time, or vice versa. 



