SALE BY ROYALTY. 451 



In Austria, also, much acuteness has been shown in devising 

 the conditions of sale of standing trees. 



2. Various kinds of Sale. 



Three kinds of sale of forest produce are in use, which 

 depend on different methods of fixing its price, namely, sale by 

 royalty, sale to the highest bidder and sale by private 

 contract. 



(a) Sale by Royalty. 



Whenever wood of any assortment is sold at rates fixed by the 

 forest-owner, the mode of sale is termed sale by royalty, or 

 sale at fixed rates or tariff-prices. The characteristic of this 

 mode of sale is that the price is fixed by the seller, the forest- 

 owner providing for the distribution of his forest produce 

 among its consumers. 



i. J/ndr of fi.riinj Ihi 1 Royalty. 



By the term royalty is meant the present local value, in a 

 forest-district, of any wood-assortment, as it is determined by 

 the free action of demand and supply in the timber-market and 

 in auction-sales. The royalty for any assortment is determined 

 by taking the average price during a recent period for all 

 similar wood sold within a certain district. The larger the 

 volume of wood sold in the open market, and the narrower 

 the limits of time and place within which the average price is 

 fixed, the more nearly will the royalty correspond to the 

 correct price of the assortment. 



Formerly royalties were fixed on quite different grounds 

 from these. Up to the end of last century it was considered 

 advisable and in some countries this is even still the case 

 that the State, at any rate, should sell the produce of its 

 forests at moderate rates to the people. Eoyalties therefore 

 were kept low purposely, so much so, that they were considerably 

 under current local prices ; they formed the minima margins 

 of the prices of forest produce. 



Eoyalties were fixed for a district by making benevolent 

 estimates of prices, after considering the area of the district 



G G 2 



