FINANCIAL ROTATION 87 



From the foregoing table it appears that the average net in- 

 come with spruce site II and present prices, is but $1.60 per acre 

 for a rotation of thirty years, rises rapidly and steadily to $15.30 

 for a ninety year rotation and passes a maximum of $16.40 at a rota- 

 tion of about no years. 



b. Rotation for largest net rental on land, maximum Se, 



and with this of highest per cent interest on the investment. See 

 also chapter on Se. The assumption is that the bare land is the 

 real capital and that by using it to raise timber this land is made to 

 pay a rental and the object is to decide upon a rotation which will 

 secure the highest net rental per acre, i. e., the highest Se. 



That a forest producing the largest Se also pays the largest rate 

 of interest or p is evident from a previous study into p where it is 

 shown that : 



Se 

 px p, the rate of p on Sc. 



Sc 



Since Sc or the cost value of the land is fixed arid p is the accepted 

 rate of interest which is also fixed, it is evident that p x increases 

 directly with Se. This calculation applies to every stand or every 

 acre in the forest and therfore to the entire property. 

 J^ Generally longer rotation means larger and better timber, larger 

 growing stock, larger capital, larger net income per acre of property. 

 As seen from the table for spruce, site II, and from discussion of 

 Se it means a larger Se and better rate of interest. But this reaches 

 a maximum after which the Se and with it the rate of interest made 

 by the forest decreases. Formerly unduly long rotations and large 

 timber were the rule and in most forest districts there was no regard 

 to the relation of this rotation with the capital invested and the in- 

 come secured. It was against this kind of luxury in forest manage- 

 ment that Pressler and Heyer raised their voices and used the math- 

 ematics of forest valuation and statics. And it was the fundamen- 

 tal formula for Se first developed by Faustman which served to 

 make clear the mistakes of very long rotations. At first the current 

 rates of interest, four and five per cent, were employed. But as 

 seen from discussion of Se these higher rates not only reduce Se 

 but bring the maximum Se very early and so suggest or demand 

 too short rotations. That there must be a limit to shortening of 

 rotation and that good marketable timber must be raised regardless 

 of any formulae was evident to every good practitioner. Unneces- 

 sary stress on mathematical formulae on the one side and common 

 sense with an aversion for formulae, especially for bringing in com- 



