LUMBERMAN'S CASE . 103 



5. What right has the company to claim pay for immature stuff 

 when the forest belongs to the province and the company pays 

 stumpage as it cuts ? 



6. Is not the province the real owner of the stumpage and the 

 one entitled to pay for stumpage destroyed? 



7. What rate of interest should be used in calculation of 

 damages ? 



Other complications came up but need no mention here. Evi- 

 dently claim numbers five and two for young stuff and stumpage re- 

 quires a court decision as to rights of a "limit holder." If favorable, 

 then the expectation value or Ge should be established on basis of 

 growth study, and cruise. 



Claims three and four are clearly right, if properly substan- 

 tiated. 



Claims one and two are not easily separated since one depends 

 on two. The simplest calculation is offered by establishing the in- 

 come or expectation value of the whole business before the fire and 

 the same value after the fire and the difference should be the loss. 



Expectation value before the fire : the cut is 20 million feet 

 per year with profit, (evidently net income and profit). $2 per M. 

 feet, or a total of $40,000 per year; interest at 3% ; since this would 

 have continued for 20 years the present value of these 20 years 

 income is : 



plus the provable wrecking value of the outfit at end of 20 years, 

 discounted to present time; let this be 10,000, then the total is 

 $601,000. 



The expectation value after the fire on basis of only $1.50 profit, 

 due to extra work of logging. 



plus the wrecking value at end of ten years, discounted to present 

 time; if this is $50,000, then the present value is $307,000, and the 

 loss due to fire is about $294,000. 



Another way of attacking this problem is to ascertain the value 

 of the stumpage on a liberal basis. Good stumpage is sold at $2 in 

 this district. Assume that 200 million feet are destroyed, that this 

 timber would have formed a uniform part of the cut during the 20 

 years. Then its present value is as follows : 



