158 North American Forests and Forestry 



is eliminated, but the second remains. On the 

 whole, I think that hard wood brings materially 

 higher prices in Europe, but the market price of 

 soft-wood timber is nearly the same there as in the 

 United States. Still, I am not by any means cer- 

 tain that this conclusion is quite correct. 



Assuming that the European forester receives a 

 higher price for his crop, yet the high rental value 

 of his land compels him to wring from the soil the 

 very greatest amount of cash it can possibly yield. 

 In other words, his forestry must be what political 

 economists call intensive, just as the European 

 farmer must resort to an intensive cultivation of his 

 high-priced land in order to compete with the farm- 

 ers of our western States and other countries with 

 low land values. This increased productiveness of 

 the land can be brought about only by the employ- 

 ment of additional capital and labor. Now, every- 

 body who has ever studied political economy knows 

 the law of diminishing returns, which is briefly 

 stated as follows : There is a point where the appli- 

 cation of capital and labor upon land brings the 

 highest return in products, in proportion to the cost. 

 If the amount of capital and labor so applied is in- 

 creased still further, the amount of products result- 

 ing will increase absolutely, but the proportion it 

 bears to the cost of production will become smaller 

 and smaller. In other words, the cost of production 

 will increase more and more until finally the further 

 increase of capital and labor so applied becomes un- 

 profitable. This law is as effective in forestal as 



