i 4 2 FORESTRY 



found in determining the absolute values to employ in the 

 formulae made use of. The time element which forestry has 

 to face makes any approach to perfect accuracy impossible. 

 The management of a single crop of trees extends, as a 

 rule, over a very lengthy period, and it cannot be expected, 

 for example, that we can at present estimate with much 

 confidence what the yield and value of a wood will be a hundred 

 years hence. No less uncertain is the task of determining the 

 rate of interest to be charged for capital invested in forestry, 

 though, owing to the length of time during which the capital 

 is lying untouched, the accuracy of the basis of this estimate 

 is of great importance. Again, the financial calculation rests 

 largely on the supposition that the future management will 

 proceed upon definite lines, which, however, it may be 

 necessary to depart from for example, the length of rotation 

 may have to be changed, the exact time at which thinnings 

 will be required is not known, and the yield from them can- 

 not well be forecast. In the narrower sense, at least, the 

 computation of the receipts and expenditure does not come 

 into the work of forest valuation, these matters being held 

 as part of the forest management especially is this the case 

 with the more important forest areas. 



Questions which materially affect the making of the esti- 

 mates are the future price of timber and the rate of interest 

 chargeable. Both of these are uncertain quantities ; but 

 statistics show that the tendency is for wood to rise in price 

 and that the rate of interest is sinking. This is true, of 

 course, only as regards the general tendency throughout long 

 periods, temporary fluctuations being beyond our power to 

 forecast. As the value and rate of interest tend to move 

 in opposite directions, the best course to adopt is to base 

 calculations on present prices, and reckon with a low rate 

 of interest say 2^ or 3 per cent. 



Amongst other arguments in favour of the use of a moderate 

 interest rate, it may be said that land, even in a good 

 agricultural district, yields but a low net return to the owner, 

 that for a permanent investment forestry is accounted very 



