FOREST FINANCE 143 



safe, and that there is a feeling of pride in the possession of 

 forest property that is to be reckoned amongst the returns 

 of capita] so invested. These advantages render this form 

 of investment particularly attractive and suitable to large 

 capitalists. If storms or insect plagues occasionally cause 

 damage, there is to be remembered, on the other hand, the 

 comparatively small expenditure required in forest maintenance. 



Sale Value, Cost Value, and Expectation Value 



Various more or less useful formulae have been constructed 

 for the calculation of the value of the forest soil, and the 

 growing stock, and for these two soil and growing stock 

 taken together under the comprehensive term "forest." For 

 each of these there is a sale value, an expectation value, and 

 a cost value ; and for the forest there is, in addition, a so- 

 called rental value. 



The Sale Value represents the market price of the object 

 for sale ; no mathematical formulae are needed to determine 

 it ; but, instead, the price is estimated by comparison with 

 lands, woods, etc., previously sold under like conditions. 



In calculating the value of a forest the selling price enters 

 largely into the calculation in the case of mature or nearly 

 mature woods. It is different with young woods ; their 

 timber may not be readily marketable, and to attempt to 

 sell anything more than a small portion of it might have 

 a very bad effect upon the price. The same consideration 

 holds good in estimating the returns and rental value of the 

 final yield wherever rotations are shortened, that they may 

 give an increased supply of a certain size of material tem- 

 porarily scarce. 



With forest soil the selling value is in many cases capable 

 of being very exactly fixed, especially when the area has 

 been cleared of trees or when it appears suitable for tillage. 



For extensive forests, owing to the diversity of the points 

 under consideration, the sale value should be used only as a 

 general guide. 



