is I'oKKsTKv PROFITABLE! 21 



means, but on the whole a profitable business. There arc large forest areas in eastern Prussia 

 which even now do not earn their mere cost of administration, let alone the yielding of a net 

 income on the capital represented. There, are considerable areas in the, mountains of Havana. 

 which are so disadvantftgeonsly located that they can not compete with the more favorably situated 

 ones, and only because managed by the same owner, the (rovernmeiit, does the management 

 appear profitable. This profitableness is expressed avowedly by a 3 or 4 percent return on the 

 capital involved which is tied up in the soil and the growing stock of wood that must be main- 

 tained, and a smaller return is in many cases considered acceptable, while a larger return is 

 probably rare. 



If If, then, in a country with dense population, where in many places every twig can be marketed, 

 with settled conditions of market, with no virgin woods which could be cheaply exploited and 

 come into advantageous competition with the costlier material produced 1 on managed properties, 

 with cost of labor low and prices for wood comparatively high if under such conditions the 

 returns for the expenditure of money, skill, intellect in the production of wood crops is not more 

 promising, it would seem hopeless to develop the argument of profitableness in a country where 

 all these conditions are the reverse, and a business man considers a (> per cent investment no 

 sufficient inducement./ 



Another point on which we must agree before discussing the question of profitableness is as to 

 what we shall consider '-profitable." The conception as to profits to be expected from investment of 

 capital varies with time and with different economic conditions. In OUT country, the rapid develop- 

 ment of our vast resources has introduced speculative aspects into almost every investment, even 

 in bona fide business transactions, and the investor in business expects still a very much larger 

 return than the low interest rates obtainable for money loans. Only-when we are reaching a 

 more settled, permanent civilization will the small but sure returns from such a business as the 

 forestry business recommend themselves especially to the large capitalist who seeks a permanent 

 investment. 



From the standpoint of national economy, to be sure, the use of our poor soils, which are 

 capable of producing nothing but wood crops, is profitable, though the money returns may not 

 recommend themselves to the private investor. 



Again, if the quest ion were asked, Is it profitable for a farmer to apply silvicultnral prin- 

 ciples in the cutting of his wood lot so as to reproduce a good second crop? the answer will be 

 without doubt affirmative, provided the soil of the wood lot is not better adapted to agricultural 

 production. So would the answer be to mine operators or furnace managers who own forest 

 property for the purpose of supplying themselves with mine timber or charcoal as an adjunct to 

 their business. 



The pulp manufacturer, too. who expects to run his mill continuously and has a definite object 

 and permanent supply of raw material from his forest property to his own business in view, is in 

 the same position; he will find it at least indirectly profitable to apply both silviculture and forest 

 economy from considerations which are conditioned on his own main business. But he who con- 

 templates entering upon the independent business of forest growing to supply the great timber 

 and wood market is in an entirely different position. 



The greater part of the forest property in this country is held either by speculators, who are 

 waiting for the opportunity to dispose of the whole, or of the wood on it, who do not hold it as a 

 permanent investment or as a basis for a business, or else by lumbermen, who from necessity or 

 by education are also inclined, and by the momentum of their business methods are forced, not 

 to look at their forest property as a permanent investment or upon their logs as a crop, but to 

 treat it as a mine, a basis, to be sure, but only a speculative basis of their mill business. Only 

 when these realixe that there are no more speculative forest areas to be had, that the remaining 

 virgin forest crop is either used up or out of the market, will they feel induced to alter their 

 methods and engage in the production instead of the mere harvesting of wood crops, becoming 

 breeders as well as butchers. 



There are other classes of capitalists, now in small numbers, who may, as in older countries, 

 be induced to own and manage large forest properties with a view of practicing forestry, when 

 they have found out that one of the safest investments, although promising only a small interest 

 rate, is in forest properties. 



