17 



PARAGRAPH VII. 



RATE OF REVENUE. 



The merits of forestry depend on the rate of revenue obtainable 

 from it. If it is admitted that forestry is a business, it must be 

 further admitted that forestry is at its best when it yields the best 

 ratio between net returns and investments. 



In the long run, the rate of revenue obtainable from con- 

 servative forestry is a small one. 



The rate of revenue can range high, however, temporarily and 

 locally, at a time at which the valuation of the forests for eco- 

 nomic reasons, and not owing to the growth of timber increases 

 at a rapid rate. 



A high price of stumpage does not involve a high rate of 

 revenue ; since the charges of interest against an investment made 

 in high-priced .stumpage tend to counter-balance the surplus re- 

 turns from high-priced stumpage. 



The rate of interest in forestry is low, particularly, when 

 stumpage prices are on the decline; it is high, particularly, when 

 stumpage prices are on the increase. 



When the price of stumpage remains constant, the rate of 

 interest obtainable from conservative forestry is influenced 

 strongly by the length of the rotation, decreasing with the in- 

 creasing length of the rotation. It is further influenced decisively 

 by local taxation, by the expense required for protection from 

 fire, and so on. The following tabular statement illustrates the 

 interdependence between the length of the rotation and the rate 

 of interest obtained in conservative forestry. 



Note. The term "Tax" here includes expense of administration, 

 protection, and other annually running expenses. The tax is 

 assumed to be independent from the amount of stumpage 

 standing. The data of growing stock and yield are taken from 

 G. Pinchot's yield tables for white pine, second quality. 



SCHENCK, FOREST POLICY. 2 



