214 ECONOMICS OF FORESTRY. 



est valuation, or better, forest finance and forestry 

 statics. This branch concerns itself, not only 

 with the ascertainment of the present value of a 

 single stand, and with the future value to which it 

 is growing, but also with its value as a part of a 

 regulated forest management, in which for all time 

 to come it is an inherent necessary member as a 

 producer of values. It also occupies itself with 

 comparisons of the financial results of different 

 kinds of management. 



It is here that the foremost peculiarity of forest 

 economy, namely, the time element, comes most 

 prominently to expression. The inability of with- 

 drawing annually the interest on the invested capi- 

 tal makes compound interest calculations necessary, 

 and since the investment in the young plantation, 

 for instance, will have to be left untouched, accu- 

 mulating upon itself the interest for fifty, one hun- 

 dred, or more years, the question as to what interest 

 rate it is fair to assume for compounding on such 

 a long time investment, becomes important. It is 

 well known that every business, every employment 

 of capital, according to its character, works with a 

 different interest rate. There are many reasons 

 why the forestry business should work with a low 

 rate of interest. Compounding for such a long 

 time, the general tendency of sinking interest 

 rates must be taken into account, while, on the 

 other hand, history has shown and philosophy 

 sustains the expectation that prices for wood are 



