322 PRIVATE FORESTRY IN FRANCE 



per working group) over the whole area of 8,294 acres is over 31,000 board 

 feet per acre. This was secured by natural regeneration, (c) The 

 average working group is 1,037 acres (see p. 226). (d) The gross yield 

 per acre is $11.18 and the net yield about $10.68; this = for mountain 

 land unquestionably unsuited to agriculture. The average price for 

 saw timber prior to 1911 was $8.70 per thousand feet board measure on 

 the stump. The local stumpage prices are now three to five times that 

 figure, (e) These fir-spruce forests averaged 2.4 per cent in growth and 

 the prescribed yield was 2.8 per cent of the growing stock a little more 

 than the growth so as to reduce the quantity of overmature timber. (/) 

 In 1908-1911 the capital invested was: Timber growing stock $4,063,902; 

 empirical soil value (estimated), $153,108; total, $4,217,010. 



The gross annual revenue 12 from timber sales was: $119,125; annual 

 cost of administration and taxes, $4,147; annual net return, $114,978. 



This is about 2.7 per cent net on the invested capital 13 for the period 

 prior to 1908-1911, or perhaps 1\ per cent on a conservative basis. It 

 should be noted that this is less than secured by private owners who use 

 shorter rotations and do not allow excess growing stock to accumulate. 



Drawbacks and Advantages to Forest Investments. Many forest 

 owners were almost ruined when the demand for charcoal and cordwood 

 was largely reduced by coal production. It is only too common that 

 much of the growing stock (conifers) is wiped out by fire, by disease or 

 by insects. Considerable losses are frequent from windfall and even in 

 France with a good market 20 to 50 per cent drops in stumpage values 

 are common when considerable areas of windfall are suddenly placed on 

 the market. Like farming land forest property is apt to deteriorate un- 

 less the owner gives it his personal attention and exercises good technique. 



Some advantages of owning forest property as a long-term business 

 investment in part compensate for its low financial returns as an invest- 

 ment in permanent forest production are: (1) Stumpage prices are in- 

 creasing, especially in countries where the virgin timber is being ex- 

 hausted. After the virgin timber is cut then stumpage must be based 

 on the cost of production or import, but even then prices will increase as 

 the intensity of population increases. (2) With inflated or depreciated 

 currency forest values increase and forest property can be sold at a profit. 

 (3) In countries like the United States, where the essential technique of 

 forest valuation is not widely known, the values placed on unmerchant- 

 able young timber are usually below the market hence private owners 



12 Compare with the figures for La Joux (2 per cent) given in the Appendix, p. 514. 



13 According to Huffel, Vol. II, Page VII of preface: "Exploitations . . . which are 

 organized with a view to producing saw timber of large size always yield small returns; 

 they hardly yield 1 or 2 per cent on the invested capital in the case of oak high forest with 

 long rotations." 



