238 FINANCIAL ASPECT OF AFFORESTATION 



The above table will serve as a rough guide for estimating 

 the average capital per acre that will accrue by the time that 

 any area, which it is intended to plant, becomes normally 

 stocked and capable of yielding a sustained annual yield, 

 provided that the rotation be either 80 or 120 years; and 

 that the dates of thinnings and their value be somewhat 

 similar to Scots Pine, if an So-year rotation be adopted ; 

 or to Oak, if a 120-year rotation be adopted. If, however, 

 the accumulated value of thinnings and the final crop be 

 respectively greater, the capital debt will be reduced, and 

 vice versa. 



Statement of the Gain in Capital after charging Com- 

 pound Interest. Another method, occasionally adopted, for 

 presenting a financial statement is to state that, after charg- 

 ing compound interest on all monies, spent and received up 

 to the end of the rotation, there will remain as additional 

 profit a lump sum of . 



For instance, a landowner is advised that on an outlay of 

 25 (which includes the value of the land) he may, by plant- 

 ing conifers on a 7O-year rotation, obtain compound interest 

 at the rate of 2\ per cent, and, at the end of the 70 years 

 should also have an extra profit of 105. 



Now, an ordinary individual will usually imagine that this 

 extra 105 at the end of 70 years is equal to an additional 



profit of - = i, los. per annum ; which, on the outlay of 



2$, is equal to an additional interest of 6 per cent. Thus, 

 without asking any further questions, he imagines that he 

 may get 6 per cent //#.$ the 2| per cent already accounted 

 for, which equals 8 J per cent altogether. In all probability, he 

 will think this a good investment And, though he may regard 

 the suggested final yield from the crop as too optimistic, he 

 feels confident that he may safely expect to get 5 or 6 per 

 cent on his outlay ; and forthwith gives instructions for the 

 planting to be carried out 



Needless to say, this line of argument on the part of one's 

 client is absolutely fallacious. The extra 105 at the end of 

 the 70 years, only equals about us. 6d. per annum on the 2\ 



