Vi PREFACE 



matical principles on which the theory of Forest Finance is 

 based. Forest Valuation deals with periods of time far longer 

 than are considered in most financial calculations. The theory 

 and application of compound interest as a mathematical means 

 of determining value needs a more complete exposition than is 

 usually given even in courses in economics, before the signifi- 

 cance of the methods taught in valuation can be grasped. Forest 

 Valuation, while disguised as a mathematical science, is in reality 

 the application of broad economic principles, equally serviceable 

 in the determination of all values. 



In order that the reader who is not thoroughly grounded in 

 economics may readily grasp these principles as applied in 

 actual Forest Valuation, Chapters I to IV have been devoted 

 to a summary of economic subjects and tenets, with especial 

 emphasis on interest. The ideas set forth follow the mathematical 

 methods used by many economists and expressed by Prof. Irving 

 Fisher of Yale University.* These chapters will serve the 

 additional purpose of stating the economic basis upon which 

 the discussion of disputed questions in the text is made to rest, 

 and will enable students who disagree with any of these funda- 

 mental definitions or principles to substitute those of other 

 authorities more to their liking. 



To the general reader and even to the student, the use of 

 formulae as a means of expressing economic relations is apt to 

 convey the impression that the subject is a difficult one to grasp. 

 The effort to attach the proper significance to symbols must 

 precede that required to reach the mathematical solution. The 

 first difficulty is lessened by the consistent use of symbols to 

 which a definite meaning is attached. An entire chapter (V) 

 has been devoted to an explanation of the derivation of the 

 formulae of compound interest. A further difficulty has arisen 

 in the past, because the methods of treatment of the subject of 

 Forest Valuation bore no relation to, and were apparently wholly 

 at variance with, the customs and principles of business account- 

 ing. An effort has been made in the present volume to indicate 



"Elementary Principles of Economics." The Macmillan Company, New 

 York, July, 1912. 



