4 o 



FOREST VALUATION 



impression that such values are different or obtained in a different 

 manner from the capitalized values computed for all other forms 

 of property. On the contrary, the process is identical and it 

 would be a distinct advantage to recognize this fact in terminol- 

 ogy. A third term, also identical in meaning with the two above 

 mentioned, is "capitalized rental value," sometimes abbreviated 

 to "rental value." Two objections to the term "rental value" 

 are that it may be confused with rent, which is only one form 

 of income, and that it may be taken to mean the value of one of 

 the current or periodical payments of income instead of its 

 true meaning, which is the sum of the discounted values of all 

 items of future income. The term "capitalized rental value" 

 seeks to emphasize this latter meaning, but the use of the word 

 "rental" might be taken to mean that such values are deter- 

 mined only for property producing income at regular intervals. 

 Since it makes no difference what the character or interval of 

 payment is, the term "capital value" is the most comprehen- 

 sive. The one great objection to this term is that the word capi- 

 tal is commonly used to denote the amount of an investment, 

 or the total funds furnished by capitalists ( 12-13), an d is in this 

 sense allied with cost rather than value of assets (73). Were all 

 assets in the form of money, this would make no difference (62), 

 but as cost and value for other assets diverge widely, some 

 term should be used which is clearly understood as referring to 

 value rather than cost. Another possibility is the term "income 

 value," or "capitalized income value." "Income value" is 

 open to the same objection urged against "rental value," that 

 it might be understood to mean the value of one year's income, 

 or of one payment. "Capitalized income value" comes nearest 

 to fully describing the value indicated and the means of ob- 

 taining it. 



The valuation of forest property differs from that of property 

 earning annual income only from the fact that the income may 

 occur at intervals separated by long periods. Hence the tend- 

 ency, expressed by the term "expectation value," to emphasize 

 this "expectation." As will be shown in Chapter V, the formulae 

 employed in the capitalization of annual and of intermittent 



