RISKS 209 



element which serves to diminish profits below the expected 

 amount. 



199. The Gauging of Risks. There are two elements to a 

 risk: the hazard, or degree of probability that damage will 

 occur, as indicated by past history and present conditions; and 

 the liability, or value of the property subject to damage. The 

 liability, in forest investments, is measured by expectation 

 value for partially mature stands; but for plantations, cost is 

 the basis considered, and extra efforts will be made to protect 

 such plantations because of the investment which they represent. 

 The hazard must be gauged, during the growth of the crop, by 

 the increasing or decreasing susceptibility or resistance of the 

 trees to fire, wind, insects and fungi, and by the probability of 

 these events occurring, through prevalence of the causes. 



When the liability is large, and the hazard is extreme, active 

 preventive measures involving considerable expense are jus- 

 tified. 



With a small present liability and extreme hazard, the ques- 

 tion arises whether protective expenses will pay for themselves. 



When liability is large, but the hazard negligible, protective 

 measures may involve a needless expense, and diminish profits 

 and value. 



With small present liability, and negligible hazard, the ex- 

 penditure justified for forest protection is still further reduced. 



The financial character of the risk thus indicates the expense 

 which should be incurred for protection. The largest expen- 

 ditures are justified when property of considerable value is in 

 great danger of being destroyed. 



200. Physical Risks : Fire. Fire is by far the greatest 

 risk in forest production. The resistance of trees to fire damage 

 depends on the character of the bark, which differs with the 

 species, and on its thickness, which increases with age for all 

 species. Sandy soils in all regions are far more subject to fire 

 than soils which retain moisture. In many localities fires burn 

 annually on such sites. As a consequence, the tree species 

 which inhabit these situations have developed a fire-resistant 

 bark which often renders them immune to the effects of ordinary 



