114 PRELIMINARY MATTERS. 



(I).) The supply and demand of capital, which change from 



time to time and with the locality. 

 (c.) The general credit of the country, in which the in- 

 dustry is carried on, in other words, the interest 

 yielded by Government securities (called Consols in 

 Britain). 

 It follows, that the general rate of interest applicable to the 

 forest industry cannot be a fixed quantity, but that it changes 

 with the locality, time and a variety of other circumstances. 



The question then arises, what rate of interest is applicable 

 to the forest industry under a given set of conditions ? In 

 attempting to answer this question, the following points must 

 be taken into consideration : — 



(1.) The safety of capital invested in forests. The soil 

 offers (apart from changes in prices) almost absolute 

 security. The growing stock is subject to damage by 

 men, insects, fungi, wind, snow, rime and, above all, 

 by fire. The degree of danger from fire differs much 

 according to species, method of treatment, length of 

 rotation, climate, etc. ; in temperate climates the 

 damage keeps within narrow limits. 

 (2.) The price of forest produce is, on the whole, subject to 



less sudden fluctuations than the value of money. 

 (3.) Investment in forest property possesses the great con- 

 venience of yielding a steady income. 

 (4.) Forests cannot easily be let on lease, as inroads on the 

 growing stock are difficult to control ; for the same 

 reason forests, beyond the value of the land, are not 

 well suited as security for loans. 

 (5.) Compared with the cultivation of field crops it must be 

 noted that : — 



{a.) A forest once placed under systematic manage- 

 ment yields annually equal returns, or nearly 

 so, whilst those of fields differ much according 

 to the seasons. 

 (/;.) Forests require much less labour. 



