CHOICE BETWEEN FORESTRY AND AGRICULTURE. 163 



Section II. — The Financial Test applied to the Method 

 OF Treatment. 



If the profitableness of the method of treatment is to be 

 tested, or if several methods are to be compared, it must be 

 assumed, that in each case those conditions exist, which render 

 the method in itself as profitable as possible. In that case it 

 may be said, that the most advantageous method of treat- 

 ment from a financial point of view is that, which yields the 

 highest profit, or the highest mean annual forest per cent., 

 provided, in the latter case, that the capital is the same under 

 each method. If the capitals differ, the following cases must 

 be distinguished : 



(1.) The method employing the greater capital is the more 



profitable, if it gives the higher forest per cent. 

 (2.) Tlie one with the smaller capital is the more profitable, 

 if it yields an equal or a greater amount of interest. If 

 it yields less interest and yet a higher forest per cent., 

 it cannot be decided off-hand, whether it is the more 

 profitable or not, as the total profit depends on two 

 factors, namely, the rate of interest and the amount of 

 the invested capital ; hence it is necessary to calculate 

 the actual amount of profit for each case, and to compare 

 the one with the other. 

 The above-mentioned tests may be applied to all questions 

 connected with forest management. Of these the following 

 are the most prominent : — 



1. Choice between Forestry and Agriculture as regards a 

 Piece of Land. 



Of these two methods of using the land that is the more 

 profitable, which yields the highest net rental of the soil. 

 Rental of soil under forest = 



[ Y,-\- r, X roj/-" + . . . + r, X ro;/-^ - c x ro/ _^] ^ .q 

 L i-oy-i J ^' 



m2 



