232 THE NORMAL GROWING STOCK. 



2. Calculation of the Financial Value of the Normal 

 Growing Stock. 



The various methods of calculating the jfinancial value of the 

 normal growing stock have been explained at pages 141 to 143. 

 It has there been stated, that the same results are obtained, 

 whether the value is calculated as the cost value, expectation 

 value, or the capitalised rental of the growing stock, provided 

 the expectation value of the soil is introduced into the account. 

 In each of these cases the value is expressed, for r units of 

 area worked under a rotation of r years, by the formula: — 



rx _ Y. + T, + ■ ■ ■ + T, - (c + r X e) 



^n :^ rxb,, 



in words, the normal growing stock is equal to the capitalised 

 annual net rental minus the expectation value of the soil. To 

 make that growing stock truly normal, it is necessary, that the 

 per cent., which the capital yields, should be exactly equal to 

 the general per cent. ^;. Every deviation from this leads to 

 loss. As it is impossible to keep a forest always in that con- 

 dition, it follows, that the financial normal growing stock has 

 only a theoretical value, which assists in the comprehension of 

 the working of the capital invested in forestry, but is of little 

 importance in determining the yield of forests. 



