234 FINANCIAL ASPECT OF AFFORESTATION 



fallacious. They compare favourably with certain literature 

 emanating from some financial " house " whose reputation is 

 doubtful, and they should be as carefully avoided as are the 

 latter's solicitations. 



The whole fallacy of the principle of the above valuations 

 lies in the fact that it is assumed that money can be borrowed 

 for 80 years without any interest ever being charged upon 

 it, which, of course, is utterly absurd. 



In the above example, if all monies received or spent 

 during the rotation be debited with 4 per cent, compound 

 interest, the correct net annual rental that may be antici- 

 pated is only 35. 2d. ; or if 3 per cent, interest be assumed, 

 the net annual rental will be 6s. id. per acre. This is 

 surely a poor return on an outlay of iS. 



CORRECT METHODS OP PRESENTING FINANCIAL 

 STATEMENTS : 



Statement of Income obtained on Average Accumulated 

 Capital which has been Sunk in Normally Stocked Areas. 



In cases where it is desired to make a comparison with 

 the returns obtained in continental forests, it must be 

 remembered, that these returns represent the yearly income 

 from a fully developed normally stocked area, which, of 

 necessity, has a large capital debit account per acre ; and a 

 net return of i, los. per acre per annum will not usually 

 represent a very high rate of interest. This capital debit 

 sum will depend upon the original value of the land, the cost 

 of planting, and the length of the rotation, etc. 



Thus, with reference to the previous example, where 

 Scots Pine are grown on an 8o-year rotation, it will be 

 necessary, in order to find the average capital sum per acre 

 invested in a normally stocked area, to imagine that I acre 

 is planted per annum until the 8oth year, and to calculate at 

 compound interest, all the monies spent and received till the 

 end of the 8oth year, and then to divide the total debt by Si. 1 



1 This is to allow of having I acre fallow, as, finally, when a crop is 

 felled, the land is not planted till the year after. The cost of planting 

 this i acre is accounted for in the average outgoings of the 8ist year. 



