FORESTRY AS AN INVESTMENT 



319 



French writers are apt to make excessive claims for forest investment 

 returns, Risler/ director of the Institut Agronomique, claiming 5 to 10 

 per cent for conifer plantations. For a pine plantation near Selongey 

 (Cote d'Or) a return of 5.7 per cent was claimed ^ for a 30-year rotation 

 on soil worth $7.72 an acre (100 francs per hectare). For a larch stand 

 at Boisy near Geneva, Barbey claimed a return of 6.30 per cent. And it 

 was said that "a private owner in the Pyrenees spent 10,000 francs on 

 reforesting uncultivatible slopes worth 20,000; forty-five years later he 

 left to his children a property worth 270,000 francs." Cases such as this 

 are numerous where the owner reaped good returns by reforesting ground 

 which he would have held anyway. 



The following returns are cited for plantations of broadleaf species, 

 such as chestnut: 



For a fir stand in the Doubs on poor soil an average annual revenue of 

 $8.96 per acre was secured (116 francs per hectare) but there are no exact 

 data on the soil and growing stock values. Extraordinary yields a;re 

 often cited for this region. Mangenot owned 9.1 acres which in 1868 

 were estimated to have 1,510 trees or 667 cubic meters worth 9,265 francs. 

 From 1868 to 1890 he cut 498 trees or 604 cubic meters and sold at 9,650 

 francs; in 1890 he still had 1,600 trees estimated at 660 cubic meters and 

 worth 9,165 francs. These exact data cited by Schaeffer ^ were equal to 

 a net annual yield of about $9 per acre per year. The growing stock per 

 acre was worth in round figures $199 and the soil at least $10, so this return 

 of $9 per acre was only 4.3 per cent on the invested capital in a favorable 

 forest region and with rapidly growing fir, spruce, and beech. But it 

 should be noted that if this property had been held until 1918 and then 

 clear cut down to a low diameter limit he would have doubled his money 

 because of the high prices prevailing during 1918 and because the French 

 currency had depreciated. But this introduces a new feature — a 

 speculative one — which is present in all forest investments, namely, the 

 sporadic increase in stumpage values with occasional very high levels. 



^ Placements Financiers en Bois. A. Jacquot. 



8 In the State forest of Levier the gross returns have been as high as $15.90 per acre, 

 according to an engineer officer writing in American Forestry (p. 1537), 1919. 



9 Quelques Conseils aux Sylviculteurs du Chablais. A. Schaeffer, Annecy, 1894. 



