FACTORS OF FOREST PRODUCTION. 127 



harvested, and that, until harvest time has arrived, 

 they are tied up and are in the nature of fixed capi- 

 tal, accumulating with compound interest charges. 



To understand the nature of this capital and get 

 an idea of the amount involved, we will have to 

 look at it from various points of view. 



If we were to start on a blank area and were to 

 plant our crop, we would have only the soil (S) as 

 fixed capital ; but since we could not harvest from 

 year to year, and thus withdraw the interest, the ex- 

 penditure for planting (E) would also have to be 

 considered fixed ; moreover, the interest on both soil 

 and other expenditures, being by necessity accumu- 

 lating, becomes fixed, until at harvest time both capi- 

 tal and accumulated interest, except the soil capital, 

 become liquidated and then again the process of 

 fixation is gone through. The fixed capital would 

 have grown to {S-\-E) i.o/'", and the interest repre- 

 sented by harvest returns would then hQ(S + E)i.oj?'' 

 — (S + E), or (S + E) (i.op''— i); r being the time 

 during which the capital is tied up, and/ the inter- 

 est-rate at which the capital is supposed to produce. 



If we started, as the forest exploiter does, with 

 a ready-made crop of virgin timber, we might take 

 the position which he usually does, namely, remove 

 at once the valuable part of the crop, and turn it 

 into cash, when as a rule both the current capi- 

 tal involved in harvesting and transporting the 

 crop, and the investment in land or stock, are liqui- 

 dated at once, or in short time, the stumpage value 

 paid under such crude conditions being usually kept 



