36 FOREST VALUATION 



E. VALUE OF SOIL AND STATICS. 



Just as in farming, so in forestry, the net income is larger on 

 good land and with good management than on poor land or with 

 less efficient work. v Since the income value of the land is the net 

 income capitalized at an arbitrary, accepted per cent this income 

 value serves as a measure of land and management. With the ex- 

 penses constant, or what may be assumed the same, with the same 

 kind and quality of management, the income and with this the in- 

 come value increases only with the quality of the soil ; the better the 

 land the greater its income value. Similarly, on the same acre of 

 land the income and with this the income value of the land increases 

 with the efficiency or quality and correctness of the work and man- 

 agement. 



It is interesting to see how the income value of the soil differs 

 with change in the various factors, what these several factors de- 

 pend upon, and how they vary under ordinary conditions. 



a. Relation of Se and its Factors. 



1. Increase of the final cut, Yr, increases the income and 

 therefore the value of the land. Since Yr is the value of one acre 

 of timber r years old it is evident that everything which increases 

 this Yr, such as good planting, right thinning, good prices, cheap 

 logging, etc. also increases the net income and income value. 



2. Thinnings not only increase the total income but as they 

 come long before the final cut can be made, twenty to sixty years in 

 ordinary cases, they help to bear expenses which are piling up at 

 compound interest. 



A good thinning practice raises the quality of the final cut and 

 so increases Yr; a very severe thinning practice may cut down the 

 Yr in volume and if too early also in quality. 



3. Cheap planting or small c means small expenses, for every 

 dollar spent, even at three per cent, becomes nineteen dollars in a 

 hundred year rotation. But if cheap planting means poor planting 

 it may lead to a poor stand, reduce the income from thinnings and 

 cut down the final cut or Yr. A large c, therefore may mean larger 

 income. From the formula it is clear that whenever c (i.op r ) is 

 larger than Yr + Ta (i.op r ' a ), etc., the term becomes negative, a 

 condition which applies to practically all young stands. 



4. The current yearly expenses for taxes, protection, etc., ac- 

 cumulate with compound interest and reduce the income. They are 



