THE CAPITAL OF FORESTRY. 25 



as 10 to 1 and even more. If, under such conditions, forests yield 

 a higher return than, for instance, that from field crops, it depends 

 on the rate of interest used in the calculation whether the one 

 or other method of utiHsing the soil is the more profitable. 

 Generally speaking, good land yields a higher percentage on the 

 invested capital under agriculture, and inferior land under 

 forestry. Although, therefore, forest soil is ordinarily of much 

 smaller value than agricultural soil, under the system of a sus- 

 tained annual working the forest capital is frequently of greater 

 vakie than that required for agriculture. In any case, the interest 

 on the capital forms part of the cost of production, and the 

 forester must make sure that any increase of the permanent 

 capital is justified by a corresponding increase in the yield. 

 The deciding element is the length of the rotation. The higher 

 that is, the greater will be the growing stock for the same area, 

 and consequently the cost of production. The net income 

 culminates under a certain rotation, beyond which it diminishes. 

 Other considerations may justify the adoption of a higher 

 rotation, such as, for instance, the production of a special class 

 of produce required for a particular purpose, or the necessity of 

 keeping a certain stock of timber in the country to safeguard it 

 in case of an emergency. 



The value of the soil or the growing stock can be ascertained 

 as the cost — expectation — or market value. In the case of the 

 sustained annual working, the value of the growing stock is 

 obtained by capitalising the net annual income and deducting 

 the value of the soil. The details of the calculations are given in 

 Forest Valuation. 



3. Labour in Forestry. 



Forests require labour in a variety of ways, which may be 

 brought under one of the following three headings : — 



( 1 ) General administration and management, including forma- 



tion, tending and harvesting. 



(2) The transport of produce. 



(3) Industries which depend on forestry for their raw material. 

 The quantity of labour required under the first heading depends 



chiefly on the intensity of management and the quantity and 

 value of the ])roduce ; in other words, on the care bestowed upon 



