THE FINANCIAL ASPECT OF AFFOKESTATION. 



107 



be sure to rise or fall in due proportion, so that these changes 

 should not, in the long run, seriously afEect the rentability of the 

 forest industry. It cannot, however, too earnestly be impressed 

 upon planters that the strictest economy should be practised in 

 aU forest business. Extravagance has no place in economic 

 forestry. A rise of even 1 penny per cubic foot of timber, brought 

 about by more economic management, would considerably raise 

 the forest per cent., amounting in the case of spruce, for instance, 

 to some 16 per cent., quite apart from any general rise in prices. 



Example of Calculation for Larch. — The following table gives the 

 returns from larch grown on land of average quality under 

 a rotation of 70 years : — 



Calculation made with 2 per cent. :- 



2,450+53 X 1-0250+105 x 1-0240+ 204 x 1-02^0 + 

 Sc = 



+ 233 X 1-0220 + 210 X 1-02^0 -110 X 1-02^0 



1-0270 _ 1 



0-02 



This gives Sc = £40 19.s. ; in other words. If the planter is 

 satisfied with 2 per cent, interest on his invested capital, he can 

 afEord to pay £40 19s. for each acre of land. By making the same 

 calculation with 3, 4 and 5 per cent., the following values are 

 obtained : With 3 per cent., £14 4s. 9d. ; with 4 per cent., 

 £3 2s. 8d. ; with 5 per cent., — £2 2s. This shows that, under the 

 given conditions, 5 per cent, is not attainable. Even if the soil 

 value was nil, not more than 4-6 per cent, could be obtained. 

 The points indicated by these values have been marked by black 



