38 RBOIME 



penditure. For after all that is the revenue properly so called, in 

 other words, the money returns derived from the forest considered as 

 an instrument of production. 



§ S. Profits. 



Profits, which are a measure of the net income or of the ratio of 

 income to the capital producing it, are quite distinct from gross 

 Income. This last may be considerable, yet the percentage of profits 

 may be very small, a circumstance which always occurs when the 

 capitalised value of the standing material in a forest is very high. 

 We thus see why in high forests, where the stock is so large, the 

 percentage of profits is, as a rule, lower than in copses. Indeed 

 copses are often so managed as to yield a fixed percentage, 4 per 

 cent, for instance, whereas in high forests where the trees are not 

 exploited until they are quite maturej the profits may be as low as 2 

 per cent, and even less. 



This is easily explained by meaos of an illustration. Suppose a 

 forest of 250 a cres worked on a rotation of 1-50 years, and composed of 

 a well graduated series of crops from 1 to 150 years old. It will yield 

 annually the mature timber standing on If acres, the value of which 

 ma}i exceed £320. This, with the outturn of the thinnings made 

 over the rest of the forest, will furnish an income, say, of about 

 £400 per annum. But the various crops aged from 1 to 149 years 

 represent together a considerable sum of money, which, added to the 

 value of the land itself, may give a capital value of, say, £20,000, 

 so that the profits will only be 2 per cent. The climate, soil and 

 species being still identical, the same area, if constituted as a copse 

 with standards worked on a rotation of 25 years, may yield, from 

 10 acres exploited annually, an income of £160, while the capita- 

 lised value of the whole standing crop and the land may be only 

 £ 4000. The resulting profits would thus be 4 per cent. 



This want of correspondence between income and profits is due to 

 the fact that the income and the capital value of the forest do not 

 increase in the same ratio. For tliem to do so would be contrary to 

 the very nature of the things in question. In order that profits 

 may be maintained at a coustant figure of 3 or 4 per cent duiiucr all 

 the time required to produce large timber, it would be necessary 

 for the selling rates of timber to increase with increase of size in a 



