ROTATION FOR COMMERCIAL EXPLOITABILITY. 105 



Even a priori It appears obvious, that to the highest capitalised 

 value capable of yielding a periodic income in perpetuity corresponds 

 the largest income derivable from the capital actually sunk in the 

 forest, and the highest rate of profits. We may nevertheless proceed 

 to prove this proposition, a task by no means difficult. The value 

 of any property whatsoever depends on the income it yields and the 

 customary rate of interest required on their money by persons in- 

 vesting in such property. The value of a field that can be let for 

 £160 per annum, free of all charges, is £160 X ^'' ='£4^000, if 

 the customary rate of interest in the locality in connection with land 

 under cultivation is 4 per cent. On the other hand, if the customary 

 rate of interest is only 2 per cent, the value of the field is £ 8000. 

 Similarly the value C of a wooded estate, which yields every n 

 years a periodic net income R, is given by the formula as shown 



above : viz : — 



R 



C= 



(l + iT—l. 



Now each of tlie respective periodic receipts derived by exploit- 

 ing the forest at different ages is represented by a certain capitalised 

 value. Of the various capitalised values thus obtained, one must be 

 higher than all the rest. That value is the true value itself of the 

 estate after the wood has been exploited, that is to say, of the land 

 with its stools and seedlings ; for the land as such would yield to 

 any one the same proportion of income compared to capital invested, 

 since he has only to exploit at the right age. And indeed the estate 

 is bought or sold at that very price, calculated, as it is, by capitali- 

 sing at the customary rate of interest the income "vhich any one 

 could derive from it ; this customary rate is itself a proof of the 

 fact. 



But this value is always the market value of the estate at 

 whatever age, judiciously or injudiciously chosen, the owner ex- 

 ploits the standing crop. If any other figure than that corresponding 

 to the highest capitalised value is obtained as income from that 

 forest, it follows that the capital represented by the value of the 

 forest is made to work at a lower rate of interest than that customary 

 in the locality, in other words, at a loss. 



We thus see that if we wish to obtain from a forest the 

 large-st possible income as compared with the sum sunk therein, we 

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