106 ROTATION FOB COMMERCIAL EXPLOITABILITT, 



must exploit it at the age at which the capitalised value of the 

 receipts is highest. It is the only way to make the investment pay 

 the utmost it can, in other words, yield the local customary rate of 

 profits expected by owners of forests. That rate is really the 

 highest at which raoney invested in forest property can be made 

 to work. If we exploited before the age in question, the capital 

 value of the land would be excessive compared with the resulting 

 receipts ; if we delayed beyond that age, then there would be so 

 much time lost without any compensating financial result. 



It is important to know that the lower the rate of profits is, the 

 later will the forest concerned become commercially exploitable. 

 The example given above shows this clearly. Conversely, the more 

 rapidly the periodic receipts increase, the further must the exploita- 

 tion of the forest be postponed ^in order to secure a given rate of 

 profits. The reason is that as the amount of compound interest 

 increases in steady progression, the receipts from the forest must also 

 increase in like manner to keep pace with the former. Now the 

 receipts from a forest, from being at first nil, increases afterwards 

 with large strides, and this often during a considerable time ; but 

 the manner in which it increases is entirely different from that in 

 which compound interest accumulates, steadily and without any 

 limit. Thus it is always a little after the receipts from a forest 

 cease to increase as rapidly as before, that it becomes commercially 

 exploitable. 



The procedure to follow in determining the rotation of a forest 

 subject to the conditions of Commercial Exploitabitily is sureandeasy. 

 Tables have been constructed giving the value of the expression 

 ( t-(,i)n_i for different values of i and n. Such a Table is that marked 

 III in M, ^ATiqnette^s Cours d' Exploitation.^ The only thing left to 

 do is thus to multiply the number taken in any given case from that 

 Table by 3, 4 or 5 several figures, representing the periodic receipts 

 of as many years, and noting the largest product thus obtained. This 

 procedure is much more important than people imagine.. As a rule, 

 forests are cut too early, without their owner being at all aware 

 of the fact. Such proprietors, by recognising their error and exploit- 

 ing at the right age, would never fail to increase their forest income, 

 sometimes even by as much as 25 or 33 per cent. In actual practice, 

 the determination of the rotation corresponding to Commercial 



(1) This Table is reproduced in au Appendix, which see. (Translator.) 



