108 EOTATION FOE COMMERCIAL BXPLOITABILITT. 



§ 2. Age of the Commercial Exploitahility of 

 Coppice Standardt. 



The question to resolve here is to ascertain, for each species m 

 the forest, at what age it would be most profitable to exploit the 

 standards. In the first place, it fe obvious that this age must be 

 some multiple of the Rotation adopted for the underwood j and, in 

 the second place, it is no less obvious that the age determined for 

 a single tree will also apply to all other trees of the same specie* 

 placed under similar eonditiona of growth. 



In order to ascertain after what age the valae of a standard 

 ceases to increase at the customary rate of profits obtained from 

 investments in forest property, it is sufficient to compare the a- 

 mount realisable at each age, on the one hand by felling the tree, 

 and on the other band by preserving^ it. By exploiting the tree,. 

 its price could be placed out at compound interest at the customary 

 rate, and with the same degree of security as if the tree were stand- 

 ing, while, in addition, a new growth would be coming up on the 

 site of the exploited tree. On the other hand, by preserving it, the 

 tree would acquire an additional value with increased size, which 

 additional value could be calculated, thanks to its older neigh- 

 bours. As long as that value exceeds the loss of compound interest 

 and new growth gained in the other ease, it is profitable to preseve 

 the tree.^ 



(1) Take, for example, the case of an oak standard of average growth, th& 

 rotation being 2& years and the eustomary rate of returns on investments in 

 forest property 3 per cent. Suppose its value at differeat agea to be as 

 follows . — 



As a standard of 25 years Is, 



n ,, » 60 „ 58. 



,, „ r. '^' i> 20s. 



„ „ 100 „ 608. 



,• „ 125 „ 1208. 



,r „ 150 „ 2008. 



Srrppose the standard of 25 years to be preserved for one rotation ; the 

 increased value would be 4 shillings. On the other hand, suppose it to be cut; 

 to draw a comparison, we must balance against the 4 shillings iu the first case the 

 total compound interest on Is. at 3 per cent for 25 years, viz : Is. 1 Jd. + the value 

 of the shoots from the stool of the felled standard, say 2s, total=38. 1^. Thus 

 there would be a net gain of lOfd. by preserving the standard of 25 years until 

 it was 50 years old. 



In the same manner, as regards the standard of 50 years, we would have 

 on the two sides respeetively los., asd Ss. &|d. (compound interest) + say 4s. 

 (value of the regrowth) = 93. 5|d. Thus there wo»ld also be a gain in preser- 

 ving the standard of 50 years till its 75th year amounting to 5s. 6 Jd. 



Similarly by preserving the staiudard of 75 years for another 26 years, the 

 net gain would be 40s, — {2la. IO|d. + say 6s.>=12s. lid. 



But by preserving the standard for 25 yeairs more, that is lo say until its 

 125th year, there would be a net loss equal to (65s. 7|d. + 83,)— 60s. = 

 13s. 7|d. 



Thus the oak standards in the forest in question must be cut at the end of 

 the 4th geiieraiiou i, e. at the age of a hundred years, supposing always that 

 present prices continue unchanged. 



