FACTORS OF FOREST PRODUCTION. 133 



ment, and then are only possible by having very 

 large areas under one management, when the good 

 acres offset the loss on the poor acres. Under 

 such conditions 35 to 60 per cent of the gross yield 

 goes for labor and administration, one-third to one- 

 quarter for the former, one-fifth to one-seventh for 

 the latter, leaving 40 to 65 per cent of the gross yield 

 as profit, equivalent to a rate of 3 to 5 per cent on the 

 wood capital from soil otherwise mostly valueless. 



There are other consequences which follow 

 from the character of the wood capital : the diffi- 

 culty of determining what is capital, what interest 

 makes the renting of woods for systematic forest 

 management impracticable ; and such management 

 is also unsuitable for stock companies, which are 

 formed to make money fast and lack conservative 

 spirit, however favorable such companies may be 

 in conducting mere forest exploitation. On the 

 other hand, it is conceivable that trusts could 

 most advantageously carry on the forestry busi- 

 ness, owing to the fact that large fixed capital is 

 needed, and is most safely invested in forest 

 growth, promising secure and steadily growing 

 income, and that the more surely the larger the 

 property under one management. 



There are, to be sure, dangers to the wood capi- 

 tal from insects, storms, and fires ; ^ but they can 



1 In Prussian forest districts in fifteen years 405 fires were reported, 

 but only 191 acres in 1,000,000 were damaged out of the 7,000,000 

 acres involved. 



