PROFIT 199 



Next to hazard the most important factor in determining the 

 proper rate of return is the frequency of turnover. A chestnut 

 acidwood operation in which wood may be converted into ready 

 money as soon as cut and hauled does not, naturally, require a 

 large return on the single job because the capital invested may 

 be utilized again and again during the year. For example, if two 

 months of cutting give a return of 3 per cent on the investment 

 and five such operations are carried on during the year it is 

 obvious that the annual return will be 15 per cent. On the other 

 hand an enterprise which must 'have its logs come on a six months' 

 drive and season its lumber another six months, must in justice 

 receive higher return per unit of finished product whether that be 

 cords or M feet board measure. 



Size is a factor likewise in determining a fair profit. A large 

 amount of capital invested for a long period in an enterprise which 

 is safeguarded by its own bulk does not need such a high return 

 as a small enterprise which must fight its way at every step to 

 keep its larger competitors from crowding it out. Hence the 

 small jobs involving relatively few men and teams should pay a 

 higher return per M than the large sawmill fed by its own logging 

 railroad and controUing many thousands of acres of stumpage. 



While generalizations cannot be safely made without allowance 

 or exceptional cases it may be said that the following rules will 

 apply in most cases,- 



1. Operations in regions where the methods are thoroughly 



standardized, as for example the New England portable 

 sawmill region, are content with net profits of $1 to $2 

 per M. 



2. Operations of medium size in less well settled regions 



demand average returns of 25 per cent per M on the 

 capital invested. 



3. Large operations involving investment for 20 years or 



more are content with a return of 10 per cent on the 

 total investment. 



4. Pioneer enterprises, whatever their size, should have a 



return of 25 per cent per M on the investment. 



