FOREST POLICY. 7 



investment, is necessarily a small one. Agriculture in the south, for 

 instance, yields one and one-half per cent, on the farm value only. • 



The rate of interest in conservative foresty depends largely upon 

 the length of the rotation, decreasing with an increasing length of 

 rotation. It is further influenced by the heaviness of local taxation 

 and the expenses necessary for protection from fire, etc.; which fac- 

 tors, however, are usually of greater influence on short than on long 

 rotations. 



The nominal rate of interest trom any investment must be con- 

 sidered as composed of the following factors: 



1. An equivalent of true earning power of capital. 



2. An equivalent of capital repaid (covering risks taken). 



3. A component meant to make up for the declining purchasing 

 power of gold. 



The owner of investments other than realties (industrial stock 

 and bonds) cannot help sinking down, gradually, to a lower level of 

 revenue and standing, unless he lays back a considerable fraction of 

 the revenue annually obtained, with a view to rebuilding waning 

 capital. 



The purchasing power of forest products does not decline. As 

 a producing machine, the forest remains through all time equally val- 

 uable, and its owner remains, at least, equally wealthy. The small 

 rate of revenue obtained from forestal investments compares favor- 

 ably with a very much larger rate of interest obtained from invest- 

 ments other than realties. 



In Saxony, records have been kept since 1816, showing that the 

 forest has paid on the average three per cent, per annum of interest; 

 and that, in addition, the value of the forest has increased, on the 

 annual average, by two per cent, (compound interest)'. 



TABLE SHOWING RELATION BETWEEN LENGTH OF 

 ROTATION AND RATE OF INTEREST. 



TABLE No. 2. 



