INFLUENCE 01' INTEREST RATE 55 



In fact, according to the same author, a rotation of fifty-five 

 or sixty-five years is most profitable, even with present prices, on 

 only eleven per cent of all forests, while the rest require, owing to 

 slower growth, rotations of over sixty-five and as high as one hun- 

 dred. 



With better machinery, manufacture of pulp and extensive use 

 of timber in mining, etc., the use of smaller sizes has been increased. 

 In conifers timber ten to fourteen inches d.b.h. with bark can be 

 sold at good price and in largest quantities. In addition the modern 

 practice of thinning gives more space to each tree, stimulates growth 

 and so produces these sizes in shorter time. Accordingly, there is 

 a tendency toward shorter rotations in all timber except oak, where 

 satisfactory quahty requires trees over eighteen inches d.b.h. In 

 the United States the timber industries are rapidly adapting them- 

 selves to the use of smaller sizes so that, locally, at least, as small 

 stuff is sawed and worked up as in Europe. In the handhng of de- 

 fective stuff the United States methods far excell those of the old 

 world. It is reasonable, therefore, to assume that the conditions de- 

 termining the rotation will be the same here as abroad. With warm- 

 er climate and better growth, shorter rotations such as fifty years 

 even for saw timber are anticipated, established or accepted in legis- 

 lation, in Massachusetts and Connecticut. In loblolly pine, hard- 

 woods in river bottoms, etc.. no doubt this will apply, but in all cases 

 the quality of "grain,"' fine or broad rings, will also be considered 

 by the market and may call for denser stands and longer time. 



6. The interest rate, p, has been discussed before. Its effect 

 on calculation of the income value of the land and of the success of 

 the forest business is very great. The interest rate actually made 

 in the forest business in the state forests of Germany varies from 

 two to three per cent on the sale value of the property. An interest 

 rate of five per cent will probably prove ninety per cent of European 

 forestry a failure. In the United States at present and for some 

 time to come the unsettled conditions of values in timber and tim- 

 ber lands will make it possible to acquire lands at prices which will 

 assure higher rates. In time the real value of land and timber will 

 approach the true income value and the interest rate made in the 

 business will be normal just as it is in agriculture and other lines of 

 business. To make these calculations reasonable, comparable and 

 useful it would be well if a uniform rate could be adopted and since 

 three per cent has been used extensively in European works it com- 

 mends itself for adoption here. 



