88 FOREST FINANCE 



In conservative logging when a portion only of the trees are removed from 

 •very acre, the indicating percentage had best be considered as a tree dividend. 



Whether and bow much of the taxes and administrative expense (e) 

 should be charged to the tree, depends upon the local circumstances. Trees 

 occupying soil and preventing, by their presence, a second growth from de- 

 veloping, must be charged with the interest on the value of the soil thus oc- 

 cupied. 



On the other hand, trees acting as mother trees must be credited with 

 the value of the progeny resulting from their presence. 



The tree indicating percentage might be expressed, adopting Kra£Ft'B 

 method, as follows : 



(LOpO-l) 



To X LOx^ + e + (soil) 1.0p"=-Tn + soil + value of progeny 



O.Op 

 in which "Tq" equals the tree value now. Where the forest stocks on agricul- 

 tural soil, all trees unable to defray the interest on such valuable soil, appear 

 to be mature, or hypermature. 



Vn. — The forester making a working plan for pine and spruce woods is usually 

 confronted by the question of the best diameter limit. The plan advises 

 the owner as to the limit yielding the highest entrepreneur's gain or the 

 highest forest dividend. 



The heavier the present cut, the smaller is the investment left, whilst the 

 protecting expenses remain the same. On the face of it, it seems unwise to 

 cut clear without considering the financial prospects of trees which might be 

 left on the ground, having 10", 12", 14", etc. in diameter. Obviously, the 

 logging expenses per M feet b. m., are smaller in the case of heavy cutting, 

 than in the case of light cutting, particularly so when the logger must avoid 

 any damage to the trees left standing. 



Again, obviously, the longer the period of waiting for a second cut, the 

 less are the chances for a good return from conservative logging. 



The diameter limit might be tested either with the help of the indicating 

 percentage or by the method of the entrepreneur's gain. 



