14 FOREST FINAHCE 



Case ni: z is larger than p 



n 



Here the taxes consume less than the part of the aft-value, e. g., 



100 



if "n" equals 25, the taxes consume less than }4 of the aft-value; 

 and if "n" equals 100, the taxes consume less than the entire aft-value. 

 Deductions from the above: — 



RULE I. 



Destructive forestry is indicated where a long number of years is expected 

 to elapse before a second cut can be obtained; where taxation ad valorem is 

 high; where the value of the forest grows slowly (x being smaller than p). 



RULE n. 



The forester, bent on forest conservation, must endeavor to shorten the 

 period of waiting between cuts by leaving sufficient stumpage and sufficient 

 means of transportation to allow of frequent cuttings within the same forest. 



RULE in. 



The damaging effect of taxation depends pre-eminently on the period of 

 waiting; the rate of interest being more irrelevant, "x" being usually equal 

 to or close to "p". After the wholesale removal of the primeval forest, the 

 period of waiting is excessively long. The forester's activity should be called 

 upon before and not after the first inroads of the axe into the primeval woods. 



PARAGRAPH VI.— PROTECTIVE EXPENSES. 



The influence exercised on the prospects of conservative lumbering by 

 expenses for forest protection is analogous to the influence of taxes. The 

 decision whether and what protection should be given to a forest, solely rests 

 with the owner. 



The following may illustrate the influence of the protective expenses on 

 a forest conservatively managed: 

 FIRST. An unprotected forest, "V", may yield an annual net surplus revenue 



"R" as long as it escapes fires and theft. 



R y 

 equals or IGOR equals yV 



V 100 



SECOND. Sacrificing annually "D" dollars for protection, the owner retains 

 a revenue, "R — D", and the interest percentage "y" is reduced to "z" 

 per cent., whilst "V" remains much unchanged as long as no fire happens 

 to occur. 



R — D z 



V 100 



