10 FOREST FINANCE 



The growth of trees expressed in dollars and cents is composed of the 

 following factors: 



A. — ^Increase of volume, due to the annual formation of a new ring or, 

 better, of a new coat all over the old body. 



B. — Increase of value, the larger diameter fetching a higher price per 

 thousand feet board measure than the smaller diameter (difference 

 in vtdue of different sized logs at the same time). 



C. — ^Increase of price (difference in price of the same sized logs at dif- 

 ferent times), due to an increase of population, to increased logging 

 facilities and to waning supplies. 



The forester speaks of the volume increment, the value increment and 

 the price increment of a tree; and of the volume increment percentage "a%", 

 the value increment percentage "b%", and the price increment percentage 

 •'c%" of a tree or of a forest. 



Thus, a tree now worth "S" dollars is worth after "n" years SXl.Oa" 

 XLOb^XLOc"; which term is almost equal to SXl.O (a + b+c)°. 



In the case of young and sound timber all percentages can be assumed 

 to range between 1% and 4%. 



In the case of primeval timber of large diameter, volume and value in- 

 crement is insignificantly small. On the other hand, primeval timber is getting 

 scarce so rapidly (walnut, cherry, white pine, yellow poplar, white oak) that 

 a large price increment percentage can be depended upon. 



Learn to differentiate between the merits of investments in first growth 

 and of investments in second grovrthll 



An interesting case of a declining VALUE increment may be found in 

 hickory poles at a time at which they begin to form heartwood; or in poplar 

 poles at a similar time, when they begin to be less St for match stock or for fibre. 



An interesting case of declining PRICE increment (aside of panics, aban- 

 doned use of given woods, replacement of one species by another, change of 

 tariff, export prohibition, Panama canal) may be found in small trees left by 

 conservative lumbering. These trees had a better value BEFORE than AFTER 

 the breaking up of the means of transportation. 



PARAGRAPH IV.— RECEIPTS AND EXPENSES 

 IN FORESTRY. 



I. — ^The revenue in forestry may consist of: — 



A. — Yields derived from sale or lease of forest pasture; from hunting 



privileges; from water privileges (power or reservoir); from mines, 



quarries, peat bogs, etc.; from turpentine and maple sugar orchards; 



from tan bark, cork, mosses, grasses, pharmaceutical herbs, litter, 



nuts, seeds and so on. 

 B.— Increasing volume of growing stock, increasing value of growing 



stock and of soil without any lumbering (so-called latent yields). 

 C— Usually, during and after the installation period, yields obtained from 



sale of wood products, notably, 



