240 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
New Hampshire this tax rate is assumed to be 2.4 percent, the average 
ratio of taxes to estimated value as given above for the three selected 
towns of this State. 
The interest rate, as elsewhere in this report, is assumed to be 3 
percent. 
On the basis of the above prospective yields and costs the highest 
possible initial forest value for each case was determined by means 
of the formula given in part 3, page 60. The rotation corresponding 
to this highest initial forest value would evidently be the most 
profitable, or financial rotation. These financial rotations and initial 
forest values are given in table 93. 
TaBLE 93.—Financial rotation, initial forest value, and tax ratio under the property 
tax for white pine in New Hampshire! 
GOOD SITE 
Planting Weeding 
Tax rate sti eee 
F -_, Initial for- . -,, Initial for- 
Hear _ est value | Taxratio | are est value | Tax ratio 
| per acre | | per acre 
| | | 
Years | Dollars Percent Years | Dollars Percent 
LO: percente asi oe eS ee 50 33. 50 46 50 |- 34. 90 
2.4 percent 2.226 Ss ee 46) 15. 50 73 45 | 16. 40 73 
310 percent se ates oes nomena meen 45 | 11. 50 80 | 44 | 12. 20 79 
MEDIUM SITE 
L-Ospercent ss 22 Nee oe eee 50 23. 70 46 50 25. 10 46 
2:4; percent 3-2 ee ee ee 48 10. 70 75 7 11. 40 74 
S.0 percent} S22 Stee ene 46 7.70 81 45 8. 30 80 
POOR SITE 
L-Oipercenta eee 2 kee Ee ee ie ee 55 14. 40 49 54 15. 50 49 
2°4 DOTCONL eee Sa eR See 50 5. 90 77 50 6. 60 7 
SiO: percent 222-2 ee See ee eee 49 4.10 84 48 4. 60 83 
1 Assumptions and method of computation are described in the text. Interest rate used, 3 percent. 
The term “‘initial forest value” as used here and elsewhere in this 
report is not necessarily the same as the value in the economic sense. 
It is the discounted prospective income less the discounted future 
expenses under a given set of conditions. It corresponds to value in 
the economic sense only when it is zero or positive and the conditions 
given represent the most profitable use of the forest in question. 
A comparison of the initial forest values in table 93 with the assumed 
costs of regeneration shows that with a tax rate of 2.4 percent and 
with the above assumptions as to yields and expenses, the planting 
of white pine on good sites in New Hampshire would return 3 percent 
on the investment only if such sites could be purchased for not more 
than $0.50 per acre. This is because, when the assumed investment: 
in planting, $15, is subtracted from the initial forest value, $15.50, 
the soil expectation value is only $0.50. The planting of white pine 
at $15 per acre on medium and poor sites would not, under these 
assumptions, yield a 3-percent return even if such sites could be 
