BALANCE-SHEET OF A NORMAL KAURI FOREST. 99 
Expenditure— 
Labour at full European rates for a fully stocked ¢ g 4g, 
forest: Permanent yearly average at the rate of 
one man per 75 acres—man at £150 yearly, with 
house, ground, &c. Labour includes all forest 
work up to putting the logs by the roadside, road- 
making, timber-felling, natural-regeneration aid 
work, and interplanting where necessary... cA 
Supervision: One man per 2,000 acres, materials, an 
direction as above, per acre per year... ix. SOS eS 

£2 1 8 

Therefore average net revenue per acre for the third or final period is 
£12 17s. 8d., less £2 1s. 8d. = £10 16s. 
At 4 per cent. £10 16s. capitalizes to £270. This is an important 
figure in considering land-values, since on a 4-per-cent. basis, or twenty- 
five years purchase, land under normal Kauri forest will have a capital 
value of £270. Just as the stocking and age-classes of any existing 
Kauri forest approaches the normal Kauri forest will its present value 
(capitalized at 4 per cent.) approach £270 per acre. Thus it is only 
land in the very best districts of New Zealand that has a higher value 
than well-stocked Kauri-forest land. This brings one round to European 
conditions, where patches of forest land and agricultural land stand 
side by side, and it wants little change in relative prices to say which 
is the most profitable. 
I have taken 4 per cent, for capitalizing here because that is the 
usual return expected from Government securities in New Zealand, but 
European Governments are satisfied with 24 or 3 per cent. from forest 
property, for various reasons, amongst which are the indirect national 
benefits of forestry. Capitalizing the normal Kauri forest at 3 per cent. 
a net yield of £10 16s. per acre per year represents a capital value of 
£359 12s. 9d. 
The percentage yield of a forest is a technical subject which cannot 
be discussed here. Quite commonly the least productive forests in a 
national sense, such as mere fuel copses, have the highest percentage 
yield. (This is one of the early surprises of forest economics.) Jt will 
be well here to remember that while at 4 per cent. the capitalized value 
of the normal Kauri forest 1s £270, at 3 per cent. it is (in round nwm- 
bers) £360. 
Comparative Value of Present and Future Timber Crops in a Normal 
Kauri Forest. 
Let us assume that the present value of Kauri royalty is 8s. 4d. per 
100 sup. ft. ( = ls. per c. ft.), and the future value 2s. per cubie foot. 
Then 10,000 c. ft. q.g., the normal stand, is worth, if cut now ... £500 
An acre of virgin forest heavily stocked with timber would, of course, 
represent a much higher value, but that is not economical production, 
and need not be considered here. Indeed, a single sound giant Kauri 
tree might represent a timber value of over £500. 
With Kauri risen to 2s. the cube, and capitalizing at 4 per cent., 
the capital value of all future Kauri and accompanying forest crops 
is Ps. ri hs a gh te a «tras 
at 3 per cent. is ... a re sf: Kt .. £360 
4* 
