THE THEORY OF INTEREST
Assuming, then, that the land owner finds predeter-mined prices and quantities of crops, lumber and minerals,with predetermined costs for obtaining them, he hasbefore him simply the choice of three definite incomestreams, each expressible in terms of money, accordingas he uses his labor, land, and capital in one or the otherof the following three ways:
(1) for farming purposes, which, let us say, will givehim a regular and perpetual succession of crops and in-come equally valuable year after year, that is, with anincome stream of the type AA' in Chart 14;
(2) for forestry purposes, with very slight returns forthe first few decades, and larger returns in the future, asindicated by the curve BB';
(3) for mining purposes, in which case we shallsuppose that the income is greatest for the early yearsand thereafter gradually decreases until the mine is ex-hausted; illustrated by Curve CC'.
The important question now before us is: What are theprinciples upon which the owner of the land chooses thebest one among these three income streams, A, B, and C?
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