Rotation Zero

Schedule C, clause 4, as inherited — The applicable rate of discount shall be the Consortium reference rate, as fixed in the Deed of Passage.

The centennial revision of the management plan is mostly ceremony. Once a century the Resource Authority must re-derive the harvest schedule from first principles rather than roll it forward, the founders having understood that a plan amended for a hundred years stops being a plan and becomes a habit with paperwork. I am the Authority’s actuary. The re-derivation fell to me.

The optimiser is not clever. I want that said early, because of what people called it later. It is a present-value calculation with a botany module bolted on: it takes the survey data, the freight schedule, the covenants on the founding debt and the reference rate, and it finds the harvest path that maximises the value of the estate. It holds no opinions. It is the same arithmetic the Consortium uses to price a bond, pointed at a forest.

I gave it the new survey and the standing instructions, and it returned a schedule I assumed was corrupt.

Optimal rotation: zero years. Harvest the entire standing stock, beginning with the cathedral stands on the Ledge, at the maximum rate the mills will bear. Replant: nothing. Projected value of the estate under this plan: a little over three times its value under the current one.

I spent nine days hunting the fault. I re-entered the survey by hand. I ran the botany module against forty years of measured growth and it matched to the width of a pencil line. On the ninth day I did what I ought to have done on the first, which was the sum itself, on paper, for one tree.

A greatwood adds not quite one per cent to itself in a year. That is not a failing. Under a sun like a banked coal, on a world where the growing season is a rumour that comes round twice a year, nought point eight per cent is the best performance ever recorded here, and the wood it makes — silica-boned, lustrous, ringing faintly when cut — is the only thing this colony produces that is worth its mass in freight.

The reference rate in the Deed of Passage is six point one.

That is the whole of the matter. A standing forest is an asset, and its yield is its growth. If money can earn six point one elsewhere — and it can; the Consortium will sell us its own bonds by return of ship — then every year a greatwood stands, it costs us the difference. The optimiser had simply noticed that we were holding our wealth in the wrong instrument. Fell it all, load it down the Lamplighter’s manifest, put the proceeds into Consortium paper, and the ledger grows at six point one for ever, which the forest can never do. Stated plainly, the recommendation was that the colony stop being a place and become a position.

There was no error to find. I signed my working and took it upstairs.

First proposed amendment

…shall be the reference rate, save that the stands listed in the Schedule of Protected Stands shall be excluded from valuation.

“So we exempt the Ledge,” the Chair said. “Protected stands. The optimiser can want what it likes about the rest.”

“You can’t exempt them from arithmetic,” Tulloch said. He is the deputy treasurer, and he was holding my working, which he had checked twice. “The statute says the fund reports estate value on a maximising basis. If the plan withholds the Ledge, the difference doesn’t vanish. It prints. A line in the accounts, every year: cost of the Schedule of Protected Stands, and then a number with enough digits in it to build the western clinic nine times over.”

“Then we live with a number.”

“Every budget hearing for the next century lives with it. Someone stands up, points at that line, and asks why the trees come before the clinic. And it travels. The estate is collateral under the Deed; the covenant says commercially reasonable management; our filings go out on every sailing. In forty-three years an analyst in a tower we’ll never see reads them and marks us down as a borrower who burns collateral for sentiment.”

The Chair looked at Ansel, who runs the survey. “Unless the growth rate is wrong.”

“You’d like it to be seven per cent,” Ansel said. “It’s nought point eight. I fought the referees for the eight. If you want a bigger number in that column, you want a different botanist, and she’ll be lying to you.”

Second proposed amendment

…shall be a rate determined by the Authority having regard to the interests of future residents.

The hearing on the second draft filled the chamber, which the centennial revision has never once done.

“‘Having regard to the interests of future residents,’” Tulloch read out. “That’s not a rate. That’s a mood. The Consortium’s lawyers will construe it inside a minute: this borrower pays when it feels like paying.”

He was not wrong, and I had helped him draft the objection. A discount rate must be a number, because it is used as one. But sitting in that chamber I found I could no longer pretend the old number was neutral. Six point one is not a law of nature. It is a price put on time itself, fixed at departure in a tower under a younger sun: a declaration that next year matters six per cent less than this one, compounding, until a resident eighty years out weighs nothing at all. We had carried that opinion here inside the Deed, and fed it to the optimiser, and the optimiser had done nothing wrong except take it seriously.

Councillor Brač asked to speak from her chair, standing being hard for her now. She came here on the third sailing, as a child.

“My mother paid everything she had at departure,” she said. “Her trade, her language, the rest of her life. She knew the price when she signed, and she knew she was buying something she would never touch. She said so, on the ramp. Whatever rate makes that a bad trade” — she nodded at the papers — “is not our rate. Put any number you like in the schedule. But don’t tell me it’s six.”

No one answered her. At six point one per cent, her mother’s bargain was madness, and the chamber was full of its proceeds.

Clause 4, as enacted

The applicable rate of discount shall not exceed the observed net rate of growth of the standing stock, as determined by the annual survey.

It was Ansel who found the wording, though she maintains she offered it as a joke that stopped being one halfway out of her mouth.

Peg the rate to the forest. Not zero — zero is a mood as well; it makes the far future infinitely heavy, and the arithmetic seizes in the other direction. Set it at whatever the greatwood does. At that rate the optimiser is exactly indifferent between a stand and the felling of it: the estate, left alone, holds its value to the shilling. Liquidation never dominates, and never quite loses either, and so the schedule collapses back to what the mills can take from windthrow and thinnings, which is what the schedule always was.

Tulloch’s objection is preserved in the minute-book: that we had defined the colony’s price of time as a biological measurement; that the covenant question was unresolved; that the Consortium’s reply was forty-three years out. The Chair’s answer is in the minute-book too. “Then we have forty-three years to be right.”

The consequences are smaller and stranger than the debate was. The fund reports balance now: valued at the enacted rate, the standing forest is the optimum, and the terrible line never prints. Whether a tower under a younger sun will call that ingenuity or default, nobody now alive will hear.

And once a year, the price of time is measured instead of declared. Ansel’s crews go up the Ledge with tapes and callipers in the short bright season, and for three weeks the treasury can do nothing but wait on botany. Then the figure is read from the Authority steps, the way ports read the tide tables. This year it was nought point seven nine — down a basis point, after the dry summer. It was read out at noon, and there was a crowd, and nobody left early.