A NEW FACTOR IN FOREST FINANCE 



1001 



A NEW FACTOR IN FOREST FINANCE 



Bv W. T. Christine. 



Nl'",\'l'".l\ hcfiirc in the history oi' the hinil)cr iii- 

 (histry of America has the question of finance 

 conmianded so great a share of the attention of 

 operators. 



Cinuhtions have called for continuing increases in plant 

 and tinil.ier investments. The unit of value of timber, 

 the price per thousand feet, is steadily advancing. Log- 

 ging equipment and logging railroads cost more todav 

 than formerly. The outcome has created an imperative 

 demand for mi ire working capital. 



When this need first became manifest it was met by 

 the issuance of bonds secured by a mortgage on the 

 timber and mill propertv of the operator. 



In many cases the results of the l)ontl issues have not 

 been satisfactory, due to restrictions in o])erations arising 

 from the conditions imposed by the Imnd house. This 

 fault may be attributed to the fact that the banker did 

 not understand the necessities of the limiber business, 

 nor its opportunities for profit. 



Forest finance is a much deeper and broader cjuestion 

 than the people of Aiuerica ha\e realized. Forestr\- is 

 practical under present conditions when it is prolita1)le; 

 and then only. 



Present tlay forest finance is extremelv practical in 

 character. Money is loaned to owners of timber and null 

 properties who are worthy of financial aid. Some of 

 these k)ans are straight mortgages ; others are evidenced 

 by bond issues, which likewise are mortgages. 



One of the largest transactions of this character placed 

 upon the market this year was the bond issue created and 

 sold ]jy the recently organized James D. Lacey Timber 

 Company, of Chicago. This was a loan of $3,000,000 

 secured by the propertv of the Brown Corporation, of 

 Portland, Maitie. The Brown Corporation constitutes 

 one of the component comjjanies of the Berlin Mills Com- 



pany and the Burgess Sulphite Fibre Company, of Berlin. 

 .\'ew Hampshire. These companies represent an organi- 

 zation founded in ISTj'i and purchased by William \^'. 

 I'lrow^n in ls(is, since which date they have been in con- 

 tinuous and profitable operation. The three com|)anies 

 today represent an investment of about $30,000,000, 

 with annual sales averaging $13,500,000. 



They use their timber economically. If true conserva- 

 tion is the wise and close use of timber, then these com- 

 panies stand well in the fore rank of the conservationists, 

 with a record of 110 jjer cent of tree utilization, against 

 ll;e ordinary sawmill record of 3.") per cent to 40 per cent. 



This bond issue was put on the market and sold at a 

 time when the banking houses of America were disin- 

 clined to consider new securities of any kind. The accom- 

 plishment was ilue to the standing of the company offer- 

 ing the bonds and to the further fact that the interests of 

 Imth maker and buyer were fully protected. It is the 

 ;diility of the James D. Lacey Timber Company to jirotect 

 liiilh the liond maker and the buyer that places it in the 

 \an of lumljer financiers. 



James D. Lacey Timber Company is a development of 

 James D. Lacey & Co., a firm which for thirty-five years 

 lias been an active force in the ])urchase, sale, cruising, 

 xi'.luing and (le\elopnieiil of the timber of North America. 

 The members of this firm also have been active in estab- 

 lishing and operating sawmill and logging enterprises. 

 They understand the needs of the operator, can approxi- 

 mate the credit to which he is entitled and appreciate 

 the latitude that should be given him to make his business 

 profitable. The new organization will ha\e at its com- 

 mand all the wealth of data assembled by James U. 

 Lacev iS; Co. It would be virtually impossible to dupli- 

 cate this information as the firm's records cover every 

 tnnber producing locality in the United States, eastern 

 arid western Canada, Mexico, and portions of South 

 America. 



^^■llen work of ibis important character is undertaken 



II- I'll I.K> 



James D. Lacey, 

 President 



(M' J,\.\ll-:s 

 W 

 i 'icc-Pyesicient 



d Beal, 

 and Ti'COsnt'er. 



.\NI) e'(iMl'.\.\V 



Victor Thrane 

 t^'ice-President 



