24 



HARDWOOD RECORD 



— its personnel, methods of doing business 

 and responsibility. 



The Evidence in the Case. 



One authority « rites as follows: 



It is claimed that the offlcers of this concern 

 are Judge \V. 11. Armstrong. ex-Uulted States 

 railroad commissioner, president : Col. A. K. SIc- 

 Clure. former e<lilor of the Philadelphia Times, 

 vice president, and C". M. McMalion, secretary 

 and treasurer. The company claims to own 

 2SS.U0O acres of land in tlie state of Campeche. 

 Me-iJico. valued at Ji.SSU.OOO. It is further 

 claimed that the mahogany cabinet and dye 

 woods, rosewood and .Spanish cedar on these 

 lands are valued at over .flO.OOO.OOO. Moreover, 

 that a good percentage of the land is in planta- 

 tions on which immense qoantities of bananas, 

 oranges, lemons, grapes, vanilla, cocoanuts and 

 cocoa beans are raised. The concern is capilal- 

 ized at a high Hgure, and is very active in solicit- 

 ing subscriptions to its stock. It was promoted 

 late in 1S1I)4, and what its success will be re- 

 mains to be demonstrated. 



Under date of December, 1905, a report- 

 ing agency says: 



We called upon these people and the secretary 

 and treasurer oromised to mail full information. 

 but failed to do so. In the local market the 

 company is not taken very seriousl.v. In the 

 company's office there are in the neighborhood of 

 twenty girls engaged in sending out literature. 

 None "of those active in the management know 

 an.vthing about the lumber business. The con- 

 cern has shipped some mahogany to New York 

 from Mexico, but it is claimed tbat the quality 

 was not good and that the stock did not bring 

 enough to pay the co^t of shipping and manufac- 

 turing. Liberal dividends are being paid to 

 stockholders and some think that they are not 

 declared in a legilimale manner, and it is not 

 believed that the concern is manufacturing lum- 

 ber that would bring Hie results claimed. It is 

 doing an immense business in advertising and 

 selling stock, but whether it is alile to do as 

 advertised is another question. 



From sundry prominent mahogany im- 

 porters the H.\KDW0OD Eecokd has received 

 letters, from which it makes the following 

 excerpts : 



Yours of the 14ih, enclosing memo, of the at- 

 tractive dividends that are paid by the Interna- 

 tional Lumber & Development Company of riniu- 

 delphia. is duly noted. Our attention was first 

 called to this company by Richard 'A. Brine, 

 whose Boston othce is room 43, Journal building. 

 Washington street. They have had some ma- 

 hogany shipped to the Astoria Veneer ilills. Long 

 Island' City. N. Y.. but certainly by the way this 

 mahogany lias been thrown on the market they 

 could not pay very lieavy dividends. We fear it 

 Is simply a stock jobbing operation to unload 

 stock upon the market so that they can finance 

 to suit tliemselves. There was a similar com- 

 pany in Boston a short time ago investigated iiy 

 the postal authorities, with the result that they 

 have had to suspend, and we believe all there i*s 

 left Is office furniture. We did write the Inter- 

 national Lumber & Development Company when 

 we first heard of them to see if they could sup- 

 ply any mah«>gany timber, but received no satis- 

 factory answer. The demand for mahogany is 

 Increasing, but slill the supply of timber is far 

 aliead of the demand. 



We cerlalnl.v endorse .vour motives to if possi- 

 ble proteci Investors from questionable enter- 

 prises, and we simply wish to endorse your move- 

 ment to have the mahogany business conducted 

 In a legitimate manner and if possible remove It 

 from suspicliiiis <lealings. 



Williams & Houghton, 1008 Tribune build 

 ini:. Clilcagii. :inrir>utice themselves as lumber 

 agents of the lulernational Lumber & Hevelop- 

 ment Company. In an interview wltii Mr. Wil- 

 liams at his ofllce a few days ago lie stated that 

 he knew nothing of the finances or financial man- 

 agement f>f the parent company or Its methods 

 of <iolng business, save that he and his partner 

 %vcre linnrlllng Hs output of mahogany and that 

 during the past year Ihey had landed one cargo 

 at the .Astoria .Mills. New York, and two at Mo- 

 bile. He volunteered further that Mr. Houghton 

 was now efigitgeil in erecting a sawmill at 

 Mobile, an bebalf of the International Cmii- 

 pany. Mr. Williams is a man of good address 

 and appearaiK-c. and Is npparentlj' very sanguine 

 over the ultiinnie success of the mahogany ft\n'vn 

 llon-» carrlcfl on by the jiarent company. ' 



Another Letter. 



The following letter is from another lc;iil 



ing nmliogany manufacturer: 



We have been in the mahogany business twenty 

 years iin<l the [,rcsent niiinagers of our company 

 have grown up In the business and all of tliein 

 have had frrun flfleen to twenty years' expe- 

 rience. We secure our supply of logs from ap- 



proximately the same district as the Interna- 

 tional people, and it is largely lurnisbed us by 

 our own contractors to wlioni we make the neces- 

 sary advances. What timber we buy is secured 

 at about the same jirice that the contractor 

 would net by shipping it to Kurope ; in must 

 cases a little less, as we know by returns on 

 similar cargoes to those we have Imuglit which 

 wo have afterward had the opportunity to ex- 

 amine. We own our own mills and believe that 

 we thoroughly understand the manufacture of 

 mahogany ; know how- to secure the full output 

 of the log and to market it to the very best ad- 

 vantage. However, for the last two or three 

 years we have been unable to make more than 

 a banking interest on tlie amount of capital in- 

 vested, due nlinost entirely to newcomers in the 

 field who have succeeded in thormigbly demoral- 

 izing the market. We have no way of knowing 

 what the l!>gs cost the International Lumber & 

 Iicvelopment Company in Mexico, but if our ex- 

 perience is any criterion we are quite sure it 

 would make more money by embarking its car- 

 goes in Laguna for Europe and leaving manufac- 

 ture alone. Their expense of handling to (lulf 

 jiorts is certainly more than ours, and we do 

 not believe tlial William II. Armstrong or Col. 

 A. K. McClure can have learned more about the 

 mahogany busintrss in a year or two tlian we 

 have been alile to learn in twenty. If the gen- 

 uineness or truthfulness of this letter is chal- 

 lenged, we arc willing to back it up at any time. 



Still More Letters. 



Accept our thanks for your favor of Mardi Ki. 

 together with memo, of advertisement of the 

 international Lumber i^ Development Company 

 of riiiladelphia. We think you are doing a very 

 good work in tliis matter. 



The above is from a pioneer mahogany 

 institution and one of the foremost of its 

 kind in the world. The one following is from 

 a mahogany producing house whose fame is 

 also world-wide, and which carries on ex- 

 tensive operations on both hemispheres: 



Your letter of the 13th is at hand and we 

 notice the ad. from the I'hiladelphia Nortii .Amer- 

 ican. We also note with interest what you say 

 on this subject. We have our own very decided 

 opinion in regard to the business that this con- 

 cern is carrying on, and have not the least doubt 

 in our own minds as to its character, as the 

 writer expressed to you when you were last here. 

 There are quite a number of points in their 

 printed m.atler that will not stand close scrutiny 

 by anyone wlio understands the mahogany busi- 

 ness. It is one thing, however, to have firm con- 

 victions and another to demonstrate them so 

 conclusively tiiat one is justified in advancing 

 them publicly. We expect soon to be in a posi- 

 tion to give you information that can be thor- 

 oughly backed up. Thanking you for the interest 

 you are taking in this matter, etc. 



The following letter is from another ma- 

 hogany operator who is likewise thoroughly 

 familiar with mahogany stumpage conditions 

 in the tropics: 



Y'ou a.sk my opinion of the ability of tlie com- 

 Ijany .vou mention to declare twelvi' per cent 

 dividends in ten months from the sale of ina- 

 liogany lumber. 1 don't think the dividt?iids paid 

 have been earned. You are in a position to de- 

 mand a linancial statement covering all tlie In- 

 Xoriiiation you desire, and you should have it, as 

 your subscribers are asking for this informal ion. 

 You owe 11 to the public. I am not in a position 

 to do anything, or sliould certainly act at once. 

 Letters of Inquiry Unanswered. 



On March 23 the editor of the Hardwood 

 Record wrote to the International Lumber 

 & Development Company at its Philadelphia 

 office in the Drcxel BIdg., the following let- 

 ter, to which no reply has been received: 



I am receiving a good many imiuirles and com- 

 ments from various sources concerning your 

 mahogany enterprise. If consistent with your 

 policy, kindly give me the details of your ma- 

 hogany Imports since .vour company was organ- 

 izati and some delalls of your ability to supply 

 elllii'i' the round cr stjuare wood, or lumber to 

 the trade, with sr>mctlilng of tin' cliaracter of 

 your wood, and any other details that might put 

 me In a position to answer Inquiries intelligently. 



A prominent Boston lumberman, under 

 ■ late of March 19, addressed the Interna- 

 tional Lumber & Development Company, as 

 follows: 



I have received from time (o time sundry ad- 

 vert Islng iiialter from you In regard to .vour 

 Mexl"nn iiro|)crty, and have become somewhat In- 

 terested in If. 1 have some money that I would 



be willing to invest, if to good advantage, but 

 would first want to understand your proposition 

 a little more clearly. I notice you invite In- 

 iiuiries for full information, and, therefore, ven- 

 ture to inflict on you the following questions: 



Has your business reached the point of yield- 

 ing pro'ht in any line other than in mahogany 

 and cedar'; If so, in what'; 



How much mahogany have you actually 

 brought forward, and where has this usually 

 lieen sold '; 



Ho you dispose of your mahogany entirely In 

 the log, or do you attempt to manufacture any 

 part of if; 



How do .vou find the prices you have been paid 

 for your lumber compare with those you ciuote In 

 vour pamphlet headed "A Life Income"'; My 

 iiusinessls pine, spruce and domestic woods, and 

 I am not particularly familiar with mahogany, 

 but I was under the impression that tlie prices 

 you quoted were rather high, as I liave heard 

 of rirst grade mahogany being sold for consid- 

 eralilv less. 



You speak of eighty million feet of standing 

 mahogany on your land. Of course, this is much 

 too l«rge an amount to have been determined by 

 any actual counting of the trees. What is your 

 me'tiiod of computation as to standing timber? 

 How does mahogany grow'; That is to say, does 

 it grow in big bunches, like pine, and is the land 

 covered to a fairly uniform degree, or is it scat- 

 tering'; What is the average size of a mahogany 

 tree or log'; I have noticed that mahogany logs 

 arc usually hewn square when they come Into 

 tills country. Do you liandle your wood in that 

 way. or do" you import them in the round logs, 

 in "same fashion that lumber is manufactured 

 here 7 



What business have you done so far In the 

 otiier woods you refer to, outside of cedar and 

 mahogany, such as rosewood, etc., and do you 

 find a ready sale for these other woods? 



I notice you value your mahogany standing at 

 .*4H per M. and the cargo on the way to New 

 York at .'?'.HI. Does this .iiHO Include the cost of 

 freight to New York'; You speak in another 

 place of freight as $G.30. and the cost of selling 

 $11 per metric ton. How is this calculated, 

 what relation is it to a thousand feet board 

 measure'; Do you und quick sales for your ma- 

 hogany and cedar as fast as imported, or is it 

 necessary to carry it in stock in this country for 

 a greater or less time? 



I notice later in your pamphlet that you speak 

 of a lumber yard located in New York where 

 you saw, store and sell tlic lumber? Where is 

 this yard located, in case I should be In New- 

 York and should like to look it over? 



You speak of having been offered $1,000 tor 

 one of your logs. I sujjpose this is quite an ex- 

 ceptional case, is it not? How often do you 

 and logs that will sell for any such large flgure 

 as this? In other words, out of a cargo of a 

 oertain number of logs, how many logs would 

 be likely to sell for more than the average 

 amount for which the ordinary lumber sells? 



Y'ou speak of guaranteeing eight per cent divi- 

 dends. How is that possible? Is there not a 

 chance in your business, as in every other busi- 

 ness, of mishaps in your operations which would 

 cause them to he carried on to a greater or less 

 extent, at a loss, instead of with prollt? So 

 far as the logging operation is concerned, I 

 know that mishaps occur in operations in this 

 country, and I would assume that In the tropics 

 tlic element of chance was even greater. In 

 other words, isn't your guarantee of eight per 

 cent dividends contingent on your operations In 

 the south iirogressing under normal conditions? 

 1 unilcrstand. of course, that the chance of de- 

 struction of your forest by lire does not exist, 

 and tbat yuu could not be hampered by lack of 

 snow for hauling, as we are In this country, hut 

 do you not depend upon streams tor getting down 

 your logs, and isn't there a chance of your being 

 dlsaiipointed at times by an Insufllclent water 

 supply ? 



How much stock have you actually sold up to 

 date, and the money paid in? 



You speak of the jiroperty being located In the 

 state of Campeche. between the cities of Cam- 

 peciie and Litguna. I don't find Laguna oti the 

 map of Mexico, tliough I do tlnd Campeche. I 

 notice name Laguna <le Terniin<^s. as apparently 

 npplit'd to a lagoon or inland body of water, at 

 the entrnncc of which is a city calle<l Carmen. 

 If yon have any small map of Mexi<'o which 

 would show the exact location of I his land, I 

 \\( iild be greatly obliged if you wottid enclose 

 that witli Ihe land marked on It, also the port 

 of Cbenkali. 



Iteterrlng again to your cargo of ISO M feet, 

 valued at ,S!K1 jier M, <lo you nieiiii that this Is 

 tlic average price of a thousMuil feet of liiinber. 

 for which flic cargo would sell or did sell In 

 .New York ufti'r It was cut up. or do you mean 



tlini is tb isl |ier flioiisand feel of the logs 



when landed in New Yiu-k ? If llie latter, what 

 do you Ilgiire the average selling price per foot 

 of lumber, affei- till' logs are iiinnnraciiiretl ? of 

 course. I notii-e your <|Uotation on the various 

 grades, but what I want to get at Is how do logs 

 average as to grade? What percentage of Isfs 



