52 JOURNAL OF FORESTRY 



effect, by limiting the loss of property we may, by this means, make it 

 possible to reduce property income to the owners of the capital engaged 

 in the industry and thus make it possible to divide a larger share of 

 the product between labor and the consumer. 



There should be added a neglected field within the industry itself 

 for securing both investment and speculative funds. I refer to the 

 employees of the industry. These receive nearly $300,000,000 a year 

 for their services, yet comparatively seldom it is that any of these 

 invest in the securities of the concerns they work for. Wherever 

 capital earned by employees in the industry goes back into it, it is often 

 in the form of new enterprises started by men formerly working for 

 salaries or wages. Would it not be better to have this capital enlisted 

 in the support of existing enterprises than to go into competing enter- 

 prises often to be used up in putting products on the market below cost, 

 a kind of competition most difficult to meet . The logic of the situation 

 seems to justify the conclusion that it would be vastly to the interests 

 of the industry to secure for itself both the investment and speculative 

 funds available from savings of employees. The former might be 

 secured by selling central association bonds over the counters of all 

 members, giving bonds instead of cash for bonuses where bonus systems 

 of wage payment are used, and in other ways. The speculative capital 

 of employees, if enlisted at all, would naturally go into stock holding. 

 The results of this partial distribution of the ownership of the industry 

 among its own employees may be expected to be of far greater importance 

 than the mere saving and investment of capital. It may be expected 

 to have a vital effect on labor conditions. 



Department of Financial Reorganization 



All collateral bonds should be issued under trust deeds providing 

 that the central association may take immediate possession of the 

 property in case of default of interest or principal of the bonds, lasting 

 a very short time. This is where, as we have said, this department 

 should step in to liquidate these bond issues "within the family." If 

 this be done the outside investor will no longer come in direct touch 

 with any defaults, and as a consequence the merits of the central bond 

 issue will constantly be enhanced in his opinion. In case of default 

 of a collateral issue this department should step in at once, make a 

 thorough examination of the business concerned and, if possible, set it 

 on its feet again. If reestablishment is not possible a distribution of the 

 assets among adjacent concerns at prices which will cover the bond 



