392 JOURNAL OF FORESTRY 



per cent net interest, and stipulating that a certain amount of the 

 timber thus bonded be cut each year in order to meet the payments of 

 interest and principal as they accrued. The net result has been the 

 issue of timber bonds amounting in 1914 and 1915 to approximately 

 $65,000,000 in the Pacific Northwest, $26,000,000 in California, $18,- 

 000,000 in the Inland Empire, and $180,000,000 in the southern pine re- 

 gion. These bonds are secured chiefly by the timber, but in part by the 

 mill plants themselves. The annual interest bill on these bonds is nearly 

 $25,000,000. The cutting of timber is compulsory in many cases 

 because of the provisions of the serial bonds, irrespective of the cur- 

 rent prices obtainable for lumber. 



The banks today are tiring of accommodating distressed lumber- 

 men, especially so because many bonded operations have failed and 

 the banks have lost heavily in the wreckage. Timber bonds are in bad 

 repute today among many leading bankers, and the lumbermen are 

 unable to secure the banking credit facilities to which they would often 

 be safely entitled. The indiscriminate and often untrue accounting 

 methods prevalent among the lumber manufacturers is an additional 

 serious obstacle to their securing reasonable banking service. Under 

 the banking regulations today, banks cannot regularly give good service 

 to an industry unable to present an accurate financial statement, show- 

 ing correctly the state of the business. In their accounting the lumber- 

 men have not yet learned to speak the same language. Relief from 

 this difificulty is available to the lumberman through his own efiforts 

 alone. 



In the absence of adequate banking accommodations and under the 

 pressure of heavy carrying charges on his timber, the timber owner has 

 been forced to resort to increased cutting, with almost no regard for 

 the market conditions, in order to make these payments, for which he 

 has no other resources. The result has been that the supply of lumber 

 is determined in large measure not by the demand of consumers of 

 lumber, but by the demand of the banks for interest and by the demand 

 of the communities for taxes on the great load of private timber 

 reserves which are not now a source of reasonable profit, but, rather, 

 an actual burden upon the industry. 



The Capacity for Lumber Production 



There is installed today in the United States a sawmilling capacity 

 of over 100,000,000,000 feet. The maximum consumption in any one 



