Pitfals of Timber Bond Issues 557 



Upon the other hand, because of the railroads pushing back 

 into the wilderness, spreading sparks in territory never before 

 traversed by a locomotive; because of the almost universal use 

 now of the type of cigarette which does not go out but consumes 

 itself to the last ash after it has been carelessly thrown aside by 

 the thoughtless smoker ; because of the increasing trend towards 

 camping life and one thing and another, the fire hazard has not 

 only increased, in some ways, but the area of such risks has been 

 enlarged. 



No matter, therefore, with what assurance the vendor of a tim- 

 ber bond may argue with a prospective buyer as to the lack of 

 risk from fire, yet it is practically impossible, in some stands of 

 timber, to wholly elminate such a risk; thus certain odds prevail 

 upon an issue of this nature as against an insurable property 

 like manufacturing plants or other combustible improvements. 



I think it is fair to say, however, that as yet no large bond 

 issue has been put in jeopardy by a devastating fire, although 

 there must have been countless instances where such fires have 

 only been averted by prompt action — so the risk cannot be 

 escaped. 



An enthusiastic dealer in bonds of this class will declare that 

 there are other greater dangers to the standing tree than fire ; that 

 insects, animals, storms, etc., are more damaging. This is prob- 

 ably true the world over, but it would not be true in the case of 

 a given tract— the insect, animal and storm destruction upon one 

 side as against fire upon the other. The latter might wipe out 

 the entire area in forty-eight hours. So, too, a cyclone or hurri- 

 cane might sweep through a narrow tract, but, even then, the 

 timber would not be destroyed, and it could be salvaged im- 

 mediately, although, to a certain extent, fire swept timber may 

 also be salvaged. 



So let us guard against misleading statistics and misleading 

 statements ; statements which tell only half the truth as suggested 

 by the great destruction going on in standing timber from in- 

 sects, etc. 



As a final word, it seems economically unsound that one should 

 loan money upon security which must, according to the contract, 

 be depleted in intrinsic value in order to pay off the loan, and 

 which really is opposed to usual practice, as most other corpora- 



