REVIEW OF BUSINESS 2S 



and plants. An examination of these state- 

 ments will enable the analyst to judge with 

 fair accuracy if the loan can be negotiated. If 

 so, he should get on the ground and examine 

 the property to see the kind of timber, and the 

 nature of equipment used in getting it out, to 

 judge the efficiency and value of the mills, to 

 note the manner of accounting, and to see the 

 method of handling sales. In this way he takes 

 a mental photograph of the entire business and 

 can tell almost exactly what the timberman can 

 borrow if the information is approximately 

 verified by the expert investigations to follow. 



Standing and living timber is the life of a 

 timber bond. The heft of the security for the 

 loan must be green and growing stumpage. A 

 small proportion of over mature trees may be 

 allowed. No loan should be made on timber 

 consisting mainly of over-ripe trees. Down tim- 

 ber should not be considered unless it is easily 

 accessible. Dead timber still standing should 

 be cruised. Fire killed timber should be cruised. 

 The timber should be on land owned in fee 

 simple. Twenty five per cent of stumpage con- 

 tracts mav be allowed if the life of the contracts 

 or the time granted for removal of timber is 

 longer than the life of the bonds. Bonds should 

 not be written when secured by timber standing 

 in a county where taxes on timber land are ex- 

 cessive. 



The ground should be fairly good for log- 

 ging. If very hilly or rough the breakage in 



