28 TIMBER BONDS 



own. This statement should be made up by 

 responsible Public Accountants who are fa- 

 miliar with lumber operations and accustomed 

 to audit for bond issues. 



The mortgage protects the banker and bond 

 dealer by permitting them to enter on the prop- 

 erty and make investigations and audits at any 

 time. This is in the nature of insurance. 11^ 

 prevents the property from being skinned and 

 forbids fraudulent operations by dishonest peo- 

 ple. The timber industry is composed of ex- 

 ceedingly high class men and these investiga- 

 tions are not often made. Comprehensive re- 

 ports, made by Independent experts, and fur- 

 nished regularly, would increase the desire for 

 timber bonds, by giving the public who now 

 hesitate to buy on account of lack of knowledge 

 of timber operations, confidence in them. These 

 reports would tend to put timber bonds in a 

 very desirable class and greatly broaden their 

 market. 



Eecently I had occasion to ask a bond dealer 

 for the latest balance sheet of a lumber com- 

 pany for whom he had sold an issue of bonds. 

 The bonds were disposed of more than two 

 years ago and he has not since had their affairs 

 inspected. The only information he could give 

 was from the original audit. This attitude is 

 wrong and dangerous. The day will soon be 

 here when buyers of timber bonds will insist 

 on annual reports. They are entitled to them 



