BOND CIRCULARS 351 



The security for the bonds may be summarized from 

 these letters and opinions as follows: 



1. First mortgage lien on approximately 70,000 acres 

 of virgin timber lands and timber in Linn, Lane, Coos, 

 Curry, Douglas and Lincoln counties, all being located In 

 the western part of the State of Oregon, estimated to con- 

 tain over 4,300,000,000 feet of fir, cedar and other timber, 

 including some pine and hemlock. 



2. Our experts state that the timber may be con- 

 servatively valued at $1.00 per thousand feet, or $4,300,000 

 in all, while their estimates show that the bonds, amount- 

 ing to $1,500,000, are issued at the low rate of 34% cents 

 per thousand feet. 



3. Secured also by first mortgage lien on a modern 

 lumber manufacturing plant valued at $200,000, and having 

 a capacity of 150,000 feet for each ten-hour day. 



4. The management is in the hands of successful and 

 experienced lumbermen, the guarantor being reputed to 

 be worth many times the amount of the bond issue. 



5. The margin of security increases as the serial in- 

 stallments are paid at the ratio of seven to one, and the 

 redemption fund will retire all the bonds before 15 per 

 cent of the timber is cut. 



6. Under the trust deed the trustee must first receive 

 payment before any timber may be cut or released from 

 the lien of the mortgage, payments for timber to be cut, 

 being at the rate of $2.50 per thousand feet. Contracts 

 have already been executed providing for the sale of at 

 least 30,000,000 feet of timber per annum at $3.00 per 

 thousand feet for fir and $6.00 per thousand feet for cedar 

 with a rising scale of prices. 



7. Frequent inspection of the property is arranged for 

 at the expense of the borrower. The valuations, titles and 

 legal matters have been passed on by well known authori- 

 ties. 



8. The fire hazard is minimized: By the separation 

 of the property into two tracts of nearly equal value; by 

 the location of the timber in the fog laden counties on the 

 Pacific Coast and west of the Cascade Mountains; by 

 efficient fire patrols. Government and private, and by the 

 provisions of the mortgage for the payment to the Trustee 

 at the rate of $1.00 per thousand feet for timber dam- 

 aged for any cause, with $1.50 per thousand feet addi- 

 tional for any such timber cut. 



9. The increasing scarcity of timber has resulted in a 

 constant enhancement In value. 



Price on application. 



