BOND CIRCULARS 359 



applicable to the protection of principal and interest of 

 these bonds will be in excess of $600,000 a year. 



SINKING FUND. 



The mortgage securing these bonds provides that on or 

 before the 15th day of each month beginning with the 

 month of March, 1911, there shall be deposited with the 

 Trustee a sinking fund equivalent to $3 per thousand feet 

 on all timber cut and removed from the Company's prop- 

 erty during the preceding calendar month. This sinking 

 fund shall be applied to the payment of the semi-annual 

 instalments of the principal of these bonds as they mature, 

 and any surplus remaining in the sinking fund at the end 

 of any six months period may, at the Company's option, 

 be utilized in one of the three following ways: 



First: It may remain in the sinking fund. 



Second: It may be applied in redeeming the bonds in 

 the reverse of their numerical order at 105 and interest. 



Third: It may be used in the purchase of additional 

 timber and timber lands, subject to the approval of Pea- 

 body, Houghteling & Company. 



This sinking fund is sufficient to pay off the entire 

 principal of these bonds from the exhaustion of less than 

 one-half of the Company's standing timber. 



DESCRIPTION OF SECURITY. 



The Panhandle Lumber Company was incorporated 

 in 1906 under the laws of the State of Idaho for the pur- 

 pose of doing a general lumber business. The Company 

 immediately began to purchase judiciously at low cost, and 

 to assemble for its future needs, important blocks of stand- 

 ing timber in the territory of the Pend Oreille River valley, 

 and it has now in complete operation two of the most 

 modern and efficient mills in this country. 



TIMBER. — The Company now owns in fee simple 89,- 

 294.83 acres of land and 943.978,490 feet of merchantable 

 standing timber in the Counties of Kootenai and Bonner in 

 the State of Idaho, and in the Counties of Spokane and 

 Stevens in the State of Washington. These timber prop- 

 erties comprise: 216,528,256 feet of white pine, 277,180.652 

 feet of yellow pine, 450,269,582 feet of mixed timber, prin- 

 cipally cedar, spruce, larch and fir. In addition to this 

 timber, these lands contain 465.668 cedar poles of mer- 

 chantable size. These timber properties are well located 

 with respect to the Company's mills, being available both 

 by rail and water at low operating and transportation 

 cost. 



MILLS. — The Company owns and operates two of the 

 largest and most modern mills in the west, located re- 



