362 TIMBER BONDS 



LIABILITIES. 



Capital stock outstanding $2,892,200.00 



Surplus earnings 188,288.79 



First mortgage bonds 1,200,000.00 



Accounts payable, not yet due.... 41,990.33 



Total liabilities ,..$4,322,479.12 



From the above statement it is evident that the Com- 

 pany has a net working capital of $971,692.77, and that 

 it has no liabilities except this issue of bonds and current 

 accounts not yet due of $41,990.33. The above balance 

 sheet shows the Company's assets at their actual cash cost 

 and does not reflect the large actual increase in the value 

 of its lands and standing timber, the true value of which 

 is shown under the heading "Valuation of Security" on 

 the front page of this circular. 



FIRE RISK. — A careful investigation of this subject 

 develops the fact that forest fires do not destroy, but only 

 kill timber of this character and where killed timber is 

 promptly cut and manufactured 100% of its value is recov- 

 ered. In the case of the Panhandle Lumber Copmany, the 

 proximity of its timber to its mills and its enormous manu- 

 facturing capacity enables it to recover any fire-killed tim- 

 ber promptly and without any loss whatever. As a mat- 

 ter of actual experience, it is interesting to note that by 

 reason of the clearing of the underbrush by forest fires, the 

 actual logging cost to the Company of fire-killed timber is 

 shown to be from one to two dollars per thousand feet 

 less than the normal operation of unburned forest, while the 

 market value of the product is not in any way impaired. 



The Panhandle Lumber Company belongs to an asso- 

 ciation of timber owners in this territory, formed for the 

 mutual preservation of their forests from fire. This asso- 

 ciation maintains an eflicient corps of rangers to patrol the 

 forests during the summer season when the dry condi- 

 tion of the underbrush makes fires possible. The fire 

 hazard in the timber of the Panhandle Lumber Company 

 is commercially negligible and cannot, in our opinion, 

 endanger the security for these bonds. 



MANAGEMENT. — The management of the Company is 

 in efficient and conservative hands. The President, Mr. F. 

 A. Blackwell, who has active charge of the Company's af- 

 fairs, is a man of the highest integrity, with a long and 

 unbroken record of success in the lumber business. The 

 manufacturing and selling organizations of the Company 

 are complete and efficient. The stockholders of the Com- 

 pany are men of substantial means and are well able to 

 protect their investment. 



