418 TIMBER BONDS 



most experienced timber and lumber men on the Pacific 

 Coast. 



The owners of the Mendocino Redwood Company are 

 successful lumbermen of Pennsylvania, California and 

 Washington and part owners of several of the largest 

 tracts of redwood, pine and fir timber lands on the Pacific 



REDEMPTION FUND. 



The mortgage, under careful restrictions, requires that 

 the company must deposit with the Trustee $2.00 per thou- 

 sand feet, log scale, for all redwood and fir timber cut, 

 based on the estimates on file in our office and with the 

 Trustee. The company is required to make this deposit 

 for each forty acres or more before cutting any timber on 

 the same. The provisions of the mortgage covering this 

 point are rigidly and carefully drawn. This deposit ap- 

 plies to the payment of the principal of the bonds only, 

 and is on a basis of double the amount for which the 

 timber is bonded and will operate to pay off the entire 

 issue of bonds when less than one-half of the standing 

 timber has been cut. 



Should the amount deposited under this redemption 

 fund exceed the amount of bonds maturing in any year, 

 the Trustee is required to purchase or call for redemption, 

 at a premium of 3 per cent, and accrued interest, bonds 

 of an amount sufficient to exhaust the surplus. Through 

 the operation of this redemption fund the bonded debt per 

 thousand feet of timber is decreased until the last series 

 of bonds are secured at the rate of only ten cents per thou- 

 sand feet. In other words, the equity of this loan in- 

 creases as the bonds are paid off, without taking into 

 account any increase in the value of the timber lands. 



BOND ISSUE. 

 Proceeds of this bond issue will be used to retire all 

 the outstanding obligations of the company, and will leave 

 it entirely free from any indebtedness outside of this bond 

 issue. 



TIMBER VALUES. 



It is now a matter of common knowledge that standing 

 timber is becoming more scarce and higher in market 

 price. This increase in values has been especially marked 

 within the last four years, owing to the rapid depletion 

 of the forests to supply the constantly increasing demand 

 for lumber. The following is taken from statistics of the 

 Forest Service, United States Department of Agriculture: 



"The consumption of lumber per capita is greater than 

 ever before, and the timber of this country is being con- 



