CHAPTER XIII. 



SINKING FUND. 



Most bond dealers at present have no stand- 

 ard method of arriving at the charge per thou- 

 sand feet that must go to the sinking fund to 

 retire the semi-annual serials. They usually 

 drive the hardest possible bargain and charge 

 the timberman all the traffic will bear. This 

 method is unsound and entirely un-scientific. 

 There are some issues outstanding, carrying 

 such a heavy sinking fund charge that unless 

 the market for lumber improves they will have 

 to default in that particular condition. 



The lumber operator has no right to draw 

 big dividends out of the business while his 

 debts are heavy. Neither should the bond 

 house break him by forcing the borrower under 

 a trust deed to pay excessive amounts to the 

 sinking fund. The stumpage owner goes to 

 the bond house to be financed, to be relieved 

 of pressing debts and liabilities. He is not 

 versed in the science of money and to a certain 

 extent places himself at the mercy of the bond 

 buyer. If the bond buyer understands lumber- 

 ing and logging the timberman is safe in doing 

 this. If the bond buyer weighs down the oper- 

 ator with excessive sinking fund charges the 

 timberman is worse off than he was prior to 

 bonding his property. Before floating the bond 



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