SINKING FUND 451 



borrow about two dollars a thousand. Under 

 the present practice the sinking fund on this 

 loan is any figure the bond house estimates. 

 The proper and scientific figure to be paid to 

 the sinking fund on such a loan is the value of 

 the stumpage, — four dollars per thousand. 

 This will pay off the loan when half the timber 

 is cut. In like manner when the loan is one- 

 third the value of the timber and the sinking 

 fund the full value of the timber the loan will 

 be paid off while two-thirds of the stumpage is 

 standing. 



The sinking fund payments up to the present 

 time have always exceeded the value of the 

 timber. The true sinking fund is the value at 

 which the timber is appraised for the loan and 

 on which the percentage to be loaned is based. 

 This gives the lender full protection and the 

 timber owner a fair deal. 



