Little Old Lumberman

"I was well along in years then, nearly 70," recalled a thin, grey, tight-lipped little man on the witness stand in a Kansas City court last week. "The organization was my own creation. . . ." It was the story of Long-Bell Lumber Co. that Chairman Robert Alexander Long, now 81 was telling. He was fighting a receivership long desired by certain bondholders (TIME, Feb. I). One day in 1918, faced with exhaustion of their southern pine reserves, Chairman Long had gathered his executives about him to ponder liquidation or continuance of the lumber business. Willingly risking his personal fortune, he joined in their vote to continue, promptly dispatched men into the Northwest to buy great tracts of Douglas fir. For the new venture they bought extensively, carefully. "A poor log costs as much to cut up as a good log, yes, and more," mused the little old lumberman.

Construction crews followed the timber cruisers. Mills were erected at Longview, Wash, on the Columbia River to secure water transportation to world markets. Railroads were built 30 mi. into the hills to lug down the logs. Plunked down in the wilderness, the entire city of Longview (pop. 10,500) was constructed for employes. Long-Bell became the world's largest lumber company. Then, two years after the Northwest operation was begun, said Founder Long, "the lumber business just dried up." Dividends were passed in the autumn of 1927, earnings shriveled and last spring Long-Bell failed to pay its bond interest.

The shame of default weighed heavily on the grey head of Founder Long. When the suing bondholders labeled one of the company's moves to obtain bank loans as fraudulent, it was too much. In his wide-eyed old Fierce-Arrow touring car (1923 model) he hurried down to court. Wear- ing a worn suit and shapeless shoes, spry old Robert Long told his tale with a grim smile. For leading his organization into Northwest timber he showed no regret.

In 1930, bankers were on pins & needles over their Long-Bell loans. Some, said Founder Long, were ready to "run out." To assure adequate credit lines part of Long-Bell's free assets were transferred to a wholly-owned subsidiary to which the banks then made loans, thus making certain of a preferred creditor position.

The bondholders suing for receivership contended that this arrangement jeopardized their security, constituted fraud. A protective committee representing 74% of the bondholders, formed by Halsey, Stuart & Co. (see p. 45), will shortly announce a reorganization plan.

This file is automatically generated by a robot program, so reader's discretion is required.