The morning call., 1891-10-27
CONSOLIDATED BEER.
A New Management for the Syn.
dictate BreWerieS.
C. B Stone Succeeds E. A. Denicke-English
Investors Who Are Disappointed
With Their Dividends

Since the consolidation about sixteen
months ago of eleven breweries in this city,
Oakland. San Jose ana Berkeley under one
management with the name Of the San
Francisco Breweries Omitted, the affairs
of the corporation have been topic OF gen
ernl discussion.
Negotiations for the purchase Of the Yari-
Gus interests involved had been in progress
for many months before the transfer to
syndicate OF English capitalists was finally
accomplished. The breweres purchased
and consolidated were as follows: Oakland
brewery. oakland HOffburg Brewery,
Berkeley: United States Brewery, San
Francisco: Chicago Brewery, San Fran
cisco; Willows Brewery, San Francisco;
Milwaukee Brewery. San Francisco; South
san Francisco Brewery, San Francisco;
Pacific Brewery, San Francisco; Fredericks-
burg Brewery, san jose; Enterprise Brew
erv. san Francisco; Brooklyn Brewery,
Oakland.
The amount paid for all these properties
wRs S5.JOO.5C0. which gave possession Of the
buildings. real estate, plant, machinery and
good will Of eleven bTeweTies. Many busi-
ness men were surprised at the magnitude
Of tie purchase money, and have maintain d
that lie bulk Of the English gold must
surely have been paid for the good Will OF
the original owners, since the other eonSld-
erations were worth only about one-halt OF
the sum named.
CASH AND BONDS.
Cash was paid for one breweTy-UniIed
States-N hose owners were SAID TO nave
received S6jOOO0. For the others partial
cash payment was made, the balance beng
secured by first mortgage bonds tor winch
dtbPntuTes were issued TO the amount OF
~g5gpCGd bearing interest at the rate of
per cent per annum. Preferred stock
amounting to S2,J0O,OOO, with guaranteed
interest Of 5 per cent yearly, aud me same
amount of ordinary stock without prom
iSed rate, covered the remaining transactions
ig the case.
\ trust deed for the debentures was exc
Cutel September > $780, in favor Of the De
bemtuTe Company Of London, but most OF
The bonds were subsequently sold IN ms
city. English capitalists were repres ented
as making a wild rush for the preferred aud
ordinary stock, which was subscribed Tor IN
very short tine. HE fad for American
investments was at It's height IN Great
Britain at that time, and the stockholders
seemed 10 believe they had discovered a
bonanza English officers and Directors Of
the corporation were elected and local
beard OF managers appointed. several
changes IN the latter have since been made,
but tLP personnel of the san Francisco
Board. as at present constituted, includes
William Alyord, President Of the Bank Of
California; :. g. Murphy, President OF the
First National Bank; II. Dutard and c. B.
Stone.
MANAGER DENICEE RESIGNS.
Ernes. \. Denicke, who had been man
aEer and chief owner or the Fredericksburg
Brewer Of San Jose, was elected manager
IF the san Fran isc0 BTewerieS limited
That gentleman at once took charge OF The
business, Overhaued each brewery, Dur-
chased needed Appliances and considerable
new machinery and maintained IN operation
the several brewing establishments, with
the exception Of the Pacific, which was
closed. The Improvements and additions
at san Jose alone aggregated S25O, uVO when
was paid out of the profits of the first years
business. Interest on the bonds and pre-
terred stock was paid, and the ordinary
shareholders received a dividend Of per
cent on the business for the first SIX months,
Tut have been paid nothing subsequently.
In the early part Of the summer the an
uUal meeting of shareholders was held at
London, and Manager Deucke was in at
Tendance to present his first annual report
He explained the operations Of the brew
cries IN detail, outlined the policy OF the
management, and after an absence OF sew
eTal weeks returned to this city about two
weeks ago. At the beginning Of this month
he resigned his position as manager, and
ms les gnaGOn was accepted by the Board
Of Directors IN London.
BIS SUCCESSOR.
The Directors wired the local managers
to secure a successor, and the latter Sc
l5cted temporarily one OF their own num-
bei, c. B. Stone, who took charge OF the
corporations affairs about ten days ago.
Mr.. Stone occupied the managerial chair
at the Office OF the San Francisco BrewereS
Omitted, when he was interviewed by
CALLrepOrter yesterday He stated that
Mr.. Denicke's res iguatiOn was voluntary,
and that, owing to ill-heaith, he had desired
70 be relieved Of the cares Of the business
for the last ten months. There bad been
no dissatisfaction with the late managers
services, either on the part Of the local
board or the London officers, and nothing In
the nature Of censure had been expressed
at the annual meeting.
I am acting as manager temporarily"
added Mr.. Stone, and have not decided
whether or not l shall accept the perma-
nent charge OF the business. IL do, shall
continue to work along the old lines and my
policy viii be in the nature of expansion
rather than contraction. | am well pleased
with the results Of the first years profits,
which were as large as any OF the local Off
GERS anticipated.
RESULTS OF CONSOLIDATION.
Each brewery was formerly owned by
two or three partners, and each of these
men had circle of friends whose business
he controlled. The consolidation lost some
OF this trade and the fact that it was owned
Dy EHEllSu CdllLtllStS WAS dlSO uJuEUDuS-
Then, too, we had to meet the rivalry of
those brewers who maintained their indi-
Yidual existence, and lastly there was some
trouble with the wOrkmen. No man on
earth can manage eleven businesses as well
as one, but Colonel Denicke has succeeded
in organizing the Consolidation, and 1t was
no easy task"
A gentleman prominent in commercial
circles and who has been familiar with the
affairs Of the bTeweries, said yesterday:
The real estate purchased by the syndi-
cate was approximately valued al $780,
eco, and the personal property, horses,
wagons an6 machinery at 100000 The
combined production was about $4,000 bar
rels annually. / consider the price paid
Just twice too much. The Wieland brewery,
which was incorporated at $4,000, was
bought for 81, 800, 600. and the United States
Brewery, with paid-up capital Of 100000,
was purchased for 100000, while the build
ings and machinery were not worth over
$4,000. How can they expect to get
dividend for their shareholders with such
load TO carry? The best thing about the
purchase was the real estate, which being,
for the most part, located in the residence
portion of the city, could be made valuable
for stores or dwellings"
DELAYED DIVIDENDS.
The Bradstreet Agency considered the
prices paid for the bTeweries excessive, and
this view was echoed by several retail deal
eTs in malt beverages. One gentleman said
the English stockholders. many of whom
were in humble circumstances, had been
grossly deceived by the promoters of the
scheme, who bad, without authority, prom
ised yearly dividends Of 16 per cent. Now
that they find they have been misled rs to
the value of the investment, they are rails
ing such a protest that all American securi
ties in London are being deprecated in con-
sequence.
THE PRICES TOO HIGH.
The great trouble with the concern"
said a prominent hoD-dealer who is fully
Conversant with the situation. sis that it
was placed too high on the market. The
prices paid to individual brewing companies
for their real estate, machinery, appliances
and goodwill were not excessive in most
cases, although the sellers all did well. The
promoters of the scheme, after buying out
the local brewers, wateTed the stock care
fully and made the English shareholders
pay 100000 too much, and the result will
be seen in small dividends for years to come.
81 think the syndicate will eventually
make money, and the fact that during their
first year they are able to pay ordinary
stOckh elders per cent on their investment