The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1893-06-22
CORDAGE INQUIRY.
Accountants Report of the
Condition of the Trusts
Affairs.

The Reorganization Committee OF the
National Cordage Company. consisting
of George c. Magoun. of Barring. 0
& Co.; Ernst 1halman q. OF Ladenburg
Thalmann s. Co. and Gustav Fl. Gossler.
OF G. AIMS inck & Co., made public yes
terday their PLAZA for the rehabilitation
Of the property. The document bears
the date of June Is. Appended to 1t Is a
report OF the committee dealing with the
operations of the company and contain
ing numerous suggestions. The financial
condition Is also shown in a certificate or
Deloitte, Dever. Grifishs 81 Co., char
tered accountants. of London u this
city.
The introductory remarks of the COM
mittee may be summarized as
Lack or adequate working capital was
the chief impeachment TO the companyss
success. This was not made manifest
until the present financial striEgsncy anu
Inverted the n OF the manage
ment from the manufacturing depart
ment to that presumably OF hunting up
finances. Tue early prosperity OF the
business induced extravaganza which
can be avoided in future.
ACCOUNTANTS SUMMARY.
The re celvership tor the company Is re-
ferred to, and then follows a summary
I Ol LH6 dCCuuubhup AcpOAu 90
The book value of all assets (after writing off
The amounts recommended by the committee)
amounts TO SIS, 732, 5l7 SO, and the liabilities Eek
elusive of capital stock amount 70 SILL 4lf.il.
Among these assets are included twenty mills
and plants, ell going concerns, of which eight
are held under lease from the security corpora
ton. The transaction of increasing the COM
mon stock from $40, COCOON to S2O,00O,GO0, as
shown by the records of the company, mas not
yet been carried into the books of account.
When this shall have been done, an increase in
49, - ~ l,A 81 g will h a nv
Continuing, they says
The committee find on examination of the ac-
counts that prior to October. 1891, sundry oper-
atoms in merchandise, of u more or less specul-
alive character, and not likely to occur again,
were made, which resulted in loss TO the COM
pany. 1t IS due. however, to state that some of
the directors who advocated such transactions
voluntarily made good the loss so sustained at
about the time it occurred, so that the company
itself has not been the lose thereby. The COM
mittee do not find that any funds of the com
pany have been employed in any stock or other
speculation other than those above mentioned.
PROFITABLE IF WELL MANAGED
From the foregoing The committee draw
he following deductions and make GER
tain suggestions
They are Of the opinion that the business of
the Cordage company, under prudent and con-
sentative management, and with the additional
working capital recommended by them, can be
made TO produce very satisfactory results, suh1-
Gent for the payment of interest on the bonds
| PROPOSED TO De lSSu6u duQ Tor Tic pdYIu0Qb OF
dividends upon the proposed preferred STOCK,
and for the payment. in good years, OF salts
factory dividends upon the common stock.
In this connection they call attention to the
fact that the ayments for interest for the year
ending Octooer 81, 1892. alone amounted to
$3.50. To-. 56. and for the six months ending May
/, 1898, $269, 250. 43.
The anticipated saving upon this item of inter-
est alone would pay the interest on the proposed
bonds and a portion of the dividends on the
preferred stock. 1t is just to add that the prin-
cipal officers aud directors of the company, be-
ing largely interested in it, have never received
any salaries.
Among the more important sug yestions
are the following
With a view to certain proposed changes in
the business management Of the company the
number of the Board of Directors should be in
creased and a majority of the present directors
should resign.
reduction of expenses in many departments can
be advantageously effected, new business meth
DDS, especially in the financial department, in
troduced, unnecessary offices abolished, con-
centration of management secured, and provis-
ion made for the protection and promotion Of
the business interests of the company in all
directions, whether their business be continued
by the present organization or a new organize
ton to be formed.
PURPOSES M PLAN.
II the reorganization is carried out, the
report continues. the following will be
the purposes Of the PLAN
| ]. Inc company issue cOlla[eral trust first
mortgage bonds having thirty years to run to
an amount not exceeding ST. 10000 bearing six
per cent interest. with a sinking fund of three
per cent. Der annum after 1895. Five million
dollars par value of these bonds will be sold and
the proceeds used in paying off the existing
debts of the company or will be delivered TO
present creditors in satisfaction of those debts
in full or in part. The bonds will be SO sold or
paid at the price or rate of eighty-ive per cent.
Before being offered for sale elsewhere the
whole of these bonds will be offered to the
1 StOCkholdarR for subScrIDtlOn at q iV htv-fVa nar
cent.
2. For The purpose of delivery to contributing
stockholders, the preferred stock of the COM
panY, now amounting to SIS, 900, 900 will be In
creased to Sc, coo, 900. This increased issue will
have the same privileges as the present pre-
ferred stock.
Each preferred stockholder will pay Ito the
Reorganization a sum equal to
twenty per centum of the par value Of their
holdings, and will receive in exchange pre-
ferred stock of the company at par.
Each common stockholder will pay a sum
equal to ten per centum of their holdings and
will receive in exchange preferred stock of the
company at par.
s. II the stockholders do not consent to the
plan with sufficient u%nanimity to satisfy the
committee, the will take such
measures-either by increasing the debt of the
present company, or by winding up the affairs
of the present company, selling out its assets
and organizing another company for the pur-
chase of these assets and the continuance of the
business, or otherwise-as they think advisable.
MR.. THALMANN's STATEMENT.
Inc IGaJufeS VI Tue REPORT WHICH Will
probably excite more or less interest are
the failure of the company to carry the
increase of common stock from $40, 000.-
GOO TO $40, 600, 900 on its books, the specu-
iative transactions prior to October. 1891.
tue criticisms as to eXtravagant mauag
ment and the recommendations for
business reorganization and the resigna-
t!on of certain officers, etc.
The common stock transaction, Ernst
Ihalmann, of the committee, said yester-
day. was simple carelessness upon the
part of the Cordage ComDany's officers.
The speculative transactions were we'll
meant. and though the company had lost
heavily by them, the amount had been
made good by individual directors. The
~extravagant management came about
! through the multiplication of officers and
the terms under which certain properties
were acquired, and the lack Of concentra-
| ton in business.
Every officer and director of the COM
pany, Mr.. Thalmann said, had placed his
resignation In the hands of the commit
tee. Many Of them would be accepted,
some would not be. Mr.. Thalmann exf
cused himself from mentioning ans
names, and it was impossible to learn
whether James NJ. Waterbury,. Chaun.
cey Marshall, Frank T. Wall. G. Weaver
Lopez and John q. Furman would or
would not be returned.