Grand Rapids herald. [volume] (Grand Rapids, Mich.) 1892-1959, 1893-09-24
ON A NEW BASIS
MAKE BIG ISSUES OF BONDS
Ob)ect Beinx ca f,and the Floating
Debt and Kss the Concerns GA
soand business BAss&

and the Widdicomb Aantel company -
sasd trust mortgages 10 the Michigan
Trust company yesterday for kz0.Ooo
and slD.ooo respectively. but the CON-
panies are IN no Wise embarrassed For
various reasons il had been thought
best Ia issue bonds and place the cen
cerns on q sound business footing. The
scheme u that usually adopted by rail
road companies and by large manufac-
turing concerns in the leading cities OF
the country.
Buttsrtield & keeney. the companies'
attorneys, made the following statement
Of the transaction:
The plan Of the Widdicomb Furniture
company Is simply TO raise money 10
fund its floating debt The idea is TO
bond the company for al amount more
than sufficient to pay every dollar that
il owes. The corporation has author
lied the issue of bonds 10 the amount
OK s350.0Oo. while its total Indebtedness
Is less than te97.O00l or these bonds
about 100000 have been issued and
cold at this date. and an equal amount
Of Indebtedness retired. and the remain
der win be issued from time TO time as
may be desirable FOR the corporate pur.
poses. but probably not over 10000
will be issued The bonds are secured
by a mortgage executed by the company
upon lie real estate aud large amount
81 personal property, running 10 tho
Michigan Trust company as trustee.
The estimated value OF this property
covered by the mortgage Is 100000. or
twice the amount Of all the bonds which
the company is authorized To issue
under the terms 81 its mortgage. The
mortgage coutains covenants for iDsur-
ance FOR the benefit of the bondholders,
and for payment OF tsxes. az well as the
other covenants usually found In invest
ment securities. The annual statement
Of the company made July last showed
that il had a surplus over and above all
indebtedness Of more than si2l 600; 90
that the security of the bondholders is
ample.
The bonds mature as follows: 10 per
cent Of the issue July /, 1894; ID per
cent Of the issue July I. 1896; 20 per
pent OF the issue July l. 1896: 20 per
cent OF the issue July l. 1891; 20 per
cent OF the issue July l. 1898; 10 per cent
Of the issue July /. lSJa.
Creditors May Purchase Bonds.
They bear interest at per cent, pay
able semi-annually. Coupons for tho
various irstallments arc attached to the
bonds. both bonds and coupons being
payable at the Michigan Trust company
ia this city.
Any creditor Of the company who de-
sires will be allowed 10 purchase bonds
To the amount Of the debt owing by the
company 10 him and pay the debt there
by, or the bonds will be offered 10 in
vestors as they are we'll secured The
bonds issued without any preference or
distinction of any kind.
This plan OF funding its debt has been
adopted by the company after consulta-
ton with some OF the ablest financiers
ia the city. No bonds were issued until
assurances were received that the
greater portion OF them could be placed
at once. and nearly 1000 of the bonds
have been sold upon the first day OF the
issue. Ii is expected 10 place n large
amount ia addition at once; no difficulty
il anticipated in 80 doing.
The Widdicomb Mantel compar has
adopted a plan similar TO the above in
its essential features. The company has
authorized the issue Of bonds To tho
amount Of sl3D.O0o. It's total debt is
considerably lees than this amount OF
these bonds esoOO0 are issued and sold
at this date. and the remainder viii be
issued later as may seem best for the
interests Of the corporation.
These bonds, issued and 10 be issued.
are also secured by mortgage 10 the
Michigan Trust company, "a trustee,
covering the real estate 81 the corpora
ton and large amount OF personal
property. The estimated Value OF the
mortgaged property IL 10000
Assurances have already been re
ceived that the greater portion of the
bonds can be placed at once. and nearly
$4,000 have already been taken.
Affairs of the Concerns
IL is believed by those having knowl.
edge OF the affairs OF these two corpora
tons. the value Of their properties. and
the nature and extent OF their business.
that these bonds will prove safe and de-
sirable investment securities; while the
absolute fairness % the plan will com
mend II 10 local parties in interest and
10 the trade at large.
by this arrangement these companies
viii be put In excellent shape, well
equipped FOR the conduct Of their busi.
mess. Their aesets are good. for instance.
ON July |. the resources of tho Wiidi-
cnmb Furniture company we're in mer-
chandise over s.D0.oo0; real estate. s200.-
90, lumber. $4,000, machinery and
tools eJ6.0o0, horses and wagon account,
fsi0no, Office furniture. s2.p0o. accoanis
receivable. sl2l 100. cash itsms. 10000.
This property was al. both real aud per.
sonal. entirely clear from any lieu.
1t vii be observed that in the above
they have upwards Of 10000 a quick
assets ia shape ~ merchandise. lumber
and accounts receivable. And "a the
above stated their total indebtedness AZ
this date - ,ess than st00n
The indebtedness x the Mantel com.
pany il much less. and the relative pro
portion ~ the aseeta to hab iifi,ss is
even greater ia the case q the Msntel
company than that % the furniture
company
AZ above stated. over seooon0 ~ thrss
bonds a The Widdic0mb Furniture ton-
pany add over 5000 u the Mattel
company have already heen issued and
spid 10 this city. the purchsses being
made ~ the banks and private paftiee
4 -. 4