The Portland daily press., 1895-06-29
ENORMOUS LOSSES.
Discouraging Report Regarding
Affairs Of Cordage Trust.
IDLE MILLS RETAINED AZ A LOSS
OF 100000
Met Out of Net Earnings but Assets
We're Used.

1t Was Stipulated the Losses Should be
Met Out of Net Earnings but Assets
We're Used.
New York. June 2s. The stockholders
committee of the United States Cordage
Company report which was issued yester-
day, show how most of the assets received
at.the time of the last reorganization
vanished, . and, by reason of the com
pany being saddled'' with disastrous
contracts with an outside bankers twine
company, all it's goods were manufact-
ured at a loss until very recent date
The exposures merely bear out what
has been published, and no COM
ment is necessary on the findings of the
committee, which explains that its re-
port is only a preliminary one. but that
it will enter more into details at later
date. The committee has succeeded on
mittee to extend the time for depositing
securities from June 28 until July 12
After speaking of the cash and securi-
ties, amounting to So, al, 115, with which
the reorganized company started out on
December 81, 1893, and of the losing con-
tract with the bankers to sell the 25, 600
tons of old binder twine at its own cost
and expense, the stockholders commit
tee says
= AT the time it was estimated that said
loss would not exceed the sum of $780,
600; and it was provided in any event
that said loss was only to be paid out
of net earnings and only after payment
OF the interest on the bonds. Such Linn
itation as to payment of any such defci-
ency seems to have been changed, as in
this report will later appear. OF said
25 900 tons of such binder twine, they
report there have been sold 16, 600 tons,
and there yet remain unsold about 5000
tons. The loss can, therefore, be deter
mined on such 16, 900 tons, but on the re-
naming 5000 tons it is yet unknown.
MUCH WORKING CAPITAL LOST. /
HAs a result of the operations of said
company for the last year it would ap-
pear to your committee that almost the
entire amount of said $3 al, 115 of work
ing capital has been lost or otherwise en-
ployed, as follows: During the year the
bonds, being unstable at par, the compa-
ny drew upon its working capital for the
S405, 600 1t made what proved to be un-
fortunate purchases of hemp, sisal and
other raw material involving a loss of
$3.50, 0O0 1t paid out of working capital
$50 600 on account of the purchase price
of the Pearson mill in Boston, purchased
OF the Mccormack Harvesting Machine
Company, for which 5000, 600 was paid.
A mortgage yet remains of S400, 600.
The company paid as expenses, under
its agreement to sell the binder twine at
its own cost, $50, 900. 1t lost by the ope-
ration of its business during 1894, S572,
600. 1t paid in interest on its first mort
gage bonds S45, GOO 1t lost by the sale of
the securities hereinbefore mentioned,
at prices less than estimated value at the
time of receipt, $40, 000-a loss tc the
working capital of about 81, CAT, 900
1T thus appears that but small
amount of the original capital remains.
During the last year but a small portion
of your mills have been operated. and
it is the opinion of the present manage
ment that the company owns at least Is
or 16 more mills than it can profitably
employ. These mills cost 500, 900 year
to maintain in idleness but the manage
ment deems it necessary to retain them,
fearing that in other hands they would
become active competitors
1.-The statement of the company as to
its loans and the merchandise pledged
thereon would lead to the belief that the
company had an equity in said loans of
between $500, 600 and 5000, 600, but your
committe believe that said equity is
held subject to the loss ON said binder
twine, and that little, if any, of such
equity will ever be recovered, in spite on
the fact that originally said company
only agreed to meet said liability out of
net earnings after paying interest on the
bonds as hereintofore set forth.
"Of the SS5 900 in cash and S2a0, 600 in
bonds left with the receivers of the Ma
tional Cordage Company, to recover
claims then pending, there is little like
lihood that anything will be returned to
your company. 1t appears therefore that
at this date your company has no free
capital, little free merchandise and no
real equity in loans. The underlying
liens mature at various dates up to 1901
interest charges to the amount of over
this year.
SHOULD BE EARNING $500, 900.
PARTIES well acquainted with the bus
mess claim that the underlying paid off
and with sufficient working capital, the
company should have an earning capacity
in ordinary years of about $500, 600 a
year; it being estimated that it can do
business of about S5, 900, 900 with an aver
age profit of 10 per cent. Your committee
learns from a trustworthy source that
the receiver of your company estimates
the value of the real estate, ETC., at
about SO, 800, 600, on which there are un-
derlying liens of about ST. 800. 0OO To
this, however must be added the value
of the good will, etc. -