The Providence news. (Providence [R.I.]) 1891-1906, 1896-02-17
A Review by United States
Investor.
Net Profit of $3,500,0 900 for
Present Year.
The Profit From Sale of WOOns0cket
Company.

states investors:
We are informed that the net profit of
the United States Rubber Company for
the present year will amount to $780,
600. After a dividend of s per cent on
the $40, 400, 500 preferred stock. there will
remain an amount equal TO more than 9l2
per cent on the common stok.
FUTURE oF THE UNITED STATES 90.
The future of the United States Rubber
Company Is q subject which has excited
a great zeal of attention. In discussing
this question some misstatements have
been made. For instance 1t is often as
serted that the company is such a large
consumer that 1t can control the market
Tor raw rubber IL il sees fit. Probably
nothing could be farther from the
truth. The raw material comes upon the
market right through the year, and an
attempt TO corner would necessitate large
purchases on almost every day from jan
uary TO December. This would occasion
such q constantly ascending scale OF
prices as to bankrupt the strongest COM
bination In time. 1t Is often said that
the supply Of rubber Is so limited as to
render easy the task of cornering the
market, bur this statement does not seem
TO be borne out by the facts. The receipts
of rubber have increased on an average
five TO ten per cent. a year. The valley
OF the Amazon Ito say nothing of the
other producing dIstricts) Is a vast en-
pire i'm itself, and the development Of its
Industries Is to all intents and purposes
still in its infancy. A vast wilderness OF
forest still awaits the rubber seeker, and
there is no reason to suppose that the sup
ply of this valuable product will not hold
out indefinitely.
OF PARA RUBBER
rlz ~zozsto "a -,LI1- Do-o ~ou-.
from say $500 tons per month down to
700 or 500 tons per month, the heaviest
months being in December, January,
February and March. The United States
Rubber Company may use 5000 tons OF
Para rubber.a year, and perhaps as much
more of other grades. This is a maximum
estimate. 1t is apparent, therefore, that in
order to corner and control the market
for the raw material, the United States
Rubber Company would nave to increase
its purchases TO an extraordinary degree.
1t is claimed that the United States
Company makes a profit by selling the
raw material to the local companies con-
trolled by it. We are informed on what
seems good authority that such. is not the
case, but that the product is turned over
without a cent of commission.
THE DANGER FROM COMPETITION.
The danger from competition is often
MCCULLOUGH. htSuTdlDk tnlo ~ may bt
said that the United States Company en-
joys peculiar advantages, inasmuch as a
large capital IL required by the business
and as the first few years OF a new concern
are apt to result In loss.
Ii is claimed that most of the companies
now In business In each case san their
original capital, and paid in new money
before they began to show a profit. The
magnitude.of the capital required is under
stood when it is stated that Para rubber
averages about 20 cents to a pound. As
sumo that the United States Company
uses 5000 tons OF this grade a year. This
would mean 10, 600, 600 pounds, to carry
which lat 70 cents a pound) would require
1880, 600. At this rate a business OF
only moderate proportions would require
an enormous amount of money.
INTERNAL FRICTION.
Much interest has been excited Of late
by reports of discussions in the manage
ment of the United States Rubber Com
pany, leading, 1t is aimed To the re-
tirement, on May /, of President Ban
igan. In this connection let us quote
some remarks which have been going the
rounds of the financial press. They are
as follows:
The trouble in the board OF directors Of the
United States Rubber Company. on account OF
which President Banigan will retire, is over
the closing OF the Banigan factories. Rubber
Dtople DtlleVt III WAS "a MISTAKE 10 nave taken
Mr.. Banigan's factories into tbo combination.
II was discovered after the Banigan properties
had been purchased and tn. contracts made
with Mr.. Banigan, under which he was TO he
president for three years, that his millions had
been made in the rubber business many years
ago, and that Of late his factories had been
Improbable. Nbe desire of the board OF
directors has, therefore, been 70 operate the
more economical factories in the combination
and close up the Banigan properties. Against
this Mr.. BaniRan has, or course. coueended,
and no naturally desires 90 protect his old
employees, but ths directors will now have
their way, and the work of tho United States
Rubber Company Will be concentrated in the
more economical plants aud the Woonsocket
factories will evidently no closed, unless they
can DO operated more economically. Vice
President Robert ID. Evans, who came into
the combination as the head OF the American
Rubber Company, Will succeed Mr.. Banigan,
and the American Rubber Company works at
Cambridg eport will not be closed, for this is
the most profitable and economical factory in
the combination. IL was found after the
combination was made that whereas Mr..
banigan's factories were out Of date, Mr..
Evens' factories were mp TO date, ana had
always made money.
The main controversy among the mana
gers OF the United States Rubber Company
appears TO be between President Ranigan
representing the Woonsocket Rubber
Company, and Vice-President Evans rep
resenting the American RubberCompany)
Both have been reputed astute business
llths IA WI bhhlkdh EtfliN
to have displayed the greater
sharpness, provided IL Is true
that ait was discovered, after the Bani-
gan properties had been purchased, and
the contracts made with Mr.. Banigan, un-
der which he was president for three years,
that his millions had been made I'm the
rubber business many years ago, and that
Of late his factories had been unpro6t-
able" Under these circumstances il will
he interesting to recall some of the facts
regarding the transfer of the Woopsocket
Company to the United States Rubber
Company.
THE PRICE FOR THE -oNsocKE 20.
The woonsocxet Company was acquired
by the United States Rubber Company
early in 1898. IL had n capital stock of
al, 800, 600, which was very closely held.
We have good reason To believe that FOR
this the holders received stock Of the
United States Rubber Company OF a nom
inal value OF $40, 20u, 200. In other words
Woonsocket Ueople received six for ore
~ fhafr otopLa nf Tho civ oharoa mid