New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-02-19

1.-The year 1892 was prosperous se"''
bad year
..,you 1sas was n year OF depression ana panic
"rhen YOU admit that there were more inen . .''
Moved by the independent companies before '"e
consolidation than SINCE
81 have so stated" ,,
Replying TO other questions the witness aoii,.eu
NAT the nr,ce of rubber shoes had increased since
he consolidation. but he explained TINS once asa"
by the statement that the qualify OF the soous ".'
beer improved and the price OF raw ruooe' ia" "
creased. 49,, g.,
- T.; r,ons ~ % m "A per cent? said Senator
Lexow
Il don't think that any suchdncrease took place.
replied the witness $3.50
Now Mr. Flint. you excuse system 'ha',
in violation of the natural economic law IN perod
of depression of the closing down of factories and
the discharging OF workingn1n, creates cond'tioh
in which you can increase TO the consumer the
price of you. goods from o to a per cent!
"As have already said don't think such an IN
crease has taken place" 49,
But II ii cor be shown that such an increase d'o
take place would you say that such system
should be tolerated?'
"A VERY COMPLEX QUESTION.
..That is a very complex question. that only men
who have had experience in legislation can zeal
with"
..Mr Searles has said here that It will take hfteen
economies adduced by consolidation VIII 'he f'uo
Der Trust take as long as that!
II say it might take husdred years 10 reai,ze
the last economy: but have before stated, the
thousands Of varieties of our products make IL I'M
possible for to realize economy as qu,ch! as CUT
porations having only one product
Now is il not a fact that the ultimate economy
which yor place as probably occurring in num-
dred years will be reached so that the consumer
will have the benefit it only after you are able TO
pay per cent the preferred STOCK ana al least
II per cent the common stock!
ION general principles. as director or the Onioed
States Rubber Company. feel that am under an
obligation to make what money We can Tor the
5000 shareholders.
so that the dividends have spoken OF must be
earned before The public gets the advantages Oh 'ne
economies of Consolidation
1T is to the of the stockholders that the
interest Of the consumers should be considered by
giving them good quality goods
THAT is not an answer to my question. flease
be more explicit.
well. the best answer ! can give is that this
trust only paid little over per cent since its
formation the common stock
Notwithstanding the increase IN the price Of
your products 10 the consumer
Yes
rs not that fact due to the circumstance that
you have issued stock to factories that not only
closed but were designed from the first to be closed
in order 10 do away with competitions"
That is not so
How much of your capital stock was issued to
those properties which have been closed down."
Less than per cent
AT some length Senator Lexow examined the wit
ness on the motive that led the consolidation Of
the rubber factories. He endeavored to show that
the capital Of the companies had been excessively
watered and that the object Of the promoters Of
the company was 10 unload the stock OF an over
loaded concec-: on the public.
Now TO put it plainly to you" said Mr.. Lexow
In deliberate tones. d" is not the entire general
stock of 1he United States Rubber Company mere
ly what is Familiarity known water?"
Mr.. Flint began TO frame reply TO the inquiry.
but he besitated. and delayed long In answering
that he appeared 70 be in quandary.
You know what the term means. ] suppose
at length suggested Mr.. Lexow.
NO; a specific condition. returned Mr.
Flint Il already stated the basis of the issue
of the stock and how 1t was done One of the most
conservative men in New-YOrk passed upon the
amount, and the stock was paid for trade capital.
trademarks goodwill. business franchises etc. For
instance the United States Rui Der Company has
a capital of $i2o00.0o0 in trade assets
Il am not doLbtng the standing of your COM
pany," returned Mr. Lexow. But is it not fact
the of your general stock. the gem
eral custom observed and that is. that it rep
nothing but water. upon which the directors
hope TO secure dividends ultmately?'
Il have no interest. have | ever had any, in
any of the so-clled industrials outside Of the
United States Rubber Company can only say that
basis of the issuance of the general stock OF the
United States Rubber Company upon the
property it now owns, consisting Of trademarks.
franchises. goodwill. etc"
THAT. then. is the sole basis upon which the
general stock was issued"
las | have said before ] cannot speak exactly
upon what detailed basis of values the stock was
issued. because ! was not a member of the Sim
mons Committee"
that committee recommending the lump price that
should be paid for the properties"
THE REPORT HANDED TO THE CHAIRMAN.
Mr Flint replied that he had, and forthwith
handed IL Mr.. Lexow.
Now" continued Mr.. Lexow. before going
into this report wish 10 put few general ques-
tons TO you / would like TO ask you from your
own knowledge business man whether or not
1t is true that ii is just this tendency TO issue
large amounts of capital stock representing what
is called goodwill has brought these industrial
associe tons into the repute in which they now
stand?'
Mr. Flint confessed that he was unable immedi-
ately 10 answer the question in the comprehensive
form in which Il stood. He intimated that he
would prefer take IL piecemeal Answering
first the reference TO the repute OF these COM
panies he said their repute was something akin
to the repute of Indviduals-Some were good and
some bad The Rubber Trust he classed in the
former category. and pointed out that some of
the businesses It had acquired had been running
for fifty years or more. and that their trademarks
and goodwill every whit as intrnsically val
liable bricks and mortar.
Now is not this system Of consolidation asked
Mr. LexoW further, part of a general system of
evolution which has manifested itself in recent
years.
There is doubt about that. Last year IN
ENGLAND there was a total capital issue of about
$4,000 CO.,
II am not asking you about England? Please
answer my question. Is 1t not fact that those
engaged in industrial pursuits are using that evo-
luton for the purposes OF increasing the normal
value of their properties. with a view TO general
distribution OF their stock among the country at
large?"