The age-herald., 1898-11-22
THE AMERICAN COTTON OIL co.

From the New York Commercial-Adverti- ser.
 The annual report of the American Cotton oil company is interesting, partly because the concern has drifted into the hands of a management that is more or less new. and partly because a short time ago the direct ors declared the first Nividend ever paid on the eompanys common stock. The Cot ton Oil company was organized in 1Ss9 as a successor to the old Cotton oll Trust, be- ing, in fact. the reorganization of that con cern In it's present form it has been run ming about nine Dears, and has been on the whole successful, but only within the last twelve months has it finally taken it's place as div'dend-payer on the common stock This very desirable consummation has been reached mainly through a partial reorgani- zaton of the company's force from top to bottom, resulting in many permanent econ omies, of which the full effect has not yet been felt.
 The company manufactures a variety of products from cotton seed, many of which products compete more or less directly with lard and other pork products. Cotton seed is its raw material. Hence, in the last two years, which have been years of very low
 
 seed, the company has been able to secure a bountiful supply of its raw material at very low prices, which is great advan- tage in any business. In the current year the same state of things exists, and the company's raw material will probably cost it less the whole than it cost them the preceding year. Consequently this ought to be another good year with the company.
 Ix.Io -t- teresting things In the first place, it shows that the company had on August 31 over $3,0O0,0O0 of cash in bank and bills and ac- counts receivable, together with over s3,200,- 900 of marketable products and supplies on hand. Against this the company owed nothing for borrowed money and only about $5S2, coo for commercial accounts. represent ing the class of accounts payable which every growing concern must at all times have outstanding, if 1t does any business at all. The other current liabilities were simply the dividends payable and the in- terest accrued. Deducting all these from the quick assets leaves over $4SOO,G0O of working capital free and clear. This ought to be quite sufficient under any circum- stances, and should leave the company very easy in it's finances at all times.
 The other point disclosed in the balance sheet is the fact that actual assets, con- sisting of plant, real estate, buildings, ma chinery, etc., amount to over H7,6OO,OO0, leaving rather less than $l7 ,350,o0O to rep resent goodwill, contracts, leases, trade marks, etc. In other words more than 50 per cent. of the assets represent tangible property as opposed to goodwill, etc. The company's debenture bonds and the com- pany's preferred stock, therefore, represent actual value dollar for dollar. with a sur- plus of over s, e00 actual value plus the goodwill, to represent the common stock. Many industrial companies have absolutely nothing at all to show for their common stock but water, as the goodwill, trade marks, etc., are represented by the pre- ferred stock.
 E Taking it all in all, the Cotton oil com- pany is unquestionably one of the cleanest of the industrial concerns known to the h. vesting public in general. It Is not, and does not claim to be, trust, because IL does not attempt to control the cotton oil industry. It is run on business principles, doing a large gros business at a moderate profit. Probably the company is doing a gross business of not less than $2,O0O,0O0 per month, on which the net profit is apparent ly in the neighborhood of per cent In a business of this kind efficiency of plant and economy of organization are every thing, and the company apparently possess both requirements. There is no reason why it should not enjoy a moderately prosper ous career henceforth.
 Industrial investments, when properly managed, are as good for general purposes as any other kind The trouble is very few of them are properly managed, or even hon. estly administered by the people appointed to the management by the owners. The temptations to mismanagement of various kinds, notably in connection with the stock market, are very great It is surely un- necessary to look very far for examples Of this in view of Wall streets experience in the last month or two in connection with American Tobacco, for example It Is a great pity that there should be so profitable field for talent, such that displayed in connection with that highly reputable terprise. The existence of that field is the main reason why industrial enterprises are not as popular with the investor on this side of the water.as they are in Europe.