The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-12-09

acquiring the following firms: The Con-
nersville Spring and Inside Axle Company,
Sheldon Axle Company, Hess Spring an1
Axle Company, Higgins Spring and Axle
company, Houston-Hay Axle Company, r.
& Frankel, Lewis Spring and Axle Conn
pany. Dalzel Axle Company. Detroit spring
and axle works, Detroit steel and spring
works, Kalamazoo Spring and Axle Com
pany, George Potter & Co, j. Il. Arm
strong Manufacturing Company, Lee, Cow
an * Bowen, Pennsylvania spring works,
Tuthill Spring Company. keystone spring
works. Edith T.. Penn, William Hail Row
land. Thomas insult Paris II. Dobbins x
Co, l. * j. La Fargo, Dauphin Axle Com
pany, Lee Porter. Standard Axle Com
pany. Concord Axle Company. Willia.1
Schiller surviving partner of ID. w. Schulsr
& Co, w. G.. Park. Spear Axle Company,
Weed Smith a. Co, Cleveland Axle Com
pany. Willis T.. Miller, Dexter Spring AMI
Gear Company; Spring Perch COMPANY,
Labelle Steel Company. Singer. Nimick &
Co. Tomlinson Spring and Axle Company.
Daniel Delaney q Sons. Scranton axle
works. fremont Manufacturing Company,
Hartford Axle Company.
The basis of purchase is set forth fol-
lows: The above properties are TO be pur-
chased at the price representing conserV-
ative and fair valuation of their tangible
property alone, no allowance being made
for good will, patents or other conventional
loading. The bOndhOlders are amply. Sc
cured and the stock will be prolitabia upon
even the basis of present earnings" The
underwriting will be done by the present
owners who will underwrite 80 per cent of
the purchase price of their respective prop
critics estimated on the cost TO proddce.
Thus the owners become interested in both
the operation and management of the new
concern as owners of a majority of as CAPT.
tai and holders of large proportion of It's
bonds. There will be no preferred stock.
the only thing in evidence being 100000 OF
common stock and s6,5O0,000 OF bonds bear
ing per cent
y SINKING FUND.
In the language of the prospectus 1.-THE
common stock takes the entire residue of
the profits after the payment of the fixed
charges and the reserve sinking fund to
retire the bond ISSUE" For the latter pur-
pose, beginning Jan. l, 1901, $4,000 year
will be set aside for the retirement of
bonds. The assets of the constituent COM
panies, as given by n. c. Wilson, the con-
fidential expert of the Westinghouse Com
pany, of Pittsburg, are: Real estate and
buildings, s2,649.042; machinery. 1881, 121;
sllndries, $53S.S53, or total of s5,56S,516.
This does not provide for any allowance
for patents or good will which, in no case,
will be bought but will be given outright
by the constituent companies. OF the as
sets, 81, 100000 will be reserved as a working
capital, while the bonds take the place OF
preferred stock except that the capital in
terest is a preferred creditor, is given lien
upon the entire property and is secured,
dollar for dollar. in actual property not
oniy taken over but in the $l,OUOO0O OF cash
capital.
Attention is called TO the fact that, for
the first time in the history of corporations,
patents, trademarks anu good Will OF every
description are eliminated from the state
ment of assets, although, in reality form
ing valuable tangible assets.
The average net earnings or the CONSOLE
dated companies for three years past is
given as $7i4,y64 year. The estimated saw
ing through the consolidation, as given by
n. G. Wilson. of PittsDurg. is as follows:
~ closing not less tnan twenty plants,
$125,00O; by working each factory upon a
given type and size by special machinery,
increasing operative effectiveness and
decreasing the cost of production expert
estimates 90 per cent. saving in labor, $751;
500; equalization of output through continu-
Gus operation and regulating output to
meet demand, $1,000; increased efficiency
of power plants and utilizing waste heat,
$4,000; rolling mills to manufacture raw
material, eliminating manufacturers profit
ESTIMATED on 10000 tons of steel a year,
saving $3.50 a ton, which is $3.50 a ton be-
low present manufacturers profit, $4,000;
by saving co per cent. of travelling sales
men and their expenses tat present $4,000
a year,, $50 900; reduction of office expenses
by consolidation, $4,000; elimination of sal
aries now paid 20 some principals $4,000;
plant to market, $125 900.
The grand total of saving through the
establishment of the trust is given as ST.
40,500.
NET AGGREUA.-4 EARNING.
The prospectus then says: while the
above increased profits are deemed not I'M
reasonable, yet for purposes of conserva-
tism for the purposes of this statement the
same are reduced 80 per cent, which
amount, added TO the present earnings,
makes total net aggregate earning of ST.
1914. This sum will pay $390,0OO interest on
the per cent. bonds, $4,000 on the sinking
fund. s664,71i in dividends on stock at 11a4
per cent, and still leave a surplus of $780,
00O''
Continuing, the prospectus says: 1.-THE
new concern will practically control the
market, as Ii will take from three to five
years 10 build up opposition plant, be-
cause manufacturers of vehicles will not
use for their whole output new or untried
spring or axle. Foreign markets can be
undersoid at the present prices. The eX-
port business has been much neglected and
the field is very attractive. There is no rea-
son why, in the near future, a many goods
should not be sold abroad as are sold in
this country. 1t will be the policy of the
company not to increase the present stand
ard of prices. The inducement to opposition
by new capital is. therefore, removed i'm
addition TO which ii will equalize the prices
of its product TO the trade and, therefore,
avoid the mistake common to combfna-
tons. The majority of the capital stock
of the company will be owned by the pres
ent owners and is taken by them in part
of the purchase price of
their plants No date is fixed for the taking
over of the DrODertieS