The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-03-04
OPERATIONS OF A TRUST
WORKINGS OF AMERICAN Mailing
COMPANY INVESTIGATED.
Economics Have Not Resulted from
Combination-Earni Below
Per Cent. on s14,44O,OOO Stock.

NEW YORK, March 3.-The committee
appointed to make an investigation into
the workings of the American Mailing
Company has completed its labors and re-
ported to the stockholders. The report, in
part. says: ION organization there was
issued to party who held purchasing
options on certain mailing plants, situated
in different States, sl3740.OOO of the common
stock and s12.5OO,0OO of the preferred stock,
which. with $4,000 of the common stock
originally subscribed for in cash. represent
total par value of s26.25O,OOO. for which
the company acquired all the plants stated
in Schedule A, hereto annexed, and cash
as working capital. the sum of s2.oSoOOO.
The books of the company do not show any
valuation for any individual plant, or what
price the selling masters received, but sim
ply record that the stock, issued as above
stated. was paid to the party above re-
ferred to for the plants shown in Schedule
A and for s.. Csc. 900 In cash.
'At the end of the company's fiscal year,
Dec. 81, 1898, computations of the COM
pany's profits were made for the first
time. They covered a period Of one year
two months and twenty days After de-
Quoting sS77,S00 for four quarterly dividends
of Ia per cent each. paid on the preferred
stock. bookkeeping surplus OF $19s.649 was
shown.
while your company has earned an ex-
cess over operating expenses. including in
terest on floating debt, such earnings have
been far below Z per cent. per annum on
$l4.440,000 of preferred stock. Profits were
determined and dividends declared by dead
reckoning a dividend having been de-
clared within three months after business
began The requirement Of sundry small
plants at excessive values impaired the
working capital and increased the expenses
OF the company. although its business did
not need such plants.
Economies in general administration.
manufacturing and distributing have not
resulted from bringing the various plants
into one ownership The masters owning
the plants your company acquired made
money for themselves, and when your
company was organized there was In the
trade generally a fair margin of profit.
From the inception of your company
(alth0ugh IL sells about 60 per cent. of all
the malt required BY brewers in the United
States who do not make their own malt).
the prices at which its product has been
sold were not judiciously established with
reference to cost or firmly maintained with
reference 10 competitors. There seems TO
have been an ambition TO increase the mere
volume OF business. Keen competition and
the lack of a settled policy as TO what must
be regarded as a given price for barley and
minimum price of malt has forced the price
of malt 20 ruinous figures. The effect on
the mailing trade as a whole Is evident
THE policy of the new administra ton so
Tar as IL can be determined after so short a
connection with your company, will be to
eliminate excessive and unnecessary ex-
penses; TO reorganize, centralize and carry
on the business on more conservative meth
DDS; TO correct. IL possible, abuses brought
on by competitions: TO make no investments
in new plant until the business shall have
grown to proportions 10 neeessitate such.
but TO concentrate. as far as possible the
and most advantageously located plants.
and 10 dispose OF such properties as can be
dispensed with without prejudice to the
companys future business. and TO pay divi-
dends only when earned. after providing
the agreed sinking fund for the bonds and
fair amount for maintenance and depre-
citation"
The American Mailing Company was or
gained two and one-haif years ago under
the auspices OF the banking firm of Moore
& Schley. Last fall the company endeav-
ored TO float bonds for the purpose of
taking up the floating debt and providing
sufficient working capital. II was unsuc-
cessful In this and early I'm December IL
was decided 10 pass dividends for one year
Originally the company acquired twenty
two plants. situated In this State Illinois.
Wisconsin, Michigan. Pennsylvania and
Ohio Later additional plants were ac-
Quired. some OF them in this city, several
others In various upstate places and one i'm
Des Moines.~ Ii has also eighteen elevator
plants located in Minnesota and Wisconsin