The daily morning journal and courier., 1901-05-17
AL1Is-cHALMERs COMPANY.
One of the Safest Industrial Combine tfoNs-Starts svish Cash Capital '"f len Million An Ind dustriaI of Unique StrcnUth

One of the Safest Industrial Combina. '' tfoNs--Starts. Svish Cash Capital .a
 Ten Million An Industrial of Uniqu,
 Strength.
 The organization of the Allis-Chal-
 mers company, one of the latest indus
 trial combinations, was attended witt
 circumstances which make it in some
 particulars unique in the business
 world. The company starts with cash
 capital of $10,0O00O0, of which sum $2,
 600,0O0 will be expended in the erection
 of an additional plapt to double the
 present capacity of the Allis works.
 The valuation of the several plants in
 cluded in the consolidation, taking into
 account the real estate, buildings, ma
 chinery, tools patterns, drawings and
 patents, together with the cost of or
 ganizing and getting into full operation,
 is placed by Julian Kennedy, an expert
 engineer who examined the properties,
 at $9,935, ,000 In this estimate no allow ance whatever is made for good will.
 The total present value of tangible
 RIOpcILyy lHCl ClOlC, io PiV,"ooJNVV, VHiAS
 the total issue of preferred stock against
 this property is only $16,250,O00. All of
 this stock, 1t is stated, is issued for cash
 at par, or in lieu of cash, for the plants
 at less than their valuation as stated
 above. Of the total issue there will be
 more than 51 per cent. in cash and the
 balance will be in property that pro- duces much more than the cumulative dividend to which the preferred stock is entitled The companies taken over by the Allis- Chalmers company include the following builders of heavy engines, mining and other machinery: The Ed ward P. Allis company of Milwaukee, Wis; Fraser & Chalmers, Incorporated, of Chicago, Ill, and the Dickson Manu-, featuring company of Scranton, Pa, Exclusive of locomotive works) The plants are all running at their fullest capacity. The examining engineer, found that the great bulk of the tools in all of them were comparatively new, having been put in within the last seven or eight years. It is stated that the Alls, Fraser & Chalmers and Gates Iron Works plants have been operated night and day during the past two years, and have from lack of capacity declined in that period as much busi- ness as they have been able to accept. The company's net profits for the fiscal year to end May 1, 1902, are estimated as sufficient to pay dividends at the rate of z per cent. on the authorized preferred stock and about 4 per cent. on the common stock. If allowance is made for the economies expected from consolidation, it is estimated that the company in this period should earn ' per cent. on both classes of stock. The increased business expected to follow the completion of the additional Allis works, now in course of construction, will, it is estimated, bring the profits up equivalent to per cent. on the pre- ferred stock and 10 per cent. on the common stock and also make material addition to the surplus account. The preferred stock is s16, 250000, | bearing z per cent cumulative divi- dends, and 1t Is convertible into com mon stock, share for share, at the, op- tion of the holder, upon any first day of May until and including May l. 1921. l It also has further preference of Fl per cent, n-cumulative, after the payment of per cent. upon the com mon stock. The authorized amount of common stock is s2O.000,000 The board | of directors is composed as follows: { Edward D. Adams, Elbert H. Garyy William A. Read, James Stillman and Cornelius Vanderbilt, of New York; William l.. Elkins, Jr., of Philadelphia; Henry w Hoyt, w. J. Chalmers. James H. Eckles and Max Pam of Chicago, [ and Charles Alys, William W Allis, Frank e. Bigelow and Edwin Reynolds, of Milwaukee, The preferred stock is < by Vermilye & O., of \ New York and Boston as manufactur- Ing investment, in the security. earn ngs and management of which they express entire confidence. Subscrip- lions will be received by this firm for ,S, 400, 900 preferred stock at 105, until he close of business on May 21. Right < Is reserved to reject any or all sub- ;criptions and to close the subscription lt any time without notice.