New-York tribune., 1901-10-23

OF the tangible assets Of each vendor would
be ascertained by valuers, the basis of
willing seller and willing buyer" The earning
power of these assets. regulating the value of
the good will. would be obtained by taking the
average annual profits Of the last five years,
and deducting therefrom interest per cent
the value of the assets and multiplying the
result by five. The good will in this way would
be valued only by such profits were in excess
of the amount Of interest which the capital in
vested in assets could elsewhere.
The total capital Of the combined company
would be the value of all the businesses. esti-
mated in this way. with the addition of such
further cash working capital might be re-
quired. 1t would be divided into debenture,
preference and ordinary shares. and the owners
of the businesses would be paid in securities or
proportionately in cash. as the stock might be
taken by the public. The debenture stock
would represent the value OF the properties. the
fixed plant and the machinery. The preference
shares would not exceed the value Of the assets
exclusive of those covered by the debenture
stock: and the ordinary shares. which would
stand for the good will OF the businesses ac-
quired. would be calculated on a basis of 10 per
cent dividends.
The method OF ascertaining the purchase price
was definitely described and illustrated. and 10
per cent was added 10 the capital each class
chinery improvements and the costs OF amalga-
nation. The total capitalization Of the com
pany would represent the aggregate amount Of
the purchase consideration paid to the vendors
With this addition, safeguards We're established
for the confidential valuation of the assets OF
vendors. and explanations We're made respecting
the method OF dealing with the questions of de-
probation and ordinary and abnormal profits.
PLAN UNDER CONSIDERATION.
This is virtually the scheme OF operations un-
der consideration by powerful group of manu-
facturers which will probably join the ANAL
gamated company. There have been many con-
ferences and the manufacturers while intensely
interested, have wanted time for reflection, and
have been waiting the fence 10 find out what
corporations would lead the way. Many of the
most important iron and steel concerns in the
United Kingdom now have the whole matter
under consideration. If there be an Enghsh
Morgan behind this iron and steel combination,
as l suspect he still remains in the background.
While the organizer is American, the pro-
1ected enterprise is exclusively English. and is
not connected in any way with the United states
Steel Corporation. II is not organized IN nos
tility to the American combination in the same
industry, but as a necessary measure or mutual
protection and self defence for the immense
masses of English capital invested in iron ana
steel manufacture. 1t is a signal proof that
while English manufacturers are not flexible
and initiative like the Germans they are gradu-
ally adapting themselves with characteristic
caution and sluggishness to the new economic
and commercial conditions.
The concentration of capital In the iron ana
steel trade viii open the way for similar move
ments among English mine owners, shlpplhB
lines and textile trades, and even railways
which are now operating against one another
and disappointing the expectations Of share
holders may ultimately be brought together on
a. common basis of self interest. l. N +.