Sharp County record., 1901-10-18

Mr.. Johnson, learning something OF
the enterprise, proposed to pay off the
debts we owed and to furnish what
Mr. Graves considered a sufficient
amount of money to perfect the ma
chine, if we would give him fifty-one
per cent of the invention.
With this assistance We got our ma
chine in as good condition as we could,
and were ready to press final action
for patents. Our machine was not in
all respects perfect, and we found
that three other companies had oD'
tanned patents or were applying for
patents, the devices, looking to the per-
fection of this process. None OF us
had complete process, and all recog-
nized the fact that each of us had
patents which, brought together,
would make a perfect machine, prac-
tically single patent. We were
also making conflicting claims for
other features absolutely necessary to
the success of any press.
Whether We would resort to a law
suit and waste years Of time determln-
ing which one Of these companies was
entitled to preference, or whether we
should, by compromise, divide this
patent among the claimants, and at
the same time bring such features as
the company had into the new COM
pany as would make the machine
perfect success, was better, we deter
4o1- LOTT and
agreed to this compromise.
These machines are costly, and it
was necessary to have a large sum OF
money to begin business. We arranged
with certain persons, that they would
furnish three millions Of dollars IN
cash for three millions of preferred
stock, and that three millions Of dol
lars of common stock should be issued
for the patents. This preferred stock
was issued dollar for dollar, there be-
ing no water in the stock, and three
millions of common stock was agreed
as a fair valuation for the patents.
In this way the American Cotton
Company was organized The preferred
stock, of course, had very ma
terial advantages over the com
mon stock, and is and always
has been very much more valu-
able. The entire company to which l
belong was by this agreement to have
eight hundred and fifty thousand dol
lars out of this three millions of com
mon stock, and this is the stock that
! Gov. Clarke promised to prove that |
owned. Of this eight hundred and
| fifty thousand dollars, of course Mr..
Johnson owned fifty-one per cent,
the remainder to be divided amongst
the balance of us according to our
several interests. My share of this bal
ance was about one hundred and seven
| ty to one hundred and eighty thous-
and dollars of common stock Later.
| Mr.. Johnson became dissatisfied, and
wanted to get out, and we, OF our old
| company. agreed that I should at
tempt to borrow the money to pay him
off and take his stock back 1t may
be that one or two of the smaller
stockholders were not willing to go
into this, but the larger stockholders
amongst us agreed, and | borrowed
fifty thousand dollars and paid 1t TO
Mr.. Johnson and deposited as security
for the loan all of the stock we got
from him and also all of the stock that
we ourselves held, making, | think,
about seven hundred and fifty to
eight hundred thousand dollars,
ali of which is held now
as collateral to secure our note. VI
course. when we pay off this note
orr own stock will be freed from
encumbrance, and we will have
the right to divide Johnson S
stock amongst ourselves in pro
norton to our different holdings Sub
| seouent to this time, Mr. Swenson,
of Chicago, made certain inventions
which were considered absolutely ne
cessary for the success or our press
one of these being a bat former, III
tended to render the bat perfectly uni
form in going into the bale. we
bought these inventions from Mr..
Swenson, and issued an addltlonal
million of common stock for them.
There never has been any other sug'
gestion of increasing the STOCK Oh tne
company.
We began operating these presses
in 1896, and have been leasing them
ever since, increasing the number
each year. At first, no gin
ner would put press ln
as It was an aDsolutely
new thing, and we were compelled to
build a gin house and put our presses
in and operate them. The cotton buy
ers refused to buy the round bale
so that when c ginner after this
agreed to take one of our presses, we
were compelled, Of course, to guaran
tee him the market price for all OF
the cotton he put up on his press
otherwise he would have had no mar
ket for his cotton. We obligated our
selves to buy all the round-bale cotton
nut up by him at the market price
but we have never required any gin
ner to sell us one ounce OF cotton. he
can sell to anybody he chooses.
The great difficulty in the intro
duction of this press is this question
of marketing the round bale. II the
cotton buyers would buy them as they