Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1902-09-18
THE MEAT MERGER ASSURED
VIII Begin Its Operations Sept. 20 Unless
Plans Fail.

Will Begin Its Operations Sept. 20 Unless
Plans Fail.
The long expected merger of the
great meat-paclliRg interests of the
United States will go into active and
open operation Saturday. Sept. -,
unless there should be an entirely un-
looked for change in the plans agreed
upon by all those concerned in the
deal at a meeting held yesterday in
Chicago. An industrial combination
second only to the steel trust in point
of magnitude and Importance is
therefore practically an accomplished
fact, says a Chicago paper.
The Armour and Swift interests
are said to be finally in perfect ac-
cord, and SchwartzschiId Il SuIzberg-
er people have been induced to def
nitely agree to more reasonable terms
than they would listen to in earlier
negotiations.
Details of the consolidation were
passed upon. Who is to handle the
underwriting for the new combine it
was impossible TO learn. WiSeacres
have assigned this important work
to the Moures, but il is believed that
these financiers are too busy with the
Rock Island reorganization and other
plans to be able to take ii up.
y sharp advance i'm Swift d Co.
stock on the local exchange yester
day added confirmation of the fact
that the packers merger was an as
sured thing. and that some one had
a pretty good tip to that effect. The
stock opened at 156. was bought up To
165 and closed by single point under
the top. The larger portion of it was
picked up by people who sold out
couple of weeks ago. just before the
announcement of the hitch i'm the ne
gotiations. They bought both i'm the
Chicago and in the Boston market,
which was practically a duplicate af
Chicago so far as Swift d Co. shares
were concerned. The buying here
was in excess of LOO shares and
about half of it was taken at above
100
Chicago bankers watched the ad-
vance in Swift stock with consider
able interest, knowing that it pOr
tended the conSummation of the big
packing deal, which viii undoubtedly
mean additional business for some of
the local banks 1t is believed. how
ever, that the cash requirements of
the merger will be small in proper
ton to the size of the transaction,
as the different companies Will ac-
cept shares in the combined com
pany for practically all their pro-
perties.
Cash will be necessary. though, t.
pay for the various smaller plants
purchased recently by the Swifts and
Armours to be turned into the gen
eral consolidation. Some Chicago
bankers expect to furnish part of the
amount and the balance will come
from New York.
Reports concerning the actual
terms of the consolidation differ.
The most reliable light shed upon
the subject was the plan outlined
by a Boston authority who has pos
sessed the most inside information
about the deal ever since its eXis-
tence was first rumored in the early
part of last spring. According to
this expert the new packing com
bine is to be capitalized at the rate
of twenty-five times the last years
earnings of the consolidated com
panies. For example. Cudahy q Co.
are said to have earned about $500
600 in 1901. which would make their
share of the capital stock in the mer-
ger $21 100000 \ 4 percent dividend
that the new consolidation might be
expected to declare would amount
to SS4O.OOO on this lot of stock-ap-
proximately its legitimate earnings.
On the same basis of capitalization
Armour & Co, whose last years prof
its are supposed to have been about
SIS, ,OO0. 900. will receive S200,000,0O0 in
the new securities in exchange for
their business. Swift q Co. will re-
ceive $4,000. 900, their net earnings
for the past year probably not
amounting to S2,OOO,OOO, by reason of
the fact that this concern does not
own its subsidy companies. such as
car lines and selling agencies.
Carrying out this method to the
end, the Schwartzschild & SulZber-
ger company would would receive
S26. 900 900.
These figures at least serve to indi-
cate the immense sum at which the
new combination must be capitalized,
and suggest the scope of its cam
,afor .nn,fy.x-