The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-16
REPLIES OF RUBBER GOODS co.
LIST OF AUGUST HECKSCHER'S
QUESTIONS AND THE ANSWERS.
Both Were in writing and Here Is the Gist
OF Them-Authentio Statement That
There Was No Criticism ut the Meeting
or the Methods OF the Brady syndicate.

both We're In writing ana Here Is tue Sist
OF Them-Authentio statement That
There Was No Criticism nj the Meeting
OF the Methods OF the Brady syndicate.
A statement has been given out showing
all the proceedings Of the annual meeting
of the Rubber Goods Manufacturing Com
pany last week which pertained to the con-
troversy between August Heokscher, one OF
the largest stockholders OF the company,
and the management over the transfer OF
the controlling interest in the company
to the United States Rubber Company
and other matters. According to the
statement, Mr.. Heckscher made no criticism
at the meeting Of the methods used by the
syndicate headed by Anthony n. Brady In
acquiring over two-thirds OF Rubber Goods
stock and transferring it to the other oom-
pany. Nor did Charles MacVeagh Of
Stetson, Jennings d Russell, who appeared
for the management, touch Upon the opera
tons Of the Brady syndicate. Whatever
criticisms of this syndicate Mr.. Heckscher
has made have been made subsequent to
the meeting.
Prior 10 the meeting Mr.. Heckscher had
served notice on the management that he
intended to submit a series Of questions
relating to the disposition of the stock of
the company. These were prepared by
his attorney and laid before the meeting
In manuscript form, Mr.. MacVeagh re-
piled to them in the same manner.
Ia his first three questions Mr.. Heckscher
wanted to know what advances by loan
or otherwise Rubber Goods had made to
United States Rubber or to any concern
subsidiary to either corporation and what
advances had been made by any subsidiary
company. The reply was a terse denial
that any such advances had been made.
To an inquiry as to the purposes Of an
issus of 81, 900, 900 Rubber Goods preferred
stock on May 10, 1905, and an issue Of 81 $780,
600 Of the same stock on November %,
1905, the reply was made that 10 900 shares
wore applied to the acquisition of a like
amount Of stock Of the General Rubber
Company, the same constituting a third
of the entire capital stock of that company.
The other Is, 900 shares We're used, 1t was
stated, in exchange for a like amount of
stock of the Morgan Il Wright Company
of Detroit and the proceeds were devoted
by that company 10 the construction Of a
large new plant. Both issues We're trans
ferred by the Rubber Goods Company to a
third party and then 10 the United States
Company.
MIR. Heckscher's next question concerned
the guarantee by the Rubber Goods Com
pany Of debentures of the General Rubber
Company. He wanted to know why the
guarantee was made and what interest
Rubber Goods had in General Rubber al
the time. The reply was that Rubber
Goods owned Sl,O00,0 600 Of the stock Of Gen-
eral Rubber and guaranteed the debentures
that 1t might share with that company
the profits accruing from the purchase of
crude rubber, profits made possible only
by the sale Of the debentureS. The Rubber
Goods Company had received no dividend on
It's stock in General Rubber, it was stated,
the latter company paying yearly and the
time for a dividend declaration not having
arrived since the purchase Of the General
Rubber stock by Rubber Goods.
In his last apd most important question
Mr.. Heckscher desired information on feat
ures of the transfer OF control of Rubber
Goods to United States Rubber. The ques-
ton minated that the management of
United States Rubber had deceived its
stockholders in stating to them, at the time
Of the transfer of the control, that the net
earnings Of Rubber Goods were over 81 500
900 for the fiscal year then ended. Mr..
Hecksoher c~ontended that the earnings We're
but $e20, 900, or over $4,000 less than the
amount specified by the officers Of United
States Rubber
The statements" bis question read,
were incident to recommending the United
States Rubber Company to enter into a
contract with a syndicate in which three
directors of the United States COMPANY
and the president of the Rubber Goods
company were participants for the pur-
chase Of a controlling interest in the Rub
Der Goods company. They justify the in
quiry whether such statements 50 publicly
made are to he taken as accurate and the
reports OF the Rubber Goods company as
inaccurate, or whether the same can be
reCOnCiled.'
1t was %contendcd in reply that the state
ments were in substantial accord with the
reports Of the Rubber Goods company
for the years 1904 and 1903. Il was not de-
MED that the net earnings applicable TO
dividends were at the figure stated by
Mr.. Heokscher, but it was stated chat the
net earnings were In excess Of the 81 800, 900
represented by the officers of the United
States company. The reply continued
as follows:
sThe report did not specifically state
how much of these let earnings for the
year were the property of the Rubber
Goods company as the holder of the ma
jority of the stock of the allied corr psnies
and how much belonged to minority stock
holders Of the allied companies, but the
fact is that of the sum of s., 723, ?9s, the
total net earnings of Rubber Goods for the
year, the amount belonging to the minority
stockholders was $40. 4s9, leaving, as the
net profits for thecyear 1904, the sum Of
81, 705, 800"
It was commended furthermore that the
officers of the United States company were
Justified in a statement made to their stock
holders that the Rubber Goods company
- would earn over 81 SOC, 900 a year when
allied with the United States ompany
I'VE find the average amount of earn
ings for 1908 and 1904, !" it was stated, ito he
81, 7eO, 894. The difference between this
average and the amount quoted Is less than
$7o,OO0.'