New-York tribune., 1907-09-01
SAY STOCK is 'MILKED."
AFTER STEEL FOUNDRIES.
Shareholders Accuse Officers o.
Using DtCidend for Bonus.

swz--wout & AppenzeI,ar bankers OF No. Il
Pine street, who soliciting proxies from tbs
ktockholders of the American Steel FoundTies
Company who desire to force resumption Of
the dividend the preferred stock. made public
yesterday circular letter cent TO the stockhold-
ers by william V. Kelley. president OF the
peny.
The letter. which is dated August g. IN Chi
cago. Is In the circular request for
proxies gent out By Swartwcut e. AppenzeIlar, In
which they stated. among other things. that the
net earnings OF the company for the last fiscal
year woCld approximate s2S0aole y per cent
on the preferred stock. more than two and one
half tlT2es the amount required to pay a dividend
CT per cent the preferred stock.
Mr. Kelley says that this estimate Of the earn
tnss is much higher than should be- and declares
thai tbs company made public reports, either
Tor the whole fiscal year ended July 81 or any part
Of IT. on which estimate of the earnings could
be based. Further on however, in speaking of the
contract under the terms OF which he and three OF
the other officials OF the company receive q bonus
OF ID per cent OF tie profits when they between
sste.os and s1.eo909o, and about % per cent when
They are s2,ootoo CT over. up TO s25o000o he said
That this maximum was reached several months
before the close OF the fiscal year. The circular
continues fellows:
II is not now, and has never been, a secret that
ARRANGEMENT 10 snare In the pTofits under certain
ccnditions and within certain limits The
board of directors and submitted and approved
ny II before execution. and was subsequently rati-
aeo by the stockholders. It, together with oher
stems 10 be acted upon by the stockholders, being
1aeSt.lng ana me form OF proxy mailed 60 each
s.eohnoloer entitled to vote, the notice further
ton By any sockholder at the office Of the secre-
Until within short time the company has been
large borrower OF money. because II lacked suf
business secured For TINS ana other excellent
business reasons, some OF which quite appar-
Of the payment Of ivdends has hherfe been s
orp9,s,ed The writer and his associates are large
stockholders in the company. therefore il IS not
20 tne5F personal PROFIT to delay the payment Of
plus necessary for the conduct and growth Of tie
companys business has been provided.
The bigh personal standing Of the members of
re BOARD Of directors is sufficient guarantee that
ne interests Of both the company. and its stock
treated and. when 20 This is added the fact that
eFal million dollars OF the company's stock. both
preferred and common. from which they are re-
may fee perfectly sure that when dividends car
; 1s1ltfIE ara saIeIy Pe pala the question VIII
seem 10 me 10 be good Judgment TO await the
atlhual statement before deciding whom to give
Your proxy.
sEr. Appenzeiiar OF Swar3out & Appenzeilar. after
Eointing out that Mir. Kelley practically corrobo-
rated their estimate OF the earnings which, he said
was based On the published reports each month.
edoec Ilaf MI keiieys statement that the bonus
contract vas ratified by the stockholders'' was
contrary 10 their information which to the ef-
feet that tbe ratification by vote Of the officers
-sNitiaaS StecAnotcerS proxies and that only one
RtockhoIder attended the meeting, and that he
voted against II.
III. AnpenzeiIar said that the nrn was receiving
thousands Of proxies every day and that there was
! no doubt that II would have 2 clear voting
T1a5orfty OF the stock before the annual meeting
'n October Many OF the stockholders he said
D. submitting their proxies expressed their indig-
la 5on al what they called being rliIkea by the
company and demanded that the dividend be re-
STORED and the bonus contract ahrosated. He added
hat Mr.. Kelley had only Iso shares of the preferred
bonus than in the dividends he would receive on his
ktscb
he officers who receive the bonus besides the
|esldents are Robert z. Lamont, first vtce-presi-
Fent: ". ". Butler. second vfce-president and G.
= Scott, third vfce-president The contesting
holders declare that IN stew cf the large
these officers out OF the net profits il would
heiT Interest to withhold dividends and in
money fn L way that would add 70 the In
the corporation. end tina: this IS the rea-
= they oppose the resumption OF dividends
preferred stock. They assert also that the
kpauy already has working capital OF
n s. 05a09a, which Is ample to carry its bust
sere is yz.sa4Nse Of per cent cumulative pre-
ted stock outstanding. On which no dividend has
paid since August. 1904 when quarterly div
& Of l Per cent was paid. From December 1.
90 May /, Iei. the reg dlar quarterly payments
X per cent were made on the preferred stock.
dvfdends have been pad on the common stock,
which S5 sle.ooo is outstanding.