The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1908-03-18
Secretary Waterman Writes
Regarding Hervey Ho-
tel Proposition.
THOSE WHO SUBSCRIBE TO THE
HOTEL WILL RECEIVE STOCK
AT PAR TO WHATEVER AMOUNT
THEY DECIDE TO INVEST IN
THE Professionalism LESS
THAN $4,000 NOR MORE THAN
$780, 900 TO BE RAISED.

The Journal last evening received
the following communication from
Secretary Waterman, of the Chamber
of Commerce, written to correct a
foolish misunderstanding regarding
the proposed plan of organization OF
the new hotel company here to build
a $350,O0O hotel
Pensacola, March u, 1908.
Dditor Pensacola Journal:
The language in part of one of the
newspaper reports regarding the pro-
posed hotel, has, it is reported to the
subscription committee, resulted in a
misunderstanding which developed
into more or less seriously false
rumor, which l hope your space Will
allow me to correct in behalf of the
Chamber of Commerce committee in
charge of the hotel proposition.
THE PLAN ADOPTED.
Mr.. Hervey having offered to pay
taxes and insurance and 6 per cent.
net for fifteen years on a hotel to
cost (site and building) not more
than $350,000, to be raised by selling
stock to the extent of not less than
$4,000 and to raise the rest of the
funds by Issuing bonds to an extent
OF not more than $500, 000 The
Chamber of Commerce committee
recommends and the directory
adopted, a general plan of action as
follows:
To sell at par stock to the extent
Of not less than $3.50, 900 and not more
than 100000, raise the rest of the
$3.50 900, or as much thereof as should
prove necessary, by issuing 20-year,
6 per cent gold bonds.
Mr. Hervey offers to pay annually
per cent. on the cost of the hotel
site and building. The difference
between per cent. on the face value
of the bond issue and 6 per cent on
the full cost of hotel (site and build
ing) would therefore be earnings for
the stock. The subscription commit
tee having decided to capitalize at
the face value of the stock subscribed
for, the annual revenue over and
above the 6 per cent. interest on the
bond issue would represent the earn
ings Of the hotel company, to be ap-
piled to the sinking fund for the re-
demption of the bonds, or otherwise,
as decided by the corporation after
organization.
There was at one time a suggestion
to have 4 per cent. preferred stock
and also common stock, the latter to
be given as bonus with the prefer
red stock, but 1t was decided to give
no bonuses, to adhere to the stricter
organization, and to have the capital
iZation exactly equal to the stock sub
scriptiOn in the aggregate. Each share
of stock subscribed for becomes, on
payment of the subscription, the
property of the person subscribing for
II, and of course each share will be
entitled to one vote in all SharehOld-
ers' meetings.
NO BONUS TO ANYONE.
No bonus is to be paid anybody. All
the gentlemen working in the matter
at present are doing so gratis as
members of the Chamber of Com
merce, and for every cent that any
one subscribes he will receive equal
face value in capital stock.
President P. K. YOnge, of the Cham
Der of Commerce, has been made
trustee of the subscription payments
1t was necessary that some one be
authorized to receive and he respOn-
sible for the payments until such
time as the full stock issue of not
less than S150,000 and not more than
5000 900 is subscribed for. Then the
subscribers will meet and elect a
board of directors of eleven members,
who will serve without remuneration
of any sort. There will of course be
some slight expense for printing sub
scription blanks, note forms, charter,
etc, but outside of these absolutely
necessary OUTLAWS, every cent paid in
for stock will go into the hotel site
price or construction cost, and be rep
resented in the hands of the sub
scribers by capital stock of face value
equal to the amount paid in.
THE BOND ISSUE.
The bond issue of not more than
$500, OOU and not less than $15O,O0O
will be against mortgage loan for
the amount of the bond issue, in or
der to provide the money which, add
ed to the stock subscription aggre-
gate. will make the $3.50, 900 necessary
to build such a hotel as Mr.. Hervey
wants, and for which he offers (as
happen to know higher annual
rental than he pays in Mobile. and
much higher than that for which the
progressive citizens of Montgomery
wanted to build him 100000 hotel.
These facts ought to be prima facie
proof to the people OF Pensacola that
the hotel proposition is good bust
ness proposition. regardless of that
civic pride and intelligent selfiShness
which would make a s350,000 hotel
here an even better advertisement of
Pensacola than the Cawthon Hotel at
Mobile is of Mobile, and my knowi-
edge OF the opinion of commercial
travellers. tourists and capitalists
from different parts of the country
is that Mr.. Hervey has made the Cav
thon Hotel Mobiles most convincing
single argument to the outside world.
n "ATE1DNAN