New-York tribune., 1912-08-16
M'CRUM-H0WElL PLAN
The Stock of the New Company
for the Creditors.

Charles II. Sabin, yice-president of the
Guaranty Trust Company, and Herman
Waldeck, vlce-president of the Continental
and Commercial National Bank, of Chi
cago.
The plan proposes the formation of
new company part Of the preferred stock
Of which IS TO be sold for cash. to pro-
vide working capital; part to be given
to the creditors, who will receive also
new common stock. and the remaining
part to be offered to the creditors ana
the holders of the present $3,OoOW each
of common and preferred stock.
The statement issued by the creditors
committee follows:
The creditors committee, since their
appointment last April. have beer IN con-
slant touch with the receivers ana nave
received the reports of the accountanlS
ard also the repCrts of engineers retained
| by the receivers. The condition ol tne
company was found TO be distressing, nut
the reports of the eE%irccrS ana OthTS
disclosed that the business has an earn
ing capacity. The committee has care
fully considered the matter from every
point of view and has unanimously de
cided upon a plan of reorganization tnat
has been agreed To by the committee
representing stockholders.
The committee recognized the neceS-
sity of new working capital IN order
that the new company he enaoleu 10
carry on its business.
The proposed plan provides for such
new capital and is as follows: new
CORPORATION will he formed with an au-
thorizcd capital Of sl.50O,OOO preferred
and S3.0OO,000 common stock. Eight
hundred ana seventy-five thousand dol
lars worth of the preferred stock viii oe
sold for cash to provide working capital
The creditors will receive % per cent OF
the amount of their claims III preferred
stock and 1S per cent oi the claims IN
common stock. The total amount OF tne
debt of the company is about S2.50O,OOO
Creditors and stockholders VIII he or
fercd the first opportunity to purchase
the new preferred stock IN proportion 20
the amounts of their claims and present
stock to be sold will carry with 1t
bonus OF common stock of the new coun
paUy. Holders of notes OF the McCruin-
Howell Company, IN addluoh 10 tIly "po'S
securities. VIII be entitled 10 hold ana
enforce their claim against the indiNidual
indorsers upon the notes. 10000,
The creditors committee has arransed
with new interests 10 purchase the pre-
fcrred stock not subscribed for by crtn-
itors and stockholders. The committee
Is ondeavoring TO make arrangements oS
which an offer or DEFINITE sum III '"s'
viii bc made To creditors VINO 90 ne, I,
Sire 10 accept the new securities. W me
tho committee has determined upon IN"
foregoing plan, the details have not YET
hcen completed, but il is hoped that th'
final plan may he submitted To inc cre"-
itors within short time.
Tho price at which creditors ana pres
eut stockholders will he invited to sub
scribe for new preferred stock Is o., II Is
understood. the subscription carrying
honus Of 100 per cent in new common
stock
The receivers, Edward X. Stettlnius,
Of
pany. and William II. WoodIn. Of the
American Car and Foundry CompanT.
Yesterday issued a statement, in which
they say that since tho filing OF their pre-
liminary report to the United States DIS
trict Court in Pennsylvania on April y
further investigation Of the condition ~
tho McCrum-H Howell Company has been
made. the results Of which, however
show little variance from the hEures
originally submitted by the expert nc
ccuntants retained by the receivers. which
arc part of the report OF April u The
receivers continue:
In addition 10 their examination OF
the books and accounts, the receivers. IN
, the interest OF both creditors and stock
holders have been engaged III examin-
iuG and considering tho question OF the
earning power OF the corporation, 50 AZ
to sscertain whether there was Il sub
etautial basis for reorganization: they
have communicated tho results of thclr
. Investigation to the committee or STOCK
holders and creditors and, as result.
i plan Of reorganization Is being consid-
cred and viii, no doubt, be laid before
every creditor and ateckhOldcr at an
carly date. The receivers expect 10
make further reports To the court, but
/ due respect to the court requires that
neither such q report nor its substance
4
of it's Ming. The receivers have not
been advised that any criminal action
has been commenced, but such action
would, OF course, not be within their
province; their duty being simply 10
conduct the business and preserve the
assets under the directions Of the court.
The McCrum- Howell Company was
manufacturer OF radiators, heating boilers
and enamel ware. aud Was also eXten-
| sively engaged in tho production of
vacuum cleaners. IL was . member of
the so-callcd "bathtub trust" the prose-
cution of which by the government
verely impaired the company's credit. Its
stock had been declining for several
months prior to the Teceivcrship, and ugly
rumors regarding the management were
circulated The governing committee OF
! the Chicago Stock Exchange, which was
the market for the c1mpany's shares,
few days before the failure demanded
prompt statement Of the McCrum-llowell
! company's condition and earnings.
The report Of tho accountants made to
the receivers in April showed assets and
liabilities of 50, G62. .957. The assets includ-
ed cash holdings OF $50, IA. less $3il9i sub
iect to possible claims OF offset; accounts
receivable. 81. 1876 S6. less ST. .239 reserved
| for bad debts. etc bills receivable. sS4,3le;
| Inventories, raw material and merchan-
disc, s66s.57 and real estate. plants. ma
chincry, etc. N,1ls,527. The liabilities to
merchandise creditors were t2oS23s. and TO
contract creditors, s.l,0lS Bills payable
were s2,O4e9lG. and notes indorscd and