New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-08-08
AM. TOBACCO MELON
Distribution of Extra Cash and
Stock Announced.
HAD BEEN EXPECTED
Company Makes Statement Of
Explanation How Surplus
Given TO Stockholders
Was Accumulated.

Tie expected special dividend announce
msnt Of tho American Tobacco Company.
which the rise In the price OF the stock
on the Stock Exchange had anticipated.
camo along in proper time yesterday. \
| special cash dividend OF 20 per cent was
declared in addition TO the 2is per cent
quarterly dividend also a distribution OF
l2,0oo shares Of the American Machine and
Foundry stock. The latter distribution Is
10 be on q basis of 1000 i0I, aS+ Of a share
for each share Of American Tobacco COM
mon stock held. The combined dividends
are payable September to stockholders
OF record August Is.
The following statement was made by
the American Tobacco Company:
Under the decree OF dislntegration In
the government case the American To-
bacco Company was required to dispose
OF certain securities. such disposition 10
DO made before January l. 1915. OF these
securities the company has disposed OF
one-half OF its holdings OF British meri-
can Tobacco Company. Ltd, nou-voting
preference shares; practically one-half OF
It's holdings OF No. ordinary shares OF
the Imperial Tobacco Company, Ltd. and
all Of ITS holdings OF Corporation OF Unit
ed Cigar Stores bonds.
From the cash received from such dis
position the directors have ordered the
distribution OF S o4s, $50 an amount equal
10 so share n the common stockholders
OF the company. 10 be charged, OF course.
10 It's surplus. This distribution, as well
as the "a per cent regular dividend. IL
payable September 8 to stock OF record
August Is.
"A further distribution has also been
ordered 10 stockholders OF record OF Au-
gust 10 OF tho holdings OF the American
! Tobacco Company of the stock OF the
American Machine and Foundry Com
pany TO Wit. 1900 shares. This Is the
entire capitalization OF tho American Ma
chine and Foundry Company, and the dis
tribution is TO be made in the same way
as other stocks were distributed by tho
American Tobacco Company IN January.
1912; that IS 10 say, each common stock
/ holder of record on August Is will receive
I as soon after September I as practicable
certificates for full shares and warrants
tor fractional shares TO the amount OF
/ 20o0-i0i, "a Of a share 81 American Ma
chine and Foundry Company stock for
each share Of common stock standing In
his name on August Is.
! 1T IL announced that American Ma
chine and Foundry Company owns IS per
cent OF the stock OF the Standard Tobacco
( S,emmer Company and 81 per cent OF the
stock OF the international Cigar Ma
chinery Company. and that. taking the
result for July /, 1911, 20 June 60, 1912. as
a basis the direct earnings Of the Ameri-
| can Machine and Foundry Company, to-
gether with its proportion Of the earnings
and losses OF the two subsidiary com
I panles mentioned above. would make an
aggregate annual profit Of &oo.0?6 equiva-
! lent 20 S.S7 per cent on 81. 90 600 at par OF
American Machine and Foundry Com
pany,"
Tie following explanation OF the move
was made al the ONCE OF the COMPANY
| No. III Fifth avenue, by an official VINO
| did not wish bis name 20 be used. \
great point-perhaps tho greatest IN the
courts decislon-was that the American
Tobacco Company, as 1t then existed
was too large. The idea OF the court az
| 10 diminish tho power. the strength ana
The size OF the American Tobacco Com
pany and 10 create a competitive con
dition in tho tobacco business.
! These results were accomplished by
| dividing tho company into four parts
I Liggett d Myers Tobacco Company T.
I,orillard Company. 3. J. Reynolds To
bacco Company and the American To-
bacco Company; and, further, by sepa-
rating the American Tobacco Company
from the British American Tobacco Com
pany: end, further. by separating the
American company from the United
Cigar Stores Company and by sun otneI
divisions and separations.
FORMERLY, that Is, prior TO the decision
Of the Supreme Court We used q portion
OF our revenues 20 acquire additional TO-
baoco properties. Not having IN view the
/ acquisition OF any such properties the
money acquired by the sale OF these
British-Anerican. Imperis and Unlteo
Cigars stores securities not being re-
ouired in the operation Of our business
opgh, 10 DO divided among our stock
holders. In taking this action VIC feel that
We arc obcying the spirit as well as the
letter OF the court ; declhlOH'
The American Machine and FOUNDRY
! Company is, as its name indicates. ma
chine and foundry bu siness that has
served all the companies which formerly
constituted tho American Tobacco Com
many. Since the dissolution, tho competi-
ton among the tobacco companies Is ~
real and 80 vigorous that It is unW'se
and undesirable for the American To-
hacco Company 10 retain ownership oil
the American Machine and Foundry Com
pany. Liggett d Myers Tobacco Com
many and r. IIorillard Company VIII give
their business to other machine and foun-
dry companies rather than increase the
earnings Of the American Tobacco Com
pauy by dealing with a corporation owned
bv the American Tobacco Company
Therefore, this action on the part OF th'
| American Tobacco Company In disposlns
az the shares OF the American Machine
and Foundry Company. We believe that
this act will enable tho American Ma
chine and Foundy Company to retain the
business OF Nggctt & Myers Tobacco
Company and p Lorillard Company
io,,uphvic NETWORK TRIBUNE