Norwich bulletin., 1913-05-07
REPORT MADE ON U. s. FINISHING
By Creditors Committee of Unearned Dividends Accounts For Part of $l ,25o00O Depletion of Capital Liquidation Would Probably Pay Full Value of Claims Reorganization Plan Awaited.

Under date of May the creditors committee has made report to the creditors of the United States Finish ing company. The following is the re- port:
 Summary of Situation.
 The work of your committee, ap- pointed by the creditors agreement of March 20, 1913. has so far progressed that a summary of the situation may now be presented.
 The finances of the United States Finishing company are involved with several affiliated or subsidiary corpor- ations, namely. Sterling Improvement company, Sterling Securities company, Queen Dyeing company, G. A. Stafford Go, C.. F. Darling company, Pas satc Lumber company and. at one time, the Conyerters company, until the latter was absorbed by the cor poration, C.. A. Stafford & Go. An analysis of the nature, extent and ef- feet of these intercorporate relations has disclosed the fundamental cause United States Finishing company.
 Briefly stated, the United States Finishing company has through these subsidiary corporations engaged in merchandising, in speculating in it's own stocks and bonds, and in financial collateral ventures such as the pur chase and sale of lumber, the manufac- ture of packing boxes, the purchase and sale of chemicals, supplies, etc. Some of these investments, noticeably that in the Queen Dyeing company, have proved profitable, but in the main the working capital of the United States Finishing company has been depleted. to the extent of approximate Iy $1,250,000. A portion of this loss can be accounted for through the pay ment of unearned dividends. Through the recent failure of the corporation, G. A. Stafford & Go. an additional loss was sustained. The finishing com pany owns the entire capital stock of the Sterling Improvement company, which company had made substantial purchases of the stock and bonds of the finishing company. so that through the depreciation of the securities of the finishing company further loss was incurred. The market value of all the investments is problematical and the realization of their intrinsic value promises to become a slow pro cess.
 Conclusions Reached.
 Your committee, after a careful sur vey of the entire situation have come to the following conclusions:
 (a) Through process of liquidation, it is altogether probable that the cred itors would receive the full face value of their claims and interest, the assets of the company, in the opinion of your committee being sufficient for that purpose, assuming that some reason able equity can be realized from the plants over and above the bonded in debtedness secured by mortgages.
 (b) The earning power of this cor poration in excess of interest and over head charges would be insufficient to assure a material reduction of indebt- edness within any reasonable period.
 Co The stability of this corporation can be restored only by the introduc- tion of new capital.
 Awaiting Reorganization Plan.
 These views have been expressed by your committee to the officers of the United States Finishing company, and with many of the larger stockholders in an effort to formulate such plan of reorganization as will meet the ap- proval of this committee. The com mittee are awaiting the result of that effort The company is being operated at profit under a new administration and your committee feels that no in terests are being jeopardized by af- fording reasonable opportunity to the to consummate their plan of reorga anfzation, but, on the that the effort should be CO., operative so far as is consistent with the interests of the creditors.
 copy of the balance sheet pre- pared by certified public accountants is sent you herewith. Your commit tee will report their further progress, as we'll as the progress of the stock holders in any effort which the latter may formulate.
 Very Respectfully.
 CHARLES l.. BAUSHER,
 Chairman.