The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1913-05-07
POWERS FOR new
RUMELY HEAD STATED
c. S. Funk to Have Complete
Control and Will Have Di-
rectors and Officers Resig-
nations.


have the designations of all the Rune
ly staff and will be at liberty to change
completely the personnel of the con-
Germ.
Business Being injured.
BY these changes the bankers and
stockholders hope to get the Rumely
company down to earth again. It's af
fairs, commercially and financially, be
came such that 1t Is understood Cyrus
Mccormick, president of the Interna-
tional Harvester company, was willing
to part with General Manager Funk
because the agricultural implement
business was being injured by the
Laporte concern.
The changes mentioned, among
others, had to be made before the
banks of New York and Chicago would
help the company to get out of the
distressing financial position which
the old management had brought
about
The founder of the Rumely company
had built UP a modest business in
tnrashing machines and other farm
machinery at Laporte. After his in
fuence ceased other members of the
family came into control, notably e,
A. Rumely. He had a notion that the
Rumely products could be made to
girdle the world. He persuaded New
York banking houses, William Solomon
& Co., and Hallgarten & Co., that there
was hardly limit to the possibilities
of Rumely service and the Rumely
products.
Collapse Follows Expansion.
Also the banking houses appear to
have taken fancy to the idea that a
great deal of money could be made in
expanding the capital of the Rumely
company. The expansion followed
quickly and the collapse has been al
most as swift.
There was issued $10.000,000 of
per cent cumulative preferred and
there was authorized $22,000,0o0 of
common stock, of which $10.90s.800
has been issued. Then the Rumely
company began to grow. 1t sold part
of it's product, accepting notes running
for three years, sold more of it's pro-
duct, borrowed more money to pur
chase raw material, and eventually
found IL was getting money ON six
months loans at the bank In order to
finance three years contracts.
About four months ago more cash
became necessary, and it was decided
to issue $12,OO0,0 900 of common stock
to raise the funds. This idea did not
take and the company, or rather the
hov >1ya 70
of s per cent notes. convertible into
the common stock at par. This con-
version privilege was supposed to be
an attractive feature, though at pres
ent there is small inducement for the
holder of per cent note to accept
at 100 cents on the dollar a common
stock at 25 cents.
Banks Withhold Credit.
About this time, in order to raise
more money, the company sold $3.000,-
900 of it's bills receivable. Still there
was not money enough, and the banks
which had been accustomed to lend
money to the company showed a dis
position to withhold credit.
Then there was a reorganization in
the management. Dr. Rumely was re-
moved from the treasurership, the
finance committee of five was reduced
to three, giving the two banking hous-
es two of the members, while ]. H.
Guy was appointed vice president in
charge of finances.
Still the bankers We're not satisfied.
The company needed $4,000 more,
and could only get it by wiping off the
Rumely slate. leaving nothing but the
name. Meanwhile the stockholders
have seen the value of their invest
ment shrink about 100000,
Paul d. Cravath and Elisha Walker
have been in Chicago as representa-
tives of William Solomon and Co.
Mr.. Walker yesterday denied that
the acquisition of Mr. Funk forecast a
consolidation of the Rumely Harves-
ter company, or even a working agree
ment in accordance with the recent
dissolution of the harvester combina-
fion