Evening star., 1915-09-26

BY I. A. FLEMING.
'aThe authorization of the directors
to retire the outstanding balance of
the company's debentures. due In 1920.
marks the completion of the task
had laid out for myself when I as
sumed the presidency in 1909. When
these debentures shall have been paid,
all of the company's funded debt and
deferred obligations will have been
discharged.
my work has been completed, have
resigned the presidency of the com
pany, and in doing so merely gratify
a desire to discontinue my active con-
nection with the company. when the
goal for which I set out six years ago
had been reached"
The quotations are from statement
of E. r. Stettinius, retiring president
of the Diamond Match Company, and
they readily furnish a text and sermon
for every corporation official.
Some day it will be the aim of the
corporation president and directors TO
pay the way of their company as prog
ress is made and to stand still when
it Is impossible to meet the charges
for the advance.
It is next to Impossible for new en-
terprises, the success of which may be
problematic, to place a stock issue
without concessions to the investor,
probably without selling bond issue
and giving one class OF stock as a
bonus
But there are many corporations like
the Diamond Match Company of Hi
nois, assured successes, with steady
revenue, where some Stettinius should
be placed in charge and given the goal
Of wiping out funded and deferred
obligations Paying the way as the
scot e is made Is much easier than pay
ing interest for a long term on fund
ed debt, perhaps, having to increase the
debt and fight for years to keep away
from foreclosure.
Shareholders are business partners in
an enterprise. Bondholders are cred
itors Many business men urge bond
issues of corporations In which they
have an Interest, perhaps for selhsh
ends, when they would not mortgage
their home nor their own personal
futures.
1t may be that bond issue is neces-
sary; that the corporation has made
improvements and actually needs re-
hab.litation of the treasury for ex-
penditures.
ury of a corporation could stand the
strain of the expenditures without
being rehabilitated..
And not infrequently, in cases like
this, a premium on the bonds. which,
under former rules in Washington,
would revert to the shareholders. who
were the only subscribers, would in
duce these stockholders to mortgage
their property heavier than necessary
for the selfish profit, regardless OF the the
wo11gars ysals .nat eo~id %sle be 20 eliminated. n
The interests of the stockholders are
advanced by the absence of any prior
liens on their property; the shares of
the Diamond Match Company, as the
result of Stettinius having reached his
goal. are worth much more than while
the company had such heavy annual
payments for interest on bonds and de-
ferred payments.
Interest on funded debt has broken
the backbone of many good railroad,
and taken from it's shareholders and
turned it to bondholders; interest on
bonds has consumed the earning power
Of thousands Of corporations and
caused cutting, slashing and passing of
dividends.
Il is almost safe proposition to as
sert that President Stettinius always
took his shareholders into his con-
hdence; that under his control, Dia-
mond Match Company. at one time the
best 10 per cent dividend payer on the
Chicago list, made reports from time to
time during the course of fiscal year.
and that it's owners, the shareholders
one and all. were not ignorant OF Its
affairs from one annual meeting to an
other. At more than one annual meet
ing of this corporation astute lawyers
were employed to keep the truth from
coming out as to the company aHairS
and mana cement, but not under the
administration of Stettinius. NO man
cessfu.ly wipes out funded debt and
deferred obligations need have any
thing to conceal.
What II the dividends were sliced a
period the mortgage was ifted-the
property clear and unincumbered.
Mr.. Stettinius is to remain with the
Diamond Match Company as director.
and it is probably safe to say that mere
will be neither delayed obligations nor
funded debt against the corporation
during his term of office.
Some High Rates.
From the reports to the controller Of
the currency as to the condition of the
national banks of the country at the
close of business June 23, 1915, it is
shown that there are five national
ranks in Geor yia whose maximum rate
of discount averages 26 per cent. with
rates up to go per cent In Alabama
one bank admitted loan at 120 per
cent. One confessed to go per cent
rate. another to SO and a third to 20
Der cent.
In Georgia there were eleven banks
with an average rate of over 80 per
cent: in Texas a number reported rates
in excess of 100 per cent, and many
placed their average rates at IL per
;ent.
In Florida the legal rate is 8 per
cent, but the addition Of commissions
makes for higher rates.
With the current low rates now being
- RI
commercial paper and 4 per cent,