New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-21
STREAMING THE
GREAT LUCK OF
|. NJ. MARINE
Profits, Though Miracu-
lous, Are Hardly Enough
Yet to Go Around.
By SHRINIVAS X. WAGEL.
First Articie.)


First Article)
The war has placed many a tottering
concern on it's feet, but to none has IT
been kinder than to the International
Mercantile Marine Company. Cinder-
ella could not have had kinder fairy.
The history Of this company fairly
teens with romance. II was born OF
the dreams of the late J. p. Morgan.
whose vision was far-reaching and
whose judgment rarely was wrong.
This was one of the very few instances
where he miscalculated, and hence 1t
was the misfortune of the company to
become insolvent at its very inception.
The founders of the company were in
spired with the vision Of making the
United States supreme in the carrying
trade, with the international as the
foundation. Building ships and thus
adding to the mercantile marine OF the
United States was a process too slow
for their imagination they took the
short cut of purchasing some existing
lines and acquiring interest in others.
Their intention was to apply internal
merger methods to control information
al shipping. They found very soon
that they had made grievous miscalcu-
lations.
The plan was formulated and the
company launched at a period Of very
severe depression in the shipping trade.
The British companies were glad of an
opportunity to rehabilitate their post
ton, especially as the formation of the
international gave a boost to the val
ues. The other members Of the COM
bine had everything to gain and moth
ing to lose. The interest Of the Inter-
national in the stocks did not affect
tn status, nationality or management.
The outsider paid high prices for
stocks. some Of which were almost
drugs on she market. The fundamental
object of the Internstional-that OF
making a nucleus for grand mercan-
tile marine-was defeated. Il was gen.
orally considered that the company was
a failure-at least it was sincerely be-
lieved so in England.
No Prospects.
To add to the discontinue of the
promoters, the earnings were far from
satisfactory. The total earnings from
the interests held in all companies
averaged s4,S9O,O0O year from 1903 to
1909. The succeeding years, prior to
1914 and the war, were ones of UNI
paralleled trade prosperity in the
wcrld; every branch Of trade was
booming. During these years-l9O9-
I3-the average earnings were s9,4lO,-
0C0 a year.
The war brought about boom in
shipping because German and Aus
trian ships were laid up and the Allied
governments took over so per cent of
their shipping for transport and mill
tary purposes. Each month added to
tie number of ships sent to the bottom
of the ocean. The international nat
urally profted, and the income for 1914
was roughly s15,60O,00o. Even then
there was no interest in the company.
There were $40 900 bonds outstand-
ing. 517,263 shares of preferred stock,
on which over 20 per cent Of dividends
were in arrears, and 1924 shares OF
common stock, which was hopeless.
Waking Up.
Then the income began to increase
by leaps and bounds, the stock and
bond holders began to wake up; each
PARTY tried to do the best it could to
help itself The bondholders naturally
wanted to beat the rest. the preferred
owners tried to beat the commons, and
the commons wished to believe that
there was money for all. 1t is need
less to 60 into the story Of the appoint
ment of a receiver for the company
and the several plans that have since
leen proposed for the reorganization
Of the company.
The earnings for 1915 totalled s41,-
100000. After deducting the war tax
Of Sl4,000,000, and allowing s5,000.000
for depreciation and replacing losses,
there was a net balance Of s22, 250,0 900
on December 81. 1915. The position, in
spite of the profits, was not; however,
altogether satisfactory, because Clark,
Child & Co. state in their report: "The
ships that have been used by the Brit
ish Admiralty come back to the Mer-
camille Marine Company in deplorable
condition. Earnings also feel the eff
feet of loss of ships" This last state
ment was. however. contradicted by
actual although profits might
have been larger If so many ships had
not been sunk.
The Present Case.
The earnings Of the first quarter of
the current year averaged s3,500,000
month and the average for the second
quarter was s6,000,000 a month. De-
Quoting the war tax. the balance avail
able from the earnings Of the current
year up to June was s2l,000,000.
The cash position OF the company on
June 80 was as under:
Balance, December 81. 1914. s6,500,00o
Net balance. working Deem
Der 81, l9l5.......... 22,25o,O0O