The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1916-09-15
Maintains Higher Lev
ell Than Any Other
Stock On Record
BUSINESS SHOWS
STEADY INCREASE
New Company Is To Be
Formed At Early
Meeting

General Motors common, as the
time draws near for the announce
ment OF the readjustment OF its cap
italization, has moved TO higher
level than any stock on the New
York stock exchange has ever main.
tained. Northern Pacific in May.
1901. momentarily touched / 900 a
share. but this was due to a bear
panic in the fight for control.
A plan has been worked out.
which will soon be officially an
nounced. providing for recapitali
zation OF the General Motors Com
pany. Under this plan. II is under
stood that a new company will be
formed, the shares OF which will be
exchanged for General Motors
shares. The present General Mo
tors common will receive five shares
OF new common for each share of
old. and present General Motors pre-
ferred stock will receive four shares
OF new preferred for each three
shares OF old The new common
stock will be without par value. The
new preferred will be a six per cent
issue. callable at 10 In 1918.
On this basis the new General
Motors Company will have outstand-
ing si9.ss0.266 six per cent stock
and S20.339 shares OF common stock,
compared with the present Sl4.9S5.-
200 seven per cent preferred and
s16.505.7 7S3 common issues.
The present preferred stock has
no callable feature and the inser.
tion OF the callable clause in the
new preferred stock II understood
10 be with the idea that within the
next two years the enormous cash
resources OF the company may be
devoted 10 the retirement OF the
preferred shares, so that the entire
ownership OF the company will be
represented In the common stock.
General Motors in the fiscal year
ended July 81. last. did a gross BUS
mess Of above S150.000,000 in the
manufactuBe OF 10000 motor cars
and net profits amounted to approx.
imately $26 1000, 900. This earning
power. after allowing for preferred
dividends, is equal to $50 per cent
on the present amount OF common
stock
General Motors doing s150.000. 600
gross business on total capitaliza-
flon of but s31 ,491 .9s3 (both com.
mon and preterred) has one Of the
lowest ratios of capitalization to
gross OF any corporation in the
country one TO hve.
AT the rate the new fiscal year
4 10 4. hoh N
General Motors will do 5000, 900. 600
gross in the 10 months 10 end July.
next. and with the capitalization on
the new basis. totaling sl02.0l4.l71,
will still be doing s. in gross for
every 81 in capitalization.
On the basis ~ capitalization as
above outlined. the earning power
of the 1916 fscal year of about S26.-
600. 600 would be equivalent 10 about
$40 per share OF the new common,
OF no par value
With the production schedule Of
10000 Bucks this season. com
pared with 10000 in the 1916 year.
and increased output OF Oaklands,
Olds and Cadillacs. an earning pow.
or subst stantially greater than s26,.
o00. 900 seems assured for the cur
rent fiscal period 10 end July 81,
next
The Chevrolet Motor Company is
the largest holder of General Mo
tors mommon The exact amount
Of General Motors common which
has been exchanged for Chevrolet
shares has never been officially an
nounced but Il is understood that
substantial amount OF the sl6.506,-
7S3 General Motors common rests
In the treasury OF the Chevrolet
company