The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1917-02-22
BIG MOTOR
CONCERN IS
BANNED
Securities Board Is
sues No Order On
Continental
L. w. GOODENOUGK
EXPLAINS ACTION
Financing of Hug e
Company Declared
Sound

News dispatches from Lansing TO
the erect that the Michigan securi-
ties commission had issued an or.
der restricting further sale OF stock
In the Continental Motors corpora
tion on the ground that il was wa
tered, were branded as untrue when
members Of the commission were
asked Thursday TO confirm the re.
port.
L. w Goodenough. counsel for
the corporation, also issued a state
ment denying that the commission
had issued any order. and explain
ing the situation in detail. The
statement follows:
The article printed Thursday Is
hardly q fair statement OF the situa-
ton with relation TO the stock OF the
Continental Motors corporation.
The company now operates two
Wy w onn ,ars Rlsns, Rno,, one I,nn in MuskeEon
5000 men. II is the largest manu-
world.
The business has grown with such
essary to retain practically all OF the
earnings or the company. which have
been large, TO construct plant addi-
tions and equipment TO meet the
Last fall IL was thought advisable
10 rennance the company on a basis
which would give ~ adequate work
ing capital TO carry on the incrcas-
Ing business. Several ~ the fore
most bankers OF the country were
consulted In relation 20 the matter
and plan was worked out which
was thought equitable and Just and
the company was accordingly cant
talized az figure commemorate
with its earnings and the stockhold
ers all shared oh an equal basis IN
the reorganisatton.
II was considered that It's actual
value WAS worth vastly in excess 80
tangible assets and this opinion was
shared and counselled by many m"n
expert in nnsne.
Gaming capacity OF about 81 500 600.
and with the Increased facilities
which IL has this year, So earning
capacity should be considerably auR
value OF IN. stock of the I'D COM
pany wsf about four times its par
value and III. present appraisal of
the new stock ~ nearly on tho same
basis. The stock " selling ~ the
market az about the same ratio n.
the stock ~ other hiRh-clar motor
COMPANIES similarly regarded
when The new company was or
eanized the "Plue sky" law OF Michi-
gan was complied with and tho stock
was listed in the standard statistics
Bureau rfhual and dealt IN on the
Detroit Stock exchange in response
60 telegram from the Michigan
securities commission that the stock
vas exempt from the provisions ~
the Blue Sky law because the law
had been complied with and the
stock listed. A few weeks after that
the securities cOmmis sion requaFf ~
a hearing. which was had ia which
the full facts were laid before Whe
body. In the second hearing. IA ~
requested. although no formal ordfr
was entered at the hearing. that hp
more than So should b. paid upnn
the common stock until $4,000 900
had been added % the assets 81 the
company as shown by the statement.
No attempt has been made 90 vio-
late any law. or engage In any high
nnancierinE. The new corporaf ION
has he~n capitalized a fair value
upon its earning power. The com
mon stock alone. after az payment
OF dividends on preferred stock viii
on present hEures earn from IS 20
20 per cent per arnum The cot'-
parv 10 in stronger financial condi-
tton than at any time IN rs history.
No stock was sold for rayr rent ~
dividends ~ making the sal~ from
the old company 60 the nrw thrre
wFs cash consideration paid Co the
old stockholders m exchange for
thslr stock
The company from its beginning
has been ConservatiV~iy managed
with practically no change IN man
aE.ment since the inception - the
company about IA wears sgo.
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