New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-30
Harvester Corp.
Handicapped by
Trade Obstacles
Earningsi in l9l6Make Best
Showing Since War Be-
gan; Large Fund Abroad

Cyrus II. Mccormick, president OF
the international Harvester Corpora
ton, which took over the foreign busl-
ness of the international Harvester
Company in 1913 when the government
instituted its dissolution suit, an
nounced in the annual report issued
yesterday that the total sales IN
1916 increased approximately "a per
cent over 1915, although conditions
under which export business was trans
acted presented more difficulties than
the corporation has ever encountered
before.
Earnings were restored to nearly the
pre-war level, operating income
amounting to s9,771, O21. compared with
81. sos, 466 in 1915, S7,329,S26 in 1914
and s1O,356,628 in 1918.
The balance available for dividends
on the common stock, after allowing
for the preferred dividends at the full
rate of per cent, was S3,037 ,O9S, eual
to 7.59 per cent on the s4O,OO0,000 out
standing, compared with 4.05 per cent
in 1915 and $40 per cent in 1914. In
view of the conditions under which the
corporation has been operating, the
directors deemed it unwise to resume
the common stock dividends during
1916.
Big Demand for Tractors
Inability to export to the Central
Powers, restrictions imposed by the
Entente upon exports to neutral coun-
tries, deficiency in cargo space and the
congested condition of Eastern rail-
roads all contributed to reduce the vol
ume of business that otherwise might
have been secured, according to the
president. Despite all these handi-
caps the European trade increased,
while Canada enjoyed fair crop condi-
tons and purchased agricultural ma
chinery more freely than in 1915. The
heavy demand for small tractors, motor
trucks, engines and other products pur-
chased by the international Harvester
Company of New Jersey for resale in
the United States resulted in large in
crease in those lines
The company's funds in Europe in
creased from S2S,04l 900 to S38, 754 900
during the year, the addition being due
not to any increase in the corpora
tons investments in those countries,
but by change in the character of
the assets. In other words, there oc-
Cured n heavy conversion of inven-
tories and receivables into cash. Con-
tinuance of the high exchange rates
and the inability to purchase exchange
has prohibited the transfer of these
funds to the United States. Every pre-
caution for the safety of these funds
is being taken by the judicious selec-
ton of repositories and by investment
in short term government Treasur
notes. Of the total amount of S38, 81
600 held in Europe there is $30,52S, 900
in Russia and S8,226,000 in Germany,
Austria and Rumana.
The net book value of assets OF other
than receivables i'm Russia amounted TO
s10,750, 900 at the end of 1916, and ia the
Central Empires, including the book
value Of the Croix works. near Lille,
France. which is in the territory occu-
pied by the Germans, to $3,200,000.
Operations in Germany
"Up to the time our country declared
that a state of war existed with Ger
many" said President Mccormick, "the
business in the Central Empires. though
greatly restricted. was carried on as
before. The works at Neuss, Germany.
were in operation, with somewhat re-
duced forces. The Croix works, near
Lille, France, have been closed down
since August. 1914. but no serious dam
age TO the buildings has been reported.
Since the declaration of war no infor-
nation as to conditions there has been
received
"The implement works at Lubertzy,
Russia. were running during the entire
year. but the serious difficulties en-
countered in securing materials and
labor curtailed production. At Norr-
koping, Sweden. the harvester plant
has been operating full time, but the
Irvine mill has been obliged TO shut
down on account Of inability to obtain
delivery of fibre purchases"
Collections wore exceptionally good
last year. accoi ling to the report. and
extreme care was exercised in the ex-
tension of credit. The percentage OF
cash obtained in the total sales in
Europe, where large portion of the
business is transacted, exceeded 90 per
cent in 1916, compared with "a per
cent in 1915 and an average of 40 per
cent in the three years preceding the
war. In Canada also much larger
percentage of cash was obtained. After