New-York tribune., 1918-05-02
Harvester Trust
Sustail1s Heavy
Losses in Europe
Amount of Foreign Losses
Written OF in 1917 Ex-
ceeded Years Profit

Heavy losses sustained on invest
ments in Russia and the countries
dominated by the Central Powers more
than offset the earnings in 1917 Of the
international Harvester Corporation,
which took over the foreign business
of the international Harvester Com
pany in 1913 after the dissolution.
The annual report issued to the
stockholders yesterday by Cyrus H.
Mccormick, president, showed that the
entrance of the United States into the
war and the collapse of Russia had
compelled the charging off of 3,941 1853
or holdings abroad. In previous an
nual reports the changes caused by the
war in the value of foreign funds Of
the company were treated as temporary
in their nature. OF tho total amount
charged off on this account last year,
$10,120,000, the report states, repre-
scnts unqucstionable losses in Russian
funds and $316,S25 the value of equip
ment commandeered by Germany at
the French works near Lille.
Deficit Results
These two war losses absorbed the
whole of the 1917 earnings and caused
deficit of $1,35O,721 for the year, COM
pared with net profits of S5,137 ,098 in
1916. Of the other war losses ST.
556,175 represents a conservative esti-
mate of the losses on receivables in
Russia, Rumania, Belgium, Serbia and
enemy countries. being so per cent of
such accounts outstanding on Decem-
ber 81, 1917. This amount has been
charged against the special reserve es-
tablished for losses on receivables. In
addition to the funds withheld in Rus
sla and enemy countries, the corpora
tons investment in those countries
consisted of property and inventory at
the Lubertzy Works, Russia, valued at
$4,750,000, and at the Neuss Works,
Germany, $2,100000. The French
works, near Lille, are still within the
German lines and their condition is
unknown, the report states. This prop
erty is carried at a value of $830OOO.
The volume of 1917 sales of the cor
poration increased % per cent over the
preceding year, due to larger produc-
ton of farm tractors and motor trucks
and to the higher prices for products
enforced by increased manufacturing
costs. Foreign shipments of farm ma
chlnery and tWine during the year were
restricted by the reduced shipping
space and the high freight rates. The
number of tractors exported increased
over the preceding year, shipments
being limited to surplus manufacture
after providing for the domestic and
Canadian trade. Exports of agricul-
tural implements and binder twine to
Russia during 1917 were restricted to
sales made to the Russian government
and paid for in dollars in New York.
The company's investment in Russia
was not increased during the year and
it was impossible to transfer any funds
from Russia to this country. The Rus
sian works at Lubertzy, near Moscow,
have been in almost continuous opera
tion in the manufacture of agricultural
implements, financed from the corpora
tion's Russian fund.
Less Cash on Hand
Income from operations after deduc-
tions for interest, the annual charges
for depreciation and losses on receiv-
ables, aggregated $9,086,103, compared
Win polio ,VSo III IS1O. MS was WlpeQ
out by the charges written off on ac-
count of the 1917 war losses. The bal
ance sheet as of December 81 last
showed cash of $5,S07,824, compared
with s12,253,958 at the close of 1916.
Operating income of the Interna-
tional Harvester Company Of New Jer-
sey last year amounted to $19,311 1888,
compared with S15,822, 800 in 1916. Net
profits we're S14,009, ,593, compared with
s1o,6s2,159 the preceding year. The
balance of S11 ,909,59 available for
common stock dividends was equivalent
t. $29.70 a share, earned on $40 100000
common stock, against $21.45 share in
1916. Nearly half of the company's
profits last year came from the opera
tions of it's steel properties. The re-
port states that the company has ac-
quired new acreage in Cuba in its effort
to broaden the source of supply of
fibre for the manufacture of binder
twine, and in addition is endeavoring
to encourage the growth of Kentucky
hemp throughout the West. The com
panyS actual capital including surplus
employed in the business now exceeds
1926, 900 900, although the nominal capi-
talizatjon is $4,000 .00O