New-York tribune., 1919-08-08
Directors Approve Increases
in Common and Preferred
of $17O,OOO,OOO; To
Retire I'd Pref. Issue
Common to Get 8 p. c.
Extra Dividend Is Also
Promised Early in 1920;
To Double Tire Capacity

Directors of the United States Rub
Der Company yesterday voted to in
crease the authorized capital of the
organization from $70,000,O00 to $780,
100000 in first preferred stock and
from $40,000,00O to $200,O00,O0O in
common stock. At the same time they
favored the retirement of the $1O,00O,-
900 second preferred stock, the greater
part of which has been acquired by
the company. This would make a net
capital increase of $4,000 900. The
action of the directors will be sub
mitted for ratification to a meeting of
stockholders on September O..
If the increase is approved it is pro-
posed to offer $36,O00,000 of common
stock to common stockholders at par.
Beginning in October. dividends on
the common are to be paid at the rate
of 8 per cent, while an extra distribu-
tion is promised early in 1920.
In his report to the directors Sam
uel ?. Colt, chairman of the board, pre-
sented q statement which shows that
the capital now issued and outstanding
is: First preferred stock. S63, ,O22 100;
second preferred stock, $403, 900, and
common stock, $36,000,0OO.
Big Increase in Business
The volume Of business transacted
by the company during 1918 was ap-
proximately $215,O0O,000, and for 1917
it was shown as amounting to S176,-
100000. In 1914 it was $83 900, 900, an
increase during the last five wears of
1882 ,00O,O 600
During that period" the report
states, 'the capital stock Of the com
pany has remained substantially the
same. The Indebtedness of the com
pany was funded in 1917 into long
term per cent bonds.
"1he surplus earnings for the years
1917 and 1918 were equivalent each
year to about 80 per cent on the com
mon stock and the earnings for the
first half of 1919 have been substan-
TALLY the same as the first half of
1913.
"Your company is engaged in a
business capable on conservative lines
of large expansion, the tire business
both OF passenger vehicles and trucks
being notable example Of this. For
the past two years your company has
been unable to meet the demand for
its tires, and Notwithstanding its ca
pacty has already been substantially
increased, further construction has
been authorized which will require in
the neighborhood of SIS 100000 for
its completion and which will double
tho present capacity of the company
for producing tires.
"The amount of present outstand-
ing common stock compared with the
property Of the company is relatively
very small.
Recommends Issue Of Common
"In view of these conditions your
chairman would recommend, upon the
certificate Of organization being
amended as proposed, that $50, ,00O,-
900 of additional common stock be
issued and offered to our common
stockholders at par, in order to pro-
vide ample capital to meet the en-
larged business Of the company with
out the application of so large pro-
portion of earnings for that purpose
as has been done the past few years
Your chairman is also of opinion
that the company is now amply JUS
titled in placing its common stock
upon an 8 per cent dividend basis and
he would, therefore, recommend that
dividends at the rate Of s per cent
per annum be paid upon the common
stock of the company beginning in
October next, and further, that an ex-
ira distribution, either in stock or in
cash, such as may be warranted under
all conditions, be made early in 1920
to common stockholders"