The Birmingham age-herald., 1919-08-13
ENORMOUS PRICE
 FOR OIL PROPERTY
By HOLLAND

New York, August 12.--(Special) The reports in circu lation that Presi- dent Marston of the Texas and Pacific
 Coal and Oil company was recently
 approached with intent to learn wheth-
 CT he would give favorible considera- tion to an offer of one hundred and twenty million dollars presumably for the control of the property and major ity ownership of i ts resources. So also with equal emphasis the report asserts that President Marston was not dis posed to give any consideration to this proposition
 How much truth there is in this re- port of course President Marston as well as those who made the offer if any were made alone knows. Never theless an offer considerably in excess Of hundred million dollars for pro- perty which only three years ago was capitalized at only three million dol lars, if such offer was made furnishes
 a striking illustration of the relation of the oil industry in all it's depart
 ments to American industrial and busi- Eess life.
 Assuming that as much as a hundred
 and twenty millions were offered for
 the control of this property and for the
 greater part of it's resources 1t is cer-
 tain that such offer could only have
 been made by some one of the very
 large corporations engaged in the oil industry of by a corporation of private
 capital and banking influence which are associa ted with the oil industry. It was inevitable that the report of
 this offer should have been put in cir culation soon after the announcement that the directors of the Standard oil company of New Jersey recommended an increase of the capital stock by an issue of preferred stock at the aggre gate being hundred million dollars. Was 1t with a view of being well for titled to make payment to President Marston for his company of a hundred anG twenty million dollars that the Standard Oil company of New Jersey has decided to issue a hundred million of preferred stock? This question has been asked many times but there ap- pears to be no good reason for pre- suming that from the Standard Oil company came this offer. The company needs new capital in great measures to facilitate the export business which there is doubt it will speedily be en- gagged in since all Europe is greatly in need of American oil and it's va rious refined and by-products
 A FINE MELON
 It has been eroneously reported that the increase of the capital stock of the Standard Oil company by as much as a hundred million dollars would in evitably serve to reduce the market quotations for the common stock of this company. Some have said that the reduction would be as much as fifty per cent But this surmise is based upon false reasoning. The new stock | is to be preferred. It will cost the company seven per cent for that is the rate of dividend agreed upon. As | it is preferred stock and has no vot- ing power it's issue should have no | market effect upon the quotations for the common stock of this company. Nevertheless the present day. stock holders who are privileged to receive for each share of the common stock they l hold, one share of the preferred stock
 at par will undoubtedly find themselves l in possession of securities for which, if | sold, much greater price than par could be obtained. Still there stands the government with outstretched hands I ready to receive a large share of ex- | cess profits.
 l It was excess profits and other fea- 1 lures of the war tax which compelled | such heavy payments to the govern | ment by this compbny as to make it 1 impracticable any longer to pay for im- l provements and expansions out of earn ings. For that reason an appeal for rev capital was necessary.
 A LARGE UNDERWRITING Some of the stock holders of the Standard Oil company of New Jersey are reported to be speaking with some regret that the company did not appeal | directly to the stock holders for the l subscriptions to the new preferred stock instead of negotiating with q. F. Morgan and company so that the new | issue could be underwritten. But there seems to be the soundest bnsi- ness reasons for secuNng the guatan- 1 tee of l. P. Morgan and company for the speedy marketing of this stock A hundred million dollars is very large amount even in these days of billions It was regretted as part of prudence that a competent guarantee that the new stock be instantly absorbed should be obtained. This guarantee is fur nished by the Morgan house so that it is certain that the preperred stock will be absorbed or at least that the
 Standard oil company will receive the
 hundred millions For this service the
 Morgan house presumably receives a
 commission not in excess of one per
 cent It is paid Q million dollars