The sun., 1919-10-23

AMERICAN RADIO TO
ABSORB MARCONI CO,
Active Competition With Cable
Lines to Europe Will
Be Established.
GENERAL ELECTRIC DEAL
VIII Provide Capital for FL.
nancing New Concern---No
Public Stock Offering.
GENERAL ELECTRIC DEAL

Plans for the establishment of
transatlantic wireless system that will
compete with and not give merely .
supplementary service to that Of IN.
cable companies were announced yes.
terday. The Radio Corporation OF
America has been formed with the back
Ing Of the General Electric Company to
absorb the American Marconi Com.
pany. The plan is dependent upon the
approval of the stockholders Of the
American Marconi Company.
The war. which led to high desre.
Of reliability In the workings Of the
long distance wireless. put a pressurs
on means of communication which in
the case Of the cable lines in the At
lantic threatens to result in a perma-
nent congestion Of messages, and in
volved temporary hindrances to the pr.
vate wireless enterprise. An aftermath
Of war has been a demand from COM
merciai interests that wireless facilities
shall be developed on a scale conimen-
surate with the need for means OF
rapid communication
The plan of organization OF the Radio
Corporation of America Is for an all
lance of the American Marconi Com
pany with the General Electric Com
pany. substantial block OF shares in
the American Marconi Company that are
now held by the British Marconi Com
pany will be acquired by the General
Electric Company and will be part Of its
contribution to the capital of the Radio
Corporation OF America.
4 =
American. An agreement is in negotia.
tion with the British company by which
the Radio Corporation will obtain en-.
larged wireless facilities abroad and
rev rights In the countries Of South
America. Because Of patent agreements
the operations of the American Marconi
Company have been limited to the
United States and to Cuba.
The directors of the American Marconi
Company have approved the plan and
appealed to stockholders to vote It into
operation. A stockholders meeting will
be held November 20.
The plan of financing provides for au.
thorization of 100000 shares OF pre-
ferred per cent. stock at IS a share and
100000 shares OF common stock with
out par value. The stock classes are to
have equal voting power. share for share
OF this stock 135,174 shares of the pre-
ferred and 100000 shares Of the com
mon have been issued to the General
Electric Company
The General Electric Company has ap.
propriated $2.500,0 for the benefit Of
the Radio Company. Part Of this will
be used in buying American Marconi
shares held by the British Company.
Each stockholder of the American
Marconi Company will the privilege
OF exchanging his stock, par for par, for
preferred stock Of the Radio Corporation,
and. in addition. will be given shares Of
the new company equal in number Of
his holdings in the Marconi company.
One share OF the American Marconi
Company, worth IS par value will be
exchanged for one share OF the preferred
and one share of the common OF the
Radio Corporation.
II Is planned to sell all the assets OF
the American Marconi Company except
its manufacturing plant at Aldene, y. j.,
and certain claims, including some
against the United States Government
arising from alleged illegal use Of Mar
conf patents. to the Radio Corporation
FOR 100000 shares of common stock
and preferred stock of a par value OF
Sl0,000,o00. The proposal involves a rs
cent dividend on Marconi shares, paya-
BILE on or about January 2. 1920, and the
leasing of the Aldene factory TO the Gem
eral Electric Company
The plan does not involve the complete
liquidation OF the American Marconl
Company but does radically change the
scope of its operations and relieves II
OF the conduct OF wireless communication
and the sale of wireless devices.
The capital provided by the proposed
financing is believed to be ample for the
FULLEST development of the company
within Its sphere. No offer of stock on
the market is contemplated.
The research laboratories and the en-.
gineering force of the General Electric
Company has been at work for a mum.
Der Of years on radio matters Appa-
ratus OF great value was developed and
turned over to the Government during
the war The new company will have
the technical assistance of the General
Electric Company and will retain the
highly specialized STAFF Of the American
Marconi Company.
Edward ]. Nally. who has been vice.
president and general manager OF the
Marconi Company. will be the first pres-
dent OF the Radio Corporation.
AS an argument for the support OF the
plan the directors urge the opposition
or the Government to the British hold
ings of stock in the American Marconi
Company. Such foreigners who retain
stock In the Radio Corporation will have
issued to them certificates that are TO be
known as foreign share certificates"