The sun., 1919-08-08
j. S. RUBBER PLANS
TO ADD TO CAPITAL
Directors Authorize Increase
10 $500, 100000 and 8 P. G.
Common Dividend.
NEEDED FOR EXPANSION
Would Retire Outstanding
Part of $4,000, 900 Second
Preferred Stock.

rbs directors of the United States
Rubber Company unanimously author
i,sd Yesterday an increase In the total
capital stock OF that company from
.Iso 400 900 to s300,0O0,000 by adding
;so 900, 900 Of new first preferred stock
snd s160. 600, 900 of new common and
rstiring the remaining outstanding part
"A the $4,000, 900 second preferred.
TN. directors announced also their inten-
zion of putting the common stock on an
q ner cent. dividend basis, beginning in
usxt October, and declared that IL earn
,nrs warrant, a substantial extra divi-
dsnd will be paid to stockholders in the
spring Of 1890.
These were the outstanding develop
nents Of the regular meeting OF the d.
rectors held yesterday afternoon at the
eompanys ONCE at Broadway and b7th
street. These steps were put before the
hoard In the form OF a communication
from the chairman OF the board. Sam
uel P. Colt. In his statement Mr.. Colt
outlined the need for new capital to
carry on the vast expansion programme
az the company and declared that earn
ings were running along at approximate
ly the same rate as they did last year.
The stockholders Of the company will
meet on September to vote on the pro-
posal for the stock increase. Stock of
record on August will be entitled to
vote at that meeting. II the capital In
crease be authorized by the shareholders
only s3sQo0, 900 of the $4,000, 900 new
common will be issued Immediately. 1t
win be offered to present stockholders
for subscription at par, or 800 a share.
on the basis OF one new share for one
share now held. There Is S36, 200, 900 Of
common stock outstanding. None of the
new preferred stock will be issued at
this time, II was announced. The sec
ond preferred, of which only $403,60O
is outstanding. is to be retired i'm
mediately.
Bankers VIII Underwrite.
The common stock issue will be un-
derwritten by banking group, probably
headed by Kuhn, Loeb & Co., with whom
will be associated, II Is expected. one
Of the subsidiary companies OF the
United States Rubber Company. Com
plete details for the underwriting have
not been worked out, 1t was stated
The statement of Samuel P. Colt,
chairman of the board, laying the situ-
aticn before the board of directors of
the company, pointed out the need Of in
creasing the capital to carry on the pres
ent work of expansion which the COM
pany has undertaken and further plans
for an Increase Of production being con-
sdered.
After careful consideration of the
subject" says his statement, your
chairman would recommend to the. board
Of directors of the United States Rubber
Company that steps be taken to amend
the certificate Of organization of the
company to provide for an authorized
increase in it's capital stock up to $780,
100000 first preferred stock 5 zoo. 900, 900
common stock and the retirement OF the
second preferred stock, the great part
OF which has alraedy been acquired by
the company.
THE present authorized capitalization
Is first preferred. $4,000, 900; second
preferred, 100000 900; common, s4O,-
100000. The capital now issued and
outstanding is first preferred, S63,022,-
100; second preferred. $403.600: COM
mon, $40, 900, 900.
THE volume of business transacted
by the company for five years In round
numbers was $SS,000.000 in 1914, S92,-
100000 in 1915. $125, 100000 in 1916,
sl76,OOO,OeO in 1917 and $215. 900. 900 in
1918. During that period the capital
stock OF the company remained sub
stantially the same.
Would Double Tire Capacity.
The Indebtedness OF the company was
runded In 1917 into long term per cent
oondsA The surplus earnings for the
years 1917 and 1918 were equivalent
each year TO about 80 per cent. on the
common stock and the earnings for the
nrst half of 1919 have been substantially.
the same as In the first half of 1918.
Your company is engaged in a busi-
ness capable, on conservative lines, of
large expansion. the tire business both
OF passenger vehicles and trucks being
notable example of this. For the last
Two years your company has been un-
apie 10 meet the demand. for it's tires
and, Notwithstanding its capacity has
sready been substantially increased
further construction has been author
ited which will require in the neighbor-
mood OF 315,000.000 for its completion
ana which will double the present ca
paclty OF the company for producing
ures' The amount of present outstand-
ing common stock. compared with the
property OF the company, Is relatively
very small
IN view of these conditions your
ehairinan would recommend, upon the
oe''hcate OF organization being amended
az az proposed, that 336,000,000 of addi-
nohsl common stock be issued and Of
ea 10 our common stockholders at
par IN order to provide ample capital TO
meet the enlarged business Of the com
pShy without the application Of so large
= proportion OF earnings for that pur-
pOse .s, as has been done the last few years. |
tour Chairman is also of the opinion
va tnSe the company is now amply justified
~ pacing It's common stock upon an 8 |
,sI cent dividend basis and he would, |
S SereIore' recommend that dividends, at
r.,, 'aS Oh ) per cent per annum be |
c.u upon the common stock OF the |
company beginning In October next. ana
iurther that an extra distributor either
" stock or in cash, such as may be war.
Iahted under all conditions. be made !
'Sry IN 1920 to common stockholders "