The Wisconsin tobacco reporter. (Edgerton, Wis.) 1877-1950, 1919-03-28
NOTE gook skE

The fling of q atvoluntary petition in
bankruptcy in the u S. district court
| at Madison on Saturday by the F. G..
Borden Co. is the first failure in tobac-
co circles the state has witnessed in
some years. The announcement of
their attorney after filing the petition
is that the company bought more to-
bacco than they could handle and the
market slumped, the result is obvious. !"
But to be more specific, the business
of the F. G.. Borden Co. late years has
been largely engaged in the purchase
of low grade Wis. leaf on order for the
Scotten-Dillon firm of manufacturers
at Detroit and often employed from 25
to so sub-buyers in this work. When
the buying of the 1918 crop started in
early August at unheard of prices the
Borden Go. were iE possession of an
order to purchase tobacco variously es-
timated from ], 200 to 1900 acres of the
new crop. Their buyers were released
and soon not only completed the order
but far exceeded it, as some claim
1,500 to 1000 acres before their men
were called in. We are creditably in
formed the Scotten-Dillon concern have
received or will accept all the tobacco
they ordered purchased for their ac-
count at the contract price, but do not
consider themselves obligated to take
over more than their order called for,
especially after the price of low grades
had sumped about 100 per cent. A
surplus of 1900 acres or such matter
on their hands means a tremendous
prospective loss, greater than the cap
itaiization of the Borden Co., hence the
bankruptcy proceedings.
The f. G. Borden Co. was incorpor-
ated under the laws of this state Feb.
8, 1906, for $50, 900, the incorporators
being L. B. Carle, N. L. Carle and F.
G. Borden. An amendment to the or
iginal articles increasing the capital
from $50, 600 to $500, 600 was filed Aug.
9, 1918. The stock was divided into
1900 shares Of $1,000 each, but not all
paid in. In the voluntary petition in
bank ruptcy the liabilities ar listed at
100000 with assets OF $50, 600, but
this does not include the liability of the
company for tobacco purchased but not
received. We learn that good many
contracts of the sub-agents were taken
in their own name instead of the Bor-
den company, which further eompli-
Gates matters, leaving them to stand
to lose not only their reputation as
buyers but considerable money if COM
PEELED to take the tobacco purchased,s
which but few can do. That the fail
ure bids fair to be fruitful source of
litigation first and last is the way
some members of the trade now
view it. 1t is especially unfortun-
ate coming at time when so much
dissatisfaction and friction occur in the
marketing of the present crop. Wheth-
er justly SO or not, many growers had
gained the impression that they are not
being treated right and this failure
throws the cloud of suspicion over the
entire trade, all of whom must suffer
the stigma, however well they have
maintained their reputation for fair
dealing heretofore. In the main the
large operators have met their con-
tracts squarely, paid the penalty for
field buying and assumed their losses
without murmur. But circumstances
like the above do not relieve them of
suspicion and help disturb friendly re-
lations that ought to exist between the
grower and dealer.
-
One exporter, who has been very
successful in this business, was bewail- |
ing the good old times of 1915-1916,
when export business was very profit |
able. "Such export business as we are |
doing now,' he declared, els nothing |
ike WnaC we were dong In 1915 and /
1916. 1t is not nearly so profitable, |
and taking the chances of loss into con !
sideration, / doubt if it is good ven-
ture under present circumstances. For /
one thing, you have to,wait long time /
for your money. You get fifty per /
cent of your money, or eighty per cent,
or perhaps none at all, when you ship,
and the remainder when the tobacco is
and accepted on the other
side. That may be four to six months
after you have shipped the tobacco.
Furthermore, we are not shipping old |
seasoned tobacco now; we are shipping
new tobacco, and there good many
chances for it to go bad in the four
months voyage, and then We will net
a loss. And even if it does not go bad,
the profits you now make are nothing
We can make now twice
what used to be normal profits, but in
1915 and 1916 there was no limit to the