The sun., 1919-09-25
AMER. SMELLING
REPORTS DEFICIT
Directors Felt Justified in
Calling on Accumulated
Surplus.

The American Smelling and Refining
Company barely earned the dividends
paid on It's preferred stock in the half
year ended on June 80, and after pay
ment of per cent. on its common stock
instead Of the usual two quarterly pay
ments aggregating per cent. had
H,1s5,464 deficit. according to the semi
annual statement just issued. Notwith-
standing the deficit the directors felt
justified In calling on accumulated sur
plus for that sum, they said. although
they omitted to announce the reasons for
their justification.
The president of the company, Simon
Guggenheim, In letter to stockholders
| admitted that the result of operations
was an unfavorable showing and mem
toned the following contributing factors:
with the cessation of the war de-
mand for metals many mines entirely
closed and those producing were COM
PEELED to reduce their output 40 to SO
per cent. A marked reduction in the
company's business necessarily followed.
While every effort was made to enforce
| economies, taxes and many overhead
charges remained relatively stationary.
Hence the reduction in output served to
increase costs very greatly and reduce
profits on the business done.
wages have continued to increase
during the six months covered by this
/ report, and the. costs of fuel. freight
and supplies have not on the whole ma
terially decreased: in fact, in some in
stances have actually increased. The
loss and profits from reduction in the
volume Of business done has thus been
| greatly augmented by simultaneous in
crease In cost of doing that business.
ION December 81, 1918, increased
treatment charges secured on long time
contracts entered into on the pre-war
| basis of our costs, terminated and ship
ments under these contracts have i'm
| posed an onerous burden on the COM
pany. Negotiations are again being
conducted for Increased treatment
charges. and the directors are hopeful
of beneficial results.
"The profits from the extremely valu-
able properties of the company in Mex
leo increased during the second quarter
of the year. and would have been much
! greater had it not been for the activity
| of the Villa forces in the vicinity OF
! Chihuahua, which resulted for con-
siderable period in a cutting of railroad
| communication, a shutdown of several
mines and relative suspension of the
| operations of Chihuahua smelter The
railroads are again running and 1t is
hoped that these properties can be oper-
ated hereafter without interruption.
THE usual charge has been made to
the profit and loss account for depreci-
| alton and depletion of ore reserves, and
provision has been made for the esti-
mated Federal income taxes for the
period"
For the six months ended on June 80
1919, according to the report, net earn
| inrs of operating properties were So
713.77s. against ss,4sS.4s2, decrease OF
s2,779.704 from the corresponding period
of the year Just before. Gross income
was s6.0216s4 against s9.745.526, a de.
crease of sS,723,s42. Net income
amounted to s2.149,159. against s4,o6s..
S21, a decrease of s1,919,661. The
amount of dividends paid on the com
mon stock fell OF s609,9s0. but the bal
| ance for the common stock after pre-
ferred dividends was only s24,496
against a payment OF s1.219. $50. leavins
la deficit after dividends of s1,195,464
This deficit reduced final profit and los.
iasurplus to S25,S64,T55