New-York tribune., 1919-03-17
American Smelling
Profits Slumped to
$500 a Share i'm 'l8
Poor Showing Attributed to
Great Increase in Costs,
With No Corresponding
Advance in Service Price

Unfavorable operating conditions in
1918 resulted in fall of approximately
80 per cent in earnings of the Ameri-
can Smelling e. Refining company
The annual report just issued to the
stockholders shows balance available
for common stock dividends of S3,459,-
724 last year, equivalent to $3.50 a
share. This compared with a balance
of S13,7a2,9S9 in 1917, equivalent to
$22 so a share on the outstanding com
mon stock.
ut is we'll known to the stock
holders" says Simon Guggenheim,
president of tie company, "that the
smelling company on account Of not
being g mining company, at least
in this country, has obtained no
value of metals. This advantage
all accrues to the mining com
panies, and the smelling company has
the burden of carrying greatly in
creased values in metals, requiring a
corresponding increase in cash re-
sources.
indirect Advantage
THE advantage of the smelling COM
pany lies only in the fact that the
great advance IN the value Of metals
resulted in a corresponding increase
in the number of tons of ore produced,
on which the smelling company normally
makes q profit per ton Of ore Smelted.
Even this situation, however, has had it's
extreme disadvantages The increase
IN the receipt of ores. much beyond
the normal, has required very large
additions to our smelling and refin-
ing works which had to be made at
very abnormal expense, due to war
prices and conditions. This situation
has resulted in the company expending
during the past three years for new
property and construction $20,0O0,000.
In addition to these capital expendi-
lures, the company spent many millions
of dollars in renewal of obsoescent
construction, in addition to capital
outlay.
During the same period of three
years the cost of metals carried by
the company has increased over ST.
100000 Notwithstanding that the in
ventory value of the fixed normal stock
has remained unchanged at the con-
servatively low value of the past. This
demand on our cash resources, which,
with the S5,807,3 of Liberty bonds
carried, has amounted to more than
s42,000,000 in the past three years,
mas been financed without borrowing.
except as drafts are drawn and dis
counts against shipments made from
South America.
Directors Conservative
THE board of directors trusts that
this recital will satisfy the stockhold-
ers as to the great resources and the
conservative management of the COM
pany, and will explain the inadvisabil-
lty of dividends being increased be-
yond per cent even while the earn
ingss of the company were abnormally
nlgn. The same conservatism has
prompted the board to reduce the div-
dend at present on account of the un-
known conditions which may develop
during the reconstruction period. We
know that the ore production has been
reduced due to the uncertain price and
demand for metals, and also that the
present lack of demand will require
the company to carry considerable
quantities of refined metals, and,
therefore, it is wise to conserve cash
resources until more normal condi-
tions prevail. 1t is the hope and ex-
pectation of the board of directors
that this condition is only temporary"
The report shows that the company
received s360,O60,4 ,486 from sales Of
metals, which without cash receipts
brought the total up to S41O,322, 1922.
Of this s376,970,008 was paid out for
ore and bullion purchased, taxes and
expenses. Dividends Of S7,602 ,663 we're
paid the stockholders. Cash on hand
at the end of the year amounted to
sl2,683,e71, against s1O,9O1,717 the
year before.
Output Smaller
pounds OF copper. compared with 91o,-
974,000 pounds in 1917. Silver pro-
duced amounted to 72,572,b06 ounces.
compared with 69,841 ,051 ounces the
Jear before. Sulphuric acid production
OF the company rose from 6G,174.0OO
pounds In 1917 to 1888, 900 pounds
last year. Average wages per eight
hour day paid to the employees of the
company last year were 1891, against
S3.31 in 1917.
Several members Of the board of
directors. Of the company are making
an examination In person of the cor
PORTIONS properties in Mexico, the
report says. With fully restored eco.
nonic and political conditions in Mox-
leo the twenty-five mines Of the com.
psny there viii produce fully $500, 1000
TONS Of ore year, according to Pregi.
dent Guggchhsim. Tho smeiters of The
company IN MoxIco are located at Chi
nunhua, Monterey, Aguasealientss
Ma.ehuala and Valardena. "All O,
tbsse,' the report says, "are now opeff
hting except the last, and they are OF
an'ncient capacity to smeltering thu
proauet OF the mines, except copper
ores At chihuahua, together with addi
tionsi tonnaRes under contract. There
are certainly many reasons at the
present time for feeling encouraged
win respect to political conditions in