New-York tribune., 1920-12-16
Oil
Companies Sell
1O-Yr.7 % Bonds
New York and California
Corporations of Group
Set Precedent in Offering
Fixed Interest Securities

Two OF the most prom nent units of
the Standard Oil group Of corporations.
Ihe Standard OF California and the
Standard of New York, have estab-
lished a precedent in Standard Oil his.
tory oy financing their needs through
tue puelic sale Of fixed intercst-pearinp
securities. The combined amount Of
the new issues involves $55 900 600. The
proceeds wi be used to finance pro-
grams of expansion.
1he Standard Of Californa yesterday
sold an issue of $25,000,0OO ten-year I
per cent debenture bonds to VIM. A.
Read & Co.
The Standard Of New York has prac
tica.ly closed with the Equitable Trust
Company of New York and Blair & Co..
Inc, for the sale of $3O,OOO,OOO of ten
year per cent serial debenture bonds.
with single exception, namely, the
sale of equipment certificates some
time. ago by the Union Tank Line.
1nls Is the tlrst time on record that any
Of the Standard Oil companies have
raised money through the issuance of
bonds. Heretofore the financial needs
have been met either by drawing upon
earnings or by selling stock to their
shareholders.
Changed conditions in the invest
ment markets, however, made it inop-
rortune for the companies to follow
the usual line Of procedure this time in
'alsing new capital, with the result
hat the arrangements decided to enter
me pond market. In the case of the
Standard of California the proceeds of
he bond sale will be used primarily
Tor the acquisition of additional pro-
ducing properties.
In maxine off cia1 ovporroor,n-s r
the Standard of California financing
VIM: A. Read & Co., the bankers in
the transaction, stated that these bonds
will constitute the only funded debt
of the company. While the issue will
not be secured by mortgage. the com
pany. agrees not to issue any bonds
ranking ahead of this issue. The
company has also agreed to create a
sinking fund of S500,000 year to pur-
chase the bonds in the market at or
below par, the sinking fund to operate
semi-annually and to lapse if the bonds
cannot be acquired in this manner
The California company is the
largest producer Of oil in the country
and. with capital of S99,373.31O. is the
second largest of the so-called Stand
ard Oil group. The value of its stock.
,stimated at the present market around
s32O,OOO 900, ranks second only to that
of the Standard Oil Company of New
Jersey. According to an appraisement
low being completed by engineers. as
sets exc usive of the company's prop
.~ty in the Philippines ana Central and
Snuth America will exceed S400 900 900
earnings, as reported by the comnany
or the year tndinr December 81 show
'et income available for depreciation.
'en'etion and Federal taxes anountinc
to more than SAG 900 900 Earnings for
The ten months, according to the com
rany's estinTa ate. were in excess of
those for the full year of 1919
Ry the end of the current year the
Standard of California will have cx-
pended out of the years earnings
mHrc than s35 800 600 for extension
and Improvements to its refneries ad
dit rs to marine equipment and req
uisitiNn of oi producing properties
Proceeds of the bond issue will be used
20 finance the 1921 procrAm Of ex-
pansion and for additional working
capital
VIM. A. Read { Co. are forming a
syndicate consisting Of the Equ table