The Washington herald., 1920-05-30
SUMATRA HAS
GOOD PROGRESS
company's Business PROM
ises to Reach Record
Proportions.
ESTIMATED EARNINGS
May Approximate Ne
Equalto $22 a Share on
The Common Stock.

The business Of the American suI
matra Tobacco Company prom!sei
TO reach record proportions in the
current year. Sales for the nfd
year after the war were more than|
double those for the last year Of tn.
war. This sets at rest the belief fn|
certain. quarters that the growing
business OF the American Sumstra|
Company was due to war conditIons
Incoming business IS far in exec
Of the company's capacity 10 pro-
duce and new money to take care of
this expansion is absolutely neces-
sary.
American Sumatra sold $4,000 .ORa
ien-y year convertible notes in June of
last year. all of which have since
been converted into common stock
The expansion in business, resuItior
from the judicious expenditure nrI
this money, has been accompanjed
by a large increase in earning
mower. Earnings for the preseu,
tiscsl year. with two and one-baIfI
months estimated. are as follows:
Gross earnings 500 0no|
Less preferred dividend
and estimated taxes. I 500 %
Applicable to com. stock go. 500 .ooI
Equal TO over S22 per share %
li4.i12 shares Of common stoct Ill
Proceeds from the new S6.56I .0Od|
rote Issue should he followed by u
further expansion in business and /.
corresponding enhancement in earn
ing power
\ representative of the America nj
sumatra Tobacco Company saws n
recession in prices should cause MI
apprehension. = Reduction wouId
lie welcomed, as IL is believed cost d
VIII Keep in touch with any declina
in prices of goods sold.
Sales OF Sumstra Tobacco. which
are now taking place in Amsterds m
are at very high prices.
ANY further taxation nIace,j
upon tobacco is also to The com j
pany's benefit" according 10 Spl
matra representative. 1T yrouIyA
serve further 10 compel the manu- I
LECTURERS Of cigars to use domestj, l..
wrappers in place Of the imnor,cs
as they would naturally be seeE jD,,
10 hnd opportunities TO reduce tbeI-
costs
The greater amount Of tho co,,
panys business comes uDd,- ,bl
head OF farming. In this come
tion IL Is interesting to state tb.,
while the company's business
largely a crop proposition. IL has
clement Of safety that is often o,-s
looked. from the fact that its ,.ror
are grown under shade. or wb
practically might be called proy
IN greenhouses. where they ar, rr
te"ted from the winds and hail an
wh"r" they have an equalization
moisture which carries tho crJ
through long periods OF drought
IN" Company now ocCupies sut
position in the tobacco frdust
that u is real necessity To cira
manufacturing Interests
American Sumatra WAS orCa1izI
with capitalization OF lO.0
shares preferred stock and ca 81
shares common stock The 100
shares preferred stock were tax
by the bankers who furnished "A
working capital for the comnsn
The 10000 shares Of common sios
represent the purchase Of the pro
critics. This amount was arrived
by the appraisal made under the "a
thority Of the bankers Of al
properties. and naturally this VI
made on very conservative basi
which was claimed by the wendell
TO be not over 50 per cent Of IN
cost OF the plantations The stool
was. therefore. issued at 100 cent
on the dollar. on a most conserva
tive basis at the time Of the acouisi
tion of the A. Cohn Company. TherX
was an increase Of loo. 900 shares oI
preferred stock when the ConneCtiJ
cut Tobacco Company was taxed
over.
In June Of last year. an issue Il
$4,000. 600 lO-year convertible NOTED
was subscribed for by the stockI
holders and almost Immediately con
verted into common stock
On October I. 1919. the Griffin I'd
bacco Company was acquired nv Il
company. and 800 shares addition
common stock were issued at til
time. The total outstanding capt.
stock today is as follows: Preferrt
stock. 1885 shares: common st"c
Ili4472 shares.
The annual interest charges 4
the new note issue will be S4se. @u
while net earnings before taxes. ar
plicable to interest charges. arc
timated at S4.sOO.OOO for the cur
rent fiscal year. A further widen,
of the security back OF the notes
found In the fact that an appraisal
now going on is expected to shoV
about SSS.oOo.O0O physical assets.
total nearly 5is times the propose