Evening journal., 1920-02-16

~ ihe Hercules Powder Company for
1919 were the smallest since isl9, &c
cordine to the annual report OF Il. II.
Dunham, president OF the COMPANY
made public today. In his report Pres
ident Dunham says.
The balance sheet shows the conal-
ton OF your company az the close oI
us seventh year. The gross assets, as
compared With last year, are decreased
about one-fourth, due principally 70
hqudation Of government accounts ano
The application Of the proceeds 70 Inc
ext,ngilshment OF bank loans, ana the
reduction Of current accounts pay
able: also due, IN large part, TO the re-
turn 10 tho United states Of that por-
ton OF the advance payment for which
your company had no prospective need
ia winding up It's obligations under
contract for the operation of the Gov
evnment -smokaless Powder Plant, at
Nitro, w. Va
'Thore has been 20 change during
this year 10 the companv's issued Of
authorized capital As stated, al bank
loans have been extinguished, and the
liqGiiatou Of government accounts
leaves The company not only with am
Iis working capital, but with cash as
sets very materially IN excess Of us In
mediate requirements, even though
those Requirements have been increas-
Cd over pre-war fgures, because OF the
higher prices prevailing for al male-
fials and labor going into The maDliao-
lure Of the companys products
IN The preparation o. IT'S statement
D. claim for. settlement under contracts
caDceled by. the army and navy at thn
end OF the war, your company reoog-
nized and acquiesced fully IN the prln-
ciple laid down By both OF these de-
pariments, that such settlements
should be made without pront 10 the
contractor, on account Of any mate
rials not actually manufactured and de-
llsercd.
your company therefore prepared
It's statements of claim including only
compensation FOR actual losses imposed
upon Il by these cancellations, consist
ing principally OF plant extensions not
already ainortized, and the loss IN value
" materials purchased especially FOR
use Oh these contracts. Your company
omitted items about which there might
be differences Of opinion or dispute, N
order that settlements might be ef-
fecied more promptly.
In rs negotiations your company
las been able 70 show the army and
navy that its claims have been deter
mined on 4 fair and equitable basis to
no United states, and those claims
have been accepted after an adjustment
OF approximately S5O0.O0000. which has
heen Written into plant account as II
involved the amortization OF certain
plant extensions.
AT the beginning OF the year, your
company had in government accounts.
a totll Of a little less than Si000ooOooo.
At the close Of the year. there remains
a little over si.Oo00o000, and 90 the
date OF writing this report there re-
mains unpaid approximately S350O0OoO
This figure has been fully agreed upon
between your company's ofllc'als and
the initial negotiating branch Of the
army. so that 10 only remains for the
reviewing boards 10 endorse this sell
.emeut, when payment viii be made
and all moneys due your company from
the United States will have been re-
celvcd
Progress is also being made on final
settlement Of your company's contract
for tho operation Of the Government
smokeless Powder Plant 40 Nitro w.
Va. though none Of the company's
funds are involved IN this matter, and
settlement will involve only the re-
lease OF mutual obligations between
your company and the army.
Your company's earnings for the
cufrait year arc the smallest since
iMi. and the earnings applicable to
dividends on common stock show only
ii small margin over the actual divi-
dend disbursements The absorption
OF overhead and closing down expenses
by your company, Of course. resulted
in an increase IN the cost Of manufao-
suro Of IS war materials that were
delivered durCg the current year. Con-
sequently, about one-fourth Of the
gross sales reported this year repre-
sent War products manufactured and
delivered without any profit whatso-
ever 40 your company.
During the early part of The year,
your company had substantial sums
borrowed through rs banking con-
nectlons, involving. Of course. payment
of interest, while on the other hand,
the large sums tied up IN government
accounts for the greater part OF the
year. brought no return whatever, aud
while these sums were available in
time 20 produce a small Income In the
form Of interest on bank deposits or
collateral loans. they were not avail
able sufficiently carly Tor actual in
ves,mcnt ia profitable extensions o.
your eompany's business. During the
early part " The year, In addition 90
war business carried over, your conf
3any was establishing certain new iincs
which, during the Introductory period,
returned no profit and FOR while a
loss.
Your company supplies moro eNplo-
siyes TO the copper industry than 70
any other single line, and during tho
year the output o. copper has been
greatly restricted Your company
sales were likewise somewhat reduced
by the coal strike and by the steel
> .fr1ke, though the latter affected some
OF the new lines Of manufacture more
than the sale Of explosives. The tu-
iure shows every Indication of i'm
IGcNctuent ID Tue iiAAtudy luts I'D
which your company Is engaged, in
,luding those newer lines Of endeayor
that have been recently established,
but undoubtedly your company's fu-
ture viii depend largely upon deyei-
,pments in the commercial world
generally.
AS advised IN last years report.
some OF the best talent IN your COM