Richmond daily register. (Richmond, Madison County, Ky.) 1917-1978, 1921-06-14

is intended to serve only the district
2 around Pullman. 1t receives, for ex-
ample, no wheat from Walla Walla
j County. There will be distinct prob
lem. In WaIla Walla County they may
: not need to put up warehouses at all,
! because they have enough public ware
| houses, all of a very high type, to take
| care of the wheat.
We cannot get 100000 out of the
growers or members of the association
/ in that district this year. They are not
, making enough money on wheat; they
are pretty we'll behind. What are we
going to do? We will organize a cor
poration called the Pullman Growers
or Whitman County Growers Ware
| housing Corporation. 1t will have two
, kinds of stock. 1t will be incorporated
for 100000. It will have 100000 of
common stock and 100000 of pre-
ferred stock. All the voting power of
this corporation will be in the common
stock; the preferred stock will have
no voting power whatsoever.
Taking Over the Storage Plants.
For the initial issue we will issue
nine shares of common stock (of the
par value of $40 a share) or that extra
$50 worth of stock. We will issue
growers association residing in Whit
man County, somewhere near Pull
man. We make each of those nine men
pay $40 share. We thus give to those
nine men the complete voting power
and control of that subsidiary corpora
ton. We issue no other common stock
at that time.
| The preferred stock is in five classes.
The classes are all alike, A, B, c. d
and +, all bearing per cent cumula-
tive dividends except for this one diff
ference: that Glass A is to be bought
back and redeemed by the warehous-
ing corporation before December 81.
1872, at par plus 2 per cent premium.
Class B is to be redeemed before De-
cember 81, 1928, at par plus per cent
premium. Class c is to be redeemed
before December 81, 1924, at par plus
per cent premium. Class D is to he
redeemed before December 81, 1925. at
par plus per cent premium. Glass e
is to be redeemed before December 81.
1926, at par plus per cent premium.
That means that each year you will
redeem one class of the preferred
stock at par, plus per cent premium.
We likewise provide that none of
those classes of stockton example.
| Glass "A"-can ever be issued after
| the redemption date of that class Ode
cember 81, 1929. So, when once a
class is redeemed, it is practically
noneXisting, except that you don't re-
duce the capital stock SO as to wipe
| it out.
The Warehousing Corporation.
This preferred stock may be sold to
anybody. Then this corporation
agrees to do no buying or selling of
wheat or grain. 1t. simply agrees (and
this IS put in the articles of incor-
poratonl to act as a warehousing or
| storage facility in a public way either
for the Washington Wheat Growers
Association or other wheat growers
who may desire to put their wheat
there. 1t may handle feeds if it's
board desires it to do so, or it may
perform other local service which its
Board of Directors desires it to pro-
vide and the marketing association
APPROVES.
Then you have d contract between
the marketing association and this
warehousing corporation under which
the warehousing corporation under
takes to provide facilities that the
marketing association needs. In re.
turn the marketing association agrees
to put all its wheat for storage into
the warehousing corporation and
agrees to pay the warehousing COR
poration for the service
1. The cost of doing the business.
.. a dividend of per cent on any
common stock.
3. A dividend of per cent on all
its issued preferred stock.
4. Money to retire one class of
stock each year, plus that retire
ment premium of 2 per cent.
Also the contract between the mar !
keting association and the grower
contains a provision permitting the
marketing association to deduct that
prorated amount from the proceeds |
of his wheat during each one of those |
years.
A MEMBER-These classes of |
stock are not cumulative each year? |
MR.. SAPIRO-You have a direct |
obligation to retire one each year, but !
in addition we have the cumulative |
provisions as to dividends.
A MEMBER-You retire AZ and |
in addition to the s per cent you de-
clare d per cent premium?
MIR. SAPIRO-On that one class.
A MEMBER-On Glass 3D. that |
goes over the two years you don't de-
clare a 2 per cent each year?
MR.. SAPIRO-No, simply d retire
ment bonus. 1t amounts to this:
Over a period of five years you have
given such a bonus for retirement that
your total runs to 8 per cent. That
is according to custom; on retirement
it is customary to give a premium.
The expect it. Every growers con-
tract contains a provision under
which the deduction is permitted. So
the entire wheat crop handled by the
association becomes guarantee for the
payment not merely of the dividend
but for retirement or the principal of
the preferred stock over a term of
five years.
Did every man get that? What hap
pens? You don't charge that against
the entire wheat pool you charge
that simply against the pool out of
the district which it serves. Whit
man County district alone would be
chargeable with this arrangement,
but you put limit as to the amount
of preferred capital stock that you
can have in any district, depending
upon your sign up in that district.
You figure out the average price of
wheat over a term of five years. You
figure the minimum sign-up in that
district. Then you arrange that the
amount you calculate you will need
to withdraw for the purpose of retir-
ing. the preferred stock shall never be
more than per cent of the average
value of the products coming out of
that district. You can calculate that
mathematically just as we did with
our whole prune group. With our
prune association we retire approx
mately 100000 of stock a year, the
crop usually running about 100000,
600. There we run about l per cent,
but our maximum allowance is per
cent deduction for plants.
Now, let me explain how the system
works: In this system you get the
common stock completely controlled
by the growers; you get preferred