The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1921-05-18

( nine shares of common stock (of the
500 worth of stock. We will issue
these in nine members of the wheat
, 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
corporation. We issue no other COM
mon stock at that time.
The preferred stock is in five classes
The classes are all alike, A, B, c, ID,
and +, all bearing 8 per cent cumula-
! tive dividends except for this one diff
ference; that Class A is to be bought
back and redeemed by the warehous-
ing corporation before December 81,
| 1922, at par plus per cent premium.
| Class B is to be redeemed before De-
cember 81, 1923, at a par plus per
cent premium. Class c is to be re-
deemed before December 81, 1924, at
par plus 2 per cent premium. Class ID
is to be redeemed before December
81, 1925 at par plus per cent prem
Jun. Class + is to be redeemed before
December 81, 1926, at par plus 2 per
! cent premium.
That means that each year you will
redeem one class of the preferred
stock at par, plue per cent premium.
We likewise provide that none of
those classes of Stockton example,
| Class "A"-can ever be issued after
the redemption date of that class
| December 81, 1929 So, when once
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 a
| grees to do no buying or selling of
wheat or grain. it simply agrees land
i this is put in the articles of incorpora-
tion) to act as warehousing or stor-
age facility in public way either for
the Washington Wheat Growers AS
ISOLATION or other wheat growers who
may desire to put their wheat there.
J 1t may handle feeds if its board de-
J sires it to do so, or it may perform
j other local service which it's Board of
Directors desires it to provide and
the marketing association approves.
| Then you have a 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 return
the marketing association agrees to
put all its wheat for storage into the
warehousing corporation and agrees
to pay the warehousing corporation
for the service
1. The cost of doing the business.
2. A dividend of 8 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 retirement
of 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 "A" and
in addition to the per cent you de-
clare 2 per cent premium?
MR.. SAPIRO-On that one class.
A MEMBER-On Class "B" that
goes over the two years you don't de-
clare 2 per cent each year?
MR.. SAPIRO-No, somply a re-
tirement bonus. 1t amounts to this:
Over a period of five years you have
given such bonus for retirement that
your total runs to 9 per cent. That
is according to custom; on retirement
it is customary to give premium
They expect it. Every growers con-
tract contains 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 of the principal of
the preferred stock over 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 dis
trict which it serves. Whitman 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 term of
five years. You figure the minimum
signup in that district. Then you ar
range that the amount you calculate
you will need to withdraw for the
purpose of retiring 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 fundamentally just as
we did with our whole prune group.
With our prune association we retire
approximately 100000 of stock a
year, the crop usually running about
SEC, 100000. There we run about l per
cent, but our maximum allowance is