The Oakes times. [volume] (Oakes, N.D.) 1906-current, 1922-01-05
CATALOG HOUSES
ARE LOSING OUT
Rosenwald, Financier, Draws on His
Personal Fortune to Aid
Sears-ROebuck
MONTGOMERY WARD SLOWS UP
People Are Learning That the Home
Merchant is Their Friend


capital stock has been made by julius
president of the firm, who
purchased certain of the mail order
houses real estate for $16,000,OO0.
Mr.. Rosenwald also made gift of |
$4,000 shares of it's common stock,
having a par value of $5,000,000. This
pledging of over $20,000,000 of the
fortune of the firms president will
enable it to write off heavy inventory
losses without scaling down the hold
ings of it's stockholders and hasten
the time when the company will be in
a position to pay dividends. His gift
of $4,000 shares of common stock re-
duces the value Of the outstanding
common stock from $105, 100000 to
$100,000,000. It is accompanied by
the proviso that the common stock
cannot be sold at less than par with
Mr.. Rosenwald holding a three-year
option to purchase it at that price. i
Mr.. Rosenwald has already made
the first payment Of Is per cent on the
real estate transaction. An official
statement by the company further
says that for the remaining Is per
cent due on Mr.. Rosenwald's pur-
chase, the concern is secured by a
trust decd N The property without the
president iscuxFing any personal liza
bilitf. - .-e,
~. Under TIN terms of such trust
deed the eoalpany's surplus at the end
;of last yeaf was $7,564, ,374, and in
ssyentofy was more than $105, ,000, 900.
sEhe new inventory is expected to show
a reduction fully as great as the 80
per cent decline in this years sales
compared with 1920.
The company will continue to occu-
py the property purchased by it's pres
ident on long term lease which, with
the deferred payment Of $4,000, ,000
which Rosenwald. is to make, will bear
interest at per cent annually. The
gift OF common stock made by the
firms head will enable the company to
reduce its capital liability by Sc, 5,OO0,-
600, representing the market value Of
the stock, and the cash payment will
serve to increase the company's cash
assets.
Another interesting sidelight on con-
-ditions Of the large mail order houses
at the close of 1921 is seen from the
reports current in financial circles
that Montgomery Ward & Co. is ex-
pected to show an approximate oper-
ating loss Of $5,000,0 600. In 1920 the
company lost $7,B55,278 Sales this
year (1921) will run around 10000
900 against $101 1,745, ,271 in 1920. The
annual report will be issued about
Feb. 1.
After deducting the dividends paid
the company showed a total loss in
1920 Of $9,467, ,65S. Its surplus at the
end Of that year stood at $2,429, ,772,
against $11 ,442,932 at the end of 1919.
A portion Of the 1921 loss, therefore,
may be deducted from the value Of
the no par common stock, which was
carried in the Dec. 81, 1920, balance
sheet at $685., $50.
There is at present 1885, 900 shares
of no par common outstanding. OF
this amount $4,000 shares were mar
keted publicly two years ago. Nearly
half Of this stock is now held by q
banking syndicate. This pool will be
dissolved the latter part Of. next Jan
uary. Negotiations are reported to be
under way to buy out the weak men,
bers Of the pool at SO per share.
The above in reference to the finan-
cial straits catalog houses are in at
present will be interesting news to
many. It is also interesting to know
who the financial interests are back
of these institutions. Catalog houses
are losing prestige because people are
realizing that, it pays better in the
long run to help develop local insti-
tutions and communities than to as
sist in piling up fortunes for eastern
magnates and banking houses.