Milford chronicle., 1922-11-24

t benefits from the expansion funds
= The fundamental idea is that unde
3 the Stone Plan the interests of tn,
management and the investors ant
of the banker are identical, in tina
greater earnings increase the value o.
the common stocks in which these
three interests ultimately share.
One of the most unusual Outstand-
ing features from the viewpoint of the
Company as an Investment Banker is
that it is required to take it's profits
in the common stocks of the Compan-
les financed, after all provisions for
the preferred stockholders are salts
fed. This puts the Investment Bank
er, the Engineers and the Companies
everybody concerned with the man
agement ION their mettle" to make
successful the future of each Com
pany financed
The Stone Plan has been in opera
tion about six years, long enough to
prove the practicability and desirable
ity of the Plan. During this time no
investor has ever lost dollar of prin-
cipal or interest on account of the 20
safeguards of the Stone Plan.
Just as candle light has been sup
planted with electric light, and the
stage coach with the motor bus, and
hundreds of other ancient methods
with modern methods, so it is be-
heved that the principles of the Stone
Plan will eventually transform the
investment methods of many, if not
all, of the old time Companies. The
failure of nearly two dozen brokerage
houses recently and the loss of mil
lions of dollars to investors justifies
the hope that the investment business
be placed on sound merchandising
principles at the very earliest mo-
ment.
The Stone Plan provides what has
been characterized as 4-Point Secur-
ity Service which provides four-fold |
investment appeal to conservative in
vestors.
Point Security of Principal-Un-
til the preferred stock of a Company
being financed is retired such Com
pany may not place any additional
mortgage on any of its property with
out the written consent of 75@o of it's
preferred stockholders.
Current indebtedness is limited and
The Company financed may not incur
liabilities in excess of a safe percent
lge of current assets stipulated by an
agreement, without first obtaining
written consent.
After paying the dividends the Com
)any financed must credit 25%o of it's
net earnings to a preferred
tock Retirement Sinking Fund be-
ore any dividend on it's common
took may be paid.
Point Irregular and Adequate In.
ONE Yield-Should any Of the Com
anies fail to declare a dividend prior
0 any dividend date, the investors
Olding such securities are paid the
I'LL amount of the regular dividend by II
Stabilizing & Guaranty Fund. II
After paying the regular dividends
n its preferred stock, the Company III
nanced must pay at least $50 of it's
net earnings into the Gen
raj Stabilizing G Guaranty Fund un- II
l sum sufficient to pay six quar-
'rly dividends on it's then total out
anding preferred stock shall have III
zen accumulated. III
Also Companies whose preferred iii
Ock issues are purchased for sale
e required to pay outright to-the III
eneral Stabilizing & Guaranty Fund III
20 of their authorized common stock III
These common stocks
gether with other resources are US III
to protect the preferred stockhold- III
s. interests and to guarantee the
eferred stock dividends.
Point 3-Quick COnVertibility into lllI
request being made by any Hi
ent to resell any preferred stock I'LL
Id to the holder under the Stone ,il ,,isl
an, the Stone Company Immediately HI
5tructs the selling force to endeav- liIE
to effect resale of such stock pro- I'm
ling such stock has been held fully ll1
i'd for at least six months. This is HI
ne as a matter of service and the iii
has never failed to resell lilI
thin 30 days in normal times or so Vii
rs in abnormal times at a price NUI
lal to the amount originally paid |lIlI
the client. Illll
Point Permanent Share in Own ll
hp-All preferred stocks of Com lEH
lies sold under the Stone Plan are lI|
irable at a premium with accumu- H
ed dividends and a $50 bonus of lll
nmon stock. Thus, after having
their preferred stocks redeemed lllI
h interest and a premium the ll
ckholders have permanent share HlH
he ownership Of the company they Hlll
e helped to finance. HEl
4 addition to the foregoing attrac- M
features from the viewpoint Of M
Investor, the plan also provides for EH
dcipation of preferred stock equal bH
With the common stock up to a to- MI
Of 1919.
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