Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-11-20
0e States on Corporation
PRODUCERS OF
OKLAHOMA CRUDE OIL
TULSA, OKLA.

oD1eUt financial editors Of the City. IL =
Afacter Of thought expression occasionally
y HeASd during q general bnll market. aitnoukh
- % not recall any expression OF this
Y nsoRe during long depressed bear market
tt6ds. when Middle States was one OF
y extremely few never selling below par:
ssr iss % Year s'n Is no. down a. much 'g a. sons some
$sner S!is, hn, the & fac. that y seiia $50 20
oak.a "s xs sssn s VIM s,"s" sssscic Ssn1ss
W.cyny traders. traders. M,hoasn liberal div!denas
sSsrs are lew II Wai stree, Who fs rcson,
mend, mend Its garchass: INQUIRY ,,,.Ss reysais -.
ESe STATE. sHTs wSics %;S WSud .hsW hay BY
%;res rph.dsry SoTpo,a.on' charge gu.
psSy y MdSis States. s,ss,i;" "s n.s4 e nst
rdsnee would "a'f BE- falt in ' tho % GSnr,nSs nv"
:.dar Sss 4 9' a".sn anti map; npSS
snsr.ss e; an. and ,ssr !, ccrnnSs n.nS..
IL n II skiinps on such charges
We shall no, presume TO criticize this
question. for we know how usual II Is for
esnerai opinion t, assume that the Gus
eomary way " doing things IL the right
way. We will b. pardoned. however. IN
our opinion that the customary way Is very
often not the best way for the stockholders.
who are really the owners q. a corporation.
There arc two criticisms embraced In the
Above comment:
First. Middle StAtns docs not show how
much subsidiary corporations charge out o.
The earnings for ~ich items n depreciation
and depletion. Mary f'narctsrs Hssunc
that there Is an exact science 70 measure
depreciation os m oil property. when the
Fact II. in every instance. when science has
undertaken TO protect stockholders aga!ns:
depreciation. science has eirrhat crllv
Vailed. for tn" very positive reason that.
unlike coal or other minerals OF ixed de-
boGt. there is no certain wav Of detnr-
mining the life ~ m oil gas nrorerty
and the ma agcmea: ~ a Corporation ;hat
presumes 10 deduct tho percentage Of THY
years earnings for deprccia iion assuming
that the rena nder Is profit. and then pass
along to succeeding years 70 regain add-
tionnl PERCENTAGE TO- depletion. IL pursuing
course Of abs,,ute unc"rta,n.v. ard II
there IL any certainty about such plan.
that certainty IL ono Of ult!:r'at" loss
In coal mine. III" SCIENTIST can safely
estimate the number % tons ~ coal re. TO
be mined whereas in oil or cas production
he can actually count what h" gets todny
bnly. with no certainty az TO what he will
Get tomorrow.
II IL the law Of average how~ver that
tnalies oil production r good bus!ress--you
o. each particular corporation safely aver
aged. The only sound business policy cNn-
trolling depletion Ia that after deduct'nS
costs Of opcratio and interest on the IN
eestment. which you may call dividends. "
Sou plsasc. every cent remaining IL deplc.
tion until the complete cost OF the property
has b"cn recovered. and when u" scientist
tries TO lead YOU into partial deduction o'
come percent this year and depending on
AnA f,,,,,
Tho balance. va will not follow 'ha. p'nn.
and in the interest ~ humanity sincere
IS hope many companies ot iii" character
~ shall aYit following the r!an. T.
has proved disastrous TO many % them.
Do much for depletion.
Tho other criticism os the rhrvn Thought
Expression Is that our different subsidia-r
companies do not publish distinct and sep
krate accounts. Our answer 10 this is that
multiply the cost Of orsrat lions BY depart,
nncnts. The mature of the o'l busn" and
int .ssurn' in W win be-
IN every active oil COMPANY. produces n
srs m,S TT'S0sT % .n na %
hnatelr acCur" 'nrSer interest. o- often
s.r,. rnrs spT Tn sc srn IN
each locality and orcraie as an nsRreRHte
mTmum 1hs Of oy"-head ;hnrss. s i ersn-
inFs OF numerous .nhsldIcr!es entirely, or
has.s e h, hs fse Sc MG s,Sss AT"
theee orera ,ions and eliminate """rv cent
esssSc ssh ~ ''pS.'s: E. S ana IN IN"
force; So, IN this method % ccnro-'v tho
hs s'ys. ~. Combine. "1' !; complete
hineN eyr"nae and net results. and conducts
US business at the lowest nOssh' exrcnse,
.,,rs Tho ccmnlaIr' ths. bond dealers nTd
tta,cs' securities should he "a-tiy, urdsr;
~ n
A:l IN which they az" !n'"rested, and
no aoqs have hs. Ss gs nc cu; rry y.
o. S- rSch in sn whc,
iicniar NE W'dale st... again de-. no,
s'Sw ' tina. M% hs. ns%"l 5sd s,T
IN undr rwri,'ns commission 70 anybody.
Fer example. tn. United on ,P-oducrr:
.lir"e, direct 10 % ~. nv.s,cr T svyns the a I.suirq niq
CoInrany par in cash, with no hfteer ~
a. ss-rcy % 'or -s'ns an the 's s,me ne s'', This %,.
beneficial 70 the ,companv to, -eeav.
money ' raa TI';,4T s1 I, ,ss ss nocv S nj Sa n'
:Si :m Il: STss.r cr :sru"S r doc, 's, n
mean that we are opposed TO the security |
:r .:r S", ' +, he .py b, m.sn: that u,.; 81, 10 mol sS
nseI ~. po!icv, and neither % our
o bond more than one year Old--has nine |
y:ar: 70 ran..has .u"rnrsseed mnImpm
IN the prce o' oil from -irhty-~lEht and
doIsr, ana twentyesv. '@s csnts pe PEP p Ssrrs w
e that means min mum In,e II !n,.rest
mum rate Of interest of twenty ann one
.ensrter ner. cont per annrm Following
hond nad nf~teen ~ and and ni,v.ffour" one. mo.
hundrcaths r"r c"rt rr- anr"rl interest:
then the second six months maid tn" maxi
mum Of twentIT. and on.'ausr'e,, per c.r!
on. the third six months is running about
eixtern per cent Per annu'n,
This Rord 10 generally known to ~ one
~ the best secured Bonds IN" market.
70 expect hrokcrs m Or bond i."'srs t" rec.
Sscnu.e there is no pronf in !. tor any
sedS hut the Who hnyS FOR hi own
the, subject ask how we, cav af'orh 70 nav
Ssr cent. ". certainly could AFFORD Tp,y /" pay
sSs. per 'sn g" vas sbH DOWN 70
rav twenty per cen, when oil goo. un 'o
two dollars and twen'v.fve cents per
s:sr' sSy NOR. AND % '%T ~, cost ,s @n rT:r
Actual investor eight n"r cen, and give
eomebody, fftc"n nor con. for n!nkinr The
tafrei TO see our hondholder. who give rs
eNe hundrea cents on the dollar OF cash
snare rS. with Y. IN the rdynncsd price ot
eurrr,t wear ~" sinking FUND rede"ms avn ,
Ssncels f"nr hrNhred and sixty thousand
isaue Going nj this rate. instead OF TAX.
ing TON amo-'ize this Rnnd iss,,o
looks l'l," about. q -four years joh. The