The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1924-03-06
Anaconda Official Clears
A-B-C of Blame for
Omitting Dividend.
BRASS EARNINGS GOOD
American Brass Acquisition
Helped Keep Loss at Mini
mum Says Official.

Kenosha. as the home of one of the
largest plants of the American Brass
Company, is interested in the letter to
the stockholders of the Anaconda. Cop
per Mining company, of which the
American Brass is now part, regard
ing the recent failure to declare reg
ular dividend This letter was written
by John D. Ryan, chairman of Ana
conda Company, and states emphatl-
cally that the American Brass Com
pany and the Chile Copper Company,
both recent acquisitions for Anaconda,
were not in the least responsible for
the slump but that to the contrary
their earnings helped to make up for
losses in other departments of the
company.
This letter as published in a recent
issue Of the Wall Street Journal, fol-
lows:
AS the regular annual report will
not be issued until May, it is deemed
desirable to issue this letter in con-
nection with the decision of the di-
rectors to omit the declaration of the
dividend at the meeting held February
&c.
During the year 1923 the company
earned, as nearly as can be estimated
pending the final audit of all closing
entries, and the closing of inventories
of metals in process, and finished and
manufactured products, approximately
S8,500,000 in excess of all fixed charges
and costs, including depreciation.
IL. o04 hA
declaration of the dividend had been
omitted, there has been some comment
that failure to act was caused by the
fixed charges incurred in the financing
of the purchases of the stock of The
American Brass Co., and majority of
the shares of the Chile Copper Co.
American Brass and Chile Earnings
Good.
These statements are incorrect. The
earnings resulting from these pur-
chases have not only carried the fixed
charges incurred in their acquisition,
but have paid substantial amount in
excess thereof to your company proper.
Without such earnings it is doubtful
if your company would have, been
justified in distributing $9000,000 in
dividends during the past year.
The directors believe that in omit
ting the dividend at this time they are
pursuing conservative policy, in view
of the prevailing conditions of the
copper market. During the first half
of 1928 earnings were upon fairly
satisfactory basis, an average price of
approximately Ia 1-2 cents pound
al
Since then, due to the increase of
production to maximum output, and
the forced selling, largely on the part
of custom smelters not directly con-
cerned in either the cost of production
or the price realized for the product,
the market has been weak, averaging
less than Is cents a pound.
At this level, with increased wages,
taxes and transportation costs, the
margin of profit is narrow, and it is
believed that it is better policy, look
ing to the interest of the shareholders
to maintain the company in a sound
condition, rather than to weaken its
current position by paying dividends
that are not wholly earned from cur
rent income.
Copper is about the only stable COM
modify selling in the markets of the
world at below pre-war prices. We do
not believe that it can long continue
to sell at the present level. Domestic
consumption has doubled since the
pre-war period, and any return to nor
NAL industrial activity in Europe will
furnish the necessary excess of de-
mand over production to cause market
prices to advance and reach level
nearly comparative with that of all
other basic commodities.
Current position of the company is
excellent. AS of January /, as nearly
as can be estimated, its net current
assets Appropriated $72,0o0,OO0.
We believe only small additional
increase in consumption is necessary
70 take up the slack caused by the
present rate of production, in order
to place the industry upon such a sub
stantial basis as will warrant an early
resumption of dividend payments.