Milford chronicle., 1927-09-16

Corporation Common Stock
Like all other well managed cor
pOrations, the DUPONT company be
lieves it prudent to cary a consider
able reserve in cash or easily mark
etable securities so as to be pre-
pared, to meet sudden and unex
pected call for additional capital b.
the business of the company.
"On May Z, 1927, the following
letter was addressed to the financ
committee of the DUPONT Company
Gentlemen:
This is to recommend that tn,
company purchase in the open mar
ket common stock of United States
Steel Corporation at, or around tn,
present market price of $186, taking
as much as they can obtain up tt
100000 shares. 1 believe that thi.
investment will enhance in value il
the future, will yield a dividend re
turn of about 6 per cent in the
meantime, and it would undoubtedly
be of use as a financial reserve ot
cushion in the emergency, being
nearly as good as a reserve in cash
or short term securities, and there
fore, could be looked upon as a
substitute for such a reserve.
Signed"
Irenee DUPONT, Chairman"
"As the result of a considerable
discussion of this letter the finance
committee authorized the proper Of
! ficers of the company to purchase
up to $14,000,000 worth of United
States Steel Corporation common
stock at not to exceed $175 per
share. These prices refer to the
shares before they sold ex-dividend,
that is before the distribution of the
recent 40 per cent dividends of the
United States Steel Corporation.
Accordingly between May 10, and
June Is, 1926, we completed the pur-
chase of the equivalents of 414,000
of the present shares of the U. S.
Steel Corporation, including the 40
per cent stock dividends at a cost
of $14,OO5,392, since which date we
have acquired no further shares.
"On July 27, 1927, the DUPONT
Company's semi-annual report to it's
stockhC ders contained the follow
ing announcement :
your Board of directors have
employed about $14,00OO0O of the
company's surplus funds in the pur-
chase of 114,000 shares of the
United States Steel Corporation
common stock. This investment
has been included in the item
Marketable Securities and Call
Loans on the accompanying balance
sheet"
"The DUPONT COmpany's holdings
of 114,OO shares of common stock
of the Steel Corporation are about
1.6 per cent of the 7,116,235 shares
of the common stock of that cor
poration and are about 1 per cent
of the 1O,719,046 shares of the vot-
ing stock of that corporation, COM
prising both the common and pre-
ferred shares.
THE United States Steel Corpora
tion, as far as we know, owns no
stock in the General Motors Cor
poration, nor in E. 1. dupont de Ne
mours and Company, nor in any of
their subsidiaries. The General Mo-
tors Corporation owns no stock in E.
1. DUPONT de Nemours and Company
nor in the United States Steel Cor
pOration or in any of their subsi-
diaries.
"The U. S. Steel Corporations
sales to the DUPONT Company in
1926 amounted to $1,O14,505 whereas
that corporations sales to other
customers in the same year, accord
ing to their published report for
1926, amounted to $987,137 ,166, so
that their sales to the DUPONT Com
pany amounted to about One-tenth
of 1 per cent Of their sales to
others.
1.-THE DUPONT Company's total
purchases for the year 1926 were
1851, ,710,295, so that slightly less
than per cent of its purchase were
from the Steel Corporation.
"In 1926 the Steel Corporation
purchase from the dupont Company
amounted to $1,599,91S. The Steel
Corporation does not report it's total
and it is therefore impos-
ible to express their. purchases
from the DUPONT Company as a per-
centage of their total purchases.
Obviously, the percentage is very
small.
"The total sales by the DUPONT
Company in 1926 were $97,547,021
so that the sales to the Steel Cor
poration were materially less than
2 per cent of it's total sales.
There is not at hand information |
of purchases and sales by the sub
sidiaries of the DUPONT Company. |
as their business are en-
tirely Rayon (artificial silk, pyra-
lin, Photographic films, etc., it will |
be found that their transactions
with the Steel Corporation are
negligible.
"As previously stated, the DUPONT
investment in the Gen
eral Motors Corporation common
stock was an investment of capital
'unds and involved an obligation on
he DUPONT Company's part to as
sumo responsibility in part for the
of the affairs of the
General Motors Corporation. I'm
ike this, however, the DUPONT Com
lany's purchase of this 114,000
shares of United States Steel Cor
common stock was purely
IN investment of $14,000,000 of it's
the stock is subject to re-
jale at a moments notice and car
les with it no right, privilege, re-
or obligation to partici-
,ate in the management of the Steel
through dictatorship or
nor is any director, Of
icer or employe of the United
states Steel Corporation.
"The ahove cOnonrises all relation