Milford chronicle., 1927-09-16
DU POINT co. TELLS
OF RELATIONS WITH
MOTORS And STEEL
rContinned from first Pagel

nership until 1887 when it was in
corporated under the laws of Della
ware It was .reorganized under the
name of E. I. dupont de Nemours
Powder Company, chartered undel
the New Jersey law in 1904, ano
again reorganized under the former
name under the Delaware law II
1915
"Since the establishment of the
business in 1902, the policy of the
cOmpany has been one of customers
This has required additional invest
ed capital. organization and pro-
ducts. -
shortly after the beginning OF
the World War, in 1914 the company
was called upon to furnish vast
quantities of military powder walch
required a huge expansion pro-
gram both in plant capacity ana
personnel. This powder was turn-
ished solely to the Allies until after
the advent of the United States INTO
the war. when the company was
called upon to furnish powder Tor
orr own Government also. In TINS
connection it is interesting to note
that the total taxes paid TO the
limited States Government by the
dupont Company during the period
of the World War 1914-19lS) ag-
pregated about S43,OOO,000, whereas
the total profits made on the poWueI
furnished to the Government durIns
the conflict aggregated about SLS'-
100000. In other words, the uu-
Pont Company paid the United
states Government S14,000,OOO more
in taxes than the total war protlts
realized on sales to our Government
during that period. This is paru-
cularly interesting when considered
in connection with the fact thaC
cannon powder was furnished to the
II. S. Government during the war
period for an average of 49 cents
per pound compared with pre-War
price of SO cents per pound IN splCe
of the increase in the price OF LABOR
and ingredients entering into Cost
of production. The low prices were
made possible by reason of the I'M
proved methods of production ana
greater efficiency.
Relations With General Motors
Corporation
Normally sales of military pow
der constitutes less than three per
cent of the volume of the du PonI
COmpanv's sales so that even be-
fore the United States entered the
war the management of the du Pont
COMPANY was giving thought to the
problem of finding new employment
for the men who would not be need
ed after the war activities had ceas-
ed. as there was no demand requlr-
ing large expansion in the powder
or chemical industry.
"In December 1917 opportunity
presented itself to purchase a sub
stantial block of General Motors
Corporation stock at an attractive
figure coupled with an obligation TO
take a responsible part in the man
agement of the affairs of that i'm
portant corporation, which was then
in its youth and had prospects OF
great expansion. This opportunity
appeared to the corporation as a
chance to utilize the services OF
many important men. Accordingly,
an initial Investment of S25,OOO,-
600 was made in January 1913.
Later in that year and in 1919, S24,-
100000 additional invetment was
made.
This investment was made on
the invitation of Mr.. w. c. Durant'
founder of the General Motors cor.
poration, and a condition imposed
and agreed to by the du Pont Com
panv was that the du POnt Company
would assume responsibility for the
financial policies of the General
Motors Corporation and that Mr..
Durant would assume responsibility
for operations.
Accordingly the Board of Di-
rectors of the General Motors Cor
poration created a Finance Com |
mite composed chiefly of du Pont |
men and Mr.. Durant and this COM |
mite was placed in complete |
charge of the financial affairs OF /
the Corporation. An Executive Com
mittee was also created with Mr..
Durant as chairman and this Com
nittee was placed in entire charge
of the operating policies of the Cor
poration.
'In 1920 Mr. Durant sold large
block of his General Motors Corpor-
alton common stock to the du PonC
COMPANY and there-upon resigned
as President and Director and re-
tired from management of the Cor
poration.
"In 1928, the du POnt Company
felt that in order to attain the sue
cess which was possible in the Cen
eral Motors management, 1t was de-
sirable to make it attractive for the
important men in that corporation
to acquire a substantial stock in
vestment. Accordingly, it sold for
S33. 10000 an interest in General
Motors stock about equivalent to
that bought from Durant to
Managers Securities Company, (
which comprised about eighty of the
most important men occupying
managerial positions in the General
Motors Corporation
The dupont Company today owns ;
the equivalent of 1,96S,244 shares of ]
General Corporation common STOCK
out of a total of 8,7OO,OOO shares
outstanding.
"All General Motors Corporation
are made on a competi-
tive basis and this goes even so far
as applying to it's own accessory
companies, which are 100 per cent
owned by it. These accessory COM
panies quote prices in competition
with outside companies in supply
ing material to the General Motors
thus the new depart ]
- as.rsrinr, nnd tho Huaft division