Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-20
FOX FILM CONTEST
AROUSES BANKERS
Struggle for Control of Com
pany Will Be Decided
March 5.
BY JOHN F. SINCLAIR.
9ecIal plspatch o The star.

Special Dispatch to The Star.
NEW YORK, February 20.-In two
weeks-March 5-the Fox Film stock
holders will determine which banking
group they favor in the struggle now
going on for the control of the Fox
organization.
Not since the fight over control of
the Standard Oil of Indiana has there
been such a banking contest
Halsey, Stuart & Co.; Western Elec-
trio and two vice presidents and direc-
tors of the Fox companies, Winfield
Sheehan and Saul Rogers, oppose the
financial plan and set-up by Lehman
Brothers, Bancamerica, Blair, Inc, and
Dillon, Read & Co., which the Fox
stockholders will vote upon.
Under this plan the Fox Film Cor
poration would issue SOS 900 900 of new
securities, composed of $40 10000 in
debentures. each bond carrying war
rants to subscribe to IS shares of COM
mon at $50 for the first five years and
5000. 600 new per cent preferred
convertible into common stock starting
at $25.
Halsey, Stuart g. Co. and Western
Electric oppose this proposition, because
both of them have 15-year preferential
contracts, one on Fox financing and
the other on Fox equipment. Under the
plan submitted both of these con-
tracts are in danger.
Halsey. Stuart g. Co. have submitted
a counter-proposition providing Tor the
issue of $40, 900, 600 debentures, with the
remaining funds necessary to come from
the sale of new common stock to the
banking group.
Samuel Untermeyer the Fox counsel,
opposes the Halsey-Stuart plan as be-
ing more expensive, because 1t involves
an issue of $4,000 to 100000 more
shares than the Lehman plan and fur-
Their provides a five-year option TO Hal
sey, Stuart & Co. on 100000 shares OF
Fox Film Corporation stock at SzO a
share. in addition to the banking and
underwriting commission OF more imam
So,000,000.
So the Lehman-Dillon-Rea d-Banc-
america-Blair group plan has the pack
ing of William Fox, though $9T5,OOO VIII
have to be paid out even If the plan is
rejected by the stockholders.
So there you are. It's a battle 70 the
bitter end.
Gold Imports.
Will a major gold import movement
begin in the next few weeks again?
1t looks like it. Gold imports since
January have been confined almost en-
tirely to South America and Japan, but
the European exchanges have steadily
declined during the past so days TO
point in several countries now where 1t
will pay to ship the gold rather than to
pay the exchange rate. Economists can
it the gold point.
Should the pound sterling reach S4.95
gold probably would start moving from
London to the United States.
The French situation is different.
With plenty of credit still in England
and the United States France could
prevent gold export, but owing to the
eagerness of French banking leaders to
establish Paris as an international ex-
change and gold market they probably
would prefer 10 see some gold moved 10
the United States. The shipping gold
point from Paris is about $50 cents a
franc 1t stands today at 3.915 cents.
Should such a condition occur and a
major gold import movement start, the
Federela Reserve banks could neutralize
the situation of this gold by selling Sc
curities and acceptance holdings In the
open market, thus preventing any In
fationary move.
This is why the gold movements are
being watched with particular care
these days by Federal Reserve officials.
Business Recovery.
Julius H Barnes, chairman Of the
national business survey conference,
emphasizes the positive rather than
the negative in public statement. He
says: Now A LOCO, 900 persons are
gainfully employed in the United
States-10, 000,000 more than during the
1921 business depression"
Is the construction program IN the
United States outlined two months ago
being carried through? Mr.. Barnes
believes it is. His reputation for con-
srvative statement. however, it fully
maintained in these words:
Reports coming in from business
establishments disclose also that they
generally are following through the
suggestions of the business survey con-
ference that until outdoor construction
generally can get under way they can
assist by advancing within prudent
Judgment all necessary repairs, i'm
provementS and bettermentS of both
normal and emergency character"
He sees the end Of the business
slump.
appears fairly over, with every evidence
of renewal of normal upward march
of living standards and business pros
pects," says this Hoover champion.
If the stock market is any evidence
of returning prosperity the recovery
must be in sight. Most stock market
observers believe that stock prices at
the present time have considerably
overdiscounted the recovery.
please give us comprehensive def
milton of the word debenture," writes
Kansas City reader Of this column.
That's a big order, for the word de-
benture is used in so many different
ways by so many banking houses, and
means so many different things.
Technically, suppose debenture Is
an obligation issued on the general
credit of a company without having any
specified pledge of security.
Granted that this definition is correct,
a debenture bond is below a mortgage
bond and just above preferred stock.
AS no foreclosure is possible in case OF
default, suit can be entered and judg-
ment secured only against the general
credit of the company.
So depenture bond is just as good
as the credit of the company no better,
no worse. If the credit is thin. then
the debenture isN thin. II the credit is
first class, then she debenture itself is
first class.
But to the investor, the word deben-
ture preflXed to the word bond should be
a signal to investigate carefully the
companys credit position and the con-
ditions under which the debenture is
issued.
(Copyright, 1880. by North American News
paper Alliancel
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