May 



1902.] 



THE INDIA RUBBER ^A/'ORL^ 



245 



THE UNITED STATES RUBBER CO.'S FUNDING NOTES. 



THE plan for funding the floating debt of the United 

 States Rubber Co., referred to in the last number of 

 this paper, involves the issue of 5 per cent, coupon 

 notes of a series of $12,000,000, in denomination of 

 I5000 each, maturing March 15, 1905, and redeemable at par 

 on any interest payment date. The mterest is payable semi- 

 annually, March 15 and September 15, and the principal and 

 interest are payable in gold, without deduction for any tax 

 which the company may be required to pay in respect thereto, 

 under any law of the United States or any state or city gov- 

 ernment. The issue was taken by the First National Bank 

 and Blair & Co., bankers, of New York city, who offered the 

 notes at 98?^ and interest, to yield 5;^ per cent, on the invest- 

 ment. 



In a letter to the financial institutions named, and which has 

 been published (dated March 27), Samuel P. Colt, president 

 of the United States Rubbe.- Co., states: 



"The Company was formed in 1892, beginning operations 

 October ist of that year, when the subsidiary Companies were 

 producing about one-third of the output of rubber boots and 

 •hoes in the country. In 1893 the United States Rubber Co. 

 acquired the capital stock of the Woonsocket Rubber Co. and 

 the Goodyear's India Rubber Glove Manufacturing Co., so that 

 the output was then increased to over one-half of the total. In 

 1898, by the acquisition of the stock of the Boston Rubber 

 Shoe Co. — the largest of the individual companies — and of the 

 Joseph Banigan Rubber Co., the output was raised to three- 

 fourths of the total, which at the present time is approximately 

 the percentage of output of the United States Rubber Co. and 

 its subsidiary Companies. - - - 



" The following statement, as furnished by the auditor of our 

 Company, gives the earnings and disbursements from the or- 

 ganization of the Company to November 30, 1901 : 



Total Net Earnings $23,910,550.53 



Deduct : 



Amount paid for Interest $4,048,055.41 



Charged off for Depreciation, etc 3,082,438.79 



Dividends paid 14,102,812.01 2i,23j,3o6.»i 



Balance $2,677,244.31 



" The charge for interest hereafter will be represented by the 

 interest paid on the new ' Funding Notes.' The ' Funding 

 Notes ' are secured by a deposit with the Morton Trust Co., 

 trustee, of notes of the subsidiary Companies aggregating $12,- 

 000,000. 



" From the proceeds of the ' Funding Notes,' payment is to 

 be made of the entire floating indebtedness of the United States 

 Rubber Co. and all of the subsidiary Companies, leaving a sub- 

 stantial amount of cash on hand. There is no mortgage debt 

 of any kind of the United States Rubber Co. or of any of the 

 subsidiary Companies. The provisions of the trust instrument 

 securing the ' Funding Notes ' forbids the creation of any such 

 debt as long as any of the ' Funding Notes ' shall be outstand- 

 ing. The trust instrument further requires that at no time 

 shall the net quick assets of the United States Rubber Co. and 

 o( the Companies in which it is principal stockholder be of less 

 value than $15,000,000 over and above all indebtedness, except 

 the said ' Funding Notes.' ' Quick Assets ' as so used are defined 

 in the trust indenture, and are in addition to the real and fixed 

 properties of the Company and the subsidiary Companies." 



Appended to the letter from President Colt is a certificate of 



Haskins & Sells, certified public accountants, stating, in regard 

 to the U. S. Rubber Co. : 



" That the quick assets, including inventory of raw materials 

 and manufactured goods on hand, exceeded the current lia- 

 bilities at June 30, 1901,10 the extent of over $8,000,000, and 



" That the value of the various plants (sixteen in number) 

 free and clear from encumbrances, based on appraisals which 

 had formerly been made and which we believe to be conserva- 

 tive, is not less than $12,500,000." 



The note issue is secured by a " Collateral Indenture," dated 

 March 15, 1902, between the United States Rubber Co. and the 

 Morton Trust Co. (New York). The document sets forth that 

 the Company is the owner of all the capital stock (excepting 

 directors' qualifying shares) of the eight corporations named 

 below, of which there is now outstanding capital stock to the 

 amount indicated : 



American Rubber Co fi ,000,000 



Joseph Banigan Rubber Co 1,500,000 



Woonsocket Rubber Co 3,000,000 



National India Rubber Co 1,200,000 



L. Candee & Co 600,000 



Goodyear's India Rubber Glove Manufacturing Co 500,000 



Goodyear's Metallic Rubber Shoe Co 1.000,000 



Lycoming Rubber Co 400,000 



The United States Rubber Co. owns promissory notes of 

 these several subsidiary companies, which are pledged as secur- 

 ity for the collateral notes to be issued under this indenture, in 

 the amounts stated as follows : 



American Rubber Co $ 800,000 



Joseph Banigan Rubber Co 1,300,000 



Woonsocket Rubber Co 2,800,000 



National India Rubber Co 1 .000,000 



L. Candee & Co 2,300,000 



Goodyear's India Rubber Glove Manufacturing Co 1,500,000 



Goodyear's Metallic Rubber Shoe Co a,ooo,ooo 



Lycoming Rubber Co 300,000 



The funding notes are to be issued as required by the United 

 States Rubber Co., though all shall be equally secured under 

 this indenture, as if issued on March 15, 1902, without priority 

 or distinction by reason of priority in the issue, sale, or nego- 

 tiation of any note or notes. But before any note shall be is- 

 sued the Trustee shall cancel any coupon which may then have 

 matured. The amount of the notes issued shall not exceed 

 $1 2.000,000, and when any notes shall have been paid, new notes 

 shall not be substituted therefor. 



Whenever the Company shall deposit with the Trustee 

 money for the redemption of notes — not less than $1,000,000 at 

 one time— the Trustee shall advertise the amount available for 

 the purchase of notes at par and accrued interest. In case notes 

 are not presented for redemption to a sufficient amount, the 

 Trustee shall draw bv lot notes to the amount of the redemption 

 fund and publicly advertise the numbers of the notes drawn, 

 after which interest upon such notes shall cease. The indent- 

 ure provides lor the proceedings to be taken by the Trustee 

 in behalf of the note holders, in case of any default in payment 

 of interest or principal, in the way of disposing of the notes of 

 the subsidiary Companies pledged under the funding agree- 

 ment. 



The indenture is signed by the United States Rubber Co., 

 by its president, Samuel P. Colt, and attested by the treasurer, 

 lames B. Ford, and by the Morton Trust Co., by J. K. Corbi- 

 ere, its second vice president, in the presence of H. M. Francis, 

 secretary. 



