June 1, 1913.] 



THE INDIA RUBBER WORLD 



477 



The United States Rubber Co.'s Annual Report. 



THE Iwenty-tirst annual report of the United Stales Rubber 

 Co. was dated and distributed on May 1, three weeks ahead 

 of the annual meeting, which occurred on May 20, at 

 New Brunswick, Xcw Jersey. The reports of the president and 

 treasurer are given below. 



REPORT OF PRESIDENT COLT. 



To THE Stockholders of the United St.\tes Rubber Co. : 



The past year has been somewhat eventful in the liistory of 

 our company. Progress has been made along lines of efficiency 

 in management with a proper expansion in operations, all having 

 been kept within the sphere of sound and conservative business 

 principles. 



The report of the treasurer, appended hereto, gives the Con- 

 solidated General Balance Sheet and the Consolidated Income 

 Statement of the United States Rubber Co. and subsidiary com- 

 panies for the fiscal year ending March 31, 1913. 



In view of the fact that the United States Rubber Co. now 

 owns all but a fraction of one per cent, of the common stock 

 and the great bulk of the preferred stock of the Rubber Goods 

 Manufacturing Co., it has been thought that it would give our 

 stockholders a more comprehensive understanding of our busi- 

 ness to include this year in these consolidated statements the 

 operations of the latter company. For the purpose of comparison, 

 the statements of both companies as made last year should be 

 considered. .As now shown, the surplus includes the surplus of 

 each company — that of the United States Rubber Co. of last year 

 having Ix-cn reduced bv the common stock dividend, amounting 

 to $5,000,000. and having been augmented by $2,254,700, gain by 

 the conversion during the same period of second preferred stock 

 into first preferred stock on the basis of four shares of second 

 for three shares of first. In the Consolidated Statement the sur- 

 plus is increased by $6,909,275, being the difference between the 

 par value of the common stock of the Rubber Goods Manufac- 

 turing Co. purchased by the United States Rubber Co., and 

 the price paid therefor: resulting, with the year's operations, in 

 a present surplus of $23,545,629.32. b'rom this surplus your di- 

 rectors have deemed it advisable to set up as a reserve $7,000,000. 



The fixed surplus formerly appearing in the several state- 

 ments of the two companies, which represented the surplus of 

 each of their several subsidiary companies at the tiine of their 

 acquisition, and which amounts to $14,504,714.54, not being sub- 

 ject to division, may be applied whenever deemed advisable in 

 reduction of the valuation of property and plants. 



The operations of the Canadian Consolidated Rubber Co., Ltd., 

 the Genera! Rubber Co.. the United States Tire Co.. and the 

 Rubber Regenerating Co. (the latter recently acquired) are not 

 included in the consolidated statements. The dividends, however, 

 derived from the same go to make up the profits of the year. 

 CHANGE OF FISCAL YEAR AND OF DATE OF ANNUAL MEETING. 



In view of the consolidation of accounts of the Rubber Goods 

 Manufacturing Co. and its subsidiary companies with those of the 

 United States Rubber Co. and its original subsidiaries, it became 

 desirable that the fiscal year of both companies should be iden- 

 tical, and it has, therefore, been decided by the directors to 

 have the fiscal year of the United States Rubber Co. end De- 

 cember 31, instead of March 31, to correspond with that of the 

 Rubber Goods Manufacturing Co. and the Canadian Consoli- 

 dated Rubber Co., Ltd., this being also the date when the re- 

 ports have to be made up for the Federal Government. With 

 this change in date of the fiscal year, it became desirable that 

 the annual meeting should be held at an earlier date and an 

 amendment to the by-laws has, therefore, been submitted to 

 you, providing that the date of such meeting shall be the third 

 Tuesday in March instead of the third Tuesday in May. 

 VOLUME OF BUSINESS. 



As appears by the consolidated statement for the year, the 

 net sales were $91,782,861.87; and in addition the net sales of 

 the Canadian company for the year were $7,199,336.28. In most 

 cases the selling prices were lower than the previous year. The 

 sales of the General Rubber Co., United States Tire Co., and 

 Rubber Regenerating Co. are not included, their product not 

 adding to the aggregate product of manufactured goods. 

 PROFITS. 



As shown by the consolidated statement, the net profits for 

 the year were $7,544,217.67 after bringing down to market price 

 the inventories of crude rubber and other materials. Of this 



profit, however, $219,131.31 pertains to the minority stock in- 

 terest in the Rubber Goods Manufacturing Co. and a subsidiary. 

 .\s heretofore all interest paid by the company upon both its 

 funded and its floating debt is deducted as an expense before 

 the net profit is shown. The net profits of the year exceed the 

 dividend payments of the year by the sum of $1,730,755.36. 



Both the net earnings and volume of business are the largest 

 in the history of the company — the percentage of net profit on 

 net sales being, however, but about 8 per cent. 



DIVIDENDS. 



The regular dividends of 8 per cent, upon the first preferred 

 stock and 6 per cent, on the second preferred stock have been 

 paid. There have also been paid to the holders of the common 

 stock cash dividends at the rate of 4 per cent, for the first 

 three-quarters and at the rate of 6 per cent, for the last quarter 

 of the year, and also in July last a dividend of 20 per cent, in 

 common stock. 



CAPITALIZATION. 



In June, 1912. by amendment to the charter, the authorized 

 first preferred capital stock of the companv was increased from 

 $40,0(X),000 to $70,000,000. and the authoVized common stock 

 from $25,000,000 to $40,000,000, and the right was given to con- 

 vert the second preferred stock into first preferred stock. 

 Under the plan authorized $5,000,000 of common stock was de- 

 clared from the surplus as a dividend to the common stock- 

 holders ; $10.(XX).000 of first preferred stock was offered pro 

 rata to the stockholders at par. of which $9,699,400 has been 

 subscribed and paid for ; and up to this time, $9,018,800 out of 

 $10.000,fXX) of second preferred stock has been converted into 

 first preferred stock. The company also renewed a former 

 offer to exchange Rubber Goods preferred stock into first pre- 

 ferred stock of the United States Rubber Co., under which 

 offer $817.8(X) has been exchanged during the year. 



TIRE OPERATIONS. 



At the last annual meeting your president called the atten- 

 tion of the stockholders to the desirability of enlarging our 

 facilities for the making of tires, and suggested the building of 

 an additional mill. In furtherance of this suggestion, the Mor- 

 gan & Wright tire plant at Detroit, Michigan, which is a modern 

 mill, is being enlarged to more than double its former capacity; 

 and a new tire mill at Berlin. Canada, is about completed. 



Our sales of tires for the first three months of this calendar 

 year show an increase of about 40 per cent, over those of the 

 corresponding months of last year. 



ACQUISITION OF THE RUBBER REGENERATING COMPANY. 



Next perhaps in importance to obtaining advantageously sup- 

 plies of crude rubber is the obtaining of the regenerated product 

 of the proper ([uality in order to derive the best results in 

 manufacture. Though laboratory work in the proper com- 

 pounding of rubber in this coimtry is practically in its infancy, 

 Mr. Raymond B. Price, president of the Rubber Regenerating 

 Co., and his staff of chemists have demonstrated their marked 

 ability in this line. Your board has no doubt that not only 

 will the direct earnings of the Rubber Regenerating Co. fully 

 demonstrate the wisdom of its purchase by our company "at the 

 price of $6,000,000 in our common stock, but that the indirect 

 advantages to the United States Rubber Co. will far surpass 

 even the direct returns. 



CRUDE RUBBER— FAR EASTERN PLANTATIONS. 



During the past fiscal year crude rubber has had a down- 

 ward tendencv. the extreme prices for fine Para being $1.23 on 

 August 22. 1912. and $0.90 on March 31. 1913. 



The development of our plantations in Sumatra has con- 

 tinued during the year. We now have planted with Ilci-ca 

 rubber trees (fine Para) 32.500 acres, or an area more than 

 double that of Manhattan Island, comprising 3.900.000 trees. 

 The growth of the trees has been more rapid than anticipated, 

 so that we look for the first rubber from our own estates next 

 autumn, a year earlier than expected. It would seem inevitable 

 that our company must realize great benefit when the time ar- 

 rives that we will obtain at least a large portion of our require- 

 ments of crude at its cost of production in Sumatra. 

 PROFIT SHARING. 



The profit sharing plan, as adopted last year, met with much 

 favor among our employes. It was taken advantage of verj- 

 generally, and an earnest desire is shown to anticipate pay- 

 ments for the stock subscribed for. Your directors have de- 



