June i, 1904.] 



THE INDIA HUBBER WORLD 



305 



THE UNITED STATES RUBBER CO.'S BEST YEAR. 



THE twelfth annual meeting of the stockholders of the 

 United States Rubber Co. was held at 12 o'clock M., on 

 May 17, at the registered offices of the company in New 

 Jersey, at New Brunswick. The annual reports of the 

 president and treasurer were presented and accepted, and direc- 

 tors elected for the ensuing year. The official reports are pre- 

 sented herewith in full : 



president's annual report. 



New Brunswick, New Jhrsey, May 17, 1904. 



To the Stockholders of the United States Rubber Co.: This 

 is the third annual report of the present president of your company, and 

 at the outset I cannot refrain from saying that it is the first report which 

 it has given me pleasure to make and submit for your consideration. 



Upon assuming the presidency of your company three yeais ago, the 

 existing conditions were far from satisfactory. Owing to the abnormally 

 high prices for our manufactured products which had prevailed for some 

 years, many new rubber companies had come into existence. The re- 

 sult was an intense competition, in which the output of this company 

 had declined to a net of $20,800,000. By January and February, 1901, 

 this competition had resulted in a reduction in prices averaging about 

 23 per cent., and in the sale by all concerned of goods at or near the 

 actual cost of production. Under these conditions, as always, the evil 

 supplied its own remedy, and only the stronger companies found them- 

 selves able to survive the strain of such competition. At the present 

 time not only have we regained our full share of the trade but we have 

 actually doubled the gross sales of our product without any advance in 

 prices except to compensate for the advance in the cost of raw material 

 — the larger product enabling us to run our mills to their full capacity, 

 which decreases materially the cost of production. The gross sales of 

 the company for the year ending March 31, 1901, were $32,000,000, 

 whereas the gross sales for the present year were $64,000,000. The 

 " gross" is measured by the list prices which are nearer uniform than 

 the net prices. 



In my annual report for 1902 reference was made to the fact that the 

 present management was called upon to adjust a large indebtedness to 

 the company. In the settlement of this claim in the spring of that year, 

 the company was obliged to take over certain interests in other corpora- 

 tions. In consequence the present officers and directors of your com- 

 pany have been obliged to manage not only the business of this com- 

 pany, but also these various outside interests. In a previous report, I 

 stated it to be my opinion that " serious loss has been avoided," and I 

 can now say that through re organization, realization, and adjustment, I 

 feel that statement has been practically made good, although, as a mat- 

 ter of precaution (as will be seen by the treasurer's report), $500,000 out 

 of the past year's earnings has been reserved for depreciation upon these 

 securities. 



Three years ago, after re adjusting the affairs of the company to meet 

 the lower range of prices for goods, and giving rebates to jobbers for 

 the goods they had on hand, in compliance with a custom which then 

 prevailed, the balance sheet showed a deficit. In the statement of two 

 years ago, this deficit had been changed !o a surplus of $42,011.75. In 

 the statement of a year ago, this surplus had increased to $[,384,460.07. 

 By this year's statement, after carrying to reserve for depreciation of se- 

 curities, as before stated, $500,000 and providing for dividend of ij£ 

 per cent, on the preferred stock, payable June 15, 1904, requiring 

 $352,882.50, there will remain a surplus of $2,107,218 86. 



Volume ok Business. — The volume of business done by the company 

 during the past year is the largest in its history. Three years ago the 

 annual net sales of boots, shoes, and miscellaneous goods were $20,853,- 

 633.94, This year the net sales amountto$33, 396, 918. 88. This shows 

 an increase of $12,543,284.94 net, of which $5,120,288.30 is the increase 

 of last year over the previous year. 



Advance in Supplies. — During the past year there has been a mate- 



rial advance in the price of crude rubber and other supplies which com- 

 pose or enter into the manufacture of our goods. This rise in the cost 

 of raw materials has necessitated the recent advance in the prices of our 

 goods, in order that in the future we may realize a legitimate profit upon 

 our very large sales. 



Employes Profit-Sharing Plan. — During the low prices for our 

 stocks members of your executive committee thought it wise to accumu- 

 late a block of the preferred stock and a block of the common stock. These 

 stocks are now to be distributed among about 150 of our principal em- 

 ployes under a plan, of which the main features are as follows : A cer- 

 tain number of shares of both the preferred stock and common stock will 

 be transferred to the name of the employe, thereby making him a stock- 

 holder in the company. The certificates are then endorsed by him in 

 blank and held by the Meyer Rubber Co., a subsidiary company of the 

 United States Rubber Co., the employe receiving a certificate of agree- 

 ment to the effect that provided he remains in the employment of the 

 United States Rubber Co. or one of its subsidiary companies till Jan- 

 uary 1, 1908, he may at his option acquire such stock by paying $45 a 

 share and interest for the preferred, and $10 a share and interest for the 

 common, which option, under the same conditions, continues till Feb- 

 ruary 1, 1910. The employe may pay into the treasury of the Meyc r 

 Rubber Co. from time to time on account of the purchase of such stock, 

 and in the event of his decision not to take such stock, he shail be en- 

 titled to receive his money back with 6 per cent, interest. All dividends 

 upon the stock shall, as declared, be paid over to the employe without 

 his accounting therefor, whether he eventually takes the stock or not, 

 and in no event shall the amount of interest charged on the purchase 

 price of the stock exceed the amount of dividends declared thereon. The 

 full text of this agreement is attached to this report marked exhibit 

 "A." 



The object of this plan is not only to give the company's employe's a 

 pecuniary benefit, but to bring them in closer touch with its manage- 

 ment, and by sharing the gains to be derived from its success, to stimu- 

 late them to greater interest and energy in its affairs. 



Funded Indebtedness.— On March 15, 1902, the indebtedness of 

 the United States Rubber Co., and of its subsidiary companies, amount- 

 ing to $12,000,000, was funded into three year 5 per cent, collateral 

 trust notes. From the earnings of the company since that time $2,000,- 

 000 of these notes have been paid and cancelled, and it is the intention 

 of your management to pay $2,ooo,oco more from earnings at or before 

 their maturity, March 15, 1905. In this connection it gives me pleasure 

 to state that there has already been consummated with the same bankers 

 who financed the original loan an agreement for refunding the balance 

 of $8,000,000 when it becomes due, for a further period of three years. 

 The terras of this agreement we regard as fair and reasonable, and ow- 

 ing to our improved conditions are much more favorable to the company 

 than those upon which the original loan was secured. It is believed 

 that during the three years of the extension the indebtedness will be 

 so far reduced that no further funding of this loan will be necessary, 

 since the quick capital of the company now is such that during some 

 portions of each year it has on hand as much as $5,000,000 cash. The 

 company and its subsidiary companies then being entirely out of debt a 

 portion of the year could readily borrow on their notes for temporary re- 

 quirements. Prior to the funding of 1902 their indebtedness of $12,- 

 000,000 was all borrowed in this way. 



Boston Rubber Shoe Co. Debentures. — The only other obligation 

 of the company to be provided for in the future is the $4,800,000 5 per 

 cent, debentures of the Boston Rubber Shoe Co., due August 1, 190S. 

 These debentures (originally $5,000,000) were given to the former stock- 

 holders of the Boston Rubber Shoe Co. as part of the purchase price for 

 the splendid properties of that company. By the terms of the deben- 

 ture, the Boston Rubber Shoe Co. at all times must have on hand net 

 quick assets in an amount equal to the outstanding debentures, and now 

 the company has on hand in such net quick assets an amount in excess 



