April 1, 1916.] 



THE INDIA RUBBER WORLD 



The Annual Report of the United States Rubber Co. 



THE annual report of President Samuel P. Colt, of the United 

 States Rubber Co., was mailed to the stockholders early 

 this month and shows a most satisfactory condition in the 

 atYairs of the company. 



-Among the interesting features may be noted the increased 

 business of the company and the profits thereon. The net sales 

 during 1915 were more than $92,000,000, an increase of more 

 than $9,000,000 over those of the previous year, and as the 

 prices of goods were less than during 1914, the increased vol- 

 ume of goods sold was proportionately greater than is indi- 

 cated by these figures. 



Regarding the net profits of the company, the figures for 1915 

 were over $1,800,000 above those of 1914, a most excellent show- 

 ing. Dividends were paid in full on the preferred stock, and 

 one dividend, amounting to lj'2 per cent, was paid upon the 

 common stock. 



As was decided the previous year, all export activities were 

 brought under one department, and this move has proven ad- 

 vantageous, the export business during the year amounting to 

 approximately 5 per cent of all the business done. 



.■Ml wmII be interested in the note in Colonel Colt's report 

 regarding preparedness. This shows that the company is among 

 the foremost in fostering the movement to place this nation upon 

 a proper basis to meet any international emergency. 



It will be noted that the principal factory which is devoted to 

 tires, has been doubled in capacity, while other plants have 

 been enlarged and all are being operated to full capacity. 



Last September the directors voted that the stockholders 

 should be furnished hereafter with semi-annual instead of annual 

 reports and, therefore, another report will be issued as of 

 June 30. 



The list of directors has been increased to 18 by the election 

 of Edgar B. Davis, Brockton, Massachusetts, who, it will be 

 remembered, was vice-president in charge of the General Rub- 

 ber Co.'s plantations in Sumatra, and who has traveled ex- 

 tensively over the Malay Peninsula and adjacent territory. Mr. 

 Davis is an authority on rubber planting and is a distinct ac- 

 quisition to the directorate of the company. 



President Colt's report is as follows: 

 To the Stockholders of the United States Rubber Co.: 



In conformity with the by-law which provides that the presi- 

 dent "shall make a report in writing to the stockholders at 

 their annual meeting, reviewing the general business and con- 

 dition of the company," your president submits the following 

 as such report for the year 1915: 



The treasurer's report, appended hereto, which is made a 

 part hereof, gives the consolidated general balance sheet as of De- 

 cember 31, 1915, and the consolidated income statement for the 

 year ended December 31, 1915, of the United States Rubber Co. 

 and all its subsidiary companies. 



FINANXIAr. POSITION OF TIIK COMP..\NY. 



As a proper safeguard and in view of the floating indebted- 

 ness of the company, the policy has been continued of carrying 

 a substantial amount of cash. 



During the past year the bonded indebtedness of the company 

 has been modified as follows: Nine million dollars of debenture 

 bonds of the General Rubber Co. (our crude rubber company), 

 which fell due July 1, 1915, were paid by the issue of $9,000,000 

 of 5 per cent debenture bonds of the same company, maturing 

 December 1, 1918. Two and one-half million dollars of 5 per 

 cent debenture bonds of the Canadian Consolidated Rubber 

 Co., Limited (whose stock is largely owned by us), maturing 

 December 1, 1918, were issued and sold, and three million dol- 

 lars of an issue of five million dollars of 5 per cent debenture 

 bonds of Morgan & Wright (our largest tire manufacturing 

 company), maturing December 1, 1918. were sold — the proceeds 

 of the two latter issues being used in reduction of the floating 

 debts and for extensions of the plants of those companies. 



The object of having these obligations mature December 1, 

 1918— that being the date of the maturity of our collateral 

 trust 6's, which through sinking fund will then be reduced to 

 $15,000,(X)0 — is that then we may issue one class of security for 

 such amount and on such time as then may seem desirable for 

 the retirement of all these obligations. 



VOLUME OF BU.SINESS. 



The net sales of the company for the year 1915 were $92,861,- 

 015.98, as against $83,678,812.05 the previous vear, or an increase 

 of about $9,000,000. As the average selling price of rubber 

 goods was less in 1915 than in 1914, the increase in volume of 

 goods sold was proportionately greater than the increase in 

 cash received therefor. 



PROFITS AND DIVIDENDS. 



The net profits from the business of the vear, before deducting 

 interest charges, amounted to $11,486,704.53; after deducting in- 

 terest charges the profits were $8,696,089.15. These profits, if 

 applied in full to dividends, would cover the dividends upon the 

 preferred stocks, and leave a sum equivalent to about ten per 

 cent upon the common stock. Full dividends upon the pre- 

 ferred stocks for the year were paid, and one and one-half per 

 cent was paid upon the common stock in April, 1915. Any 

 further application of profits to dividends under existing condi- 

 tions would be most unwise and against the permanent interests 

 of all our stockholders. 



Indeed, notwithstanding that the earnings of the vear have 

 proved to be better than in last July they promised to be, the 

 wisdom of the decision of your directors then made to suspend 

 dividends upon the common stock has been fully justified. 

 Owing to the European war many uncertainties have been created' 

 and still exist, notably the uncertainty as to the price of crude 

 rubber and the hazards affecting its transportation to this coun- 

 try. In consequence of prevailing conditions, we have felt it 

 incumbent to purchase a much larger stock of crude rubber than 

 would be necessary in ordinary times, and this alone necessitates 

 the employment of larger quick capital. Moreover, it is most de- 

 sirable, in connection with the funding of our debt December 1, 

 1918, that we should continue to strengthen the financial position 

 of the company. 



DEPRECIATION. 



In addition to maintaining the fixed properties of the company 

 m the highest state of efficiency, and charging the cost of such 

 maintenance to expense account, as heretofore, vour directors 

 have deemed it wise to apply to the reduction of certain fixed 

 properties, $2,000,000 of the $7,000,000 reserved for depreciation 

 and have further charged $1,175,479.62 against income on items 

 existing prior to 1915. 



BASIS OF INVENTORIES. 



Following our usual practice, inventories of manufactured goods 

 and materials have been taken at cost where cost was below 

 market, and at market where market was below cost. Market 

 value of crude rubber and other materials inventoried December 

 31, 1915, exceeded cost by a substantial amount. 



UNITED ST.\TES RUBBER EXPORT CO., LIMITED, 



As stated in the report of last year, our export business has 

 been largely consolidated under one organization, and is being 

 satisfactorily expanded under the management of the able men 

 in charge thereof. Our export business the past vear has been 

 approximately 5 per cent of our entire business. 

 UNITED STATES TIRE CO. 



The organization of the United States Tire Co., under which 

 we transact our tire business, has been recentlv enlarged and 

 strengthened. In addition to the distribution of tires through 

 the fifty-one branches of the United States Tire Co., provision 

 has been made for a very much wider distribution than here- 

 tofore through the many stores of the I'nited States Rubber 

 Co. The addition to our former brands of tires of the new 

 "Royal Cord" tire and the new non-skid "L'sco" tire gives us 

 the most complete line of tires manufactured bv any company. 

 Our well known "Nobby Tread" and "Chain "Tread" are still 

 having a wide and increasing demand, and are acknowledged the 

 best non-skid tires in the market. Our tire sales for January 

 and February of this year show a very large increase over the 

 same period last year. 



OUR SUMATRA RUBBER PLANTATIONS. 



We have continued the further development of our rubber 



