286 



THE INDIA RUBBER WORLD 



[Femruarv 1. 1917. 



THE UNITED STATES RUBBER COMPANY'S RE- 

 FINANCING PLAN. 



THE refinancing of the United States Rubber Co. by the issue 

 of $60,000,000 Ijonds. which, it is expected, will be author- 

 ized by the .stockholders at a meeting on the fourteenth of this 

 month, is a move of more than ordinary interest in lioth rubber 

 and linancial circles. 



These 5 per cent bonds maturing January 1. 1917 are to be 

 secured upon the properties owned or controlled by the company 

 by direct mortgage thereupon or by pledge of mortgage bonds 

 of the companies owning or controlling the same, or by pledge 

 under the mortgage of the United States Rubber Co., or under 

 the mortgages securing the mortgage bonds so pledged, of shares 

 of stock of the companies owning or controlling the same with a 

 covenant not to permit mortgages thereupon. It is understood 

 that the purpose is to provide for the payment of all maturing 

 obligations of this great corporation with certain minor ex- 

 ceptions. It is intended that all existing bonds and liens upon 

 the properties of the company or its subsidiaries will be paid 

 on or before December 1, 1918, llie exceptions lieing $2,600,000 

 gold bonds of the Canadian Consolidated Rubber Co. maturing 

 in 1946 and $9,000,000 debentures of the General Rubber Co. due 

 Decemlier 1, 1918. The latter will be left undisturbed for the 

 present, as the company announces it has under consideration 

 other plans for dealing with its important crude rubber interests. 

 Of the $60,000,000 bonds to be issued forthwith, $24,697,148.07 is 

 to be set aside to retire the following : 



United States Rubber 6 per cent bonds due Decem- 

 ber 1. 1918 $16,000,000.00 



Eureka Fire Hose Manufacturing Co. .S per cent 

 b.inds due December 1, 1918 970,000.00 



Canadian Consolidated Rubber Co., Limited, 5 per 



cent debentures due December 1. 1918 2,500,000.00 



Morgan & Wright 5 per cent debentures due Decem- 

 ber 1, 1918 5.000,000.00 



Mechanical Rubber Co. 6 per cent first 

 mortgage bonds due January 1, 1918. $687,000.00 



Less sinking fund deposited with 

 trustee 459.851.93 227.148.07 



$24,697,148.07 

 The remaining bonds presently to be issued are to provide for 

 the funding of current indebtedness, for additional working 

 capital, for discounts and premiums in connection with the 

 above refunding and for other corporate purposes. Another 

 $10,0(X),000 of the bonds may be issued for working capital, and 

 for development, and for other purposes, and out of the remain- 

 ing bonds reservation is to be made to provide for the $9,000,- 

 000 General Rubber Co. 5 per cent delientures due December 1, 

 1918, until otherwise provided for, and the $2,600,000 Canadiati 

 Consolidated Co. bonds, due October 1. 1946. Any additional 

 bonds, and any bonds not used for such refunding are to be re- 

 served for capital expenditures made after January 1, 1917, for 

 additions, betterment, improvements, or for new properties, at 

 75 per cent of cost. 



The circular sent out by President Samuel P. Colt states that 

 the net earnings of the company and its subsidiary companies 

 available for interest during these years, as found by Messrs. 

 Haskins & Sells, have been : 



For the fiscal year ending December .31. 1914 $10,690,988.48 



For the fiscal'year ending December ,31. 1915 11,539,313.10 



For the fiscal year ending December 31, 1916 (partly 



estimated) 12,500,000.00 



The above net earnings are after deducting expenses of every 

 nature, except interest, and including expenditures for repairs 

 and renewals through which the plants are maintained in the 



highest state of efficiency. The average losses from bad debts 

 during these years have been less than l/i oi \ per cent of the 

 total sales. 



F'urther, the circular states that the consolidated financial 

 position of the company, and its subsidiary companies, as of 

 October 31, 1916, but after applying the proceeds of the sale of 

 these $60,000,000 new bonds, is appraised as follows : 



Property, plant and equipment $54,850,204.33 



Manufactured goods and material 48.791,238.61 



Securities owned 1.731,870.29 



Net current assets, consisting of cash and receiv- 

 ables, less payables 30,840,293.38 



$136,213,606.61 

 Undisturbed bonds: 



Canadian Consolidated Ruliber Co., 



Limited $2,600,000 



General Rubber Co 9,000,000 11,600,000.00 



$124,613,606.61 

 The underwriting was arranged by Kuhii, Loeb & Co., and it 

 is understood that the American International Corporation is 

 also interested in the transaction, which seems to presage the 

 further acquisition of plantation acreage in the Far East to insure 

 an adequate supply of crude rubber. Subscriptions were solicited 

 on January 17 at 96-)4 per cent, and were largely oversubscribed 

 when the books closed on January 23 to such extent that only 

 about 60 per cent of amounts subscribed for could be allotted. 



In this connection it is reported as probable that W. S. Kies, 

 vice-president of the American International Corporation ; C. B. 

 Seger, vice-president of the Union Pacific Railroad, and J. S. 

 Alexander, president of the National Bank of Commerce of New 

 York City, will be elected directors of the United States Rubber 

 Co. at an early meeting. 



RUBBER FOOTWEAR PRICES. 



AS was anticipated in the January number of The India Rub- 

 ber World, the rubber footwear manufacturers sent out 

 new price-lists the first of the year showing a material increase 

 in the net cost of these goods to wholesalers and retailers. The 

 United States Rubber Co. made a few changes in its gross price- 

 lists, and these were confined to the red and white goods manu- 

 factured by that company by pressure process. The discounts 

 of former years have been reduced to this extent: Last year 

 first-quality goods were bought at 25 and 5 per cent off, with 

 a further 5 per cent for early orders. On second quality the 

 terms were 25, 5 and 10 per cent, besides the usual 5 per cent 

 for early orders. 



This year's discounts are 15 per cent off on first quality, and 

 15 and 8 per cent on second quality. On the differential brands, 

 namely. Woonsocket, Meyer, Rhode Island and Jersey there is 

 an additional 5 per cent. The discount for early orders is now 

 allowed until the first of June for jobbers, who can, if they wish, 

 allow this same 5 per cent discount until tlie first of May to 

 their customers. 



It will be seen that this makes a very considerable increase in 

 the net cost of goods both to the wholesalers and retailers. Such 

 portions of the orders given in 1916 which were not filled on 

 December 31 were to be considered cancelled unless re-ordered 

 by the customers. It is stated that although the company's sales 

 were 15 per cent larger than the previous year, a large proportion 

 of the orders remained unfilled because of lack of capacity of 

 the factories, and it is expected that the coming year's business 

 will surpass that of last year by a large amount. 



Copy of Index to "Rubber Machinery" will be sent free upon 

 request. 



