Story of the automobile: Its history and development from 1760 to 1917 / With an analysis of the standing and prospects of the automobile industry

by H. L. Barber

(e) The United Alloy Steel Corporation issued 525,000 shares without par value, of which 500,000 were used to acquire United Steel Company, manufacturing alloy steel parts for the automobile trade.

For expansion purposes to provide more adequate equipment to supply the increasing demand for its product, $4,000,000 additional cash capital was to be provided. The estimated net earnings for 1916 were about $7 a share on 500,000 shares.

(f) Transue & Williams Steel Forging Company issued 110,000 shares without par value. One hundred thousand shares and $750,000 cash was to be paid for company subscriptions at $45.50 a share. The net earnings for 7 months of 1916 were $648,026 or $12 a share.

Security Issues of Tire Companies.

Among the tire company stock issues a few leading examples may be cited.

The Firestone Tire & Rubber Company issued $5,000,000 of 6 per cent cumulative preferred stock. A sinking fund is provided to redeem this stock at $110, beginning 1921. There are no bonds, and the company is required to maintain at all times total net assets equal to 250 per cent and net quick assets equal to 150 per cent of the aggregate par value of this stock outstanding.

The earnings for 1916 were $4,482,554.52, or over seven times the dividend requirements on the total issue of preferred stock. This stock was sold at $107.

Another representative issue was that of the Fisk Rubber Company, which consisted of $5,000,000 of cumulative 7 per cent first preferred convertible stock. This is redeemable at $110 upon 60 days’ notice.

The earnings for the year ending August 31, 1916, were $1,992,043, or three times the dividend requirements. There are no bonds or other form of funded debt.

One of the few instances of an issue of bonds by a tire company is the issue of $60,000,000 of 5 per cent gold bonds by the United States Rubber Company. Of course, tires are only a part of this company’s output. The proceeds of the sale of these bonds are to be used to retire certain obligations of subsidiaries, to provide additional working capital, etc.