Document 2qVZVQZkOnv6p9wwj5jNYErbR

Saint Joseph Lead Company Annual Report --1965 America's Corporate Foundation; 1965; ProQuest Historical Annual Reports Pg-OJ . *. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. HIGHLIGHTS OF THE 102nd YEAR Sales of metals, etc. .. . ... Federal and State income taxes ... .. .. Net income (after taxes) and special items . . Dividends paid: Cash ..... . ... 3-for-2 stock split effected in the form of a stock dividend ... . - - . i. Shares of capita! stock outstanding ... .' Per share on capital stock: Taxes on income ... . Net earnings (and special credit -- 1964, $0.51) , . ,-T Dividends . .................................................` . Current assets ... ....................................... .... Current liabilities . .................................. Net current assets . , . . . .... Ratio of current assets to current liabilities............................. Long-term debt (excluding amounts in current liabilities) . . . Cash .............................. . . ...... Marketable securities (at cost) . ............................. . Capital expenditures (excluding Meramec Mining Co.) . . ; . Number of employees ................................................. Number of stockholders . ........................ ... Stockholders' investment in the business: Total . , .. . . , Per share . ., .................................. ......... 1965 $136,156,901 , $ 11.601.802 $ 22.781,108 $ 10,503,786 ! ;' -- 4,570.564 $2 54 : $4 98 , $2 30 . $ 74,347,349 $ 17,129.015 $ 57.218,334 4 34 to 1 $ 19.216,669 ;$ 3.935,327 $ 43.211,538 $ 10,377,266 3.820 11.792 ; $117,250,252 $25 66 1964 $109,509,039 $ 6,521,990 $ 20,244,494 $ 7,588,828 50% 4,560,077 $1.43 $4,44 $1.66 $ 70,071,803 $ 14,222,293 $ 55,849,510 4 93 to 1 $ 30,388,098 $ 3,281,913 $ 44,932,844 $ 8,314,200 3,769 9,107 $104,778,131 $22.98 TABLE OF CONTENTS :v Letter to the Stockholders .................................................... 1 Review of Operations .............. 3 Financial Statements Balance Sheet......................... Statements of income and Retained Earnings Notes to Financial Statements Accountants' Opinion Comparative Financial Review 1956-1965 Working Capital Analysis 1956-1965 General Statistics 1956-1965 8 10 II 13 .14 16 16 Lead Statistics (U.S. and St. Joe) 18 Zinc Statistics (U.S and St. Joe) 19 Board of Trustees and Executives . 20 ST. JOE ANNUAL REPORT COVER Lead, iron, and zinc--St. Joe's principal meta'is-are among the oldest of the useful metals found in the earth's crust The early Greek alchemists originated a system of identifying metals by symbols, and assigned the symbol for Saturn to lead ( 5 ) and that of Mars ( $ ) to iron Later, when the dis tinctive properties of zinc became known in the 35th century, the medieval alchemists assigned a variety of symbols to zinc, in cluding the one shown above (^? ) Today, the symbcls commonly used for lead, iron, and zinc are Pb, Fe, and Zn Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. HARVARD UN1V. G.s. OF 8. A. IBAKERUBRARY CORPORATION records DIVISION Herculaneum expansion, with new buildings shown m white, will make this the most modern iead smelter in the United States TO THE STOCKHOLDERS: Your Company's net income for 1965, the 102nd year of operation, amounted to $22,766,498, equivalent to $4.98 per share on the 4,570,564.5 shares outstanding at the year end, and was the highest in the Company's history. In addition, an after-tax profit of $506,979 was realized from the sale of the Company's holdings of stock in New Jersey Zinc Company, which was largely offset by an after-tax loss of $492,369 incurred as a result of the insol vency of the general contractor in charge of building the Fletcher Mine surface facilities, resulting in a net gain of $14,610. By comparison, in 1964 net income was $17,911,779, or $3.93 per share, to which was added net after-tax profit of $2,332,-715 from the sale of the Company's investment in stock of the Missouri-lllinois Railroad Company, equivalent to 510 per share. Earnings were principally derived from the Company's domestic operations. Although net profits of the Company's foreign based affiliates in 1965 amounted to $6,420,992 (com puted on the basis of year-end official exchange rates), the operation of exchange restrictions reduced the amount of dividends and interest received by the Company from such operations to $2,013,534, as against $4,310,437 received in 1964. Of the income received from for eign operations, $1,148,000 was in the form of Argentine government 5% External Dollar Bonds, payable over the next 3-4 years. The record earnings in 1965 reflected the excellent metal prices which prevailed and the Company's ability to operate at capacity without interruption throughout the year. The new facilities at Viburnum were operated in excess of rated capacity and the zinc smelter Reproduced with permission of the copyright owner Further reproduction prohibited without permission. at Josephtown produced 202,657 tons of metal equivalent, a new record, compared with the former record of 193,444 tons set in 1964. In addition, Meramec Mining Company increased its output of iron ore pellets and contributed to St. Joe's net earnings for the first time. The Board of Trustees on August 17, 1965 increased the quarterly dividend rate from 500 to 650 per share, and a total of $230 per share was distributed during the year. Earlier in the year, the Board authorized prepayment of the entire remaining unpaid long term bank debt of the Company, amounting to $10,000,000. Despite increased cash dividend payments, retirement of bank debt and capital expenditures of $10,377,266, working capital increased from $55,849,510 at the end of 1964 to $57,218,334 at December 31, 1965. For the past two years world-wide,demand for both lead and zinc has increased more rapidly than industry's ability to enlarge its production capacity. The increased U. S. con sumption of lead and zinc kept both metals in short supply throughout the year. Critical potential shortages were forestalled by releases from the Government stockpiles. In October the President of the United States announced the elimination of import quotas on foreign importation of lead and zinc metal, and on concentrates. This action fol lowed a report by the Tariff Commission concluding that such restrictions were no longer necessary. Elimination of the 1958 quotas had no immediate effect on the prices of either metal or on industry efforts to complete expansion projects. It is well known, however, that large deposits of both lead and zinc are under development in the U. S., Canada, Australia and elsewhere, with the result that the potential supply of these metals within two to three years may be in excess of presently anticipated increases in demand. Your management does not foresee a decrease in demand or a material increase in supply developing during 1966. This situation could change should business activity decline or should the Government's present policy with regard to the release of stockpile metals be changed. Your Company's new lead mining and milling facilities at the Fletcher project, and the expanded lead smelting facilities at Herculaneum, should come into operation in the 4th quarter of 1966. During the past year, No. 29 shaft unit at Viburnum came on-stream and contributed substantially to the production at this operation. At Edwards the new mill facil ities became operative, and the resultant increased production helped ease the tight supply situation in zinc. Exploration efforts in Missouri continue to add to the Company's already large reserves in the new Lead Belt, and at Balmat deep drilling has indicated what may prove to be sub stantial additions to the zinc reserves of this property. St. Joe's exploration activity else where, both in this country and abroad, continues at a somewhat accelerated pace but without any discoveries worthy of reporting. The 1966 outlook is favorable, although earnings will be affected by having to close the Herculaneaum smelter for four to six weeks during the third quarter to effect a changeover to the new smelting facilities. Contributions to St. Joe earnings from our overseas companies are difficult to assess because of continuing exchange difficulties in those countries in which we operate. Physically, your Company's mines and treatment plants are in excellent condition and have never operated at greater efficiency. The Company's new domestic mines, mills and expanded and modernized smelters should be in operation before the major effect of future competitive pressures is felt. Continuing our policy of modernization and improvement of facilities, to achieve greater efficiencies and lower costs, capital expenditures in 1966 are budgeted at $9,300,000. In addition, the Research and Development budget for the year has been substantially increased. During the course of the past year there were no material changes in personnel, and labor relations at all Divisions of the Company were harmonious. Mr. James G. Colvin, our Treasurer, was elected by the Trustees to the additional office of Vice President in August. Our employees put forth extra effort to enable us to achieve the records established in 1965, and we take this opportunity to express to them and to our stockholders our appreciation of their support. . 2 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. REVIEW OF 1965 DOMESTIC OPERATIONS Construction at Fletcher Mine is proceeding on schedule to meet the target completion date of late 1966 LEAD OPERATIONS The Company's mining and milling operations in southeast Missouri, compris ing the Federal Division, the Indian Creek Division, and the Viburnum Division, operated continuously during the ^ear on a 40-hour week basis. Lead concen trate production for the year amounted to 186,367 tons from all units, up from **' a production in 1964 of 167,623 tons. The increased production was primarily from the Viburnum area, where all of the Company's new mines were in full operation. In addition to lead concentrates, the Federal unit produced a minor quantity of by-product copper concentrates, the Indian Creek unit small tonnages of zinc concentrates, and the Viburnum unit both by-product copper and zinc concentrates. For many years the Federal plant has also recovered from the tailings it produces, an agricultural limestone product which is sold in the Mid-West farming states for soil improvement. The development of the Fletcher mine and mill complex south of Viburnum is proceeding on schedule and it is expected that the first production from this unit will be obtained late this year. Construction has also started on new surface facilities and a hoisting shaft, located about rniles from the Indian Creek mill. Production from this facility is not planned for at least two years, and the ore from this mine will be milled at the present Indian Creek plant. ' . < , i \ j ; ` Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. I 3( The modernization and expansion program of the Company's lead smelter at Herculaneum is scheduled for completion during the fourth quarter of 1966. It will increase the Company's lead smelting capacity to in excess of 200,000 tons per year of refined lead metal. Upon completion it is expected to be one of the most modern and efficient lead'smelters in the world, and will incorporate a number of new technological features which should be effective both in improving efficiency and lowering costs. Over-all plans for Herculaneum call for the even tual construction of a by-product sulphuric acid plant to utilize the waste gases produced from the sinter plant. Despite disruptions caused by the construction program in progress, the Her culaneum smelter produced 105,799 tons of refined pig lead during 1965, as compared with a production of 117,643 tons in 1964. The excess of concentrates produced by the Company's mines was smelted on a toll basis by other lead smelters. Although further disruptions of smelter operations will be experienced during 1966--due to the change-over to the new facilities--the smelter's total production of refined lead for the year should approximate that of 1965. A sub stantial portion of the excess mine production will again be smelted on a toll basis by others. ? ZINC OPERATIONS The mines and mills of the Balmat-Edwards Division in northern New York State operated without interruption on a six-day week basis throughout the year. The tonnage of ore mined and of zinc concentrates produced established a record for this Division. Zinc concentrate production totaled 131,492 tons, all of which was shipped to the Josephtown smelter, as compared with 114,383 tons in 1964. In addition, the Balmat mill produced a minor tonnage of lead concentrates which was shipped to Hercu laneum for smelting. The increase in production at this Division resulted largely from the completion, in the second quarter, of the expansion and modernization program undertaken last year at the Edwards mine and mill. The Company's Zinc Smelting Division at Josephtown, Penn sylvania, for the second year in a row established a new produc tion record, producing 202,657 tons of zinc metal equivalent for the year, as compared with 193,444 tons in 1964. The con tinuing increase in productivity resulted more from improve ments in operating techniques than from other factors, as new productive capacities planned and under construction will not be operative until mid-1966. Stag de watering tanks at the Hercu laneum lead smelter, part of the improved system for preparing the blast furnace charge. 4 , . / Reproduced with permission of the copyright owner. FurtHeprepfoduction prohibited without permission. IRON ORE MINING AND PELLETIZING Meramec Mining Company, the Company's joint venture with Bethlehem Steel, gradually increased the rate of pellet produc tion from 1,250,000 long tons early in the year, to a fate of over 1,700,000 long tons by the year end. Total pellet production for the year amounted to 1,581,736 long fon?.; Because of the premium quality of these pellets, demand exceeded available supply. Long term contracts were negotiated during the year for the sale of St. Joe's share of the anticipated annual pellet production. Meramec operations returned a profit (after all charges) to the Company in 1965 as against a loss in 1964, although development and experimental work continued to be carried on at a rate well in excess of normal. Continuing research has been conducted into methods for handling efficiently the very large tonnage of high grade hematite ore encountered in the mining of the basically magnetiteiorebody. The existing concentrating plant and pelletizing furnace were designed primarily for the processing of magnetite ore, and although the hematite represents a valuable additional source of iron, it presently cannot be utilized to full advantage in exist ing facilities. l Zinc slab stacker, designed and built by the Zinc Smelting Division, receives and stacks the slabs and pallets of the zinc metal ready for conveyance to the shipping area i ( Customer technical service is an important part of the Zinc Smelting Division's sales ef fort Here. Division Manager Charles D Hen derson (left) reviews a photomicrograph of a galvanized coating, shown enlarged in the inset, with Technical Service Representative William Tunney ; , Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 5 ! A FOREIGN OPERATIONS ARGENTINA Cia. Minera Aguilar, S. A., St, Joe's Argentine affiliate, with its associated com panies had a very satisfactory year. The Aguilar mine production in 2965 amounted to 35,339 metric tons of lead concentrates and 57,758 metric tons of zinc concentrates, as against 27,889 metric tons of lead concentrates and 41,240 metric tons of zinc concentrates in 1964. The demand for lead and zinc in Argentina continued to be such that the entire production in 1965 of both metals was sold in that country. With the growing demand within Argentina for metals, Aguilar has embarked on an expansion program which will increase its capacity by a minimum of 50%. Engineering and design work on this expansion project is under way and it is hoped that the additional capacity will be available commencing in 1968. Cia. Metalurgica Austral, an Argentine company 43% owned by Aguilar, which operates a zinc smelter at Comodora Rivadavia, produced all the Prime Western zinc in 1965 that the availability of electric power would permit. The entire production for 1965, as well as previously accumulated inventory, was sold during the year within Argentina. Cia. Sulfacid, S.A., an Argentine corporation 50% owned by Aguilar, like wise operated at capacity during 1965, producing Special High Grade zinc from its recently completed electrolytic plant, and by-product sulfuric acid. An expansion program completed late in the year increased Sulfacid's electrolytic zinc productive capacity from a previous 6,600 metric ton per year rate to approximately 12,000 metric tons per year. The high purity zinc produced by Sulfacid has found ready acceptance among Argentine consumers, and both sales and earnings have been satisfactory. Aguilar mining community, high in the mountains of North ern Argentina, is a self contained town for the Company's employees Overhead conveyor transports ore from the Aguilar mine, well up in the mountainside, down to the mill in the valley below Inflation, federal budget deficits, and currency softness continue to present major difficulties to be overcome in improving Argentina's basic economic con dition. The Government is searching earnestly for a solution, and there is reason to hope that it may be successful in stabilizing and reversing the present infla tionary trend. Aguilar, because of its faith in the country's ability to overcome present economic problems and effectively develop the country's natural wealth, has been actively investigating opportunities to reinvest substantial portions of its current earnings in Argentine industry. 6 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. PERU The Company's mining operations in Peru, carried on through Compania Mmerales Santander, Inc., had a record production in 1965 of 10,827 tons of lead concentrates and 54,717 tons of zinc concentrates, as compared with 9,169 tons of lead con centrates and 45,382 tons of zinc concentrates in 1964. In creased efficiency and reduced costs, with excellent metal prices received during the year, provided Santander with a new high in earnings and permitted the declaration of its first dividend. As the life of the present open pit mine is limited, active preparations are under way for a gradual transfer to an under ground mining operation. The shift to underground mining should add years to the life of the operation, and although costs may be greater and earnings somewhat reduced, it is believed that the operation should remain economically attractive. The economic and political outlook in Peru appears favorable if the present Government is successful in its continuing efforts to forestall threatening inflationary pressures. Large scale public works programs have put a severe strain on government budgets and on the exchange value of the sol. However, the country's traditional exports of fish meal, metals and agricultural prod ucts continue to expand, providing a stabilizing influence. Santander, in the Peruvian Andes, is also a self contained community Flotation process used to separate lead and zinc ores from rock is basically the same at Santander as at the lead mines of Missouri and the zinc mines of New York State *."* EXPLORATION The Company's exploration activities during 1965 were cen tered, as in the recent past, largely in this country and in Argen tina and Peru. Drilling programs in Southeast Missouri added additional tonnages to an already large lead ore reserve. In the Balmat area, likewise, drilling indicated substantial additions to the potential zinc ore reserves of the Balmat operation. In Argentina an active program outside of the Aguilar area was car Multi purpose hydraulic press in the metal product laboratory at Josephtown is used for experimental extrusion of lead, compacting powders, press form mg material, and other metalworking techniques requiring high pressure ried on, but failed to develop properties of significant interest. In Peru, where the higher price of silver has greatly stimulated the interest of many international mining companies, an active investigation program was also carried on with encouraging prospects for the future. The continuing search for new reserves to replace those being exhausted is a prime function of any progressive mining company, and it is the policy of your Company to vig orously pursue such a search in those areas which we consider attractive. In 1966 our exploration expenditures in the U.S. and elsewhere can be expected to be increased. RESEARCH AND DEVELOPMENT In 1965, combined direct and indirect expenditures for research and development in creased to approximately $2,000,000, including the Company's contributions to the pro grams of the Lead Industries Association, the American Zinc Institute, and the International Lead-Zinc Research Organization, Inc. This industry-sponsored product research has dem onstrated the soundness of undertaking non-proprietary research on a cooperative basis. In the area of proprietary research, the Company in 1965 established at its Josephtown Zinc Smelter Division a new laboratory for research on products and processes aimed at new applications for lead and zinc which will hopefully broaden our markets for these metals. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY and CONSOLIDATED SUBSIDIARIES ASSETS CONSOLIDATED BALANCE SHEET CURRENT ASSETS: Cash......................................................... Marketable securities (at cost) . . . . Accounts receivable--trade........................ Other accounts receivable........................ Inventories (Note 1): Lead, zinc, etc......................................... Materials and supplies........................ 1965 $ 3,935,327 43,211,538 12,191,583 1,203,286 7,440,362 6,365,253 $ 74,347,349 1964 $ 3,281,913 44,932,844 9,885,059 918,509 5,241,508 5,811,970 $ 70,071,803 INVESTMENTS AND ADVANCES (Note 2) . . . 18,077,125 25,192,184 PROPERTY, PLANT AND EQUIPMENT (Note 3) . Less accumulated depreciation and depletion....................................................... 153,916.527 97,041,384 56,875,143 145,505,033 94,089,993 51,415,040 OTHER ASSETS: Securities on deposit with Governmental agencies................................................ Cash and marketable securities-- Fire Insurance Fund (see contra) . . . 963,429 360,574 1,324,003 963,812 360,743 1,324,555 DEFERRED CHARGES: Deferred shaft sinking, development and exploration charges (Note 4) ... . Other deferred charges............................. TOTAL 6,290,119 1,819,561 8,109,680 $158,733,300 4,890,212 813,807 5,704,019 $153,707,601 See Notes to Financial Statements, 8 i Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. i DECEMBER 31, 1965 and 1964 LIABILITIES A;ND STOCK HO L D E R S EQ UITY . . CURRENT LIABILITIES: Accounts payable and accrued liabilities . Long-term debt clue within one year (Note 5) ........................................... Federal income taxes ........................ 1965 $ 9,333,008 1,425,000 6,371,007 $ 17,129,015 LONG-TERM DEBT (Note 5) 19,216,669 DEFERRED FEDERAL INCOME TAXES-related to accelerated amortization and depreciation . . 3,874,050 RESERVES: Injury claims and workmen's liability insurance................................................ Employees life insurance and retirement . Fire insurance (see contra).................... 612,679 250,061 360,574 1,223,314 STOCKHOLDERS' EQUITY (Notes 5 and 6): Capital stock, par value $10 per share: Authorized--10,000,000 shares Outstanding-1965, 4,570,564.5 shares; 1964, 4,560,077.5 shares (after deducting 21,386.35 shares in treasury)........................................... Other Capital--representing principally excess of amount of stock dividends over par value of capital stock ... Retained Earnings TOTAL 45,705,645 23,057,292 48,527,315 117,290,252 $158,733,300 1964 $ 7,226,971 4,282,143 2,713,179 $ 14,222,293 30,388,098 2,978,452 717,374 262,510 360,743 1,340,627 45,600,775 22,927,363 36,249,993 104,778,131 $153,707,601 See Notes to Financial Statements. Reproduced with permission of the copyright owner! Further reproduction prohibited without permission. 9 ST. JOSEPH LEAD COMPANY and CONSOLIDATED SUBSIDIARIES STATEMENT OF CONSOLIDATED INCOME FOR THE YEARS ENDED DECEMBER 31, 1965 AND 1964 NET SALES COST OF SALES ................................................................................... ........................... .. OTHER INCOME: Dividends on: Foreign investments . Domestic investments ... Interest . . ... Royalty, Meramec Mining Company . Sundry-net ... . ....................................... ............................................ ... ... .... .... TOTAL . . .. DEDUCT: Selling, general and administrative expenses....................................... Research expenses ................................................. ...................... Shaft sinking and development expenses Meramec, Viburnum and Fletcher Projects (Note 4) Other exploration and development expenses .. .. Past service annuities (Note 7) . ....................................... Depreciation....................................................................... ................................. Depletion............................................................ ................................................. Interest on indebtedness . ....................................... TOTAL DEDUCTIONS ... ................................. INCOME BEFORE INCOME TAXES AND SPECIAL ITEMS FEDERAL AND STATE INCOME TAXES ..... .. NET INCOME FOR THE YEAR (1965, $4.98 per share on 4,570,564.5 shares; 1964, $3.93 per share on 4,560,077.5 shares) . . SPECIAL ITEMS (Note 9) ... NET INCOME FOR THE YEAR AND SPECIAL ITEMS PER SHARE ................................. . ... . 1965 $136,156,901 96,979,226 39,177,675 1,815,760 166,793 1,945,655 1,250,000 354,680 44,710,563 2,629,666 695,363 365,850 229,546 153,581 4,343,765 517,069 1,121,922 10,056,762 34,653,801 11,887,303 22,766,498 14,610 $ 22,781,108 $4~98 1964 $109,509,039 83,481,096 26,027,943 4,180,634 274,860 1,544,327 1,250,000 235,528 33,513,292 2,495,910 559,611 501,176 217,490 153,580 4,183,059 368,196 1,378,073 9,857,095 23,656,197 5,744,418 17,911,779 2,332,715 $ 20,244,494 STATEMENT OF CONSOLIDATED RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1965 AND 1964 RETAINED EARNINGS AT BEGINNING OF THE YEAR ........................... NET INCOME for the Year and Special Items .. . .... TOTAL .... DIVIDENDS PAID: Cash (1965, $2.30 per share; 1964, $1.66 per share reflecting 3-for-2 stock split) Stock ...................... ... , . ... TOTAL RETAINED EARNINGS AT END OF THE YEAR See Notes to Financial Statements. 1965 $ 36,249,993 22,781,108 59,031,101 10,503,786 10,503,786 $ 48,527,315 10 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1964 $ 38,781,252 20,244,494 59,025,746 7,588,828 15,186,925 22,775,753 $ 36,249,993 ST. JOSEPH LEAD COMPANY AND CONSOLIDATED SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS 1. INVENTORIES Inventories of lead, zinc, etc. (finished, in proc ess, and concentrates) are valued at cost (not in excess of market), determined substantially on the last-in, first-out (LIFO) method. Materi als and supplies are valued at average cost. 2. INVESTMENTS AND ADVANCES The carrying values of investments in the con solidated balance sheet, which are stated at cost, except as noted below, do not indicate the current value of such investments. The fol lowing is a summary of investments and ad vances: Subsidiaries not Consolidated: Compania Minera Aguilar, S.A.--99.9% owned, capi tal stock (nominal value) (note 10)............................$ Compania Minerales Santander, Inc.--wholly owned (capital stock $899,071 and debentures $1,473,536) ..................... 1 2,372,607 Fifty-Percent Owned Companies: Meramec Mining Company (capital stock $2,500 and advances, net $15,636,651) ................... Mine La Motte Corporation capital stock (nominal value) ................................ 15,639,151 1 Other Securities, Loans, etc.: North Africa Investment: Societe des Mines de Zellidja (at less than cost).. Societe Nouvelles des Mines D'Ain-Arko (nominal value) 52,115 1 The Bunker Hill Company-- 400 shares capital stock at cost................................ 4,000 Sundry securities, loans, etc...9,249 $18,077,125 The net assets of Compania Minerales San tander, Inc. and its liability to the Company on debentures, totaled $4,535,464 at December 31, 1965 and its net income for the year then ended was $1,111,762 after provision for in terest on indebtedness to the Company, depre ciation and depletion, of $81,625, $306,188, and $59,161, respectively. Development costs for 1965 were $281,733, which were charged against income. During the year 1965, Bethlehem Steel Corpo ration and the Company, each reimbursed Meramec Mining Company to the extent of $9,113,373 for expenditures made by it. Of , this amount, $120,313 was recorded in the Company's accounts as additional investment in that 50% owned Company, and $8,993,060 as the cost of production. For financial accounting purposes, depreciation is provided in the accounts of the Company on its share of the depreciable property of Mera mec Mining Company over twenty years, but for Federal income tax purposes on the declin ing balance method over ten years. Deprecia tion was provided in 1965, in the amounts of $883,646 and $2,588,231, for book and tax purposes, respectively and deferred U.S. in come taxes of $818,201, based on current tax rates, applied to the difference in the deprecia tion amounts, were charged against income. The Company's equity in the net assets of Mine La Motte Corporation at December 31, 1965, was $289,511 and its equity in the cor poration's net loss for the year then ended, was $54,082. 3. PROPERTY, PLANT AND EQUIPMENT All properties are stated at cost except for $17,000,000 of mining properties and mineral rights stated at appraised values, for which full allowances for depletion have been provided. The net amount of property, plant and equip ment as shown in the consolidated balance sheet does not indicate the present value of these assets, as such value could be arrived at only by current estimates which would vary from time to time depending on the price of metals, rate of production, cost of labor, and other factors. 4. SHAFT SINKING AND DEVELOPMENT EXPENDITURES in 1963 the Company adopted the practice of capitalizing for financial accounting purposes, shaft sinking and development expenditures reduced by amounts equal to the current tax reductions. The amounts so capitalized are to be written off over the life of the property or the lives of the related mine equipment. 5. LONG-TERM DEBT Long-term debt, exclusive of amounts due within one year, at December 31, 1965 was as follows: 3% % Notes payable to Con solidation Coal Company..... $ 2,550,000 41/2% Notes payable to Bethle hem Steel Corporation......... 16,666,669 $19,216,669 The 37a % Notes are payable in fixed semi annual instalments of $425,000 each on Janu ary 1 and July 1 through July 1, 1969. The Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST, JOSEPH LEAD COMPANY AND CONSOLIDATED SUBSIDIARIES. NOTES TO FINANCIAL STATEMENTS AND ACCOUNTANTS' instalment due January 1, 1966 was paid on December 31, 1965. The 4% % Notes Payable to Bethlehem Steel Corporation are due on March 31, 1984. Under its Credit Agreement with Bethlehem Steel Corporation, the Company has assigned royalties to be received from Meramec Mining Company up to $1,000,000 annually as col lateral security for the 41/2% Notes Payable. 6. STOCK OPTION INCENTIVE PLAN Under the Stock Option Incentive Plan ap proved by the stockholders in 1958, 130,000 shares of the Company's unissued stock was reserved for issuance and sale to officers and other key employees under 60 years of age, at a price not less than the market price at the time the options are granted. Due to the 10% stock dividend in 1962 and the three-for-two stock split declared in 1964, the total amount of shares so reserved was increased to 189,589 after the elimination of shares applicable to options exercised totaling 49,403 shares. The options may be exercised in equal annual instalments on the anniversary date of each grant and any part of an option not exercised at the end of five years from the date of the grant becomes void and available for future grants. During the year 1965, options for 33400 shares were granted at $41.25 per share, op tions for 10,487 shares were exercised, and options for 750 shares were cancelled. The excess of the aggregate option price over the par value of 10,487 shares issued upon exer cise of options in 1965, which amounted to $129,929, was credited to Other Capital. Outstanding options at December 31, 1965 adjusted to reflect the 10% stock dividend and the three-for-two stock split, both in the num ber of shares and the option prices, are as follows: Date of Grant Number of Shares Option Price April 28, 1961 January 10,1964 July 8, 1965 495 45,574 32,350 $18.2576 35.5833 41.25 78,419 At December 31, 1965 there remained avail able for future grants, 47,280 shares. 7. RETIREMENT AND PENSION PLANS The Company and its consolidated subsidiaries have a Retirement Plan for Salaried Employees and a Pension Plan for Payroll Employees, cov ered either by a contract with an insurance company or by funds deposited with a Trustee. The assets of the Plans are not included in the accompanying consolidated balance sheet. Both Plans are non-contributory and all past service costs have been funded. At December 31, 1965, the deferred past service costs were $1,495,493, which amount is to be amortized over the period as allowed by the Internal Rev enue Code. Current service costs of both the Retirement Plan and Pension Plan aggregated $1,042,167 in 1965. 8. INCOME Sales and cost of sales for the year ended December 31, 1965, include $8,657,384 for lead and zinc sold from the Government stock pile on which, by law, no profit was realized. Amounts of depreciation and depletion for 1964 reflect reclassification to conform with the classifications used in 1965. 9. SPECIAL ITEMS Special items comprise the following: 1965: Profit from sale of investment in The New Jersey Zinc Com pany after taxes of $168,993..$506,979 Less -- Abnormal costs incurred through insolvency of con tractor in construction of new mine facilities after taxes of $454,494 ............................... . 492,369 $ 14,610 and for 1964, profit from sale of investment in Missouri-lllinois Railroad Company (after taxes of $777,572), $2,332,715. 10. COM PAN IA MIN ERA AGUILAR, S.A. A balance sheet of Compania Minera Aguilar, S.A., as of December 31, 1965, and a related statement of income for the year then ended, both in summary form and stated in Argentine pesos, follow: BALANCE SHEET Argentine Pesos* Current Assets............... . 2,293,112,528 Investments (at cost).... . 272,992,072 Capital Assets............... .. 562,657,025 Deferred Charges ......... . 13,113,477 Total Assets................ . 3.141,875,102 Current Liabilities......... . 732,942,086 Deferred Credits ........... . 30,818,408 Reserves ........................ . 896,992,173 Stockholders' Equity .... . 1,481,122,435 Total Liabilities and Stockholders' Equity... . 3.141,875402 12 , . Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. L r ! k L s i PINION STATEMENT OF INCOME Argentine Pesos* Gross Profit on Sales..... 1,655,856,496 Other income.................. 247,546,198 Total .......................... 1,903,402,694 Expenses, Other Taxes, Depreciation and Depletion, and Other Deductions ................... 192,494,407 Argentine Income and Emergency Taxes, net. 610,835,674 Special Appropriation for Replacement of Capital Assets.......... 114,431,930 Total ............................. 917,762,011 Net income forthe Year.... 985,640,683 *The quoted free rate of exchange for a peso was approximately $.0053 at December 31, 1965. ACCOUNTANTS' OPINION The above financial statements are in conform ity with accounting principles generally ac cepted in Argentina, which differ in respect to the accounting for capital assets and related depletion and depreciation and for special ap propriations out of income for the replacement of capital assets, from that generally accepted in the United States of America. The equity of the Company in the net income of the Argentine subsidiary, exceeded divi dends received by 671,558,091 pesos. Divi dends received are recorded as they are converted into U.S. dollars or into U.S. dollar bonds of the Argentine Government. HASKINS & SELLS certified public accountants TWO BROADWAY NEW YORK 10004 To the Stockholders of St. Joseph Lead Company: We have examined the consolidated balance sheet of St. Joseph Lead Company and its consolidated subsidiaries as of December 31, 1965 and the related statements of consolidated in come and consolidated retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying consolidated balance sheet and statements of consolidated income and consolidated retained earnings present fairly the financial position of St. Joseph Lead Company and its consolidated subsidiaries at December 31,1965 and the results of their operations for the year then ended, in con formity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. HASKINS & SELLS February 23, 1966 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 13 ST. JOSEPH LEAD COMPANY and CONSOLIDATED SUBSIDIARIES COMPARATIVE FINANCIAL REVIEW 1956-1965 1965 1964 1963 AVERAGE METAL PRICES (Cents per pound) Lead, New York................................. Zinc, St. Louis....................................... 16.000 14.500 13.596 13.568 11.137 11.997 SALES ............................................................. Cost of Sales....................................... Gross profit on sales $136,156,901 96,979,226 39,177,675 $109,509,039 83,481,096 26,027,943 $ 75,598,525 57,932,666 17,665,859 OTHER INCOME: Dividends................................................. Interest and other (net)...................... Royalty--Meramec Mining Company . Total 1,982,553 2,300,335 1,250,000 44,710,563 4,455,494 1,779,855 1,250,000 33,513,292 2,613,188 781,304 1,250,000 22,310,351 DEDUCT: Selling, general administrative, research, etc....................................... Strike and shutdown expense . . . Shaft sinking, development and exploration....................................... Depreciation and depletion .... Interest on indebtedness .... U.S. and foreign income taxes . . Total Deductions . i! ; " 3,478,610 3,209,101 595,396 4,860,834 1,121,922 11,887,303 21,944,065 718,666 4,551,255 1,378,073 5,744,418 15,601,513 2,657,207 1,566,461 1,657,847 3,897,981 975,111 1,651,971 12,406,578 NET INCOME BEFORE SPECIAL ITEMS . . SPECIAL ITEMS............................................ 22,766,498 14,610 17,911,779 2,332,715 9,903,773 _ NET INCOME PER SHARE OUTSTANDING AT END OF YEAR* ............................................................. PERCENT GROSS PROFITS ON SALES APPLICABLE TO: Lead Zinc Iron .................................................. . . ................................. ... ............................ Total Assets.................................................. Current Assets............................................ Current Liabilities....................................... Current Ratio (to 1) ............................ STOCKHOLDERS' EQUITY: Amount.................................................. Per share outstanding at end of year* $ 22,781,108 j $4.98 $ 20,244,494 $4.44 $ 9,903,773 $2.18 50 43 7 $158,733,300 74,347,349 17,129,015 4.34 ;1 $117,290,252 $25.66 41 59 -- $153,707,601 70,071,803 14,222,293 4.93 $104,778,131 $22.98 29 71 -- $123,611,533 45,422,385 11,352,128 4.00 $ 91,795,960 $20.21 Adjusted to reflect the 10% stock dividend paid December 21, 1962, and the three-fortwo stock split effected September 30,1964, .1 \ Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1962 9.631 ; 11.625 i $ 67,981,883 58,106,248 : 1 9,875,635 - a 3,588,027 it 952,053 729,166 A 15,144,881 \ i J 2,542,330 1,844,107 2,770,751 3,538,848 1,142,997 518,216 12,357,249 S 5 .4 3 a Ih r>* f 2,787,632 1,532,241 ' $ 4,319,873 I $.96 6 94 -- $117,897,308 46,823,524 8,753,333 5.35 $ 84,578,891 $18.86 i i i | 1961 10.871 11.542 $ 71,008,301 58,063,668 12,944,633 1960 11.948 12.946 $ 79,970,908 69,062,502 10,908,406 1959 r 12.211 11.448 $ 86,611,677 72,804,292 13,807,385 1 1958 12.109 10.309 $ 76,075,865 67,370,230 8,705,635 1957 14.658 11.399 $107,473,568 92,042,828 15,430,740 1956 16.013 13.494 $120,229,545 100,905,492 19,324,053 1,634,422 1 2,493,264 | 17,072,319 1,991,830 551,587 13,451,823 2,276,864 732,196 16,816,445 2,762,943 321,775 11,790,353 2,042,879 639,177 18,112,796 1,065,833 284,534 20,674,420 I 2,272,135 I" 1 2,304,202 1 3,180,607 I 1,136,735 | 1,846,444 | 10,740,123 1 6,332,196 2,322,476 -- 2,880,829 3,766,920 1,172,042 337,488 10,479,755 2,972,068 2,355,219 316,272 1,850,551 3,334,648 1,154,307 1,542,372 10,553,369 6,263,076 2,310,268 --* 1,522,462 2,754,733 513,973 702,037 7,803,473 3,986,880 2,468,540 -- 561,676 2,935,632 118,833 4,001,842 10,086,523 8,026,273 2,286,583 166,740 2,649,221 5,280,519 10,383,063 10,291,357 $ 6,332,196 $1.41 $ 2,972,068 $.66 $ 6,263,076 $1.40 $ 3,986,880 $.89 $ 8,026,273 $1.79 $ 10,291,357 $2.30 26 74 5120,298,163 54,787,270 11,276,912 4.86 5 82,967,539 $18.50 26 74 $116,545,876 45,178,167 7,485,650 6.04 $ 79,349,540 $17.70 42 58 $117,549,738 50,098,983 7,456,767 6.72 $ 79,064,194 $17.64 33 67 $107,679,085 45,791,438 5.786,183 7.91 $ 75,517,340 $16.85 42 58 $ 94,327,695 42,707,719 9,148,775 4.67 53 47 $ 85,320,288 49,625,248 11,383,335 4.36 $ 74,246,682 $16.57 $ 71,652,895 $15.99 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY and CONSOLIDATED SUBSIDIARIES WORKING CAPITAL ANALYSIS AND GENERAL STATISTICS 1950 WORKING CAPITAL SOURCE Earnings ...................................... Provision for Depreciation and Depletion Long-term Borrowings............................ Sale of Investments ........................ Other, net ........................................... Total USE Dividends Paid: Shares outstanding at end of year . Per share........................................... Amount........................................... Capital Expenditures............................ Investments........................................... Repayment of Debt................................. Other, Net................................................ Total WORKING CAPITAL AT END OF YEAR GENERAL STATISTICS Number of Stockholders........................ United States Employees: Number ...................................... Salary and wage costs................... Pension and Retirement Plans: Members ............................................ Contributions................................. Pensioners ................................. Pension Payments........................ Deferred Profit Sharing Plan: Eligible employees........................ Contributions ............................. 1965 $ 22,781,108 4,860,834 -- 5,724,028 663,198 $ 34,029,168 1964 $ 20,244,494 4,551,255 18,000,000 197,213 1,773,262 $ 44,766,224 1963 $ 9,903,773 3,897,981 -- -- -- $ 13,801,754 1962 $ 4,319,873 3,538,848 3,000,000 -- -- $ 10,858,721 4,570,565 $2.30 $ 10,503,786 10,377,266 607,863 11,171,429 -- $ 32,660,344 $ 57,218,334 4,560,078 $1.66 $ 7,588,828 8,314,200 2,376,800 4,707,143 -- $ 22,986,971 $ 55,849,510 3,028,217 $1.25 $ 3,763,404 3,186,963 5,866,947 4,290,476 693,897 $ 17,801,687 $ 34,070,257 2,989,382 ! $1.00 $ 2,717,622 | 3,750,014 4,634,987 4,290,476 | 905,790 | $ 16,298,889 i ..$.....38,07.0..,.1..90. 5< 11,792 :: 3,820 $ 27,900,722 2,911 $ 2,384,779 1,047 606,841 666 $ 636.135 9,107 3,769 $ 24,926,760 2,788 $ 1,314,415 1,023 $ 537,621 669 $ 590,768 8,772 3,621 $ 20,813,527 2,628 $ 814,733 937 $ 496,194 687 $ 297,113 8,986 ; 3,774 j $ 19,781,411 | 2,777 $ 939,017 ; 920 $ 457,701 : 683 ; Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1 965 j 1961 j $ 6,332,196 3,180,607 -- 8,549,758 179,429 $ 18,241,990 1960 $ 2,972,068 3,766,920 -- -- -- $ 6,738,988 1959 $ 6,263,076 3,334,648 5,000,000 -- 1,509,628 $ 16,107,352 1958 $ 3,986,880 2,754,733 15,000,000 -- 1,108,897 $ 22,850,510 1957 $ 8,026,273 2,935,632 8,500,000 -- 399,130 $ 19,861,035 1956 $ 10,291,357 2,649,221 -- 5,437,827 -- $ 18,378,405 i j 2,717,322 ' $1.00 j $ 2,717,247 ' 2,445,243 ! 3,554,516 : 3,707,143 i" | $ 12,424,149 : $ 43,510,358 i' 3 i i : 9,740 i 3,871 ! $ 22,598,389 ' 2,789 $ 944,152 886 $ 434,517 702 S 189,966 2,717,222 $1.00 $ 2,717,222 5,912,656 1,891,994 850,000 316,815 $ 11,688,687 $ 37,692,517 10,651 4,171 $ 24,803,687 2,690 $ 1,049,557 819 $ 355,782 698 2,716,222 $1.00 $ 2,716,222 9,283,290 620,879 850,000 -- $ 13,470,391 $ 42,642,216 2,716,222 $1.00 $ 2,716,222 11,830,509 1,857,468 -- -- $ 16,404,199 $ 40,005,255 2,716,222 $2.00 $ 5,432,486 15,017,048 4,094,470 -- -- $ 24,544,004 $ 33,558,944 11,812 13,315 4,263 4,581 $ 22,670,522 ' $ 23,755,404 2,622 $ 780,000 822 $ 331,550 2,448 $ 826,198 780 $ 303,019 682 $ 187,8# 693 14,267 5,076 $ 27,832,266 2,582 $ 800,928 710 $ 276,461 685 $ 240,788 2,716,222 $3.00 $ 8,148,666 3,533,984 1,326,339 -- 743,533 $ 13,752,522 $ 38,241,913 13,219 5,213 $ 25,682,126 2,656 $ 2,170,872 671 $ 254,942 662 $ 308,741 \ Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UNITED STATES LEAD STATISTICS IN SHORT TONS CURRENT SUPPLY: Recoverable U. S. mine production................... From U. S. stockpile ............................................ From scrap. . . ............................. .... . , , Imports of concentrates and bullion (lead content) .......................................................... Metal imports (net) . . ............................. .... Total Lead Metal Available .... CONSUMPTION: Batteries . . . ............................................ Ethyl gasoline . ................................................ Cables ............................................................... Construction . ........................ ........................ Pigments . ..................................................... Other uses .......................................................... Total Consumption........................ APPARENT SURPLUS (DEFICIT) .................................. 1965 (Estimated) 293,000 37,000 560,000 128,000 214,000 1,232,000 433,000 230,000 60,000 125,000 105,000 277,000 1,230,000 2,000 1964 (Final) 286,000 50,000 520,000 128,000 199,000 1,183,000 429,000 223,000 56,000 125,000 104,000 265,000 1,202,000 (19,000) ST, JOSEPH LEAD COMPANY LEAD STATISTICS IN SHORT TONS Year 1956 1957 1958 1959 1960 1961 1962 1963 1-964 1965 .... . ... .... ..., .... .... .... .... .... .... '. Lead Concentrates Produced from Company's Mines 158,861 163,079 149,624 143,167 147,879 139,817 86,375 113,801 170,704 189,962 Net ' Lead Raw Materials Purchased 44,353 46,309 25,102 8,300 13,656 4,927 4,453 2,773 3,528 4,086 Pig Lead Production 137,429 137,940 116,799 101,478 98,447 116,148 77,156 81,319 117,643 133,601 Pig Lead Purchased 61,522 62,392 51,569 50,306 33,209 17 -- 10,357 8,724 9,135 Pig Lead . Sales Including 1956-1960 Sales Under Agency Contracts 1 199,294 183,942 139,131 1 164,084 131,852 , 108,447 112,857 , 96,692 ' 125,177 142,243 18 . i \ - -' - : - - - ^ -----J -- - - ' ' - Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ' ' UNITED STATES ZINC STATISTICS IN SHORT TONS CURRENT SUPPLY: ' .. V Recoverable U. S. mine production . . . , . Less -- used to make pigments....................... ..... Recoverable domestic zinc available to metal smelters................................. ................................. From U. S. stockpile.................................................. From scrap........................................................; . Imports of concentrates (recoverable zinc content) . . ............................................. . . Imports of slab zinc................................................... Total Zinc Metal Available .... CONSUMPTION: Galvanizing................................................................... Zinc-base alloys ................................................... Brass.............................................................................. Rolled zinc........................... ....................................... Oxides......................................................................... Other.............................................................................. Total Consumption............................. Exports......................................................................... Total Zinc Metal Consumed and Exported ......... APPARENT DEFICIT...................... ..... ............................; . Y. : 1965 (Estimated) 610.000 97.000 513,000 150,000 75.000 401,000 154,000 1,293,000 475,000 630,000 130,000 46,000 27,000 32,000 1,340,000 6,000 1,346,000 53,000 1964 (Final) 575,000 92,000 483,000 75,000 63,000 312,000 133,000 1,066,000 456,000 525,000 135,000 44,000 20,000 27,000 1,207,000 27,000 1,234,000 168,000 ST. JOSEPH LEAD COMPANY ZINC STATISTICS IN SHORT TONS Year 1956 . . . 1957 .... 1958 .... 1959 . . . . 1960 .... 1961 .... 1962 .... 1963 .... 1964 .... 1965 . . . . Zinc Concentrates Produced from Company's Mines Net Zinc Raw Materials Purchased 114,138 123,417 99,523 81,292 128,762 111,598 104,080 99,914 117,473 140,284 151,452 129,847 110,182 121,611 166,613 123,882 170,281 153,053 214,772 229,958 Slab Zinc Equivalent of Smelter Production 136,879 151,554 122,774 128,670 148,788 141,209 153,968 174,089 133,444 202,657 Purchased Zinc 48,672 56,613 46,453 44,334 26,730 8,511 4,709 6,726 15,538 21,058 Slab Zinc Equivalent of Sales 181,324 192,112 174,083 179,478 158,276 162,005 152,258 178,515 211,731 221,329 Sulphuric Acid Sales 190,004 204,255 171,938 176,607 186,722 194,327 189,866 211,930 243,920 237,305 Reproduced with permiss on of the cop yright owner. Further reprciduction prohi bited without permission. 19 > ST. JOSEPH LEAD COMPANY . Incorporated March 25, 1864, under the laws of the State of New York EXECUTIVE OFFICE 250 Park Avenue, New York, N. Y. 10017 BOARD OF TRUSTEES '"Member of Executive Committee EXECUTIVE OFFICERS YEAR ELECTED Andrew Fletcher* Chairman George 1. Brigden* Retired Vice President and Treasurer, St Joseph Lead Company Francis Cameron* President Bernard F. Desloge Vice President, Minerva Oil Co., St. Louis, Missouri Eli Whitney Debevoise* Debevoise, Plimpton, Lyons & Gates, New York, N. Y. James W. McAfee President, Union Electric Company of Missouri, St. Louis, Missouri David R. Calhoun President, St. Louis Union Trust Company Joseph Pursgiove, Jr. :? Vice President, Consolidation Coal Co., Pittsburgh, Pa. Plato Malozemoff President, Newmont Mining Corporation Guido F. Verbeck, Jr. Senior Vice President, Morgan Guaranty Trust Company of New York Elmer A. Jones Division Manager, St Joseph Lead Company Lawrason Riggs III* Vice President Robert H. Ramsey Vice President 1921 1944 1953 1953 1954 1954 1957 1959 1961 1961 1963 1963 1964 Andrew Fletcher Chairman Francis Cameron President Malcolm Bonynge Vice President--Sales John R. Englehorn Vice President Robert H. Ramsey Vice President Lawrason Riggs III Vice President James G. Colvin Vice President and Treasurer D. Broward Craig Secretary William L. Murphy, Jr. Comptroller & Assistant Secretary Edward P. Merrell Assistant Treasurer Frank J. Reidy Assistant Comptroller MANAGER OF EXPLORATIONS UNITED STATES DIVISION MANAGERS CIA. MINERA AGUILAR, S. A., ARGENTINA CIA. MINERALES SANTANDER, INC., PERU MERAMEC MINING COMPANY GENERAL COUNSEL TRANSFER OFFICE AUDITORS REGISTRAR Norman H. Donald, Jr. Mines Elmer A. Jones, Southeast Missouri Marshall G. Jones, Ba I mat-Edwards, N.Y. Smelters John W. Sherman, Herculaneum, Missouri Charles D. Henderson, Josephtown, Pennsylvania Wing L. Lew, Managing Director Clinton L. Miller, Vice President & General Manager Robert G. Peets, Resident Manager Debevoise, Plimpton, Lyons & Gates 320 Park Avenue, New York, N.Y. 10022 St Josepn Lead Company, 250 Park Avenue, New York, N.Y. 10017 Haskins & Sells, Two Broadway, New York, N.Y. 10004 The First National City Bank, 55 Wall Street, New York, N.Y. 10005 20 3\> . . ............ _ . Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Printed in U.S.A,