Document 82JxrEaoxrappMXJvVdM4OoN5

Annual Report of The President of THE NATIONAL LEAD TRUST February 4th 1891 : l \\ 0000-NLI-000017816 ANNUAL REPORT February 4,1891 if At the last Annual Nesting cf the Shareholders, the Trustees presented a general statement with reference to the organization and operations of The Trust from its inception to the ending cf .that fiscal year, in r;hioh was shown the valuation of the properties and the Profit and Loss Account up to that tires. r ' The capitalization then was 89,447,600, for which certificates were outstanding* There haa been no change > in the capitalization since that time. ~/ The valuation of the properties at that time was 22*593,800.59, for which Certificates to the amount above stated (on the basis of four for one) had been issued, and 231,700.59 paid in cash. ; 1/ M The Balance Sheet of The Trust at the close of the fiscal year January 31, 1891, 3hcws investments to the value Of 24,217,638.61 in the stocks of corporations, our proportion of the assets of the various corporations being represented as follows: 5 ; ! Plant Investment................................................ .. Other Investments................. ................................. Working Capital..................... 6,156,778.27 tes3 Mortgages............. 391,364.25 Net Value of Corporate Stocks as above.............. ..................................... .. Cash Assets of The Trust.....910,785.80 Stocks in hand? cf the Trus tees paid for in Cash, fear which Certificates have not been issued............................ 231,700.59 Total Assets January 31, 1891........... 17,992,989.80 459,234.79 5,765,414.02 24,217,638.61 1,142,486.39 25,360,125.00 i Some slight changes have been made in the report as read to simplify the statements. The net amount invested by the Corporations during the year for Betterments was 153,303.05. -1- 0000-NLI-000017817 Of the amount reported at the last meeting as net assets over ..and above the Plant, 55,594,139.29, it was found necessary to write off 35,785.33 of uncollectible jceounts, thus reducing the profit3 to January 1, 189Q, %o that extent. This was owing to the accounts of the rarious corporations not being received in time to give them the thorough scrutiny necessary previous to that meeting. The cash assets then stated have, therefore, been reduced by that amount, and should be stated as 45,558,403.97. Proper steps were immediately taken to avoid such errors thereafter. After making suitable provision for the maintenance of Plant, in which i3 included a large number of machines, which are not only a saving in labor but also minimise the danger to health and life among our employees, and the acquirement of certain valuable patents, the net earn ings of the corporations for the year were 53,057,746.32. j The Trust share of this smount i3................. 2,055,088.11 The net interest received on loans to its various interests is................ 33,361.57 leaking a total profit of..............................*...2,088,449.68 Lcaa ex?en333 of The Treat for the year... 59,897.45 Leaving the net earnings of The Trust for the fiscal year to January 31,1894............2,023,552.23 1.1 f It is proper to eay in this connection that the efforts of the Trustees have been to taka the exact condition3 by which ss are surrounded, and not to borrow from the future* In furtherance of this, the Inventory of December 31, 1890, has been taken upon a sore con servative ba,3is than heretofore. If the Inventory had been taken upon the basis of the previous year, the profit shown would h^ve been larger by 100,634.98. j In order that the shareholders may fully and oam! pletaly understand the situation of their properties, the following detail i3 pr2?3nted: On January 1, 1890, there had been realized by the several Companies, a net profit of 803,635.89 And during the year terminating December 31, 1890, as stated, a profit of................... 3057,746.22 Total pfofit to January 1, 1891 52381,382.11 ;r i :k 0000-NLI-000017818 f Total profit to January 1* 1891........................ 52,861,382.11 From this should be deducted the propor tion of above profits which belong to the owners of shares not aoquired by The Tru3t.............. ........................................................ 4,164.09 Leaving as a final net profit on the inter ests held by the Trustees.................. ..2*857,218.03 - The following statement from the books of the Trust ees ahow3 the status on February 1, 1891: Dividends received from Companies to January 31, 1891.................................. 1,233,180.00 Interest reoeived from loans made to Companies........................................................................ 33,361.57 Leas: Expenses of Trustees from organization 1,266,541.57 Expenses of Trustees for year ending January 31, 1891..... 59,897.45 Net Assets in hands of Trustees..................... These are accounted for as follows: Cash on hand................................................................ Loans to Companies........................................... .. Ca3h pa id for stock of Armstrong, lio- Kelvy Lead and Oil Company.............. ............. Cash paid for stook of Maryland Nhite Lead Company............ ................. ............................. Office furniture and fixtures..................... Less due Companies....................... Net Assets of Trustees.................. 124,055.18 1,142,486.39 1 83,340.67 1,186,417.57 | t 237,200.59 4,500.00 3,492.56 1,503,951.39 361,465.00 1,142,486.39 To further illustrate the present situation of our properties as compared with 1890, the following exhibit is made: Ca3b Assets then shown were............. 5,594,189.29 From which deduction was made, as stated heretofore. ....................... .... 35,785.33 Leaving the then Ca3h Assets at................ 5,558,403.97 Net profits for the year 1890..................... 2,057,746.22 Or a total of........................................... .. 7,616,150.19 Of these assets there has been, during the year 1890, expended and distributed as follows: 0000-NLI-000017819 3- 37,618,150.19 For new _ Construction............3 153,302.05 Dividends paid to Trustees. 1,233,180.00 Dividend piid to others. 330.00 1,386,803.05 Leaving: the Net A3 sets now on hand in the Companies, other than Plant 36,229,348.14 Made up as follows: Ca3h in Hands of Companies........... Merchandise in hands of Corroder3 and Crushers....................................... .. Ore and Bullion in hands of Smelters and Refiners................................. Equipment.............. ............................. Miscellaneous................................... Notes and Accounts Receivable 320,060.09 4,266,739.30 2,156,044.89 372,780.96 87,574.05 3,617,873.00 Total................................................................ 9,721,073.29 Less: Notes and Accounts Payable 3,100,359.90 Mortgages 391,364.25 3,491,734.15 6,229,348.14 i. The Companies paid off during the year, 76,300 of their mortgage indebtedness. It will be observed that in the Notes and Accounts? Payable i3 included 1,186,417.57 loaned by the Trustees to the various Companies, and a large part of the bal ance is for material exchanged between the different Companies. The total sales from our Smelting and Refining Department, of Lead,Silver and Gold amounted to............ ................. .. 8,391,600.16 The total sales from our Corroding Works and Linseed Oil Mills, amounted to... Making the total amount of all sales... The attention of the Shareholders i faot of the lags amount of capital neoea oonduot of the Smelting and Refining bus In the corroding business it is neoessary to carry from four to five months of supply continuously, and in i the purchase of flax seed and linseed, both from foreign points and the dom3atic markets, large sums of money are 1 necessary for the purchase and carrying of raw materials. It will be seen that the entire oapital accumulated is employed directly in the oonduot of the business. r - 4 0000-NLI-000017820 4 I The busins33 of the various Companies showed a very ,{lsfactory condition and a fair increase for the first ijifl months of the year. In the last three months, it seriously affected by speoial and partial legislaton> which created undue and severe fluctuations in the Liue of lead and silver ores and their produots, though *ppily by great care and active work, we escaped from jtrery threatening condition, without loss. i The grave financial crisis,added to the just expectiticn of the trade that by reason of the rapidly declinag values of Pig Lead and Linseed Oil, lower prices for he early periods of the season of 1S91, for the man-- jfactured articles would prevail, oaused a serious dillnution of the output of substantially all of our prodjots. The large trade nos being done seems to warrant lbs hope that thi3 business was simply postponed and lot lost. i T The Trustees take pleasure in calling. attention to the very kind and satisfactory relations existing between i ihe Companies and their patrons, who have expressed in a d tttional, and many local conventions, their satisfaction lith and approval of the principle and methods guiding fed controlling our business. $ I1 In my last Annual Report, your attention was called o our very large capitalisation, and you passed a esolution authorising the Trustees to take steps to re- luce the capitalization by two-thirds. In the pinion >f the Trustees this was a most wise action on your part; but, soon after the meeting, a very many shareholders ftve strong evidence of th6ir indisposition to avail hemselvss of the plan which had been adopted, and, as ha Trustees simply desired to carry out the wishes of heir shareholders, they postponed final action on that tan, and after waiting until December 20, 1890, to a3- 'wtain whether there was any considerable proportion of he Shareholders who were desirous of scaling the capital proposed, and finding them still reluctant, they re- 'Onsidsred their action, leaving it to the future to de- ermine whether the capitalization should remain as at esent, or some more feasible and satisfactory plan be fropcaed. The Trustees, after careful consideration of *he natter, reached the conclusion that if the plan had [en adopted, the value of the certificates would have *en materially increased over their current market price, it lias become apparent that on a capitalisation of irty Millions, the earninge power of the Companies in -5- 0000-NLI-000017821 s eolation with us would have been 3teadily equivalent 0 4uite seven per cant upon that capitalisation. As indicated in cur report of 1890, the actual cap{ftl required to carry on the very large business acquir^ by The Tru3t was inadequate. Rather than resort to the hazardous expedient of Rising money by placing bond3 upon the property, it aa thought wiser to go forward disciplining the business and acquire a sufficient capital by earnings to carry it on in an orderly manner without the necessity for large loans and t he consequent payment of interest. I In the opinion of the Trustees at this time,this !ha3 besn fairly accomplished, and the interests of The fru3t placed beyond a reasonable probability of jeopardy, and that, too, without placing upon the property a single dollar of outside obligation. It is the judgement of the Trustees, as expressed by a Resolution, after careful consideration of the en tire situation, that out of the profits to be received by the Trustees hereafter quarterly dividends shall be paid. In order to commence a return to our Shareholders, who have waited with patience for these accumulations, they have declared a dividend of FIFTY CENTS per share to the Shareholders, payable on the FIFTEENTH DAY of APRIL, 1S91, for which purpose the transfer books will close d&rch 14, 1891, and re-open April IS, 1891. It i3 the purpose of the Trustees to continue the payment of Dividends from the earnings from this time forward. The Trust is sitheut a dollar of indebtedness in any direction. The amounts borrowed by the Companies is com paratively small, ana 3uoh loans are temporary, and occasioned by the necessary laying in of adequate stocks. Respectfully, W. P. Thompson, President. -6 - 0000-NLI-000017822