Document oe6MK8DLd1GKZ5zOXqJq1bDe8

1. SUBJECT UNITED STATES GYPSUM CO. September 6, 1933* Mr. C. H. Shaver, Asst. Comptroller, e/o Hotel Ns* Yorker, New York City. Dear Tex: Your letters of August 31 and September 3 in dicate a quite surprising state of affairs and makes it appear most important that we be very thorough in our examination of the situation and in our appraisal of the opportunity. *r In the course of your examination, vill you ascertain vho the stockholders of the oompany are and where the oontrol lies? I presume, if the National Company owns real estate in Elizabeth valued at $311,000, it will be well to find out if it has been their Intention to include this property in any proposal they make to us. I can not imagine that we would hare any interest in unattached property and I assume it will be eliminated on the basis of the book value. An appraisal made in 1919 may be a favorable or unfavorable starting point. If Jaok will study the appraisal, he can determine if the unit valuations are high or low. You will then be able to oonolude whether you have a good or bad starting point for building up the plant account valuation. If Mr. Scharwath has had $585,000 in cash out of the company in 6 years, it would indioate that his need for cash approximates $100,000 per year. This is the figure Mrs. Scharwath gave me when I saw her at the hotel - that he needed $60,000 for his life insurance premiums and $40,000 to live on. If the oompany has not been making money during the past several years, it would appear that its working capital is being or has baen seriously impaired. My thought has been that our proposition, when we oome to make it, would be a flat figure for physical CS003 0056 2 properties (as Is usually done in suoh oases), they re taining the accounts receiTable, and reoelre from us the aaount of the lnwsntory in eash. I assuasd this would glre then something well orer a Billion dollars in cash, but if their working capital has been lapalred, it is quite possible that such a proposal will not reoeire consideration at this tiae and we nay hare to wait until they have a full realization of the hazardous position they are now oooupying* I will await with interest your further letters. Very truly yours, SxeoutlTe Vice President CS003 00S7