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ST.r tlieTHE BICYCLE TRUSTG, President Smith Gives OutitionLeaf I Details of the Big , tb« ■ *: -TmJPl Combine.thatfrom thetax j CAPITAL OF $40,000,000i sea.t by ilnstrers. Colonel Pope Likely To Be Presi-nade dent—The Trust Will MakeJtcgLst01ri••ES.No TiresNngeSpecial Dispatch to,Commercial Tribune.INDIANAPOLIS, Ind., July 2S.-Presi-dent Charles F. Smith, of the Indiana Bicycle Company, yesterday gave out allthe details of the formation of the bicycleRFdingyear» 100 axes ionsrith-hich10.000njni-i.De-tlTEiiCPTthe trust- v7 ~ '*-.1'-^the He says the new trust has been or-war ganized on a more conservative basis than t of j the plan outlined at first, all the waterhas been squeezed out of the 'combination and It is now capitalized at rational figures. It had been originally intended to organize with a capital of $80,000,000 and have the Morgan-Belmont Syndicate underwrite it.Under the new plan the bankers will not be asked to underwrite the concern except for the common and preferred stock. Instead of $80,000,000 the new trust has been capitalized at $40,000,000, of which $10,000,000 will be in 5 per cent debentures, $10,000,000 in preferred stock and $20,000,000 in common stock. The forty-two plants which have been included in the combine will cost $31,000,000 to purchase, leaving $9,000,000 as a working capital and for stamping out competition. It has been j * popularly supposed that, as A. G. Spalding has been prominently before the public as the organizer of the trust, he would be the head of the combine* when it was organized. Instead, Mr. Smith says that Spalding’s Interest will be a small one, and that, although he has been the '’‘go-between” in the deal, his largest profit by the consolidation will be in the nature of a “rake-off” from the United States, Mortgage and Trust Company, which is acting as the depository for the stock subscriptions. /S]FiIU.ihopex-Pat-ticeIttorythisen~filedThe Leaders in the Combine.cPicntlPdicisrlt;Arlt;i ofthere-EEFE-tbethemin)al-r abiteif CLn aler.tingAsur-or-eisppt;aascflVntytib-ad-ensthelay,ler,Ion.blyoPwCltlptlflp'dtlOcThe people who will figure most prominently in the new combine will be Colonel Albert S. Pope, of the Columbia Company;H. A. Lozier, of the Cleveland Company; Gormully Jeffery, of Chicago; Mr. Coleman, of the Western Wheel Works, and C. F. Smith, of the Waverley Company. According to Mr. Smith, although he has been an enemy of Colonel Pope for several years, he will vote for him for President of the new company, and there is little probability of any other man being chosen for that position. It is further probable that the other men named will fill the other offices and serve ae the Board of Directors. Mr. Spalding, according to Mr. Smith, is but a sm^l manufacturer, and will cut but a small figure in the trust.The most important thing settled by the new trust, was the thing that prevented the consummation of the deal several weeks ago. The trust will make no tires and whatever the different factories require in this line will be bought of the rubber goods company which is headed by the “rubber king,” Charles R. Flint, of New York. According to Mr. Smith, there is everjr reason to believe that the trust would have been established along Its original lines had it not been for the “rubber king.”This Individual, who owns a line of steamers plying between New York and his extensive rubber plantations In South and Central America, has gradually acquired, either by purchase or consolidation, nearly all the rubber tire' plants in the country except those owned by bicycle companies, such as the Pope, Indiana and other concerns, which have made their own tires for several years past. The Flint Interests are represented by the ruh-ber goods company which was financed by J. P. Morgan and the Belmonts some t time before the trust was thought of. of I When it was decided to organize the bicy-tib- I cle trust the same financiers were asked to underwrite It, and they have agreed to ted I do so.ion Everything went well until the ques-tclT I tlon of tires was taken up, and then the L bicycle men who had given options to the trust were notified that it would be impos- : a sible to finance the new trust. Neatly all of them hurried to New York to ascertain what*had so radically changed thd situation In such a short time. The promoters and those who had fixed selling prices on their plants were then Informed that I v ber I Charles R. Flint, through his rubber I t goods company, whose finances were still not in the hands of the Morgan-Belmont syn-ce, dicate, had objected to them acting as un-be. derwriters for the new trust, which, on the paper* looked as though it might, in the end, drive the rubber goods company out 3 a | of the tire business.igh Inasmuch as the syndicate had made dm I mim°ns out of the rubber company, and still controlled its financial policy, it was Jep I decided not to underwrite the bicycle trust. Then it was that the different manufacturers, feeling a confidence in the future of the trust, undertook to underwrite their own business, and a start was made in that direction. Before much had been done, however, an agreement was patched up with the rubber company, by which it was arrange*! that the trust would not manufacture tires and would allow the tire plants, controlled by the Pope Manufacturing Qompany and the Indiana Bicycle Company, to be nlerged into the Rubber Goods Company, which11iiirv,bwetesvillkhetheberstfis-ilmheice» a trillndJSt:ellsn-dyas13tls'tlahas acquired all the other tire works of j itlu-ioninp-m-ofofofinofImportance in the country This plan has already been perfected and the transfer will be made as soon as the bicycle trust has been formally organized. While these negotiations were progressing, the principal bicycle manufacturers in the trust had already subscribed for all debentures of the trust and the financial syndicate then agreed to float the common and preferred stock.aooSeparation of Indnvtrits,HI-(10-en-m-ofIc-eldiatbeitsek;enngteelinlotitngie-he on In i alO-enie-gnLorutOftototohen-lyOne of the principal features of the now trust will be the separation of the different industries allied with the actual manufacture of wheels. As the first step in this direction, a formal deal was consummated on paper Wednesday, by which the Shelby Tube Company, of Shelby, O., which already owned ten of the thirteen tube works in the country, acquired the Pope Tube Works, of Hartford, Conn., operated In connection with the Columbia Bicycle Works, and the two tube works owned jointly by the Indiana Bicycle Company, Gormully Jeffery and the Western Wheel Works, and located aj Muncie, Ind., and Auburn, Pa* The concern, which, however, has become a part of the bicycle trust, will be incorporated separately, withn ranital of S3.000.000.flrrmloUlfcIfcorstbeP-illg*hetlbirTkinIdr’»K*heWhile, according to Mr. Smith, nearly all the big bicycle companies have been experimenting with automobiles, the only really valuable machines are those made by the Indiana Bicycle Company, and the automobile department was therefore a large'part of the assets of the Indiana Bicycle Company. Under the direction of the trust it is expected that they will be put on the market at such reduced prices as to render outside competitors, using gasoline for motive power, practically helpless. Wrhether the manufacture of the Indiana automobiles will be confined to the Waverley works has not yet been Ue-cided. |The principal effect of the trust wdll be, however, to simplify and, therefore, cheapen the cost of production of the different wheels. It is not now’ contemplated closing any of the factories, except some of the smaller ones, which have been buying a large part of their j w material, ready made, from the supply houses and simply asembllng the) at parts. An Immense -saving in tolls and material will be msde under the now ord*r of things by making it | ~unnecessary for the different factories to make several grades of wheels, as at present. Several of the factories make asmany at eight grades of bicycles, while th« Waverley works turn out three. Heretofore it has been necessary to do this inorder Uo nfeet competition# withdrawn, however, now that the trusthas been organized. Hereafter the bigplants will only make one grade of wheels.Mr. Smith believes that, Instead of causing many workmen to lose their position*, the trust will be to their advantage, as. with all the factorlea working without friction, the trust will be able to forceAmerican wheels on the foreign markets at smaller cost without competition from other American makers, and ttv this way enlarge both the Held and the output. It is exported that all the details will be arranged by noxt Thursday, at which tim# all the parties to the trust will *»-r„mhin tn New York and elect officers.
Newspaper Details
Cincinnati Commercial Tribune
Cincinnati, Ohio, US
Sat, Jul 29, 1899
Page 2
Full Page
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WI, USA 11 Dec 2021
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