Evening Star Newspaper, June 13, 1929, Page 15

FINANGIAL. «FHE -EVENING ‘STAR, "WASHINGTON, D. €, THURSDAY JUNE 13, 1929. FINANCIXT, COMMISSION RULE < ¢ ONTRADE REVOKED “Clandestine Violation” Prin- ciple Discarded After Brief Test—Vote Is Close. BY JOHN F. SINCLAIR. Bpecial Dispatch to The NEW YORK, June 13.—The Federal Trade Commission by & vote 3 to 2 has Tescinded the so-called “clandestine At the time of its adoption, also by & vote of 3 to 2, the rule admittedly Was an experiment. No evidence was presented to show that any harm re- sulted. It ‘was largely through the work of Herbert Hoover in the Department of Oommerce that many trade conferences were held to formulate rules for the conduct of industries. The cotton men, for example, would get together and draw up working rules for the entire industry. And so in many other in- dustries trade practice agreements were drawn up and indorsed. Naturally, there were people in nearly every industry who did not care to follow the rules laid dewn. So the Federal Trade Commission adopted the “clandestine violation” rule as a method of “rationalizing the Sherman act"— & method whereby the independent units in business-might enter info agreements for their preservation Then one member of the commission resigned, and the commission withdrew the rule by the same vote by which it ‘was adopted. E. A. McCulloch, chairman of the commission, who opposed the rescinding says: “In my opinion the commission’s policy of preventing secret violations of trade conference rules is not invalid and it should not be abandoned—the policy is at least an adventure which can, if pursued, result in no harm to business interests, and, on the contrary, might be helpful.” The rescinding of so important a Tule after such a short period of test reveals the weakness of the structure of the Federal Trade Commission as it is now constituted. Dr. Robert M. Hutchins, 31, new presi- dent, of the University of Chicago, made ‘w‘ohlkl)lflml statements within a weel As’ retiring dean of the Yale Law School, he made an address warning against the steadily increasing number of inferfor law schools. | “In Greater New York alone there are 14,000 law students,” he said. “Only 700 of these are in a school which has standards high enough to be approved gyhuw Association of . American Law chools.” The other day Dr. Hutchins made his first trip to the University of Chicago since his election. He said: view of university training is to men to think, to think straight, if possible; but to think always for themselves.” Speaking of the business of education and the business life, Arthur E. Morgan, president of Antioch College, Ohio, is a leader anything but conventional in vielw dol.:c fixuuon and business, ntly, ussing pressure of popu- Iation on world affairs, he said: “In a century world population has more than doubled. Emigration does not permanently relieve pressure of population. Some overcrowded nations, such as Italy, Japan and Belgium, con- i birth rate. OUier Uk Bwitser: raf e - l.ln!ll ll:g l{m with birth nntr’l;‘ Openly taug overproduction high-grade people.’ “Some nations \ve a concept of values in which quality of life is con- sidered along with quantity. This standard requires limitation of mx.l:d- tion. Its it would be ni by unlimited immigration.” (Copyright, 1920, by North American News- Paper Alliance.) TOBACCO FIRM PLANS WAREHOUSE EXTENSION Bpecial Dispatch to The Star. . DURHAM, N. C. June 13 —Eleven | new warehouses will be added to the American Tobacco Co.'s plant at Dur- ham, it has been announced, at a cost of $500,000, to provide additional stor- age for 25,000,000 to 30,000,000 pounds of tobacco. ‘Ten similar warehouses are under construction in Reidsville, N. C. The 11 warehouse units, each 152 by 258 feet, will be based upon & concrete plat- form running the entire length of the property. e tobacco is packed by hydraulic pressure in giant hogsheads | and stored in warehouses for two vears, “ageing” being an important prelimi- nary to the processes of toasting and blending. CHICAGO DAIRY MARKET. CHICAGO, June 13 (P).—Butter— Receipts, 9,947 tubs; lower; creamery extras, 42%; standards, 42%; extra firsts, 4135842%,; firsts, 39%4840%5; seconds, 38a39. Eggs—Higher; receipts, 17,800 cases; extra firsts, 30a30%;; firsts, 20%4829%; ordinary firsts, 27a28%; storage packed firsts, 30158303 storage packed extras, 31%. Poultry—Alive, weak; receipts, 5 cars; fowls, 26!5a27';; Springs, 39; broilers, 34a35; roosters, 20: turkeys, 22a30; ducks, 19a20; Spring ducks, 28; geese, 15; Spring geess, 25. Exchange Scat Sold. NEW YORK. June 13 (#)-—A mem- bership in the New York Cvrb Exchange has been sold for $150,000, the same price of the last sale. Names of the new and retiring members were not an- Boiler Institute Formed. NEW YORK, june 13 (P —The In- ship comprises manufacturers low-pressure and radiators in the country. i | Business Notes I By the Associated Prese. NEW YORK, June 13.—May domestic lead shipmenis totaled 61,933 short tons, as against 67,164 tons in April and 72,774 tons in Pebruary, the American Bureau of Metal Statistics reports. A new raw silk classification, the use of which will be optional with the trade, has been adopted by the Silk As- sociation of America. It is the result of years of study to determine what characteristics shall enter into the grading of raw silkks and how those characteristics shall be determined. An increase of 615 per cent in sales during the first five months of this ear compared with the same period ey year is reported by the Viking Oil Co. The figures are. 1929, $626,146; 1928, $387,616. Following similar announcements by ths Erle and Pennsylvania Railroads, the New York Central Lines has an- nounced that it will inaugurate & 10- day perishable fright delivery between Pacific Coast points and Boston and New York. New securities, including stocks and bonds, offered for public subscription in this country during the first five months of the year totaled approximately $2.874,874,000, mmn"::mmm [gl",- 000,000, says & compilation made Nations) Statistiesl Servien Properties behind Smith Offerings. No. 9, The Hamilton Hotel. A First Mortgage Issue HE Hamilton Hotel occupies a prominent I downtown location at the Northeast corner of Fourteenth and K Streets, N. W., Wash- ington, D. C. It is immediately opposite Franklin Square park, an excellent location for a high class hotel. At this time there are being erected on opposite corners a new 12-story office building and a new 12-story hotel. The Hamilton Hotel is an 11-story, steel and concrete, fireproof struc- ture, and is farnished and decorated so as to com- pare favorably with the best modern hotels. In July, 1927, The F. H. Smith Company offered, as and when issued, $1,550,000 6159 bonds to be secured by a first mortgage on the Hamilton Hotel (land, building, furniture, fix- tures and equipment). At that time there was an existing first mortgage on this property, dated July 1, 1921, securing an issue of $1,200,000 8% bonds. Provision was made for retiring the out- standing bonds of said prior issue and interim receipts of The F. H. Smith Company for the new issue, were sold until the deed of trust se- curing the prior issue was released. The bonds of the new issue are in serial maturities ranging from 3 to 15 years, so as to reduce the issue to $1,160,000 before final maturity. 3% Premium Paid On Original First Mortgage Bonds Provision was made for retiring the outstand- ing bonds of the $1,200,000 8% bond issue at par and accrued interest, plus a premium of 3% and the deed of trust securing this issue was released of record on January 3, 1928. Valuation of Prop The property was appraised as of April 25, 1927, by Ford, Bacon & Davis, Inc., nationally known engineers and appraisers, and their certificate of valu: tion follows: “Based upon our inspection of the Hotel Hamilton, erected 1921, located at Fourteenth and K Streets, Washington, D. C., we hereby eertify that I‘im‘ll.‘ Cost of Reproduction New and the Esti- mated Cost of Reproduction New Less Depreciation of this Physical property, comprising the land, hotel building, equi, ture and fixtures contained therein, as existing April 1927, based upon prices of materials and labor prevailing in the above locality at that date, are as follows: Estimated Reproduction Cost as of Agril 25, 1927 New . Deprecistion b lllu:;z: 1"‘}3'33 uilding pment. ... 1,809, Farniture and Fixtures and Misc. Equip- E 487,837 463,445 . 83,119,058 $3,015.470 appraised by W. H. West .+, of Washington, D. ance made for dep ion represents the loss due to acerned physical deterioration, observed by our ineer. Supersession, due to obsolescence, changes in business eonditions, u:‘; Il‘ other cause, has not been considered. ‘o For the information of the public at large and im the Hamilton Hotel of Washington, D. statement relative to this property and te certain securities effered by this STRONG SECURITY - BEHIND BONDS.... THE HAMILTON HOTEL Northeast Corner of Fourteenth and K Streets, Northwest, Washington, D. C. erty—$3,015,470 allowance to cover such overhead costs as organization and legal expenses, engineering and architectural supervision, interest, taxes and insurance during the period of construction. “Our inventory does not include miscellaneous supplies charge- able to expense, or stationery. “No allowance has been included in the above amounts shown for building and mechanical equipment, furniture and fixtures and miscellaneous equipment, for any value attaching to good will, ad- vantage in location, going concern, or any other elements of in- tangible value. (Signed) “FORD, BACON & DAVIS, INC., “New York, June 24, 1927.” The land alone was appraised by the Wardman Con- struction Company, Inc., a well-informed organization on land values in the District of Columbia, and a promi- nent member of the Washington Real Estate Board, as follows: “May 25, 1927. “Regarding the land on which the Hamilton Hotel is located at the corner of Fourteenth and K Streets, N. W., Washington, D. C., fronting on Fourteenth Street and on K Street, with wide alley on the north, we would appraise this lot, containing 14,945 square feet, at $55.00 per foot, or a total of $821,975.00. e estimated cost of materials and labor, we have added an (Signed) “WARDMAN CONSTRUCTION CO., INC. “James D. Hobbe, Treasurer.” EFarnings of The Hamilton Hotel According to the owner’s report, the total gross income from this property for the first five months of this year amounted to $303,433.16, and the total operating expenses (estimated for May), including taxes and insurance for that period, were $185,558.59, leaving a net income for the period of $117,874.57. The owner estimates that the gross earnings for the entire year 1929 will be $686,957.16 and the net earnings will be $267,998.57, which is approxi- mately 9% of the valuation of $3,015,470 made by Ford, Bacon & Davis, Inc. The earnings of the rooms and of the restaurant for the year 1929, actual and estimated, according to the owner's report, are itemized below: 1929 Income Actual January $33,380.36 il February 31,426.94 “ March . 44,210.25 * April . 46,377.73 ! May 37,764.32 Estimated June . . 37,764.00 % July .. 33,380.00 S August .. 37,764.00 “ September . 31,426.00 “* October 37,764.00 - November S 31,426.00 = 29,000.00 Totals $431,683.60 Total estimated gross income Total estimated expenses Total estimated net income ........ First Mortgage Bond interest. . Advance payments for retiring prin First Mortgage Bonds $18,650.03 $212,100.66 Restaurant- Expenses Income Expenses $18,061.72 $17,393.43 17,050.05 16,383.41 22,663.75 18,313.43 28,769.14 21,867.66 23,728.90 18,000.00 (est.) 23.000.00 18,400.00 18,000.00 14,400.00 23.000.00 18,100.00 20,000.00 1€,800.00 23,000.00 13,810 1% 20,000.00 16,000.00 18,000.00 14,400.00 $255,273.56 $206,857.93 .. $686,957.16 418,958.59 ...................... . $267,998.57 £ .. $100,750.00 al of *15,000.00 19,004.73 19,480.12 19,465.78 17,000.00 (est.) 17,750.00 16,500.00 17,500.00 16,500.00 17,750.00 16,500.00 16,000.00 115,750.00 Estimated earnings for year 1929 over and above First Mort- gage Bond interest and principal retirements. .....qu...... $152,248.57 "+ Curtails of principal at the rate of $30,000 per year begin July These figures do not include any allowance for depreciation of the building and equipment nor for appreciation in the value of the land, A Collateral Trust Issue In December, 1928, The F. H. Smith Com- pany offered $1,050,000 7% Collateral Trust Sinking Fund Coupon Bonds, maturing December 1, 1940, issued by Properties In- vestment Corporation, present owner of the Hamilton Hotel. These bonds are secured by deposit and pledge under a trust inden- ture, and the guarantee thereof, of the fol- lowing securities: 1. An issue of 615,% General Mortgage Coupon Bonds totalling $1,250,000 secured by a general mortgage on the Hamilton Hotel, which is a subordinate lien to the first mortgage of $1,550,000. / 2. 529, of the Capital Stock of Arco Hotel Company, lessee and operator of the Arlington Hotel and the Cairo Hotel, Wash- ington, D. C. ¢ 3. The entire Capital Stock of Proper- ties Investment Corporation. H. C. Maddux, owner of said Capital Stock of Properties Investment Corporation, unconditionally guaranteed payment of the bonds of this collateral trust issue and pledged said stock as additional security therefor. Properties Investment Corporation originally estimated the value of the collateral pledged to secure the bonds of this issue to be $1,566,870, and that the estimated annual earnings of said collateral would be $229,650. Farnings of the Pledged Collateral The earnings of the Arlington Hotel and Cairo Hotel for the year 1929, actual and estimated, according to the report of Arco Hotel Company, are itemized as follows: ——————ROOME———————\ INCOME EXPENSES 1929 January . $18,482.19 $24,341.13 Febr'y .. 19,103.52 25,771.09 March .. 31,220.95 25,725.20 16,869.34 April ... 38,486.97 26,322.99 23,010.71 May ... 33,282.73 26,000.00(est) 21,675.71 Estim'd June ... 32,500.00 25,000.00 23,500.00 ksl July ... 26,000.00 24,000.00 15,000.00 b August . 31,000.00 25,000.00 16,000.00 Sept’r .. 22,000.00 23,000.00 12,000.00 Octob’r . 24,000.00 24,000.00 13,000.00 Novm’r . 19,000.00 23,000.00 11,000.00 Dec’h’s . 18,000.00 23,000.00 9,000.00 $8,447.27 11,121.12 $180,624.15 $144,036.62 ... $493,700.51 . 439,197.03 Totals. . ..... $313,076.36 $295,160.41 Total estimated gross income. . . . Total estimated expenses ...... Total estimated net income REMARKS: Restaurant not charged with rent nor proportionate everhead expense. These figures do not include any allowance for depreciation of furniture and equipment in these hotels, which is partly owned by Arco Hotel Com- pany. For the year 1929 the earnings, actual and estimated, for the Collateral Trust Bond Issue requirements are as follows: Estimated net earnings of Hamilton Hotel over and above First Mortgage Bond interest and principal retirements 52% of estimated net earnings of The Arlington Hotel and The Cairo Hotel $152,248.57 28,341.81 Total estimated net earning: cesersenaes. .. $180,590.38 Collateral Trust interest requirements. . ..cuuemamavmes- - . *78,500.00 e Balance of estimated net carnings for the year 1929 over and above requirements of both First Mortgage and Collateral Li;:-mm-lnflodnmnuuml-mnmmnmhhn—d- The F. H. Smith Company Investment Securities—Founded 1873 SMITH ” UILDING (815 15th St., N. W.), WASHINGTON, D.C. - Branch Offices in Other Cities