Mr. PERRY. The Rockland and Rockport Lime Company? Mr. PERRY. Well, last year, $48,000. Mr. CLARK. On what? Mr. PERRY. Everything above the bonds. Mr. CLARK. On $2,000,000? Mr. PERRY. That is the profit. Mr. CLARK. Forty-eight thousand dollars on $2,000,000? Mr. PERRY. Forty-eight thousand dollars after paying interest on the bonds. That did not take care of any common or preferred stock, but it was a bad year last year. Mr. CLARK. Forty-eight thousand dollars is about 2 per cent on $2,000,000. Do you undertake to tell this committee you only made 2 per cent? Mr. PERRY. That is what I do. Mr. CLARK. How long have you been making 2 per cent? Mr. PERRY. Last year. Mr. CLARK. How much did you make the year before? Mr. PERRY. We made $90,000. Mr. CLARK. That was after counting out interest, salaries and wages, and material? Mr. PERRY. Everything up to the preferred and common stock. Mr. CLARK. And you came down here because everybody else was coming? Mr. PERRY. This is the first time I have ever been here. The CHAIRMAN. How many kilns do you have in that property? Mr. PERRY. The Rockland and Rockport Lime Company has 80. There are about 48 outside. The CHAIRMAN. How many did they have when they consolidated? Mr. PERRY. About the same number. The CHAIRMAN. How many years ago was that? Mr. PERRY. In 1900. The CHAIRMAN. What were they making on it a year before they consolidated it? Mr. PERRY. Making nothing. The CHAIRMAN. They were making nothing? Mr. PERRY. Yes, sir.' The CHAIRMAN. How much stock did they have? Mr. PERRY. They were making nothing-just before they organized the price of lime was away down. The CHAIRMAN. How much stock did they have before they reorganized? Mr. PERRY. They did not reorganize. The CHAIRMAN. When did you start this Rockland and Rockport Lime Company? Mr. PERRY. In 1900. The CHAIRMAN. Did you buy out the other companies? Mr. PERRY. They bought out the other companies; yes, sir. Mr. PERRY. Seven or eight. The CHAIRMAN. What was their capital stock? Mr. PERRY. They were individual firms, except one. The CHAIRMAN. You issued four millions of stock for 80 lime kilns? Mr. PERRY. No, sir; two millions of bonds and two millions of stock. The CHAIRMAN. Did you give that to the parties who owned the original properties? Mr. PERRY. Not altogether. We bought property outside of the State of Maine, and bought also a fleet of barges. The CHAIRMAN. How much did you give to the old firms? Mr. PERRY. I could not tell you that. The CHAIRMAN. How much did you give for property you bought outside? Mr. PERRY. I think the properties in Rockland and Rockport and Thomaston cost them about $2,000,000. Mr. GRIGGS. How much? Mr. PERRY. Two million dollars. Mr. GRIGGS. In cash? Mr. PERRY. Yes, sir. The CHAIRMAN. How much bonus was there in that? Mr. PERRY. Nothing. The CHAIRMAN. I am trying to find out what an old lime kiln is worth. We have some for sale in my locality. Do you know why it is no other locality in the United States came here to ask for a tariff on lime except these people from Maine? Mr. PERRY. I think we are interested a little more than most anybody else, because they are our next-door neighbors, you know. The CHAIRMAN. Because of Canada? Mr. PERRY. Brunswick and Canada both. The CHAIRMAN. Do they get down into the Boston market? Mr. PERRY. Yes; they get down into the Boston market, and get into the New York market. The CHAIRMAN. You say they do get into the New York market? Mr. PERRY. Yes; they do. The CHAIRMAN. There are a great many limekilns nearer New York than you are? Mr. PERRY. Yes; but no lime quite so good as ours. The CHAIRMAN. Is not the New Brunswick lime as good? Mr. PERRY. Practically. Mr. GRIGGS. I would not say that; that might not be true. [Laughter.] The CHAIRMAN. There are people who live and die who never heard of Rockland lime. Mr. PERRY. Not in New York. The CHAIRMAN. The best lime is found in New York. Mr. PERRY. That is where we sell it. That is our best market. Mr. GRIGGS. You say they paid $2,000,000 for those limekilns? Mr. PERRY. Yes, sir; and the quarries. We have the finest quarries in the world there. Mr. GRIGGS. What do you quarry? Mr. PERRY. I mean the lime quarries. Mr. GRIGGS. Of course, I meant to include all that with the limekilns. Were those all worth $2.000.000 in cash? Mr. PERRY. We are trying to work it out on that basis. Mr. GRIGGS. You say you have not been able to do so? Mr. PERRY. NO; but I say we are going to do so. Mr. GRIGGS. It was not worth that when you got it together? Mr. PERRY. I think it was. I think it was then and I think it is now. Mr. GRIGGS. But nobody paid any cash for it? Mr. PERRY. Every dollar of that preferred stock and common stock was sold at par. I have five thousand of common and five thousand of preferred. Mr. GRIGGS. Did you pay cash for it? Mr. PERRY. I did. Mr. GRIGGS. Then you have $10,000 of the bonds? Mr. PERRY. No; no bonds. I paid par for the common and par for the preferred stock. Mr. RANDELL. You said the price of lime was very low just before the corporation was organized? Mr. PERRY. It happened to be that year. Mr. RANDELL. And it got up very high just directly afterwards? Mr. PERRY. It went up some; yes. Mr. RANDELL. You said it was very low before that, and got higher afterwards. How low was it before, and how high did it go? Mr. PERRY. In 1900 the price of lime in the New York marketMr. RANDELL. I mean just before this corporation was organized. Mr. PERRY. A very low price-as low as 60 cents a barrel. Mr. RANDELL. And what did it go to after that? Mr. PERRY. From 70 cents, I believe, to 80. Mr. RANDELL. It went up about 333 per cent directly after you organized this corporation? Mr. PERRY. Not directly after; from that up till now. Mr. GRIGGS. Is it still high-at high-water mark? Mr. PERRY. Yes, sir; 80 cents. Mr. SHEPHERD. If the committee please, I would like to say one word: I was one of the original parties-one of the original threewho acquired the property of the Rockland Lime Manufacturers. I want to say that we paid spot cash for every piece of property that we bought. There was no man who got a single block of that stock, common or perferred, or one of the bonds, who did not pay for it in actual cash. Mr. CLARK. Had you been in the lime business before? Mr. SHEPHERD. Yes, sir; since 1868. Mr. CLARK. You put in your property at that time as so much cash, did you not? Mr. SHEPHERD. I sold my property for cash; I had given an option to other parties at $25,000 more than I sold it to this company for. Mr. CLARK. You sold this property to yourself, did you not? Mr. SHEPHERD. I was interested in the company with other people. We paid this gentleman, Mr. Perry, a great deal more in proportion than that, and he will say so, and we paid him cash, and he will say the actual property we turned over was worth more than the property he turned over. Mr. CLARK. Is not this the way you did it: You determined you would have a corporation; then you went to work and agreed what your property was worth in proportion to each piece of property, and then marked it up so as to make this $2,000,000? Mr. SHEPHERD. No; I will tell you how we did it. We talked the matter over about the various properties. Parties had tried to work that out for four years, consecutively. They had not succeeded in getting the prices at which they could finance it. We then decided that on a certain basis, by paying spot cash, we could buy this property which was owned by individuals. The quarries were the essential thing. We talk about the kilns, because that is the producing capacity, but unless you have the quarries you can not make lime. Some of those quarries we bought of outside parties, one in particular, for which we paid $165,000, and it was not very large. We acquired a railroad down there. We paid 75 per cent for the stock, and paid cash, and assumed the bonded indebtedness. That railroad is 14 miles long. Mr. CLARK. There are no new kilns up there? Mr. SHEPHERD. There have been no new kilns discovered there in my day. The best one we have was opened in 1817, according to history. Mr. CLARK. This all happens to be on account of geographical location, does it not? There is not a square mile in Maine that is not rock, is there? Mr. SHEPHERD. I do not know about that. Mr. CLARK. Is not that largely the truth? Mr. SHEPHERD. It is rock, yes, but certain kinds of rock. We are talking about commercial limestone. Mr. CLARK. Limestone rock? Mr. SHEPHERD. There is limestone, but there is a great difference in the quality of limestone. Mr. CLARK. For how much is this thing capitalized? Mr. SHEPHERD. Two million dollars, and it was all paid in in cash, all that was issued. There has been about $1,700.000 issued. Mr. CLARK. What dividends do you make? Mr. SHEPHERD. We have not made a single dividend except the first year. Mr. CLARK. What do you do with the money you make? Mr. SHEPHERD. We have not made 2 per cent on our investment. Mr. CLARK. You do not count it as making anything when you go and buy a new quarry? Mr. SHEPHERD. We have not bought a new one since we bought Mr. Perry's. Mr. CLARK. Do you say you have not made any money in the lime business since you organized this corporation? Mr. SHEPHERD. That is what I say. Mr. CLARK. You have been losing? You have been running at a loss? Mr. SHEPHERD. We have made sufficient money to pay our coupons, and we have made some improvements. He told you we made $48,000 last year. Mr. CLARK. What are the improvements worth? Mr. SHEPHERD. We were obliged to put those in Mr. CLARK. How much are they worth? Mr. SHEPHERD. That is problematical. Mr. CLARK. How much did you put into improvements? Mr. SHEPHERD. We put into improvements, perhaps, since the com pany has been organized, on an average of $25,000 a year. Mr. CLARK. How long has it been organized? Mr. SHEPHERD. Since 1900. 61318-TARIFF-No. 14-08- -2 Mr. CLARK. That is $200,000. Mr. SHEPHERD. Only $175,000. You understand, we paid no dividends on our stock, and the stock has not a market value to-day. Mr. CLARK. How did you all make a living? Mr. SHEPHERD. We have other business, some of us. I do not make my living out of the lime business, I assure you. Mr. GRIGGS. Tell us who owns those bonds. Mr. SHEPHERD. They are owned by savings banks and by trust companies. Mr. GRIGGS. You disposed of those bonds, did you not? Mr. SHEPHERD. To buy this other property. Mr. GRIGGS. Which other property? Mr. SHEPHERD. The $2,000,000 of stock was not sufficient funds to acquire this property. We have seven barges that cost us $60,000 apiece, and a steel ocean-going towboat that cost $70,000. Mr. GRIGGS. But you only put out $1,700,000 of stock? Mr. SHEPHERD. That is stock; yes, sir. We only issued what we were obliged to. Mr. GRIGGS. In addition to that, you sold $2,000,000 of bonds? Mr. GRIGGS. At par? Mr. SHEPHERD. Some of them were sold at 95. Mr. GRIGGS. Did you tell the purchasers what a poor piece of property it was when you sold those bonds? Mr. SHEPHERD. We think it is going to be a good piece of property. Mr. GRIGGS. Going to be? Mr. SHEPHERD. Yes, sir. The conditions have been such we have not been thus far as successful as we had hoped, but by closest economy and by cutting off all corners it is possible to cut off, we hope to reach the day when we shall make a dividend on the preferred stock and also on the common, although I do not look really for the common stock to pay a dividend for many years. Mr. CLARK. Do you ever expect to see any better years for business than 1905 and 1906 and 1907? Mr. SHEPHERD. They were very good for certain lines of business but, unfortunately for us, two of those years were extremely cold, so it was practically impossible to market lime or use it. Our bays and harbors were practically all frozen over in New York. Mr. CLARK. All those years were especially good for building purposes? Mr. SHEPHERD. Not particularly for us alone; not during extreme weather. Mr. CLARK. There was a time when the market did not buy any? Mr. SHEPHERD. That is true. Mr. CLARK. That is because you put the price of lime up? Mr. SHEPHERD. We do not think so. Mr. CLARK. I should think you would make money during those good years we have. Mr. SHEPHERD. When the Wilson bill was pending your people gave us a most thorough investigation and thought we were entitled to 5 cents. |