MANUFACTURING: Fisk to U. S.

Not long after Fisk Rubber Co. was pulled through the receivership wringer in 1933, the House Select Committee on Investigation of Real Estate Bondholders' Reorganizations roundly spanked the firm's reorganizers (most of whom were bankers who had financed Fisk) for sacrificing the bondholders to suit their own fiscal interests. The old company was sold for $3,030,000 to a new corporation which wrote it up to $13,000,000, but new Fisk Rubber Corp. was clean in one respect: it had no bonded debt. And it prospered.

Its sales rose from $10,229,000 in 1934 to an estimated $20,000,000 this year, its net income from a 1935 deficit of $275,000 to an anticipated 1939 profit of $1,000,000. Still, minority stockholders were not satisfied. Once they set up a fuss at their annual meeting at the firm's Chicopee Falls, Mass, plant over the $12,000 annual fee directors had voted their chairman. Next year the directors retaliated by holding the stockholders' meeting in Delaware. Last week, however, it looked as if the controversy would soon be ended.

In the Wall Street banking house of Dillon, Read & Co., Fisk directors listened to a proposition from big, potent U. S. Rubber Co., nodded their heads in approval. U. S. Rubber offered to buy Fisk outright for $6,827,330 cash and 109,981 shares of U. S. Rubber Common, holders of Fisk's 34,738 preferred shares to get $110 a share cash (call price), holders of its 439,923 common shares $6.75 a share cash plus 1 share of U. S. Rubber common (last week priced about 41).

U. S. Rubber is No. 2 U. S. tiremaker (No. 1, Goodyear). Its President Francis Breese Davis Jr. wants to expand without increasing the total U. S. tire production facilities. Fisk will give him a first-rate trade name, a going concern with a best-selling tire (Safti-Flight), plus New England tire plants that U. S. Rubber lacks. Also important, the deal will give U. S. Rubber valuable Fisk tire patents.

To one man, however, the deal was a shock. He is short, bald, capable Colonel Charles Edward Speaks, 52, Fisk President, who has increased his firm's business about 65% since he took over in 1936. Almost solely responsible for Fisk's good showing, he wanted to keep his plant going independently and profitably. Says he: "Of course, I'm an operating man, and I don't see any reason why the directors should want to sell out."

Last week it was a good guess that President Davis would have a good job for such a good executive. They met at N. A. M.'s Congress of Industry and had a good time together.