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Show . TV..' Cttbm ; Wednesday April 14, ?fhe Tangled Tale of a Did' Cleveland's Cyrus Eaton Renege on f&ii. ve. ccr'e Cf.:ii t,;m lblTOR'S NOTES Fabulous fttfttty J. Kaiser surprised the .tomes 'When his post-war venture ven-ture into the automobile business sky-rocketed into as bis an operation op-eration as his booming war-time 4rwfi"rf"l ventures.. But last inonth financiers surprised Kais-T Kais-T by sticking a pin in the Kais-T-Frazer : auto balloon. Here's he last of two dispatches in irhich the chief of NEA's Wash ington bureau tells the exclusive Inside story of multi-million ollar fight T JrETEK EUSOM EA Staff Correspondent WASHINGTON; (NEA) The angled tale of the raulti-million- ollar fight between Cleveland inancler Cyrus Eaton's cms sc o. ana uic iigerr rer buio pany begins back in 1945. at was wnen isduious nenry Kaiser and Detroit auto man fosSfch F; -Prater were first plan-filng plan-filng to manufacture their new :ar. All thje two men had then was i pretty- drawing of an automobile automo-bile and an idea they'd like to juild it. They had no factory, hey had no labor force and they utd no .sales organization. They shopped all over the east imong the blue chip -underwriters for. linancial backing. The big fnoney boys wouldn't take a fchance on them. But Cyrus Eaton tf Cleveland did. His Otis & Co. ormed 'a syndicate with First uxornia co. oi ban t rancisco nd Allen & Co. of New York, to ack the enterprise. Eaton was a spectacular oper- tor who had won a battle against all Street for competitive bid ing on new railroad securities ack in the 1930's. First Califor- Jtia was an offshoot of Gianini nterests. Charles Allen of New ork, heading his own invest- ent company, was president of olorado Fuel and Iron. These three firms underwrote iser-Frazer's first two stock ssues of 3,500,000 shares. They aised the $54 million capital hich set the new auto company p in business. Both issues were ver-subscribed by the public. e three underwriters made $5 illion on the deal, practically ithout effort. In year and a half by May, 947 Kaiser-Frazer was in the lack. They made and sold 200,- 00 cars in their first two years. ey showed a profit of over $20 illion in 1947. In January. 948, they made 1100 cars a day nd a $5 million profit. The company wanted to step p production to 1500 cars a day. uo do tms they needed new capital capi-tal for more machinery. The blue chip underwriters were now Interested in Kaiser-Frazer. But oyal to its first friends, the oung company decided to stick o Otis, First California and Hen. jf- A deal was made to offer ,500,000 shares of new stock at 13 a share. Kaiser-Frazer was o get 511.50, the underwriters 1.50. The company would thus et over $17 million, the under writers $2 million. The three underwriters met in Kaiser's New York office on Monday, Feb. 24 to close the deal. U. S. Securities and Exchange pommission had approved the registration. 1 It was then suggested by Eaton that the market on Kaiser-Frazer stock be stabilized the next day at $13.50 a share. A verbal agreement was made that Kaiser-Frazer would buy all of the company's stock offered on ithe market Feb. 3. If the mar-fleet mar-fleet closed at $13.50 or better, the (contract to underwrite the new ssue would be sfgned at three m. Kaiser-Frazer officials were We'll Make Your Car 'Like New!' Whether just a fender job or making the car look like new. See us. We are experts in Body & Fender repair. WARD'S Auto Body & Paint Call 2193 225i West 2nd North vjr I fJ( fed? ))o 1948 DAILY HERALD p -lirq1""''"- .'; A f iV 4m fr Kaiser-Frazer Assembly Line: Blue chip underwriters may yet ret a chance to step up Its production. told that stabilizing the market wr. a routine matter that they might have to buy only 10,000 to 25,000 shares, a normal day's trading. The whole matter was to be kept very hush-hush, so there would be no leaks. But on Feb. 3 Kaiser-Frazer sell orders began to roll into the Curb Exchange by the thousand. In the first hour 90,000 shares were offered. For the whole day, 120,000 shares were offered in New York, 46,000 in San Francisco, Fran-cisco, 20,000 elsewhere. Kaiser-Frazer stuck it out. They spent over $2,500,000 from the firm's $18 million operating capital, buying their own stock. But when the market closed the price was firm at $13.50. That was the day, however, that the commodity market broke. New York and London stock exchanges also had bad days. When Cyrus Eaton came to Kaiser's office at three p.m., it was to announce there would be no signing. ' Everything that happened on that day is still something of a mystery. Kaiser-Frazer officials say that baton admitted he had tipped dealers to sell the stock at $13.50. There was every assurance assur-ance that they could buy the stock back next day at $13 when the new issue went on th market, and pocket the profit. The three-hour meeting that followed in Kaiser's office wa3 terrific. At six p.m. there was a compromise. Instead tot buying 1,500,000 shares, Eaton's -syndi cate was to buy 900,000 shares at $11.50. They took an option to buy 600,000 shares before Feb. 9 at $11.60. Instead of getting the $17 million mil-lion it had counted on, Kaiser u irk a a , d a 1 H Fli n i-ifii. J I" mar- Win, ii i i -1 i il ni i tjfmmmu ummmmmmmmTsS3 Jtm-v-: S iiyti .. owv-. 4,4. il SERVE S x kf ?Ldr m i 2sjrrrrrsrrt:$r: If yourself flJt IxH I -1 ty3i' ii i"i SSSCSwA mmtttMlttiiimiima V ' f J i fe'i-" ' ' - r7 a QJJ OTTU0 UN0ER AUTHORITY OF TH COCX-C0U CtfltYXtW lY COCA-COLA BOTAL...."CAkFANy. SALT L.ii CITV, UTAH Battle for Kaiser Deal? naferm;n0 T I G - ' Frazer now stood to get only $10 million. The company had a man standing by at SEC head quarters in Washington to amend the stock registration. When that was done and approved, the new deal was signed. The stock actually ac-tually went on sale Feb. 4. Next act in the drama came GAL TWO The Tangled Tale . the day following when Eaton announced from Cleveland that any statements that the 900,000 shares had been sold were incorrect. in-correct. Eaton in the meantime had notified Kaiser that he wanted out of the deal. Kaiser-Frazer Kaiser-Frazer decided to hold Eaton to Iiis contract. Eaton had until 10 a.m. on Feb. 9 to hand over the money. But when Kaiser-Frazer lawyers reported re-ported in Cleveland on that Monday Mon-day morning to turn over the stock certificates and get the money, they were informed by Otis St Co. that the-deal was off. Allen & Co. separately agreed to take a fourth of the offering, or 225,000 shares, and has stuck by its deal. But to date this $2.5 million plus is all Kaiser-Frazer will receive from the offering. Eaton has given two reasons for not carrying out the contract. First was that Kaiser-Frazer directors di-rectors had refused to buy back from the company the 186,000 shares of stock they had been forced to buy in stabilizing the market on Feb. 3. Second was the Masterson suit filed 1n Detroit at 9:20 or 9:40 a.m. There is confusion over the exact time of filing but it is claimed to have been before: the 10 a.m. deadline. One "of the terms of the Kaiser-Frazer contract con-tract with the Otis syndicate. Was that the auto company should b iv: is 1 . 3- 1 Mtili uiions Joseph Fnwer and. Henry Kaiser; To sell stock, Ihey bought. - have no suits pending against it. whether these two. reasons give Qtis it Co. an . adequate legal out is one of the main points Securities- and- Exchange Commission Com-mission in Washington Is now trying to determine. In the meantime, First Boston Company has entered the picture as financial adviser to Kaiser-Frazer. Kaiser-Frazer. This old line investment company's George wood is try ing to work out ways and means to .take over the issue-of new siock ana 'ouna up me com pany's financial standing. LEAFHOPPERS TRACED BERKELEY. Cal ' (U.R) Five more Jeaf hoppers have been dis covered to carry. cam oxma'aster- ery, according to Dr. Henry H. P. Severin. University of California college' ox-agrtcjultute; entomolo gist. He said this makes 17 known leafhopper carriers of the virus, which, also damages lettuce, car rots, parsley, parsnips and pota toes. In Prejss Parley Hugh rJaillie, president of the United Press, has been named consultant to the American delegation dele-gation at the International Conference Con-ference on Freedom of Information, Informa-tion, now in session in Geneva, Switzerland. O IMS. TIm CatCata Cwiry n -Vv: Letters to The Editor . Letters to the editor will not be published If they exceed ex-ceed $50 words; if the wrlier falls to sign his true name and, address in ink; if- they concern partisan ' political comment or advertising; if they convey religious or sectarian sec-tarian matter; if they contain statements untrue or libelous. libel-ous. FAVORS ROSE GARDEN . FOR SOLDIERS MEMORIAL Editor. Herald: I should like to write in behalf of the Timpanogos Garden club in regard to the placing of a me morial or monument honoring the ward dead of this city. A' year ago the garden club sponsored a Jiving memorial of roses for our loved ones, who gave their life in the World War II, through the aid of the city, the Centennial program, and inter ested citizens. Areas were provided provid-ed in the design of the memorial rose garden for the placing of a monument for our war dead. Suggested Sug-gested monuments were also de signed, the last of which seems most fitting and appropriate. The construction of such is a great expense ex-pense and as yet no sponsors have been found. A monument sitting by itself or on a wall is not very appealing. Each needs a setting, each needs a background that makes the structure dominant and becomes a feature of attraction. The rose garden as planned in Sowiette park will furnish such a setting. The honored dead of World War II would be proud to be in such a colorful, fragrant, peaceful place. Sowiette park could be planned to become Provo city's finest park. It is well located. It has facilities and possibilities for both passive and active recreation. The present pioneer village; the Pior neer building, with its treasures in new show cases; and the rose garden, with the monument could provide the passive recreation; while the softball field, baseball field, swimming pool, tennis courts, and children's play facilities facili-ties provide for the active recrea tion. (Passive recreation comes from and through any of the five senses such as: seeirfg, smelling. hearinn, feeling, touching, and even tasting.) The monument and roses prop- mi - v5 far IP i Mr - passes- lMf ; :r - v ' 2L Take it from those who know travel and travelers best . . . before any trip, drain out that dirty old winter oil and Oil-Plate your engine with Conoco N'! Conoco N' Motor Oil (Patented) (Pat-ented) contains a plus ingredient ingredi-ent that acts magnet-like to fasten an extra film of lubricant so closely to metal that your engine's cylinder walls and all moving !Me Ccsyrttht MO, CootlnnUI OS Coipy Under New Command . - f : r' j ; :r o NEA ItUphof) Gen. Dwlght D. Elsenhower Cleft) beams approval as his five-day-old grandson. Dwlght D. Elsenhower n. makes .his first -public appearance" appear-ance" at Station Hospital. West Point N V The proud father , Capt. John Eisenhower rig tit smiles as tils son makes drowsy debut in arms of bis mother Betty Jean perly arranged in an enclosed area of flowering lilacs, the area lighted at night, the park benches available for those who like to rest, would give an appealing feeling to the passer-by as well as the visitor of the garden. The tourist would also say: "This truly is a garden city." The Timpanogos Garden club suggests that a memorial be constructed con-structed in the present rose garden gar-den through the sponsorship of the city and community organizations. organiza-tions. Ernest F. Reimschiissel President, Timpanogos Garden club. ELECTRICITY SPURNED MEXICO, Mo. (U.R) The lights are dimming around the village of Farmer, Mo. No trouble, just Mennonites. A new coloney of that sect moved in. They are dis connecting light service to the farms they buy. Lamps even re placed lights in the Farmer gen eral store, which the Mennonites bought. parts are actually Oil-Plated! And because protective Oil-Plating Oil-Plating stays up there where it belongs . . . won't all drain down even when your engine's idle overnight . . . N' Oil t?xm-pro-tects from "dry-friction" starts . . . from power-choking sludge and carbon due to wear! For exrvs-powerful, extra-cool, extra low-cost miles a Me io OtkPhM&l D. S. TU. Kim. t.4i.Ml ai 2,I1(,1U ' ' 1 I i THIEVES CLEAN UP PHILADELPHIA. (U.R) Thieves broke into the garage of a trucking truck-ing firm, stripped trucks of tires and rims valued at $2,200 and stole tools and office equipment valued at $1,000. Then they loaded load-ed their loot on a company truck worth $3. 500 and drove away, undetected, un-detected, f Get a cash faan hero on th fi-lendly basla that mads personal' the choice of over a million persona last year. Slmpl To Get If you can make monthly Instalments In-stalments see table c'on't hesitate to oco Personal's YES MAN. Come in or phone today. loans $25 to $250 or more ii m 'it m P il 'in m i J Nephi .Banker' Heads Jaycees NEPHI Roy W. Hanson, as sistant cashier of the Commercial bank of Nephi was ready today to assume his duties as president of the Nephi Junior chamber of commerce, following his election to the post Monday night. He succeeds suc-ceeds Harlow W. Pexton. " . Other officers elected include' Rex Wirthlin, vice president; Ray Gundick, secretary - treasurer; Jack Ludlow, Dean Archibald, and Howard Hansen, directors. The new officers will be installed in-stalled at a regular meeting on April 21, it was reported. Wallace Garrett was named chairman of the annual cleanup-paint cleanup-paint up campaign jointly sponsored spon-sored by the city club. Trial on Wiring Count Set Apr. 17 John Fisher, Provo city electrical elec-trical inspector, will face trial in the city court Apr. 17 on a charge of doing wiring in a private pri-vate home without having a city license to practice as an electrician. electri-cian. . Fisher entered a plea of not guilty to the charge when arraigned ar-raigned recently before City Judge W. Dean Loose. The charge was brought against him by W. D. Bird, Provo electrician, after Fisher signed a complaint against Bird charging the latter with doing do-ing wiring without a permit for the particular job. Bird pleaded guilty and was fined $10. , The blue whale, caught in the Antarctic, measures up to 100 feet in length and is the largest animal in the world. for seasonal shopping to pay up old bills ttgl Pick Yost Ows Firmest? est:! S m. 1 12 Mo. I 20 Ms. S2I.8S $1007 S 6.74 43.72 20.14 13.49 65 M 30.21 20.23' 2tt i Above peymtnH cover ewyfrima. lopoy monti on othor loon, or for othor soriodt, oro In proportion. (27) -tut eommurij THAt irf to Sr fv tWbpnwL FINANCE CO. 2nd Floor Knight Block Over Walgrecn's 13 East Center Fhone No. 621 Manager T. II. Copus te-O'A 7 : lywm J I ! |