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About Google Book Search Google's mission is to organize the world's information and to make it universally accessible and useful. Google Book Search helps readers discover the world's books while helping authors and publishers reach new audiences. You can search through the full text of this book on the web at |http : //books . google . com/ *B ^60 Its AIBERT RUSSEL ERSKINE Studebaker Shop and Home Ashland, Ohio 1835 HISTORY OF The Studebaker Corporation BY ALBERT RUSSEL ERSKINE ^\^ w ^nr ^s- t<^ ij^ fli'--' r ■'' L. C. Dedicated to the Memory of My Friend JOHN MOHLER STUDEBAKER 372822 THE STUDEBAKER CORPORATION General Offices: South Bend, Ind. Works: South Bend, Ind., Detroit, Mich., Chicago, 111., and Walkerville, Ont. DIRECTORS Frederick S. Fish, Chairman Waddill Catchings Herbert H. Lehman Frederick P. Delafield Philip Lehman A. R. Erskine L. J. Ollier FT Studebaker Fish Geo. M. Studebaker Henry Goldman J. M. Studebaker, Jr. C. C. Hanch a. B. Thielens A. Barton Hepburn M. F. Wollering EXECUTIVE COMMITTEE Waddill Catchings Frederick P. Delafield A. R. Erskine '■* »^ Frederick S. Fish Herbert H. Lehman *^Eo. M. Studebaker J. M. Studebaker, Jr. FINANCE COMMITTEE A. R. Erskine ■* ^^ *Kjeo. M. Studebaker Frederick S. Fish M. F. Wollering C. C. Hanch OFFICERS Frederick S. Fish A. R. Erskine "^^^ M. F. Wollering L. J. Ollier C. C. Hanch . . H. E. Dalton A. G. RuMPF C. D. Fleming W. P. Shillington Geo. a. Fulmer . J. M. Peterson . Chairman of Board President Vice-President Vice-President Treasurer General Auditor Secretary Assistant Treasurer Assistant Treasurer Assistant Treasurer Assistant Treasurer Hawkins, Delafield and Longfellow, New York . . Counsel Touche, Niven & Co., New York and Chicago . . . Auditors Lawyers Title & Trust Co., New York . . . Transfer Agent Columbia Trust Co., New York Registrar First Trust & Savings Bank, Chicago . . Transfer Agent Harris Trust & Savings Bank, Chicago Registrar INDEX OF ILLUSTRATIONS PAGB First Studebaker Shop, Ashland, Ohio, 1835 .... 2 John Studebaker 10 Rebecca Mohler Studebaker 12 Henry Studebaker 14 Qement Studebaker .16 John Mohler Studebaker 18 Peter Everst Studebaker 20 Jacob Franklin Studebaker 22 Frederick Saihuel Fish 24 Henry Goldman 26 H. & C. Studebaker Factory, South Bend, 1856 ... 28 Interesting Advertisement; found in an old scrap book, in the handwriting of Clem Studebaker .... 30 H. & C. Studebaker Factory, South Bend, 1868 ... 32 Studebaker Branch House, St. Joseph, Mo., 1870 . . 34 Studebaker Factories, South Bend, 1872 36 Studebaker Factories, South Bend, 1876 38 Studebaker Branch House, Chicago, 1885 40 Studebaker Factories, South Bend, 1890 ..... 42 Studebaker Factories, South Bend, 1900 44 Y.M.C.A. Building, 1908 46 Studebaker Factories, South Bend, 1910 48 Studebaker Factories, South Bend, 1918 50 Studebaker Foundries, South Bend, 1918 .... 52 Studebaker Factories, Detroit, Plants Nos. 1 and 10, 1918 54 Studebaker Factories, Detroit, Plant No. 2, 1918 . . 56 Studebaker Factories, Detroit, Plants Nos. 3 and 4, 1918 58 Studebaker Factories, Chicago, Plant No. 8, 1918 . . 60 Studebaker Factories, Walkerville, Canada, 1918 . . 62 Studebaker Branch Houses, 1918 64 Houses of Foreign Dealers, 1918 66 Types of Studebaker Farm Wagons, 1918 . . . . .68 Types of Studebaker Buggies, 1918 70 Types of Studebaker Dump and Delivery Wagons, 1918 72 Types of Studebaker Flushers and Oilers, 1918 ... 74 Types of Studebaker Harness, 1918 76 Relic in Studebaker Museum 78-80 Types of Studebaker Electric Automobiles, 1902, 1912, 82-84 Types of Studebaker Gasoline Automobiles, 1904 -1910, 86-88 Types of Studebaker Automobiles, 1918 .... 90-94 President Wilson's Message 96 PREFACE THIS BOOK IS written for the informa- tion of the 3,000 stockholders of The Studebaker Corporation, the 12,000 dealers in its products living throughout the world, its 15,000 employees and numberless friends. Studebaker products have been manu- factured and sold for nearly seven decades, and its name is a household word wherever vehicles are used. There are few trade names in American industry older or more highly regarded than the name "Studebaker," which has always stood for quality and fair dealing, and this name today is the greatest asset the corporation owns. Buildings, machinery and operating organizations can be replaced for money, but an old and honored trade name can only be acquired by merit and through the lapse of time. During the past seven years The Stude- baker Corporation has spent 36,000,000 for advertising, yet it fully recognizes that the quality of its products and the satisfaction they give customers are, in the last analysis, the only safe foundation for the upbuilding and perpetuation of its name. It is the ambition of the author, who is its President, to continue the policies toward the public which will add luster to the name "Studebaker." South Bend, Indiana, A. R. E. February 2$^ iqi8 John Studebaker 1799-1877 10 THE STUDEBAKER BROTHERS 'TpHE ancestors of the Studebaker -^ ^ family first arrived in America at the port of Philadelphia on September 1, 1736, on the ship Harle, from Rotter- dam, Holland, as shown by the original manuscripts now in the Pennsylvania State Library at Harrisburg, and included Peter Studebecker, age 38 years; Clement Studebecker, age 36 years; Henry Stude- becker, age 28 years; Anna Margetha Studebecker, age 38 years; Anna Cather- ine Studebecker, age 28 years. The last part of the name, "becker,'' was after- wards changed to "baker." The tax list of what was then Huntingdon Town- ship, York County, Pennsylvania, in 1798-9, showed among the taxables were Peter Studebaker, Sr., and Peter Stude- baker, Jr., wagon-makers, which trade later became the foundation of the family fortune and the corporation which now bears the name. John Studebaker, father of the five brothers, born in Adams County, Penn- 11 ^^^^^^^^^^f ^^^^^^^^^1 ■I ^^K^ ^^j^^H f%^ ^^ ^Bh '^ ^^mm ^^^^^^^^^^^^^^^K^S^^i w^ Rebecca Mohler Studebaker 1802-1887 12 THE STUDEBAKER BROTHERS sylvania, was the son of Peter Stude- baker. In 1830 he bought property near Gettysburg, Pennsylvania, on which he built a brick house and shop in which he pursued the trade of blacksmith and wagon builder. Becoming imbued with the pioneer spirit, he resolved to go West and grow up with the country. So he disposed of his property in 1835 and moved with his family and worldly possessions to Ashland, Ohio, making the trip overland in three wagons, one of Conestoga pattern, drawn by four horses. Here he bought property and again established himself as a black- smith and wagon builder, working indus- triously and practicing frugality. Striv- ing for success, he encountered the hard- ships of those days, and for some years found life a hard struggle. With a small income and a large family, it was necessary for his wife to spin and weave the cloth and make the clothes of the family, which included ten children. Brighter days followed in later years, 13 Henry Studebaker 1826-1895 14 THE STUDEBAKER BROTHERS and ultimately he and his wife moved to South Bend and lived there until their death. The boys were put to work early. On one occasion the three oldest boys drove fifty miles into an adjoining county and worked as harvest hands at small wages for some weeks. They returned home with sixty dollars, which they gave to their father. When the , older boys became of age, their father urged upon them the importance of getting an inde- pendent start in life, so about 1850 Henry and Clem went overland to South Bend, Indiana, where Clem taught school for a time and also worked at black- smithing for SO cents per day. Here, in 1852, the two brothers, under the firm name of H. & C. STUDEBAKER, began blacksmithing and wagon-building, with a capital of sixty-eight dollars and two forges. The first year they built two wagons, one of which was in constant daily use for thirty-three years. 15 Clement Studebaker 1831-1901 16 THE STUDEBAKER BROTHERS John M. came to South Bend to join his brothers, but, meantime, gold had been discovered in California and thou- sands of venturesome men, traveling in wagons, were rushing out there to Eldorado in quest of fortune. These were the rosy pioneer days, and men were daring, so it was natural for young John M., then nineteen, ' to become interested. He determined to go, and he and his brothers built a wagon which he traded to an expedition for his passage and board. This was one of the wagons of the caravan which arrived at old Hangtown, Cal. (now Placerville), five months later, in good condition. They arrived in 1853, and in 1912, when John M. returned to Hangtown and gave a reunion dinner to the old settlers and friends of his youth, he recounted his experience in graphic words. He said : "We were mote than five months on the road, and landed right here on this square in August, 1853, and I had but fifty 17 John Mohler Studebaker 1833-1917 18 THE STUDEBAKER BROTHERS cents in my pocket. Although that was my only earthly possession, my spirit was not daunted, for we were all led to believe that all we had to do was to go out on the morrow and dig all the gold that the heart could desire. Of course, a big crowd gathered around us, and while we were trying to get them to talk about the gold mines, they insisted on asking questions about what had happened in the States since they had heard from their friends. While the hubbub was going on, a man came up and asked if there was a wagon-maker in the crowd of new arrivals. They pointed me out, and he asked, *Are you a wagon- maker?' 'Yes sir,' I answered, as big as life, with my fifty-cent piece in my pocket. He offered me a job in his shop, and I replied, *I came to California to mine for gold.' After he had gone, a man stepped up very politely and said, 'Will you let me give you a little advice, young man.?' and upon my replying in the affirmative, continued, 'Take that job and take it quick'. His manner impressed me. He said that there would be plenty of time to dig gold, it wasn't always a sure thing, and that the job just offered me was a mighty fine chance for a stranger. I was 19 Peter Everst Studebaker 1836-1897 20 THE STUDEBAKER BROTHERS impressed, and decided to go to work for the wagon-maker. He wanted me to make wheelbarrows for the miners, and arranged to pay me ten dollars each for my work. The tools were poor, and material only pitch pine lumber. I stuck to the job, made many wheelbarrows, and put my money in the bank. I soon found that hundreds and thousands of the pioneers who tried the mines never made a cent, but those who stuck to steady jobs at good wages and saved their money were doing well. We worked many a night all night, frequently making miners' picks and repairing stage coaches, which came in late, and ha;^ to get out at six o'clock in the morning." Meantime, back in South Bend, the little firm of H. & C. Studebaker was having a hard time financing its busi- ness, was confronted with judgments, and about to go under. They had few tools, bought their material as needed from a local hardware store, and usually traded their wagons to farmers for live stock or crops, or took notes in pay- ment. Money was scarce and seldom 21 Jacob Franklin Studebaker 1844-1887 22 THE STUDEBAKER BROTHERS obtained for sales. They appealed to John M. to come back to South Bend and join them in business. Accordingly, after five years of life in California, he yielded to their suggestions and took passage on a sailing ship for New York, via the Isthmus of Panama, with 38,000 he had earned in gold nuggets sewed in a leather belt and strapped around his waist. . Upon arrival at South Bend, he invested his money in the business and bought out the interest of his brother Henry, who being discouraged and pre- ferring a rural life, decided to retire and become a farmer. This new money rehabilitated the firm of H. & C. Stude- baker and assured its future prosperity. At that time, in 1858, the total assets of the firm were valued at 310,000. Peter E., the fourth brother, who had been a merchant in Goshen, Ind., shortly afterwards cast his lot with the firm and became an important factor in its management. 23 Frederick Samuel Fish chairman of board 24 THE STUDEBAKER BROTHERS During the next ten years the business prospered, and in 1867 the factory build- ings covered four acres of ground; 140 mechanics were employed; the pay roll amounted to over 31,500 per week; and the inventory of material was sufficient for about six thousand vehicles. 25 Henry Goldman DIRECTOR 26 STUDEBAKER BROTHERS MFG. CO. N January 1, 1868, the net tangible assets of H. & C. Studebaker amounted to 3223,269.06, and the sales to about 3350,000 annually.! Thus had the business grown to stfch extent that it was determined to form a corporation, and, accordingly, Studebaker Brothers Manufacturing Company was organized March 26, 1868, under the statutes of Indiana, with a capital of 375,000, paid in one-third each by Clem, John M. and Peter E. Studebaker, who were elected directors. Clem was elected President, John M., Treasurer, and Peter E., Secretary, at annual salaries of 32,000 each. The capital of the company in com- mon stock was increased Ijy stock divi- dends in 1875 to 31,000,000, and in 1896 to 33,600,000, and in 1906, 31,500,- 000 six per cent preferred stock was issued for cash. 27 H. & C. Studebaker Factory 1856 28 STUDEBAKER BROTHERS MFG. CO. In 1870 Jacob F. joined the company as a salesman, and about this time Peter E. was sent to St, Joseph, Mo., where he established a branch house to. handle the trade of the pioneers, who were crossing the country in wagons in great numbers. Later, branches were established in Salt Lake City, San Fran- cisco, Kansas City, Portland, Dallas, Minneapolis, Chicago, New York, Denver and other large cities. Clem Studebaker, President of the company thirty-three years, was a public- spirited, high-minded man of democratic disposition, honored in his home town and by the Nation. In 1897, a reunion of former residents at Ashland, Ohio, was attended by 10,000 people, among whom were the three Studebaker brothers, it being their first visit since their removal nearly fifty years before. Clem was the spokesman for the family, and read a most interesting paper, reciting an unvarnished story of thefearly ups 29 000,000. The company was organized to manufacture and market in large quantities a medium-priced gaso- line propelled automobile. Promptly after the organization of the company, Studebaker made an arrange- ment with it under which Studebaker obtained certain exclusive rights to sell the product to be known as Studebaker- E-M-F cars. Studebaker shortly after- wards acquired substantial stockholdings in the company and in the following year purchased the remaining stock and became sole owner of the business. The company, immediately upon organization, acquired by purchase the plant, property and assets of the Wayne Automobile Company of Detroit, and 55 00 I H s Q H O n 56 EVERETT-METZGER-FLANDERS CO. in October, 1908, the plants, property and assets of the Northern Automobile Company, of Detroit and Port Huron, increasing its capital stock from 3500,000 to 31,000,000, to provide the necessary capital. The growth and expansion of the business was so rapid that the com- pany was compelled to increase its plants, and facilities, and by October 1, 1909, it operated and owned the following plants: Wayne Automobile Company, of Detroit. Northern Motor Car Company, of Detroit and Port Huron. Deluxe Motor Car Company, of Detroit. Monroe Manufacturing Company, of Pontiac, Mich. Western Malleable Steel Company, of Detroit. Pressed Steel Sanitary Manufactur- ing Company of Detroit. Everett-Metzger-Flanders Company, of Canada. 57 00 rH H Q H Oh c/T (X] o H U (X] (55 58 EVERETT-METZGER-FLANDERS CO. The record of the company during its two and one-half years of operations shows the following remarkable results: Cars From Produced Sales Net profits Aug. 4, 1908, to Dec. 31, 1909 8,132 ?7,366,428.27?1,607,776.17 Year Ending Dec. 31, 1910 15,300 13,869,986.87 1,606,305.72 Totak 23,432 ?21,236,41S.14?3,214,081.89 Dividends Surplus Aug. 4, 1908, to Dec, 31, 1909 ?314,824.00 ?1,292,9S2.17 Year Ending Dec. 31, 1910 250,000.00 1,356,305.72 Tocals ?564,824.00 ?2,649,257.89 The company was merged into The Studebaker Corporation as of December 31, 1910, and the following balance sheets show its condition at the time of its formation and of its later merger: 59 00 1—1 o 1—1 U 00 i t @ C/D 60 EVERETT-METZGER-FLANDERS CO. BALANCE SHEETS Assets Aug. 4, 1908 Dec. 31, 1910 Cash 3 52,322.59 $ 70,492.40 Receivables 55,450 .09 919,304 . 68 Investments 142,494 . 16 Inventories 95,738.28 2,338,134.62 Plants and Property 153,438.77 3,827,293.23 Deferred Charges . . . 16,358 . 15 40,234.02 Total ?373,307.88 ?7,337,953 .11 Liabilities Notes Payable $ 17,873 .50 ?1,765,262 .67 Accounts Payable... 94,434.38 1,923,432.55 CapiulStock(Issued) 261,000.00 1,000,000.00 Surplus 2,649,257.89 Total ?373,307.88 ?7,337,9S3 .11 Net Worth ?261,000 .00 ?3,649,257 . 89 61 00 1— I i ■ \ 2 < U > (X] s o H U < w 62' THE STUDEBAKER CORPORATION 'T^HE necessity for additional capital to finance the development of the automobile business required the organi- zation of The Studebaker Corporation, which acquired the business, plants, and trade names, of Studebaker Brothers Manufacturing Company and Everett- Metzger-Flanders Company and their subsidiary companies, as of December 31, 1910. The Studebaker Corporation was incorporated February 14, 1911, under the laws of the State of New Jersey, with an authorized capitalization of 315,000,000 of 7 per cent cumulative preferred stock, of which 313,500,000 was issued, and 330,000,000 of common stock, all issued, with par values 3100 per share in each case. 63 iEIUi U^u' 367ik - ^*V-*"*rtAfl/^ '^^du^^^. Types of Branch Houses 1918 THE STUDEBAKER CORPORATION The capitalized tangible assets of the merged companies were obtained from the following sources: Studebaker Bros. Mfg. Co. — Original capital and surplus of H. & C. Studebaker. . . $ 223,269.06 Subscribed Capital 75,000.00 6% Preferred Stock issue 1,500,000.00 Surplus Profits (43 years) 9,916,594.06 311,714,863.12 Everett-Metzger-Flanders Co. — Original Capital . . . 31,000,000.00 Surplus Profits .... 2,649,257.89 g3,649;257.89 Tangible assets of merged com- panies 315,364,121.01 To these assets were added the proceeds from the sale at par of a like amount of the 7% Preferred Stock of The Stude- baker Corporation, amounting to 8,328,602.35 (Of this, 32,600,000 was used to retire outstanding First Mort- gage Bonds of S. B. M. Co.) Total assets of the new corporation 323,692,723.36 65 Houses of Foreign Dealers — 1918 66 THE STUDEBAKER CORPORATION These assets were distributed as follows: Cash $ 6,243,619.69 Receivables 5,566,977 .42 Investments 742,513 .29 Inventories 14,643,419 .92 Deferred Charges 251,358 . 52 Total Quick Assets ?2 7,447,888 .84 Less all Liabilities 13,567,155 .82 Working Capital ?13,880,733 .02 Plants and Property 9,81 1,990 . 34 Total Tangible Assets .... $23,692,723 . 36 Outstanding against these assets was the issue of 313,500,000 of preferred stock, for which the corporation received par from the bankers who purchased it, and 330,000,000 of common stock. The financial reorganization of the Studebaker business was of an ultra- conservative character, in that preferred stock was issued for only 57 per cent of its net tangible assets, which gave the stock an original book value of 3175.50 67 Types of Studebaker Farm Wagons 68 THE STUDEBAKER CORPORATION per share, of which 3103.03 per share was represented by net quick assets. The common stock had an original book value of 336.49, of which 31.47 was net quick assets. As a result of the retention in the business of 50.9 per cent of the net profits of the past seven years, the book values of these stocks, December 31, 1917, were as follows: Preferred stock, 3355,79 per share, of which 3214.64 was represented by net quick assets. Common stock, after deduction of 3100 for the preferred stock, 393.49 per share, of which 341.90 was represented by net quick assets. The stocks of the corporation, both common and preferred, are listed on the New York, Chicago and Detroit Stock Exchanges. The charter of the corporation requires that annually, after July 1, 1912, 3 per cent of the largest amount in par value of preferred stock that shall have been Types of Studebaker Buggies 70 THE STUDEBAKER CORPORATION issued shall be set apart out of net profits in a special surplus and utilized for the purchase and retirement of preferred stock. In accordance with this provision, the corporation has during the past seven years purchased in the open market and canceled 25,350 shares of preferred stock at a cost of 32,548,654. 17, thereby fulfilling the requirements up to and including the fiscal year of 1918, and reducing the amount of preferred stock outstanding at present to 310,965,000. When the corporation was organized it assumed the indebtedness of the merged companies in notes payable amounting to 310,257,236.69; and although it re- ceived 35,728,602.35 new money at the same time, this money was needed to finance the immediate and continuous growth of the business. The sales of the merged companies in 1910, the last year of their operations, amounted to 323,- 473,600, and if the sales of the new 71 Types of Studebaker Dump AND Delivery Wagons 72 THE STUDEBAKER CORPORATION corporation had not greatly exceeded this figure, the fresh capital and future profits would have paid off a large part of the floating indebtedness in a few years. Instead of a moderate growth, the new corporation was immediately compelled to finance, in plant additions, increased inventories and increased receivables, a remarkable growth of busi- ness, as is shown by the appended table of sales: ,, No. Automobiles , T^}?^ %^^.' i Increase Over Year gold Including Vehicles jqiq and Harness 1911 22,555 328,487,900 21.4% 1912 28,523 35,440,300 50.9% 1913 35,410 41,464,900 76.6% 1914 35,460 43,444,200 85.1% 1915 46,845 56,539,000 140.9% 1916 65,885 61,988,600 164.1% 1917 42,357 50,147,500 113.6% Totals 277,035 317,512,400 93.2 (avg.) On March 1, 1912, a large part of the indebtedness was funded by the issu- ance and sale, on very favorable terms, 73 Types of Studebaker Flushers AND Oilers 74 THE STUDEBAKER CORPORATION of 38,000,000 of five per cent ten-year serial gold notes, payable ^00,000 semi- annually, on September 1st and March 1st, from 1912 to 1922. In the latter part of 1914, through increase of profits and heavy reduction in vehicle inventories, it was possible to anticipate payment of some of the serial notes, and at the end of that year, the entire floating debt, including serial notes, had been reduced to 37,400,000. The profits of the next two years per- mitted anticipating payment of the re- maining serial notes and all bank loans, so that by the spring of 1916 the corporation was entirely freed from floating debt. Additionally, it had also retired 32,535,000 of preferred stock, and on June 1, 1915, had placed the common stock on a five per cent dividend basis, which was increased to 10 per cent on December 1st of the same year. This 10 per cent rate was continued until August 7, 1917, 75 Types of Studebaker Harness 76 THE STUDEBAKER CORPORATION when, on account of changed conditions resulting from the war, it was reduced to a 4 per cent basis. The 7 per cent dividends on the preferred stock have been regularly paid by the corporation from the date of its organization.. The financing of the new corporation was handled by the banking firms of Goldman, Sachs & Co. and Lehman Bros., of New York City, which brought into its counsels and directory several representatives of these firms whose advice and support have proved invalu- able to the corporation. Most notable of these has been Henry Goldman, who, as a member of the executive committee, has kept himself constantly informed of all important matters affecting the busi- ness, and without any compensation or reward, given it the benefit of his great ability. Shortly after the outbreak of the war in August, 1914, the English Govern- ment, which had used Studebaker wagons General La Fayette's Carriage Used by him during tour of United States 1824-1825 President Lincoln's State Carriage Used during night of his assassination Relics in Studebaker Museum 78 THE STUDEBAKER CORPORATION in the Boer War, placed a cable order with the corporation for 3,000 transport wagons selected from its catalog, which order was filled in six weeks. Rapidly following came an order for 20,000 sets of six-horse English artillery harness and 60,000 artillery saddles, probably the largest single order of its kind ever placed. The contract required this order to be completed within twenty weeks, and it was actually completed in sixteen. Orders followed for ambulances, drinking wagohs, spare parts, and repeat orders on harness and saddles, while this gov- ernment bought hundreds of Studebaker cars from the Studebaker house in London. The corporation also received large orders for vehicles, harness and auto- mobiles from the French and Russian governments, all of which were filled satisfactorily to both parties. With the entry of our own government into the war, the corporation instantly 79 General Grant's Carriage Used during his last term 1873-1877 Old Studebaker Phaeton Built by H. & C. Studebaker in 1857 Relics in Studebaker Museum THE STUDEBAKER CORPORATION placed its plants at the disposal of the President, and later delegated two of its executives upon important committee work, whose purpose it was to mobilize raw materials, control prices to be paid by the Government and assist it in obtain- ing its requirements promptly. At the present time the corporation is devoting half of its plant capacity to Gov- ernment work, covering orders for large quantities of military supplies of a char- acter suited to our equipment and in line with our manufacturing experience. To handle this work, it became neces- sary to reduce our regular manufacturing schedules of automobiles and vehicles and rearrange our plants on a war basis. This undertaking involved some unusual expenses and consumed considerable time, but it is now well accomplished, and we feel gratified at having voluntarily met the issue and placed ourselves in position to serve our Government as long as the 81 RUNABOUT 1902 PANEL DELIVERY 1904 Types of Studebaker Electric Automobiles 82 THE STUDEBAKER CORPORATION war may last, freely and without com- pulsion. Ample evidence is gradually being dis- closed that substantial use and service is expected by the Government from the automobile plants of the country, which are accordingly reducing their output of passenger automobiles. To what extent this situation will finally curtail the total production of passenger cars, depends upon the duration of the war, but as we have adjusted ourselves to conditions, we hope to maintain our business in a healthy condition, and be prepared to take prompt advantage of the opportunities that will be open to us when peace returns. A review of the results of the business of the corporation for the seven years ending December 31, 1917, discloses many interesting facts, of which the following are most important: 83 . VICTORIA-PHAETON 1908 COUPE 1912 Types of Studebaker Electric Automobiles 84 THE STUDEBAKER CORPORATION Its seven plants at South Bend, Detroit, Chicago, and Walkerville, Ont., cover 167.89 acres, contain 4,704,118 square feet of floor space, and after charging off 32,193,048.30 for depreciation, represent an investment of 315,477,186.41. Acres Square feet South Bend Plants 131.90 2,642,581 Detroit Plant No. 1 6.61 518,757 No.2 .... 1.88 112,171 No.3 & 4 16.66 883,241 No.lO... 3.24 140,630 Chicago " No.8 .... 4.84 304,400 Walkerville, Ont., Plant 2.76 102,338 Totals . 167.89 4,704,118 The annual capacity of these plants is 100,000 automobiles, 75,000 horse-drawn vehicles, and about 310,000,000 worth of automobile and vehicle spare parts and harness. The products include a complete line of passenger automobiles, with a line of trucks in contemplation, and complete lines of farm wagons, dump wagons, heavy service wagons, sprinklers, flushers, bug- gies and harness. 85 1904 1908 Types of Studebaker Gasoline Automobiles THE STUDEBAKER CORPORATION The industrial pay rolls for 1917 amounted to 38,677,456.00 and the aver- age number of employees was 9,444. The average number of employees on the administrative and commercial pay rolls during last year was 2,830 and the salary roll was 33,526,404.00. The total salary and pay rolls were 312,203,860.00 and average number of persons employed was 12,274. There were 6,000 dealers and 26 branch houses handling Studebaker auto- mobiles throughout the world at the close of the year. There were 6,000 dealers and 8 branch houses handling Studebaker vehicles and harness throughout the world at the close of the year. There were 277,035 automobiles and 466,962 horse drawn vehicles sold in the seven years. The total sales during that period amounted to 3317,512,400. 87 [I ^ STUDEBAKER *'30" 1908 STUDEBAKER "20" 1910 Types OF Studebaker Gasoline Automobiles 83 THE STUDEBAKER CORPORATION The total net profits amounted to 330,126,600, which was 9.5 per cent of the sales. These net profits were disposed of as follows: Total The regular 7% dividends paid to preferred stock- holders amounted to 19.2% (the preferred stock dividend was earned 5.2 times annually.) The dividends paid to common stockholders amounted to 21.5% (after deducting pre- ferred dividends, the amount remaining for the common stock averaged 11.6% an- nually.) The amount paid to pur- chase and retire pre- ferred stock was 8.4% The amount of net profits kept in the business and used to discharge debt and finance growth was 50.9% Total 100%) 89 Studebaker Delivery Wagon 1917 Studebaker Light Four Weight, 2400 lbs. 1918 90 THE STUDEBAKER CORPORATION Appended are condensed balance sheets showing the condition of the corporation as of the date of its formation and as of December 31, 1917, from which greatly increased financial strength is evidenced. 91 Studebaker Light Six Weight, 2925 lbs. 1913 Studebaker Light Six Weight, 2800 lbs. 1918 92 THE STUDEBAKER CORPORATION BALANCE SHEETS ASSETS Dec. 31, 1917 Dec. 31, 1910 Cash $ 2,528,555.07 $ 6,243,619.69 Receivables 9,325,498.96 5,566,977.42 Investments 847,672 . 17 742,513.29 Inventories 21,322,134.35 14,643,419.92 Deferred Charges 358,683.81 251,358.52 Quick Assets . .334,382,544.36 327,447,888.84 Plants and Property. 315,477,186.41 3 9,811,990.34 Good Will, Trade Marks, etc.... 19,807,276.64 19,807,276.64 Total 369,667,007.41 357,067,155.82 LIABILITIES Notes Payable... 3 7,400,000.00 310,257,236.69 Other Payables.. 3,447,277.78 3,309,919.13 Current Lia- bilities 310,847,277.78 $13,567,155.82 Preferred Stock.. 310,965,000. 00 $13,500,000.00 Common Stock.. 30,000,000.00 30,000,000.00 Surplus and Reserves 17,854,729.63 Total 369,667,007.41 357,067,155.82 93 THE STUDEBAKER CORPORATION Summarizing the important features of the foregoing balance sheets, it will be seen: That the net tangible assets (exclusive of trade name and good will) are 339,012,- 452.99, an increase of 315,319,729.63. That the working capital (the differ- ence between the total quick assets and all liabilities) amounts to 323,535,266.58, an increase of 39,654,533.56. That the total capitalization is 340,965,- 000, a decrease of 32,535,000, due to the retirement of preferred stock. That the floating debt is 37,400,000, a decrease of 32,857,236.69. That the ratio of quick assets to all liabilities is 317 per cent, an increase of 56.1 per cent. 95 rjITj ORIGINAL ■KNT FBOM Ol TELEGRAM XOf THE STUDEB.\k£K CORTORATION, aovTH KBND. IND. To th» PTOidtnt, The VhiU Houds. WashlneXon, 9.C. atadcbaker fsotoriss of cottrss ar* at ta« disposal of Xb» SOTamaant. Any ordara giTan u$ will racaiTa prafaranoa and olesr rli^ht of vay. A.H.Brakina'. Fraxidant. TUB STUQ3BA£SR CORPOBATIOH. TMC WHITt MOUSt 96 THE STUDEBAKER CORPORATION That the plant and property account IS 315,477,186.41, an increase of 35,665,- 196.07 or 57.7 per cent. This small increase of plant and property account compares with increases in the volume of output or sales, over 1910, amounting to 164.1 per cent in 1916 and 113.6 per cent in 1917, as shown on page 73. The House of Studebaker has existed sixty-five years. Industry, economy and patience char- acterized the Studebaker brothers, whose hearts, as well as heads, were in their business. Profits were always secondary to the conservation of reputation and good will, and hence we find that during the forty-three years in which they operated under the name of Studebaker Brothers Manufacturing Company, they and their stockholders withdrew only six million dollars of dividends from net profits of sixteen million dollars, and left the larger part of ten million dollars remaining in the business. 97 POOLE BROS. OHIOAOO. ,. Tmia jf OOK I» DX7E OK THE LAST DATE 8TA3IPEI) BELOW AN INITIAL FINE OP 25 OENTS WJLL BE ASSESSED FOR FAILUHE TO RETUItN THia BOOK ON THE DATE dUE. THE PENALTY WILL JNCREASE TO SO CENTS ON THE roURTH DAY AND TO ft.OO ON THE SEVENTH DAY OVERDUE. *^^ 1 fjH loin ^^^ ^2 1939 ^ *^v9 MAY 21 1940 28MarM9Rl — — — ■ — ^fAV'E 'ill ' r V^t r k pr^ -.^ 1304 U J ^0FpV!)9IW RECD EB ^feBy 195^ LD ai-aom-s/ss (02eoft) 372822 ^ 5 £r6 UNlVERSnY OF CALIFORNIA UBRARY