格雷厄姆-纽曼公司——致股东的信函及1948财年年度报告

GRAHAM-NEWMAN CORPORATION

52 WALL STREET

NEW YORK 5. N. Y.

February 27, 1948

To the Stockholders of Graham-Newman Corporation:

Submitted herewith is a copy of the report of our auditors, Messrs. stern, Kingston « Coleman, covaring ine fiscal Jear onded January 31, 1948.

The appended balance sheet indicates a net asset value of $114,13 per share on January 31, _1948, compared with $116.84 per share on January 31, 1947.

Dividends of $17.10 per share were paid during the year, of which #12.37 has been designated as capital Gain Dividends, pursuant to Section 362 of the Internal revenue

The over-all gain for the fiscal year, after deduction of the decrease in unrealized appreciation, amounted to $14.39 per share on the average number of shares outstanding. Net realized profits for the year, without reflecting the shrinkage in unrealized appreciation, amounted to $17.01 per share.

indicated net asset value as of February 14, 1948, was approximately #ll1 per share.

The annual meeting of stockholders is scheduled to be held 1948. In connection

on Monday, April I formal notice will be therewith, It is expected that mailed to stockholders before April 2, 1948, together with a proxy statement and request for proxies.

Very truly yours,

Bent. Graham,

-President

Jerome A. Newman,

Vice-President & Treasurer 1168514690 16%4 1706ü 13368 {a5 in

STERN. PORTER, KINGSTON & COLEMAN

CERTIFIED PUBLIC ACCOUNTANTS

MURRAT HILL 2. 8075 to the Board of Directors and Stockholders o

rahar-Newman Corporation

We have examined the Balance Sheet of Grahan-Newman Corporation as at January 31, 1948 and the related statements of Profit and Loss, Surplus and Unrealized Appreciation of Investments for the year then ended, have revieved the system of internal control and the accounting procedures of the company and, without making & detailed audit of the transactions, bave examined or tested accounting records of the company and other supporting evidence by methods and io the extent we deemed appropriate and in accordance vith generally sa-cepted standards applicable in the circumstances.

Pursuant to regulations of the Securities and Exchange Commission applicable to regulated investment companies, the Baiance Sheet herein gives effect to the evaluation of investments in secur1- ties at their quoted market values as at the date thereof.

In our opinion, the accompanying Balance Sheet and related statements of Profit and Loss, Surplus and Unrealized Appreciation of Investments together with the notes appended thereto, present fairly the position of Graham Newman Corporation as at January 31, 1948 and the results of its operations for the year then ended, in conformity with the accounting principles set forth hereinabove applied on a basis consistent with that of the preceding year.

Steml Loiter Knigstn -Coleman

STERN, PORTER, KINGSTON & COLEMAN

Certified Public Accountants

Fob Tory 24; 7348.

GRABAM- NEWMAN NEW BALANCE JANUARY 31, (ON BASIS OF QUOTED MARKET VALUES OP CASH IN BANKS

DUE FROM BROKERS

INVESTMENTS IN SECURITIES (see Note A)

Marketable Securities-at Quoted Market Values

as at Janusry 31,

(Cost $3,818,607.17)

OTHER ASSETS

Interest accrued $782.50

STERN. PORTER, KINGSTON & COLEMAN

CORPORATION YORK SHEBT 1948

SECURITIES AS AT JANUARY 31, 1948)

LIABILITIES AND CAPITAL-

SECURITIES SHORT - at Quoted Market Values as at

January 51, 1948 (see Note A) $ 37,388.00

(Net Proceeds of Sales $71, 077.77,

DUE TO BROKERS - Sor securities purchased

ACCOUNTS PAYABLE AND ACCRUALS

Officers' Compensation Payable (see Note B) $ 33, 664.84

Sundry Payables and Accruals 7,832.90 41,497.74

Total Liab1l1t1es 85,543.89 NET ASSETS APPLICABLE IO CAPITAL STOCK Capital stock: Authorized-40,000 shares of no par value Issued and Outstanding-

34,715 shares, at stated value

of $50.00 per share 1,735, 750.00

Capital Surplus 2,202,939.79

Earned Surplus None

Total Capital Stock and Surplus 3,938,689.79

Unrealized Appreciation Of Investments 23,258.60

Total Assets Applicable to Capital Stock 3,961,948.39

(see lotes A and C)

(Equivalent to $114.13 per share)

$4,241,492.28

accompanying notes to financial statements

and should be read in conjunction therewith.

GRAHAM-NEWMAN CORPORATION

NEW YORK

PROFIT AND LOSS STATEMENT

FOR THE FISCAL YEAR ENDED JANUARY 31, 1948

STATEMENT OF INCOME AND EXPENSES - excluding Gain or Loss

Income Dividends on Investments $109,980.28 Interest on Investments Total Income Expenses 44,664.31 154, 644.59 Officers' Compensation (see Note B):

Ban janin Graham

Jerome A. Newman

Seynour Cohn

Other:

Office Salaries

Executive $ 31,832.42 31,832.42 20,000.00 10,422.50 Committee Fees

Directors' Fees

Rent and Light 4,400.00 875.00 2,995.66 Telephone and Telegraph Insurance 1,476.79 412.50 Taxes (other than Federal Income Tax) 5,938.61 Auditing and Legal Custodian Peos

General Expense

Interest 12,735.87 3, 043: 37 _1,564.58 Total Expenses 119,269.69

Net Income, exclusive of gain or loss on investments

35,374.90

REALIZED GAIN ON SALES OF INVESTMENTS

546, 205.45

UNREALIZED APPRECIATION OR DEPRECIATION OF INVESTMENTS

Unrealized Appreciation at January

One 112ed Apprecation at January 31,1946 24, 388.64

Unrealized Appreciation at January 31,1948 23,258.60

23,258.60

Net Decrease of Unrealized Appreciat 1on

91,130.24 155,075.21

TOTAL NET INCOME, including Unrealized Appreciation of

Investments (see Notes A and C)

STERN, PORTER, KINGETON A COLEMAN

$490,450.27

GRAHAM-NEWMAN CORPORATION

NEW YORK

STATEMENT OF CHANCES IN NET ASSETS

POR THE FISCAL YBAR ENDED JANUARY 31, 1948

NET ASSETS AT JANUARY 31,1947 $3,996, 593.16

N0. OF PER SHARES SHARE 34,207 $116.84 ADD:-

Capital Stock Issued during the year for cash 65,240.13

Net Income for year (adjusted for decrease

In unrealized appreciation):

excluding gain or

Not Is on are dent

$ 35,374.90

Realized Gain on Investments 546,205.4

581,580.3!

Loss-Decreased in Unrealized

Appreciation 91,130.24 490,450.11

Surplus Adjustments-Tax refund and

adjustment of tax reserves for

prior years 3,291.49

TOTAL 4,555, 574.89

DEDUCT - DIVIDENDS PAID

Per

Date Paid Share

May 22,1947 $ 1.75 60,751.25

August 15,1947 1.75 60, 751.25

November 25,1947 4.00 138, 860.00

January 29,1948 9.60 333,264.00

Total $17.20 .593,626.50

NBT ASSETS AT JANUARY 31, 1948 $3,961,948.39

508 128.42 34,715 14.13(0) • 09(8) 131.23 17.10(b) 34, 725 Capital Capital Barned ANALYS IS Total stock Surplus surplus

Not Assets at

January 31,1947 3,996, 593.16 $1, 710, 350. $2,171, 854.32 -

Add:-

Capital stock

Issued during

year (508 shs.) 65,240.13 25,400.k) 39,840.13 (d)

Net Income for Year 490, 450.11

$211,13 Unrealized Appreciation $214,388.84 581,580.35

Surplus Adjustments 3,291.49

Total 4,555, 574.89 1,735, 750. 2, 211, 694.45 84,871.8

Deduct-Dividends

Paid 593,626.50 8,754.66

-91,130.24

23,258.60

584,871.84

Not Assets at

January 31, 1948 $3,961, 948-32 $1,735,750. $3,202,939.79

(800 following page for footnotes)

STEÁN, PORTER, KINGSTON & COLEMAN

-2- 23,258,60

STATEMENT OF CHANGES IN NET ASSETS

FOR THE FISCAL YEAR ENDED JANUARY 31, 1948

(CONTINUED)

FOOTHOTES

(a) Computed on number of shares outstanding at close of year.

(b) Computed on number of shares upon which dividends were

actually paid.

(e) At stated value of $50.00 per share.

(1) Exotor of eato go or or 300 per age) haros

STERN. PORTER, KINGSTON & COLEMAN

GRAHAM-NEWMAN CORPORATION

NEW YORK - NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 1948

NOTE A - UNREALIZED APPRECIATION OF INVESTMENTS

the unrealized appreciation of investments at January 31, 1948 wa

23,258.60, represented as follows

Quotod

Market Value at Appreciation

Cost January 31,1948 (or Depreciation)

Investments In Securities $3,818,607.17 $3,808,176. $-10,431.17

Securities short - 71,077.77 -37,388(a)

Together $3,747,529.40 $3.770,788.

(a) Cover Value

NOTE B - COMPENSATION OF OFFICERS

The compensation of Benjamin Graham and Jerome A. Newman as officers of the company for the current fiscal year 19, in respect of each of them (a) a stated salary of $15,000, per annum, and (b) additional compensation in an amount equal to 10% of the excess of the adjusted for the net change as at the end of the year, as compared with the status at the beginning of the year, in the unrealized appreciation of PROPS FOr The top oar Vi So han an out qua 0 30. 01,128 goo

for the prior year was less than an amount equal to $0.01724 share per day on the average number of shares outstanding during that year, and (11) an amount equal to $5.84 per share on the average number of shares outstanding during the current year. The above amounts viz: $0.1724 per share per day and $5.84 per share per year represent respectively the equivalent of 5% on the asset value of the capital stock at the beginning of the respective fiscal years, Viz: at January 3,1946 $125,88 per share and at January 31,1947 $116.84 per share. In effect, additional compensation is therefore payable to each of these officers In an amount equal to 10% of the excess of the "over-all not profit" over an amount equal to 5% of the asset value of the capital stock at the beginning of the year, - any deficiency in profits as compared with such exclusion (of 5% on the asset value of the stock at the beginning of the year) being chargeable against the profits of the subsequent year or years in arriving at the base upon which additional compensation is to be computed. The additional compensation payable to these officers cannot be in excess of 25% (12}% to each) of the amount of dividends paid during the year. In the event that additional compensation had been computed and peld upon this latter basis, non, in the event of the death oi either, or upon the termination of ai tenure of office, he or his estate would he entitled to receive any exces if the amount of additional compensation as computed on the basis of the over-sll net profits" (after deducting the exclusions above noted) over the amounts that had previously been pald to him. Had such event occurred as at January 31,1948 there would, however, have been no additional compensation payable to either officer or to his estate other than the amounta set forth in the statements herein.

STERN, PORTER. KINGSTON & COLEMAN

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 1948

(CONTINUED)

NOTE C - TAX STATUS

The company 1s a "regulatod investment company" under the Internal

and as such it is sublet to federal income tax at 25% of Pao exe Coder die net 102g term capital gain (ted 1 capital gan dive-capItaL 1088, If any) over the amount distributed as dends • and at 38% of the excess oi its other net incone over the amouni distributed as dividends and chargeable thereto. Dividends vero paid during the year in an amount which exceeded both the "capital gains other incoue, so that the company 1s not subject to income tax for the current year. The company intends in the future to distributo all of its net income as dividends. No provision has therefore been made in the statements berewith for federal Income tax on the net unroalized appreciation in market values as at January 31, 1948.

NOTE D- The aggregate dollar amount of purchases and sales of investment securities, other than government securities, made by the company during the fiscal year ended January 31, 1948 were as follows:

Cost of Purchases $4,459,501.

Proceeds from Sales 4,920,352.

STERN. PORTER, KINGSTON a COLEMAN

GRAHAM-NEWMAT CORPORATION NEW YORK INVESTMENT IN SECURITIES BONDS Railroads Utilities Real Batate 60.3.0520100 Total Bonds

PREFERRED STOCKS

Industrials

JANUARY 31, 1948

SUMMARY MARKET VALUE $ 233,365. 157,969. 1,023: 200,000. $ 602,268. 211,288. 150,375.

Investment Companies

Utilities

385,750.

4,150.

insurance Company:

Holding Companies

121,678. 873,341. Iotal Preferred Stocks COMMON STOCKS Industrials

Holding Companies

1,366,888.

Investment Companies

Railroads Utilities 288, 955. 288,666.

Insurance Companies

$2,332,667. Iotal Common Stocks TOTAL COLEMAN $3,828,276. STERN. PORTER. KINGSTON 8

GRAHAM-NEWMAN CORPORATION

NEW YORK

INVESTMENT IN SECURITIES

JANUARY 31, 1948

MARKET VALUE

PACE AMOUNT DESCRIPTION OF SECURITIES JANUARY 31,1948

BONDS - RAILROADS

$ 50,000. Boston Terminal Co. 32% 2/1/1947 $ 31,750.

$ 96,000. Chicago, Terre Hauta and Southeastern Rallway Co.

Income Mortgage 2-3/4% 1/1/1994

$180,000. Northwestern Terninal Ra1lway Company First

Mortgage Income 5% 1/1/1977

• 63,000. Rio Grande & Western Railway Co. First Consolidate

lortgage Serlos A 4$ 4/1/1949 (stubs)

$ 50,000. Wisconsin Central Railway Company First General

Mortgage 4% 7/1/1949

Total Railroad Bonds $233,365.

BONDS - UTILITIES

Chicago Rapid Transit Company:

$43,000. First and Refunding Mortgage Series A)

6% 7/1/1953 (stubs)

$67,000. First and Refunding Mortgage

62% 7/1/1944 (stubs)

$5,000. Federal Street & Pleasant Valley Passenger

Ra1lway Co. Consolidated Mortgage 5% 5/1/1942

Metropolitan West Side Elevated Ra1lway Co. (Chicago):

$ 93, 000. intension Mortgage 4% 1/1/1958 | stubs

194,000. First Mortgage $ 8/1/1938 (stubs

Northwestern Elevated Railway Company

$ 1, 000. 1st Mortgage 5% 9/1/1941 (stubs

20,000. First Mortgage 3/D 5837171941 (stubs) } 20,000.

$ 50,000. Portland Electric Power Co. Collateral Trust

Cumulative Income 6% 3/1/1950

$ 43,000. Union Elevated Railroad Company First Mortgage

5% 10/1/1945 (stubs)

$ 30,000. West End Traction Co. General Mortgage 5% 1/1/1938 19,200.

Total Utilities Bonds $257,969.

BONDS - REAL ESTATE

2,500 Units Schulco Company Incorporated Scrip 5% 7/1/1963

$10,000. Sunnyside Properties

Notes (Registered' InC, 6% Cumulative Income

Total Real Estate Bends $

BONDS - HOLDING COMPANIES

$50,000. continental Securities Corp. Debenture series, "A"

5$5/1/42 (Stubs)

696,500. Reynolds de Piglization Corporation Debentures

5%

Total Holding Companies Bonds $. 22021.

STERN. PORTER, KINGSTON & COLEMAN

INVESTMENT IN SECURITIES

JANUARY 31, 1948

(CONTINUED)

но. ОР MARKET VALUE

SHARES OR DESCRIPTION OF SECURITIES JANUARY 31,1948

FACE AMOUNT

BONDS - U.S. GOVERNMENT

$200,000. U.s. Treasury Bonds 24% 12/15/1959-62

PREFERRED STOCKS - INDUSTRIALS

1,100 Avco Manufacturing Corp. Cumulative

Convertible Preferred

1,000 Autocoro Good Sor gus 4, 1 and Convertible

Cluett, Peabody & Company 4% Cumulative

500 Bastern Sugar Associates $5.00 Cumulative

Preferred Certificates of Beneficial Interest

300 Franklin Simon & Co., Inc. Cumulative Convertible

Preferred

500 Gar Wood Industries, Inc. 496 Cumulative

Convertible Preferred

700 Graham Paige Motors Corp. Cumulative Convertible

Preferred

200 Marion Power Shovel Company 1% Cumulative Preferred

300 Murray Company 1 $4.50 Cumulative Preferred

400 Thermoid Co. $2.50 Cumulative Convertible Preferred

Iotal Preferred Stocks - Industrials

PREFERRED STOCKS - INVESTMENT COMPANIES

1,300 Alleghany Corporation Cumulative Convertible

$2.50 Prior Preferred

925 Railway and Light Securities Company 4% Cumulative

Convertible Preferred

3,500 Transit Investment Corp. 5% Cumulative

Participating Preferred

Total Preferred Stocks - Investment Companies $150,315.

PREFERRED STOCKS - UTILITIES

500 Illinois Power Company 5% Cumulative

Convertible Preferred

4,000 Market Street Railway Company Cumulative Prior

Preference 6%

685 New England Public Service Company $6.00 Prior Lien

Cumulative Preferred Contingent Certificate for

Additions Amount Due (stubs)

1,020 low Englana Public Service Company $7.00 Prior Lien

Cumulative Preferred Contingent Certificate for

Additional Amount Due (stubs)

1,300 North American Light & Power Company $6.00

Cumulative Preferred

775 United Public Utilities Corporation $1.87 Cumulative

Convertible Preferred

165 United Public Utilities Corporation $2. 04 Cumulative

Convertible Preferred

Total Preferred Stocks - Ut111t108 $385,750.

STERN. PORTER. KINGSTON & COLEMAN

INVESTMENT IN SECURITIES

JANUARY 31, 1948

(CONTINUED) NO. OF MARKET VALUE SHARES DESCRIPTION OF SECURITIES JANUARY PREFERRED STOCKS - INSURANCE COMPANIES

400 U. 9. Casualty Co. $0,45 Cumulative Convertible

Participating Preferred

PREFERRED STOCKS - HOLDING COMPANIES

8,850 Electric Bond & Share Co. $6.00 Preferred Contingent

Certificates for Additional Amounts Due (stubs)

100 Electric Power and Light Corp. $6.00 Cumulative

Preferred

200 Federal Light & Traction Co. Cumulative preferred

Contingent Certificate for Additional Amount Due

740 Standard Power and Light Corporation $7. 01

umulative Preferre

Total Preferred Stock-Holding Companies

COMMON STOCKS - INDUSTRIALS

4,600 A. D. F. Company

3,000 American Hawaiian Steamship Company

12,300 Bell Aircraft Corporation

500 Boeing Airplane Company

12,100 Brewster Aeronautical Company

4, 000 Buda Company

3,000 Companta Manufactures del Patrero, S. A.

5,000 consolidated Steel Corporation

500 Consolidated Vultee Aircraft Corporation

300 Continental Steel Corporation

900 Cuban-American Sugar Company

200 Douglas Aircraft Co.

7,128 Equitable Office Building Corporation

1,000 Fairchild Engine & Airplane Corporation

4,200 rajardo sugar co. of Porto Rico

500 Franklin Railway Supply Company

2,200 I. I. Gilmer Company

300 International Match Realization Company, Ltd.

600 Jones & Lamson Machine Company

1,000 Lee Rubber & Tire Corporation

500 andel Brothers, Inc

1,550 Merchants & Miners Transportation Company

2,400 National Department Stores corp.

44,790 Hallonal Transit Pump & Machine Company*

500 New Britain Machine Company

300 i. I. Shipbuilding Corp.

100 Pittsburgh Incline Plane Company

2,000 Tide Water Associated 011 Company

573 utica Knitting Company

1,000 R. C. Williams Company

Total Common Stocks - Industrials $3,366,888.

*Hon-controlled affiliate.

STERN. PORTER. KINGETON & COLEMAN

INVESTMENT IN SECURITIES

JANUARY 31, 1948

(CONTINUED)

NO. OF MARKET VALUE

SHARES DESCRIPTION OF SECURITIES JANUARY 31,1948

COMMON STOCKS - HOLDING COMPANIES

1,500 Amerex Holding corporation $ 41,250.

500 Central & Southwest Utilities Co.

3,005 Engineers Public service Company-ex distribution

100 Georgia Railroad and Banking Company

3,000 Midland Realization Company

4,500 Midland Utilities Company

500 Railroad Securities Company

Italian Conner Stocks - Holding Companies $ 83,522.

COMMON STOCKS - INVESTMENT COMPANIES

530 Aldred Investment Trust

1,000 American Research & Development Corporation

1,500 American International Corp.

7,400 Carriers and General Corporation

5,000 General Shareholdings Corporation

5,000 General Tin Investments Ltd.-American Certificate

for Ordinary Capital

800 Mission Corporation

1,000 Nagara Shares Corp. "B"

7,000 Pac1l1e American Investors, InC.

15,000 The Pennroad Corporation

2,300 Railway and Light Securities Company

100 U.S. & Foreign Securities Corporation

Total Common Stocks-Investment Companies

COMMON STOCKS - RAILROADS

Boston Elevated Railway Co. Stamped as to

Liquidation Payment

1,700 Mine Hill and Schuykill Haven Railroad Company

1,000 Northern Pacific Railway Company

500 Vacating, bareroport t act Ra11vag Company

Total Common Stocks - Railroads $256, 092.

COMMON STOCKS - UTILITIES

300 International Ocean Telegraph Company

10,000 Longview Bridge Company 4% Non-cumulative Class A

684 Monongahela Street Railway Company

400 United Public Utilities Corporation

Ietal Common Stocks-Ut111t1eg $126,255.

STERN. PORTER. KINGSTON & COLEMAN

INVESTMENT IN SECURITIES

JANUARY 31, 1948

(CONTINUED) NO. OF DESCRIPTION OF SECURITIES SHARES COMMON STOCKS - INSURANCE COMPANIES American Surety Company

Employers Group Associates

National Union Fire Insurance Company

Your Amsterdam Casualty Company

Universal Insurance Company

Iotal Cosmon Stocka-Insurance Companies

STERN PORTER KINGSTON & COLEMAN

MARKET VALUE

JANUARY 31,1948

$ 15,500. 28,625. 25,446 23,029 14,400. 26,300 20,628. $288,666.

GRAHAM- NEWMAN ION

NEW YORK

SECURITIES SHORT

JANUARY 31, 1948

COMMON STOCKS - INDUSTRIALS NO. OF SHARES 2,800 Arco Manufacturing Corp. NET PROCEEDS OF SALE $31,378.63 COVER VALUE

JANUARY 31,1948

Price Amount

5-1/4 $14,700.

2,100 Graham Paige Motors Corporation

1,200 Thermoid Co.

Total STERN. PORTER. KINGSTON & COLEMAN 22,690.07 17,009.07 $722071.11 5-3/8 11,288. 9-1/2 11,400. $31,388.