Ward War

The last common dividend on the Class A stock of Ward Baking Corp. was paid April 1, 1929. The stock which five years ago was selling at 198 last week was selling at 23 1/2. Profits of $4,232,000 in 1927 slumped to $3,294,000 in 1928 and to $3,124,000 in 1929. During the first half of 1930 the company made $948,548 as compared to $1,795,108 for the corresponding period of 1929. Developing from a single New York city bakery in 1849 to its present position with 22 bakery plants and $44.575.000 assets the Ward company, particularly since the deaths of Charles A. Ward (February 1930) and William Breining Ward (February 1929) has been unprosperous. Last week alarmed stockholders, headed by Edgar Palmer of New Jersey Zinc Co., organized an ouster movement to replace the present management with a new directorate of which George Kenan Morrow of Gold Dust Corp. would be chairman. The regular stockholders' meeting is scheduled for the second Thursday in February, but the Morrow faction was attempting to arrange a special meeting in which they hoped to secure control.

"It is our belief," said the Morrow manifesto to stockholders, "that the company's troubles are largely, if not entirely, due to a lack of skilled and experienced management." In addition to citing the earnings decline, the antimanagement group attacked the company's depreciation policy. It was pointed out that whereas the 1928 statement carried depreciation at $2,051,576, the 1929 statement carried depreciation at only $1,052,253. Practical result of this depreciated depreciation was to add $1,000,000 to earnings, so that the 1929 statement showed earnings of only 5% instead of 32% less than in 1928. Included in the Morrow group was onetime (1924-28) Ward-President George Byron Smith, who said that the Ward organization was demoralized, that the company was managed by "a lawyer without long experience in the baking business."

The lawyer meant is Ward-President Ralph Sherlock Kent, longtime attorney for the late William B. Ward. The Kent reply to the Morrow attack attributed earnings declines to general depression, stressed the company's sound cash position. "In times of depression," said the management's letter to stockholders, "there will appear designing individuals who will seek to stir up dissension and seize upon it to accomplish selfish ends. . . . We must . . . warn you against any scheme . . . which may have as its object stock manipulation for the benefit of the few." Between-the-lines readers saw in this statement a suggestion that a Morrow victory might result in a merger between Ward and Gold Dust.

Although the antimanagement group has been popularly referred to as the Morrow faction, and although able Mr. Morrow's acquisition (TIME, Aug. 26, 1929) of United Cigar Stores gave wide publicity to the Morrow Interests, Edgar Palmer might well have been considered prime mover in the attempt to shift Ward control. Mr. Palmer is the largest individual stockholder not only in Ward but also in Continental and in General Baking. He is said to have some $15,000,000 invested in the bakery business. In 1924, when Ward Class A (voting) stock was selling between $50 and $130 Mr. Palmer purchased a large Ward interest, has since witnessed a steady decline in the value of his securities. Mr. Palmer's New Jersey Zinc Co., makers of zinc, zinc products, sulphuric acid, lithopone, etc., etc., is the successor of a company established in 1848. It has paid uninterrupted dividends for the last 30 years. In 1929 it earned $9.221.794. In addition to his zinc and baking interests, short, stocky, strong-chinned Mr. Palmer, an outstanding member of Princeton's outstanding Class of 1903, built Princeton's Palmer Memorial Stadium in memory,of his father. Steven S. Palmer. He is head of Princeton Municipal Improvement, Inc., which is razing and erecting buildings wholesale back of Princeton's Nassau Street. Associated with Mr. Palmer are seasoned Charles Hayden, head of Hayden, Stone & Co., and Thomas H. Mclnnerney, sage president of National

Dairy Products Co., which sold $392,000,000 worth of dairy products in 1929 and has reported 1930 sales far in advance of the 1929 totals.

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