Annual report. Mergenthaler Linotype Company. Brooklyn, N.Y., The Co. http://hdl.handle.net/2027/ien.35556003385879

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333, 761/ M56! ‘/4//-5U 2?/2.; AQ Mergenthaler Linotype Company

REPORTS PRESENTED AT THE ANNUAL MEETING OF STOCKHOLDERS

OCTOBER 18, 1911

EXECUTIVE OFFICES; TRIBUNE BUILDING, N1-:w YORK FACTORYI BOROUGH OF BROOKLYN, NEW YORK Northwestern Univcny The Joseoh Schnffinr L51‘,

PRINTED DIRECT FROM LINOTYPE SLUGS

1145 ORGANIZATION

CAPITAL STOCK ISSUED-$I2,797,800 (Authorized— $15,000,000)

INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK

President and General Manager: PHILIP T. DODGE.

Vice-President: OGDEN MILLS.

Secretary and Treasurer:

FRED’K _]. WARBURTON.

Directors: OGDEN MILLS, WHITELAW REID, PHILIP T. DODGE, SIR JOSEPH LAWRENCE,

ROBERT I. GAMMELL, E. V. MURPHY, ALBERT H. SAWYER, OGDEN L. MILLS, NORMAN DODGE

Executive Committee:

OGDEN MILLS, ROBERT I. GAMMELL, PHILIP T. DODGE, E. V. MURPHY, OGDEN L. MILLS.

Second Vice-President: NORMAN DODGE. Third Vice-President: THOS. _]. MERCER. Ass’t and Treas.: Sec’y ]. WILLIS HEARD.

Registrar of Transfers: METROPOLITAN TRUST COMPANY

7890‘?

iJ;».;3lTi llUH—iE»i»’B3"iElil€ Uiii

SEP 1 1915

S»pliL.0L Ut’ i}il..l1.iIlT%tJl~} IIBF..‘t.i‘i

PRESIDENT’S REPORT

the of To the Board of Directors Mergenthaler Linotype Company. Gentlemen: a I submit the following as report of the operations of your Company for the year ending September 30, 1911. Notwithstanding the general depression in the printing in dustry of the United States, due to the disturbance and un certainty existing in other industrial fields, the business of the Linotype Company has been large and satisfactory. As will be seen on reference to the accompanying report of the Treasurer, the net gain for the year was $2,733,269.51.

The use of the Linotype is being extended to the most remote parts of the world, in large offices and small, and to all classes of composition, simple and complex, in many languages.

It is used in the production of nearly all daily newspapers of America, the leading dailies of most foreign countries, and a. great number of weeklies. is It also used in the production of periodicals in great numbers, and of books of the highest class, including mathe matical works, dictionaries, and encyclopedias containing intri cate arrangements of matter and combinations of various type: faces.

Through recent improvements it has become available also for the composition of newspaper headings and advertising mat ter demanding type faces of sizes heretofore considered impos sible, and the mixture of faces differing greatly in size and style. The American Linotype shops have produced about l6,000 machines, which are distributed throughout the world. To these must be added about 10,000 machines from the English, German, and Canadian shops. The reliability and desirability of the Linotype is shown by the fact that there are still in operation, and in good condition, many machines which have run day and night in newspaper offices for nearly twenty years. This is due in part to the policy of the Company, which supplies at moderate prices all those minor parts liable in the course of time to be affected by wear. As a matter of fact the ordinaray cost of maintenance is so small as to be almost negligible. From the beginning the improvements and attachments, de veloped from year to year, have, as far as possible, been designed for application to earlier machines, and sold at fair prices, thus enabling the machine users to modernize their plants. More than twenty languages are composed in more than five hundred faces, and in order that this may be done more than one hundred million brass letter matrices, for use in the machine, are carried in stock. The Linotype machine has revolutionized the printing in dustry of the world. It has led to an enormous increase in the volume of printing, cheapened the cost, increased the profits, shortened the hours of labor, and increased the pay of the com positors. It has been in every way beneficial to the employer and employee, and because of the growth of business, due largely to the machine, there are more compositors employed than at the time of the machine’s introduction. Continuing the practice of past years, experimental work has been carried on continuously, and during the year three new forms of machine have been placed on the market. Two of them mark a great advance in the art. One, designed more particularly for newspaper work, carries a series of magazines, each containing matrices for two faces, so arranged that change from one style of type to another may be effected by the operator in a moment, thus avoiding the loss of time and labor involved in making a like change in earlier ma chines. This machine, already in extensive use, is meeting with universal approval, and promises to become the standard machine in newspaper and many other oflices. The second machine carries a still larger series of maga zines, and is so constructed that the operator may instantly cause the production of any one of many faces, which may differ widely in size and design; and may also compose different faces in one line. This machine is the highest development in the art, and is adapted for many important classes of work impossible on any other machine, and heretofore done solely by hand. The third machine, of simple design, is intended to meet the needs of the small offices, and offices in which price is the chief consideration. Although serviceable and reliable it is offered at a much smaller price than any other high class machine. The indications are that it will find an extended sale and meet the needs of a very large number of printers who now confine them selves to hand composition. The foreign interests of the Company are in satisfactory con dition .and are being steadily advanced and strengthened. The British company, “Linotype and Machinery, Limited,” having its office in London and works at Broadheath, near Man chester, constructs Linotype machines, printing presses and other printing machinery. During the year the works have been en larged and additional machinery provided. This Company has also placed on the market improved Linotypes with multiple magazines, and new classes of presses. While the volume of businessand the earnings were increased, the expenditures and the indebtedness are such that no cash dividend is anticipated in the near future. The debenture indebtedness of this Company is not a charge against the American Company. The German company, the “Mergenthaler Setzmaschinen Fabrik” of Berlin is in most satisfactory condition. During the year it has also placed a new and important form of machine on the market. In all ways its management has been rigorous, ef ficient, and such as to safeguard the future. Its business has in creased both in volume and in net earnings. In Canada the sale of machines in satisfactory numbers con tinues although there was great interruption because of the reci procity issue and promised free trade. Manufacturing operations in the Montreal shop have been greatly reduced because the territory will not, at present, justify the large expenditure for the special tools and machinery needed for their production. In the Brooklyn factory numerous changes and improve ments have been made, looking to increased efficiency. In order to carry on this work and give increased security it will probably be advisable to replace certain of the existing buildings by fire proof structures during the coming year. Although labor and material have steadily advanced in cost for some years, Linotype machines of the same class are sold at the prices prevailing nearly twenty years ago. In the meantime the Company has reduced the daily hours of labor in the Brooklyn works from ten to eight, has increased wages, and has contributed liberally for the benefit of sick workmen and to the families of deceased workmen. The maintenance of earnings under the above conditions has been possible only by persistent effort, the adoption of modern’ methods and tools, and by capable superintendence. Machines for various parts of the world are delivered from the factories which can most advantageously meet the geograph ical shipping conditions, the character of the machine demanded, and other controlling factors in each case, the effort being to deliver with the greatest celerity and at the lowest possible cost. Of the machines produced in Brooklyn nearly one-quarter are sent to foreign countries, principally Canada, South America, Australasia, and France. In building up the export business the United States com panies are at a great disadvantage in competing with European makers because of the higher wages, the lack of a merchant marine, the lack of foreign banks to finance machine purchasers, and weakness in the consular service. In all these matters the foreign competitors, particularly in Germany and England, have a great advantage. The printing industry is rapidly growing, and the Linotype machine has become a standard feature in all modern plants. By reason of the improvements in design, and the increased capacity of recent machines, their use is being rapidly extended into new fields and new classes of work, and it is certain that this will continue. The line as a unit of composition is now generally recognized as cheapest and most advantageous for ‘substantially all print ing. That this is true, and the Linotype» the most efficient and economical form of composing machine, is evidenced by the recent investigation and report of a committee of the German Master Printers’ Association, the largest and best informed body of high class printers in the world. Financially the Company is in a sound and safe condition, and free from any dangers other than those which attend all industrial enterprises in a land in which there is constant change in conditions, and governmental interference. The change in the manner of paying dividends by distrib uting the amount more evenly over the year has commended itself to the stockholders. Respectfully submitted, PHILIP T. DODGE, President. New York, October l7, I911. wt 3. »I-¥ti»I\’I‘d‘IIf>‘$"I‘§,l3,‘1, \ 53- X it

_ 3*; \:- ._‘. ~_ TREASURER’S REPORT

FINANCIAL STATEMENT

OCTOBER I, I911 MERGENTI-IALER LINOTYPE COMPANY ASSETS

Rights, privileges, franchises, patents and inven

tions ...... $4,000,000.00

Plant and Property: Real Estate, New York ...... 941,214.97 Real Estate, San Francisco ...... 147,317.56 Real Estate, New Orleans ...... 52,393.79

Plant, machinery, etc ...... 1,333,698.35 Power and light equipment ...... 116,152.07 Brooklyn factory fittings ...... 148,118.98 Furniture and fixtures, including agencies ...... 55,970.85

Investment and stock and bond account ...... 3,801,515.78

Inventory: Raw material, manufactured parts and Lino types in course of construction ...... 2,080,357.68 Linotypes ...... 496,950.00

Current Assets: Cash ...... 1,198,622.00 Bills receivable ...... 3,373,506.94 Accounts receivable ...... 1,531,345.82 Canadian Linotype, Limited ...... 421,468.38

$19,698,6-33.17 FINANCIAL STATEMENT

LIABILITIES

Capital stock ...... $l2,799,200.00 Creditors’ open accounts ...... 46,616.34 Bills payable ...... 111,404.86 Dividends unpaid ...... 855.75 Surplus ...... 7,570,237.00

$20,528,3 13.95

FRED’K J. WARBURTON, Treasurer. ‘ 1'21 Mergenthaler Linotype Company

REPORTS PRESENTED AT THE ANNUAL MEETING OF STOCKHOLDERS OCTOBER 21, 1914

EXECUTIVE Oeeices: TRIBUNE BUILDING, New YORK FACTORY: BOROUGH OF BROOKLYN, New YORK PRINTED DIRECT FROM LINOTYPE SLUGS

2678 ORGANIZATION

CAPITAL STOCK ISSUED—$ 12,799,200.00 (Authorized—$15,000,000)

INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK

President and General Manager: PHILIP T. DODGE.

Vice-President: OGDEN MILLS.

Secretary and Treasurer: FRED’K J. WARBURTON.

Directors: PHILIP T. DODGE, ROBERT I. GAMMELL, OGDEN MILLS, ALBERT H. SAWYER, SIR JOSEPH LAWRENCE, OGDEN L. MILLS, E. V. MURPHY, NORMAN DODGE, OGDEN M. REID.

Executive Committee: OGDEN MILLS, ROBERT I. GAMMELL, PHILIP T. DODGE, E. V. MURPHY, OGDEN L. MILLS.

Second Vice-President: NORMAN DODGE, Third Vice-President: THOS. J. MERCER, Ass’t Sec’y and Treas.: J. WILLIS HEARD.

Registrar of Transfers: METROPOLITAN TRUST COMPANY.

PRESIDENT’S REPORT

To the Board of Directors of the Mergenthaler Linotype Company.

Gentlemen: The following is submitted as a general report of the opera tions of your company for the fiscal year ending September 30, 1914. The net gain for the year from all sources was $2,547,849, and this after making all proper charges for depreciation of plant, tools and materials in stock, for bad and doubtful debts, and for the other losses which attend every complicated business of magnitude. Directly and through its affiliated foreign companies and agencies the Mergenthaler Linotype Company manufactures in four countries, and does business throughout the world. American companies have always been at a great disad vantage as compared with European companies in the extension of their business into foreign countries, because of the lack of an American merchant marine, American banking facilities abroad and a proper consular service—all of which are highly developed by other leading countries, such as Germany, England and France. The business of this company has been extended only by the most diligent effort and most careful study of foreign conditions, needs and customs. In its numerous forms, designed to meet different conditions and demands, the Linotype is used in every civilized country and for every class of printing from the reading matter, display heads and miscellaneous advertising matter of newspapers through the range of job printing, the field of high class periodicals, and the field from book the cheapest popular editions to the most hftistic and costly editions de luxe. For small offices, and printers of limited capital, efficient machines are furnished at low prices; for offices demanding mixed and complicated composition multiple magazine machines carry ing at one time faces in great variety and in many sizes are pro vided; and there are machines in all the intermediate grades.

Within the past two years the remodeling of old machines has become an important branch of the business. During the year many of the most important offices in the country have replaced their old machines by those of later designs; and for other offices machines have been rebuilt and modernized. It is interesting to note that 775 offices have been added during the year to the list of Linotype users. The so-called multiple Linotype, an important step in the art originated and steadily advanced by your company, continues to grow in favor, and is fast becoming the standard composing machine. The development of new and improved machines to meet new demands and enlarge the field of mechanical composition has been continued in a department devoted exclusively to this subject, and in due time the results already accomplished will be made public. The Brooklyn plant and equipment are in excellent shape, thanks to the Superintendent and his associates, and machines and supplies can be produced in quantity sufiicient to meet all demands, and of the highest excellence, at costs substantially the same as in previous years, although wages and the prices of material have steadily advanced. The workmen in this plant receive the highest ruling wages, work but eight hours per day, and are all insured, wholly at the expense of the company, for amounts equal to one year’s wage. In character, ability and loyalty the employees are not excelled by those of any other company. For more than twenty years the most harmonious relations have existed between the company and its workmen, due largely to the fact that the demands or complaints of the men have been freely received and considered, and to the further fact that no outside interference has been permitted. It is a matter of satisfaction that this company has not lost from its service a single man occupying any important position or of any importance in the operation of the company, although many of them have been tempted by offers of greatly increased salaries. For many years it was the custom of the company to place machines with users on rental, many printers being doubtful as to their durability and merit, and therefore hesitating to purchase. This rental system is now practically at an end, the reputation of the machine and the great advantage attending its use being so generally and firmly established that customers refuse to rent. and insist on purchasing. Liberal credits are given even the smallest printers, and in consequence offices in great numbers have been established and are being successfully carried on by men of small capital. Gradually these offices will grow in size and importance, and additional machines will be required. The files of the company contain hundreds of letters from customers, small and large, expressing their appreciation of the consideration and help extended to them. The suits brought against another corporation for imitating the machines of the company and infringing its patents have been vigorously pushed, and it is hoped to have trials at an early date—as soon as the condition of work in the courts will permit. There has been no delay or attempted delay of any kind on the part of the Mergenthaler Linotype Company. The company is still without debts of any kind other than the current monthly bills. The great European war, seriously affecting the business and credits of countries to which this country sells, closing many ports to which this and the European companies exported, and stopping to a great extent the manufacturing operations of the European companies, will inevitably affect seriously the busi question cover many features necessary to make the machine acceptable to the modem office. The actions will be vigorously prosecuted against the machine builders, and also, in any flagrant cases, against the purchasers and users. The use of the Linotype is being rapidly extended in many foreign countries. The operations of the German company for the year have been very satisfactory, and those of the English company some what better than in the previous year, although materially affected by Continental wars and other disturbing influences. The value of the Canadian business has increased during the year, largely because of the removal of the Canadian duty. The newly enacted tariff law places Linotype machines on the free list, although protection of 20 per cent is extended to general machinery, and as high as 45 per cent to special classes of machinery which are largely exported from the United States. What will be the effect of this tariff, bringing an American com pany, forced to pay high prices for labor and material, into direct competition with Europe and its cheap labor, remains to be seen. In a number of the European countries the American ma chines are compelled to pay duty and charges of one kind and another, which are ultimately borne by the manufacturers. The company is still without debts or obligations of any kind other than current bills. The shareholders of the company are under obligations to the heads of the manufacturing, experimental and sales departments and their eflicient staffs for their excellent and intelligent work, their loyalty, and their hearty co-operation with the management. Respectfully, PHILIP T. DODGE, President. New York, October 15, 1913. TREASURER’S REPORT

FINANCIAL STATEMENT

OCTOBER 1, 1913 MERGENTHALER LINOTYPE COMPANY

ASSETS

Rights, privileges, franchises, patents and inven

tions ...... $4,000,000.00

Real Estate ...... 1,142,208.78

Plant, Machinery, etc ...... 1,007,454.71

Power and light equipment ...... 126,611.02

Brooklyn factory fittings ...... 120,817.34

Furniture and fixtures, including agencies ...... 66,596.46

Investment and stock and bond account ...... 3,658,997.64

Inventory:

Raw material, manufactured parts and Lino types in course of construction ...... 1,936,235.39

Linotypes ...... 46,980.00

Current Assets:

Cash ...... 1 ,031,826.56

Bills Receivable ...... 5,148,927.83 Accounts Receivable ...... 1,230,673.14

Canadian Linotype, Limited ...... 339,346.52

$l9,856,675.39

October 1, 1915. FINANCIAL STATEMENT

LIABILITIES

Capital stock ...... $l2,799,600.00

Creditors’ open accounts ...... 5,056.88

Dividends unpaid ...... 602.00 Surplus ...... 7,686,117.06

$20,491,375.94

FRED’K J. WARBURTON, Treasurer.

MERGENTHALER LINOTYPE COMPANY

REPORTS PRESENTED AT THE ANNUAL MEETING OF STOCKHOLDERS

NOVEMBER 15, 1916

Exncunvn OFFICES: TRIBUNE BUILDING, N1~:w Yomc FACTORY: BOROUGH OF BROOKLYN, NEW Yomc COMPOSED ON THE LINOTYPE AND PRINTED DIRECT FROM THE RESULTANT SLUGS ORGANIZATION

CAPITAL STOCK ISSUED—$l2,800,000 (Authorized—$ 15,000,000)

INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK

President PHILIP T. DODGE

Vice-President OGDEN MILLS

Second Vice-President and General Manager NORMAN DODGE

Third Vice-President THOMAS J. MERCER

Secretary and Treasurer JOSEPH T. MACKEY

Assistant Secretary and Treasurer W. C. A. MAGUIRE

Directors PHILIP T. DODGE ALBERT H. SAWYER OGDEN MILLS OGDEN L. MILLS SIR JOSEPH LAWRENCE, Bart. NORMAN DODGE E. V. MURPHY OGDEN M. REID FREDERIC D. McKENNEY

Executive Committee OGDEN MILLS E. V. MURPHY PHILIP T. DODGE OGDEN L. MILLS NORMAN DODGE

Registrar of Transfers METROPOLITAN TRUST COMPANY

PRESIDENT’S REPORT

To the Board of Directors of the Mergenthaler Linotype Company.

Gentlemen : I submit below a statement of the general operations of your company for the fiscal year ending September 30th, 1918. Throughout the year business has been carried on under serious and steadily increasing difficulties. These included a marked shortage of labor, skilled and unskilled, increased wages, limitations established by war agencies affecting common carriers by land and water, the cutting off of sup plies of raw materials, and the inability to sell or transport factory products to foreign countries. Notwithstanding all these adverse conditions, and others, the net gain for the year was $1,343,545.17, an amount some what less than the gain of the preceding year, but slightly in excess of the amount required to pay the regular dividend of 10% on the outstanding stock amounting to $12,800,000, distributed among more than three thousand stockholders. During the year many improvements were made in the Brooklyn buildings, tools and machinery; and in order to provide for additional space, demanded as a protection of the business under abnormal war conditions, a building of substantial size was purchased on very advantageous terms in Brooklyn in convenient relation to the main factory. Work has continued systematically in the Experimental and Manufacturing Departments looking to the standardiza tion and improvement of the Linotype machines of different [5] models. As a result, certain models have been adapted to produce with marked advantage classes of composition here tofore accomplished only by hand. To the Linotype Company the entire world is indebted for the solution of the problem of cheap and satisfactory com position. Your company originated the system of composing and casting type in solid slugs or “linotypes," each bearing the characters to print one line, these slugs being automati cally assembled one after another to produce a printing form. This system has extended the world over, and by far the greater part of the current reading matter of the world is produced thereby. From year to year the machines have been improved, and new machines and machine attachments developed, so that type faces of different sizes and styles can be rapidly composed from one machine. All the important improve ments in line-casting machines originated with and were given to the public by your company, which has expended large sums in development work and in the purchase of pat ents of various inventors, besides paying to Mr. Mergen thaler and his estate substantially more than $1,000,000 in royalties. The principal competitive machines of the “slug” type on the market are copies or imitations, as to all their essential parts, of certain Linotype machines on which pat ents have expired, some of their parts having been originally made from and in accordance with drawings which were sur reptitiously obtained from the Linotype plant. Up to the present time approximately 40,000 Linotype machines have been built by your company and its asso ciates. They are to be found in every important country of the world, and are used in the composition of more than twenty languages. They are used in substantial numbers in the military camps and on battleships and other vessels. [6] For several years the company has maintained schools in which printers were instructed, generally without charge, as to the construction and operation of the machines. Many hundred men and women have been thus qualified to hold lucrative positions, and the printing industry has been bene fited by having skilled labor placed at its disposal. In its Brooklyn works the company has continued the system of insuring the lives of all persons in its service. Whenever an employee dies from any cause the dependents receive immediately an amount equal to one year’s pay at the rate prevailing at the time of his or her death. The com pany has also contributed large sums to the treasury of the Mergenthaler Mutual Aid Society for the benefit of sick or disabled workmen. The eight-hour day, with extra pay for overtime, has prevailed in the works for many years. The buildings are all of fireproof construction and are unexcelled as to heat, light, ventilation, and sanitary conditions in gen eral. The wages and piecework prices paid at all times have been adjusted with reference to the pay prevailing in other shops of high standing. Complaints or demands of the men could at any time be brought to the management through es tablished channels. In short, the employees of the company have always been treated with consideration and with due regard to their health and welfare. Notwithstanding this fact, on the 26th of July eight hun dred of the employees abandoned their work and walked out on strike, with great loss to the company, without having first made complaint, claim, or demand of any kind. This strike was undoubtedly brought about by the influence of out side mischief-makers, and was, it is believed, possible only because of the generally unsettled industrial conditions due to the war, the fact that many employees had been induced to join outside organizations, and the excitement and hys [7] terical conditions brought about by specious and unscrupulous agitators. The demand that the shop should be unionized was refused; with the result that most of the employees re turned to their work within a week, the company declaring that it would maintain an open shop, control its own opera tions, and pay its workmen the best wages generally prevail ing. No business can be safely or properly conducted if un der the control of outside organizations or interests having nothing in common with the investing shareholders. The strike developed the fact that many men who had received every consideration practicable exhibited no loyalty and no regard for the interest of the company. A large num ber, however, continued their work, and this fact will not be forgotten by the management. Before the strike there was a shortage of labor due to the fact that many men had been called into the Government service and to the further fact that the Government in many places was temporarily paying unprecedented wages impos sible in any private enterprise on a competitive basis. For these reasons the company instituted a new policy, that of employing women in the manufacturing departments in general. They had been employed in substantial numbers for some years in the Matrix Department, making use of small and delicate tools and instruments, and the good re sults there obtained encouraged their trial in the other de partments. Tools and facilities were provided for training them, proper provisions were made for their comfort and protection, and the work of instruction begun. It is gratify ing to say that at the present time more than two hundred additional women, operating a variety of machine tools, are doing as much and as good work as was ordinarily accom plished by the same number of men. For this work they re ceive the same pay as the men. The policy of employing [8] women will be continued as long and as far as the interests of the company may from time to time dictate, with the hope that they will show a proper appreciation of the treatment received and a reasonable loyalty to their employer. In common with all industries, other than those produc ing war materials, your company’s business and profits have been adversely affected by the universal disorganization and interruption due to the unprecedented war conditions. A comparison of the Treasurer’s report, appended hereto, with that of the previous year will, however, show a substan tial gain in the strength of the company. It will, of course, be understood by the man of business that while the large company surplus is real it represents, in one form or another, values required to carry on the busi ness, and therefore not convertible into cash for distribution as dividends. The moderate decrease in the surplus is due to the fact that the amount paid in dividends included an extra divi dend, and for that reason exceeded the earnings for the year. Up to October 1st, 1918, the company paid in dividends $39,113,229.50, of which $12,962,181.00 represented spe cial or extra dividends. It is to be noted that the bills payable--loans from the bank—shown in the Treasurer’s report represent in large part the purchase of Liberty Bonds. In the days of great national peril, when the interests of all demanded that the Government should receive financial support, there could be no doubt that it was both the duty and the interest of the stockholders to bear their share of the burden. Appreciating this fact, it was the unanimous view of your Directors that the company should subscribe such an amount as could be spared without endangering its financial soundness. [9] Of the company forces almost four hundred have entered the military service. Throughout the war the company has done all in its power to assist the Government. When important Govern mental printing was said to be in arrears the company ten dered to the Government, without charge, Linotype machines in such number as could be advantageously employed. The company has loaned Linotype machines to the Surgeon General’s office for rehabilitation work in the training of crippled soldiers. It has also offered, through the Surgeon General’s office and the Department of Labor, to give em ployment in its factory to crippled soldiers, and proposes, whenever possible, to re-employ men formerly in its service who joined the colors. In addition the company has done for the Government a moderate amount of work requiring extreme precision obtainable only in the company’s tool room and in a few other places. This work occupied the greater part of the tool-room force and was carried on at con siderable disadvantage to the company, but it was felt to be a matter of duty, and it is believed that it will be approved by the stockholders. During the year numerous changes have been made in the organization and personnel of the foreign selling agen cies, this in order to meet any conditions which may result from the war. So far as possible the conditions in the vari ous countries in which the company has interests have been carefully watched, the influence of the war carefully studied, and every possible precaution taken to minimize the losses. It is manifest that definite information as to all matters af fecting the company’s foreign interests are not obainable at the present time, and no one can foresee what may result from the world-wide changes which are taking place in gov ernments, in labor conditions, and in financial matters.

[10] Directly and indirectly the company is the owner of exten sive credits given to the purchasers in various countries. It may be that substantial losses will occur in those sections in which the war has been actively conducted and those coun tries in which the governments have been disorganized. For obvious reasons it is unwise to discuss these matters in de tail in this report. It may be fairly said, however, that the safeguards provided and the depreciation already repre sented on the books prevent any serious losses, or losses which could materially affect your company or its earning power. The British company, Linotype 8: Machinery, Ltd., has been engaged throughout the war principally in the produc tion of war materials for the Allies. In the face of great dif ficulties the company has been conducted in the most grati fying manner. It could not be expected to reap large profits on the Government work, but the property has been pro tected, the fixed charges paid, and the financial conditions improved. As to the future prospects of your company, it is believed that the termination of the war, near at hand, will be fol lowed by a gradual approach to normal conditions in all lines of business; that your company will be relieved from the many restrictions and interferences now existing; that the opening of the seas will again develop foreign trade; and that the domestic business will increase and an era of prosperity follow the war—if past experiences can be relied upon as a guide. The company continues to sell its products, at home and abroad, in large part on long-time payments or, in other words, on the installment plan. While this involves the use of large working capital, it permits the purchase of machines by men of limited means conducting small ofiices, who would not otherwise be able to purchase. The records of the com [ll] pany show that hundreds of minor offices owe their existence, growth, and prosperity to the liberal terms offered them. Thousands of machines have been sold, but in no case has a purchaser been sold out or driven out of business by the Linotype Company. The stockholders of the company, in justice to the man agement and for the future protection of their own inter ests, should bear in mind the extent and complexity of the business, the uncertainties and hazards of the future against which provision must be made, and the fact that the Direc tors, owners of a large amount of stock, in acting for the protection of their own holdings necessarily give like pro tection to all other owners. Respectfully, PHILIP T. DODGE, President.

New York, November 19th, 1918.

[12] TREASURER’S REPORT

FINANCIAL STATEMENT

October 1, 1918 MERGENTHALER LINOTYPE COMPANY

ASSETS

Rights, privileges, franchises, patents and inventions ...... $3,656,330.00 Real estate ...... 1,288,624.30 Plant, machinery, etc ...... 768,200.03 Power and light equipment ...... 72,312.06 Brooklyn factory fittings ...... 108,185.99 Furniture and fixtures, including agencies. . 56,272.30

‘Investment:

Stock and bond account ...... 4,042,639.97

Inventory: Raw material, manufactured parts, and Linotypes in course of construction. . . . 2,998,414.73 Linotypes ...... 69,605.00

Current Assets: Cash ...... 348,189.77 Bills receivable ...... 6,695,149.04 Accounts receivable ...... 881,277.44

Canadian Linotype Limited ...... 358,461.64

$21 ,343,662.27 *Includes United States Government Bonds.

October 1, 1918.

[14] FINANCIAL STATEMENT LIABILITIES

Capital stock ...... $l2,800,000.00 Creditors’ open accounts ...... 41,208.59 Bills payable ...... 1,281,300.00 Dividends unpaid ...... 698.00 Reserve for taxes ...... 126,586.53 Surplus ...... 7,093,869.15

$21 ,343,662.27

JOSEPH T. MACKEY, Treasurer.

[15]

Mergenthaler Linotype Company

REPORTS PRESENTED AT THE ANNUAL MEETING OF STOCKHOLDERS NOVEMBER 19, 1919 Iii]

EXECUTIVE O1-‘ncas: TRIBUNE BUILDING, New YORK Fncroar: BOROUGH OF BROOKLYN, Naw Yonx Composed on the Linotype and Printed Direct from the Resultant Slip

I I-IO-I P-I“ ORGANIZATION

CAPITAL STOCK ISSUED——$12,800,000 (Authorized—$15,000,000)

INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK

President PHILIP T. DODGE

Vice-President OGDEN MILLS

Second Vice-President and General Manager NORMAN DODGE

Third Vice-President THOMAS J. MERCER

Secretary and Treasurer JOSEPH T. MACKEY

Assistant Secretary and Treasurer W. C. A. MAGUIRE

Directors PHILIP T. DODGE NORMAN DODGE OGDEN MILLS OGDEN M. REID ALBERT H. SAWYER FREDERIC D. McKENNEY OGDEN L. MILLS EDWARD J. McQUADE A. HUNGERFORD POLLEN

Executive Committee OGDEN MILLS OGDEN L. MILLS PHILIP T. DODGE NORMAN DODGE ALBERT H. SAWYER

Registrar of T1;-nsfers METROPOLITAN TRUST COMPANY

ANNUAL REPORT

To the Board of Directors of the Mergenthaler Linotype Company. GENTLEMEN2 In the absence of the President in Europe, in cen nection with the affairs of the Company, I submit the following report of the operations of your Company for the fiscal year ending September 30, 1919: The net gain for the year, from all sources, and after making proper allowance for depreciation and taxes, was $1,663,138.74. The year has been one of great disturbance in all lines of business, and of labor unrest throughout the world. During the summer a serious strike, lasting nine weeks, occurred in the Brooklyn Factory, due to the interference of outsiders; and this nothwithstand ing the fact that the Company has maintained its policy of paying the highest prevailing wages, observing the prevailing hours, and has continued the life insurance for each employee for an amount equal to one year’: pay wholly at the Company’s expense. For many years the Company duplicated the payments made by the members of the Mergenthaler Mutual Aid Society, and this was continued until the Society had accumulated a large cash surplus. There has been a steady increase in the rates of wages and in all expenses connected with the business; and there have been many difficulties and interruptions in securing labor and material; and delays in making foreign shipments, due to the dislocation of transpor tation. [ 5 ] The maintenance of earnings under these condi tions, and the increase of eamings as compared with the previous year, have been made possible only by continual effort, unremitting vigilance, and the adop tion of the most modem tools, methods of manufac ture, and supervision of output. The character of the market for Linotypes has changed in the past few years, the large field for new business lying principally in the smaller oflices, in re placements and additions to the larger ofiices, and in the foreign field. There is less profit per machine than in former years, so that profits must be secured through a larger production and sale of machines and supplies. To bring about the increased demand for its product the Company has gradually added to its sell ing organization, and has come into increasingly closer contact with the printers at home and abroad. It has also continued to increase the range and ver satility of the Linotype, and improve the typographical excellence of the product, to meet the varying demands of the printing industry. The continually increasing demand for Linotype machines and supplies makes imperative an enlarge ment of the Factory and the introduction of additional machinery. To meet the situation, and hold its domi nant position in the industry, the Company will at once begin the erection of a new building, 300 feet long, 70 feet deep, and eight stories high, facing the present Factory buildings. To give the efiicient service required by the print ing industry the Company must carry large stocks in its United States Agencies and with its Agents abroad. [6] Throughout the world the Company sells its ma chines on deferred terms of payment extending over three years or more. The Company does not discount its customers’ notes or other evidences of indebted ness, but retains them in its possession until paid, and it is through its ability to extend long credits and carry its customers’ obligations that the great success of the Company is largely due. It will be appreciated that this locks up a vast amount of capital in the business and requires the closest supervision and most thorough knowledge of foreign and domestic trade customs. The Company maintains a staff of experts, giving constant attention to the improvement of the Linotype and to the development of new tools, new methods of manufacture, the perfection of the product, and econ omy in production. During the year various changes in the personnel of the Brooklyn Factory have been made for the better ment of the organization. Great credit should be given to the loyalty and efficiency of the Works Manager and his staff . The Linotype continues to be the standard com posing machine of the world and is used in practically every civilized country, setting matter in about forty different languages. Its use is well established even in such distant places as: Manaos, Brazil, a thousand miles from the mouth of the Amazon River; Asuncion, Paraguay, eleven hundred miles from the mouth of the Rio de La Plata; La Paz, Bolivia, thirteen thousand feet above sea level; throughout Siberia, from the Rus sian Border to Vladivostok; various cities in China, including one a thousand miles from the sea coast; [7] throughout India; the Malay Peninsula; Fiji Islands; Alaska; Iceland; the Dutch East Indies; the Philippine Islands; the Hawaiian Islands; and in many cities in North and South Africa. The Company has large European interests and directly and indirectly is the owner of extensive credits given to purchasers in countries which were involved in the war, and in which conditions are still unsettled. What adjustments must be made as a consequence of the world-wide disorganization is not yet known. The full details of the condition of the German Company are now being studied. The British Company throughout the war was en gaged almost wholly in the manufacture of war ma terial. This work has now ceased and the Company has resumed the production of Linotype machines, printing presses, and other printers’ machinery. The British Company’s holdings are in good con dition and that Company has been managed skilfully and with due regard to the rights of the American holders, at the same time giving marked assistance to the British Govemment throughout the war. It should be noted that the Bills Payable shown in the Treasurer’s report represent in large part the pur chase of Liberty and Victory Bonds. During the year the Company suffered great loss through the death of Mr. E. V. Murphy, who for many years, and up to the time of his death, was a Director and a member of the Executive Committee of the Board of Directors of the Company, and to whose wise counsels the Company is deeply indebted. The Company also suffered a severe loss during [3] the year through the death of Mr. Jacques Mayer, one of the founders of the German Company, who was Managing Director of that Company from its begin ning until his death. Mr. Mayer, a loyal American citizen, remained in Germany throughout the war to protect the Company’s interests. Since the close of the fiscal year the Company has suffered another loss in the death of Sir Joseph Law rence, Bart., a Director of Mergenthaler Linotype Company, and Chairman of the Board of Directors of the British Company, who occupied that position from the inception of the Company until his death. In conclusion, the Company is in good condition and the outlook for the future is most encouraging. Respectfully, MERGENTHALER LINOTYPE CO., NORMAN Donor,1, Second Vice-President. November 18, 1919.

[9]

TREASURER’S REPORT

FINANCIAL STATEMENT October 1, 1919 MERGENTHALER LINOTYPE COMPANY ASSETS

Rights, Privileges, Franchises, Patents and Inventions ...... 8 3,642,990.00 Real Estate ...... 1,254,698.06 Plant, Machinery, etc ...... 664,163.76 Power and Light Equipment ...... 69,425.85 Brooklyn Factory Fittings ...... 115,363.58 Fumiture and Fixtures including Agencies ...... 56,555.76 *Investment: Stock and Bond Account ...... 3,901,580.96 Inventory: Raw Material, Manufactured Parts and Linotypes in Course of Con struction ...... 3,166,423.52 Linotypes ...... 109,955.00 Current Assets: Cash ...... 482,663.52 Bills Receivable ...... 6,019,670.44 Accounts Receivable ...... 1,471,231.17

Canadian Linotype Limited ...... 479,882.93

321,4.-34,604.55 *Includes United States Government Bonds.

October 1, 1919.

[12] FINANCIAL STATEMENT LIABILITIES

Capital Stock ...... $12,800,000.00 Creditors’ Open Accounts ...... 69,950.21 Bills Payable ...... 825,000.00 Dividends Unpaid ...... 718.00 Reserve for Taxes ...... 261,928.45 Surplus ...... 7,477,007.89

$21,434,604.55

Josnpn T. Mxcxar, Treasurer.

[13]

THE facing illustration shows the Factory and new Executive Oflices and Matrix Building of the MERGENTHALER LINOTYPE COMPANY at Brooklyn, New York

1883

the The first step in the development of Linotype—the Rotary Matrix Machine built by Moore ANNUAL REPORTS 1920 L

= 5%- MERGENTHALER LINOTYPE COMPANY

REPORTS PRESENTED

AT THE ANNUAL MEETING or STOCKHOLDERS

NOVEMBER 17, 1920

Executive Oflices and Factory PARK AVE. AND RYERSON ST. BROOKLYN, N.Y.

1884 1885

THE first machine was produced without a metal pot, in 1884. The pot was added a year later. The machine indented characters in paper. Slugs were cast in another machine from these matrices ORGANIZATION

CAPITAL STOCK IssUED—$12,800,000 (Authorized-$15,000,000)

INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK

President PHILIP T. Donor:

Vice-President OGDEN MILLs

Second Vice-President and General Manager NORMAN DoDcE

Third V ice-President THOMAS J. MERCER

Secretary and Treasurer JosEPH T. MACKEY

Assistant Secretary and Treasurer W. C. A. MAGUIRE

Directors PHILIP T. DoDGE NORMAN DODGE OGDEN MILLs OGDEN M. REID ALBERT H. SAWYER FREDERIC D. MCKENNEY

OGDEN L. MILLs EDWARD J. MCQUADE A. HUNGERFORD PoLLEN

Executive Committee

OGDEN MILLS OcDI-:N L. MILLs PHILIP T. DODGE - NORMAN DODGE ALBERT H. SAWYER

Registrar of Transfers METROPOLITAN TausT_CoMPANY

ANNUAL REPORT

TO THE BOARD OF DIRECTORS OF THE MERGENTHALER LINOTYPE COMPANY

Gentlemen:——I beg to submit the following state ment of the affairs of your Company for the fiscal year ending September 30th, 1920. Throughout the year the business has been carried on under abnormal and changing conditions—aIIect ing nearly all industrial, financial, and international operations. Notwithstanding this fact, the year has been a prosperous one, and the net gain from all sources was $2,430,731.63. While this gain is substantial and satisfactory, and while it includes cash sufficient to continue the liberal regular dividends, it is proper to say, for the benefit of shareholders unfamiliar with such matters, that the gain is represented in large part by increased inven tories, and by credits to purchasers, payable at future _ dates. It should be understood, therefore, that the dividend of 10 per cent per annum is as large as it is prudent to declare for the time being. It is to be remembered that substantial stock dividends, based on the increasing value of the property, have been twice received by shareholders in past years; and that extra cash divi dends were also paid prior to the war for a number of years. During the earlier days of the Company the machines made were of limited capacity and were sold in small numbers, each at a large profit. Their introduction was [7] attended with great difiiculty, as the practices of four centuries, and the opposition of vested interests, or ganized labor, and the typefounders’ combination had to be overcome. In common with all other revolution ary and epoch-making inventions, the machine met the strongest and most serious opposition from the recog nized leaders of the printing art—conscientious men intrenched in the customs and traditions of their fore fathers. Although the influence of these men for some years retarded the adoption of the machine, they are today among its warmest advocates. Linotype ma chines in their various forms are now known and used in practically every country of the world, for more than forty-five languages. They were originally adapted for, and employed only in, newspaper offices for plain reading matter—each machine for one face; but today, in their more highly developed forms, they are used for the composition of mixed faces in great variety, for advertising matter, and for book and ar tistic printing of the highest class. Owing to changed industrial conditions, the expira tion of the fundamental patents, and the existence of competitive machines, principally copies or imitations of earlier Linotypes, the character of the business has been greatly modified, and the profits are now obtained by manufacturing machines and supplies in far greater quantity than in the past, but with less profit per ma chine. This condition and the great increases in costs of labor, material, and operating expenses, have neces sitated, as in other industries, radical changes in the conduct of the business; first, the provision of greatly [8] increased manufacturing facilities; and second, the employment of far greater working capital in propor tion to the volume of business. The changes were necessary in order to keep the business economically in a sound condition, to insure the continuance of divi dends through the years to come, and to guard against future dangers. To provide for ‘the manufacture of the increased number of machines demanded, and the vast and grow ing quantity of parts and supplies necessary for ma chines in use, and particularly to increase the output of matrices used in the machines, it was necessary to enlarge the manufacturing plant. Fortunately, the Company was in possession of cer tain real estate acquired cheaply with the view of pos sible future expansion. Other and adjacent property was secured. On this property, directly opposite the older plant in Brooklyn, there has been erected within the year an eight-story fire-proof factory building, seventy_ by three hundred feet, specially designed and in accordance with the latest and best practice as re gards space, light, heat, and sanitary conditions. It is believed that this building is unexcelled by anything in its class in the country. The new building is devoted principally to the manufacture of matrices, and is already equipped with the necessary tools and ma chinery. In this building matrices will be produced at the rate of 1,000,000 or more per week in great variety both as to size and style, so that the machines equipped with these matrices will be adapted for practically every known class of printing in many [9] languages. The production of each matrix involves from 50 to 60 operations, and as to certain dimensions, a precision which is unequaled in any other plant in the world in which parts are machined in like quantity. In addition to the new tools and machines, many of the earlier tools have been transferred from the main factory to the new building, thus giving the older fac tory additional room for further tools and machinery, which have been installed, in order to increase the pro duction of Linotype machines. The output of the cur rent year is far greater than that of the preceding year, and will be steadily increased to the extent required, so that machines and supplies may be carried in stock the world over ready for instant delivery. While the organization of the new factory and the reorganization of the older one have led to some in terruption of the orderly course of manufacture, the output of all departments has steadily increased. This is due largely to the ability, skill, and energy of the Works Manager, Mr. Hanson, and his competent staff of assistants, who have labored harmoniously and will ingly for the best interests of the Company. The cost of labor is far greater than in past years, the hourly wage having increased since 1913 more than 100 per cent, and the laboring week has been re duced from 48 to 44 hours. Friendly relations have been maintained with the workmen throughout the year. There have been no strikes and no suspension of work. . It is a lamentable fact that skilled workmen, as a class, are not giving the production of past years. This [10] evil extends the world over. It is believed, however, that a change is taking place in the spirit of workmen in general, and that the men and the leaders of or ganized labor are slowly coming to an appreciation of the fact that the maximum output is for the benefit of both the employer and employee, and that this will in time result in the establishment of closer relations and in conditions which will enable the employer to give the men liberal pay based on output. The factory of your Company is, and will continue to be, operated as an open shop, with the shortest hours and with the highest wages generally prevailing, and with the continuance of piece work, based on prices which will enable the diligent men to earn more than the average daily wage. Requests, suggestions, and demands of workmen have been, and always will be, carefully considered by the Management, whether presented by individuals or Committees comprised wholly of men on the payrolls —the only men who are directly interested and who have a knowledge of shop conditions. For years it has been the effort of the Company to treat those in its employ fairly, and there are in the service today a large number who have been on the rolls for ten years and upward, and a substantial num ber who were with the Company and its predecessor at the beginning of operations over thirty years ago. Many years since the Company introduced a system of insuring, wholly at its own expense, the lives of its operatives for an amount equal to one year’s pay— this amount being paid to the wife or beneficiaries [11] immediately on the death of the workman, regardless of the cause of death. The amount thus paid has run into very large figures. It is believed that this was the first industrial Company in the United States to volun tarily adopt and pay for group insurance for its work men. Beyond this, and before the adoption of the present compensation laws of the State, the Company con tributed, to a Mutual Benefit organization, carried on by its employees, an amount equal to that contributed by the members, so that those sick or disabled received very substantial assistance from the Company. The top floor of the new building—a light and beautiful room with a fine outlook—has been equipped as a lunch-room, with a proper kitchen and attendants, and furnished for the seating of 1200 at one time. While the operative force is much larger, it is believed that this will provide suitably for all who desire to remain at the works during the mid-day recess. For the purpose of reducing expense and securing closer relations between the various departments, the large clerical force and executive offices have been transferred from the Tribune Building in the City of New York to two of the upper floors in the new building. The Linotype of today is the outcome of an evolu tion carried on continuously and persistently. For many years efforts were made to find a substitute for the hand composition and distribution of type. For tunes were expended by various individuals and com panies without substantial success. All of the early efforts dealt with the composition and distribution of [12] individual, commercial type. Finally it was realized that the unit in composition should be not an individual letter or type, but an entire line of type in one piece or on one slug; in other words, a Linotype. The introduction of the Linotype as a unit, and the development of machines’ for producing these Lino types and assembling them one after another to con stitute a printing “form” marked the greatest. revolu tion in the printing art since the days of Gutenberg and Faust. The Linotype Machine assumed various experi mental forms. In 1886 there was produced the first merchantable or commercial machine, controlled by

Fmsr MACHINE THAT CAST A SLUG on LINE or TYPE FROM WHICH THE Wom) LINOTYPE was COINED

THE BLOWER MACHINE, which was installed in the New York Tribune Oflice, in July, 1886. The first commercial Linotype. The first Linotype with individual circulating matrices. The Linotype that revolutionized the printing art by making the slug or solid line of type the unit of composition in place of the individual type-character. [13] finger keys, and adapted to produce the successive slugs or “Linotypes” against metal matrices represent ing the characters to appear in one line, and tempo rarily assembled in the proper order against the face

of a slotted mold in which the molten type metal was delivered, thus producing a slug or “Linotype” on the edge of which the type characters were formed in relief by the mat

rices. _ Machines of 1886, in which an air blast was used to assemble the

circulating matrices,

1391_M0DE;_ 1 were manufactured in

The First Single-Magazine Linotype considerable numbers limited I0 f(lCCS 710$larger and used, than I1 paint . but were open to minor drawbacks. At the end of 1891, the financial resources of the then existing companies, which had expended about $2,000,000, being exhausted, a new company was organized in New Jersey in October of the same year, and the present management came into control. This Company was succeeded in December, 1895, by the present New York Company. The machines produced during. the latter part of 1891 contained a single set or font of single-character matrices, and adapted to produce only one alphabet,

[14-1 without the italics or small capitals which were gener ally demanded. At an early day an Experimental Department was organized in Brooklyn, competent inventors and me

chanics were employed, a systematic course of improvement and de velopment carried on. Machines were speedily adapted to produce, in addition to the original face, italics and small capitals, as required for bookwork. This was fol lowed by their adapta tion to produce also bold letters and display letters._ As time ran on, 190z_M0DEL2

the speed of the ma- The rim Double-Magazine Linotype chines was increased, additional magazines carrying additional fonts of matrices were incorporated, and provision was made for the speedy change of magazines so that the assort ments of faces or characters produced by the machines could be speedily varied, thus adapting the machines for different classes of work, and enabling the small newspaper publisher to purchase Linotype machines because they could be used part of the time for the production of newspapers, and the balance of the time on outside work of various kinds, giving additional revenue. Machines of the latest design are adapted to [15] produce at will as many as eight reading faces, differ ing in style and size, and also a substantial number of large faces adapted for headings, advertising work, and display matter. These machines are already in great demand. It is the

experience of those using them that they ef fect great economy in the cost of composition, saving in floor space, and the avoidance of a large investment in ad vertising type. While all the ma chines are based on the early inventions of Ott

mar Mergenthaler and

1902_MODE,_3 others, many and radi

Single-Magazine Linotype cal improvements have been contributed by va rious other inventors, more notably John R. Rogers, D. S. Kennedy, and your President, who originated the two letter matrices, multiple magazines, and the power driven keyboard mechanism now in universal use. Throughout the world nearly all printing machinery is sold on credit; or in other words, payments are made on the instalment plan, extending frequently over two, three, or more years. lt is this fact, among others, that necessitates the employment of a large and steadily increasing working capital. On the other hand, as a result of this system, the Company is enabled to sell [16] many machines which could not be purchased by printers under other conditions, and is constantly in possession of well secured paper in large volume. The possession of this interest-bearing paper, which could be used in an emergency, adds appreciably to the financial strength of the Company, and insures its safety in the event of any general financial panic or a long period of business depression. The Company has in its files hundreds of letters from its customers ex pressing their apprecia tion of its fair and 1906—MODEL 4 liberal policy. Double-Magazine Linotype with Un reference to the quick-change magazines report of the Treasurer, attached hereto and forming a part of this report, it will he observed that the Company is for the time being a substantial borrower from the banks. The amount thus borrowed is, however, less than one-half the amount of the bills receivable in hand, and the bor rowing is due wholly to the large amounts which were required in a short space of time to pay for the erection and equipment of the new building, and additional equipment for the other buildings, for carrying the necessary volume of raw materials and supplies in stock at more than twice the prices which formerly [171 prevailed, and the necessity of extending credit to pur chasers of machines into which these materials enter. It is, and ever has been, the policy of the manage ment to conduct the business on conservative and sound economic lines, thereby properly safeguarding against the effect of those violent financial disturbances and panics which have always oc curred from time to time—tl1e prime con sideration being the continuation of divi dends,which have never failed. That this a policy

#1 is a wise one and for

1906—Mo1>1-ix. 5 the best interest of those

Single-Magazine Linotype W110 are lI1V6St0I'S and The Fzrst Linotype with front- not mere Speculators in removable magazine _ , the shares 1s well evi denced by the continuing prosperity and growth of the Company, without the issuance of bonds. The holdings of the Company at the end of 1891 were valued at $360,000. As shown by the report of the present year, they now amount, after due charges for depreciation and amortization, to $24,855,000, and this although more than $41,000,000 has been paid in cash dividends. At the close of 1892 there were in existence only 353 Linotypes. To date there have been produced in [18] America alone 26,500. In 1892 there were employed a small number of operatives with a total payroll of $137,263. At the present time there are employed in the Brooklyn works more than 2600 men and 600 women with an annual payroll of $4,439,000. The steady course of development of the machines will be apparent on reference to the illustrations ap pearing herein above the dates on which they were respectively produced, and the development of the factory buildings will also be appreciated on reference to the illustrations, beginning with the small, leased building of 1888. The older shareholders will remember that, before the present management came into control, the patent rights of the Linotype had been disposed of in all countries outside of the United States. Owing to various causes the foreign companies were unsuccessful, and there was grave danger that the properties and patents would pass into the hands of those who would so manage them as to imperil in dif ferent ways the success of the American Company. From time to time, as opportunity occurred, the con trol of the Canadian, the British, and the continental European interests was acquired by the American Company. The Canadian operations have been advantageous, and will improve with the rapid growth of that pros perous country and improvement in exchange. As the . business would not have justified, in that country, the large investment necessary for new tools, the Canadian [19] market is supplied principally with the more modern machines produced in the United States.

The British company, Linotype 81 Machinery, Ltd., taken over subject to a debenture indebtedness, and having a fine plant at Broadheath near Manchester devoted to Linotypes and printing machinery in gen eral, is doing a substantial business and is steadily gaining ground, although it is not at present a source of direct revenue to the American Company. Its oper ations were very greatly interfered with during the war, and it was only through the ability of the Manager, Mr. Walker, and his assistants that the property was protected and preserved. The operations of the German company were largely - arrested during the war, and conditions are still such that America, the only country remaining at war with Germany, is unable to properly protect its interests and do those things which would otherwise be possible in the interest of the American shareholders. While the people of all other nations are carrying on their busi ness relations with Germany and gaining greatly by so doing, particularly in the cheap acquisition of prop erty, Americans are held in leading strings to their great disadvantage. As before mentioned, Linotype machines are sold the world over on long credit. Throughout Europe and other parts of the world credits were extended in ac cordance with sound and well established systems and customs, and with safeguards which assured protection and payment under the normal conditions existing [20] before the war. The losses from long-time credits were so small as to be negligible. The war resulted in vast destruction of printing property, in the ruination and bankruptcy of many in the industry, and in the death of many debtors. Until peace is established in Russia, until conditions in Germany are stabilized, until general business con ditions in other countries are brought back to a condi tion approximating the normal, and the exchange between the various countries equalized, it will be im possible to determine what losses may result from the Companies’ outstanding credits, and it will also be im possible to increase foreign business to the extent which could otherwise be accomplished. The expansion of the business has led to the creation of an extensive selling organization, and directly and indirectly the Company is represented in all parts of the world, large stocks being carried in many places, so that the needs of the printers and publishers may be met without delay. Due credit should be given to the Sales Managers and their staffs for their loyal and eflicient coopera tion. At the Brooklyn Works, at the various Agencies in the United States, and in many foreign countries, the Company has long maintained schools equipped with Lino-types where its customers are privileged to send their employees for free instruction in the operation and mechanism of the machines. From these schools thousands of students have been graduated. In addi tion to this, the Company has loaned, and is continuing [21] a to loan, a very large number of Linotypes to other schools for instruction purposes. Referring in general to the affairs of the Company, it can be said that it is in a strong position, that there are no dangers in the immediate future, and that a con tinuance of the regular dividends may be confidently expected, if the management is permitted to continue its conservative course of conserving, instead of dissi pating, its holdings. Respectfully, P.T.DODGE, President. N aw Yomc, Novem ber 16th, 1920.

[22] TREAsURER’s REPORT

FINANCIAL STATEMENT

OCTOBER 1, 1920 MERGENTHALER LINOTYPE COMPANY

ASSETS

Rights, Privileges, Franchises, Patents and Inventions ...... $3,646,940.00

Real Estate ...... 2,237,930.49

Plant, Machinery, etc ...... 1,408,689.16

Power and Light Equipment ...... 116,123.85

Brooklyn Factory Fittings ...... 156,479.61

Furniture and Fixtures, including Agencies. . 57,805.12 * Investment :

Stock and Bond Account ...... 3,070,921.91

Inventory: Raw Material, Manufactured Parts and

Linotypes in Course of Construction. . . . . 4,503,123.24

Linotypes ...... 89,325.40

Current Assets:

Cash . . .- ...... 462,792.20

Bills Receivable ...... 6,294,308.77

Accounts Receivable ...... 2,284,360.31

Canadian Linotype Limited ...... 527,145.97

$24,855,946.03 ‘Includes United States Government Bonds.

October 1, 1920.

[24] FINANCIAL STATEMENT

LIABILITIES

Capital Stock ...... $12,800,000.00 Creditors’ Open Accounts ...... 104,398.22 Bills Payable ...... 2,722,500.00 Dividends Unpaid ...... 788.00 Reserve for Taxes ...... 600,520.29 Surplus ...... 8,627,739.52

$24,855,946.03

JOSEPH T. MACKEY, Treasurer.

[25]

"."""“‘.. meow»; l

1920—-MooEL 21 Standardllndard Single-Magazine Display Linotype

1920—-l\/IODEL 22 rd Single-Magazine Display Linotype with A uxiliary Magazine

MERGENTHALER LINOTYPE COMPANY

REPORTS PRESENTED AT THE ANNUAL MEETING or STOCKHOLDERS

NOVEMBER 16, 1921

Executive Oflices and Factory PARK AVE. AND RYERSON ST. BROOKLYN, N. Y.

ORGANIZATION

CAPITAL Srocx IssUED——$ I 2,800,000 (Authorized—$ I 5,000,000) INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK

President PHILIP T. DoDGE

Vice-President OGDEN MII.I.s

Second Vice-President and General Manager NORMAN DoDGE

Third Vice-Prerident THOMAS ]. MERCER

Slfifltflfy and Treasurer ]osEPI-I T. MACKEY

Assixtant Secretary and Treasurer W. C. A. MAGUIRE

Directors PHILIP T. DoDGE NORMAN DoDGE OGDEN MII.I.s OGDEN M. REID ALBERT H. SAWYER FREDERIC D. McKENNEY OGDEN L. MILLS EDWARD ]. McQUADE A. HUNGERFORD POLLEN

E xeeutie/e Committee OGDEN MII.I.s OGDEN L. MILLS PHILIP T. DoDGE NORMAN DoDGE ALBERT H. SAWYER

Registrar of Transfers METROPOLITAN TRUST COMPANY

ANNUAL REPORT

TO THE BOARD OF DIRECTORS OF THE MERGENTHALER LINOTYPE COMPANY

I submit below a general statement of the opera tions of your Company for the fiscal year ending September 30, I921. As evidenced by the report of the Treasurer the net gain for the year was $2,3 I 3,4.69.44.—an amount . fractionally less than for the preceding year. It should be a matter of satisfaction and self-con gratulation on the part of shareholders that the Com pany has been able to hold its business, build and equip a new plant unexcelled in character, and protect its future without reducing or discontinuing the high regular dividends, or issuing bonds or debentures as has been necessary in many of the leading companies in the United States. The entire industrial and financial world is still in a chaotic state as a result of the war. Manufacturing and selling operations are carried on under abnor mal, difficult and threatening conditions. High prices of material and labor, greatly increased freight rates and steadily mounting taxes have seriously affected manufacturing costs. Adequate stocks of Linotype machines, parts and matrices needed to carry on the World-wide business must be maintained, and the extension of the neces sary trade credits must be provided for, all of which necessitates the employment of far greater Working [7] capital, in proportion to the volume of business, than I before the war. The taxes now paid by the Company are practically fifteen times the amount paid before the War and equivalent to about 5 per cent. on the face value of the outstanding capital stock. The new Brooklyn factory is now complete, fully equipped with tools and machinery, and organized and operated in such manner as to effect many savings in labor and cost, giving an increased output and secur ing an extreme precision of parts recognized as un usual by engineers the World over. The plant is and will continue to be operated on the American Plan, that is to say, as an open shop, with recognition of the right of every man to work where he pleases, under pay and conditions satisfac tory to him, and without control or domination by outside so-called leaders or other non-producers, who as a class live at the expense of the workmen and are interested in preventing peace or direct relations be tween employer and employee. It is a matter of great satisfaction that the most harmonious and friendly relations have existed dur ing the year between the Company and the many hundred employees. This was due to the fact that the Company has in matters of mutual interest taken the workmen into its confidence and through shop com mittees, elected by the men, discussed and adjusted all questions which have from time to time arisen. No better evidence could be found of the intelligence and sympathy of American workmen when they are [8] fairly treated and made to see and understand the conditions of an industry, and the difliculties and dangers faced by the employer and shareholders in supplying capital and giving continuous employment under adverse conditions of business. Many in the service-have become holders of Linotype stock. The Company has always paid the highest wages and observed the shortest hours generally prevailing. Its piecework prices have always enabled diligent men to earn more than the day’s scale. For nearly thirty years operations were carried on without strikes, or lock-outs, or friction of any kind. When it is considered that the average wage paid per day in Brooklyn is from seven to eight times the wages paid in some of the European countries for similar work, the advantageous position of the Ameri can Workman can be appreciated. The management, having in mind the welfare of its employees and their families, continues the long

_ time practice of providing insurance on the lives of all for amounts equal to their yearly pay. The Company has in the past also contributed large amounts to the treasury of the Mutual Benefit or Sick Fund Association, organized and wholly conducted by those in the service. To the Linotype Company the world owes the revo lutionary step of departing from single letter type and substituting as the unit of composition the solid slug or Linotype bearing the characters to print an entire line. [9] The Company produced the first machines for this purpose, controlled by finger-keys and enabling a single operator to compose as much matter as five to ten hand compositors, besides doing away with the necessity for distribution. Every marked advance in slug machines has origi nated in your Company. With the exception of one machine, producing single type, all would-be com petitors are imitators or copyists, making use mainly of the older Linotype inventions on which patents have expired. The machines have for years been steadily im proved and their range of work expanded until today they are used the world over in more than forty languages, and for all classes of printing from simple news matter to the finest class of book work, for tabular figure work, complicated mathematical for mulze, and advertising and display matter of all classes, including faces in great variety from the smallest to the largest sizes, and for borders and ornamental designs and other printing surfaces. Certain of the modern machines are adapted to produce at one time more than a dozen faces of type differing in size and style. They permit almost instant change of assortment of more than a thousand faces _ from which to select. Linotype faces are now made in great variety, both as to design and size. The time was when it was neces sary for the Company to produce in great variety undesirable and inartistic faces in order to match the type faces then in use by certain classes" of printers. [10] At the present day, Linotype faces are recognized and accepted as standard. Old faces have been eliminated, new faces have been designed, and faces which have been standard since the days of Caslon reproduced. The great success in this direction is due largely to the efiorts of Mr. Edward E. Bartlett, recognized the world over as an authority in matters typographic, who for several years has given the Linotype Com pany the advantage of his experience and judgment. The Company still conducts an Experimental or Research Department in which experienced men are constantly engaged in improving the machines, de veloping inventions of their own and of certain Com pany oflicials and inventions obtained from outside sources. It also conducts an apprenticeship system under which American boys are encouraged and developed into high-class educated mechanics. There is also in operation a school of accounting in which young men in the service are educated broadly in accounting systems and business methods free of charge. For the education of printers in the operation and care of the Linotype, the Company conducts numer ous training schools in different parts of the country, instruction being free in most cases and at a nominal charge in others. Machines in large numbers are also loaned for the same purpose to many schools, printers and educa tional organizations. Machines thus loaned and used are of the value of several hundred thousand dollars. [11] The Company maintains in the United States dis tributing agencies and warehouses in New York, Chicago, San Francisco, and New Orleans. Through numerous agencies of its own and through other channels, the American machines are distrib uted throughout the world. They are built by the Company and its subsidiaries not only in America, but also in England and Germany in certain special forms and for certain foreign territories which can be most advantageously supplied from these countries. In various foreign countries the purchasing power is greatly limited by heavy losses and taxes and by the depreciated value of their currency as compared with our own, consequently they are unable, as in the past, to purchase in this country to advantage. The British Company, Linotype & Machinery, Limited, controlled by the American Company, with a fine and recently improved plant near Manchester, England, produces not only Linotype machines, but printing presses, stereotyping machines and other ma chinery used in the printing art. VVhile European conditions have seriously interfered with its business, the Company has operated for the past year with some profit, due mainly to the zeal and ability of the - Managing Director, Mr. Arthur H. Walker, the Works Manager, Mr. B. J. Goulding and their associates. The German Company, Mergenthaler Setzmas chinen-Fabrik, G. m. b. H., is again being operated with profit, but the exceedingly low rate of exchange and financial conditions in general in Germany are [I1] such that for the time being cash return to America cannot be safely or advantageously arranged. The local management, headed by Colonel Adam Kapell and Mr. F. W. King, is to be commended for the efficient and loyal manner in which it has faced difii cult conditions. It seems proper to give expression to the fact that the shareholders are under obligations to the General Works Manager, Mr. C. A. Hanson; Mr. D. S. Ken nedy in charge of the Experimental Department, Mr. R. Rogers, Consulting Engineer; to the works foremen and to the men heading the various selling agencies; all of them having co-operated loyally and energetically in overcoming unusual difiiculties. In all respects your Company is in a sound and prosperous condition, but the future contains so many uncertainties at home and abroad that extreme caution must be exercised as to the character of its operations and extension of credit, and its surplus must be con served, maintained and carefully guarded to safe guard the future. Respectfully P. T. DoDGE President

NEW YORK, November 15, I92 1

[13] MERGENTHALER LINOTYPE COMPANY

ASSETS

Rights, Privileges, Franchises, Patents and Inventions ...... $3,647,290.00 Real Estate ...... 2,597,257.88 Plant, Machinery, etc ...... 1,655,831.98 Power and Light Equipment ...... 1 12,221.60 Brooklyn Factory Fittings ...... 185,206.59 Furniture and Fixtures, including Agencies 79,946.99

*Investment:

Stock and Bond Account ...... 3,094,224.12

Inventory: Raw Material, Manufactured Parts and Linotypes in Course of Construction . . . . 5,263,460.25 Linotypes ...... 78,906.98

Current Assets: V Cash ...... 330,165.91 Bills Receivable ...... 6,590,714.19 Accounts Receivable ...... 3,867,603.48 Canadian Linotype Limited ...... 553,382.66

$28,o56,212.63

*Includes United States Government Bonds

October 1, 1921

[14] FINANCIAL STATEMENT

LIABILITIES

Capital Stock ...... $I2,8oo,ooo.oo Creditors’ Open Accounts ...... 276,057.42 Bills Payable ...... 4,612,500.00 Dividends Unpaid ...... 808.00 Reserve for Taxes. . . .- ...... 705,638.25

Surplus ...... 9,661,208.96

4;/ $28,o56,2I2.63

]osEPI-I T. MACKEY Treasurer

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"The lesson Scnattnev Ltbrly

DATE LOAN ED

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ISSUED TO 1 \ l Me;-gent. haler Linotype a.

1911-21