INTERNATIONAL HARVESTER COMPANY FIFTY YEARS AGO, on August 1902^1952 12, 1902, Cyrus H
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INTERNATIONAL HARVESTER COMPANY FIFTY YEARS AGO, on August 1902^1952 12, 1902, Cyrus H. McCormick, then president of the McCormick Harvesting Machine Company and eldest son of the man who perfected the reaper, began a letter to sales agents: "We are about to dispose of our business in a way which we feel will have a permanent and beneficial influence upon the whole industry." Thus, the International Harvester Company came into being, with five large harvesting machinery manufacturers forming a single new company. Although it traces the origin of its business back to the perfection of the reaper in 1831, Harvester did not reach its 50th anniversary as a Company until 1952. In its 50 years, Harvester has weathered one major and three lesser business depressions. It has survived two world wars and their troublesome aftermaths. It has grown into a strong and useful business enterprise in the atmosphere of freedom in which America itself has grown great. There were reasons for its survival and growth. One such reason has been the great service which Harvester has rendered the United States in agricultural mechanization, in growth of motor truck transport, power equipment, and refrigeration. In this process America changed from a predominantly agricultural nation into the world's greatest industrial power. Another reason has been people. So, in the photographs in the 1952 annual report, the 50-year span of Harvester's history is illustrated in terms of people closely associated with it for all or the greater part of that period. These people, symbolic of thousands of others, emphasize again that the greatest asset of any successful business is its people. ••••ffil "THE PONY MIGHT THROW YOU, but this stock never will," L. L. Treat, Webster City, Iowa, businessman, said to his young daughter, Teresa, nearly 50 years ago when he handed her some shares of Harvester stock instead of the pony she so fondly desired. Today, Mrs. Teresa Treat Stearns, living at Friendship Haven, a home for retired people in Fort Dodge, Iowa, still owns that Harvester stock and additional shares she has since received. "As I grew up I began to realize that while this stock was increasing in value and paying dividends, the pony would have eaten his head off and would long since have been turned out to grass," Mrs. Stearns says. U~\l | HARVESTER FACTS AT A GLANCE 1952 and 1951 1952 1951 SALES $1,204,001,000 $1 ,277,320,000 TAXES—FEDERAL, STATE, AND LOCAL .. $ 87,476,000 $ 144,395,000 NET INCOME (after taxes): From sales* $ 44,760,000 $ 58,575,000 From dividends received from subsidiary companies 8,424,000 8,557,000 From adjustment of prior years' tax provisions 5,604,000 From miscellaneous charges and credits (net) 3,132,000 4,131,000 Total net income 55,656,000 $ 63,001,000 *Net income from each dollar of sales 3.7* 4M DIVIDENDS .. $ 32,131,000 $ 31,788,000 NET INCOME RETAINED FOR USE IN THE BUSINESS .. $ 23,525,000 $ 31,213,000 PER SHARE OF COMMON STOCK: Net income .. $ 3.76 $ 4.36 Dividends declared 2.00 2.00 EXPENDITURES FOR LAND, BUILDINGS, MACHINERY AND EQUIPMENT .. $ 33,362,000 $ 43,403,000 SUMMARY OF EQUITY CAPITAL INVESTED: Current assets 680,686,000 $ 499,397,000 Current liabilities 185,217,000 2.57,4:77,000 Net current assets (working capital) .. $ 495,469,000 $ 241,980,000 Property (net) 303,288,000 296,403,000 Investment in subsidiary companies 97,129,000 103,866,000 Miscellaneous assets 9,541,000 9,795,000 Total capital invested $ 905,427,000 $ 652,044,000 Deduct funded debt 225,000,000 Equity capital invested .. $ 680,427,000 $ 652,044,000 BOOK VALUE PER SHARE OF COMMON STOCK .. $ 45.07 $ 43.43 APPROXIMATE NUMBER OF SHARE OWNERS 78,000 71,000 EMPLOYES: Average number during year 87,185 93,461 Total comnensation • • $ 372,856,000 $ 390,612,000 Total compensation in 1952 reflects the effect of prolonged strikes. 3 INTERNATIONAL HARVESTER COMPANY (A New Jersey Corporation) (As of October 31, 1952) DIRECTORS RALPH BUDD JAMES R. LEAVELL EDWARD L. RYERSON JOHN A. CHAPMAN JOHN L. MCCAFFREY FOREST D. SIEFKIN CHRIS L. CHRISTENSEN CHAUNCEY MCCORMICK JUDSON F. STONE CHRISTIAN E. JARCHOW FOWLER MCCORMICK JOHN STUART FRANK W. JENKS PETER V. MOULDER MERLE J. TREES ARNOLD B. KELLER JAMES L. PALMER JOHN P. WILSON EXECUTIVE COMMITTEE RALPH BUDD JUDSON F. STONE JAMES R. LEAVELL MERLE J. TREES JOHN L. MCCAFFREY JOHN P. WILSON FOWLER MCCORMICK CHAUNCEY MCCORMICK (1st Alternate) PETER V. MOULDER CHRISTIAN E. JARCHOW (2nd Alternate) OFFICERS JOHN L. MCCAFFREY President PETER V. MOULDER Executive Vice President ROBERT P. MESSENGER Executive Vice President CHRISTIAN E. JARCHOW Executive Vice President FRANK W. JENKS Vice President, Merchandising Services THEODORE B. HALE Vice President, General Sales FOREST D. SIEFKIN Vice President and General Counsel RALPH C. ARCHER Vice President, Manufacturing MERCER LEE Vice President, Supply and Inventory IVAN L. WILLIS Vice President, Industrial Relations WILLIAM R. ODELL, JR. Vice President and Treasurer EDWARD M. RYAN Vice President, Foreign Operations ARNOLD E. W. JOHNSON Vice President, Engineering GERARD J. EGER Secretary HAROLD B. MYERS Comptroller GENERAL MANAGERS OF DIVISIONS NEIL LOYNACHAN Fiber and Twine Division FIRST LEADERS of the International HARALD T. REISHUS Industrial Power Division Harvester Company were both sons EUGENE F. SCHNEIDER Farm Implement Division HARRY O. BERCHER Steel Division of men who had built large enter WILLIAM C. SCHUMACHER Motor Truck Division prises for the manufacture of grain MARK V. KEELER Farm Tractor Division harvesting machinery — Cyrus H. CHARLES D. HARRIS Refrigeration Division McCormick, left, who had been president of the McCormick Har TRANSFER AGENTS vesting Machine Company, and Charles Deering, right, who had been senior partner of the Deering Har Guaranty Trust Company of New York, New York vester Company. Together, they The First National Bank of Chicago, Chicago charted the early direction of the Company and established the solid REGISTRARS foundation on which future growth and progress could be built. The New York Trust Company, New York CYRUS H. McCORMICK became first president of the Company in Continental Illinois National Bank and Trust Company of Chicago, Chicago 1902. He served in that capacity until he became chairman of the Board of GENERAL OFFICES Directors in 1918. CHARLES DEERING became Harvester Building, 180 North Michigan Avenue, Chicago first chairman of the executive com mittee of the Board of Directors in 1902. Two years later, when the post 4 was created, he became first chairman of the board of the Company, and served until 1916. INTERNATIONAL HARVESTER COMPANY The Board of Directors presents with its approval the management's report on operations for the fiscal year ended October 31, 1952, with certain information on important develop ments since that date. This report has been compiled for the information of share owners, employes, customers, and all others who have an interest in the business of International Harvester Company. IN THE FIFTIETH YEAR of its corporate operation the Company experienced a number of difficulties, some of which had been foreseen and noted in the 1951 annual report. A strike by the United Farm Equipment and Metal Workers-UE union in eight plants lasted 12 weeks. A strike by the local union of the United Automobile Workers-CIO at the Melrose Park Works lasted ten weeks. Prior to these two strikes, nearly all our plants were shut down during most of the month of July because of a lack of steel brought about by a strike in the steel industry. Therefore, about half our productive facilities were idle for almost four months. Consequently, operating results in the last third of the year were seriously affected. SALES Sales in 1952 totaled $1,204,001,000, exceeding natural resources in that country making it an the billion-dollar mark for the second successive especially favorable market for our products. year. Impact of the strikes upon sales cannot be While demand for nearly all our products was measured, but we know that a substantial volume good in the first half of the year, a definite buyers' was lost in certain lines of products. The dollar market developed about midyear. In the closing sales volume showed a decline of 5.7% from the months of the fiscal year, intensive selling was 1951 sales of $1,277,320,000. required to sustain large volume. Machines such Sales to subsidiary companies in 1952, almost as crawler tractors, cotton pickers, hay balers, entirely for export, were lower than in 1951, prin and corn pickers were in greatest demand. Motor cipally because of the lack of dollar exchange on trucks and refrigeration products also were in the part of most foreign countries, and the inability good demand. of the parent company to supply all of the prod Our 1952 sales would not have compared so ucts ordered by the subsidiaries because of the favorably with those of 1951 except for the in strikes in this country. The sales to subsidiaries crease in sales of defense products. Total defense totaled $145,179,000, as compared with $200,813,- sales were $173,713,000, compared with $86,357,- 000 in 1951. Sales to the Canadian subsidiary, 000 in 1951. Principal sources of such sales were while lower than in 1951, were on a relatively high the 5-ton military truck, which we have built level, the large program for the development of for the past two years, the armored personnel carrier, and related service parts. Production strikes occurred, all available manpower was con got under way on airplane wheels and brakes. centrated during the strikes on production of Defense sales accounted for 14.4% of the 1952 service parts.