I. M. M. Reorganization

International Mercantile Marine stockholders last week decided to exchange vain mementoes of a frustrated plan, for new shares that seemed to promise them actual dividends. The late J. P. Morgan organized I. M. M. 25 years ago, close to the time when he organized the U. S. Steel Corp. His ideal was to create great corporations that would lead their fields. In steel he succeeded: in shipping he failed. The overdue, unpaid dividends on I. M. M. preferred stock now amount to tidy millions. The common stock, under such circumstances, has of course earned nothing.

Last summer President Philip Albright Small Franklin sold the corporation's White Star Line, getting about $36,500,000 (TIME, May 17, 1926). That sum approximates the amount of bonds which I. M. M. has owed for years. But President Franklin, astute, did not pay off any bonds. He kept the millions ready to snap up at sacrifice sales, bonds or ships. He has bought overtly no ships during the year, but probably many a bond discreetly offered.

I. M. M.'s capital structure has been inflated in respect to present condition of shipping. The corporation has made money, but not enough to pay dividends on $51,725,000 preferred stock outstanding. Thought of dividends on the $49,871,800 common stock has caused investment salesmen to laugh.

Recently President Franklin calculated a capital re-organization--103,450 preferred, 616,993 common shares, all of no stated par value. Earnings would be fractioned off among such shares. Stockholders would trade in their old shares for them. That is what they last week voted to do with scarcely a dissenting voice.