The Evening Sun from Baltimore, Maryland • 28

THE EVENING SUN SECTION FINANCIAL PAGE 10 BALTIMORE. MONDAY. JUNE 30, 1975 Some Saying Sell In Peak Demand Steels Just How Resilient? Ashland Oil Officials Told To Reimburse Illegal Payments I ant in connection with general 'business opportunities in that New YorttSpecial)Direc-tors i- Ashl'id Oil Company, Inc. after a -month investigation, have ordered several officers to make reimbursement New York (Renter) -It's somewhat ironic, in a way, that a recent memorandum recommending the sale of steel stocks should go under the title of a "View From 140." And, in a way, it couldn't be more natural. On the latter count, 140 Broadway is, in fact, where the authors of the memo Paine, Webber, Jackson and Curtis' Investors Services Group work, and thus the title.

But then directly across the street from, and in 140 Broadway's purview, stands Onw Lib for illegal political contribu tions and other payments. Ashland the nation's largest country; $150,000 and $40,000 to two Gabon officials; also, $50,000 to a Dominican person when the company was planning an oil refinery there; payment of $100,000 to a Libyan consultant; $5,000 to a minor Libyan official. Ashland said it understands the Internal Revenue Services may impose a negligence penalty on its tax returns for 1970 and 1971, this penalty unrelated independent refiner and distributor of oil products, admitted earn arouna 7.75 a snare whereas in 1971 a similarly depressed period it earned less than $3 00. This represents alfitficant decline 11.72 US Steel earned in 1974. Ingersoll notes that when U.S.

Steel earned close to $4.00 a share In 1974's third quarter, it showed it had the potential of earning even more than last year's $11. 00-plus. And as Ingersoll sees it what's true for U.S. Steel's pro-sepcts this year and its strengthened earnings power is pretty much true for the rest of the steel companies. As for how he'd view the steel stocks as an investor, Ingersoll said that if he were acting as an individual, he'd wait and see what happened to the steel stocks when the disap pointing earnings comparisons came out.

Whereas, as an institution, he would be building a position in steel stocks. second half when customers feared a lengthy coal strike." That two of the biggest consumershousing and the auto companies have yet to recover. That imports may again pose a threat Extent Uncertain He also says that while investors may be willing to look beyond 1975's lower profits, the "extent o' earnings recovery next year is uncertain." Analyst Ingersoll's scenario for 1975 at least in some respects doesn't differ that much, though longer term he feels the steel companies will show how much stronger they now are. Moreover, he doesn't feel that cheap imports now pose the threat they once did. In fact, he thinks the steel companies will soon be raising their prices again 5 or 6 per cent Of the improved earnings power of the steel companies, he notes that this year a company like U.S.

Steel will probably But then what seems to most trouble Eldredge is that many investors may not have fully taken account of what he calls a less than bright intermediate term outlook for steel companies. Conservative Image Says Eldredge in the report: "Many investors regard steel stock as conservative issues supported by reasonable yields and low P-E multiples, generally holding their shares from peak to trough through each market and economic cycle. "But the record doesn't support this assumption of conservatism," he says. Earnings and dividend payments, he notes, have traced an erratic pattern over the past decade. Among the factors which trouble Eldredge are the following: That the first quarter strength in steel shipments was somewhat misleading, "reflecting shipments ordered in 1974's erty Plaza.

that during the last eight years there may have been $500,000 in questionable payments to government officials and to consultants in Libya, Nigeria, Gabon, the Dominican Republ ic, and perhaps other countries. One of the principal owners of One Liberty Plaza, a recently erected steel girded edifice, happens to be U.S. Steel, one of the objects of the Paine, Webber review. Two Decision What Paine, Webber's Ash-ton Eldredge believes is that the whole steel group a group They decided the officials most directly responsible for making the contributions should reimburse the company for part of the firm unrecoverable payments. Orin E.

At he calls "two decision stocks" kins, chairman, will reimburse are "highly vulnerable" for a a total of vice chair variety of reasons. More specifically, Eldredge man William R. Seaton, vice president Clyde M. Eastern Europe and his cohorts say in their report that, "in the absence of Webb. $45,000.

This will be over special circumstances, we be a period of years. The special director com lieve investors would be well Black Market In Calculators nut tee said an even greater to- to political contributions. The director committee studied Ashland's records of more than $15 million in funds transferred overseas from 1967 to 1974. Most of the transactions it found to be legitimate. Ashland is but one of a number of companies which are or have been under investigation for political payoffs, both at home and abroad.

Others include Gulf Oil Corporation, Phillips Petroleum Company, Northrop Corporation, and Minnesota Mining and Manufacturing Company. Some officials concerned have taken early retirement The Ashland board decided on no management changes while demanding restoration of funds it thought unlawfully dispensed. It asserted that the company's ten-fold growth since 1962 has been properlyy attributed to Mr. Atkins and other officials. It adopted recommendations prohibiting corporate political contributions in the United States, and a policy against illegal payments of any kind here and abroad.

advised to liquidate positions in steel." have been used, including amounts pre Bonn (KND -Electronic calculators, one of the hottest It's not a view held by some viously made public which consumer items of the decade steel analysts, but then even those who are more favorably could not be accounted for. The company has been reim have become valued black mar disposed towards steel stocks ket items in Eastern Europe developed across the East-West German border. And the West German government recently warned travelers not to take undeclared calculators over as the East Germans inflict severe punishment on violators. Nearly 1.5 billion calculators were sold in West Germany last year the demand concede that the next few months, like the last few, may bursed for $135,000 by some recipients and two officers whose personal contributions were where sophisticated commodities, if available at all. are so costly ordinary citizens can prove to be a period the steel companies would prefer to The Koppers Company's metal products division has its largest backlog ever for coke oven doors.

Made of ductile iron, a door weighs from 4,000 to 6000 pounds, is 13 to 20 feet high. The doors are being supplied to major steel makers. They are cast at the firm's South Baltimore foundry and machined at its Bar-tlett Hayward plant. USRA Sees A Profit For Conrail By 1979 Washington (DJ) The U.S.has agreed tentatively to take Railway Association forecast lover about 2,000 miles of north- hardly afford them. At the risk of punishment for reimbursed by Ashland.

Directors said several foreign transactions were not satisfactorily explained, including $30,000 to a Nigerian consult- For instance analysts such shows no sign of abating. violating trade laws, Poles Manufactured primarily by Hungarians, and other East Europeans visiting Western Europe take prized items back as Alliance One's John Ingersoll figure that steel industry shipments will continue to lag behind last year's. Japanese, Americar. and German firms, electronic calculators are offered for practically home for sale at a handsome profit if they are not caught. Trailing Shipments According to Ingersoll's esti Ashland has been under in electronic adding machine for $130 two years ago now finds the same model with improvements is available for less than $30.

Various models sold at department stores here cost anywhere from $16 to $170. One German mail order house of fers a minicalculator for only $11. The Japanese market share once a commanding 80 meanwhile has dropped to 50 as more American and Europe an firms produce the popular computers. Italy Payment Balance Shrinks Rome (DJ)-Italy had a balance of payments deficit of only 38.2 billion lire in April compared with a gap of 479.7 billion a year earlier, Banca D'ltalia said. For the first four months the deficit was 151.6 billion lire compared with 1.83 trillion in the 1974 period.

At the bast German border. that Consolidated Rail roads USRA also said it now rec any purpose or vocation, whether as an aid to businessmen and bank clerks, for students and housewives, or just for ordinary taxpayers who use them when filling out their tax forms. vestigation by the Securities and Exchange Commission, the Senate subcommittee on mul poration, the new line it is forming from financially ailing northeast roads, won't show a profit until 1979. customs officials now ask not only the standard question for forbidden currencies and guns, but also want to know whether West Germans visiting rela ommends that only about 5,900 miles of red-ink branch lines in the Northeast be abandoned or tinational corporations, and the mates, second and third quarter industry shipments will trail the 22.6 million tons shipped in the first quarter by about 2.5 million tons in each quarter, and for the year about 85 million tons will have been shipped or much less than 1974's 109.5 million tons. Internal Revenue Service for They have become popular 'made available for combined This is a year later than had maintaining an overseas slush been predicted by U.S.

Railway; federal-local subsidy. This ren tives there carry minicomputers as gifts. advertisement gifts and some newspapers offer them as a bonus to new subscribers. resents the restoring of roughly in a preliminary plan issued in fund and making illegal political contributions. The new disclosures were If they do and say so.

the du 1,100 miles of previous aban donment candidates to the Con Fierce Competition And though prices for most However, ingersoll feels that made by Ashland in accordance ty is $130 to $200 each. The calculators are valued between $900 and $1,300 in East by the fourth quarter, ship with the settlement terms of a ments will be on the upturn. lawsuit brought by the SEC and provided the first details of commodities have soared in recent years, those of electronic calculators have plunged, largely as result of fierce com And, in a more positive vein. Black Market Despite the danger of wind Ashland's questionable over seas payments. Ingersoll says that there has recently been "a basic improvement in the earnings power of ing up in jail a thriving black petition.

market business seems to have A German who bought an The company pleaded guilty the steel companies." rail system. Previously USRA had said it would favor abandonment or subsidy of about miles including lines of the Erie Lackawanna Railway. Japan Financing Argentine Plant Buenos Aires (AP)-Ja-penese trade officials announced that Japan will loan Argentina about $200 million to help finance a major steel mill late February. However, in the first chapters of the final plan for northeast lines.the government corporation predicted that Conrail will show income of $663 million in 1985, against its earlier projection of a profit of $382 million in that year. In forecasting its outlook, U.S.

Railway said its estimate of Conrail earning $663 million in 1985 reflects inflation over the next 10 years. The earlier profit projection of $382 million did not reflect any possible inflationary impact On an uninflated basis the late last year to live counts of making illegal campaign contributions and was fined Orin E. Atkins Ashland Oil chief ordered by directors to reimburse questionable payments. 000. The previous year, Atkins pleaded no contest to similar charges and paid a $1,000 fine.

Pocket the tax savings while you save for retirement with an Individual Retirement Account and a hydroelectric plant The announcement was the third made here in a week indi forecast for Conrail net income in 1985 is now $353 million. eating sizeable foreign support Store Workers Asked To Take 11 Pay Cut Pittsburgh (DJ)-Thoro-fare Markets, a food store A major factor in the out tor a aiding Argentina in set tling inflation-swollen debts from Equitable. and trade problems. Dr. Shigeo Nagon, head of Japan's Chamber of Commerce and leader of a 40-member offi look is a new recommendaton by U.S.

Railway that government financing for Conrail be in interest-free form for the first 10 years. This would eliminate Conrail interest payments of more than $1 billion in that span and would reduce the cial mission here, said that fi chain, asked employes to take an immediate 11 per cent pay cut, Milton G. Hulme, board nancing of the loans would be chairman, said over 10 years but added that in terest rates had not been set. The funds would go for ex overall federal financing from One employe said a letter he received from Thorofare indi $3 billion including interest charges to $1.8 billion. pansion of the government-run Somisa steel plant in San Ni For the next 10 years, how cholas north of here and partial ever, the agency expects Con cated the company wanted the moves approved by July 1 or Thorofare "would be forced to close stores that weren't making any money." construction of flood gates for rail to be affected by a dimmer business outlook than had been the Salto Grande hydroelectric Quarterly Deficit For Kaufman and Broad has reported a loss for the second quarter of $733,000 compared with a net profit of $294,000, or 1 cent a share, for the like period a year ago.

Sales for the period were $57.1 million versus $64.2 million. The loss was sustained despite a net contribution to earnings of $1,915,000 from Sun Life Insurance Company, a Baltimore operation which is a wholly owned subsidiary of For the first half. showed a loss of $1,323,000 compared to a profit of for the first half of 1974. Sales were $104,326,000 versus $114,471,000. During the first half of this year Sun Life contributed $4,087,000 to earnings.

Stock Split Soston(DJ)--Eastern Gas Fuel Associates direectors approved a 3-for-2 stock split and a quarterly cash dividend of 20 cents a share on the new units. plant- predicted earlier including Hulme said five stores have likely downturn in the economy in about 1978 CD fc 1 jL tf USRA also said its railroad been or are in the process of being closed. He didn't reveal how many more stores the company might consider closing or structure for the Northeast comptemplates the acquisition divulge the precise contents of by Norfolk Western Railway the letter sent to employes. NEW 1975 Thorofare has 87 stores in of Perm Central Railroad Lines giving the Norfolk Western a link between Cincinnati and Western Pennsylvania and 17 in West Virginia. New Castle, Ind.

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