Business & Finance: Air Split

When, last week, directors of Air Reduction Co. recommended a 3-for-1 split-up of its 835,000 shares, many a trader did the following problem in simple arithmetic :

In 1920, when Air Reduction stock moved over from the Curb to the Big Board, 100 shares could have been purchased for $3,200. In 1928 the stock was split 3-for-1. Last week the new stock was up to $172. Thus the original holding of 100 shares at $32 had grown to 300 shares at $172, and a $3,200 investment had reached a market value of $51,600. The new stock split will not be ratified by stockholders until next April, at which date the original 100-share-holder will have 900 shares, will be disappointed if those shares are not worth at least $60 apiece.

During the first nine months of 1935 Air Reduction Co. made $3,895,000. Full year earnings may come to $5,000,000, compared to a top of about $6,000,000 in 1929. The regular $3 dividend has been augmented by two extras, bringing dividend payments thus far this year up to $5.50. Technically a “chemical company,” Air Reduction should not be confused with Allied Chemical, E. I. du Pont de Nemours, or any other corporation with a general line of chemical products. The company specializes in two major products —acetylene and oxygen. A combination of acetylene and oxygen, ignited, burns at a temperature of 6,400° F.—the hottest flame that man has yet produced. The oxygen-acetylene flame, directed with an oxyacetylene torch, melts practically every kind of metal almost instantaneously. It has two kinds of uses: cutting metal, as in scrapping locomotives, battleships; welding metal, in which the oxyacetylene flame fuses the parts to be joined together. Air Reduction is so called because it reduces air—that is, it separates air into its major components, primarily oxygen and nitrogen.