1925 Liquidation of William Galloway Company

Liquidating and Trading Certificate

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R.R.2. Box508A. Yarmouth. Maine 04096

I have been a gas engine collector and hobbyist for over 25 years, and many times have wondered whatever became of some of the large and well-known engine manufacturers of the past. One of these was the William Galloway Company of Waterloo, Iowa.

In my continuous searches for literature and ephemera about gas engine manufacturers, I purchased some very informative papers about the William Galloway Company and its successor: 'The Galloway Company.' The liquidation of the original company, and exchange program to stock and bondholders of both the old and new companies, was a very complicated and interesting arrangement, to say the least. In order to share this information with GEM readers, I have provided the letter and liquidating and trading certificate, as sent September 21,1925 to Amos F. Braman, Central Bridge, New York.

Mr. Braman was a stockholder in William Galloway Company and recipient of the offering for the new company. Apparently he chose not to respond, as none of the various coupons were ever detached and the return envelope to the Galloway Company was never used.

The letter Braman received reads as follows:

'Dear Friend:

We have at last worked out the Liquidating and Trading Plan for the share holders of the old company, which can also be used by the share holders of the new Company in case they wish to retire their stock, and we are enclosing herewith Liquidating Trading Certificate.

Now in case you prefer not to trade out your stock, if you have stock in the new company, please return this certificate and we will send you the 5% Profit Sharing Certificates similar to those furnished stockholders in the old Company, but if you wish to liquidate your old or new stock by purchasing merchandise, this is your opportunity.

We are enclosing herewith $200.00 worth of coupons, a certain percent of which can be used as part of the purchase price of anything you may select, according to the schedule on the reverse side of the certificate. You will notice on some of our lines you can send in a larger percent in coupons than on others, for the simple reason that some of our lines are like sugarthey are handled on the basis of very little profit. Take tillage tools for example. The labor and cost on this line of machinery has gone up so much in the past eight years that there is very little margin to go on. The same is also true of manure spreaders. They are handled on an extremely close basis. You will notice we give an extra good allowance on Cream Separators, Radios and some other special lines.

Because of the contingent liability of these outstanding certificates we necessarily must have a definite and fixed date for their expiration, which we have set at two years, but any who are unable to trade out the full amount of their holdings in two years time, it is the plan and intention to renew the Liquidating and Trading Certificates. Also, in case you own more shares than the amount of trading certificates we have mailed you, as soon as you have used these we will mail some more to you.

Now you can sell these trading coupons to your neighbors or friends if you wish. In other words; if you have a good friend who wants to buy a radio you can explain that you were a former stock holder in the William Galloway Company, or are a stock holder in the reorganized Galloway Company, and that through these coupons you have special privilege that goes only to stock holders, and you want them to help you get your money out of your investment by buying these coupons and turning them in as part of the purchase price of anything that they may need. In this way by a little visiting with your friends and neighbors it would work out to the mutual interest of both you and your neighbor or friend.

Hoping you will start right in and use these trading certificates for your benefit, and assuring you that this is done in the spirit of cooperation and of past appreciation, and thanking you for past favors, I beg to remain

Very sincerely,

Wm. Galloway

P.S. If you have not already gone into the reorganization plan, as has been described to you in various letters and correspondence, you can still do so, but of course you can understand how this plan cannot be left open indefinitely. If you have already made the exchange just disregard this paragraph.

Under the reorganization plan designed by the Junior Bond holders reorganization committee, if you subscribe for one third of your holdings in the old company in First Mortgage 7% Gold Bonds of the new reorganized Galloway Company, according to the plan you would receive three times that amount par value 7% Prior Preference stock plus common stock on the basis of two shares for every $ 100.00 par value of Prior Preference stock. For example if you would take $100.00 worth of 7% First Mortgage Gold Bonds, you would receive $300.00 par value 7% Prior Preference stock plus 6 shares of Common.

In case you cannot go in under the reorganization plan as previously explained, you can make the straight exchange of your old Common and Preferred for new Common, which new Common can be exchanged and traded out through the enclosed Liquidating Trading Certificates. The reorganization plan, naturally, is the best if you are in a position to go into it. It is fair, liberal and equitable, and while the Junior Bond holders legally came ahead of the share holders, yet the share holders were finally given exactly the same basis of participation. If you wish to go in under the reorganization plan I would suggest that you do so at your earliest possible convenience.

In case you do not have our latest current catalog let us hear from you and we will gladly mail one to you.'