Business: Sumatra Tobacco

The trend in smoking from cigars to cigarets has hit the American Sumatra Tobacco Co.-producers of cigar wrappers-very hard. For four years, deficits have been piling up, and now amount to about $4,500,000. As a result, inventories have had to be liquidated and dividends on its preferred stock suspended. Finally, on June 1 next, a 7½% "gold" loan matures. So hopeless was the outlook for funding this issue that the Company was placed in the hands of receivers.

The asset position of the Company, while not good, is at the same time not at all hopeless. The real trouble lies in the...

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