Motors-Yellow Cab

For some time, General Motors has had a hankering to enter the profitable business of making auto buses. It has been repeatedly rumored that the big auto concern was out after Mack Truck. Quite unexpectedly, however, came the news that it would take over control of the Yellow Cab Manufacturing Co. shortly, to be re-christened the Yellow Truck & Coach Manufacturing Co.

The purchase of Yellow Cab will be made without the use of cash, by a judicious plan of exchanging securities. First Yellow Cab will change its name and capital structure, having then 150,000 shares of 7% preferred stock, 600,000 shares of class B stock and 800,000 shares of common stock. The latter issue will then be issued to General Motors in payment for stock of the corporation to which property as aforementioned will be transferred. The class B stockholders will then receive a 25% dividend by having issued to them the 150,000 preferred shares as a consolation for parting with control.

Both class B stock and the common will have voting power, and will participate in net earnings and dividends after all cumulative dividends on the preferred have been paid.