XXXXX Stockholders of the Yosemite Portland Cement company were advised today by the board of directors that an offer to purchase the company's Merced plant had been received and accepted by the board, subject to approval by the stockholders.

XXXXX Although the notice did not include the name of the prospective purchaser, The Sun-Star learned from company officers today that Henry J. Kaiser, the internationally known war industrial chieftain, made the purchase offer.

XXXXX The notice said that decision to sell was dictated by the board's opinion that abandonment of the Yosemite Valley Railroad is inevitable, resulting in loss of transportation of lime rock from the quarry to the mill here.

XXXXX Asked whether the plant would continue operations until the end of the war, a company official said the closing date was indefinite but believed it may close down within three months.

XXXXX Stockholders were told that liquidation of the company holdings would result in distribution to holders of the preferred stock an amount per share substantially in excess of the present market price. (5 1/2 at noon Friday). The notice also said the directors held no hope that sufficient assets will be available for distribution to the holder of the class A or B common stock.

XXXXX The cement plant and the Yosemite Valley Railroad may close before too long. There are hopes that some agency, perhaps the prospective purchaser, will find a way to:continue to operate both for years to come.

XXXXX However that may be, the day when the railroad would be in distress has been foreseen from the moment that the National Park Service insisted on taking the Carl Inn tract into Yosemite National Park some eight years ago. This took away from the Yosemite Sugar Pine Lumber Company, about 7,000 acres of fine timber. This cut short their logging operations by many years.

XXXXX The Yosemite Sugar Pine Lumber Company provided seventy per cent of the Yosemite Valley Railroad's revenue. Loss of this revenue has made the continued operation of the railroad impracticable under present conditions and the railroad's present financial structure.

XXXXX Recognizing this, the Merced City Chamber of commerce during 1942 and 1943 exerted every effort to get the National Park Service to open up the Carl Inn tract for selective logging. This effort received some support from the San Joaquin Valley Council of the State Chamber of Commerce. The effort did not overcome the opposition of Secretary Harold Ickes. The effort failed and lumbering ceased.

XXXXX If the cement plant closes, its passing will be viewed with mingled emotions. It will be a distinct business loss to Merced. The payrolls of that concern and others affected are a substantial portion of our industrial payrolls. The business interests will regret their loss. The wives of the town will measure the news in the terms of less housework and cleaning. Red roofs may blossom once again without the risk of soon becoming "tattle-tale gray."

XXXXX On the whole the loss of the cement plant, the railroad and the hauling and other employment they entail, will be a distinct loss to our city and county. The cement dust could have been eliminated and thus the only complaint around town could have been avoided. The payrolls must be replaced by other concerns. Already one such concern, the new huge Bear Creek Cannery, is underway. Others are bound to follow.

XXXXX Merced County can supply so much livestock and produce to be processed that these other payrolls will be small in comparison. Let's hope we retain all we have and gain many more.

XXXXX In a number of the daily newspapers of the past week, there were news stories of the proposed sale of the Yosemite Portland Cement Company's property in Merced and Mariposa counties to the Henry J. Kaiser Company.

XXXXX The Cement Company had mailed out notices to stockholders of a meeting to be called for the purpose of discussing and voting upon the sale of the million dollar plant. In the case of such a purchase the cement company would be liquidated and the holders of preferred stock would receive something more than the current market price of the stock which was, at the date the story broke, selling for 4 1/2 on the market. The par value of the stock is $10.00 per share and it is likely that the holders of preferred stock will receive that amount.

XXXXX The decision to sell the property arises over the fact that the Yosemite Valley railroad may cease operation at a date not too far distant.

XXXXX Recently the Cement Corporation officials appeared before the Board of Supervisors at Mariposa and had their taxes reduced for this and the coming year and as well were given authority to collect taxes which the board decided was excess taxes of 1943. It would be difficult to believe that the company officials were aware of the proposed sale at the time the application was made for reduced taxes and the return of the so-called over payment to the company.

XXXXX A report is also current that Kaiser is contemplating purchase of the Y.V. Railroad. Some fear that it may be for the purpose of junking it.

XXXXX The prospect of Merced's retaining the Yosemite Valley Railroad and the Yosemite Portland Cement Co. is frankly not too good. The abandonment of the railroad would probably require the cement plant to shut down and the abandonment of the railroad is likely to take place unless it is reorganized.

XXXXX The Yosemite Valley Railroad was constructed in 1905. Bonds in the amount of $5,000,000 were issued. There were two issues of bonds-the first for $3,000,000 and the second for $2,000,000. In 1936 the second mortgage bondholders foreclosed subject to the rights of the holders of the outstanding first mortgage bonds. These bonds, now reduced in amount to $2,138,000, are still outstanding.

XXXXX The Yosemite Sugar Pine Lumber Co. was the largest customer of the Yosemite Valley Railroad in normal times. The lumber company supplied approximately 70 per cent of the railroad's total income through the hauling of logs from the company's timber down to the mill at Merced Falls and the hauling of lumber from the mill at Merced Falls to connections with other carriers at Merced. The closing of the lumber company a year ago eliminated this course of revenue. Since that time the Yosemite Portland Cement Co. and the barium mine of the National Lead Company have been the principal freight customers of the railroad line. Yosemite Park and Curry Co. and the United States Navy have hauled substantially all of their freight on the railroad to El Portal. The Park and Curry Co.'s business varies with the season.

XXXXX Since the Yosemite Sugar Pine Lumber Co. has ceased to operate, the railroad has not earned sufficient profit to pay the interest on the outstanding $2,138,000 of bonds. The railroad company is in a very favorable cash position with all current operating bills paid in full promptly and with a large for $2,000,000. In 1936 the second mortgage bondholders foreclosed subject to the rights of the holders of the outstanding first mortgage bonds. These bonds, now reduced in amount to $2,138,000, are still outstanding.

XXXXX The Yosemite Sugar Pine Lumber Co. was the largest customer of the Yosemite Valley Railroad in normal times. The lumber company supplied approximately 70 per cent of the railroad's total income through the hauling of logs from the company's timber down to the mill at Merced Falls and the hauling of lumber from the mill at Merced Falls to connections with other carriers at Merced. The closing of the lumber company a year ago eliminated this course of revenue. Since that time the Yosemite Portland Cement Co. and the barium mine of the National Lead Company have been the principal freight customers of the railroad line. Yosemite Park and Curry Co. and the United States Navy have hauled substantially all of their freight on the railroad to El Portal. The Park and Curry Co.'s business varies with the season.

XXXXX Since the Yosemite Sugar Pine Lumber Co. has ceased to operate, the railroad has not earned sufficient profit to pay the interest on the outstanding $2,138,000 of bonds. The railroad company is in a very favorable cash position with all current operating bills paid in full promptly and with a large cash and security reserve. This cash reserve, together with the junk value of the railroad properties, would total approximately $800,000. The expense of abandonment and of sale would be considerable, and these expenses would probably leave sufficient funds to pay the holders of the first mortgage bonds slightly more than 30c on the dollar.

XXXXX It is hoped that the bondholders, substantially all of whom have joined in a bondholders' committee, will sell their bonds to a prospective buyer who is ready, able and willing to pay their reasonable value. This buyer would, in turn, operate the road and would attempt to increase freight revenues as quarries and other mineral resources might be opened up in Mariposa County. How much additional revenue could be obtained from passenger traffic, primarily week end traffic into Yosemite, would be difficult to determine. In any event, these are factors figuring at present in the proposal by which the line would be taken over by other interests. An alternative of this would be for the present bondholders to scale down their bonds to the actual value of the railroad property and its cash reserves, with the present company permitted to continue to operate.

XXXXX An important factor ill all this is the question of elimination of the cement dust which has plagued the City of Merced for several years. The President of the Yosemite Portland Cement Co., Mr. Stewart, assures us that equipment will be installed within the next two or three months to substantially eliminate dust from the plant. If and when this is done, efforts to save the railroad and cement company for Merced should receive more support locally. There is no question but what the payrolls of these two concerns are substantial addition to our City and County's industrial program and their loss would be greatly felt in this community. What the prospects are for the saving of these payrolls cannot be determined accurately at present. Substantial interests are working toward that end and it is hoped that their efforts will be crowned with success.

XXXXX A special stockholders' meeting of Yosemite Portland Cement Corporation has been called for June 12 in San Francisco to act upon the proposed sale to Henry J. Kaiser Company of the machinery, equipment, structures, inventories at the mill here and the quarry near Emory, to authorize sale of remaining property, and to approve the proposed severance pay plan.

XXXXX The notice sets forth that the Kaiser Company purchase would approximate $565,000, subject to adjustments, that the total available for distribution to stockholders after liquidation of other assets would approximate $1,830,000, or about $7 a share of preferred Stock. It is emphasized, however, that this is an estimate. The management "has no hope" that any amount will be available for distribution to Class A common stock, if not converted to preferred, or to Class B common stock.

XXXXX Setting forth reasons for the proposed sale and liquidation of the company, the notice states that abandonment of the Yosemite Valley railroad is "inevitable and imminent," that the management takes a pessimistic view of future sales should the company continue in business." The report states that it is the Kaiser Company's intention to ship most of the machinery and equipment to Venezuela for installation as elements in a cement mill in the country.

XXXXX It is estimated that a period of six months to a year would be required to dispose of the remaining property not sold to Kaiser Company.

XXXXX Stockholders representing approximately 80 percent of all outstanding shares of Yosemite Portland Cement Corp. stock approved the sale of the company’s Merced plant to the Henry J. Kaiser Co. at a special meeting in San Francisco Monday.

XXXXX The stockholders also approved a severance pay plan for all employees. Details of the plan are being withheld pending War Labor Board approval.

XXXXX Announcement was made today that the company’s quarry at Incline closed Monday night.

XXXXX The sale will include machinery, equipment, and buildings here.

XXXXX Merced's cement dust problem will probably be settled permanently July 1. On that date Henry J. Kaiser will be the new owner of the Yosemite Portland Cement Co. plant here and operation will cease on or about that date, according to company officials.

XXXXX In a letter to stockholders Saturday, the board of directors said that authorization for the sale of the plant to Kaiser was approved by a vote of 318,397 to 2,177. Sale of other property was approved 301 to 17,828. The ballot count followed the special meeting of the stockholder June 12.

XXXXX The letter continues:

XXXXX “The Severance Pay Plan has been approved by the treasury department with respect to employees under its jurisdiction, constituting administrative and professional personnel, but no action has yet been taken by National War Labor Board with respect to employees under its jurisdiction, constituting the remaining personnel.

XXXXX “The agreement with the Henry J. Kaiser company calls for consummation of the sale of equipment etc., on July 1. Immediately thereafter it is the purpose of the board to dispose of the remaining assets as promptly as is consistent with obtaining fair prices. As intimated in the proxy statement, it is further the purpose of the board to submit to the stockholders without undue delay a proposal for the dissolution of the corporation.

XXXXX “At a meeting of the board of directors following the stockholders meeting, the time for the conversion of class A common stock into preferred stock was extended to Sept. 30, 1944.”

XXXXX Exact closing date cannot be determined at present, according to William McCanless, plant manager. He said material now in process of manufacture may take beyond the July 1 deadline for completion.

XXXXX The Sun-Star learned that the severance pay plan approved by the stockholders provides a half month’s pay for each year with the company.

XXXXX The quarry near El Portal closed last Monday.

XXXXX Kaiser, it is reported, does not intend to operated the plant, but is acting as purchasing agent for a Venezuela concern.