Spencer Heath Archive

Item 2138

Typed sheets, signed by Heath, President and J. M. Creamer, Vice-President. No date, but it mentions a Haskins & Sells’ statement of May 21, 1917, which may have been the occasion for this writing in preparation for new financing of the company.

 

 

 

 

 

THE AMERICAN PROPELLER AND MANUFACTURING COMPANY

Statement of Origin and Growth

The business of the American Propeller & Mfg. Co. was started in the year 1910 in Washington, D.C. by Spencer Heath, who, as president of the company, is still at the head of the business. Mr. Heath at that time was a trained and experienced mechanical engineer who had taken the added profession of law and was then practicing before the United States Patent Office and in the District and Federal courts. Before taking up law and patent work Mr. Heath had been employed in various engineering capacities by well-known Middle West manufacturing companies including the Elgin National Watch Company, The Crane Company, Western Electric Company and others. In 1902 he took a position in the Navy Depart­ment at Washington. His duties here were in the preparation of plans and specifications for almost every kind and variety of engineering work, both under water and on shore, in connection with Naval Coal Depots in all parts of the world. After some four years of the Navy work Mr. Heath resigned that position to take up the practice of law for which he had meantime prepared, his previous engineering connections leading him mainly into patent practice. Among his clients in this connection was Mr. Christopher J. Lake, Vice President of the Lake Torpedo Boat Company, who retained him regularly for several years in his patent work.

 

 In 1909 Mr. Heath became interested in a purely scientific way in the design of Aeronautical Screw Propellers. Some interesting developments in this led to applications for patents and to the establishment of a very small shop for amateur construction. No money was ever invested in this shop. The first propellers made were turned into cash so promptly that these returns were used to meet bills, etc. for the preliminary expenses. The demand continued until at the end of 1911 the little shop without machinery of any kind showed a surplus of $4,000.00. During 1910 the propeller work was directed only in spare time from the law and patent work and in 1911 Mr. Heath took position as General Manager and Consulting Engineer of the Gyro Motor Company, in Washington, which company was principally owned by Mr. Emile Berliner of that City. Mr. Heath gave to the Gyro Company only four hours per day taking supervision also of Mr. Berliner’s patent work generally during that year and until removal to Baltimore in May of the next year.  Parallel to these activities the propeller work continued to grow until it became necessary at the end of 1911 to seek a new location for the manufacturing work. The new factory was equipped and started opera­tions in May of 1912, using a small part of the present premises. At times the business has been very slack but was maintained by its own profits or out of surplus till the summer of 1914 at which time Mr. J. M. Creamer joined the business, became its Vice President, in which position he continues to the present time, and from time to time invested various small amounts in its capital stock which finally in 1916 amounted to $3,000.00, the last $650.00 of which, however, was paid out of dividends from the company’s business. Mr. John also invested $1,000.00, $300.00 of which came out of dividends. The entire outside cash investment thus became $3,050.00.

 

 On November 17th, 1915 the company was reorganized with its present authorized capital of $150,000 and an issue of $119,000 of its capital stock.

 

 The sales of propellers in 1910 amounted to about $3,500, in 1911 about $11,000, in 1912 about $7,000, in 1913 $6,000, in 1914 $8,000, in 1918 about $12,000, in 1916 about $27,000. The statement of Messrs. Haskins & Sells shows sales of $28,669.37, for the period of nearly eight months prior to May 21, 1917. Orders on the books at that date were $78,000.  This has now been increased by further orders, principally from the United States Government, which make the present total over $150,000.  One Government order to the amount of $74,400 stands as yet in full verbal agreement while the formal papers are being prepared.

 

 On the pending orders the rate of deliveries required and agreed upon is very rapid enabling us to make quick turnover. Due to this fact we estimate that each $1,000 to $1,500 cash capital will enable us to finance orders of $10,000. The nature of the business is exceptional in being able to build itself up without capital to the present date and it is now requiring probably not more than one third the cash capital usually required for a similar amount of business.

 

 Almost from its beginning the business has been patronized by the United States Government in proportion to its aircraft activities. Official transactions have always been heartily grati­fying on both sides. Dealings with the Canadian Government also are very satisfactory. The Canadian Aeroplanes, Limited, is the official agency through which orders from the Imperial Munitions Board are placed.

 

 The present need for working capital grows entirely out of the sudden large increase of orders and rapid deliveries required. It is necessary to purchase some equipment and large amounts of material early enough to absolutely insure having it as fast as required. The company enjoys good commercial credit, the full amount of which it is not justified in using without cash resources in case its accounts mature more rapidly than the immediate returns on sales are adequate to meet. With a banking credit of $20,000 to $25,000 as a form of reserve to be drawn on only as required the company can make provident purchases and other provisions necessary to prompt execution of its present heavy orders. On account of the rapid turnover it is believed that no more than a small part of the company’s normal bank credit would need to be used.

 

 The business has been carried on in the same city and location and under the same management for over five years during which time it has enjoyed full credit from the principal material and supply houses of Baltimore and in other cities so far as it has had occasion to trade. The following concerns have carried accounts for this company during practically the entire period and at the present time:

 

 The Fairbanks Co., Wallace Stebbins & Sons, John Duer & Son, Anderson & Ireland, Wm. G. Whetherall, Clendenin Brothers, Cumberland Dugan & Co., Price & Heald, Thomas Matthews & Sons, Sloan Lumber Co., Joseph Thomas & Sons, The Carborundum Company, and many others, all of whom may be used for reference as to satisfactory dealings.

 

 

AMERICAN PROPELLER & MFG. CO.

 

     

      (Signed) Spencer Heath

       _____________________

                   President

 

     

      (Signed) J. M. Creamer

       _____________________

              Vice-President