The following- report cover
ing the affairs of the Kodiak
Ice and Cold Storage Com
pany, Inc. was compiled by
Marshall Crutcher, chairman
of the Chamber of Commerce
committee to consider the
affairs of the KICSC.
Early in January, Crutcher,
Emil Knudsen and Jorgen
Fredrickson were nimed by
C of C President Merrill Coon
to investigate the matter.
Recently the City of Kodiak
filed suit against the cold
storage company in Third
District Court asking that the
concern vacate its quarters at
the city dock.
The cold storage company
filed an answer to the suit. It
is represented by Faulkner,
Banfield and Boochever, law
firm in Juneau. The city is
represented by Paul Du pier,
city attorney.
Feb. 14, 1952
Mr. Merrill C. Coon,
President
Kodiak Chamber of Commerce
Kodiak, Alaska
Dear Mr. Coon:
To carry out the work of
the Kodiak Chamber of Com
merce “Special Committee to
consider the affairs of the Ko
diak Ice and Cold Storage
Company, Inc.”, I visited
Juneau from January 31 un
til February 5, 1952. I told
Mr. Wallis S. George, Presi
dent of the Company, about
the interest which the Kodiak
stockholders of the Company
and the citizens of Kodiak
have in the affairs of the
Company, and of our wort-y
because of the incomplete con
struction of the plant and of
the suit started by the City of
Kodiak to appropiate the
Company’s property. I ex
pressed personal dissatisfac
tion because the Company had
not had stockholders meet
ings, nor issued annual state
ments about the Company’s
finances, prospects and in
tentions.
Mr. George granted me ac
cess to all of the Company’s
records and gave me all of
the information that I asked
for. I did not verify the book
entries by an inspection of
cancelled checks, vouchers
and other supporting docu
ments. The Company’s books
gave all indications of being
kept properly and I relied
upon them.
I took a trial balance of the
general ledger as of December
31, 1951. The policy of the
Company has been to classify
all of its disbursements as in
cidents necessary to the erec
tion of the cold storage plant
and to capitalize them, which
policy I approve. Its federal
income tax returns show
neither income nor expense.
The financial condition of
the Company, as determined
from its trial balance at De
cember 31, 1951, is shown in a
Balance-Sheet which is at
tached.
Mr. George stated that the ;
Company has no liabilities
which are not entered in its
books. Nothing occured dur
ing my examination 1u cast
doubt upon that statement. j
The Comoany has been pay- !
ing the City of Kodiak $500.00 j
per month under the terms of j
a “Lease, Option and Agree
ment” dated October 8, 1947. j
It has been the reasonable ex-;
pectation of the Company that
those payments will apply |
upon the purchase price of the
site of the Company’s plant, j
Therefore, the total of such j
payments, $22,500.00, has been
capitalized as the cost of the
i land.
I inspected the stock certi
ficate stubs and found that the
Company has issued shares
for the full par value thereof,
for cash, as follows:
The stock at December 31,
1951, was held as follows:
Wallis S. and Alliene George
SHARES; 1,808; PERCENT
64.1, Kodiak stockholders,
SHARES: 640; PER CENT;
22.8, Juneau stockholders,
SHARES. 371; PER CENT;
13.1.
Year 1947
1948
1949
1950
1951
$2,500.00
68.500.00
75.300.00
36.900.00
98.700.00
$281,900.00
The Articles of Incorpora
tion provide that Wallis S.
George shall receive shares
of a par value of $25,000.00
for organizing the Company
and that he shall sell the re
maining shares without ex-j
pense to the Company. None]
of the 250 shares thus authori
zed have been issued to Mr.
George as yet. The accounts
of the Company show no ex
penses for selling shares. The
authorized capital of the Com
pany is $500,000.00.
Mr. George has drawn no
salary. I found nothing in the
expense accounts to indicate
any overhead expenses; he
has furnished bookkeeping1
service, office space, etc. with
out charging for them. I ob
served nothing to indicate any
impropriety in the Company’s
expenses or affairs. The By
laws pertaining to the signing
of the checks have not been
adhered to literally and should
be changed by the sharehol
ders. Such other discrepancies
as I observed were trivial.
I feel that Mr. George, as
the President of the Com
pany, should have held the
annual meetings of the cor
poration in Kodiak on the
third Wednesdays in Septem
ber in 1948, 1949, 1950 and
1951, as called for by the
Articles of Incorporation, but
believe that they will be ob- (
served hereafter, as required!
by law and by sound business
practice.
The Company has filed re
ports with the Auditor of A
laska as required by law.
The “Lease, Option and;
Agreement’’ between the City,
of Kodiak and the Kodiak Ice;
and Cold Storage Company
Inc., dated October 8, 1947,
grants the Company an option
to purchase certain water
front property after the ex
piration of three years from
the date of lease, provided the
cold storage plant is in opera
tion by that date, for $25,000 -
00, less such sums as shall!
I have been paid as rent, the)
I option to be exercised not
later than October 8, 1952
The Company was organiz
ed and sold its first shares
j during 1948. In 1949 it tore
j out a part of the old City
Dock and erected a wharf of
, creosoteu piling, upon which
j stands a large fish shed of ex- 3
cellent construction, which has'
cost $138,134.85 to date. Dur- j
ing 1950 the reinforced con
crete foundations for the cold |
storage building were erected, j
which have cost to date $117, -
885.32. j
During 1951 the Company 1
purchased and shipped to j
Kodiak a tonnage of struc
tural steel for the cold storage
building, at a cost of about
$25,000 00
Since the outbreak of hos
tilities in Korea the construc
t on work has been stymied.
The availability of labor has
declined and shortages of
material and its increasing
cost iiave deterred the Com
pany’s program. Further
more, contractors have had
plenty of work for the fede
ral government and have been
independent about bidding to
complete the cold storage
plant.
I feel that Mr. George plans
to finish the plant have been
reasonable and in the Com
j pany’s interest. Hindsight is
1 always better than foresight
; and no good can come from
1 reciting that if the Comptny
had done thus and so at vari
ous times the present results
would be better. If I had had
to carry the responsibilities
for the Company’s affairs, I
r.ow believe that i should have
done about the same as Mr.
George has done.
) I ft el that the legal action
I by the City of Kodiak against
(the Company is unfortunate
| and unfair, but I recognize
! that the Common Council
i needed first hand knowledge
j from Mr. George about the
I Company’s prospects, which
i he should nave furnished. I
hope that the Council will
withdraw its legal action. The
law suit will not help the
Company to accomplish its
'objects, in fact will prevent
: the Company from financing
' its needs. Tne Company has
|done all that could have been
j expected under the circum
! stances and should be helped
, now, rather than hindered.
The best possible evidence
of good faitn upon Mr.
. George’s part has been that
j whenever the Company need
ed funds that were not avail
able from other sources, he
has bought shares at their full
par value to provide the cash.
No stockholder could ask for
better support than this.
Of course the shareholders,
the Common Council, the
Continued on Page 6
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