Corporate Genealogy
October 3, 1964
In 1929, several textile operations with much common ownership were amalgamated with Berkshire Cotton Manufacturing Co. (incorporated 1889), immediately renamed Berkshire Fine Spinning Associates, Inc. The merging mills were Valley Falls Co., Coventry Co., Greylock Mills, and Fort Dummer Mills, incorporated in 1853, 1865, 1880 and 1910 respectively. Although the documentation is not perfect, it is believed that the earliest progenitor of these corporations began business in 1806.
The resulting operation was a giant, accounting for about 25% of the countrys fine cotton textile production. In the 1930s its many mills utilized approximately 1% of the electric output in the New England states. But profitability did not follow volume and preferred dividends were omitted late in 1930 and for six years thereafter.
World War II and the immediate postwar years produced extraordinary profitability and great balance sheet strength. In 1955, Hathaway Manufacturing Co., a New Bedford based manufacturer of both synthetic and cotton textiles was merged into Berkshire Fine Spinning and the name was immediately changed to Berkshire Hathaway Inc. Hathaway was founded in 1888 by Horatio Hathaway and included Hetty Green as an original shareholder with 6% ownership.
The combined enterprise had over 10,000 employees and owned close to six million square feet of plant but the subsequent financial record was just as dismal as that which followed the previous grand consolidation of 1929.
After the merger, Berkshire Hathaways summarized balance sheet was as follows at its fiscal year-end September 30, 1955:
Assets
| Cash | $ 4,169,000 |
| Marketable Securities | 4,580,000 |
| Accounts Receivable and Inventories | 28,918,000 |
| Net Property, Plant and Equipment | 16,656,000 |
| Other Assets | 1,125,000 |
| $55,448,000 |
Liabilities and Stockholders Equity
| Accounts Payable and Accrued Expenses | $ 4,048,000 |
| Stockholders Equity — 2,294,564 shares outstanding; book value $22.40 per share | 51,400,000 |
| $55,448,000 |
During the nine following years, sales of Berkshire Hathaway Inc. aggregated approximately $530 million. A reconciliation of shareholders equity for these nine years follows:
| Stockholders equity at September 30, 1955 | $51,400,000 |
| Additions to capital surplus | 888,000 |
| Aggregate net loss-from operations 1956-64 | (10,138,000) |
| Cash dividends paid 1956-64 | ( 6,929,000) |
| Repurchases of common stock | (13,082,000) |
| Stockholders equity at October 3, 1964 | $22,139,000 |
Berkshire Hathaway Inc.s summarized balance sheet at October 3, 1964 was as follows:
Assets
| Cash | $ 920,000 |
| Accounts Receivable and Inventories | 19,140,000 |
| Net Property, Plant and Equipment | 7,571,000 |
| Other Assets | 256,000 |
| $27,887,000 |
Liabilities and Stockholders Equity
| Notes Payable | $ 2,500,000 |
| Accounts Payable and Accrued Expenses | 3,248,000 |
| Total Liabilities | 5,746,000 |
| Stockholders Equity — 1,137,776 shares outstanding; book value $19.46 per share | 22,139,000 |
| $27,887,000 |