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was a general discussion Karpen comes back with his two company suggestion, one a holding company for the patents the other made of the 3 constituents with issue of bonds. I pointed out issue of bonds or even issue of increased capital on a merger exposes each stockholder individually to pay large income taxes in accordance of decision of Supreme Court of two days ago None of them seems to have read or studied these decisions. Told to Karpen that I personally would be unwilling to have such a loss and I imagined several other stockholders including himself would feel the same.
I told him that in any
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proposed merger we must aim to be fair and equitable and in so doing the shares now in the hands of the present stockholders of each one of the three companies would all increase in intrinsic value regardless their nominal value. That the main thing to arrive at was an understanding as to the relative values of each company. It was easy enough to establish physical value of assets of each company by having this determined by impartial appraisal following the same rules for each. But there was besides the intangible assetts There was more difficult but not impossible and might be determined by a ratio between assets and earnings. But even these consideration should be