[Letter from R. M. Armstrong, June 10, 1965] Page: 5 of 6
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SUMMATION OF COSTS TO IMPERIAL PER ITEMS 1 TIPU 5
1. In October of 1961, Imperial verbally agreed to enter into a 10 year agree-
ment with C and H cove ring purchases of raw sugar and a new shipping
arrangement. Imperial's decision was made in haste, with only two days
in which to consider such proposal and in reaching such decision, relied
upon the assurances of C and H that such an agreement would increase
the Galveston operation earnings by $160, 000 per year. At that time it
was contemplated that an investment of $500,000 would be required for
the installation of receiving and warehousing facilities to accornodate the
large ships discharging at an average rate of 1, 000 tons per hour.
Our experience to date with the new shipping arrangement rev ls that our
earnings at Galveston are 53 /long ton short of the anticipated goal or a
total of $103,000. Also, the total investment in the Galveston facilities
amounted to approximately $1,200,000 or $700,000 in excess of the original
estimate. Consequently, adding interest of $32, 000 to the deficit in
earnings of $103, 000 results in a total deficit in contemplated earnings of
$135,000. The net result is that we are realizing increased ea rnings from
the Galveston operation in the amount of $25, 000 with which to amortize
an investment of $1, 200, 000.COMPARATIVE COST BETWEEN C AND H TERMS
AND CONVENTIONAL TERMS:
2. Laytime provisions of 5 running days vs laytime
computed @ 2,000 tpd discharge excluding Sat.
Sun. , & Holidays.
Laydays less 2. 06 days required to discharge
provides 8.59 days dispatch @ $1,064. 25/day -
Total Dispatch $9, 1 37.22
Actual Dispatch earned 5,444.58
LOSS OF DISPATCH PER ITEM 2 $3, 692. 64
3. Demurrage Liability in case of Longshoremen strike
Experience would indicate annual sum of
4. Difference in stevedoring allowance
$2.89 vs $2.36 - 53 /ton on 193, 000 long tons
5. Purchase price of raws at New York vs Gulf Price
2 Ocean freight differential 40r /ton on 216, 000 short
tons
TOTAL ITEMS 2 THRU 5AMOUNT
PER YEAR$ 33, 233. 76
10,000.00
1 02,290.0086,400.00
$231,923.76
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Armstrong, Robert Markle. [Letter from R. M. Armstrong, June 10, 1965], letter, June 10, 1965; (https://texashistory.unt.edu/ark:/67531/metapth1210426/m1/5/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Rosenberg Library.