T”ANNUAL REPORT

48 FOR THE-YEAR ENDED MAY 31, 1945

THE DOW CHEMEMICALCOMPANY .

MIDLAND MICHIGAN
 The next annual meeting of stockholders will be held on Wednesday, August
22, 1945, at two o’clock in the afternoon (Eastern War Time) at the Company’s
office in Midland, Michigan.
A formal notice of the meeting, together with a proxy statement and form of
proxy, will be mailed to each holder of common stock separately from but concur-
rently herewith, at which time proxies will be solicited by the management.
TO THE STOCKHOLDERS OF
THE DOW CHEMICAL COMPANY:

It is with satisfaction that in this, our 48th annual report of operations,

we are able to look back upon the cessation of hostilities on the continent of Eu-
rope and a large increase in the tempo of the war against Japan during the fiscal
year just ended. In this mighty effort it has been the high privilege of your
Company to have taken an important and significant part in helping to supply the
war materiel which has contributed to our military successes. And to the task
that still remains to be accomplished, we dedicate our energies and our resources.

FINANCIAL RESULTS-

The dollar value of sales for the fiscal year 1945 was the largest in the his-
tory of the Company and amounted to $124,570,200 representing a 3.44 per cent
increase as compared with the previous fiscal year. The consolidated net income
of the Company and its Subsidiaries amounted to $8,738,761 representing a 1.93
per cent increase over the previous year. Taxes amounted to $18,620,849 as com-
pared to $16,583,000 for 1944. After deducting dividends of $1,215,476 paid
during the year on the preferred capital stock, the consolidated net income was
equivalent to $6.02 per share on 1,248,706 shares of common capital stock. This
compares with $6.34 per share for the year ended May 31, 1944. After deduct-
ing dividends of $6,201,992 declared during the current fiscal year on the preferred
and common stock, there remained $2,536,769 for general Company operations.

During the year dividends amounting to $500,000 were received from an

associated company as compared with dividends of $900,000 received from the
same company during the preceding year. The earnings of this associated com-
pany were sufficent to permit the payment of equivalent dividends this year but a
greater portion of its earnings was retained for expansion.

EMPLOYMENT-

The number of employees of the Company amounted to a total of 1 1,500 for

the fiscal year, which represents only a slight decrease from that of a year ago.
Wages paid out for the period amounted to $40,567,000.

EMPLOYEES IN THE SERVICE-

As of July 1st of this year, 4,828 employees of The Dow Chemical Com-
pany and its Subsidiaries have entered the Armed Forces, many of whom have seen
active service on battle fronts around the world. Eighty-nine of these have made
the supreme sacrifice in the service of our country.

ARMY-NAVY “E” AWARDS-

Since the beginning of the present emergency, the Company has received
seven “E” awards in recognition of its contributions to the war effort, and in
addition has received sixteen stars for its continued high achievement in the pro-
duction of strategic chemicals.

LABOR RELATIONS-

It is with a deep sense of pride that we are again able to report the com-
pletion of another year in which, since the beginning of the war, the operations
of the Company have not suffered from a single interruption due to labor dis-
agreements. The Company has been fortunate in its labor relations primarily
because management on one hand and the representatives of labor on the other
have endeavored to make prompt settlement of labor problems, through grievance
procedure, a matter of first importance. This willingness to cooperate on the part
of both parties concerned is, in our opinion, the only sound basis for successful
labor relations. ,

CHEMICALS ESSENTIAL TO INDUSTRY-

The Dow Chemical Company produces and sells hundreds of different chemical
items. Variations of dozens of these multiply the total number again so that,
in attempting to present an overall picture of our operations for the year to our
stockholders, it would not be possible to give a complete picture in this brief
letter. As a result, we have chosen to outline in a summary fashion the points of
development of major interest, but at the same time request our stockholders to
bear in mind that many products not specifically mentioned are as vital to our
overall picture as those discussed in some detail. The outstanding and most sig-
nificant feature about The Dow Chemical Company is that we start with basic
raw materials, such as common salt, or ocean water, or natural gas or oil, and
develop products from these sources which are in basic demand by all other man-
ufacturers. Our manufacturing processes have much of romance but little of glamor.
There are no long assembly lines, but instead, hundreds of storage tanks, miles upon
miles of piping, and all sorts of intricate equipment and control devices which
are the concealed assembly lines of molecular activity. The highest quality products
come from these assembly lines but much of the glamor, unfortunately, is lost
when we find the end product filling a common tank car, a barrel, or a drum.
These are the products that turn the wheels of industry and make better living an
actuality for the American people.

MAGNESIUM-

Magnesium production and sale is one of the Company’s major operations.

At the beginning of the fiscal year, all Dow-operated plants were in full production.
During the year, however, government cutbacks were issued to reduce the country’s
magnesium production rate. In September, 1944, the Marysville-Ludington opera-
tion was discontinued, and the plants have since been maintained in standby con-
dition. The Dow-operated plant at Velasco, Texas was shut down in January, 1945,
but within a few months the military demand for magnesium again increased and
in May the Velasco plant was ordered to resume production.

During the past few years, constant changes have taken place in the mag-
nesium industry, most of them effected by military and government operations,
rather than by normal customer demand. In October, 1944, the War Production
Board released magnesium from allocation because of its over supply. Manpower
and fabricating capacity have not been as readily available, but this situation is
now rapidly easing and the time is here when our customers can again begin to
use the metal as they did before the war. In addition, we can now exert our ef-
forts toward developing new fields of application. There is a high current inter-
est among manufacturers in new materials, and particularly in magnesium.

In March, 1945, your president appeared before the Small Business Commit-
tee of the United States Senate to make suggestions regarding the disposal of the
government-owned magnesium plants. At the same time, illustrations of products
which can be made lighter and better through the use of magnesium and which are
adapted to manufacture by small business were presented to the committee.

The Company is still occupied with a large amount of war work and will
continue to meet every possible demand of the armed forces as long as it is nec-
essa ry. Some facilities are available at times, however, and other fabricators are
beginning to have opportunity to do civilian work. For this reason, every effort is
being made to enlarge established prewar uses of the metal and to develop new
applications.

The continuous years of metallurgical research and production engineering

development have resulted in the ability of the Company not only to furnish tre-
mendous amounts of pure magnesium ingot, but also to produce alloy ingot, castings,
wrought products and fabricated assemblies efficiently on a large scale. The de-
velopment of reverberatory melting, pumping, and direct chill casting methods have
revolutionized alloy ingot and billet production. The new Dow direct reading spec-
trometer has made possible almost instantaneous analysis of alloy content of the
metal. The corrosion testing program at Wilmington, North Carolina is now in its
fifteenth year and outstanding results are being obtained. The remarkable cor-
rosion resistance of magnesium alloys has impressed hundreds of government,
military and industrial officials who have visited the station during the past year.
The research department is constantly working on problems of basic research na-
ture, on methods of improving practical operation of foundry, wrought product
and fabrication production departments, on design and engineering of structural ap-
plications of magnesium, and on analytical methods. It is interesting to note that
of the total magnesium personnel, 4.5 per cent are research workers. Ten years
ago the figure was 15 per cent, and twenty years ago, 25 per cent. This is ac-
counted for by the fact that the total personnel has increased both in research and
production but production has increased to a more nearly proper proportion.

PLASTICS-

During 1945 we have had only a limited supply of plastics for sale to the
civilian trade, because either the raw materials entering into them have been criti-
cal or the plastics themselves have found essential military uses up to the extent of
our ability to produce them.

During the year, however, improvements have been made in the properties
and behavior of our materials, thereby extending their field of application, some in-
crease in production has been realized, and careful studies are constantly being
made to determine postwar requirements for our four major plastics-Styron, Etho-
ccl, Saran and Styraloy.

Almost the entire production of styrene at the present time is allocated for
the synthetic rubber program, but an increasing number of applications for it in
large quantities are being discovered so that when it is freed from government
controls the entire output of our privately owned production will find a ready
market. Styrene has been used in the manufacture of a variety of new resins
and compounds related to styrene show great promise of profitable manufacture
and wide sale.

Continued experimental and developmental work is uncovering new appli-

cations for Ethocel which should be sufficient to absorb our entire production after
the war. Currently, Ethocel is being used in military weapons.

Our plastic, Saran, continues to be used chiefly by the Armed Forces for in-
sect screening. Additional production facilities have been constructed and are now
in operation. Even this increased output, however, will be insufficient to care for
the anticipated demands for upholstery, drapery and other fabrics. Many other
applications of Saran also promise large postwar markets.

The modern and versatile polymerization plant built for the production of
Styraloy has been put into operation and has demonstrated its ability to produce
large quantities of material at low cost. Extensive production of Styraloy was not
available for the peak wartime demand, but with the completion of the plant recent
interest on the part of the trade indicates a large future market.
DOWELL INCORPORATED-

The United States Supreme Court decision, which held invalid a basic Dow
patent on acidizing of oil wells, will have little effect on the activities of this
wholly-owned subsidiary. The Court’s ruling of March 5th of this year merely
opens the patent to public use four years earlier than would otherwise have been
the case inasmuch as the patent, issued in 1932, was due to expire automatically
in 1949. Furthermore, acidizing of oil wells does not now constitute the full scope
of Dowell’s activities. During more than twelve years of technical service, in-
dustrial acidizing has become an important contribution to industry, along with
plastic plugging of oil wells. Other useful developments wi I I undoubtedly come
about in the future. Dowell Incorporated is a steadily growing asset to The Dow
Chemical Company.

AGRICULTURAL CHEMICALS-

In the past few decades the evolution of scientific agriculture has been
proceeding at an accelerated pace. Progress has been speeded because of the work
of federal, state, and independent research groups, the mass production of agricul-
tural machinery and a new era in the application of chemistry to the problems of
agriculture. It might be said that today chemistry aids and protects the produc-
tion of food crops from before the planting of the seed until the product reaches
the table of the consumer. While this may not be an actuality in other than a few
isolated cases, it serves to indicate the new and inclusive range of influence of
chemistry over agriculture. Dow products may be found at both ends of this range.

Soil fumigation, to free the planting area of root-attacking pests, is one of

the newest developments in agricultural chemistry. Dow has been and is playing
a significant part in this research and already numbers three soil fumigant materials
among its contributions. The coating or “pelleting” of certain types of seeds, par-
ticularly fine seeds such as those of the sugar beet, to facilitate mechanical culti-
vation is another gift of science, the potentialities of which have as yet hardly been
tapped. Dow is fortunate in having been able to play a major part in this
development.

We have long occupied the position of a leading producer of insecticides

and fungicides, and our line of these materials is constantly being improved and
expanded as, for instance, with soil fumigants and plant hormones.

Among our more recent developments is 2,4-D, a plant hormone-like com-

pound which already shows promise of a number of interesting uses. As a selective
weed killer, it kills by stimulating overgrowth, attacking broad-leafed plants with-
out damaging other types, and shows great promise for controlling weeds by chem-
ical means in lawns and many varieties of farm crops.

The use of phenothiazine, the “sulfa drug of the animal industry”, has been
considerably extended during the past few years. Dow fumigants protect foodstuffs
from infestation in transit and storage, and Dow packaging materials will, when
available to the civilian market, help to bring agricultural products into the home
attractively wrapped and protected against climatic conditions, insects, dirt and other
hazards.

Agriculture is America’s largest industry and we are proud of our ever-

growing bond with it.

CONCLUSION-

As we survey the years of our growth and plan for the future, we can gain
satisfaction in the fact that we are a basic industry-an industry which is an in-
tegral part of the economic fabric of our nation. There is scarcely a single
enterprise in the country in which chemistry does not today play an important
part. For this reason there is cause to reflect on how the application of chemistry
can best serve the well-being of our nation.

Less than four years ago the American people were given a lesson which they
should never forget. It is simply that to the extent that any nation lacks self-
sufficiency in basic raw and industrial materials, to the same extent is she vulner-
able to attack in time ‘of war.

Rubber, of course, is the outstanding example of this principle. Our depend-

ence upon foreign sources of raw rubber hampered our ability to wage war and
disrupted to no small degree our civilian life. Only the rapid development of an
entirely new industry- the synthetic rubber industry-saved this country from a
military and industrial impotency that might have prolonged the war by years.

We, as a nation, are today more self-sufficient than at any time in our his-
tory. The accomplishments of the last few years are proof in themselves of ,the
diversification which is possible through the science of chemistry. We have seen
that through it nearly all the needs of man can be supplied from only a handful of
basic resources, such as coal, petroleum, sea water and air. We have learned that
through chemistry merely a few basic resources can be converted into a vast num-
ber of industrial materials and that agricultural products as raw materials for
chemistry have only just crossed the threshold into the realm of their potential
possibilities. We should make it our job to preserve and protect this independ-
ence we have gained, for only in this way can we do our part most efficiently
in helping to maintain peace and to provide employment for our people. We are
only beginning to realize the opportunities which chemistry and science are open-
ing up to us for raising our standards of living and abolishing disease. During
the war many billions of dollars worth of industrial facilities and equipment have been
constructed, much of which, if we have a healthy market here at home, can be
put to work in meeting the demands for new products and new materials.

It would be folly, indeed, if after the war we should surrender our economic
independence and place obstacles in the way of producing materials and goods
domestically in order to build up an artificial system for world trade. This nation
would be grievously ill-advised if it entered into any grandiose schemes to foster
world trade at the expense of our own economic and military security. The best
way to provide jobs is to produce here at home as great a portion of our needs as
possible. Let us not, therefore, try to turn backward the wheels of our scientific
progress, but let us move forward through chemistry toward a broader eco-
nomic system which will provide maximum opportunity for the people of our country.
Toward this end, The Dow Chemical Company hopes to make a significant contribution.

WILLARD H. DOW
President

Midland, Michigan
July 30, 1945
HASKINS & SELLS
THE NATIONAL BANK BUILDING
CERTIFIED PUBLIC ACCOUNTANTS
DETROIT

ACCOUNTANTS CERTIFICATE

The Dow Chemical Company:

We have examined the consolidated balance sheet of The Dow Chem-

ical Company and its subsidiary companies as of May 31, 1945 and the
related statements of consolidated income and surplus for the year ended
that date, have reviewed the accounting procedures of the companies, and
have examined their accounting records and other evidence in support of
such financial statements. Our examination was made in accordance with
generally accepted auditing standards applicable in the circumstances and
included all auditing procedures we considered necessary, which procedures
were applied by tests to the extent we deemed appropriate in view of the
systems of internal control; it was not practicable to confirm receivables
from United States Government departments and agencies but we have
satisfied ourselves with respect to such receivables by means of other audit-
ing procedures.

In our opinion, the accompanying consolidated balance sheet and state-

ments of consolidated income and surplus fairly present the financial con-
di tion of the companies at May 3 1, 1945 and the results of their operations
for the year ended that date, in conformity with generally accepted account-
ing principles and practices applied on a basis consistent with that of the
preceding year.

HASKINS 0 SELLS

July 24, 1945.

 THE DOW CHEM
( Incorporated

AND SUBSIDIA
-
CONSOLIDATED BALANCE SHEET,

ASSETS
May 31
CURRENT ASSETS: 1945 1944
Cash ~~-__-___--~---_~__--~---~~-~-~~-~--~-~~-~-~~~ $ 17,505,643.48 $ 14,1x18.42
United States Government Securities (including Treasury tax
notes, 1945, $1 1,560,OOO.OO; 1944, $8,680,000.00) - at cost $ 22,885,OOO.OO $ 16,884,153.36
Notes and accounts receivable:
Customers _________-_________--------------------- $ 1 1,537,408.91 $ 1 1,650,822.72
Associated companies ------__-------------~------~--- 193,527.91 432,926.60
Employees __-___-- ______-_ - ____ - ____ - _________ -__- 4 1,344.80 33,549.69
Sundry __-___--___-____-___----------------------- 350,707.80 277 I- 638.38
Total -_--_---_----_--_-_--~~~--~~--~~~-~~ $ 12,122,989.42 $12,394,937.39
Less reserves for doubtful receivables _ _ - - - __ - - _ _ __ - _ _ - - _ 305,244.70 280,l 10.09
Net receivables _-___---___- ____ - ____ - $ 1 I,81 7,744.72 $ 12,1 14,827.30
Billed and unbilled receivables from United States Government and
its agencies (other than for sale of product) --_---__----_ $ 272,105.12 $ 1,Ol 1,231.49
Inventories:
Finished goods and work in process (at lower of cost or market) $ 9,4 15,374.86 $ 9,101,841.98
Materials and supplies (at cost---approximately market) _--_ 6,8 14,096.49 7,540,610.55
Total ___-______-__---__------------ $ 16,229,47 1.3 5 !$ 16,642,452.53
Total current assets _-_ __ _ _- - -_ _ _ $ 68,709,964.67 $ 60,772,183.10
INVESTMENTS AND NON-CURRENT RECEIVABLES:
Notes receivable and capital stock (at cost) of associated com-
panies (less than equity in net assets OS shown by balance
sheets of companies) _____-____--______-_----------- $ 5,688,OOO.OO $ 3,538,OOO.OO
Postwar refund of excess profits taxes -_----_--_-_--_-_---_ 2,597,03 1.2 1 1,563,646.14
Non-current notes and accounts receivable (including employees’
receivables, 1945, $16,558.68; 1944, $41,320.5 1 1 ---a---- 304,292.44 605,234.19
Sundry securities (less reserve, $63,413.93) --_-----_--_--_ 658,664.1 1 593,8 12.55
Total investments and non-current
receivables ---__--__-_-__-___ $ 9,247,987.76 $ 6,300,692.88
PROPERTY (including emergency facilities for national defense,
completed and in progress, with a gross book value (cost) subject
to amortization, 1945, $44,486,885.53; 1944, $42,368,941.32) :
Plant properties and equipment- at cost (less reserves for depre-
ciation and amortization, 1945, $57,736,794.15; 1944,
$45,174,593.72) ___________ ---__---_-_-_--_----___ $ 66,265.4 17.03 $ 70,826,904.63
Housing properties- at cost (less reserves for depreciation and
amortization, 1945, $552,933.96; 1944, $416,786.13) ____ 1,374,553.95 1,302,973.03
Total property --_---___---_-___ $ 67,639,970.98 $ 72,129,877.6/6
PATENTS--At cost or nominal value (less reserves for amortization,
1945, $71,862.94; 1944, $64,403.11) --_-__---_----___-_ $ 64,91 1.46 $ 72,37 1.29
DEFERRED CHARGES-Unexpired insurance premiums, unamortized
debenture discount and expense, and sundry ---------_-__-__ $ 484,064.20 $ 34 1,204.49
TOTAL __-_-_---_--___--- $146,146,899.07 $139,6 16,329.42
-

NOTE: Operations of the Company and its subsidiaries include transactio

the Government the right under certain conditions to renegoti
result of renegotiation proceedings for the years ended May 3
subsidiaries for those years except that, in the case of one sub:
ended May 31, 1942 and 1943. Renegotiation proceedings f
upon the results of proceedings of the three prior years, it is
meaning of the legislation have not been realized for such yea
ZAI. COMPANY
Michigan 1

r COMPANIES

IAY 31,1945 AND MAY 31, 1944

LIABILITIES
May 31
CURRENT LIABILITIES: 1945 1944
Accounts payable-Trade and sundry ___---_______________ $ 6,2=93.3 1 $ 5,3=2.84
Federal income and excess profits taxes ____________________ 17,304,690.07 14,059,968.47
Serial debentures maturing within one year ________ -___- ____ 750,000.00 750,000.00
Dividends payable _ _ _ - _ _ _ _ _ - - _ _ _ _ _ _ _ - _ _ _ _ __ _ _ _ _ _ _ __ _ - - 1,240,398.50
Accrued liabilities:
Payrolls ________________________________________-- 926,805.20 1,23 1,994.42
Taxes -Social security, property, Federal capital stock, state
income and franchise, and sundry ----_--------------- 1,280,932.89 1,326,847.99
Interest ____ -------------------------------------- 63,039.69 65,985.63
Rents __________-_____________________________--- 144,06 1.70 166,630.64
Sundry ------------------------------------------ 107,600.l 1 127,33 1.97
Total current liabilities __________ $ 28,l 12,121.47 $ 23,057,22 1.96

FUNDED DEBT (Board of Directors resolved on July 17, 1945 to

redeem as of September 1, 1945 the debentures classified here-
under) :
Ten year 2%% debentures, due September 1, 1950 -_-------_ $ 7,500,000.00 $ 7,500,000.00
Serial debentures maturing in the amount of $750,000.00 on
September 1, 1946 and annually thereafter until September 1,
1950 (debentures maturing within one year included in current
liabilities) _________-____-_______________ ---___---- 3,750,000.00 4,500,000.00
Total funded debt ____ -_- ____ --- $ 1 1,250,OOO.OO $ 12,000,000.00

RESERVES FOR FIRE AND ACCIDENT LOSSES, DAMAGE CLAIMS,

ELECTROLYTIC CELL REPLACEMENTS, AND SUNDRY ______ $ 1,455,163.22 $ 1,808,29 1.08
MINORITY INTERESTS IN SUBSIDIARY COMPANIES __-_____-- !3 1,3 12,455.09 $ 1,270,426.12
CAPITAL STOCK:
Cumulative preferred stock, Series A (authorized, 600,000 shares
without par value; outstanding, 303,869 shares) - annual
dividend $4.00 per share ____________ --__-----_----_- $ 30,386,900.00 $ 30,386,900.00
Common capital stock (authorized, 2,000,OOO shares without par
value; outstanding, 1,248,706 shares) ___- _____ ---__----- 37,293,908.83 37,293,908.83
Total capital stock _____ --__----- $ 67,680,808.83 $ 67,680,808.83

SURPLUS :
Capital surplus _________________-___________ ---__-_--- $ 638,84 1.93 $ 638,84 1.93
Earned surplus ______--_____________________ ---__----- 35,697,508.53 33,160,739.50
Total surplus ---___---_---- ____ $ 36,336,350.46 $ 33,799,58 1.43

TOTAL --__-__--__-__-___ $146,146,899.07 $139,6 16,329.42

ch are subject to the provisions of war profits control legislation giving

rr contracts and subcontracts for the purpose of limiting profits. As a
.2, 1943, and 1944, no refunds were required of the Company or its
refunds, not relatively material in amount, were required for the years
year ended May 31, 1945 have not been started. However, based
minion of officials of the Company that excessive profits within the
 THE DOW CHEMICAL COMPANY
AND SUBSIDIARY COMPANIES

STATEMENT OF CONSOLIDATED INCOME

FOR THE YEARS ENDED MAY 31,1945 AND 1944

Year Ended May 31

1945 1944
SALES AND OTHER REVENUE:
Sales _-------_--_-_------_____________ $124,570,200.83 $120,426,95 1.95
Dividends received from associated company --_ 500,000.00 900,000.00
Interest from associated companies --_-----__ 294,955.42 158,732.36
Fees received in connection with the construction
and operation of government owned plants __ 2,085,080.04 2,680,009.47
Other income ________ -- -____ -___-------- 537,300.37 49 1.087.46
Total - ____________________ -- $127,987,536.66 $124,656,78 1.24

COSTS AND OTHER CHARGES:

Cost of sales (excluding provision for deprecia-
tion and amortization) ----------------- $ 82,03 1,153.29 $ 83,208,320.47
Provision for depreciation ----------------- 5,332,014.66 4,1 18,785.23
Provision for amortization of emergency facili-
ties ________________________________ 8,353,549.70 7,530,695.50
Selling and administrative expenses --------- 6,840,949.68 5,814,088.01
Interest and amortization of discount and ex-
pense on debentures ------------------- 265,6 18.84 275,643.56
Loss on disposal by dedication for public pur-
poses or by sale of property located within a
townsite developed by the Company for em-
ployees ----------------------------- 12,05 1.79 8 19,559.02
Other income charges _-_--------_-------- 78,428.59 174,674.78
Minority interests in income of subsidiary com-
panies -_____________________________ 67,028.97 83,148.06
Provision for Federal income and excess profits
taxes :
Normal tax and surtax _________________ 4,307,365.49 3,927,728.63
Excess profits tax (less postwar refund and
credit for debt retirement) ____________ 1 1,960,614.12 10,130,634.74
Total ---_------------------- $1 19.248,775.13 $1 16,083,278.00
INCOME FOR THE YEAR -----___---_--_--__ $ 8,738,761.53 $ 8,573,503.24
 THE DOW CHEMICAL COMPANY
AND SUBSIDIARY COMPANIES

STATEMENT OF CONSOLIDATED SURPLUS

FOR THE YEARS ENDED MAY 31, 1945 AND 1944

Year Ended May 31

CAPITAL SURPLUS 1945 1944

BALANCE AT BEGINNING OF THE YEAR _-_-- $ 638,841.93 $ 36,539.0 1

CREDIT-Excess of proceeds ( less expenses) re-
ceived from sale of 249,504 shares of cumulative
preferred capital stock, Series A, over $100.00
per share credited to the capital stock account 630,477.92
Total --- ______ --_--___------ $ 638,841.93 $ 667,0 16.93
CHARGE-Premium paid on retirement of 5,635
shares of 5% cumulative preferred capital stock 28,175.OO

BALANCE AT END OF THE YEAR --____------ $ 638,841.93 $ 638,84 1.93

EARNED SURPLUS
BALANCE AT BEGINNING OF THE YEAR ----- $ 33,160,739.50 $ 28,99 1,490.17
CREDIT-Net income for the year ____________ 8,738,761.53 8.573.503.24
Total __-- ____ -----___-_--___ $ 41,899,501.03 $ 37,564,993.4 1
CHARGE-Cash dividends (See Note) :
Common capital stock _________ --__-_---- $ 4,682,647.50 $ 3,746,1 18.00
5% cumulative preferred capital stock ______ 174,984.20
Cumulative preferred capital stock, Series A __- 1,5 19,345.oo 483,151.71
Total ____ ----~---~~~~----~----~~ $ 6,20 1,992.50 $ 4,404,253.9 1
BALANCE AT END OF THE YEAR ---_---_-___ $ 35,697,508.53 $ 33,160,739.50

NOTE : Dividends for the year ended May 3 1 ,1945 include five regular
quarterly dividends on the common and preferred stocks which
were declared during the year, including dividends amounting to
$936,529.50 on the common stock and $303,869.00 on the Series
A preferred stock declared on May 29, 1945 and paid on July 16,
1945 which are included in current liabilities at May 31, 1945 in
the accompanying consolidated balance sheet.
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 THE DOW CHEMICAL COMPANY

Directors
E. 0. BARSTOW L. I. DOAN M. E. PUTNAM
E. W. BENNETT A. B. DOW C. J. STROSACKER
J. S. CRIDER W. H. DOW W. R. VEAZEY

Officers
Chairman of the Board, President and
General Manager - - - - W. H. DOW
Vice President and Treasurer - - E. W. BENNETT
Vice President and Secretary - - - L. I. DOAN
Vice President - - - - E. 0. BARSTOW
Vice President - - - - C. J. STROSACKER
Vice President - - - - M. E. PUTNAM
Assistant Treasurer - - ’ - - J. S. CRIDER

Assistant Treasurer and Assistant Secretary F. H. BROWN

Assistant Secretary - - - - A. P. BEUTEL
Assistant Secretary - - - L. A. CHICHESTER
Assistant Secretary - - - - R. L. CURTIS
Assistant Secretary - - - G. M. McGRANAHAN
Assistant Secretary - - D. J. LANDSBOROUGH
Auditor - - - - - C. PENHALIGEN

Transfer Agents Stock Registrars

Guaranty Trust Company of New York Common The New York Trust Company
The Notional City Bank of New York Preferred Guaranty Trust Company of New York
The Cleveland Trust Company Common and Preferred The National City Bank of Cleveland
 THE DOW CHEMICAL COMPANY

Executive Office: Midland, Michigan

General Sales Office: Midland, Michigan

Soles Offices

Boston 16, Massachusetts New York 20, New York

20 Providence Street 30 Rockefeller Plaza

Chicago 3, Illinois Philadelphia 2, Pennsylvania

135 So. LaSalle Street 1400 S. Penn Square

Cleveland 13, Ohio San Francisco 4, California

Terminal Tower 310 Sansome Street

Detroit 2, Michigan St. Louis 8, Missouri

Fisher Building 3615 Olive Street

Houston 2, Texas Seattle 1, Washington

2205 Commerce Building 1702 Textile Tower

Los Angeles 14, California Washington 5, D. C.

634 So. Spring Street 915 Shoreham Building

Factories Located

at

Midland, Michigan Pittsburg, California

Bay City, Michigan Seal Beach, California

Freeport, Texas
 ,THE DOW CHEMICAL COMPANY

Subsidiary Companies

Cliffs Dow Chemical Company Marquette, Michigan

Dow Chemical of Canada, Limited Sarnia, Ontario

Dow Magnesium Corporation Midland, Michigan

Midland Ammonia Company Midland, Michigan

Dowel I I ncorpora ted :

Executive Office Midland, Michigan

General Off ice Tulsa, Oklahoma

Dowell Incorporated Soles Off ices

Chicago 3 Illinois 135 South LoSolle Street

Salem Illinois P. 0. Box 292
Wichita 2 Kansas 519 Union Not’1 Bank Bldg.
Baton Rouge Louisiana P. 0. Box 1266
Shreveport 23 Louisiana 326 First Not’1 Bank Bldg.
Mt. Pleasant Michigan P. 0. Box 152
Kansas City 8 Missouri 220 B. M. A. Bldg.
St. Louis 8 Missouri 3615 Olive Street
New York 20 New York 30 Rockefeller Plaza
Cincinnati 2 Ohio 521 Keith Bldg.
Cleveland 13 Ohio Terminal Tower Bldg.
Oklahoma City 2 Oklahoma 1350 First Not’1 Bldg.
Tulsa 3 Oklahoma 524 Kennedy Bldg.
Philadelphia 2 Pennsylvania 1400 South Penn Square
Borger Texas P. 0. Box 1029
Fort Worth 2 Texas 635 Ft. Worth Club Bldg.
Houston 2 Texas 21 15 Commerce Bldg.
Midland Texas P. 0. Box 1858
Wichita Falls Texas Waggoner Bldg.
Calgary Alberto, Canada 907 Lancaster Bldg.

Associated Companies

Dow Corning Corporation Midland, Michigan

Freeport, Texas
Ethyl-Dow Chemical Company
Wilmington, N. C.