, 1873-07-02
MONEY AND conn ERCE
MONETARY.

MONETARY.
ruEapAx EvErrao, tuiy1.
Tho money market continues quiet, aud Ia
,bu,saas,tly supplied with 1oauahlo funds.
Nov York exchange WIS weaker to-day at 25o
per al 900 premium.
Thoro lis scarcely my currency going to tho
country though considerable amoun's are com,
ing in from various parts Of tho 1Veat and North
West.
WHAT Is " wArERED" srooK7
Among tho charges brought hy tho farmora'
Oranges against tho rni1road companioa Ia TINT
Of" Watering tl,oir Btooks." and wlli1o, Id nomo
caAos, thoro ts, aonbt}pss, good ground for tho
clnrgcs, thoro is, nevertheless, vast aoal Of
mscoucoptlon on tho pnrt Of thoac WHO mako
them as to what constitutes watering"
Many writer's nnl public Bpoakors find 1t so con-
yo1,iout phrase 30 ambiguous, 80 littlo under-
stood by thoir roaders and horrors, or eyon by
themselves, TINT It il considered aafo to uso 1t
under any circumstances In regard not only to
railroads but all sorts Of joint stock corpora
lions. With many persons tho more fact that
B manufacturing company, or any othor Joint
stuck associasion, has Increased lte capital With
out sou1o large assessment on 1ts stockholders,
mud without my large ausn Of money paid in by
thom ut ono fine, IL considered sufficient evidence
of tcale,7ug their stock. But tint there is nmany
casos a legitimate increase Of capital from earn-
tngB which is mistaken for " watering OF stock
nny DO illustrated by taking the caao Of, say, a
bank. Lot us suppose D bank started hero in
The Wost with eepital 1o ot saMo og paa aata n
for instance, arc from 1d to 20 per cont not lot
uH suppose 18 per cont to bo the not profit III tho
ease untIer confederation. But, though tho
bank clears l8 ror cont every year on te capltal
- ofaC t3Sr1H In JEtft
tho payment Of annnnl dividends to the amount
cont &c, 10 an % addition to 10 WORKING capital. This
.aded capital Is eslea s a.,9 s9urpus ,dasti5, 1uaa,
Now Now II tho bank should continae to earn d tho
cato OF ia per cont on its original capital for ton
goars, and should annually divide per cont % %
per cont to the surplus fund, and II tho amount
90 carried to surplus, boing in faot capital and
used az such should earn profits at tho same
ratio aa tho original capital nl Of Which aro roa-
the capital III the course Of tho ton years would
bo about s3, 500 900. THUS ut tho end of tho ton
years tho bank would have an aggregate capital
Il e4,5oo,oo its atockloldors would d. be be
annually, or per cent on g. 5oo &c., instead Of
esO,o0o, or por cont on el,oo0,0oo, as ct tho
beginning. Now horo would DO m incrtnso Of
$50 per cont in hoth capital and divfdeptls, IN
1n 1auI oI r H." s,oothnidaru nvnr fhc o,.ipinaI
tet ;t nonoay atonu noun ;ta atnok r aSi.
ing tne pank VIII ~ nts,,a ,roeo nr,onod ~
ammnn &c t e,Ins enin Sn the stoc y
nf tho bank would at tho ond Of tho ton years be
%ottn premium ouy p's eons, p"s - ~ n'e
cnassea up .u eapMu a.eo4i,s t,, XIX n ~
yaas' ,,a VI osolf ,,1,, 'uo ,ttio ao avor
.ue e1oGA I "outa giy 3iE ~ ,a;.,n .o ct t'ct
par tnG on unoromeu pIsins tI ,,,n aaas ~.
aae iunnof ~ aoaaa nno,, sor S.tu rn,,a ~
sIey were ~ sG pcs.nng, oaSn oa1o oan;tn
ca1ry ~ u ny aa ~ ~.
wh1lo tno snntes wot1 lueaeaseu l n5 saas a. u oaR
atI aEcuIlauiaseu eacn Sla.o noaa W WILL III
oniy tne Gi1GInai RllGo: t"'.loaa co.npaateo WIZ VI "u
!o -sGs obieod E to cataIizo thar acoumalatod anu IT.
proita O. onee NY sao pulchaao o. esfs; d, theln-
Gfgaso u aopo.s snopa ta HUnn w. ,i,i ii ~ nr,,s
~ ~ ,'n 70 su ~ r ro1.nir
~ actua " ~ se ~ ,i;,'. @ t,;e ,,.oasa -
tnote - ~ ioaso ~ % s.os t s. 49,. eaeu . ~
t!'p' t,oto ~ ~ for canr thc s,rn1,,s