New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-04-05
in time of trouble, and the foundation OF all
their success in life.
SINNER nv. g. AND ISLANDER.

The facts regarding the Willimantc Linen
Comnany have now been ascertained. They will
be more interesting to everybody else than 10
Professor Sumner, whose veracity can hardly DO
n natter of absolute indifference to those who
have an interest in Yale College. professor
Sumner publicly stated that the Wllilmantic
Linen Company paid dividend of % per cent
in 1882. This assertion he reiterates as late as
February 6, 1888, in letter to the president
of the company, though it had been pro-
nounced untrue, and he was then able to give
for the assertion no other authority than "a
newspaper paragraph copied from Will
mantle paper"
The fact is that the company voted January
&c, 1882, to increase its capital stock from
81, 800 900 to $2.OO0.000 by permitting
stockholders of record at that date to pay in
$500, 900 more, and to receive for 1t stock Oh
the par value of $500, 900. This was neither
legally nor in any other proper sense a dividend.
Any person of common sense aud honesty,
whether professor of political economy or not,
would recognize the radical difference betwe
snch subscription, which involves addition
al investment and additional risk, and div
idend which is mere distribution of past earn
lneS. no property VI tho e"i"P""y
have been destroyed as soon as the additiouai
investment was made, oil it's business might
have been rendered Improbable, or the market
value of stock might have 10 declined on ac-
count of the increase that four shares after
the increase would never have sold for as much
"A three shares before the increase. Knowing
all this Mr.. Sumner originally asserted and
still persists in asserting that the increase OF
capitai was really stock dividend. The
truth il that the only dividend made for the
year 1882 was one Of Is per cent on the cap
ital stock, and for the whole OF that stock par
had been paid in cash. Yet Mr.. Sumner in his
letter of February either most ignorantiy or
most dishonesty calls this dividend Of IL
per cent on the watered capital
The privilege of subscribing for stock at par
which was then worth much more might have
been of some advantage to stockholders, how
ever. But even if this had been in any sense
a dividend, as it is urtruthfully called by MI.
Sumner, il did not amount with the regular div
idend paid for 1882 to onc-half the rate stated
bv him, namely, % per cent for the year. For
three shares held January 26, worth prior to
that SOL per share the holder was permitted
to take one additional share at S2j-an appar-
ent gain, had the price remained unchanged, of
S6C on the four shares But the price dropped
at once the quotation for February was SUE,
and so for March and April; 793i for May, ~
for June, ard sole for July. All this time the
new stock could not he sold and delivered be-
cause il was not issued until final payment was
made August /, and the quotation for August
was 49, Thus the holder Of three shares worth
1913 in January, 1852. was permitted to pay
in $50 more, making his whole investment
1898. and then could have sold his four shares
for 1912 in Augus,-a profit of Sll on his
whole investment. Adding the regular div
idend Of is per cent, the holder might have
realized for the year 1889. had he been able to
sell in August and still get the dividend at the
cnd of the year, IA much as $32 gain on 500
actually paid in cash for four shares Even
then Mr.. Summers statement would have been
false to the extent Of 500 OH every 500 in-
vested.
Bat il was not possible to sell at August
prices and yet to get the dividends Mt the end
of the year. The dividend of Is per cent, de-
clared in January. 1888, was followed by idll
of the stock to 500 per sharc. the quotation IN
February. IN March SOS was realized. Thus
the account for the year 1882 FOR every three
shares held in January of that year came out
as follows: Cash value. January, 1SS2, OF
three shares, 1918; additional investment
$l2 80 February 1. and $l2 30 August total
investment, S29S. Dividend on four shares
for 1882, $lS; value of tour shares after div
idend was paid, at 500 per share, $500; total
value. S27S; actual loss for the year. $50 on
an investment of S29S Mt the date Of the sub
scription for additional stock, or 500 at tho
original cost Of stock. Had the stock been held
until last month"; the actual loss would have
been only So III other words instead of
dividend of % per cent III $50, the stakeholder
actually realized on his money from to 20
per cent less than nothing. Nor was there any
time during all the year when lie could have
gained mo,e than Sl2 on an original invest
mcnt of 500 in cash. even if he had teen able
to sell the new stock in February, before it
was paid for, and still to draw the dividend
PAYABLE on it at the end of the wear.
That Mr.. Sumner vas originally ignorant
and merely repeated "a his own n newspaper
statement, without any attempt to verify it, is
highly probable. But after the exceeding
falsity of the assertion had been cOnclusivcly
shown lie persisted in repeating it, and tried
to deceive by pretending that the stock increase
was dividend, and that the regular dividend
was on "watered stock" There is only one
name for the man who does that sort of thing,
whether he does it as a private individual or
gives to an untruth the indorsemen! of q pro-
fessor in Yale College