New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-06-08
HAyUF1CTURIYG DIVIDENDS.

"The Rome Sentinel" quotes from this paper
n statement made in n dispatch from Fall RIVER
to the effect that during the first quarter OF this
wear thirty two corporations in that city, with
n total capital Of SlT,O330O0 had paid out
in dividends to stockholders SiSI 300, an
average of Ell per cent on their entire capital,
and then proceeds 10 add This is at the
rate Of 1881 per cent year" No, it is not,
because most Of these companies pay dividends
only half-ycarly. Out Of a published list OF
forty-six companies only seven appear to have
naid dividends quarterly, while six paid only
ono dividend for the year the last OF which VIC
have record. 4 part-for the same year eleven
companics-pay in any year no dividends what
ever The King Philip and TccumSeh mills
yay three times "A year, but the majority pay
only half-ycarly or yearly. In view Of this
fact Of which it is charitable 10 suppose that
1.-THE Rome Sentinel was ignorant, payment
of 2.7l per cent during the first three months
Of the year does not mean 1851 per cent
yearly" but probably about IL per cent and
on the nominal capital Of those mills only which
earn dividends for stock.
The remainder, which do not earn any divi-
dends, must also be included, il frcc-trade
diSputant, endcayOring TO usc tho dividends as
an argument against the tariff, means to ho
honest or is addressing any person whom he
supposes to have Common-scnSc. For the com
uapics which according to The Rome Sen
| tineI," "have a practical monopoly Of furnish
ing cotton cloth to the people Of this country"
are not those merely which pay dividends. but
all the companies in the business OF making
cotton cloth. Those which are managed with
1 ~. l.-1 in
years pay handsomely, but they show ho
effects Of the tariff not one whit more truly
than the other companies which get no dlF-
dends whatever. Then there is another thlng
10 be said. Most Of the mills have been IN
existence many years, and their present owners
Maid for their stock, not 90 cents on the dollar,
hut much more especially in these later years
when a four-par-ccnt bond sells for more than
1875 The business Of cotton manufacture has
great fluctuations and risks, but when II pays
and is well managed it pays we'll Now the
man who paid $1,000 for $1,000 share IN
the Granite Mill in 1882, when he gets diyi-
dcnd of $50 on his 81 ,OOO-dOes he reckon that
dividend on the par value, or on the money he
put in?
MANY Of these companies have bcr' in opera
ton n long time, and have accumulated prop
erty much in excess Of the par value OF theil
stock, for which they have gradually paid ont
of their earnings. The stock represents this
accumulated property, and in addition all The
experience, all the money sacrificed in building
M a reputation, all the dividends sacrificed in
times Of trial or disaster. The present owners
have bought shares OF all this property and pas
labor and sacrifice, and have had to pay more
than the shares originally represented. Tho
only honorable way to calculate dividend, IL
such a corporation and when considering th'
effect Of public policy upon the returns Of cap
ital is upon the money actually paid for thu
shares in the open market. That sum the hold
err could get for his share il he chose, and OF
that sum he looks for return if he continue
TO take the risk Of the business.
Measured in that way, manufacturing stock
even in New England have paid as much a
6 per cent on their market cost only three year
in the last fifteen. In one year, 1880, the!
averaged dividends over 10 per cent on tn
par value of their stock, and over per cen
on their market cost. But taking the aYerag
for fifteen years, IL has falleA below the ordi
l nary interest on money loaned. That is tn
fact about the monopoly" Of which Tn
g Rome Sentinel takes pains to tell so httl
. truih,