The times. [volume] (Richmond, Va.) 1890-1903, 1895-12-08
TOBACCO STOCKS SLUMP.
Great Excitement on Change Following
The Directors Notice
REGARDING PAYMENT OF DIVIDENDS.
Two Per Cent 20 be RAID ON Preferred
stock-Earnings on Common stock
Used To Create a surplus to Pay for
New Purchases ofPlug Factories.

NEW YORK. Dec. When the Stock
Exchange opened this morning there
was a wild time about the big post
where the stock of the American Tobacco
Company is dealt in. Two hundred
brokers were crowded together. and they
all seemed bent on selling the common
stock of the company. Within thirty
seconds, 5000 shares OF the stock changed
hands. at from IS TO 20 whereas the
closing sale on Friday was at y. The
price continued to decline until 20 "a
was touched, when there was a rally to
- l-2. after which there was an irregular
descent to 81 is. the final quotation.
The total transactions were gl.0si half
shares" The total sales OF all stocks
We're 1s6.sO5 shares.
The preferred stock was not severely
affected by the drop in the common.
IL opened at ~ II, against the closing
Friday Of 100 as. and closed regular,
at 9S 81.
CAUSE OF THE TROUBLE.
The sales were only 800 "full shares -
The cause Of the commotion In tobacco
was an unexpected announcement by the
American Tobacco Company that while
cent. on the preferred stock would be
paid in February, the customary quar-
teriy dividend OF per cent. on the COM
mon stock due at the same time, would
not be paid.
The explantion was tnat the company
required additional working capital 20
carry on its increased business. BY
emitting the February dividend on the
common stock. II was decided the com
4 "a
.u. se IN conducting its extended op-
erations.
The company has Sl7.9o0O0O OF common
stock. on which a quarterly dividend
Of per cent. amounts TO S55l.O00 and
81 has Sii. 900 Of preferred stock on
which a quarterly dividend OF per cent.
amounts 10 S2iAO
There are two ideas I'm Wall street as
90 the passing OF the dividend on the
common stock one was that the COM
pany wanted money TO fight the western
tobacco manufacturers who have gone
into the cigarette-making business az a
retaliatory measure against the compare
for engaging in the production OF plug
tobacco. and the other was that the com
pany was badly hurt by the competition
of the plug tobacco makers. The specula-
tors appeared TO take the latter view,
whether IL was the correct one or not
COMPARATIVE EARNINGS.
Adding the figures Of the company for
1873 the following calculation for the year
in comparison with 1he two preceding
years was made:
4i5; 1888. A334, i0l. Eight per cent. on pre-
ferred stock-lS95. S9Si,soO. 1894 ssdSO
1898 sq56. 800. Baanccs-lhg5, s.. .s5l 900. 1894.
A1lf6l5. 1893. y33T.61I Equals on COM
mon-ls95. 1873 per cent, 1894. . per cent 4,
1888 ISIS per cent Nine per cent on com
mon-iSq5. sl,6l1.000. Twelve per cent. on
com q
Surplus-lssj yl,2J0,Oo0. 1894, sl.965,6i5; 1888.
SIPS. l67.
Bv the foregoing a falling off In net
earnings OF Sl.2536i5, or p per cent, Is
shown. Still. the extra per cent. could
have been paid and a surplus OF 4 per
cent. left over. The surplus account on
January I, 1895. was y',l9n,E0. adding 10
which the estimated surplus for 1898
makes the total prospective surplus on
January lst next sS.i4S.z9
Secretary Josiah c. Brown. Of the
American Tobacco Company, said there
was "A majority OF the qpmpany's directors
in the factory in vest Twenty-second
a notice that the dividend on the common
stock would be passed
METHOD or PROCEDURE.
I'VE do not call II a quarterly dividend.
but simply a dividend" said Secretary
Brown we first declare the dividend
on the preferred stock and then decide
what We viii do about the common stock.
! cannot say what will be done about
future dividends on the common stock.
our surplus OF 100000 in January last
was not in cash. II was represented by
investments IN our plant
When Secretary Brown was asked as
10 whether the company Intended 10 ac-
quire opposition concerns, he replied that
he had nothing 10 say on this point.
The company last summer paid sl,WOV1
for the cigarette business In Canada, ana,
as reported. $4,000 FOR the Hall factory IN
New York. These TWO purchases equal
Ina amount the company's estimated sur
plus for 1885.