The Harrison times., 1903-08-08
GREEDINESS RUINS MANY A NINE.
Dividends Should not be Expected Until
the Company has Sinking Fund
From the Output of Ore.

mining company to pay dividends
has killed and is killing many eNCell-
ent mining enterprises. 1t causes the
abandonment of properties that
with sufficient sinking fund would
pull through and make excellent out
putters Some stockholders become
greedy for dividends and there are
boards of directors that will too of
ten drain the cOmpany's exchequer
to meet the demands of stockholders
when firm refusal would be prop
er course. A fund for development
and emergency is one of the prime
requisites of a strong company, and
the company cannot be strong with
out these conditions exist. The wis
est companies require a stated per-
centage of profits set aside monthly
for emergency. Deterioration must
be taken into account, and a posi-
bic extension or change in the plant
are very important considerations
that must be provided for to main
tain a mine at its best
Many competent superintendent
is embarrassed and handicapped by
the demands of the directors and
stockholders of his company for divi-
dends, when the money rightfullv be-
longs in the sinking fund One in
stance is sufficient for illustration
| there are MANY of them: An impOr-
tAnt and absolutely necessary i'm
prOvement-the sinking of a new
shaft-was delayed and the project
was finally abandoned after having
| been started for the reason that the
| company demanded that certain pro-
fits be distributed in dividends, and
later when the mine ceased paving
because of the great expense of oper-
ating through the crooked old shafts
the stockholders refused or were un-
able to put up" the money neces-
sary to sink a new shaft, and the
mine was closed down and remained
closed; but this is only one instance
of many of the same kind.
When a mine is sufficiently devel-
oped to afford a continuous supply
| Gc65nsfdetiffssdd, but TDTt1id4 the unfortunate
experience of many companies which
have prematurely V declared dividends
that is, disbursed the first available
profits in dividends, making no pro-
vision for possible change in exist
ing cOnditions-has shown the Wis
dom of Withholding sum sufficient
to build the surface plant or to tide
over any temporary and unforeseen
interruption in the progress of min
ing and reduction of the ores.
Mining companies are organized
for profit, which is legitimate and
a much to be desired result Ofmininp
operations, but haste to paw divi-
dends is sometimes retroactive and
works more harm than good. Stock
holders are always willing to accept
dividends, and in the majority of in
stances it is their wish that divi-
dends be forthcoming soon and often,
but there are very few stockholders
who cheerfully submit to an assess
ment even when they realize that the
money is to be used in extending the
tplant to the ultimate advantage of
the stockholders themselves.
| The greediness of stockholders for
dividends makes possible the guar
anteed dividend schemes, and the
stOckholder in his greediness loses
all in demanding part of a loaf.
Dividends should not be expected be-
fore a sinking fund is established
even after a mine is outputting, and
when offered or paid before mine is
outputting there is certainly some
thing suspicious in the act Atten-
tiOn was called In these columns last
week to the announcement of the
Winner Lead and Zinc Company
that a dividend would be paid in
July, and it was noted that the
; property was not in shape to have
earned a dividend. The query natu.
rally arises: Where does the money
come from to pay such dividends:
There is but one conclusion: II
comes from the money paid in bv
the stockholders. This is true of all
guaranteed dividend companies. Ii
cannot be otherwise when there is
no outputting mine.
Don't be deceived by guaranteed
dividends.
Don't expect dividends before q
sinking fund has been provided
A mining investment is as safe ar
investment as man can make ii
any form of speculative securities.
1t is clean money.
1t is adding wealth to the nation