New-York tribune., 1907-09-22
STANDARD OIL DIVIDENDS.
Their Size Held Not To Be an Evidence Of
Robbery

To the Editor OF The Tribune
Sir: The attorneys of the Standard OF Com
pany say its earnings have not been large. Divi-
dends Of 40 and 80 per cent a year strike the
average mind colossal But It is ell ques-
ton Of capitalization The Standard on COM
pany has pursued conservative policy OF keep
ing its capital low. and by its economies. its
efficiency Of management. its virtual monopoly
perhaps, has paid large dividends ITS small
capital. In regard to profits 1t has managed its
affairs in the old fashioned way that prevailed
before the days Of high finance. as men once ran
large grocery and drygoods businesses.
The company is undoubtedly a good deal Of
sinner In the public mind. but there are still
some things be taken into account before
jumping TO the conclusion that ~ per cent divi-
dends are lneffabe wckedness. I do not intend
to discuss the question at issue in the present
trial nor the methods by which the company
secured its hold upon the OIL industry. The i'm
morality Of the secret rebate is established in
the public mind Some Of the other methods
have been condemned. but OF them II must he
remembered that they the blessed methods
Of competition, now often praised. What
wish 10 speak Of is simply the large dividends.
With such earnings as it had the company
might have raised its stock every few years.
built securities company on securities company.
after the manner of high finance, and sold all
taking profits not in the form of dividends but
by unloading on the credulous successive issues
Of watered stock This is frequent course
with holders Of valuable property and 1t Is uni
versaIly condemned. At least the Standard oil
Company by keeping its capital stock low, has
not capitalized public credulity and .swindled
the buyers Of nearly worthless securities
BUYERS Of securities, however. are only small
class but the largest class Of all the consumers.
have not suffered seriously from the operations
of the company. It has not done what other
large concerns have been charged with doing.
what for instance. the controlling interests In
copper have done 1t has not forced the price
of its product up either for the sake of enhanc-
ing profits or of stimulating speculation in its
shares. The price of oil is steady. 1t is much
lower than it was in the days of oil competition.
I know It is a debatable question whether or
not II would have been just as low under free
competition as 1t now is. There is no way or
nroving that it would or would not But as II
is the public has received large share Of the
benefits from the lowering OF the price OF OIL
II the company had contented itself with a
modest 10 per cent of earnings the price or oil
q gallon to the public would have been very
little lower ThereforeH the company has not
been guilty of the worst vice of high finance
nor of the common sin of monopolies.
AZ 70 the inherent wickedness of 4S per cent
s,,;dends they should clearly not be permitted
q, .,i nubIic enterprises those affected with
, = ,,hIic interest but il is long step from the
,,arrp,ant regulation OF such concerns to the
Axtnp of prices of general commodities. such as
oil coal iron and the like, so that large divi-
dends viii be impossible in their production or
distribution Before any one concludes that
large dividends are essentially evil let MIN re-
member that they have been the rule In vast