New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-04-30
PLATT'S REPLY
NO LARGER Dividends.
Hostile Legislation One Reason,
Says u. S. Express Co. Head.

Senator Plat, as president Of the United
States Express Company. has sent a circular
letter to the stockholders in reply to the letter
recently circulated by two OF their number, A
L. Banister, president OF the Alliance Trust
company and Samuel S. HIATT, OF Albany, who
are carrying on a campaign for an increase Of
dividends from per cent. the present rate, to
per cent. Mr.. Platt gives hostile legislation
increased cost OF labor. larger payments to rail-
roads and the desire for a large surplus fund to
protect stockholders. the company not being
corporation but voluntary association in which
every shareholder is personally liable, as the
reasons for not increasing the dividends. In
substance, Mr. Platt's circular follows:
To correct any possible erroneous impression
me present management makes the following
statement: The real estate and other assets of
me company do not together amount to more
than Its normal shares, $4,000 600; the company
has no surplus over this amount available for
distribution
The following reasons have deferred directors
from increasing dividends:
The company IS not a corporation, but a vol
untaIy association in which every shareholder
IS personally liable for the company's obliga-
lions. 1t has been the aim OF the directors TO
accumulate q fund sufficient to protect stock
holders against personal liabilities. The direc-
tors have been led to this conclusion especially
by the obligations assumed in contracts with
railroad corporations, which require the COM
paliy 10 pay the railroads q certain guaranteed
percentage Of gross express earnings. These
railroad guarantees now outstanding under con-
tract amount to more than $25OO0OOO
The risk involved IN carrying millions Of
money especially under contract with the gov
eminent, makes it desirable to have large
surplus fund
The increased payments to railroads, higher
labor costs and advance in the prices Of sup
plies have kept net earnings down TO per
cent OF the present gross receipts. In 1906 the
company paid the railroads 81 661 900 more than
IN 1904, and it paid for labor in 1905 SS60OOO
more than in 1904, while the increase in earn
ings over 1904 was but 81 $50 900
Hostile legislation has decreased and must
continue to decrease the company's receipts by
affecting rates In twelve of the twenty-siX
states in which the company does business laws
have been passed in the last three months en-
larging the powers of the railroad commissions.
one state (Nebraska) arbitrarily reduced all eX-
press rates - per cent after January l, 1901
a reduction in state rates generally means
reduction I'm interstate rates. More than twenty
bills adverse to express companies nave been
introduced in legislatures in the last three
months. In the last two years ten states have
by statute increased express company taxes.
About a year ago it was understood that sew
eral of the large insurance companies, which had
lost heavily by the earthquake that destroyed
San Francisco and were anxious TO have the
dividends from their investments increased,
tried TO induce Mr.. Plat TO agree 10 an In
crease in dividends. and 1t was believed that
they were back of the recent movement in that
direction. 1t was learned yesterday. however
that representatives of the largest stock inter
ests in the company, which Of course. includes
the insurance companies, after several confer
ences with Edward T Platt the treasurer Of the
company were unanimously OF the opinion that
4 per cent much as the company ought
20 pay under present conditions.
In the circular letter sent out by Messrs. Ban
lister and HIATT on April II last they said that
the cash assets of the company were twenty
five or thirty times large the original cap
ital, and gave that one Of the reasons for
increasing the dividend. The original capital OF
the company was only $20O.OOO. however, so That
the cash assets according to that statement.
would not amount to more than SG,OOOOOO at
the outside A proxy was inclosed with every
circular letter sent out by them, asking for
assignments OF votes at the ennuRl meeting and
requesting the stockholders 10 send 90 cents 4
share for the expenses OF the committee Pro-
vided the committee was successful in its efforts
10 have the dividend increased, they We're 10
receive 81 % more share. What response
Messrs canister and HIATT had received TO their
circular could not be learned yesterday.