Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-07-07
LODGES Cotton Facts.

Senator canvassed the cotton sit
uation thoroughly and urged upon
his colleagues the necessity OF
revising the Dingley cotton schedule
only after they had taken cogniZance
of the effect such revision must have
upon this important New England in
dustry.
His speech referred to two principal
subjects, first the mercerization of yarn,
the preparation of cloth for mercerizing
and the increased price resulting from
the process, and second to the alleged
gigantic profits of the New England
mills which, he said. "are found in the
Senate but not in the places where the
mills exist" Gigantic profits had been
credited to three mills by advocates of
a reduction in the tariff on cotton
goods. One of the mills was the Dart
mouth near New Bedford. Senator
Lodge stated that it could not be taken
as an example of the cotton industry
inasmuch as it produces union goods
of silk and cotton, an entirely different
proposition from straight cotton goods.
The Troy Cotton and Wooden Manu-
featuring Co., was another one cited.
He explained that the unusual divi-
dends from this mill, 66 per cent of the
capital stock, resulted from the advan-
tageous position of the mill property
in the center of the city of Fall River,
city of 100000 people, the unusual in
come resulting from the real estate
operations rather than from the con-
duct of the business of cotton manu-
featuring. The Acushnet mill was the
third cited. 1t was said that it had
paid &c per cent. Senator Lodge, after
a personal examination of the dividend
records, stated that he could not find
where the mill had paid Sc per cent at
any time and that the average dividend
for II years has been 1886 per cent.
He further noted, however, that the
Acushnet is der-capitalized, the face
value of the stock being 100000, and
to replace the plant. With an average
of 1886 per cent on the capital stock
and plant valued at $2,OOOOOO, the
average dividend of the mill is about
per cent.
Senator Lodge entered into this dis
cussion of the earning ability of the
New England cotton mills not from any
desire to cry down their earning ca
pacity but to present before body of
men who were to enact legislation
directly affecting the industry, the
facts as to earning capacity I'M
der the varying conditions which have
obtained since the mills were establish
ed. The disposition to credit New Eng
land cotton mills with an earning
capacity greater than actually exists
has created all sorts of trouble for the
mills as well as for the general public.
After disposing of the three excessive"
dividends cited, he turned to the dis
cussion of the mills in the several cities
of Massachusetts and finally to those
of New England, naming As mills hav-
ing a total capital stock of $77,15G,615
and a net return of $5,14S775. or 6.67
per cent. These figures represent the
total average dividend for the past 20
years of A of these companies and for
the rast 10 years of one company.
Thirty-eight are engaged in cotton.
three in wool and four in wool and cot
ton manufacturing Senator Lodge
gave it as his belief that 6.67 is fair
presentation of the average earnings
of the New England manufacturing
districts and that may set at rest the
claim that cotton manufacturing pays
excessive dividends. He did not claim,
however, that money invested in New
England cotton mills was not reason
abbey safe and that it did not pay a
fair return.
The fallacy of excessive dividends
in cotton manufacturing grew out of a
few isolated cases where mills oper-
ated under extremely favorable condi-
tons were made to return to their
stockholders a much greater percent
age than is commonly realized in in
dustrlal investments. This condition
was brought about in part, at least, by
agents who, in their anxiety to satisfy.
the never ceasing cry of the stock
holders for dividends, sacrificed the
plant. Many mills are now undergoing
lean period while agents reorganize
and refit the plants despoiled by their
predecessors for the sake of a good re-
port to the board or directors. Ex-
amples of this state of affairs are
found all over New England and it was
when stockholders came to a realiz-
alton that it would be a-number of
years before they could again receive
anything like the dividends of the years
gone by that they turned to the South
f. ..ar:af boEax,;no fha3 mills nv, tho