The labor argus. [volume] (Charleston, W. Va.) 1906-1915, 1910-05-12


idend OF ) per cent on the new capitalize
ZION OF 100000
The entire 100000 capital stock would
probably be issued and given by vote OF
the board OF directors IN return for the
business. the Judgment OF the directors
that the business would pay per cent on
the entire capita! stock, We may expect :.
, attempts TO reduce The wages OF empIayee,
or TO Increase their output, or in every
/ way TO cheaper the cost of production,
or perhaps 70 decrease the quality OF the
product il order that dividends on the
large amount OF fictitious capital may lie
Increased
TINS - tine process termed stock water
ing which IN the illustration just given
| means that the 800. 600 fictitious capital
Is watered stock.
The s;aIne process occurred il the Or
ganizatIOA Of The United States steel
/ trust, only instead OF real capital as one
to live, II Was more nearly 4 ratio of
one to twenty.
In other words the steel trust stock
was watered four times as much in pro-
portion as the illustration given here.
and besides that, as frequently happens
IN such cases bonds were issued in pay
ment Tor the properties taken into the
trust
Carnegie, iOr instance, is supposed 10
have received bonds IN return Tor his
steel properties far IN excess OF their real
values, and the interest on these bonds
I,. ~
declared the stock.
And 50 the steel trust, being obliged to
earn net profits TO ay:-frst, the in.
terest on the bonds issued in excess OF
| real Investment in all the properties; Sec.
ond, dividends on the preferred stock !;
and third, dividends on the common
stock, sought in every way 10 cheaper
its product and TO increase its profits.
Finding the labor unions an obstacle
TO the reduction TO the cost OF produc.
tion II began systematic campaign Of
destruction of the unions in the steel in
dustry. For of what importance are the
earnings OF linen, as compared with the
earnings OF a paper bond stock Ger
tificate without value'
only one example OF the evil effects upon
labor OF the practice OF stock watering;
that the same thing exists in nearly all
industries, that because OF these schem mes
and in order that dividends may be de
clared Oh worthless paper certificates,
labor must work cheap and pay dear,
and all for the benefit OF slick schemers
a lp pnif ber do
the taxes for dividends on watered stock
like all other taxes, finally rest on and
must he borne by the men who labor
who produce-it becomes apparent that
the evil OF stock watering is of the ut
most concern TO the men OF labor, both as
individuals and as unions
All such financial schemes are held to-
gether by the greed Of each dollar for
cent per cent, which causes each dollar
TO work in harmony with every other dol,
Lar. III striking contrast to the fractional
differences in the ranks OF labor
II the forces OF labor are TO check
the excesS..s OF capital, if they are to cor
rect the abuses of stock watering, if they
ar" TO cXalr the man above the dollar or
above the paper stock certificate. they
must close up and solidfy their own
ranks.
Before labor may cure capital of
stock watering il must eliminate its own
watered stock.
Before removing the mote from the
ey" of capital it must remove the beam
from the eye of labor.
Our watered stock consists of the M.