The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-09-27
MAKING COPPER VS..
D|SPOS|NC OF It
Present Output Too Large for
Present Demand and
Prices.
DIVIDENDS IN DANGER
Wall Street Journal Goes
Over Situation Confront
ing Producers.
DIVIDENDS IN DANGER

| ne toliONlnS ulStuSSJpn OF InC earning
capacity OF the big copper producers Is
taken from the Wall Street Journal of
| September IS:
With copper prices distinctly down
! ward and curtailed consumption abroad.
| many OF the copper companies arc again
confronted with the problem Of main ain :
ing current dividend rates, II the pres
Ont recession in commercial activity Is
temporary, there Will he no dividend dis
| turbance, but In the event OF a prolonged
depression and lower copper prices there
| arc a number of copper companies that
will be forced TO reduce disbursements 10
shareholders.
When copper drops to l2i cents a
maintaining current dividends is con-
cerned has been reached. The mainte-
nance OF prices below Is cents q pound
profits OF most of the copper companies
below the surplus required for dividends.
The Butte as well as the porphyry
mines arc Included. Tho Utah and Ne
vada Consolidated Copper companies are
making exceptionally good showings. even
on basis of present copper prices They
could report large earnings with copper
al II cents pound. but dividends were
started at such a high rate that deficit
would be the result II the two companies
in question we're unable TO obtain for
their product more than II cents pound.
Utah Copper Record.
The Utah Copper company. for exam
Pile produced 900. 900 pounds of copper
last month or at the rate of more than
l0S,O00,0O0 pounds year. This is rec
ord monthly production. comparing with
6.I0l 900 pounds in January. which was
at the rate of S0.500,O00 pounds a year,
an increase In the yearly rate OF nearly
30, ,000,0 600 pounds. Whether this in
crease In output Is justified in the face
OF unsettlement in the copper market re-
mains TO be seem However. with lower
copper prices the Utah would be forced
TO increase Its output in order to meet
dividend requirements. The question is.
whether or not there will be a call from
consumers for this additional output.
The Utah Copper company has Il pro-
duction cost OF close 10 50 cents pound.
and on basis OF l2i-cent copper the
margin of profit per pound would be 3I5
cents. On a production OF los. 600, 900
pounds year. the rate last month"; it
proNimately S4.O50,OO0 annually, Add the
81 100000 received on the stock OF Ne
vada Consolidated held would make the
total income $500 600, Dividends call for
l2i-cent copper and production of los,
100000 pounds a year, there would remain
surplus of SS50:00o.
Nevada Consolidated.
The Nevada Consolidated last month
produced AT the rate OF 62.9SS,0o0 pounds
per pound is figured al cents. This
would mean net earnings at the rate Of
81, 206, o00 year. Dividends require
SO 900. so that there wousi remain a
surplus OF S206. 900.
The Anaconda Copper company has
100000 shares and It's dividend require
ments are SS.340, 600 The Butte camp
has been producing at the rate OF 285.o00.
200 pounds OF copper year Giving the
Anaconda Copper company an average
cost of 9.e5 cents per pound. would make
the margin Of profit on each pound of
copper sold cents. On production Of
80. 600. 900 pounds "A year net earnings
would he Approximately IS. 900. 900, or
$4,000 below dividend requirements.
Outlook in Butte.
In this connection, however. the Ana
conda group Will be more strongly forti-
fled than the other copper companies. AS
an example the Amalgamated owns
and received in dividends $4,000. 900 a
year To its shareholders II pays out
SO 600. 900. leaving a surplus OF S3. 900 900.
Deduct the possible deficit OF 100000 the
Anaconda group on A 12t cent copper
market and production of 26J. 900 900
pounds could show d surplus of more than
50 500 600,
The Anaconda company has the same
right 10 increase its output as the Utah,
II is in a position to outturn close to
$50. 600, 900 pounds OF copper year. and
stands as much of a chance OF selling it
as the Utah, Then again the Anaconda
group. according 10 their last reports. had
liquid assets of more than so 000. 900. The
porphyry mines have not been In exist
cnce long enough 10 accumulate liquid
assets proDortioDate with the total of the
Anaconda group.
II would be disastrous for the copper
companies to increase their production
Mt this time No moro copper could he
sold. and the plling UP OF surplus would
certainly be followed by downward