New-York tribune., 1912-02-27
DEFERS STEEL DIVIDEND
Republic Company Declares Its
Earnings Aren't Sufficient.
HARD HIT BY LOW PRICES
Says It Is in Strong Position to
Await Return of Normal
Business Conditions. y

The executive committee Of the Re-
public Iron and Steel Company decided
Yesterday TO defer payment Of the regular
quarterly dividend of 1& per cent on the
preferred stock. due and payable on April
/. The announcement. which was given
out after the close Of the stock market,
explained the reason for the executive COM
mittee's action as follows:
Present and prospective earnings are not
sufficient TO warrant fun payment, ana II
was the Judgment Of the committee that
under existing conditions Of business, tarin
uncertainties and political agitation II was
70 the interest cf the stockholders ~ con-
serve the company's cash assets, o,.,
The company is operating al approx
mately 90 per cent Of capacity and " cur
rent prices are maintained viii insure a
profit The net quick assets are approx
matelv $4,000, 900 which places the COM
panv I'm a strong position and will enable
II to carry through such improvements as
arr necessary. and when normal conditions
Of business return the earning power ~ the
property will he sufficient to discharge
dividend obligations.
There have been many rumors recently
that the dividend on the preferred stock
would be reduced, and the decline In price
has indicated that the full per cent rate.
paid for more than two years, would no
longer he maintained; but there have been
few who have predicted that the dividend
would be passed entirely
The preferred stock sold on January ;
at S52s it's high of the year, and on Feb
ruary 1 closed at 1917. II touched 65i2 yes
terday decline OF about 20 points within
two months, closing at 81, net loss Tor
the day Of IL points. The common, on
which no dividend has ever been paid. sold
at q on January and 1874 yesterday.
The Republic Iron and Steel Company
has outstanding s2719l 600 common stock
and s25oD0,0O0 per cent cumulative pre-
ferred stock Dividends on the latter issue
we're paid at the full rate from the or
ganization Of the company I'm 1899 until
1893, inclusive. In 1904 no dividends were
paid, I'm 1906 a disbursement Of IA per cent
was made. in 1906 and 1907 the sharehold-
ers received their regular per cent, the
dividend being reduced to 3i9 per cent Tor
the year in 1905 and 1909 and being re-
stored to7 per cent. beginning with 1910.
Payments Of deferred dividends were made
from time to time, beginning in 1875, and
the stock has received practically the full
per cent to which as a cumulative Issue
II is entitled,
In the fiscal year ended June 20, 1911, tho
company earned net profits Of s2422,5l9
after depreciation and other charges and
deductions. and after payment Of the per
cent dividend on the preferred stock had
a surplus for the year of SS72.579. For the
last six months Of the calendar year 1911
Il reported net profits of S79S.772 and a
deficit of S76.22s after payment of dividends.
II was on May % last year that the Re
public company, through John a. Topping.
chairman OF the board announced that on
account OF the low prices OF iron and steel
made by some OF the smaller manufactur-
ers, It had been unable to secure what II
regarded as a fair proportion OF the
tonnage and had been unable 10 maintain
an economical operation, and that the
board had therefore determined on more
aggressive sales policy. This announce
ment was followed the next day by the
news that the United States Steel Cor
poration and the leading independents, not
including the Republic, mad decided 10
lower the prices Of many steel products,
the list embracing the products in which
the Republic company was competitor.
Since that time there has been an open
market in steel, and prices have declined
10 the lowest levels I'm many years. and
although there has been "A considerable re-
vival of activity in the industry the busi-
ness has been conducted upon much
scanuer margin of profit than formerly.