The Washington herald., 1914-10-17
LIGHTS AND SHADOWS
OF THE DIVIDEND LIST
tCopyrisht. lsl4. By c. NJ. K,y..)

Two great staple lines of industry may
be used as a text to illustrate again the
old and weIl-known, but much neglected
! principle that the stockholder in a cor
poration is a silent partner in business.
and that his fortune, good or bad, de-
pends upon vicissitudes and chances
which he little understands, the chances
being in direct proportion to the change
full character Of the business represented
by his corporation.
The copper trade and the sugar trade
are two great staple trades. Three
months ago the position OF these trades
seemed to make the copper trade the
more certain and better OF the two from
the standpoint of the stockholder. The
prices of copper were fairly good, there
had been large European consumption,
and basic conditions seemed to be sound,
although there was nothing like a boom
in sight. All the old companies in this
country were paying regular dividends
and seemed pretty sure of them. Several
OF the new companies were contemplat-
ing increasing their regular dividends.
The stock OF one of them had enjoyed
substantial advance in the open mar
ket and had bought its own insiders in
the expectation of larger dividend later
in the summer. The trade, then, while
not booming, was cheerful and promising.
In the sugar business. meaning there
by the business Of producing raw sugar,
conditions were bad. There had been
overprOduction for years. and the COM
panies Of which there are a great num-
Der, were almost universally weak Pro-
fits had been declining for some years
and dividends had been reduced pretty
much all along the line. The. prices of
raw sugar had not been higher and the
competition Of European producers had
been quite keenly felt by Hawaiian, Gu
ban and American growers. The busi-
ness Of being a stockholder in these pro-
ducing companies had not been a good
business for quite a while, and stock
holders were quite generally uneasy.
Then the war came. In a current num-
ber of financial publication covering the
the last two weeks of September, there
are items concerning the reduction or the
entire elimination of the dividends of
FIVE copper producing companies in the
United States. In the same publication
there are items concerning the increase
Of dividends of five producing companies.
Another company has made no announce
ment, but its officers say that il will
make up, out Of the earnings of August
and September, some accumulated divi-
dends on the preferred stock, and will
pay, of a part Of its bonded debt
1t is not often that one can encounter
in the chronicles OF so brief a space of
time 50 powerful an illustration of the
vicissitudes of business, or so clear an
exposition of the character of stocks that
represent businesses into which specula-
tion enters largely. The term "specula-
tom is here used with no critical intent
and is intended to convey only the i'm
preston that the business of such COM
panies as those indicated depends to
some extent upon prices for products
which are made in the open market and
which vary sharply and quickly ac-
cording to conditions.
The change in conditions was not an
accident It was a natural result of |
known causes. Since the, European |
nations that have gone to war consumed |
at tmes Of peace about half our eop-