New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-07-02
U.S.. RUBBER co.
PASSES DIVIDEND
Payments on Common
SuSpended-Earnings
Said To Be Fair.

The United States Rubber Company,
which has been paying dividends on its
S36,0O0,0O0 common stock at the rate of
6 per cent annually since April, 1913,
yesterday passed the usual quarterly
payment Of / y per cent What action
the directors would take has been the
occasion Of much speculation in Wall
Street. On reports that the dividend
mi. ht be omitted the stock. which a
little more than a week ago sold around
65, subsequently, dropped TO ASH Yes
tertay, on conflicting rumors concern
ing the pending action of the directors,
the stock. after selling at high as 53&
closed at 81 7s
President Samuel z. Colt, in an
nouncing the reasons for the passing
Of the common dividend, stated that
the excess of earnings over the require
mcnts was too small TO warrant pay
ment, IN view Of the company's floating
Indebtedness, the additional capital re-
CURED TO develop new lines of bust
ness and the uncertain conditions arts
ing from the European war. He said it
was the opinion Of the directors that
the money necessary 20 pay a dividend
on the common stock should be used to
reduce the floating debt and increase
working capital.
A statement presented TO the board
by Mr. Colt outlining more in detail a
Recommendation for emitting the divi-
dond recalled the opposition of several
Of the members TO a payment immedi-
ately following the outbreak of the
war This feeling, Mr.. Colt pointed
out, had increased since that period.
He also recalled his declaration in the
b l.et annual fhQf III a
year 1915 would be one of uncertainty.
THAT report said Mr. Colts state
ment, further shows that the surplus
profits of the company for the year
1914 were S72l.950 over dividends paid
on the preferred and common stock
during the year. Il further shows that
$4,S50000 was expended during the
year in fixed properties, including the
rubber plantations in Sumatra. which
sum. less surplus of earnings, was
taken from the quick capital Of the
company.
The net earnings Of the company so
far this year are substantially the same
as those of last year. and as rule the
earnings Of the last half Of the year
exceed those of the first half. The un-
expected prolonGatioH and extension Of
the European war have presented un-
certainties which it may be urged make
il now especially desirable 10 maintain
am unusually strong fiuanciSl position.
The tendency Of the war makes il pru-
dent 70 carry a larger stock Of crude
rubber than in normal times, involving
the use Of larger amount Of quick
capital.
THE outstanding common stock
being S36.O00.000, per cent dividends
thereon amount to S2,160000 per an
mum. L is undoubtedly desirable that
current bank loans should be reduced
in volume. The lower price of crude
rubber, resulting from its cultivation
in the East, opens up new lines Of
manufacture, i'm the development Of
which capital is especially desirable.
Should the directors determine 10 sus-
pend common stock dividends for a
time the company will undoubtedly be
greatly strengthened thereby, and it
is not unreasonable 70 believe that such
action in the end will prove more ad-
vantageous 10 our common stock
holders and profit sharers than the
present distribution of cash"
The passing Of the common dividend
Yesterday means an immediate loss TO
stockholders Of $4,000.