The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-07-02
RUBBER DIVIDEND
SURPRISES MARKET
Stock Advances 3 IA Points in
Expectation Of Usual
Disbursement.
CASH HELD; DUE TO WAR

Directors Of the United States Rubber
Company voted yesterday to pass the
dividend on the common stock. The rate
was 9 per cent. in 1914. 5h per cent. in
1919, 4 per cent. in 1912 and I per cent.
in 1911. the frst year Of dividends. Tho
last quarterly payment was in April OF
his year. when IN per cent. was dis
tributed.
The passing Of the dividend was not
announced until after the market had
closed. wall Street looked upon the
action unfavorably because Of the belief
that had been spread abroad that the
company was in excellent condition.
Until about two weeks q the posi-
bility OF the passing OF the dividend by
the company had not been considered by
Wall Street, the decline in the stock Mt
that time being the first intimation hat
something was wrong.
Advance-EHpectinG Dividend.
The stock gained 3h points yesterday
from the low on reports that the divi-
dend would be paid as usual. The clos
ing was nearly 2 points lower. Direc-
tors issued the following explanation:
THE directors of the United states
Rubber Company. having heard the sug-
gestions of tho president In regard to
the payment OF n dividend on The com
mon stock at this time and having fully
considered the question. are unanimously
OF the opinion that the excess OF earn
ings over dividend requirements Is too
small to warrant the payment Of this
dividend at this time In view OF the
amount OF the company's floating In
debtedness. the additional capital re-
Quired to develop new lines of business
and the uncertain conditions arising
from the European war.
I'm their view a sound and con-
sentative business policy requires that
the money necessary to pay a dividend
on the common stock should at this time
be used to reduce the floating debt and
to increase the working capital: and
they believe that this action will
strengthen the position of the company.
and in the end increase the value of
both the common and preferred stocks"
Col. Colt, president of the company,
In n long statement. said that. despite
the fact that a number OF directors were
averse to the payment of the dividend
last fall. It was declared in the hope of
an early termination Of the war and
because motives OF patriotism in
fiuenced their action" Conservatism
since that time has increased in the
board.
No Decrease In Earnings.
THE net earnings OF the company so
far this year are substantially the same
as those Of last year and as q rule the
earnings Of the latter half OF the year
exceed those OF the first hail. continued
Col. Colt. THE tendency OF the war
makes II prudent to carry n larger
stock OF crude rubber than In normal
times. involving the use Of a larger
amount OF quick capital. Dividends on
the common stock amount 10 $2.1S0. 900
per annum. 1t Is undoubtedly desirable
that current bank loans should be re-
duced in volume.
while competition in the rubber
manufacturing business promises 10 be
keen In the future your president looks
to see the United States Rubber Com
pany continue q prosperous business
and. with the coming into bearing OF
our rubber plantations in Sumatra,
from which We will in the not distant
future receive at its production cost a
substantial amount OF our crude rub
Der requirements. We may reasonably
look for greater profits than hereto
fore realizad"