New-York tribune., 1919-04-03
Cut in Smelters
Dividend Rate Is
Explained 10y Bush
Protesting Stockholder Told
of Need of Conserving
Cash; Copper Stocks Are
Accumulating Rapidly

After a stockholder had criticised the
management of the American Smelt-
ing and Refining Company for reduc-
ing the common stock dividend from
to per cent a year, Simon Guggen-
helm, president, declared at the annual
meeting of the shareholders yesterday
that the corporation will be able to
earn 6 per cent or better upon restora-
tion of normal conditions in the in
dustry.
Edward Brush, vice president of the
company, on behalf of the manage
ment, said that the corporation is now
turning out about $4,000 tons of re-
fined copper per month, none of which
is being sold. This, he pointed OUT
created a serious situation temporari-
~ with regard to cash resources" and
is tying up the company's money for
the time being.
Reasons for Cut
"Ihe American Smelling directors" ;"
he added, "did not reduce the dividend
without giving the gravest consdera-
ton to the matter. In taking this step
they were actuated by two principal
causes: First, uncertainty as to the
future; second, uncertainty as to the
company's cash resources. The sur
plus earned for the common stock in
the war period was expended for the
benefit of the stockholders in enlarg-
ing the company's capacity for produc-
ing material needed by the United
States government. 1t was not believed
that the directors should go on paying
s per cent when the company's Mexi-
can earnings, which are normally very
large, were greatly curtailed and the
income from the smelling and refining
business virtually cut Off
Though copper production at the
mines has been reduced to about half
of the war rate, it will take five or six
months for this cut to be reflected in
the output of the smelters and re-
tineries, which have been turning out
refined copper at the monthly rate of
$4,000 tons since January None of
this metal has been sold.''
Ralph j. Jacobs, the stockhoder VIII l.,
criticised the action of the directors
said that during the war the company
earned surplus of $56 share on the
common stock after dividend charges
and that ''the greatest risk it would
have incurred in continuing the pei
cent rate during the time of industrial
unSettlement, which cannot reasonably
last more than two years, would have
amounted to $4 a share on the common
stock" Mr.. Jacobs asked why, if the
company's cash resources were tied w
under present conditions, the director:
did not resort to the expedient of pay.
ing per cent annual dividends in long
term scrip, which would not be a drain
upon the company's liquid funds,
Mexican Prospects
Simon Guggenheim told the stock
holders that the company's brightest
prospects are centred in Mexico, where
he asserted, the Carranza government
is daily growing in strength. eve have
received assurances" he said, "that il
three or four months the Villista ban
dts will be entirely driven out o1
Northern Mexico, where our most prof
liable Mexican properties are located
and where we have been handicapped
the most by revolutionary disturbances
Authorities on the silver market agree
that the price of this metal will bt
maintained at dollar for prolonged
period, greatly enhancing the output OF
the Mexican mines, which are big sill
yer producers"