New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-08-05
American Tobacco
Declares Dividend
OF 3 p. C.. in Scrip
VIII Bear Interest of s 2. G..
and Will Be Convertible
Into Class B Stock; Rate
Had Been 5 p. C.. in Cash

The American Tobacco COMPANY.
yesterday announced a dividend of
three per cent in scrip, payable to both
classes of common stock of record
August IA. The scrip with bear in
tcrcst at 8 per cent and Will be dis
'ributed September ana may be
transferred into common stock on
March !, 1928.
On May 5 the company declared a
. per cent quarterly dividend IN cash,
which had been the prevailing earning
of this security for nearly a year.
1t was announced that special
meeting of stockholders would be
called to vote on the proposal to in
crease authorized "B" common from
S50000.0 600 TO 100000, 900 1t is not
the intention of the management to
sell any of this stock
Commenting on the companys bust
ness. Percival S. Hill said:
The company's business and earn
tgs are r satisfactory condition !;
Is volume of business for 1920 TO july
/, as compared with the same period
If 1919 shows an increase Of more
han So 800 600, or more than 20 per
cent
I'm the same period the business of
have a whole or part interest, has in
creased more than S11 100000 Raw
materials and Federal taxes continue
abnormally high. Delays in trans
portation and the increase in our bust
ness make necessary more working
capital.
with the volume of business and the
profits satisfactory as they are, our
stockholders are entitled to continu-
ance of reasonable dividends, but with
the present and prospective financial
needs we do not feel that there should
be diminution of the cash resources
of the company by the distribution of
cash dividends"
If the stockholders ratify the pro
posal to increase the authorized "B"
common from $50 100000 to $1,000 OO-
600, it is not the intention of the COM
pany to sell any Of the stock Pay
ment of the dividend in scrip was de-
signed to conserve the comnanvs cash
resources. There are S3,333,OOO Of
notes maturing in November, and these
expected that any financing will be
necessary; in fact, any need for inanc-
ing has undoubtedly been precluded by
the policy of making scrip payments.
Although, as announced the scrip
Will be convertible into either class of
common, it Will be redeemed in "B"
common if the additional stock is
authorized by the shareholders The
authorized common at present amounts
to S100,000,000, divided equally into
common and common "B." There re-
mains unissued less than 100000 OF
"B' common. OF old common there re-
mains unissued S9,757 500. 1t is the
intention of the management to ask
the stockholders to provide the neces-
sarv "B' stock to take care of the
conversion of the scrip and also pro-
vide the usual reserve of unissued
stock which the company has been ac
customed to carry.
There is outstanding approximately
$50 .442, 400 of both classes of common.
following the distribution of the rs
per cent stock dividend in "B" common.
This dividend will require, upon con-
version, the issue of s2,6S3,272 of adj
ditional common.
With the "B" common selling around
Sl07 a share. the present istribution,
which because of conversion may be
regarded in the light of stock divi-
dend, is equivalent to 1921 q share or
at the annual rate Of $12.S4 This
would be the equivalent of /$22.47 on
the old shares before the distribution
of the IS per cent stock dividend. On
the old common capitalization the COM
pany had maintained the % per cent
divided since dissolution of the old
trust" The present rate means an
increase to the stockholder who has re-
tanned his holdings and received the
stock distribution at the beginning Of
this month