Norwich bulletin., 1921-08-17

federal capital and in capitals of AS states, such staggering taxes particularly upon public service corporations. as that with the wages paid employees, many corporate treasuries are mere vacuums.
 In this situation what Is left for the third party in corporate activity, stock holders who originally contributed and are now contributing the life blood of corporate existence?
 Stockholders, strange as it may seem to some people, are a class of persons of small means often past their time of industrial vigor and capacity, who have saved and invested surplus wages in cor porations under the implied promise of the public to the right of such reason able profits as the business of the cor porations may warrant. Such persons have made investments with the just ifiabie expectation that the nominal in- come from their investments would be made to harmonize with existing condi- tions because society had permitted this from the time when corporations were originated down. to recent dates.
 What now is the situation in this re- gard?
 The cost of living has nearly doubled in the last six years, not merely for the dear puklic and the employees of corporations, but for the stockholders as well. It is not to be forgotten that stockholders are mere humans like the rest of us. To illustrate this, asume an investment of S100 in stock in a cor poration which six years ago yielded an annual income of S6 per annum, which was then no more than a reasonable return on the investment, as all will ad- nit. Since then in most cases the cor porations have not increased the then nominal dividend, and in many cases the nominal dividend has been decreased. We will assume the same dividend has been continued. If S per cent was six years ago no more than 8 reasonable return on the investment obviously the same nonnin- al return now is wholly unreasonable, because the purchasing power of such a | dividend is now not more than one half or two thirds of what is then was.
 What then is the situation of a stock | holder who made his investment with the implied agreement of the public that | he should have a reasonable income in the event that the business of the corpora tion in which his money was invested | Justified? Measuring the value of the div idend by it's purchasing power, such a stockholder Is in the position now of actu- ally having an income of only one half or at best two thirds of what he received at the date of his investment, while the other two interested factors in corporate activity have their income vastly in creased. The public receives this in the shape of enormous new taxes and the
 employees In .he shape of wages iron
 90 per cent to 100 per cent higher thar
 those of years ago. Is it just now tt
 assert that the corporation is wrong, i1
 giving it's stockholders some iccrease
 and to assert that such corporation ough
 to limit the dividend to the old rate
 and spend the excess of it's income fo
 the benefit of the so-called public?
 Is this fair and right to the stock
 holder? I submit it is net.
 In the instance of the Telephone Com pany we have one great public utilit, J corporation with the foresight and wis dom to recognize it's obligation to tn essential third factor in corporate activ
 ity, viz! the common stockholder. 1 } this recent action this corporation ha treated the stockholder as etftled to O increased dividend in view of the chang ed conditions of the world, and that a
 the public and the employees are receiN 3 ing so much more, that the commo stockholder is also entitled to some sligf
 increase in his income in harmony wit h that of the other interests referred t : This action is now criticized as an il . stance of corporate greed, and I sur . init most mistakenly.
 l Were it pertinent much might be sal respecting the enormous debt which u . public itself owes to this agency, whic
 has enabled individuals of the entil - civilized world to receive almost instan a aneously information of events wher ! ever occurring, a debt so great that h, q manity itself must recognize that it ca 7 never be paid, except in part. This is T debt owed in large part to people l. small means who risked their accum' n lated wages in an enterprise that with Il memories of many readers of The Bu n letin was regarded as a speculative a1 e visonary venture which could never su
 sud. These people thus invested the
 accumulated wages, instead of sauande
 ing them for some temporary and oft p times wasteful luxury. The public al < the corporate employees who now pr
 test against this trihing increase of {
 dividend rate have short memories
 they have forgotten these facts. As t l. telephone officials have declared in co T. necton with it's increase of dividend, t t. company needs and will need capital al T. simply cannot get it unless it offers i y ducements similar to those offered 3 other corporations That situation alo 2t justifes this increase.
 j. Irrespective, however, of that req SC
 the one above elaborated calls for coI ss mendation of this increase instead It criticism It Is an act of mere comm le justice to the stockholders of the col It pany.
 e MT. Linco1n's letter has much to si sS