The New York herald., 1921-09-17
12P. G. BASIS SSET
BY GUARANTY TRUST
Board Of Directors Cut Quar-
terly Dividend From S5
to So q Share.

The Guaranty Trust Company OF New
York announced yesterday that is d.
rectors had cut its quarterly dividend
rate from IS to So share. Announce
ment that all its realized losses had
been charged OFF and that other pos
sible losse3 had been anticipated by set
ting up extraordinary reserves of ap-
proximately $15.25o. 900 by reducing sur
Plus and undivided profits to the extent
OF S14,400.000 and by charging 100000
to earnings since June 80 also was
made.
Put into table. the action Of the board
made the following changes In. capital.
surplus and profits account. as COM
pared on September with June ao
Capital ............ .$25 900 scr. .OO0, 600
SURPLUS ............. lo.OOO.0O0 .JO0O.OO0
Undivided profits.... 1.131,4s5 5.545.373
Totals ........... .s4i .13i .4e5 S55.5453Is
Ever since 1903 the Guaranty Trust
Company had paid at least $40 year.
and sometimes 80 per cent. 38 per can't
and 40 per cent. On it's present capital
ization Of S25.0o0,00 dividends Of $50
a year had been paid since 1917. when
the stock was increased to its present
figure. The new dividend of 3 per cent.
or IS a share, is payable September 30
to stock Of record September 81. A let
ter sent to the stockholders yesterday
fy order Of the board OF directors said
in part:
'"Your directors have unanimously
voted a dividend for the quarter ending
September 80 of three (3) per cent
this contrasting with five (5) per cent.
quarterly that has been paid for some
years.
Your directors have heretofore
charged off all realized losses: but in
addition, in order 10 anticipate any other
possible losses. have now set up ex-
traordinary reserves Of approximately
S15.250 900, charging such reserve items
against the company's surplus and un-
divided profits accounts The company's
statement thus shows capital. surplus
and undivided profits Of $41,131.4C4.
These figures have been arrived at by
the directors. In consultation with lead
ing authorities, after exhaustive ex.
animation. and make complete allow
ance for all accounts concerning which
question has been raised. These inclu
any losses that may be sustained frcn
banking operations In Central and South
America, where the shrinkage In the
value Of customers loans. due to the un-
precedented fall IN the price Of COM
modities and the fluctuation in ex-
change, have been excessive
'The company's current earnings (be-
fore charge offs) for the nine months
ending September so will be In excess Of
$5,000,000, the total dividend require
ments for the year ut the former rate.
but your directors have adopted the con-
servative course. first. Of setting up i'm
mediately ample reserves against all its
known or potential losses; and. second,
at this time, OF making a certain reduce
tlon In its dividend distribution, so as to
devote q greater portion Of its earnings
than heretofore to the increase OF its
surplus fund"
Following the charge offs. q director
said, for realized losses during the first
half year, the directors of the company
were faced with two methods of deal
ing with their accounts in future. One
course would be to charge against sur
plus losses only when realized, but this
would mean a considerable period OF
stagnation, with the institution showing
no growth and no progress.
The other course, and the one chosen
by the directors, was to charge Off all
losses thus far realized and in addi-
ton to make an exhaustive examination
Of each and all outstanding accounts.
including losses that might be sustained
from banking operations In South and
Central America, to set up reserve
against any account on which question
was raised by reducing surplus and un-
divided profits and after securing
clean slate to devote all earnings above
1c per cent. paid In dividends, including
velvet that may be obtained from
salvage of doubtful accounts to the
building up of the surplus fund.
AS a result of the drastic action
prominent member OF the board de-
clared that the surplus would bo re-
stored quickly to its former figures.