The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1922-12-07

~ IRECTORS of the Tamarack &
Custer Consolidated Mining
company have called a meet
ing of stockholders of the COM
pany in this city on December IS for
the purpose of considering and acting
upon the question of increasing the
capital stock of said corporation from
100000 shares of the par value of 81
each to S5,OOO.OOO, divided into 5.OOO,-
600 shares of the par value of 81 each.
and to consider and act upon the
question of declaring a stock dividend
amounting to 166 per cent upon the
issued and outstanding stock of the
corporation" This action was made
public Tuesday and has since been
the subject of much comment and dis
cussion, and much curiosity is mani
Tested in why it was taken. Increase
of capital stock and stock dividends
have been of rather frequent occur
renee in recent years among large
eastern corporations, and the popular
impression has been and is that it is a
AAANAAAo4 A40BANn AOi lHt purpose OF
evading the federal income tax in
some form or another though far be
it from the intention of the Miner to
insinuate such a motive on the part
of the Tamarack directors.
Why Stock Dividends Are Declared.
As explained to the Miner which
does not pretend to be versed in this
phase of high finance, stock dividends
are sometimes declared in lieu of cash
dividends when the earnings of a
company have been invested in a
manner that increases the value of
the company's property or adds to its
assets. In that case the additional
stock has an actual cash value and
the proceeding would seem 10 be per-
fectly proper. Again. some compan-
les have a fixed dividend rate and
when their earnings increase to an
extent that calls for a higher rate. it
is said that as matter of policy they
increase their capital stock and de-
clare a stock dividend as means Of
maintaining the low dividend rate
while making the larger disbursement
More recently it has been claimed that
companies having large surplus funds,
in anticipation of enactment of a law
placing a heavy tax upon it, have in
creased their capital stock and de-
clared stock dividends the purpose
being to reduce the surplus in COM
parison with the capitalization to a
point that would escape the provi-
sons Of the proposed law
Tamarack Has Large Surplus.
The popular belief is that lamar
ack & Custer has a very large surplus
in the treasury but on this point
there is no official information avail
able to the public The mine was idle
for a year and a half. up to the first
OF last July. and while closed down a
force was employed on
development work which with fixed
expenses must have been quite a
heavy drain on the treasury of the
company. Since resuming production
the company has been deriving large
profits on shipments, but a consider
able time elapsed after starting be-
fore normal shipments were moving.
About the time the Tamarack resumed
operation it is presumed that the COM
pany shared in a substantial payment
on the purchase price of the North
port smelter The last cash dividend
paid by Tamarack was in 1920, when
payment of $4,000 was made. Previ-
Gus dividends were in 1916. $71 $50;
1917 s5S275; 1918, s266,2S5; 1919, $780,
400. Total dividends to date, S521,992.