Newark leader. ([Newark, Ohio]) 1917-1946, 1922-12-29
Stock Dividends is Proof
of Low Wages and
Big Profits

The issuance of stock dividends is
the best proof that the fruits of in
dustry are being divided unequally,
and that the wage workers claims
are justified.
Stock dividends is another name for
capitalizing profits.
The reason for stock dividends is to
avoid the income tax; fear that con-
gress will tax undivided profits, and
a desire to extend profits over a larger
issuance of stock so the public's at
tention will not be detracted by exces-
sive profits.
To dispose of these profits they are
turned into capital account" (put
back into the business) and additional
common stock to that amount issued
and divided among the stockholders.
This stock is called "stock dividends"
although it is an extra issue of the
ordinary variety of common stock.
Stock dividends indicate profit that
is above and beyond a fair profit on
an investment. Workers struggle for
a living wage, but the dollar is always
guaranteed fixed interest rate. This
interest rate is a charge on industry,
as is salaries, the cost Of raw material,
taxes and wages.
After these and other charges are
paid, profit is considered. When this
profit is inordinate, the stock dividend
is used to conceal excessive incomes.
The stock dividend is proof that the
people are being gouged. 1t also in
dicates the enormous values others
have created and which are now CEN
tered in the hands of those who refuse
workers a living wage and the right
to organize.
Stock dividends are an answer to
the continuous whine bv the defenders
of reaction and privilege that alleged
The stock dividend is evidence that the
gouger and prOnteer are making new
records and that wage earners are not
being justly compensated.
The stock dividend does not tell the
full story of corporate profits. Be
hind these are princely salaries and
numerous funds and holdings that can
not be untangled or understood save
by one acquainted with the intricacies
Of accountancy.
Inc trickery of corporations in con-
cealing profits is indicated by the re-
cent account of how a Well-knoWn
5-and-1O-cent store corporation "lost"
profits aggregating $20,O0O,OOO
This concern was carrying on its
books "good will' as an asset, which
it valued at $50,000,000. Aside from
some leaseholds, this asset was in
tangible and pure guesswork. The
corporation had profits of $2O,OOO,OOO
piled up, and to dispose of these
profits it voted to reduce the $780,
100000 good will" asset to $3O,OOO,-
0OO
In other words, the corporation took
$2O,OOO,O00 from one pocket and put
it in another pocket. By this Jug
glery S20,OOO,000 in profits were
wiped out, with the money remaining
in the hands of the corporation.
This tricky bookkeeping is useful if
the government would call for a
record of profits that have been
"sweated" from immature girls and
little children.
Stock dividends and other forms of
concealed profits are found in every
industrial and commercial group.
Even railroads, masters of the art of
telling hard-luck stories, announce
stock dividends, while cash dividends
in excess of the regulation 51a per
cent, are quite common.
Only recently on the floor of the
senate Mr.. Capner of Kansas charged
the railroads with concealing profits,
yet the public is continually warned
that the roads are facing bankruptcy,
while the railroad labor board rejects
the shop mems living wage demand.
The textile industry, which has at
tempted to reduce wages and is re-
sponsible for a long strike the past
summer, is now declaring stock divi-
dends. issues of so, 100, and 200 per
cent by capitalists who used the state
to Cypress their employees are common
The significance of stock dividends
and other profit concealments is not
discussed by our "molders of public
opinion"
Those who have the publicity ma
chinery to enlighten the people on this
subject are in the stock-dividend
game themselves. They, too, are in
terested in profit, despite their ideal
istic pretenses.
1t aids their purpose to keep alive
the fiction of "high" wages and the
pauperization of industry and COM
merce.