Twin city review. [volume] (Champaign, Ill.) 19??-1929, 1922-12-29
BOARD OF CENsoRs.
STOCK DIVIDENDS.

| The issuance OF stock. dividends l.
the best proof that the fruits oil in
dustry are being divided unequally
and that the wage workers claims
are justified.
Stock dividends is another name
for capitalizing profits.
The reason Tor stock dividends is
to avoid the income tax; a fear that
congress will tax undivided profits,
and desire to extend profits over a
larger issuance of stock so the pub
lies attention will not be attracted by
excessive profits.
To dispose of these profits they
are turned into capital account"
(put back into the business) and ad-
ditional common stock to that amount
issued and divided among the stock
holders. This stock is called stock
dividends" although it is an extra
issue of the ordinary variety of
common stock.
Stock dividends indicate a profit
that is above and beyond fair profit
on an investment. Workers struggle
for living wage, but the dollar is
always guaranteed a 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 81 considered. When this
profit is inordinate, the stock divi-
dend is used to conceal excessive in
come.
The stock dividend is proof that
the people are being gouged. 1t also
indicates the enormous values others
have created and which are now CEN
tered in the hands of those who re-
fuse workers living wage and the
right to organize.
Stock dividends are an answer to
the continuous whine by the defend
ers of reaction and privilege that
alleged high wages are a drag on in
dustry. The stock dividend is evil
dence that the gouger and profiteer
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 in
tricacies of accountancy.
The trickery of corporations in con-
cealing profits is indicated by the re-
cent account of how a well-known
5-and-lO-cent store corporation lost"
profits aggregating $20,000,00O.
This concern was carrying on its
books good will' as an asset, which
it valued at $50,O00,00O. Aside from
some leaseholds, this asset was in
tangible and pure guesswork. The
corporation had profits of $40, 700 900
piled up, andS to dispose of these
profits it voted to reduce the 50,000,-
600 good will" asset to $30,000,000.
In other words, the corporation
took 100000 from one pocket and
put it in another pocket. By this
jugglery $20,000,000 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 5l5 per
cent, are quite common.
Only recently on the floor of the
senate Mr.. Capper 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 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 COM
mon.
The significance of stock dividends
and other profit concealments is not
discussed by our "molders of public
opinion"
j Those who have the publicity ma.