Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1923-01-01
1872 REPORT OF
CORPORATIONS
SHOW PROFITS
Last Three Months Of Year
Have Been Exceptionally
Prosperous Ones, Report
Show


NEW YORK. Jan. Increases In
capital stock Of several hundred cor
poraticns in the last three months of
billion dollars. and indications are that
the total will soon be greatly increas-
ed. Nearly all of these increases have
been distributed TO stockh elders in
'stock dividends
The Standard Oil companies and SUI
sidaries have led the list in the size
and amounts Of their stock dividens.
The Industries involved have included
safety rnxor companies, banks, cotton
mills. insurance companies. machine
shops and manufacturing concerns. The
stock dividends have ranged from two
percent of the outstanding capital stock
Of the corpo -ations to 400 stock div
;dend declared by The Whitten Machine
Works. of Boston.
The big movement to capitalize the
surplus earnings Of corporations began
last October when the Gulf Oil Com
pany. Of New Jersey, announced plans
10 form the Gulf Oil Company. OF
Pennsylvania. and give stockholders in
the old company an equal share in the
new company and 200 percent stock
dividend. Andrew L. Melioa. brother OF
Secretary Of the Treasury Mellon. its
president Of the company.
This was followed by rumofs in the
financial districts that other big oil
companies and corporations were con
templating stock dividends after capi-
talizing their large surplusses. Stock
quotations of those companies rose
sharply. but almost invariably fell off
again after the stock dividends were
declared. The big Standard Oil COM
parics were among the first to increase
their capitalization and declare divi-
s'cnds in stock. and then the movement
became general.
The Standard Oil Of New Jersey on
announcing ar increase in capitaliza-
tion of $5l5.o0o.o00 and 400 stock
dividend. stated there was no reason to
believe that the old rate Of dividend
would be maintained on the new stock
IL was declared that the capitalized
surplus Of the company represented un-
divided profits of mary years that had
been returned to the business and was
held as property of all kinds necessary
TO the transaction Of the company's
business. Only small part of the sur
plus was represented By cash.
Many Of the stockholders receiving
stock dividends on their holdings found
in effect that they had received the
equivalent Of four quarters for the dol
lar they had held before, a. there
was no prospect Of receiving more cash
dividends in the future on their in
creased stock holdings than they had
received previously.
The general belief in Wall Street il
that the reason for great number of
stock dividends DECLARED Is that COM
panics with large surplus earnings
feared legislation designed to levy Oh
their surplus capital I'M the near future
There was a referendum in Switzerland
last fall on a proposal 70 make CAPT
tai levy on corporations and wealthy
individuals. While that was defeated by
an overwhelming popular vote. the cap
itai levy is still being advanced as n
means Of assisting government finan.
ces by radical elements IN Great Brit
ain. and there has been talk Of similar
measures in this country
Spokesman for the Standard oil com
panics have stated that their COM
panics have always been under capital.
lied and ;hat the surplus earnings o.
which taxes have already been paid
were turned back into the companies
business: "plowed under" il is termed.
Most Of those companies have decreased
the par avlue Of their shares in order
u was said. TO bring the market price
Of their stocks within the reach OF
their employees and the general public
and cause wider distribution.