The Washington times., 1930-10-02
GAN DIVIDEND
IS EXAMPLE
FOR FIRMS
BY LESLIE GOULD

~ A~6GA@&A@ &~OA4S
American Can Company has
started the ball rolling.
Directors, believing actions
speak louder than words, have
ordered an extra dividend Of 81 a
share paid to stockholders out of
this wears earnings. They have
no qualns about the future Of
this country.
American Cans earnings are
: running at the same rate as last
year, SO they are going to help
their stockholders spend little
more by giving them a little more.
1t is now up to other leading
corporations with large surpIuses
and with earnings relatively the
same as last year to keep the ball
rolling.
American Cans action will re.
lease $2,473,998 extra dollars to
help bring business back to nor
NAL. The company has that many
shares outstanding. If the COM
pany's business keeps UP at its
present rate the directors may in
crease the regular rate at their
December meeting. The company
pays $4 share annually now, ex-
cluding the extra dividend.
Not Market Play
American Cans action was not
q stock market play, it was solely
intended as a gesture of conf
dence in the future of American
industry.
Can stockholders have not al
ways Jared SO we'll in the way Of
dividends. In the early days Of
the company, accumulations piled
up on the preferred stocks and
nothing was paid on the common
until 1923.
The company was formed in
1901 as { consolidation Of IS
companies. It is the leading tin
can maker in the world, with a
business volume four times that
Of its nearest competitor.
The company was sued as a
trust back in 1918, right after the
Government had smashed" the
tobacco and Standard Oil trusts.
While holding the company was
illegally formed the Judge said he
was reluctant to destroy so fine
~ adjusted industrial machine"
This left the case hanging in the
air until about 10 years later
when the Government dropped
the action. The Judge at the time
had ordered the company to walk
the straight and narrow path.
The First National Bank in
terests, which the George F.
Bakers head, is the dominating
banking interest in the company.
F. s. Wheeler, the chairman, and
Henry Willis Phelps, the presi-
dent, have been with the COM
pany ever since it's organization.
Phelps was head of Union Can Co.
when 1t was taken into the
American Can combination and
was made general sales manager
at Chicago. He became a vice
president in 1913 and president in
1928. Back in 1903, though, he
was put off the board for a time.
Merger Comes High
One of the reasons for the COM
pany's early difficulties was the
high prices paid for the plants.
In the Government suit to dis
solve the company, a william
Fait testified he received $780, 900
in cash and 100000 in stock for
his plant. Machinery in the plant
cost only $4,000. and the bal
ance, he said, was for good will.
Asked If this was not pretty high.
Fait said:
"Well, / am not sure about
that; but I got all 1t was
WORTH"
Another, though did not fare
so well. He held out too long and
sold out larger plant than Fats
for only 100000 "to get 1t out Of
the wet"
After the plants had bees
bought, the company's "wrecker"
went to work and shut most of
them up, it was testified.
How about that market letter
writer who wrote ten days ago,
''Now is the time for all good men
to come to the aid of the stock
market"
Then there's the man who
predicted last autunn's break, but
who turned bu1lish In August ami
advised his clients on the 9th of
that month to invest 20 per cent
Of their funds in stocks. He
recommended IL. The general
market averages have declined
since that date almost $50 a
share.
LII q