Evening star., 1933-01-29
PREFERRED
. DIVIDEND CUT SEEN
Wall Street Believes 81 Rate
Will Be Changed
Tuesday. ...zz<s
BY the Associated Press.

BY the Associated Press.
NEW YORK, January 28.-Wall
Streets interest in the dividend meet
ing of the directors of the United States
Steel Corporation next Tuesday was
heightened today, when it was stated in
authoritative sources that the public
should be prepared for a change in the
81 annual rate on the preferred shares.
1t was felt in Wall Street banking
quarters that public sentiment should
not be much effected by q reduction in
the dividend, in view of the fact that
recent payments have been made en-
tlrely from surplus, at time when
large losses were being reported.
Six months ago directors warned that
improvement in business would be essen
tial If the dividend was to be continued,
hut since then the company has shown
large deficits. Dividends on the stock
are cumulative, so any reduction IN pay
ments at this time will have to be made
UP later. The SITS quarterly payments
have been made regularly since forma-
ton of the company, in 1901.
Earnings Remain Low.
Fourth quarter earnings of the COM
peny were no better than in the third
quarter, leading close students of the
business to believe that fourth-quar-
ter deficit, before dividend payments,
would be reported in an amount of
S2O,OO0OO0. Final 1882 figures will be
announced after the directors meeting.
Not all directors are of the same mind
in regard to continuing the present an
nual 81 dividend rate on the companys
3602.811 shares of preferred stock. it
was reliably reported. To do SO entails
a quarterly disbursement of S6.304, ,919,
or at the rate of S25.219676 year.
The position of Myron c. Taylor,
chairman of the board, was stated on
July 26, 1881. when he said that sur
plus of the company had been drained
S73,063,548 in the preceding II months
in order to make up the deficit from
operations.
Nothing has been earned for the
preferred stock since the third quarter
of 1881" said the chairman. THE pre-
ferred dividend has, however. been paid
in full resulting in total draft on sur
plus during the year ending June 80,
1892 in order to cover both net losses
from operations and the preferred divi-
dendS for the period of S60,008,670
in view of this very large draft
upon surplus and current available re-
sources within the past year. it is
apparent that Improvement in the busi-
ness and earnings must in future deter
mine dividend action on the preferred
stock"
Bethlehem Report.
BY a quirk of the 1888 calendar, a
clue to big steel's" probable earnings
for 1882 was furnished this week be-
cause CT the Bethlehem Steel Co.'S re-
port issued on Thursday. Bethlehem
directors meet regularly on the last
Thursday of the month and United
States Steel directors on the last Tues
day. But this month, the last Tuesday
falls few days after the last Thurs
day The Bethlehem report showed
slightly greater deficit in the fourth
quarter than in the third. United
States Steel is expected to make a
similar showing.
Operations of the big company are
believed now to be around 16 per cent
of capacity. In July, when Chairman
Taylor made. his statement on pre-
ferred dividend policy, they were about
IL per cent They rose gradually to
around II per cent in October, then
receded sharply to about IL per cent at
the turn CT the year. Since them,
operations have shown but little i'm
provement.